H. R. 7183
IN THE HOUSE OF REPRESENTATIVES
September 27, 2008
Mr. Engel (for himself and Mr. English of Pennsylvania) introduced the following bill; which was referred to the Committee on Foreign Affairs, and in addition to the Committee on Financial Services, 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 direct the Secretary of State to work with the Government of Brazil and the governments of other countries in the Western Hemisphere to develop partnerships to strengthen diplomatic relations and energy security by accelerating the development of biofuels production, research, and infrastructure, and for other purposes.
Short title; table of contents
This Act may be cited as the
Western Hemisphere Energy Compact Act
Table of contents
The table of contents for this Act is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Sec. 3. Definitions.
Sec. 4. Western Hemisphere Energy Cooperation Forum.
Sec. 5. United States-Brazil biofuels partnership.
Sec. 6. Biofuels feasibility studies.
Sec. 7. Multilateral development banks.
Sec. 8. Carbon credit trading mechanisms.
Sec. 9. Energy crisis response mechanism.
Sec. 10. Energy foreign assistance.
Sec. 11. Energy public diplomacy.
Sec. 12. Report.
Congress makes the following findings:
The engagement of the United States Government on energy issues with the Government of Brazil and the governments of willing countries in the Western Hemisphere is a strategic priority because such engagement can help to—
reduce the potential for conflict over energy resources;
maintain and expand reliable energy supplies;
expand the use of renewable energy; and
reduce the detrimental effects of energy import dependence.
Current energy dialogues and agreements should be expanded and refocused, as needed, to meet the challenges described in paragraph (1).
Countries in the Western Hemisphere can most effectively meet their common needs for energy security and sustainability through partnership and cooperation. Cooperation between governments on energy issues will enhance bilateral and regional relationships among countries in the Western Hemisphere. The Western Hemisphere is rich in natural resources, and there are significant opportunities for the production of renewable energy, including hydro, geothermal, solar, and wind. Countries in the Western Hemisphere can provide convenient and reliable markets for their own energy needs and for foreign trade in energy goods and services.
Development of sustainable energy alternatives in countries in the Western Hemisphere can improve energy security, balance of trade, and environmental quality, and can provide markets for energy technology and agricultural products.
The Government of the United States has actively worked with the Government of Brazil to develop a strong biofuels partnership and to increase the production and use of biofuels. On March 9, 2007, the Memorandum of Understanding Between the United States and Brazil to Advance Cooperation on Biofuels, was signed in São Paulo, Brazil.
Brazil and the United States have led the world in the production of ethanol. Deeper cooperation on biofuels with other countries in the Western Hemisphere would extend economic, security, and political benefits.
The United States is committed to developing a biofuels partnership in the Western Hemisphere that benefits the welfare of the people of the Western Hemisphere. According to the Latin American Energy Organization, the percentage of total energy consumption in each of the following countries in the Western Hemisphere that originated from imported crude oil and oil products in 2005 was—
2 percent in Argentina;
93 percent in Barbados;
7 percent in Bolivia;
13 percent in Brazil;
55 percent in Chile;
4 percent in Colombia;
56 percent in Costa Rica;
77 percent in the Dominican Republic;
20 percent in Ecuador;
76 percent in El Salvador;
85 percent in Grenada;
72 percent in Guatemala;
100 percent in Guyana;
93 percent in Haiti;
81 percent in Honduras;
91 percent in Jamaica;
10 percent in Mexico;
98 percent in Nicaragua;
100 percent in Panama;
46 percent in Paraguay;
39 percent in Peru;
34 percent in Suriname;
45 percent in Trinidad and Tobago;
79 percent in Uruguay; and
0 percent in Venezuela.
Private sector partnership and investment in all sources of energy is critical to providing energy security in the Western Hemisphere. Several countries in the Western Hemisphere have endangered the investment climate. Other countries in the Western Hemisphere have been unable to make reforms necessary to create investment climates necessary to increase the domestic production of energy.
It is the policy of the United States to promote free trade in energy among countries in the Western Hemisphere, which would—
help support a growing energy industry;
create jobs that benefit development and alleviate poverty;
increase energy security through supply diversification;
strengthen relations among countries in the Western Hemisphere through closer cooperation and understanding; and
promote the production and use of clean forms of energy.
In this Act:
Appropriate congressional committees
The term appropriate congressional committees means the Committee on Foreign Affairs of the House of Representatives and the Committee on Foreign Relations of the Senate.
The term biofuel means any liquid fuel that is derived from biomass.
The term biomass means any organic matter that is available on a renewable or recurring basis, including agricultural crops, trees, wood, wood wastes and residues, plants (including aquatic plants), grasses, residues, fibers, animal wastes, municipal wastes, and other waste materials.
