[House Report 110-7]
[From the U.S. Government Publishing Office]



110th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                      110-7

======================================================================



 
       ADVANCED FUELS INFRASTRUCTURE RESEARCH AND DEVELOPMENT ACT

                                _______
                                

February 5, 2007.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

Mr. Gordon of Tennessee, from the Committee on Science and Technology, 
                        submitted the following 

                              R E P O R T

                        [To accompany H.R. 547]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Science and Technology, to whom was 
referred the bill (H.R. 547) to facilitate the development of 
markets for alternative fuels and Ultra Low Sulfur Diesel fuel 
through research, development, and demonstration and data 
collection, having considered the same, report favorably 
thereon with amendments and recommend that the bill as amended 
do pass.

                                CONTENTS

                                                                   Page
   I. Amendments......................................................2
  II. Purpose of the Bill.............................................3
 III. Background and Need for the Legislation.........................3
  IV. Hearing Summary.................................................6
   V. Committee Actions...............................................7
  VI. Summary of Major Provisions of the Bill.........................7
 VII. Section-by-Section Analysis (by Title and Section)..............8
VIII. Committee Views.................................................8
  IX. Cost Estimate...................................................9
   X. Congressional Budget Office Cost Estimate.......................9
  XI. Compliance with Public Law 104-4...............................10
 XII. Committee Oversight Findings and Recommendations...............10
XIII. Statement on General Performance Goals and Objectives..........10
 XIV. Constitutional Authority Statement.............................11
  XV. Federal Advisory Committee Statement...........................11
 XVI. Congressional Accountability Act...............................11
XVII. Earmark Identification.........................................11
XVIII.Statement on Preemption of State, Local, or Tribal Law.........11

 XIX. Changes in Existing Law Made by the Bill, as Reported..........11
  XX. Committee Recommendations......................................11
 XXI. Minority Views.................................................11
XXII. Proceedings of the Full Committee Markup.......................12

                             I. AMENDMENTS

    The amendments are as follows:
    Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Advanced Fuels Infrastructure 
Research and Development Act''.

SEC. 2. FINDINGS.

    The Congress finds that--
          (1) in order to lessen United States dependence on foreign 
        sources of petroleum, and decrease demand for petroleum in the 
        transportation sector, the Nation must diversify its fuel 
        supply to include domestically produced biofuels;
          (2) while ethanol has been successful in the market place as 
        a fuel additive, newer biofuels may present unique challenges 
        that may render the fuels incompatible with the current fuel 
        transportation and delivery infrastructure, placing the burden 
        of costly refurbishment and construction on fuel distributors 
        and retailers;
          (3) chemical additives to the fuels may mitigate the negative 
        impacts of some biofuels on existing infrastructure and 
        preclude costly retrofitting or installation of new biofuel 
        compatible infrastructure and transportation systems;
          (4) in order to mitigate air pollution and comply with 
        Federal mandates, Ultra Low Sulfur Diesel fuel was introduced 
        into the marketplace in 2006;
          (5) fuel labeled Ultra Low Sulfur Diesel may accumulate more 
        than the statutory limit of 15 parts per million of sulfur when 
        transported through multiple pipelines, tanks, and trucks to 
        the final point of sale; and
          (6) fuel distributors and retailers may inadvertently take 
        delivery of fuel labeled Ultra Low Sulfur Diesel with more than 
        15 parts per million of sulfur without a practical means of 
        verifying sulfur content.

SEC. 3. BIOFUEL INFRASTRUCTURE AND ADDITIVES RESEARCH AND DEVELOPMENT.

    The Assistant Administrator of the Office of Research and 
Development of the Environmental Protection Agency (in this Act 
referred to as the ``Assistant Administrator''), in consultation with 
the Secretary of Energy and the National Institute of Standards and 
Technology, shall carry out a program of research and development of 
materials to be added to biofuels to make them more compatible with 
existing infrastructure used to store and deliver petroleum-based fuels 
to the point of final sale. The program shall address--
          (1) materials to prevent or mitigate--
                  (A) corrosion of metal, plastic, rubber, cork, 
                fiberglass, glues, or any other material used in pipes 
                and storage tanks;
                  (B) dissolving of storage tank sediments;
                  (C) clogging of filters;
                  (D) contamination from water or other adulterants or 
                pollutants;
                  (E) poor flow properties related to low temperatures;
                  (F) oxidative and thermal instability in long-term 
                storage and use;
                  (G) microbial contamination; and
                  (H) problems associated with electrical conductivity;
          (2) alternatives to conventional methods for refurbishment 
        and cleaning of gasoline and diesel tanks, including tank 
        lining applications; and
          (3) other problems as identified by the Assistant 
        Administrator, in consultation with the Secretary of Energy and 
        the National Institute of Standards and Technology.

SEC. 4. SULFUR TESTING FOR DIESEL FUELS.

    (a) Program.--The Assistant Administrator, in consultation with the 
National Institute of Standards and Technology, shall carry out a 
research, development, and demonstration program on portable, low-cost, 
and accurate methods and technologies for testing of sulfur content in 
fuel, including Ultra Low Sulfur Diesel and Low Sulfur Diesel.
    (b) Schedule of Demonstrations.--Not later than 1 year after the 
date of enactment of this Act, the Assistant Administrator shall begin 
demonstrations of technologies under subsection (a).

SEC. 5. STANDARD REFERENCE MATERIALS AND DATA BASE DEVELOPMENT.

    Not later than 6 months after the date of enactment of this Act, 
the National Institute of Standards and Technology shall develop a 
physical properties data base and standard reference materials for 
biofuels. Such data base and standard reference materials shall be 
maintained and updated as appropriate as additional biofuels become 
available.

SEC. 6. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to the Environmental 
Protection Agency $10,000,000 for carrying out this Act.

    Amend the title so as to read:

    A bill to facilitate the development of markets for biofuels and 
Ultra Low Sulfur Diesel fuel through research and development and data 
collection.

                        II. PURPOSE OF THE BILL

    The purpose of the bill is to facilitate the development of 
markets for biofuels and Ultra Low Sulfur Diesel fuel through 
research and development, including data collection and 
demonstration of research and development results.

