The document is a memorandum analyzing Section 526 of the Energy Independence and Security Act of 2007, which requires that alternative fuels purchased by federal agencies have equal or lower lifecycle greenhouse gas emissions than conventional fuels. It discusses challenges in implementing the provision due to undefined terms, provides background on fuels and standards, and explains that conventional fuels today involve complex synthesis processes and that alternative fuels could eventually be defined as conventional. It concludes that Section 526 could be interpreted to either expand or restrict federal fuel acquisition depending on the definitions used.

1. From Chairman, House Committee on Oversight and Government Reform, to Secretary,1
Department of Defense, January 30, 2008.
Congressional Research Service Washington, D.C. 20540-7000
Memorandum April 30, 2008
TO: Permission to share this memorandum has been granted by the
original requesting member
FROM: Anthony Andrews
Specialist in Energy and Energy Infrastructure Policy
Resources, Science, and Industry Division
SUBJECT: Analysis of Section 526 of the 2007 Energy Policy Act
This memorandum responds to yourrequest foran analysis ofSection526ofthe Energy
Independence and Security Act of 2007 — P.L. 110-140 and a discussion of its possible
implications. The section is repeated below with several terms italicized that are discussed
this analysis.
Section 526 — Procurement and Acquisition of Alternative Fuels — provides that:
“No Federal agency shall enter into a contract for procurement of an alternative
or synthetic fuel, including a fuel produced from nonconventional petroleum
sources, for any mobility-related use, other than for research or testing, unless the
contract specifies that the lifecycle greenhouse gas emissions associated with the
production and combustion of the fuel supplied under the contract must, on an
ongoing basis, be less than or equal to such emissions from the equivalent
conventional fuel produced from conventional petroleum sources.”
House Committee Explanation of the Provision
InJanuary2008,theHouseCommittee onOversight andGovernment Reform requested
theDefenseDepartmenttoexplainhow it intended to complywith Section 526. The request1
noted that, with respect to coal-to-liquids fuels, the promise that a future means of avoiding
greenhouse gas (GHG) emissions would not be sufficient to meet the requirement of the
Section, and that actual fuel supplied to the government must not have greater GHG
emissions than equivalent conventional fuel. To help the Committee evaluate the Section’s
implementation, specific information was requested on active or potential projects to
purchasecoal-to-liquids,tar sand, andalternativeorsyntheticfuels;coordinatingefforts with

2. CRS-2
From Chairman, House Committee on Oversight and Government Reform ,to Chairman, Senate2
Committee on Energy and Natural Resources, March 17, 2008.
On January 18, 2007, the House passed the CLEAN Energy Act (H.R.6). The bill, crafted as part3
of the House Leadership’s “Hundred Hours Legislation,” was designed only to establish a reserve
to collect funds from repealed oil and gas subsidies that could be used to support new incentives for
energy efficiency and renewable energy. On June 21, 2007, the Senate adopted an amendment in the
nature of a substitute to H.R. 6 (S.Amdt. 1502) which transformed H.R. 6 into an omnibus energy
policy bill — Renewable Fuels, Consumer Protection, and Energy Efficiency Act of 2007. The
Senate substitute was derived primarily from S. 1419 (of the same title), which, in turn, was
composed from four major bills: the Energy Savings Act (S. 1321), the Public Buildings Cost
Reduction Act (S. 992), the Ten-in-Ten Fuel Economy Act (S. 357), and the Energy Diplomacy and
Security Act (S.193). On August 4, 2007, the House passed an omnibus energy policy bill, H.R.
3221, which had two divisions and 13 titles. Because the House omnibus bill (H.R. 3221) and the
Senate omnibus bill (H.R.6) had different bill numbers, the bills could not be taken directly to
conference committee.However, after theHouse completedactiononH.R.3221,informal bipartisan
negotiations over the omnibus energy bills began between the House and Senate. On December 13,
2007, the Senate approved (86-8) a substituteamendment to the House-passedversion of H.R.6. The
resultant bill was subsequently approved by the House (314-100) and signed into law as P.L. 110-
140. For further information refer to CRS Report RL34294 Energy Independence and Security Act
of 2007: A Summary of Major Provisions.
the Environmental Protection Agency (EPA) and other federal agencies; efforts to develop
a methodology for calculating life-cycle GHG emissions; whether carbon capture and
sequestration will play a part in the project; and how fuel purchase contracts will be drafted
to exclude fuels derived from tar sands or other unconventional sources.
