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[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 1324 Introduced in Senate (IS)]

110th CONGRESS
  1st Session
                                 S.1324

  To amend the Clean Air Act to reduce greenhouse gas emissions from 
             transportation fuel sold in the United States.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                              May 7, 2007

 Mr. Reid (for Mr. Obama (for himself and Mr. Harkin)) introduced the 
 following bill; which was read twice and referred to the Committee on 
                      Environment and Public Works

_______________________________________________________________________

                                 A BILL

 
  To amend the Clean Air Act to reduce greenhouse gas emissions from 
             transportation fuel sold in the United States.

    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 ``National Low-Carbon Fuel Standard 
Act of 2007''.

SEC. 2. FINDINGS.

    Congress finds that--
            (1) the dependence of the United States on imported oil 
        imposes tremendous burdens on the economy, foreign policy, and 
        military of the United States;
            (2) according to the Energy Information Administration, 60 
        percent of the crude oil and petroleum products consumed in the 
        United States are imported;
            (3) at a cost of approximately $75 per barrel of oil, 
        people in the United States remit more than $600,000 per minute 
        to other countries for crude oil and petroleum imports;
            (4) a significant percentage of those imports originate in 
        countries controlled by regimes that are unstable or openly 
        hostile to the interests of the United States;
            (5) dependence on oil production from those countries 
        contributes to the volatility of domestic and global markets 
        and corresponding increase in oil prices paid by consumers in 
        the United States (commonly known as a ``risk premium'');
            (6) the Energy Information Administration projects that the 
        total petroleum demand in the United States will increase by 23 
        percent between 2006 and 2026, while domestic crude oil 
        production is expected to decrease by 11 percent, resulting in 
        an anticipated 28-percent increase in petroleum imports;
            (7) absent significant action, the United States will 
        become more vulnerable to oil price increases and more 
        dependent on foreign oil;
            (8) \2/3\ of all domestic oil use occurs in the 
        transportation sector, which is 97 percent reliant on 
        petroleum-based fuels;
            (9) passenger vehicles, including light trucks under 10,000 
        pounds gross vehicle weight, represent more than 60 percent of 
        the oil used in the transportation sector;
            (10) the oil used in the transportation sector accounts for 
        approximately \1/3\ of the emissions in the United States of 
        the greenhouse gases that cause global warming;
            (11) to avoid catastrophic global warming, the United 
        States should take decisive action, in conjunction with other 
        countries, to reduce greenhouse gas emissions by 60 to 80 
        percent from 1990 levels by 2050;
            (12) transitioning the transportation sector in the United 
        States to a more efficient use of low-carbon petroleum 
        alternatives is essential both to increasing domestic energy 
        security and reducing global warming pollution, but that 
        transition must be accomplished while avoiding adverse impacts 
        on the environment; and
            (13) it is urgent, essential, and feasible to reduce 
        emissions of greenhouse gases, enhance national security by 
        reducing dependence on oil, and promote economic well-being 
        without sacrificing land, water, and air quality by enacting 
        energy policies that motivate environmental performance.

SEC. 3. RENEWABLE FUEL STANDARD.

    The table contained in section 211(o)(2)(B)(i) of the Clean Air Act 
(42 U.S.C. 7545(o)(2)(B)(i)) is amended--
            (1) in the row expressing applicable volume of renewable 
        fuel (in billions of gallons) for calendar year 2009, by 
        striking ``6.1'' and inserting ``12.0'';
            (2) in the row expressing applicable volume of renewable 
        fuel (in billions of gallons) for calendar year 2010, by 
        striking ``6.8'' and inserting ``13.0'';
            (3) in the row expressing applicable volume of renewable 
        fuel (in billions of gallons) for calendar year 2011, by 
        striking ``7.4'' and inserting ``14.0''; and
            (4) in the row expressing applicable volume of renewable 
        fuel (in billions of gallons) for calendar year 2012, by 
        striking ``7.5'' and inserting ``15.0''.

