[Congressional Record Volume 145, Number 150 (Friday, October 29, 1999)]
[Senate]
[Pages S13526-S13529]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                    ENERGY SECURITY TAX ACT OF 1999

  Mr. DASCHLE. Mr. President, for the last 2 years I have been working 
closely with a number of my colleagues to develop a package of tax 
incentives to foster domestic energy alternatives and thus help reduce 
our growing dependence on imported oil. Along with those colleagues, I 
am pleased today to introduce the Energy Security Tax Act of 1999, and 
I am hopeful that Congress will enact this legislation in the near 
future.
  Despite periodic efforts by Congress to address this problem, since 
the oil price shocks of the 1970s, we have seen our dependence on 
foreign oil continue to grow. Today, our Nation's energy supply is more 
vulnerable than ever to events taking place in countries far from our 
shores. Solving this problem will require the collective efforts of all 
our Nation's energy producers.
  The legislation we have developed is correspondingly ambitious in its 
scope.

[[Page S13527]]

It encompasses a broad range of technologies, representing the diverse 
regions and resources of the country. Farmers will benefit from the 
provisions modifying the existing tax incentive for small ethanol 
producers, so that farmer-owned cooperatives can utilize it, and by the 
establishment of tax credits for efficient irrigation equipment, 
conservation tillage expenses, and anaerobic digesters that convert 
manure and crop waste into useful gas. The legislation will encourage 
the development of biomass-based electric power industries, which will 
provide a market for wide range of biomass, including switchgrass, 
crops and crop residues, and wood waste.
  We are proposing to extend the wind energy tax credit, so that we can 
more fully develop the wind power potential of States from California 
to the Dakotas to New England. Coal miners from West Virginia to 
Montana will benefit as a result of the tax incentives for repowering 
or replacing older coal-fired power plants with more efficient 
technology. Steelmakers will become more competitive through the use of 
tax incentives for more energy-efficient processes and for the 
production of energy from cogeneration. Hawaiian ethanol producers will 
be encouraged to utilize bagasse--a sugar cane residue--thereby 
converting a potential waste into a useful fuel.
  Oil and gas producers in States like New Mexico, Texas, and Oklahoma 
will benefit from incentives for greater domestic production. Business 
owners will be able to use the new incentives to make investments in 
energy-efficient property, thereby reducing energy costs and improving 
competitiveness. Homeowners throughout the country will benefit from 
new incentives designed to encourage the installation of renewable and 
more efficient energy technologies, and by the construction of energy-
efficient homes. Americans from all parts of the nation will be 
encouraged to use environmentally friendly electric and hybrid 
vehicles.
  There is an old saying: The time to fix the roof is when the sun is 
shining. While we are fortunate now to have adequate supplies of oil, 
our dependence on foreign nations continues to grow. It is incumbent on 
U.S. policymakers today to recognize the risks associated with this 
trend and to prepare the nation for a more secure future. As part of 
that effort, we should take the first opportunity that presents itself 
to enact the tax policies necessary to encourage the development of a 
more diverse and robust domestic energy portfolio, one that will reduce 
our vulnerability to future oil price shocks and supply shortages. This 
effort not only will result in greater energy security, it will reduce 
our balance-of-trade deficit, create domestic jobs, improve air 
quality, and help limit the emission of greenhouse gases.
  I hope that all of my colleagues will consider cosponsoring this 
important legislation and will support its timely enactment.
  Mr. BYRD. Mr. President, I join with the distinguished Democratic 
leader and other colleagues in cosponsoring the Energy Security Tax Act 
of 1999.
  I thank Senator Daschle for his leadership in crafting this targeted 
tax proposal that offers incentives for the more efficient use of a 
broad range of energy sources vital to the American economy. This 
targeted proposal has a multiplicity of economic and environmental 
benefits.
  I have long been an advocate of programs that encourage the more 
efficient use of energy. This proposal does exactly that. The United 
States is a highly energy-intensive nation, and it depends heavily on 
energy for manufacturing, communications, transportation, and many 
other purposes. While the United States is currently enjoying the 
