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Petroleum products for storage, transport, or exchange

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§6240. Petroleum products for storage, transport, or exchange

(a) Eligibility of petroleum products

The Secretary may acquire, place in storage, transport, or exchange petroleum products acquired by purchase or exchange.

(b) Objectives in determining manner of acquisition

The Secretary shall, to the greatest extent practicable, acquire petroleum products for the Reserve in a manner consonant with the following objectives:

(1) minimization of the cost of the Reserve;

(2) Repealed. Pub. L. 106–469, title I, §103(14)(C), Nov. 9, 2000, 114 Stat. 2031 ;

(3) minimization of the Nation's vulnerability to a severe energy supply interruption;

(4) minimization of the impact of such acquisition upon supply levels and market forces; and

(5) encouragement of competition in the petroleum industry.

(c) Procedures

The Secretary shall develop, with public notice and opportunity for comment, procedures consistent with the objectives of this section to acquire petroleum for the Reserve. Such procedures shall take into account the need to-

(1) maximize overall domestic supply of crude oil (including quantities stored in private sector inventories);

(2) avoid incurring excessive cost or appreciably affecting the price of petroleum products to consumers;

(3) minimize the costs to the Department of the Interior and the Department of Energy in acquiring such petroleum products (including foregone revenues to the Treasury when petroleum products for the Reserve are obtained through the royalty-in-kind program);

(4) protect national security;

(5) avoid adversely affecting current and futures prices, supplies, and inventories of oil; and

(6) address other factors that the Secretary determines to be appropriate.

(d), (e) Repealed. Pub. L. 106–469, title I, §103(14)(D), Nov. 9, 2000, 114 Stat. 2031

(f) Predrawdown diversion

If the Secretary finds that a severe energy supply interruption may be imminent, the Secretary may suspend the acquisition of petroleum product for, and the injection of petroleum product into, the Reserve and may sell any petroleum product acquired for and in transit to, but not injected into, the Reserve.

(g) Repealed. Pub. L. 106–469, title I, §103(14)(D), Nov. 9, 2000, 114 Stat. 2031

(h) Purchase from stripper well properties

(1) If the President finds that declines in the production of oil from domestic resources pose a threat to national energy security, the President may direct the Secretary to acquire oil from domestic production of stripper well properties for storage in the Strategic Petroleum Reserve. Except as provided in paragraph (2), the Secretary may set such terms and conditions as he deems necessary for such acquisition.

(2) Crude oil purchased by the Secretary pursuant to this subsection shall be by competitive bid. The price paid by the Secretary-

(A) shall take into account the cost of production including costs of reservoir and well maintenance; and

(B) shall not exceed the price that would have been paid if the Secretary had acquired petroleum products of a similar quality on the open market under competitive bid procedures without regard to the source of the petroleum products.

( Pub. L. 94–163, title I, §160, Dec. 22, 1975, 89 Stat. 888 ; Pub. L. 95–619, title VI, §691(b)(2), Nov. 9, 1978, 92 Stat. 3288 ; Pub. L. 96–294, title VIII, §§801(a), 802(a), 803, June 30, 1980, 94 Stat. 775 , 776; Pub. L. 97–35, title X, §1033, Aug. 13, 1981, 95 Stat. 618 ; Pub. L. 97–229, §4(a)(1), (b)(2)(C), Aug. 3, 1982, 96 Stat. 250 , 252; Pub. L. 99–58, title I, §§102(b), 103(b)(1), July 2, 1985, 99 Stat. 103 , 104; Pub. L. 99–88, title I, §100, Aug. 15, 1985, 99 Stat. 342 ; Pub. L. 99–272, title VII, §7102, Apr. 7, 1986, 100 Stat. 141 ; Pub. L. 99–509, title III, §3202, Oct. 21, 1986, 100 Stat. 1889 ; Pub. L. 101–383, §§4(b), (c), 5(a), (b)(3), 7, Sept. 15, 1990, 104 Stat. 728 , 729, 734; Pub. L. 101–548, §1, Nov. 14, 1990, 104 Stat. 2398 ; Pub. L. 102–486, title XIV, §1404(a), (b)(2), Oct. 24, 1992, 106 Stat. 2994 , 2995; Pub. L. 104–66, title I, §1051(f), Dec. 21, 1995, 109 Stat. 716 ; Pub. L. 106–469, title I, §103(14), Nov. 9, 2000, 114 Stat. 2031 ; Pub. L. 109–58, title III, §301(e)(2)(A), Aug. 8, 2005, 119 Stat. 684 ; Pub. L. 113–67, div. A, title III, §306(a), Dec. 26, 2013, 127 Stat. 1183 .)

