II

105TH CONGRESS

1ST SESSION S. 186

To amend the Energy Policy and Conservation Act with respect to purchases

from the Strategic Petroleum Reserve by entities in the insular areas

of the United States, and for other purposes.

IN THE SENATE OF THE UNITED STATES

JANUARY 22, 1997

Mr. AKAKA introduced the following bill; which was read twice and referred

to the Committee on Energy and Natural Resources

A BILL

To amend the Energy Policy and Conservation Act with

respect to purchases from the Strategic Petroleum Reserve by entities in the insular areas of the United

States, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Emergency Petroleum

5 Supply Act’’.
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1 SEC. 2. PURCHASES FROM STRATEGIC PETROLEUM RE2 SERVE BY ENTITIES IN INSULAR AREAS OF

3 UNITED STATES.

4 Section 161 of the Energy Policy and Conservation

5 Act (42 U.S.C. 6241) is amended by adding at the end

6 the following:

7 ‘‘(j) PURCHASES FROM STRATEGIC PETROLEUM RE8 SERVE BY ENTITIES IN INSULAR AREAS OF UNITED

9 STATES.—

10 ‘‘(1) DEFINITIONS.—In this subsection:

11 ‘‘(A) BINDING OFFER.—The term ‘binding

12 offer’ means a bid submitted by the State of

13 Hawaii for an assured award of a specific quan14 tity of petroleum product, with a price to be

15 calculated pursuant to this Act, that obligates

16 the offeror to take title to the petroleum prod17 uct without further negotiation or recourse to

18 withdraw the offer.

19 ‘‘(B) CATEGORY OF PETROLEUM PROD20 UCT.—The term ‘category of petroleum prod21 uct’ means a master line item within a notice

22 of sale.

23 ‘‘(C) ELIGIBLE ENTITY.—The term ‘eligi24 ble entity’ means an entity that owns or con25 trols a refinery that is located within the State

26 of Hawaii.
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1 ‘‘(D) FULL TANKER LOAD.—The term ‘full

2 tanker load’ means a tanker of approximately

3 700,000 barrels of capacity, or such lesser

4 tanker capacity as may be designated by the

5 State of Hawaii.

6 ‘‘(E) INSULAR AREA.—The term ‘insular

7 area’ means the Commonwealth of Puerto Rico,

8 the Commonwealth of the Northern Mariana Is9 lands, the United States Virgin Islands, Guam,

10 American Samoa, the Republic of the Marshall

11 Islands, the Federated States of Micronesia,

12 and the Republic of Palau.

13 ‘‘(F) OFFERING.—The term ‘offering’

14 means a solicitation for bids for a quantity or

15 quantities of petroleum product from the Stra16 tegic Petroleum Reserve as specified in the no17 tice of sale.

18 ‘‘(G) NOTICE OF SALE.—The term ‘notice

19 of sale’ means the document that announces—

20 ‘‘(i) the sale of Strategic Petroleum

21 Reserve products;

22 ‘‘(ii) the quantity, characteristics, and

23 location of the petroleum product being

24 sold;
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1 ‘‘(iii) the delivery period for the sale;

2 and

3 ‘‘(iv) the procedures for submitting of4 fers.

5 ‘‘(2) IN GENERAL.—In the case of an offering

6 of a quantity of petroleum product during a

7 drawdown of the Strategic Petroleum Reserve—

8 ‘‘(A) the State of Hawaii, in addition to

9 having the opportunity to submit a competitive

10 bid, may—

11 ‘‘(i) submit a binding offer, and shall

12 on submission of the offer, be entitled to

13 purchase a category of a petroleum prod14 uct specified in a notice of sale at a price

15 equal to the volumetrically weighted aver16 age of the successful bids made for the re17 maining quantity of the petroleum product

18 within the category that is the subject of

19 the offering; and

20 ‘‘(ii) submit 1 or more alternative of21 fers, for other categories of the petroleum

22 product, that will be binding if no price

23 competitive contract is awarded for the

24 category of petroleum product on which a
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1 binding offer is submitted under clause (i);

2 and

3 ‘‘(B) at the request of the Governor of the

4 State of Hawaii, a petroleum product purchased

5 by the State of Hawaii at a competitive sale or

6 through a binding offer shall have first pref7 erence in scheduling for lifting.

8 ‘‘(3) LIMITATION ON QUANTITY.—

9 ‘‘(A) IN GENERAL.—In administering this

10 subsection, in the case of each offering, the Sec11 retary may impose the limitation described in

12 subparagraph (B) or (C) that results in the

13 purchase of the lesser quantity of petroleum

14 product.