As later explained in another letter by the Chairman of the House Committee on
Oversight and Government Reform, the provision “ensures that federal agencies are not2
spending taxpayer dollars on new fuel sources that will exacerbate global warming. It was
included in the legislation in response to proposals under consideration by the Air Force to
develop coal-to-liquid fuels. . . . The provision is also applicable to fuels derived from tar
sands, which produce significantly higher greenhouse gas emissions than are produced by
comparable fuel from conventional petroleum sources.” As further explained, “Section 526
applies specificallyto contracts to purchase fuels, and it must be interpreted in a manner that
makes sense in light of federal contracting practices. . . . It was not intended to bar federal
agencies from entering into contracts to purchase fuels that are generally available in the
market, such as diesel or jet fuel, that may contain incidental amounts of fuel produced from
nonconventional petroleum sources.” Finally, accordingto theletter, thedetermination only
need be made that the specific GHG emission profile for a fuel type exceeds a comparable
conventional fuel; a precise estimate is not necessary. Thus, “there is no barrier to the
immediate implementation of Section 526 with respect to these fuels.”
Challenges for Implementation
The terms conventional fuel, alternative fuel, synthetic fuel, conventional petroleum
sources, and nonconventional petroleum sources are not defined by the Act and the Section.
No explanatory statement referenced the provision nor did a Committee report accompany
H.R. 6. When the meaning of specific statutory language is at issue and the word or phrase3
is defined in the statute (federal statutes frequently collect definitions in a “definitions”
section), or elsewhere in the United States Code, then that definition governs if applicable
in the context used. Even if the word or phrase is not defined by statute, it may have an

3. CRS-3
ASTM International —Standards Worldwide. [http://69.7.224.88/viewnews.aspx?newsID=1037]4
accepted meaning in the area of law addressed by the statute, it may have been borrowed
from another statute under which it had an accepted meaning, or it mayhave had an accepted
and specialized meaning at common law. In each of these situations the accepted meaning
governs and the word or phrase is considered a technical term or “term of art.” (For further
information on this subject refer to CRS Report 97-589, Statutory Interpretations: General
Principles and Recent Trends.)
Background on Fuel and Petroleum
In this case, the terms in various contexts and to varying degree have been defined by
the petroleum industry, federal agencies, and previous legislation (as discussed below).
Consequently, the section’s language could conceivably be interpreted to either expand or
further restrict federal acquisition of fuel. Conventional fuels are already, to a large degree,
synthesized by modern refining processes. Due to declining production, many petroleum
reservoirs in the United States and abroad employ energy intensive enhanced oil recovery
technologies (EOR — also termed secondaryand tertiaryrecovery) which maybe associated
with increased greenhouse gases that may not be fully accounted for in a life-cycle analysis.
2Conversely,otherEORtechnologies injectcarbon-dioxide(CO ),andthusmightbecredited
with reducing GHG emissions.
Conventional Fuel. Crude oil is a complex blend of molecular weight hydrocarbon
molecules, the light end ranging from methane and butane, to heavier gasoline, naphtha, and
kerosene, and even heavier asphaltenes. Late 19 and early 20 Century refining processesth th
employed simple atmospheric distillation to separate the natural gasoline and kerosene
fractions from crude oil by their boiling ranges. The introduction of catalytic and
hydrocrackingprocessledtoimprovedgasolinewithhigheroctanerating. Modernrefineries
employ a complex series of processing steps that break down heavier weight hydrocarbons,
add hydrogen, strip away sulfur, and reform the molecules into the ideal shapes (isomers).
Overall, modern refining is a complex synthesis process employed to meet evolving
regulatory requirements for modern fuels.
The American Society for Testing and Materials (ASTM) has developed generally
recognized standards for motor and aviation fuels, as well as standards that guide research,
testing, and production of alternative energysources. ASTM Committee D02 on Petroleum4
Products and Lubricants, a committee of over 1,500 members from 52 countries, has
developed over 650 fuel-related standards, including several specifications that address
alternative fuels such as biodiesel and ethanol, and coal-based Fischer-Tropsch fuel.
