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HR 3435 IH

To improve energy security of the United States through a reduction in the oil intensity of the economy of the United States and expansion of secure oil supplies, to be achieved by increasing the availability of alternative fuel sources, fostering responsible oil exploration and production, and improving international arrangements to secure the global oil supply, and for other purposes.

August 3, 2007

Mr. PICKERING introduced the following bill; which was referred to the Committee on Energy and Commerce, and in addition to the Committees on Ways and Means, Science and Technology, Natural Resources, Armed Services, Foreign Affairs, and Select Intelligence (Permanent Select), for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

To improve energy security of the United States through a reduction in the oil intensity of the economy of the United States and expansion of secure oil supplies, to be achieved by increasing the availability of alternative fuel sources, fostering responsible oil exploration and production, and improving international arrangements to secure the global oil supply, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) Short Title- This Act may be cited as the `Security and Fuel Efficiency Energy Act of 2007' or the `SAFE Energy Act of 2007'.

(b) Table of Contents- The table of contents of this Act is as follows:

Sec. 1. Short title; table of contents.

TITLE I--INCREASED USE OF ALTERNATIVE FUELS AND INFRASTRUCTURE

Sec. 101. Renewable fuel standard.

Sec. 102. Ethanol-blend fuel infrastructure.

Sec. 103. Emerging biofuels.

Sec. 104. Biodiesel.

Sec. 105. Unconventional fossil fuels.

Sec. 106. Phaseout of alternative fuels credits.

Sec. 107. Advanced biomass fuels production tax credit.

Sec. 108. Study of incentives for renewable fuels.

TITLE II--DEVELOPMENT AND INVENTORY OF CERTAIN OUTER CONTINENTAL SHELF RESOURCES

Sec. 201. Authorization of activities and exports involving hydrocarbon resources by United States persons.

Sec. 202. Travel in connection with authorized hydrocarbon exploration and extraction activities.

Sec. 203. Moratorium of oil and gas leasing in certain areas of the Gulf of Mexico.

Sec. 204. Inventory and leasing of outer Continental Shelf oil and natural gas resources.

Sec. 205. Conforming amendments to moratoria on use of appropriations.

Sec. 206. Enhanced oil recovery.

Sec. 207. Treatment of revenues under oil and gas leases for other areas.

TITLE III--MANAGEMENT OF ENERGY RISKS

Sec. 301. Bureau of International Energy Policy.

Sec. 302. Strategic energy infrastructure equipment reserve.

Sec. 303. Increase in capacity.

TITLE I--INCREASED USE OF ALTERNATIVE FUELS AND INFRASTRUCTURE

SEC. 101. RENEWABLE FUEL STANDARD.

Section 211(o) of the Clean Air Act (42 U.S.C. 7545(o)) is amended as follows:

(1) In paragraph (2)(B) as follows:

(A) By striking clause (i) and inserting the following:

`(i) CALENDAR YEARS 2006 THROUGH 2020-

`(I) RENEWABLE FUEL- For the purpose of subparagraph (A), subject to subclause (II), the applicable total volume for any of calendar years 2006 through 2020 shall be determined in accordance with the following table:

2006

--4.0

2007

--4.7

2008

--7.1

2009

--9.5

2010

--12.0

2011

--12.6

2012

--13.2

2013

--13.8

2014

--14.4

2015

--15.0

2016

--18.0

2017

--21.0

2018

--24.0

2019

--27.0

2020

--30.0

`(II) CELLULOSIC BIOMASS ETHANOL- For the purpose of paragraph (1), of the total volume of renewable fuel required under subclause (I), the applicable volume for any of calendar years 2012 through 2020 for cellulosic biomass ethanol shall be determined in accordance with the following table:

2012

--0.25

2013

--1.0

2014

--3.0

2015

--5.0

2016

--7.0

2017

--9.0

2018

--11.0

2019

--13.0

2020

--15.0'.