              III. BACKGROUND AND NEED FOR THE LEGISLATION

    Rising oil prices, concern about the level of U.S. 
dependence on foreign energy sources, and efforts to reduce air 
emissions have all increased interest in diversifying our 
energy supply through the development of clean domestic sources 
of transportation fuel.

Biofuels

    The demand for biobased fuels such as ethanol and biodiesel 
is increasing, and there is great interest in expanding the 
development and production of these fuels beyond low-
concentration blends. There are over 100 ethanol refineries in 
operation today, with many more in various stages of planning. 
Ethanol is currently blended with roughly 40% of the nation's 
gasoline supply, usually as an oxygenate and at concentrations 
of approximately 10% of the fuel by volume. Similarly, 
biodiesel is used as additive in diesel fuel because of its 
good lubricating properties and lack of sulfur, but seldom in 
concentrations higher than 20%.
    Ethanol is both hydrophilic and highly corrosive and not 
compatible with much of the existing petroleum and gasoline 
distribution infrastructure. Even low concentration blends 
containing ethanol currently must be transported through a 
``virtual pipeline'' consisting of truck, barge, and rail. As 
demand for ethanol has grown, ethanol shippers have found 
themselves in increasing competition with other users of rail 
transportation. Capacity is strained and costs are increasing 
for all users of these transportation methods.
    The auto industry is currently ahead of the energy industry 
in the movement towards biobased fuels. According to the 
National Ethanol Vehicle Coalition there are approximately six 
million E85-compatible Fuel Flexible Vehicles (FFV) on American 
roads today; these vehicles can handle ethanol concentrations 
in fuel of up to 85 percent (E85), and auto manufacturers are 
in the process of adding several new FFV models to their 
product lines.
    The U.S. Department of Energy counts less than a thousand 
stations to date that are capable of selling E85; these are 
concentrated in the Upper Midwest, close to ethanol sources. 
While the number of stations is expanding, it is still less 
than 1% of the approximately 167,000 retail fuel outlets in the 
U.S. California currently has one public E85 station.
    It is at higher concentrations such as in E85 and B100 
(100% biodiesel) where the toughest technical issues arise. 
Biofuels such as E85 and biodiesel have different physical and 
chemical properties that make them incompatible with existing 
transportation, distribution, and retail infrastructure and 
hardware. These fuels are associated with a variety of 
technical issues relating to corrosion of tank and pipeline 
materials, increased buildup and dissolving of storage tank 
sediment, filter clogging, electrical conductivity, water and 
microbial contamination, varying flow rates, and thermal and 
oxidative instability. The degrading and corrosive effects are 
most problematic since this can affect the glues, corks, 
rubbers, plastics and many metal compounds used in hoses, 
gaskets, seals, elastomers, regulators, pipe welds, and other 
fittings. It is also important to note that to date, no E85-
specific dispenser has been certified by Underwriters 
Laboratory (UL), a crucial step in establishing a market-wide 
infrastructure. The lack of service stations selling E85 means 
that in the near-term only a very small proportion of flexible 
fuel vehicles will actually utilize E85.
    A variety of industry and government sources have estimated 
costs that range from $15,000 to $200,000 for refurbishment or 
replacement of the infrastructure at a retail outlet. When 
applied over the more than 160,000 stations nationwide costs 
quickly reach into the billions of dollars. Unfortunately, even 
with federal assistance grants, the cost of replacing or 
building new infrastructure is simply not feasible for many 
fuel retailers and distributors, most of whom are small 
businesses.
    It may be possible to develop additives and blendstocks 
that would mitigate certain negative effects of biofuels and 
avoid the need for expensive modification and replacement of 
existing infrastructure and hardware. It may also be possible 
to develop safer and less destructive infrastructure 
refurbishment methods and technologies. Therefore, Section 3 of 
H.R. 547 directs the Assistant Administrator of the Office of 
Research and Development of the Environmental Protection 
Agency, in consultation with the Secretary of Energy and the 
National Institute of Standards and Technology to develop 
additives, blendstocks, technologies and methods to address 
these concerns.

Ultra Low Sulfur Diesel (ULSD)

