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[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 1443 Introduced in Senate (IS)]

110th CONGRESS
  1st Session
                                S. 1443

    To provide standards for renewable fuels and coal-derived fuels.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                              May 21, 2007

Mr. Thomas (for himself and Mr. Bunning) introduced the following bill; 
   which was read twice and referred to the Committee on Energy and 
                           Natural Resources

_______________________________________________________________________

                                 A BILL

 
    To provide standards for renewable fuels and coal-derived fuels.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Clean, Affordable, and Domestic 
Fuels for Energy Security Act of 2007''.

SEC. 2. DEFINITIONS.

    In this Act:
            (1) Advanced biofuel.--
                    (A) In general.--The term ``advanced biofuel'' 
                means fuel derived from renewable biomass other than 
                corn starch.
                    (B) Inclusions.--The term ``advanced biofuel'' 
                includes--
                            (i) ethanol derived from cellulose, 
                        hemicellulose, or lignin;
                            (ii) ethanol derived from sugar or starch, 
                        other than ethanol derived from corn starch;
                            (iii) ethanol derived from waste material, 
                        including crop residue, other vegetative waste 
                        material, animal waste, and food waste and yard 
                        waste;
                            (iv) diesel-equivalent fuel derived from 
                        renewable biomass, including vegetable oil and 
                        animal fat;
                            (v) biogas produced through the conversion 
                        of organic matter from renewable biomass; and
                            (vi) butanol or higher alcohols produced 
                        through the conversion of organic matter from 
                        renewable biomass.
            (2) Coal-derived fuel.--The term ``coal-derived fuel'' 
        means fuel derived from coal that is--
                    (A) extracted by mining or in-situ methods in the 
                United States; and
                    (B) refined or otherwise processed at facilities 
                located in the United States that are capable of 
                capturing carbon dioxide emissions.
            (3) Conventional biofuel.--The term ``conventional 
        biofuel'' means ethanol derived from corn starch.
            (4) Covered fuel.--The term ``covered fuel'' means--
                    (A) aviation fuel;
                    (B) motor vehicle fuel;
                    (C) home heating oil; and
                    (D) boiler fuel.
            (5) Greenhouse gas.--The term ``greenhouse gas'' means any 
        of--
                    (A) carbon dioxide;
                    (B) methane;
                    (C) nitrous oxide;
                    (D) hydrofluorocarbons;
                    (E) perfluorocarbons; and
                    (F) sulfur hexafluoride.
            (6) Greenhouse gas emission standard.--The term 
        ``greenhouse gas emission standard'' means a comprehensive 
        measurement of the level of greenhouse gases emitted by a fuel, 
        as calculated during the period beginning with the acquisition 
        of feedstock by a refinery, blender, or importer of the fuel 
        and continuing through manufacture, transportation, and use of 
        the fuel in a motor vehicle, aircraft, boiler, or furnace.
            (7) Renewable biomass.--The term ``renewable biomass'' 
        means--
                    (A) biomass (as defined by section 210 of the 
                Energy Policy Act of 2005 (42 U.S.C. 15855)) that is 
                harvested where permitted by law and in accordance with 
                applicable land management plans from--
                            (i) National Forest System land; or
                            (ii) public lands (as defined in section 
                        103 of the Federal Land Policy and Management 
                        Act of 1976 (43 U.S.C. 1702)); or
                    (B) any organic matter that is available on a 
                renewable or recurring basis from non-Federal land or 
                from land belonging to an Indian tribe, or an Indian 
                individual, that is held in trust by the United States 
                or subject to a restriction against alienation imposed 
                by the United States, including--
                            (i) renewable plant material, including--
                                    (I) feed grains;
                                    (II) other agricultural 
                                commodities;
                                    (III) other plants and trees; and
                                    (IV) algae; and
                            (ii) waste material, including--
                                    (I) crop residue;
                                    (II) other vegetative waste 
                                material (including wood waste and wood 
                                residues);
                                    (III) animal waste and byproducts 
                                (including fats, oils, greases, and 
                                manure); and
                                    (IV) food waste and yard waste.
            (8) Renewable fuel.--
                    (A) In general.--The term ``renewable fuel'' means 
                motor vehicle fuel, boiler fuel, or home heating fuel 
                that is--
                            (i) produced from renewable biomass; and
                            (ii) used to replace or reduce the quantity 
                        of fossil fuel present in a fuel or fuel 
                        mixture used to operate a motor vehicle, 
                        boiler, or furnace.
                    (B) Inclusion.--The term ``renewable fuel'' 
                includes--
                            (i) conventional biofuel; and
                            (ii) advanced biofuel.
            (9) Secretary.--The term ``Secretary'' means the Secretary 
        of Energy.
            (10) Small refinery.--The term ``small refinery'' means a 
        refinery for which the average aggregate daily crude oil 
        throughput for a calendar year (as determined by dividing the 
        aggregate throughput for the calendar year by the number of 
        days in the calendar year) does not exceed 75,000 barrels.