The term partner country means a country that, along with the United States and Brazil, joins the Western Hemisphere Energy Cooperation Forum established pursuant to section 4 and has agreed to conduct a biofuels feasibility study under section 6.
Regional development banks
The term regional development banks means the African Development Bank, the Inter-American Development Bank, the Andean Development Corporation, the European Bank for Reconstruction and Development, and the Asian Development Bank.
Western Hemisphere Energy Cooperation Forum
The Secretary of State, in coordination with the
Secretary of Energy, shall seek to establish a regional-based ministerial forum
to be known as the Western Hemisphere Energy Cooperation Forum (referred to in
this section as the
Energy Forum). The United States Government
shall initially provide the framework for the Energy Forum and shall seek to
establish a rotating chairmanship, in consultation with the Government of
The Secretary of State, in coordination with the Secretary of Energy, shall seek to include in the Energy Forum membership of other countries in the Western Hemisphere.
The Energy Forum should seek—
to strengthen relationships between the United States and other countries in the Western Hemisphere through cooperation on energy issues;
to enhance cooperation, including information and technology sharing, between major energy producers and major energy consumers in the Western Hemisphere, particularly among the Governments of Brazil, Canada, Mexico, and the United States;
to explore possibilities to work with countries in the Western Hemisphere to promote renewable energy production (particularly in biofuels) and to lessen dependence on oil imports without reducing food availability (particularly in Mexico and Central American countries);
to ensure that energy contributes to the economic, social, and environmental enhancement of the countries in the Western Hemisphere;
to provide an opportunity for open dialogue and joint commitments among Energy Forum countries and with private industry; and
to provide participating countries the flexibility necessary to cooperatively address broad challenges posed to the energy supply of the Western Hemisphere to find solutions that are politically acceptable and practical in policy terms.
The United States Government shall seek to implement, in cooperation with Energy Forum countries—
an energy crisis initiative that will promote national and regional measures to respond to temporary energy supply disruptions, including participating in a Western Hemisphere energy crisis response mechanism in accordance with section 9(b);
an energy sustainability initiative to facilitate long-term supply security by fostering reliable supply sources of energy and improved energy efficiency, including—
developing, deploying, and commercializing technologies for sustainable renewable fuels within the region;
promoting production and trade in sustainable energy, including energy from biomass and other alternatives;
facilitating investment, trade, and technology cooperation in energy infrastructure, petroleum products, natural gas (including liquefied natural gas), energy efficiency (including automotive efficiency), clean fossil energy, renewable energy, and carbon sequestration;
promoting regional infrastructure and market integration;
developing effective and stable regulatory frameworks;
developing policy instruments to encourage the use of renewable energy and improved energy efficiency;
establishing educational training and exchange programs between Energy Forum countries; and
identifying and removing barriers to trade in technology, services, and commodities;
an energy for development initiative to promote energy access for underdeveloped areas through energy policy and infrastructure development, including—
increasing access to energy services for the poor;
improving energy sector market conditions;
promoting rural development though biomass energy production and use;
increasing transparency of, and participation in, energy infrastructure projects;
promoting development and deployment of technology for clean and sustainable energy development; and
facilitating the use of carbon sequestration methods in agriculture and forestry and linking greenhouse gas emissions reduction programs to international carbon markets; and
biofuels studies, with country studies provided by each partner country, in accordance with section 6.
It is the sense of Congress that the Energy Forum should—
meet at least once every 2 years; and
meet on a subregional basis, as needed.
Western hemisphere energy industry group
The Secretary of State, in coordination
with the Secretary of Commerce and the Secretary of Energy, shall approach the
governments of other countries in the Western Hemisphere to seek cooperation in
establishing a Western Hemisphere Energy Industry Group (referred to in this
subsection as the
Energy Group) within the Western Hemisphere
Energy Cooperation Forum. The Energy Group should include representatives from
industries and governments in the Western Hemisphere.
The purpose of the Energy Group should be to—
increase public-private partnerships;
foster private investment; and
enable countries in the Western Hemisphere to devise energy agendas compatible with industry capacity and cognizant of industry goals.
It is the sense of Congress that the Energy Group should discuss—
promoting a secure investment climate;
developing and deploying biofuels and other alternative energy and clean electrical production facilities;
developing and deploying energy efficient technologies and practices in the industrial, residential, and transportation sectors;
oil and natural gas production and distribution;
maintaining transparency of energy production, trade, consumption, and reserves data;
promoting biofuels and alternative energy research; and
training and education exchange programs.
Oil and natural gas working group
The United States Government shall seek
cooperation in establishing an Oil and Natural Gas Working Group (referred to
in this subsection as the
Working Group) within the Western
Hemisphere Energy Cooperation Forum or the Western Hemisphere Energy Industry
The Working Group should strengthen dialogue between international oil companies, national oil companies, and civil society groups on issues related to international standards on transparency, social responsibility, and best practices in leasing and management of oil and natural gas projects.
