[Congressional Record Volume 147, Number 81 (Tuesday, June 12, 2001)]
[House]
[Pages H3038-H3044]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
ADMINISTRATION'S ENERGY POLICY TO BENEFIT THE ENVIRONMENT AND
AGRICULTURE
The SPEAKER pro tempore (Mr. Grucci). Under the Speaker's announced
policy of January 3, 2001, the gentleman from Minnesota (Mr. Gutknecht)
is recognized for 60 minutes as the designee of the majority leader.
Mr. GUTKNECHT. Mr. Speaker, I am joined tonight by some of my
colleagues, and we are going to talk about what I think is a very happy
thing that happened today. It is a happy coincidence where good policy
comes together, when we are talking about energy policy, we are talking
about environmental policy, and ultimately also talking about what is
good for American agriculture. All three of those things came together
today when the White House announced that they are not going to give
California a waiver of the clean air standards in terms of oxygenated
fuel.
We have got a number of experts who are going to talk tonight. I know
some of my colleagues have other things that they need to be at and so
I want to first of all recognize the gentleman from Illinois (Mr.
Shimkus), who has been really one of the stalwart fighters in the
battle for oxygenated fuels, for biofuels, for making certain that
wherever possible we grow the energy that we need here in the United
States. I want to welcome him to the special order tonight. I know he
has got somewhere else that he needs to be tonight. I thank the
gentleman for joining us.
{time} 2000
Mr. SHIMKUS. Mr. Speaker, I thank the gentleman from Minnesota (Mr.
Gutknecht). We have folks from Minnesota, Nebraska, Iowa, and I am from
Illinois. It is a great day.
I will take kind of a different twist because many of the Members who
will come up to speak will be from their position on the Committee on
Agriculture or the Committee on Appropriations, and other committees
that have an important role. I serve on the Committee on Commerce, and
from that vantage point I have had an exciting time dealing with
biofuels issues across this Nation, not only ethanol but also
biodiesel.
The decision rendered by the EPA today on the California waiver
request was a major victory for a couple of reasons. One, it is just a
simple great victory for clean air. The Clean Air Act that was enacted
into law in 1992 has had a significant impact on cleaning our air
throughout this country. The greatest benefit is that 2 percent oxygen
requirement that in essence just helps the fuel burn with more
intensity and by burning with more intensity it then burns out the
impurities. So we have some benefits.
We have a reduction in carbon monoxide at the tailpipe. We also have,
in essence, a reduction in carbon dioxide because ethanol and the 2
percent quality is replacing petroleum-based fossil fuels, which is
decreasing the carbon dioxide. So we are having tremendous benefits.
Let us talk about it from just the overall energy issue. We have and
still have an increased reliance on foreign imported oil. It is very
critical to our national strategic energy policy to make sure that we
have the ability internally to produce the fuels that we need to create
the energy sources to help development in all aspects, and also to have
the fuel resources we need to go to war. If we continue to rely solely
on one fuel type, petroleum-based fuels, and not explore renewable
fuels, then we put ourselves at a disadvantage.
What this California waiver decision does is it establishes for the
capital markets and for all the co-ops and all the producers who have
been anxiously awaiting some certainty that ethanol is going to have a
role in our national energy policy, that there will be some certainty
in their investments.
California is a tremendous market, a market that has been primarily
filled, the oxygen portion, by MTBE. MTBE has been known to pollute
groundwaters and is now becoming the additive persona non grata. No one
wants to use it. Ethanol creates a win/win for us because it helps us
keep the clean air standards that were passed that have been so
successful while ensuring that we have clean water since ethanol does
not pollute the groundwater.
This will also translate into an increased demand for our producers,
certainty to the markets for the capital investments and as I have
talked to a lot of my producers and the folks in the agricultural
industry, the most important thing that this administration could have
done was to deny the California waiver, keep the clean air and push for
the continued use of the oxygenation standard and that oxygenation
standard being the use of ethanol. It is a tremendous victory. I
applaud the administration on keeping a proper balance with clean air
and clean water and also putting a hand out to our family farmers who
have for many, many years invested in a product that they know can meet
the demands of the future and have cleaner air.
This sends a strong signal to the agricultural sector that ethanol is
here to stay and now we can use this victory to leverage an increasing
biofuel usage across the board, maybe a renewable standard, also
working in the biodiesel aspect with the soy, soy diesel aspects that I
have worked through in other legislation.
I wanted to make sure that I had an opportunity to come on the floor
to reemphasize the importance of what the administration has done
today, and I thank the gentleman from Minnesota (Mr. Gutknecht) for
arranging this special order and yielding me the time.
Mr. GUTKNECHT. Well, I thank the gentleman from Illinois (Mr.
Shimkus) for his remarks. He has been afire on this issue in terms of
biofuels, and we worked with the gentleman on not only this but
ultimately moving forward with biodiesel, a product that can be made
with a blend of diesel fuel and soybean oil or other oils. Soybeans
seem to work the best. These are ways that we can help solve our energy
problems by growing more of that energy supply.
I want to just come back to one point that the gentleman made about
MTBEs. Now, we know that MTBEs cause cancer. We also know that it
leaches into the groundwater. The reason that ethanol is such a great
product in terms of replacing it really is twofold. First of all, we
know that ethanol is harmless to people. As a matter of fact, if one
puts it in an oak barrel for 7 years, many people enjoy it in the form
of bourbon, a modified version of whiskey. So it is something that
actually can be consumed by human beings, and it is consumed by human
beings.
