Order Code RL33521
Gasoline Prices:
Legislation in the 110th Congress
Updated May 14, 2008
Carl E. Behrens
Specialist in Energy Policy
Resources, Science, and Industry Division
Carol Glover
Information Research Specialist
Knowledge Services Group

Gasoline Prices: Legislation in the 110th Congress
Summary
The high price of gasoline has been and continues to be a driving factor in
consideration of energy policy proposals. Despite passage of the massive Energy
Policy Act of 2005 (EPACT 2005, P.L. 109-58), and the Energy Independence and
Security Act of 2007 (H.R. 6, P.L. 110-140), numerous other proposed initiatives
remain under active consideration in the 110th Congress. Measures proposed include
repeal of some tax benefits to domestic oil and gas producers contained in
EPACT2005, provisions on price gouging, and reform of oil and gas leasing in the
Gulf of Mexico. With crude oil and gasoline prices surging to record levels, tax
relief proposals have been added to the list of proposals.
A large number of factors have combined to put pressure on gasoline prices,
including increased world demand for crude oil and limited U.S. refinery capacity to
supply gasoline. The war and continued violence in Iraq added uncertainty, and
threats of supply disruption have added pressure, particularly to the commodity
futures markets. Concern that speculation has added volatility and upward pressure
has frequently been cited. In recent months, a decline in the value of the dollar
compared to other currencies has increased the dollar price of oil on futures markets.
The gasoline price surge has stimulated much legislative activity, but until
recently there has not been the sense of the extreme urgency of previous energy
crises. In part, this may be due to the fact that there has been no physical shortage
of gasoline or lines at the pump, as there were after the Arab oil embargo in 1973 and
the Iranian revolution in 1979. At that time there was expectation that prices were
destined to grow ever higher, and many believed that the world’s supply of oil was
running out. Such views have been less prevalent during the current run-up. But the
continued and unrelenting increase in crude oil prices to record levels, even
discounting inflation, is leading many to suggest that changing world market
conditions may have led to permanent, or at least chronic, shortages of petroleum
production capacity. Others continue to expect that growth in demand will moderate,
and production will increase to meet demand, as it did following the shortages of the
1970s.
The continuing high prices have led to a further search for legislative remedies.
This report, after analyzing factors that have contributed to high gasoline prices,
describes the major legislative initiatives and discusses the issues involved.

Contents
Most Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Background and Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Legislative Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Why Are Prices So High? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Crude Oil Prices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Gasoline Prices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Policy Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Oil-Related Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Major Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Reducing Impacts on Consumers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Mid- to Long-Term Supply and Demand . . . . . . . . . . . . . . . . . . . . . . . 10
Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
List of Figures
Figure 1. Average Daily Nationwide Price of Unleaded Gasoline,
January 2002 - April 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Figure 2. China’s Oil Production and Consumption, 1986-2006 . . . . . . . . . . . . . 3
Figure 3. U.S. Gasoline Consumption, January 2000 - April 2008 . . . . . . . . . . . . 4
Figure 4. Nominal and Real Price of Gasoline, 1950-2007 and
February 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Figure 5. Consumer Spending on Oil as a Percentage of GDP, 1970-2004 . . . . . 6

