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): 201010.0 201111.0 201212.0 201314.0 201417.0 201522.0 201628.0 201735.0

(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 TypeCompliance Value Ethanol (non-Cellulosic)1.0 Ethanol (Cellulosic)1.0 Biodiesel1.4 Gas-to-Liquid Diesel Fuel1.5 Coal-to-Liquid Diesel Fuel1.5 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 Methanol0.8 Butanol1.3 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).