More importantly, it is actually cheaper than the MTBE. Let me just
share some numbers that because ethanol contains twice as much oxygen
as MTBE, one only needs to blend half as much; in other words, 5.7
percent ethanol by volume compared to 11 percent MTBE. If one weighs
out the economics of it, this decision will allow California to replace
18 cents worth of MTBE with only 7 cents worth of ethanol. In other
words, consumers in California will actually save 11 cents a gallon
because of this decision.
It is good for the environment. It is good for our energy
independence. It is good for the farmer, but ultimately it is going to
be good for the consumer as well.
[[Page H3039]]
So I want to thank the gentleman from Illinois (Mr. Shimkus) for his
remarks. I appreciate him stopping by. I know he has a busy schedule.
I also have another good friend and colleague from the State of
Nebraska who has been working on this issue for a very long time as
well, the gentleman from Nebraska (Mr. Bereuter). I want to welcome him
to this special order and yield to him.
Mr. BEREUTER. Mr. Speaker, I thank my distinguished colleague from
Minnesota (Mr. Gutknecht) and commend him for taking the important
initiative on this important subject tonight and am pleased to be here
with my colleagues from Illinois, Nebraska and Iowa.
We have had some discussion about the problems brought on by MTBEs
and I am glad the gentleman brought that to the forefront with his
colleague, the gentleman from Illinois (Mr. Shimkus).
I would begin by strongly commending President Bush for his decision
to deny California's request for a waiver of the reformulated gasoline,
the RFG oxygenation requirement. I think this is a huge victory for the
American farmers and it is a huge victory for our environment. One of
the problems, of course, with the additives used in California and in
other States, the MTBE, is that we know now it causes cancer. It is
highly soluble in water. It does not biodegrade. Indeed, the problem of
MTBE, of course, is not limited to California. It is estimated that
about 21 percent of the drinking water wells in RFG areas are
contaminated nationwide, and the proper solution to California's
problem is to switch to using ethanol to meet the Federal oxygen
standards.
Now, the impact, of course, on agriculture is particularly important.
We will be the first to admit that because we have low commodity
prices. Using my State as an example, Nebraska produces about 20
percent of our country's ethanol. The State estimates that its seven
ethanol plants would have generated $1 billion in investment and 1,300
jobs. So the decision by President Bush on the California request
creates outstanding expansion opportunities for our State just as it
does for other ethanol-producing areas of the country.
Our governor is Mike Johanns. He is currently the Chairman of the
National Governors Association Ethanol Coalition. We are proud of the
leadership that he and other governors are bringing to this issue.
Their estimate, the coalition's estimate, is that the ethanol
industry has the capacity of doubling in size by 2004 and tripling by
2010 without disruption in supply or increasing consumer prices.
I want to quote also an analysis released earlier this year by the
renowned economist John M. Urbanchuk. He is Executive Vice President of
AUS Consultants. He found that greater ethanol use has positive
implications for our Nation's economy. The study found that quadrupling
the use of ethanol over the next 15 years would save American consumers
$57.5 million in 1996 dollars, so it would be more today. This is the
equivalent of nearly $540 per household in the U.S.
In the process, more than 156,000 new jobs would be created
throughout the economy by 2015.
The Department of Energy's Energy Information Agency now projects a
figure of imported oil, 60 percent now, would grow to 70 percent unless
we take some changes. Ethanol deserves to be a part of a national
energy policy and we have just seen a step forward with the President's
decision, and we are ready to meet the challenges.
So I thank my colleague for yielding me this time and I look forward
to hearing what the rest of my colleagues have to say and perhaps
engaging further with my colleagues, but I thank the gentleman for the
initiative.
Mr. GUTKNECHT. We are more than delighted to share the time. I would
like to just come back to a chart here that my staff has put together
that I think tells a very important story, and a lot of consumers just
in the last several months have begun to wake up to the reality that we
have not had a very coordinated energy policy in this country for the
last 10 years. It really is time that we have one.
As the gentleman indicated, the gentleman from Nebraska (Mr.
Bereuter), according to the numbers we have from the United States
Department of Energy, the U.S. imported more than 8.9 million barrels
of crude oil per day in the year 2000. That represents over 60 percent
of our domestic crude oil demand. Now that is a scary number, but it
gets worse. We are currently importing in excess of 613,000 barrels a
day from Iraq.
Now in case it has been forgotten, Iraq is the place where Saddam
Hussein calls home. We are importing over 600,000 barrels a day every
day from Saddam Hussein. At $25 a barrel, that is a lot of money.
Supposedly that money is now being used for food and medical supplies,
humanitarian concerns, but the truth of the matter, of course, is we
cannot know exactly how Saddam Hussein spends that money.
The California waiver decision decreases our dependence on foreign
oil and increases demand for clean-burning, domestically-produced
ethanol. It is a great decision and, again, in the words of the old
spiritual, oh, happy day.
Now I am delighted to have with us as well tonight a good friend that
came to the Congress the same year that I did. In fact, his district
adjoins mine for a few miles on the southern border, the gentleman from
Iowa (Mr. Latham).
Mr. LATHAM. Mr. Speaker, I thank the gentleman from Minnesota (Mr.
Gutknecht) for having this special order this evening on a very, very
important issue, I think, for the whole country. This announcement
today really shows the concern and the commitment that this
administration has and we all have for our environment. The fact of the
matter is, this shows that one does not have to sacrifice clean air to
have clean water.
The gentleman brought up earlier a discussion on MTBE. We all know
that this is a pollutant that has affected our groundwater. Even in
Iowa where it has not been used there are traces of MTBE in our water,
because it is coming from other States and in the aquifer. This is a
very, very important issue for everyone who believes, like we all do,
that one has to have clean water.