Gasoline Prices: Legislation in the
110th Congress
Most Recent Developments
Gasoline prices surged to record levels in April 2008 as the summer driving
season approached and crude oil prices also reached record highs. (See Figure 1.)
However, consumption of gasoline continued above 9 million barrels per day (mbd).
Some observers claimed to detect signs that the threat of an economic downturn and
higher prices had curbed gasoline consumption, but others claimed that growth in
demand was continuing unabated. (See Figure 3.)
Despite passage in December 2007 of the Energy Independence and Security
Act (H.R. 6, P.L. 110-140), the main provisions of which were an increase in the
Corporate Average Fuel Economy (CAFE) standards for automobiles and light
trucks, and an increase in the requirement for the use of renewable fuels in gasoline,
the latest increases have led to urgent discussion of ways to increase supply and
ameliorate prices, in Congress, by the Administration, and on the campaign trail. On
May 13, 2008, both the House and the Senate passed legislation that would prohibit
the federal government from acquiring oil for the Strategic Petroleum Reserve (SPR)
during 2008.
Background and Analysis
Legislative Activities
The persistence of high gasoline prices led to a broad spectrum of proposed new
legislation in the First Session of the 110th Congress. Despite passage of the major
Energy Policy Act of 2005 (P.L. 109-58), many Members continued to explore a
variety of measures to increase supply and reduce demand in the short term, and to
reduce the impact of high prices on consumers, as well as revisit longer-term policies
that were left behind in the process of reaching agreement on P.L. 109-58.
One such proposed policy was increasing CAFE standards for automobiles and
light trucks, and the Energy Independence and Security Act of 2007 (H.R. 6, P.L.
110-140) resolved a decades-long debate by setting new standards and procedures for
meeting them. P.L. 110-140 also increased the requirement to use renewable fuels
in gasoline, including advanced biofuels such as cellulosic alcohol starting in 2016.
However, a number of proposals included in one or more versions of energy
legislation in 2007 were dropped from the final bill, and those issues remain of
interest to the Congress during the Second Session.

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With gasoline prices soaring, a new wave of legislative proposals appeared in
the Congress. Prominent among them were bills to suspend the federal gasoline and
diesel transportation tax during the summer driving season, by presidential candidates
Senators McCain and Clinton. Senator Domenici introduced a bill emphasizing U.S.
petroleum production, including opening the Outer Continental Shelf (OCS) and part
of the Arctic National Wildlife Refuge (ANWR) for oil and gas leasing and
encouraging leasing of oil shale deposits. Democrats in both the House and the
Senate were reported to be preparing new energy proposals to deal with the situation,
and Senator Reid soon introduced a bill which, among other measures, would impose
a windfall profits tax on oil companies.
This report reviews the major legislative initiatives to deal with the gasoline
price issue. To put these proposals in perspective, it first describes some of the
factors that have led to the high prices of both crude oil and gasoline.
Why Are Prices So High?
The run-up of gasoline prices that began in spring 2004 (see Figure 1) climaxed
a period of almost five years during which gasoline prices demonstrated a great deal
of regional volatility but less of an increase at the national level. In 2004, a large
number of factors combined to exert pressure on gasoline prices in all parts of the
country. Some of these factors have affected the price of crude oil, and others the
cost of producing and marketing gasoline.
Figure 1. Average Daily Nationwide Price of Unleaded Gasoline,
January 2002 - April 2008
3.75
3.50
3.25
3.00
2.75
2.50
2.25
2.00
Dollars per Gallon 1.75
1.50
1.25
1.00
r
t
r
t
r
t
r
t
r
t
r
t
r
Jul
Jul
Jul
Jul
06
Jul
07
Jul
08
n '02 Ap
Oc n '03 Ap
Oc n '04 Ap
Oc n '05 Ap
Oc
Ap
Oc
Ap
Oc
Ap
Ja
Ja
Ja
Ja
Jan '
Jan '
Jan '
Source: Daily Fuel Gauge Report, American Automobile Association [http://www.fuelgaugereport.
com], compiled by CRS.
Notes: Prices include federal, state, and local taxes. Last date above is April 30, 2008.
Crude Oil Prices. Past energy crises have demonstrated that oil is traded in
a world market, in which events in remote areas affect the price of crude for almost
everyone. As a result, the price of crude oil is set through the interaction of world

