Gasoline Prices: New Legislation and Proposals

Gasoline Prices: New Legislation and Proposals

Order Code IB10134
CRS Issue Brief for Congress
Received through the CRS Web
Gasoline Prices: New Legislation and Proposals
Updated June 2, 2006
Carl E. Behrens and Carol Glover
Resources, Science, and Industry Division
Congressional Research Service ˜ The Library of Congress

CONTENTS
SUMMARY
MOST RECENT DEVELOPMENTS
BACKGROUND AND ANALYSIS
Legislative Activities
Why Are Prices So High?
Crude Oil Prices
How Oil and Gasoline Prices Are Determined
Gasoline Prices
Policy Options
Oil-Related Legislation
Reducing Impacts on Consumers
Mid- to Long-Term Supply and Demand
ANWR
Savings Goals
OCS Leasing
Refinery Revitalization
LEGISLATION
FOR ADDITIONAL READING
CRS Issue Briefs
CRS Reports

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06-02-06
Gasoline Prices: New Legislation and Proposals
SUMMARY
The high price of gasoline was an impor-
on oil and gas leasing on much of the Outer
tant consideration during the debate on major
Continental Shelf (OCS). Both the Senate
energy legislation, which ended August 8 as
Energy and Natural Resources Committee and
the President signed the Energy Policy Act of
the House Resources Committee included
2005, H.R. 6 (P.L. 109-58). However, prices
leasing ANWR in their reconciliation bill
continued to surge, spiking at the end of
sections. The House Resources Committee
August when Hurricane Katrina shut down
included provisions regarding OCS leasing,
refining operations in the Gulf of Mexico.
but the Senate Energy Committee did not.
The continuing crisis renewed attention to
ANWR leasing was included in the Senate bill
some issues that were dropped or compro-
that passed on November 3 (S. 1932), but the
mised in the debate over P.L. 109-58, as well
House leadership dropped both ANWR and
as a number of initiatives to reduce the impact
OCS provisions before its reconciliation bill,
of high prices on consumers.
H.R. 4241, was passed on November 18 by a
vote of 217-215. The conference report on the
A large number of factors combined to
bill, approved by the House but amended in
put pressure on gasoline prices, including
the Senate, does not contain either measure.
increased world demand for crude oil and U.S.
refinery capacity inadequate to supply gaso-
The gasoline price surge influenced the
line to a recovering national economy. The
debate over P.L. 109-58, but the urgency of
war and continued violence in Iraq added
previous energy crises was lacking. In part,
uncertainty and a threat of supply disruption
this may be due to the fact that there has been
that added pressure particularly to the com-
no physical shortage of gasoline or lines at the
modity futures markets.
pump. In addition, the expectation of former
crises — that prices were destined to grow
Among the issues that received new
ever higher — has not been prevalent.
attention were vehicle fuel economy stan-
dards, leasing on the Outer Continental Shelf,
However, the persistence of high gaso-
and refinery “revitalization” provisions. The
line and oil prices into a second summer has
Gasoline for America’s Security Act of 2005,
raised alarms over the economic consequences
H.R. 3893, was passed by the House on Octo-
of the situation, heightened following the
ber 7 by a vote of 212-210. A similar bill, S.
disastrous effects of Hurricane Katrina.
1772, was defeated in the Environment and
Public Works Committee on October 26 by a
As gasoline prices surged to the $3.00
tie vote of 9-9.
per gallon level again in spring 2006, a new
wave of legislative proposals was put forth in
The budget reconciliation process was
Congress, including strengthening measures
the vehicle for two major energy initiatives:
regarding price gouging and profiteering,
the opening of part of the Arctic National
temporarily refunding federal gasoline taxes,
Wildlife Refuge (ANWR) to oil and gas
and windfall profits tax measures.
development and the lifting of the moratorium
Congressional Research Service ˜ The Library of Congress

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MOST RECENT DEVELOPMENTS
Gasoline prices surged toward $3.00 per gallon in April and stayed there during the first
half of May. The approach of the summer driving season, and complications involving the
phasing out of the gasoline additive MTBE, were cited by some observers as behind the latest
runup.
The price move stimulated a large number of new legislative initiatives and renewed
interest in several that had been under consideration for some time. On May 3, the House
passed the Federal Energy Price Protection Act (H.R. 5253) to prevent price gouging.