The environment is very, very important. The question today that was
answered was, does one have to sacrifice clean air in order to get
clean water? Well, the fact of the matter is, one does not. The proof
is here today that one can both get rid of MTBE, clean up our water
supply, make it safe for our children, for our families, and also have
clean air. With ethanol, we are able to provide the oxygenate that is
needed for the fuels. In California, MTBEs will be banned, I believe,
by 2003.
{time} 2015
They are going to have to have a replacement. I can tell you, in Iowa
we are going to do our part. In particular, just in my congressional
district, we currently have five ethanol plants under construction in
the planning stage, and are going to be online very, very quickly.
The great part of this is, and the gentleman from Minnesota knows
this very well, but these are farmer-owned cooperatives, farmer-owned
investment groups. This is not some big corporation out here that is
going to profit from this. When we talk about value-added products,
this is what it is all about.
We believe in investment; we believe in adding value to our products
that we produce in such abundance, especially in corn, in our part of
the country. We will utilize this great crop that we have in a very,
very positive and productive way.
In addition to the five plants that are coming online in my
congressional district, we also have at least another five coming
online statewide in Iowa to go along with these seven plants that
currently are in operation. I know that the gentleman from Minnesota
knows very well what this is going to do for the economy as far as
adding value to our corn crop. This, I think, combined with biomass,
soy diesel, wind energy, and the President's energy proposal, I think,
is right-on as far as what he is talking about with alternative energy
sources. When we talk about ethanol, soy diesel, and wind energy, we
have the largest wind energy farm in the entire country in my
congressional district also.
But it is so important that we utilize our resources here, renewable
resources, to solve this energy crisis that
[[Page H3040]]
we are in, and to cut down our dependence, like the gentleman talked
about, on foreign oil. I remember very well back in 1973 waiting in
line to buy gasoline, if you could buy any at all. Many times the
stations were closed. They were simply out of gasoline. At that time,
if I remember correctly, we were about 35 percent dependent on foreign
oil. Today we are over 60 percent dependent on foreign oil. The problem
has gotten only worse, and it has gone on for decades now; but we have
not had really an energy policy in place to address this problem.
So I think today is a very, very significant step in the right
direction: good for the environment, good for reducing our dependency
on foreign oil, good for value-added agriculture and for people really
pulling together in rural America for a cause and to help themselves.
This is extremely positive.
Mr. Speaker, one last thing. I think it is so important, and last
year we went through a real difficult, very, very close campaign. One
of the major issues in that campaign was restoring honesty, integrity,
in the Oval Office, having people there who will honestly keep their
word.
When our President today was a candidate in Iowa, he came to Iowa,
and he said, yes, I support ethanol; I support Iowa farmers. I believe
they can help themselves and increase their way of life and improve
their families' lives, and we will work for you.
I had the honor to be the with the President last Friday in Waukee
and heard the President then reiterate his support for ethanol and
support for family farmers; and, as the gentleman well knows, with the
tax bill that he signed last Thursday, it is going to be a giant step
forward for people to be able to keep the family farm, to reduce the
tax burden on people who work and pay taxes, and families, helping them
all the way through.
But the thing of it is, many people were cynical. Some of the people
who supported the President in the campaign would come up to me and
say, Well, he says he is for ethanol, but he is from Texas. You know,
the big oil companies down there, they have a lot of influence. You
know how many votes there are in California. Well, is he really with
us?
All I ever said was just watch; that I believe that there is a person
with great integrity, with real honor, who is running for the
Presidency.
I think this shows to all Americans that you do not just have to go
out and make campaign promises and not keep your word. It is very
important I think in this day of very cynical politics in our system,
with people being filled with doubt in our leaders, that we finally
have someone who actually has done what he said he was going to do, and
a phrase that is very familiar around here, the idea of promises made
and promises kept.
I am just extraordinarily proud of our President, proud of this
administration; and I am so happy for rural America, for Iowa, for all
farmers who really want to derive a livelihood from the marketplace
with value-added products. This is a great day for all of us.
I thank the gentleman from Minnesota for yielding.
Mr. GUTKNECHT. I thank the gentleman very much. I think the gentleman
said it exactly right. This is a person who says what he means, means
what he says, and is doing exactly what he said he was going to do,
on virtually every front, whether it was education policy, tax policy,
the budget, right down the line, from the day that this President took
the oath of office, when he put his hand on that Bible and he swore to
uphold the Constitution.
He went on to say that he wanted to restore dignity to that office,
and part of it is doing what you said you were going to do. This
decision today, I think while it surprises some people here in
Washington, the cynics, the critics here in Washington, it really does
not surprise me, because it was the right thing to do. It is right for
the environment, it is right for energy policy, it ultimately is the
right thing in terms of agriculture.
I wanted to come back to a couple of quick points before I yield time
to another new member of the Committee on Agriculture from the great
State of Nebraska. I want to come back to this chart and just point out
a couple things to my colleagues.
This is how the increased demand for ethanol is really going to
benefit our farmers. I want to talk a little bit about why corn is so
important in this equation.
First of all, ethanol demand as we begin to phase out MTBE and
replace it with the oxygenate we call ethanol, ethanol demand in
California is expected to top 580 million gallons annually. Now, that
will utilize, if you produce all of that ethanol with corn, and,
incidentally, you can produce ethanol with other agriculture products,
I want to make that clear. But I am going to come back to why corn is
so important. That would utilize 230 million bushels of corn each year,
which ultimately would boost corn prices by anywhere from 10 to 15
cents per bushel. Let me tell you, representing a farm district, 10 to
15 cents per bushel is really the difference for many of our producers
between profit and loss. That is a very, very significant number.