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demand and supply. Major factors in the run-up of crude oil prices have been the
sharply increased consumption of imported oil by China (see Figure 2) and the
continuing possibility of a supply disruption, either from violence or terrorism in the
Middle East, or from natural disasters like Hurricanes Katrina and Rita in 2005.
World demand for crude oil grew by 1.3% in 2007 to 86.0 mbd. It is forecast
to grow by 1.5% to 87.3 mbd in 2008. World supply was 87.3 mbd in March 2008,
leaving relatively little excess supply to draw on if the market were disrupted by
natural or political disasters.1 When excess supply on the market is low, prices tend
to rise and become more volatile.
Some observers have suggested that speculators, who have entered the
commodity markets in large numbers looking for ways to increase their monetary
investments rather than to trade in oil and oil products, are causing an unacceptable
upward pressure on prices. Another factor in recent months has been the decline in
the value of the dollar compared to other currencies. Since world prices of oil are
quoted in dollars, this would have an upward effect on market prices.
Figure 2. China’s Oil Production and Consumption, 1986-2006
8,000
Consumption
7,000
y
a

r D 6,000
e
P

Net Imports
5,000
ls
rre 4,000
a
B
d
3,000
Production
n
a
s
2,000
ou
Th
1,000
0
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
Source: EIA, Country Analysis Brief — China, August 2006, at [http://www.eia.doe.gov/emeu/cabs/
China/Oil.html].
Note: 2006 is January through August only.
Gasoline Prices. Higher prices for crude oil tend to translate directly into
higher prices for gasoline. Currently, crude oil accounts for about 72% of the cost of
gasoline. Refining, distributing, and marketing account for about 16% of the cost of
gasoline, and taxes account for about 13%. However, until recently crude oil’s share
of the cost of gasoline has been more typically in the range of 45% to 55%. In May
2007, for example, with gasoline at $3.15 per gallon, crude oil contributed 46% of
1 International Energy Agency, Oil Market Report, April 11, 2008, p. 1.

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the cost; refining, distributing and marketing 41%; and taxes 13%.2 Whether the
crude oil a refiner processes is purchased on the open market or is produced by the
oil company itself, higher costs for any element in the cost of gasoline are likely to
be passed on to consumers.3 A number of factors have aggravated the pressure on
gasoline prices, including limited refining capacity in the United States, the range of
fuel blends required to meet air pollution requirements, and the mandated use of
ethanol as an additive. Perhaps most important, U.S. demand for gasoline has
increased as economic growth continued, at least through 2007. Some reports that
consumption has slowed in light of a threatening economic downturn and higher
prices have been challenged by other observers.4 (See Figure 3.)
Figure 3. U.S. Gasoline Consumption, January 2000 - April 2008
10
9.5
y
a
9
r D
e
p
ls
rre 8.5
a
B
ion
ill
8
M
7.5
7
Jan
Jul
Jan
Jul
Jan
Jul
Jan
Jul
Jan
Jul
Jan
Jul
Jan
Jul
Jan
Jul
JanApr
'00
'01
'02
'03
'04
'05
'06
'07
'08
Monthly Averages
Annual Averages
Note: The data point for April 2008 is the average for the four week period ending on 4/25/08.
Source: EIA, Monthly Energy Review, April 2008, Table 3.5 and EIA, Weekly Petroleum Status
Report
, April 30, 2008, Table 10.
The 2004 price surge intensified discussion of energy policy and led to further
calls for passage of energy legislation. However, until the climax of the Katrina
disaster, the urgency of previous energy crises had been lacking. Throughout the
2 Energy Information Administration data based on March 2008 data and a base price of
gasoline of $3.24 per gallon. See Gasoline & Diesel Fuel Update [http://www.eia.doe.gov].
3 The price of diesel fuel for transportation has also surged to record levels. For details on
the relationship between diesel and gasoline prices, see CRS Report RL34431, The
Disparity Between Retail Gasoline and Diesel Fuel Prices,
by Robert Bamberger and Robert
Pirog.
4 “Big Goof by the Wall Street Journal,” Lundberg Letter, March 14, 2008, p. 5.