SEC. 4. NATIONAL LOW-CARBON FUEL STANDARD.

    (a) Definitions.--Section 241 of the Clean Air Act (42 U.S.C. 7581) 
is amended--
            (1) by striking ``For purposes of this part--'' and 
        inserting ``In this part:'';
            (2) by redesignating paragraphs (1), (2), (3), (4), (5), 
        (6), and (7) as paragraphs (12), (2), (10), (1), (4), (5), and 
        (3), respectively, and moving those paragraphs so as to appear 
        in numerical order;
            (3) by inserting after paragraph (5) (as redesignated by 
        paragraph (2)) the following:
            ``(6) Fuel emission baseline.--The term `fuel emission 
        baseline' means the average lifecycle greenhouse gas emissions 
        per unit of energy of the average of conventional 
        transportation fuels in commerce in the United States during 
        the period of calendar years 2005 through 2007.
            ``(7) 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.
            ``(8) Lifecycle greenhouse gas emissions.--The term 
        `lifecycle greenhouse gas emissions' means, with respect to a 
        fuel, the aggregate quantity of greenhouse gases emitted during 
        production, feedstock extraction, distribution, and use of the 
        fuel, as determined by the Administrator.
            ``(9) Low-carbon fuel.--
                    ``(A) In general.--The term `low-carbon fuel' means 
                fuel produced, to the maximum extent practicable, in 
                the United States--
                            ``(i) that meets the requirements of an 
                        appropriate American Society for Testing and 
                        Materials standard; and
                            ``(ii) the lifecycle greenhouse gas 
                        emissions of which are lower than the fuel 
                        emission baseline, as determined by the 
                        Administrator.
                    ``(B) Exclusions.--The term `low-carbon fuel' does 
                not include fuel produced from biomass derived from--
                            ``(i) designated national interest land 
                        (such as land included in a national wildlife 
                        refuge, national park, national monument, 
                        national forest, or national grassland); or
                            ``(ii) any--
                                    ``(I) old-growth forest;
                                    ``(II) roadless area within a 
                                national forest;
                                    ``(III) wilderness study area;
                                    ``(IV) protected native grassland; 
                                or
                                    ``(V) lawfully designated intact, 
                                rare, threatened, or endangered 
                                ecosystem.''; and
            (4) by inserting after paragraph (10) (as redesignated by 
        paragraph (2)) the following:
            ``(11) Obligated party.--
                    ``(A) In general.--The term `obligated party' means 
                an obligated party as described in section 80.1106 of 
                title 40, Code of Federal Regulations (or a successor 
                regulation).
                    ``(B) Related term.--The term `any and all of the 
                products', when used with respect to an obligated 
                party, means diesel and aviation fuel to be included in 
                the volume used to calculate the requirements 
                applicable to the obligated party under section 250.''.
    (b) National Low-Carbon Fuel Standard.--Part C of title II of the 
Clean Air Act (42 U.S.C. 7581 et seq.) is amended--
            (1) by redesignating section 250 (42 U.S.C. 7590) as 
        section 251; and
            (2) by inserting after section 249 (42 U.S.C. 7589) the 
        following:

``SEC. 250. NATIONAL LOW-CARBON FUEL STANDARD.