The tentative schedule for the week of June 5 included possible House floor action on
H.R. 5254, the Refinery Permit Process Schedule Act of 2006, and other energy legislation.
BACKGROUND AND ANALYSIS
Legislative Activities
The continuing crisis of high gasoline prices has led to a broad spectrum of proposed
new legislation. Despite passage of the major Energy Policy Act of 2005 (P.L. 109-58) last
summer, many Members are exploring a variety of measures to increase supply and reduce
demand in the short term, and to reduce the impact of high prices on consumers. Some are
also proposing to revisit longer-term policies, some of which were passed up in the process
of reaching agreement on P.L. 109-58.
This issue brief 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.
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. In the
12-18 months leading up to the crisis, these events included the following:
! Decisions by the Organization of Petroleum Exporting Countries (OPEC)
cartel, after having reduced production quotas in 2002, to raise them only
slowly and reluctantly;
! Unexpected demand growth in China;
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! Disruptions in oil production in major exporters, including Venezuela, Iraq
and Nigeria;
! Decline in the value of the U.S. dollar, the currency in which oil is traded in
the world market, compared to other major currencies, particularly the Euro.
! Uncertainty and fear of major disruptions in Iraq and Saudi Arabia, in the
context of the war in Iraq and the threat of terrorism.
Figure 1 . Average Daily Nationwide Price of Unleaded Gasoline, January
2002 - May 2006
3.20
3.00
2.80
2.60
llon
2.40
a
2.20
per G
2.00
rs
lla
o
1.80
D
1.60
1.40
1.20
1.00
pr
l
t
l
r
r
l
t
Ju
pr
Ju
ct
'04
Jul
ct
Ju
ay
n '02
A
Oc n '03 A
O
n
Ap
O
n '05 Ap
Oc
'06
M
Ja
Ja
Ja
Ja
Jan
Note: Prices include federal, state and local taxes. Last date above is May 15, 2006.
Source: Daily Fuel Gauge Report, American Automobile Association, [http://www.fuelgaugereport.com],
compiled by CRS.
How Oil and Gasoline Prices Are Determined. The price of crude oil is set
through the interaction of world demand and supply. World demand, at 83.6 million barrels
per day in 2005, grew by 4% in 2004, moderated to 1.3% in 2005, and is forecasted to grow
by 1.8% in 2006.1 World supply, at 84.5 million barrels per day, was less than 1 million
barrels per day more than demand, leaving relatively little excess supply to draw on if the
market was disrupted by natural or political disasters. When excess supply on the market is
low, prices tend to rise and become more volatile.
Higher prices for crude oil translate directly into higher prices for gasoline. Crude oil
accounts for about 55% of the cost of gasoline. Refining, distributing, and marketing
1 International Energy Agency, Oil Market Report, April 12, 2006. pp.4-6.
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account for about 26% of the cost of gasoline, and taxes account for about 19%.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. Gasoline prices have also increased due to 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.
As often happens when commodity prices are volatile, speculation in futures contracts
accentuated the upward price pressure and appeared to continue high prices longer than
would be expected as market fundamentals push toward lower prices.
Gasoline Prices. Just as a number of factors led to increased crude prices, a
combination of features in the U.S. refinery industry contributed to an increase in gasoline
prices.
! U.S. demand for gasoline has increased as economic growth has continued
(See Figure 2).
! Domestic refining capacity has declined, both in number of refineries —
from 324 in 1981 to 153 in 2002 — and in total capacity — from 18.62
million barrels per day (mbd) in 1981 to 16.78 mbd in 2002.
! The structure of the refining industry has changed. In 1981 most refining
capacity was owned and operated by integrated oil companies that supplied
their own crude oil, refined it, distributed it, and marketed the products.
Refining was only one part of the company’s profit-making operation, and
frequently was not an important profit maker. Now the refining industry is
characterized more by independently owned, nonintegrated firms. When
refineries are the sole source of revenue to the owners, it becomes more
important that the operation be profitable, leading to pressure to raise prices.
! The refining industry has been operating with lower inventories of both
crude oil and gasoline, as a means of cutting costs. The side effect has been
reduced ability to meet unanticipated demand, leading to greater price
pressure.
! Gasoline markets are fragmented regionally because air quality requirements
have led to numerous different formulations to meet varying standards. In
meeting demand for these regional formulations, called “boutique fuels,”
refiners lose flexibility to meet local variations in demand elsewhere,
leading to increased price pressure.
