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[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 1007 Introduced in Senate (IS)]

110th CONGRESS
  1st Session
                                S. 1007

To direct the Secretary of State to work with the Government of Brazil 
    and other foreign governments to develop partnerships that will 
strengthen diplomatic relations and energy security by accelerating the 
 development of biofuels production, research, and infrastructure; to 
 alleviate poverty, create jobs, and increase income, while improving 
            energy security and protecting the environment.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                             March 28, 2007

   Mr. Lugar introduced the following bill; which was read twice and 
             referred to the Committee on Foreign Relations

_______________________________________________________________________

                                 A BILL

 
To direct the Secretary of State to work with the Government of Brazil 
    and other foreign governments to develop partnerships that will 
strengthen diplomatic relations and energy security by accelerating the 
 development of biofuels production, research, and infrastructure; to 
 alleviate poverty, create jobs, and increase income, while improving 
            energy security and protecting the environment.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``United States-
Brazil Energy Cooperation Pact of 2007''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Sec. 3. Definitions.
Sec. 4. Western Hemisphere Energy Cooperation Forum.
Sec. 5. United States-Brazil biofuels partnership.
Sec. 6. Biofuels feasibility studies.
Sec. 7. United States-Brazil bilateral tax treaty.
Sec. 8. Multilateral development banks.
Sec. 9. Carbon credit trading mechanisms.
Sec. 10. Energy crisis response mechanism.
Sec. 11. Energy foreign assistance.
Sec. 12. Energy public diplomacy.
Sec. 13. Energy trade.
Sec. 14. Western Hemisphere hydrocarbon production.
Sec. 15. Report.

SEC. 2. FINDINGS.

    Congress makes the following findings:
            (1) The engagement of the United States Government with the 
        Government of Brazil and the governments of willing countries 
        in the Western Hemisphere and throughout the world is a 
        strategic priority for reducing the potential for tension over 
        energy resources, maintaining and expanding reliable energy 
        supplies, expanding use of renewable energy, and reducing the 
        detrimental effects of energy import dependence. Current energy 
        dialogues and agreements should be expanded and refocused, as 
        needed, to meet this challenge.
            (2) Countries in the Western Hemisphere can most 
        effectively meet their common needs for energy security and 
        sustainability through partnership and cooperation. Cooperation 
        between governments on energy issues will enhance bilateral and 
        regional relationships among countries in the Western 
        Hemisphere. The Western Hemisphere is rich in natural 
        resources, including biomass, oil, natural gas, and coal, and 
        has significant opportunities for the production of renewable 
        energy, including hydro, solar, and wind. Countries in the 
        Western Hemisphere can provide convenient and reliable markets 
        for their own energy needs and for foreign trade in energy 
        goods and services.
            (3) Development of sustainable energy alternatives in 
        countries in the Western Hemisphere can improve energy 
        security, balance of trade, and environmental quality, and can 
        provide markets for energy technology and agricultural 
        products.
            (4) The Government of the United States has actively worked 
        with the Government of Brazil to develop a strong biofuels 
        partnership and to increase the production and use of biofuels. 
        On March 9, 2007, the Memorandum of Understanding Between the 
        United States and Brazil to Advance Cooperation on Biofuels, 
        was signed in Sao Paulo, Brazil.
            (5) Brazil and the United States have led the world in the 
        production of ethanol. Deeper cooperation on biofuels with 
        other countries of the hemisphere would extend economic, 
        security, and political benefits.
            (6) The United States is committed to developing a biofuels 
        partnership with the Government of Brazil that benefits the 
        welfare of the people of the Western Hemisphere. According to 
        the Latin American Energy Organization, the percentage of total 
        energy consumption in each of the following countries in the 
        Western Hemisphere that originated from imported crude oil and 
        oil products in 2005 was--
                    (A) 2 percent in Argentina;
                    (B) 93 percent in Barbados;
                    (C) 7 percent in Bolivia;
                    (D) 13 percent in Brazil;
                    (E) 55 percent in Chile;
                    (F) 4 percent in Colombia;
                    (G) 56 percent in Costa Rica;
                    (H) 77 percent in the Dominican Republic;
                    (I) 20 percent in Ecuador;
                    (J) 76 percent in El Salvador;
                    (K) 85 percent in Grenada;
                    (L) 72 percent in Guatemala;
                    (M) 100 percent in Guyana;
                    (N) 93 percent in Haiti;
                    (O) 81 percent in Honduras;
                    (P) 91 percent in Jamaica;
                    (Q) 10 percent in Mexico;
                    (R) 98 percent in Nicaragua;
                    (S) 100 percent in Panama;
                    (T) 46 percent in Paraguay;
                    (U) 39 percent in Peru;
                    (V) 34 percent in Suriname;
                    (W) 45 percent in Trinidad and Tobago;
                    (X) 79 percent in Uruguay; and
                    (Y) 0 percent in Venezuela.
            (7) Private sector partnership and investment in all 
        sources of energy is critical to providing energy security in 
        the Western Hemisphere. Several countries in the Western 
        Hemisphere have acted to endanger the rule of law necessary for 
        such investment. Other countries in the Western Hemisphere have 
        been unable to make reforms necessary to create sufficient 
        investment climates for increased domestic production of 
        energy.