    ``(a) In General.--Not later than January 1, 2009, the 
Administrator shall, by regulation--
            ``(1) establish a fuel emission baseline based on the 
        average lifecycle greenhouse gas emissions per unit of energy 
        of the average of conventional transportation fuels in commerce 
        in the United States during the period of calendar years 2005 
        through 2007;
            ``(2) identify qualifying low-carbon transportation fuels 
        based on--
                    ``(A) whether the lifecycle greenhouse gas 
                emissions of a fuel are lower, per unit of energy 
                delivered by use of a specific quantity of the fuel, 
                than the fuel emission baseline, including the 
                percentage greenhouse gas emission reduction provided 
                by the fuel to the fuel emission baseline;
                    ``(B) whether a fuel--
                            ``(i) achieves a substantial reduction in 
                        petroleum content over the lifecycle of the 
                        fuel; and
                            ``(ii) otherwise contributes to the energy 
                        security of the United States; and
                    ``(C) with respect to calculation of the lifecycle 
                greenhouse gas emissions of the fuels used in vehicles 
                that run on electricity or a hydrogen fuel, the 
                quantity of energy delivered by use of the fuel, which 
                shall be determined by calculating the product obtained 
                by multiplying--
                            ``(i) a unit of energy delivered by use of 
                        the electricity or hydrogen fuel; and
                            ``(ii) an adjustment factor determined by 
                        the Administrator to reflect the substantial 
                        lifecycle greenhouse gas benefits of using the 
                        electricity or hydrogen fuel, on a per-mile 
                        basis, resulting from reasonably anticipated 
                        energy efficiency of an average--
                                    ``(I) battery electric vehicle;
                                    ``(II) plug-in hybrid electric 
                                vehicle; or
                                    ``(III) hydrogen fuel cell vehicle; 
                                and
            ``(3) establish a low-carbon fuel certification and 
        marketing process--
                    ``(A) to certify fuels that qualify as low-carbon 
                fuels under this section;
                    ``(B) to make those certifications available to 
                consumers; and
                    ``(C) to label and market low-carbon fuels.
    ``(b) Environmental Sustainability Standards.--Not later than 
January 1, 2012, the Administrator shall also identify qualifying low-
carbon transportation fuels based on environmental sustainability 
standards established under section 211(t)(2)(B).
    ``(c) Requirements Applicable to Obligated Parties.--
            ``(1) Requirements.--
                    ``(A) Calendar years 2010 through 2024.--Not later 
                than January 1, 2010, the Administrator shall, by 
                regulation, require each obligated party to reduce, 
                through the use of low-carbon fuels and improvements in 
                the production of conventional fuels, the average 
                lifecycle greenhouse gas emissions per unit of energy 
                of the aggregate quantity of fuels introduced into 
                commerce by the obligated party to a level that is, as 
                determined by the Administrator, to the maximum extent 
                practicable--
                            ``(i) by calendar year 2011, substantially 
                        equivalent to the fuel emission baseline;
                            ``(ii) by calendar year 2015, substantially 
                        equivalent to at least 5 percent below the fuel 
                        emission baseline; and
                            ``(iii) by calendar year 2020, 
                        substantially equivalent to at least 10 percent 
                        below the fuel emission baseline.