But even more significant is that it could add as much as $1 billion
annually to the value of American farmers' corn crops or other crops,
because if we are using this corn crop to produce ethanol, it means
that other row crops can be used for other purposes. So on a net-net
basis, this ultimately will benefit all kinds of farmers.
Let me come back to why corn. When we talk about the plants that are
the very high-tech plants today producing ethanol, they do not just
produce ethanol. One of the great what used to be a by-product but is
now a very important product that comes out of the ethanol process is
you end up with a very high-quality protein feed.
So there are a lot of things about these processing plants. It is not
just about producing ethanol. As my colleague from Iowa pointed out, it
is about value added. We are adding value in several ways to this corn
crop, and more and more of the production facilities are farmer-owned.
This is a way that they can recover more of that downstream profit.
I want to now recognize one of our new members of the Committee on
Agriculture, who certainly needs no introduction to anybody in the
State of Nebraska or anyone who has followed college football over the
years. The gentleman from Nebraska (Mr. Osborne) has quickly become a
leader in the Committee on Agriculture, not only on the issue of
ethanol, but on the whole issue of value-added agriculture and the
importance of us at the Federal level doing all that we can to improve
markets and find additional markets for those things which we can grow
and produce here in abundance in the United States.
Mr. Speaker, I would yield to the gentleman from Nebraska (Mr.
Osborne).
Mr. OSBORNE. Mr. Speaker, I would like to thank the gentleman from
Minnesota, and I certainly appreciate the comments of my colleagues
from Iowa, Nebraska, and others who are going to speak after me.
I guess I would like to add my comments of appreciation for what the
administration has done. We have heard for a number of weeks that the
answer had not been official, but we were going to like what we heard,
so I would reiterate what the gentleman from Iowa (Mr. Latham) said,
that we believed all along that the President was a man of his word,
and so we are glad this has happened.
The problem has been that we currently have roughly 62 production
plants for ethanol in the United States, and we probably have somewhere
near that number in various stages of production. Of course, the thing
that has held these people up has been concern, what is going to happen
about the waiver in California. If the waiver had been granted, then
the demand for ethanol would not have been increased, it would have
been reduced.
So those people who are sitting on the sidelines and were worried
about investment now are free to go forward, and I think we will see an
immediate benefit. We will see a great jump in the production of
ethanol in the next year or 2 years. This is important. It has been
important for the Nation and important for the Midwest.
I would just like to mention three areas where I think this will have
far-reaching consequences.
First of all, as has been mentioned earlier, it reduces our
dependence on foreign oil. This is a big issue, because
[[Page H3041]]
today roughly 56 percent of our petroleum is imported from OPEC; and as
has been pointed out previously, OPEC is not necessarily terribly
friendly to the United States. If at any time they decide to double the
price or simply turn off the spigot, our Nation would grind to a halt
within a matter of months. So dependence on foreign oil is a big issue.
As the gentleman from Iowa (Mr. Latham) mentioned, the earlier crises
in the petroleum industry in the late 70s and 80s, where we had long
lines of automobiles lined up for gasoline, at that time we imported 30
percent of our oil from OPEC, and today that number is double. So we
are more at crisis today than we were even at that time.
Of course, there was a great deal of concern about OPEC in those
years. Two-thirds of the world's known oil reserves are located in the
Persian Gulf at the present time; and by the year 2010, many analysts
believe that more than 75 percent of the world's petroleum will be met
by Middle Eastern countries. So we are going to become more dependent,
instead of less, if we stay on the current track we are on.
In 1998, a poll showed that 83 percent of American voters feared that
the United States is extremely vulnerable to OPEC. Of course, if you
took that poll today, I am sure that number would be much higher than
83 percent.
Currently, I think there is one thing that many people may not
realize, but every vehicle marketed in the United States today can run
on ethanol blends. Many people feel, well, you have to have a special
automobile. That is not true. Every automobile can run on a 10 percent
blend. We have many automobiles that run on 85 percent blends. So if
you think about the possibilities, we can certainly lessen our
dependence on OPEC greatly as we increase the percentages. So this is a
very important development.
The second area that I think is very important as far as this ruling
is concerned, as has been mentioned earlier, ethanol and biodiesel are
of great benefit to the environment. It reduces greenhouse gases,
global warming, acid rain, ozone depletion; and of course, many of us
have been somewhat skeptical about global warming, but a recent study
that the administration has ordered indicates that apparently there is
something to this. It is something that needs to be addressed
seriously, and of course, ethanol and biodiesel are important elements
of this equation.
Currently, ethanol contains 35 percent oxygen by weight; and of
course, that enhances the combustion of gasoline, resulting in a more
efficient burn and greatly reduced exhaust emissions. Some people have
said it reduces exhaust emissions by as much as 30 to 35 percent. This
is a huge factor, and this is why ethanol and MTBE both are required in
many of our major cities. Of course, we know that MTBE has been a
problem.
{time} 2030
Ethanol has nearly twice the oxygen content of MTBE, and can provide
greater emission reduction on a per gallon basis than MTBE.
As has been mentioned earlier, MTBE has been proven to have some
health consequences and cancer risks. It does pollute the ground water.
It is being phased out in a great many of our States, and we think
others will follow. Ethanol is not only better for the environment, it
is more cost-effective, and is certainly a superior fuel.
Then lastly we might mention, in regard to environmental issues, that
ethanol can replace the most toxic parts of gasoline with a fuel that
quickly biodegrades in water, reducing the threat that gasoline poses
to waterways and ground water. Anyone who has been involved with a
brownfield or Superfund problem realizes the threat that petroleum
poses to ground water. It has been proven that at the present time
ethanol is not a threat, and it is soluble in water, so it is one
product that can be used in petroleum that is not a hazard. So
environmentally, we see that there are a great many benefits.
