[Congressional Record Volume 148, Number 22 (Tuesday, March 5, 2002)]
[Senate]
[Pages S1431-S1438]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




       NATIONAL LABORATORIES PARTNERSHIP IMPROVEMENT ACT OF 2001

  The ACTING PRESIDENT pro tempore. Under the previous order, the 
Senate will now resume consideration of S. 517, which the clerk will 
report.
  The assistant legislative clerk read as follows:

       A bill (S. 517) to authorize funding the Department of 
     Energy to enhance its mission areas through technology 
     transfer and partnerships for fiscal years 2002 through 2006, 
     and for other purposes.

  Pending:

       Daschle/Bingaman amendment No. 2917, as modified, in the 
     nature of a substitute.

  The ACTING PRESIDENT pro tempore. The Senator from Nevada.
  Mr. REID. Mr. President, I ask unanimous consent that when the energy 
bill is laid down this morning--which it has been--there be a period 
for debate only until 12:30 p.m. today, the time we recess for the 
party conferences; further, I ask unanimous consent that at 2:15 today 
the pending amendment be further modified by Senator Daschle or his 
designee with the changes that are at the desk, and that no further 
modifications be in order to the substitute. Finally, I ask unanimous 
consent that following that modification the amendment be printed.
  The PRESIDING OFFICER (Mr. Carper). Is there objection?
  Without objection, it is so ordered.
  The Senator from New Mexico.
  Mr. BINGAMAN. Mr. President, I am pleased that the Senate is today 
finally proceeding to consider the Energy Policy Act of 2002. The fact 
that we are at this point in our deliberations is the result of a 
tremendous amount of work involving several committees in the Senate.
  I think the committee with the largest stake in the development of 
this legislation is, of course, the Committee of Energy and Natural 
Resources, which I am privileged to chair and of which Senator 
Murkowski is the ranking member at this point.
  We have held over 50 hearings in the 106th and 107th Congresses that 
are related to today's bill. I express appreciation to Senator 
Murkowski, the ranking member, who chaired many of these hearings.
  I believe we have a good understanding of the issues that are forming 
this debate and that are at stake in this debate. Many of the elements 
in

[[Page S1432]]

this energy bill are not going to shake out along party lines but 
because of genuine differences of opinion that particular Senators 
have.
  I anticipate we will see all sorts of combinations of sponsorship on 
amendments on both a party and on a regional basis, before we are done.
  Let me speak for a few minutes about the rationale for this energy 
bill. It is important to recall why we have invested so much time on 
the topic of energy in preparing this legislation. Why is it important 
for the Senate at this stage in the year 2002 to consider and pass 
comprehensive legislation?
  I believe there are two basic answers to that question: First, energy 
is central to our present and our future economic prosperity. Because 
of its importance, improving and strengthening our national energy 
system can provide significant economic benefits for each American. 
Similarly, the vulnerabilities in our national energy system can 
present major threats to our national economic health. We need to 
anticipate those threats and deal with them, as we try to in this 
legislation.

  A second basic reason we are considering energy legislation is there 
have been significant changes in energy markets since the last time 
Congress considered comprehensive energy legislation. The last major 
energy bill passed in Congress was the Energy Policy Act of 1992, 10 
years ago. Since that time, as a nation we have moved further away from 
the command-and-control regulation of energy toward a system that 
relies more on market forces to set the price of energy. In the process 
of making that move, energy markets have become more competitive and 
dynamic but not without some significant bumps along the way.
  Let me recount a few of those bumps of which we are all aware. First, 
consumers are now more vulnerable to the vagaries of the energy markets 
and to volatile prices for energy that cause repercussions throughout 
our economy. We saw that phenomenon at work in California last winter 
over a year ago and last spring. Also, the structures to regulate these 
emerging market forces, particularly with respect to trading in natural 
gas and electricity, are not fully developed. I think we all saw that 
with the collapse of Enron.
  Gasoline supplies nationwide have become increasingly subject to 
local crises and price spikes due to the proliferation of inflexible 
local fuel specifications and tight capacity for refining and for 
pipelines.
  And, finally, the events of September 11 have caused many of us to 
reflect on the inherent vulnerabilities of the energy transmission 
system we have in the country. The time may be right for rethinking how 
we site energy infrastructure and the balance between central and 
distributed generation of power in our electricity system.
  Congress does need to respond to these changes and to these 
challenges and to these opportunities. If we do so in a balanced and 
comprehensive and forward-looking way, we can develop an energy policy 
that will lead to new economic prosperity for the country and, 
hopefully, for the world. But we will not get there simply by 
perpetuating the energy policy approaches of the past. We need new 
ideas and new approaches as well as greater investment in order to move 
to the future that we all want. That is what this bill tries to do.
  The bill has three overarching goals. I have a chart that sets these 
out. Let me briefly go through each of them.
  The first goal is to ensure a diversity of fuels and technologies for 
adequate and affordable supplies of energy. By this we are talking 
about renewable sorts of energy, as well as the more traditional 
sources we have depended upon. Natural gas, coal, oil, hydropower, 
nuclear power--all of those issues are dealt with in this legislation, 
and we have provisions intended to encourage adequate supply from this 
entire diversity of sources.