To support the production of biodiesel, Committee D02 developed ASTM D 6751,
Standard Specification for Biodiesel Fuel Blend Stock (B100) for Middle Distillate Fuels,
a quality standard for pure biodiesel before it is blended with diesel fuel. D 6751 provides
an industry consensus standard that assists suppliers in registering their products with the
EPA, and is intended to ensure proper performance for users.
In the area of ethanol, ASTM D 5798, Standard Specification for Fuel Ethanol (Ed75-
Ed85)forAutomotiveSpark-IgnitionEngines,isthekeyspecificationusedintheproduction
of E85 fuel for flexible fuel ground vehicleswith automotive spark-ignition engines. ASTM
D4814, Standard Specification for Automotive Spark-Ignition Engine Fuel, is the

4. CRS-4
Space Daily, Sasol Synthetic Fuel Wins Approval for Commercial Aviation Use. April 10, 2008.5
specification for automotive gasoline and its blends with up to 10% ethanol. ASTM D 4806,
Standard Specification for Denatured Fuel Ethanol for Blending with Gasolines for Use as
Automotive Spark-Ignition Engine Fuel, is the specification for the ethanol intended to be
blended with gasoline at 1-10 % by volume.
ASTM Committee D02.E0.02 on Diesel Fuel Oils is developing a new specification
(WK14609LowTemperatureFischer-TropschDerivedDieselFuelOils)forsyntheticdiesel
fuel oils derived from the Low Temperature Fischer-Tropsch process. This specification is
intendedtoensurethat purchasersareobtaininga syntheticdieselfuelofhighquality.ASTM
International Aviation Fuels Subcommittee D02.J, part of ASTM International Committee
D02 on Petroleum Products and Lubricants, will meet in June 2008 on recent proposals for
aviation fuels from Fischer-Tropsch methods and biomass conversion methods.
ASTM International has been working closely with the United Kingdom’s Ministry of
Defence and is expected to include Sasol CTL synthetic jet fuel in its ASTM D1655
specification following the publication of the UK’s DEFSTAN 91-91. Jet A-1 according to
the DEF STAN 91-91 specification is very similar to Jet A-1 defined by ASTM D1655
except for a small number of areas where DEF STAN 91-91 is more stringent.5
The Air Force recently certified jet fuel produced by the Fischer-Tropsch for use in
several aircraft. However, the primary federal agency responsible for procuring defense and
federal fuels — the Defense Energy Support Center (DESC) — has not adopted standards
for this fuel. Consequently, DESC is not prepared to procure such fuels in the near term.
Any fuel, whether derived from petroleum, coal, or oil shale must meet the generally
accepted standards (hence convention) adopted for its use, and future legislation may be
introduced to enforce the convention by regulation. Thus, even “alternative fuels” might
eventually be defined as conventional fuel.
Alternative Fuel. The Energy Policy Act of 1992 (P.L. 102-486) established
National Energy Policy Goals Towards Energy Security with provisions on Energy
Conservation, Environmental Preservation, Petroleum Fuel Consumption, and Alternative
Fuel Usage. The act established statutoryrequirements for the acquisition of alternative fuel
vehicles (AFVs) by federal agencies. After FY2000, 75% of light-duty vehicle (LDV —
vehicles weighing less than 8,500 lb gross vehicle weight) acquired in covered fleets must
be AFVs.
As defined by the Energy Policy Act of 2005 (P.L.109-58) under Subtitles C and D, the
term “alternative fuel” means: (a) liquefied natural gas, compressed natural gas, liquefied
petroleum gas, hydrogen, or propane; (b) methanol or ethanol at no less than 85 percent by
volume; or (c) biodiesel conforming with standards published by the American Society for
Testing and Materials as of the date of enactment of the Act.
Renewable Fuels Mandate . The Renewable Fuel Standard was established by the
Energy Policy Act of 2005 with a national mandate for using more than 7.5 billion gallons
of ethanol and biodiesel by 2012. Later, President Bush issued an executive order directing
that at least half of the statutorily required renewable energy consumed by each federal

5. CRS-5
The White House, President George W. Bush, Executive order: Strengthening Federal6
Environmental, Energy, and Transportation Management, January 24, 2007.
Defense Energy Support Center, Fact Book, FY 2007.7
[http://www.desc.dla.mil/DCM/DCMPage.asp?PageID=721]
agency in a fiscal year come from new renewable sources. Under Section 201 (Renewable6
Fuel Standard) of the 2007EnergyIndependenceAct, gasoline sold in the United States must
contain an increasing volume of renewable fuel — the applicable volume for 2008 is set at
9.0 billion gallons, and under Sec. 246 the head of each federal agency is directed to install
at least one renewable fuel pump at each federal fleet refueling center by January 1, 2010.