! With domestic refining capacity constraints, a greater proportion of gasoline
demand is being met with imported products. Foreign refiners typically
manufacture products designed to sell in the international market, not the
2 Energy Information Administration data based on March 2006 data and a base price of gasoline of
$2.43 per gallon. See [http://www.eia.doe.gov].
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special product “boutique fuels” demanded by a significant share of the U.S.
market.
! Refiners have had increased costs in the past year to comply with new
requirements to limit sulfur content and to switch from the oxygenate
additive MTBE to ethanol.
These various factors pushed the nationwide average price of gasoline over $2 per
gallon in May 2004. By mid-June, Energy Information Administrator Guy Caruso was able
to note a slight decline in prices, and tell a Senate Energy Committee hearing that, “absent
major disruptions, oil and gasoline markets may be turning a corner.”3 However, persistent
high crude prices pushed gasoline prices over $2 again in October, and yet again in March
2005. By April 2005, Caruso was suggesting that increasing world demand for oil might
keep the price of crude above $50 per barrel through 2006.4 In fact, in August the price
surged close to $70.
Figure 2 . Consumption of Motor Gasoline, 2000 - April 2006
10
9.5
ay
9
r D
e
ls p
rre 8.5
a
B
n
io
ill
8
M
7.5
7
Jan
Jul
Jan
Jul
Jan
Jul
Jan
Jul
Jan
Jul
Jan
Jul
Jan Apr
'00
'01
'02
'03
'04
'05
'06
Monthly Averages
Annual Averages
Source: EIA, Monthly Energy Review, April 2006, Table 3.4 and Weekly Petroleum Status Report, May 10,
2006, Table 10.
3 Guy Caruso, statement before the Senate Committee on Energy and Natural Resources, June 15,
2004.
4 “EIA: Oil to remain above $50 through ‘06.” Oil Daily, April 8, 2005, p. 1. Report of a speech by
Guy Caruso at the National Press Club in Washington, DC, April 7, 2005.
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The 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 has been lacking. Throughout the period, U.S. gasoline
consumption continued to rise, although the usual summer peak in consumption appears to
have been somewhat blunted in 2004, as shown in Figure 2. 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 3), again
until Katrina pushed it toward the $3.00-per-gallon mark. Further, unlike the earlier crises,
there was no physical shortage of gasoline, and no lines at the pump, except in local disaster-
affected areas. Consumption of gasoline fell sharply after prices peaked. The drop was
typical of the post-Labor Day decline but more steep than in previous years.
As Figure 4 indicates, 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. This view is no longer
prevalent, and the general expectation has been that the price increase is a temporary
phenomenon, although lasting longer than expected. The current crisis has led to some
analytical speculation that world oil production has peaked, but additions to proved world
oil reserves seem to contradict that thesis. Oil industry analysts appear confident of a long
life remaining for the resource and argue that if oil is replaced, it will be because of improved
alternative technologies, not because the world is running out of oil.
Figure 3. Nominal and Real Price of Gasoline,
1973-2004 and March 2005
3
2.5
2
1.5
1
0.5
0
1973
1977
1981
1985
1989
1993
1997
2001
Mar '05
Nominal Price
Real Price (2004 Dollars)
Source: EIA, Monthly Energy Review, May 2005, Tables 1.6 and 9.4, calculated by CRS.
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Figure 4. Consumer Spending on Oil as % of GDP, 1970 - 2001
10
8
6
4
2
0
1970
1975
1980
1985
1990
1995
2000
Source: Calculated by CRS with data from EIA, Annual Energy Review 2005, Table 3.5. GDP from Bureau
of Economic Analysis, Department of Commerce.
As shown in Figure 5, gasoline prices historically have increased less than the general
rate of inflation, as measured by the Consumer Price Index (CPI). After the surge in 1973,
and again after the 1979-1980 run-up, gasoline prices grew very slowly and even declined,
dropping sharply in 1986. A sudden increase in 2000 was similarly followed by slow or
declining prices. During the current run-up, gasoline price increases have far outpaced the
general CPI increase.
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Figure 5. Percent Change in Gasoline Prices Compared to the
Consumer Price Index, 1973-2004
30
20
10
0
-10
-20
-30
2004
1973
1976
1979
1982
1985
1988
1991
1994
1997
2000
2003
Source: EIA, Annual Energy Review 2004, Table 5.24. CPI from the Bureau of Labor Statistics. Calculated
by CRS.