  A second major goal of the legislation is to improve the efficiency 
and productivity of our energy use, including the reliability of our 
electric transmission system, the efficiency of energy use in industry, 
in vehicles, appliances, and buildings. We will have a great deal of 
discussion during the debate about the various provisions in the bill 
intended to encourage more efficient use of energy. We all recognize 
that we waste a tremendous amount of energy, and new technology can 
help us to use energy much more efficiently.
  The third major overarching goal is to be sure that whatever we do in 
the energy area is done with an eye toward protecting the environment, 
toward not worsening the problem of climate change. I believe we have 
achieved that goal. Again, we will get into a serious discussion of the 
details as we get into the bill.
  We can achieve these goals if we both accelerate the development and 
introduction of new technology--and we try to do that through this 
legislation--and if we create flexible market conditions that empower 
energy consumers so they can make the right choices, the choices that 
benefit them but also that benefit society more generally.
  This combination of technology and policy innovation in pursuit of a 
diverse and robust national energy system can be seen in the provisions 
of the bill related to this first major goal--the adequate and 
affordable supply of energy. Let me talk about that goal and what we 
have in the bill related to it.
  The first part of energy supply I will discuss is renewable energy. 
We have put a great emphasis on renewable energy in this legislation. 
The Senate bill contains numerous provisions to enhance the 
contribution of renewable forms of energy to our future energy mix. 
Under what I see as pretty much a business-as-usual approach, which is 
reflected in the House-passed bill, H.R. 4, the contribution of our 
energy mix from renewables would not markedly grow over the next 20 
years. The result would be an energy system, particularly for the 
production of electricity, that would go from being 68 percent based on 
coal and natural gas today, in the year 2002, to being about 80 
percent, based on those two fuels, by the year 2020.
  That overdependence on those two fuels would leave our country 
extremely vulnerable to shortfalls in the delivery of either of these 
commodities and leave consumers exposed to the severe risk of price 
spikes. We need a more diverse way in which to produce electricity, not 
a less diverse way.
  Such an overdependence does not make sense in light of the 
commitments to renewable energy that we are seeing in other countries, 
particularly in Europe. I have a chart that makes that point. This 
chart is ``Commitment to Renewable Generation.'' It is the percentage 
of increase in nonhydro renewable generation from 1990 to 1995. That 
was the first half of the last decade.
  It shows that Spain, Germany, Denmark, the Netherlands, and France 
have all dramatically increased their percentage of power generated 
from renewable sources; the United States is barely on the chart. Even 
France, which is often held up as a model for its commitment to nuclear 
power, has outpaced the United States in development of renewable 
sources for electricity.
  The United States needs to lead the world in renewable technologies. 
We have abundant domestic renewable resources. The world market for the 
technologies we have developed is capable of growing immensely. 
Renewable technology leadership would help U.S. firms achieve a strong 
position in winning these markets and creating new jobs domestically.
  If the United States is to lead the world in renewable energy 
technologies, though, we need to do a better job of getting those 
technologies into our own economy and into our own markets.
  This bill we are beginning to debate today boosts our future use of 
renewables in five major ways: First, the bill contains market 
incentives that will triple the amount of electricity produced from 
renewable energy over the next 20 years. This chart tries to make that 
point very effectively. The orange band at the bottom represents the 
Energy Information Agency's projection of nonhydro renewables, assuming 
we do not pass the legislation. We can see that from the year 2000 to 
the year 2020, the percentage we are generating from nonhydro 
renewables would not change at all, absent legislation such as we are 
considering today.
  The green wedge represents the contribution we believe would be made 
if this Senate energy bill becomes law, as we hope very much it will. 
You can see

[[Page S1433]]

that we would be essentially tripling, or more than tripling the 
percentage of the electricity generated from renewable sources.
  Let me talk about the specific incentives. One incentive in the bill 
is what we call the renewable portfolio standard. It creates a market 
for new renewable sources of energy, whether they are from wind, solar, 
biomass, or incremental hydroelectric generation in existing dams. This 
is something which many States have already done. We believe it is a 
good policy and one we should move to as well. One State that has moved 
ahead very dramatically is Texas. We commend the Senate to be aware of 
what has happened in Texas during the time, in fact, when our current 
President was Governor of that State. We believe the rest of the 
country should follow suit.
  A second market incentive is a Federal purchase requirement for 
renewables. It grows to 7.5 percent for all Federal electricity 
purchases by the year 2010. We believe the Federal Government should 
lead in this area. This is an opportunity for it to do so.
  The third provision is the renewable energy production incentive. 
There is an existing program in place to help rural electric co-ops and 
municipal utilities to generate renewable energy. In this bill we 
propose to reauthorize that and extend it to include Indian lands which 
contain prime renewable resources.
  The next provision is that when the Senate considers the energy tax 
incentive amendment from the Finance Committee--and we believe Senator 
Baucus and Senator Grassley will be offering that amendment at some 
stage during the debate--we will have an important opportunity to boost 
the future production of renewable energy. Existing renewable tax 
incentives expire January 1 of this year. This package of tax 
provisions that has come from the Finance Committee will reinstate the 
highest priority incentives for 5 years. It will expand the coverage of 
the production tax credit to include open-loop biomass and geothermal 
energy.
  In addition to these incentives for renewable production of 
electricity, the bill greatly expands the contribution of renewable 
fuels such as ethanol and biodiesel. Those fuels, of course, are used 
primarily to power vehicles of transportation.
  By the year 2005, 75 percent of the Federal Government's vehicles 
that can burn alternative fuels will be required to do so. That will 
create more market certainty for renewable fuels and for their 
associated infrastructure.
  By 2012, 5 million gallons per year of renewable fuels will be 
blended into gasoline, thereby decreasing our import dependence on 
foreign oil.
  The bill helps renewables contribute more to the energy mix also by 
removing existing regulatory barriers that affect renewable energy. For 
example, wind and solar power can be effectively tapped by small 
distributed generation systems. But current practices and rules in the 
marketplace often discriminate against distributed generation.