                    ``(B) Calendar year 2025 and thereafter.--For 
                calendar year 2025, and by not later than each fifth 
                calendar year thereafter, the Administrator shall, by 
                regulation, require each obligated party to reduce the 
                average lifecycle greenhouse gas emissions per unit of 
                energy of the aggregate quantity of fuels introduced 
                into commerce by the obligated party to a level that 
                is, as determined by the Administrator, at least 13 
                percent below the fuel emission baseline (with respect 
                to calendar year 2025), and at least 2 percent below 
                the most recent percentage reduction (with respect to 
                each fifth calendar year thereafter), unless the 
                Administrator, in coordination with the Secretary of 
                Agriculture and the Secretary of Energy, establishes an 
                alternative required percentage reduction based on--
                            ``(i) a review of the implementation of 
                        this paragraph during the period of calendar 
                        years 2010 through 2020;
                            ``(ii) the expected annual rate of future 
                        production of low-carbon fuel, and Category I 
                        ultra-low carbon fuel and Category II ultra-low 
                        carbon fuel (as those terms are defined in 
                        subsection (p)); and
                            ``(iii) the practicability of complying 
                        with environmental sustainability standards 
                        referred to in subsection (b).
            ``(2) Failure to promulgate regulations.--If the 
        Administrator does not promulgate regulations in accordance 
        with this subsection, the average lifecycle greenhouse gas 
        emissions of the aggregate quantity of fuel introduced by an 
        obligated party for calendar year 2012 shall be at least 3 
        percent below the average lifecycle greenhouse gas emissions of 
        gasoline in commerce in the United States during calendar year 
        2007.
            ``(3) Temporary suspension.--An obligated party may apply 
        to the Administrator to receive a temporary suspension of the 
        requirement to comply with this subsection if the obligated 
        party demonstrates to the satisfaction of the Administrator 
        that events outside of the control of the obligated party could 
        lead or have led to supply disruptions in the transportation 
        fuel supply of the United States.
            ``(4) Enforcement; penalties.--In carrying out this 
        subsection, the Administrator--
                    ``(A) shall enforce this subsection in accordance 
                with the authority of the Administrator to enforce this 
                Act; and
                    ``(B) may commence a civil action and assess and 
                collect penalties in accordance with the amounts and 
                under the authority described in section 205.
    ``(d) Credits.--
            ``(1) In general.--The regulations promulgated to carry out 
        this section shall permit obligated parties to receive credits 
        for achieving, during a calendar year, greater reductions in 
        lifecycle greenhouse gas emissions of the fuel produced, 
        distributed, or imported by the obligated party than are 
        required under subsection (c).
            ``(2) Method of calculation.--The number of credits 
        received by an obligated party described in paragraph (1) for a 
        calendar year shall be calculated by multiplying--
                    ``(A) the aggregate quantity of fuel produced, 
                distributed, or imported by the obligated party in the 
                calendar year; and
                    ``(B) the difference between--
                            ``(i) the lifecycle greenhouse gas 
                        emissions of that quantity of fuel; and
                            ``(ii) the maximum lifecycle greenhouse gas 
                        emissions of that quantity of fuel permitted 
                        for the calendar year under subsection (c).''.