The Defense Energy Support Center reported sales of 2.142 million gallons of gasohol to
federal clients in FY2007.7
Synthetic Fuel. During World War II, Congress’s concern for conserving and
increasing the nation’s oil resources prompted passage of the Synthetic Liquid Fuels Act of
1944 (30 U.S.C. Secs. 321 to 325), which authorized funds for the Interior Department’s
Bureau of Mines to construct and operate demonstration plants to produce synthetic liquid
fuel from oil shales, among other substances. The Interior Department Appropriations Act
of 1980 (P.L. 96-126) and the Supplemental Appropriations Act of 1980 (P.L. 96-304)
appropriated $17.522 billion to the Energy Security Reserve fund in the Treasury for the
EnergyDepartment’ssyntheticfuelsprojects. TheUnitedStatesSyntheticFuelsCorporation
Act of 1980 (P.L. 96-294) established the United States Synthetic Fuels Corporation (SFC)
withtheauthoritytoprovidefinancial assistancetoqualifiedprojects that produced synthetic
fuel from coal, oil shale, tar sands, and heavy oils. Congress terminated the SFC under the
Consolidated Omnibus Reconciliation Act of 1985 (P.L. 99-272).
The coal liquefaction technology investigated under the Synfuels program differed
substantiallyfromthecoal-to-liquidstechnologyutilizingFischer-Tropschtechnology. Coal
liquefaction is ideally suited to making gasoline, whereas oil shale retorting and Fischer-
Tropsch are ideally suited to making middle distillate fuels. Though considered a synthetic
fuel process,coal liquefactionemploys processes similar to those used in refiningpetroleum.
Modern refining, in turn, makes extensive use of catalytic processes, which are the core of
Fischer-Tropsch technology.
It might be argued then, that all “conventional fuels” produced today are “synthetic” to
varying degrees. For information on synthetic fuels refer to CRS report RL33359, Oil Shale:
History and Policy. For further information on Fischer-Tropsch technology refer to CRS
report RL34133, Fischer-Tropsch Fuels from Coal, Natural Gas and Biomass; Background
and Policy.
Conventional Petroleum Sources. The terminology used in the classification of
petroleum reserves and resources has been the subject of study and ongoing revision. The
Society of Petroleum Engineers (SPE) and the World Petroleum Council (WPC, formerly
World Petroleum Congresses) developed a set of petroleum reserves definitions which were
presented to the industry in March 1997. The U.S. Geological Survey has adopted its own
terminology for describing petroleum resources.

6. CRS-6
Society of Petroleum Engineers, “Glossary of Terms Used in Petroleum Reserves/Resources8
Definitions.” [http://www.spe.org/spe-app/spe/industry/reserves/index.htm].
U.S. Geological Survey, Chapter GL Glossary in U.S. Geological Survey Digital Data Series 60.9
[http://energy.cr.usgs.gov/WEcont/chaps/GL.pdf]
The average lifting cost for the U.S. was $6.83/barrel in 2006 (an increase of 23% over the10
$5.56/barrel cost in 2005). EIA, Crude Oil Production [http://www.eia.doe.gov/neic/infosheets/
crudeproduction.html]
Electric Power Research Institute, Enhanced Oil Recovery Scoping Study (TR-113836) October11
1999.
EIA, Crude Oil Production. [http://www.eia.doe.gov/neic/infosheets/crudeproduction.html]12
The term “conventional petroleum source” is not defined in the SPE glossary.8
However, the term “conventional crude oil” is defined as: Petroleum found in liquid form,
flowing naturally or capable of being pumped and without further processing or dilution.
And “crude oil” is defined as the portion of petroleum that exists in the liquid phase in
natural underground reservoirs and remains liquid at atmospheric conditions of pressure
and temperature. Crude Oil may include small amounts of non-hydrocarbons produced with
the liquids. Crude Oil has a viscosity of less than or equal to 10,000 centipoises at original
reservoir temperature and atmospheric pressure, on a gas free basis.
