II 110th CONGRESS 1st Session S. 1766 IN THE SENATE OF THE UNITED STATES July 11, 2007 Mr. Bingaman (for himself, Mr. Specter, Mr. Harkin, Mr. Stevens, Ms. Murkowski, and Mr. Akaka) introduced the following bill; which was read twice and referred to the Committee on Environment and Public Works A BILL To reduce greenhouse gas emissions from the production and use of energy, and for other purposes.

1.

Short title; table of contents

(a)

Short title

This Act may be cited as the Low Carbon Economy Act of 2007. (b)

Table of contents

The table of contents is as follows: Sec. 1. Short title; table of contents. Sec. 2. Findings. Sec. 3. Definitions. TITLE I—Strategic reduction targets, compliance, and trading Sec. 101. Quantity of annual allowances. Sec. 102. Submission of allowances, credits, and payments. Sec. 103. Trading system for allowances and credits. TITLE II—Allocation and auction of allowances Sec. 201. General allocation and auction rules. Sec. 202. Allocation to industry sectors other than carbon-intensive manufacturing. Sec. 203. Allocation to carbon-intensive manufacturing. Sec. 204. Allocation to States. Sec. 205. Allocation for agricultural projects. Sec. 206. Allocation for early reductions. Sec. 207. Allocation of carbon capture and sequestration bonus allowances. Sec. 208. Auction of allowances for technology, adaptation, and assistance programs. TITLE III—Provision of credits Sec. 301. Credits for activities that take greenhouse gas precursors out of commerce in the United States. Sec. 302. Credits for carbon dioxide sequestration. Sec. 303. Credits for projects that offset other greenhouse gas emissions. TITLE IV—Technology, adaptation, and assistance programs Sec. 401. Early technology deployment programs. Sec. 402. Adaptation programs. Sec. 403. Assistance programs. TITLE V—Periodic review and international leadership Sec. 501. Executive branch and congressional review of program. Sec. 502. International reserve allowance requirement. TITLE VI—General provisions Sec. 601. Monitoring and reporting. Sec. 602. Enforcement. Sec. 603. Administrative provisions. Sec. 604. Judicial review. Sec. 605. Savings provision.

2.

Findings

Congress finds that— (1)under the United Nations Framework Convention on Climate Change, done at New York on May 9, 1992, the United States is committed to stabilizing greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system; (2)according to the Fourth Assessment of the Intergovernmental Panel on Climate Change, protecting the climate system could require reductions of global greenhouse gas emissions equivalent to 50 to 85 percent below 2000 levels by 2050; (3)meeting the commitment to stabilize greenhouse gas emissions at appropriate levels will require a long-term global effort; and (4)it is possible and desirable to implement, in the United States, an economy-wide annual limit on greenhouse gas emissions for calendar year 2012 and each subsequent calendar year, with the limit declining to 2006 levels by 2020, 1990 levels by 2030, and at least 60 percent below 2006 levels by 2050 (contingent on sufficient international effort), if the system includes— (A)cost mitigation measures, including a technology accelerator payment mechanism, banking, and offsets; (B)requirements for periodic Presidential reports and recommendations and expedited congressional procedures to adjust the stringency of the regulatory program on consideration of new scientific information and the efforts of other countries to reduce their emissions; (C)an aggressive advanced energy technology deployment program to lower costs of compliance and to improve use of fuels; (D)a program to fund activities to address adaptation to a warming climate; and (E)a program to provide assistance to low-income persons who may be hardest hit by the costs of climate change and mitigation measures.

3.

Definitions

In this Act: (1)

Allocation period

(A)

Allocation period

The term allocation period means the initial allocation period or a subsequent allocation period, as appropriate. (B)

Initial allocation period

The term initial allocation period means the period beginning January 1, 2012, and ending December 31, 2021. (C)

Subsequent allocation period

The term subsequent allocation period means— (i)the 5-year period beginning January 1, 2022, and ending December 31, 2026; and (ii)each subsequent 5-year period. (2)

Carbon dioxide equivalent

The term carbon dioxide equivalent means— (A)for each covered fuel, the quantity of carbon dioxide that would be emitted into the atmosphere as a result of complete combustion of a unit of the covered fuel, to be determined for the type of covered fuel by the President; and (B)for each greenhouse gas (other than carbon dioxide), the quantity of carbon dioxide that would have an effect on global warming equal to the effect of a unit of the greenhouse gas, as determined by the President, taking into consideration global warming potentials. (3)

Climate Adaptation Fund

The term Climate Adaptation Fund means the Climate Adaptation Fund established under section 208(f)(1)(B). (4)

Coal

The term coal means any of the recognized classifications and ranks of coal, including anthracite, bituminous, semibituminous, subbituminous, lignite, peat, and fuel derivatives of coal. (5)

Covered fuel

The term covered fuel means— (A)coal; (B)petroleum products; (C)natural gas, including liquefied natural gas; (D)natural gas liquids; and (E)any other fuel derived from fossil hydrocarbons (including bitumen, kerogen, and coalbed methane). (6)

Covered greenhouse gas emissions

(A)