SEC. 5. ULTRA-LOW CARBON FUEL STANDARD.

    (a) In General.--Section 211 of the Clean Air Act (42 U.S.C. 7545) 
is amended--
            (1) by redesignating the first subsection (r) (relating to 
        fuel and fuel additive importers and importation) as subsection 
        (v) and moving that subsection so as to appear at the end of 
        the section; and
            (2) by inserting after subsection (o) the following:
    ``(p) Ultra-Low Carbon Fuel Standard.--
            ``(1) Definitions.--In this subsection and subsection (t):
                    ``(A) Category i ultra-low carbon fuels.--
                            ``(i) In general.--The term `Category I 
                        ultra-low carbon fuel' means fuel produced in 
                        the United States--
                                    ``(I) that meets the requirements 
                                of an appropriate American Society for 
                                Testing and Materials standard; and
                                    ``(II) the lifecycle greenhouse gas 
                                emissions of which are at least 50 
                                percent lower than the average 
                                lifecycle greenhouse gas emissions of 
                                conventional transportation fuel, as 
                                determined by the Administrator.
                            ``(ii) Exclusions.--The term `Category I 
                        ultra-low carbon fuel' does not include fuel 
                        produced from biomass derived from--
                                    ``(I) designated national interest 
                                land (such as land included in a 
                                national wildlife refuge, national 
                                park, national monument, national 
                                forest, or national grassland); or
                                    ``(II) any--
                                            ``(aa) old-growth forest;
                                            ``(bb) roadless area within 
                                        a national forest;
                                            ``(cc) wilderness study 
                                        area;
                                            ``(dd) protected native 
                                        grassland; or
                                            ``(ee) lawfully-designated 
                                        intact, rare, threatened, or 
                                        endangered ecosystem.
                    ``(B) Category ii ultra-low carbon fuel.--
                            ``(i) In general.--The term `Category II 
                        ultra-low carbon fuel' means any fuel produced 
                        in the United States--
                                    ``(I) that meets the requirements 
                                of an appropriate American Society for 
                                Testing and Materials standard; and
                                    ``(II) the average lifecycle 
                                greenhouse gas emissions of which are 
                                at least 75 percent lower than the 
                                average lifecycle greenhouse gas 
                                emissions of conventional 
                                transportation fuel, as determined by 
                                the Administrator.
                            ``(ii) Exclusions.--The term `Category II 
                        ultra-low carbon fuel' does not include fuel 
                        produced from biomass derived from--
                                    ``(I) designated national interest 
                                land (such as land included in a 
                                national wildlife refuge, national 
                                park, national monument, national 
                                forest, or national grassland); or
                                    ``(II) any--
                                            ``(aa) old-growth forest;
                                            ``(bb) roadless area within 
                                        a national forest;
                                            ``(cc) wilderness study 
                                        area;
                                            ``(dd) protected native 
                                        grassland; or
                                            ``(ee) lawfully designated 
                                        intact, rare, threatened, or 
                                        endangered ecosystem.
                    ``(C) Conventional transportation fuel.--The term 
                `conventional transportation fuel' means any fossil-
                fuel based transportation fuel used in the United 
                States as of the date of enactment of this subsection.
                    ``(D) Low-carbon fuel.--The term `low-carbon fuel' 
                has the meaning given the term in section 241.
            ``(2) Ultra-low carbon fuel.--
                    ``(A) Regulations.--
                            ``(i) In general.--Not later than 3 years 
                        after the date of enactment of this subsection, 
                        the Administrator shall promulgate regulations 
                        to ensure that fuel sold or introduced into 
                        commerce in the United States (except in 
                        noncontiguous States or territories), on an 
                        annual average basis, contains at least the 
                        applicable volume of ultra-low carbon fuel 
                        determined in accordance with subparagraph (B).
                            ``(ii) Provisions of regulations.--
                        Regardless of the date of promulgation, the 
                        regulations promulgated under clause (i)--
                                    ``(I) shall contain compliance 
                                provisions applicable to obligated 
                                parties, as appropriate, to ensure that 
                                the requirements of this paragraph are 
                                met; but
                                    ``(II) shall not--
                                            ``(aa) restrict geographic 
                                        areas in which low-carbon 
                                        transportation fuel and ultra-
                                        low carbon fuel may be used; or
                                            ``(bb) impose any per-
                                        gallon obligation for the use 
                                        of those fuels.
                    ``(B) Applicable volume.--
                            ``(i) Calendar years 2012 through 2025.--
                        For the purpose of subparagraph (A), the 
                        applicable volume of Category I ultra-low 
                        carbon fuel and Category II ultra-low carbon 
                        fuel for any of calendar years 2012 through 
                        2025 shall be determined in accordance with the 
                        following table:

------------------------------------------------------------------------
                         Total applicable volume     Total applicable
                         of Category I ultra-low   volume of Category II
     Calendar Year        carbon fuel (billions    ultra-low carbon fuel
                               of gallons)         (billions of gallons)
------------------------------------------------------------------------
2012                     0.5                      0.25
2014                     1.5                      0.75
2016                     3.0                      1.5
2018                     5.0                      2.5
2020                     8.0                      4.0
2022                     11.0                     6.0
2025                     13.0                     8.0
------------------------------------------------------------------------

