[Congressional Record Volume 148, Number 24 (Thursday, March 7, 2002)]
[Senate]
[Pages S1621-S1658]
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 the mission areas through technology
transfer and partnerships for fiscal years 2002 through 2006,
and for other purposes.
Pending:
Daschle/Bingaman further modified amendment No. 2917, in
the nature of a substitute.
Mr. REID. Madam President, I suggest the absence of a quorum.
The ACTING PRESIDENT pro tempore. The clerk will call the roll.
[[Page S1622]]
The assistant legislative clerk proceeded to call the roll.
Mr. SMITH of Oregon. Madam President, I ask unanimous consent the
order for the quorum call be rescinded.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
Mr. SMITH of Oregon. Madam President, I ask unanimous consent to
speak for 2, maybe 3 minutes as in morning business.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
(The remarks of Mr. Smith of Oregon are printed in today's Record
under ``Morning Business.'')
Mr. SMITH of Oregon. Madam President, I yield the floor and suggest
the absence of a quorum.
The ACTING PRESIDENT pro tempore. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. VOINOVICH. Madam President, I ask unanimous consent the order for
the quorum call be rescinded.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
Amendment No. 2983 To Amendment No. 2917, As Further Modified
Mr. VOINOVICH. Madam President, I send an amendment to the desk and
ask for its immediate consideration.
The ACTING PRESIDENT pro tempore. The clerk will report the
amendment.
The assistant legislative clerk read as follows:
The Senator from Ohio [Mr. Voinovich], for himself, Mr.
Bingaman, Mr. Smith of New Hampshire, Mr. Domenici, Ms.
Landrieu, Mr. Murkowski, Mr. Hagel, Mr. Crapo, Mr. Thomas,
Mr. Inhofe, Mr. Thompson, Mr. Bond, Mr. Campbell, Mr. Frist,
Mr. Kyl, and Mr. Craig, proposes an amendment numbered 2983
to amendment No. 2917.
Mr. VOINOVICH. Madam President, I ask unanimous consent reading of
the amendment be dispensed with.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
The amendment is as follows:
(Purpose: To reauthorize the Price-Anderson Act)
On page 115, strike line 5 and all that follows through
page 119, line 10 and insert the following:
Subtitle A--Price-Anderson Act Reauthorization
SEC. 501. SHORT TITLE.
This subtitle may be cited as the ``Price-Anderson
Amendments Act of 2002''.
SEC. 502. EXTENSION OF INDEMNIFICATION AUTHORITY.
(a) Indemnification of Nuclear Regulatory Commission
Licensees.--Section 170 c. of the Atomic Energy Act of 1954
(42 U.S.C. 2210(c)) is amended--
(1) in the subsection heading, by striking ``LICENSES'' and
inserting ``LICENSEES''; and
(2) by striking ``August 1, 2002'' each place it appears
and inserting ``August 1, 2012''.
(b) Indemnification of Department of Energy Contractors.--
Section 170 d.(1)(A) of the Atomic Energy Act of 1954 (42
U.S.C. 2210(d)(1)(A)) is amended by striking ``, until August
1, 2002,''.
(c) Indemnification of Nonprofit Educational
Institutions.--Section 170 k. of the Atomic Energy Act of
1954 (42 U.S.C. 2210(k)) is amended by striking ``August 1,
2002'' each place it appears and inserting ``August 1,
2012''.
SEC. 503. DEPARTMENT OF ENERGY LIABILITY LIMIT.
(a) Indemnification of Department of Energy Contractors.--
Seciton 170 d. of the Atomic Energy Act of 1954 (42 U.S.C.
2210(d)) is amended by striking paragraph (2) and inserting
the following:
``(2) In agreements of indemnification entered into under
paragraph (1), the Secretary--
``(A) may require the contractor to provide and maintain
financial protection of such a type and in such amounts as
the Secretary shall determine to be appropriate to cover
public liability arising out of or in connection with the
contractual activity; and
``(B) shall indemnify the persons indemnified against such
liability above the amount of the financial protection
required, in the amount of $10,000,000,000 (subject to
adjustment for inflation under subsection t.), in the
aggregate, for all persons indemnified in connection with
such contract and for each nuclear incident, including such
legal costs of the contractor as are approved by the
Secretary.''.
(b) Contract Amendments.--Section 170 d. of the Atomic
Energy Act of 1954 (42 U.S.C. 2210(d)) is further amended by
striking paragraph (3) and inserting the following:
``(3) All agreements of indemnification under which the
Department of Energy (or its predecessor agencies) may be
required to indemnify any person under this section shall be
deemed to be amended, on the date of the enactment of the
Price-Anderson Amendments Act of 2002, to reflect the amount
of indemnity for public liability and any applicable
financial protection required of the contractor under this
subsection.''.
(c) Liability Limit.--Section 170 e.(1)(B) of the Atomic
Energy Act of 1954 (42 U.S.C. 2210(e)(1)(B)) is amended
(1) by striking ``the maximum amount of financial
protection required under subsection b. or''; and
(2) by striking ``paragraph (3) of subsection d., whichever
amount is more'' and inserting ``paragraph (2) of subsection
d.''.
SEC. 504. INCIDENTS OUTSIDE THE UNITED STATES.
(a) Amount of Indemnification.--Section 170 d.(5) of the
Atomic Energy Act of 1954 (42 U.S.C. 2210(d)(5)) is amended
by striking ``$100,000,000'' and inserting ``$500,000,000''.
(b) Liability Limit.--Seciton 170 e.(4) of the Atomic
Energy Act of 1954 (42 U.S.C. 2210(e)(4)) is amended by
striking ``$100,000,000'' and inserting ``$500,000,000''.
SEC. 505. REPORTS.
Section 170 p. of the Atomic Energy Act of 1954 (42 U.S.C.
2210(p)) is amended by striking ``August 1, 1998'' and
inserting ``August 1, 2008''.
SEC. 506. INFLATION ADJUSTMENT.
Section 170 t. of the Atomic Energy Act of 1954 (42 U.S.C.
2210(t)) is amended--
(1) by redesignating paragraph (2) as paragraph (3); and
(2) by adding after paragraph (1) the following:
``(2) The Secretary shall adjust the amount of
indemnification provided under an agreement of
indemnification under subsection d. not less than once during
each 5-year period following July 1, 2002, in accordance with
the aggregate percentage change in the Consumer Price Index
since--
``(A) that date, in the case of the first adjustment under
this paragraph; or
``(B) the previous adjustment under this paragraph.''.
SEC. 507. CIVIL PENALTIES.
(a) Repeal of Automatic Remission.--Section 234A b.(2) of
the Atomic Energy Act of 1954 (42 U.S.C. 2282a (b)(2)) is
amended by striking the last sentence.
(b) Limitation for Not-for-Profit Institutions.--Subsection
d. of section 234A of the Atomic Energy Act of 1954 (42
U.S.C. 2282a(d)) is amended to read as follows:
``d. (1) Notwithstanding subsection a., in the case of any
not-for-profit contractor, subcontractor, or supplier, the
total amount of civil penalties assessed under subsection a.
may not exceed the total amount of fees paid within any one-
year period (as determined by the Secretary) under the
contract under which the violation occurs.
``(2) For purposes of this section, the term `not-for-
profit' means that no part of the net earnings of the
contractor, subcontractor, or supplier inures, or may
lawfully inure, to the benefit of any natural person or for-
profit artificial person.''.
(c) Effective Date.--The amendments made by this section
shall not apply to any violation of the Atomic Energy Act of
1954 occurring under a contract entered into before the date
of enactment of this section.
SEC. 508. TREATMENT OF MODULAR REACTORS.
Section 170 b. of the Atomic Energy Act of 1954 (42 U.S.C.
2210(b)) is amended by adding at the end the following:
``(5)(A) For purposes of this section only, the Commission
shall consider a combination of facilities described in
subparagraph (B) to be a single facility having a rated
capacity of 100,000 electrical kilowatts or more.
``(B) A combination of facilities referred to in
subparagraph (A) is 2 or more facilities located at a single
site, each of which has a rated capacity of 100,000
electrical kilowatts or more but not more than 300,000
electrical kilowatts, with a combined rated capacity of not
more than 1,300,000 electrical kilowatts.''.
SEC. 509. EFFECTIVE DATE.
The amendments made by sections 503(a) and 504 do not apply
to any nuclear incident that occurs before the date of the
enactment of this subtitle.
Mr. VOINOVICH. Madam President, I rise today to offer the Price-
Anderson reauthorization bill as an amendment to the Energy Policy Act.
Last year, as the former chairman of the Nuclear Safety Subcommittee, I
introduced the Price-Anderson reauthorization bill, S. 1360, that
reauthorizes the insurance program for commercial nuclear reactors.
The Price-Anderson Act was first passed back in 1957 and has been
renewed three times since then. The current authorization expires on
August 1 of this year.
This amendment provides the insurance program for commercial nuclear
powerplants and Department of Energy contractor employees. In my State
of Ohio, this is very important for the contractor employees who are
currently working at the Mound and Fernald facilities, former sites of
nuclear facilities of the Department of Energy.
This is the type of must-pass legislation that keeps the trains of
Government running on time.
I think it is important to note that during the previous
administration, both the Department of Energy and the
[[Page S1623]]
Nuclear Regulatory Commission issued reports to Congress recommending
the reauthorization of Price-Anderson.
The DOE and the NRC reports also called for a doubling of the annual
premium paid by the nuclear reactors from $10 million to 20 million.
This recommendation was made prior to the relicensing process. At
that time, the Nuclear Regulatory Commission projected that up to half
of our nuclear reactors would be retired instead of being relicensed.
We have something like 103 nuclear reactors out there.
However, thanks to regulatory improvements made in the process,
largely due to the oversight of the Nuclear Safety Subcommittee, the
NRC believes that most of our nuclear reactors will be in fact
relicensed. Therefore, the NRC issued a statement last year revising
their projections and recommending that the annual premium not be
increased. This amendment follows those recommendations.
It is important for the American public to understand how the Price-
Anderson liability program works. First of all, it is important to
understand it is not a Federal subsidy. The nuclear industry actually
funds the program. Each nuclear powerplant purchases liability
insurance to cover the first $200 million from private insurers for
immediate response in the case of an accident. If the costs exceed $200
million and additional funds are needed, all the other nuclear
reactors--and there are 103 of them--contribute up to $88 million each.
That totals $9.3 billion.
These funds are contributed by other reactors in increments of $10
million per year. If more than the $9.3 billion would be needed,
Congress could then go back to the industry and demand a larger
contribution.
I know of no other industry in which all of the competitors agree up
front to pay for the mistakes or acts of God that impact upon any one
company.
In addition, I know of no facilities of any type anywhere in the
country which are insured for $9.3 billion. It is incredible.
It is also important to note for the American public that the
industry does something else that is very unusual. It waives its
traditional tort defenses so that the fund begins making payments
immediately instead of fighting out claims in the courts. If we had
some kind of a nuclear disaster somewhere, as we did at Three Mile
Island, immediately the insurance companies start paying out claims. As
a matter of fact, after Three Mile Island, claims offices were on the
site within 24 hours. It provides more insurance coverage for Americans
and provides the coverage up front.
America's nuclear energy industry currently provides approximately 20
percent of our energy, while fossil fuels, such as oil, coal, and
natural gas, provide the bulk of the remainder. Nuclear energy is
particularly used in the northeast part of the United States.
Nuclear power is a safe and reliable energy source. It is also a
zero-emission source of energy.
As I discussed in the Senate on Tuesday, just since the nuclear
energy has prevented 62 million tons of sulfur dioxide, a key component
of acid rain, and 32 million tons of nitrogen oxide, a precursor to
ozone, from being released into the atmosphere. It has probably
contributed more to a reduction in emissions than any other source of
energy but for solar and wind and hydroelectric.
This has had a tremendous positive effect on the environment and
public health. In my view and in the view of many, coal and nuclear
power have been inappropriately demonized over the last few years.
These characterizations are patently unfair if we look at the record.
Both are efficient and cost-effective sources of energy, and given
our current energy consumption rates, we are going to be dependent upon
them for the foreseeable future.
The truth is, we are not meeting our energy needs currently
domestically. And if we look at 20-year projections, we are going to
need another 30 percent production of energy if we are going to be
competitive.
We are taking steps to make coal a cleaner burning fuel. We should
also do whatever we can to promote a safe and efficient nuclear energy
industry for our Nation and encourage the development of new nuclear
reactors such as modular reactors which we have been discussing of
late. Reauthorizing the Price-Anderson Act is a major step in that
direction.
I thank my colleagues for cosponsoring this amendment: Senators
Bingaman, Bob Smith, Inhofe, Murkowski, Domenici, Landrieu, Hagel,
Crapo, Thomas, Bond, Campbell, and Frist. I urge all of my colleagues
to support this amendment. This should not be something that is
extremely controversial. It is long overdue. It is something we have
had since 1957. We should get on with it and make it part of Senator
Daschle's energy legislation.
I yield the floor.
The ACTING PRESIDENT pro tempore. The Senator from New Mexico.
Mr. BINGAMAN. Madam President, I commend the Senator for offering
this amendment. I am cosponsoring the amendment. Title V of the
underlying bill we are debating renews the provisions of the Price-
Anderson Act that relate to Department of Energy contractors, but it
does not renew those that relate to NRC licensees.
The reason is that jurisdiction over the contractor provisions was in
the Energy Committee, which was where we were largely developing this
bill. The jurisdiction over the NRC licensee provisions is in the
Environment Committee that Senator Smith chaired. Some members of the
Environment Committee asked us not to include provisions that were
under its jurisdiction in this substitute. The pending amendment
Senator Voinovich has offered now provides a substitute for the Price-
Anderson provisions in the underlying bill.
It repeats the provisions that renew DOE contractor portions of
Price-Anderson that are already there, and in addition, it adds the new
provisions related to the NRC licensee part of the act.
Let me give a short summary of what the pending amendment would do.
Section 502 of the amendment extends the NRC's indemnification
authority for another 10 years. That has been recommended by the
Nuclear Regulatory Commission, and it is part of what Senator Voinovich
is proposing. It extends the indemnification authority of the
Department of Energy indefinitely. That is also consistent with the
1998 report of the Department of Energy.
Section 503 of the amendment raises the liability limit for DOE
contractors and hence the amount that DOE indemnifies its contractors
up to $10 billion, which would be adjusted in the future for inflation.
Under current law, the liability limit for DOE contractors is tied to
the maximum liability of Nuclear Regulatory Commission licensees, which
is currently at $9 billion.
Section 504 increases the liability limits and indemnification for
accidents involving government-owned nuclear facilities or devices
located outside the United States from the $100 million, where it
presently is, to $500 million. This increase also was recommended by
the Department of Energy. It is consistent with international nuclear
liability standards.
Section 505 requires both the Department of Energy and the Nuclear
Regulatory Commission to submit new reports on the need to continue or
modify the act in 2008.
Section 506 requires the Secretary of Energy to adjust the $10
billion liability limit every 5 years for inflation. This is consistent
also with the provision in existing law that requires the Nuclear
Regulatory Commission to adjust the limit for Nuclear Regulatory
Commission licensees.
Section 507 repeals two provisions in current law that exempt
nonprofit Department of Energy contractors from civil penalties for
nuclear safety violations.
Section 507 subjects nonprofit contractors to set civil penalties. It
limits the total amount of those penalties to the fee the contractor
receives in any year under the contract.
Finally, section 508 provides two or more so-called ``modular''
reactors that are located at one site should be treated as a single
nuclear powerplant for purposes of assessing premiums under the Price-
Anderson Act. This provision has been added to allow for the use of
some of the new advanced technology reactor designs that make use of
several small reactor modules to do the work of a single large nuclear
[[Page S1624]]
reactor. The provision will permit the NRC to treat a collection of
these modules at a single site as a single reactor for Price-Anderson
purposes.
In summary, the Price-Anderson Act has served this nation well for 45
years, by enabling utilities to generate 20 percent of our Nation's
electricity with nuclear power, universities to conduct important
nuclear research, and corporations to build nuclear weapons for our
national defense without the threat of unlimited liability.
At the same time, the act has ensured that the public will be
compensated in the event of a nuclear accident, that adequate funds
will be available to pay claims, and that victims will be able to
recover through an efficient no-fault liability system, which waives
many of the legal obstacles that would confront victims in the absence
of the act.
The important pending amendment renews this important law with a
minimum number of changes, and in ways consistent with the strong
recommendations we have received from the two agencies charged with
administering it. I urge its adoption.
The ACTING PRESIDENT pro tempore. The Senator from New Hampshire is
recognized.
Mr. SMITH of New Hampshire. Madam President, I rise in very strong
support of the Voinovich-Bingaman Price-Anderson amendment.
Senator Voinovich has long been a leader at the EPW Committee on
nuclear issues. I am proud to join him as a cosponsor of this
amendment. Last year, Senator Voinovich introduced S. 1360 to
reauthorize Price-Anderson for NRC licensees--a bill of which I was an
original cosponsor, as the ranking member of the Environment and Public
Works Committee. I am also pleased to be joining my colleagues on both
the Energy Committee and on my own committee in cosponsoring this
amendment. I especially thank Senator Bingaman for his cooperation with
us on this issue.
Price-Anderson addresses two classes of nuclear facilities:
commercial nuclear reactors and Federal nuclear facilities operated by
``DOE contractors.'' It combines both NRC licensee and DOE contractor
provisions of Price-Anderson.
I want to speak for a couple of minutes to the provisions of the
amendment that deal with NRC licensees, as that is where the EPW
Committee has focused its efforts. It does two very simple things. No.
1, it reauthorizes Price-Anderson for NRC licensees for an additional
10 years--consistent with NRC recommendations. Secondly, the amendment
recognizes that new nuclear technologies--technologies that provide
smaller, modular, cost-effective, and even safer reactors--are on the
horizon. That is the future. This amendment allows for that new
technology to come forth and to be used.
For the purposes of secondary protection requirements, this amendment
treats modular reactor facilities containing modules of 100 to 300
megawatts, up to a total of 1,300 megawatts, as a single facility.
These modular units--now being developed--are the future of nuclear
power, and it is important that Price-Anderson recognize the difference
between these smaller modular units and the current larger facilities.
Again, this legislation--this amendment--will allow for this modular
concept to take hold and bring us into the future with nuclear power.
The background has been stated on Price-Anderson by my colleagues,
but just briefly to summarize, it was a law passed in 1957 in order to
provide immediate compensation in the event of a nuclear accident.
Price-Anderson is the best mechanism for providing the highest level
of compensation in the shortest period of time, without having to put
victims through an arduous and protracted legal process.
Equally important, it is the best deal for the taxpayer. With Price-
Anderson, if there were a nuclear accident or incident, up to $9.5
billion would be available to compensate any victims. Not one dime of
that money would come from taxpayers. It comes from a combination of
insurance coverage and the industry itself--the entire nuclear industry
pooling their collective resources--and this is compensation without
having a lengthy judicial process to determine liability or
culpability. So the law requires the insured and the insurers to waive
most standard legal defenses. Fault does not need to be established.
That is very important. Absent Price-Anderson, victims would have to
rely on the court system, and damages would effectively be limited by
the assets of a single company.
It is unlikely that any one company, on its own, would ever be
capable of paying out $9.5 billion in damages in the case of an
accident. So the bottom line is that without Price-Anderson there would
be less money available and it would take years for the dollars to work
their way through the courts and then to those who need immediate
assistance. That assumes there would be something left after the
lawyers have taken their share. We don't know whether that would be the
case or not. It is likely that the taxpayer, via Congress, would
already have stepped in and provided whatever financial assistance was
needed. The events of September 11 showed how quickly Congress can act
in a disaster situation.
Price-Anderson is a good deal for the taxpayers, for the industry,
and for victims seeking damages.
I understand there are those who don't like nuclear energy and will
see the Price-Anderson debate as a means to stop nuclear power. I
respect the rights and integrity of those who hold this view. I don't
think they are right. We will have a lot of energy needs in the coming
decades, and nuclear power can provide them cleanly and efficiently.
There are enormous benefits to nuclear power. The majority of energy
generated in New Hampshire is from nuclear power from the Seabrook
nuclear powerplant--about 60 percent of it to be exact. I wonder where
we would be today for our energy needs had that reactor not been built,
in spite of the controversy and hard times we had to get it built.
Seabrook Station has proven to be a safe, reliable source of power, not
only for New Hampshire but for a large part of New England.
These are great benefits. They are tremendous benefits. It can't be
overlooked. I have spent the better part of 2 years working to come up
with a bipartisan plan for reducing utility emissions without
compromising our long-term energy security. In fact, Senator Voinovich
has been a valued partner in that effort.
Nuclear power allows us to generate enormous amounts of energy at low
cost and with zero emissions. I know the issue of the waste comes up
and it is very controversial; that is an issue we are going to have to
confront. But when you are talking about emissions, this nuclear power
is safe and efficient. It allows us to generate this power, as I said,
at low cost with zero emissions, no SOX, NOX,
mercury, and no carbon dioxide. Zero.
Nuclear provides 20 percent of our Nation's energy production, with
no emissions. We need to be able to not have that diminished further as
these powerplants get older and older. One way to do that is with this
modular concept for which we provide. If we want clean air and energy
security, nuclear has to be a part of any reasonable energy plan.
We should be encouraging the development of new, more effective and
safe nuclear technologies. I am not saying this to the exclusion of
other sources of power--renewables such as water, wind, solar, and
others; we are not excluding those. We want to continue to do research
there. I want to make it clear from this Senator's position, it is not
only about nuclear power, it is all sources of power that can be
efficient, clean, and produce what we need.
At a minimum, we ought not to be discouraging this kind of technology
and what this nuclear industry can do. If we don't reauthorize Price-
Anderson, we effectively kill all the new promising technologies that
are the next generation of emissions-free power production. We can't
afford to do that.
This amendment recognizes the recommendations made by the NRC, and
they should be adopted. Price-Anderson enjoys strong bipartisan support
in this body, as well as on the other side of the Capitol in the House.
Again, I thank Senator Voinovich and Senator Bingaman for their
leadership. It has been a pleasure to work with them and Senator Inhofe
on nuclear issues in the committee. They deserve a great deal of
credit--Senators
[[Page S1625]]
Voinovich and Inhofe--for the work they have done. I particularly thank
my friends on the Energy Committee for their collective effort in
bringing this bipartisan amendment to the floor--in particular,
Senators Murkowski, Domenici and, again, Senator Bingaman.
Madam President, I urge my colleagues to support this bipartisan
amendment to reauthorize the Price-Anderson Act. I yield the floor.
The ACTING PRESIDENT pro tempore. The Senator from Idaho.
Mr. CRAIG. Madam President, I join my colleague from New Hampshire in
thanking Senator Voinovich, Senator Inhofe, a good number of folks on
our side of the aisle, and certainly a good number on the Democratic
side of the aisle for crafting what I think is truly a bipartisan
amendment to a necessary and important mix of our energy portfolio in
this country.
As you know, the Price-Anderson Act provides a substantial amount of
the necessary insurance protection for the commercial sector to deal
with nuclear energy in our country.
The Price-Anderson Act removed the deterrent to private sector
participation in nuclear activities when there was a substantial threat
of liability.
As we know, the historic management of our nuclear facilities on the
private side, the commercial side of the equation has proven to be very
successful and very safe throughout their operation.
The kind of protection we have offered in no way has ever deterred or
lessened the desire or the responsibility of good management. In fact,
the Nuclear Regulatory Commission has not only ensured that by its
constant and vigilant oversight--and certainly the private sector in
operating these reactors for the benefit of the country has known
that--but has demonstrated that very clearly. It is truly one of the
great success stories of energy generation in our country that is not
often told.
Why? Because when we talk nuclear, there are automatic reactions and
some risks are argued even though those risks have never effectively
played out in an area of effective regulation, quality management of
the kind we have seen historically within the nuclear industry of this
country.
Price-Anderson is an act that has been working well since its
origination in 1957. We will need nuclear energy as we meet the growing
energy needs of our country. My colleague from New Hampshire was just
talking about clean energy and its importance. There is no cleaner
energy than that which is produced by a nuclear reactor and electrical
generator. That has clearly demonstrated itself historically.
All I can say today is, thank goodness that 20 percent of our energy
basket in this country is nuclear. I wish it were more. If it were
more, I think we would have less concern today about the climate change
issue and other issues such as greenhouse gases released into the
environment. That is going to push us, as it should, toward ever-
increasing higher levels of technology and the application of that
technology to make cleaner fuels.
While doing that, many of us in this body and the other body have
recognized the value of advancing nuclear reactor design. Over the last
several years, Senator Domenici from New Mexico, chairing the
Appropriations Energy Subcommittee, and I have worked to increase
budgets to allow for that kind of experimentation and development.
The administration in its new budget has come forth with a proposal
called 2010 to invest money in the new technologies of nuclear
reactors, to get that technology to the marketplace and to the private
sector and to allow an ever-increasing amount of our energy portfolio
to become nuclear generated.
As a result, reauthorization of the Price-Anderson Act is absolutely
critical because without it, and without that kind of protection, the
reality of expanding that energy base simply would not happen.
As we know, just in the last 3 weeks the President has proposed a new
and dramatic direction for climate change in our country with the
bringing together of science, the application of new computer models,
and the idea of not picking winners and losers but allowing the great
technology and the human mind in this country to lead the world to a
cleaner environment.
We cannot get there and have an abundance of energy that will drive
this wonderful economy of ours and create the jobs that it can and has
created without nuclear energy as a part of it. There is no technology
today that builds at those levels of commercial power production
without nuclear energy being a part of it and an increasing part of
that overall energy basket.
That is why we are here today. I think that is why we have arrived at
a bipartisan approach to this issue. Some of my colleagues on the other
side of the aisle who a decade ago were archcritics of nuclear energy
are quietly saying today: We recognize that new technology in this
area, new reactor design, has to come about if we are going to lead the
world and have safer and more abundant forms of energy. That is why
this overall energy bill is critical, with all of the new approaches
that we bring, along with assuring current levels of hydrocarbon
production and new levels of hydrocarbon production, and, at the same
time, clearly technology and the application of that brings us to a
cleaner environment that can be and must be abundant in energy.
I do appreciate the opportunity to speak briefly on the
reauthorization of the Price-Anderson Act. It is an important part of
any national energy policy for our country. I am confident it can pass
because it has been brought before this body in a bipartisan effort.
Madam President, I yield the floor.
The ACTING PRESIDENT pro tempore. The Senator from Nevada.
Mr. REID. I suggest the absence of a quorum.
The ACTING PRESIDENT pro tempore. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. REID. Madam President, I ask unanimous consent that the order for
the quorum call be rescinded.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
Mr. JEFFORDS. Mr. President, I want to express my concern about the
provisions of this amendment, and state my reasons for opposing it.
As Chairman of the Committee on Environment and Public Works, which
has jurisdiction over the licensing and regulation by the Nuclear
Regulatory Commission of the Nation's commercial nuclear power plants,
I have a very strong interest in the application of the provisions of
Price-Anderson.
Under the Atomic Energy Act of 1954, the Nuclear Regulatory
Commission has the obligation to assure the safety and security of our
Nation's nuclear power plants, and to oversee compensation to the
public in the event of a catastrophic accident. This is the most
serious of responsibilities.