Lastly, I would mention that there is a serious economic benefit to
the Nation, and particularly to the farm economy. All of us who are on
the Committee on Agriculture are very aware of the fact that most of
our people will tell us, we do not want any more government payments,
we just want a fair price. We want profitability in agriculture.
So most of us, I think, as we have studied the problem, have come to
believe and to understand that the key to profit in agriculture is
value-added agriculture. It lies in cooperatives, where the farmer
participates in the whole process from the beginning to the end. So
this is an opportunity for the Nation and certainly for our farmers to
reap some of the economic benefits of this product.
Currently, ethanol represents a market for over 600 million bushels
of corn each year. This adds $4.5 billion in farm revenue annually. The
USDA, as mentioned earlier, estimates that this adds about 15 cents to
the price of a bushel of corn. When corn is selling at $1.60, that 15
cents is a huge issue for a great many of our farmers.
Currently, more than 1.5 billion gallons of ethanol are added to
gasoline in the U.S. each year, and it is estimated on our current
track with this ruling that by 2004, that will go to 3.2 billion. It
will more than double. Of course, this will pretty much eat up any
surplus that we have in corn and milo, and that could probably be in
soybeans, as well. This has been one of the factors, of course, that
has led to a lower price, so we think this has some great opportunities
in this regard.
Then we might also mention some statistics put out by the Midwestern
Governors Conference. They say that ethanol will boost total employment
by 195,000 jobs. That is a huge increase in employment, particularly in
the agriculture economy. It adds over $450 million to State tax
receipts, and improves the U.S. trade balance by $2 billion.
Of course, all of us have been suffering and realize our Nation is
suffering from a negative trade balance. This is something that
reverses that trend by $2 billion, and it results in a net savings in
the Federal budget to $3.6 billion. Of course, that involves all
taxpayers, not just people in the farmland, but all taxpayers
everywhere.
Lastly, let me just mention a couple of other things. As most people
know, we have been talking about ethanol, we have been talking about
biodiesel, but it is not just that. In the production of ethanol we
have by-products, so we have feed, which is very high protein, very
nutritious, and of course that adds value to our cattle, and has been a
huge benefit to the livestock industry.
Also we have wet milling plants that, from the by-products of making
ethanol, are able to produce clothing, in some cases; plastics,
biodegradable plastics, and other products. So we see great potential
in terms of side effects, side products. We think this is going to be
very important.
So we greatly appreciate the decision by the administration, and that
is why all of us are over here tonight voicing our pleasure, our
approval. We think it is a win-win situation for the American people,
the farmers, the environmentalists, and everyone involved.
So I appreciate the gentleman organizing this special order.
Mr. GUTKNECHT. Mr. Speaker, I thank the gentleman from Nebraska for
his contributions, not only to this discussion, but the whole debate
about value-added agriculture and how ethanol and biodiesel can
certainly be part of the solution. They are not part of the problem.
We are also joined tonight by the gentleman from Illinois (Mr.
Johnson). He, like I, spent considerable time in the State legislature.
He is a freshman Member of the Congress and a freshman member of the
Committee on Agriculture.
He represents the Champaign-Urbana area of the State of Illinois,
which of course is the home of the University of Illinois, one of the
great research institutions, particularly from a land grant institution
perspective. If there is a bigger fan of the Illini, I have yet to meet
them. So we welcome him, and I yield to the gentleman from Illinois
(Mr. Johnson).
Mr. JOHNSON of Illinois. Mr. Speaker, I thank my distinguished
colleague and senior, mentor, from the State of Minnesota, for this
colloquy, and for the opportunity for us to address a critical and
serious issue in a very positive vein.
Mr. Speaker, I rise tonight in strong support of the Bush
administration's
[[Page H3042]]
decision today to deny California's request for a waiver from the
reformulated gasoline oxygen requirement. Americans should not have to
choose between clean air and clean water. Today's announcement ensures
that the citizens of California do not have to make that decision.
This is also a victory for our Nation's corn producers. My home State
of Illinois is the number one producer of corn-based ethanol. At a time
when farmers are facing, at the very least, difficult economic
conditions, today's actions will be a much needed shot in the arm.
This decision will add more than $1 billion to the depressed farm
economy. Ethanol is renewable, it is nontoxic, and it is domestically
produced. This means jobs for American workers.
California has wisely chosen to eliminate MTBE from its gasoline
supplies, and as my State has done recently through an initiative by
State Representative Bill Mitchell and State Senator Dwayne Nolan, we
have acted likewise at a State level to ban that substance.
I have joined with my distinguished colleagues here and other Members
of the House and Senate to introduce similar legislation. We hope for
its passage at the Federal level.
The California elimination represents 11 percent of California's fuel
supply. Without the addition of ethanol, gas prices would rise
dramatically. By denying the waiver and maintaining the oxygenate
standard, the lost volume will be replaced with ethanol, which is less
expensive than MTBE. Ethanol contains twice the oxygen as MTBE, so
blenders will need only half as much ethanol by volume. In fact, the
decision will allow ethanol to replace MTBE at half the cost to
consumers.
Ethanol currently has 20 percent of the oxygenate requirement market
in California. Most if not all petroleum companies in California have
experienced using ethanol in Phoenix, Las Vegas, Tucson, and Seattle-
Portland. The ethanol market is poised to expand to meet the needs of
the California market.
In conclusion, again, I thank the gentleman for this opportunity, and
I applaud in the strongest possible terms the Bush administration for
its wise, forthright decision to provide both clean air and clean water
to the citizens of California, and for opening up a new market for
Illinois and Midwest-grown ethanol around the country.