(B) In clause (ii)--

(i) in the clause heading, by striking `2013' and inserting `2021';

(ii) by striking `2013' and inserting `2021'; and

(iii) by striking `2012' and inserting `2020'.

(C) In clause (iii), by striking `thereafter--' and all that follows through `(II) the' and inserting `thereafter, the'.

(D) In clause (iv)--

(i) by striking `2013' and inserting `2021'; and

(ii) in subclause (II)(bb), by striking `2012' and inserting `2020'.

(2) In paragraph (3)--

(A) in subparagraph (A), by striking `2011' and inserting `2019'; and

(B) in subparagraph (B)(i), by striking `2012' and inserting `2020.'

(3) In paragraph (6)(A), by striking `2012' and inserting `2020'.

(4) By amending paragraph (7) to read as follows:

`(7) WAIVERS-

`(A) IN GENERAL- The Administrator, in consultation with the Secretary of Agriculture and the Secretary of Energy, may waive the requirements of paragraph (2) in whole or in part on petition by one or more States by reducing the national quantity of renewable fuel required under paragraph (2)--

`(i) based on a determination by the Administrator, after public notice and opportunity for comment, that implementation of the requirement would severely harm the economy or environment of a State, a region, or the United States; or

`(ii) based on a determination by the Administrator, after public notice and opportunity for comment, that there is an inadequate domestic supply.

`(B) PETITIONS FOR WAIVERS- The Administrator, in consultation with the Secretary of Agriculture and the Secretary of Energy, shall approve or disapprove a State petition for a waiver of the requirements of paragraph (2) within 90 days after the date on which the petition is received by the Administrator.

`(C) TERMINATION OF WAIVERS- A waiver granted under subparagraph (A) shall terminate after 1 year, but may be renewed by the Administrator after consultation with the Secretary of Agriculture and the Secretary of Energy.'.

SEC. 102. ETHANOL-BLEND FUEL INFRASTRUCTURE.

Section 211(o) of the Clean Air Act (42 U.S.C. 7545(o)) is amended by adding at the end the following:

`(11) INSTALLATION OF ETHANOL-BLEND FUEL PUMPS BY COVERED OWNERS AT STATIONS-

`(A) DEFINITIONS- In this paragraph:

`(i) COVERED OWNER- The term `covered owner' means any person that, individually or together with any other person with respect to which the person has an affiliate relationship or significant ownership interest, owns 10 or more retail station outlets, as determined by the Secretary.

`(ii) ETHANOL-BLEND FUEL- The term `ethanol-blend fuel' means a blend of gasoline not more than 85 percent, nor less than 80 percent, of the content of which is derived from ethanol produced in the United States, as defined by the Secretary in a manner consistent with applicable standards of the American Society for Testing and Materials.

`(iii) SECRETARY- The term `Secretary' means the Secretary of Energy, acting in consultation with the Administrator and the Secretary of Agriculture.

`(B) ASSESSMENT- Not later than 5 years after the date of enactment of this paragraph, the Secretary shall make an assessment of the progress made toward the creation of adequate infrastructure for the production and distribution of ethanol-blend fuel (including the creation of adequate qualified alternative fuel vehicle refueling property that is a blender pump).

`(C) REGULATIONS- If the Secretary determines (in the assessment made under subparagraph (B)) that adequate progress has not been made toward the creation of adequate infrastructure for the production and distribution of ethanol-blend fuel, the Secretary shall promulgate regulations to ensure, to the maximum extent practicable, that each covered owner installs or otherwise makes available 1 or more pumps that dispense ethanol-blend fuel (including any other equipment necessary, such as tanks, to ensure that the pumps function properly) at not less than the applicable percentage of the retail station outlets of the covered owner specified in subparagraph (D).

`(D) APPLICABLE PERCENTAGES- For the purpose of subparagraph (C), the applicable percentage of the retail station outlets shall be--

`(i) during the 10-year period beginning on the date of any determination made under subparagraph (C), 10 percent; and

`(ii) after the 10-year period described in clause (i), 20 percent.

