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S. 154 (110th): Coal-to-Liquid Fuel Energy Act of 2007

The text of the bill below is as of Jan 4, 2007 (Introduced).


II

110th CONGRESS

1st Session

S. 154

IN THE SENATE OF THE UNITED STATES

January 4, 2007

(for himself, Mr. Obama, Mr. Lugar, Mr. Pryor, Ms. Murkowski, Mr. Bond, Mr. Thomas, Mr. Martinez, Mr. Enzi, Ms. Landrieu, and Mr. Craig) introduced the following bill; which was read twice and referred to the Committee on Energy and Natural Resources

A BILL

To promote coal-to-liquid fuel activities.

1.

Short title

This Act may be cited as the Coal-to-Liquid Fuel Energy Act of 2007.

2.

Definitions

In this Act:

(1)

Coal-to-liquid

The term coal-to-liquid means—

(A)

with respect to a process or technology, the use of a feedstock, the majority of which is the coal resources of the United States, using the class of reactions known as Fischer-Tropsch, to produce synthetic fuel suitable for transportation; and

(B)

with respect to a facility, the portion of a facility related to producing the inputs to the Fischer-Tropsch process, the Fischer-Tropsch process, finished fuel production, or the capture, transportation, or sequestration of byproducts of the use of a feedstock that is primarily domestic coal at the Fischer-Tropsch facility, including carbon emissions.

(2)

Secretary

The term Secretary means the Secretary of Energy.

3.

Coal-to-liquid fuel loan guarantee program

(a)

Eligible projects

Section 1703(b) of the Energy Policy Act of 2005 (42 U.S.C. 16513(b)) is amended by adding at the end the following:

(11)

Large-scale coal-to-liquid facilities (as defined in section 2 of the Coal-to-Liquid Fuel Energy Act of 2007) that use a feedstock, the majority of which is the coal resources of the United States, to produce not less than 10,000 barrels a day of liquid transportation fuel.

.

(b)

Authorization of appropriations

Section 1704 of the Energy Policy Act of 2005 (42 U.S.C. 16514) is amended by adding at the end the following:

(c)

Coal-to-liquid projects

(1)

In general

There are authorized to be appropriated such sums as are necessary to provide the cost of guarantees for projects involving large-scale coal-to-liquid facilities under section 1703(b)(11).

(2)

Alternative Funding

If no appropriations are made available under paragraph (1), an eligible applicant may elect to provide payment to the Secretary, to be delivered if and at the time the application is approved, in the amount of the estimated cost of the loan guarantee to the Federal Government, as determined by the Secretary.

(3)

Limitations

(A)

In general

No loan guarantees shall be provided under this title for projects described in paragraph (1) after (as determined by the Secretary)—

(i)

the tenth such loan guarantee is issued under this title; or

(ii)

production capacity covered by such loan guarantees reaches 100,000 barrels per day of coal-to-liquid fuel.

(B)

Individual projects

(i)

In general

A loan guarantee may be provided under this title for any large-scale coal-to-liquid facility described in paragraph (1) that produces no more than 20,000 barrels of coal-to-liquid fuel per day.

(ii)

Non-Federal funding requirement

To be eligible for a loan guarantee under this title, a large-scale coal-to-liquid facility described in paragraph (1) that produces more than 20,000 barrels per day of coal-to-liquid fuel shall be eligible to receive a loan guarantee for the proportion of the cost of the facility that represents 20,000 barrels of coal-to-liquid fuel per day of production.

(4)

Requirements

(A)

Guidelines

Not later than 180 days after the date of enactment of this subsection, the Secretary shall publish guidelines for the coal-to-liquids loan guarantee application process.

(B)

Applications

Not later than 1 year after the date of enactment of this subsection, the Secretary shall begin to accept applications for coal-to-liquid loan guarantees under this subsection.

(C)

Deadline

Not later than 1 year from the date of acceptance of an application under subparagraph (B), the Secretary shall evaluate the application and make final determinations under this subsection.

(5)

Reports to Congress

The Secretary shall submit to the Committee on Energy and Natural Resources of the Senate and the Committee on Energy and Commerce of the House of Representatives a report describing the status of the program under this subsection not later than each of—

(A)

180 days after the date of enactment of this subsection;

(B)

1 year after the date of enactment of this subsection; and

(C)

the dates on which the Secretary approves the first and fifth applications for coal-to-liquid loan guarantees under this subsection.