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period, U.S. gasoline consumption continued to rise. In part, this may be because
although the price of gasoline in nominal terms set a record, in real terms it did not
appear to be reaching the level of the Iranian crisis years of the early 1980s (see
Figure 4); that is, until Katrina pushed it toward the $3.00-per-gallon mark. Further,
unlike the earlier crises, there was no physical shortage of gasoline and there were no
lines at the pump, except in local disaster-affected areas.
Figure 4. Nominal and Real Price of Gasoline, 1950-2007 and
February 2008
350
300
250
Real (2000 Dollars)
200
150
100
Nominal
50
2/08
0
1950
1955
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
2007
Source: EIA, Annual Energy Review 2006, Table 5.24 and Monthly Energy Review, March 2008,
Table 9.4.
As Figure 5 indicates, by the early 1990s the proportion of consumer
expenditures on oil and gasoline had declined from the high levels of the 1970s and
early 1980s. Data are not yet available to indicate what effect the price run-up
starting in 2004 has had on this measure.
Perhaps most important, the common view during the earlier crises was that oil
prices not only were high, but were destined to become ever higher in the coming
years, because world resources were probably beginning to level off and would
decline in the future. This view is no longer widely prevalent, largely because world
proved reserves have increased faster than production, and are currently more than
twice the level at the time of the Arab oil embargo in 1973.
At the beginning of the current crisis, the general expectation was that the price
increase was a temporary phenomenon. In part, this may be due to the fact that there
has been no physical shortage of gasoline or lines at the pump, as there were after the

CRS-6
Arab oil embargo in 1973 and the Iranian revolution in 1979. But the continued and
unrelenting increase in crude oil prices to record levels, even discounting inflation,
is leading many to suggest that changing world market conditions may have led to
permanent, or at least chronic, shortages of petroleum production capacity. The
persistent increases in world demand for oil, despite higher prices, and the inability
or unwillingness in many parts of the world, particularly in the Middle East, to
develop known existing resources, appear to presage a continuing tight market, in
which production capacity is only slightly greater than demand. Under those
conditions, temporary interruptions in production, caused for example by local
political crises or weather, are much more likely than normal to force prices upward.
Figure 5. Consumer Spending on Oil as a Percentage of GDP, 1970-
2004
10
8
6
4
2
0
1970
1975
1980
1985
1990
1995
2000
2004
Source: EIA, Annual Energy Review, 2006, Tables 3.5 and D1
Others continue to expect that growth in demand will moderate, and production
will increase to meet demand, as it did following the shortages of the 1970s. They
argue that the market price of oil appears to be much higher than production costs,
and is being sustained by the expectation of continued strong demand in the
indefinite future. In addition, they point to large profits flowing to oil producers, and
political pressure to invest those profits in increased production.
Policy Options
Congress has considered numerous energy policy initiatives and enacted many
of them. With the continuing pressure of rising prices, however, energy policy has
once again become the focus of attention, both in the Congress and on the campaign
trail.

