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[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 1158 Introduced in Senate (IS)]

110th CONGRESS
  1st Session
                                S. 1158

    To amend the Clean Air Act to increase the use of renewable and 
               alternative fuel, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                             April 19, 2007

  Mr. Inhofe 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 increase the use of renewable and 
               alternative fuel, and for other purposes.

    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 ``Alternative Fuel Standard Act of 
2007''.

SEC. 2. RENEWABLE AND ALTERNATIVE FUEL PROGRAM.

    Section 211(o) of the Clean Air Act (42 U.S.C. 7545(o)) is 
amended--
            (1) in the subsection heading, by inserting ``and 
        Alternative'' after ``Renewable'';
            (2) in paragraph (1)--
                    (A) by redesignating subparagraphs (A), (B), (C), 
                and (D) as subparagraphs (B), (I), (G), and (H), 
                respectively;
                    (B) by moving subparagraph (I) (as redesignated by 
                subparagraph (A)) to the end of the paragraph;
                    (C) by inserting before subparagraph (B) (as so 
                redesignated) the following:
                    ``(A) Alternative fuel.--
                            ``(i) In general.--The term `alternative 
                        fuel' means the portion of any motor vehicle or 
                        nonroad fuel, as measured by volume, that 
                        consists of--
                                    ``(I) methanol, denatured ethanol, 
                                butanol, and other alcohols;
                                    ``(II) natural gas, including 
                                liquid fuels domestically produced from 
                                natural gas;
                                    ``(III) liquefied petroleum gas;
                                    ``(IV) hydrogen;
                                    ``(V) coal-derived liquid fuels;
                                    ``(VI) fuels (not including a fuel 
                                that consists of alcohol) derived from 
                                biological materials (including 
                                biodiesel);
                                    ``(VII) electricity; and
                                    ``(VIII) any other fuel that the 
                                Administrator determines, by rule, is 
                                not derived from crude oil and would 
                                yield energy security benefits or 
                                environmental benefits.
                            ``(ii) Inclusion.--The term `alternative 
                        fuel' includes any portion of a blending 
                        component that is derived from an alternative 
                        fuel.'';
                    (D) in subparagraph (B) (as so redesignated), by 
                striking the second sentence;
                    (E) by inserting after subparagraph (B) (as so 
                redesignated) the following:
                    ``(C) Nonroad engine.--The term `nonroad engine' 
                means an internal combustion engine (including the fuel 
                system of the internal combustion engine) that is not--
                            ``(i) used--
                                    ``(I) to power a motor vehicle; or
                                    ``(II) in a vehicle used solely for 
                                competition; and
                            ``(ii) subject to standards of performance 
                        for stationary sources of air pollution.
                    ``(D) Nonroad fuel.--The term `nonroad fuel' means 
                fuel required for--
                            ``(i) a nonroad engine; or
                            ``(ii) a nonroad vehicle.
                    ``(E) Nonroad vehicle.--The term `nonroad vehicle' 
                means a vehicle or a piece of equipment that is--
                            ``(i) powered by a nonroad engine; and
                            ``(ii) not a motor vehicle or a vehicle 
                        used solely for competition.
                    ``(F) Program.--The term `program' means the 
                renewable and alternative fuel program established 
                under paragraph (2).'';
            (3) by striking paragraphs (2) and (3) and inserting the 
        following:
            ``(2) Program.--
                    ``(A) In general.--The Administrator shall, by 
                regulation, establish an alternative fuel program to 
                ensure that motor vehicle and nonroad fuel sold or 
                introduced into commerce in the United States (except 
                in territories of the United States), on an annual 
                average basis, contains the applicable volume of 
                alternative fuel determined in accordance with 
                subparagraph (C).
                    ``(B) Provisions.--Regulations promulgated under 
                subparagraph (A)--
                            ``(i) shall--
                                    ``(I) contain compliance provisions 
                                applicable to refineries, blenders, 
                                distributors, and importers, as 
                                appropriate, to ensure that the 
                                requirements of this section are met;
                                    ``(II) establish applicable 
                                percentages under subparagraph (D);
                                    ``(III) establish compliance values 
                                for alternative fuels under 
                                subparagraph (E);
                                    ``(IV) provide for the generation, 
                                banking, trading, and use of 
                                identification numbers under 
                                subparagraph (F);
                                    ``(V) require the taking of any 
                                other action that is necessary for the 
                                implementation of the alternative fuels 
                                program, as determined by the 
                                Administrator; and
                                    ``(VI) to the maximum extent 
                                practicable, incorporate the program 
                                structure, compliance, calculation of 
                                applicable volume, registration, 
                                recordkeeping, and reporting 
                                requirements described in regulations 
                                promulgated under subparagraph (A) to 
                                implement this section; and
                            ``(ii) shall not--
                                    ``(I) restrict the geographic area 
                                in which alternative fuel may be used; 
                                or
                                    ``(II) impose any per-gallon 
                                obligation for the use of alternative 
                                fuel.
                    ``(C) Applicable volume.--
                            ``(i) Calendar years 2010 through 2017.--
                        For the purpose of subparagraph (A), the 
                        applicable volume of alternative fuel for each 
                        of calendar years 2010 through 2017 shall be 
                        determined in accordance with the following 
                        table:

                 ``Applicable volume of alternative fuel
------------------------------------------------------------------------
            Calendar year:                  (in billions of gallons):
------------------------------------------------------------------------
2010                                    10.0
2011                                    11.0
2012                                    12.0
2013                                    14.0
2014                                    17.0
2015                                    22.0
2016                                    28.0
2017                                    35.0
------------------------------------------------------------------------

                            ``(ii) Calendar year 2018 and thereafter.--
                                    ``(I) In general.--Subject to 
                                clauses (iii) and (iv), for the purpose 
                                of subparagraph (A), the applicable 
                                volume for calendar year 2018 and each 
                                calendar year thereafter shall be 
                                determined by the Administrator based 
                                on a review containing the information 
                                described in subclause (II).
                                    ``(II) Contents of review.--The 
                                review described in subclause (I) shall 
                                contain a evaluation of the 
                                implementation of the program during 
                                calendar years 2010 through 2016, 
                                including an evaluation of--
                                            ``(aa) the impact of the 
                                        use of alternative fuels on--

                                                    ``(AA) public 
                                                health;

                                                    ``(BB) air quality;

                                                    ``(CC) water 
                                                quality;

                                                    ``(DD) job 
                                                creation;

                                                    ``(EE) rural 
                                                economic development;

                                                    ``(FF) the expected 
                                                annual rate of future 
                                                production of 
                                                alternative fuels;

                                                    ``(GG) the 
                                                reduction of the use of 
                                                fuels derived from 
                                                crude oil in the United 
                                                States;

                                                    ``(HH) the energy 
                                                security of the United 
                                                States; and

                                                    ``(II) costs to 
                                                consumers.