Policy Options
The several energy crises of the past led to major legislative action, twice in the 1970s
and once following the 1991 Gulf War. The just-passed Energy Policy Act of 2005 differs
from the previous actions because the Congress had been considering major energy
legislation for three years before the situation became a nationwide concern. By the time the
bill finally moved through the Congress, the major issues had already been fully debated, and
the final version differed little from previous initiatives except for resolving a number of
issues that had blocked passage before.
As in previous legislative energy debates, a major policy divide existed between those
who view the gasoline-fueled automobile as a temporary necessity to be tolerated only until
a substitute fuel or alternative means of transportation can be developed, and those who
expect oil to be the same dominant transportation fuel in the indefinite future that it is at
present. Compromise agreements have been reached via a combination of measures that
enhance the development of alternatives or restrain the growth in demand for oil, on the one
hand, and those that increase production or reduce the cost of supplying that demand, on the
other. However, individual measures often carry with them complicating features that make
passage more difficult. In addition, major legislation often becomes the vehicle for measures
that typically would not find enough support to pass as individual bills, or which may be
added to gain support for the whole measure. In the legislative climate of the 108th Congress,
balancing the various interests involved proved too difficult a task, despite the influence of
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a nationwide energy crisis in an election year. Under the stimulation of continued high oil
and gasoline prices, the 109th Congress pursued the goal again, this time successfully.
However, as gasoline prices continued to surge, and damage to Gulf of Mexico oil and gas
resources and facilities by Hurricane Katrina was assessed, calls for further measures to
address the crisis were heard in Congress. Continued price pressure into the spring of 2006
has solidified the calls into specific legislative proposals.
Oil-Related Legislation
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 the recent
increases in gasoline prices. H.R. 3893, as passed the House October 7, includes provisions
requiring FTC to define price gouging and penalize violators.
After gasoline prices surged again in April 2006, momentum increased for various
price-gouging proposals. Several initiatives that would impose windfall profits taxes on
crude oil profits were also introduced. On May 3, the House passed the Federal Energy Price
Protection Act, H.R. 5253, by a vote of 389-34. The bill would require the Federal Trade
Commission within six months after passage to issue rules defining price gouging in crude
oil, gasoline, diesel, home heating oil, and biofuel, and would prohibit gouging so defined.
Tax Relief. On April 26, 2006, Senator Domenici proposed an amendment to the
FY2006 emergency supplemental appropriations bill (H.R. 4939) that included a $100 “Fuel
Tax Holiday Rebate.” The proposal was cosponsored by Majority Leader Frist and other
Senators. The amendment also contained provisions about price-gouging, easing restrictions
on rebates for hybrid vehicles, and approving leasing of ANWR. However, the amendment
was withdrawn May 2.
Suspending Import Duties on Ethanol. Because the latest gasoline price run-up
was attributed in part to the need to increase use of ethanol, some Members, including Senate
Foreign Relations Committee Chairman Lugar and House Energy and Commerce Chairman
Barton, have proposed suspending temporarily duties on imported ethanol, particularly from
Brazil.
“Boutique” Fuels. The Energy Policy Act of 2005 had some provisions related to
local requirements for specific blends of gasoline, but some proposed legislation is aimed at
further reducing “boutique fuels” requirements that, according to some observers, make the
national gasoline market less flexible. H.R. 3893, the Gasoline for America’s Security Act
of 2005, passed by the House October 7, 2005, by a vote of 212-210, would among other
provisions require EPA to develop a Federal Fuels List and to limit local gasoline blends to
those on the list. (For details, see CRS Report RL31361, “Boutique Fuels” and
Reformulated Gasoline: Harmonization of Fuel Standards, by Brent D. Yacobucci.) Other
boutique fuels legislation has also been proposed.
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Windfall Profits Tax. Several bills introduced would impose taxes on oil companies
in light of record profits recorded as a result of the crude and gasoline price run-up. The
context of the proposals lies in the Crude Oil Windfall Profit Tax Act (P.L. 96-223) of 1980,
as part of a compromise between the Carter Administration and the Congress over the
decontrol of crude oil prices. (For details, see CRS Report RL33305, The Crude Oil
Windfall Profit Tax of the 1980s: Implications for Current Energy Policy, by Salvatore
Lazzari.)
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.