Amendments

2013-Subsec. (a). Pub. L. 113–67 amended subsec. (a) generally. Prior to amendment, text read as follows: "The Secretary may acquire, place in storage, transport, or exchange-

"(1) crude oil produced from Federal lands

"(2) crude oil which the United States is entitled to receive in kind as royalties from production on Federal lands; and

"(3) petroleum products acquired by purchase, exchange, or otherwise."

2005-Subsec. (c). Pub. L. 109–58 added subsec. (c).

2000-Subsec. (a). Pub. L. 106–469, §103(14)(A), in introductory provisions, substituted "The Secretary may acquire, place in storage, transport, or exchange" for "The Secretary is authorized, for purposes of implementing the Strategic Petroleum Reserve Plan or the Early Storage Reserve Plan, to place in storage, transport, or exchange".

Subsec. (a)(1). Pub. L. 106–469, §103(14)(B), struck out ", including crude oil produced from the Naval Petroleum Reserves to the extent that such production is authorized by law;" after "Federal lands".

Subsec. (b). Pub. L. 106–469, §103(14)(C), struck out ", including the Early Storage Reserve and the Regional Petroleum Reserve" before "in a manner consonant" in introductory provisions.

Subsec. (b)(2). Pub. L. 106–469, §103(14)(C), struck out par. (2) which read as follows: "orderly development of the Naval Petroleum Reserves to the extent authorized by law;".

Subsecs. (c) to (e). Pub. L. 106–469, §103(14)(D), struck out subsecs. (c) to (e) which related to fill operations by the President, disposition of crude oil from Naval Petroleum Reserve Numbered 1, and suspensions of fill operations during emergency situations.

Subsec. (g). Pub. L. 106–469, §103(14)(D), struck out subsec. (g) which required the Secretary to conduct a test program of storage of refined petroleum products within the Reserve.

1995-Subsec. (g)(7). Pub. L. 104–66 struck out par. (7) which read as follows: "No later than January 31, 1994, the Secretary shall transmit to the Congress a report on the test program. The report shall evaluate the mechanisms demonstrated under the test program, other potential mechanisms, and the purchase of facilities. The report shall include an assessment of the costs and benefits of the various mechanisms. The report shall also make recommendations with regard to future storage of refined petroleum products and contain drafts of any legislative provisions which the Secretary wishes to recommend."

1992-Subsec. (d)(2). Pub. L. 102–486, §1405, redesignated cls. (i) to (iii) as pars. (A) to (C), respectively, and struck out former par. (A) designation after "(2)".

Subsec. (h). Pub. L. 102–486, §1404(a), added subsec. (h).

1990-Subsec. (c)(3). Pub. L. 101–383, §4(b)(1), substituted "fiscal year 1994" for "fiscal years 1988 and 1989" and "1,000,000,000" for "at least 750,000,000".

Subsec. (d)(1)(A). Pub. L. 101–383, §4(c), inserted "Government owned facilities of" after "within".

Subsec. (d)(1)(B). Pub. L. 101–383, §4(b)(2), inserted before period at end "and the Secretary has amended the Strategic Petroleum Reserve Plan as required by section 6239(j) of this title".

Subsec. (d)(4). Pub. L. 101–383, §5(b)(3), added par. (4).

Subsec. (f). Pub. L. 101–383, §5(a), added subsec. (f).

Subsec. (g). Pub. L. 101–548 inserted "with regard to future storage of refined petroleum products and" after "recommendations" in par. (7).

Pub. L. 101–383, §7, added subsec. (g).