benefits of an expanding economy, that economy demands even more 
energy. The United States has already invested heavily in the research 
and development of many innovative clean and efficient technologies 
that will allow our Nation to help meet these demands, and we must 
continue exploring these opportunities.
  This bill provides key incentives to demonstrate and to deploy these 
technologies, including clean coal technologies, a program that I have 
long supported. Now that we are at the threshold of a new millennium 
that begins the year after next--not next year; next year completes the 
current second millennium. Next year completes the 20th century. It is 
not the beginning of the 21st. So much for that.
  Now that we are at the threshold, just a little over a year away, of 
a new millennium, Congress can and Congress should help to prepare a 
pathway for the new era of energy and resource use. New technologies 
should be part of that path. For example, with the use of clean coal 
technologies, it remains economically feasible to produce electricity 
in coal-fired powerplants while also improving environmental quality.
  By demonstrating and deploying these technologies, coal continues to 
be a viable ``cleaner and greener'' fuel for power generation. Clean 
coal technologies are American-made technologies that provide a variety 
of positive benefits for the U.S. as well as other developing nations 
with large coal reserves.
  Coal currently provides the energy to generate more than fifty 
percent of the electricity consumed in the U.S. The Energy Information 
Administration, an arm of the Department of Energy (DOE), projects that 
coal will continue to provide our nation with the energy needed to 
generate more than one-half of its electricity needs in 2020. Equally 
as important, the International Energy Agency has projected that coal 
will provide forty-six percent of the world's electricity in 2020. 
Significant growth in coal use to generate electricity is expected to 
take place in developing countries like China and India. The challenge 
associated with the continued use of coal, the nation's most cost 
competitive and abundant energy resource, is to preserve our nation's 
energy security while also meeting important environmental goals. There 
has to be a balance. Also, the opportunity exists to use better, more 
advanced technologies in those developing countries that will 
experience increases in the use of coal.
  The current Clean Coal Technology Program has demonstrated a number 
of first-of-a-kind technologies that increase efficiency and reduce 
greenhouse gases and other emissions from coal combustion. As a result, 
a number of emerging clean coal technologies are ready to be deployed 
commercially. However, full commercial penetration first requires 
constructing and operating several early commercial-scale applications. 
In order to install these early commercial applications, all 
stakeholders including the designer, manufacturer, financier, and owner 
will have to face both the technological and economic risk associated 
with the ``not yet fully commercial'' technology.
  Development of these early commercial clean coal technology 
applications will require a new program of limited tax and financial 
incentives to overcome the associated technological and economic risks 
that will complement continued research and development (R&D) funding. 
The required R&D funding has come under the DOE's Fossil Energy 
Program. The associated tax and financial incentives program proposed 
here would be limited in scope and timing and the proposed technologies 
would be required to meet ever-increasing performance levels to qualify 
for the tax incentives. The U.S. tax code would be amended to provide 
for: (1) a ten percent investment tax credit; and (2) a production tax 
credit. In addition, annual appropriations would be provided for a risk 
pool to offset costs, if any, for modifications resulting from the 
technology's need to reassess its design performance during start-up 
and initial operation.
  Mr. President, another section of this bill provides tax incentives 
to encourage newer, more innovative steelmaking technologies. Although 
threatened by a flood of cheap, even illegal, foreign steel imports, 
the U.S. steel industry still employs some 160,000 workers and forms an 
important element in overall U.S. industrial strength. It is in the 
U.S. national and security interests, I believe, to ensure that U.S. 
steelmakers have the ability and encouragement to remain energy 
efficient, environmentally sound, and economically healthy.
  By continuing to make investments in the steel industry through tax 
incentives, we will be helping to preserve high-paying manufacturing 
jobs in the United States. Of course the obvious other benefit is its 
effect on our environment and the preservation of our