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Policy options include efforts to ameliorate the effects of high prices in the short
term, and to attack the longer term problem. The latter options come in three major
forms: to reduce consumption by increased efficiency without having a negative
effect on the economy; to substitute alternative fuels at a cost comparable to the oil
they replace; and to encourage production of more oil, either in this country or
abroad.
The choice of these options depends to a certain extent on how the future of the
oil market is viewed. Those who consider it likely that the present tightness of the
market is likely to continue, as described above, tend to support alternative fuels and
increased efficiency, and to denigrate efforts to increase oil production as futile and
ineffective compared to the growth in world demand, which they expect to continue
indefinitely. Those who view the present tightness of the world market as an
aberration that can be relieved with adequate investment in new production capacity
view any move to increase supply, anywhere in the world, as a positive signal that the
tightness and volatility of the world oil market can be eased and prices can more
closely reflect the cost of production.
Oil-Related Legislation
Two major bills were introduced in the Senate in May 2008, one by Senate
Majority Leader Reid and the other by Senator Domenici, ranking Republican on the
Energy and Natural Resources Committee. In addition, bills to suspend the federal
gasoline tax during the 2008 summer driving season were introduced by Senator
McCain and Senator Clinton. The gasoline tax suspension provision is not included
in either Senator Reid’s bill or Senator Domenici’s bill.
Most but not all provisions of these and other bills described in this report are
aimed at achieving one or more of the policy options described above. This section
reviews major legislation that could affect the choice and cost of fuels for
transportation, or affect the ability or motivation of industry to develop petroleum
resources or alternative fuels, or the modes of transportation that use them. Issues
that have a history of debate and legislation are also discussed in more detail.
Major Legislation. The main features of the gas tax moratorium and the
Democratic and Republican Senate energy bills are described below.
Gas Tax Moratorium. Bills introduced by Senator McCain (S. 2890) and
Senator Clinton (S. 2971) would suspend federal gasoline and diesel transportation
taxes for the summer driving season, and the proposals have been a topic in the
presidential campaigns of the two candidates. Senator Obama, also campaigning for
the Democratic presidential nomination, has criticized Senator Clinton’s proposal.
Similar bills have been introduced in the House. (For details see CRS Report
RL34475, Transportation Fuel Taxes: Impacts of a Repeal or Moratorium, by Robert
Pirog and John W. Fischer.)
Consumer-First Energy Act of 2008 (S. 2991). S. 2991, introduced by
Senator Reid and cosponsored by 22 Democratic Senators, has the following major
provisions:

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! A number of tax provisions affecting the oil and gas industry, related
to the treatment of foreign profits, and also including a “windfall
profits” tax on income in excess of “the reasonably inflated average
profit” on crude oil;
! Creation of an “Energy Independence and Security Trust Fund,” to
be financed by funds received from the windfall tax provisions;
! A “Petroleum Consumer Price Gouging Protection” provision,
similar to the price gouging protection proposals previously
considered (see section on price gouging, below);
! Suspension of acquiring additional petroleum for the Strategic
Petroleum Reserve (SPR) while the price of petroleum exceeds $75
per barrel (see section on SPR below);
! A “No Oil Producing and Exporting Cartels (NOPEC)” provision
that would declare illegal collective action by foreign states to limit
oil production, and deny sovereign immunity from prosecution to
states that violated the provision;
! Set limits on speculation in energy commodities delivered in the
United States in foreign boards of trade and require information
regarding such speculative activity.
The American Energy Production Act of 2008 (S. 2958). S. 2958,
sponsored by Senator Domenici with 21 Republican cosponsors, includes the
following provisions:
! Allow oil and gas leasing in the Atlantic and Pacific Outer
Continental Shelf (OCS), excluding the Gulf of Mexico, allowing
governors of coastal states to petition for lifting the moratorium
within their state boundaries, and creating a revenue-sharing plan in
which states would receive 37.5% of revenue from new production
(see section on OCS below);
! Establish oil and gas leasing in the coastal plain of the Arctic
National Wildlife Refuge (ANWR: see below);
! Mandate production of 6 billion gallons of coal-derived fuel by
2022, to be produced without emission of greenhouse gas in excess
of that emitted by the gasoline it replaces;
! Suspend filling the SPR for 180 days;
! Encourage commercial leasing of oil shale resources in Colorado,
Wyoming and Utah.