`(E) FINANCIAL RESPONSIBILITY- In promulgating regulations under subparagraph (C), the Secretary shall ensure that each covered owner described in that subparagraph assumes full financial responsibility for the costs of installing or otherwise making available the pumps described in that subparagraph and any other equipment necessary (including tanks) to ensure that the pumps function properly.

`(F) PRODUCTION CREDITS FOR EXCEEDING ETHANOL-BLEND FUEL PUMPS INSTALLATION REQUIREMENT-

`(i) EARNING AND PERIOD FOR APPLYING CREDITS- If the percentage of the retail station outlets of a covered owner at which the covered owner installs ethanol-blend fuel pumps in a particular calendar year exceeds the percentage required under subparagraph (D), the covered owner shall earn credits under this paragraph, which may be applied to any of the 3 consecutive calendar years immediately after the calendar year for which the credits are earned.

`(ii) TRADING CREDITS- A covered owner that has earned credits under clause (i) may sell credits to another covered owner to enable the purchaser to meet the requirement under subparagraph (D).'.

SEC. 103. EMERGING BIOFUELS.

(a) Establishment of Incentive Program- The Secretary of Energy (referred to in this section as the `Secretary') shall establish a program under which the Secretary shall provide to eligible entities such incentives (including grants, loans, and loan guarantees) as the Secretary determines to be appropriate for the production of cellulosic ethanol and other emerging biofuels derived from renewable sources (including municipal solid waste).

(b) Application- To be eligible to receive an incentive under this section, an eligible entity shall submit to the Secretary an application at such time, in such manner, and containing such information as the Secretary may require, including--

(1) a description of the project for which the incentive will be used;

(2) a description of the use by the eligible entity of the incentive; and

(3) an estimate of the annual production using the incentive by the eligible entity of cellulosic ethanol or another biofuel, expressed on a per-gallon basis.

(c) Selection Requirements-

(1) MINIMUM NUMBER OF INCENTIVES- The Secretary shall provide incentives under this section to not less than 6 biorefineries located in different regions of the United States.

(2) LEAST-COST INCENTIVES- The Secretary shall provide incentives under this section only to eligible entities the applications of which reflect the least-cost use of the incentives, on a per-gallon basis, with respect to similar projects.

(d) Authorization of Appropriations- There is authorized to be appropriated to carry out this section $500,000,000.

SEC. 104. BIODIESEL.

(a) In General- Not later than 180 days after the date of enactment of this Act, the Secretary of Energy shall submit to Congress a report on any research and development challenges inherent in increasing to 5 percent the proportion of diesel fuel sold in the United States that is biodiesel, as defined in section 757 of the Energy Policy Act of 2005 (42 U.S.C. 16105).

(b) Regulations- The Administrator of the Environmental Protection Agency shall promulgate regulations providing for the uniform labeling of biodiesel blends that are certified to meet applicable standards published by the American Society for Testing and Materials.

SEC. 105. UNCONVENTIONAL FOSSIL FUELS.

(a) In General- The Secretary of Energy shall carry out a 10-year carbon capture research and development program to develop carbon dioxide capture technologies that can be used in the recovery of liquid fuels from oil shale and the production of liquid fuels in coal utilization facilities to minimize the emissions of carbon dioxide from those processes.

(b) Authorization of Appropriations- There are authorized to be appropriated to carry out this section--

(1) $50,000,000 for the period of fiscal years 2008 through 2012; and

(2) $100,000,000 for the period of fiscal years 2013 through 2017.

SEC. 106. PHASEOUT OF ALTERNATIVE FUELS CREDITS.

(a) Alcohol Fuels Credit- Section 40 of the Internal Revenue Code of 1986 (relating to alcohol used as fuel) is amended by adding at the end the following new subsection:

`(i) Phaseout of Credit-

`(1) IN GENERAL- The amount of the credit allowable under subsection (a) shall be reduced by an amount which bears the same ratio to the amount of the credit (determined without regard to this paragraph) as--

`(A) the amount by which the reference price for the calendar year preceding the calendar year in which the taxable year begins exceeds $45, bears to

`(B) $20.

