[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 2435 Introduced in Senate (IS)]








109th CONGRESS
  2d Session
                                S. 2435

  To increase cooperation on energy issues between the United States 
Government and foreign governments and entities in order to secure the 
 strategic and economic interests of the United States, and for other 
                               purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

               March 16 (legislative day, March 15), 2006

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

_______________________________________________________________________

                                 A BILL


 
  To increase cooperation on energy issues between the United States 
Government and foreign governments and entities in order to secure the 
 strategic and economic interests 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 ``Energy Diplomacy and Security Act of 
2006''.

SEC. 2. DEFINITIONS.

    In this Act:
            (1) Major energy producer.--The term ``major energy 
        producer'' means a country that--
                    (A) had crude oil, oil sands, or natural gas to 
                liquids production of 1,000,000 barrels per day or 
                greater average in the previous year;
                    (B) has crude oil, shale oil, or oil sands reserves 
                of 6,000,000,000 barrels or greater, as recognized by 
                the Department of Energy;
                    (C) had natural gas production of 30,000,000,000 
                cubic meters or greater in the previous year;
                    (D) has natural gas reserves of 1,250,000,000,000 
                cubic meters or greater, as recognized by the 
                Department of Energy; or
                    (E) is a direct supplier of natural gas or 
                liquefied natural gas to the United States.
            (2) Major energy consumer.--The term ``major energy 
        consumer'' means a country that--
                    (A) had an oil consumption average of 1,000,000 
                barrels per day or greater in the previous year;
                    (B) had an oil consumption growth rate of 8 percent 
                or greater in the previous year;
                    (C) had a natural gas consumption of 30,000,000,000 
                cubic meters or greater in the previous year; or
                    (D) had a natural gas consumption growth rate of 15 
                percent or greater in the previous year.

SEC. 3. SENSE OF CONGRESS ON ENERGY DIPLOMACY AND SECURITY.

    (a) Findings.--Congress makes the following findings:
            (1) It is imperative to the national security and 
        prosperity of the United States to have reliable, affordable, 
        clean, sufficient, and sustainable sources of energy.
            (2) United States dependence on oil imports causes 
        tremendous costs to the United States economy, foreign policy, 
        military, and environmental sustainability.
            (3) Energy security is a priority for the governments of 
        many foreign countries and increasingly plays a central role in 
        the relations of the United States Government with foreign 
        governments. Global reserves of oil and natural gas are 
        concentrated in a small number of countries. Access to these 
        oil and natural gas supplies depends on the political will of 
        these producing states. Competition between governments for 
        access to oil and natural gas reserves can lead to economic, 
        political, and armed conflict. Oil exporting states have 
        received dramatically increased revenues due to high global 
        prices, enhancing the ability of some of these states to act in 
        a manner threatening to global stability.
            (4) Efforts to combat poverty and protect the environment 
        are hindered by the continued predominance of oil and natural 
        gas in meeting global energy needs. Development of renewable 
        energy through sustainable practices will help lead to a 
        reduction in greenhouse gas emissions and enhance international 
        development.
            (5) Cooperation on energy issues between the United States 
        Government and the governments of foreign countries is critical 
        for securing the strategic and economic interests of the United 
        States and of partner governments.
    (b) Sense of Congress.--It is the sense of Congress that--
            (1) United States national security requires that the 
        United States Government have an energy policy that pursues the 
        strategic goal of achieving energy security through access to 
        clean, affordable, sufficient, reliable, and sustainable 
        sources of energy;
            (2) achieving energy security is a priority for United 
        States foreign policy and requires continued and enhanced 
        engagement with foreign governments and entities in a variety 
        of areas, including activities relating to the promotion of 
        alternative and renewable fuels, trade and investment in oil, 
        coal, and natural gas, energy efficiency, climate and 
        environmental protection, data transparency, advanced 
        scientific research, public-private partnerships, and energy 
        activities in international development;
            (3) the President should ensure that the international 
        energy activities of the United States Government are given 
        clear focus to support the national security needs of the 
        United States, and to this end, there should be established a 
        mechanism to coordinate the implementation of United States 
        international energy policy among the Federal agencies engaged 
        in relevant agreements and activities; and
            (4) the Secretary of State should ensure that energy 
        security is integrated into the core mission of the Department 
        of State, and to this end, there should be established within 
        the Office of the Secretary of State a Coordinator for 
        International Energy Affairs with responsibility for--
                    (A) developing United States international energy 
                policy;
                    (B) working with appropriate United States 
                Government officials to develop and update analyses of 
                the national security implications of global energy 
                developments;
                    (C) incorporating energy security priorities into 
                the activities of the Department;
                    (D) coordinating activities with relevant Federal 
                agencies; and
                    (E) carrying out other relevant functions currently 
                carried out by the Office of International Energy and 
                Commodity Policy within the Bureau of Economic and 
                Business Affairs.