My State of Vermont receives much of its power from the Vermont
Yankee Nuclear Power Plant. While I am supportive of nuclear power and
the many benefits it brings, I am deeply and personally aware of the
potential dangers to the public that a nuclear power plant could pose,
should something go wrong.
Since the events of September 11, of course, intense scrutiny has
been given to security at nuclear plants, and chairman of the EPW
Committee, I am committed to ensuring that our obligations to protect
the public are fully met. Because this amendment fails to satisfy that
responsibility,I must oppose it.
The Price-Anderson Act establishes a system of liability, and
compensation to the general public for damages in the event of a
nuclear accident, an ``extraordinary nuclear occurrence'' in the
language of the Atomic Energy Act. The current language provides that
every commercial reactor having a rated capacity of 100,000 electrical
kilowatts or more must obtain insurance as provided in the act.
Section 508 of the amendment would make an exception for modular
reactors, which are small reactors in the 100 to 110 kilowatt range,
that must be clustered together in order to be economically viable. The
amendment would treat them as a group of units comprising a single
nuclear reactor. This would prevent each module from being treated, for
purposes of liability coverage under Price-Anderson, as an individual
reactor. Without this protection, construction of these modular
reactors would not in all likelihood be economically viable.
[[Page S1626]]
The safety and performance of these reactors is still a matter of
considerable speculation. I am not satisfied that these issues have
been sufficiently reviewed within my committee or elsewhere to justify
encouraging their continued development at this time. Particularly with
the events of September 11 heavy in our hearts and in our minds, I
believe we must act with due caution in authorizing activities which we
are not fully satisfied meet our obligations for protection of the
public health and safety.
Along those same lines, there are a number of issues relating to the
adequacy of Price-Anderson that should be given greater scrutiny
following the events of September 11. We must determine whether
liability limits established under the Act are sufficient, given the
potential for terrorist attack as we now perceive it. In so doing, we
must carefully examine what are likely to be the full scale impacts to
the public from a terrorist attack resulting in an ``extraordinary
nuclear occurrence.''
We have requested this information from the Nuclear Regulatory
Commission, but have not yet received a full response. I intend to work
with my colleagues to develop language to address some of these
concerns. I do not believe the amendment adequately addresses these
issues, and for that reason, I will oppose it.
Amendment No. 2984 to Amendment No. 2983
Mr. REID. Madam President, I send an amendment to the desk.
The ACTING PRESIDENT pro tempore. The clerk will report.
The assistant legislative clerk read as follows:
The Senator from Nevada [Mr. Reid] proposes an amendment
numbered 2984 to amendment No. 2983.
Mr. REID. Madam President, I ask unanimous consent that the reading
of the amendment be dispensed with.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
The amendment is as follows:
In lieu of the matter to be inserted, insert the following:
SEC. 5____. FINANCIAL PROTECTION FOR LICENSEES.
(a) Standard Deferred Premium.--Section 170b.(1) of the
Atomic Energy Act of 1954 (42 U.S.C. 2210(b)(1)) is amended
in the third sentence by striking ``$63,000,000 (subject to
adjustment for inflation under subsection t.), but not more
than $10,000,000 in any 1 year'' and inserting ``$88,000,000
(subject to adjustment for inflation under subsection t.),
but not more than $20,000,000 in any 1 year (subject to
adjustment for inflation under subsection t.)''.
(b) Financial Hardship.--Section 170b.(2)(A) of the Atomic
Energy Act of 1954 (42 U.S.C. 2210(b)(2)(A)) is amended by
striking ``paragraph (1)'' and all that follows and inserting
``paragraph (1) for any facility if more than 1 nuclear
incident occurs in any 1 calendar year.''.
(c) New Licenses.--Section 170c. of the Atomic Energy Act
of 1954 (42 U.S.C. 2210(c)) is amended--
(1) by striking ``The Commission'' and inserting the
following:
``(1) Licenses issued on or before august 1, 2002.--The
Commission''; and
(2) by adding at the end the following:
``(2) Licenses issued after august 1, 2002.--After August
1, 2002, as a condition to receiving a license for a
utilization facility under this Act, the applicant, before
receiving the license, shall obtain insurance coverage from
the private insurance market for the full potential liability
(including the public liability and any other liability) of
the person that might arise as a result of a nuclear incident
at the utilization facility.
SEC. 5____. GUARANTEE OF DEFERRED PREMIUM; FINANCIAL
QUALIFICATIONS.
Section 170b. of the Atomic Energy Act of 1954 (42 U.S.C.
2210(b)) is amended by adding at the end the following:
``(5) Guarantee of deferred premium.--
``(A) Condition of indemnification.--Not later than 180
days after the date of enactment of this paragraph, and not
less frequently than each year thereafter, the Commission, in
consultation with the Securities and Exchange Commission,
shall, as a condition of indemnification, require each
licensee to demonstrate that the licensee has the financial
ability to pay the full potential retrospective premium for
each reactor through 1 or more of--
``(i) a surety bond;
``(ii) a letter of credit or loan;
``(iii) an insurance policy; or
``(iv) maintenance of an escrow deposit of government
securities in reserves, a trust, or an equivalent instrument.
``(B) Reorganization proceedings.--If a licensee or
creditors of a licensee file a petition under chapter 11 of
title 11, United States Code, for reorganization of the
licensee, the Commission--
``(i) shall review the ability of the licensee to--
``(I) pay the full amount of prospective and standard
deferred premiums; and
``(II) ensure that adequate funds will be available for
safe operation of the licensed facility; and
``(ii) if the Commission determines that the licensee is
unable to meet the requirements of clause (i), shall not
renew any indemnification of the licensee under this section.
``(6) Financial qualifications.--
``(A) In general.--The Commission, in consultation with the
Securities and Exchange Commission, shall establish criteria
and procedures for determination of the minimum financial
qualifications for new licensees (including license
transferees) to ensure that the new licensee has the
resources and instruments necessary to--
``(i) operate safely if it becomes necessary to shut down a
reactor for 12 months or longer; and
``(ii) ensure payment of prospective and deferred premiums
under this subsection.
``(B) Condition.--A license shall be conditioned on meeting
and maintaining the minimum financial qualifications
established under subparagraph (A).''.
SEC. 5____. PRESIDENTIAL COMMISSION ON INCIDENT CONSEQUENCES.
Section 170(l) of the Atomic Energy Act of 1954 (42 U.S.C.
2210(l)) is amended--
(1) in paragraph (1), by striking ``1988'' and inserting
``2002'';
(2) in paragraph (2)--
(A) in subparagraph (A), by striking ``not less than 7 and
not more than 11 members'' and inserting ``6, 8, 10, or 12
members''; and
(B) in subparagraph (B), by striking ``not more than a mere
majority of the members are of the same political party'' and
inserting ``there are equal numbers of members of each major
political party''; and
(3) by striking paragraph (3) and inserting the following:
``(3) Duties.--
``(A) In general.--The study commission shall conduct a
comprehensive study of the economic, public health, and
environmental impacts of nuclear incidents that may result in
a full breach of containment and uncontained meltdown at a
facility built in accordance with an existing design or a
proposed design.
``(B) Inputs.--The matters to be studied under subparagraph
(A) include--
``(i) for each existing and proposed facility--
``(I) the public health effects; and
``(II) the economic costs attributable to public health
effects, property damage, environmental damage, and
evacuation and resettlement of affected populations;
of a worst-case nuclear incident; and
``(ii) the ability of the licensee of each existing or
proposed facility to pay the standard deferred premium for a
potential occurrence at each covered facility of the licensee
and at a facility that is not covered by the licensee.
``(C) Sensitivity analysis.--
``(i) In general.--In studying the matters under
subparagraph (B)(i), the study commission shall conduct a
sensitivity analysis based on various modeling input
assumptions to determine the maximum potential consequences
of a worst-case nuclear incident.
``(ii) Assumptions.--The assumptions on which the
sensitivity analysis is based shall include assumptions
regarding--
``(I) nuclear incident scenarios;
``(II) weather patterns;
``(III) traffic patterns; and
``(IV) human behavior that may have an effect on evacuation
of persons threatened by a nuclear incident.''.
SEC. 5____. ACTS OF TERRORISM.
Section 11q. of the Atomic Energy Act of 1954 (42 U.S.C.
2014(q)) is amended--
(1) by striking ``q. The term'' and inserting the
following:
``q. Nuclear Incident.--
``(1) In general.--The term''; and
(2) by adding at the end the following:
``(2) Occurrences.--
``(A) In general.--In paragraph (1), the term `occurrence'
includes an act that the President determines to have been an
act of domestic terrorism or international terrorism (as
those terms are defined in section 2331 of title 18, United
States Code).
``(B) No judicial review.--A determination of the President
under subparagraph (A) shall not be subject to judicial
review.''.
SEC. 5____. TREATMENT OF NUCLEAR REACTOR FINANCIAL
OBLIGATIONS.
Section 523 of title 11, United States Code, is amended by
adding at the end the following:
``(f) Treatment of Nuclear Reactor Financial Obligations.--
Notwithstanding any other provision of this title--
``(1) any funds or other assets held by a licensee or
former licensee of the Nuclear Regulatory Commission, or by
any other person, to satisfy the responsibility of the
licensee, former licensee, or any other person to comply with
a regulation or order of the Nuclear Regulatory Commission
governing the decontamination and decommissioning of a
nuclear power reactor licensed under section 103 or 104b. of
the Atomic Energy Act of 1954 (42 U.S.C. 2133, 2134(b)) shall
not be used to satisfy the claim of any creditor in any
proceeding under this title, other than a claim resulting
from an activity undertaken to satisfy that responsibility,
until the decontamination and decommissioning of the nuclear
power reactor is completed to the satisfaction of the Nuclear
Regulatory Commission;
[[Page S1627]]
``(2) obligations of licensees, former licensees, or any
other person to use funds or other assets to satisfy a
responsibility described in paragraph (1) may not be
rejected, avoided, or discharged in any proceeding under this
title or in any liquidation, reorganization, receivership, or
other insolvency proceeding under Federal or State law; and
``(3) private insurance premiums and standard deferred
premiums held and maintained in accordance with section 170b.
of the Atomic Energy Act of 1954 (42 U.S.C. 2210(b)) shall
not be used to satisfy the claim of any creditor in any
proceeding under this title, until the indemnification
agreement executed in accordance with section 170c. of that
Act (42 U.S.C. 2210(c)) is terminated.''.
Mr. REID. Madam President, the Price-Anderson Act was created nearly
50 years ago to stimulate the fledgling nuclear power industry by
shielding owners from the full cost of an accident. The nuclear
industry is now a mature electric industry and is no longer in need of
liability protection.
The Price-Anderson Act has actually led to a decrease in the amount
of private insurance available instead of increasing it. In the 1950s,
the private insurance industry was willing to insure an accident for
$50 million despite limited experience with the new technology. Today,
the private insurance industry only provides $200 million in insurance.
I say only, Madam President. Think about that. One accident, think what
it would do.
On public radio today, there was a segment that dealt with your
State, New York. What would happen if a dirty bomb were dropped on New
York? What is a dirty bomb? A dirty bomb could be TNT surrounded by the
same piece of equipment that is used to irradiate food. That little
piece of equipment would cause 1 out of 100 people in New York City to
develop cancer.
Madam President, $200 million sounds like a lot of money, but it is
not very much money when we talk about the damage nuclear power can
cause.
Today, Price-Anderson serves to shield the nuclear power industry
from the true costs of producing power, providing an unfair economic
advantage over other traditional and alternative electrical sources.
For example, wind has a tax credit--or, if we extend it, will have and
has had one--solar, geothermal, nothing; biomass, nothing; but yet we
give this sweetheart deal to nuclear power. The nuclear power industry
must assure compensation to the public in the event of an accident, as
any other business. The nuclear power industry must not shirk its
responsibility.
Although an event we hope is unlikely, we are also hopeful that an
accident never occurs. We must acknowledge the possibility of a
catastrophic event. We know that the Titanic was unsinkable but, of
course, it sank on its first voyage.
To address the shortcomings I have spoken about, and more, my
amendment would modernize the Price-Anderson coverage for existing
reactors and would require new reactors to obtain private insurance to
cover the full amount of a nuclear accident. It would raise the maximum
annual contribution for reactor owners from $10 million to $20 million.
The Nuclear Regulatory Commission recommended this increase in 1998 and
then backed down.
My amendment also would require each reactor owner to guarantee the
full financial commitment of each reactor using hard money resources
such as surety bonds, letters of credit, private insurance, escrow
deposit accounts. Currently, the NRC requires only a 3-month cashflow
statement to demonstrate the reactor owner can pay $10 million. Based
upon Enron accounting and Andersen accounting, this is not the way to
do it.
My amendment would establish a Presidential commission to examine the
public health and environmental consequences of a catastrophic
accident. My amendment would protect the Price-Anderson payments for
victims if the owner of a reactor filed for bankruptcy.
Finally, my amendment would require the President to determine if an
intentional act against a nuclear powerplant was an act of terrorism
covered under Price-Anderson.
Together, these amendments make Price-Anderson a viable system,
perhaps, or at least a more viable system, for existing reactors and
take away the training wheels for the next generation of nuclear
powerplants so they can succeed on their own merits. Taken together,
this amendment will let the nuclear industry stand on its own two feet.
Taken together, these amendments will protect the environment and the
American people for generations to come.
This is a very serious issue with which we are dealing. A resident of
the Chair's State, Christy Brinkley, who is a famous woman--not only
because of how she looks but how she thinks--has become really involved
in things nuclear. She has testified at hearings in Washington.
Our committee, of which the Presiding Officer is a member, held a
hearing on Price-Anderson. We do not have all the jurisdiction of
Price-Anderson. The Energy Committee that is handling this bill has
some of the jurisdiction. But if there were ever things legislative
that the Environment Committee should deal with, it would be nuclear
power. Christy Brinkley is one of many who recognize the problems
involved.
Every environmental--I should not say every environmental group;
there may be a few missing, but most environmental groups in Washington
signed a letter supporting the amendment I have offered, recognizing
that it is important Price-Anderson be changed. It is not fair the way
things now are. Why should they have the benefit of government
handouts, really, when other electricity generators do not? My
amendment would give financial protection for licensees. It would be a
guarantee of preferred premium. There would be financial
qualifications. We would have a Presidential commission on incident
consequences.
Of course, the section clarifies acts of terrorism involving nuclear
licensees would be covered under Price-Anderson, but this section
directs the President to determine whether an attack on a nuclear
powerplant is an act of terrorism or an act of war for the purposes of
paying claims for public liability.
The act and regulations under Price-Anderson are really flawed. Most
operators meet the current provisions through a loophole. That is to
make sure they are financially sound to respond to what largess the
Federal Government has given them. But even there they ``Enron'' us.
The acting regulations are flawed in this regard. Most operators meet
the current provisions through a loophole by providing only an annual
certified financial statement, which is essentially an auditor's
statement. The public deserves, especially in light of what has
happened since the Enron debacle, more protection than that offered by
a potentially misleading certified financial statement, particularly,
as I have mentioned, after the Enron mess involving its financial
auditor, Arthur Andersen.
The amendment I have submitted would ensure real financial safeguards
such as a bond, a letter of credit, or a loan. Escrow funds, or even
insurance, would be the only measure of a nuclear operator's ability to
meet its financial obligations to the public.
Under the present legislation, I repeat, all that is needed is an
annual certified financial statement showing there is a cashflow or
something can be generated, not then but within 3 months. All operators
who propose to build new plants to produce electricity from nuclear
power, particularly in the context of deregulated wholesale electricity
markets, should be expected to incorporate the cost of obtaining
insurance, the economics of generating electricity, but not under
Price-Anderson. Many of these companies are owned by limited liability
corporations, thinly capitalized, highly leveraged, legally structured
to avoid exposing their parent corporate entity to liability in the
event of insolvency and, of course, in the event of accident.
This amendment establishes minimal financial qualifications to ensure
operators can meet their monetary obligations to the public in the
event of an accident or terrorist attack. This amendment is supported
by the U.S. PIRG, the Environmental Defense Fund, Union of Concerned
Scientists, Defenders of Wildlife, Sierra Club, Friends of the Earth,
Nuclear Information Resources, League of Conservation Voters, Taxpayers
for Common Sense, National Environmental Trust, National Resources
Defense Council, Public Citizens Critical Mass, STAR, Safe Energy
Communications Council, and Greenpeace.
[[Page S1628]]
A 1992 analysis of energy subsidies by the U.S. Department of Energy
indicates a Federal regulation that continues to have a cost-reducing
effect on the nuclear power industry is simply unfair. These liability
limits provide a subsidy to the nuclear industry to the degree private
insurance premiums paid by operators of individual plants are reduced.
In 1983--almost 20 years ago--the NRC concluded the liability limits
were sufficiently significant to constitute a subsidy, and it has
really been magnified during the last 19 years. However, a
quantification of the amount of subsidy was not attempted at that time.
One of the questions raised is: Are acts of terrorism covered by
Price-Anderson? The Nuclear Regulatory Commission indicated, in
response to questions from the same hearing I have talked about
earlier, on January 23, courts would likely have to settle the
question. We had leading scholars present from the legal academic
world, and they said it would lead to significant delay or even
termination of victim compensation.
Are victims guaranteed to receive payments from reactors that file
chapter XI bankruptcy? In the same hearing we had in January, the
Nuclear Regulatory Commission stated that the NRC could potentially
face a conflict with other claims in a bankruptcy proceeding if there
were an accident sufficient to trigger these industry payments. The NRC
would presumably require a licensee to pay the assessment, but the
bankruptcy court could order the licensee to pay it. The NRC also
indicated it would support legislation to address this concern.
In the Economist magazine, they have a very in-depth article about
nuclear power generally. Among other things in this long article of May
19 of last year, they talk about when costing nuclear power, it is
essential to remember the scope, scale, and subtlety of the subsidy it
receives. Liability insurance is a good example of this subsidy. The
American industry's official position is there is no subsidy involved
in Price-Anderson. To do that, you would have to be without any common
sense, let alone academic prowess.
Since there is no subsidy involved, why not let the act lapse when it
comes up for renewal next year? What we were told by our Vice President
is that it needs to be renewed; if not, nobody will invest in nuclear
powerplants.
That answers the question.
In the end, the article continues, nuclear energy's future may be
skewed by the same sword that is making it fashionable today, the
deregulation of electricity markets.
Why is that? Because, Madam President, right now nuclear power is the
most expensive, even with the subsidies. Yet the article continues:
Liberalization is also exposing the true economics of new plants and is
aiming a fierce spotlight at the hefty subsidies that nuclear power has
long enjoyed. As these fade, the industry once again will be brought
down to earth.
Now, this is not me speaking. This is from the Economist magazine.
They say these are significant subsidies and once they are attached,
nuclear power will no longer be in vogue.
The New York Times published an article entitled ``Hard Questions On
Nuclear Power,'' written last year. Among other things, they say the
Congress will need to take a close look at whether it should renew one
of the industry's economic underpinnings, the so-called Price-Anderson
Act, that limits companies' liability in the event of an accident. If
the industry is safe, they may not need such subsidized protection.
A lot of this has come to light following September 11, and whether
we have to be more concerned about acts of terrorism. I know the
Presiding Officer, this Senator, and the junior Senator from
Connecticut, Mr. Lieberman, have looked closely at the safety of
nuclear powerplants. He is right. They have different standards at
different plants, different companies, different private contractors.
If someone going through a baggage checkpoint is examined by someone
who works for the Federal Government, should we not have a system
whereby nuclear powerplants have Federal employees? The answer is yes.
They should not have rent-a-cops determining the safety of those
facilities.
Today, thinly capitalized, limited liability corporations operate
nearly half of the Nation's nuclear reactors. Taxpayers, I suggest, by
default, shoulder secondary insurance costs whenever it is determined
insurance claims would constitute undue hardship.
It is reported the NRC did not require the company purchasing the
single largest fleet of 16 reactors to provide adequate evidence of
financial stability as a condition of granting a license. Some
advocates of Price-Anderson argue that because the Government indemnity
has never been used, we don't need to worry about it. Price-Anderson is
not a subsidy, they say. However, every legal scholar has said it is.
Price-Anderson allows utilities to commit less capital to insuring
nuclear plants so that the act results in a reallocation of resources
away from more highly valued uses, so it is indeed a subsidy. Think of
its advantage over solar, geothermal, biomass, clean coal, and
certainly natural gas.
Despite continuing claims concerning the safety of nuclear power, the
amount of private liability insurance available has actually declined
in real terms since 1957. The reason is they figured ways to get around
that. The Nuclear Regulatory Commission report states it is unlikely
that the amount of available liability insurance would increase much
beyond the $200 million level without strong pressure from outside
the insurance industry. The obvious question is, What could be expected
with repeal of Price-Anderson? One could argue, as Richard Howell does,
that the more likely result is that sufficient insurance will be
provided to maintain the viability of the industry.
These companies make a lot of money. As every other business, they
will buy insurance to cover their liability. Why should the Federal
Government have to provide that? Utilities needing more liability
insurance would have an incentive to accept stricter safety standards
from insurance companies. An increase in the role of the insurance
industry would be a welcome development by regulators and an economic
incentive for safe operating methods and not relying on the Federal
Government to give them a subsidy.
If Price-Anderson were allowed to expire, the determination for what
sort of tort liability, strict liability, or negligence to which the
plants are subject reverts to States. We have been debating in the
Senate for the many years I have been here whether or not we will have
a national standard for product liability. The answer is no. We let the
States determine that. That is the way it should be.
Amendment No. 2984, Withdrawn
I will withdraw my amendment. I hope people will vote against this
amendment. I know there will be people wanting to vote for this simply
because the two managers of the legislation support this legislation. I
have the greatest respect for my friend from New Mexico. He has been
somebody I have looked up to the entire time I have been in the Senate.
I will continue to look up to him even though he is wrong on this
issue. He is simply wrong. Price-Anderson needs to be changed.
I hope Senators vote against this mischievous and unworthy amendment.
It is not good for the country. It is not good for the country for so
many reasons, not the least of which is the liability aspect of it, not
the least of which the Federal Government should get out of subsidizing
nuclear power. But also, if we got rid of this amendment, people living
near nuclear powerplants would know there is sufficient insurance to
take care of their family if something went wrong.
I ask unanimous consent to withdraw my amendment.
The PRESIDING OFFICER (Mr. Carper). Without objection, the amendment
is withdrawn.
The amendment (No. 2984) was withdrawn.
Mr. REID. I ask for the yeas and nays on the Voinovich amendment.
The PRESIDING OFFICER. Is there a sufficient second?
There does not appear to be a sufficient second.
Mr. VOINOVICH. Mr. President, I will mention that I have the highest
regard for Senator Reid. Much of what he just discussed came up in the
committee hearing we had. Perhaps the Presiding Officer was at the
meeting.
[[Page S1629]]
Mr. REID. Could I ask my friend to yield for a brief second?
I will ask for the yeas and nays on the Senator's amendment. It is my
understanding everyone wants to vote on it. We did not get a second
from the Republicans.
I ask for the yeas and nays on the Voinovich amendment No. 2983.
The PRESIDING OFFICER. Is there a sufficient second? There is a
sufficient second.
The yeas and nays were ordered.
Mr. MURKOWSKI. I apologize to the majority whip and the manager of
the bill. I apologize. I have not been active in the discussion this
morning. But as I understand it, the Senator from Nevada offered a
second degree which he intends to withdraw--or is it withdrawn? It is
withdrawn, so we are on Price-Anderson. I certainly support the call
for the yeas and nays.
It is my understanding the majority side will introduce the next
amendment. At this time I wonder if they will indicate what that
amendment might be.
Mr. BINGAMAN. Mr. President, in response to my friend from Alaska,
once the debate is concluded on the Price-Anderson amendment Senator
Voinovich has offered, it is our intent to set that aside and go to an
amendment on hydraulic fracturing, which I would offer. I think Senator
Inhofe and various other Senators are cosponsoring that.
Then I believe it is the whip's intent to have us stack a couple of
votes on those two issues right after lunch.
Mr. REID. If the Senator will yield for a minute, we are now showing
to the minority the proposal. We have two votes at 2 o'clock, with the
time between now and 2 o'clock to be divided to speak on both
amendments, Price-Anderson and also the hydraulic fracturing. We would
have a vote on both those. We are not in a position to offer that as a
unanimous consent agreement because we have to clear it with the two
leaders, but that is the intention.
Mr. MURKOWSKI. Mr. President, what I am concerned about is the whip
indicated 2 o'clock. Will we break for lunch or is it the intention to
go right through?
I just have been alerted there are a couple of our Members who are
going to want to speak on the fracturing amendment. Unless there is any
extended debate, I am certainly willing to agree to a vote at 2
o'clock. Obviously, we are about through with Price-Anderson.
Mr. REID. If the Senator from Alaska will yield, I think we are just
about finished on Price-Anderson. The Senator from Ohio wants to speak,
and maybe the Senator from New Mexico, briefly, on it. But I think we
will have quite a bit of time on fracturing.
I will propound that at a subsequent time.
Mr. MURKOWSKI. I assure the whip we want to work with him. We have a
couple of more Members, I am advised, who want to speak very briefly on
Price-Anderson. We are going to urge them to come here now and speak,
and then we will have no objection to moving to the fracturing.
Mr. REID. If the Senator will yield, it doesn't matter if they come
now or later. The agreement will be that during this next period of
time they can speak on either amendment.
Mr. MURKOWSKI. Either amendment; that is certainly fair enough.
I am going to make a short statement on Price-Anderson. Since the
second degree has been withdrawn, I will not belabor that other than to
say I am very pleased the Senator from Nevada saw fit to withdraw it
because had his amendment prevailed, clearly it would have basically
amounted to the demise of the nuclear industry from the standpoint of
any future facilities being built, because that is the whole
justification of Price-Anderson. I will put that behind me and simply
support speaking of the Price-Anderson reauthorization amendment.
I think Congress has been derelict in not resolving this issue some
time ago. It is an important issue, to encourage further development of
our nuclear industry.
For those who are critical of the nuclear industry, I remind you it
has an extraordinary safety record, considering the hyperpublicity
given to almost any irregularity associated with the operation of the
plants.
The point is, to a large degree the system has worked. Any mechanical
function has a certain degree of exposure. So you back it up with
checks and balances. When you talk about Three Mile Island and the
mistakes that were made, the reality is the system worked. If you talk
about what happened in Chernobyl, you recognize human activity overrode
the systems, which is just what happened when the Exxon Valdez went on
the rocks. It was human activity--inattentive, in spite of the bells
and whistles--that simply allowed this ship in a 10.5-mile-wide channel
to hit a rock.
My point is I think the nuclear industry in this country deserves a
fair assessment of its extraordinary record. As a consequence, I think
we must recognize the significant contribution nuclear energy makes.
It is emission free. As we look at concern over global warming/
emission reductions, the one area that generates tremendous potential,
even further than the 20 percent of the electric power generation that
comes from nuclear energy, is the nuclear industry.
The critics who would like to see this industry simply go away and
not expand have to come up with an alternative, other than
conservation, because conservation is simply not enough. Conservation
will not pick up for the 20 percent of our energy mix that comes from
nuclear energy. So we must continue to recognize the nuclear industry
is going to play a greater role in the future if we want to meet our
energy needs and protect our air quality.
