
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 23, 2000]
[Document affected by Public Law 106-469 Section 103(15)]
[CITE: 42USC6241]

 
                 TITLE 42--THE PUBLIC HEALTH AND WELFARE
 
                     CHAPTER 77--ENERGY CONSERVATION
 
               SUBCHAPTER I--DOMESTIC SUPPLY AVAILABILITY
 
                   Part B--Strategic Petroleum Reserve
 
Sec. 6241. Drawdown and distribution of Reserve


(a) Power of Secretary

    The Secretary may drawdown and distribute the Reserve only in 
accordance with the provisions of this section.

(b) Drawdown and distribution of Reserve in accordance with Distribution 
        Plan contained in Strategic Petroleum Reserve Plan

    Except as provided in subsections (c), (f), and (g) of this section, 
no drawdown and distribution of the Reserve may be made except in 
accordance with the provisions of the Distribution Plan contained in the 
Strategic Petroleum Reserve Plan which has taken effect pursuant to 
section 6239(a) of this title.

(c) Drawdown and distribution of Early Storage Reserve in accordance 
        with Distribution Plan contained in Early Storage Reserve Plan

    Drawdown and distribution of the Early Storage Reserve may be made 
in accordance with the provisions of the Distribution Plan contained in 
the Early Storage Reserve Plan until the Strategic Petroleum Reserve 
Plan has taken effect pursuant to section 6239(a) of this title.

(d) Presidential finding prerequisite to implementation of Distribution 
        Plan

    (1) Neither the Distribution Plan contained in the Strategic 
Petroleum Reserve Plan nor the Distribution Plan contained in the Early 
Storage Reserve Plan may be implemented, and no drawdown and 
distribution of the Reserve or the Early Storage Reserve may be made, 
unless the President has found that implementation of either such 
Distribution Plan is required by a severe energy supply interruption or 
by obligations of the United States under the international energy 
program.
    (2) For purposes of this section, in addition to the circumstances 
set forth in section 6202(8) of this title, a severe energy supply 
interruption shall be deemed to exist if the President determines that--
        (A) an emergency situation exists and there is a significant 
    reduction in supply which is of significant scope and duration;
        (B) a severe increase in the price of petroleum products has 
    resulted from such emergency situation; and
        (C) such price increase is likely to cause a major adverse 
    impact on the national economy.

(e) Price levels and allocation procedures

    The Secretary may, by rule, provide for the allocation of any 
petroleum product withdrawn from the Strategic Petroleum Reserve in 
amounts specified in (or determined in a manner prescribed by) and at 
prices specified in (or determined in a manner prescribed by) such 
rules. Such price levels and allocation procedures shall be consistent 
with the attainment, to the maximum extent practicable, of the 
objectives specified in section 753(b)(1) \1\ of title 15.
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    \1\ See References in Text note below.
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(f) Removal or disposal of products in Industrial Petroleum Reserve

    The Secretary may permit any importer or refiner who owns any 
petroleum products stored in the Industrial Petroleum Reserve pursuant 
to section 6236 of this title to remove or otherwise dispose of such 
products upon such terms and conditions as the Secretary may prescribe.