`(2) REFERENCE PRICE- For purposes of paragraph (1), the term `reference price' means, with respect to any calendar year, the reference price determined for such calendar year under section 45K(d)(2)(C).'.

(b) Biodiesel Fuels Credit- Section 40A of such Code (relating to biodiesel and renewable diesel used as fuel) is amended by redesignating subsection (g) as subsection (h) and by inserting after subsection (f) the following new subsection:

`(g) Phaseout of Credit-

`(1) IN GENERAL- The amount of the credit allowable under subsection (a) shall be reduced by an amount which bears the same ratio to the amount of the credit (determined without regard to this paragraph) as--

`(A) the amount by which the reference price for the calendar year preceding the calendar year in which the taxable year begins exceeds $45, bears to

`(B) $20.

`(2) REFERENCE PRICE- For purposes of paragraph (1), the term `reference price' means, with respect to any calendar year, the reference price determined for such calendar year under section 45K(d)(2)(C).'.

(c) Credit Against Excise Tax on Alcohol Fuel, Biodiesel, and Alternative Fuel Mixtures- Section 6426 of such Code (relating to credit for alcohol fuel, biodiesel, and alternative fuel mixtures) is amended by adding at the end the following:

`(h) Phaseout of Credit-

`(1) IN GENERAL- The amount of the credit allowable under subsection (a) shall be reduced by an amount which bears the same ratio to the amount of the credit (determined without regard to this paragraph) as--

`(A) the amount by which the reference price for the calendar year preceding the calendar year in which the taxable year begins exceeds $45, bears to

`(B) $20.

`(2) REFERENCE PRICE- For purposes of paragraph (1), the term `reference price' means, with respect to any calendar year, the reference price determined for such calendar year under section 45K(d)(2)(C).'.

(d) Effective Dates-

(1) IN GENERAL- Except as provided in paragraph (2), the amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.

(2) CREDIT AGAINST EXCISE TAX- The amendment made by subsection (c) shall apply to fuel sold, used, or removed after December 31, 2007.

SEC. 107. ADVANCED BIOMASS FUELS PRODUCTION TAX CREDIT.

(a) In General- Subchapter B of chapter 65 of the Internal Revenue Code of 1986 (relating to rules for special application) is amended by adding at the end the following:

`SEC. 6426A. CREDIT FOR PRODUCING ADVANCED BIOMASS FUEL.

`(a) Allowance of Credit- There shall be allowed as a credit against the tax imposed by section 4041 and against the tax imposed by section 4081 an amount equal to the credit described in subsection (b). No credit shall be allowed in the case of the credits described in subsections (b) and (c) unless the taxpayer is registered under section 4101.

`(b) Advanced Biomass Fuel Credit-

`(1) IN GENERAL- For purposes of this section, the advanced biomass fuel credit is the product of 50 cents and the number of gallons of an advanced biomass fuel produced by the taxpayer and which during the taxable year--

`(A) is sold by such taxpayer to another person--

`(i) for use by such other person in the production of a qualified mixture in such other person's trade or business (other than casual off-farm production),

`(ii) for use by such other person as a fuel in a trade or business, or

`(iii) who sells such advanced biomass fuel at retail to another person and places such fuel in the fuel tank of such other person, or

`(B) is used or sold by such taxpayer for any purpose described in clause (i).

`(2) ADVANCED BIOMASS FUEL- For purposes of this subsection--

`(A) IN GENERAL- The term `advanced biomass fuel' means fuel derived from any lignocellulosic or hemicellulosic matter that is available on a renewable or recurring basis, including--

`(i) dedicated energy crops and trees,

`(ii) wood and wood residues,

`(iii) plants,

`(iv) grasses,

`(v) agricultural residues,

`(vi) fibers,

`(vii) animal wastes and other waste materials, and

`(viii) municipal solid waste.