Furthermore, SPE defines a “conventional deposit” as a discrete accumulation related
to a localized geological structural feature and/or stratigraphic condition, typically with
each accumulation bounded by a down-dip contact with an aquifer, and which is
significantly affected by hydrodynamic influences, such as the buoyancy of petroleum in
water. Primaryrecoveryofpetroleumfromreservoirs,fromSPE’sperspective, utilizes only
the natural energy(gas and water pressure) available in the reservoirs to move fluids through
the reservoir rock or other points of recovery.
TheU.S. Geological Survey(USGS) uses a similar definition: Adiscreteaccumulation,
commonly bounded by a downdip water contact, which is significantly affected by the
buoyancy of petroleum in water. This geologic definition does not involve factors such as
water depth, regulatory status, or engineering techniques.9
Enhanced Oil Recovery. After a petroleum reservoir loses its natural drive, from
exhausting either its water drive or gas pressure, EOR is often employed to extend the
reservoir’s production life. Typical applications include waterflooding, steam injection
2(thermal), and gas injection (CO , nitrogen, and natural gas) in addition to artificial lift
(pump jack) . Many depleted reservoirs in the United States remain marginally productive10
through artificial lift — these areoften referred to as stripper wells (producing between 5 and
15 barrels of oil per day). A decade ago, over 700,000 barrels per day was produced by
EOR, accounting then for 12% of the national crude oil production. Primary production11
methods now account for less than 40% of the oil produced on a daily basis, secondary
methods account for about half, and tertiary recovery the remaining 10%, according to the
Energy Information Administration.12
The Alaska North Slope, driven by Prudhoe Bay and Kuparuk oil fields, has comprised
up to 25% of U.S. domestic crude oil production and currently accounts for about 17% of

7. CRS-7
U.S. DOE, Al ask a N or th Slope Oil and Gas A Promising Future or an Area in Decline?13
(DOE/NETL-2007/1280), August 2007.
EIA, Crude Oil and Total Petroleum Imports Top 15 Countries. [http://www.eia.doe.gov/14
pub/oil_gas/petroleum/data_publications/company_level_imports/current/import.html]
U.S. DOE , Practical Experience Gained During the First Twenty Years of Operation of the Great15
Plains Gasification Plant and Implications for Future Projects, April 2006.
U.S. DOE, Coal Gasification Plant Returns $79 Million to DOE in Revenue-Sharing Gas Sales,16
M a y 1 2 , 2 0 0 6 . [ h t t p : / / w w w . f e . d o e . go v/ n e w s / t e c h l i n e s / 2 0 0 6 / 0 6 0 2 5 -
Dakota_Gasification_Revenue_Sharin.html]
USGS, Unconventional (Continuous) Petroleum Sources.17
[http://energy.cr.usgs.gov/oilgas/addoilgas/unconventional.html]
U.S. domestic production. The current production rate is less than 900,000 barrels of oil per13
day (BOPD) or about 45% of the peak production levels of the late 1980s. Natural gas
injection and waterflooding is seen as a means of enhancing recovery from what are
described as huge viscous, heavyoil resource overlying the Prudhoe Bayand Kuparuk River
fields.
By comparison, Saudi Arabia’s Ghawar Field, which produces more than 5 million
barrels per day (nearly 6% of world production), depends upon extensive waterflooding to
maintain output. Overall, Saudi Arabia supplied an average 1.4 million barrels per dayto the
United States, second only to Canada’s 1.85 million.14
2While petroleum producers have been separating associated gas and CO for EOR
reinjection, the Dakota Gasification Company’s Great Plains Synfuels Plant (GPSP) in
2Beulah, North Dakota, is the first energy facility to capture CO from a coal process and sell
it for EOR. The plant has operated successfullyfor 20 years as the onlycommercial coal-to-15
natural gas facility in the United States. It consumes 18,000 tons per day of lignite coal and
2delivers captured CO through a 205-mile pipeline to a mature oil field in Saskatchewan,
2Canada. More than 5 million tons of CO have been sequestered to date, while doubling the
oil recovery rate of the oil field. The plant was purchased from DOE in 1988 following a
default on $1.5 billion in DOE-guaranteed loans. The current owners paid $79 million to
DOE in 2006 as part of a revenue sharing agreement. As the third such payment from16
Dakota, the revenue share to DOE from gas sales totals more than $241 million to date.