                            ``(ii) Calendar year 2026 and thereafter.--
                        Subject to clause (iii), the applicable volume 
                        for calendar year 2026 and each calendar year 
                        thereafter shall be determined by the 
                        Administrator, in coordination with the 
                        Secretary of Agriculture and the Secretary of 
                        Energy, based on a review of the implementation 
                        of the program under this subsection during the 
                        period of calendar years 2012 through 2025, 
                        including a review of--
                                    ``(I) the impact of the use of 
                                Category I ultra-low carbon fuel and 
                                Category II ultra-low carbon fuel on--
                                            ``(aa) environmental 
                                        sustainability standards 
                                        established under subsection 
                                        (t)(2)(B);
                                            ``(bb) energy security; and
                                            ``(cc) job creation; and
                                    ``(II) the expected annual rate of 
                                future production of those fuels for 
                                use as blending components or 
                                replacements for a certain quantity of 
                                conventional fuel in the United States.
                            ``(iii) Minimum applicable volume.--For the 
                        purpose of subparagraph (A), the applicable 
                        volume for calendar year 2026 and each calendar 
                        year thereafter shall be equal to the product 
                        obtained by multiplying--
                                    ``(I) the number of gallons of 
                                conventional transportation fuel that 
                                the Administrator estimates will be 
                                sold or introduced into commerce during 
                                the calendar year; and
                                    ``(II) the ratio that--
                                            ``(aa) for the applicable 
                                        volume of Category I ultra-low 
                                        carbon fuel, 13,000,000,000 
                                        gallons of that fuel bears to 
                                        the total number of gallons of 
                                        conventional transportation 
                                        fuel sold or introduced into 
                                        commerce in the United States 
                                        in calendar year 2025; and
                                            ``(bb) for the applicable 
                                        volume of Category II ultra-low 
                                        carbon fuel, 8,000,000,000 
                                        gallons of that fuel bears to 
                                        the total number of gallons of 
                                        conventional transportation 
                                        fuel sold or introduced into 
                                        commerce in the United States 
                                        in calendar year 2025.
            ``(3) Applicable percentages.--
                    ``(A) Provision of estimate of volumes of 
                conventional fuels sales.--Not later than October 31 of 
                each of calendar years 2011 through 2025, the 
                Administrator of the Energy Information Administration 
                shall provide to the Administrator an estimate, with 
                respect to the following calendar year, of the volumes 
                of conventional fuels projected to be sold or 
                introduced into commerce in the United States.
                    ``(B) Determination of applicable percentages.--
                            ``(i) In general.--Not later than November 
                        30 of each of calendar years 2012 through 2025, 
                        based on the estimate provided under 
                        subparagraph (A), the Administrator shall 
                        determine and publish in the Federal Register, 
                        with respect to the following calendar year, 
                        the fuel obligations that would meet the 
                        requirements of paragraph (2).
                            ``(ii) Required elements.--The fuel 
                        obligations determined for a calendar year 
                        under clause (i) shall--
                                    ``(I) subject to subparagraph (C), 
                                be applicable to obligated parties, as 
                                appropriate; and
                                    ``(II) be expressed in terms of a 
                                volume percentage of conventional fuels 
                                sold or introduced into commerce in the 
                                United States.
                    ``(C) Adjustments.--In determining the applicable 
                percentage for a calendar year, the Administrator shall 
                make adjustments to prevent the imposition of redundant 
                obligations on any obligated party.
            ``(4) Credit program.--
                    ``(A) In general.--The regulations promulgated 
                pursuant to paragraph (2)(A) shall provide for the 
                generation of an appropriate quantity of credits by 
                obligated parties that includes a quantity of Category 