Authorization of appropriations
There are authorized to be appropriated $3,000,000 for fiscal year 2009 to carry out this section.
United States-Brazil biofuels partnership
The Secretary of State, in coordination with the Secretary of Energy, shall work with the Government of Brazil to—
coordinate efforts to promote the production and use of biofuels among countries, giving preference to those countries that are among the poorest (as determined by the Inter-American Development Bank) and most dependent on petroleum imports, including—
coordinating the biofuels feasibility studies described in section 6;
collaborating on policy and regulatory measures to—
promote domestic biofuels production and use, including related agricultural and environmental measures;
reform automotive sectors to incorporate biofuels use, including increased efficiency, reduced emissions, and integration with high-efficiency advanced technologies; and
reform fueling infrastructure to allow for use of biofuels and other alternative energy sources;
invite the European Union, China, India, South Africa, Japan, and other interested countries to join in and expand upon existing international efforts to promote the development of a global strategy to create global biofuels markets and promote biofuels production and use in developing countries;
assess the feasibility of working with the World Bank and relevant regional development banks regarding—
biofuels production capabilities; and
infrastructure, research, and training related to such capabilities; and
develop a joint and coordinated strategy regarding the construction and retrofitting of pipelines and terminals near major fuel distribution centers, coastal harbors, and railroads.
International agricultural extension programs
The Secretary of Agriculture shall work with the Government of Brazil to facilitate joint agricultural extension activities related to biofuels crop production, biofuels production, and environmental and greenhouse gas emissions reduction practices.
The Secretary of Energy, in coordination with the Secretary of State, and in collaboration with the Government of Brazil, shall establish a grant program to finance advanced biofuels research and collaboration between academic and research institutions in the United States and Brazil.
Authorization of appropriations
There are authorized to be appropriated for fiscal year 2009—
$3,000,000 to carry out subsection (a);
$5,000,000 to carry out subsection (b); and
$7,000,000 to carry out subsection (c).
Biofuels feasibility studies
The Secretary of State, in consultation with the Secretary of Energy, shall work with each partner country to conduct a study to determine the feasibility of increasing the production and use of biofuels in such country.
Analysis of the energy policy framework
The study conducted under subsection (a) shall analyze—
the energy policy of the partner country, particularly the impact of such policy on the promotion of biofuels; and
the status and impacts of any existing biofuel programs of the country.
Assessment of demand
The study conducted under subsection (a) shall assess, with respect to the partner country—
the quantitative and qualitative current and projected demand for energy by families, villages, industries, public transportation infrastructure, and other energy consumers;
the future consumption by the heat, electricity, and transportation sectors;
the demand for high-quality transportation fuel;
the local market prices for various energy sources; and
the employment, income generation, and rural development opportunities from biofuel industry.
Assessment of resources
The study conducted under subsection (a) shall—
assess the present and future biomass resources that are available in each geographic region of the participating country to meet the demand assessed under subsection (c);
include a plan for increasing the availability of existing biomass resources in the country; and
include a plan for developing new, sustainable biomass resources in the country, including wood, manure, agricultural residues, sewage, and organic waste.
Analysis of available technologies and systems
Building upon the results of the assessments described in subsections (c) and (d), the study shall—
analyze available technologies and systems for utilizing biofuels in the country, including—
technologies for the conversion of biomass crops and agroforestry residues in pellets and briquettes;
charcoal and activated coal production;
combustion and co-combustion technologies;
the availability of biofuels technologies in various geographic regions; and
the economic viability of biomass technologies; and
compare such technologies and systems to conventional energy supplies with respect to cost-effectiveness, maintenance, social acceptability, and the impact on development.
The study conducted under subsection (a) shall assess—
the likely impacts of increased biomass harvesting and production, and biofuels production and use on environmental sustainability, including effects on carbon emissions; and
the availability of financing from global carbon credit trading mechanisms.
Food security assessment
The study prepared by each partner country under subsection (a) shall assess the likely impacts on food stocks and prices in partner countries.
Development of policy options To promote biofuel production and use
The study prepared by each partner country under subsection (a) shall identify and evaluate policy options to promote biofuel production and use, after taking into account—
the existing energy policy of the country; and
the technologies available to convert local biomass resources into biofuels.
In conducting the evaluation under paragraph (1), the partner country shall involve local, national, and international public and private institutions with responsibility or expertise in biofuel production and use.
The study shall address—
potential biomass in the country and barriers for the production of biofuels from such biomass products;
strategies for creating a market for biomass products in the country;
the potential contribution of biofuels to reducing fossil fuel consumption in the country;
environmental sustainability issues and the mitigating effect on carbon emissions of increased biofuel production;
the potential contribution of biofuels to economic development, poverty reduction, and sustainability of energy resources;
programs for the use of biofuels in the transportation sector;
economic cooperation across international borders to increase biofuel production and use;
technology collaboration and joint ventures and technological, cultural, and legal barriers that may impede such technological cooperation; and
the economic aspects of the promotion of biofuels, including job creation, financing and loan mechanisms, credit mobilization, investment capital, and market penetration.
