[House Report 104-814]
[From the U.S. Government Publishing Office]



104th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 2d Session                                                     104-814
_______________________________________________________________________


 
TO EXTEND CERTAIN PROGRAMS UNDER THE ENERGY POLICY AND CONSERVATION ACT 
                       THROUGH SEPTEMBER 30, 1997

_______________________________________________________________________


 September 20, 1996.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

  Mr. Bliley, from the Committee on Commerce, submitted the following

                              R E P O R T

                        [To accompany H.R. 4083]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Commerce, to whom was referred the bill 
(H.R. 4083) to extend certain programs under the Energy Policy 
and Conservation Act through September 30, 1997, having 
considered the same, report favorably thereon without amendment 
and recommend that the bill do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     1
Background and Need for Legislation..............................     2
Hearings.........................................................     3
Committee Consideration..........................................     3
Rollcall Votes...................................................     3
Committee Oversight Findings.....................................     3
Committee on Government Reform and Oversight.....................     3
New Budget Authority and Tax Expenditures........................     3
Committee Cost Estimate..........................................     3
Congressional Budget Office Estimate.............................     4
Inflationary Impact Statement....................................     6
Advisory Committee Statement.....................................     6
Section-by-Section Analysis of the Legislation...................     6
Changes in Existing Law Made by the Bill, as Reported............     6

                          Purpose and Summary

    H.R. 4083 extends certain programs under the Energy Policy 
and Conservation Act through September 30, 1997. Paragraphs 1 
and 2 of H.R. 4083 extend the authorities to buy or lease oil 
for, operate, and drawdown the Strategic Petroleum Reserves 
through September 30, 1997, and authorize such sums as may be 
necessary. Paragraphs 3 and 4 extend funding and authority for 
the United States to participate in the International Energy 
Agency (IEA) through September 30, 1997, and authorize such 
sums as may be necessary. Absent an extension, (1) the 
President's authority to drawdown the Reserve in an emergency 
might be insufficient or his ability to order a rapid drawdown 
if necessary could be delayed, and (2) the ability of oil 
companies to participate in oil sharing programs ordered by the 
IEA in an emergency would be severely limited.

                  Background and Need for Legislation

    The Energy Policy and Conservation Act (EPCA) was enacted 
on December 22, 1975, (Public Law 94-163) to deal with the 
chronic energy supply shortages, particularly petroleum supply 
shortages, experienced by the United States in the early 1970s. 
Among other things, EPCA authorized the creation of a Strategic 
Petroleum Reserve (SPR or Reserve) capable of storing up to one 
billion barrels of oil to reduce the U.S.'s vulnerability in 
the event of a disruption in imported petroleum supplies. EPCA 
also authorized U.S. participation in the International Energy 
Agreement. Authorization of both of these programs expired June 
30, 1996.
    The SPR presently consists of six sites on the Gulf Coast 
in Texas and Louisiana. These sites currently contain about 582 
million barrels of crude oil and have a total storage capacity 
of 750 million barrels. The current storage level is equivalent 
to approximately 71 days of U.S. imported oil consumption. By 
law, the SPR is required to contain one billion barrels of oil. 
However, recent budget constraints have forced the Department 
of Energy to end plans to expand the SPR's capacity and to 
propose to stop buying and to start selling SPR oil. In the 
104th Congress, two sales of oil from the Reserve were 
authorized to meet budgetary goals and a third has been 
proposed.
    The purpose of the International Energy Agreement is to 
coordinate the responses of oil consuming nations to oil supply 
disruptions in order to minimize the global impact of those 
disruptions. The authorities being extended by H.R. 4083 allow 
the President to participate in the program and give U.S. oil 
companies a limited antitrust exemption for their participation 
in the program.
    Authority to undertake activities related to the Reserve 
and the International Energy Agreement expired on June 30, 
1996. Concerns have been raised that the expiration of this 
authority leaves the President without complete authority to 
drawdown the Reserve in an energy emergency and impairs the 
ability of U.S. oil companies to participate in the 
International Energy Agreement. This short term extension 
addresses these concerns and assures that these important 
authorities are continued when the Congress adjourns. This 
short term extension also gives the Congress additional time to 
consider issues involved in a longer term extension.

