[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 2032 Introduced in Senate (IS)]

103d CONGRESS
  2d Session
                                S. 2032

    To amend the Energy Policy and Conservation Act with respect to 
   purchases from the Strategic Petroleum Reserve by entities in the 
      insular areas of the United States, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

               April 20 (legislative day, April 11), 1994

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

_______________________________________________________________________

                                 A BILL


 
    To amend the Energy Policy and Conservation Act with respect to 
   purchases from the Strategic Petroleum Reserve by entities in the 
      insular areas of the United States, and for other purposes.

    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 ``Emergency Petroleum Supply Act''.

SEC. 2. PURCHASES FROM THE STRATEGIC PETROLEUM RESERVE BY ENTITIES IN 
              THE INSULAR AREAS OF THE UNITED STATES.

    (a) General Provisions.--Section 161 of the Energy Policy and 
Conservation Act (42 U.S.C. 6241) is amended by adding at the end the 
following new subsection:
    ``(j)(1) With respect to each offering of a quantity of petroleum 
product during a drawdown of the Strategic Petroleum Reserve:
            ``(A) A purchaser located in an eligible insular area of 
        the United States, in addition to having the opportunity to 
        submit a competitive bid, may submit (at the time bids are due) 
        a binding offer, and shall on submission of the bid be entitled 
        to purchase a category of a petroleum product specified in a 
        notice of sale at a price equal to the average of the 
        successful bids made for the remaining quantity of petroleum 
        product within the category that is the subject of the 
        offering.
            ``(B) A vessel that arrives at a delivery line of the 
        Strategic Petroleum Reserve to take on a petroleum product for 
        delivery to a purchaser located in an eligible insular area of 
        the United States shall be loaded ahead of other vessels 
        waiting for delivery if the Governor or other chief executive 
        officer of the eligible insular area of the United States 
        certifies that delivery must be expedited to avert a critical 
        supply shortage in the eligible insular area of the United 
        States.
    ``(2)(A) In administering this subsection, and with regard to each 
offering, the Secretary may impose the limitation described in 
subparagraph (B) or (C) that results in the purchase of the lesser 
quantity of petroleum product.
    ``(B) The Secretary may limit the quantity that any one purchaser 
may purchase through a binding offer at any one offering to \1/12\ of 
the total quantity of petroleum products that the purchaser imported 
during the previous year.
    ``(C)(i) Subject to clause (ii), the Secretary may limit the 
quantity that may be purchased through binding offers at any one 
offering to 3 percent of the offering.
    ``(ii) If the Secretary imposes the limitation stated in clause 
(i), the Secretary shall prorate the quantity among the purchasers who 
submitted binding offers.
    ``(3) In administering this subsection, and with regard to each 
offering, the Secretary shall, at the request of a purchaser--
            ``(A) if the quantity is less than 50 percent of 1 full 
        tanker load less than a whole-number increment of a full tanker 
        load of a petroleum product, adjust upward, to the next whole-
        number increment of a full tanker load, the quantity to be sold 
        to the purchaser; or
            ``(B) if the quantity is 50 percent of 1 full tanker load 
        more than a whole-number increment of a full tanker load of a 
        petroleum product, adjust downward, to the next whole-number 
        increment of a full tanker load, the quantity to be sold to the 
        purchaser.
    ``(4)(A) Except as provided in subparagraph (B), petroleum products 
purchased through binding offers pursuant to this subsection shall be 
delivered to the eligible insular area of the United States.
    ``(B) Purchasers may enter into exchange or processing agreements 
that require delivery to other locations.
    ``(5) As used in this subsection:
            ``(A) The term `eligible insular area of the United States' 
        means the State of Hawaii, the Commonwealth of Puerto Rico, the 
        Virgin Islands, Guam, American Samoa, and the Commonwealth of 
        the Northern Mariana Islands.
            ``(B) The term `offering' means a solicitation for bids to 
        be submitted not later than any specified day for a quantity or 
        quantities of crude oil or petroleum product from a delivery 
        line of the Strategic Petroleum Reserve.''.
    (b) Effective Dates.--The amendments made by subsection (a) shall 
remain in effect until such time as the Secretary promulgates and 
implements regulations pursuant to section 3.