SEC. 3. CLEAN, AFFORDABLE, AND DOMESTIC FUEL PROGRAM.

    (a) Program.--
            (1) In general.--Not later than 1 year after the date of 
        enactment of this Act, the President shall promulgate 
        regulations to ensure that covered fuel sold or introduced into 
        commerce in the United States (except in noncontiguous States 
        or territories), on an annual average basis, contains the 
        applicable volume of coal-derived fuel determined in accordance 
        with paragraph (4).
            (2) Provisions of regulations.--Regardless of the date of 
        promulgation, the regulations promulgated under paragraph (1)--
                    (A) shall contain compliance provisions applicable 
                to refineries, blenders, distributors, and importers, 
                as appropriate, to ensure that the requirements of this 
                subsection are met; but
                    (B) shall not--
                            (i) restrict geographic areas in the 
                        contiguous United States in which coal-derived 
                        fuel may be used; or
                            (ii) impose any per-gallon obligation for 
                        the use of coal-derived fuel.
            (3) Greenhouse gas emission standard.--
                    (A) Limitation.--No coal-derived fuel shall be 
                included in the applicable volume established under 
                paragraph (4), or satisfy the coal-derived fuel 
                obligation for refineries, blenders, and importers 
                under subsection (b)(2)(B), unless the coal-derived 
                fuel meets the greenhouse gas emissions level 
                requirement for coal-derived fuel under subparagraph 
                (C).
                    (B) Reduction of greenhouse gas emissions level.--
                The greenhouse gas emissions level shall be reduced by 
                the sum of, as applicable--
                            (i) the quantity of greenhouse gases 
                        absorbed in the production of any renewable 
                        biomass used in the production of the coal-
                        derived fuel; and
                            (ii) the quantity of greenhouse gases 
                        produced during the production of the coal-
                        derived fuel that are sequestered.
                    (C) Greenhouse gas emissions level of coal-derived 
                fuel.--
                            (i) In general.--The greenhouse gas 
                        emissions level for coal-derived fuel, as 
                        adjusted under clause (ii), shall not exceed 
                        the greenhouse gas emissions level for the same 
                        quantity of covered fuel, as applicable.
                            (ii) Adjustment.--The greenhouse gas 
                        emissions level for coal-derived fuel shall be 
                        adjusted by the product of--
                                    (I) the greenhouse gas emissions 
                                level; and
                                    (II) the ratio that--
                                            (aa) the number of British 
                                        thermal units of energy 
                                        produced by the combustion of 1 
                                        gallon of covered fuel, as 
                                        applicable (as measured under 
                                        conditions determined by the 
                                        Secretary); bears to
                                            (bb) the number of British 
                                        thermal units of energy 
                                        produced by the combustion of 1 
                                        gallon of the coal-derived fuel 
                                        (as measured under conditions 
                                        determined by the Secretary to 
                                        be comparable to conditions for 
                                        measuring the energy produced 
                                        by covered fuel, as 
                                        applicable).
                    (D) Fuel production emissions level of covered 
                fuels.--The greenhouse gas emissions level of covered 
                fuel, as applicable, shall be based on fuels that do 
                not contain renewable fuels.
            (4) Applicable volume.--
                    (A) Calendar years 2016 through 2022.--For the 
                purpose of this subsection, the applicable volume for 
                any of calendar years 2016 through 2022 shall be 
                determined in accordance with the following table:

