[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.
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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
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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
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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.
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