It is interesting to look on occasion at what the Joneses do. In
France, obviously, nuclear power has been accepted. It is the area of
technology that has the highest recognition in the higher educational
system of France. The Japanese are moving towards greater dependence on
nuclear energy because of the significant advantages associated with
that.
One of the problems, of course, is the nuclear waste issue. We will
be getting into that at a later time. But I think it represents the
frustration here in the United States with our nuclear industry, not
being able to come to grips with what we do with the waste that is
generated by the reactors that, of course, are subject to yearly
examination when their fuel rods are removed. The question is, What is
done with that high-level waste and how is it stored? It is not
designed to be permanently stored necessarily in casks. We even
embarked on an effort to try to find a repository. The solution appears
to have been a selection in Nevada, at Yucca Mountain.
I think it should be recognized we have expended some $7 billion of
taxpayers' money on this repository at Yucca Mountain in Nevada. I
think we should also recognize the ratepayers have paid, for this
nuclear power, into a special fund, which was supposed to fund the
construction of a site, that expended approximately $11 billion. So the
Federal Government entered into a contractual relationship to take that
waste in 1998.
Mr. President, 1998 has come and gone and the Federal Government has
not lived up to the terms of its contractual agreements. It is in
violation of its contract. As a consequence, litigation associated with
suits filed against the Federal Government are somewhere in the area of
$40 billion. As we simply put off the decisionmaking process, what to
do with this waste, clearly the liability to the taxpayer continues. So
we simply have to come to grips with this issue.
I am pleased to say this administration is facing it head on with a
series of steps and procedures that will eventually get us to a final
decision on how and on what terms this waste is stored, so we can get
on with a clear bridge, if you will, to what we are going to do with
the waste. That will, to a large degree, address the expansion of
nuclear energy in this country because we are not going to expand
nuclear production, nuclear energy, until we resolve what to do with
that waste.
It is important we get this issue behind us. But an important part of
this, indeed, is Price-Anderson because that supplies, if you will, the
necessary underwriting by the Federal Government of catastrophic
exposure.
Solid nuclear baseload power provides our grids with stability and
reliability. In California alone, nuclear
[[Page S1630]]
supplies about 16 percent of the energy. Without it, last summer the
California energy situation would have faced a collapse. High natural
gas prices and low uranium prices help to make electricity produced by
nuclear some of the cheapest in the country. Perhaps someday we might
reach the fabled ``too cheap to meter'' goal. I am not sure that is
going to happen, but nevertheless it is a reasonable objective.
We have had, as I have indicated, safe and efficient operation of
U.S. plants. They are operating at record efficiencies as they have
recognized the procedural efficiencies.
The point is that they are very efficient, and as a consequence they
have become very attractive investments. We have seen more
concentration by utility companies picking up some of the newer and
more efficient plants.
In 1999, U.S. nuclear reactors achieved close to 90 percent
efficiency. The total efficiency increase during the nineties at the
existing plants was the equivalent to approximately 23 1,000-megawatt
powerplants. I think that is pretty significant. During the 1990s, a
10-year period of existing plants, the equivalent efficiency was 23
1,000-megawatt powerplants. I think that more or less speaks for itself
relative to the advantages and attractiveness of nuclear power. Keep in
mind that this is clean, it is nonemitting generation.
With that efficiency, the industry is on an upswing. Four or five
years ago, you wouldn't have thought you would hear talk about buying
and selling plants, or even building new plants. Today the discussion
is occurring.
By the end of the 2002, the Chicago-based Exxon corporation will have
invested a total of $25 million in a South African venture to build a
pebble bed modular reactor.
I see my friend from New Mexico, the senior Senator, in the Chamber.
He is very familiar with this particular technology, which I think
provides greater attractiveness for the nuclear industry.
If we ever hope to achieve energy security and energy independence in
this country, we cannot abandon the nuclear option which is an
important and integral part of our energy mix. Our economy depends on
nuclear energy. Our national security depends on nuclear energy. Our
environment depends on nuclear energy. And our future, to a large
degree, depends on nuclear energy.
Critical to the future continuation of this industry is Price-
Anderson. I have been a strong advocate of reauthorization of Price-
Anderson. Senator Bingaman and I have worked together with our staff to
agree on language in the last Congress to renew the Price-Anderson Act.
Both of our comprehensive energy bills introduced in the first session
of this Congress contain the same language based on recommendations
from the Department of Energy and the Nuclear Regulatory Commission.
Renewal of the act was supported by the last administration. Renewal of
the act was also one of President Bush's 105 recommendations in the
national energy policy. For over 40 years, the act has ensured ample
insurance for the industry, and it will provide a mechanism for the
prompt payment to victims in the unlikely event of a nuclear exposure
of some kind. Renewal of this act is necessary if we are to continue
nuclear energy, new plants, and ensure the relicensing of our existing
plants.
I don't understand really why the majority leader excluded the NRC
licensees from the substitute. But this amendment is going to rectify
that oversight.
I am very pleased to see the level of support on the floor of the
Senate. I thank the Senator from Ohio, Mr. Voinovich, for his
leadership in this area, and Senator Domenici and Senator Bingaman,
chairman of the Energy Committee.
I yield the floor.
The PRESIDING OFFICER. The Senator from New Mexico.
Mr. DOMENICI. Mr. President, I am very pleased that early in the
discussion of the energy bill an amendment on Price-Anderson extension
is before the Senate. I am also very pleased that it has so many
cosponsors and that it is very bipartisan, in particular on the issue
of nuclear power and its role in America and the world's future. If we
are looking for the energy of the future and if we are looking to have
clean air, obviously nuclear power has to be looked at.
I am grateful that today Senator Bingaman, the manager of the bill
and chairman of the committee, is a cosponsor of the Voinovich
amendment. It also has a number of other Senators as cosponsors, all of
whom from time to time have expressed great interest in nuclear energy.
I also would like to commend the manager of the bill, even though we
didn't mark up all the way through the committee. Senator Bingaman's
staff, the majority staff, are fully aware of the nuclear power issues
that confront our country.
If there are Senators who wonder why there are not a series of
amendments on nuclear power and its future that are going to be
offered--there will be two or three--it is because this bill contains
general type language that will permit nuclear power to be a player in
the future. If, in fact, there are utility companies here and elsewhere
in the world privately and publicly owned that want to produce nuclear
power because of its efficiency and, equally important, because clean
electricity is produced, and if we are worried about underdeveloped
countries developing and using a lot of energy, and because America
needs more energy over the next 20 or 30 years, it is good that we have
not locked out the option of nuclear energy.
There are some things that could be said about nuclear power in terms
of the shortage we have found ourselves in. Just the past year, we
found that of all the power sources in the country, the cheapest after
hydropower is, and has been for some time, nuclear power. Per unit of
electricity, the cheapest power generation of any major size in America
has been nuclear power.
Nuclear powerplants have gone without incident or accident for years.
As a matter of fact, they have increased productive capacity in the
neighborhood of from 70 to 75 percent of capacity to the low 90s for
this entire period of time when we needed more energy because we were
in the position as a nation of being sort of ambivalent about our
energy supply. We weren't quite sure where we were going.
There are also some exciting occurrences in terms of the next
generation of nuclear powerplants. Perhaps before we finish we will
have time to discuss events that are occurring around the world. Even
American companies are thinking about nuclear plants in terms of future
supply of electricity.
The future is very bright. New technology will make nuclear power
safer, if that can be. It will make it cheaper. It will permit us to
locate nuclear powerplants more easily. They won't have to be the
large-megawatt plants. They can be small and rather mobile plants built
much more easily than in the past, and with far less permit time with
the kind of work we have to do in that regard.
Already the United States is ahead of the crisis. We have begun to
build back into our Department of Energy some significant nuclear
activities. We have had an Energy Department during the last 25 years
when the Department was acting as if it were embarrassed about nuclear
power and didn't even want it to be part of the Department of Energy.
It is back, and we are now spending some money every year to help
generate enthusiasm among engineers and those who would join the corps
of experts in physics and chemistry and the like who will work on
nuclear powerplants in the future.
In producing this bill, Senator Bingaman took many of the things we
had appropriated and made them permanent law with reference to the
future of nuclear power.
I will insert in the Record at a later time, rather than itemize them
now, the numerous areas where the bill already takes into consideration
the need for us to put nuclear power on a neutral footing with other
kinds of power and to see if we can't come out winners both as to
energy and as to the environment.
So I want to state my very strong support for the renewal of Price-
Anderson, which is going to expire later this year--I think in August.
It has been extended by Congress three times since becoming law in
1957. Price-Anderson provides a framework for payment of public
liability claims for any accident at a commercial nuclear powerplant.
This law is vital to ensure that our taxpayers continue to receive the
benefits
[[Page S1631]]
of nuclear energy and allows the industry to consider the construction
of new plants.
The Price-Anderson amendment, as it is structured--the one that is
pending--takes care of and provides coverage for future plants. Some
have wanted to cover the past but not the future. I am very pleased,
and am certain that those who think there is a new day for the
production of energy in the United States ahead, and that it might
involve nuclear power, are also strongly supportive and delighted that
this amendment is the broad amendment that also covers the future, not
just the past.
Many bills pending before the Senate incorporate renewal of Price-
Anderson. As I indicated, I have introduced a bill, S. 472, which
contained renewal provisions. I was very pleased that 18 cosponsors
joined me in that bill. Earlier bills from Senator Bingaman and Senator
Murkowski had also incorporated renewal.
This renewal amendment should enjoy strong bipartisan support in the
Senate. I am very pleased that it will receive strong support because
that in and of itself sends a signal that was not around 10 or 15 years
ago when we thought we had an abundance of energy and the supply was
not a problem. There was a small cadre of those who did not like nor
want us involved in nuclear power. They prevailed. It would appear that
we are moving in the direction of a neutral approach and that nuclear
power will have to prove itself alongside all the other energy sources
as being efficient and safe and the kind of power that we would truly
like to have in our country, and it would be good for the world.
In addition to coverage of commercial nuclear plants, Price-Anderson
enables companies to accept the challenges that are involved in the
cleanup of past nuclear weapons activities without charging the
Government for insurance for coverage of very large possible, although
highly unlikely, claims. It assures the availability of funds to
provide prompt compensation to any member of the public who is harmed
by nuclear activities. Without renewal, no new nuclear powerplants
would be covered and progress on the cleanup of weapons activities
could indeed be seriously jeopardized.
That will not be the case once we have reported out a bill.
Hopefully, before this year ends, the Senate and the House will find a
way to do that.
Since taxpayer funds are not used to pay claims resulting from a
nuclear incident, there is no ``subsidy'' to industry, as some claim.
Over the last 43 years of Price-Anderson protection, the insurance
pools, never the Federal Government, have paid claims totaling $180
million. Price-Anderson, with its risk-pooling among all nuclear
companies, provides a far greater measure of certainty to the public
for any liabilities that any one company could provide.
Again, I appreciate Senator Bingaman's work on the basic bill, the
underlying bill, as it pertains to nuclear power and various activities
that will bring it into the future and line itself up along with other
major energy sources not only for America but for the world.
One area involves the appropriate treatment for
nonprofit contractors. We have agreed that these contractors should
have some degree of liability, but we have carefully limited their
liability to the fee they are receiving at the time of any penalty.
Without such a limitation, nonprofits could undertake a contracting
role with the Department, but they would have to charge excessive fees
to the Government and, obviously, would not be awarded any kind of
work.
There is a second provision for the treatment of modular reactors.
When Price-Anderson was first drafted, it was assumed that all
commercial reactors would be very large, maybe 1,000 megawatts or even
more. But lately, there is growing interest in very small powerplants
that might utilize modular construction and deliver much less power,
perhaps only 100 megawatts per module.
These small plants have some very interesting features, of which the
most important is the ability to make them absolutely safe against
meltdown incidents. Yes, that is a reality. That is what those who are
inventing and putting together these new modular constructed
powerplants, with new technology, will be able to do. They will not, by
their own physics, be able to have a meltdown.
I appreciate that this version of an extended Price-Anderson law
provides equitable treatment for modular reactors to ensure that the
act becomes viable in the future and is not a disincentive to
considering new technology of the kind that is exciting many people.
The renewal of Price-Anderson is one of the key actions needed to
ensure that nuclear energy continues to provide clean, safe power for
our Nation.
Again, I am grateful for the leadership shown by the chairman of the
committee. I am hoping that before this year is out, we will come out
of conference with a Price-Anderson that is intact and that contains
the language that is before the Senate today. We will have done
something worthwhile.
For those who wonder if anything is happening on this energy bill
that is good and healthy and salutary and futuristic, I hope they will
join us in saying that we did one thing, and it became less and less
controversial, that is to extend the underpinnings, in terms of
liability coverage, the underpinnings of nuclear power for today and
nuclear power for the future.
I yield the floor and thank the Chair for recognition.
The PRESIDING OFFICER. The Senator from Ohio.
Mr. VOINOVICH. Mr. President, I ask unanimous consent that Senator
Lincoln be added as a cosponsor of this amendment.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. VOINOVICH. I think it is significant, Mr. President, that the two
Senators from New Mexico--one a Republican and one a Democrat--are both
cosponsors of this amendment. I do not believe there is anyone in this
country who speaks out more eloquently on behalf of nuclear power than
Senator Domenici. This has been a cause of his for many years. I think
it is important that he underscored the fact that not only does this
deal with the nuclear power industry, but it also deals specifically
with the cleanup of over 100 DOE facilities; that without this
legislation the contractors would not be willing to go forward with the
work they are now doing at those facilities. And it also provides a
situation so that in the event that new reactors come on board--that
is, more nuclear power facilities are built--that it would include
those new facilities.
Before I conclude on this amendment, I would like to point out and
clarify the fact that the $10 million this bill continues to be asked
for is adequate to get the job done.
With the Presiding Officer's permission, I would like to read from
the testimony of William F. Kane, who is the Deputy Executive Director
for Reactor Programs because I think, in a nutshell, he can clarify to
our colleagues just exactly what this is about.
In his testimony on January 23rd, he said:
Further developments in the electric generating industry
since the 1998 report to Congress have led the Commission to
review its 1998 recommendations and to reevaluate its
recommendation that Congress consider increasing the annual
installment to $20 million. There is now a heightened
interest in extending the operating life for most, if not
all, of the currently operating power reactors, and some
power companies are now examining whether they wish to submit
applications for new reactors or complete construction of
reactors that have been deferred. As a result, contrary to
our former recommendations, the commission does not
believe there is now justification for raising the maximum
annual retrospective premium of $10 million. The level is
adequate and does not need to be changed.
He went on to say:
In summing up, I would like to leave these thoughts with
you: To date, the United States Government has not paid a
penny for claims against nuclear power licensees. In the
event a serious accident were to occur, over $9 billion would
be available to pay compensation for any personal injury or
off-site property damage. The money will come from insurance
policies bought by the industry and from retrospective
premiums that will be paid by the industry. If these funds
are inadequate, Congress will be called upon to decide what
action is needed to provide assistance to those harmed. We
believe the public is protected by the broad base of prompt
funding. The Price-Anderson Act further aids the public by
establishing important procedural reforms for claims arising
from nuclear accidents. It channels liabilities to the
licensee, establishes a single Federal form for all claims,
eliminates the need
[[Page S1632]]
to prove fault, requires waivers of other significant
defenses, makes prompt settlements possible, and if
litigation is needed, establishes the legal management
process to assure fairness and equity and distribution of
damages.
That lays it out in a nutshell in terms of why it is that we need to
reauthorize Price-Anderson.
It is my understanding the Senator from New Mexico will be
introducing another amendment. For the Members of the Senate, those who
still would like to speak on Price-Anderson will be able to continue to
do that, as well as those who will be supporting Senator Bingaman's
amendment.
The PRESIDING OFFICER. The Senator from New Mexico.
Mr. BINGAMAN. Mr. President, just a couple of other words about the
Price-Anderson amendment: First, I thank my colleague from New Mexico
for his kind words about provisions that are included in this bill. He
has authored many of those provisions, particularly the ones related to
nuclear power, and he has been a tireless advocate for peaceful use of
nuclear power in this country for many years. We are all well aware of
that.
We have included in the bill those provisions he suggested which
clearly do contemplate and envision continued contributions by the
nuclear power industry to our energy needs. That is certainly my
purpose and, I know, the purpose of Senator Voinovich as well. We were
talking in one of the asides about the fact that the Price-Anderson Act
was originally proposed by Representative Price from Illinois, Mel
Price, and also by Senator Clinton Anderson from New Mexico. It has
served the country well for 45 years, as we have indicated before. We
think it is important that it continue to do so.
Mr. President, I ask unanimous consent that the amendment be set
aside, and it be in order for me to send another amendment to the desk
for consideration.
The PRESIDING OFFICER. Is there objection?
Mr. INHOFE. Reserving the right to object, I would like to ask the
Senator from New Mexico, could I have maybe 2 minutes to say something
about Price-Anderson? I am anxious to get to the next amendment.
Mr. BINGAMAN. I withdraw my request, Mr. President.
The PRESIDING OFFICER. The Senator from Oklahoma.
Mr. INHOFE. Mr. President, we have been talking about a complete
energy policy for America. This is a bipartisan effort. I tried to get
the Reagan administration to do it, then the Bush administration, the
Clinton administration. None of them had done it. Now we have an
opportunity to do it. An essential part of that is going to be nuclear
energy. Maybe it has been said before, but I only want to put into the
Record that after going through this long arduous thing on ambient air
and the problems of other forms of energy, each year the U.S. nuclear
powerplants prevent 5.1 million tons of sulphur dioxide, 2.4 million
tons of nitrogen oxide, and 164 million metric tons of carbon from
entering the earth's surface.
Consequently, there are many people who were out protesting against
nuclear energy just 20 years ago who now realize this is an abundant
and safe and cheap form of energy.
It is necessary in order to do that to have the Price-Anderson Act
reauthorized.
I yield the floor
Amendment No. 2986 To Amendment No. 2917
Mr. BINGAMAN. Mr. President, I send an amendment to the desk and ask
for its immediate consideration.
The PRESIDING OFFICER. Without objection, the pending amendment is
set aside. The clerk will report.
The bill clerk read as follows:
The Senator from New Mexico [Mr. Bingaman], for himself,
Mr. Baucus, Mr. Bond, Mr. Breaux, Mr. Campbell, Mr. Conrad,
Mr. Dorgan, Mr. Inhofe, Ms. Landrieu, Mrs. Lincoln, and Mr.
Thomas, proposes an amendment numbered 2986 to amendment No.
2917.
Mr. BINGAMAN. Mr. President, I ask unanimous consent that reading of
the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:
(Purpose: To study whether there is a need to regulate hydraulic
fracturing))
At the end of title VI, add the following new section:
``SEC. 610. HYDRAULIC FRACTURING.
``Section 1421 of the Safe Drinking Water Act (42 U.S.C.
Sec. 300h) is amended by adding at the end the following:
``(e) Hydraulic Fracturing for Oil and Gas Production.--
(1) Study of the effects of hydraulic fracturing.--
``(A) In general.--As soon as practicable, but in no event
later than 24 months after the date of enactment of this
subsection, the Administrator shall complete a study of the
known and potential effects on underground drinking water
sources of hydraulic fracturing, including the effects of
hydraulic fracturing on underground drinking water sources on
a nationwide basis, and within specific regions, States, or
portions of States.
``(B) Consultation.--In planning and conducting the study,
the Administrator shall consult with the Secretary of the
Interior, the Secretary of Energy, the Ground Water
Protection Council, affected States, and, as appropriate,
representatives of environmental, industry, academic,
scientific, public health, and other relevant organizations.
Such study may be accomplished in conjunction with other
ongoing studies related to the effects of oil and gas
production on groundwater resources.
``(C) Study elements.--The study conducted under
subparagraph (A) shall, at a minimum, examine and make
findings as to whether--
``(i) such hydraulic fracturing has endangered or will
endanger (as defined under subsection (d)(2)) underground
drinking water sources, including those sources within
specific regions, states or portions of States;
``(ii) there are specific methods, practices, or
hydrogeologic circumstances in which hydraulic fracturing has
endangered or will endanger underground drinking water
sources; and
``(iii) there are any precautionary actions that may reduce
or eliminate any such endangerment.
``(D) Study of hydraulic fracturing in a particular type of
geologic formation.--The Administrator may also complete a
separate study on the known and potential effects on
underground drinking water sources of hydraulic fracturing in
a particular type of geologic formation.
``(i) If such a study is undertaken, the Administrator
shall follow the procedures for study preparation and
independent scientific review set forth in subparagraphs
(1)(B) and (C) and (2) of this subsection. The Administrator
may complete this separate study prior to the completion of
the broader study of hydraulic fracturing required pursuant
to subparagraph (A) of this subsection.
``(ii) At the conclusion of independent scientific review
for any separate study, the Administrator shall determine,
pursuant to paragraph (3), whether regulation of hydraulic
fracturing in the particular type of geologic formation
addressed in the separate study is necessary under this part
to ensure that underground sources of drinking water will not
be endangered on a nationwide basis, or within a specific
region, State or portions of a state. Subparagraph (4) of
this subsection shall apply to any such determination by the
Administrator.
``(iii) If the Administrator completes a separate study,
the Administrator may use the information gathered in the
course of such a study in undertaking her broad study to the
extent appropriate. The broader study need not include a
reexamination of the conclusions reached by the Administrator
in any separate study.
``(2) Independent scientific review.--
``(A) In general.--Prior to the time the study under
paragraph (1) is completed, the Administrator shall enter
into an appropriate agreement with the National Academy of
Sciences to have the Academy review the conclusions of the
study.
``(B) Report.--Not later than 11 months after entering into
an appropriate agreement with the Administrator, the National
Academy of Sciences shall report to the Administrator, the
Committee on Energy and Commerce of the House of
Representatives, and the Committee on Environment and Public
Works of the Senate, on the--
``(i) findings related to the study conducted by the
Administrator under paragraph (1);
``(ii) the scientific and technical basis for such
findings; and
``(iii) recommendations, if any, for modifying the findings
of the study.
``(3) Regulatory determination.--
``(A) In general.--Not later than 6 months after receiving
the National Academy of Sciences report under paragraph (2),
the Administrator shall determine, after informal public
hearings and public notice and opportunity for comment, and
based on information developed or accumulated in connection
with the study required under paragraph (1) and the National
Academy of Sciences report under paragraph (2), either:
``(i) that regulation of hydraulic fracturing under this
part is necessary to ensure that underground sources of
drinking water will not be endangered on a nationwide basis,
or within a specific region, State or portions of a State;
or
``(ii) that regulation described under clause (i) is
unnecessary.
``(B) Publication of determination.--The Administrator
shall publish the determination in the Federal Register,
accompanied by an explanation and the reasons for it.
``(4) Promulgation of regulations.--
``(A) Regulation necessary.--If the Administrator
determines under paragraph (3) that regulation by hydraulic
fracturing
[[Page S1633]]
under this part is necessary to ensure that hydraulic
fracturing does not endanger underground drinking water
sources on a nationwide basis, or within a specific region,
State or portions of a State, the Administrator shall, within
6 months after the issuance of that determination, and after
public notice and opportunity for comment, promulgate
regulations under section 1421 (42 U.S.C. 300h) to ensure
that hydraulic fracturing will not endanger such underground
sources of drinking water. However, for purposes of the
Administrator's approval or disapproval under section 1422 of
any State underground injection control program for
regulating hydraulic fracturing, a State at any time may make
the alternative demonstration provided for in section 1425 of
this title.
``(B) Regulation unnecessary.--The Administrator shall not
regulate or require States to regulate hydraulic fracturing
under this part unless the Administrator determines under
paragraph (3) that such regulation is necessary. This
provision shall not apply to any State which has a program
for the regulation of hydraulic fracturing that was approved
by the Administrator under this part prior to the effective
date of this subsection.
``(C) Existing regulations.--A determination by the
Administrator under paragraph (3) that regulation is
unnecessary will relieve all States (including those with
existing approved programs for the regulation of hydraulic
fracturing) from any further obligation to regulate hydraulic
fracturing as an underground injection under this part.
``(5) Definition of hydraulic fracturing.--For purposes of
this subsection, the term `hydraulic fracturing' means the
process of creating a fracture in a reservoir rock, and
injecting fluids and propping agents, for the purposes of
reservoir stimulation related to oil and gas production
activities.
``(6) Savings.--Nothing in this subsection shall in any way
limit the authorities of the Administrator under section 1431
(42 U.S.C. 300i).''.
Mr. BINGAMAN. Mr. President, this is a bipartisan amendment offered
by myself, Senator Inhofe from Oklahoma, and by various other of our
colleagues--Senators Baucus, Bond, Breaux, Campbell, Conrad, Dorgan,
Landrieu, Lincoln, and Thomas. I thank my colleagues.
The proposed amendment concerns hydraulic fracturing. That is a
valuable tool in reducing our dependence on foreign energy supplies. It
is one that the oil and gas industry uses on a very regular basis. It
is necessary if we are to develop the majority of our onshore natural
gas wells. Hydraulically fractured wells produce about 10 trillion
cubic feet of natural gas annually. Through injecting fluids under high
pressure, hydraulic fracturing creates pathways for gas to flow to the
well.
The amendment I have sent to the desk and have offered sets up a
study process to determine whether high fracturing should be regulated
by the Federal Government under the Safe Drinking Water Act. Let me
give the context for this proposed amendment.
States already have the authority to regulate hydraulic fracturing.
They do that through measures such as requiring casing or lining of oil
and gas wells where those wells cross through aquifers. The State
regulatory programs have been effective to date. And although there
have been over a million hydraulic fracturing jobs conducted in the
last 5 years, there have been zero confirmed instances of hydraulic
fracturing contaminating drinking water. There is not one time that
contamination has been established.
Where no one has been able to confirm any harm from hydraulic
fracturing, it is sensible to study whether there is a real problem
before we rush forward to impose additional Federal regulation. That is
precisely what the amendment I have sent to the desk would do.
The Environmental Protection Agency must first study whether
hydraulic fracturing has any effects on underground sources of drinking
water. After that, the National Academy of Sciences, as an independent
scientific body, would review EPA's study. Then based upon all the
evidence, EPA must determine whether in addition to State regulation,
Federal regulation of hydraulic fracturing under the Safe Drinking
Water Act is necessary to protect underground sources of drinking
water.
While the study is being prepared, States would fully retain their
own existing programs and EPA would fully retain its emergency powers
to prevent any contamination of drinking water that would immediately
threaten public health.
The proposed amendment's reliance on existing State programs while a
study is prepared has received extensive bipartisan support. It has
received that support both in the Senate but also in the executive
branch. During both the previous administration, the Clinton
administration, and the current administration, the EPA has maintained
that Federal regulation of hydraulic fracturing is not required.
In fact, the previous administration's EPA argued in Federal court--I
quote from one of their briefs:
Alabama is appropriately regulating production of methane
via hydraulic fracturing. There is no need for EPA to
supplant these efforts.
The previous administration's EPA also cited the absence of any
evidence that hydraulic fracturing has harmed drinking water and
Alabama's close regulation of hydraulic fracturing in denying a 1994
petition to impose Federal regulations on Alabama.
Mr. President, let me at this point submit for the record a letter
from Carol Browner, then the head of the EPA, sent to David Ludder,
general counsel for the Legal Environmental Assistance Foundation. This
is a 1995 letter in which she says:
EPA does not regulate--and does not believe it is legally
required to regulate--the hydraulic fracturing of methane gas
production wells under its UIC program.