                                Hearings

    The Subcommittee on Energy and Power held a hearing on H.R. 
2965, a bill to extend energy conservation programs under the 
Energy Policy and Conservation Act through Fiscal Year 1999, 
and for other purposes, on November 9, 1995. The Subcommittee 
received testimony from the following witnesses: Mr. C. Kyle 
Simpson, Associate Deputy Secretary for Energy Programs, U.S. 
Department of Energy; Mr. John Nunley, III, Director, Wyoming 
Energy and Conservation Office, representing the National 
Association of State Energy Officials; and Mr. Scott Sklar, 
Executive Director, Solar Energy Industries Association.

                        Committee Consideration

    On September 18, 1996, the Committee on Commerce met in 
open markup session and ordered H.R. 4083, a bill to extend 
certain programs under the Energy Policy and Conservation Act 
through September 30, 1997, reported to the House, without 
amendment, by a voice vote.

                             Rollcall Votes

    Clause 2(l)(2)(B) of rule XI of the Rules of the House 
requires the Committee to list the recorded votes on the motion 
to report legislation and on amendments thereto. There were no 
recorded votes taken in connection with ordering H.R. 4083 
reported. A motion by Mr. Bliley to order H.R. 4083 reported to 
the House, without amendment, was agreed to by a voice vote, a 
quorum being present.

                      Committee Oversight Findings

    Pursuant to clause 2(l)(3)(A) of rule XI of the Rules of 
the House of Representatives, the Committee held a legislative 
hearing and made findings that are reflected in this report.

              Committee on Government Reform and Oversight

    Pursuant to clause 2(l)(3)(D) of rule XI of the Rules of 
the House of Representatives, no oversight findings have been 
submitted to the Committee by the Committee on Government 
Reform and Oversight.

               New Budget Authority and Tax Expenditures

    In compliance with clause 2(l)(3)(B) of rule XI of the 
Rules of the House of Representatives, the Committee states 
that H.R 4083 would result in no new or increased budget 
authority or tax expenditures or revenues.

                        Committee Cost Estimate

    The Committee adopts as its own the cost estimate prepared 
by the Director of the Congressional Budget Office pursuant to 
section 403 of the Congressional Budget Act of 1974.

                  Congressional Budget Office Estimate

    Pursuant to clause 2(l)(3)(C) of rule XI of the Rules of 
the House of Representatives, the following is the cost 
estimate provided by the Congressional Budget Office pursuant 
to section 403 of the Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                Washington, DC, September 19, 1996.
Hon. Thomas J. Bliley, Jr.,
Chairman, Committee on Commerce,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 4083, a bill to 
extend certain programs under the Energy Policy and 
Conservation Act through September 30, 1997.
    Enacting H.R. 4083 would not affect direct spending or 
receipts. Therefore, pay-as-you-go procedures would not apply 
to the bill.
    If you wish further details on this estimate, we will be 
pleased to provide them.
            Sincerely,
                                         June E. O'Neill, Director.
    Enclosure.

               congressional budget office cost estimate

    1. Bill number: H.R. 4083.
    2. Bill title: A bill to extend certain programs under the 
Energy Policy and Conservation Act through September 30, 1997.
    3. Bill status: As ordered reported by the House Committee 
on Commerce on September 18, 1996.
    4. Bill purpose: H.R. 4083 would amend the Energy Policy 
and Conservation Act (EPCA) to extend the authorization of 
programs and activities related to energy emergencies through 
September 30, 1997. The previous authorization for these 
activites expired on June 30, 1996. This bill would authorize 
the Department of Energy (DOE) to continue to operate the 
Strategic Petroleum Reserve, participate in the International 
Energy Agency, and conduct related activities through the end 
of fiscal year 1997, and would authorize such sums as may be 
necessary for these programs.
    5. Estimated cost to the Federal Government: As shown in 
the following table, we estimate that enacting H.R. 4083 would 
result in additional descretionary spending totaling $224 
million over the 1997-2002 period, assuming appropriation of 
the necessary amounts for fiscal year 1997.

