Sec. 1501. RENEWABLE CONTENT OF GASOLINE
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## SEC. 1501 RENEWABLE CONTENT OF GASOLINE ###
(a)In General Section 211 of the Clean Air Act (42 U.S.C. 7545) is amended— ####
(1)by redesignating subsection
(o)as subsection (r); and ####
(2)by inserting after subsection
(n)the following: > > ### “(o) Renewable Fuel Program > > > #### “(1) Definitions > > In this section: > > > ##### “(A) Cellulosic biomass ethanol > > The term ‘**cellulosic biomass ethanol**’ means ethanol derived from any lignocellulosic or hemicellulosic matter that is available on a renewable or recurring basis, including— > > > ###### “(i) > > dedicated energy crops and trees; > > > ###### “(ii) > > wood and wood residues; > > > ###### “(iii) > > plants; > > > ###### “(iv) > > grasses; > > > ###### “(v) > > agricultural residues; > > > ###### “(vi) > > fibers; > > > ###### “(vii) > > animal wastes and other waste materials; and > > > ###### “(viii) > > municipal solid waste. > > The term also includes any ethanol produced in facilities where animal wastes or other waste materials are digested or otherwise used to displace 90 percent or more of the fossil fuel normally used in the production of ethanol. > > > ##### “(B) Waste derived ethanol > > The term ‘**waste derived ethanol**’ means ethanol derived from— > > > ###### “(i) > > animal wastes, including poultry fats and poultry wastes, and other waste materials; or > > > ###### “(ii) > > municipal solid waste. > > > ##### “(C) Renewable fuel > > > ###### “(i) In general > > The term ‘**renewable fuel**’ means motor vehicle fuel that— > > > ###### “(I) > > > ######
(aa)> > is produced from grain, starch, oilseeds, vegetable, animal, or fish materials including fats, greases, and oils, sugarcane, sugar beets, sugar components, tobacco, potatoes, or other biomass; or > > > ###### “(bb) > > is natural gas produced from a biogas source, including a landfill, sewage waste treatment plant, feedlot, or other place where decaying organic material is found; and > > > ###### “(II) > > is used to replace or reduce the quantity of fossil fuel present in a fuel mixture used to operate a motor vehicle. > > > ###### “(ii) Inclusion > > The term ‘**renewable fuel**’ includes— > > > ###### “(I) > > cellulosic biomass ethanol and ‘waste derived ethanol’; and > > > ###### “(II) > > biodiesel (as defined in section 312(f) of the Energy Policy Act of 1992 (42 U.S.C. 13220(f))) and any blending components derived from renewable fuel (provided that only the renewable fuel portion of any such blending component shall be considered part of the applicable volume under the renewable fuel program established by this subsection). > > > ##### “(D) Small refinery > > The term ‘**small refinery**’ means a refinery for which the average aggregate daily crude oil throughput for a calendar year (as determined by dividing the aggregate throughput for the calendar year by the number of days in the calendar year) does not exceed 75,000 barrels. > > > #### “(2) Renewable fuel program > > > ##### “(A) Regulations > > > ###### “(i) In general > > Not later than 1 year after the date of enactment of this paragraph, the Administrator shall promulgate regulations to ensure that gasoline sold or introduced into commerce in the United States (except in noncontiguous States or territories), on an annual average basis, contains the applicable volume of renewable fuel determined in accordance with subparagraph (B). > > > ###### “(ii) Noncontiguous state opt-in > > > ###### “(I) In general > > On the petition of a noncontiguous State or territory, the Administrator may allow the renewable fuel program established under this subsection to apply in the noncontiguous State or territory at the same time or any time after the Administrator promulgates regulations under this subparagraph. > > > ###### “(II) Other actions > > In carrying out this clause, the Administrator may— > > > ###### “(aa) > > issue or revise regulations under this paragraph; > > > ###### “(bb) > > establish applicable percentages under paragraph (3); > > > ###### “(cc) > > provide for the generation of credits under paragraph (5); and > > > ###### “(dd) > > take such other actions as are necessary to allow for the application of the renewable fuels program in a noncontiguous State or territory. > > > ###### “(iii) Provisions of regulations > > Regardless of the date of promulgation, the regulations promulgated under clause (i)— > > > ###### “(I) > > shall contain compliance provisions applicable to refineries, blenders, distributors, and importers, as appropriate, to ensure that the requirements of this paragraph are met; but > > > ###### “(II) > > shall not— > > > ###### “(aa) > > restrict geographic areas in which renewable fuel may be used; or > > > ###### “(bb) > > impose any per-gallon