Underabroadinterpretation ofSection526, some mightargueforrestrictingthefederal
acquisition of petroleum products derived by EOR when the energy intensive recovery
methods exceed the life-cycle GHG emissions of petroleum produced by natural drive.
Non-Conventional Petroleum Sources. The term “non-conventional petroleum
sources” is not defined by API or USGS. However, the API glossary defines “non-
conventional gas” as natural gas found in a natural reservoir that does not contain crude oil.
USGS refers to the increasing importance of “unconventional” resources; which are17
described as:
! the oil and natural gas resources that exist in geographically extensive
accumulations.

8. CRS-8
USGS, National Assessment of Oil and Gas Fact Sheet, Assessment of Undiscovered Oil18
Resources in the Devonian-Mississippian Bakken Formation, Williston Basin Province, Montana
and North Dakota, 2008.
EIA, Office of Oil and gas, Reserves Production Division, Technology-based Oil and Natural Gas19
Plays: Shale Shock! Could There Be Billions in the Bakken? November 2006.
BLM, Draft Oil Shale and Tar Sands Resource Management Plan Amendments to Address Land20
Use Allocations in Colorado, Utah, and Wyoming and Programmatic Environmental Impact
Statement, December 2007.
Michael Wilson, Embassy of Canada, to Robert Gates, Department of Defense, Letter of February21
22, 2008.
! thedepositsgenerallylackwell-definedoil/waterandgas/watercontactsand
include coalbed methane, some tight sandstone reservoirs, chalks, and auto-
sourced oil and gas in shale accumulations.
General categories of unconventional petroleum include: deep gas, shallow biogenic gas,
heavyoil/natural bitumen,shalegas andoil,gas hydrates,andcoalbedmethane. Presumably,
Canada’s extensive oil sand resources fall under the USGS unconventional category. For
further information on tar sands refer to CRS Report RL34258, North American Oil Sands:
History of Development, Prospects for the Future.
The Bakken Formation of the Williston Basin, covering Montana and North Dakota, is
estimated to contain 3.65 billion barrels of oil. Discovered in 2000 and now grown to 52918
square miles, the Elm Coulee Field of the Bakken produced 15 million barrels of oil in 2005
and accounted for almost 50,000 barrels of oil per day, about half of Montana’s crude oil
production at the time. By comparison, the U.S. Geological Survey estimated the Arctic19
National Wildlife Refuge Coastal Plain could contain up to 17 billion barrels of oil.
However, the Bakken resources are defined by the USGS as unconventional “continuous-
type” oil resources. This means the hydrocarbons within the Bakken have not accumulated
into discrete reservoirs of limited areal extent.
Oil shale is prevalent in the western states of Colorado, Utah, and Wyoming
representing a resource potential of 1.8 trillion barrels of oil in place. In the early 20th
century, three oil shale reserves were set aside on federal lands out of concern for the Navy’s
petroleum supply. Naval Oil Shale Reserves (NOSRs) Nos. 1 (36,406 acres) and 3 (20,171
acres) are located 8 miles west of Rifle, Colorado, in Garfield County. Reserve No. 2
(88,890 acres) in Carbon and Uintah Counties, Utah, has been transferred to the Ute Indian
Tribe. The most promising oil shale resources occur in the Green River formation that
underlies 16,000 square miles of northwestern Colorado, northeastern Utah, and
southwestern Wyoming. Approximately 72% of the land overlying the Green River
Formation is federally held. Though no commercial production currently takes place, the
Bureau of Land Management (BLM) has completed a draft programmatic environmental
impact statementwhichexaminesalternatives formakingBLM-administered lands available
for applications for future commercial leasing .20
In 2006, Canada supplied the United States with nearly 1 million barrels per day of
crude oil derived from oil sands, representing roughly5% of the U.S. supply. With planned21
investments, Canada’s oil sands production is expected to grow from its current 1.4 million

9. CRS-9
U.S. EPA,Greenhouse GasImpacts of Expanded Renewable and Alternative Fuels Use (EPA420-22
F-035), April 2007.
Use of U.S. Croplands for Biofuels Increases Greenhouse Gases Through Emissions from Land-23
Use Change, Timothy Searchinger (Woodrow Wilson School, Princeton), et al. Science 319, 1238
(February 29, 2008).
barrels per day to 3 million barrels per day by 2015. Most of the new production is destined
for the United States.