Continuing the quotation:
There is no evidence that the hydraulic fracturing at issue
has resulted in any contamination or endangerment of
underground sources of drinking water.
I ask unanimous consent that that letter be printed in the Record at
the end of my statement.
The PRESIDING OFFICER. Without objection, it is so ordered.
(See Exhibit 1.)
Mr. BINGAMAN. Mr. President, a cautionary word. We will need to use
hydraulic fracturing of gas wells over the next decade. An unneeded
regulation of hydraulic fracturing could make some of these wells
uneconomical to produce and could defeat our important efforts to
increase our energy independence--particularly as it relates to natural
gas.
My proposed amendment would sensibly allow hydraulic fracturing to
assist efforts to increase our energy independence, while studying
whether there is any known environmental harm that would require
Federal regulation. For this reason, I urge my colleagues to vote for
this amendment.
I yield the floor.
Exhibit 1
EPA,
Washington, DC, May 5, 1995.
David A. Ludder, Esq.,
General Counsel, Legal Environmental Assistance Foundation,
Inc., Tallahassee, FL.
Dear Mr. Ludder: The Environmental Protection Agency (EPA)
has received and carefully reviewed your May 3, 1994,
Petition for Promulgation of a Rule Withdrawing Approval of
Alabama's Underground Injection Control (UIC) Program. Based
on that review, I have determined that Alabama's
implementation of its UIC Program is consistent with the
requirements of the Safe Drinking Water Act (42 U.S.C.
Sec. 300h, et seq.) and EPA's UIC regulations (40 C.F.R. Part
145). EPA does not regulate--and does not believe it is
legally required to regulate--the hydraulic fracturing of
methane gas production wells under its UIC Program.
There is no evidence that the hydraulic fracturing at issue
has resulted in any contamination or endangerment of
underground sources of drinking water (USDW). Repeated
testing, conducted between May of 1989 and March of 1993, of
the drinking water well which was the subject of this
petition failed to show any chemicals that would indicate the
presence of fracturing fluids. The well was also sampled for
drinking water quality and no constituents exceeding drinking
water standards were detected. Moreover, given the horizontal
and vertical distance between the drinking water well and the
closest methane gas production wells, the possibility of
contamination or endangerment of USDWs in the area is
extremely remote. Hydraulic fracturing is closely regulated
by the Alabama State Oil and Gas Board, which requires that
operators obtain authorization prior to all fracturing
activities.
Accordingly, I have decided to deny your petition. Enclosed
you will find a detailed response to each contention in your
petition, which further explains the basis for this denial.
Sincerely,
Carol M. Browner.
The PRESIDING OFFICER. The Senator from Oklahoma is recognized.
Mr. INHOFE. Mr. President, first of all, I ask that Senator Tim
Hutchinson and Senator Voinovich be added as cosponsors of this
amendment and the Price-Anderson amendment.
The PRESIDING OFFICER. Without objection, it is so ordered.
[[Page S1634]]
Mr. INHOFE. Mr. President, first of all, I thank my colleague from
New Mexico. I am happy to join him in proposing this amendment. I think
it is very important for a number of reasons. I just came from the
Senate Armed Services Committee, where we had all four of the chiefs of
the services. We were talking about this war that we are prosecuting
right now. We were talking about the Nation's security.
I can remember all the way back in the 1980s, when then-Secretary of
the Interior Don Hodel and I went around the country and talked about
the fact that an energy policy is something that is important to our
Nation's security. It is a national security issue, not an energy
issue. Consequently--and I said this a minute ago--this has not been a
partisan thing. We tried to get President Reagan to come up with an
energy policy. He would not do it. I thought George ``the first,''
coming from the oil fields, would have one, but he didn't do it either.
The last administration didn't do it.
A national energy policy is really necessary for national security
reasons. Right now, we are dependent upon foreign countries for 57
percent of our energy supply--something that is not acceptable,
particularly right now in a time of war.
Where does this issue of hydraulic fracturing come in? I am from
Oklahoma, and I understand we have a tremendous reserve down there in
terms of marginal production. I started many years ago--probably before
many fellow Members were born--in the oil fields in cable tool rigs--
something they used before rotaries--the pounding method. I realized at
that time how much this meant to the country and how much our shallow
production meant.
When we talk about energy policy, we talk about nuclear, as we did in
the last amendment, and we talk about ANWR--and it is necessary to get
into some of the deep stuff.
In terms of marginal production--wells that have 15 barrels a day, or
less, and a comparable amount for gas wells--this has a tremendous
prospect to be an important ingredient in a national energy policy. If
we had all of the gas wells that have been plugged in the last 10
years, or oil wells that have been plugged, producing today--marginal
wells, producing 15 barrels or less--it would equal more than what we
are currently importing from Saudi Arabia. So it is necessary to have
these wells.
How does hydraulic fracturing fit into this equation? This system has
been used--I remember using it myself--since the 1940s. In the 1940s,
we had a system of injection in order to get maximum production in both
oil and gas wells. Not one time in that period of time--after over a
million wells have used this process--has there been any kind of damage
to the environment. In the last 15 years, there have been over 100,000
wells using this, with no damage to the environment.
As the Senator from New Mexico points out, this is not a partisan
thing. The Clinton administration supported this, the Bush
administration supports this, and Carol Browner supported this when I
served as chairman of one of the subcommittees of the Environment and
Public Works Committee. This is necessary to have, and it does no harm
to the environment.
I am honored to join my colleague, Senator Bingaman, in supporting
this amendment and in saying this is a necessary part of the national
energy policy.
I ask unanimous consent that a letter from Carl Smith Assistant
Secretary, Office of Fossil Energy, of the Department of Energy be
printed in the Record.
There being no objection, the letter was ordered to be printed in the
Record, as follows:
Department of Energy,
Washington, DC, March 7, 2002.
Hon. Jeff Bingaman,
Chairman, Committee on Energy and Natural Resources, U.S.
Senate, Washington, DC.
Dear Mr. Chairman: As the Senate considers legislation to
address our growing dependence on imported oil and to
consider ways to promote the production on of our domestic
energy resources, I am concerned that the impact of possible
restrictions on the use of hydraulic fracturing, the most
commonly used technique to stimulate domestic oil and gas
wells, may not be well known or fully understood. Therefore,
I thought it would be useful to provide you with some
information on the essential role this technology plays in
today's oil and gas industry.
Hydraulic fracturing is used on approximately two thirds of
the onshore gas wells drilled in the United States today and
since its inception in 1947, it has enabled the production of
over eight billion barrels of North American oil reserves
that otherwise would have been unrecovered. It is estimated
that hydraulically fractured gas wells produce 10 Tcf of
natural gas annually, or nearly sixty percent of the gas
produced from domestic gas wells. Further, production of one
of our fastest growing sources of onshore natural gas
supplies, coalbed methane, would be seriously diminished if
hydraulic fracturing was unavailable. Approximately seventy-
five percent of the 1.5 Tcf of coal bed methane produced
annually comes from wells that were hydraulically fractured.
I would also point out that hydraulic fracturing offers
several environmental benefits. By increasing the production
of oil and gas from reservoirs that have lower flow rates,
hydraulic fracturing reduces the number of wells needed to
deplete the reservoir, thereby protecting the environment by
minimizing the waste volumes and surface disturbance
associated with oil and gas drilling. Also, by increasing the
amount of methane recovered from mineable coal seams prior to
the start of mining activities, hydraulic fracturing promotes
coal mine safety and lowers the amount of methane gas that
escapes during mining operations, a significant source of
greenhouse gas emissions.
On August 24, 2000, while still Secretary of Energy for the
State of Oklahoma, I had the opportunity to raise these
points at a workshop held here in Washington by the
Environmental Protection Agency (EPA). Also speaking at that
workshop was Tom Stewart, Executive Vice President of the
Ohio Oil and Gas Association. I managed to find a copy of his
remarks on the internet and I thought you might be interested
in them. They mirrored many of the comments I heard from my
colleagues during the workshop. Tom noted that, ``With very
limited exceptions, hydraulic fracturing was used to complete
over 55,000 Ohio wells drilled since 1970. Exploitation of
the tight Clinton sand would not have been possible without
fracturing. The hydraulic fracturing process made the modern
Ohio oil and gas industry.''
In September 2001, the Department of Energy's concern with
the impact of proposed restriction on the use of hydraulic
fracturing, led the Office of Fossil Energy to ask the
National Energy Technology Laboratory's Strategic Center for
Natural Gas to conduct a study on, ``Quantifying the Impact
of Hydraulic Fracturing in Meeting U.S. Natural Gas Supply
Requirements''. The number and types of stimulation
treatments (hydraulic fracturing) will be quantified,
treatment costs will be identified, and natural gas
production and price relationships will be reviewed and
projected. Results of this study will be available in May of
this year but I anticipate that some useful information
regarding the important role of hydraulic fracturing will be
available over the next few weeks. I will provide this
information to you as it becomes available.
I welcome the opportunity to bring this very important
matter to your attention. If you need more information or
have any questions please contact Peter Lagiovane of my
office. He can be reached at, 202-586-8116 or via email at,
[email protected].
Sincerely,
Carl Michael Smith,
Office of Fossil Energy.
Mr. INHOFE. I yield the floor.
Mr. JEFFORDS. Mr. President, I wish to express my opposition and deep
concern to the amendment being offered from my good friend from New
Mexico, Senator Bingaman.
This amendment would prohibit the Environmental Protection Agency
from regulating hydraulic fracturing, an oil and gas operation which
the U.S. Court of Appeals for the 11th Circuit has held should be
regulated under the Safe Drinking Water Act. As chairman of the
Committee on Environment and Public Works, which has jurisdiction over
the Safe Drinking Water Act, I am very disappointed that this matter is
being added to the Energy bill without my committee having held
hearings on the matter. Hydraulic fracturing is a method for
stimulating recovery of natural gas and coalbed methane by fracturing
rock formations through the injection of highly pressurized water
treated with various additives. There is substantial question as to the
nature of these additives--which are not closely regulated under most
state and Federal laws--and whether they have the potential to migrate
to public sources of drinking water when hydraulic fracturing occurs.
The amendment would in essence overturn the finding by the Court of
Appeals that hydraulic fracturing must be regulated under the Safe
Drinking Water Act. The amendment would require EPA to conduct a study
to determine whether hydraulic fracturing would contaminate
groundwater. Only after completing the study would EPA
[[Page S1635]]
be free to regulate the activity and protect drinking water wells,
unless during the interim the EPA found emergency circumstances. I do
not believe the record provides ample support for a conclusion that
little harm will occur during the course of this study, and the EPA
should not be barred from regulating hydraulic fracturing until the
study is completed. Further, I do not believe the EPA should be the
sole determiner of whether these activities should ultimately be
regulaed. That issue is properly within the realm of Congress to
decide. Such a decision should be made after the benefit of full
congressional review. That has not occurred here.
This is not a question of blocking oil and gas development. Oil and
gas development has been proceeding briskly within the State of Alabama
since the EPA instituted new regulations under the Safe Drinking Water
Act for hydraulic fracturing operations, pursuant to the order of the
court. Nobody has gone out of business. The industry simply objects to
additional costs they are incurring, costs which appear to be
relatively minor, and which are directed solely to helping protect the
adequacy of the public's drinking water supplies. This matter is
squarely within the jurisdiction of the Committee on Environment and
Public Works, and as chairman, I must object to inclusion of this
amendment within the energy bill, without the matter being properly
examined and dealt with within the committee.
For the above reasons, I oppose the amendment.
The PRESIDING OFFICER. The Senator from Nevada is recognized.
Mr. REID. Mr. President, I ask unanimous consent that the time until
2 p.m. today be for debate with respect to the following amendments:
the pending Voinovich amendment No. 2983, and a Bingaman or designee
amendment regarding hydraulic fracturing to be offered; with the time
to be equally divided and controlled with respect to these amendments;
that there be no second-degree amendments in order prior to a vote in
relation to these amendments; that the votes with respect to these
amendments occur in the order offered; and that if an amendment is not
disposed of, the Senate continue the vote sequence which was not
disposed of previously.
Before asking that the request be agreed to, I yield to my friend
from New Mexico for sending a modification to the desk.
Amendment No. 2986, As Modified
Mr. BINGAMAN. Mr. President, I send a modification to the desk.
The PRESIDING OFFICER. The Senator has a right to modify his
amendment. The amendment is so modified.
The amendment (No. 2986), as modified, is as follows:
At the end of title VI, add the following new section:
``SEC. 610. HYDRAULIC FRACTURING.
``Section 1421 of the Safe Drinking Water Act (42 U.S.C.
Sec. 300h) is amended by adding at the end the following:
``(e) Hydraulic Fracturing for Oil and Gas Production.--
``(1) Study of the effects of hydraulic fracturing.--
``(A) In general.--As soon as practicable, but in no event
later than 24 months after the date of enactment of this
subsection, the Administrator shall complete a study of the
known and potential effects on underground drinking water
sources of hydraulic fracturing, including the effects of
hydraulic fracturing on underground drinking water sources on
a nationwide basis, and within specific regions, States, or
portions of States.
``(B) Consultation.--In planning and conducting the study,
the Administrator shall consult with the Secretary of the
Interior, the Secretary of Energy, the Ground Water
Protection Council, affected States, and, as appropriate,
representatives of environmental, industry, academic,
scientific, public health, and other relevant organizations.
Such study may be accomplished in conjunction with other
ongoing studies related to the effects of oil and gas
production on groundwater resources.
``(C) Study elements.--The study conducted under
subparagraph (A) shall, at a minimum, examine and make
findings as to whether--
``(i) such hydraulic fracturing has endangered or will
endanger (as defined under subsection (d)(2)) underground
drinking water sources, including those sources within
specific regions, states or portions of States;
``(ii) there are specific methods, practices, or
hydrogeologic circumstances in which hydraulic fracturing has
endangered or will endanger underground drinking water
sources; and
``(iii) there are any precautionary actions that may reduce
or eliminate any such endangerment.
``(D) Study of hydraulic fracturing in a particular type of
geologic formation.--The Administrator may also complete a
separate study on the known and potential effects on
underground drinking water sources of hydraulic fracturing in
a particular type of geologic formation.
``(i) If such a study is undertaken, the Administrator
shall follow the procedures for study preparation and
independent scientific review set forth in subparagraphs
(1)(B) and (C) and (2) of this subsection. The Administrator
may complete this separate study prior to the completion of
the broader study of hydraulic fracturing required pursuant
to subparagraph (A) of this subsection.
``(ii) At the conclusion of independent scientific review
for any separate study, the Administrator shall determine,
pursuant to paragraph (3), whether regulation of hydraulic
fracturing in the particular type of geologic formation
addressed in the separate study is necessary under this part
to ensure that underground sources of drinking water will not
be endangered on a nationwide basis, or within a specific
region, State or portions of a state. Subparagraph (4) of
this subsection shall apply to any such determination by the
Administrator.
``(iii) If the Administrator completes a separate study,
the Administrator may use the information gathered in the
course of such a study in undertaking her broad study to the
extent appropriate. The broader study need not include a
reexamination of the conclusions reached by the Administrator
in any separate study.
``(2) Independent scientific review.--
``(A) In general.--Prior to the time the study under
paragraph (1) is completed, the Administrator shall enter
into an appropriate agreement with the National Academy of
Sciences to have the Academy review the conclusions of the
study.
``(B) Report.--Not later than 11 months after entering into
an appropriate agreement with the Administrator, the National
Academy of Sciences shall report to the Administrator, the
Committee on Energy and Commerce of the House of
Representatives, and the Committee on Environment and Public
Works of the Senate, on the--
``(i) findings related to the study conducted by the
Administrator under paragraph (1);
``(ii) the scientific and technical basis for such
findings; and
``(iii) recommendations, if any, for modifying the findings
of the study.
``(3) Regulatory determination.--
``(A) In general.--Not later than 6 months after receiving
the National Academy of Sciences report under paragraph (2),
the Administrator shall determine, after informal public
hearings and public notice and opportunity for comment, and
based on information developed or accumulated in connection
with the study required under paragraph (1) and the National
Academy of Sciences report under paragraph (2), either:
``(i) that regulation of hydraulic fracturing under this
part is necessary to ensure that underground sources of
drinking water will not be endangered on a nationwide basis,
or within a specific region, State or portions of a State; or
``(ii) that regulation described under clause (i) is
unnecessary.
``(B) Publication of determination.--The Administrator
shall publish the determination in the Federal Register,
accompanied by an explanation and the reasons for it.
``(4) Promulgation of regulations.--
``(A) Regulation necessary.--If the Administrator
determines under paragraph (3) that regulation by hydraulic
fracturing under this part is necessary to ensure that
hydraulic fracturing does not endanger underground drinking
water sources on a nationwide basis, or within a specific
region, State or portions of a State, the Administrator
shall, within 6 months after the issuance of that
determination, and after public notice and opportunity for
comment, promulgate regulations under section 1421 (42 U.S.C.
300h) to ensure that hydraulic fracturing will not endanger
such underground sources of drinking water. However, for
purposes of the Administrator's approval or disapproval under
section 1422 of any State underground injection control
program for regulating hydraulic fracturing, a State at any
time may make the alternative demonstration provided for in
section 1425 of this title.
``(B) Regulation unnecessary.--The Administrator shall not
regulate or require States to regulate hydraulic fracturing
under this part unless the Administrator determines under
paragraph (3) that such regulation is necessary. This
provision shall not apply to any State which has a program
for the regulation of hydraulic fracturing that was approved
by the Administrator under this part prior to the effective
date of this subsection.
``(C) Existing regulations.--A determination by the
Administrator under paragraph (3) that regulation is
unnecessary will relieve all States (including those with
existing approved programs for the regulation of hydraulic
fracturing) from any further obligation to regulate hydraulic
fracturing as an underground injection under this part.
``(5) Definition of hydraulic fracturing.--For purposes of
this subsection, the term `hydraulic fracturing' means the
process of creating a fracture in a reservoir rock, and
injecting fluids and propping agents, for the purposes of
reservoir stimulation related to oil and gas production
activities.
``(6) Savings.--Nothing in this subsection shall in any way
limit the authorities of the Administrator under section 1431
(42 U.S.C. 300i).
[[Page S1636]]
``SEC. 611. AUTHORIZATION OF APPROPRIATIONS.
``There are authorized to be appropriated to the
Administrator of the Environmental Protection Agency $100,000
for fiscal year 2003, to remain available until expended, for
a grant to the State of Alabama to assist in the
implementation of its regulatory program under section 1425
of the Safe Drinking Water Act.''.
The PRESIDING OFFICER. Is there objection to the unanimous consent
request?
Without objection, it is so ordered.
Mr. REID. Mr. President, for Members, we have until 2 p.m. today to
debate these two amendments. We have been told other people want to
speak on Price-Anderson, and certainly others want to talk about
hydraulic fracturing. We also have some people who have indicated to me
and others that they wish to do so. This would be an appropriate time
to do that.
The PRESIDING OFFICER. Who yields time?
Mr. INHOFE. I yield the Senator from Alabama 5 minutes.
The PRESIDING OFFICER. The Senator from Alabama is recognized.
Mr. SESSIONS. Mr. President, I thank the Chair and I thank Senator
Inhofe for giving me this time. I particularly thank Senator Inhofe and
Senator Bingaman for their leadership in moving forward on the
hydraulic fracturing issue.
The purpose of this bill is to help us produce more energy, and
cleaner energy, to meet our energy needs more at home from our domestic
sources, but also to do it in a cleaner way. There are a lot of things
we can do to make that happen.
One significant and important event is to deal with the hydraulic
fracturing issue. I believe we can make some progress. This is a
process that is used for the production of coalbed methane. They use
high-pressure water, carbon dioxide and sand to create microscopic
fractures in coal seams, and that releases the methane that is in that
coal seam. That is the basic process.
Of course, carbon dioxide is readily available in the atmosphere. It
is not a pollutant, the sand is not a pollutant, and water is not a
pollutant. They have never believed that this process in any way was a
polluting enterprise.
Most States in which hydraulic fracturing is used--including my State
of Alabama--have implemented regulations to ensure that hydraulic
fracturing continues to be used in a safe manner. The technique has
been used safely by coalbed methane oil and gas producers for over 15
years, and there has never been a single event of contamination to
underground drinking sources.
The history of this issue is kind of simple. Currently, EPA has
directed the state of Alabama to regulate hydraulic fracturing under
the Safe Drinking Water Act. Neither EPA nor Congress ever intended to
be regulating this procedure. However, in 1995 a lawsuit was filed
against EPA.
This was Carol Browner's EPA, which was very aggressive in regulating
anything that needed to be regulated. They claimed that the hydraulic
fracturing in Alabama should be regulated under not an obscure but a
significant rule called the Underground Injection Control Program that
was established by the Safe Drinking Water Act.
The Underground Injection Control Program was designed to regulate
the disposal of hazardous waste underground, but fluids and sand used
in hydraulic fracturing certainly are not hazardous waste.
The lawsuit was filed and the EPA defended it. They said we should
not be regulating this. They defended it in court: It did not fit
within the purposes of the UIC Program, and that the State of Alabama
already sufficiently regulated the process, and the procedure itself
posed little risk to underground drinking water sources or to the
environment.
In 1997, the Eleventh Circuit Court of Appeals, in analyzing the
statute written by Congress, found that the language in the statute,
whether Congress intended to cover it or not, reading the plain
wording, covered injection of carbon dioxide and sand in the ground and
it is covered by the Safe Drinking Water Act. We have been trying to do
something about this situation for quite some time. It has been a
burdensome process.
Congress has come up with a number of ideas. The EPA pretty well
indicated at the beginning they supported fixing this problem, and we
have moved forward on it. I believe this compromise which Senator
Bingaman and Senator Inhofe have talked about--a thorough scientific
review--will show that there is no environmental degradation
whatsoever. Once that is done, we can fix this process and get it back
into the normal scheme of things.
This is a big impact on my State. We are the second-largest producer
of coalbed methane in the country. It is a process that started in
Alabama. The technology was developed in Alabama. I guess that is why
they picked on our State to file the lawsuit. As a result, this has had
a significant adverse impact on the State of Alabama.
We have had 300 new hydraulic fracturing proposals submitted since
the lawsuit.
The PRESIDING OFFICER (Mr. Cleland). The Senator's time has expired.
Mr. SESSIONS. I ask I be allowed 2 additional minutes.
Mr. BINGAMAN. Mr. President, I yield another 5 minutes to the
Senator.
Mr. SESSIONS. Mr. President, I thank the Senator. That is very
generous.
It has fallen particularly hard on the Alabama Department of
Environmental Management whose budget is strapped at this time. Their
financial problems have made a lot of news, frankly. Since this is a
matter of national importance, I believe it is appropriate that
Alabama, which is the State most adversely impacted at this time within
the Eleventh Circuit where the court ruling applies, be given some
compensation toward the cost of administering and reviewing these 300-
plus proposals.
I am pleased we were able to work out an agreement that $100,000 will
be authorized for that purpose. I am pleased Senator Bingaman and
Senator Inhofe, as I understand it, have agreed that if this continues
to be a problem or if there is sound evidence that additional moneys
are required to do this--more than the $100,000 that will be approved--
they will consider that in conference as we move forward with the bill.
Methane is one of the cleanest of all burning fuels. Methane produces
good energy and, at the same time, it is very clean energy. The fact
that we can draw the cleanest of all burning fuels from land within the
United States is a good thing that we should be promoting. This is the
kind of energy production that should be promoted in the country. I am
glad we are moving forward finally to get this settled so we can
enhance the production of coalbed methane throughout the country. It
will be a good step forward.
In conclusion, this is a new source. Every Btu of energy we take from
gas, or from gasoline and oil, that we purchase from outside our
country is a drain on the wealth of this country. It generates economic
activity in the country from which we purchase it. It does not generate
economic activity in the United States. It is a net transfer of
American wealth. That is why I believe this is not just an oil industry
issue, this is not a big business issue, this is not simply an
environmental or non-environmental issue. I believe we need to increase
energy production in America because it is a matter of economic
importance. It generates jobs and wealth in our country, not in
Venezuela and the kind of government they have there, or Saudi Arabia,
or Iraq. It creates wealth in the United States. It keeps our dollars
here. It generates jobs here.
To me, there is no more worthwhile energy production than one of the
cleanest of all: Coalbed methane. I am pleased we are moving forward,
even though it is going to take a little longer than I would like, to
get this regulatory matter settled and to enhance this production. It
will be good for America.
I thank the Chair.
The PRESIDING OFFICER. The Senator from Oklahoma.
Mr. INHOFE. Mr. President, I thank the Senator from Alabama. We have
been working on this for a long time. For 4 years, we have actually had
an amendment that would accomplish this. The approach we are taking now
is the right approach because it is letting scientists decide, not
people who come to this Chamber and say hysterically there is going to
be harm done to the environment. We can look at history, and, as we
have said several
[[Page S1637]]
times before, of the over 1 million of these processes that have taken
place, there is not one bit of evidence of a problem to the
environment.
I have a letter from the Ground Water Protection Council. It is a
group of EPAs throughout America. They strongly endorse this amendment.
I ask unanimous consent that this letter be printed in the Record.
There being no objection, the letter was ordered to be printed in the
Record, as follows:
GWPC,
Oklahoma City, OK, March 7, 2002.
U.S. Senate,
Washington, DC.
Dear Senator: The Ground Water Protection Council (GWPC)
strongly encourages you to support the Bingaman-Inhofe
Hydraulic Fracturing Amendment.
The GWPC is a national association of state agencies who
regulate the nation's ground water and underground injection
control programs. Our members and Board of Directors are
professional geologists, hydrologist, geo-chemists and
petroleum engineers.
As the state agencies charged with protecting the nation's
ground water supplies and regulating the oil and gas
industry, we are very concerned that failure to pass the
amendment would result in an additional and unnecessary
regulatory burden on both states and the industries they
regulate, with no environmental benefit.
We are aware of a March 6, 2002 letter to you opposing the
Bingaman-Inhofe Hydraulic Fracturing Amendment and have the
following comments:
In no state is the oil and gas industry exempt from the
requirements of the Safe Drinking Water Act. A number of
activities conducted as part of oil and gas exploration and
production are regulated under the UIC program, including
injection of produced water and some related wastes.
Hydraulic fracturing is fundamentally different because it is
part of the well completion process, does not ``dispose of
fluids'' and is of short duration, with most of the fluids
being immediately removed.
Fracturing fluids do not contain MTBE. Fracturing fluids
may contain small amounts of other hazardous chemicals but
constituents such as benzene do not appear in fluids that
would be used in fracturing shallow formations. Such fluids
are used in deeper formations that are usually thousands of
feet below the strata that drinking water wells actually tap
into.
Any ``regulatory rollback'' would occur only after careful
EPA study and only if EPA determined, based on the study and
the peer review by NAS, that federal regulation of hydraulic
fracturing is not necessary.
The letter ignores the fact that states already regulate
underground injection and hydraulic fracturing. In fact, the
``exclusive deal'' for the oil industry that is alleged in
the letter was in actually a recognition by Congress in 1980
that states were already effectively regulating oil and gas
exploration and production activities and had done so for
years. Congress further recognized that it did not make sense
to change these effective state programs by making the states
comply with redundant federal regulations.