                                     Applicable volume of coal-derived 
                                                                  fuels
Calendar year:                                (in billions of gallons):
    2016..........................................                 3.0 
    2017..........................................                 6.0 
    2018..........................................                 9.0 
    2019..........................................                12.0 
    2020..........................................                15.0 
    2021..........................................                18.0 
    2022..........................................                21.0.
                    (B) Calendar year 2023 and thereafter.--Subject to 
                subparagraph (C), for the purposes of this subsection, 
                the applicable volume for calendar year 2023 and each 
                calendar year thereafter shall be determined by the 
                President, in coordination with the Secretary and the 
                Administrator of the Environmental Protection Agency, 
                based on a review of the implementation of the program 
                during calendar years 2016 through 2022, including a 
                review of--
                            (i) the impact of coal-derived fuels on the 
                        energy security of the United States;
                            (ii) the expected annual rate of future 
                        production of coal-derived fuels; and
                            (iii) the impact of the use of coal-derived 
                        fuels on other factors, including job creation, 
                        rural economic development, and the 
                        environment.
                    (C) Minimum applicable volume.--For the purpose of 
                this subsection, the applicable volume for calendar 
                year 2023 and each calendar year thereafter shall be 
                equal to the product obtained by multiplying--
                            (i) the number of gallons of covered fuel 
                        that the President estimates will be sold or 
                        introduced into commerce in the calendar year; 
                        and
                            (ii) the ratio that--
                                    (I) 21,000,000,000 gallons of coal-
                                derived fuel; bears to
                                    (II) the number of gallons of 
                                covered fuel sold or introduced into 
                                commerce in calendar year 2022.
    (b) Applicable Percentages.--
            (1) Provision of estimate of volumes of certain fuel 
        sales.--Not later than October 31 of each of calendar years 
        2016 through 2021, the Administrator of the Energy Information 
        Administration shall provide to the President an estimate, with 
        respect to the following calendar year, of the volumes of 
        covered fuel projected to be sold or introduced into commerce 
        in the United States.
            (2) Determination of applicable percentages.--
                    (A) In general.--Not later than November 30 of each 
                of calendar years 2016 through 2022, based on the 
                estimate provided under paragraph (1), the President 
                shall determine and publish in the Federal Register, 
                with respect to the following calendar year, the coal-
                derived fuel obligation that ensures that the 
                requirements of subsection (a) are met.
                    (B) Required elements.--The coal-derived fuel 
                obligation determined for a calendar year under 
                subparagraph (A) shall--
                            (i) be applicable to refineries, blenders, 
                        and importers, as appropriate;
                            (ii) be expressed in terms of a volume 
                        percentage of covered fuel sold or introduced 
                        into commerce in the United States; and
                            (iii) subject to paragraph (3)(A), consist 
                        of a single applicable percentage that applies 
                        to all categories of persons specified in 
                        clause (i).
            (3) Adjustments.--In determining the applicable percentage 
        for a calendar year, the President shall make adjustments--
                    (A) to prevent the imposition of redundant 
                obligations on any person specified in paragraph 
                (2)(B)(i); and
                    (B) to account for the use of coal-derived fuel 
                during the previous calendar year by small refineries 
                that are exempt under subsection (f).
    (c) Volume Conversion Factors for Coal-Derived Fuels Based on 
Energy Content.--
            (1) In general.--For the purpose of subsection (a), the 
        President shall assign values to specific types of coal-derived 
        fuel for the purpose of satisfying the fuel volume requirements 
        of subsection (a)(4) in accordance with this subsection.
            (2) Energy content relative to diesel fuel.--For coal-
        derived fuels, 1 gallon of the coal-derived fuel shall be 
        considered to be the equivalent of 1 gallon of diesel fuel 
        multiplied by the ratio that--
                    (A) the number of British thermal units of energy 
                produced by the combustion of 1 gallon of the coal-
                derived fuel (as measured under conditions determined 
                by the Secretary); bears to
                    (B) the number of British thermal units of energy 
                produced by the combustion of 1 gallon of diesel fuel 
                (as measured under conditions determined by the 
                Secretary to be comparable to conditions described in 
                subparagraph (A)).
    (d) Credit Program.--
            (1) In general.--The President, in consultation with the 
        Secretary and the Administrator of the Environmental Protection 
        Agency, shall implement a credit program to manage the coal-
        derived fuel requirement of this section.