Mr. GUTKNECHT. I thank the gentleman from Illinois, and again, I
thank him for his work on the Committee on Agriculture, not only in
terms of ethanol and biodiesel, but in terms of value-added
agriculture, because, as we said earlier in the discussion tonight,
what most of our farmers want is not a bigger check from the Federal
government. What they want is an opportunity and more markets so they
can earn a decent living from the market itself.
By opening up new markets like the ethanol market and making certain
that it is available to American farm producers in the State of
California, we really have opened a whole new chapter in terms of
value-added agriculture, and again, it is a win-win situation.
Mr. Speaker, I am pleased to introduce tonight a new colleague of
mine, the gentleman from Minnesota (Mr. Kennedy). The gentleman came to
us from the private sector and had never served in public office
before. He joined me on the Committee on Agriculture.
I think the first meeting that I ever had with the gentleman from
Minnesota (Mr. Kennedy) when he was a candidate, he said, what we have
to do is find more markets. He came from a marketing background in
business and understands that ultimately, if we are going to increase
prices for farm commodities, we have to find additional markets.
He quickly came to understand how important biofuels, including
ethanol and biodiesel, were. I am delighted to yield to the gentleman
from the Second District of Minnesota (Mr. Kennedy), a new Member of
the Congress and a very important and valuable member of the Committee
on Agriculture.
Mr. KENNEDY of Minnesota. Mr. Speaker, I thank the gentleman from
Minnesota for yielding to me. I am happy to be here and working on the
Committee on Agriculture.
I want to applaud the decision that the EPA and the administration
has made to stand up for rural America and for our environment and for
rural communities.
This is a decision that is very important to me. I have spoken quite
a bit on this. The gentleman from Minnesota (Mr. Gutknecht) and I wrote
the President a letter earlier in the year encouraging him to make this
decision, as we had written President Clinton before him.
When I was at the White House for lunch for the 100-day celebration,
I had an opportunity to say just one good thing to President Bush, and
that was to encourage him to make the decision we are making here
today.
I have taken every opportunity I can, whether it be talking to
President Bush's staff or to the Secretary or to other people in the
administration, to encourage this decision. That is why I am so
pleased.
I have gone around my district in southwest Minnesota for the last
several weeks. I have had six agriculture forums. I have collected over
250 letters at those forums from our constituents that have been
addressed to President Bush encouraging this decision, so there has
been a groundswell of support for this decision. No one is more pleased
than I.
As the gentleman said, the reason is because I do come from a
business background. In my business background, whenever I have been
faced with prices that are too low, my response has always been, how do
we grow demand? As I look around our country, we all seem to be well-
fed. We are probably not going to eat a whole lot more, so one of the
best ways for us to grow demand for our country, for our country's
products in agriculture, is to tap into the energy market. This clearly
does that.
If we look at that, one of the best things this does is it grows our
domestic energy supply. Ethanol is both renewable and it is domestic.
As we grapple with how do we deal with the tight energy supplies in
this country, this is something that is very important to us.
It was interesting to me to read an article in the Wall Street
Journal several weeks ago that talked about one of the reasons why
gasoline prices were going up so high was because the alternative to
ethanol, MTBE, which has been found harmful to drinking water, was made
out of natural gas, and given the shortage of natural gas, that was
driving up the price of our gasoline.
So this is ultimately going to help to keep our gasoline prices lower
and take demand away from important resources like natural gas that are
important for heating our homes in the upper Midwest, as well as
providing our fertilizer for corn that we get the ethanol from. So for
many, many reasons, this is a great thing. It is a win-win-win-win
situation.
It is a win for the supply of energy, for one.
The second thing is in the environment. This is a great thing for the
environment. Not only does it take MTBE out of production, which has
been found to be harmful to the drinking water, but it helps gas burn
cleaner.
We did not have to be paying attention that much in high school
science class to know that we cannot start a fire without having
oxygen, and if we put a match inside a closed jar, sooner or later it
is going to run out. By injecting oxygen into gasoline, which ethanol
does, it helps that gas burn cleaner. It helps us deal with the air
pollution and global warming and all those other things. So that is the
second major reason why this is a very, very positive development for
the environment.
A third reason why it is positive is because this creates jobs in our
local communities. We in Minnesota have 15 ethanol plants. Twelve of
those are farmer-owned and have about 9,000 farmer investors. Six of
those are in my district. I visited all of them several times.
As the gentleman mentioned, they have expanded recently, and I think
several of the other ones are considering expansion, plants in Winthrop
and in Bingham Lake, towns we have never heard of, but towns where
these jobs that are brought into those communities are very important.
They are growing quality jobs and they are growing this production of
ethanol to
[[Page H3043]]
meet the increased demand that we see from a decision such as this. So
this is very important to get jobs in the rural communities and help
those communities thrive.
Finally, it is important for how it increases our demand for our
products, for our corn products and all of our other agricultural
products. The more demand for corn there is, the better off it is for
all products.
I had a forum. At one of the forums, they put up the price of corn,
whether it was $1.60 or whatever in a local area. The farmer circled
the 0 and said, ``It does not make any difference if this is 160 or
161. If you change the 6 to the 7, it is something we talk about in the
coffee shops. But what we really need to do is to change the number to
the left of the decimal point. That is what we really need to do for
agriculture to make it thrive and succeed.''
{time} 2045
And for those that are one of these 87-50 ethanol farmer investors,
the amount of dividends that they have gotten back with the high price
of gasoline and the low price of corn has really added a digit to the
left side of the decimal point for the corn that they have produced.
These are the types of opportunities.