.

4.

Coal-to-liquid facilities loan program

(a)

Definition of eligible recipient

In this section, the term eligible recipient means an individual, organization, or other entity that owns, operates, or plans to construct a coal-to-liquid facility that will produce at least 10,000 barrels per day of coal-to-liquid fuel.

(b)

Establishment

The Secretary shall establish a program under which the Secretary shall provide loans, in a total amount not to exceed $20,000,000, for use by eligible recipients to pay the Federal share of the cost of obtaining any services necessary for the planning, permitting, and construction of a coal-to-liquid facility.

(c)

Application

To be eligible to receive a loan under subsection (b), the eligible recipient shall submit to the Secretary an application at such time, in such manner, and containing such information as the Secretary may require.

(d)

Non-Federal match

To be eligible to receive a loan under this section, an eligible recipient shall use non-Federal funds to provide a dollar-for-dollar match of the amount of the loan.

(e)

Repayment of loan

(1)

In general

To be eligible to receive a loan under this section, an eligible recipient shall agree to repay the original amount of the loan to the Secretary not later than 5 years after the date of the receipt of the loan.

(2)

Source of funds

Repayment of a loan under paragraph (1) may be made from any financing or assistance received for the construction of a coal-to-liquid facility described in subsection (a), including a loan guarantee provided under section 1703(b)(11) of the Energy Policy Act of 2005 (42 U.S.C. 16513(b)(11)).

(f)

Requirements

(1)

Guidelines

Not later than 180 days after the date of enactment of this Act, the Secretary shall publish guidelines for the coal-to-liquids loan application process.

(2)

Applications

Not later than 1 year after the date of enactment of this Act, the Secretary shall begin to accept applications for coal-to-liquid loans under this section.

(g)

Reports to Congress

Not later than each of 180 days and 1 year after the date of enactment of this Act, the Secretary shall submit to the Committee on Energy and Natural Resources of the Senate and the Committee on Energy and Commerce of the House of Representatives a report describing the status of the program under this section.

(h)

Authorization of appropriations

There is authorized to be appropriated to carry out this section $200,000,000, to remain available until expended.

5.

Location of coal-to-liquid manufacturing facilities

The Secretary, in coordination with the head of any affected agency, shall promulgate such regulations as the Secretary determines to be necessary to support the development on Federal land (including land of the Department of Energy, military bases, and military installations closed or realigned under the defense base closure and realignment) of coal-to-liquid manufacturing facilities and associated infrastructure, including the capture, transportation, or sequestration of carbon dioxide.

6.

Strategic Petroleum Reserve

(a)

Development, operation, and maintenance of Reserve

Section 159 of the Energy Policy and Conservation Act (42 U.S.C. 6239) is amended—

(1)

by redesignating subsections (f), (g), (j), (k), and (l) as subsections (a), (b), (e), (f), and (g), respectively; and

(2)

by inserting after subsection (b) (as redesignated by paragraph (1)) the following:

(c)

Study of maintaining coal-to-liquid products in Reserve

Not later than 1 year after the date of enactment of the Coal-to-Liquid Fuel Energy Act of 2007, the Secretary and the Secretary of Defense shall—

(1)

conduct a study of the feasibility and suitability of maintaining coal-to-liquid products in the Reserve; and

(2)

submit to the Committee on Energy and Natural Resources and the Committee on Armed Services of the Senate and the Committee on Energy and Commerce and the Committee on Armed Services of the House of Representatives a report describing the results of the study.

(d)

Construction of storage facilities

As soon as practicable after the date of enactment of the Coal-to-Liquid Fuel Energy Act of 2007, the Secretary may construct 1 or more storage facilities in the vicinity of pipeline infrastructure and at least 1 military base.

.

(b)

Petroleum products for storage in Reserve

Section 160 of the Energy Policy and Conservation Act (42 U.S.C. 6240) is amended—

(1)

in subsection (a)—

(A)

in paragraph (1), by inserting a semicolon at the end;

(B)

in paragraph (2), by striking and at the end;

(C)

in paragraph (3), by striking the period at the end and inserting ; and; and

(D)

by adding at the end the following:

(4)

coal-to-liquid products (as defined in section 2 of the Coal-to-Liquid Fuel Energy Act of 2007), as the Secretary determines to be appropriate, in a quantity not to exceed 20 percent of the total quantity of petroleum and petroleum products in the Reserve.