    In 2000 the U.S. Environmental Protection Agency (EPA) 
instituted a program to lower the emissions of diesel fuels by 
approximately 97%. Federal regulations mandated that after an 
initial phase-in period, beginning June 1, 2006, all diesel 
fuel refined and sold in the U.S. must be Ultra Low Sulfur 
Diesel (ULSD). ULSD is diesel fuel containing less than 15 
parts per million (ppm) of sulfur.
    Prior to this time retailers sold Low Sulfur Diesel (LSD) 
containing up to 500 ppm of sulfur. The reduction in the sulfur 
content of diesel fuel served to mitigate the acid rain-causing 
effects of sulfur compounds and also allowed for the 
introduction in 2007 of advanced diesel engine technologies 
that would otherwise foul with high concentrations of sulfur. 
These new engine technologies reduce the emissions of 
particulate matter and nitrogen oxides, or NOx, 
which exacerbate respiratory ailments and react with oxygen to 
produce ozone. A wide range of new clean diesel trucks and 
passenger vehicles using the new engine technologies are now 
entering the U.S. market.
    Major challenges remain at various points of the ULSD 
distribution chain. Prior to and during the transition to ULSD, 
there were widespread concerns throughout the industrythat as 
ULSD moves from the refinery through the pipelines, tanks, trucks and 
related infrastructure it can absorb residual sulfur left by other, 
high-sulfur fuel products. Products such as Low Sulfur Diesel with up 
to 500 ppm sulfur, Jet Fuel with 3000 ppm, and even Heating Oil with up 
to 5000 ppm utilize much of the same infrastructure as ULSD. The fuel 
industry feared that contamination could result in diesel fuel arriving 
at fueling stations with sulfur content that exceeded 15 ppm, thus 
exposing ``downstream'' retailers and distributors to liability and 
fines of up to $32,500 for the sale of noncompliant fuels. Six months 
after market introduction of ULSD the transition is progressing 
smoothly, but it is not perfect. The results of market testing 
conducted at the end of 2006 show the over 80% of samples complying 
with ULSD sulfur limits.
    The state of the art for verifying sulfur content in fuels 
is advancing, but further technological hurdles remain. Current 
protocols and equipment, as specified in ASTM standards such as 
D-2622, D-5453, and D-7039, are still expensive, unwieldy, and 
often inaccessible for most fuel distributors and retailers. 
For instance, the method described in D-5453 requires 
pyrolyzing fuel samples with flammable gas to obtain a sulfur 
signature. Furthermore, these forms of testing often require 
shipping fuel samples to an off-site laboratory and waiting 
days for results. While other aspects of the transition to ULSD 
have gone smoothly by most all accounts, the development of 
less expensive, robust, accurate and rapid testing methods 
would enable more frequent testing of fuel sulfur content to 
assure that regulated limits are not exceeded and rapid 
correction of any contamination problems that may occur along 
the distribution chain.
    The need for advances in testing equipment is not limited 
to ULSD. Evolution in sulfur analysis technologies may lead to 
advances in testing for other fuel contaminants. For instance, 
current standards for biodiesel (ASTM standard D6751) lay out 
the critical specifications and set limits for manufacturers on 
maximum allowed concentrations for various contaminants, 
including sulfur. The biodiesel industry is pushing for strict 
adherence to these specifications. Because of the low 
concentrations and narrow tolerances needed to meet these 
standards, the measurements are difficult to perform 
accurately, especially in the smaller production facilities 
that tend to characterize the biofuels industry.
    Further steps that can be taken to improve measurement 
accuracy for diesel fuels involve working with analytical 
instrument manufacturers and commercial suppliers of 
calibration materials to transfer the inherent accuracy of 
Standard Reference Materials developed by NIST to calibration 
standards used for field testing instrumentation. Therefore, 
Section 4 of H.R. 547 directs the Assistant Administrator of 
the Office of Research and Development of the Environmental 
Protection Agency, in consultation with the National Institute 
of Standards and Technology, to develop portable, low cost, and 
accurate technologies for testing sulfur content of diesel 
fuels, and begin demonstrations of such technologies within one 
year.

Standard Reference Materials (SRMs)

    NIST prepares Standard Reference Materials (SRMs) for three 
main purposes: (1) to help develop accurate methods of 
analysis; (2) to calibrate measurement systems used to 
facilitate exchange of goods, institute quality control, 
determine performance characteristics, or measure a property at 
the state-of-the-art limit; and (3) to ensure the long-term 
adequacy and integrity of measurement quality assurance 
programs.
    Industry, academia, and government use NIST SRMs to 
facilitate commerce and trade and to advance research and 
development. For example, state governments use SRMs for fuels 
to certify station pumps and other dispensing equipment.
    Market acceptance of any fuel requires a reliable supply of 
the fuel that consistently meets certain specifications needed 
to ensure quality and compatibility with engines and 
infrastructure. Therefore, Section 5 of H.R. 547 directs NIST 
to compile a database of physical properties for alternative 
fuels, and use these data to develop Standard Reference 
Materials (SRMs) such as those NIST develops for conventional 
fuels.

                          IV. HEARING SUMMARY

    On Tuesday, January 30, 2007 the Subcommittee on Energy and 
Environment of the Committee on Science and Technology held a 
legislative hearing on H.R. 547, the Advanced Fuels 
Infrastructure Research and Development Act introduced by 
Chairman Bart Gordon. The hearing examined the infrastructure-
related challenges of adopting biofuels in the nation's fuel 
marketplace and of transitioning to clean diesel fuels. The 
Committee received testimony from Mr. John Eichberger, Vice 
President of the National Association of Convenience Stores 
(NACS) who testified on behalf of the Society of Independent 
Gasoline Marketers of America (SIGMA); Mr. Bob Dinneen, 
President and CEO of the Renewable Fuels Association; and Mr. 
Richard Kassel, Senior Attorney and Director of the Clean Fuels 
and Vehicles Project at the Natural Resources Defense Council.
    Mr. Eichberger described the substantial technical and cost 
barriers fuel retailers encounter in making the decision to 
sell biofuels such as ethanol and biodiesel. He also described 
retailers' concerns that the lack of sulfur testing methods 
hinders the market's ability to ensure ULSD quality controls 
and regulatory compliance. NACS and SIGMA endorsed H.R. 547.
    Mr. Dinneen described the current and future role of 
ethanol in fuel markets, the state of development of ethanol 
refineries, and the ``Virtual Pipeline'' of trucks, rail and 
barges the ethanol manufacturers must use to transport product 
from biorefineries to the marketplace. RFA endorsed H.R. 547.
    Mr. Kassel described the successful implementation of the 
Environmental Protection Agency's Highway Diesel Rule which 
mandates the use of Ultra Low Sulfur Diesel. NRDC supports H.R. 
547 with modifications suggested in Mr. Kassel's testimony.
    The Subcommittee also received written testimony and 
endorsements from the National Association of Truck Stop 
Owners, The Society of Independent Gas Marketers of America, 
the Petroleum Marketers Association of America, the National 
Associationof Shell Marketers, The Coalition of E85 Retailers, 
X-Ray Optical Systems, and the Underwriters Laboratory which were 
inserted in the hearing record.