The gentleman mentioned value-added production. These are absolutely
critical and are putting capital dollars back into our communities for
them to continue to invest in more value-added production.
So whether you are talking adding to our energy supply, improving the
environment, helping our local rural communities have the quality jobs,
or growing the demand for our productions so that they can get better
prices, this is absolutely a very positive decision that will be one of
the short list of decisions that we say the Bush administration has
done great things for rural America.
And I am just proud to be serving under this President and very
pleased that we have this decision today, and I thank the gentleman for
the time and thank the gentleman for his leadership on this issue.
Mr. GUTKNECHT. Well, I thank my colleague, the gentleman from
Minnesota (Mr. Kennedy), because, as I say, very quickly the gentleman
has picked up and made this one of his top issues. It is important to
the gentleman's district. It is important to rural development.
We talk about how can we create more jobs and economic possibilities
in rural America? This clearly is one of them. Ethanol is not the only
answer. We can do biodiesel. We can make plastics, as was mentioned.
One of the great things about making ethanol from corn is that you can
have so many other by-products from it.
We are learning how to make plastics now. We are learning how to make
other products out of this, as well as perhaps the best high-protein
feed possible for our cattle and hogs. I am not an expert, but we are
finding out that if you take this feed product just at the right time
while there is still a little bit of alcohol left in the product, that
it makes a terrific product to feed to dairy cows. We are finding that
you can actually increase dairy production with just exactly the right
blend of feed from these corn-processing plants.
Mr. Speaker, I want to mention something else. And I hope the
gentleman will stick around so we can have a little colloquy here that
I think is important, and I talked about this chart. I want to come
back to it again.
According to the United States Department of Energy, in 2000, the
United States imported more than 8.9 million barrels of crude oil every
single day. And the problem is that is getting worse every single day.
That represents over 60 percent of our domestic crude oil demand; what
is worse, we are currently importing over 600,000 barrels of oil from
Saddam Hussein every day.
Now, if you multiply 600,000 times $25 a barrel, that gives him an
enormous amount of cash that he can use for whatever purposes he really
intends it for. Now, we believe, and we have said that that is, you
know, for food and humanitarian concerns, but some of us wonder just
how much of that actually goes to benefit the citizens of Iraq and how
much is going to help him develop even more sinister methods of
declaring war on his neighbors.
Finally, the California waiver decision decreases our dependency on
foreign oil and increases demand for clean-burning, domestically
produced ethanol. Ethanol is not part of the problem. It is part of the
solution.
I want to talk, too, about corn itself and what a tremendous
reprocessor corn is of CO2, carbon dioxide. We have heard a lot
recently about global warming and global climate change. A couple of
years ago, I had the head of NOAA, I serve also on the Committee on
Science, and NOAA is the National Oceanic and Atmospheric
Administration. They are our top weather people. I had the head of NOAA
in my office a couple of years ago. He was sitting right there in the
chair, and I had the chance to ask the question a lot of Americans
would like to ask, I asked him this question: I said, is there any hard
evidence that global warming really exists to the extent that some of
the people are saying? After a very long pregnant pause, finally he
said, no.
Now, he said there is evidence that the level of carbon dioxide in
the atmosphere is going up. We believe that in the long-term if the
level of CO2 goes up in the atmosphere that will begin to
drive the overall temperature of the Earth up slightly. We do not know
how much. We do not exactly what the cause effect. We need to study it
more, and I think everyone agrees that we certainly need more study.
Let me just share with you and anyone who happens to be watching
tonight how corn plays an important role in this. An acre of growing
corn consumes 5 times more CO2 than an acre of old growth
forest. One of the great things about corn is it draws an enormous
amount of carbon dioxide from the atmosphere, converts some of it into
oxygen, which we can reprocess and make high oxygenated fuels, like
ethanol. And so in many respects, cornfields are a great way to
reprocess some of that CO2 in the atmosphere.
They are better than an old growth forest. In fact, they are five
times better. An acre of growing corn consumes five times more
CO2 than an acre of old-growth forest. That is good news.
The great thing that happened today is, as I think the President made
it clear, that we are going to have a coordinated energy policy in this
country. We are going to try and move away from this incredible
dependency we currently have in OPEC.
Part of the reason we have seen our energy prices spiking and going
up so much in the last year or so is because now we are so dependent on
OPEC, they literally can set the price for us. So this is another step
that the President is taking today to say that we are not going to be
dependent on OPEC. We are going to grow some of our own energy. We are
going to solve some of the problems that we have in terms of energy. We
are going to do it right here in the United States.
Mr. Speaker, I would yield to the gentleman from Minnesota (Mr.
Kennedy), my colleague.
Mr. KENNEDY of Minnesota. Mr. Speaker, I say to the gentleman from
Minnesota (Mr. Gutknecht), you are absolutely right on all of the
benefits that this has from reducing our dependence on foreign oil, as
well as the environment.
We are very, very pleased with the result here today, but the
gentleman and I both being from Minnesota, we never settle for what we
have achieved today. We are always looking for where we can take it to
the next step. Our great State of Minnesota has been a leader on
biofuels.
We have just about all the gasoline sold in Minnesota with a 10
percent blend. And as the gentleman from Nebraska (Mr. Osborne) said,
any car can consume gasoline with a 10 percent blend. But we are also a
leader when it comes to E-85, 85 percent ethanol blend, and vehicles
like my Dodge Grand Caravan that I drive and several Ford vehicles and
several vehicles from other makes can use this product where you have
85 percent blend of ethanol, and the benefits that we have been talking
about for the last hour, about the benefits of the environment, the
benefits to increasing our energy supply are equally as important
there.