[[Page S13528]]

natural resources. The steelmaking provisions would provide incentives 
for investment in cutting-edge steelmaking technologies and allow the 
steel industry to work with other sectors in the production of more 
efficient energy through co-generation.
  In conclusion, I strongly support this targeted tax incentive 
package. This legislation embraces the belief that the U.S. is a leader 
in developing energy efficient technologies as well as stressing the 
importance of fuel diversity. I support the adoption of these tax 
incentives, which demonstrate that economic growth and environmental 
protection can go hand-in-hand.
  Again, I thank the distinguished Democratic leader.
  Mr. REID. May I ask the Senator a question?
  Mr. BYRD. Yes.
  Mr. REID. Is the Senator aware that about 12 or 15 miles outside 
Reno, NV, the newest generation facility in Nevada is clean coal 
technology?
  Mr. BYRD. Well, I am certainly aware of it now. I am heartened by 
this information.
  Mr. REID. The only reason I mention that to the Senator from West 
Virginia is that these things actually happen. Clean coal technology 
actually exists, and it exists in a place such as Nevada.
  Mr. BYRD. Yes. I thank the distinguished Senator. I am proud to say I 
have been fighting this fight for clean coal technology now for years. 
I was in the position to do it during the time I was the Senate 
Democratic leader. It may have been back when I was the whip. I was 
able to put money in appropriations bills for clean coal technology. I 
also thank the distinguished Democratic leader for his kindness and 
courtesy in allowing me to introduce this bill. I thank him for his 
drafting of the legislation, and I thank him for his leadership. I 
thank him for allowing me to be a cosponsor.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from South Dakota.
  Mr. DASCHLE. Mr. President, let me begin by complimenting the 
distinguished Senator from West Virginia for his eloquence and his 
statement and for his willingness to take the leadership and to provide 
his name on this legislation. I can think of no one I would rather have 
in support of legislation of this kind than the senior Senator from 
West Virginia.
  As has been noted, he is ``the'' leader, not just ``a'' leader, on 
coal and on clean coal technology. No one has committed more time, 
effort, and leadership to the issue than he has. So it was with that 
appreciation that I asked the distinguished Senator from West Virginia 
about his willingness to honor me as he did this afternoon.
  It troubles me, as I know it does him, that this country continues to 
depend on foreign sources for energy to a far greater degree than it is 
in our Nation's best interest. If we are ever going to deal with that 
real dilemma, it seems to me we have to continue to find ways in which 
to utilize more effectively our own resources. That has been the 
argument made so passionately and so ably by the Senator from West 
Virginia now for so long.
  This legislation would allow us to move closer to the goal that one 
day we can be more energy self-sufficient, and that we can do so with 
the recognition of the importance of the environment. It combines two 
national goals: a clean environment and energy independent. I am 
hopeful we can see careful consideration of this legislation, and other 
ideas that we offer in good faith with the expectation that the Senate 
recognize the importance of these goals and this contribution to those 
goals.
  Again, let me thank the distinguished Senator for his kindness, for 
his leadership, and for the commitment he has made with this 
legislation.
  I yield the floor.
  Mr. BYRD. Mr. President, will the distinguished minority leader 
yield?
  Mr. DASCHLE. I am happy to yield.
  Mr. BYRD. I thank the Senator.
  Clean coal technology also provides a very important key to the 
problem of global warming. I hope that we can interest other countries, 
such as China. China is in the process of constructing many new 
powerplants. They are new in the sense that they are newly constructed. 
But they are old in the sense that they use the old technology, if I 
may use that word. They depend on the burning of coal in ways that 
contribute to the deterioration of the environment.
  I hope these countries such as China and Brazil and India will join 
with the developed countries of the world in the attempt to do 
something about global warming.
  I have lived a long time--82 years, Saturday 3 weeks from tomorrow. 
And I have seen changes in climate. I don't know much about the science 
and global warming, but I know that I have seen changes in the climate. 
When I was a young man, when I was a man in my middle ages, I never saw 
storms of the frequency and the intensity, floods and droughts that we 
are seeing today, and seemingly increasingly. There is something going 
on out there.
  As I say, I am not a scientist. But there is something going on, and 
I am concerned about it. But whatever it is, whatever the part may be 
that it is manmade, can be limited considerably if the developing 
countries would utilize the technologies that our country through its 
research and demonstration projects, through the millions--yea, 
billions--of dollars that this country has spent on research, if those 
countries would utilize these technologies in the building of their 
powerplants, they would diminish the emissions of carbon dioxide and 
the other gases that I think are having some considerable impact upon 
climate worldwide.
  I congratulate the leader for this legislation. I hope that we can 
continue to do research on clean coal technology. I hope, as I say, 
when countries meet in various places, such as Bonn and Buenos Aires, 
to discuss global warming, that they will somehow be able to persuade 
the developing countries in the world to use our technology, because 
while we are plugging the holes in the front of the boat that we have 
helped to create through two world wars--by defeating Hitler, and the 
German Kaiser, and others in the interest of the freedoms that these 
developing countries enjoy to some extent--I hope that the developing 
countries would not be in the back of the boat drilling more holes, and 
thus increasing emissions which affect all of us. It is not a boat only 
part of which will sink. The entire boat will sink.

  We need the cooperation of the developing countries. We can help them 
through clean coal technology and other technologies.
  I thank the distinguished leader.
  Mr. DASCHLE. Mr. President, I thank the Senator from West Virginia 
for his very important additional comments.
  We talk a lot about globalization, a globalized economy. We have a 
globalized diplomatic infrastructure today due to the fact the cold war 
ended. We have had a globalized environment from the very first day of 
creation. A globalized environment means that what happens in China, 
what happens in Asia, what happens in Europe, or Africa, or Latin 
America, has an effect on what happens here, and vice versa.
  The Senator from West Virginia makes a very important point. If we 
are, indeed, globalized, then it seems to me that we ought to share our 
technology with those countries that may be contributing both favorably 
and unfavorably to that globalized environment. We ought to provide 
leadership. They ought to recognize the importance of involvement. He 
has made that point for some time. I have heard some of his excellent 
speeches to that effect on the Senate floor.
  Let us hope we can continue to make progress, and let us hope that 
maybe this legislation will help us do so even more successfully.
  Again, I yield the floor.
  The PRESIDING OFFICER (Mr. Bunning). The Senator from Illinois.
  Mr. DURBIN. Thank you, Mr. President.
  Let me join a chorus thanking Senator Byrd and Senator Daschle for 
their leadership. Illinois has a history of being a great coal-
producing State. Environmental standards have changed, and I hope we 
can find ways to develop technology so that this almost infinite energy 
resource can be tapped that now sits in the ground. Many unemployed 
coal miners drive over it every day asking policy leaders in Washington 
what they are doing. The legislation Senator Byrd is proposing is a 
step in the direction of finding new technology to use this domestic 
energy resource to create jobs in

[[Page S13529]]

America, to be responsible to the environment, and to lessen our 
dependence on foreign fuel.
  As always, I salute Senator Byrd for his leadership on this.
  Mr. DASCHLE. I yield the floor.
  Several Senators addressed the Chair.
  The PRESIDING OFFICER. The distinguished majority leader.
  Mr. LOTT. Will the Senator from Arkansas allow me to proceed briefly 
with a unanimous consent request?
  Mrs. LINCOLN. Certainly.

                          ____________________