1986-Subsec. (c)(3). Pub. L. 99–509, §3202(a), substituted "fiscal year 1987 and continuing through fiscal years 1988 and 1989" for "fiscal year 1986 and continuing through fiscal years 1987 and 1988", "750,000,000 barrels" for "527,000,000 barrels", and "at the highest practicable fill rate achievable, subject to the availability of appropriated funds" for "at a level sufficient to assure a minimum average annual fill-rate of at least 35,000 barrels per day in addition to any petroleum products acquired for the Reserve to replace petroleum products withdrawn from the Reserve as a result of a test drawdown and distribution".

Pub. L. 99–272, §7102(a), added par. (3).

Subsec. (d)(1)(A). Pub. L. 99–509, §3202(b)(1), substituted "750,000,000 barrels" for "527,000,000 barrels".

Pub. L. 99–272, §7102(b)(1), substituted "527,000,000 barrels" for "500,000,000 barrels".

Subsec. (d)(1)(B). Pub. L. 99–509, §3202(b)(2), substituted "75,000 barrels" for "100,000 barrels", and substituted a period for "; or".

Subsec. (d)(1)(C). Pub. L. 99–509, §3202(b)(3), struck out subpar. (C) which read as follows: "acquisition, transportation, and injection activities for the Reserve are being undertaken, beginning in fiscal year 1986 and continuing through fiscal years 1987 and 1988 until the quantity of crude oil in storage within the Reserve is at least 527,000,000 barrels, at a level sufficient to assure that petroleum products in storage in the Reserve will be increased at a minimum annual average rate of at least 35,000 barrels per day in addition to any petroleum products acquired for the Reserve to replace petroleum products withdrawn from the Reserve as a result of a test drawdown and distribution".

Pub. L. 99–272, §7102(b)(2), added subpar. (C) and struck out former subpar. (C) which read as follows: "the fill rate is sufficient to attain a level of 500,000,000 barrels by the end of the fiscal year during which the fill rate falls below the rate established in (B)."

1985-Subsec. (d)(1)(C). Pub. L. 99–88 added subpar. (C).

Subsec. (d)(3). Pub. L. 99–58, §103(b)(1), added par. (3).

Subsec. (e)(1)(B). Pub. L. 99–58, §102(b)(1), (2), inserted "and" at end of cl. (i), inserted a period following "to the Congress", and struck out "in accordance with section 6422 of this title, together with a request for a suspension of such provisions; and" in cl. (ii), and struck out cl. (iii) which directed that provisions of subsecs. (c) and (d) of this section would not apply if a Presidential request for the suspension of such provisions was approved by a resolution of each House of Congress within 60 days of continuous session after the date of its transmittal in accordance with provisions of section 6422 of this title applicable to energy conservation contingency plans.

Subsec. (e)(2). Pub. L. 99–58, §102(b)(3), substituted "may become effective on the day the finding is transmitted to the Congress and shall terminate nine months thereafter or on such earlier date as is specified in such finding" for "shall take effect on the date on which a resolution approving that request is adopted by the second House to have so approved that request and shall terminate 9 months thereafter, or such earlier date as is specified in the request transmitted under paragraph (1)(B)(ii)".

Subsec. (e)(3), (4). Pub. L. 99–58, §102(b)(3), (4), redesignated par. (4) as (3). Former par. (3), which related to application of section 6422 of this title for purposes of par. (1)(B), was struck out.

1982-Subsec. (c). Pub. L. 97–229, §4(a)(1), substituted provisions directing the President to fill the Strategic Petroleum Reserve with petroleum products at a level sufficient to assure an increase at an annual rate of at least the minimum required fill rate, 300,000 barrels per day, until the quantity of petroleum products stored is at least 500,000,000 barrels, allowing for a lower minimum required fill rate of 220,000 barrels per day if the President finds that compliance with the 300,000 barrels per day rate would not be in the national interest, specifying the effective period of such a Presidential finding, authorizing a higher minimum required rate than the 220,000 barrels per day if funds are available in any fiscal year after fiscal year 1982, making the Impoundment Control Act of 1974 applicable to funds available under section 6247(b) and (e) of this title, and providing that, after the Strategic Petroleum Reserve reaches 500,000,000 barrels, the President shall seek to fill the Reserve at an annual rate of at least 300,000 barrels per day of petroleum products until the Reserve reaches 750,000,000 barrels for provisions directing the President to seek to fill the Strategic Petroleum Reserve with crude oil at a level sufficient to assure that crude oil in storage will be increased at an average annual rate of at least 300,000 barrels per day until the Reserve is at least 750,000,000 barrels.