Some could argue that as a “non-conventional source,” fuels derived from Bakken
formation should be excluded from federal procurement under Section 526, as should oil
shale derived fuels (which would generate federal revenues from commercial consumption).
Life-Cycle Greenhouse Gas Emissions. Section 526 restricts federal
procurement of alternative or synthetic fuels that exceed the life-cycle greenhouse gas
emissions generated by refining and consuming of conventional petroleum-based fuels
(primarily gasoline). In general, life-cycle analysis is an approach for qualifying and
quantifying the environmental impacts of all processes used in the conversion of raw
materials into a final product. It may also be referred to as “well-to-wheel” analysis when
examining fuel production and utilization. To fully evaluate energyand emission impacts of
advanced vehicle technologies and new transportation fuels, the fuel cycle from wells to
wheels, and the vehicle cycle through material recovery and vehicle disposal need to be
considered,ArgonneNational Laboratory developed the GREET model (Greenhousegases,
Regulated Emissions, and Energy use in Transportation). In particular, the GREET model
provides a commonly used life-cycle analysis of GHG emissions from the different stages
of biofuel and gasoline production.22
Argonne’s studiesof substitutingbiofuelsforgasolinefoundreducedgreenhousegases
because biofuel feedstocks sequester carbon. Based on Argonne’s studyof comparing fuels
on an energy equivalent basis for every BTU of gasoline replaced by corn ethanol, the total
life-cycle GHG emissions that would have been produced from that BTU of gasoline would
2be reduced by 21.8%. These emissions account not only for CO , but also methane and
nitrous oxide. Results of the GREET Model are shown in Figure 1.
The model assumes that corn ethanol representscurrent andfutureproduction primarily
through the dry mill process using natural gas as the primary fuel source. By comparison,
coal-to-liquids (Fischer-Tropsch) with carbon capture and sequestration would contribute
a 3.7% increase in GHG emissions, and 118.5% without capture and sequestration.
GREET assumes carbon sequestration credits for land devoted to growing biofuel
feedstock. By excluding emissions from land-use change, most previous accountings were
one-sided, critics charge. The carbon benefits of using land for biofuels were counted but23
notthecarboncosts— thecarbonstorageand sequestration sacrificedbydivertinglandfrom
its existing uses. The net impact on the carbon benefit of land must be properly accounted
for, not merely counting the gross benefit of using land for biofuels. The carbon generated
on land to displace fossil fuels (the carbon uptake credit) must exceed the carbon storage and
sequestration given up directlyor indirectly bychanging land uses (the emissions from land-
use change) to generate greenhouse benefits.

10. CRS-10
Mark Schipper, U.S. DOE EIA, Energy-Related Carbon Dioxide Emissions in U.S.24
Manufacturing (DOE/EIA-0573), 2005.
Figure 1. Argonne National Laboratory GREET Model
Criticism of GREET. Authors of the studycritical of GREET found that “Over a 30-
yearperiod, countinglandusechange, GHGemissionsfrom corn ethanol nearlydoublethose
from gasoline for each km driven. . . even if corn ethanol caused no emissions except those
from land use change, overall GHGs would still increase over a 30-year period.” An
allocation of total emissions for all converted land by emissions per megajoule of fuel
factored into the GREET model is presented in Table 2. As shown in the table, land use
change factored into corn ethanol production has been estimated to result in a 93% net gain
in GHG emissions over gasoline production.
In light of the authors findings on the life-cycle GHG emission attributed to increased
production of renewable fuels, some may argue that a broad interpretation of Section 526
would restrict federal procurement of such fuel.
CO2 Emissions from Petroleum Production and Refining. In 2005, U.S.
2refineries emitted 306.11 million U.S. tons of CO to produce 5,686 million barrels of
2petroleum products — or approximately 0.05 tons CO per barrel refined. However, from24
2a life-cycle perspective, these emissions do not account for the CO emitted by expending
This chart represents best available information about current or projected production
practices and the impact of those practices on lifecycle greenhouse gas emissions. The
numbers presented for renewable fuels were used in the analysis of the Agency’s
Renewable Fuel Standard rulemaking. EPA along with other Federal agencies and
stakeholders are committed to continuing to improve lifecycle analysis techniques.