                          V. COMMITTEE ACTIONS

    On January 18, 2007 the Science and Technology Committee 
Chairman Bart Gordon introduced H.R. 547, the Advanced Fuels 
Infrastructure Research and Development Act. The purpose of the 
bill is to facilitate the development of markets for biofuels 
and Ultra Low Sulfur Diesel fuel through research and 
development, including data collection and demonstration of 
research and development results. (This bill as introduced was 
virtually identical to Congressman Gordon's bill from the 109th 
Congress, H.R. 5658, to facilitate the development of markets 
for alternative fuels and Ultra Low Sulfur Diesel fuel through 
research, development, and demonstration and data collection. 
The language from H.R. 5658 was included as Section 17 of H.R. 
5656, the Energy Research, Development, Demonstration and 
Commercial Application Act of 2006, during Full Committee 
markup of that bill. The same text later passed by the House 
under suspension of the rules as Section 15 of H.R. 6203.)
    The Full Committee on Science and Technology met on January 
31, 2007 to consider H.R. 547. A Manager's Amendment was 
offered by Chairman Gordon and adopted by voice vote. In 
addition to minor and conforming changes, this amended the bill 
by removing the Department of Energy as the lead agency, and 
instructing the Assistant Administrator of the Office of 
Research and Development at the Environment Protection Agency 
to conduct programs under Sections 3 and 4 of the bill; making 
the term ``biofuels'' consistent throughout the bill; removing 
the words ``demonstration and commercial application''; and 
adding a one-time authorization of appropriations for $10 
million to carry out programs under the bill.

              VI. SUMMARY OF MAJOR PROVISIONS OF THE BILL

    Section 3 directs the Assistant Administrator of the Office 
of Research and Development of the Environmental Protection 
Agency, in consultation with the Secretary of Energy and the 
National Institute of Standards and Technology to develop 
additives, blendstocks, technologies and methods to mitigate 
the negative effects of biofuels on infrastructure.
    Section 4 directs the Assistant Administrator of the Office 
of Research and Development of the Environmental Protection 
Agency, in consultation with the National Institute of 
Standards and Technology to develop portable, low cost, and 
accurate technologies for testing sulfur content of diesel 
fuels, and begin demonstrations of such technologies within one 
year.
    Section 5 directs NIST to compile a database of physical 
properties for alternative fuels, and use these data to develop 
Standard Reference Materials (SRMs) such as those NIST develops 
for conventional fuels.
    Section 6 authorizes an appropriation of $10 million to the 
Environmental Protection Agency to carry out programs under the 
Act.

                    VII. SECTION-BY-SECTION ANALYSIS

Section 1. Short title

    The Advanced Fuels Infrastructure Research and Development 
Act

Section 2. Findings

    The nation should have a diverse fuel supply which includes 
alternative fuels, but incompatibility of some fuels with 
existing infrastructure presents significant and costly 
barriers to market penetration. Fuel additives or other 
technologies may allow such alternative fuels to be distributed 
and dispensed in existing infrastructure. Fuel retailers and 
distributors do not have ready access to technologies that 
verify fuels are in compliance with federal regulations for 
diesel fuels.

Section 3. Alternative fuel and ULSD infrastructure and additives 
        research and development

    Directs the Environmental Protection Agency (EPA) in 
consultation with the Department of Energy (DOE) and the 
National Institute of Standards and Technology (NIST) to 
conduct research and development of additives for biofuels to 
address infrastructure compatibility issues such as: corrosion 
of infrastructure materials, dislodging of storage tank 
sediment, water and microbial contamination, increased 
emissions, temperature-sensitivity. The program should also 
investigate various methods of refurbishment and cleaning of 
storage tanks, and other infrastructure-related problems as 
identified by EPA, DOE and NIST.

Section 4. Sulfur testing for diesels fuels

    Directs the Environmental Protection Agency and the 
National Institute of Standards and Technology (NIST) to 
conduct research, development, demonstration and commercial 
application of portable, low cost, and accurate technologies 
for testing sulfur content of diesel fuels, and begin 
demonstrations of such technologies within one year.

Section 5. Standard reference materials and data base development

    Instructs the National Institute of Standards and 
Technologies (NIST) to collect data on the physical properties 
of various alternative fuels, and develop the Standard 
Reference Materials (SRM) such as those that are available for 
conventional petroleum-based fuels.

Section 6. Authorization of appropriations

    Authorizes $10,000,000 to EPA to carry out this Act.

                         VIII. COMMITTEE VIEWS

    The Committee views biofuels including E85 and biodiesel as 
important steps towards increased reliance on domestic sources 
of fuel. It affirms the traditional roles of the voluntary 
consensus standards system in developing standards that can be 
used both by the government and the private sector. It also 
recognizes the major roles played by government in energy 
research and development to assure that new fuels can enter the 
commercial marketplace in an environmentally acceptable manner. 
It recognizes that NIST has a long history through its research 
programs and its development of standard reference materials in 
maintaining quality control of transportation fuels.
    The Committee sees a series of impediments to substantial 
market penetration by these new fuels. Ethanol is hydrophilic 
and additives and blendstocks and new infrastructure 
technologies are needed to mitigate the corrosive properties of 
biofuels before there can be significant market penetration by 
these fuels. The financial incentives to do this research and 
development do not exist in the private sector because of the 
relative costs of the new fuels and the petroleum based 
products they seek to replace.
    Similarly, significant improvements are needed in the test 
methods used to verify that ultra low sulfur diesel is still in 
compliance after transmission with EPA limits of 15 parts per 
million (ppm) of sulfur. Current tests are slow, expensive, and 
cumbersome and put the small businessmen who sell this fuel in 
risk of substantial penalties even though they do not control 
the sulfur levels in the fuel they sell. The Committee feels 
that it is in the national interest to ask EPA and NIST to 
develop portable, low cost, and accurate technologies for 
testing sulfur content of diesel fuels, and begin 
demonstrations of such energy technologies within one year and 
for NIST to compile a database of physical properties for 
alternative fuels, and use these data to develop Standard 
Reference Materials (SRMs) such as those it develops for 
conventional fuels.

                           IX. COST ESTIMATE

    A cost estimate and comparison prepared by the Director of 
the Congressional Budget Office under section 402 of the 
Congressional Budget Act of 1974 has been timely submitted to 
the Committee on Science prior to the filing of this report and 
is included in Section X of this report pursuant to House rule 
XIII, clause 3(c)(3).
    H.R. 547 does not contain new budget authority, credit 
authority, or changes in revenues or tax expenditures. Assuming 
that the sums authorized under the bill are appropriated, H.R. 
547 does authorize additional discretionary spending, as 
described in the Congressional Budget Office report on the 
bill, which is contained in Section X of this report.