SEC. 3. DEFINITIONS.

    In this Act:
            (1) Biofuel.--The term ``biofuel'' means any liquid fuel 
        that is derived from biomass.
            (2) Biomass.--The term ``biomass'' means any organic matter 
        that is available on a renewable or recurring basis, including 
        agricultural crops, trees, wood, wood wastes and residues, 
        plants (including aquatic plants), grasses, residues, fibers, 
        animal wastes, municipal wastes, and other waste materials.
            (3) Partner country.--The term ``partner country'' means a 
        country that has agreed to conduct a biofuels feasibility study 
        under section 6.
            (4) Regional development banks.--The term ``regional 
        development banks'' means the African Development Bank, the 
        Inter-American Development Bank, the Andean Development 
        Corporation, the European Bank for Reconstruction and 
        Development, and the Asian Development Bank.

SEC. 4. WESTERN HEMISPHERE ENERGY COOPERATION FORUM.

    (a) Establishment.--The Secretary of State, in coordination with 
the Secretary of Energy, shall establish a regional-based ministerial 
forum to be known as the Western Hemisphere Energy Cooperation Forum 
(referred to in this subsection as the ``Energy Forum'').
    (b) Purposes.--The Energy Forum should seek--
            (1) to strengthen relationships between the United States 
        and other countries of the Western Hemisphere through 
        cooperation on energy issues;
            (2) to enhance cooperation between major energy producers 
        and major energy consumers in the Western Hemisphere, 
        particularly among the Governments of Brazil, Canada, Mexico, 
        the United States, and Venezuela;
            (3) to explore possibilities to work with countries in the 
        Western Hemisphere to promote renewable energy production 
        (particularly in biofuels) and to lessen dependence on oil 
        imports without reducing food availability (particularly in 
        Mexico and Central American countries);
            (4) to ensure that energy contributes to the economic, 
        social, and environmental enhancement of the countries of the 
        Western Hemisphere;
            (5) to provide an opportunity for open dialogue and joint 
        commitments among Energy Forum countries and with private 
        industry; and
            (6) to provide participating countries the flexibility 
        necessary to cooperatively address broad challenges posed to 
        the energy supply of the Western Hemisphere to find solutions 
        that are politically acceptable and practical in policy terms.
    (c) Activities.--The United States Government, in cooperation with 
Energy Forum countries, shall seek to implement--
            (1) an energy crisis initiative that will promote national 
        and regional measures to respond to temporary energy supply 
        disruptions, including participating in a Western Hemisphere 
        energy crisis response mechanism in accordance with section 
        10(b);
            (2) an energy sustainability initiative to facilitate long-
        term supply security by fostering reliable supply sources of 
        fuels, including--
                    (A) developing, deploying, and commercializing 
                technologies for sustainable renewable fuels within the 
                region;
                    (B) promoting production and trade in sustainable 
                energy, including energy from biomass;
                    (C) facilitating investment, trade, and technology 
                cooperation in energy infrastructure, petroleum 
                products, natural gas (including liquefied natural 
                gas), energy efficiency (including automotive 
                efficiency), clean fossil energy, renewable energy, and 
                carbon sequestration;
                    (D) promoting regional infrastructure and market 
                integration;
                    (E) developing effective and stable regulatory 
                frameworks;
                    (F) developing renewable fuels standards and 
                renewable portfolio standards;
                    (G) establishing educational training and exchange 
                programs between Energy Forum countries; and
                    (H) identifying and removing barriers to trade in 
                technology, services, and commodities; and
            (3) an energy for development initiative to promote energy 
        access for underdeveloped areas through energy policy and 
        infrastructure development, including--
                    (A) increasing access to energy services for the 
                poor;
                    (B) improving energy sector market conditions;
                    (C) promoting rural development though biomass 
                energy production and use;
                    (D) increasing transparency of, and participation 
                in, energy infrastructure projects;
                    (E) promoting development and deployment of 
                technology for clean and sustainable energy 
                development, including biofuel and clean coal 
                technologies; and
                    (F) facilitating the use of carbon sequestration 
                methods in agriculture and forestry and linking 
                greenhouse gas emissions reduction programs to 
                international carbon markets.
    (d) Implementation.--It is the sense of Congress that the Energy 
Forum--
            (1) should meet at least once every 2 years;
            (2) may meet on a subregional basis; and
            (3) shall be co-chaired by an official of the Department of 
        State and an official of the Department of Energy.
    (e) Western Hemisphere Energy Industry Group.--
            (1) Authority.--The Secretary of State, in coordination 
        with the Secretary of Commerce and the Secretary of Energy, 
        shall approach the governments of other countries in the 
        Western Hemisphere to seek cooperation in establishing a 
        Western Hemisphere Energy Industry Group (referred to in this 
        subsection as the ``Energy Group''). The Energy Group should be 
        coordinated by the United States Government and should include 
        representatives from industries and governments in the Western 
        Hemisphere.
            (2) Purpose.--The purpose of the Energy Group should be 
        to--
                    (A) increase public-private partnerships;
                    (B) foster private investment; and
                    (C) enable countries in the Western Hemisphere to 
                devise energy agendas compatible with industry capacity 
                and cognizant of industry goals.
            (3) Discussion topics.--The Energy Group should discuss--
                    (A) promoting a secure investment climate;
                    (B) developing and deploying biofuels and other 
                alternative fuels and clean electrical production 
                facilities, including clean coal and carbon 
                sequestration;
                    (C) developing and deploying energy efficient 
                technologies and practices in the industrial, 
                residential, and transportation sectors;
                    (D) investing in oil and natural gas production and 
                distribution;
                    (E) maintaining transparency of energy production 
                and reserves data;
                    (F) promoting biofuels research; and
                    (G) training and education exchange programs.
    (f) Oil and Gas Working Group.--
            (1) Establishment.--The Secretary of Energy, in cooperation 
        with the Secretary of State, shall facilitate the establishment 
        of the Oil and Gas Working Group.
            (2) Purposes.--The Oil and Gas Working Group should 
        strengthen dialogue between international oil companies, 
        national oil companies, and civil society groups on issues 
        related to international standards on transparency, social 
        responsibility, and best practices in leasing and management of 
        oil and natural gas projects.
    (g) Appropriation.--There are authorized to be appropriated 
$3,000,000 to carry out this section.

SEC. 5. UNITED STATES-BRAZIL BIOFUELS PARTNERSHIP.