                I ultra-low carbon fuel or Category II ultra-low carbon 
                fuel that is greater than the applicable quantity 
                required under paragraph (2).
                    ``(B) Use of credits.--A person that generates a 
                credit under subparagraph (A) may use the credit, or 
                transfer all or a portion of the credit to another 
                person, for the purpose of complying with regulations 
                promulgated pursuant to paragraph (2)(A).
                    ``(C) Duration of credits.--A credit generated 
                under this paragraph shall be valid--
                            ``(i) during the calendar year in which the 
                        credit was generated; and
                            ``(ii) for the 2-year period following that 
                        calendar year.
                    ``(D) Inability to generate or purchase sufficient 
                credits.--The regulations promulgated pursuant to 
                paragraph (2)(A) shall include provisions allowing any 
                person that is unable to generate or purchase 
                sufficient credits under subparagraph (A) to meet the 
                requirements of paragraph (2) by carrying forward a 
                credit generated during a previous year on the 
                condition that the person, during the calendar year 
                following the year in which the ultra-low carbon fuel 
                deficit is created--
                            ``(i) achieves compliance with the fuel 
                        requirements under paragraph (2); and
                            ``(ii) generates or purchases additional 
                        credits under subparagraph (A) to offset the 
                        deficit of the previous year.
            ``(5) Waivers.--
                    ``(A) In general.--The Administrator, in 
                consultation with the Secretary of Agriculture and the 
                Secretary of Energy, may waive the requirements of 
                paragraph (2), in whole or in part, on receipt of a 
                petition of 1 or more States by reducing the national 
                quantity of Category I ultra-low carbon fuel or 
                Category II ultra-low carbon fuel in the conventional 
                transportation fuel pool required under paragraph (2) 
                based on a determination by the Administrator, after 
                public notice and opportunity for comment, that--
                            ``(i) implementation of the requirement 
                        would severely harm the economy or environment 
                        of a State, a region, or the United States; or
                            ``(ii) there is an inadequate domestic 
                        supply of the applicable ultra-low carbon fuel.
                    ``(B) Petitions for waivers.--Not later than 90 
                days after the date on which the Administrator receives 
                a petition under subparagraph (A), the Administrator, 
                in consultation with the Secretary of Agriculture and 
                the Secretary of Energy, shall approve or disapprove 
                the petition.
                    ``(C) Termination of waivers.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), a waiver under subparagraph (A) 
                        shall terminate on the date that is 1 year 
                        after the date on which the waiver is provided.
                            ``(ii) Exception.--The Administrator, in 
                        consultation with the Secretary of Agriculture 
                        and the Secretary of Energy, may extend a 
                        waiver under subparagraph (A), as the 
                        Administrator determines to be appropriate.''.
    (b) Credit for Cellulosic Ethanol.--Section 211(o)(4) of the Clean 
Air Act (42 U.S.C. 7545(o)(4)) is amended by inserting ``through 
calendar year 2017,'' before ``1 gallon''.
    (c) Performance Standards.--Section 211 of the Clean Air Act (42 
U.S.C. 7545) is amended by inserting after subsection (s) the 
following:
    ``(t) Performance Standards.--
            ``(1) Intensity and index numbers.--Not later than 2 years 
        after the date of enactment of this subsection, the 
        Administrator shall establish, for fuels blended with low-
        carbon fuel, and Category I ultra-low carbon fuel and Category 
        II ultra-low carbon fuel, as part of the renewable 
        identification number program of the Environmental Protection 
        Agency--
                    ``(A) a carbon intensity number measured in the 
                quantity of lifecycle greenhouse gas emissions per unit 
                of energy provided by use of the fuel; and
                    ``(B) a green index number representing the 
                percentage reduction of greenhouse gas emissions 
                achieved by the fuel as compared to the fuel emission 
                baseline (as defined in section 241).
            ``(2) Environmental sustainability study.--
                    ``(A) In general.--Not later than 3 years after the 
                date of enactment of this subsection, the 
                Administrator, in conjunction with the Secretary of 
                Agriculture and the Secretary of Energy, and based on 
                recommendations issued by the National Academy of 
                Sciences, the Food and Agricultural Policy Research 
                Institute, and not more than 2 other appropriate 
                independent research institutes, as determined by the 
                Administrator, shall establish a methodology to assess 
                and quantify environmental changes associated with an 
                increase in the volume of fuels required by this 