Subsec. (e)(4). Pub. L. 97–229, §4(b)(2)(C), substituted "petroleum product" for "crude oil".

1981-Subsec. (c). Pub. L. 97–35 substituted provisions respecting fill operation at a rate of 300,000 barrels per day for provisions respecting fill operation at a rate of 100,000 barrels per day.

1980-Subsec. (c). Pub. L. 96–294, §801(a), added subsec. (c).

Subsec. (d). Pub. L. 96–294, §802(a), added subsec. (d).

Subsec. (e). Pub. L. 96–294, §803, added subsec. (e).

1978-Pub. L. 95–619 substituted "Secretary" for "Administrator", meaning Administrator of the Federal Energy Administration, wherever appearing.

Effective Date of 1982 Amendment

Pub. L. 97–229, §4(a)(2), Aug. 3, 1982, 96 Stat. 251 , provided that: "The amendment made by paragraph (1) [amending this section] shall take effect July 1, 1982."

Effective Date of 1981 Amendment

Pub. L. 97–35, title X, §1038, Aug. 13, 1981, 95 Stat. 621 , provided that: "The provisions of this title [enacting sections 6247, 8341, and 8484 of this title, amending this section and sections 6245, 6246, 6831 to 6833, 6835, 6837 to 6839, 8372, 8421, 8422, and 8803 of this title, repealing sections 6834, 6836 and 8341 of this title, and enacting provisions set out as notes under sections 6201, 6231, 6247, 7270, and 8341 of this title, section 3620 of Title 12, Banks and Banking, and section 719e of Title 15, Commerce and Trade] shall take effect on the date of enactment of this Act [Aug. 13, 1981]."

Effective Date of 1980 Amendment

Pub. L. 96–294, title VIII, §801(b), June 30, 1980, 94 Stat. 775 , provided that: "The amendment made by subsection (a) [amending this section] shall take effect on the date of the enactment of this Act [June 30, 1980], and shall apply with respect to the entirety of fiscal year 1981 (and each fiscal year thereafter)."

Pub. L. 96–294, title VIII, §802(b), June 30, 1980, 94 Stat. 776 , provided that: "The amendments made by subsection (a) [amending this section] shall take effect October 1, 1980."

Filling Strategic Petroleum Reserve to Capacity

Pub. L. 109–58, title III, §301(e)(1), Aug. 8, 2005, 119 Stat. 684 , provided that: "The Secretary [of Energy] shall, as expeditiously as practicable, without incurring excessive cost or appreciably affecting the price of petroleum products to consumers, acquire petroleum in quantities sufficient to fill the Strategic Petroleum Reserve to the 1,000,000,000-barrel capacity authorized under section 154(a) of the Energy Policy and Conservation Act (42 U.S.C. 6234(a)), in accordance with the sections 159 and 160 of that Act (42 U.S.C. 6239, 6240)."

Procedures for Acquisition of Petroleum for Reserve

Pub. L. 109–58, title III, §301(e)(2)(B), (C), Aug. 8, 2005, 119 Stat. 684 , 685, provided that:

"(B) Review of requests for deferrals of scheduled deliveries.-The procedures developed under section 160(c) of the Energy Policy and Conservation Act [42 U.S.C. 6240(c)], as added by subparagraph (A), shall include procedures and criteria for the review of requests for the deferrals of scheduled deliveries.

"(C) Deadlines.-The Secretary [of Energy] shall-

"(i) propose the procedures required under the amendment made by subparagraph (A) [amending this section] not later than 120 days after the date of enactment of this Act [Aug. 8, 2005];

"(ii) promulgate the procedures not later than 180 days after the date of enactment of this Act; and

"(iii) comply with the procedures in acquiring petroleum for the Reserve effective beginning on the date that is 180 days after the date of enactment of this Act."