                            ``(iii) Minimum quantity derived from 
                        cellulosic biomass.--
                                    ``(I) Calendar years 2010 through 
                                2012.--For each of calendar years 2010 
                                through 2012--
                                            ``(aa) the compliance value 
                                        for cellulosic ethanol 
                                        contained in subparagraph (E) 
                                        shall not apply; and
                                            ``(bb) a compliance value 
                                        of 2.5 shall apply in the same 
                                        manner as if included on the 
                                        table contained in subparagraph 
                                        (E).
                                    ``(II) Calendar years 2013 and 
                                thereafter.--For calendar year 2013, 
                                and each calendar year thereafter, the 
                                applicable volume described in clause 
                                (ii) shall contain a minimum of 
                                250,000,000 gallons that are derived 
                                from cellulosic biomass.
                            ``(iv) Waste-derived ethanol credit.--For 
                        each of calendar years 2010 through 2012, the 
                        compliance value for waste-derived ethanol 
                        shall--
                                    ``(I) be 2.5; and
                                    ``(II) apply in the same manner as 
                                if included in the table in 
                                subparagraph (E).
                            ``(v) Minimum applicable volume.--For the 
                        purpose of subparagraph (A), the applicable 
                        volume for calendar year 2018 and each calendar 
                        year thereafter shall, at a minimum, be equal 
                        to the product obtained by multiplying--
                                    ``(I) the number of gallons of 
                                gasoline that the Administrator of the 
                                Energy Information Administration 
                                estimates will be sold or introduced 
                                into commerce in the calendar year; and
                                    ``(II) the ratio that--
                                            ``(aa) 35,000,000,000 
                                        gallons; bears to
                                            ``(bb) the number of 
                                        gallons of gasoline projected 
                                        to be sold or introduced into 
                                        commerce in calendar year 2017.
                    ``(D) Applicable percentages.--
                            ``(i) Provision of estimate of volumes of 
                        gasoline sales.--Not later than October 31, 
                        2009, and annually thereafter, the 
                        Administrator of the Energy Information 
                        Administration shall provide to the 
                        Administrator an estimate relating to the 
                        volume of gasoline projected by Administrator 
                        of the Energy Information Administration to be 
                        sold or introduced into commerce in the United 
                        States during the following calendar year.
                            ``(ii) Determination of applicable 
                        percentages.--
                                    ``(I) In general.--Not later than 
                                November 30, 2009, and annually 
                                thereafter, based on the estimate 
                                provided under clause (i), the 
                                Administrator shall determine and 
                                notify any obligated party, with 
                                respect to the following calendar year, 
                                of the alternative fuel obligation 
                                determined by the Administrator to 
                                ensure that the requirements of 
                                subparagraph (C) will be met.
                                    ``(II) Required elements.--The 
                                alternative fuel obligation determined 
                                for a calendar year under clause (ii) 
                                shall--
                                            ``(aa) be applicable to 
                                        refiners, blenders, and 
                                        importers of gasoline, as 
                                        appropriate;
                                            ``(bb) be used in motor 
                                        vehicle or nonroad applications 
                                        in the United States;
                                            ``(cc) be expressed in 
                                        terms of a volume percentage of 
                                        gasoline sold or introduced 
                                        into commerce in the United 
                                        States; and
                                            ``(dd) subject to clause 
                                        (iii), consist of a single 
                                        applicable percentage that 
                                        applies to an obligated party 
                                        who is a refiner, blender, or 
                                        importer of gasoline used in 
                                        motor vehicle and nonroad 
                                        applications in the United 
                                        States.
                            ``(iii) Adjustments.--In determining the 
                        applicable percentage for a calendar year, the 
                        Administrator shall make adjustments to prevent 
                        the imposition of redundant obligations on any 
                        individual or entity described in clause (ii).
                    ``(E) Compliance value.--
                            ``(i) Table.--Subject to clauses (ii) and 
                        (iii), the Administrator shall assign a 
                        compliance value for each alternative fuel to 
                        satisfy the alternative fuel volume under 
                        subparagraph (C), in accordance with the 
                        following table:

------------------------------------------------------------------------
                   Fuel Type                         Compliance Value
------------------------------------------------------------------------
Ethanol (non-Cellulosic)                         1.0
Ethanol (Cellulosic)                             1.0
Biodiesel                                        1.4
Gas-to-Liquid Diesel Fuel                        1.5
Coal-to-Liquid Diesel Fuel                       1.5
Compressed Natural Gas (78 standard cubic feet)  1.0
Liquefied Natural Gas                            1.0
Liquefied Petroleum Gas                          1.1
Electricity (6.4 kilowatt-hours)                 1.0
Gaseous Hydrogen (132 standard cubic feet)       1.0
Liquid Hydrogen                                  1.0
Methanol                                         0.8
Butanol                                          1.3
Bio-Butanol                                      1.3
------------------------------------------------------------------------