              X. CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

                                                  February 1, 2007.
Hon. Bart Gordon,
Chairman, Committee on Science and Technology,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 547, the Advanced 
Fuels Infrastructure Research and Development Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Daniel 
Hoople.
            Sincerely,
                                           Peter R. Orszag,
                                                          Director.
    Enclosure.

H.R. 547--Advanced Fuels Infrastructure Research and Development Act

    Summary: H.R. 547 would authorize appropriations for two 
projects to be carried out by the Office of Research and 
Development at the Environmental Protection Agency (EPA). The 
bill would direct the agency to undertake research and 
development programs involving additives to biofuels that would 
increase compatibility with the existing motor fuel storage and 
delivery infrastructure, as well as alternative methods for 
testing the sulfur content of diesel fuels. CBO estimates that 
implementing H.R. 547 would cost $10 million over the 2008-2010 
period, assuming the appropriation of the specified amount. 
Enacting H.R. 547 would not affect direct spending or revenues.
    H.R. 547 contains no intergovernmental or private-sector as 
defined in the Unfunded Mandates Reform Act (UMRA) and would 
not affect the budgets of state, local, or tribal governments.
    Estimated cost to the Federal Government: The estimated 
budgetary impact of H.R. 547 is shown in the following table. 
The cost of this legislation falls within budget function 300 
(natural resources and environment). For this estimate, CBO 
assumes that the bill will be enacted in fiscal year 2007 and 
that the amounts authorized by the bill will be appropriated 
for fiscal year 2008.

----------------------------------------------------------------------------------------------------------------
                                                                  By fiscal year, in millions of dollars--
                                                           -----------------------------------------------------
                                                              2007     2008     2009     2010     2011     2012
----------------------------------------------------------------------------------------------------------------
                                  CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Biofuel Infrastructure and Sulfur Testing Research and
 Development Programs:
    Authorization Level...................................        0       10        0        0        0        0
    Estimated Outlays.....................................        0        4        5        1        0        0
----------------------------------------------------------------------------------------------------------------

    Intergovernmental and private-sector impact: H.R. 547 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would impose no direct costs on state, 
local, or tribal governments.
    Estimate prepared by: Federal Costs: Daniel Hoople. Impact 
on State, Local, and Tribal Governments: Lisa Ramirez-Branum. 
Impact on the Private Sector: Craig Cammarata.
    Estimate approved by: Robert A. Sunshine, Assistant 
Director for Budget Analysis.

                  XI. COMPLIANCE WITH PUBLIC LAW 104-4

    H.R. 547 contains no unfunded mandates.

         XII. COMMITTEE OVERSIGHT FINDINGS AND RECOMMENDATIONS

    The Committee on Science's oversight findings and 
recommendations are reflected in the body of this report.

      XIII. STATEMENT ON GENERAL PERFORMANCE GOALS AND OBJECTIVES

    Pursuant to clause (3)(c) of House rule XIII, the goals of 
H.R. 547 are to develop additives, blendstocks, technologies 
and methods to mitigate the negative effects of biofuels on 
infrastructure, to develop portable, low cost, and accurate 
technologies for testing sulfur content of diesel fuels, and 
begin demonstrations of such technologies within one year, and 
for NIST to compile a database of physical properties for 
alternative fuels, and use these data to develop Standard 
Reference Materials (SRMs) such as those NIST develops for 
conventional fuels.

                XIV. CONSTITUTIONAL AUTHORITY STATEMENT

    Article I, section 8 of the Constitution of the United 
States grants Congress the authority to enact H.R. 547.

                XV. FEDERAL ADVISORY COMMITTEE STATEMENT

    H.R. 547 does not establish nor authorize the establishment 
of any advisory committee.

                 XVI. CONGRESSIONAL ACCOUNTABILITY ACT

    The Committee finds that H.R. 547 does not relate to the 
terms and conditions of employment or access to public services 
or accommodations within the meaning of section 102(b)(3) of 
the Congressional Accountability Act (Public Law 104-1).

                      XVII. EARMARK IDENTIFICATION

    H.R. 547 does not contain any congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined in 
clause 9(d), 9(e), or 9(t) of rule XXI.

     XVIII. STATEMENT ON PREEMPTION OF STATE, LOCAL, OR TRIBAL LAW

    This bill is not intended to preempt any state, local, or 
tribal law.

       XIX. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

    None.

                     XX. COMMITTEE RECOMMENDATIONS

    On January 31, 2007, the Committee on Science and 
Technology favorably reported the Advanced Fuels Infrastructure 
Research and Development Act by a voice vote, and recommended 
its enactment.

                          XXI. MINORITY VIEWS

    None.

    XXII. PROCEEDINGS OF THE FULL COMMITTEE MARKUP ON H.R. 547, THE 
       ADVANCED FUELS INFRASTRUCTURE RESEARCH AND DEVELOPMENT ACT

                              ----------                              


                      WEDNESDAY, JANUARY 31, 2007

                  House of Representatives,
                       Committee on Science and Technology,
                                                    Washington, DC.