SEC. 3. REGULATIONS.

    (a) Definitions.--For the purposes of this section--
            (1) the term ``insular area'' means the State of Hawaii, 
        the Commonwealth of Puerto Rico, the Virgin Islands, Guam, 
        American Samoa, and the Commonwealth of the Northern Mariana 
        Islands; and
            (2) the term ``eligible purchaser'' means--
                    (A) an insular area government; or
                    (B) a person who owns a refinery that--
                            (i) is located in an insular area; or
                            (ii) has supplied refined petroleum product 
                        to an insular area within the year immediately 
                        preceding the sale, or within another period 
                        the Secretary determines to be representative 
                        of recent imports to the insular area.
    (b) In General.--The Secretary shall issue regulations that provide 
benefits for insular areas during the sale of petroleum product 
withdrawn from the Strategic Petroleum Reserve.
    (c) Content.--The regulations issued under subsection (a)--
            (1) shall permit an eligible purchaser to purchase 
        petroleum product--
                    (A) at a price equal to the average price of 
                comparable quality petroleum product sold at the 
                contemporaneous competitive sale of petroleum product 
                withdrawn from the Strategic Petroleum Reserve; or
                    (B) if no comparable quality petroleum product sold 
                at the contemporaneous competitive sale, at a price 
                estimated by the Secretary to be equivalent to the 
                price described in subparagraph (A);
            (2) shall provide for priority cargo lifting of petroleum 
        product purchased by an eligible purchaser at a competitive 
        sale or under paragraph (1);
            (3) may limit the amount of petroleum product that may be 
        purchased under paragraph (1) during a sales period--
                    (A) by an eligible purchaser, to no less than \1/
                12\ of the total amount of petroleum product that the 
                purchaser brought into an insular area during the year 
                immediately preceding the sale or during another period 
                the Secretary determines to be representative of recent 
                imports to the insular area; or
                    (B) by all eligible purchasers, to no less than 3 
                percent of the amount of petroleum product offered for 
                sale during the sales period prorated among the 
                eligible purchasers;
            (4) may provide that, at the request of a purchaser, the 
        quantity of petroleum product to be sold to the purchaser may 
        be adjusted upward or downward, to the next whole-number 
        increment of a full tanker load, if the quantity that otherwise 
        would be sold is less than a whole-number increment;
            (5) may establish procedures for qualifying an entity as an 
        eligible person before a sale of petroleum product withdrawn 
        from the Strategic Petroleum Reserve;
            (6) may require an eligible purchaser to comply with 
        financial and performance responsibility requirements applied 
        to offerors in competitive sale;
            (7) except as otherwise provided by this subsection, may 
        require an eligible purchaser who purchases petroleum product 
        under paragraph (1) to comply with standard contract provisions 
        applied to purchasers at competitive sales;
            (8) may ensure, to the extent practicable, that an eligible 
        purchaser who receives benefits under paragraph (1) or (2) 
        passes on the benefits to an insular area;
            (9) may require an eligible purchaser who receives benefits 
        under paragraph (1) or (2) to furnish the Secretary with 
        documents and other appropriate information to determine 
        compliance with this subsection; and
            (10) may establish procedures for imposing sanctions on an 
        eligible purchaser who receives benefits under paragraph (1) or 
        (2) and who does not comply with the requirements of this 
        subsection.
    (d) Plan Amendments.--No amendment of the Strategic Petroleum 
Reserve Plan or the Distribution Plan contained in the Strategic 
Petroleum Reserve Plan is required for any action taken under this 
subsection if the Secretary determines that an amendment to the plan is 
necessary to carry out this section.
    (e) Administrative Procedure.--Regulations issued to carry out this 
subsection shall not be subject to the requirements of section 523 of 
the Energy Policy and Conservation Act (42 U.S.C. 6393) or of section 
501 of the Department of Energy Organization Act (42 U.S.C. 7191).

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