Calendar No. 116
[Report No. 110–54]
IN THE SENATE OF THE UNITED STATES
January 4, 2007
Mr. Lugar (for himself, Mr. Biden, Mr. Craig, Mr. Salazar, Ms. Snowe, Ms. Landrieu, Mr. Coleman, Mr. Lieberman, Mr. Hagel, and Mr. Thune) introduced the following bill; which was read twice and referred to the Committee on Foreign Relations
April 12, 2007
Reported by Mr. Biden, without amendment
To increase cooperation on energy issues between the United States Government and foreign governments and entities in order to secure the strategic and economic interests of the United States, and for other purposes.
This Act may be cited as
Energy Diplomacy and Security Act
In this Act:
Major energy producer
The term major energy producer means a country that—
had crude oil, oil sands, or natural gas to liquids production of 1,000,000 barrels per day or greater average in the previous year;
has crude oil, shale oil, or oil sands reserves of 6,000,000,000 barrels or greater, as recognized by the Department of Energy;
had natural gas production of 30,000,000,000 cubic meters or greater in the previous year;
has natural gas reserves of 1,250,000,000,000 cubic meters or greater, as recognized by the Department of Energy; or
is a direct supplier of natural gas or liquefied natural gas to the United States.
Major energy consumer
The term major energy consumer means a country that—
had an oil consumption average of 1,000,000 barrels per day or greater in the previous year;
had an oil consumption growth rate of 8 percent or greater in the previous year;
had a natural gas consumption of 30,000,000,000 cubic meters or greater in the previous year; or
had a natural gas consumption growth rate of 15 percent or greater in the previous year.
Sense of Congress on energy diplomacy and security
Congress makes the following findings:
It is imperative to the national security and prosperity of the United States to have reliable, affordable, clean, sufficient, and sustainable sources of energy.
United States dependence on oil imports causes tremendous costs to the United States national security, economy, foreign policy, military, and environmental sustainability.
Energy security is a priority for the governments of many foreign countries and increasingly plays a central role in the relations of the United States Government with foreign governments. Global reserves of oil and natural gas are concentrated in a small number of countries. Access to these oil and natural gas supplies depends on the political will of these producing states. Competition between governments for access to oil and natural gas reserves can lead to economic, political, and armed conflict. Oil exporting states have received dramatically increased revenues due to high global prices, enhancing the ability of some of these states to act in a manner threatening to global stability.
Efforts to combat poverty and protect the environment are hindered by the continued predominance of oil and natural gas in meeting global energy needs. Development of renewable energy through sustainable practices will help lead to a reduction in greenhouse gas emissions and enhance international development.
Cooperation on energy issues between the United States Government and the governments of foreign countries is critical for securing the strategic and economic interests of the United States and of partner governments. In the current global energy situation, the energy policies and activities of the governments of foreign countries can have dramatic impacts on United States energy security.
Sense of Congress
It is the sense of Congress that—
United States national security requires that the United States Government have an energy policy that pursues the strategic goal of achieving energy security through access to clean, affordable, sufficient, reliable, and sustainable sources of energy;
achieving energy security is a priority for United States foreign policy and requires continued and enhanced engagement with foreign governments and entities in a variety of areas, including activities relating to the promotion of alternative and renewable fuels, trade and investment in oil, coal, and natural gas, energy efficiency, climate and environmental protection, data transparency, advanced scientific research, public-private partnerships, and energy activities in international development;
the President should ensure that the international energy activities of the United States Government are given clear focus to support the national security needs of the United States, and to this end, there should be established a mechanism to coordinate the implementation of United States international energy policy among the Federal agencies engaged in relevant agreements and activities; and
the Secretary of State should ensure that energy security is integrated into the core mission of the Department of State, and to this end, there should be established within the Office of the Secretary of State a Coordinator for International Energy Affairs with responsibility for—
developing United States international energy policy in coordination with the Department of Energy and other relevant Federal agencies;
working with appropriate United States Government officials to develop and update analyses of the national security implications of global energy developments;
incorporating energy security priorities into the activities of the Department;
coordinating activities with relevant Federal agencies; and
coordinating energy security and other relevant functions currently undertaken by offices within the Bureau of Economic, Business, and Agricultural Affairs, the Bureau of Democracy and Global Affairs, and other offices within the Department of State.
Strategic energy partnerships
Congress makes the following findings:
United States Government partnership with foreign governments and entities, including partnership with the private sector, for securing reliable and sustainable energy is imperative to ensuring United States security and economic interests, promoting international peace and security, expanding international development, supporting democratic reform, fostering economic growth, and safeguarding the environment.