  This bill deals with the problem by requiring electric utilities to 
offer customers net metering in which a customer can offset his or her 
electric bill by the amount of electricity that is generated and that 
he or she is able to sell to the local utility. This provision will 
facilitate the use of a wide variety of distributed generation 
technologies by electric customers, including renewable technologies 
such as solar and wind power.
  This bill also requires fair transmission rules for intermittent 
generation. By that, I am referring to wind and solar generation in 
particular. Those types of generations should not be unfairly penalized 
because of the natural variability of these resources from day to day 
or hour to hour.
  Finally, the bill mandates easier interconnection for distributed 
energy production into the interstate transmission grid. It requires 
States to examine ways to facilitate interconnection of distributed 
energy in local electric distribution systems.
  A fourth way in which the bill promotes the use of renewables is by 
disseminating information about and facilitating access to areas with 
high resource potential. Particularly here, I am talking about public 
lands. There are many places in the Nation--particularly in the West 
and in the State that I represent in the Senate--where we have 
significant untapped renewable energy potential. The bill creates a 
pilot program in the Department of Interior and in the Forest Service 
for development of wind and solar energy projects on Federal land. The 
bill authorizes the study of renewable energy development potential on 
Indian tribal lands. The bill requires an annual publication of the 
assessment of available renewable resources by the Department of 
Energy.
  A fifth and final area in which the bill helps make renewable energy 
a bigger part of the supply picture in the future is through enhanced 
research and development programs. Under this bill, these R&D programs 
at the Department of Energy will grow from an authorized level of $500 
million in fiscal year 2003 to $733 million in fiscal 2006. Renewable 
energy R&D was cited by the distinguished Presidential task force in 
1997 as being significantly underfunded relative to its long-term 
promise and the benefits that we can achieve for our economy if we did 
better by funding this research and development. Our bill expands the 
research and development activity, consistent with the recommendations 
of that task force.
  These are all measures that I have described, which we believe will 
increase the contribution of renewables to our energy supply picture. 
They are balanced in our bill with a very strong commitment to the 
other more traditional energy supply sources. Let me briefly describe 
those.
  Natural gas is one that is very much on our minds and very much a 
fuel of the future as well. I want to briefly describe what the bill 
will do to support continued development in this area. In the area of 
natural gas, our Nation is at a crossroads. We need to make some major 
decisions about our energy security. U.S. natural gas demand is 
expected to increase from 23 trillion cubic feet per year, which is 
what it is now, to 35 trillion cubic feet per year by 2020. Much of 
that demand will be driven by the use of natural gas for electricity 
generation.
  This chart makes the case very strongly. The green line, of course, 
represents production; the red line represents consumption. We can see 
very clearly that consumption is outstripping production by a 
significant amount--even in the year 2000, which is where that line is. 
By the year 2020, the problem becomes much worse. As a result, we are 
at risk of becoming, as a Nation, dependent upon imported natural gas 
that is brought to us by tanker. Countries on which we would rely for 
such gas are, as we all know, prone to political instability. They 
are--as far as we can tell at this point--in the early stages of 
forming an OPEC-like organization for natural gas exporters. There is a 
cover story in the June 2001 issue of the OPEC Bulletin with a headline 
entitled ``Iran Hosts Inaugural Meeting of Gas-Exporting Countries 
Forum.'' I don't think any of us wants to put our Nation into a 
position of having to deal with a natural gas cartel, in addition to 
the cartel that controls the price of oil now.

  This bill will take several steps to try to come up with a different 
policy for natural gas in order to avoid that possibility. It increases 
funding for research to develop domestic natural gas deposits in deep 
water areas of the Gulf of Mexico and in harder to tap geologic 
formations on shore. It provides research funds to explore the 
potential of methane hydrates trapped on the ocean floor. The bill 
authorizes more funds to facilitate the permitting and leasing of 
Federal lands for natural gas production in places where it is 
environmentally acceptable. It addresses a number of developing 
problems in natural gas provision--conflicts over coal methane, 
hydraulic fracturing--and tries to bring those conflicts to resolution 
before we encounter a real crisis.
  But even after all these steps--and I believe each one is useful and 
important--that will not be enough to close the gap that we indicated 
earlier. The most significant thing the bill tries to do for future 
natural gas supply is to provide financial incentives to build a 
pipeline to bring from Alaska the vast reserves of natural gas that 
have been discovered and developed in the Prudhoe Bay region. I know my 
colleague from Alaska, Senator Murkowski, has championed this for some 
time. This is a high priority for his

[[Page S1434]]