    (a) In General.--The Secretary of State, in coordination with the 
Secretary of Energy, shall work with the Government of Brazil to--
            (1) coordinate efforts to promote the production and use of 
        biofuels among all interested countries, giving preference to 
        the countries in the Western Hemisphere that are among the 
        poorest and most dependent on foreign sources of fuel 
        (particularly oil), including--
                    (A) coordinating the biofuels feasibility studies 
                described in section 6;
                    (B) collaborating on policy and regulatory measures 
                to--
                            (i) promote domestic biofuels production 
                        and use, including related agricultural and 
                        environmental measures;
                            (ii) reform automotive sectors to 
                        incorporate biofuels use including increased 
                        efficiency, reduced emissions, and integration 
                        with high-efficiency advanced technologies; and
                            (iii) reform fueling infrastructure to 
                        allow for use of biofuels and other alternative 
                        fuels;
            (2) develop a global strategy to work with the European 
        Union, China, India, South Africa, Japan, and other interested 
        countries to create global biofuels markets and promote 
        biofuels production and use in developing countries;
            (3) assess the feasibility of working with the World Bank 
        and relevant regional development banks regarding--
                    (A) biofuels production capabilities; and
                    (B) infrastructure, research, and training related 
                to such capabilities; and
            (4) develop a joint and coordinated strategy regarding the 
        construction and retrofitting of pipelines and terminals near 
        major fuel distribution centers, coastal harbors, and 
        railroads.
    (b) International Agricultural Extension Programs.--The Secretary 
of Agriculture shall work with the Government of Brazil to facilitate 
joint agricultural extension activities related to biofuels crop 
production, biofuels production, and environmental and greenhouse gas 
emissions reduction practices.
    (c) Educational Grants.--The Secretary of Energy, in coordination 
with the Secretary of State, and in collaboration with the Government 
of Brazil, shall establish a grant program to finance advanced biofuels 
research and collaboration between academic and research institutions 
in the United States and Brazil.
    (d) Funding Sources.--
            (1) Authorization of appropriations.--There are authorized 
        to be appropriated for fiscal year 2008--
                    (A) $3,000,000 to carry out subsection (a);
                    (B) $5,000,000 to carry out subsection (b); and
                    (C) $7,000,000 to carry out subsection (c).
            (2) Supplemental funding sources.--The Secretary of State 
        shall work with the Government of Brazil, the governments of 
        partner countries, regional development banks, the Organization 
        of American States, and other interested parties to identify 
        supplemental funding sources for the biofuels feasibility 
        studies described in section 6.

SEC. 6. BIOFUELS FEASIBILITY STUDIES.

    (a) In General.--Each partner country shall participate in a study 
to determine the feasibility of increasing the production and use of 
biofuels in such country.
    (b) Analysis of the Energy Policy Framework.--The study conducted 
under subsection (a) shall analyze--
            (1) the energy policy of the partner country, particularly 
        the impact of such policy on the promotion of biofuels; and
            (2) the status and impacts of any existing biofuel programs 
        of the country.
    (c) Assessment of Demand.--The study conducted under subsection (a) 
shall assess, with respect to the partner country--
            (1) the quantitative and qualitative demand for energy by 
        families, villages, industries, public transportation 
        infrastructure, and other energy consumers;
            (2) the current and projected future energy consumption by 
        the heat, electricity, and transportation sectors;
            (3) the demand for high-quality transportation fuel;
            (4) the local market prices for various energy sources; and
            (5) the employment, income generation, and rural 