The letter alleges that hydraulic fracturing threatens
underground sources of drinking water. The letter does not
allege that hydraulic fracturing has actually resulted in
adverse impacts to USDWs because no such impacts have ever
been confirmed.
The proposed amendment would not ``overturn two Court of
Appeals decisions.'' It certainly would not overturn LEAF II.
In fact, it codifies LEAF II. It doesn't even overturn LEAF
I, but would allow EPA to determine that the current state/
EPA regulatory partnership is working effectively and that
additional federal regulation is not necessary
The proposed amendments would not ``fully suspend''
regulation of hydraulic fracturing. Current state regulations
would be unaffected and remain in force.
On behalf of the Ground Water Protection Council, we again
urge you to support the Hydraulic Fracturing Amendment.
Sincerely,
Michel J. Paque,
GWPC Executive Director.
Mr. INHOFE. Mr. President, again, we are saying let's not get
emotional about this. Let's not come up with all kinds of accusations.
Instead, let's let science decide. Right now, scientific studies
subjected to an independent peer review is an appropriate way to
determine if Federal regulation of hydraulic fracturing is necessary.
The required National Academy of Sciences review of EPA's findings
approves an independent verification of the study's results. When the
study does come in, it does not necessarily mean EPA has to follow the
dictates, the results of this study, but they can and they may decide
to do another study. At least we are letting the scientists make a
decision as to who is right.
I cannot overemphasize, as the Senator from Alabama talked about how
clean natural gas is, how clean it is. That is not even debatable. It
is in such plentiful supply. We need this.
Eighty percent of the wells that are done have to use this technique
in order to produce the natural gas that is necessary to fully utilize
that source. So I think this is a very balanced approach, and it is
certainly bipartisan.
I applaud our Senator from New Mexico, along with others who have
joined us in supporting this amendment.
I yield the floor.
The PRESIDING OFFICER. The Senator from New Mexico.
Mr. BINGAMAN. Mr. President, I also commend the Senator from Alabama
for his effort in this regard. I do think his proposed modification of
our amendment makes a good deal of sense, and we were very pleased to
accept that. He does have some peculiar problems in Alabama in trying
to implement their regulatory program, and I think clearly we want to
see that State succeed. That is his objective as well. So I am glad we
could accommodate that concern.
I yield the floor.
I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. BINGAMAN. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. BINGAMAN. Mr. President, I ask unanimous consent that the time
during the quorum call be counted equally against all the Senators who
are controlling time.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. BINGAMAN. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. SESSIONS. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. SESSIONS. Mr. President, I would like to share some thoughts as
we move toward a vote on the Price-Anderson nuclear liability amendment
that will be coming up later this afternoon. It is an important
amendment. It represents an extension of current policy, and it is
something we should do. The reason we should do that, I am so firmly
convinced, is that nuclear power is an important component of our
national energy mix. One out of every five times Americans turn on
their light bulbs, one out every five times Americans turn on their
refrigerators, or turn on anything else, one out every five times
Americans use electricity, that electricity is produced thanks to
nuclear power.
Currently, 20 percent of our supply comes from nuclear power. I think
it is time for us to consider not only maintaining that but actually
increasing that percentage. The Palo Verde Nuclear Generation Station
in Arizona, for example, generates more electricity annually than any
other power plant of any kind, including coal, oil, natural gas, and
hydropower. We simply have to realize the potential of this energy
source and join many of the other leading nations in the world in
continuing to implement nuclear as a major component of our energy mix.
The Energy Information Agency predicts a 30-percent increase in the
demand for electricity in this country by the year 2015--a 30-percent
increase in demand over the current level. Twenty percent of our power
today comes from nuclear power. France produces over 60 percent from
nuclear. Japan produces nearly 50 percent of its electricity from
nuclear power sources. In 10 countries, there are 29 nuclear plants
currently under construction. The United States has none. We should be
following suit. We simply do not need to allow the rest of the world to
get ahead of us on the question of producing power by nuclear energy.
I have enjoyed visiting our nuclear plants in Alabama. The Tennessee
Valley Authority is setting records for safety, reliability, and
productivity at their Browns Ferry plant. They have 1,000-plus
employees making high wages and producing a steady source of energy 24
hours a day. They have the time to shut down those plants for
refurbishing, and the cost has been reduced quite significantly. It is
an important part of our energy mix.
Shortly after I came to the Senate, I attended the 44th Annual
Session of
[[Page S1638]]
the North Atlantic Assembly in Scotland. Members of parliaments from
throughout the North Atlantic nations attended. At that meeting, the
Ambassador to the United Nations International Energy Agency appointed
by President Clinton, John B. Ritch, III, stated in his presentation
that electricity demands will double in the world by 2050 and the one
technology capable of meeting a large baseload with negligible
greenhouse emissions is nuclear power.
He added:
In the century ahead, mankind must place great reliance on
harnessing the nuclear genie and using it to maximum effect,
if our needs are to be met and our security preserved.
In fact, he went into some detail about the cost and the benefits of
alternative sources of power. He concluded that they all have some
benefit but that none can even come close to meeting this huge surge in
demand the world is going to be facing in the decades to come.
Nuclear energy is a clean source of energy. It is environmentally
friendly. I am astounded we have the debate that we have over whether
or not nuclear energy is a positive thing for the environment. It most
certainly is. Nothing else can produce this kind of source of power
with no air pollution from it.
We would never have air as clean as we have today if we dropped all
our nuclear plants and started producing that energy with coal or oil.
We could not come close to that. According to a study conducted by
Energy Resources International, nuclear energy has prevented the
release into the atmosphere of 219 million tons of sulfur dioxide, 98
million tons of nitrogen oxide, and 2 billion tons of carbon dioxide
since 1973.
Annually, nuclear power prevents the release of 5.1 million tons of
sulfur dioxide, 2.4 million tons of nitrogen oxide, and 33 million
metric tons of carbon.
In Alabama, there are currently two nuclear powerplants: Browns Ferry
and Farley. In 1999, those powerplants avoided the release of
approximately 163,000 tons of sulfur dioxide emissions, 90,000 tons of
nitrogen oxide emissions, and 6.8 million metric tons of carbon
emissions.
The building blocks of ozone, that we know is not a good thing in our
atmosphere, as we have created it in manmade quantities--an irritant to
our lungs, a health risk to children and the elderly--are not emitted
at all by nuclear powerplants. Ozone precursors are fossil fuel
produced.
Implementing nuclear energy is the only way we can meet our projected
energy demand while simultaneously reducing the release of sulfur
dioxide and nitrous oxides. Furthermore, nuclear energy does not emit
carbon dioxide, which is what people blame for global warming. That is
a matter I think people cannot dispute.
It strikes me as hypocritical that those who complain most and
express the most fear about global climate change are, in general--but
not always--the same people who are against nuclear power. Many of
these people, I believe, unfortunately, are not rational on this
subject. People have referred to them as ``nuke kooks.'' But, whatever,
they are obsessed with blocking nuclear power.
A few years ago the American Society of Mechanical Engineers, a
reputable professional organization composed of innovative individuals,
engineers, who design solutions to meet our energy needs, issued a
paper regarding climate change. In the paper, they made numerous
statements regarding the importance of nuclear to our energy mix. They
stated:
It is unlikely, however, that a worldwide, stable
atmospheric carbon dioxide concentration--
That is, a stable amount of carbon dioxide in the air--
can be reached without the use of nuclear, renewable, and
biomass energy for electric power generation.
Our legislation significantly promotes biomass and renewable energy.
There is little in this bill to really increase nuclear power.
I continue to quote:
Assuming that the historical trend continues in which
electricity consumption follows economic growth, it becomes
essential that the U.S. environmental policies include
retention of existing nuclear power generation capacity.
Indeed, these policies should include development and
implementation of additional nuclear power reactors to meet a
growing demand for electricity. . . .
Looking at this matter objectively, just at the overall picture of
our energy demands, it is clear to me that nuclear energy is the only
viable solution to meeting both our energy demands and our
environmental objectives. It will produce power required to meet our
energy needs in a safe and environmentally friendly way.
People say: It is risky. It is dangerous. The people who live near
the nuclear reactors in Alabama with whom I meet and talk are very
strong supporters of nuclear power. The overwhelming majority of
Americans favor nuclear power. They favor the expansion of nuclear
power.
But let's talk about the safety record.
The nuclear energy sector has, in any way you look at it, a stellar
safety record. We have not lost one life in this country--ever--as a
result of a nuclear power accident in the history of this country. How
many people have we lost in accidents with trucks and trains carrying
coal, or with pipelines carrying natural gas, or in coal mines, or in
other ways where lives are lost in the production of other unclean
sources of energy, the kind of sources of energy that produce NOx and
SOx and the kind of adverse exposures to health that come from fossil
fuels? So we have those kinds of unhealthy actions, too, in addition to
just the safety factor in producing the energy.
The main reason the nuclear industry is so safe is that it is
overseen--originally by the Atomic Energy Commission and now the
Nuclear Regulatory Commission. As a member of the Environment and
Public Works Committee at the time, we had a number of hearings about
the oversight by NRC. They are meticulously reviewing and monitoring
nuclear plants all over America. They do that on a constant basis. They
are exceeding other countries in the cost of their supervision and in
the minutiae of it. But we have not had any accidents.
We had the problem at Three Mile Island. A major sea change has
occurred since then. A recent study has shown that no one suffered
injury from the Three Mile Island accident, even though, if you asked
Americans, they would probably think people were injured from it. But a
scientific study has indicated there were no injuries, whatsoever, as a
result of that accident.
But since then, we have learned and we have stepped up, even to a
much higher degree, our supervision by the Nuclear Regulatory
Commission of nuclear plants. I do not believe we will see that ever
happen again. I believe we would react so much better, if anything were
to begin to happen like that, that we would not see that kind of event
occur again.
We are also looking at new and special ways to produce nuclear power,
new kinds of reactors where it would be impossible to have a nuclear
reactor explosion or break.
Last June, at the Economic Club of Chicago, in a major address, Alan
Greenspan, Chairman of the Federal Reserve Board--the architect, I
suppose, of our economy--talking about what America needed to do, made
this statement:
Given the steps that have been taken over the years to make
nuclear energy safer, and the obvious environmental
advantages it has in terms of reducing emissions, the time
has come for us to consider whether or not we can overcome
the impediments to tapping its potential more fully.
Doesn't he always have a nice way of saying those things?
I think it is time for us to consider the impediments to the
expansion of nuclear energy. I agree with him, especially in light of
our goal of cleaning up our air.
Every year, the Federal Government provides tax credits and financial
incentives for solar cells and wind turbines and biomass sources. I
supported many of those. We are not providing anything here for nuclear
energy. I think we need to consider that.
Many people have objected, saying, you have no place to put nuclear
waste, and this is, somehow, the Achilles' heel of nuclear power. They
act as if the amount of nuclear waste would cover the entire State of
Rhode Island, I suppose, and that nuclear waste is so hazardous, if you
move it on a rail or truck, it could blow up and kill us all.
[[Page S1639]]
The truth is, if a truck loaded with nuclear waste were to roll over
or a train were to roll over, as Senator Murkowski says, it does not
blow up, it does not flow off into the air; you just pick it back up,
put it on the track, and send it off.
We can move nuclear waste. There is no danger in that. It is an
irrational thing that we have created this idea that somehow it is
greatly disastrous and risky to move nuclear waste to an acceptable
site to store it.
I applaud the work of the Secretary of Energy, Spence Abraham, a
former Member of this body, and President Bush who are moving forward
with a decision on Yucca Mountain to store this waste. It is the
culmination of decades of scientific study, consultation with science
and environmental advisers, and meetings with leaders and citizens in
Nevada. Finding a safe and central repository is mandated by a law
passed years ago, and it is also necessary for America's homeland
security. For example, 40 percent of our Navy's fleet is powered by
nuclear power. The lack of a repository drives up the cost of nuclear
power, rendering this clean power generation less economical than it
would be and less competitive.
Certainly one of the main reasons we are not building new plants
today is because of the waste problem. Of course, those who oppose
nuclear energy, I strongly believe--and a fair person would agree--have
used this as a tool to attack nuclear power and not allow us to proceed
in a rational way.
Nuclear materials are now stored in 131 aboveground facilities in 39
States in America; 161 million Americans live within 75 miles of these
sites. One central site in the Nevada desert, where we exploded nuclear
bombs on the surface when we were first learning how to make nuclear
bombs, provides much more protection for America, much more security,
and is much cheaper than keeping all these other sites that have been
ongoing.
Nobody has ever been injured from the 131 sites we now have. They are
going to bury it in the ground, spending billions of dollars paid for
by the nuclear energy companies, part of the rates they charge, to fund
this site. We need to use that. We have the ability to solve this
problem, to move ahead with it. The only objection I can see, other
than some of the people in Nevada that oppose it, is that it would
relieve an objection, it would remove an objection that the antinuclear
supporters have used to hide behind in their opposition to nuclear
power.
This nuclear liability amendment we will be voting on this afternoon
is critical to helping us maintain, not expand but maintain our current
clean source of 20 percent of our electricity. We ought to pass that.
We ought to open our eyes to the possibilities for the world for the
expansion of nuclear power.
It has been said that the lifespan of human beings on this globe who
have ready access to nuclear power electricity is twice that of
countries where it is not readily available. Electricity is one of the
great discoveries in the history of mankind. If you don't think so,
what would it be like to have to cook by fire every day or wash your
clothes in the river? It is an energy system that has done so much for
the world.
We have large portions of this world--think about India, China, South
America, not nearly at full capacity on electricity--that could use
much more electricity. How are we going to produce it? What will happen
to our global warming theorists when they start using coal and other
fossil fuels in huge numbers to meet their growing demands for power
around the world? Do they think they are not going to expand their
electricity? How could we ask them not to? How could we ask a poor
country where people are dying at 40 and 45 years of age, with all the
adverse consequences, not counting the quality of life, to not expand
their energy? They are not going to be able to do it solely with solar
and windmills and biomass. It is just not there; the numbers are not
there.
Yes, we can do conservation. Yes, we can reduce our use. Yes, we
could be more efficient. I visited an Alabama plant not long ago that
makes refrigerators. That product they produce uses one-half the
electricity of one of the same size used 10 years ago, but you can't go
much lower. It takes a certain amount of electricity to run a
refrigerator. We have a limit on how much we can conserve.
In fact, many of our better and easier steps toward improving
efficiency have already been found. We are using them. The new steps to
make ourselves more energy efficient are out there. Many more can be
done. But they will not make as big an impact as the ones we have
already undertaken. That is the law of science.
It would be an error of colossal proportions for our environment, for
safe energy, and for low-cost power, if we do not deal with the
question of nuclear liability. I believe we will do that. I am
confident we will pass it later on this afternoon.
We also need to, as a nation, shake off the misinformation about
nuclear power. Look at it. Consider the fact that we lost not one life
in America as a result of the production of nuclear power, that we have
not lost any lives as a result of breathing pollutants, as we probably
have, as we certainly have, from coal and other plants, as a result of
breathing the air around nuclear plants.
This is a good environmental issue. It is a good energy issue. It has
the potential to move us forward. We need to be thinking about the
great potential to make the plants that are more modern and more
efficient and even more safe than today. In fact, some can be designed
that make it impossible to release radioactive material.
I know we will be voting later on this afternoon on this amendment. I
yield the floor and suggest the absence of a quorum.
The PRESIDING OFFICER (Mr. Nelson of Florida). The clerk will call
the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. REID. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. REID. Mr. President, I ask unanimous consent that the vote that
is now scheduled for 2 o'clock today be rescheduled for 2:15 p.m. under
the same conditions of the previous unanimous consent agreement, and
the only change I request is between the first and second vote there be
2 minutes equally divided for those who wish to speak on the amendment.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. REID. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. SESSIONS. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. SESSIONS. Mr. President, I have some further comments
specifically addressing the Price-Anderson insurance program for
nuclear powerplants that we will be voting on a little later this
afternoon, maybe around 2:15. Making some points about the details of
it, 45 years ago the nuclear power industry said if they were going to
go forward with this new source of power, they wanted to be able to
develop an insurance program that would work and that would assure the
communities in which they are building these plants they would be
operated safely, and if something bad occurred that everybody would be
compensated.
Those communities have been confident in that process ever since, but
the act does expire and it is time for us to extend it. It would be a
terrible mistake if we did not. It would cause quite a bit of
heartburn.
I will share a few thoughts about how this insurance program works. I
believe people would feel good about it and want to go forward with it.
The average business in America that does the things they do every day
may have products on their premises that are somewhat dangerous. If a
terrorist or somebody blows it up and it kills people, it is not their
fault. They are not liable. They did not do anything wrong. They were
not negligent. They were not irresponsible. They were not reckless, and
they did business in a safe way.
Of course, the nuclear power industry operates precisely the way the
Nuclear Regulatory Commission tells them to
[[Page S1640]]
operate, in a safe fashion. At any rate, they are doing what they can
to comply with the law and the regulations, and they have had
this insurance policy. Each plant has a $200 million policy for which
they are personally responsible. If anything happens, they carry their
own $200 million policy. The entire industry has come together and
pooled up to $9 billion of a policy, and this is sort of structured by
the Price-Anderson Act, and it is all paid for by the nuclear power
industry.
Above that, if something were to happen so badly above that, then the
Federal Government would have liability to pay under Price-Anderson.
That is what our American communities have had a right to expect. They
were told that when the plants were built, and we need to continue that
policy today. We certainly do not need to stop it. I believe the votes
are there, and we will pass an extension of Price-Anderson. It would be
a bad thing, cause unnecessary heartburn, would be a breach of the
fundamental promises of the Federal Government that we do that if we
did not extend it, and also it could weaken the nuclear power industry,
further containing any hope of expansion of this 20 percent of our
electric-generating capacity that produces no pollution.
As I noted earlier, the U.S. nuclear powerplants prevent 5.1 million
tons of sulfur dioxide from being emitted into the atmosphere, 2.4
million tons of nitrogen oxide, NOX, and 164 metric tons of
carbon from entering the Earth's atmosphere. That is the kind of thing
they do on a regular basis, producing power cleanly and safely for the
benefit of humankind throughout this country.
For over 45 years, Price-Anderson has provided a guaranteed
compensation to the public in the event a nuclear accident were to
occur. It provided coverage for precautionary evacuations and out-of-
pocket expenses, reducing delays that are inherent in any kind of
lawsuit that would have been filed, maybe taking years. It guaranteed
prompt payment by the insurance companies; no lawsuits. You are liable.
You accept strict liability, which is not the law, as I noted, for
other businesses, and it consolidated the matters in a single Federal
court so promptness and efficiency and fairness can occur. That is a
good policy. We ought not to end it now.
It is important for safe and clean power to be continued to be
produced for America, and I believe we will have a strong vote in favor
of it this afternoon. Thus, I note there is concern by people, but even
in Three Mile Island the total amount expended was less than $200
million, compensating everybody and doing all the things necessary to
test and examine and make sure the community was safe; $191 million.
That would all be covered by that insurance company's own policy, that
power company's own policy. If it went above that, up to $9 billion,
then the industry would pay for it. Only above that would the taxpayers
have any risk. I think it is a good bargain for America. It is a sound
program. We ought to continue it.
I yield the floor.
I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The bill clerk proceeded to call the roll.
Mr. REID. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. REID. Mr. President, I was with Senator Lott during the lunch
hour and was not able to hear all the remarks of the Senator from
Alabama, my friend, Mr. Sessions, but my staff did outline for me some
of the things he said.
This is not the time and the place for a discussion, debate, on
things nuclear in the true sense of the word. That time will come.
Price-Anderson points up the problems we have with nuclear power. If
in fact nuclear power was such a good deal, why does it need a subsidy?
Wouldn't any other utility love to have the Federal Government backing
its liability? That is, in effect, what Price-Anderson does.
Many years ago, when nuclear power was an experiment and was in its
infancy, and we, the Government, Congress, the President, decided to
give it a shot in the arm to see if it would work, even back then
everyone recognized the dangers of nuclear power. We have had since
then Three Mile Island and other problems. It was simply a question
that they could not get the places insured.
We are now told these places are so safe, there is no reason for the
subsidy. If these places are so safe, they should be able to buy
insurance. If they can't buy insurance, then the amendment I offered
should have been followed; that is, there should be real, true
accounting in determining liability of these companies. It is clear the
nuclear power industry is now a mature electricity industry that no
longer needs liability protection.
Price-Anderson has actually led to a decrease in the amount of
private insurance available. In the 1950s the private insurance
industry was willing to insure an accident for $50 million, despite
experience with the new technology. Today, the private insurance
industry only provides $200 million insurance. That does not keep up
with inflation.
One of the things that is wrong with Price-Anderson is, how do they
determine the $200 million that they have available in case there is an
accident? What they should do is have a surety bond, a letter of
credit, some type of escrow account, or perhaps government securities
or insurance.
If there were ever an Enron example, it is this. They have a showing
that they either have a cashflow or cash reserve that can be generated
and would be available within 3 months. Not now--within 3 months. That
is, as far as I am concerned, sheer foolishness.
I wasn't born yesterday. I know this amendment is going to be agreed
to, but it should not be agreed to. I think nuclear power should stand
on its own two feet. In Nevada, we are trying to develop large windmill
factories to produce electricity. They are going to put up their own
money. There is no Government assurance if somebody gets hurt out there
the Government will pick up the expense. The same is true with solar,
geothermal, biomass, coal, and natural gas. So Price-Anderson should
fail.
As I have indicated earlier today, virtually every environmental
group in America is opposed to this legislation.
I offered an amendment. I talked about it this morning. Every
environmental group was in favor of my amendment. But we have a
situation now where this amendment is being pushed forward. As I said
in the presence of my friend, the junior Senator from New Mexico, I am
disappointed he is cosponsoring this amendment. I think it is wrong. I
think we should follow the Friends of the Earth, Sierra Club,
Environmental Defense Fund, the Union of Concerned Scientists,
Defenders of Wildlife, USPIRG, Safe Energy Communications Council,
Natural Resources Defense Council, National Environmental Policy Act
Trust, Nuclear Information Resource Service, League of Conservation
Voters, Taxpayers for Common Sense, Public Citizens for Critical Mass,
and STAR. These are entities that are concerned about the environment
and they say Price-Anderson is not good for the environment.
So I hope Members will look closely at what they are doing. There
will be a few votes against this. There should be a lot more. I am very
disappointed that we cannot slow this down.
This bill is important legislation for the country, and I recognize
that. I think the work we did yesterday was so important, to allow a
pipeline to come from Alaska. That would have 50 million tons of steel
to construct the pipeline. It would be 2,100 miles of pipe creating
400,000 jobs. That is what we should be doing.
About 40 trillion cubic feet of natural gas can come down that
pipeline. That is big. Of course, this is relatively new. It wasn't
many years ago that natural gas was just pumped out into the
environment. It served no purpose. Now, of course, we use it to power
many of our powerplants in America today.
As I said earlier, there is going to be a time in the next several
months to talk in more detail about nuclear waste, but this is not the
time or the place to do it. I look forward to a vote in approximately
20 minutes to take care of the matter that Senator Bingaman offered
dealing with hydraulic fracturing, and also the amendment
[[Page S1641]]
dealing with the Price-Anderson legislation. I hope the Price-Anderson
legislation gets a significant number of votes against it.
Mr. INHOFE. Mr. President, I ask how much time remains on both sides.
The PRESIDING OFFICER. The Senator from Oklahoma, on his side of the
aisle, has no time remaining.
Mr. REID. If the Senator from Oklahoma wishes time, how much time
does he wish?
The PRESIDING OFFICER. The Senator from Nevada has 21 minutes
remaining.
Mr. INHOFE. Five minutes?
The PRESIDING OFFICER. The Senator is recognized for 5 minutes.
Mr. INHOFE. Mr. President, I thank the Senator from Nevada for giving
me some of his time, particularly since we are not in agreement with
each other on one of the two votes that will be taking place.
I spent 30 years of my life in the insurance business. I know the
Chair knows a little bit about this business--he spent some time there,
too. I think the Price-Anderson program as an insurance program is a
good deal for the public. For over 45 years, Price-Anderson has
provided immediate and substantial private compensation to the public
in the event of a nuclear accident. It has provided coverage for
precautionary evacuations, out-of-pocket expenses, has reduced delays
that are inherent in court cases, and has consolidated all cases into a
single Federal court.
I think it is also important to recognize it has never cost the
Government any money. This is not a Government program.
Going back to my third point, if we didn't have something like this,
then we would be dependent upon the tort system in this country. We are
going to hear about the delays and the cost. This is one of the
programs that has been successful for 45 years. When it gets down to
some of the people who are opposing the program, they are actually
opposed to nuclear energy.
I am old enough to remember back in the 1960s and 1970s, the hysteria
that hit the streets when they were talking about nuclear energy and
picketing and protesting. As the years went by, other problems came up
with other forms of generation of energy.
We went through a long period of time during the Clinton
administration with the EPA coming up with some ambient air targets
that were not realistic. It created great problems. So we started
talking about all the pollutants, emission problems, refineries--
keeping in mind all during that discussion our refineries were at 100
percent capacity. Yet we were trying to add more and more problems to
them with new source review and other programs, making it just a very
expensive program.
During that time, a lot of the people who 20 years before had been
picketing because they were opposed to nuclear energy, realized that
nuclear energy is safe now, it is clean, and it is abundant.
The thing that I stress when we are talking about energy is we want
all forms of energy--we want renewables, we want nuclear energy, we
want fossil fuels, we want all the forms of energy because we do not
want an energy crisis.
As far as nuclear energy is concerned, we are only dependent on that
for 20 percent of our energy needs. France is 80 percent dependent. I
think we will see in the future that percentage is going to have to go
up until some of the renewables and other experimental systems come
into play where we can depend on them for an abundance of energy. Until
then, we are going to have to be using some of the energy sources that
we know work and work today. Certainly this is one of them.
The assistant majority leader also mentioned we will have two votes
starting at 2:15. The other is on hydraulic fracturing. I think it is
important to talk about that in the same vein because there you are
talking about natural gas. I am from Oklahoma. We know a little bit
about natural gas. We know it is among the cleanest forms of energy out
there. It is plentiful. It is inexpensive. But as far as being
plentiful, one of the problems we are having is we have to be sure that
we can maintain what we are doing right now in bringing natural gas out
of the ground.
Right now, and for the next couple of years, we will be able to do
that. However, because of the court decision that has already been
discussed on the floor by a number of the Senators, we could be having
a problem. The system, the procedure of hydraulic fracturing where you
are forcing the natural gas or the oil out of the rock formations, is
one that has been proven and has been used since the 1940s.
We are talking about 60 years we have been doing this. In 60 years
and over 1 million wells where we have used this procedure, we have yet
to have any environmental problem. So it kind of blows my mind there
would be people, after 60 years of success, who would say there might
be an environmental problem with it. There is no environmental problem
with it.
The only problem right now is a court case for which we are going to
have to go ahead and complete a study.
It is important for all my colleagues to realize on this vote today
all we are talking about is completing the study that is underway right
now. The EPA does not have to follow the guidelines of that study. They
can authorize another study. But this amendment is to at least let
science step in and say: Since there has not been a problem before,
here are the risks of a problem in the future. If there is not a
problem, we need to go ahead and eliminate that obstacle so we will be
able to continue using that system.