State. It is a high priority for this Nation, in my view. The existing 
reserves are estimated to be over 30 trillion cubic feet of gas. It is 
estimated that the total natural gas resource in the North Slope is 
enormous--on the order of 100 trillion cubic feet.
  The natural gas pipeline from Alaska to the lower 48 would provide 
daily at least 4 billion to 6 billion cubic feet of natural gas before 
the end of the decade.
  Once a pipeline is constructed, it would provide gas to American 
consumers for at least 30 years and would be a stabilizing force on 
natural gas prices. We all saw the volatility in natural gas prices in 
the year or 18 months where at one point they were up around $8 per 
MCF, and now it is down around $2 per MCF. Building this pipeline, we 
believe, will stabilize the price, and that will benefit consumers 
tremendously.
  This project makes a great deal of sense for our Nation, but it is 
not happening because of this uncertainty about the investment risk of 
building such a major pipeline, making such an enormous investment. By 
any measure, the pipeline would be one of the largest construction 
projects ever undertaken. Construction would take approximately 8 
years, from start to finish. It would require $15 billion to $20 
billion. The pipeline project would create a massive number of jobs in 
Alaska, Canada, and in the lower 48. It would require the construction 
of the largest gas treatment plants in the world, and the laying of 
about 3,600 miles of pipe. It would require an enormous amount of steel 
to be produced. The number of jobs that would be created also is 
extremely significant--350,000 to 400,000 jobs, at a time when the 
steel industry is suffering harm from global overcapacity of steel 
production and foreign dumping. A project that would require over 500 
million tons of steel means real jobs for workers in communities and 
States that produce steel.
  Since natural gas prices vary, as I indicated before, from $2 to $8 
and sometimes $10 per million cubic feet, it is hard for the free 
market to take this challenge on by itself. At the same time, we want 
to rely on the private sector to the greatest extent possible. There 
are two major groups of potential investors in such a pipeline, and the 
provisions of the bill are aimed at giving them both a shot at 
proposing a successful project. The provisions include an expedited 
process for the permits, rights of way, and certificates needed for the 
U.S. segment of the pipeline.
  Time is money in any construction project, and in a construction 
project of this magnitude, uncertainty and delay will kill the project. 
The Government has an obligation on behalf of U.S. consumers to see 
that it exercises its role in a responsible way and in an expeditious 
way.
  The Alaska Natural Gas Transportation Act of 1976 provided a 
framework for construction and operation of a gas pipeline along a 
designated route. Our legislation preserves this option. It also 
provides an alternative expedited procedure in the event the parties 
decide to pursue a different route.
  Because of the enormous benefits this long-term supply of energy will 
have on the economy and the significant uncertainties in natural gas 
prices, I believe the Government has an interest in reducing the 
financial risks associated with the project. Accordingly, the bill does 
authorize in its present form loan guarantees for the project, as long 
as appropriate filings are made within 6 months after the bill becomes 
law.
  I understand there are a number of refinements and modifications that 
may be sought by my distinguished ranking member on the Energy 
Committee as we move forward. He is also vitally interested in the 
project. For example, we are working together to come up with a tax 
provision that could reduce the financial uncertainty of the economics 
of the project going forward. Both of us are committed to encouraging 
Alaska North Slope producers, the interested pipeline companies, the 
State of Alaska, and other interested parties to begin serious 
negotiations on a final outline of a commercial agreement.
  I believe it is important for the Senate to be proactive on this 
project, not simply to sit back and cross our fingers and hope that 
someday it occurs. If we do not act while there is a substantial 
private sector interest in building this pipeline, we will lose an 
important opportunity to bolster our energy security in natural gas. As 
a consequence, we might be hearing speeches 10, 20 years from now about 
our dependence upon foreign sources of natural gas that sound a lot 
like the speeches we will be hearing today and in the next few days 
about our dependence on foreign sources of oil.
  Let me say a few words about oil. That is a central part of our 
energy mix. Clearly, we want to increase domestic production of oil and 
maintain domestic production of oil. The volume of rhetoric about 
drilling in the Arctic National Wildlife Refuge--both from the 
proponents and the opponents--would lead one to think that is the only 
place in the country where we can look for additional oil. In my view, 
that is far from true.
  There are 32 million acres of the Outer Continental Shelf off the 
coast of Texas, Louisiana, and Mississippi that have already been 
leased by the Government to oil companies for exploration and 
production. This chart shows that. As shown on this map, the yellow 
part of this chart indicates those areas that have been leased and not 
yet developed. The red dots indicate actual producing wells.
  In addition to production in the Gulf of Mexico, there are 
outstanding prospects for increased production from National Petroleum 
Reserve-Alaska, which lies to the west of the Prudhoe Bay region. Under 
the Clinton administration, leasing was expanded in this area. Industry 
has made some major finds. There is no law that needs to be passed to 
have additional parts of this area leased. As I understand it, the 
Secretary of the Interior is proceeding to prepare some of that area 
for leasing.

  If the problem is not finding areas to lease under current law, why 
is there not more domestic production going on in the areas that have 
already been leased for exploration and production? In my view, an 
important reason might be the difference between our Federal and State 
royalty and tax policies relative to those in other countries with oil 
and gas resources.
  Oil exploration and production is a worldwide business. Areas such as 
the ones on the map and in Alaska compete with other producing regions 
around the world. U.S. companies are making major commitments of 
capital derived from their earnings in the United States to develop 
energy resources elsewhere in the world. For example, ExxonMobil is 
investing $20 billion to develop natural gas in Saudi Arabia. Other 
U.S. companies are actively looking for oil in the Caspian region.
  A key initiative in the bill to support increased domestic production 
is to have a top-to-bottom review of Federal and State royalty and tax 
policies on domestic oil and gas production, and then to have a 
comparison of that with similar provisions encountered by companies in 
other countries.
  Our current U.S. policies were put in place when the United States 
had abundant and easily accessible reserves. We have fewer such 
reserves now. While technology for finding oil has continued to 
improve, we should consider whether our tax and our fiscal policies 
should change to policies that enhance the economics for exploration of 
oil and gas in more challenging geologic formations.
  Our fiscal policies should also be changed to take into account the 
boom-and-bust nature of the industry and to provide incentives to 
maintain domestic production when prices are low. They might also 
include disincentives for buying and sitting on leases without 
developing them in a timely way. That is what we have seen off the 
coast in the gulf.
  All of that I have described is a tall order. I do not believe 
Congress has the background it needs to revise these laws in a sensible 
way right now. We need to have a distinguished external group 
investigate these issues and make reports back. Setting this process in 
motion might prove to be useful to boost domestic production in the 
long run.
  A second proposal to boost domestic production in the near future is 
to provide adequate funding for the Federal programs that actually 
issue new leases and permits for oil and gas production. For all the 
rhetoric we have