11. CRS-11
Yeld, John, Cape Argus (Cape Town), South Africa: Sasol Plant Named as Top Culprit25
in Emissions [http://allafrica.com/stories/200708080651.html]
fossil energy for drilling, lifting (production), and transporting crude oil by tanker ship and
pipeline. In the past, poor reservoir management practices contributed to early decline in
reservoir production when the associated natural gas was vented and flared (burned) to the
atmosphere. This was a common practice when the natural gas had little market value.
2The largest single global source of CO is considered to be the Sasol CTL plant, which
emits approximately0.48 U.S. tons per barrel of product (1 metric ton product = 7 barrels).25
This would not include mining related emissions.
Table 2. Total Emissions for All Converted Land Factored into the Greet Model
(Grams CO2 per Megajoule* energy in Fuel)
Source of
Fuel
Making
feedstock
Refinin
g
Fuel
Vehicle
Operation
Net land-use effects
Total
GHGs
%Change
in
net GHGS
versus
gasoline
Feedstock
carbon
uptake
from
atmospher
e
(GREET)
Land-
use
change
Gasoline +4 +15 +72 0 — +92 —
+74 -20%
Corn
ethanol
(Greet)
+24 +40 +71 -62 —
+135
without
feedstock
credit
+47%
without
feedstock
credit
Corn
ethanol
plus land
use
change +24 +40 +71 -62 +104 +177 +93%
Biomass
ethanol
(GREET) +10 +9 +71 -62 — +27 -70%
Biomass
ethanol
plus land
use
change +10 +9 +71 -62 +111 +138 +50%
Comparison of corn ethanol and gasoline greenhouse gases with and without land-use change by
stage of production and use (grams of GHGs CO2 equivalents per MJ of energy in fuel). Figures
in total column may not sum perfectly because of rounding in each row. Land-use change was
amortized over 30 years. Dash entries indicate “not included.”
*1 megajoule = 948 British Thermal Units (BTU)
Source: Searchinger, et al. Science 219, 1238 (2008)

12. CRS-12
Reuters, Table-U.S. refinery expansion plans (ConocoPhillips), March 12, 2008.26
[http://uk.reuters.com/articlePrint?articleId=UKN1258015020080312]
In Conclusion
In addition to an analysis and discussion of possible implications, you had also asked
about potential Congressional response to issues that might be associated with Section 526.
The provision’s intent as described in the Oversight Committee letter is to forestall the
Air Force’s initiative to attract private sector development of a coal-based Fisher-Tropsch
plant for supplying jet fuel. A comprehensive analysis of the economic viability of Fischer-
Tropsch technology is outside the scope of this memorandum. There are arguments that
federal tax incentives and loan subsidies are needed to stimulate Fischer-Tropsch coal based
fuel production. The only successful venture to date, Sasol, was chartered by South Africa’s
government and then benefitted from price subsidies and import tariffs until crude oil
reached a floor price of about $45 per barrel. With crude oil now hovering near $120 per
barrel, and refined diesel exceeding $4 per gallon, others may argue, there is incentive
enough to stimulate private sector investment in such an enterprise. Furthermore U.S.
middle distillate supply is currently supplemented by up to 400,000 barrels per day in
imported products (the Defense Department’s approximate daily consumption). The recent
diesel price spike and the import demand has not gone unnoticed by the refining industry,
and several refiners are planning to increase diesel refining capacity. As diesel fuel26
specifications are less demanding than jet fuel (especially military specification), refiners
may be more inclined to shift to diesel production over jet fuel. With the imposition of new
regulations for ultra-low sulfur diesel (ULSD), Fischer-Tropsch coal-to-liquids offers the
inherentadvantageofproducingzero-sulfurfuel.Thedownsidetothisisthatrefinersalready
appear less responsive to DESC solicitations for jet fuel contracts.
As discussed above, undefinedtermsofreferencecanhavetheunintended consequence
of diluting legislative intent. Apart from explicit definitions, Congress may opt to consider
defining a set GHG emission limit that any federally procured fuel must not exceed. The
underlying issues, however, are the availability of sources, natural resources, and the
increasing cost of meeting defense energyneeds and therefore national securityneeds. Thus,
Congress may be called upon to review Section 369 of EPAct 2005 directing the Secretary
of Defense to develop a strategy to use fuel produced, in whole or in part, from coal, oil
shale, and tar sands to assist in meeting the fuel requirements of the Defense Department
while not exceeding set GHG emissions..
If you have any questions, or require further assistance on this issue, please contact me
at 7-6843.