`(B) FUEL PRODUCED IN FACILITIES WHERE CERTAIN WASTE MATERIALS DISPLACE FOSSIL FUELS USED IN PRODUCTION- Such term also includes any fuel derived from biomass and produced in facilities where animal wastes or other waste materials are digested or otherwise used to displace 90 percent or more of the fossil fuel normally used to produce a quantity of ethanol with the same energy content.

`(C) EXCEPTIONS- Such term does not include ethanol, methanol, or biodiesel.

`(3) CERTIFICATION OF ADVANCED BIOMASS FUEL- No credit shall be allowed under this subsection unless the taxpayer obtains a certification (in such form and manner as prescribed by the Secretary) from the producer or importer of a biofuel or biofuels-blend that identifies the product produced and the percentage of advanced biomass fuel in the product.

`(c) Mixture Not Used as a Fuel, etc-

`(1) IMPOSITION OF TAX- If--

`(A) any credit was determined under this section with respect to advanced biomass fuel used in the production of any advanced biomass fuel mixture, and

`(B) any person--

`(i) separates the advanced biomass from the mixture, or

`(ii) without separation, uses the mixture other than as a fuel,

then there is hereby imposed on such person a tax equal to the product of the applicable amount and the number of gallons of such advanced biomass fuel.

`(2) APPLICABLE LAWS- All provisions of law, including penalties, shall, insofar as applicable and not inconsistent with this section, apply in respect of any tax imposed under paragraph (1) as if such tax were imposed by section 4081 and not by this section.

`(d) Coordination With Exemption From Excise Tax- Rules similar to the rules under section 40(c) shall apply for purposes of this section.'.

(b) Conforming Amendments-

(1) Section 6427(e) of such Code is amended--

(A) in paragraph (1) by inserting `or 6427A' after `6427',

(B) by redesignating paragraphs (3) through (5) as paragraphs (4) through (6), respectively, and by inserting after paragraph (2) the following new paragraph:

`(3) ADVANCED BIOMASS FUEL- If any person sells or uses an advanced biomass fuel (as defined in section 6426A) for a purpose described in section 6426A(c)(1) in such person's trade or business, the Secretary shall pay (without interest) to such person an amount equal to the advanced biomass fuel credit with respect to such fuel.',

(C) in paragraph (4), as so redesignated, by striking `paragraph (1) or (2)' and inserting`paragraphs (1), (2), or (3)', and

(D) in paragraph (5), as so redesignated, by striking ` or alternative fuel mixture credit' and inserting `, alternative fuel mixture credit, advanced biomass fuel credit, or advanced biomass fuel mixture credit'.

(2) Section 6427(i)(3) of such Code is amended--

(A) by inserting `or 6426A' after `6426' in subparagraph (A), and

(B) in the section heading by striking `AND BIODIESEL MIXTURE CREDIT' and inserting `BIODIESEL MIXTURE CREDIT, AND ADVANCED BIOMASS FUEL MIXTURE CREDIT'.

(3) Section 40(c) of such Code is amended by inserting `section 6426A,' after `6426,'.

(4) Section 40A(c) of such Code is amended by inserting `section 6426A,' after `6426,'.

(5) Section 4101(a)(1) of such Code is amended--

(A) by striking `or alcohol' and inserting `, alcohol', and

(B) by inserting `or advanced biomass fuel (as defined in section 6426A)' before `shall register'.

(6) Section 4104(a)(2) of such Code is amended by inserting `section 6426A,' after `6426,'.

(7) Section 9503(b)(1) of such Code is amended by inserting `or 6426A' after `6426'.

(c) Clerical Amendment- The table of sections for subchapter B of chapter 65 of such Code is amended by inserting after the item relating to section 6426 the following new item:

`Sec. 6426A. Credit for producing advanced biomass fuel.'.