obligation for the use of renewable fuel. > > > ###### “(iv) Requirement in case of failure to promulgate regulations > > If the Administrator does not promulgate regulations under clause (i), the percentage of renewable fuel in gasoline sold or dispensed to consumers in the United States, on a volume basis, shall be 2.78 percent for calendar year 2006. > > > ##### “(B) Applicable volume > > > ###### “(i) Calendar years 2006 through 2012 > > For the purpose of subparagraph (A), the applicable volume for any of calendar years 2006 through 2012 shall be determined in accordance with the following table:Applicable volume of renewable fuel``Calendar year:(in billions of gallons):20064.020074.720085.420096.120106.820117.420127.5. > > > ###### “(ii) Calendar year 2013 and thereafter > > Subject to clauses
(iii)and (iv), for the purposes of subparagraph (A), the applicable volume for calendar year 2013 and each calendar year thereafter shall be determined by the Administrator, in coordination with the Secretary of Agriculture and the Secretary of Energy, based on a review of the implementation of the program during calendar years 2006 through 2012, including a review of— > > > ###### “(I) > > the impact of the use of renewable fuels on the environment, air quality, energy security, job creation, and rural economic development; and > > > ###### “(II) > > the expected annual rate of future production of renewable fuels, including cellulosic ethanol. > > > ###### “(iii) Minimum quantity derived from cellulosic biomass > > For calendar year 2013 and each calendar year thereafter— > > > ###### “(I) > > the applicable volume referred to in clause
(ii)shall contain a minimum of 250,000,000 gallons that are derived from cellulosic biomass; and > > > ###### “(II) > > the 2.5-to-1 ratio referred to in paragraph
(4)shall not apply. > > > ###### “(iv) Minimum applicable volume > > For the purpose of subparagraph (A), the applicable volume for calendar year 2013 and each calendar year thereafter shall be equal to the product obtained by multiplying— > > > ###### “(I) > > the number of gallons of gasoline that the Administrator estimates will be sold or introduced into commerce in the calendar year; and > > > ###### “(II) > > the ratio that— > > > ###### “(aa) > > 7,500,000,000 gallons of renewable fuel; bears to > > > ###### “(bb) > > the number of gallons of gasoline sold or introduced into commerce in calendar year 2012. > > > #### “(3) Applicable percentages > > > ##### “(A) Provision of estimate of volumes of gasoline sales > > Not later than October 31 of each of calendar years 2005 through 2011, the Administrator of the Energy Information Administration shall provide to the Administrator of the Environmental Protection Agency an estimate, with respect to the following calendar year, of the volumes of gasoline projected to be sold or introduced into commerce in the United States. > > > ##### “(B) Determination of applicable percentages > > > ###### “(i) In general > > Not later than November 30 of each of calendar years 2005 through 2012, based on the estimate provided under subparagraph (A), the Administrator of the Environmental Protection Agency shall determine and publish in the Federal Register, with respect to the following calendar year, the renewable fuel obligation that ensures that the requirements of paragraph
(2)are met. > > > ###### “(ii) Required elements > > The renewable fuel obligation determined for a calendar year under clause
(i)shall— > > > ###### “(I) > > be applicable to refineries, blenders, and importers, as appropriate; > > > ###### “(II) > > be expressed in terms of a volume percentage of gasoline sold or introduced into commerce in the United States; and > > > ###### “(III) > > subject to subparagraph (C)(i), consist of a single applicable percentage that applies to all categories of persons specified in subclause (I). > > > ##### “(C) Adjustments > > In determining the applicable percentage for a calendar year, the Administrator shall make adjustments— > > > ###### “(i) > > to prevent the imposition of redundant obligations on any person specified in subparagraph (B)(ii)(I); and > > > ###### “(ii) > > to account for the use of renewable fuel during the previous calendar year by small refineries that are exempt under paragraph (9). > > > #### “(4) Cellulosic biomass ethanol or waste derived ethanol > > For the purpose of paragraph (2), 1 gallon of cellulosic biomass ethanol or waste derived ethanol shall be considered to be the equivalent of 2.5 gallons of renewable fuel. > > > #### “(5) Credit program > > > ##### “(A) In general > > The regulations promulgated under paragraph (2)(A) shall provide— > > > ###### “(i) > > for the generation of an appropriate amount of credits by any person that refines, blends, or imports gasoline that contains a quantity of renewable fuel that is greater than the quantity required under paragraph (2); > > > ###### “(ii) > > for the generation of an appropriate amount of credits for biodiesel; and > > > ###### “(iii) > > for the generation of credits by small refineries in accordance with paragraph (9)(C). > > > ##### “(B) Use of credits > > A person that generates credits under subparagraph