Suspension of Test Program Requirements During Fiscal Year 1994

Pub. L. 103–138, title II, Nov. 11, 1993, 107 Stat. 1406 , provided in part that requirements of subsec. (g) of this section would not apply in fiscal year 1994.

Study and Report on Oil Leasing and Other Arrangements To Fill SPR to One Billion Barrels

Pub. L. 101–46, §2, June 30, 1989, 103 Stat. 132 , directed Secretary of Energy to conduct a study on potential financial arrangements, including long-term leasing of crude oil and storage facilities, that could be used to provide additional, alternative means of financing the filling of the Strategic Petroleum Reserve to one billion barrels and directed Secretary to transmit an interim report to Committee on Energy and Natural Resources of Senate and Committee on Energy and Commerce of House of Representatives no later than Oct. 15, 1989, and no later than Feb. 1, 1990, to transmit to such committees a copy of the preliminary written solicitations for proposed alternative financial arrangements to assist in filling the Strategic Petroleum Reserve to one billion barrels and a final report containing findings and conclusions together with a draft of legislative changes necessary to authorize the most significant alternative financial arrangements.

Exchange of Agricultural Products for Crude Oil To Be Delivered to Strategic Petroleum Reserve

Pub. L. 99–190, §101(d) [title II], Dec. 19, 1985, 99 Stat. 1224 , 1254, provided that: "Notwithstanding any other provision of law, the Secretary of Agriculture, at the request of the Secretary of Energy, may exchange agricultural products owned by the Commodity Credit Corporation for crude oil to be delivered to the Strategic Petroleum Reserve: Provided, That the Secretary of Energy shall approve the quantity, quality, delivery method, scheduling, market value and other aspects of the exchange of such agricultural products: Provided further, That if the volume of agricultural products to be exchanged has a value in excess of the market value of the crude oil acquired by such exchange, then the Secretary of Agriculture shall require as part of the terms and conditions of the exchange that the party or entity providing such crude oil shall agree to purchase, within six months following the exchange, current crop commodities or value-added food products from United States producers or processors in an amount equal to at least one-half the difference between the value of the commodities received in exchange and the market value of the crude oil acquired for the Strategic Petroleum Reserve."

Allocation to Strategic Petroleum Reserve of Lower Tier Crude Oil and Federal Royalty Oil; Procedures Applicable, Authorities, Etc.

Pub. L. 96–294, title VIII, §805, June 30, 1980, 94 Stat. 777 , provided that:

"(a)(1) In order to carry out the requirement of the amendment made by section 801 of this Act [amending this section and enacting provision set out as a note above] and to carry out the policies and objectives established in sections 151 and 160(b)(1) of the Energy Policy and Conservation Act (42 U.S.C. 6231 and 6240(b)(1)) the President shall, within 60 days after the date of the enactment of this Act [June 30, 1980], promulgate and make effective an amendment to the provisions of the regulation under section 4(a) of the Emergency Petroleum Allocation Act of 1973 [15 U.S.C. 753(a)] relating to entitlements, which has the same effect as allocating lower tier crude oil to the Government for storage in the Strategic Petroleum Reserve. Such amendment shall not apply with respect to crude oil purchased after September 30, 1981, for storage in such reserve.

"(2) The authority provided by this subsection shall be in addition to, and shall not be deemed to limit, any other authority available to the President under the Emergency Petroleum Allocation Act of 1973 [15 U.S.C. 751 et seq.] or any other law.

"(3) The President or his delegate may promulgate and make effective rules or orders to implement this subsection without regard to the requirements of section 501 of the Department of Energy Organization Act [42 U.S.C. 7191] or any other law or regulation specifying procedural requirements.

"(b) In addition to the requirement under subsection (a), the President may direct that-

"(1) all or any portion of Federal royalty oil be placed in storage in the Reserve,

"(2) all or any portion of Federal royalty oil be exchanged, directly or indirectly, for other crude oil for storage in the Reserve, or

"(3) all or any portion of the proceeds from the sales of Federal royalty oil be transferred to the account established under subsection (c) for use for the purchase of crude oil for the Reserve, as provided in subsection (c).