[[Page S1435]]

heard from the administration about the need to increase domestic 
production, the budget request we received for fiscal year 2002 did not 
ask for enough money to do this job properly.
  The result of inadequate funding for land management agencies is 
delay and frustration on the part of oil and gas producers. This bill 
provides increased budget levels for these functions. The Federal 
Government can then take the necessary steps to make oil and gas 
leasing faster and more predictable where it is already permitted and 
where it is able to be achieved in an environmentally acceptable way.
  The bill also contains increased R&D funding to support oil and gas 
production by smaller companies and independent producers. These are 
the entities that account for the majority of onshore U.S. production 
of oil. They do not have the resources to do their own exploration and 
production research and development. Improving their ability to use new 
technology to find and produce oil and gas is a good policy for 
increased domestic production.
  Here, too, there is room for improvement on the part of the 
administration. The most recent budget request we have seen from them 
has slashed funding in the Department of Energy for these very 
programs. My ranking member and I oppose these cuts. It is important 
for the Senate to take a position in favor of increased authorization 
for these programs, not cutting funding for these programs, and this 
bill will do that.
  Let me say a few words about coal. Another very important contributor 
to our current energy supply picture is coal. This chart makes the case 
very dramatically. We can see this is a chart that depicts where the 
electricity generation comes from by fuel. We can see that the top line 
is coal. So 59 percent of the electricity generated today in this 
country is produced from coal.
  We have a tremendous coal resource. We have been called by some the 
Saudi Arabia of coal by some. But coal in our energy future needs to be 
clean, and it needs to be emission free. Coal-based generation produces 
more greenhouse gas emissions per Btu of energy output than does 
natural-gas-fired generation.
  Other pollutants from coal-fired plants have been a source of 
regional tensions between the States where coal-fired plants are based 
and States downwind from those particular States.
  Coal is too important a resource for us to write off. Technology 
holds promise for dramatically lowering, even reducing to zero, the 
emissions from coal-based plants.
  This bill takes a very forward-looking approach to the issue. It 
authorizes $200 million per year for research and development and 
demonstration programs, based on coal gasification, on carbon 
sequestration, and related ultraclean technologies for burning coal. 
This proposal was a result of a strong bipartisan push in the Energy 
Committee by Senator Bayh and Senator Thomas, who was present a few 
minutes ago and I am sure will want to speak on this issue.
  There is one more example of the crucial role research and 
development is going to have to play in shaping the energy future we 
want. Let me say a few words about nuclear power because clearly 
research and development is also the key to the future of nuclear power 
in the country.
  Nuclear reactors emit no greenhouse gases. So on that basis one would 
think they were an option we should be looking to for the future. But 
nuclear plants have other characteristics that are not as attractive. 
They have very high upfront capital costs compared to other generating 
options. That puts them at a disadvantage in the marketplace.
  The nuclear waste problem is still not solved. Nuclear safety is a 
continuing concern for the public. Our cadre of nuclear scientists and 
engineers is growing older and is dwindling in size, and we are not 
seeing a large supply of students being trained to help us deal with 
nuclear issues in the future. This bill takes on these problems by 
focusing on research and development on new nuclear plant designs that 
might address these problems and on a program to strengthen university 
departments of nuclear science and technology.
  The bill also contains a partial reauthorization of the basic nuclear 
liability statute, the Price-Anderson Act. The part that is in the bill 
deals with the liability of the Department of Energy nuclear 
contractors, including our national laboratories that are a significant 
source of our national nuclear expertise. The other main part of the 
Price-Anderson Act dealing with the commercial nuclear power industry 
is likely to feature prominently in the debate we have on this bill, 
and I believe we should go ahead with full authorization of that bill 
and will support efforts to do that.
  Hydropower is another source of energy supply that this bill tries to 
address in electricity generation. Many hydropower facilities are 
reaching the age at which their original licenses under the Federal 
Power Act are about to expire. The process of relicensing these 
facilities needs to be protective of the environment, predictable for 
licensees, and efficient in the way it is administered.
  We have been working for months with various Senators to try to come 
up with compromise, consensus language that would accomplish all of 
these objectives. I hope we can do so, and I hope we can include 
legislation in the final version of this bill by the time it passes the 
Senate. We have legislative language in the bill right now, but there 
are still concerns about it, and I am aware of those concerns.
  Indian energy, a final way this bill focuses on increasing the supply 
of domestic energy, is through a series of provisions facilitating the 
development of energy resources on Indian lands. We have a significant 
share of our untapped domestic energy resources located on Indian 
lands. I will not go into great detail about those provisions but 
simply say it is very much in our national interest that we 
facilitate development of those resources. It can be a benefit to the 
Indian tribes that have those lands. It can also be a great benefit to 
our Nation.