Mr. President, 80 percent of the wells right now--and it is a higher
percentage when you go to my State of Oklahoma because most of those
are marginal wells, wells with 15 barrels a day or less--but 80 percent
of them are going to have to use hydraulic fracturing. That system is
necessary in order to come up with the natural gas we need.
Mr. REID. Mr. President, I started out my legal career as an attorney
for insurance companies. I did lots of trial work representing insurers
in automobile accidents, hospitals, and hotels. I have some knowledge
of insurance. I have no question that Price-Anderson gives the nuclear
generators a subsidy and an unfair advantage.
Having said that, I want to comment briefly on some of the things my
friend from Alabama said, I am told, about nuclear power and the high-
level nuclear repository that is being contemplated in Nevada.
First of all, the GAO said there are 292 scientific investigative
reports for which the Department of Energy is waiting. It wasn't time
to go forward with that.
In addition to that, the Nuclear Waste Technical Review Board, led by
the prominent American scientist, Jared Cohon, who was dean of the
forestry department at Yale and is now president of Carnegie Mellon,
and his group have said that the science at Yucca Mountain is poor.
I think before we get into a long debate here on the floor, which we
are not going to do--I said there will be another time to do that--
Leader Gephardt issued a statement just 2 days ago decrying the
Department of Energy's action recently dealing with nuclear waste
saying that, among other things, St. Louis passed a resolution saying
nuclear waste should not be brought through their city. There are other
things, and we will talk about those later.
I hope we can move forward generally on this legislation. By tomorrow
we will have spent a whole week on this. I am not certain how much more
time Senator Daschle can afford to stay on this. We have debt limits,
campaign finance, and a lot of other things to deal with. I hope those
who believe this bill needs a lot more work will move forward as
quickly as possible and do what they think in the way of amendments
will improve this legislation, of course recognizing that a conference
committee will take place. I think we should do everything we can to
move this legislation as quickly as possible.
I suggest the absence of a quorum.
The PRESIDING OFFICER (Mrs. Carnahan). The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. INHOFE. Madam President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. INHOFE. Madam President, I know our side is out of time. I would
[[Page S1642]]
like to ask if I could have a couple minutes.
Mr. REID. Madam President, does the Senator from North Dakota wish to
speak prior to the vote at 2:15?
The Senator from Oklahoma may have 3 minutes. Will that be adequate?
Mr. INHOFE. That is fine.
Madam President, I respectfully disagree with what the Senator from
Nevada said about the subsidy. The Federal Government does not use
taxpayer money to pay claims in the event of a nuclear incident. There
has been no subsidy in the 43 years of Price-Anderson protection. The
nuclear insurance pool is not the Federal Government. It has paid a
total of, I believe, $191 million in claims. The Price-Anderson Act
ensures that full compensation will be available in the event of a
nuclear attack. In the absence of the law, members of the public filing
claims would need to overcome substantial obstacles of tort law for
recovery. As we all know, that is very expensive and very time
consuming.
I think the key here is that no public funds have ever been paid out.
For that reason, there is no way one can say this is a subsidized
program.
The Federal Government provides insurance mechanisms for losses
associated with agricultural disasters, floods, banks, savings and
loans; to pay for home mortgages, Social Security, Medicare, crime, and
maritime accidents. It is not unusual for the Federal Government to do
it. But under the current law, the limitation on liability exists for
oil spills, bankruptcy, and workers compensation, but not in the case
of nuclear accident. While it is very common for the Federal Government
to expend moneys to underwrite and to be in the insurance business many
times to compete with the insurance industry, in this case it isn't
true. There is no subsidy involved.
I am sure my time has expired. I yield the floor. I suggest the
absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. REID. Madam President, I ask unanimous consent the order for the
quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
The Senator from New Mexico.
Mr. BINGAMAN. Madam President, what is the regular order?
The PRESIDING OFFICER. The Senate is to vote on amendment No. 2983.
Mr. BINGAMAN. Is that vote to occur immediately or is there time to
speak?
The PRESIDING OFFICER. At 2:15.
Mr. BINGAMAN. I see Senator Voinovich.
That is the Price-Anderson amendment, I believe.
The PRESIDING OFFICER. The Senator is correct.
Mr. BINGAMAN. I thank the chair.
Vote on Amendment No. 2983
The PRESIDING OFFICER. Under the previous order, the question occurs
on agreeing to amendment No. 2983 offered by the Senator from Ohio. The
yeas and nays have been ordered. The clerk will call the roll.
The assistant legislative clerk called the roll.
Mr. REID. I announce that the Senator from Massachusetts (Mr.
Kennedy) is necessarily absent.
The PRESIDING OFFICER. Are there any other Senators in the Chamber
desiring to vote?
The result was announced--yeas 78, nays 21, as follows:
[Rollcall Vote No. 42 Leg.]
YEAS--78
Akaka
Allard
Allen
Bayh
Bennett
Bingaman
Bond
Breaux
Brownback
Bunning
Burns
Byrd
Campbell
Cantwell
Carnahan
Carper
Chafee
Cleland
Cochran
Conrad
Corzine
Craig
Crapo
Daschle
DeWine
Dodd
Domenici
Dorgan
Durbin
Edwards
Enzi
Fitzgerald
Frist
Graham
Gramm
Grassley
Gregg
Hagel
Hatch
Helms
Hollings
Hutchinson
Hutchison
Inhofe
Johnson
Kohl
Kyl
Landrieu
Levin
Lieberman
Lincoln
Lott
Lugar
McCain
McConnell
Mikulski
Miller
Murkowski
Murray
Nelson (FL)
Nelson (NE)
Nickles
Roberts
Santorum
Sarbanes
Sessions
Shelby
Smith (NH)
Smith (OR)
Specter
Stabenow
Stevens
Thomas
Thompson
Thurmond
Torricelli
Voinovich
Warner
NAYS--21
Baucus
Biden
Boxer
Clinton
Collins
Dayton
Ensign
Feingold
Feinstein
Harkin
Inouye
Jeffords
Kerry
Leahy
Reed
Reid
Rockefeller
Schumer
Snowe
Wellstone
Wyden
NOT VOTING--1
Kennedy
The amendment (No. 2983) was agreed to.
Mr. REID. I move to reconsider the vote.
Mr. INHOFE. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
Amendment No. 2986, As Modified
The PRESIDING OFFICER. Under the previous order, there are now 2
minutes evenly divided prior to a vote on the Bingaman amendment No.
2986, as modified. Who yields time?
Mr. BINGAMAN. Madam President, I ask unanimous consent that Senator
Rockefeller be listed as a cosponsor of the amendment.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. BINGAMAN. Madam President, this amendment sets up a study process
to determine whether hydraulic fracturing should be regulated by the
Federal Government under the Safe Drinking Water Act. It is a
bipartisan amendment with many cosponsors. It is good policy. It is a
policy that was supported by the Clinton administration. It is now
supported by the current administration.
I yield the remainder of my time to the Senator from Oklahoma.
The PRESIDING OFFICER. The Senator from Oklahoma.
Mr. INHOFE. Madam President, I ask unanimous consent that the
following Senators be added as cosponsors: Senators Enzi, Murkowski,
Sessions, and Nickles.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. INHOFE. Madam President, I wish to add to the remarks of the
Senator from New Mexico. This procedure is being used today. It has
been used since the 1940s. Over 1 million wells have used hydraulic
fracturing. There has never been any documented case of any
environmental damage.
The PRESIDING OFFICER. The Senator's time has expired. Who yields
time in opposition?
Mr. MURKOWSKI. May I take the remainder of the time? I simply want to
advise Senators that, indeed, this matter has been cleared by both the
minority and majority, and we concur in its adoption. It is the right
thing to do.
The PRESIDING OFFICER. The question is on agreeing to amendment No.
2986, as modified.
Mr. THOMAS. I ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
There is a sufficient second.
The clerk will call the roll.
The legislative clerk called the roll.
Mr. REID. I announce that the Senator from Massachusetts (Mr.
Kennedy) is necessarily absent.
The PRESIDING OFFICER (Mr. Corzine). Are there any other Senators in
the Chamber desiring to vote?
The result was announced--yeas 78, nays 21, as follows:
[Rollcall Vote No. 43 Leg.]
YEAS--78
Akaka
Allard
Allen
Baucus
Bayh
Bennett
Bingaman
Bond
Breaux
Brownback
Bunning
Burns
Byrd
Campbell
Carnahan
Carper
Chafee
Cleland
Cochran
Collins
Conrad
Craig
Crapo
Daschle
DeWine
Dodd
Domenici
Dorgan
Edwards
Ensign
Enzi
Frist
Graham
Gramm
Grassley
Gregg
Hagel
Harkin
Hatch
Helms
Hollings
Hutchinson
Hutchison
Inhofe
Inouye
Johnson
Kohl
Kyl
Landrieu
Levin
Lincoln
Lott
Lugar
McCain
McConnell
Miller
Murkowski
Nelson (FL)
Nelson (NE)
Nickles
Reid
Roberts
Rockefeller
Santorum
Sessions
Shelby
Smith (NH)
Smith (OR)
Snowe
Specter
Stevens
Thomas
Thompson
Thurmond
Torricelli
Voinovich
Warner
Wyden
NAYS--21
Biden
Boxer
Cantwell
Clinton
Corzine
Dayton
Durbin
Feingold
Feinstein
Fitzgerald
Jeffords
Kerry
Leahy
Lieberman
Mikulski
Murray
Reed
Sarbanes
Schumer
Stabenow
Wellstone
[[Page S1643]]
NOT VOTING--1
Kennedy
The amendment (No. 2986), as modified, was agreed to.
Mr. INHOFE. I move to reconsider the vote.
Mr. BINGAMAN. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
Mr. BINGAMAN. At this point, I believe Senator Craig has an amendment
he wishes to offer that we can agree to and voice vote. Then I have
amendments on behalf of Senator Akaka that I would like to handle the
same way.
The PRESIDING OFFICER. The Senator from Idaho.
Amendment No. 2987
Mr. CRAIG. Mr. President, I send the amendment to the desk.
The PRESIDING OFFICER. The clerk will report.
The legislative clerk read as follows:
The Senator from Idaho [Mr. Craig] proposes an amendment
numbered 2987.
Mr. CRAIG. Mr. President, I ask unanimous consent reading of the
amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:
(Purpose: To provide for multiple-year authorization for the fusion
energy sciences program)
Strike subsection (e) of section 1254 and insert the
following:
``(e) Authorization of Appropriations.--From amounts
authorized under section 1251, the following amounts are
authorized for activities under this section and for
activities of the Fusion Energy Science Program:
``(1) for fiscal year 2003, $335,000,000;
``(2) for fiscal year 2004, $349,000,000;
``(3) for fiscal year 2005, $362,000,000; and
``(4) for fiscal year 2006, $377,000,000.''.
Mr. CRAIG. Mr. President, this amendment authorizes outyear funding
levels for the Department of Energy Fusion Energy Sciences Program.
I appreciate Chairman Bingaman incorporating provisions of my bill on
fusion science research in the Daschle-Bingaman substitute bill.
However, the Daschle-Bingaman substitute did not incorporate outyear
funding authorizations for the Fusion Energy Sciences Program. This
technical amendment authorizes funding for fiscal years 2003 through
2006.
While we grapple with short-term remedies to our energy problems, we
need to stay focused on long-term investment in those areas which have
the potential to help secure our energy future. I believe fusion energy
has the potential.
I appreciate the support of the chairman on this issue. It is our
understanding we might be able to voice vote this.
Mr. BINGAMAN. Mr. President, I support the amendment. I think this
will improve the bill. I urge all Senators to support this amendment.
The PRESIDING OFFICER. The question is on agreeing to the amendment.
The amendment (No. 2987) was agreed to.
Mr. BINGAMAN. Mr. President, I am informed Senator McCain is ready to
offer his amendment.
Amendment No. 2979
Mr. McCAIN. Mr. President, I call up amendment No. 2979 which is at
the desk, and I ask for its immediate consideration.
The PRESIDING OFFICER. The clerk will report.
The legislative clerk read as follows:
The Senator from Arizona [Mr. McCain], for himself, Mr.
Hollings, Mrs. Murray, Mr. Bingaman, Mr. Breaux, Mr. Smith of
Oregon, Mr. Domenici, Mrs. Hutchison, and Mr. Wyden, proposes
an amendment numbered 2979.
Mr. McCAIN. Mr. President, I ask unanimous consent reading of the
amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
(The amendment can be found in the Record of Tuesday, March 5, 2002,
on page S 1542.)
Mr. McCAIN. Mr. President, I understand the Senator from Alaska has a
second-degree amendment to the pending amendment. I know the Senator
from Alaska is very busy. I have a statement which is probably about 10
or 15 minutes long, but if the Senator from Alaska wishes to propose
his second-degree amendment, I am willing to delay in my statement.
Mr. MURKOWSKI. I can wait.
Mr. McCAIN. Mr. President, over a year ago the Senate passed S. 235,
the Pipeline Safety Improvement Act. That bill was approved by a vote
of 98-0 on February 8, 2001, and is designed to promote both public and
environmental safety by reauthorizing and strengthening our Federal
pipeline safety programs which expired in September 2000.
While the Senate has now passed pipeline safety legislation in both
the 106th and the 107th Congresses, the other body has yet to take
meaningful action to address pipeline safety. Despite efforts to
encourage the other body to approve pipeline safety legislation and
help prevent not only needless deaths and injuries but also
environmental and economic disasters, there has been little movement by
the House on this important issue. Therefore, the Senate must take
whatever action we can to advance pipeline safety legislation.
Today I offer the Pipeline Safety Improvement Act as an amendment to
the pending energy bill. I believe it is appropriate to consider this
issue in the context of energy legislation. I believe it is appropriate
to consider this issue in the context of the post-September 11
environment. I think it is appropriate to consider this issue in the
context that it is an issue which really needs to be addressed.
The Senator from Alaska, it is my understanding, will be proposing an
amendment that has to do with the damage to the Alaskan pipeline, which
is probably an important amendment.
When one looks at this chart of the natural gas and hazardous liquid
pipelines of the United States, the first conclusion one draws is that
there is a need for pipeline safety and security. I don't need to draw
scenarios as to what could happen in the event of the disruption or
destruction of one of these pipelines, many of which carry material
which is highly toxic and hazardous. I am pleased to be joined in this
bipartisan effort by Senators Hollings, Murray, Bingaman, Breaux,
Smith, Domenici, Hutchison, Wyden, and Torricelli. Our goal is to enact
comprehensive legislation for pipeline safety for the public, the
environment, and the economy.
The Office of Pipeline Safety, within the Department of
Transportation Research and Special Programs Administration, oversees
the transportation of about 65 percent of the petroleum and most of the
natural gas transported in the United States. The Office of Pipeline
Safety regulates the day-to-day safety of 3,000 pipeline operators with
more than 1.6 million miles of pipeline. I repeat, 1.6 million miles of
pipeline. It also regulates more than 200 hazardous liquid operators
with 155,000 miles of pipelines, as depicted on this chart. This chart
shows the red lines as the liquid pipelines and the dark-colored lines
as natural gas pipelines.
Given the immense array of pipelines that traverse our Nation,
reauthorization of our pipeline safety programs is critical to the
safety and security of thousands of communities and millions of
Americans nationwide. That is why it is appropriate to include pipeline
safety provisions as a key component of any comprehensive energy
legislation under consideration.
The amendment being offered today is the product of many months of
hearings, bipartisan compromise, and cooperation that began during the
106th Congress. During the past 2 years, my colleagues and I have made
repeated statements discussing the critical need to enact pipeline
safety improvement legislation.
That necessity has been demonstrated by a number of tragic accidents
in recent years.
For example, In June 1999, a fatal pipeline accident occurred in
Bellingham, WA, when gasoline leaked from an underground pipeline and
was subsequently ignited. That accident resulted in the deaths of two
boys and a young man, in addition to a number of injuries and severe
environmental damage to the area.
Other tragedies have occurred. On August 19, 2000, a natural gas
transmission line ruptured in Carlsbad, NM, killing 12 members of two
families. On September 7, 2000, a bulldozer in Lubbock, TX, ruptured a
propane pipeline, resulting in the death of a police office. In total,
71 fatalities have occurred as a result of pipeline accidents over the
past 3 years.
I think that number is worth repeating: 71 fatalities over the last 3
years
[[Page S1644]]
have occurred. Meanwhile, Congress has not acted to enact legislation
which, in the view of many experts, possibly could have prevented these
fatalities. That is a pretty onerous burden, it seems to me, that is
placed on us as legislators in our failure to act.
I regret to report that just yesterday, there was a pipeline
explosion near Jeffersonville, KY. Thankfully, no fatalities have been
reported, but I am informed it caused a fire so intense that it was
picked up on a Federal Government satellite. Clearly, the amendment we
are proposing today is not only timely but urgent.
As I mentioned, the Senate has worked to improve pipeline safety and
reduce the risk of future accidents. During the last Congress, with the
assistance of a bipartisan group of Senators, including Senators Slade
Gorton and Patty Murray, the Senate passed the Pipeline Safety
Improvement Act of 2000. Unfortunately, the House failed to approve
pipeline safety legislation so we were never able to send a measure to
the President.
When the 107th Congress convened, one of the first legislative
actions taken by the Senate was to consider and pass S. 235, the
pipeline safety Improvement Act of 2001, a measure nearly identical to
what we passed in the prior Congress. Early attention by the Senate
demonstrated our firm commitment to improving pipeline safety. Once
again, my colleagues and I are seeking to advance pipeline safety
legislation by offering this amendment.
I would be remiss if I didn't point out that despite the tragic
accidents I highlighted earlier, the pipeline industry generally has a
good safety record relative to other forms of transportation. According
to the Department of Transportation, pipeline related incidents dropped
nearly 80 percent between 1973 and 1998, and the loss of product due to
accidental ruptures has been cut in half. From 1989 through 1998,
pipeline accidents resulted in about 22 fatalities per year--far fewer
than the number of fatal accidents experienced among other modes of
transportation. But this record should not be used as an excuse for
inaction on legislation to strengthen pipeline safety.
The pipeline safety program expired nearly 18 months ago. Congress as
a whole must address this critical public and environmental safety
issue. We need to reauthorize the pipeline safety programs. We need to
provide additional funding for safety enforcement and research and
development efforts, as well as provide for increased State oversight
authority and facilitate greater public information sharing at the
local community level.
Let me describe the major provisions of the amendment which is nearly
identical to S. 235:
First, it would require the implementation of pipeline safety
recommendations issued in March 2000 by the Department of
Transportation Inspector General to RSPA. The Inspector General found
several glaring safety gaps at Office of Pipeline Safety and it is
incumbent upon us all to do all we can to ensure that the Department
affirmatively acts on these critical problems.
The amendment would also require the Secretary of Transportation, the
RSPA Administrator, and the Director of the Office of Pipeline Safety
to respond to all NTSB pipeline safety recommendations within 90 days
of receipt. The Department's responsiveness to the National
Transportation Safety Board pipeline safety recommendations has been
poor at best. while current law requires the Secretary to respond to
the NTSB no later than 90 days after receiving a safety recommendation,
there are no similar requirements at RSPA. Therefore, this legislation
statutorily require RSPA and Office of Pipeline Safety to respond to
each and every pipeline safety recommendation it receives from the NTSB
and to provide a detailed report on what action is plans to initiate in
response to the recommenation.
The amendment would require pipeline operators to submit to the
Secretary of Transportation a plan designed to improve the
qualificaitons for pipeline personnel. At a minimum, the qualificaiton
plan would have to demonstrate that pipeline employees have the
necessary knowledge to safely and properly perform their assigned
duties and would require testing and periodic reexamination of the
employees' qualifications.
It would also require the Department of Transportation to issue
regulations mandating pipeline operators to periodically determine the
adequacy of this pipeline to safely operate and to implement integrity
management programs to reduce identified risks. The regulations would
require operators to base their integrity management plans on risk
assessment to periodically assess the integrity of their pipeline and
to take steps to prevent and mitigate unintended releases, such as
improving leak detection capabilities or installing restrictive flow
devices. The integrity management provisions will not only be critical
to advancing pipeline safety, but also to addressing potential security
concerns, which is a shared goal among all the sponsors of this
amendment.
The amendment also would require pipeline operators to carry out a
continuing public education program to advise municipalities, school
districts, businesses, and residents about a variety of pipeline
safety-related matters, including pipeline locations. It would also
direct pipeline operators to initiate and maintain communication with
State emergency response commissions and local emergency planning
committees and to share with these entities information critical to
addressing pipeline safety and mitigating risks.
The amendment further directs the Secretary to develop and implement
a comprehensive plan for the collection and use of pipeline-related
data in a manner that would enable DOT to conduct incident trend
analyses and evaluations of operator performance. Operation would be
required to report incident releases greater than 5 gallons, compared
to the current reporting requirement of 50 barrels. In addition, the
Secretary would be directed to establish a national depository of data
to be administered by the Bureau of Transportation Statistics in
cooperation with RSPA.
In recognition of the critical importance of technology applications
in promoting transportation safety across all modes of transportation,
the legislation directs the Secretary to focus on technologies to
improve pipeline safety as part of the Department's research and
development efforts. Further, the amendment includes provisions
advanced by Senator Bingaman, myself, and others, to provide for a
collaborative R&D effort directed by the Department of Transportation
with the assistance of the Department of Energy and the National
Academy of Sciences.
The amendment would provide for a 3-year authorization, with
increased funding for Federal pipeline safety activities, the State
grant program, and research and development efforts.
Additionally, the amendment requires operators, in the event of an
accident, to make available to the DOT or NTSB all records and
information pertaining to the accident and to assist in the
investigation to the extent reasonable. It also includes provisions
concerning serious accidents that provide for a review to ensure the
operator's employees can safely perform their duties. In addition,
pipeline employees would be afforded the same whistle-blower
protections as are provided to employees in other modes of
transportation. These protections are nearly identical to the
protections aviation-related employees were granted in the Wendell H.
Ford Aviation and Investment Reform Act for the 21st Century, P.L. 106-
181.
I want to point out this amendment includes a few minor modifications
to the Senate-passed version of S. 235. It extends the authorization
period for an additional fiscal year which is necessary to reflect the
fact that a year has passed since we considered S. 235. The amendment
would fund pipeline safety programs for fiscal years 2003, 2004, and
2005 at $64 million annually.
The amendment also includes two new provisions intended to address
pipeline security concerns heightened in the wake of the September 11
attacks. While the pipeline safety provisions were not originally
developed as security legislation, I believe it is our duty to address
identified security concerns and will certainly consider any security-
related proposals brought to our attention in the future by the
administration and other interested parties.
[[Page S1645]]
In the meantime, the amendment seeks to strike a balance between
public access to pipeline information and the need to restrict security
sensitive information. It would tie the new information disclosure
requirements of the legislation to the existing Freedom of Information
Act standards that restrict the release of certain information based on
national security and national defense concerns. Again, it would apply
current FOIA exemption standards to the public disclosure provisions to
protect information critical to national security and defense. As this
and other security-related measures continue through the legislative
process, I plan to work with my colleagues to ensure the proper
handling of security sensitive data within the Federal Government.
Security sensitive information must not be released into the wrong
hands. This amendment should afford useful protection in the near term.
Finally, the amendment would authorize the Secretary to provide
technical assistance to pipeline operators and state and local
officials to ensure that they are adequately prepared to respond to
terrorist attacks or threats that could impact pipelines.
We must ensure that the Department has the tools it needs to carry
out its critical pipeline safety responsibilities, to advance research
and development efforts, and to protect pipeline security sensitive
data. I urge my colleagues to join with me in demonstrating their
strong support for improving pipeline safety by voting for this
amendment. I remain hopeful that the Congress will approve pipeline
safety legislation before we receive another call to action by another
tragic accident.
We have not reauthorized pipeline safety. It is important that we do
so. It has lapsed.
We can see by this chart the miles and miles of pipeline that cross
America. Many of them are perfectly safe. There are others that clearly
need renewed attention and renewed regulations as embodied in this
bill. There are 3,000 gas pipeline operators with more than 1.6 million
miles of pipeline and 200 hazardous liquid operators with 155,000 miles
of pipeline.
I don't like to refer to nor discuss various scenarios for acts of
terror, but I think this chart in itself depicts the urgent need for
reauthorization of this legislation. Also, it is of interest and value
to put a human face on some of these issues and the importance of them.
As I mentioned in my remarks earlier, there was a tragic accident in
Bellingham, WA. Two young boys were killed. I will not describe the
circumstances of their deaths. It aroused the entire community.
With the assistance of Senator Murray and Senator Gorton, hearings
were held in Bellingham on this issue, its cause, and what needed to be
done. The people, the families, and the mayor of Bellingham came to
Washington, DC, to testify before the Commerce Committee.
Senator Murray, other Senators, and I made a commitment to the people
of that community who were directly impacted by the tragic deaths of
these children and to the people of this Nation that we would do
everything we could to enact legislation--to act as is our
responsibility--to see that there wouldn't be a recurrence of the
tragedy and that no other family in America would undergo the agony and
pain of the families of Bellingham, WA.
We passed that bill on February 8, 2001. Yet the other body has not
acted. I think that is very unfortunate. That is why I feel compelled
to come today with this amendment on the energy bill in hopes that it
will now either be part of this bill or the other body will act on this
very important legislation which not only has to do with spillage of
toxic waste, or hazardous materials, or fires, such as just happened
yesterday, but which in some cases tragically endangers the lives of
our citizens. I know of no greater responsibility than to try to do
everything in our power to prevent a recurrence.
I thank the managers of the bill for their consideration of this
legislation. I again applaud Senator Murray for her tremendous efforts
and dedication on this issue--not only the issue but for her sympathy
and the concern she showed to the families and the people in that
community who were deeply impacted by the accident.
I hope we can do this to fulfill our responsibilities.
I yield the floor.
The PRESIDING OFFICER. The Senator from Alaska.
Mr. MURKOWSKI. Mr. President, I compliment Senator McCain and members
of the Commerce Committee for bringing this matter up.
I would like to be added as a cosponsor to the amendment.
As all are aware, Senator McCain's amendment is similar to the one
submitted last February. It passed this body by a vote of 98 to 0. I
feel quite confident that we can dispose of it favorably. Certainly,
Senator McCain and others have been diligent in making sure Congress
addresses the issue. Safety is an extremely important component of
energy policy.
Senator McCain has indicated the highlights of the legislation. I
will not be repetitive.
The pipeline, as we know, provides this country with supplies of oil
and natural gas in a very efficient manner. I believe we will hear from
the Senator from Washington relative to the tragedy that occurred in
Bellingham and New Mexico as well.
But clearly these incidents highlight that some pipelines are aging,
and the increased demand for energy is putting more and more pressure
on these pipelines. It is appropriate that there be oversight adequate
to ensure that wear and tear does not result in tragedies such as we
have already seen. The public must have confidence in safety. This
legislation will facilitate that.
We are fortunate in this country to have a network of pipelines, as
the Senator from Arizona has shown on the map, because it is much more
efficient than moving by rail or by truck. I think it enables us to
have relatively abundant and inexpensive energy in the manner in which
we move it. No other country has a network as efficient as the United
States as far as pipeline transfer of energy is concerned. But we
cannot become complacent. We must improve the safety of these
pipelines.