SEC. 4. STRATEGIC ENERGY PARTNERSHIPS.

    (a) Findings.--Congress makes the following findings:
            (1) United States Government partnership with foreign 
        governments and entities, including partnership with the 
        private sector, for securing reliable and sustainable energy is 
        imperative to ensuring United States security and economic 
        interests, promoting international peace and security, 
        expanding international development, supporting democratic 
        reform, fostering economic growth, and safeguarding the 
        environment.
            (2) Democracy and freedom should be promoted globally by 
        partnership with foreign governments, including in particular 
        governments of emerging democracies such as those of Ukraine 
        and Georgia, in their efforts to reduce their dependency on oil 
        and natural gas imports.
            (3) The United States Government and the governments of 
        foreign countries have common needs for adequate, reliable, 
        affordable, clean, and sustainable energy in order to ensure 
        national security, economic growth, and high standards of 
        living in their countries. Cooperation by the United States 
        Government with foreign governments on meeting energy security 
        needs is mutually beneficial. United States Government 
        partnership with foreign governments should include cooperation 
        with major energy consuming countries, major energy producing 
        countries, and other governments seeking to advance global 
        energy security through reliable and sustainable means.
            (4) The United States Government participates in hundreds 
        of bilateral and multilateral energy agreements and activities 
        with foreign governments and entities. These agreements and 
        activities should reflect the strategic need for energy 
        security.
    (b) Statement of Policy.--It is the policy of the United States--
            (1) to advance global energy security through cooperation 
        with foreign governments and entities;
            (2) to promote reliable, diverse, and sustainable sources 
        of all types of energy;
            (3) to increase global availability of renewable and clean 
        sources of energy;
            (4) to decrease global dependence on oil and natural gas 
        energy sources; and
            (5) to engage in energy cooperation to strengthen strategic 
        partnerships that advance peace, security, and democratic 
        prosperity.
    (c) Authority.--The Secretary of State, in coordination with the 
Secretary of Energy, should immediately seek to establish and expand 
strategic energy partnerships with the governments of major energy 
producers and major energy consumers, and with governments of other 
countries (but excluding any countries that are ineligible to receive 
United States economic or military assistance).
    (d) Purposes.--The purposes of the strategic energy partnerships 
established pursuant to subsection (c) are--
            (1) to strengthen global relationships to promote 
        international peace and security through fostering cooperation 
        in the energy sector on a mutually beneficial basis in 
        accordance with respective national energy policies;
            (2) to promote the policy set forth in subsection (b), 
        including activities to advance--
                    (A) the mutual understanding of each country's 
                energy needs, priorities, and policies, including 
                interparliamentary understanding;
                    (B) measures to respond to acute energy supply 
                disruptions, particularly in regard to petroleum and 
                natural gas resources;
                    (C) long-term reliability and sustainability in 
                energy supply;
                    (D) the safeguarding and safe handling of nuclear 
                fuel;
                    (E) human and environmental protection;
                    (F) renewable energy production;
                    (G) access to reliable and affordable energy for 
                underdeveloped areas;
                    (H) appropriate commercial cooperation;
                    (I) information reliability and transparency; and
                    (J) research and training collaboration;
            (3) to advance the national security priority of developing 
        sustainable and clean energy sources, including through 
        research and development related to, and deployment of--
                    (A) renewable electrical energy sources, including 
                biomass, wind, and solar;
                    (B) renewable transportation fuels, including 
                biofuels;
                    (C) clean coal technologies;
                    (D) carbon sequestration, including in conjunction 
                with power generation, agriculture, and forestry; and
                    (E) energy and fuel efficiency, including hybrids 
                and plug-in hybrids, flexible fuel, advanced 
                composites, hydrogen, and other transportation 
                technologies; and
            (4) to provide strategic focus for current and future 
        United States Government activities in energy cooperation to 
        meet the global need for energy security.
    (e) Determination of Agendas.--In general, the specific agenda with 
respect to a particular strategic energy partnership shall be 
determined by the Secretary of State in consultation with the Secretary 
of Energy.
    (f) Use of Current Agreements to Establish Partnerships.--Some or 
all of the purposes of the strategic energy partnerships established 
under subsection (c) may be pursued through existing bilateral or 
multilateral agreements and activities. Such agreements and activities 
shall be subject to the reporting requirements in subsection (g).
    (g) Reports Required.--
            (1) Initial progress report.--Not later than 180 days after 
        the date of the enactment of this Act, the Secretary of State 
        shall submit to the appropriate congressional committees a 
        report on progress made in developing the strategic energy 
        partnerships authorized under this section.
            (2) Annual progress reports.--
                    (A) In general.--Not later than one year after the 
                date of the enactment of this Act, and annually 
                thereafter for 20 years, the Secretary of State shall 
                submit to the appropriate congressional committees an 
                annual report on agreements entered into and activities 
                undertaken pursuant to this section, including 
                international environment activities.
                    (B) Content.--Each report submitted under this 
                paragraph shall include details on--
                            (i) agreements and activities pursued by 
                        the United States Government with foreign 
                        governments and entities, the implementation 
                        plans for such agreements and progress 
                        measurement benchmarks, United States 
                        Government resources used in pursuit of such 
                        agreements and activities, and legislative 
                        changes recommended for improved partnership; 
                        and
                            (ii) polices and actions in the energy 
                        sector of partnership countries pertinent to 
                        United States economic, security, and 
                        environmental interests.