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On May 13, 2008, the Senate considered the provisions of the American Energy
Production Act offered as an amendment to the Flood Insurance Reform and
Modernization Act (S. 2284/H.R. 3121). The amendment was not adopted.
Reducing Impacts on Consumers. A number of proposals are aimed at
easing the impact of high prices on consumers, or are aimed at the oil industry’s
price-making policies.
Price Gouging. The rapid increase in gasoline prices following the Katrina
disaster led to allegations of price gouging. P.L. 109-58 included a provision
requiring the Federal Trade Commission (FTC) to conduct an investigation into price
gouging in increased gasoline prices.
The issue reemerged in the 110th Congress as gasoline prices surged past $3.00
per gallon. On May 23, 2007, the House passed the Federal Price Gouging
Prevention Act (H.R. 1252). The bill would ban the sale of gasoline at
“unconscionably excessive” prices during energy emergencies declared by the
president, and impose heavy fines and imprisonment for violations. The White
House complained that the bill could result in gasoline price controls, and threatened
to veto it, but the House vote of 284-141 indicated enough support to override a veto.
The Senate, in passing its version of H.R. 6, the Creating Long-Term Energy
Alternatives for the Nation (CLEAN Energy) Act of 2007 on June 21, 2007, included
a price-gouging provision similar to that in H.R. 1252. However, the provision was
not included in the final version of H.R. 6, which became P.L. 110-140.
The Consumer-First Energy Act (S. 2991) contains a provision on price gouging
similar to the previously considered measures.
Filling the Strategic Petroleum Reserve. Authorized in 1975, SPR
consists of caverns formed out of naturally occurring salt domes in Louisiana and
Texas in which nearly 700 million barrels of crude oil are stored. Its current capacity
is 727 million barrels, and it is authorized at 1 billion barrels. The purpose of the SPR
is to provide an emergency source of crude oil that may be tapped in the event of a
presidential finding that an interruption in oil supply, or an interruption threatening
adverse economic effects, warrants a drawdown from the reserve.
Program costs for the SPR in recent years have been dedicated principally to
maintaining SPR facilities and keeping the SPR in readiness should it be needed.
Since FY1999, any fill of the SPR has been with deliveries of royalty-in-kind (RIK)
oil to the SPR in lieu of cash royalties to the federal government on offshore
production. Through FY2007, royalty-in-kind deliveries to the SPR have totaled
roughly 140 million barrels and forgone receipts to the Department of the Interior are
estimated to be $4.6 billion. DOE has projected deliveries of RIK oil during FY2008
of 19.1 million barrels and $1.170 billion in forgone revenues.
Continued fill of the SPR with royalty-in-kind oil has been controversial. Critics
argue that it is inadvisable to add oil to the SPR when markets are tight and prices
remain high. They argue further that the additional oil adds little to U.S. energy
security. Supporters of RIK fill argue that the fill rate is too little to have a discernible

CRS-10
impact on markets, and that currently high refined-product prices are sustained by
factors other than crude supply, which is more than ample at this time.
Legislation has been introduced in the Second Session (H.R. 5146, S. 2598) to
suspend RIK fill. The House bill would also mandate a sale of 13 million barrels of
SPR oil during FY2008, with the proceeds to be spent on a number of energy
efficiency and alternative fuel programs. Both bills would establish conditions,
including a significant decline in crude oil prices, that would have to be satisfied
before RIK fill could be resumed. On May 13, 2008, the House passed, 385-25, a
similar bill, the Strategic Petroleum Reserve Fill Suspension and Consumer
Protection Act (H.R. 6022), which would suspend SPR fill until the end of 2008
unless the price of oil dropped below $75 per barrel. The Senate on the same day
adopted the same measure by a vote of 97-1 as an amendment to the Flood Insurance
Reform and Modernization Act (S. 2284/H.R. 3121).
In addition, both the Consumer-First Energy Act (S. 2991) and the American
Energy Production Act (S. 2958) contain provisions suspending SPR fill. (For details
see CRS Report RL33341, The Strategic Petroleum Reserve: History, Perspectives,
and Issues
, by Robert Bamberger).
Mid- to Long-Term Supply and Demand. Most proposals affecting supply
and demand of crude oil and gasoline would not affect the current short-term crisis
but would be aimed at longer term trends.
Fuel Economy. Corporate average fuel economy (CAFE) standards also have
a long history of controversy, going back to their establishment in the 1970s. In the
mid-1990s, the National Highway Traffic Safety Administration (NHTSA) was
considering a rulemaking that would result in increased standards for light-duty
trucks (including sport utility vehicles), but for several years, Congress included in
its annual appropriation for NHTSA a measure prohibiting NHTSA from analyzing
or undertaking such a ruling. That prohibition was dropped in the FY2004 NHTSA
appropriations, and a final rule issued by NHTSA in April 2003 required a boost in
light-truck fuel economy to 22.2 miles per gallon by model year 2007. New fuel
economy standards for light trucks were issued in 2006, to take effect in the 2008
model year, but implementation was blocked in court.
During House floor debate on P.L. 109-58, an amendment to increase fuel
economy standards to 33 miles per gallon over 10 years was defeated by a vote of
177-254. A more general amendment to the House bill, requiring the Administration
to take “voluntary, regulatory, and other actions” to reduce oil demand in the United
States by 1 million barrels per day from projected levels by 2013 was defeated 166-
262. The measure was included in the bill passed by the Senate but was dropped in
conference.
Continued high gasoline prices raised congressional interest in higher mandated
CAFE standards again. On January 22, 2007, a bipartisan group of 10 Senators
introduced S. 357, the Ten-in-Ten Fuel Economy Act, which would raise standards
for SUVs and passenger cars to 35 mpg by 2019. The President argued that standards
should be set by the executive branch, not by Congress, and in his State of the Union
speech on January 23, 2007, he set a goal of reducing gasoline consumption by 5%