        development opportunities from biofuel industry.
    (d) Assessment of Resources.--The study under subsection (a) 
shall--
            (1) assess the present and future biomass resources that 
        are available in each geographic region of the participating 
        country to meet the demand assessed under subsection (c);
            (2) include a plan for increasing the availability of 
        existing biomass resources in the country; and
            (3) include a plan for developing new, sustainable biomass 
        resources in the country, including wood, manure, agricultural 
        residues, sewage, and organic waste.
    (e) Analysis of Available Technologies and Systems.--Building upon 
the results of the assessments described in subsections (c) and (d), 
the study shall--
            (1) analyze available technologies and systems for 
        utilizing biofuels in the country, including--
                    (A) technologies for the conversion of biomass 
                crops and agroforestry residues in pellets and 
                briquettes;
                    (B) low-pollution stoves;
                    (C) biogas production;
                    (D) charcoal and activated coal production;
                    (E) biofuel production;
                    (F) combustion and co-combustion technologies;
                    (G) the availability of biofuels technologies in 
                various geographic regions; and
                    (H) the economic viability of biomass technologies; 
                and
            (2) compare such technologies and systems to conventional 
        energy supplies with respect to cost-effectiveness, 
        maintenance, social acceptability, and the impact on 
        development.
    (f) Environmental Assessment.--The study under subsection (a) shall 
assess--
            (1) the likely impacts of increased biomass harvesting and 
        production, and biofuels production and use on environmental 
        sustainability, including effects on carbon emissions; and
            (2) the availability of financing from global carbon credit 
        trading mechanisms.
    (g) Food Security Assessment.--The study under subsection (a) shall 
assess the likely impacts on food stocks and prices in partner 
countries.
    (h) Development of Policy Options To Promote Biofuel Production and 
Use.--
            (1) In general.--The study under subsection (a) shall 
        identify and evaluate policy options to promote biofuel 
        production and use, after taking into account--
                    (A) the existing energy policy of the country; and
                    (B) the technologies available to convert local 
                biomass resources into biofuels.
            (2) Coordination.--In conducting the evaluation under 
        paragraph (1), the participating country shall involve local, 
        national, and international public and private institutions 
        with responsibility or expertise in biofuel production and use.
            (3) Principal issues.--The study shall address--
                    (A) potential biomass in the country and barriers 
                for the production of biofuels from such biomass 
                products;
                    (B) strategies for creating a market for biomass 
                products in the country;
                    (C) the potential contribution of biofuels in the 
                country;
                    (D) environmental sustainability issues and the 
                mitigating effect of increased biofuel production and 
                use on carbon emissions;
                    (E) the potential contribution of biofuels to 
                economic development, poverty reduction, and 
                sustainability of energy resources;
                    (F) programs for the use of biofuels in the 
                transportation sector;
                    (G) economic cooperation across international 
                borders to increase biofuel production and use;
                    (H) technology collaboration and joint ventures and 
                technological, cultural, and legal barriers that may 
                impede such technological cooperation; and
                    (I) the economic aspects of the promotion of 
                biofuels, including job creation, financing and loan 
                mechanisms, credit mobilization, investment capital, 
                and market penetration.
    (i) Authorization of Appropriations.--There are authorized to be 
appropriated $20,000,000 for fiscal year 2008 to carry out this 
section.