                        All values in terms of gallons unless otherwise 
                        specified.
                            ``(ii) Authority of the administrator.--
                                    ``(I) In general.--In accordance 
                                with the requirements described in 
                                subclause (II), the Administrator may--
                                            ``(aa) add fuel types to 
                                        the table contained in clause 
                                        (i);
                                            ``(bb) revise any fuel type 
                                        and assign a different 
                                        compliance value to any fuel 
                                        type described in the table 
                                        contained in clause (i); and
                                            ``(cc) assign each new or 
                                        revised category or subcategory 
                                        of an alternative fuel type an 
                                        appropriate compliance value.
                                    ``(II) Use of information.--
                                            ``(aa) In general.--In 
                                        carrying out a modification or 
                                        revision of any fuel type or 
                                        compliance value under 
                                        subclause (I), the 
                                        Administrator shall use 
                                        appropriate scientific and 
                                        technical information relating 
                                        to the energy content of 
                                        alternative fuels.
                                            ``(bb) Requirement relating 
                                        to compliance values.--In 
                                        carrying out a modification or 
                                        revision of any compliance 
                                        value under subclause (I), the 
                                        Administrator may revise the 
                                        compliance value to the extent 
                                        that the revision is 
                                        predominantly supported by 
                                        scientific and technical 
                                        information.
                            ``(iii) Use of compliance value.--The 
                        compliance value described in the table 
                        contained in clause (i) shall be used as a 
                        multiplier to determine the extent to which 
                        each gallon of the alternative fuel would 
                        satisfy the alternative fuel volume obligation 
                        under subparagraph (C).
                    ``(F) Generation, banking, trading, and use of 
                identification numbers.--
                            ``(i) In general.--Regulations promulgated 
                        under subparagraph (A) shall provide that--
                                    ``(I) unique identification numbers 
                                shall be generated and assigned to each 
                                batch or other quantifiable unit of 
                                production, as determined by the 
                                Administrator, of alternative fuel by--
                                            ``(aa) the producer of any 
                                        facility located in the United 
                                        States; and
                                            ``(bb) the importer of 
                                        alternative fuel imported into 
                                        the United States;
                                    ``(II) identification numbers shall 
                                be based on the volume of the 
                                alternative fuel and the compliance 
                                values established under subparagraph 
                                (E);
                                    ``(III) identification numbers may 
                                be used to demonstrate compliance with 
                                the alternative fuel volume obligation 
                                under subparagraph (A);
                                    ``(IV) identification numbers may 
                                be held by any individual or entity;
                                    ``(V) identification numbers may be 
                                transferred by any individual or entity 
                                to any other individual or entity;
                                    ``(VI) identification numbers shall 
                                be valid for use in achieving 
                                compliance for the calendar year in 
                                which the numbers are generated, and 
                                each calendar year thereafter, 
                                regardless of the calendar year in 
                                which the alternative fuel that the 
                                numbers represent is used; and
                                    ``(VII) any obligated party that is 
                                unable to acquire sufficient 
                                identification numbers to meet the 
                                requirements for any calendar year 
                                under this section shall be allowed to 
                                carry forward a deficit on the 
                                condition that the obligated party, in 
                                the calendar year following the 
                                calendar year in which the deficit was 
                                created, achieves compliance with the 
                                obligation for--
                                            ``(aa) the calendar year 
                                        following the calendar year in 
                                        which the deficit was created; 
                                        and
                                            ``(bb) the calendar year in 
                                        which the deficit was created.
                    ``(G) Evaluation and adjustment of required 
                volumes.--
                            ``(i) In general.--The Administrator shall 
                        annually evaluate the domestic production and 
                        import capabilities relating to the required 
                        volumes of the alternative fuel standard for 
                        each year for which there have been specified 
                        volumes pursuant to clauses (i) and (ii) of 
                        subparagraph (C).
                            ``(ii) Adjustment of volume of alternative 
                        fuels.--
                                    ``(I) In general.--If any condition 
                                affects the production or importation 
                                of alternative fuel (including drought, 
                                environmental degradation, 
                                technological difficulties, economic 
                                infeasibility, national security 
                                interests, or any other factor may 
                                substantially affect the availability 
                                of an alternative fuel in a quantity 
                                necessary to meet the requirements of 
                                this section) the Administrator may, to 
                                account for the impact of the 
                                condition, not later than October 31 of 
                                each calendar year, adjust the 
                                applicable volume of any alternative 
                                fuel for the following calendar year, 
                                or any calendar year thereafter, 
                                described in the table contained in 
                                subparagraph (C)(i).
                                    ``(II) Corresponding adjustment of 