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by 2017 through more stringent standards. The White House said that would be the
equivalent of increasing CAFE standards 4% per year starting with model year 2010.
After considerable debate, P.L. 110-140 was passed and signed in December
2007, including setting a target of 35 miles per gallon for the combined fleet of cars
and light trucks by model year 2020. A number of new procedures, including the
trading of fuel economy credits among auto manufacturers, were included in the bill.
(For details see CRS Report RL33413, Automobile and Light Truck Fuel Economy:
The CAFE Standards,
by Brent D. Yacobucci and Robert Bamberger.)
ANWR. Oil and gas exploration and development of part of the Arctic National
Wildlife Refuge (ANWR) has been controversial for many years. This was part of
the early proposals for legislation that eventually became the Energy Policy Act of
1992 (P.L. 102-486), but was dropped in the face of strong opposition in both houses.
Support for the action grew gradually in the following years, along with technological
developments that advocates claimed would reduce the environmental impact of
development. Numerous attempts to open the region for leasing have been made, and
both the House and the Senate at various times approved measures that included
leasing provisions, but none of them have survived to become law. (For more
details, see CRS Report RL32838, Arctic National Wildlife Refuge (ANWR):
Legislative Actions Through the 110th Congress, First Session
, by Anne Gillis, M.
Lynne Corn, and Elizabeth A. Roberts.)
Savings Goals. A number of legislative proposals would have set goals for
reducing oil consumption. An example is the Enhanced Energy Security Act of 2006
(S. 2747), introduced by Senator Bingaman May 4, 2006, which would have required
the Director of the Office of Management and Budget to develop an action plan to
save 2.5 million barrels per day (mbd) in 2016, 7 mbd in 2026, and 10 mbd in 2031.
President Bush took up the idea in his State of the Union speech on January 23,
2007, calling for a cut in gasoline consumption of 20% in 10 years, through a
combination of increased fuel economy standards (see above) and increased
mandated use of alternative fuels (see below).
Alternative Fuels. In his January 31, 2006 State of the Union message,
President Bush asserted that the United States is “addicted to oil,” and set the goal
of replacing more than 75% of oil imports from the Middle East by 2025. The main
thrust of the presidential initiative was to increase funding for research in producing
ethanol from plant fiber biomass (rather than from corn), for improved batteries for
hybrid automobiles, and for hydrogen fuels.
In his next State of the Union speech, on January 23, 2007, the President went
further, setting a goal of reducing gasoline consumption by 20% in 10 years, through
a combination of more stringent fuel economy standards and setting a mandatory
renewable fuels standards of 35 billion gallons of renewable and alternative fuels by
2017, about five times the current consumption. The Energy Policy Act of 2005
(P.L. 109-58) set a target of 7.5 billion gallons by 2012.
On June 21, 2007, the Senate passed its version of H.R. 6, the Creating Long-
Term Energy Alternatives for the Nation (CLEAN Energy) Act of 2007, including