In general

The term covered greenhouse gas emissions means— (i)for a regulated coal facility in the United States, the emissions associated with coal consumed or converted to synthetic fuels by the facility; (ii)for a petroleum refinery located in the United States, the emissions associated with petroleum products, that are refined, produced, or consumed at the refinery; (iii)for a natural gas processing plant in the United States, a quantity of emissions equal to the sum of— (I)the emissions associated with natural gas liquids produced or consumed at the plant; and (II)the emissions associated with natural gas delivered into commerce from, or consumed at, the plant; (iv)for an importer of petroleum products, coke, or natural gas (including liquefied natural gas) into the United States, the emissions associated with the petroleum products, coke, or natural gas imported; (v)for a manufacturer or importer of hydrofluorocarbons, perfluorocarbons, sulfur hexa­fluoride, or nitrous oxide or an importer of a product containing hy­dro­fluo­ro­car­bons, per­fluo­ro­car­bons, sulfur hexa­fluoride, or nitrous oxide, the quantity of hy­dro­fluo­ro­car­bons, per­fluo­ro­car­bons, sulfur hexa­fluoride, or nitrous oxide produced in the United States or imported by, or contained in products imported by, the manufacturer or importer; (vi)for a facility in the United States that manufactures adipic acid or nitric acid, the quantity of nitrous oxide emitted by the facility; (vii)for an aluminum smelter in the United States, the quantity of per­fluo­ro­car­bons emitted by the smelter; (viii)for a facility in the United States that produces hy­dro­chlo­ro­fluo­ro­car­bon–22, the quantity of hy­dro­fluo­ro­car­bon–23 emitted by the facility; and (ix)such other emissions of greenhouse gases from facilities in the United States that the President, by rule under section 102(g), determines is necessary to ensure that allowances are submitted for each covered fuel. (B)

Units

Quantities of covered greenhouse gas emissions shall be measured and expressed in units of metric tons of carbon dioxide equivalent. (7)

Eligible coal mine

The term eligible coal mine means a coal mine located in the United States. (8)

Eligible electric generation facility

(A)

In general

The term eligible electric generation facility means a fossil-fuel-fired facility for the generation of electric energy located in the United States. (B)

Exclusion

The term eligible electric generation facility does not include any facility described in subparagraph (A) that— (i)began operations after December 31, 2006; and (ii)does not satisfy the criteria established in section 202(c). (9)

Eligible facility

The term eligible facility means— (A)an eligible coal mine; (B)an eligible electric generation facility; (C)an eligible natural gas processing plant; (D)an eligible nonfuel regulated facility; or (E)an eligible refinery. (10)

Eligible natural gas processing plant

The term eligible natural gas processing plant means a natural gas processing plant located in the United States. (11)

Eligible nonfuel regulated facility

The term eligible nonfuel regulated facility means a nonfuel regulated facility located in the United States. (12)

Eligible refinery

The term eligible refinery means a petroleum refinery located in the United States. (13)

Energy Assistance Fund

The term Energy Assistance Fund means the Energy Assistance Fund established under section 208(f)(1)(C). (14)

Energy Technology Deployment Fund

The term Energy Technology Deployment Fund means the Energy Technology Deployment Fund established under section 208(f)(1)(A). (15)

Greenhouse gas

The term greenhouse gas means— (A)carbon dioxide; (B)methane; (C)nitrous oxide; (D)hydrofluorocarbons; (E)perfluorocarbons; and (F)sulfur hexafluoride. (16)

Natural gas processing plant

The term natural gas processing plant means a facility in the United States designed to separate natural gas liquids from natural gas. (17)

Natural gas processor

The term natural gas processor means the owner or operator of a natural gas processing plant. (18)

Nonfuel regulated entity

The term nonfuel regulated entity means— (A)the owner or operator of a nonfuel regulated facility; and (B)an importer of— (i)hydrofluorocarbons, per­fluo­ro­car­bons, sulfur hexa­fluoride, or nitrous oxide; or (ii)a product containing hy­dro­fluo­ro­car­bons, perfluorocarbons, sulfur hexa­fluoride, or nitrous oxide. (19)

Nonfuel regulated facility

The term nonfuel regulated facility means a facility that— (A)manufactures hydrofluorocarbons, perfluorocarbons, sulfur hexafluoride, or nitrous oxide; (B)emits nitrous oxide associated with the manufacture of adipic acid or nitric acid; (C)is an aluminum smelter; or (D)emits hydrofluorocarbon–23 as a byproduct of hydrochlorofluorocarbon–22 production. (20)

Offset project

The term offset project means any project to— (A)reduce greenhouse gas emissions; or (B)sequester or destroy a greenhouse gas. (21)

Petroleum product

The term petroleum product means— (A)a refined petroleum product; (B)residual fuel oil; (C)petroleum coke; or (D)a liquefied petroleum gas. (22)

Regulated coal facility

The term regulated coal facility means a facility that uses more than 5,000 tons of coal in a calendar year. (23)

Regulated entity

The term regulated entity means— (A)a regulated fuel distributor; (B)the owner or operator of a regulated coal facility; (C)a nonfuel regulated entity; or (D)an entity designated by the President under section 102(g)(2). (24)

Regulated fuel distributor

The term regulated fuel distributor means— (A)the owner or operator of— (i)a petroleum refinery; or (ii)a natural gas processing plant; or (B)an importer of— (i)petroleum products; (ii)coke; or (iii)natural gas (including liquefied natural gas). (25)

Secretary

The term Secretary means the Secretary of Energy. (26)

State

The term State means— (A)each of the several States of the United States; (B)the District of Columbia; (C)the Commonwealth of Puerto Rico; (D)Guam; (E)American Samoa; (F)the Commonwealth of the Northern Mariana Islands; (G)the Federated States of Micronesia; (H)the Republic of the Marshall Islands; (I)the Republic of Palau; and (J)the United States Virgin Islands. (27)

TAP

The term TAP means the technology accelerator payment determined under section 102. (28)

United States

The term United States, when used in the geographic sense, means all of the States.