                                    [By fiscal year, in millions of dollars]                                    
----------------------------------------------------------------------------------------------------------------
                                                           1996    1997    1998    1999    2000    2001    2002 
----------------------------------------------------------------------------------------------------------------
Spending under current law:                                                                                     
    Budget authority \1\................................     290  ......  ......  ......  ......  ......  ......
    Estimated outlays...................................     272     128      29  ......  ......  ......  ......
Proposed changes:                                                                                               
    Estimated authorization level.......................  ......     224  ......  ......  ......  ......  ......
    Estimated outlays...................................  ......     123      79      22  ......  ......  ......
Spending under H.R. 4083:                                                                                       
    Estimated authorization level \1\...................     290     224  ......  ......  ......  ......  ......
    Estimated outlays...................................     272     251     108      22  ......  ......  ......
----------------------------------------------------------------------------------------------------------------
\1\ The 1996 level is the amount appropriated for that year.                                                    

    The costs of this bill fall within budget function 270.
    6. Basis of estimate: For the purpose of this estimate, we 
assume that appropriations will be provided by the start of 
fiscal year 1997 and that outlays will follow historical trends 
for the affected programs. In the absence of specific 
authorization levels, we assume that the amounts appropriated 
for the current fiscal year represent the level of funding 
necessary to carry out the functions outlined in the bill. The 
one exception to this approach is the estimate for operation 
and maintenance of SPR facilities. For that account, we have 
based our estimate on DOE's current estimate of the program's 
requirements for 1997 because the 1996 level includes the one-
time cost of decommissioning one of the SPR sites. Hence, we 
project spending for the SPR would total about $220 million in 
1997, assuming appropriations consistent with operations and 
maintenance needs.
    For comparability to the estimate for 1997, the table 
includes the $287 million gross appropriation for the SPR 
facilities account for 1996. This SPR account received no new 
budget authority for 1996 because the entire operation was 
offset by collections of $100 million from a sale of oil from 
one of the SPR sites and by the transfer of $187 million in 
unobligated balances from the SPR petroleum acquisition 
account.
    7. Pay-as-you-go considerations: None.
    8. Estimated impact on State, local, and tribal 
governments: The bill contains no intergovernmental mandates as 
defined by the Unfunded Mandates Reform Act of 1995 (Public Law 
104-4), and would not have any impact on the budgets of state, 
local, or tribal governments.
    9. Estimated impact on the private sector: This bill would 
impose no new private-sector mandates as defined in Public Law 
104-4.
    10. Previous CBO estimate: In 1996, CBO submitted estimates 
of several bills approved by the House Committee on Commerce 
and the Senate Committee on Energy and Natural Resources that 
would have extended the authorization of the programs 
authorized by H.R. 4083. Estimates were provided for H.R. 2596, 
a bill to reauthorize the Energy Policy and Conservation Act 
through 1999, and for other purposes; H.R. 3868, a bill to 
extend certain programs under the Energy Policy and 
Conservation Act through September 30, 1996; S. 1605, the 
Energy Policy and Conservation Act Amendment Act; and S. 1888, 
the Energy Policy and Conservation Act Amendments of 1996. Most 
of differences between those estimates and the estimate for 
H.R. 4083 reflect differences in the time period and programs 
that would be affected by the respective bills.
    11. Estimate prepared by: Federal cost estimate--Kathleen 
Gramp. Impact on State, local, and tribal governments--Pepper 
Santalucia. Impact on the private sector--Patrice Gordon.
    12. Estimate approved by: Robert A. Sunshine, for Paul N. 
Van de Water, Assistant Director for Budget Analysis.

                     Inflationary Impact Statement

    Pursuant to clause 2(l)(4) of rule XI of the Rules of the 
House of Representatives, the Committee finds that the bill 
would have no inflationary impact.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act are created by this 
legislation.

             Section-by-Section Analysis of the Legislation

    Paragraph 1 of H.R. 4083 authorizes such sums as may be 
necessary to carry out the Strategic Petroleum Reserve program 
through September 30, 1997. Funds for this program have already 
been appropriated through the end of Fiscal Year 1997.
    Paragraph 2 of the bill extends the authorities to buy or 
lease oil for, operate and drawdown the Strategic Petroleum 
Reserves through September 30, 1997. Absent extension of this 
authority the President's ability to drawdown the Reserve in an 
energy emergency is incomplete.
    Paragraph 3 authorizes such sums as may be necessary to 
participate in the International Energy Program through 
September 30, 1997. Funds for the program have already been 
appropriated through the end of Fiscal Year 1997.
    Paragraph 4 simply extends the authority for the U.S. to 
participate in the International Energy Agency (IEA) through 
September 30, 1997. Absent such an extension, the ability of 
oil companies to participate in oil sharing programs ordered by 
the IEA in an emergency would be severely limited.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3 of rule XIII of the Rules of the 
House of Representatives, changes in existing law made by the 
bill, as reported, are shown as follows (existing law proposed 
to be omitted is enclosed in black brackets, new matter is 
printed in italic, existing law in which no change is proposed 
is shown in roman):