SEC. 5. INTERNATIONAL ENERGY CRISIS RESPONSE MECHANISMS.

    (a) Findings.--Congress makes the following findings:
            (1) Cooperation between the United States Government and 
        governments of other countries during energy crises promotes 
        the national security of the United States.
            (2) The participation of the United States in the 
        International Energy Program established under the Agreement on 
        an International Energy Program, done at Paris November 18, 
        1974 (27 UST 1685), including in the coordination of national 
        strategic petroleum reserves, is a national security asset 
        that--
                    (A) protects the consumers and the economy of the 
                United States in the event of a major disruption in 
                petroleum supply;
                    (B) maximizes the effectiveness of the United 
                States strategic petroleum reserve through cooperation 
                in accessing global reserves of various petroleum 
                products;
                    (C) provides market reassurance in countries that 
                are members of the International Energy Program; and
                    (D) strengthens United States Government 
                relationships with members of the International Energy 
                Program.
            (3) The International Energy Agency projects that the 
        largest growth in demand for petroleum products, other than 
        demand from the United States, will come from China and India, 
        which are not members of the International Energy Program. The 
        Governments of China and India vigorously pursue access to 
        global oil reserves and are attempting to develop national 
        petroleum reserves. Participation of the Governments of China 
        and India in an international petroleum reserve mechanism would 
        promote global energy security, but such participation should 
        be conditional on the Governments of China and India abiding by 
        customary petroleum reserve management practices.
            (4) In the Western Hemisphere, only the United States and 
        Canada are members of the International Energy Program. The 
        vulnerability of most Western Hemisphere countries to supply 
        disruptions from political, natural, or terrorism causes may 
        introduce instability in the hemisphere and can be a source of 
        conflict, despite the existence of major oil reserves in the 
        hemisphere.
            (5) Countries that are not members of the International 
        Energy Program and are unable to maintain their own national 
        strategic reserves are vulnerable to petroleum supply 
        disruption. Disruption in petroleum supply and spikes in 
        petroleum costs could devastate the economies of developing 
        countries and could cause internal or interstate conflict.
            (6) The involvement of the United States Government in the 
        extension of international mechanisms to coordinate strategic 
        petroleum reserves and the extension of other emergency 
        preparedness measures should strengthen the current 
        International Energy Program.
    (b) Energy Crisis Response Mechanisms With India and China.--
            (1) Authority.--The Secretary of State, in coordination 
        with the Secretary of Energy, should immediately seek to 
        establish a petroleum crisis response mechanism or mechanisms 
        with the Governments of China and India.
            (2) Scope.--The mechanism or mechanisms established under 
        paragraph (1) should include--
                    (A) technical assistance in the development and 
                management of national strategic petroleum reserves;
                    (B) agreements for coordinating drawdowns of 
                strategic petroleum reserves with the United States, 
                conditional upon reserve holdings and management 
                conditions established by the Secretary of Energy;
                    (C) emergency demand restraint measures;
                    (D) fuel switching preparedness and alternative 
                fuel production capacity; and
                    (E) ongoing demand intensity reduction programs.
            (3) Use of existing agreements to establish mechanism.--The 
        Secretary may, after consultation with Congress and in 
        accordance with existing international agreements, include 