    The Committee met, pursuant to call, at 11:05 a.m., in Room 
2318 of the Rayburn House Office Building, Hon. Bart Gordon 
[Chairman of the Committee] presiding.
    Chairman Gordon. Welcome, everyone, to the Committee of 
Science and Technology, and we will come to order. Pursuant to 
notice, the Committee meets to consider the following measures: 
H.R. 547, the Advanced Fuels Infrastructure Research and 
Development Act; H.Res. 72, Recognition of the work and 
accomplishments of Mr. Britt Max Mayfield, Director of the 
National Hurricane Center's Tropical Prediction Center upon his 
retirement. We are moving forward now for two reasons: one is 
because it is time to move forward, and the second is that we 
are going to be having votes in about 15 minutes. And if some 
of your Members aren't here yet, we are not trying to preempt 
them but rather provide them the courtesy of being able to get 
to vote and not have to come back.
    So we now proceed with the markup, beginning with opening 
statements. I will be brief, since I will also speak to two 
bills.
    Today, we will be meeting to markup two good, bipartisan 
pieces of legislation. The first bill, H.R. 547, is a quick-
shot bill to help address a very important energy issue 
confronting our nation. As I said, it is a quick-shot piece of 
legislation rather than a large, ominous bill. My hope is that 
as good ideas come to this committee we can quickly address 
them and get them out the door, and this bill is a good 
example.
    As I mentioned, both of these bills are co-sponsored by 
some of our Republican colleagues, and my hope is that this 
committee will continue to work on a bipartisan basis.
    And I now recognize Mr. Hall to present his opening 
statement.
    Mr. Hall.  Mr. Chairman, I will waive my opening statement. 
You have already set forth a policy that benefits our country 
and spends the taxpayer dollars efficiently and I do support 
your legislation and the manager's amendment and hope my 
Republican colleagues will do likewise.
    Chairman Gordon.  I compliment your statement, and without 
objection, Members may place statements in the record.
    [The prepared statement of Ms. Johnson follows:]
       Prepared Statement of Representative Eddie Bernice Johnson
    Thank you, Mr. Chairman, for holding today's markup and for being 
aggressive in expediting good proposals through the Committee on 
Science and Technology.
    The mountain of data supporting global warming is too large to 
ignore. This committee is positioned to have leadership on this issue.
    One important thing the Science and Technology Committee needs to 
be doing is supporting research and development into alternative fuels.
    Texas has great potential for wind power, as well as solar.
    Until the American public begin investing in economy cars and 
alternative fuel sources, government must take the lead. That way, when 
this nation feels the pinch of oil in short supply, like it has in 
recent years, we will be set to ramp up our alternative fuel market.
    H.R. 547, the Advanced Fuels Infrastructure Research and 
Development Act is a solid proposal with a noble purpose.
    I support investments in research to develop alternative fuel 
markets and better understand and develop ultra low sulfur diesel.
    This is a good bill, and I urge my colleagues to support it.
    Thank you, Mr. Chairman. I yield back the balance of my time.

    [The prepared statement of Mr. Hill follows:]
           Prepared Statement of Representative Baron P. Hill
    Thank you Mr. Chairman for bringing this extremely important bill 
before our committee. Our country needs to end our dependence on 
foreign oil. Indiana boasts coal, corn, soy, and other forms of biomass 
that will help solve the country's energy problems. For this reason, I 
am proud to support the Advanced Fuels Infrastructure Research and 
Development Act. This bill provides for important research into making 
our current fuel infrastructure compatible with new bio-based fuels. By 
making the transition to bio-based fuels less costly for retailers, we 
can accelerate the pace of the country's transition away from foreign 
oil. Energy independence is important for my constituents and for our 
county. I proudly support this bill.

    Chairman Gordon.  We will now consider H.R. 547, the 
Advanced Fuels Infrastructure Research and Development Act. I 
yield myself five minutes to describe the bill.
    When I became Chairman of the Committee, I made a promise 
that this would be a committee of good ideas and consensus. And 
we are here to solve problems. I want H.R. 547 to serve as an 
example of how we can identify problems, big and small, 
leverage the resources and expertise of the Committee to 
develop creative ways to bridge technological gaps through 
research and development.
    It is clear that fueling our economy solely on conventional 
fuels threatens our economic well-being and environmental 
health. The public wants and deserves clean and reliable fuel 
choices.
    But if this country is serious about reducing our 
dependency on foreign oil, we need to get serious about 
mobilizing the infrastructure necessary to distribute and 
dispense the newest generation of fuels. For a number of 
reasons, alternative bio-based fuels, such as ethanol and bio-
diesel, are often incompatible with many components of the 
present-day infrastructure.
    Fuel distributors and retailers are left to bear the 
considerable burden and much of the cost of refurbishing, 
replacing, or constructing entirely new infrastructure if they 
want or even are required at a later date to carry such fuels. 
At $30,000 to $200,000 per station, a nationwide change in 
infrastructure could cost $5 to $30 billion.
    Instead, my bill directs research and development of fuel 
additives and other technologies that could mitigate many of 
these problems and make bio-based fuels more compatible with 
the country's petroleum-based infrastructure. In addition, this 
bill addresses potential challenges as suppliers transition to 
significantly cleaner fuels by directing development of 
portable, low-cost, and accurate methods that suppliers can use 
to test sulfur content in fuels.
    Since infrastructure is used for various fuel productions 
with sulfur content ranging anywhere from 15 to 5,000 ppm, 
there is a concern that distributors and retailers may sell 
fuel with levels of sulfur beyond what is safe for the newest 
generation of diesel technologies.
    And with that, I am going to conclude my remarks other than 
to simply say this is, once again, an example of an industry 
that came to us, told us problems that they were having, and 
how technological changes could move this bill forward.
    Our purpose here today is not to create an enormous energy 
bill. As a matter of fact, this was part of our bill last year 
that passed but never became law, because it got bogged down. 
And once again, my hope is that we are going to take good 
ideas, move them forward. Today, it is a Democratic bill, but I 
understand that Mrs. Biggert has introduced her bills, and we 
look forward to hearing those in the future.
    And with that, I thank you, and I recognize Mr. Hall to 
present any remarks on the bill.
    [The prepared statement of Chairman Gordon follows:]
               Prepared Statement of Chairman Bart Gordon
    When I took the reins of this committee, I made a promise that this 
would be a committee of ``good ideas'' and ``consensus.'' We are here 
to solve problems.
    I want H.R. 547 to serve as an example of how we can identify 
problems big and small, and leverage the resources and expertise of the 
Committee to develop creative ways to bridge technological gaps through 
research and development.
    It is clear that fueling our country solely on conventional fuels 
threatens our economic well-being and environmental health. The public 
wants and deserves clean and reliable fuel choices.
    But, if this country is serious about reducing our dependence on 
foreign oil, we need to get serious about mobilizing the infrastructure 
necessary to distribute and dispense the newest generation of fuels.
    For a number of reasons, alternative bio-based fuels such as 
ethanol and biodiesel are often incompatible with many components of 
the present-day infrastructure.
    Fuel distributors and retailers are left to bear the considerable 
burden and much of the cost of refurbishing, replacing, or constructing 
entirely new infrastructure if they want (or are ever required) to 
carry such fuels.
    At $30,000 to $200,000 per station, a nationwide change in 
infrastructure could cost $5 to $30 billion.
    Instead, my bill directs research and development of fuel additives 
and other technologies that could mitigate many of these problems and 
make bio-based fuels more compatible with the country's petroleum-based 
infrastructure.
    In addition, this bill addresses potential challenges as suppliers 
transition to significantly cleaner fuels by directing development of 
portable, low-cost, and accurate methods suppliers can use to test 
sulfur content in fuels.
    Since infrastructure is used for various fuel products with sulfur 
content ranging from 15 to 5000 ppm, there is a concern that 
distributors and retailers may sell fuel with levels of sulfur beyond 
what is safe for the newest generation of highway diesel engines.
    It should be noted that this section is not meant to interfere with 
the role of the Environmental Protection Agency in what has been a very 
successful market transition to Ultra Low Sulfur Diesel. It simply 
seeks to provide easier access to testing and verification for all 
participants. In the legislative hearing yesterday, we heard from three 
valuable experts in the field, and we have taken testimony, 
endorsements and suggestions that will make this a better bill.
    Today, with your cooperation we will send the bill out of Committee 
with some minor changes, the addition of the EPA Assistant 
Administrator for the Office of Research and Development, as well as 
the addition of a funding authorization. These changes have been 
discussed with and agreed to by both sides of the aisle.
    But this is not our last chance to improve the bill.
    H.R. 547 could be on the Floor under a rule as early as next week, 
and it is possible that I will have a Floor amendment that makes 
additional minor adjustments. Nor is this the last chance for the 
Committee to act on the issue of biofuels, or any fuel or energy issue 
for that matter. On the contrary, this is just the beginning. We will 
be very active in energy this Congress.
    I hope this bill also illustrates that solving problems does not 
require years of wrangling over major omnibus legislation that in the 
end fails to meet everyone's expectations.
    Here we took a good idea, turned it into a good bill, and with the 
support of our Members we will pass it out of Committee today and send 
it to the Floor next week.
    Thank you.