(d) Effective Date- The amendments made by this section shall apply to fuel sold, used, or removed after December 31, 2007.

SEC. 108. STUDY OF INCENTIVES FOR RENEWABLE FUELS.

(a) Study- The Director of the National Science Foundation (in consultation with the Secretary of Energy, the Secretary of the Treasury, Secretary of Agriculture, the Administrator of the Environmental Protection Agency, representatives of the biofuels industry, the oil industry, and other interested parties) shall conduct a study of the renewable fuels industry and markets in the United States, including--

(1) the costs to produce corn-based and cellulosic-based ethanol and biobutanol, biodiesel, and other emerging biofuels;

(2) the factors affecting the future market prices for those biofuels, including world oil prices; and

(3) the level of tax incentives necessary, to the maximum extent practicable, to grow the biofuels industry of the United States to reduce the dependence of the United States on foreign oil during calendar years 2011 through 2030.

(b) Goals- The study shall include an analysis of the types and advantages and disadvantages of tax incentive options to, to the maximum extent practicable--

(1) limit the overall cost of the tax incentives to the Federal Government;

(2) encourage expansion of the biofuels industry by ensuring that new plants and recently-built plants can fully amortize the investments in the plants;

(3) reward energy-efficient and low carbon-emitting technologies;

(4) ensure that pioneering processes (such as those that convert cellulosic feedstocks like corn stover and switch grass to ethanol) are economically competitive with fossil fuels;

(5) encourage agricultural producer equity participation in ethanol plants; and

(6) encourage the development of higher blend markets, such as E-20, E30, and E-85.

(c) Report- Not later than 1 year after the date of enactment of this Act, the Director shall submit a report that describes the results of the study to--

(1) the Committee on Agriculture, Nutrition, and Forestry of the Senate;

(2) the Committee on Energy and Natural Resources of the Senate;

(3) the Committee on Environment and Public Works of the Senate;

(4) the Committee on Finance of the Senate;

(5) the Committee on Agriculture of the House of Representatives;

(6) the Committee on Energy and Commerce of the House of Representatives; and

(7) the Committee on Ways and Means of the House of Representatives.

TITLE II--DEVELOPMENT AND INVENTORY OF CERTAIN OUTER CONTINENTAL SHELF RESOURCES

SEC. 201. AUTHORIZATION OF ACTIVITIES AND EXPORTS INVOLVING HYDROCARBON RESOURCES BY UNITED STATES PERSONS.

(a) Authorization- Notwithstanding any other provision of law (including a regulation), United States persons (including agents and affiliates of those United States persons) may--

(1) engage in any transaction necessary for the exploration for and extraction of hydrocarbon resources from any portion of any foreign exclusive economic zone that is contiguous to the exclusive economic zone of the United States; and

(2) export without license authority all equipment necessary for the exploration for or extraction of hydrocarbon resources described in paragraph (1).

(b) Definition- In this section, the term `United States person' means--

(1) any United States citizen or alien lawfully admitted for permanent residence in the United States; and

(2) any person other than an individual, if 1 or more individuals described in paragraph (1) own or control at least 51 percent of the securities or other equity interest in the person.

SEC. 202. TRAVEL IN CONNECTION WITH AUTHORIZED HYDROCARBON EXPLORATION AND EXTRACTION ACTIVITIES.

Section 910 of the Trade Sanctions Reform and Export Enhancement Act of 2000 (22 U.S.C. 7209) is amended by inserting after subsection (b) the following:

`(c) General License Authority for Travel-Related Expenditures by Persons Engaging in Hydrocarbon Exploration and Extraction Activities-

`(1) IN GENERAL- The Secretary of the Treasury shall, authorize under a general license the travel-related transactions listed in section 515.560(c) of title 31, Code of Federal Regulations, for travel to, from, or within Cuba in connection with exploration for and the extraction of hydrocarbon resources in any part of a foreign maritime exclusive economic zone that is contiguous to the exclusive economic zone of the United States.