SEC. 7. UNITED STATES-BRAZIL BILATERAL TAX TREATY.

    The Secretary of State, in coordination with the Secretary of the 
Treasury, shall renew negotiations on a bilateral tax treaty with 
Brazil.

SEC. 8. MULTILATERAL DEVELOPMENT BANKS.

    The Secretary of the Treasury shall inform the managements of the 
international financial institutions and the public that it is the 
policy of the United States that assistance by such institutions should 
encourage development of renewable energy sources, including energy 
derived from biomass.

SEC. 9. CARBON CREDIT TRADING MECHANISMS.

    (a) In General.--The Secretary of State shall work with interested 
governments in the Western Hemisphere and other countries to organize 
regional and hemispheric carbon trading mechanisms under the United 
Nations Framework Convention on Climate Change and existing trade and 
financial agreements to--
            (1) establish special carbon credits for the preservation 
        of tropical rain forests;
            (2) use greenhouse gas-reducing farming practices;
            (3) jointly fund greenhouse gas sequestration studies and 
        experiments in various geological formations; and
            (4) jointly fund climate mitigation studies in vulnerable 
        areas in the Western Hemisphere.
    (b) Authorization of Appropriations.--There are authorized to be 
appropriated $5,000,000 for fiscal year 2008 to carry out this section.

SEC. 10. ENERGY CRISIS RESPONSE MECHANISM.