Democracy and freedom should be promoted globally by partnership with foreign governments, including in particular governments of emerging democracies such as those of Ukraine and Georgia, in their efforts to reduce their dependency on oil and natural gas imports.
The United States Government and the governments of foreign countries have common needs for adequate, reliable, affordable, clean, and sustainable energy in order to ensure national security, economic growth, and high standards of living in their countries. Cooperation by the United States Government with foreign governments on meeting energy security needs is mutually beneficial. United States Government partnership with foreign governments should include cooperation with major energy consuming countries, major energy producing countries, and other governments seeking to advance global energy security through reliable and sustainable means.
The United States Government participates in hundreds of bilateral and multilateral energy agreements and activities with foreign governments and entities. These agreements and activities should reflect the strategic need for energy security.
Statement of policy
It is the policy of the United States—
to advance global energy security through cooperation with foreign governments and entities;
to promote reliable, diverse, and sustainable sources of all types of energy;
to increase global availability of renewable and clean sources of energy;
to decrease global dependence on oil and natural gas energy sources; and
to engage in energy cooperation to strengthen strategic partnerships that advance peace, security, and democratic prosperity.
The Secretary of State, in coordination with the Secretary of Energy, should immediately seek to establish and expand strategic energy partnerships with the governments of major energy producers and major energy consumers, and with governments of other countries (but excluding any countries that are ineligible to receive United States economic or military assistance).
The purposes of the strategic energy partnerships established pursuant to subsection (c) are—
to strengthen global relationships to promote international peace and security through fostering cooperation in the energy sector on a mutually beneficial basis in accordance with respective national energy policies;
to promote the policy set forth in subsection (b), including activities to advance—
the mutual understanding of each country’s energy needs, priorities, and policies, including interparliamentary understanding;
measures to respond to acute energy supply disruptions, particularly in regard to petroleum and natural gas resources;
long-term reliability and sustainability in energy supply;
the safeguarding and safe handling of nuclear fuel;
human and environmental protection;
renewable energy production;
access to reliable and affordable energy for underdeveloped areas, in particular energy access for the poor;
appropriate commercial cooperation;
information reliability and transparency; and
research and training collaboration;
to advance the national security priority of developing sustainable and clean energy sources, including through research and development related to, and deployment of—
renewable electrical energy sources, including biomass, wind, and solar;
renewable transportation fuels, including biofuels;
clean coal technologies;
carbon sequestration, including in conjunction with power generation, agriculture, and forestry; and
energy and fuel efficiency, including hybrids and plug-in hybrids, flexible fuel, advanced composites, hydrogen, and other transportation technologies; and
to provide strategic focus for current and future United States Government activities in energy cooperation to meet the global need for energy security.
Determination of agendas
In general, the specific agenda with respect to a particular strategic energy partnership, and the Federal agencies designated to implement related activities, shall be determined by the Secretary of State and the Secretary of Energy.
Use of current agreements To establish partnerships
Some or all of the purposes of the strategic energy partnerships established under subsection (c) may be pursued through existing bilateral or multilateral agreements and activities. Such agreements and activities shall be subject to the reporting requirements in subsection (g).
Initial progress report
Not later than 180 days after the date of the enactment of this Act, the Secretary of State shall submit to the appropriate congressional committees a report on progress made in developing the strategic energy partnerships authorized under this section.
Annual progress reports
Not later than one year after the date of the enactment of this Act, and annually thereafter for 20 years, the Secretary of State shall submit to the appropriate congressional committees an annual report on agreements entered into and activities undertaken pursuant to this section, including international environment activities.
Each report submitted under this paragraph shall include details on—
agreements and activities pursued by the United States Government with foreign governments and entities, the implementation plans for such agreements and progress measurement benchmarks, United States Government resources used in pursuit of such agreements and activities, and legislative changes recommended for improved partnership; and
polices and actions in the energy sector of partnership countries pertinent to United States economic, security, and environmental interests.
International energy crisis response mechanisms
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.
The participation of the United States in the International Energy Program established under the Agreement on an International Energy Program, done at Paris November 18, 1974 (27 UST 1685), including in the coordination of national strategic petroleum reserves, is a national security asset that—
protects the consumers and the economy of the United States in the event of a major disruption in petroleum supply;
maximizes the effectiveness of the United States strategic petroleum reserve through cooperation in accessing global reserves of various petroleum products;
provides market reassurance in countries that are members of the International Energy Program; and
strengthens United States Government relationships with members of the International Energy Program.