        China and India in a petroleum crisis response mechanism 
        through existing or new multilateral or bilateral agreements.
    (c) Energy Crisis Response Mechanism for the Western Hemisphere.--
            (1) Authority.--The Secretary of State, in coordination 
        with the Secretary of Energy, should immediately seek to 
        establish a Western Hemisphere energy crisis response 
        mechanism.
            (2) Scope.--The mechanism established under paragraph (1) 
        should include--
                    (A) an information sharing and coordinating 
                mechanism in case of energy supply emergencies;
                    (B) technical assistance in the development and 
                management of national strategic petroleum reserves 
                within countries of the Western Hemisphere;
                    (C) technical assistance in developing national 
                programs to meet the requirements of membership in a 
                future international energy application procedure as 
                described in subsection (d);
                    (D) emergency demand restraint measures;
                    (E) fuel switching preparedness and alternative 
                fuel production capacity; and
                    (F) ongoing demand intensity reduction programs.
            (3) Membership.--The Secretary should seek to include in 
        the Western Hemisphere energy crisis response mechanism 
        membership for each major energy producer and major energy 
        consumer in the Western Hemisphere and other members of the 
        Hemisphere Energy Cooperation Forum authorized under section 6.
    (d) International Energy Program Application Procedure.--
            (1) Authority.--The President should place on the agenda 
        for discussion at the Governing Board of the International 
        Energy Agency, as soon as practicable, the merits of 
        establishing an international energy program application 
        procedure.
            (2) Purpose.--The purpose of such procedure is to allow 
        countries that are not members of the International Energy 
        Program to apply to the Governing Board of the International 
        Energy Agency for allocation of petroleum reserve stocks in 
        times of emergency on a grant or loan basis. Such countries 
        should also receive technical assistance for, and be subject 
        to, conditions requiring development and management of national 
        programs for energy emergency preparedness, including demand 
        restraint, fuel switching preparedness, and development of 
        alternative fuels production capacity.
    (e) Reports Required.--
            (1) Petroleum reserves.--Not later than 180 days after the 
        date of the enactment of this Act, the Secretary of Energy 
        shall submit to the appropriate congressional committees a 
        report that evaluates the options for adapting the United 
        States national strategic petroleum reserve and the 
        international petroleum reserve coordinating mechanism in order 
        to carry out this section.
            (2) Crisis response mechanisms.--Not later than 180 days 
        after the date of the enactment of this Act, the Secretary of 
        State, in coordination with the Secretary of Energy, shall 
        submit to the appropriate congressional committees a report on 
        the status of the establishment of the international petroleum 
        crisis response mechanisms described in subsections (b) and 
        (c). The report shall include recommendations of the Secretary 
        of State and the Secretary of Energy for any legislation 
        necessary to establish or carry out such mechanisms.
            (3) Emergency application procedure.--Not later than 60 
        days after a discussion by the Governing Board of the 
        International Energy Agency of the application procedure 
        described under subsection (d), the President should submit to 
        Congress a report that describes--
                    (A) the actions the United States Government has 
                taken pursuant to such subsection; and
                    (B) a summary of the debate on the matter before 
                the Governing Board of the International Energy Agency, 
                including any decision that has been reached by the 
                Governing Board with respect to the matter.