What we found is that over time as we have invested in these
technologies, we get better and better at making ethanol. We find more
and more uses for the by-products that drives down
[[Page H3044]]
the overall costs that makes it increasingly more competitive. I am
confident that that will be the case in the future.
We have also been a leader on another very significant biofuel in the
form of biodiesel; what people do not really realize about our
President is that he has taken some bold moves for the environment.
This being one.
Another very bold move that he did was to significantly reduce the
amount of sulfur in diesel, about a 95 percent reduction in the sulfur
in diesel and by taking sulfur out of diesel, you significantly reduce
its lubricity. One of the ways to increase lubricity and put that back
in is through biodiesel.
We have had a very active discussion in Minnesota on trying to be a
forward State on biodiesel as well, and I am hopeful that discussion
continues on. I think we can do the same things with biodiesel that we
have done with ethanol.
Finally, I just want to go back to one very simple example about how
good this is for your environment. As I go around into our ethanol
plants, I have oftentimes challenged those that make MTBE, that I will
drink some ethanol if you will drink some MTBE. MTBE would be very
harmful for, other than given that it is basically 100 percent alcohol,
you can drink our good ethanol.
Mr. Speaker, I have been trying to come up with something, because
our former Senator Rudy Boshwitz had his milk stand at the Minnesota
State Fair where he had flavored milk, strawberry milk and blueberry
milk, and trying to come up with something else.
So we toyed for a very short period of time having a taste test like
the Pepsi-Coke test, where you would come out to the farm feast, you
come out to the State Fair, and you could taste your ethanol versus
your biodiesel.
Given that we probably would be killing some and making the rest
intoxicated, we gave up on that idea very quickly, but it just really
highlights the fact that this is something that is going to be good for
the environment.
It is not going to have any side effects. It is the type of thing
that we ought to be promoting, and it is the type of thing that we
ought to be applauding the administration as we are here today for
making the decision that we did.
Mr. GUTKNECHT. I agree. I think every American. This is not just
about rural America. I think if every American would think through the
arguments about this, I would think every American would thank the
President today. He did the right thing. He did the right thing for the
environment.
As was said earlier, this is not a choice between clean air and clean
water. He made the right choice for the environment. He made the right
choice in terms of energy independence and he made the right choice in
terms of rural America and helping us find new markets for things that
we can grow and produce in abundance here in the United States.
I would like to paraphrase President John Kennedy, he said, you know,
we all inhabit this same small planet. We all breathe the same air. We
all cherish our children's future.
And if I might parenthetically add, we are all environmentalists. We
all want to leave this country and this world a better place. Ethanol
is a big part of the solution. I know sometimes the critics, they say,
well, yeah, they get the subsidy. We are sending these checks out to
farmers for ethanol.
We need to explain this. What happens is we give the blenders of
ethanol. It actually goes to the refiners we give them a tax credit. If
they will use this product, which we know is better for the
environment, both the air and the water, we said a number of years ago,
we will give you a small credit.
And the interesting thing is that our farmers and the people who
produce ethanol have found ways to produce it so much more efficiently
today, that when corn is less than $2 a bushel and oil is over $25 a
barrel, it is actually cheaper to put the ethanol in the gasoline.
As a matter of fact, last year when we had this big debate in the
United States, because the price of gasoline, particularly in the
Chicago market, went up to over $2.20 for a gallon of gasoline, a lot
of people were saying it is ethanol. Ethanol is the problem.
But at that time, the rack price of ethanol delivered from Minnesota
to Chicago was about $1.10 a gallon. The rack price of the gasoline
that was being blended with was over $1.20 a gallon. In fact, it was
something like $1.40 to $1.50. That is what the cost was at the
refinery.
I find it hard to believe that people would argue that somehow
blending a 10 percent blend of a product that costs $1.10 a gallon with
a 90 percent blend that costs $1.30 or $1.40 or $1.50 a gallon, how in
the world the price of ethanol is driving the price of gasoline?
The fact of the matter is that the price of ethanol was keeping the
price of gasoline lower. It is better for the environment. It is better
for the consumer. It is better for the energy dependence.
The President did exactly the right thing today, and I think he
understood what President Kennedy meant when he said that we all
inhabit the same small planet. We all breathe the same air. We all
cherish our children's future, and ethanol and biofuels are going to be
an important part of our energy future.
Our time is almost expired, and I want to thank all of my colleagues,
the gentleman from Illinois (Mr. Shimkus), the gentleman from Illinois
(Mr. Johnson), the gentleman from Nebraska (Mr. Osborne), as well the
gentleman from Nebraska (Mr. Bereuter), the gentleman from Iowa (Mr.
Latham).
Mr. Speaker, I want to thank our new freshman colleague, the
gentleman from the State of Minnesota (Mr. Kennedy). I think this has
been an important special order.
This is a very important day. And again as I started this special
order, and the words of the old spiritual, oh, happy day. This is a
happy day for America. It is a happy day for America's farmers. It is a
happy day for American consumers, and whether they realize it today or
not, this is a happy day for all of the people in the State of
California.
Because they are going to begin to phase out that cancer-causing
product which is leaching into their groundwater even as we speak
called MTBE, and we are going to begin to replace that with a wholesome
product that can be grown right here in the United States called
ethanol.
As my colleague from Minnesota pointed out, ethanol is the kind of a
product, it is so pure and so clean, and I would not say good for you
necessarily, but it will do no more than inebriate you. It will not
kill you. We are going to replace that cancer-causing MTBE with
ethanol.
So the President has done us all an enormous favor today. This is an
important decision. I applaud the administration for making it. I think
it is going to open new avenues for all of us. And, again, I thank my
colleagues for joining us tonight.
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