CAFE. Automobile fuel economy 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 requires
a boost in light-truck fuel economy to 22.2 miles per gallon by model year 2007. In the
summer of 2005, the Bush administration proposed new fuel economy standards for light
trucks, to take effect in the 2008 model year.
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 have raised congressional interest in higher mandated
CAFE standards again. Among the proposals is H.R. 3762, which would require average
fuel economy of 33 miles per gallon by 2016. Other proposals would give NHTSA authority
to raise standards above the present level and would change the vehicle classifications to one
based on weight. On May 10, the House Energy and Commerce Committee ordered reported
a bill that would authorize the Secretary of Transportation to set fuel economy standards for
passenger automobiles based on one or more vehicle attributes.
ANWR. Oil and gas exploration and development of part of the Arctic National
Wildlife Refuge (ANWR) have been controversial for many years. This was part of the early
proposals for legislation that eventually became the Energy Policy Act of 1992, but was
dropped in the face of strong opposition in both houses. Support for action grew gradually
through the decade, along with technological developments that advocates claimed would
reduce the environmental impact of development; the House included a development
measure in its version of an omnibus energy bill in August 2001. A similar measure was part
of the House-passed legislation in the 108th Congress. Opposition in the Senate kept the
measure from the floor, however, and it was dropped in conference.
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In the 109th Congress, Senate supporters of ANWR development moved the issue to the
budget process, where it can be approved by a simple majority vote. On March 9, 2005, the
Senate Budget Committee issued a FY2006 budget resolution that assumes $2.4 billion of
revenue over five years from leases in ANWR. On March 16 the Senate rejected an
amendment by Senator Cantwell to strike the ANWR provisions, by a vote of 49-51. The
next day the Senate passed the budget resolution (S.Con.Res. 18). The measure was included
in the package of provisions for the budget reconciliation bill approved by both the Senate
Energy Committee and the House Resources Committee. However, the House leadership
removed the ANWR provisions from its reconciliation bill (H.R. 4241) before it was passed
on November 18 by a vote of 217-215.
Despite the failure of the ANWR provision, the Administration’s FY2007 budget
request for the Department of the Interior, submitted February 6, assumes that $8 billion can
be raised in 2008 through leasing of oil and gas resources in ANWR.
Savings Goals. A number of legislative proposals would 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 require the Director of the
Office of Management and Budget to develop an action plan to save 2.5 mbd in 2016, 7 mbd
in 2026, and 10 mbd in 2031.
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 even 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 Katrina, momentum to lift the moratorium
increased, and some supporters suggested it might be included in the budget reconciliation
process. The House Resources Committee on September 28 marked up a bill that would
have given states the option of allowing drilling for petroleum and natural gas. In approving
the bill, the committee adopted an amendment that would lift the moratoriums on drilling the
OCS for natural gas completely. In the face of opposition to the natural gas provision,
Representative Pombo, Chairman of the Resources Committee, decided not to bring the bill
to the floor as planned.
On October 26, the Resources Committee, as part of its package of measures for the
budget reconciliation bill, included provisions that would make statutory the current
presidential moratorium on OCS leasing until 2012 but would allow individual states to opt
out of the moratorium and would allow states close to 50% of the royalties from oil and gas
production that resulted. It would also give states the option to extend the moratorium after
2012. However, the provision was removed from the bill (H.R. 4241) before it was passed
on November 18 by a vote of 217-215.
On May 10, 2006, the House Appropriations Subcommittee on Interior and the
Environment voted to lift the congressional suspension of natural gas leasing for much of the
OCS. The legislation, if approved, would leave in place the presidential moratorium on the
same region, which operates until 2012.
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Refinery Revitalization. P.L. 109-58 contained some provisions to encourage
construction of new oil refineries, but the destruction to refining facilities caused by Katrina
in the Gulf of Mexico area led to calls for further measures. On September 28, 2005, the
House Energy and Commerce Committee reported out H.R. 3893, the Gasoline for
America’s Security Act of 2005, and the House passed the bill October 7 by a vote of 212-
210. Among other measures, the bill would provide for presidential designation of potential
refinery sites on federal lands and military bases that are closing, and set up a process for
coordinating authorization and related environmental reviews for construction of new
refineries, to be led by the Department of Energy. It would centralize judicial review of the
process in the U.S. Court of Appeals for the District of Columbia. The bill as reported would
also have amended the Clean Air Act regarding provisions for New Source Review for
refineries and other facilities, but the measure was dropped before being brought to the
House floor. (For details, see CRS Report RS21608, Clean Air and New Source Review:
Defining Routine Maintenance, by Larry Parker.) The bill also contains measures concerning
boutique fuels (see above).