            (2) Market transparency.--In carrying out the credit 
        program under this subsection, the President shall facilitate 
        price transparency in markets for the sale and trade of 
        credits, with due regard for the public interest, the integrity 
        of those markets, fair competition, and the protection of 
        consumers.
    (e) Waivers.--
            (1) In general.--The President, in consultation with the 
        Secretary and the Administrator of the Environmental Protection 
        Agency, may waive the requirements of subsection (a) in whole 
        or in part on petition by 1 or more States by reducing the 
        national quantity of coal-derived fuel required under 
        subsection (a), based on a determination by the President 
        (after public notice and opportunity for comment), that--
                    (A) implementation of the requirement would 
                severely harm the economy or environment of a State, a 
                region, or the United States; or
                    (B) extreme and unusual circumstances exist that 
                prevent distribution of an adequate supply of 
                domestically-produced coal-derived fuel to consumers in 
                the United States.
            (2) Petitions for waivers.--The President, in consultation 
        with the Secretary and the Administrator of the Environmental 
        Protection Agency, shall approve or disapprove a State petition 
        for a waiver of the requirements of subsection (a) within 90 
        days after the date on which the petition is received by the 
        President.
            (3) Termination of waivers.--A waiver granted under 
        paragraph (1) shall terminate after 1 year, but may be renewed 
        by the President after consultation with the Secretary and the 
        Administrator of the Environmental Protection Agency.
    (f) Small Refineries.--
            (1) Temporary exemption.--
                    (A) In general.--The requirements of subsection (a) 
                shall not apply to small refineries until calendar year 
                2018.
                    (B) Extension of exemption.--
                            (i) Study by secretary.--Not later than 
                        December 31, 2013, the Secretary shall submit 
                        to the President and Congress a report 
                        describing the results of a study to determine 
                        whether compliance with the requirements of 
                        subsection (a) would impose a disproportionate 
                        economic hardship on small refineries.
                            (ii) Extension of exemption.--In the case 
                        of a small refinery that the Secretary 
                        determines under clause (i) would be subject to 
                        a disproportionate economic hardship if 
                        required to comply with subsection (a), the 
                        President shall extend the exemption under 
                        subparagraph (A) for the small refinery for a 
                        period of not less than 2 additional years.
            (2) Petitions based on disproportionate economic 
        hardship.--
                    (A) Extension of exemption.--A small refinery may 
                at any time petition the President for an extension of 
                the exemption under paragraph (1) for the reason of 
                disproportionate economic hardship.
                    (B) Evaluation of petitions.--In evaluating a 
                petition under subparagraph (A), the President, in 
                consultation with the Secretary, shall consider the 
                findings of the study under paragraph (1)(B) and other 
                economic factors.
                    (C) Deadline for action on petitions.--The 
                President shall act on any petition submitted by a 
                small refinery for a hardship exemption not later than 
                90 days after the date of receipt of the petition.
            (3) Opt-in for small refineries.--A small refinery shall be 
        subject to the requirements of subsection (a) if the small 
        refinery notifies the President that the small refinery waives 
        the exemption under paragraph (1).
    (g) Penalties and Enforcement.--
            (1) Civil penalties.--
                    (A) In general.--Any person that violates a 
                regulation promulgated under subsection (a), or that 
                fails to furnish any information required under such a 
                regulation, shall be liable to the United States for a 
                civil penalty of not more than the total of--
                            (i) $25,000 for each day of the violation; 
                        and
                            (ii) the amount of economic benefit or 
                        savings received by the person resulting from 
                        the violation, as determined by the President.
                    (B) Collection.--Civil penalties under subparagraph 
                (A) shall be assessed by, and collected in a civil 
                action brought by, the Secretary or such other officer 
                of the United States as is designated by the President.
            (2) Injunctive authority.--
                    (A) In general.--The district courts of the United 
                States shall have jurisdiction to--
                            (i) restrain a violation of a regulation 
                        promulgated under subsection (a);
                            (ii) award other appropriate relief; and
                            (iii) compel the furnishing of information 
                        required under the regulation.
                    (B) Actions.--An action to restrain such violations 
                and compel such actions shall be brought by and in the 
                name of the United States.
                    (C) Subpoenas.--In the action, a subpoena for a 
                witness who is required to attend a district court in 
                any district may apply in any other district.
    (h) Effective Date.--Except as otherwise specifically provided in 
this section, this section takes effect on January 1, 2016.