I certainly welcome the changes to existing law made by the
legislation that will improve the overall safety of the pipelines. When
this legislation is enacted, it will be the strongest and most
comprehensive safety measure ever approved by Congress. At the same
time, it will avoid responses that would lead to a lack of investment
in pipelines without any measure to improve safety.
I think we can all agree, given our a reliance on energy in our
everyday lives, that we recognize the significance of this legislation
and the contribution it is going to make of ensuring the confidence of
the American people that indeed the pipeline network is safe.
Accordingly, I urge the Senate to agree to this amendment.
Mr. President, I am going to offer a second degree amendment, which I
understand has been circulated.
The PRESIDING OFFICER. The Senator from Alaska.
Amendment No. 2988 to Amendment No. 2979
Mr. MURKOWSKI. Let me outline the necessity of the second-degree
amendment.
We have a unique situation in Alaska with the 800-mile Trans-Alaska
Pipeline which moves about 20 percent of the total crude oil produced
in this country but is not protected in the sense of the pipeline
safety act because our pipeline is completely within the State's
borders. I am not going to argue with those who have analyzed this. But
clearly our rivers are in interstate commerce. The fish in the rivers
are in interstate commerce. But even though our pipeline goes basically
from the Arctic Ocean to the Pacific Ocean it apparently may not be
protected under the criminal penalties of the pipeline safety act.
As a consequence, the amendment I am about to offer includes
intrastate pipelines that transport gas in interstate commerce within
the criminal penalty section of the pipeline safety act that currently
only protects interstate pipelines.
An incident occurred in my State of Alaska last fall where an
individual fired a weapon and hit the 800-mile Trans-Alaska Pipeline.
The evidence indicates that perhaps the individual fired
approximately 5 or 6 shots. Ordinarily, we are told, the steel in a
pipeline is such that it is
[[Page S1646]]
very unlikely there could be a penetration by a bullet more than the
circumference of the bullet, and very doubtful if that.
It is interesting to note the history of that pipeline. It has been
bombed. It has had dynamite wrapped around it. And it has been shot at,
and finally an individual did penetrate the surface of the pipeline
with a bullet.
Now, the defendant was allegedly intoxicated at the time, so we
really do not know how many times he shot at it or whether he kept
moving up closer until he hit it. But despite the importance of the
contribution of the pipeline to the Nation's flow of oil--as I have
indicated, once contributing 25 percent, and now it is at about 20
percent; it has a capacity unused of a million barrels a day--we were
unable to prosecute due to the loopholes in Federal law. Instead, the
State prosecuted the individual for the wrongdoing.
We believe there is no reason the Federal Government should not have
been able to prosecute this crime since it involved infrastructure that
is so important to our Nation's energy. This amendment closes that
loophole in the Pipeline Safety Act and ensures that the Federal
Government will be able to prosecute such cases in the future. It
assures that both natural gas pipeline facilities and hazardous liquid
pipeline facilities that are intrastate are protected as well.
It will protect those facilities even if the facility is within the
confines of one individual State's borders, as long as the pipeline is
used in interstate or foreign commerce or in any activity affecting
interstate or foreign commerce. I think this is important because even
though some pipelines may be confined to one State, such as ours, the
Trans-Alaska Pipeline, they certainly affect interstate commerce.
The amendment will enable the Federal Government to prosecute
individuals who threaten infrastructure which is integral to the
transportation of important energy resources throughout our country.
And I think from the standpoint of our State of Alaska, it relieves
some of the responsibility on our State troopers in recognizing,
indeed, this would be considered a Federal responsibility as well.
So, Mr. President, I send to the desk a second-degree amendment to
the McCain amendment.
The PRESIDING OFFICER. The clerk will report the amendment.
The legislative clerk read as follows:
The Senator from Alaska [Mr. Murkowski] proposes an
amendment numbered 2988 to amendment No. 2979.
Mr. MURKOWSKI. Mr. President, I ask unanimous consent reading of the
amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:
At the appropriate place, insert the following:
SEC. . CRIMINAL PENALTIES FOR DAMAGING OR DESTROYING A
FACILITY.
Section 60123(b) of title 49, United States code, is
amended--
(1) by striking ``or'' after ``gas pipeline facility'' and
inserting a comma; and
(2) by inserting after ``liquid pipeline facility'' the
following: ``, or either an intrastate gas pipeline facility
or an intrastate hazardous liquid pipeline facility that is
used in interstate or foreign commerce or in any activity
affecting interstate or foreign commerce''.
Mr. MURKOWSKI. Mr. President, my understanding is that the floor
manager has indicated we would have a vote on this at some point. I do
not need a rollcall vote on my second degree. I would leave it up to
the Senator from Arizona to determine his intent for a vote on his
underlying amendment.
Mr. McCAIN. If the Senator will yield, I am told it is the preference
of the majority leader that a vote would be set for sometime tomorrow
morning.
Mr. REID. Mr. President, if my friend will yield, I have spoken to
the Senator from Arizona. He has agreed to accept a vote on this in the
morning. We believe that even though this vote will, I think, be
overwhelmingly in support for the McCain amendment, we need to send a
strong message to the House, so we want a rollcall vote on this. So the
plan is to work on this as long as anyone else wants to speak on it.
It is my understanding the Senator from New Mexico will accept the
second-degree amendment of the Senator from Alaska and that we will
then have other people speak on the McCain amendment. When that is
completed, the Senator from California will offer an amendment. We will
not complete the amendment of the Senator from California because the
Senator from Texas and others wish to speak on that. However, there is
another amendment that the Senator from New Mexico is going to offer
later today.
We would vote first on the McCain amendment in the morning, probably
at about a quarter to 10, and then we would vote, subsequent to that,
on the amendment of the Senator from New Mexico. But we have to work
this out. The majority leader knows about this, but not the details. We
will confirm that with him and the minority leader at a subsequent
time.
The PRESIDING OFFICER. The Senator from New Mexico.
Mr. BINGAMAN. Mr. President, I think this is a good second-degree
amendment. I suggest we go ahead and adopt it at this point, and then,
as the Senator from Nevada indicated, have the scheduled vote on the
McCain amendment tomorrow.
I know Senator Murray from Washington is waiting to speak on the
McCain amendment, as is Senator Breaux from Louisiana.
Mr. MURKOWSKI. Mr. President, I would like to discuss with my
colleagues an issue that relates to pipeline safety. I am concerned
about an incident that occurred in Alaska last fall. The Senator may
recall hearing in the news about an individual who fired a weapon and
hit the Trans-Alaska Pipeline.
Mr. McCAINE. I do recall hearing about that incident.
Mr. HOLLINGS. I remember reading about the incident as well.
Mr. MURKOWSKI. Well, the individual was allegedly intoxicated when
the Trans-Alaska Pipeline was damaged. Unfortunately, the U.S.
Attorney's Office was unable to prosecute the individual for damaging
the line due to some loopholes in the Federal law. One of those
loopholes will be closed by my amendment to pipeline safety that
includes intrastate pipelines that transport gas in interstate commerce
within the criminal laws that currently only protect interstate
pipelines. However, there was another problem with the case. The
defendant was allegedly intoxicated at the time, and the statute
requires proof that he ``knowingly and willfully'' damaged the pipeline
pursuant to Section 60123(b) of title 49, United States Code.
Therefore, due to this higher standard of intent, known as specific
intent, it appears that he had a diminished capacity defense. It does
not seem that this type of vandalism crime should be held to such a
standard.
Mr. McCAIN. I understand the Senator's concern but also know that if
we lower the intent standard in Section 60123(b) of title 49, we want
to ensure that a person cannot be held criminally liable for
negligence.
Mr. MURKOWSKI. I understand that concern as well and certainly do not
want someone criminally prosecuted unless there was intent. I was
wondering if the Senator would agree to work with me to see if we can
find a compromise that would address the intent issue.
Mr. McCAIN. I would be happy to work with the Senator on the issue.
Mr. HOLLINGS. I would be interested in working on it as well.
Mr. BINGAMAN. I understand the concerns of the issue also and would
agree to work with all Senators to see if we can address this intent
issue prior to the end of consideration of energy legislation.
Mr. DOMENICI. Mr. President, I am pleased to co-sponsor an amendment
to modernize our nation's pipeline safety programs. As you know, the
Senate passed this legislation on February 8th of last year, by a vote
of 98-0. Because it has not yet been acted on in the House, I am
pleased to see that we are working to get this important legislation
enacted in another way.
As we all remember, the issue of our country's pipeline safety came
to the forefront after tragic explosions in Bellingham, Washington, and
later, in my own state of New Mexico.
On August 19, 2000, twelve members of an extended family were on a
camping and fishing trip along the Pecos River near Carlsbad, New
Mexico. Just after midnight, a natural gas pipeline exploded, sending a
350 foot high ball of flame into the air. Six of the campers died
instantly. The six remaining family members later died from their
horrific injuries.
[[Page S1647]]
We have to make sure that tragedies like this do not occur again.
What I am here to do today, is to work so that we don't have to think
twice before camping with our families and friends.
Pipelines carry almost all of the natural gas and 65 percent of the
crude oil and refined oil products. Three primary types of pipelines
form a network of nearly 2.2 million miles, 7,000 of which lie in my
own state of New Mexico.
Pipelines stretch across our country. They allow us to obtain energy
resources quickly and economically.
In light of the energy crisis in California, and in the west in
general, the value of our nation's pipeline system is obvious. We must
have access to energy.
Therefore, pipelines and the potential hazards they pose affect us
all. It is time that we do something to ensure our safety while
protecting our access to energy.
This amendment:
Significantly increases States' role in oversight, inspection, and
investigation of pipelines.
Improves and expands the public's right to know about pipeline
hazards.
Dramatically increases civil penalties for safety and reporting
violations.
Increases reporting requirements of releases of hazardous liquids
from 50 barrels to five gallons.
Provides important whistle blower protections prohibiting
discrimination by pipeline operators, contractors or subcontractors.
Furthermore, the legislation would provide much needed funding for
research and development in pipeline safety technologies.
In fact, technology currently exists that might have detected
weaknesses in pipelines around Carlsbad. Unfortunately, due to
insufficient funding those products have yet to reach the market.
La Sen Corporation in my own state of New Mexico has developed
technology that can detect faulty pipelines where current pipeline
inspection technology is not usable. La Sen's Electronic Mapping System
can be very effective even in pipelines where conventional pig devices
cannot be used.
Pipeline inspection is costly and slow. Innovative new technologies
could allow us to inspect all 2.2 million miles of pipeline each year
in a cost effective manner. Today, pipeline inspection technology only
covers 5-10 miles per day at a cost of $50 per mile. Again, La Sen's
technology can survey 500 miles per day at a cost of $32 per mile.
The bottom line is that today, we can take action that will hopefully
make pipelines safer.
I encourage my colleagues to recognize the potential dangers that
pipelines pose and to minimize those dangers by agreeing to this
amendment.
The PRESIDING OFFICER. Is there further debate on the second-degree
amendment No. 2988?
Mr. MURKOWSKI. Mr. President, I urge adoption of the amendment.
The PRESIDING OFFICER. If not, the question is one agreeing to the
amendment.
The amendment (No. 2988) was agreed to.
Mr. MURKOWSKI. I thank the chairman and the Presiding Officer.
The PRESIDING OFFICER. The Senator from Washington.
Amendment No. 2979
Mrs. MURRAY. Mr. President, I rise today in strong support of this
amendment. I take this opportunity to thank the Senator from Arizona,
Mr. McCain, for his leadership, his perseverance, and his tremendous
work on the issue of pipeline safety.
As he said, many of us became aware of this issue on June 10, 1999,
when a gasoline pipeline ruptured in my home State of Washington,
killing three young people and really shattering our sense of security.
The Senator from Arizona was tremendous in his work with us as we
brought that family here to Washington, DC. As he stated, the
community, the mayor, so many people came here. His commitment to
follow through with hearings and legislation, and to pass it out of the
Senate, has just been really noted and respected in the State of
Washington. And like he, I have difficulty standing here and speaking
to those families today and telling them the House has still not acted,
which is why we are on the floor of the Senate during the energy
debate, once again, passing this legislation.
As I said, when that tragedy happened, I discovered that there were
inadequate laws, insufficient oversight and inspection, and a real lack
of public awareness about the dangers of these pipelines. So I began to
work on a national effort to raise pipeline safety standards. I
testified before Congress, and I introduced the first pipeline safety
bill in the 106th Congress.
As the Senator from Arizona said, we passed legislation in the Senate
in September of 2000, and again in February of 2001; and those bills
passed without dissent, on a bipartisan basis, with leadership from
both sides.
I am proud to have worked with several Senators, including Senators
Hollings, Inouye, Breaux, Wyden, Brownback, Bingaman, Domenici,
Corzine, Torricelli, and my colleague, Senator Cantwell, in this
Congress, and my colleague in the previous Congress, Senator Gorton.
But, again, I especially thank Senator McCain for his work on
pipeline safety. I have to say that without his attention to this issue
over the last several years, I really doubt we would have accomplished
what we have so far. I know that all of the advocates and I appreciate
Senator McCain's leadership on this issue, and I am looking forward to
continuing to work with him on this and many other critical safety
issues before us.
The bill that the Senate passed was the strongest pipeline safety
bill ever passed by either body of Congress. It improves the
qualification and training of pipeline personnel. It improves pipeline
inspections and prevention practices. It expands the public's right to
know. It raises the penalties for safety violators. It increases the
States' ability to expand their safety activities. It invests in new
technology to improve pipeline safety. It provides whistle-blower
protection. It increases funding to improve pipeline safety. And it
recognizes State citizen advisory committees.
Despite the Senate's quick, measured, and deliberate work on this
issue, as I stated, and as the Senator from Arizona said, the House of
Representatives has blocked progress on this initiative. A couple of
weeks ago, the House finally held a hearing on pipeline safety; and
that was the first one that was held in 2 years on this issue. I
understand they intend to move to a markup very soon, and that is
encouraging. I am also encouraged that House Members from the
Washington delegation, especially Representative Rick Larsen, are
working really hard to make progress on this issue.
I have to say, unfortunately, that the bill they intend to mark up
excludes many of the important safety measures we put into the Senate
bill, including strong inspection and testing requirements and adequate
operator qualification standards. So overall I remain skeptical that
the House will eventually pass a comprehensive bill, and that is why I
am especially pleased that Senator McCain has introduced this
amendment. I am here to support that effort.
The amendment before us is nearly identical to the bill that has
passed the Senate unanimously 2 years in a row. We did, however, make a
needed change for national security purposes. September 11 has shown us
that our transportation infrastructure is vulnerable to attack by
terrorists, so we included a provision that would give the Secretary of
Transportation the discretion to withhold public information about
pipelines if the Secretary believed it would compromise national
security. The standard would be the same as the current one used under
the Freedom of Information Act.
I am very proud to cosponsor this amendment. We all know if we want
meaningful legislation to move on to the President, it will have to be
attached to a piece of legislation such as the energy bill. The history
of this legislation in the House requires that we proceed in this
manner.
In addition to working on this bill, I am also using my position as
chair of the Senate Transportation Appropriations Subcommittee to keep
the pressure up and to secure the funding we need to hire inspectors,
to enforce safety regulations, and to support the States with their
efforts. I have held several hearings in Washington, DC, and I have
questioned the Transportation Secretary and others about our progress
on pipeline safety. I have met
[[Page S1648]]
with the new head of the office that oversees pipeline safety at the
Department of Transportation, and I told her exactly what I expect the
department to do to improve pipeline safety. I have not hesitated to
push the department to issue new pipeline safety rules and regulations.
In my position as chair of the Senate Transportation Appropriations
Subcommittee, I worked to pass a bill that provides record funding for
the Office of Pipeline Safety. Overall it provides more than $58
million for that office. That is $11 million more than the fiscal year
2001 funding level. That budget included funding for 26 new staff
positions, from safety inspectors to researchers. OPS requested those
positions, and my bill fully funds those new hires.
Finally, it provides needed resources within OPS for critical
testing, safety programs, and R&D. I plan to continue to work in the
Appropriations Committee to make sure the funding is there to do the
adequate testing and oversight of our pipeline infrastructure.
When it comes to pipeline safety, we have taken a major step forward,
especially in funding, but we still have to raise the standards
nationally with legislation.
I urge my colleagues to support our efforts to move this critical
legislation forward to the President for his signature. From Carlsbad,
NM, to Bellingham, WA, communities across this country are counting on
us to protect them.
I yield the floor.
Ms. CANTWELL. Mr. President, I rise in support of the amendment and
would like to take a few minutes to describe why this is so important.
I have stood on this floor before and described an incident that
occurred in my State just 3 years ago. In a park near Bellingham, WA,
an aging pipeline burst, sending a blast of flames that engulfed two
10-year-old boys. Both of those boys died in that blast and one young
man drowned after being overcome by fumes. But that incident wasn't the
first, nor the last. This was only one of numerous pipeline accidents
in the State of Washington, which has suffered 47 reported incidents
and more than $10 million in property damage in just the 15 years from
1984 to 1999.
I would like to think that many of those accidents could have been
prevented if the agency responsible for regulating that industry had
been more diligent. This week we begin a substantial debate about
increasing the domestic supply of affordable energy, but a significant
part of that debate hinges on the integrity and reliability of our
Nation's energy infrastructure. And that debate must not overlook the
critical importance of our citizens' safety as we work to secure and
transport increasingly larger amounts of these resources. For many of
us in this body, the issue of safety has hit close to home. We have
seen the loss of human life; the devastation to families and
communities; and the significant property damage associated with
mismanagement of our pipeline infrastructure. But this is not simply
about the personal tragedies in our states.
The tremendous efforts to finally pass this legislation--by the
sponsor of the pipeline safety bill, Senator McCain, Senator Hollings,
my colleague Senator Murray, and so many others--are based on a
continuing pattern of oversight failures by the Office of Pipeline
Safety. Many of my colleagues have already referenced the June 2000
report by the GAO, which found persistent failures by OPS to implement
congressional mandates. That report indicated that in 22 of 49 cases,
OPS ignored congressional direction and failed to follow statutory
requirements. And since 1990, our Nation has suffered literally
hundreds of pipeline-related deaths. Now, we have more than 2.2 million
miles of pipelines traversing this nation, carrying almost all of the
natural gas and 65 percent of the crude oil and refined oil products.
Obviously, we don't want to hinder the effective transportation of
these products that are so critical to our national economy. But we can
and must do a better job of ensuring the public safety.
My colleague Senator Murray has been instrumental in the ongoing
efforts to improve the public disclosure of pipeline information.
Obviously we need to employ common sense in restricting access to
information that poses a real national security threat to our
communities and our nation--but I believe that we must apply the
highest standards in assessing those security risks and providing the
most complete information possible to our public safety officials and
to the public at large, so that they can take steps to protect their
own communities from potential disasters.
This amendment seeks to balance these equally important objectives--
security and public disclosure--that are both intended to enhance the
public safety. I am also pleased that this amendment maintains a
critical provision that I had worked to pass along with my colleagues,
Senator Corzine, Senator Torricelli, and Senator Murray, which would
ensure the assessments of nearly all pipeline systems at least once
every 5 years. This is an issue of tremendous importance if we are
going to make real strides in prevention of accidents. If we do not
know the fundamental state of integrity of these systems and
facilities, we cannot identify real threats to our communities. We
passed this legislation by a wide margin last year and the other body
has failed to finish the job. I urge my colleagues to join me in
supporting this amendment and finally getting the job done to better
protect our constituents, and better protect our fuel supply.
The PRESIDING OFFICER. The Senator from Louisiana.
Mr. BREAUX. Mr. President, I join my colleagues in supporting the
legislation and amendment pending before the Senate. This will be the
third time the Senate has passed this legislation. You would think that
eventually it is going to get done. It has failed to pass the House,
although the House at one point had an identical provision and it
passed. It passed with a majority, but they took it up under suspension
of the rules, and they needed two-thirds majority, so it did not pass.
This legislation will now pass the Senate for a third time and is
still waiting on the House to take action on it, which will send it
ultimately to the President for his signature.
There are literally millions and millions of gas and hazardous liquid
pipelines that cover the United States. Every State has natural gas
pipelines and oil pipelines that traverse through various parts of
individual States and carry literally billions and billions of cubic
feet of natural gas every day, 24 hours a day, 7 days a week, 365 days
out of the year.
Gas comes from my State of Louisiana, from the Gulf of Mexico. It
goes to California. It goes to Florida, to Maine, to New Jersey. It
goes all the way up to the Midwest and throughout the United States. We
have gas coming from the north that serves markets in the southern
lower 48. This is an intricate pattern, a complicated transportation
system that is absolutely needed and necessary. Without the extent of
the natural gas pipeline system, this country would simply not be able
to operate.
It provides energy for plants. It provides energy for factories. It
provides heat and also cooling elements to family homes, to businesses,
to offices throughout the United States. This, indeed, is one of the
most sophisticated, complicated systems that man has ever devised in
order to transport energy.
Is there potential and likely sometimes accidents that happen? The
answer is yes. There were two tragic accidents--one in the State of
Senator Murray, Washington, one in the State of Senator Bingaman, New
Mexico--that were tragic and unfortunate. They should never have
happened. But if you look at it from the perspective of the millions
and millions of miles of the transportation system, with the good that
it provides, it is absolutely clear that these systems must be
protected.
We need to do a better job of ensuring their safety and security,
their protection from normal accidents, as well as insulate them to the
maximum extent possible from terrorist activities and even from
deranged activities such as of the drunk shooting out the Alaskan
pipeline in the State of Senators Stevens and Murkowski. We can do
that.
There is not a form of transportation in this country that does not
have accidents that happen: Airplanes crash; trains run off tracks;
trucks run off highways; accidents happen; people are injured; people
are killed.
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The answer is not to eliminate the system but to better ensure the
security of the systems, to build better trucks, to better investigate
the drivers, to better inspect their licenses, to build better
airplanes, to correct deficiencies in airplanes, to require better
training for pilots.
As we do those things for those other means of transportation, it is
also incumbent that we provide better and adequate inspections and
guarantee that pipelines are built to the highest standards possible
from an engineering and technical capability, and also that people are
involved in the decisions as to where pipelines are actually built and
where they are laid in order to let the public know what is near them
in order for them to be aware.
It is interesting to note that pipelines are things you never see.
Every day, every hour, every minute they are providing efficiency in
terms of transportation of energy. Pipelines are buried under the sea,
under the ground. People don't see them. They don't know they are
there. But they are there to do a very effective job to provide for the
security of this country.
This legislation will also provide for better security and better
safety for the general public to make sure that while we are
transporting billions and billions of cubic feet of natural gas, we are
also doing it as safely as we possibly can.
Previous speakers have talked about the structure of the legislation.
I support it. It is good legislation. It has brought both the pipeline
companies, as well as citizens, to the same table to negotiate with
government officials to get a system in place that we can be proud of
and will assure the system continues to work as it has in the past with
the maximum degree of safety that is humanly possible. This legislation
goes a long way toward doing that.
This is the third time the Senate will pass this legislation. We urge
our colleagues in the other body to do it just once.
I yield the floor.
The PRESIDING OFFICER. The Senator from New Mexico.
Mr. BINGAMAN. I know the Senator from California is here to offer her
amendment. Before we set this amendment aside, let me speak briefly
about it.
It is very important that we pass the McCain amendment once again to
make the point to the House of Representatives that this is a priority
for our Nation and this is vitally needed legislation.
In my State, we lost 12 people as a result of a tragic breach or
break in a high-pressure gas pipeline south of Carlsbad, NM. I visited
the site. I saw the tremendous damage that was done when that pipeline
broke without any warning and essentially killed a great many people
who were there camping beside the Pecos River. This is a tragedy that
should have been enough to galvanize action in Washington. When you add
it to the other tragedy, which has been talked about here several
times, in Washington State, it is clear to me this is legislation that
should be passed quickly and moved to the President for signature.
I very much hope, when we vote tomorrow on the McCain amendment,
there will be a resounding vote, as there has been in the past, and
that we will finally get the House of Representatives to give attention
to this issue and to pass it quickly.
As I understand it, at this point it is the desire of the Senator
from California to offer an amendment. I ask unanimous consent that the
pending amendment be set aside so that she may offer her amendment.
The PRESIDING OFFICER. Without objection, it is so ordered.
Amendment No. 2989 to Amendment No. 2917
Mrs. FEINSTEIN. Mr. President, I rise to introduce an amendment on
behalf of Senators Cantwell, Wyden, Boxer, Leahy, and Durbin to provide
price transparency when energy derivatives are traded and to give the
Commodity Futures Trading Commission oversight authority for such
transactions. Let me set the framework for this amendment.
I send the amendment to the desk.
The PRESIDING OFFICER. The clerk will report.
The bill clerk read as follows:
The Senator from California [Mrs. Feinstein], for herself,
Ms. Cantwell, Mr. Wyden, Mrs. Boxer, Mr. Leahy, and Mr.
Durbin, proposes an amendment numbered 2989 to amendment No.
2917.
Mrs. FEINSTEIN. Mr. President, I ask unanimous consent that further
reading of the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
(The text of the amendment is printed in today's Record under
``Amendment, Submitted.'')
Mrs. FEINSTEIN. Mr. President, I will quote from a March 5 letter of
the American Public Gas Association by its president, out of Fairfax,
VA:
As you know, Enron operated in what was essentially an
unregulated environment. While there will be much more to
come in the wake of Enron, one thing is perfectly clear
today--our Federal Government has an obligation to make sure
that no important trading activities fall between the cracks,
leaving some energy markets without a Federal agency with
oversight authority. Your amendment remedies this glaring
deficiency.
The American Public Gas Association is fully committed to
support our effort to reverse the action Congress took just
15 months ago in the Commodities Futures Modernization Act.
The Commodities Futures Modernization Act amended the
Commodity Exchange Act by allowing some energy contracts to
be traded with no Government oversight. We firmly believe
that the CFTC must have at its disposal the necessary
jurisdiction and authority to protect the operational
integrity of energy markets so that (1) transactions are
executed fairly, (2) proper disclosures are made to
customers, and (3) fraudulent and manipulative practices are
not tolerated.
I ask unanimous consent that the full letter be printed in the Record
following my remarks.
The PRESIDING OFFICER. Without objection, it is so ordered.
(See Exhibit 1.)
Mrs. FEINSTEIN. Let me also quote from the Texas Independent
Producers and Royalty Owners Association:
[This association] believes that this measure will tend to
improve price transparency in natural gas markets, leading to
a more efficient and stable marketplace. The relatively
modest requirements outlined above should not unduly reduce
liquidity for gas traders. Accordingly, TIPRO endorses your
amendment.
I ask unanimous consent that that be printed in the Record following
my statement.
The PRESIDING OFFICER. Without objection, it is so ordered.
(See Exhibit 2.)
Mrs. FEINSTEIN. This letter is from the MidAmerican Energy Holdings
Company out of Omaha, NE:
I am writing in support of your effort to ensure that there
is transparency and appropriate Federal oversight of energies
futures trading markets.
As I testified before the Senate Energy and Natural
Resources Committee last month--
This is the chairman and CEO--
I have long been concerned that the type of exchange run by
Enron before its collapse offered opportunities for
manipulation. Enron was the largest buyer, the largest seller
and operator of an unregulated exchange. In view of the
revelations of the last several months regarding Enron, the
unregulated nature of these markets has raised serious
concerns regarding the ability of the Federal Government to
ensure that energy trading and futures markets are operating
in the interest of the public and market participants.