    (a) Findings.--Congress makes the following findings:
            (1) Cooperation between the United States Government and 
        governments of other countries during energy crises promotes 
        the national security of the United States and of the 
        cooperating countries.
            (2) Credible contingency plans to respond to energy 
        shortages may serve as deterrents to the manipulation of energy 
        supplies by export and transit countries.
            (3) The vulnerability of most countries in the Western 
        Hemisphere to supply disruptions from political, natural, or 
        terrorism causes may introduce instability in the Western 
        Hemisphere and can be a source of conflict, despite the 
        existence of major energy resources in the Western Hemisphere. 
        The United States and Canada are the only members of the 
        International Energy Program in the Western Hemisphere.
            (4) Integrating countries in the Western Hemisphere into 
        regional and international agreements for the management of 
        energy emergencies will benefit market stability and encourage 
        development in participating countries.
    (b) Establishment of an Energy Crisis Response Mechanism for the 
Western Hemisphere.--
            (1) Authority.--The Secretary of State, in coordination 
        with the Secretary of Energy and the Secretary of Defense, 
        shall immediately seek to establish a Western Hemisphere energy 
        crisis response mechanism.
            (2) Scope.--The mechanism established under paragraph (1) 
        should include--
                    (A) a real-time information sharing and 
                coordinating mechanism to respond to energy supply 
                emergencies;
                    (B) technical assistance in the development and 
                management of national and regional strategic reserves 
                within the Western Hemisphere;
                    (C) technical assistance in developing national 
                programs to meet the requirements of membership in the 
                international energy application procedure described in 
                subsection (c);
                    (D) emergency demand restraint measures;
                    (E) energy switching preparedness and alternative 
                energy production capacity;
                    (F) ongoing demand intensity reduction programs; 
                and
                    (G) measures to strengthen sea lane and 
                infrastructure security.
            (3) Membership.--The Secretary shall seek to include in the 
        Western Hemisphere energy crisis response mechanism membership 
        for each major energy producer and major energy consumer in the 
        Western Hemisphere and other members of the Western Hemisphere 
        Energy Cooperation Forum established pursuant to section 4(a).
            (4) Studies.--
                    (A) Supply vulnerability study.--The Secretary of 
                Energy shall--
                            (i) conduct a study of supply 
                        vulnerabilities for natural gas in the Western 
                        Hemisphere; and
                            (ii) submit a report to Congress that 
                        includes recommendations for infrastructure and 
                        regulatory needs for reducing supply disruption 
                        vulnerability and international coordination.
                    (B) Coordination mechanism assessment.--The 
                Secretary of Energy shall assess the feasibility of 
                developing coordination mechanisms to ensure a 
                consistent supply of biofuels, especially in the event 
                of an interruption of the oil supply.
    (c) International Energy Program Application Procedure.--
            (1) Authority.--The President should place on the agenda 
        for discussion at the Governing Board of the International 
        Energy Agency, as soon as practicable, the merits of 
        establishing an international energy program application 
        procedure.
            (2) Purpose.--The purpose of the procedure described in 
        paragraph (1) is to allow countries that are not members of the 
        International Energy Program to apply to the Governing Board of 
        the International Energy Agency for allocation of petroleum 
        reserve stocks in times of emergency on a grant or loan basis. 
        Such countries should also receive technical assistance for, 
        and be subject to, conditions requiring development and 
        management of national programs for energy emergency 
        preparedness, including demand restraint, fuel switching 
        preparedness, and development of alternative fuels production 
        capacity.
    (d) Authorization of Appropriations.--There are authorized to be 
appropriated $5,000,000 for fiscal year 2008 to carry out this section.

SEC. 11. ENERGY FOREIGN ASSISTANCE.

    (a) In General.--The Administrator of the United States Agency for 
International Development (referred to in this section as the 
``Administrator'') shall seek to increase United States foreign 
assistance programming in renewable energy, including in activities to 
reduce energy import dependence through the use of biofuels.
    (b) Development Strategy Review.--The Administrator shall review 
country assistance strategies to increase assistance for renewable 
energy activities. Results of this review shall be reported to Congress 
no later than 180 days following passage of this act.
    (c) Expedited Sustainable Energy Grants.--
            (1) Authorization.--The Administrator is authorized to 
        award grants to nongovernmental organizations for sustainable 
        energy and job creation projects in at-risk nations, such as 
        Haiti. Grant funds shall be provided to grantees on an 
        expedited basis upon approval of the eligible project.
            (2) Authorization of appropriations.--There are authorized 
        to be appropriated $5,000,000 to the United States Agency for 
        International Development for grants under this subsection.

SEC. 12. ENERGY PUBLIC DIPLOMACY.

    (a) Authorization of Appropriations.--There are authorized to be 
appropriated $5,000,000 to the Department of State for public education 
activities on renewable energy in the Western Hemisphere.
    (b) Limitation.--Not less than 50 percent of any amount 
appropriated pursuant to paragraph (1) shall be used for education 
activities implemented through civil society organizations.

SEC. 13. ENERGY TRADE.