SEC. 6. HEMISPHERE ENERGY COOPERATION FORUM.

    (a) Findings.--Congress makes the following findings:
            (1) The engagement of the United States Government with 
        governments of countries in the Western Hemisphere is a 
        strategic priority for reducing the potential for tension over 
        energy resources, maintaining and expanding reliable energy 
        supplies, expanding use of renewable energy, and reducing the 
        detrimental effects of energy import dependence within the 
        hemisphere. Current energy dialogues should be expanded and 
        refocused as needed to meet this challenge.
            (2) Countries of the Western Hemisphere can most 
        effectively meet their common needs for energy security and 
        sustainability through partnership and cooperation. Cooperation 
        between governments on energy issues will enhance bilateral 
        relationships among countries of the hemisphere. The Western 
        Hemisphere is rich in natural resources, including biomass, 
        oil, natural gas, coal, and has significant opportunity for 
        production of renewable hydro, solar, wind, and other energies. 
        Countries of the Western Hemisphere can provide convenient and 
        reliable markets for trade in energy goods and services.
            (3) Development of sustainable energy alternatives in the 
        countries of the Western Hemisphere can improve energy 
        security, balance of trade, and environmental quality and 
        provide markets for energy technology and agricultural 
        products. Brazil and the United States have led the world in 
        the production of ethanol, and deeper cooperation on biofuels 
        with other countries of the hemisphere would extend economic 
        and security benefits.
            (4) Private sector partnership and investment in all 
        sources of energy is critical to providing energy security in 
        the Western Hemisphere.
    (b) Hemisphere Energy Cooperation Forum.--
            (1) Establishment.--The Secretary of State, in coordination 
        with the Secretary of Energy, should immediately seek to 
        establish a regional-based ministerial forum to be known as the 
        Hemisphere Energy Cooperation Forum.
            (2) Purposes.--The Hemisphere Energy Cooperation Forum 
        should seek--
                    (A) to strengthen relationships between the United 
                States and other countries of the Western Hemisphere 
                through cooperation on energy issues;
                    (B) to enhance cooperation between major energy 
                producers and major energy consumers in the Western 
                Hemisphere, particularly among the governments of 
                Brazil, Canada, Mexico, the United States, and 
                Venezuela;
                    (C) to ensure that energy contributes to the 
                economic, social, and environmental enhancement of the 
                countries of the Western Hemisphere;
                    (D) to provide an opportunity for open dialogue and 
                joint commitments between member governments and with 
                private industry; and
                    (E) to provide participating countries the 
                flexibility necessary to cooperatively address broad 
                challenges posed to the energy supply of the Western 
                Hemisphere that are practical in policy terms and 
                politically acceptable.
            (3) Activities.--The Hemisphere Energy Cooperation Forum 
        should implement the following activities:
                    (A) An Energy Crisis Initiative that will establish 
                measures to respond to temporary energy supply 
                disruptions, including through--
                            (i) strengthening sea-lane and 
                        infrastructure security;
                            (ii) implementing a real-time emergency 
                        information sharing system;
                            (iii) encouraging members to have emergency 
                        mechanisms and contingency plans in place; and
                            (iv) establishing a Western Hemisphere 
                        energy crisis response mechanism as authorized 
                        under section 5(c).
                    (B) An Energy Sustainability Initiative to 
                facilitate long-term supply security through fostering 
                reliable supply sources of fuels, including 
                development, deployment, and commercialization of 
                technologies for sustainable renewable fuels within the 
                region, including activities that--
                            (i) promote production and trade in 