Authorization of appropriations
There are authorized to be appropriated $20,000,000 for fiscal year 2009 to carry out this section.
Supplemental funding sources
The Secretary of State shall work with the Government of Brazil, the governments of partner countries, regional development banks, the Organization of American States, and other interested parties to identify supplemental funding sources for the studies described in this section.
Multilateral development banks
It is the sense of Congress that the Secretary of the Treasury should instruct the United States Executive Director at each international financial institution to which the United States is a member to use the voice, vote, and influence of the United States to ensure that assistance provided by the institution encourages development of renewable energy sources, including energy derived from biomass.
Carbon credit trading mechanisms
The Secretary of State shall work with interested governments in the Western Hemisphere and other countries to organize regional and hemispheric carbon trading mechanisms under the United Nations Framework Convention on Climate Change and existing trade and financial agreements to—
establish special carbon credits for the preservation of tropical rain forests;
use greenhouse gas-reducing farming practices;
jointly fund greenhouse gas sequestration studies and experiments in various geological formations; and
jointly fund climate mitigation studies in vulnerable areas in the Western Hemisphere.
Authorization of appropriations
There are authorized to be appropriated $5,000,000 for fiscal year 2009 to carry out this section.
Energy crisis response mechanism
Congress makes the following findings:
Cooperation between the United States Government and governments of other countries during energy crises promotes the national security of the United States and of the cooperating countries.
Credible contingency plans to respond to energy shortages may serve as deterrents to the manipulation of energy supplies by export and transit countries.
The vulnerability of most countries in the Western Hemisphere to supply disruptions from political, natural, or terrorism causes may introduce instability in the Western Hemisphere and can be a source of conflict, despite the existence of major energy resources in the Western Hemisphere. The United States and Canada are the only members of the International Energy Program in the Western Hemisphere.
Integrating countries in the Western Hemisphere into regional and international agreements for the management of energy emergencies will benefit market stability and encourage development in participating countries.
Establishment of an energy crisis response mechanism for the Western Hemisphere
The Secretary of State, in coordination with the Secretary of Energy, shall immediately seek to establish a Western Hemisphere energy crisis response mechanism.
The mechanism established under paragraph (1) should include, as appropriate—
a real-time information sharing and coordinating mechanism to respond to energy supply emergencies;
technical assistance in the development and management of national and regional strategic reserves within the Western Hemisphere;
the promotion of increased energy infrastructure integration between countries;
emergency demand restraint measures;
energy switching preparedness and alternative energy production capacity;
enhanced demand intensity reduction programs; and
measures to strengthen sea lane and infrastructure security.
The Secretary shall seek to include in the Western Hemisphere energy crisis response mechanism membership of each major energy producer and major energy consumer in the Western Hemisphere and other members of the Western Hemisphere Energy Cooperation Forum established pursuant to section 4(a).
The Secretary of Energy shall—
conduct a study of supply vulnerabilities for natural gas in the Western Hemisphere; and
submit a report to the appropriate congressional committees that includes recommendations for infrastructure and regulatory needs for reducing supply disruption vulnerability and international coordination.
Authorization of appropriations
There is authorized to be appropriated $5,000,000 for fiscal year 2009 to carry out this section.
Energy foreign assistance
The Administrator of the United States
Agency for International Development (referred to in this section as the
Administrator) shall seek to increase United States foreign
assistance programming in renewable energy, including in activities to reduce
energy import dependence through the use of biofuels.
Development strategy review
The Administrator shall—
review country assistance strategies to increase assistance for renewable energy activities; and
submit the results of this review to the appropriate congressional committees not later than 180 days after the date of the enactment of this Act.
Expedited sustainable energy grants
The Administrator is authorized to award grants to nongovernmental organizations for sustainable energy and job creation projects in at-risk nations, such as Haiti. Grant funds shall be provided to grantees on an expedited basis upon approval of the eligible project.
Authorization of appropriations
There are authorized to be appropriated $5,000,000 for fiscal year 2009 to carry out this subsection.
Energy public diplomacy
Authorization of appropriations
There is authorized to be appropriated $5,000,000 to the Department of State for public diplomacy activities on renewable energy in the Western Hemisphere.
Not less than 50 percent of any amount appropriated pursuant to the authorizations of appropriations under paragraph (1) shall be used for education activities implemented through civil society organizations.
The Secretary of State, in consultation with the Secretary of Energy, shall submit an annual report to the appropriate congressional committees on the activities carried out to implement this Act.