(A)may use the credits, or transfer all or a portion of the credits to another person, for the purpose of complying with paragraph (2). > > > ##### “(C) Duration of credits > > A credit generated under this paragraph shall be valid to show compliance for the 12 months as of the date of generation. > > > ##### “(D) Inability to generate or purchase sufficient credits > > The regulations promulgated under paragraph (2)(A) shall include provisions allowing any person that is unable to generate or purchase sufficient credits to meet the requirements of paragraph
(2)to carry forward a renewable fuel deficit on condition that the person, in the calendar year following the year in which the renewable fuel deficit is created— > > > ###### “(i) > > achieves compliance with the renewable fuel requirement under paragraph (2); and > > > ###### “(ii) > > generates or purchases additional renewable fuel credits to offset the renewable fuel deficit of the previous year. > > > #### “(6) Seasonal variations in renewable fuel use > > > ##### “(A) Study > > For each of calendar years 2006 through 2012, the Administrator of the Energy Information Administration shall conduct a study of renewable fuel blending to determine whether there are excessive seasonal variations in the use of renewable fuel. > > > ##### “(B) Regulation of excessive seasonal variations > > If, for any calendar year, the Administrator of the Energy Information Administration, based on the study under subparagraph (A), makes the determinations specified in subparagraph (C), the Administrator of the Environmental Protection Agency shall promulgate regulations to ensure that 25 percent or more of the quantity of renewable fuel necessary to meet the requirements of paragraph
(2)is used during each of the 2 periods specified in subparagraph
(D)of each subsequent calendar year. > > > ##### “(C) Determinations > > The determinations referred to in subparagraph
(B)are that— > > > ###### “(i) > > less than 25 percent of the quantity of renewable fuel necessary to meet the requirements of paragraph
(2)has been used during 1 of the 2 periods specified in subparagraph
(D)of the calendar year; > > > ###### “(ii) > > a pattern of excessive seasonal variation described in clause
(i)will continue in subsequent calendar years; and > > > ###### “(iii) > > promulgating regulations or other requirements to impose a 25 percent or more seasonal use of renewable fuels will not prevent or interfere with the attainment of national ambient air quality standards or significantly increase the price of motor fuels to the consumer. > > > ##### “(D) Periods > > The 2 periods referred to in this paragraph are— > > > ###### “(i) > > April through September; and > > > ###### “(ii) > > January through March and October through December. > > > ##### “(E) Exclusion > > Renewable fuel blended or consumed in calendar year 2006 in a State that has received a waiver under section 209(b) shall not be included in the study under subparagraph (A). > > > ##### “(F) State exemption from seasonality requirements > > Notwithstanding any other provision of law, the seasonality requirement relating to renewable fuel use established by this paragraph shall not apply to any State that has received a waiver under section 209(b) or any State dependent on refineries in such State for gasoline supplies. > > > #### “(7) Waivers > > > ##### “(A) In general > > The Administrator, in consultation with the Secretary of Agriculture and the Secretary of Energy, may waive the requirements of paragraph
(2)in whole or in part on petition by one or more States by reducing the national quantity of renewable fuel required under paragraph (2)— > > > ###### “(i) > > based on a determination by the Administrator, after public notice and opportunity for comment, that implementation of the requirement would severely harm the economy or environment of a State, a region, or the United States; or > > > ###### “(ii) > > based on a determination by the Administrator, after public notice and opportunity for comment, that there is an inadequate domestic supply. > > > ##### “(B) Petitions for waivers > > The Administrator, in consultation with the Secretary of Agriculture and the Secretary of Energy, shall approve or disapprove a State petition for a waiver of the requirements of paragraph
(2)within 90 days after the date on which the petition is received by the Administrator. > > > ##### “(C) Termination of waivers > > A waiver granted under subparagraph