    (a) Findings.--Congress makes the following findings:
            (1) It is the policy of the United States to promote free 
        trade in energy among countries in the Western Hemisphere, 
        which would--
                    (A) help support a growing energy industry;
                    (B) create jobs that benefit development and 
                alleviate poverty;
                    (C) increase energy security through supply 
                diversification; and
                    (D) strengthen relations among countries in the 
                Western Hemisphere through closer cooperation and 
                understanding.
            (2) Several countries in the Western Hemisphere, including 
        the United States, have protective tariffs and duties that 
        limit the benefits that would accrue from free trade in energy. 
        The United States Government should work with foreign 
        governments to remove trade barriers in energy.
            (3) The United States should implement a plan to open its 
        markets to trade in biofuels. This plan should--
                    (A) encourage expanded investment and innovation in 
                the biofuels industry in the United States; and
                    (B) revise Federal incentives for the domestic 
                production of biofuels so they do not finance biofuels 
                investment abroad.
    (b) Ethanol Tariff Study.--The Secretary of Commerce, in 
cooperation with the Secretary of State, shall conduct a study that 
evaluates--
            (1) tariffs, duties, and other restrictions on trade in 
        biofuels in the Western Hemisphere, including the United 
        States;
            (2) the economic impacts resulting from the restrictions 
        referred to in paragraph (1);
            (3) the impacts on United States foreign policy resulting 
        from the restrictions referred to in paragraph (1);
            (4) the effect of restrictions referred to in paragraph (1) 
        on United States obligations to the World Trade Organization;
            (5) the probable impacts on the economy and biofuels 
        industry of the United States of--
                    (A) removing all duties and tariffs on biofuels 
                imports, beginning on January 1, 2009;
                    (B) removing all duties and tariffs on biofuels 
                imports and making various revisions to the tax credits 
                for ethanol production in the United States, including 
                shifting the blend credit to be a producers credit and 
                replacement of the current credit with a variable 
                credit scheme;
                    (C) removing all duties and tariffs and increasing 
                the renewable fuels standard mandate to 30,000,000,000 
                gallons by 2020 and 60,000,000,000 gallons by 2030, 
                including extending the renewable fuels standard, with 
                revisions favoring the use of next generation biofuels 
                and domestic production; and
                    (D) gradually removing the duties and tariffs over 
                a 5- and 10-year period; and
            (6) the probable impacts of removing United States tariffs 
        and duties under the conditions described in paragraph (5) on 
        biofuels production, economic development, and poverty 
        alleviation in countries in the Western Hemisphere.
    (c) Ethanol Quotas.--The Secretary of Commerce shall conduct a 
study examining the likely impacts and feasibility of--
            (1) introducing a new, duty-free quota for biofuels that is 
        imported from countries receiving normal trade relations 
        treatment from the United States that is equal to 15 percent of 
        the biofuels consumed annually in the United States;
            (2) increasing the quota in ethanol imports to the United 
        States from 7 percent to 15 percent over the next several years 
        and expanding the scope of the quota beyond countries 
        participating in the Caribbean Basin Initiative to other least 
        developed countries and to all countries who have received a 
        Millennium Challenge grant; and
            (3) creating a separate quota for any other country 
        receiving normal trade relations treatment from the United 
        States.

SEC. 14. WESTERN HEMISPHERE HYDROCARBON PRODUCTION.

    (a) Study Partnership With Mexico.--The Secretary of Energy shall 
seek to work with the Government of Mexico to conduct a technical 
analysis of the status of Mexican oil and gas production, future 
technological and investment needs, and recommendations for maintaining 
and increasing hydrocarbon production consistent with the priorities of 
the Government of Mexico.
    (b) Natural Gas Study.--
            (1) Study.--The Secretary of Commerce, in consultation with 
        the Secretary of Energy, shall conduct a study of--
                    (A) the current state of natural gas production in 
                the Western Hemisphere; and
                    (B) future natural gas demand and supply 
                projections.
            (2) Report.--The Secretary of Commerce shall submit a 
        report to Congress that contains recommendations for the 
        integration of the natural gas sector, including developing a 
        liquefied natural gas infrastructure.
    (c) Authorization of Appropriations.--There are authorized to be 
appropriated $1,000,000 for fiscal year 2008 to carry out this section.

SEC. 15. REPORT.

    The Secretary of State, in consultation with the Secretary of 
Energy, shall submit an annual report to Congress on the activities 
carried out to implement this Act.
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