    Mr. Hall.  Mr. Chairman, I think you have said it very 
well, and we are, on this side, in total support of the bill.
    Chairman Gordon.  Does anyone else wish to be recognized?
    I ask unanimous consent that the bill is considered as read 
and open to amendment at any point and that the Members proceed 
with the amendments in order of the roster. Without objection, 
so ordered.
    The first amendment on the roster is a manager's amendment. 
The amendment is at the desk, and the Clerk will report the 
amendment.
    The Clerk.  Amendment to H.R. 547, offered by Mr. Gordon of 
Tennessee.
    Chairman Gordon.  I ask unanimous consent to dispense with 
the reading, and without objection, so ordered.
    After consultation with colleagues on Energy and Commerce 
and our minority and following up on testimony from the 
hearings yesterday, I made the following changes in the 
manager's amendment. Biofuels is used to make the term for this 
category of fuel consistent throughout the bill and consistent 
with terms of existing law. We removed demonstration and 
commercial applications to make the bill consistent with 
activities that we expect the EPA to engage in. And since EPA 
is the agency that is charged with implementation of both 
diesel and renewable fuel rules and standards, EPA is now the 
lead agency for sections 3 and 4 of the bill. And it makes a 
one-time authorization of $10 million.
    The practical implication here is that after talking with 
Energy and Commerce, they felt there were some jurisdictional 
concerns. We wanted to meet that need. We talked with them. We 
worked it out. We talked with the minority, and I think all 
problems have been settled.
    Is there further discussion of the amendment?
    If no, the vote occurs on the amendment. All in favor, say 
aye. Those opposed, say no. The ayes have it, and the amendment 
is agreed to.
    The second amendment on the roster is offered by Mr. 
Costello, if he is here. And he is not here. If I could, I have 
discussed Mr. Costello's amendment with him, and let me relate 
to the Committee our conversation.
    Jerry was going to introduce an amendment and was going to 
withdraw it, and the amendment was concerned with coal 
technologies. It really wasn't adaptable to this particular 
bill. Jerry and I had a discussion yesterday, and the fact of 
the matter is that any type of serious look at our energy 
problem is going to have to deal also with coal. And we agreed 
that we should bring together Resources as well as Energy and 
Commerce under the auspices of this committee, have probably an 
informal, rather than a formal, hearing about the pros and cons 
of coal, the technology, where it is going, and its role that 
it can play.
    I think this is going to be constructive to an overall 
energy bill, and I look forward to working with him on that. 
And he was supposed to withdraw his amendment after that, so we 
will move on.
    Are there any other amendments?
    Hearing none, the vote is on the bill H.R. 547, the 
Advanced Fuels Infrastructure Research and Development Act. 
    Mr. Bilbray.  Mr. Chairman?
    Chairman Gordon.  Yes. Who is----
    Mr. Bilbray.  Mr. Chairman?
    Chairman Gordon.  Yes, Mr. Bilbray.
    Mr. Bilbray.  Yes, Mr. Chairman. I just want to thank you 
for bringing this bill forward. As a former member of the State 
Air Resources Board in the State of California, I do want to 
sort of reflect the fact that those of us in California, in 
many ways with clean air technology, have been far ahead of the 
curve nationally, as you know. States all across this country 
are using California as the goal standard for clean air.
    Chairman Gordon.  Yeah.
    Mr. Bilbray.  The reference to California on the issue of 
ethanol is not by accident, and I just want to point out that 
though biofuels have some great opportunities, in fact, I was 
one of those who fought strongly that diesel--bio-diesel be 
recognized in our--in the exemption from certain type of 
assessments and taxes, the fact is there are challenges. And 
the ethanol issue in California was not by accident. Our 
scientists came forward and said that there are certain 
applications, especially during warm summers, that there was 
major environmental problems that needed to be addressed. That 
aside, winter application, because of emission issues, the 
biofuel opportunities are huge. I just want us, as we move 
forward, to remember to do a reality check that there are 
scientific challenges here, and California has been the lead on 
this issue and reflect that.
    The other issue I would like to point out, and I hope this 
study looks into, the challenges I have run into with using 
alternative fuels has not been as much economic and market-
based as it has been government obstruction. A good example was 
the opportunity for consumers to use natural gas as an 
alternative to gasoline where we have public utilities that 
were absolutely blocking that application even though, from an 
air pollution point of view, we were trying to initiate it.
    So I just want to point out that there--we hope, as we move 
forward, that we continue to keep this as a science-based, 
because in the long run, when we--with all of the different 
economic opportunities, the science is going to determine our 
success and our failure.
    And I thank you for bringing this forward. I look forward 
to seeing us work in California, and I hope--in fact, I know 
the EPA has worked great--very closely with the Air Resources 
Board and the California EPA and actually, again, allowed us to 
take a lead on many issues. And with this bill, hopefully, we 
will see that relationship continue.
    I yield back, Mr. Chairman.
    Chairman Gordon.  Well, if you would--if the gentleman 
would yield, there have been a lot of models from California. I 