  Our second big goal in the bill, on that list of three goals I 
mentioned, is increased efficiency in the use of energy. So far, I have 
described ways in which the bill achieves the goal of increasing 
supplies of energy, but let me talk a little bit about this efficiency 
issue.
  As I have mentioned consistently through this past year, we cannot 
have a sound energy policy based only on production or based only on 
conservation; we need a combination of the two. The energy policy needs 
to make a major push toward increased efficiency.
  The first major way in which we can use energy supplies more 
effectively and efficiently is by having an electricity transmission 
system that is ready for the challenges of the 21st century. 
Electricity is essential to our way of life. It is how we light our 
offices. It is how we light our homes.
  Our electric system largely operates on a design that is nearly a 
century old. The vulnerabilities of the current system by which we 
regulate electricity were illustrated by the electricity problems faced 
by California and the West last year and the year before. Those 
problems which occurred on the west coast should be a wake-up call to 
the fact that we need to deal with these electricity markets in a more 
proactive way.
  In addition to these problems, there are important opportunities 
during the next few years. Literally billions of dollars of investment 
will be planned and committed to electricity generation and 
transmission. Those investments will have 30- to 50-year lifespans, so 
it is important we get it right. Market institutions need to be 
developed that ensure reliable and affordable supplies of electricity, 
and policies need to be adopted that favor future investments in new 
technologies and give consumers real choices over the energy they use. 
I believe the provisions contained in this bill do that.
  First, the bill sorts out the roles and responsibilities between the 
Federal Energy Regulatory Commission and the States. We give FERC 
clearer direction as to what its role is in ensuring the adequacy and 
reliability of a transmission system. FERC is given, in fact, 
responsibility for making mandatory adherence to rules to promote the 
reliability of this interstate transmission system in this legislation. 
The bill also gives FERC tools to make sure competitive markets work 
well to provide customers with affordable electricity by strengthening 
its authority

[[Page S1436]]

over mergers, clarifying its authority over market-based rates, and 
increasing the transparency in energy market information.
  One of the lessons we all learned as we watched the collapse of Enron 
was that we need more transparency. We need more openness in these 
markets so we can see on a real-time basis what is being bought and 
what is being sold and at what price.
  Finally, the bill begins to address the tough issue of siting new 
electric transmission lines. This is obviously a contentious and 
controversial issue. I believe the Federal Government can play a role, 
through FERC, in assisting in decisionmaking at the regional level, and 
we try to put in place a framework for the Federal Government to assist 
States in more effective regional coordination on all of these energy 
issues, including transmission siting.
  On energy efficiency, this modernized electricity system is a major 
way to move ahead and position the country for the future. A second is 
to increase the efficiency of the various uses of energy across the 
board in vehicles, in industry, in appliances, in buildings. I will 
talk a minute for each of those.
  The bill contains provisions that directly bear on fuel efficiency of 
vehicles. We will have a great deal of debate on that. One mandates 
higher fuel efficiency in the vehicles that are purchased by Federal 
agencies for civilian use. We also provide a framework for the 
Department of Energy to assist States in expanding voluntary incentive 
programs. The major initiative in this area is an increase in the 
corporate average fuel efficiency, or economy, standards. The House-
passed bill had a very weak provision on this subject. We attempt to do 
better.
  The chart we have shows the problem we have with oil being imported 
into this country. The top line is total oil demand. Something in the 
range of 52 to 54 percent of our oil today is imported. Our total 
demand for oil is represented by that top line, and it is continuing to 
rise as we go from the year 2000 to the year 2020.
  All projections are it will rise. The reason it is rising, looking at 
the next line down: The transportation demand line is also 
rising. Unless we can do something to flatten out that transportation 
demand line by using gasoline more efficiently, we will not do anything 
very significant to reduce our dependence on foreign oil.

  We try to do that in this bill. As I indicated, there will be a great 
deal of debate about whether or not we are doing what we should do 
there. I believe strongly that we should strengthen or increase 
corporate average fuel economy standards. We are trying to do that.
  This chart also reflects our projection as to what would be achieved 
by opening the Arctic National Wildlife Refuge to drilling. The small 
red line on the bottom of the chart shows that there would be increased 
production. The green line on the bottom is domestic oil production. It 
would go up if there were an opening of ANWR to drilling and 
development, but in our view it does not constitute a substantial 
solution to the problems we face.
  These issues, both the CAFE standards and the ANWR issue, are issues 
about which we will have a great deal of debate.
  We also have provisions in the bill to improve the energy efficiency 
of Federal buildings and schools and public housing. We have provisions 
to reduce energy use in manufacturing and other industries, provisions 
to increase efficiency for numerous consumer and commercial products, 
and we reauthorize the important Federal grant programs that help low-
income families pay their energy bills and reduce their energy costs. 
That is something which I think all Senators will support.
  We could go into great detail about each of these, but in the 
interest of time I will not do so at this point. Let me just point out 
that there will be an opportunity to debate these issues as we get into 
the amendments. The Senate bill addresses each of these areas. We have 
tried to work hard with Senators who have an interest in them to come 
up with consensus proposals.
  Let me also talk about energy efficiency research and development. 
The research and development emphasis that is in this bill applies to 
increased supply because much of our ability to increase supply depends 
upon increased research and development activity, but also the 
increased research and development applies to improved efficiency in 
our use of energy. We have a major push for that in the bill. We 
propose a funding increase--from $810 million in fiscal year 2003 to 
over $1 billion in 2006--that will support efficiency progress across 
the spectrum. I believe this is one of those areas where we have a 
tremendous amount that can be accomplished. I believe very strongly the 
provisions in this bill will move us in that direction.
  One particularly exciting R&D activity being funded as part of this 
bill is a program called the Next Generation Lighting Initiative. In 
contrast to a grant program with the same name in the House bill, the 
Senate bill establishes a Government-industry partnership to develop 
the technology for semiconductor-based lighting that would be 
ultraefficient. The model for this partnership is the SEMATECH 
consortium, established several years ago, which boosted our national 
competitiveness in semiconductor manufacturing in the 1980s and 1990s.
  Current lighting technology wastes an enormous amount of energy going 
into the bulb in the form of heat. That is one reason it feels so hot 
under kleig lights. Light-emitting diodes, which have been developed in 
recent years, create light with very little energy loss. The only 
problem is that we do not know how to commercially manufacture, at low 
cost, reliable light-emitting diodes producing white light. There are a 
lot of good ideas for how to do that. This Next Generation Lighting 
Initiative will try to develop long-lasting, cost-competitive white 
lights from diodes by the year 2011, and develop those in a way they 
can be manufactured at a low cost. We are continuing to use the light 
bulb that Thomas Edison developed. After 100 years, I think it is time 
we move to a new generation of technology. This provision in our bill 
tries to help us do that.