(g) Directive to carry out test drawdown

    (1) The Secretary shall conduct a continuing evaluation of the 
Distribution Plan. In the conduct of such evaluation, the Secretary is 
authorized to carry out test drawdown and distribution of crude oil from 
the Reserve. If any such test drawdown includes the sale or exchange of 
crude oil, then the aggregate quantity of crude oil withdrawn from the 
Reserve may not exceed 5,000,000 barrels during any such test drawdown 
or distribution.
    (2) The Secretary shall carry out such drawdown and distribution in 
accordance with the Distribution Plan and implementing regulations and 
contract provisions, modified as the Secretary considers appropriate 
taking into consideration the artificialities of a test and the absence 
of a severe energy supply interruption. To meet the requirements of 
subsections (d) and (e) of section 6239 of this title, the Secretary 
shall transmit any such modification of the Plan, along with explanatory 
and supporting material, to both Houses of the Congress no later than 15 
calendar days prior to the offering of any crude oil for sale under this 
subsection.
    (3) At least part of the crude oil that is sold or exchanged under 
this subsection shall be sold or exchanged to or with entities that are 
not part of the Federal Government.
    (4) The Secretary may not sell any crude oil under this subsection 
at a price less than that which the Secretary determines appropriate 
and, in no event, at a price less than 90 percent of the sales price, as 
estimated by the Secretary, of comparable crude oil being sold in the 
same area at the time the Secretary is offering crude oil for sale in 
such area under this subsection.
    (5) The Secretary may cancel any offer to sell or exchange crude oil 
as part of any drawdown and distribution under this subsection if the 
Secretary determines that there are insufficient acceptable offers to 
obtain such crude oil.
    (6)(A) The minimum required fill rate in effect for any fiscal year 
shall be reduced by the amount of any crude oil drawdown from the 
Reserve under this subsection during such fiscal year.
    (B) In the case of a sale of any crude oil under this subsection, 
the Secretary shall, to the extent funds are available in the SPR 
Petroleum Account as a result of such sale, acquire crude oil for the 
Reserve within the 12-month period beginning after the completion of the 
sale. Such acquisition shall be in addition to any acquisition of crude 
oil for the Reserve required as part of a fill rate established by any 
other provision of law.
    (7) Rules, regulations, or orders issued in order to carry out this 
subsection which have the applicability and effect of a rule as defined 
in section 551(4) of title 5 shall not be subject to the requirements of 
subchapter II of chapter 5 of such title or to section 6393 of this 
title.
    (8) The Secretary shall transmit to both Houses of the Congress a 
detailed explanation of the drawdown and distribution carried out under 
this subsection. Such explanation may be a part of any report made to 
the President and the Congress under section 6245 of this title.

(h) Prevention or reduction of adverse impact of severe domestic energy 
        supply interruptions

    (1) If the President finds that--
        (A) a circumstance, other than those described in subsection (d) 
    of this section, exists that constitutes, or is likely to become, a 
    domestic or international energy supply shortage of significant 
    scope or duration; and
        (B) action taken under this subsection would assist directly and 
    significantly in preventing or reducing the adverse impact of such 
    shortage,

then the Secretary may, subject to the limitations of paragraph (2), 
draw down and distribute the Strategic Petroleum Reserve.
    (2) In no case may the Reserve be drawn down under this subsection--
        (A) in excess of an aggregate of 30,000,000 barrels with respect 
    to each such shortage;
        (B) for more than 60 days with respect to each such shortage;
        (C) if there are fewer than 500,000,000 barrels of petroleum 
    product stored in the Reserve; or
        (D) below the level of an aggregate of 500,000,000 barrels of 
    petroleum product stored in the Reserve.

    (3) During any period in which there is a drawdown and distribution 
of the Reserve in effect under this subsection, the Secretary shall 
transmit a monthly report to the Congress containing an account of the 
drawdown and distribution of petroleum products under this subsection 
and an assessment of its effect.
    (4) In no case may the drawdown under this subsection be extended 
beyond 60 days with respect to any domestic energy supply shortage.

(i) Exchange of withdrawn products

    Notwithstanding any other law, the President may permit any 
petroleum products withdrawn from the Strategic Petroleum Reserve in 
accordance with this section to be sold and delivered for refining or 
exchange outside of the United States, in connection with an arrangement 
for the delivery of refined petroleum products to the United States.

(j) Purchases from Strategic Petroleum Reserve by entities in insular 
        areas of United States and Freely Associated States

                           (1) Definitions

        In this subsection:

        (A) Binding offer

            The term ``binding offer'' means a bid submitted by the 
        State of Hawaii for an assured award of a specific quantity of 
        petroleum product, with a price to be calculated pursuant to 
        paragraph (2) of this subsection, that obligates the offeror to 
        take title to the petroleum product without further negotiation 
        or recourse to withdraw the offer.

        (B) Category of petroleum product

            The term ``category of petroleum product'' means a master 
        line item within a notice of sale.

        (C) Eligible entity

            The term ``eligible entity'' means an entity that owns or 
        controls a refinery that is located within the State of Hawaii.

        (D) Full tanker load

            The term ``full tanker load'' means a tanker of 
        approximately 700,000 barrels of capacity, or such lesser tanker 
        capacity as may be designated by the State of Hawaii.

        (E) Insular area

            The term ``insular area'' means the Commonwealth of Puerto 
        Rico, the Commonwealth of the Northern Mariana Islands, the 
        United States Virgin Islands, Guam, American Samoa, the Freely 
        Associated States of the Republic of the Marshall Islands, the 
        Federated States of Micronesia, and the Republic of Palau.