(A)shall terminate after 1 year, but may be renewed by the Administrator after consultation with the Secretary of Agriculture and the Secretary of Energy. > > > #### “(8) Study and waiver for initial year of program > > > ##### “(A) In general > > Not later than 180 days after the date of enactment of this paragraph, the Secretary of Energy shall conduct for the Administrator a study assessing whether the renewable fuel requirement under paragraph
(2)will likely result in significant adverse impacts on consumers in 2006, on a national, regional, or State basis. > > > ##### “(B) Required evaluations > > The study shall evaluate renewable fuel— > > > ###### “(i) > > supplies and prices; > > > ###### “(ii) > > blendstock supplies; and > > > ###### “(iii) > > supply and distribution system capabilities. > > > ##### “(C) Recommendations by the secretary > > Based on the results of the study, the Secretary of Energy shall make specific recommendations to the Administrator concerning waiver of the requirements of paragraph (2), in whole or in part, to prevent any adverse impacts described in subparagraph (A). > > > ##### “(D) Waiver > > > ###### “(i) In general > > Not later than 270 days after the date of enactment of this paragraph, the Administrator shall, if and to the extent recommended by the Secretary of Energy under subparagraph (C), waive, in whole or in part, the renewable fuel requirement under paragraph
(2)by reducing the national quantity of renewable fuel required under paragraph
(2)in calendar year 2006. > > > ###### “(ii) No effect on waiver authority > > Clause
(i)does not limit the authority of the Administrator to waive the requirements of paragraph
(2)in whole, or in part, under paragraph (7). > > > #### “(9) Small refineries > > > ##### “(A) Temporary exemption > > > ###### “(i) In general > > The requirements of paragraph
(2)shall not apply to small refineries until calendar year 2011. > > > ###### “(ii) Extension of exemption > > > ###### “(I) Study by secretary of energy > > Not later than December 31, 2008, the Secretary of Energy shall conduct for the Administrator a study to determine whether compliance with the requirements of paragraph
(2)would impose a disproportionate economic hardship on small refineries. > > > ###### “(II) Extension of exemption > > In the case of a small refinery that the Secretary of Energy determines under subclause
(I)would be subject to a disproportionate economic hardship if required to comply with paragraph (2), the Administrator shall extend the exemption under clause
(i)for the small refinery for a period of not less than 2 additional years. > > > ##### “(B) Petitions based on disproportionate economic hardship > > > ###### “(i) Extension of exemption > > A small refinery may at any time petition the Administrator for an extension of the exemption under subparagraph
(A)for the reason of disproportionate economic hardship. > > > ###### “(ii) Evaluation of petitions > > In evaluating a petition under clause (i), the Administrator, in consultation with the Secretary of Energy, shall consider the findings of the study under subparagraph (A)(ii) and other economic factors. > > > ###### “(iii) Deadline for action on petitions > > The Administrator shall act on any petition submitted by a small refinery for a hardship exemption not later than 90 days after the date of receipt of the petition. > > > ##### “(C) Credit program > > If a small refinery notifies the Administrator that the small refinery waives the exemption under subparagraph (A), the regulations promulgated under paragraph (2)(A) shall provide for the generation of credits by the small refinery under paragraph
(5)beginning in the calendar year following the date of notification. > > > ##### “(D) Opt-in for small refineries > > A small refinery shall be subject to the requirements of paragraph
(2)if the small refinery notifies the Administrator that the small refinery waives the exemption under subparagraph (A). > > > #### “(10) Ethanol market concentration analysis > > > ##### “(A) Analysis > > > ###### “(i) In general > > Not later than 180 days after the date of enactment of this paragraph, and annually thereafter, the Federal Trade Commission shall perform a market concentration analysis of the ethanol production industry using the Herfindahl-Hirschman Index to determine whether there is sufficient competition among industry participants to avoid price-setting and other anticompetitive behavior. > > > ###### “(ii) Scoring > > For the purpose of scoring under clause
(i)using the Herfindahl-Hirschman Index, all marketing arrangements among industry participants shall be considered. > > > ##### “(B) Report > > Not later than December 1, 2005, and annually thereafter, the Federal Trade Commission shall submit to Congress and the Administrator a report on the results of the market concentration analysis performed under subparagraph (A)(i).” > . ###