`(2) PERSONS AUTHORIZED- Persons authorized to travel to Cuba under this section include full-time employees, executives, agents, and consultants of oil and gas producers, distributors, and shippers.

`(3) DEFINITION- In this section, the term `exclusive economic zone of the United States' has the meaning given the term `Exclusive Economic Zone' in section 2101(10a) of title 46, United States Code.'.

SEC. 203. MORATORIUM OF OIL AND GAS LEASING IN CERTAIN AREAS OF THE GULF OF MEXICO.

(a) In General- Section 104(a) of the Gulf of Mexico Energy Security Act of 2006 (43 U.S.C. 1331 note; title I of division C of Public Law 109-432) is amended--

(1) in paragraph (2), by striking `125 miles' and inserting `45 miles'; and

(2) in paragraph (3), by striking `100 miles' each place it appears and inserting `45 miles'.

(b) Regulations-

(1) IN GENERAL- The Secretary of the Interior shall promulgate regulations that establish appropriate environmental safeguards for the exploration and production of oil and natural gas on the outer Continental Shelf.

(2) MINIMUM REQUIREMENTS- At a minimum, the regulations shall include--

(A) provisions requiring surety bonds of sufficient value to ensure the mitigation of any foreseeable incident;

(B) provisions assigning liability to the leaseholder in the event of an incident causing damage or loss, regardless of the negligence of the leaseholder or lack of negligence;

(C) provisions no less stringent than those contained in the Spill Prevention, Control, and Countermeasure regulations promulgated under the Oil Pollution Act of 1990 (33 U.S.C. 2701 et seq.);

(D) provisions ensuring that--

(i) no facility for the exploration or production of resources is visible to the unassisted eye from any shore of any coastal State; and

(ii) the impact of offshore production facilities on coastal vistas is otherwise mitigated;

(E) provisions to ensure, to the maximum extent practicable, that exploration and production activities will result in no significant adverse effect on fish or wildlife (including habitat), subsistence resources, or the environment; and

(F) provisions that will impose seasonal limitations on activity to protect breeding, spawning, and wildlife migration patterns.

SEC. 204. INVENTORY AND LEASING OF OUTER CONTINENTAL SHELF OIL AND NATURAL GAS RESOURCES.

(a) Inventory-

(1) IN GENERAL- Except as otherwise provided in subsection (c), the Secretary of the Interior (in this section referred to as the `Secretary') may conduct an inventory in accordance with this subsection of oil and natural gas resources beneath the waters of the outer Continental Shelf (as defined in section 2 of the Outer Continental Shelf Lands Act (43 U.S.C. 1331)), other than beneath such waters located in the Gulf of Mexico or off the coast of Florida.

(2) BEST AVAILABLE TECHNOLOGY- In conducting the inventory, the Secretary shall use the best technology available to obtain accurate resource estimates.

(3) REPORTS- The Secretary shall submit to Congress and the requesting Governor a report on any inventory conducted under this section.

(b) Leasing- Except as otherwise provided in subsection (c), the Secretary shall offer for oil and natural gas leasing pursuant to the Outer Continental Shelf Lands Act (43 U.S.C. 1331 et seq.) by as soon as practicable after the date of enactment of this Act all areas for which an inventory has been conducted under subsection (a).

(c) Limitations- The Secretary may not under this section--

(1) conduct an inventory under this subsection for any area of the outer Continental Shelf located within 50 miles of the State, if the Governor of the State notifies the Secretary that the State objects to conduct of the inventory in that area;

(2) conduct any offshore oil and natural gas preleasing, leasing, or related activities for any area of the outer Continental Shelf located within 50 miles of a State, before--

(A) the Secretary submits to Congress the report under subsection (a)(3) for that area; and

(B) the Governor of the State requests the Secretary to make such area available for such leasing; or

(3) conduct any offshore oil and natural gas preleasing, leasing, or related activities for any area of the outer Continental Shelf located more than 50 miles and less than 100 miles from the State, if the Governor of the State notifies the Secretary that the State objects to conduct of the inventory in that area.