hope that you will review those, brings some of those toward 
this Committee, and I hope you will bring some of your members 
on your side of the aisle to support those, too. And I think, 
again, California has been out front to see some of the things 
that work, some of the things that don't work. I hope you will 
bring those things that work to us.
    Mr. Bilbray.  If you may yield, Mr. Chairman.
    Chairman Gordon.  Yes.
    Mr. Bilbray.  I----
    Chairman Gordon.  I yield back.
    Mr. Hall.  Would the gentleman yield?
    Mr. Bilbray.  I--yes, Mr. Hall.
    Mr. Hall.  Yeah, I agree with the gentleman, and I thank 
him for his information on biofuels and would suggest, also, 
though, that hydrogen, solar, wind, plug-in hybrids, energy-
efficient buildings, coal gasification and a lot of other 
things need to be addressed that aren't addressed in this that 
we are--that no one on either side is in opposition to it. It 
is just that we work them in right. I am from a state that is a 
fossil fuel state, but I believe in coal. Our major producer 
for electricity for the State of Texas has used lignite for 
over 50 percent of their energy for the past 15 years, so 
coal--clean coal is very important and probably there is enough 
coal in this country to double the total output of OPEC nations 
all put together if we could just mine it. We need to be the 
avenue through which they are able to do that, and I yield back 
my time----
    Mr. Bilbray.  Reclaiming my----
    Mr. Hall. --to the gentleman from California.
    Mr. Bilbray.  Thank you. Mr. Chairman, I just want to sort 
of restate that in my previous life on the--in the House of 
Chambers, I was the author of the bill that eliminated the 
ethanol--methanol mandate for those states that had cleaner 
alternatives. The fact is, three years after sponsoring that 
bill and being attacked by people who thought they were 
protecting the environment, the methanol disaster came out. And 
in fact, Chairman Waxman's city of Santa Monica has probably 
got the most polluted wells, and those wells were polluted by a 
federal mandate that were well intentioned but were not 
grounded in good science. So that is why I feel strongly that 
we do that. And as the gentleman from Texas pointed out the 
issue about coal, I have been a strong opponent of the use of 
coal from a clean air point of view, but now, with the latest 
issues of global dimming, which is something we haven't even 
discussed in Congress. All at once, coal comes out as maybe not 
being such a bad guy, at least in the short run.
    So I appreciate the chance to be able to dialogue on this 
issue, and I appreciate the chance to be able to vote on this 
bill.
    Chairman Gordon.  If the gentleman will yield, this is a 
good dialogue. It is one we need to continue. Unfortunately, we 
have votes today at about 11:15. I don't want to have to bring 
you back. But I think, as Mr. Hall pointed out, there isn't a 
silver bullet here. You know. Where the wind blows, where the 
sun shines, whether it is geothermal, nuclear, the whole works, 
we are going to take a look at it and we are going to bring 
together. And this is a model, and let us bring them forth as 
we have them. Let us not try to wait for two or three years to 
develop an enormous bill that gets bogged down.
    Are there any other amendments? If not, all in favor, say 
aye. All of those opposed, nay. The ayes have it. And I 
recognize Mr. Hall to offer a motion.
    Mr. Hall.  Mr. Chairman, I move that the Committee 
favorably report H.R. 547, as amended, to the House with the 
recommendation that the bill do pass. Furthermore, I move that 
the staff be instructed to prepare the legislative report and 
make necessary technical and conforming changes and that the 
Chairman take all necessary steps to bring the bill before the 
House for consideration.
    I yield back my time.
    Chairman Gordon.  The question is on the motion to report 
the bill favorably. Those in favor of the motion will signify 
by saying aye. Opposed, no. The ayes have it, and the bill is 
favorably reported.
    Without objection, the motion to reconsider is laid on the 
table. I move that Members have two subsequent calendar days in 
which to submit supplemental, minority, or additional views on 
the measure. I move pursuant to Clause 1 of Rule 22 of the 
Rules of the House of Representatives that the Committee 
authorize the Chairman to offer such motions as may be 
necessary in the House to adopt and pass H.R. 547, the Advanced 
Fuels Infrastructure Research and Development Act. Without 
objection, so ordered.
    And let me say to our new Members and other Members today. 
This was a bit of a bim-bam operation today, the reason being a 
couple of things. First of all, these bills were well vetted. 
They were bipartisan. Also, we had consultation with our other 
committees of jurisdiction. And as I mentioned to you, we are 
going to be having votes any moment now. Let this be the 
opening of discussion about climate change, of energy, and of 
alternative energies. We have got a lot to do here. I know that 
Mrs. Biggert has a couple of bills that she has just 
introduced. We are looking forward to those. Mrs. Biggert, we 
are glad you are here. And we welcome other bills on this 
issue. We want to try to get a good idea, vet it well, take it 
out and get it passed, and then we hope that you will talk with 
senators in your states, and we will get some things done.
    So I want to thank the Members for their attendance, and 
this concludes our markup.
    [Whereupon, at 11:29 a.m., the Committee was adjourned.]

                               Appendix:

                              ----------                              


                     H.R. 547, Roster of Amendments