SEC. 4. LOAN GUARANTEES FOR COAL-DERIVED FUEL FACILITIES.

    (a) In General.--Section 1703 of the Energy Policy Act of 2005 (42 
U.S.C. 16513) is amended by adding at the end the following:
    ``(f) Coal-Derived Fuel Facilities.--
            ``(1) In general.--The Secretary may make guarantees under 
        this title for projects that produce coal-derived fuel (as 
        defined in section 2 of the Clean, Affordable, and Domestic 
        Fuels for Energy Security Act of 2007).
            ``(2) Requirements.--A project under this subsection shall 
        employ new or significantly improved technologies for the 
        production of coal-derived fuels as compared to commercial 
        technologies in service in the United States at the time that 
        the guarantee is issued.
            ``(3) Issuance of first loan guarantees.--Section 20320(b) 
        of division B of the Continuing Appropriations Resolution, 2007 
        (42 U.S.C. 16515(b)) shall not apply to the first 6 guarantees 
        issued under this subsection.
            ``(4) Maximum guaranteed principal.--The total principal 
        amount of a loan guaranteed under this subsection may not 
        exceed $250,000,000 for a single facility.
            ``(5) Amount of guarantee.--The Secretary shall guarantee 
        100 percent of the principal and interest due on 1 or more 
        loans made for a facility that is the subject of the guarantee 
        under this subsection.
            ``(6) Deadline.--The Secretary shall approve or disapprove 
        an application for a guarantee under this subsection not later 
        than 90 days after the date of receipt of the application.
            ``(7) Report.--Not later than 30 days after approving or 
        disapproving an application under this subsection, the 
        Secretary shall submit to Congress a report on the approval or 
        disapproval (including the reasons for the action).''.
    (b) Improvements to Underlying Loan Guarantee Authority.--
            (1) Definition of commercial technology.--Section 1701(1) 
        of the Energy Policy Act of 2005 (42 U.S.C. 16511(1)) is 
        amended by striking subparagraph (B) and inserting the 
        following:
                    ``(B) Exclusion.--The term `commercial technology' 
                does not include a technology if the sole use of the 
                technology is in connection with--
                            ``(i) a demonstration plant; or
                            ``(ii) a project for which the Secretary 
                        approved a loan guarantee.''.
            (2) Specific appropriation or contribution.--Section 1702 
        of the Energy Policy Act of 2005 (42 U.S.C. 16512) is amended 
        by striking subsection (b) and inserting the following:
    ``(b) Specific Appropriation or Contribution.--
            ``(1) In general.--No guarantee shall be made unless--
                    ``(A) an appropriation for the cost has been made; 
                or
                    ``(B) the Secretary has received from the borrower 
                a payment in full for the cost of the obligation and 
                deposited the payment into the Treasury.
            ``(2) Limitation.--The source of payments received from a 
        borrower under paragraph (1)(B) shall not be a loan or other 
        debt obligation that is made or guaranteed by the Federal 
        Government.
            ``(3) Relation to other laws.--Section 504(b) of the 
        Federal Credit Reform Act of 1990 (2 U.S.C. 661c(b)) shall not 
        apply to a loan or loan guarantee made in accordance with 
        paragraph (1)(B).''.
            (3) Amount.--Section 1702 of the Energy Policy Act of 2005 
        (42 U.S.C. 16512) is amended by striking subsection (c) and 
        inserting the following:
    ``(c) Amount.--
            ``(1) In general.--Subject to paragraph (2), the Secretary 
        shall guarantee up to 100 percent of the principal and interest 
        due on 1 or more loans for a facility that are the subject of 
        the guarantee.
            ``(2) Limitation.--The total amount of loans guaranteed for 
        a facility by the Secretary shall not exceed 80 percent of the 
        total cost of the facility, as estimated at the time at which 
        the guarantee is issued.''.
            (4) Subrogation.--Section 1702(g)(2) of the Energy Policy 
        Act of 2005 (42 U.S.C. 16512(g)(2)) is amended--
                    (A) by striking subparagraph (B); and
                    (B) by redesignating subparagraph (C) as 
                subparagraph (B).
            (5) Fees.--Section 1702(h) of the Energy Policy Act of 2005 
        (42 U.S.C. 16512(h)) is amended by striking paragraph (2) and 
        inserting the following:
            ``(2) Availability.--Fees collected under this subsection 
        shall--
                    ``(A) be deposited by the Secretary into a special 
                fund in the Treasury to be known as the `Incentives For 
                Innovative Technologies Fund'; and
                    ``(B) remain available to the Secretary for 
                expenditure, without further appropriation or fiscal 
                year limitation, for administrative expenses incurred 
                in carrying out this title.''.