The International Energy Agency projects that the largest growth in demand for petroleum products, other than demand from the United States, will come from China and India, which are not members of the International Energy Program. The Governments of China and India vigorously pursue access to global oil reserves and are attempting to develop national petroleum reserves. Participation of the Governments of China and India in an international petroleum reserve mechanism would promote global energy security, but such participation should be conditional on the Governments of China and India abiding by customary petroleum reserve management practices.
In the Western Hemisphere, only the United States and Canada are members of the International Energy Program. The vulnerability of most Western Hemisphere countries to supply disruptions from political, natural, or terrorism causes may introduce instability in the hemisphere and can be a source of conflict, despite the existence of major oil reserves in the hemisphere.
Countries that are not members of the International Energy Program and are unable to maintain their own national strategic reserves are vulnerable to petroleum supply disruption. Disruption in petroleum supply and spikes in petroleum costs could devastate the economies of developing countries and could cause internal or interstate conflict.
The involvement of the United States Government in the extension of international mechanisms to coordinate strategic petroleum reserves and the extension of other emergency preparedness measures should strengthen the current International Energy Program.
Energy crisis response mechanisms with india and china
The Secretary of State, in coordination with the Secretary of Energy, should immediately seek to establish a petroleum crisis response mechanism or mechanisms with the Governments of China and India.
The mechanism or mechanisms established under paragraph (1) should include—
technical assistance in the development and management of national strategic petroleum reserves;
agreements for coordinating drawdowns of strategic petroleum reserves with the United States, conditional upon reserve holdings and management conditions established by the Secretary of Energy;
emergency demand restraint measures;
fuel switching preparedness and alternative fuel production capacity; and
ongoing demand intensity reduction programs.
Use of existing agreements to establish mechanism
The Secretary may, after consultation with Congress and in accordance with existing international agreements, including the International Energy Program, include China and India in a petroleum crisis response mechanism through existing or new agreements.
Energy crisis response mechanism for the western hemisphere
The Secretary of State, in coordination with the Secretary of Energy, should immediately seek to establish a Western Hemisphere energy crisis response mechanism.
The mechanism established under paragraph (1) should include—
an information sharing and coordinating mechanism in case of energy supply emergencies;
technical assistance in the development and management of national strategic petroleum reserves within countries of the Western Hemisphere;
technical assistance in developing national programs to meet the requirements of membership in a future international energy application procedure as described in subsection (d);
emergency demand restraint measures;
energy switching preparedness and alternative energy production capacity; and
ongoing demand intensity reduction programs.
The Secretary should seek to include in the Western Hemisphere energy crisis response mechanism membership for each major energy producer and major energy consumer in the Western Hemisphere and other members of the Hemisphere Energy Cooperation Forum authorized under section 6.
International energy program application procedure
The President should place on the agenda for discussion at the Governing Board of the International Energy Agency, as soon as practicable, the merits of establishing an international energy program application procedure.
The purpose of such procedure is to allow countries that are not members of the International Energy Program to apply to the Governing Board of the International Energy Agency for allocation of petroleum reserve stocks in times of emergency on a grant or loan basis. Such countries should also receive technical assistance for, and be subject to, conditions requiring development and management of national programs for energy emergency preparedness, including demand restraint, fuel switching preparedness, and development of alternative fuels production capacity.
Not later than 180 days after the date of the enactment of this Act, the Secretary of Energy shall submit to the appropriate congressional committees a report that evaluates the options for adapting the United States national strategic petroleum reserve and the international petroleum reserve coordinating mechanism in order to carry out this section.
Crisis response mechanisms
Not later than 180 days after the date of the enactment of this Act, the Secretary of State, in coordination with the Secretary of Energy, shall submit to the appropriate congressional committees a report on the status of the establishment of the international petroleum crisis response mechanisms described in subsections (b) and (c). The report shall include recommendations of the Secretary of State and the Secretary of Energy for any legislation necessary to establish or carry out such mechanisms.
Emergency application procedure
Not later than 60 days after a discussion by the Governing Board of the International Energy Agency of the application procedure described under subsection (d), the President should submit to Congress a report that describes—
the actions the United States Government has taken pursuant to such subsection; and
a summary of the debate on the matter before the Governing Board of the International Energy Agency, including any decision that has been reached by the Governing Board with respect to the matter.