                   ENERGY POLICY AND CONSERVATION ACT

          * * * * * * *

        TITLE I--MATTERS RELATED TO DOMESTIC SUPPLY AVAILABILITY

          * * * * * * *

                  Part B--Strategic Petroleum Reserve

          * * * * * * *

                    [authorization of appropriations

  [Sec. 166. (a) There are authorized to be appropriated--
          [(1) such funds as are necessary to develop and 
        implement the Early Storage Reserve Plan (including 
        planning, administration, acquisition, and construction 
        of storage and related facilities) and as are necessary 
        to permit the acquisition of petroleum products for 
        storage in the Early Storage Reserve or, if the 
        Strategic Petroleum Reserve Plan has become effective 
        under section 159(a), for storage in the Strategic 
        Petroleum Reserve in the minimum volume specified in 
        section 154(a) or 155(a)(2), whichever is applicable;
          [(2) $1,100,000,000 to remain available until 
        expended to carry out the provisions of this part to 
        develop the Strategic Petroleum Reserve Plan and to 
        implement such plan which has taken effect pursuant to 
        section 159(a), including planning, administration, and 
        acquisition and construction of storage and related 
        facilities, but no funds are authorized to be 
        appropriated under this paragraph for the purchase of 
        petroleum products for storage in the Strategic 
        Petroleum Reserve;
          [(3) such funds for the fiscal year ending September 
        30, 1978, not to exceed $1,210,000,000, as are 
        necessary to permit the acquisition and storage of 
        petroleum products in the Strategic Petroleum Reserve, 
        in accordance with the storage schedule set forth in 
        the Strategic Petroleum Reserve Plan then in effect in 
        excess of the minimum volume specified in section 
        154(a), but not in excess of 500,000,000 barrels; and
          [(4) for the fiscal year ending September 30, 1982, 
        not to exceed $260,000,000 to carry out the provisions 
        of this part, except--
                  [(A) acquisition, transportation, and 
                injection of petroleum products for the 
                Reserve, and
                  [(B) the carrying out of any drawdown and 
                distribution of the Reserve.]


                    authorization of appropriations


  Sec. 166. There are authorized to be appropriated for fiscal 
year 1997 such sums as may be necessary to implement this part.
          * * * * * * *

                           Part D--Expiration

                               expiration

  Sec. 181. Except as otherwise provided in title I, all 
authority under any provision of title I (other than a 
provision of such title amending another law) and any rule, 
regulation, or order issued pursuant to such authority, shall 
expire at midnight, [June 30, 1996] September 30, 1997, but 
such expiration shall not affect any action or pending 
proceedings, civil or criminal, not finally determined on such 
date, nor any action or proceeding based upon any act committed 
prior to midnight, [June 30, 1996] September 30, 1997.
          * * * * * * *

                  TITLE II--STANDBY ENERGY AUTHORITIES

          * * * * * * *

    Part B--Authorities With Respect to International Energy Program

          * * * * * * *

   domestic renewable energy industry and related service industries

  Sec. 256. (a) * * *
          * * * * * * *
  (h) Authorization of Appropriations.--There are authorized to 
be appropriated to the Secretary for purposes of carrying out 
the programs under subsections (d) and (e) $10,000,000, to be 
divided equitably between the interagency working subgroups 
based on program requirements, for each of the fiscal years 
1993 and 1994, and such sums as may be necessary for fiscal 
year 1995 to carry out the purposes of this subtitle. There are 
authorized to be appropriated for fiscal year 1997 such sums as 
may be necessary to carry out this part.
          * * * * * * *

                           Part D--Expiration

                               expiration

  Sec. 281. Except as otherwise provided in title II, all 
authority under any provision of title II (other than a 
provision of such title amending another law) and any rule, 
regulation, or order issued pursuant to such authority, shall 
expire at midnight, [June 30, 1996] September 30, 1997, but 
such expiration shall not affect any action or pending 
proceedings, civil or criminal, not finally determined on such 
date, nor any action or proceeding based upon any act committed 
prior to midnight, [June 30, 1996] September 30, 1997.
          * * * * * * *