15 ‘‘(B) PORTION OF QUANTITY OF PREVIOUS

16 IMPORTS.—The Secretary may limit the quan17 tity of a petroleum product that the State of

18 Hawaii may purchase through a binding offer

at any offering to 1 19 ⁄12 of the total quantity of

20 imports of the petroleum product brought into

21 the State during the previous year (or other pe22 riod determined by the Secretary to be rep23 resentative).

24 ‘‘(C) PERCENTAGE OF OFFERING.—The

25 Secretary may limit the quantity that may be
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1 purchased through binding offers at any offer2 ing to 3 percent of the offering.

3 ‘‘(4) ADJUSTMENTS.—

4 ‘‘(A) IN GENERAL.—Notwithstanding any

5 limitation imposed under paragraph (3), in ad6 ministering this subsection, in the case of each

7 offering, the Secretary shall, at the request of

8 the Governor of the State of Hawaii, or an eli9 gible entity certified under paragraph (7), ad10 just the quantity to be sold to the State of Ha11 waii in accordance with this paragraph.

12 ‘‘(B) UPWARD ADJUSTMENT.—The Sec13 retary shall adjust upward to the next whole

14 number increment of a full tanker load if the

15 quantity to be sold is—

16 ‘‘(i) less than 1 full tanker load; or

17 ‘‘(ii) greater than or equal to 50 per18 cent of a full tanker load more than a

19 whole number increment of a full tanker

20 load.

21 ‘‘(C) DOWNWARD ADJUSTMENT.—The Sec22 retary shall adjust downward to the next whole

23 number increment of a full tanker load if the

24 quantity to be sold is less than 50 percent of
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1 a full tanker load more than a whole number

2 increment of a full tanker load.

3 ‘‘(5) DELIVERY TO OTHER LOCATIONS.—The

4 State of Hawaii may enter into an exchange or a

5 processing agreement that requires delivery to other

6 locations, if a petroleum product of similar value or

7 quantity is delivered to the State of Hawaii.

8 ‘‘(6) STANDARD SALES PROVISIONS.—Except as

9 otherwise provided in this Act, the Secretary may re10 quire the State of Hawaii to comply with the stand11 ard sales provisions applicable to purchasers of pe12 troleum product at competitive sales.

13 ‘‘(7) ELIGIBLE ENTITIES.—

14 ‘‘(A) IN GENERAL.—Subject to subpara15 graphs (B) and (C) and notwithstanding any

16 other provision of this paragraph, if the Gov17 ernor of the State of Hawaii certifies to the

18 Secretary that the State has entered into an

19 agreement with an eligible entity to carry out

20 this Act, the eligible entity may act on behalf

21 of the State of Hawaii to carry out this sub22 section.

23 ‘‘(B) LIMITATION.—The Governor of the

24 State of Hawaii shall not certify more than 1
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1 eligible entity under this paragraph for each no2 tice of sale.

3 ‘‘(C) BARRED COMPANY.—If the Secretary

4 has notified the Governor of the State of Ha5 waii that a company has been barred from bid6 ding (either prior to, or at the time that a no7 tice of sale is issued), the Governor shall not

8 certify the company under this paragraph.

9 ‘‘(7) SUPPLIES OF PETROLEUM PRODUCTS.—At

10 the request of the governor of an insular area, the

11 Secretary shall, for a period not to exceed 180 days

12 following a drawdown of the Strategic Petroleum

13 Reserve, assist the insular area in its efforts to

14 maintain adequate supplies of petroleum products

15 from traditional and non-traditional suppliers.’’.

16 SEC. 3. REGULATIONS.

17 (a) IN GENERAL.—The Secretary of Energy shall

18 issue such regulations as are necessary to carry out the

19 amendment made by section 2.

20 (b) ADMINISTRATIVE PROCEDURE.—Regulations is21 sued to carry out the amendment made by section 2 shall

22 not be subject to—

23 (1) section 523 of the Energy Policy and Con24 servation Act (42 U.S.C. 6393); or
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1 (2) section 501 of the Department of Energy

2 Organization Act (42 U.S.C. 7191).

3 SEC. 4. EFFECTIVE DATE.

4 The amendment made by section 2 takes effect on

5 the earlier of—

6 (1) the date that is 180 days after the date of

7 enactment of this Act; or

8 (2) the date that final regulations are issued

9 under section 3.

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