        (F) Offering

            The term ``offering'' means a solicitation for bids for a 
        quantity or quantities of petroleum product from the Strategic 
        Petroleum Reserve as specified in the notice of sale.

        (G) Notice of sale

            The term ``notice of sale'' means the document that 
        announces--
                (i) the sale of Strategic Petroleum Reserve products;
                (ii) the quantity, characteristics, and location of the 
            petroleum product being sold;
                (iii) the delivery period for the sale; and
                (iv) the procedures for submitting offers.

                           (2) In general

        In the case of an offering of a quantity of petroleum product 
    during a drawdown of the Strategic Petroleum Reserve--
            (A) the State of Hawaii, in addition to having the 
        opportunity to submit a competitive bid, may--
                (i) submit a binding offer, and shall on submission of 
            the offer, be entitled to purchase a category of a petroleum 
            product specified in a notice of sale at a price equal to 
            the volumetrically weighted average of the successful bids 
            made for the remaining quantity of the petroleum product 
            within the category that is the subject of the offering; and
                (ii) submit one or more alternative offers, for other 
            categories of the petroleum product, that will be binding if 
            no price competitive contract is awarded for the category of 
            petroleum product on which a binding offer is submitted 
            under clause (i); and

            (B) at the request of the Governor of the State of Hawaii, a 
        petroleum product purchased by the State of Hawaii at a 
        competitive sale or through a binding offer shall have first 
        preference in scheduling for lifting.

                     (3) Limitation on quantity

        (A) In general

            In administering this subsection, in the case of each 
        offering, the Secretary may impose the limitation described in 
        subparagraph (B) or (C) that results in the purchase of the 
        lesser quantity of petroleum product.

        (B) Portion of quantity of previous imports

            The Secretary may limit the quantity of a petroleum product 
        that the State of Hawaii may purchase through a binding offer at 
        any offering to 1/12 of the total quantity of imports of the 
        petroleum product brought into the State during the previous 
        year (or other period determined by the Secretary to be 
        representative).

        (C) Percentage of offering

            The Secretary may limit the quantity that may be purchased 
        through binding offers at any offering to 3 percent of the 
        offering.

                           (4) Adjustments

        (A) In general

            Notwithstanding any limitation imposed under paragraph (3), 
        in administering this subsection, in the case of each offering, 
        the Secretary shall, at the request of the Governor of the State 
        of Hawaii, or an eligible entity certified under paragraph (7), 
        adjust the quantity to be sold to the State of Hawaii in 
        accordance with this paragraph.

        (B) Upward adjustment

            The Secretary shall adjust upward to the next whole number 
        increment of a full tanker load if the quantity to be sold is--
                (i) less than 1 full tanker load; or
                (ii) greater than or equal to 50 percent of a full 
            tanker load more than a whole number increment of a full 
            tanker load.

        (C) Downward adjustment

            The Secretary shall adjust downward to the next whole number 
        increment of a full tanker load if the quantity to be sold is 
        less than 50 percent of a full tanker load more than a whole 
        number increment of a full tanker load.

                   (5) Delivery to other locations

        The State of Hawaii may enter into an exchange or a processing 
    agreement that requires delivery to other locations, if a petroleum 
    product of similar value or quantity is delivered to the State of 
    Hawaii.

                    (6) Standard sales provisions

        Except as otherwise provided in this chapter, the Secretary may 
    require the State of Hawaii to comply with the standard sales 
    provisions applicable to purchasers of petroleum products at 
    competitive sales.

                        (7) Eligible entities

        (A) In general

            Subject to subparagraphs (B) and (C) and notwithstanding any 
        other provision of this paragraph, if the Governor of the State 
        of Hawaii certifies to the Secretary that the State has entered 
        into an agreement with an eligible entity to carry out this 
        chapter, the eligible entity may act on behalf of the State of 
        Hawaii to carry out this subsection.

        (B) Limitation

            The Governor of the State of Hawaii shall not certify more 
        than one eligible entity under this paragraph for each notice of 
        sale.

        (C) Barred company

            If the Secretary has notified the Governor of the State of 
        Hawaii that a company has been barred from bidding (either prior 
        to, or at the time that a notice of sale is issued), the 
        Governor shall not certify the company under this paragraph.