A similar bill was introduced in the Senate September 26, as the Gas Petroleum Refiner
Improvement and Community Empowerment Act, S. 1772, but the bill was rejected October
26 by the Environment and Public Works Committee by a vote of 9-9.
On May 3, 2006, the House brought up under suspension of the rules the Refinery
Permit Process Schedule Act (H.R. 5254), but the 237-188 vote was less than the two-thirds
approval required under suspension. The bill, which would require the President to appoint
a “federal coordinator” to organize the permitting of new refineries, is expected to come to
the floor under regular rules the week of June 8.
Presidential Proposals: The Advanced Energy Initiative. In his January 31
State of the Union message, President Bush set the goal of breaking the U.S. “addiction to
foreign oil” and of “replacing” more than 75% of oil imports from the Middle East by 2025.
In specifying the Middle East as the source, the proposal differed from provisions considered
in the previous year to set a goal of reducing total imports.
The main thrust of the presidential initiative is 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. At the same time, the budget request for
FY2007 for DOE, which includes these increases, would eliminate programs for oil and gas
research.
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LEGISLATION
109th Congress
P.L. 109-58, H.R. 6
Energy Policy Act of 2005. Introduced April 18, 2005. Passed by the House April 21,
2005 (249-183). Passed the Senate June 28. Reported out of conference July 26 and passed
by both houses July 28 and July 29. Signed into law August 8, 2005.
H.R. 3893 (Barton)
The Gasoline for America’s Security Act of 2005. Introduced September 26, 2005.
Reported out by the House Energy and Commerce Committee September 28. Passed by the
House October 7 by a vote of 212-210.
H.R. 5253 (Barton)
The Federal Energy Price Protection Act of 2006. Passed by the House May 3, 2006,
under suspension of the rules by a vote of 389-34.
H.R. 5254 (Barton)
The Refinery Permit Process Schedule Act of 2006. Rejected by the House under
Suspension of the Rules May 3, 2006, by a vote of 237 yeas to 188 nays.
H.R. 3762 (Boehlert)
To require higher standards of automobile fuel efficiency in order to reduce the amount
of oil used for fuel by automobiles in the United States by 10% beginning in 2016, and for
other purposes.
S. 1772 (Inhofe)
The Gas Petroleum Refiner Improvement and Community Empowerment Act.
Introduced September 26, 2005. Rejected by the Senate Environment and Public Works
Committee October 26 by a vote of 9-9.
S. 555 (DeWine)
The No Oil Producing and Exporting Cartel (NOPEC) Act of 2005. Introduced March
8, 2005. Adopted by voice vote as an amendment to H.R. 6 in the Senate, June 21. Not
included in the final version of H.R. 6.
S. 2747 (Bingaman)
The Enhanced Energy Security Act of 2006. Introduced May 4, 2006.
S. 2748 (Bingaman)
The Enhanced Energy Security Tax Incentives Act of 2006. Introduced May 4, 2006.
CRS-12

IB10134
06-02-06
FOR ADDITIONAL READING
CRS Issue Briefs
CRS Issue Brief IB10136, Arctic National Wildlife Refuge (ANWR): Controversies for the
109th Congress, by M. Lynne Corn, Bernard A. Gelb, and Pamela Baldwin.
CRS Issue Brief IB10054, Energy Tax Policy, by Salvatore Lazzari.
CRS Reports
CRS Report RL31361, “Boutique Fuels” and Reformulated Gasoline: Harmonization of
Fuel Standards, by Brent D. Yacobucci.
CRS Report RS21608, Clean Air and New Source Reviews: Defining Routine Maintenance,
by Larry Parker.
CRS Report RS22233, Oil and Gas: Supply Issues After Katrina, by Robert L. Bamberger
and Lawrence Kumins.
CRS Report RL33021, Oil Industry Profits: Analysis of Recent Performance, by Robert
Pirog.
CRS Report RL32248, Petroleum Refining: Economic Performance and Challenges for the
Future, by Robert L. Pirog.
CRS Report RS22236, Price Increases in the Aftermath of Hurricane Katrina: Authority to
Limit Price Gouging, by Angie A. Welborn and Aaron M. Flynn.
CRS-13