Hemisphere energy cooperation forum
Congress makes the following findings:
The engagement of the United States Government with governments of countries in the Western Hemisphere is a strategic priority for reducing the potential for tension over energy resources, maintaining and expanding reliable energy supplies, expanding use of renewable energy, and reducing the detrimental effects of energy import dependence within the hemisphere. Current energy dialogues should be expanded and refocused as needed to meet this challenge.
Countries of 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 relationships among countries of the hemisphere. The Western Hemisphere is rich in natural resources, including biomass, oil, natural gas, coal, and has significant opportunity for production of renewable hydro, solar, wind, and other energies. Countries of the Western Hemisphere can provide convenient and reliable markets for trade in energy goods and services.
Development of sustainable energy alternatives in the countries of the Western Hemisphere can improve energy security, balance of trade, and environmental quality and provide markets for energy technology and agricultural products. Brazil and the United States have led the world in the production of ethanol, and deeper cooperation on biofuels with other countries of the hemisphere would extend economic and security benefits.
Private sector partnership and investment in all sources of energy is critical to providing energy security in the Western Hemisphere.
Hemisphere energy cooperation forum
The Secretary of State, in coordination with the Secretary of Energy, should immediately seek to establish a regional-based ministerial forum to be known as the Hemisphere Energy Cooperation Forum.
The Hemisphere Energy Cooperation Forum should seek—
to strengthen relationships between the United States and other countries of the Western Hemisphere through cooperation on energy issues;
to enhance cooperation between major energy producers and major energy consumers in the Western Hemisphere, particularly among the governments of Brazil, Canada, Mexico, the United States, and Venezuela;
to ensure that energy contributes to the economic, social, and environmental enhancement of the countries of the Western Hemisphere;
to provide an opportunity for open dialogue and joint commitments between member governments 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 that are practical in policy terms and politically acceptable.
The Hemisphere Energy Cooperation Forum should implement the following activities:
An Energy Crisis Initiative that will establish measures to respond to temporary energy supply disruptions, including through—
strengthening sea-lane and infrastructure security;
implementing a real-time emergency information sharing system;
encouraging members to have emergency mechanisms and contingency plans in place; and
establishing a Western Hemisphere energy crisis response mechanism as authorized under section 5(c).
An Energy Sustainability Initiative to facilitate long-term supply security through fostering reliable supply sources of fuels, including development, deployment, and commercialization of technologies for sustainable renewable fuels within the region, including activities that—
promote production and trade in sustainable energy, including energy from biomass;
facilitate 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;
promote regional infrastructure and market integration;
develop effective and stable regulatory frameworks;
develop renewable fuels standards and renewable portfolio standards;
establish educational training and exchange programs between member countries; and
identify and remove 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 activities that—
increase access to energy services for the poor;
improve energy sector market conditions;
promote rural development though biomass energy production and use;
increase transparency of, and participation in, energy infrastructure projects;
promote development and deployment of technology for clean and sustainable energy development, including biofuel and clean coal technologies; and
facilitate use of carbon sequestration methods in agriculture and forestry and linking greenhouse gas emissions reduction programs to international carbon markets.
Hemisphere energy industry group
The Secretary of State, in coordination with the Secretary of Commerce and the Secretary of Energy, should approach the governments of other countries in the Western Hemisphere to seek cooperation in establishing a Hemisphere Energy Industry Group, to be coordinated by the United States Government, involving industry representatives and government representatives from the Western Hemisphere.
The purpose of the forum should be to increase public-private partnerships, foster private investment, and enable countries of the Western Hemisphere to devise energy agendas compatible with industry capacity and cognizant of industry goals.
Topics of dialogues
Topics for the forum should include—
promotion of a secure investment climate;
development and deployment of biofuels and other alternative fuels and clean electrical production facilities, including clean coal and carbon sequestration;
development and deployment of energy efficient technologies and practices, including in the industrial, residential, and transportation sectors;
investment in oil and natural gas production and distribution;
transparency of energy production and reserves data;
research promotion; and
training and education exchange programs.
The Secretary of State, in coordination with the Secretary of Energy, shall submit to the appropriate congressional committees an annual report on the implementation of this section, including the strategy and benchmarks for measurement of progress developed under this section.
Appropriate congressional committees defined
In this Act, the term appropriate congressional committees means the Committee on Foreign Relations and the Committee on Energy and Natural Resources of the Senate and the Committee on Foreign Affairs and the Committee on Energy and Commerce of the House of Representatives.
April 12, 2007
Reported without amendment