  All the major elements of the U.S. lighting industry are supporting 
this effort in the Senate energy bill. The rationale for their interest 
and for a Government-industry partnership is clear: Lighting represents 
20 percent to 30 percent of all U.S. electricity use. The best current 
systems are about 25 percent efficient. That is, for every kilowatt of 
power going in, you get about 25 percent of it back in light. We need 
to change that. The technology is here to do that. We need to find a 
way to manufacture it in a low-cost way.
  These energy efficiency assistance programs are the Low Income Home 
Energy Assistance Program, the LIHEAP program, with which we are all 
familiar here in the Senate, and also the Weatherization Assistance 
Program. We propose to authorize those at a higher level and to make 
those more useful programs for all parts of the country. As I said 
before, those are provisions which should get the support of all 
Senators. I certainly hope that is the case.
  The third and final goal of the bill is reducing the adverse effects 
of energy on the environment. Energy production and use are associated 
with a host of consequences for the environment. We need to strike the 
right balance among energy and the environment and the economy in order 
to deal with the longstanding concern we have in the Senate and in our 
society in this regard. This bill addresses these issues in a number of 
ways.
  There are provisions in the bill dealing with the legacy of past 
problems posed by energy production and use for the environment. These 
include programs to clean up orphaned and abandoned oil and gas wells 
and programs to develop research to remediate groundwater supplies 
damaged by past energy activities. Another way in which the bill 
addresses the connection is by developing and adopting new energy 
technologies with better environmental performance.
  Probably the most important future problem on which we need to focus 
as part of this bill is the problem of increased concentrations of 
greenhouse gases in the atmosphere and the impact they are believed to 
be having on the climate. We have various provisions in this bill that 
ensure we integrate climate change strategy with our energy policy. We 
will have a chance later in the debate to go into those in great 
detail. Some of those provisions

[[Page S1437]]

are drawn from a bipartisan climate change bill sponsored by Senator 
Byrd and Senator Stevens. That had the unanimous support of the 
Committee on Governmental Affairs when it was reported out of that 
committee.
  We need a strategic plan for climate change that can get buy-in from 
both the Congress and the administration. Just before our Presidents 
Day recess, President Bush announced a new climate change policy 
framework based on reducing the greenhouse gas emission intensity of 
the U.S. economy. Emission intensity is defined as the output of 
greenhouse gases divided by the gross domestic product. The President 
announced that his plan would decrease emission intensity by 18 
percent by the year 2012. That sounds impressive until you look at this 
chart we have here entitled ``Greenhouse Gas Emission Intensity; recent 
trends as compared to the Bush proposal.''