                 (8) Supplies of petroleum products

        At the request of the Governor of an insular area, the Secretary 
    shall, for a period not to exceed 180 days following a drawdown of 
    the Strategic Petroleum Reserve, assist the insular area or the 
    President of a Freely Associated State in its efforts to maintain 
    adequate supplies of petroleum products from traditional and 
    nontraditional suppliers.

(Pub. L. 94-163, title I, Sec. 161, Dec. 22, 1975, 89 Stat. 888; Pub. L. 
95-619, title VI, Sec. 691(b)(2), Nov. 9, 1978, 92 Stat. 3288; Pub. L. 
99-58, title I, Sec. 103(a), (b)(2), July 2, 1985, 99 Stat. 103, 104; 
Pub. L. 101-383, Secs. 3(b), 8, 10, Sept. 15, 1990, 104 Stat. 727, 735; 
Pub. L. 102-486, title XIV, Sec. 1401, Oct. 24, 1992, 106 Stat. 2993; 
Pub. L. 105-388, Sec. 9(a), Nov. 13, 1998, 112 Stat. 3482.)

                       References in Text

    Section 753 of title 15, referred to in subsec. (e), was omitted 
from the Code pursuant to section 760g of Title 15, Commerce and Trade, 
which provided for the expiration of the President's authority under 
that section on Sept. 30, 1981.
    This chapter, referred to in subsec. (j)(6), (7)(A), was in the 
original ``this Act'', meaning Pub. L. 94-163, Dec. 22, 1975, 89 Stat. 
871, as amended, known as the Energy Policy and Conservation Act. For 
complete classification of this Act to the Code, see Short Title note 
set out under section 6201 of this title and Tables.


                               Amendments

    1998--Subsec. (j). Pub. L. 105-388 added subsec. (j).
    1992--Subsec. (d). Pub. L. 102-486, Sec. 1401(1), designated 
existing provisions as par. (1) and added par. (2).
    Subsec. (h)(1)(A). Pub. L. 102-486, Sec. 1401(2), inserted ``or 
international'' after ``domestic''.
    1990--Subsec. (g)(1). Pub. L. 101-383, Sec. 8, amended par. (1) 
generally. Prior to amendment, par. (1) read as follows: ``In order to 
evaluate the implementation of the Distribution Plan, the Secretary 
shall, commencing within 180 days after July 2, 1985, carry out a test 
drawdown and distribution under this subsection through the sale or 
exchange of approximately 1,100,000 barrels of crude oil from the 
Reserve. The requirement of this paragraph shall not apply if the 
President determines, within the 180-day period described in the 
preceding sentence, that implementation of the Distribution Plan is 
required by a severe energy supply interruption or by obligations of the 
United States under the international energy program.''
    Subsec. (h). Pub. L. 101-383, Sec. 3(b), added subsec. (h).
    Subsec. (i). Pub. L. 101-383, Sec. 10, added subsec. (i).
    1985--Subsec. (b). Pub. L. 99-58, Sec. 103(b)(2), inserted reference 
to subsec. (g) of this section.
    Subsec. (g). Pub. L. 99-58, Sec. 103(a), added subsec. (g).
    1978--Subsecs. (a), (e), (f). Pub. L. 95-619 substituted 
``Secretary'' for ``Administrator'', meaning Administrator of the 
Federal Energy Administration, wherever appearing.


                    Effective Date of 1998 Amendment

    Pub. L. 105-388, Sec. 9(c), Nov. 13, 1998, 112 Stat. 3484, provided 
that: ``The amendment made by subsection (a) [amending this section] 
takes effect on the earlier of--
        ``(1) the date that is 180 days after the date of enactment of 
    this Act [Nov. 13, 1998]; or
        ``(2) the date that final regulations are issued under 
    subsection (b) [set out as a note below].''


                               Regulations

    Pub. L. 105-388, Sec. 9(b), Nov. 13, 1998, 112 Stat. 3484, provided 
that:
    ``(1) In general.--The Secretary of Energy shall issue such 
regulations as are necessary to carry out the amendment made by 
subsection (a) [amending this section].
    ``(2) Administrative procedure.--Regulations issued to carry out the 
amendment made by subsection (a) shall not be subject to--
        ``(A) section 523 of the Energy Policy and Conservation Act (42 
    U.S.C. 6393); or
        ``(B) section 501 of the Department of Energy Organization Act 
    (42 U.S.C. 7191).''

                  Section Referred to in Other Sections

    This section is referred to in sections 6234, 6239, 6240, 6247 of 
this title.