(b)Penalties and Enforcement Section 211(d) of the Clean Air Act (42 U.S.C. 7545(d)) is amended— ####
(1)in paragraph (1)— #####
(A)in the first sentence, by striking “or (n)” each place it appears and inserting “(n), or (o)”; and #####
(B)in the second sentence, by striking “or (m)” and inserting “(m), or (o)”; and ####
(2)in the first sentence of paragraph (2), by striking “and (n)” each place it appears and inserting “(n), and (o)”. ###
(c)Exclusion From Ethanol Waiver Section 211(h) of the Clean Air Act (42 U.S.C. 7545(h)) is amended— ####
(1)by redesignating paragraph
(5)as paragraph (6); and ####
(2)by inserting after paragraph
(4)the following: > > #### “(5) Exclusion from ethanol waiver > > > ##### “(A) Promulgation of regulations > > Upon notification, accompanied by supporting documentation, from the Governor of a State that the Reid vapor pressure limitation established by paragraph
(4)will increase emissions that contribute to air pollution in any area in the State, the Administrator shall, by regulation, apply, in lieu of the Reid vapor pressure limitation established by paragraph (4), the Reid vapor pressure limitation established by paragraph
(1)to all fuel blends containing gasoline and 10 percent denatured anhydrous ethanol that are sold, offered for sale, dispensed, supplied, offered for supply, transported, or introduced into commerce in the area during the high ozone season. > > > ##### “(B) Deadline for promulgation > > The Administrator shall promulgate regulations under subparagraph
(A)not later than 90 days after the date of receipt of a notification from a Governor under that subparagraph. > > > ##### “(C) Effective date > > > ###### “(i) In general > > With respect to an area in a State for which the Governor submits a notification under subparagraph (A), the regulations under that subparagraph shall take effect on the later of— > > > ###### “(I) > > the first day of the first high ozone season for the area that begins after the date of receipt of the notification; or > > > ###### “(II) > > 1 year after the date of receipt of the notification. > > > ###### “(ii) Extension of effective date based on determination of insufficient supply > > > ###### “(I) In general > > If, after receipt of a notification with respect to an area from a Governor of a State under subparagraph (A), the Administrator determines, on the Administrator's own motion or on petition of any person and after consultation with the Secretary of Energy, that the promulgation of regulations described in subparagraph
(A)would result in an insufficient supply of gasoline in the State, the Administrator, by regulation— > > > ###### “(aa) > > shall extend the effective date of the regulations under clause
(i)with respect to the area for not more than 1 year; and > > > ###### “(bb) > > may renew the extension under item
(aa)for two additional periods, each of which shall not exceed 1 year. > > > ###### “(II) Deadline for action on petitions > > The Administrator shall act on any petition submitted under subclause
(I)not later than 180 days after the date of receipt of the petition.” > . ###
(d)Survey of Renewable Fuel Market ####
(1)Survey and report Not later than December 1, 2006, and annually thereafter, the Administrator of the Environmental Protection Agency (in consultation with the Secretary acting through the Administrator of the Energy Information Administration) shall— #####
(A)conduct, with respect to each conventional gasoline use area and each reformulated gasoline use area in each State, a survey to determine the market shares of— ######
(i)conventional gasoline containing ethanol; ######
(ii)reformulated gasoline containing ethanol; ######
(iii)conventional gasoline containing renewable fuel; and ######
(iv)reformulated gasoline containing renewable fuel; and #####
(B)submit to Congress, and make publicly available, a report on the results of the survey under subparagraph (A). ####
(2)Recordkeeping and reporting requirements The Administrator of the Environmental Protection Agency (hereinafter in this subsection referred to as the “Administrator”) may require any refiner, blender, or importer to keep such records and make such reports as are necessary to ensure that the survey conducted under paragraph
(1)is accurate. The Administrator, to avoid duplicative requirements, shall rely, to the extent practicable, on existing reporting and recordkeeping requirements and other information available to the Administrator including gasoline distribution patterns that include multistate use areas. ####
(3)Applicable law Activities carried out under this subsection shall be conducted in a manner designed to protect confidentiality of individual responses.
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