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a provision requiring production of 36 billion gallons of ethanol in 2022. The final
version of the bill, P.L. 110-140, set a modified standard that starts at 9.0 billion
gallons of renewable fuel in 2008 and rises to 36 billion gallons by 2022. Of the
latter total, 21 billion gallons is required to be obtained from cellulosic ethanol and
other advanced biofuels. (For more details, see CRS Report RL34265, Selected
Issues Related to an Expansion of the Renewable Fuel Standard (RFS),
by Brent D.
Yacobucci and Randy Schnepf.)
OCS Leasing. The moratorium on oil and gas leasing in the Outer
Continental Shelf (OCS), except in the central and western Gulf of Mexico and some
parts of Alaska, was subject to much controversy during consideration of P.L. 109-
58. A proposal to allow states to voluntarily opt out of the moratorium was dropped
under threat of filibuster, and a measure to order the Department of the Interior to
perform an inventory of OCS resources barely survived the debate.
Following the disruption of production by Hurricane Katrina, momentum to lift
the moratorium increased, along with efforts by Gulf states to increase their share of
revenues from oil and gas production in the Gulf of Mexico. This movement
culminated in S. 3711, the Gulf of Mexico Energy Security Act of 2006, which lifted
some restrictions in Gulf of Mexico oil and gas leases and increased revenue sharing
for Gulf producing states. The Senate passed S. 3711 on August 1, 2006, and its
provisions were included in H.R. 6111 (P.L. 109-432), the Tax Relief and Health
Care Act of 2006, which passed the House on December 8 and the Senate the
following day. (For details, see CRS Report RL33493, Outer Continental Shelf:
Debate Over Oil and Gas Leasing and Revenue Sharing
, by Marc Humphries.)
Representative Barton’s proposed energy bill, which he submitted in the form
of a motion to recommit H.R. 3221 on August 4, 2007, included a provision to open
up the OCS to oil and gas leasing beyond 100 miles of the coast. The motion to
recommit was defeated by a vote of 169 ayes to 244 noes.
Another issue regarding OCS leasing concerns a number of leases issued in
1998 and 1999 which granted royalty relief under certain conditions without
including a price threshold. Several initiatives to force renegotiation of these
contracts have been proposed, including the House-passed version of H.R. 6, the
CLEAN Energy Act. Similar provisions, including denial of new Gulf of Mexico
leases to lessees holding leases without price thresholds, and establishing
“conservation of resources” fees, were included in H.R. 3221, as passed by the House
August 4, 2007. However, the provision was not included in the final bill, P.L. 110-
140. (For details on OCS royalty relief issues see CRS Report RS22567, Royalty
Relief for U.S. Deepwater Oil and Gas Leases,
by Marc Humphries.)

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Legislation
H.R. 1596 (Ferguson). Clean and Green Renewable Energy Tax Credit Act of
2007.
H.R. 2448 (Kuhl). Emergency Gas Price Relief Act of 2007.
H.R. 5146 (Lampson). Invest in Energy Security Act. Would suspend SPR fill,
and sell SPR oil to finance an Energy Independence and Security Fund.
H.R. 6022 (Welch). Strategic Petroleum Reserve Fill Suspension and
Consumer Protection Act. Passed the House May 13, 2008.
S. 2598 (Dorgan). Strategic Petroleum Reserve Fill Suspension and Consumer
Protection Act of 2008.
S. 2890 (McCain). A bill to amend the Internal Revenue Code of 1986 to
provide for a highway fuel tax holiday.
S. 2896 (Snowe). Diesel Tax Parity Act of 2008.
S. 2958 (Domenici). American Energy Production Act of 2008.
S. 2971 (Clinton). A bill to amend the Internal Revenue Code of 1986 to
provide for a suspension of the highway fuel tax, and for other purposes.
S. 2991 (Reid). Consumer-First Energy Act of 2008.