                                applicable percentages.--In making an 
                                adjustment to the applicable volume of 
                                an alternative fuel under subclause 
                                (I), the Administrator shall make a 
                                corresponding adjustment to the 
                                determination of the alternative fuel 
                                obligation of an obligated party under 
                                subparagraph (D).
                                    ``(III) Termination of 
                                adjustment.--
                                            ``(aa) In general.--Subject 
                                        to item (bb), an adjustment 
                                        made by the Administrator to 
                                        the applicable volume of an 
                                        alternative fuel under 
                                        subclause (I) shall terminate 1 
                                        year after the date on which 
                                        the adjustment is made.
                                            ``(bb) Authority to renew 
                                        adjustment.--The Administrator 
                                        may renew the adjustment made 
                                        in accordance with subclause 
                                        (I) not later than October 31 
                                        of the calendar year preceding 
                                        the calendar year in which the 
                                        adjustment made by the 
                                        Administrator to the applicable 
                                        volume of an alternative fuel 
                                        under subclause (I) would 
                                        apply.
                    ``(H) Sale of identification numbers.--
                            ``(i) In general.--The Administrator shall 
                        make available for sale to any obligated party 
                        additional identification numbers at a price of 
                        $1.00 per gallon of gasoline equivalent.
                            ``(ii) Use of identification numbers.--An 
                        additional identification number sold by the 
                        Administrator under clause (i) may be used by 
                        an obligated party to comply with any 
                        alternative fuel obligation requirement under 
                        subsection (C) relating to the year in which 
                        the identification number was purchased.
                            ``(iii) Disposition of funds.--For each of 
                        fiscal years 2010 through 2017, any funds 
                        generated by the sale of additional 
                        identification numbers by the Administrator to 
                        obligated parties shall be transferred by the 
                        Administrator to the Secretary of the Treasury 
                        and deposited in the Treasury of the United 
                        States.'';
            (4) by striking paragraph (8);
            (5) by redesignating paragraphs (4) through (7) as 
        paragraphs (3) through (6), respectively;
            (6) by redesignating paragraphs (9) and (10) as paragraphs 
        (7) and (8), respectively;
            (7) in paragraph (4)(A)(iii) (as redesignated by paragraph 
        (5)), by striking ``paragraph (9)(C)'' and inserting 
        ``paragraph (7)(C)'';
            (8) by striking paragraph (6) (as redesignated by paragraph 
        (5)) and inserting the following:
            ``(6) Waiver.--
                    ``(A) In general.--The Administrator may issue a 
                temporary waiver for any requirement of paragraph (2) 
                if the Administrator determines that--
                            ``(i) an extreme or unusual fuel supply 
                        circumstance has affected the United States, or 
                        a region of the United States, that--
                                    ``(I) prevents the distribution of 
                                an adequate supply of 1 or more 
                                alternative fuels or the feedstock used 
                                to produce 1 or more alternative fuels; 
                                and
                                    ``(II) is of sufficient magnitude 
                                to prevent compliance by 1 or more 
                                obligated parties with the applicable 
                                volume of any alternative fuel 
                                described in the table contained in 
                                paragraph (2)(C), as determined by the 
                                Administrator;
                            ``(ii) the extreme or unusual fuel supply 
                        circumstance will cause a severe increase in 
                        the price of 1 or more alternative fuels or of 
                        the feedstock used to produce 1 or more 
                        alternative fuels; and
                            ``(iii) the extreme or unusual fuel supply 
                        circumstance was caused by--
                                    ``(I) a natural disaster;
                                    ``(II) an act of God;
                                    ``(III) a pipeline or refinery 
                                equipment failure;
                                    ``(IV) the national security 
                                interests of the United States; or
                                    ``(V) a circumstance that could not 
                                have been reasonably foreseen or 
                                prevented, or prepared for by prudent 
                                planning of a supplier of alternative 
                                fuel to the United States.
                    ``(B) Effect of waiver.--A temporary waiver issued 
                by the Administrator under subparagraph (A) shall--
                            ``(i) apply to--
                                    ``(I) any obligated party affected 
                                by the extreme or unusual fuel supply 
                                circumstance; and
                                    ``(II) the smallest appropriate 
                                geographic area, as determined by the 
                                Administrator;
                            ``(ii) be effective for--
                                    ``(I) a period that begins on the 
                                date on which the Administrator issues 
                                the temporary waiver under subparagraph 
                                (A) and ends 20 calendar days after the 
                                date on which the Administrator issued 
                                the temporary waiver; or
                                    ``(II) the shortest appropriate 
                                period of time, as determined by the 
                                Administrator;
                            ``(iii) preempt, for the duration of the 
                        waiver, any State or local laws (including 
                        regulations) relating to the renewable or 
                        alternative content of motor fuel and nonroad 
                        fuel that are inconsistent with any adjustment 
                        of the volume of an alternative fuel under 
                        paragraph (2)(G)(ii)(I); and
                            ``(iv) be renewed for 1 or more additional 
                        20 calendar day periods if the Administrator 
                        determines that any extreme or unusual fuel 
                        supply circumstance on which the initial 
                        determination was made under subparagraph (A) 
                        continues to warrant a waiver under that 
                        subparagraph.''; and
            (9) in paragraph (7) (as redesignated by paragraph (6))--
                    (A) in subparagraph (A)(ii)(I), by striking 
                ``2008'' and inserting ``2009''; and
                    (B) in subparagraph (C), by striking ``paragraph 
                (5)'' and inserting ``paragraph (4)''.
                                 <all>
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