SEC. 205. CONFORMING AMENDMENTS TO MORATORIA ON USE OF APPROPRIATIONS.

The Department of the Interior, Environment, and Related Agencies Appropriations Act, 2006 (Public Law 109-54) is amended--

(1) in section 104 (119 Stat. 521) by striking `the areas of northern, central, and southern California; the North Atlantic; Washington and Oregon; and';

(2) in section 105 (119 Stat. 521) by inserting `and any other area that the Secretary of the Interior may offer for leasing, preleasing, or any related activity under section 104 of that Act' after `2006)'; and

(3) in section 106 (119 Stat. 522) by striking `the Mid-Atlantic and South Atlantic planning areas' and inserting `the portion of the South Atlantic planning area located off the coast of Florida'.

SEC. 206. ENHANCED OIL RECOVERY.

Section 354(c)(4)(B) of the Energy Policy Act of 2005 (42 U.S.C. 15910(c)(4)(B)) is amended--

(1) in clause (iii), by striking `and' at the end;

(2) in clause (iv), by striking the period at the end and inserting `; and'; and

(3) by adding at the end the following:

`(v) are carried out in geologically challenging fields.'.

SEC. 207. TREATMENT OF REVENUES UNDER OIL AND GAS LEASES FOR OTHER AREAS.

Section 105 of the Gulf of Mexico Energy Security Act (Public Law 109-432; 43 U.S.C. 1331 note) is amended by adding at the end the following:

`(g) Treatment of Revenues Under Oil and Gas Leases for Other Areas- Amounts received by the United States as rentals, royalties, bonus bids, and other sums due and payable under Federal oil and gas leases for outer Continental Shelf planning areas that are opened for such leases after the date of the enactment of this subsection shall be deposited and paid to States adjoining such areas in substantially the same manner in which qualified outer Continental Shelf revenues are deposited and paid under this section.'.

TITLE III--MANAGEMENT OF ENERGY RISKS

SEC. 301. BUREAU OF INTERNATIONAL ENERGY POLICY.

Section 101 of the National Security Act of 1947 (50 U.S.C. 402) is amended--

(1) by redesignating subsection (i) (as added by section 301 of Public Law 105-292 (112 Stat. 2800)) as subsection (k); and

(2) by adding at the end the following:

`(l) Bureau of International Energy Policy-

`(1) ESTABLISHMENT- The President shall establish within the National Security Council a Bureau of International Energy.

`(2) DUTIES- The Bureau shall, in conjunction with the Secretary of Defense, the Secretary of State, and the Secretary of Energy, prepare and submit to Congress an annual energy security report.'.

SEC. 302. STRATEGIC ENERGY INFRASTRUCTURE EQUIPMENT RESERVE.

(a) Establishment- The Secretary of Energy may establish and operate a strategic energy infrastructure equipment reserve.

(b) Use- The reserve shall be used and operated for--

(1) the protection, conservation, maintenance, and testing of strategic energy infrastructure equipment; and

(2) the provision of strategic energy infrastructure equipment whenever and to the extent that--

(A) the Secretary, with the approval of the President, finds that the equipment is needed for energy security purposes; and

(B) the provision of the equipment is authorized by a joint resolution of Congress.

(c) Authorization of Appropriations- There are authorized to be appropriated such sums as are necessary to carry out this section.

SEC. 303. INCREASE IN CAPACITY.

(a) The Energy Policy and Conservation Act is amended--

(1) in section 151(b) (42 U.S.C. 6231(b)) by striking `1' and inserting `1.5'; and

(2) in section 154(a) (42 U.S.C. 6234(a)) by striking `1' and inserting `1.5'.

(b) Section 301(e) of the Energy Policy Act of 2005 (42 U.S.C. 6240 note) is amended by striking `1,000,000,000' and inserting `1,500,000,000'.