                        sustainable energy, including energy from 
                        biomass;
                            (ii) facilitate investment, trade, and 
                        technology cooperation in energy 
                        infrastructure, petroleum products, natural gas 
                        (including liquefied natural gas), energy 
                        efficiency (including automotive efficiency), 
                        clean fossil energy, renewable energy, and 
                        carbon sequestration;
                            (iii) promote regional infrastructure and 
                        market integration;
                            (iv) develop effective and stable 
                        regulatory frameworks;
                            (v) develop renewable fuels standards and 
                        renewable portfolio standards;
                            (vi) establish educational training and 
                        exchange programs between member countries; and
                            (vii) identify and remove barriers to trade 
                        in technology, services, and commodities.
                    (C) An Energy for Development Initiative to promote 
                energy access for underdeveloped areas through energy 
                policy and infrastructure development, including 
                activities that--
                            (i) increase access to energy services for 
                        the poor;
                            (ii) improve energy sector market 
                        conditions;
                            (iii) promote rural development though 
                        biomass energy production and use;
                            (iv) increase transparency of, and 
                        participation in, energy infrastructure 
                        projects;
                            (v) promote development and deployment of 
                        technology for clean and sustainable energy 
                        development, including biofuel and clean coal 
                        technologies; and
                            (vi) facilitate use of carbon sequestration 
                        methods in agriculture and forestry and linking 
                        greenhouse gas emissions reduction programs to 
                        international carbon markets.
    (c) Hemisphere Energy Industry Group.--
            (1) Authority.--The Secretary of State, in coordination 
        with the Secretary of Commerce and the Secretary of Energy, 
        should approach the governments of other countries in the 
        Western Hemisphere to seek cooperation in establishing a 
        Hemisphere Energy Industry Group, to be coordinated by the 
        United States Government, involving industry representatives 
        and government representatives from the Western Hemisphere.
            (2) Purpose.--The purpose of the forum should be to 
        increase public-private partnerships, foster private 
        investment, and enable countries of the Western Hemisphere to 
        devise energy agendas compatible with industry capacity and 
        cognizant of industry goals.
            (3) Topics of dialogues.--Topics for the forum should 
        include--
                    (A) promotion of a secure investment climate;
                    (B) development and deployment of biofuels and 
                other alternative fuels and clean electrical production 
                facilities, including clean coal and carbon 
                sequestration;
                    (C) development and deployment of energy efficient 
                technologies and practices, including in the 
                industrial, residential, and transportation sectors;
                    (D) investment in oil and natural gas production 
                and distribution;
                    (E) transparency of energy production and reserves 
                data;
                    (F) research promotion; and
                    (G) training and education exchange programs.
    (d) Annual Report.--The Secretary of State, in coordination with 
the Secretary of Energy, shall submit to the appropriate congressional 
committees an annual report on the implementation of this section, 
including the strategy and benchmarks for measurement of progress 
developed under this section.

SEC. 7. APPROPRIATE CONGRESSIONAL COMMITTEES DEFINED.

    In this Act, the term ``appropriate congressional committees'' 
means the Committee on Foreign Relations and the Committee on Energy 
and Natural Resources of the Senate and the Committee on International 
Relations and the Committee on Energy and Commerce of the House of 
Representatives.
                                 <all>