  The black line which leads up to about halfway through the chart, up 
to 2002, shows how greenhouse gas emission intensity has been declining 
in the 1990s. Greenhouse gas intensity has been declining because the 
part of the economy that is growing fastest is the service sector, 
which does not produce greenhouse gases in any significant amount.
  The red line, which is on this chart--you can see it very clearly 
there--shows what the President claims his proposal would do.
  The green line, which is harder to see because it is covered up by 
the red line, shows what would happen if current trends were simply to 
continue. The point is, it is hard to see the green line on the chart 
because it is almost completely covered up by the red line. Simply put, 
the President's proposal would not change the trend in greenhouse gas 
intensity over what would likely happen at any rate based on current 
trends. It is perhaps a good thing. The President has indicated an 
interest in climate change policy--a policy that does not improve over 
what would likely happen anyway, and is certainly not an adequate 
strategic plan in my view. We will have an opportunity to debate that 
issue as part of this bill as well.
  I will not go into detail about the various provisions in the Byrd-
Stevens proposal except to say that I believe they set up a good 
framework for addressing this issue in future years.
  Strengthening our Nation's energy infrastructure security is another 
key issue as a result of the terrorist attacks we have suffered.
  This is something that I am sure is of great concern to all Senators. 
We have various provisions in the bill that attempt to do that. One set 
of relevant provisions has already been described--giving FERC 
authority to promulgate rules to ensure the reliability of States' 
electric grids.
  Another set of provisions in the bill focuses on the Nation's 
Strategic Petroleum Reserve. This is a major insurance policy against 
cutoffs of oil from the Middle East.
  We have a provision to provide for permanent authorization of that 
and fulfilling of the Strategic Petroleum Reserve.
  Let me say a few final words about R&D, technology transfer, and 
education as crosscutting themes in this bill.
  I have described the many provisions of this bill in terms of the 
three overarching themes of increasing energy supply, increasing the 
efficiency and productivity of energy use, and coordinating energy 
policy with other societal goals. Throughout these discussions, I have 
described R&D programs that play a major role in achieving these goals. 
An aggressive and forward-looking R&D program on energy is the 
pervasive cross-cutting theme of this bill. I believe there is a broad 
consensus in the Senate that new science and new technology are at the 
core of any solution to our national energy challenges. Yet, despite 
the importance of energy R&D, our recent commitment to it leaves a lot 
to be desired. Federal energy technology R&D today is equivalent, in 
constant dollars, to what it was in 1966. Yet, our economy is 3 times 
larger today than it was in 1966. When you look at trends in Federal 
expenditures for R&D over the last 10 years, some startling facts stand 
out.
  First, while Federal R&D expenditures for health science at the NIH--
the blue line--and basic science at the National Science Foundation--
the black line--have grown during the 1990s, R&D support for energy--
the red line--has stagnated or even fallen, in real timers. Today, in 
real terms, we are still below where we were in 1990 in terms of 
support for energy science and technology. For fiscal year 2002 and 
fiscal year 2003, the Bush administration has proposed nothing to 
reverse these trends. Both budget requests proposed cuts in R&D for 
energy.
  It is hard to see how you build a 21st century energy system on 
stagnant, 1960's-level-of-effort R&D budgets. This bill builds these 
budgets in a rational way to levels that, by 2006, will give us a 
robust energy R&D effort to support the goals of this bill.
  As we proceed with this debate, there will be areas in which we reach 
bipartisan agreement and areas in which we will differ substantially. 
In the latter areas, we will have to make a choice between 
alternatives.
  With respect to the areas of bipartisan agreement, I am pleased with 
the support that we have received from the administration for our 
position that electricity is an integral part of any energy bill. They 
have worked hard on assisting with electricity as a part of this energy 
bill. We may differ on a number of the details, but the President and 
the Department of Energy have made clear their interest in working on a 
bipartisan basis to get electricity provisions that increase renewable 
sources of electricity, protect consumers, and promote a reliable and 
effective transmission grid.
  The Administration has also supported our initiative to promote the 
construction of the Arctic Natural Gas Pipeline.
  There are also some important differences between where we are 
starting in this bill and the administration's positions. Perhaps the 
most reported-upon difference is on drilling in the Arctic Refuge. We 
will probably not get to that debate immediately, but when we do, the 
differences will be apparent.
  We support a stronger standard for central air conditioning units, 
recognizing that their energy use on hot summer days are a key 
contributor to the threat of brownouts and blackouts. In my view, the 
administration's position to roll back the standards it found when it 
took office was a mistake, based on incorrect and outdated data on 
costs. In hearings in the Energy Committee, this point was explored in 
detail.
  We are advocating a much stronger position on CAFE standards in this 
bill than the administration is willing to step up to. We believe that 
there is no conflict between safety, employment, and higher fuel 
efficiency in cars. They myths that higher standards will lead to less 
safe cars, or that we will lose domestic employment if we make our cars 
and trucks more fuel efficient are just that--myths. The National 
Academy of Sciences pretty much exploded them in the report that 
Congress commissioned it to write on the subject.
  Finally, now that we have seen the President's proposal on climate 
change, we must recognize some real differences between our approach 
and the President's plan, which is simply business as usual.
  I hope there are some concrete steps we can take to actually reduce 
the amount of carbon we are putting into the atmosphere. It is not 
enough to just reduce it relative to our GNP. We need to reduce it in 
absolute terms at some stage in the foreseeable future.
  I hope we can have a very good debate. I hope we can come together--
both Democrat and Republican Members of the Senate, as well as the 
administration--and have a thoughtful analysis of our current energy 
challenges and demonstrate a willingness to take some bold policy steps 
to address those challenges. The country needs no less. Our national 
security, our future economic prosperity, and the jobs of millions of 
Americans are at stake as we try to shape an energy policy for these 
next several decades.
  I look forward to the debate. I know my colleague from Alaska, the 
ranking member on the committee, is here to give his opening statement.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Alaska is recognized.
  Mr. MURKOWSKI. Mr. President, under the order, we are likely to go 
out at 12:30 for the luncheon recess.
  The PRESIDING OFFICER. The Senator is correct.
  Mr. MURKOWSKI. Senator Bingaman has used how much time?

[[Page S1438]]

  The PRESIDING OFFICER. Approximately 55 minutes.
  Mr. MURKOWSKI. So I would have perhaps 30 minutes left. I propose 
that I be allowed to proceed when we come back. I have probably a 
little less than 55 minutes. I am somewhat reluctant to start and be 
interrupted. I would propose to the leader that we might use the 
remaining time for Senators who want to speak in morning business, and 
I be allowed to introduce my opening statement at 2 o'clock when we 
come back. We will probably have statements and take amendments as they 
come up.
  Mr. REID. Mr. President, if I could respond to my friend from Alaska, 
what the Senator from Alaska proposes is that we go into a period of 
morning business until 12:30, and at 2:15, when we return, the Senator 
from Alaska be recognized for up to 1 hour; at 3:15, the Senator from 
South Dakota, the majority leader, or his designee would offer a 
modification. The Senator has suggested that he proceed at 2:15.
  For the convenience of everyone, I propose that the majority leader, 
or his designee, at 2:15 lay down the modification, which would take a 
matter of a few minutes at the most, and then the Senator from Alaska 
would have 1 hour to present his opening statement.
  Mr. MURKOWSKI. If I may respond, I certainly have no objection to the 
procedure of the majority leader laying down his modification. I don't 
want to be bound by a time agreement. We didn't discuss a time 
agreement on opening statements. It is not my intention to speak at 
length, but I would not like to be limited necessarily.
  Mr. REID. I think that is entirely appropriate. I would like to hear 
the Senator speak longer than an hour.
  Mr. MURKOWSKI. I am sure the Senator would.

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