I 112th CONGRESS 1st Session H. R. 1807 IN THE HOUSE OF REPRESENTATIVES May 10, 2011 Mr. Markey introduced the following bill; which was referred to the Committee on Energy and Commerce A BILL To provide for the sale of oil from the Strategic Petroleum Reserve and acquisition of refined petroleum product, and for other purposes.

1.

Short title

This Act may be cited as the Enhanced Supply and Price Reduction Act of 2011 or the Enhanced SPR Act.

2.

Definition

In this Act, the term Secretary means the Secretary of Energy.

3.

Petroleum product reserve

Section 154(a) of the Energy Policy and Conservation Act (42 U.S.C. 6234(a)) is amended by striking 1 billion barrels of petroleum products and inserting 1,000,000,000 barrels of petroleum products (including refined petroleum products).

4.

Sale of oil from the Strategic Petroleum Reserve and acquisition of refined petroleum product

(a)

Initial Petroleum Sale and Replacement

(1)

Authority

Notwithstanding section 161 of the Energy Policy and Conservation Act (42 U.S.C. 6241), the Secretary may sell, in the amounts and on the schedule described in subsection (b), petroleum from the Strategic Petroleum Reserve and acquire refined petroleum product. (2)

Proceeds

If the Secretary acts pursuant to paragraph (1), the Secretary shall— (A)deposit the cash proceeds from sales under subparagraph (A) into the SPR Petroleum Account established under section 167 of the Energy Policy and Conservation Act (42 U.S.C. 6247); and (B)from the cash proceeds deposited pursuant to paragraph (2), withdraw the amount necessary to pay for the direct administrative and operational costs of the sale and acquisition, including for acquisition and maintenance of, and improvements to, storage facilities. (b)

Amounts and Schedule

(1)

In general

The sale and acquisition described in subsection (a) may require the offer for sale of a total quantity of no more than 30,000,000 barrels of petroleum from the Strategic Petroleum Reserve. The sale may commence within 180 days after the date of enactment of this Act and may end not later than 3 years after such date of enactment. In no event shall the Secretary sell barrels of oil under subsection (a) that would result in a Strategic Petroleum Reserve that contains fewer than 90 percent of the total amount of barrels in the Strategic Petroleum Reserve as of the date of enactment of this Act. (2)

Acquisitions

If the Secretary acts pursuant to subsection (a)(1), the Secretary shall acquire refined petroleum product under this section— (A)beginning no sooner than 180 days after the date of enactment of this Act; (B)ending no later than 5 years after the date of enactment of this Act; and (C)in a manner so as to minimize both the cost to the Federal Government and market disruption associated with the acquisition.

5.

Report to Congress

Not later than 18 months after the commencement of any sale authorized pursuant to section 4, the Secretary shall transmit to Congress a report— (1)describing the amounts and types of petroleum sold and refined petroleum product acquired under section 4; (2)describing the actions taken for the storage of refined petroleum product acquired under section 4, and identifying any requirements for additional facilities; (3)describing efforts the Department of Energy has taken to ensure that distributors and importers are not discouraged from maintaining and increasing supplies of refined petroleum products; (4)describing actions that the Department of Energy has taken and plans to take to ensure quality of refined petroleum product in the Reserve, including the rotation of product stored; and (5)analyzing the effects that activities under section 4 have had on oil markets.

6.

Strategic Petroleum Reserve drawdown and exchange in public interest

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: (k)

Public interest

(1)

General Authority

If, after consultation with the Secretary of Energy, the Secretary of Defense, and the Chairman of the Federal Trade Commission, the President finds that a circumstance, other than those described in subsections (d) or (h) of this section, exists of such significance and scope that action under this subsection would be warranted to address market manipulation or otherwise be in the public interest, then the President may instruct the Secretary to drawdown and sell or exchange petroleum product from the Reserve under this subsection. (2)

Limitations

Petroleum product from the Reserve may not be drawn down or exchanged under this subsection— (A)in excess of an aggregate of 30,000,000 barrels with respect to each circumstance warranting a finding under paragraph (1); or (B)in an amount that would lower the aggregate level of petroleum product in the Reserve to less than 600,000,000 barrels of petroleum product. (3)

Report to Congress

At the end of any month during which there is a drawdown and sale of petroleum products from the Reserve under this subsection, the Secretary shall transmit a report to the Congress containing an account of the drawdown and sale, along with an assessment of the effects of the drawdown and sale. (4)

Replenishment

In the case of a drawdown and sale or exchange under this subsection, the Secretary shall provide for the timely replenishment of the Reserve in accordance with the objectives and procedures set forth in section 160. .