                section, as compared with the effects of an increase in 
                conventional transportation fuels otherwise displaced 
                by this section, as applicable, for the purpose of 
                negating overall adverse environmental impacts, 
                particularly with respect to the effects on or changes 
                in--
                            ``(i) land, air, and water quality, and 
                        quality of other resources, including changes 
                        resulting from production, handling, and 
                        transportation of fuel (and associated effects 
                        on public health and safety);
                            ``(ii) land use patterns;
                            ``(iii) the rate of deforestation, in the 
                        United States and globally;
                            ``(iv) areas containing significant 
                        concentrations of biodiversity values 
                        (including endemism, endangered species, high 
                        species richness, and refugia), including 
                        habitats in which any alteration of the habitat 
                        would render the habitat unable to support most 
                        characteristic native species and ecological 
                        processes;
                            ``(v) land enrolled in the conservation 
                        reserve program established under subchapter B 
                        of chapter 1 of subtitle D of title XII of the 
                        Food Security Act of 1985 (16 U.S.C. 3831 et 
                        seq.) or the wetlands reserve program 
                        established under subchapter C of chapter 1 of 
                        subtitle D of title XII of the Food Security 
                        Act of 1985 (16 U.S.C. 3837 et seq.);
                            ``(vi) the long-term capacity of the United 
                        States to produce biomass feedstocks;
                            ``(vii) the impact on areas at risk of 
                        wildfire, including the vicinity of buildings 
                        and other areas regularly occupied by people, 
                        or of infrastructure;
                            ``(viii) the effects on materials produced, 
                        acquired, transported, or processed that would 
                        require an exemption from otherwise applicable 
                        Federal law (including regulations);
                            ``(ix) the conversion of nonrenewable 
                        biomass into biofuel;
                            ``(x) the conversion of biowaste and other 
                        wastes into fuels (as compared with use of 
                        those wastes for other beneficial purposes 
                        (such as recycling postconsumer waste paper), 
                        and any potential for the generation of toxic 
                        byproducts resulting from that conversion (such 
                        as painted, treated, or pressurized wood, or 
                        wood contaminated with plastic or metals);
                            ``(xi) designated national interest land 
                        (including land that is within the National 
                        Wildlife Refuge System, the National Park 
                        System, a National Monument, the National 
                        Wilderness Preservation System, the National 
                        Landscape Conservation System, or the National 
                        Forest System, or that is otherwise under the 
                        administrative jurisdiction of the Secretary of 
                        the Interior or Secretary of Agriculture or 
                        protected by Federal law); and
                            ``(xii) such other matters or activities as 
                        are identified by the Administrator.
                    ``(B) Environmental sustainability standards.--Not 
                later than January 1, 2012, the Administrator, in 
                conjunction with the Secretary of Agriculture and the 
                Secretary of Energy, shall, based on the methodology 
                established under subparagraph (A), promulgate 
                regulations to establish a set of standards to 
                minimize, to the maximum extent practicable, the 
                negative environmental impacts and ensure long term 
                resource sustainability from the sourcing and 
                production of low-carbon fuels.
    ``(u) State Authority.--If the Administrator determines that a 
State law (including a regulation) provides for equivalent or greater 
greenhouse gas emission reductions than any provision in section 250 or 
subsection (p) or (t) of this section, the State law shall apply in the 
State in lieu of the provision.''.
    (d) Penalties and Enforcement.--Section 211(d) of the Clean Air Act 
(42 U.S.C. 7545(d)) is amended--
            (1) in paragraph (1), by striking ``or (o)'' each place it 
        appears and inserting ``(o), or (p)''; and
            (2) in paragraph (2), by striking ``and (o)'' each place it 
        appears and inserting ``(o), and (p)''.
    (e) Technical Amendments.--Section 211 of the Clean Air Act (42 
U.S.C. 7545) is amended--
            (1) in subsection (i)(4), by striking ``section 324'' each 
        place it appears and inserting ``section 325'';
            (2) in subsection (k)(10), by indenting subparagraphs (E) 
        and (F) appropriately;
            (3) in subsection (n), by striking ``section 219(2)'' and 
        inserting ``section 216(2)''; and
            (4) in subsection (s)(1), by striking ``this subtitle'' and 
        inserting ``this part''.
                                 <all>
```