;

(2)

in subsection (b), by redesignating paragraphs (3) through (5) as paragraphs (2) through (4), respectively; and

(3)

by redesignating subsections (f) and (h) as subsections (d) and (e), respectively.

(c)

Conforming amendments

Section 167 of the Energy Policy and Conservation Act (42 U.S.C. 6247) is amended—

(1)

in subsection (b)—

(A)

by redesignating paragraphs (2) and (3) as paragraphs (1) and (2), respectively; and

(B)

in paragraph (2) (as redesignated by subparagraph (A)), by striking section 160(f) and inserting section 160(e); and

(2)

in subsection (d), in the matter preceding paragraph (1), by striking section 160(f) and inserting section 160(e).

7.

Authorization to conduct research, development, testing, and evaluation of assured domestic fuels

Of the amount authorized to be appropriated for the Air Force for research, development, testing, and evaluation, $10,000,000 may be made available for the Air Force Research Laboratory to continue support efforts to test, qualify, and procure synthetic fuels developed from coal for aviation jet use.

8.

Coal-to-liquid long-term fuel procurement and department of defense development

Section 2398a of title 10, United States Code is amended—

(1)

in subsection (b)—

(A)

by striking The Secretary and inserting the following:

(1)

In general

The Secretary

; and

(B)

by adding at the end the following:

(2)

Coal-to-liquid production facilities

(A)

In general

The Secretary of Defense may enter into contracts or other agreements with private companies or other entities to develop and operate coal-to-liquid facilities (as defined in section 2 of the Coal-to-Liquid Fuel Energy Act of 2007) on or near military installations.

(B)

Considerations

In entering into contracts and other agreements under subparagraph (A), the Secretary shall consider land availability, testing opportunities, and proximity to raw materials.

;

(2)

in subsection (d)—

(A)

by striking Subject to applicable provisions of law, any and inserting Any; and

(B)

by striking 1 or more years and inserting up to 25 years; and

(3)

by adding at the end the following:

(f)

Authorization of appropriations

There are authorized to be appropriated such sums as are necessary to carry out this section.

.

9.

Report on emissions of Fischer-Tropsch products used as transportation fuels

(a)

In general

In cooperation with the Administrator of the Environmental Protection Agency, the Secretary of Defense, the Administrator of the Federal Aviation Administration, and the Secretary of Health and Human Services, the Secretary shall—

(1)

carry out a research and demonstration program to evaluate the emissions of the use of Fischer-Tropsch fuel for transportation, including diesel and jet fuel;

(2)

evaluate the effect of using Fischer-Tropsch transportation fuel on land and air engine exhaust emissions; and

(3)

in accordance with subsection (e), submit to Congress a report on the effect on air quality and public health of using Fischer-Tropsch fuel in the transportation sector.

(b)

Guidance and technical support

The Secretary shall issue any guidance or technical support documents necessary to facilitate the effective use of Fischer-Tropsch fuel and blends under this section.

(c)

Facilities

For the purpose of evaluating the emissions of Fischer-Tropsch transportation fuels, the Secretary shall—

(1)

support the use and capital modification of existing facilities and the construction of new facilities at the research centers designated in section 417 of the Energy Policy Act of 2005 (42 U.S.C. 15977); and

(2)

engage those research centers in the evaluation and preparation of the report required under subsection (a)(3).

(d)

Requirements

The program described in subsection (a)(1) shall consider—

(1)

the use of neat (100 percent) Fischer-Tropsch fuel and blends of Fischer-Tropsch fuels with conventional crude oil-derived fuel for heavy-duty and light-duty diesel engines and the aviation sector; and

(2)

the production costs associated with domestic production of those fuels and prices for consumers.

(e)

Reports

The Secretary shall submit to the Committee on Energy and Natural Resources of the Senate and the Committee on Energy and Commerce of the House of Representatives—

(1)

not later than 180 days after the date of enactment of this Act, an interim report on actions taken to carry out this section; and

(2)

not later than 1 year after the date of enactment of this Act, a final report on actions taken to carry out this section.

(f)

Authorization of appropriations

There are authorized to be appropriated such sums as are necessary to carry out this section.