SEC. 5. COAL RESEARCH AND DEVELOPMENT.

    Section 961 of the Energy Policy Act of 2005 (42 U.S.C. 16291) is 
amended--
            (1) in subsection (b)--
                    (A) in paragraph (2), by striking ``$626,000,000'' 
                and inserting ``$627,000,000''; and
                    (B) in paragraph (3), by striking ``$641,000,000'' 
                and inserting ``$645,000,000''; and
            (2) in subsection (c)(1)--
                    (A) in subparagraph (B), by striking 
                ``$376,000,000'' and inserting ``$377,000,000''; and
                    (B) in subparagraph (C), by striking 
                ``$394,000,000'' and inserting ``$398,000,000''.

SEC. 6. COAL CENTERS FOR TRANSPORTATION SECTOR RESEARCH.

    Section 962 of the Energy Policy Act of 2005 (42 U.S.C. 16292) is 
amended by adding at the end the following:
    ``(e) Coal Research Centers.--
            ``(1) Establishment.--The Secretary shall establish at 
        least 7 coal research centers to conduct research on 
        transportation fuels, with an emphasis on research on the 
        technologies and procedures described in paragraphs (2), (5), 
        (6), (7), (9), (10), and (11) of subsection (a).
            ``(2) Location.--At least 1 coal research center authorized 
        under paragraph (1) shall be established in each of the 
        following States:
                    ``(A) Colorado.
                    ``(B) Kentucky.
                    ``(C) Montana.
                    ``(D) North Dakota.
                    ``(E) Pennsylvania.
                    ``(F) West Virginia.
                    ``(G) Wyoming.''.

SEC. 7. STUDY OF DEFENSE DEPARTMENT PROCUREMENT OF COAL-DERIVED FUELS.

    (a) In General.--The Secretary, in consultation with the Secretary 
of Defense and private sector stakeholders, shall conduct a 
comprehensive feasibility study of developing a domestic coal-derived 
fuels industry, including an analysis of the national security 
benefits.
    (b) Factors for Consideration.--In conducting the study under 
subsection (a), the Secretary shall take into consideration--
            (1) the existing authority of the Secretary of Defense to 
        procure coal-derived fuels; and
            (2) the estimated future authority of the Secretary of 
        Defense to enter into long-term contracts with private entities 
        or other entities to purchase coal-derived fuel or to develop 
        or operate coal-derived fuel facilities on or near military 
        installations, based on--
                    (A)(i) the availability of land and testing 
                opportunities; and
                    (ii) the proximity to raw materials;
                    (B) a contract term of not more than 25 years;
                    (C) the authority to purchase coal-derived fuels at 
                fixed prices above, at, or below comparable market 
                prices of fuel during the term of the contract;
                    (D)(i) the corresponding budgetary impact of the 
                long-term contracts; and
                    (ii) alternative methods for accounting for the 
                contracts; and
                    (E) any legislative, administrative, or other 
                actions that could decrease obstacles to the use of 
                long-term contracts.
    (c) Report.--Not later than 90 days after the date of enactment of 
this Act, the Secretary, in consultation with the Secretary of Defense 
and private sector stakeholders, shall submit to Congress a report 
describing the results of the study conducted under subsection (a).
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