"(c)(1) Any proceeds-

"(A) from the sale of entitlements received by the Government under the amendment to the regulation made under subsection (a), and

"(B) to the extent provided in subsection (b), from the sale of Federal royalty oil,

shall be deposited in a special account which the Secretary of the Treasury shall establish on the books of the Treasury of the United States.

"(2)(A) Subject to the provisions of any Act enacted pursuant to section 660 of the Department of Energy Organization Act [42 U.S.C. 7270], such account shall be available (except as provided in subparagraph (B)) for use by the Secretary of Energy, without fiscal year limitation, for the purchase of crude oil for the Strategic Petroleum Reserve, to the extent provided in advance in appropriation Acts.

"(B) Amounts in such account attributable to the proceeds from the sale of entitlements under the amendment to the regulation under subsection (a) are hereby appropriated for fiscal year 1981 for acquisition of crude oil for the Strategic Petroleum Reserve pursuant to subsection (a).

"(d) For purposes of this section-

"(1) the terms 'entitlements', 'crude oil', and 'allocation' shall have the same meaning as those terms have as used in the Emergency Petroleum Allocation Act of 1973 [15 U.S.C. 751 et seq.] (and the regulation thereunder);

"(2) the term 'lower tier crude oil' means crude oil which is subject to the price ceiling established under section 212.73 of title 10, Code of Federal Regulations;

"(3) the term 'Federal royalty oil' means crude oil which the United States is entitled to receive in kind as royalties from production on Federal land (as such term is defined in section 3(10) of the Energy Policy and Conservation Act (42 U.S.C. 6202(10)); and

"(4) the term 'proceeds from the sale of Federal royalty oil' means that portion of the amounts deposited into the Treasury of the United States from the sale of Federal royalty oil which is not otherwise required to be disposed of (other than as miscellaneous receipts) pursuant to (A) the provisions of section 35 of the Act of February 25, 1920, as amended (41 Stat. 450; 30 U.S.C. 191), commonly known as the Mineral Lands Leasing Act, or (B) the provisions of any other law."

Rate of Fill of Strategic Petroleum Reserve

Pub. L. 96–514, title II, Dec. 12, 1980, 94 Stat. 2976 , provided in part: "That the President shall immediately seek to undertake, and thereafter continue, crude oil acquisition, transportation, and injection activities at a level sufficient to assure that crude oil storage in the Strategic Petroleum Reserve will be increased to an average annual rate of at least 300,000 barrels per day or a sustained average annual daily rate of fill which would fully utilize appropriated funds: Provided, That the requirements of the preceding provision shall be in addition to the provisions of title VIII of the Energy Security Act [title VIII of Pub. L. 96–294, which amended this section and section 7430 of Title 10, Armed Forces, and enacted provisions set out as a note above] and shall not affect such provisions of the Energy Security Act in any way."

Ex. Ord. No. 12231. Strategic Petroleum Reserve

Ex. Ord. No. 12231, Aug. 4, 1980, 45 F.R. 52139, provided:

By the authority vested in me as President of the United States of America by Title VIII of the Energy Security Act (Public Law 96–294) [title VIII of Pub. L. 96–294, which amended this section and section 7430 of Title 10, Armed Forces, and enacted provisions set out as a note above] and by Section 301 of Title 3 of the United States Code, and in order to meet the goals and requirements for the strategic petroleum reserve, it is hereby ordered as follows:

1–101. The functions vested in the President by Section 160(c) of the Energy Policy and Conservation Act, as amended, are delegated to the Secretary of Energy (42 U.S.C. 6240(c); see Section 801 of the Energy Security Act).

1–102. The functions vested in the President by Section 7430(k) of Title 10 of the United States Code are delegated to the Secretary of Energy (see Section 804(b) of the Energy Security Act).

1–103. The functions vested in the President by Section 805(a) of the Energy Security Act [section 805(a) of Pub. L. 96–294, set out as a note above] are, consistent with Section 2 of Executive Order No. 11790, as amended [set out as a note under section 761 of Title 15, Commerce and Trade], delegated to the Secretary of Energy.

Jimmy Carter.

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