I ask unanimous consent that this letter, and also a similar letter
from PG&E, be printed in the Record at the end of my remarks.
The PRESIDING OFFICER. Without objection, it is so ordered.
(See Exhibit 3.)
Mrs. FEINSTEIN. Mr. President, this amendment would provide the same
transparency and oversight that is provided for every other traded
tangible commodity. All this amendment says is that electronic
exchanges which change energy derivatives are subject to the same
requirements as other exchanges, such as the Chicago Mercantile
Exchange and the New York Mercantile Exchange. Incidentally, these two
organizations support this legislation.
Additionally, it says that if you are trading energy derivatives off
an exchange, you simply need to keep a record of that transaction; and
if it turns out that there is a complaint, the CFTC will have a record
to review.
The problem, and why we need the legislation: Presently, energy
transactions are regulated by the FERC, Federal Energy Regulatory
Commission, when there is an actual delivery of an energy commodity.
Let me give you an example. If I buy gas from you and you deliver that
natural gas to me, FERC has the authority to ensure that
[[Page S1650]]
this transaction is both transparent and reasonably priced. That is a
direct delivery. However, energy transactions have gotten so complex
over just the past decade, most energy transactions no longer result in
delivery; thus, with these nondelivery trades and transactions, a giant
loophole has opened, where there is no oversight and no transparency.
Let me explain. Mr. President, I can purchase from you a promise that
you will deliver natural gas to me at some point in the future. This is
referred to as a derivatives contract. I may never really need to
physically own that gas, so I can sell that gas to someone at a small
profit, who can then turn around and sell it to yet someone else, and
so on and so forth. This promise of a gas delivery can literally change
hands dozens of times before the commodity is ever delivered. Even
then, it may never get delivered if the spot market price is lower than
the future price that comes due on that day.
In fact, 90 percent of energy trades represent purely financial
transactions, not regulated either by FERC or the Commodity Futures
Trading Commission. As long as there is no delivery, there is no price
transparency. So we don't know the price or the terms for 90 percent of
the energy transactions taking place.
Again, this lack of transparency and oversight only applies to
energy. It does not apply if you are selling wheat, or pork bellies, or
any other tangible commodity. So, as I said, there is a very big
loophole here.
Why is this type of trading so important? Many of these transactions
provide needed insurance so a company can lock in set prices in the
future without necessarily ever having to receive delivery. For
example, knowing the price of natural gas in the future allows an
energy company to, in turn, contract out its electricity, since it will
know the price of natural gas, the main cost of production.
These transactions are here to stay. What this amendment simply does
is shed light on them. Futures transactions do affect market prices for
consumers, and that is why we need this transparency. That is precisely
why other commodities, except for excluded financial commodities, are
already regulated by the CFTC.
One simple example of how energy derivatives can affect delivered
energy prices is the long-term energy electricity contracts that
California and other Western States entered into last year, which were
priced according to the long-term future costs for natural gas. As soon
as the future price of natural gas plummeted after the contracts had
been signed, electricity prices fell substantially. All of a sudden,
these States looked foolish for signing these contracts.
How did this happen? How did it come up all of a sudden? The simple
answer is that the Commodity Futures Modernization Act, signed into law
in 2000, exempted energy and minerals trading from regulatory oversight
and also exempted electronic trading platforms from oversight.
In a sense, what that legislation did was set up two different
systems treating electronic trading platforms differently from all
other platforms and treating energy commodities differently from other
commodities.
Up until 2000, energy derivative transactions were regulated just
like other transactions, and electronic trading platforms were treated
like other platforms. I repeat, these were the standards that were in
place all the way up to 2000.
Up until that time, if a gas or electricity commodity was delivered,
FERC had oversight. If there was not delivery, the CFTC had the
authority. So the loophole arose just 2 years ago.
At the time of the 2000 legislation, nobody knew how the exemptions
would affect the energy market. We have a much better idea today
because of what we have learned since then.
It did not take long for Enron Online and others in the energy sector
to take advantage of this new freedom by trading energy derivatives
absent any regulatory oversight or transparency. Thus, after the 2000
legislation was enacted, Enron Online began to trade energy
derivatives--not deliveries, but derivatives--bilaterally over the
counter in a one-to-one transaction without being subject to any
regulatory oversight whatsoever. If the trade has delivery, again, it
is regulated by FERC. If it does not, it falls into the abyss. Enron
Online was able to trade back and forth without records and in secret.
The result, of course, was higher prices.
Let me give an example of how that secret trading has affected
California and the western energy markets.
On December 12, 2000, the price of natural gas in southern California
on the spot market was $50 a decatherm, while it was $10 a decatherm
close by in San Juan, NM. A decatherm is 1,000 cubic feet or enough gas
to power about 100 kilowatt hours of electricity for a typical
powerplant. It is enough gas to provide electricity for about 900 homes
for 1 hour.
This problem lasted from November of 2000 to the end of April 2001--a
full 6 months--while energy price spikes affected the entire western
energy market. And all this time, hardly anyone understood what was
happening in nondelivered energy transactions.
In 1999, California's total electricity price for the entire State
was $7 billion. In 2000, it was $27 billion, and in 2001, it was $26.7
billion. You can see there are serious ramifications when markets are
secret without any Federal oversight or investigation of dramatic price
spikes. You cannot investigate it because there is no evidence because
all this trading was done in secret with no records.
The Senate Energy Committee, of which I am a member, examined this
issue last year, but we were not able to piece together the pieces at
that time. In the wake of Enron's bankruptcy, we are beginning to learn
a lot more. By controlling a significant number of energy
transactions affecting California, and by trading in secret, Enron had
the unique opportunity to drive up prices. Only time will tell whether
that can be proved because of the absence of records and transparency.
Let me explain how this amendment works. First, the bill repeals the
provisions of the 2000 Commodity Futures Modernization Act which
exempted energy derivatives from regulatory oversight. As I said
before, these transactions were regulated by the CFTC until 2000, so
this is not an entirely new authority for the CFTC.
As a result of this provision, all electronic trading exchanges will
once again be subjected to the same oversight as other exchanges when
it comes to energy transactions.
Companies trading energy commodities off the exchange will simply
have to keep a record of that transaction, just as they do for other
traded commodities. That is certainly not too much to ask.
The amendment also requires FERC and the CFTC to work together to
ensure that energy trading markets are, one, transparent, not in
secret; two, regulated, which they should be; and three, working.
This will close the regulatory loopholes that allowed entities, such
as Enron Online, to operate unregulated trading markets in secret.
I have received a letter from Pat Wood, the Chairman of FERC.
Chairman Wood writes that neither FERC nor CFTC has adequate authority
to determine price transparency and ensure that the energy market is
functioning as it should. He supports this amendment. FERC
Commissioners Brownell and Massey do as well.
This amendment does one more important thing. It ensures that
entities running online trading forums must maintain sufficient capital
to carry out their operations and maintain open books and records for
investigation and enforcement purposes.
This last point is very important. Enron saw its future as a
``virtual'' company. As such, it sold off many of its physical assets
over the past few years. So when investors and customers lost
confidence and stopped trading out of fear that bankruptcy was in the
offing, they learned that Enron had no collateral to back up these
trades, and this was a major factor in Enron's final spiral into
bankruptcy.
Who is supporting this bill? The New York Mercantile Exchange, the
Chicago Mercantile Exchange, Cambridge Energy Research Associates who
asked for just this, the American Public Gas Association, the American
Public Power Association, Pacific Gas & Electric, Calpine, Mid-America
Energy Holding Company, Texas Independent Producers and Royalty
Association,
[[Page S1651]]
the Consumers Union, and the Consumer Federation of America, all
because they believe the time has come to see there are no trading
markets in secret that do not keep records, and to shine the light of
day on these trades.
Now, who is opposed to the amendment? Some energy companies oppose
this bill. One lesson some of these companies seem to have learned from
the recent energy crisis was they make more money when they can operate
without any transparency, in secret, without any reporting requirements
or oversight of any kind, and that cannot continue to exist.
I am very much encouraged that not all energy companies want to
operate this way. As I mentioned, PG&E, Calpine, Apache, Mid-America
Energy, and others support this bill, and many other energy companies
are sitting on the sidelines waiting to see what may happen.
There are still some who fail to recognize the glory days of
operating in secret are over. Regardless of what happens with this
amendment, I want to go on record saying I will do everything in my
power to see the energy sector is exposed to the same price
transparency and oversight as every other sector of our economy. Make
no mistake, this debate boils down to the issue of whether energy
companies should be able to operate in continued secrecy.
Some of these companies have argued this amendment creates unfair
reporting and oversight over energy companies. So let us again look at
what this provision would do. It would treat electronic trading
exchanges like any other exchange since, as I said before, there is
neither price transparency nor regulatory authority over those
exchanges where there is not a direct delivery. So with this provision,
the same reporting requirements that CFTC requires of the New York
Mercantile Exchange and the Chicago Exchange would now be required of
electronic exchanges. This means simply that CFTC would be able to
assert the same oversight and require the same transparency of
electronic exchanges that are already required of nonelectronic
exchanges.
I have a very hard time understanding why this is so burdensome and
unfair. Additionally, some of these companies have also asserted this
amendment would create unfair burdens on companies engaged in bilateral
transactions. Here is what they are complaining about: With our
amendment, any entity engaging in bilateral transactions in energy
commodities would have to keep a record of those transactions, and the
CFTC would have the authority to look for fraud and manipulation.
Again, let me repeat, a company engaged in bilateral trading has to
keep a record of that transaction, and the CFTC has the authority to
investigate fraud. That is it. It is the same authority that was there
before 2000 and the same standard that traders of all other commodities
are required to meet.
So with all we now know about the energy sector and Enron, I
challenge anyone to explain to me why energy companies should continue
to have a loophole so they can trade in secret, not keep any records,
and therefore there is no evidence that can be proven as to
manipulation of price. The day has come to close that loophole.
I note one of the main original cosponsors is in the Chamber and
wishes to speak to this amendment. I have had the pleasure of working
with the Senator from Oregon on the Energy Committee, as I have with
the Presiding Officer. The Senator from Oregon has been a leader and
very focused on this issue. I want to thank him for his help, and I ask
the Chair recognize him.
Exhibit 1
American Public Gas Association,
Fairfax, VA, March 5, 2002.
Hon. Dianne Feinstein,
Hart Senate Office Building,
U.S. Senate, Washington, DC.
Dear Senator Feinstein: The American Public Gas Association
(APGA) is very pleased that you have taken the lead to amend
the Commodity Exchange Act (CEA). Your revisions to S. 517,
which amends the CEA, brings the trading of energy products,
including natural gas spot and forward prices, under the
appropriate jurisdiction of the Commodity Futures Trading
Commission (CFTC). As a result, your amendment will reduce
the various risks imposed on consumers by a partially
unregulated energy trading market.
As you know, Enron operated in what was essentially an
unregulated environment. While there will be much more to
come in the wake of Enron, one thing is perfectly clear
today--our federal government has an obligation to make sure
that no important trading activities fall between the cracks
leaving some energy markets without a federal agency with
oversight authority. Your amendment remedies this glaring
deficiency.
APGA is fully committed to support your effort to reverse
the action Congress took just 15 months ago in the
Commodities Futures Modernization Act (CFMA). The CFMA
amended the CEA by allowing some energy contracts to be
traded with no government oversight. We firmly believe that
the CFTC must have at its disposal the necessary jurisdiction
and authority to protect the operational integrity of energy
markets so that (1) transactions are executed fairly, (2)
proper disclosures are made to customers, and (3) fraudulent
and manipulative practices are not tolerated.
In December of 2000, when the CFMA was under consideration
in the Senate, APGA submitted a Statement for the Record to
the U.S. Senate Committee on Energy and Natural Resources
during a hearing on the ``Status of Natural Gas Markets.'' In
the statement, we expressed a concern that the proposed
legislation would codify an exemption for energy commodity
transactions that would shield those energy transactions from
the oversight and review of the CFTC. Enron took advantage of
this gap in regulatory oversight. Your amendment will close
that gap. Consumers across the country will benefit from your
efforts because they are less likely to be victimized by
activities that occur in a market where the CFTC exercises
oversight.
Again, public gas utilities and the hundreds of communities
that we serve commend you for your thoughtful and deliberate
leadership on this very important issue. While there may be
some who will oppose this amendment, one need not look far to
see whether the opposition is looking out for the best
interests of Wall Street or Main Street. We pledge to work
with you in any way we can to pass this much-needed
amendment. Please let me know how I can assist you.
Sincerely,
Bob Cave,
President.
____
Exhibit 2
Texas Independent Producers &
Royalty Owners Association,
Austin, TX., March 6, 2002.
Hon. Dianne Feinstein,
U.S. Senate, Hart Senate Office Building, Washington, DC.
Dear Senator Feinstein: We understand that later today, you
will introduce an important measure designed to bring greater
transparency to natural gas markets. We believe that improved
transparency will reduce price-markups charged in
transactions that take place after natural gas leaves the
wellhead and before it reaches the burner tip. Thus your
measure will benefit both consumers and producers. We support
the modified version of S. 1951 that you intend to offer as
an amendment to the Senate Energy Bill.
We understand that the amendment:
(1) will not grant any price control authority under the
Federal Power Act or Natural Gas Act;
(2) will continue to allow energy commodities (actually all
commodities other than agricultural commodities) to be traded
on electronic trading facilities that currently qualify as
exempt commercial markets, provided that the trading
facilities register, meet net capital requirements, file
reports, and maintain books and records;
(3) will require participants in such markets to maintain
books and records; and
(4) will apply these requirements to electronic trading
facilities which permit execution with multiple parties and
non-binding bids and offers, and will require books and
records to be kept by participants in facilities that permit
bilateral negotiations.
TIPRO believes that this measure will tend to improve price
transparency in natural gas markets, leading to a more
efficient and stable marketplace. The relatively modest
requirements outlined above should not unduly reduce
liquidity for gas traders. Accordingly, TIPRO endorses your
amendment.
Sincerely,
Gregory Moredock,
Natural Energy Policy
Committee Chairman.
____
Exhibit 3
MidAmerican Energy Holdings Co.,
Omaha, NE., March 5, 2002.
Hon. Dianne Feinstein,
U.S. Senate,
Washington, DC.
Dear Senator Feinstein: I am writing in support of your
effort to ensure that there is transparency and appropriate
federal oversight of energy futures trading markets.
As I testified before the Senate Energy and Natural
Resources Committee last month, I have long been concerned
that the type of exchange run by Enron before its collapse
offered opportunities for manipulation. Enron was the largest
buyer, the largest seller and the operator of an unregulated
exchange. In view of the revelations of the last several
months regarding Enron, the unregulated nature of these
markets has raised serious concerns regarding the ability of
the federal government to ensure that energy trading and
futures markets are operating in the interest of the public
and market participants.
As the Senate addresses this issue, it is important to
remember that electric and gas
[[Page S1652]]
markets as a whole responded to the Enron collapse without
disruption, so legislation should not compromise the
liquidity of these markets. I applaud your determination to
keep your amendment focused on oversight and transparency and
am encouraged that you, along with Senators Cantwell and
Wyden, have pledged to work with market participants to
continue to perfect this proposal as debate on the
comprehensive energy bill continues.
Ensuring public confidence in the integrity of energy
futures markets is a critical component of establishing a
modernized regulatory framework for the electric and natural
gas industries. I am pleased to support your effort and
commend you on your work on this important issue.
Sincerely,
David L. Sokol,
Chairman and CEO.
____
PG&E Corporation,
Washington, DC, March 6, 2002.
Hon. Dianne Feinstein,
U.S. Senate, Hart Senate Office Building, Washington, DC.
Dear Senator Feinstein: We are writing today in reference
to the amendment you will be offering to the Senate Energy
bill, containing the substance of legislation you and several
of your colleagues introduced earlier to provide regulatory
oversight over energy trading markets, as amended.
At the outset, we applaud your efforts to ensure public and
consumer confidence in the operation and orderly functioning
of the energy marketplace. As you know, the industry relies
heavily on these markets and products to manage risk for the
benefit of consumers of electricity. We thus appreciate your
willingness to work with us and other market participants to
address areas of interest and concern as the provisions of
your amendment have been debated and refined. As presently
drafted, we view your amendment as providing an increased
level of oversight, while ensuring the continued ability of
market participants to utilize these instruments as part of
overall risk management strategies. We therefore support your
amendment.
Thank you for your hard work in this area, and we look
forward to continuing to work with you and others on matters
of national energy policy.
Sincerely,
Steven L. Kline.
The PRESIDING OFFICER. The Senator from Oregon.
Mr. WYDEN. Madam President, I want to commend Senator Feinstein for
leading all of us in this critically important effort. It has been a
pleasure to team up with her. She has been the catalyst in this whole
effort and it is a pleasure to stand with her.
I also want to note that Senator Cantwell has been a tremendous voice
for consumers in the Pacific Northwest and our country, and I have
enjoyed teaming up with her as well as Senator Feinstein. I am going to
be very brief because I think our colleague from California has laid it
out very well.
Today, as the Senate turns to a number of important amendments that
are going to relate to the consumer protection issue, I think it is
important to note this is an opportunity to end the Enron exemption.
For years, Enron and other energy traders have operated back room
trading floors where energy has been bought and sold as a commodity
while the public has been kept in the dark. I think the question that
colleagues may be asking is: Had this amendment been law during the
time when all of the damage associated with Enron was being
perpetrated, what would have been the difference? What would have been
different had the Feinstein-Cantwell-Wyden effort been law at the time?
It seems to me there would have been two very significant benefits
had this legislation been law. First, I think it would have been less
likely that there would have been market manipulation. Certainly, the
Federal Energy Regulatory Commission is investigating that question.
That has not yet been determined. Certainly, conceptually it is much
tougher to manipulate a market if in fact the transparency and the
openness is there that this legislation calls for.
Second, had this legislation been law, if in fact there was market
manipulation it would be possible to find that out very quickly. As all
of our colleagues know, as a result of the request from west coast
Senators, virtually all of us have joined into it. The Federal Energy
Regulatory Commission has written to the west coast Senators saying
they are going to investigate whether Enron manipulated our markets,
but it will take them several months to conduct this investigation.
Had Enron's energy trading been regulated, as called for in this
amendment, we would not have had to wait months to determine if Enron
manipulated the market. Information about energy trading operations
would have been immediately available to regulators and the public
instead of shrouded in secrecy.
I think it is important for colleagues to note, first, this amendment
makes it less likely that anybody can manipulate a market; and, second,
if there is that kind of conduct taking place, it would not take months
to ascertain what went on. One could find it out much more readily
because information would be made available more quickly.
Before it collapsed, Enron was the biggest energy trader in the
country, controlling one-quarter of all wholesale energy trades.
Despite the great impact on energy markets, they were able to hide the
facts about the trading operations from public scrutiny by securing
exemptions from regulation for their energy and derivatives trading.
Evidence is emerging that Enron may have secretly used its market
power to manipulate prices in energy markets. A witness testified
before the Senate Energy Committee that the price of forward contracts
for electricity dropped as much as 30 percent after Enron filed for
bankruptcy, suggesting, according to this witness, Enron was
artificially inflating prices in western markets.
There is a well-regulated system in place for trading pork bellies
and other commodities to protect the public from market manipulation,
but energy, a commodity that we all regard as essential, has been
completely exempt. It seems to me if energy is going to be bought and
sold as a commodity, the public should at least have the same
protections that exist for trading any other commodity. There must be
transparency for the markets to work.
Let me conclude with one last point, and then I know we are going to
hear from our colleague from Washington. There has been considerable
discussion as to whether this is somehow granting vast new powers to
Government, and that Government is in some way reacting to what
happened in the Enron situation.
First of all, the Commodity Futures Trading Commission had this
authority before. This is not a brand new idea. They had this authority
and essentially they gave it up. What this bill does is restore
authority to the Commodity Futures Trading Commission to regulate
energy the same way it regulates every other commodity.
I hope when my colleagues vote on this amendment, they recognize this
is something that the Commodity Futures Trading Commission used to
have. It is authority that was on the books before the agency granted a
blanket exemption from regulating energy as a commodity. As my
colleague from California noted, Congress later went along as part of
an appropriations rider. But this bill does not give the Commodity
Futures Trading Commission vast new powers nobody has ever heard about,
and constitute in some way a rush to judgment in reaction to the Enron
situation. This is restoring a power the agency should not have given
up.
I compliment my colleague from California. She has been the leader in
this effort, as has the Senator from the State of Washington.
Mrs. FEINSTEIN. Madam President, before Senator Cantwell is
recognized, I ask unanimous consent Senator Fitzgerald of Illinois be
added as an original cosponsor, and that he be called on to speak
directly following Senator Cantwell.
The PRESIDING OFFICER. Without objection, it is so ordered.
The Senator from Washington.
Ms. CANTWELL. Madam President, I, too, rise in support of this very
important legislation, the Feinstein-Cantwell-Wyden energy derivatives
legislation. I thank my colleagues for articulating the importance
passing this amendment.
It is no secret that the States of California, Oregon, and Washington
have been greatly impacted by the high prices of energy that our
consumers are still paying and that have had a very negative impact on
our economies. That is why this legislation is so important.
I applaud Senator Feinstein for her hard work in driving this
legislation. Basically, this amendment closes a very dangerous
loophole, which was actually created by Congress and which
[[Page S1653]]
Enron may have used--I say ``may'' have used--to turn political
influence into profit at the expense of consumers. That is why we must
act today.
The Enron loophole created by the Commodity Futures Modernization Act
actually allowed Enron Online and other companies like it to sell
futures behind closed doors, without the regulatory oversight or the
safeguards that this nation's ratepayers deserve.
At its core, our amendment allows the Commodity Futures Trading
Commission to treat energy futures like all other regulated commodity
futures. It does not give the CFTC any new powers that it does not
already have when it is regulating other futures markets. This is a
very important point. Our amendment places currently unregulated energy
futures trading exchanges, such as Enron Online, under the CFTC's
regulatory authority.
Closing this loophole, as Senator Feinstein said, has the support of
many organizations, such as NYMEX, Calpine, and Cambridge Energy
Research Associates. But more importantly, consumers are counting on
us. The Consumers Union, the Consumers Federation, and Public Interest
Research Group all support this amendment. They support it for one very
basic reason: They support it because it requires open books and
transparency for markets that currently operate in secret. It is
important because if there have been patterns of irregular energy
trading, we want those patterns to be found and made abundantly clear.
What we are saying is that there should not be special rules for
Enron. If agricultural products, minerals, and even certain other types
of energy futures transactions are regulated by there CFTC, there is no
good reason we should allow online energy trading exchanges to operate
in the dark.
After all we have learned about Enron, shouldn't it be clear to all
that exposing its trading activities to the light of day is essential?
Closing the loopholes will open books and require transparency. It will
give us the ability to do important things like compare Enron Online
prices to competitors, compare forward markets with physical market
pricing, and investigate the books of online traders to search for what
those potential irregularities might be.
Being able to answer these questions will be incredibly valuable in
reinforcing the strength and integrity of our energy markets. Why is
this so important to the State of Washington? Many people may not
realize that Enron continues to hold gigantic long-term contracts with
utilities throughout the country, at least $900 million worth in my
home State. We are now learning that these contracts may have been the
result of market manipulation by Enron.
In one case alone, the Bonneville Power Administration has long-term
contracts with Enron of over $700 million. At today's market price,
those contracts would only cost $350 million. That means BPA--and that
means, ultimately, Washington state ratepayers, who have to pay for
those energy costs are paying Enron about $350 million more than the
current market value.
Contracts like these have translated into unacceptably high utility
bills for ratepayers throughout the West who deserve relief as soon as
possible. That is why I have joined my colleagues in urging FERC to
investigate and determine whether Enron manipulated these energy prices
in the West, and if so, make sure that if these contracts are unjust
and unreasonable, our consumers are let out of having to pay these high
prices for the next 3 to 5 years.
Until we change this and require open books and transparency from
Enron Online and businesses similar to it, the public will not be
protected in the future for having the same kind of market
manipulations, perhaps, happen to them. That is why passing this
legislation is so important. We have to close the Enron loophole and
restore the faith that the public needs to have in our energy markets--
the faith that consumers deserve. They deserve to know that these
entities are being regulated and are operating in the light of day.
I again thank my colleague from California who has worked so
diligently on this important legislation, which is a key part of our
energy strategy. We need to make sure and consumers need to believe
that we are on the right track.
I yield the floor.
Mrs. FEINSTEIN. If the Senator from Illinois who is next under the
unanimous consent agreement will yield for just a second, I thank
Senator Cantwell. She also is on the Energy and Natural Resources
Committee. She also has been very concerned, very diligent, working
very hard at what has been a very difficult onion to peel. I am very
grateful for her leadership.
I ask unanimous consent to add Senator Corzine as an original
cosponsor. I believe he wants to speak to the amendment.
The PRESIDING OFFICER. Without objection, it is so ordered.
The Senator from Illinois.
Mr. FITZGERALD. Madam President, I am pleased to rise in support of
this amendment by my colleague from California. I support it and
congratulate her for introducing it. Illinois, specifically Chicago, is
home to some of the largest futures exchanges in the world. Certainly,
I was very involved in the Commodity Exchange Act Reauthorization a
couple of years ago. Since that time, in the wake of the Enron
bankruptcy, the Enron exemption that allowed Enron Online to operate
without any regulatory oversight has come to light, and it has drawn
some criticism.
I say at the outset, I think probably Enron Online may not have had
all that much to do with Enron's bankruptcy. I have also been very
involved in the Enron investigations in the Senate, and as far as I can
tell, Enron was running what amounts to a gigantic shell game or
pyramid scheme, essentially borrowing money and booking borrowed money
as income by filtering the borrowings through partnerships. They had
the debt parked on the books of the off-the-balance-sheet partnerships
rather than on their direct books.
At the end of the day, when Enron filed bankruptcy, it was because it
had several billion dollars in indebtedness coming due that it, Enron,
could not pay.
I don't know that Enron Online and their energy trading, per se, was
responsible for it. I have seen many transactions that Enron engaged in
that were simply borrowing money and reporting it as income. We will
have to wait for a full autopsy. Nonetheless, I think it is appropriate
to close the Enron exemption in the Commodities Exchange Act. That is
what this bill does.
Right now, in an electronic exchange in which energy contracts are
traded, that exchange is exempt from regulation under the Commodity
Futures Trading Commission or by the FERC. FERC only comes in if energy
is actually delivered, and in most cases energy is not actually
delivered. You have contracts traded back and forth and many times an
actual delivery of the commodity is put off.
I have been troubled to some extent by the wholesale exemption that
is given to online futures exchanges. The exchanges at the Board of
Trade and the Mercantile Exchange face a great deal of overhead to
comply with their regulatory burden. I think that is appropriate. I
think sometimes it is unfair to set up an offline exchange and say this
is an offline exchange because online does not have any regulation. I
like to see industries competing on a level playing field. I think that
is what America is all about. I do not think there should be regulatory
advantages given to one side or the other.
I do think this would be a protection for consumers, even
sophisticated principals who may be trading energy contracts on
electronic exchanges. I think there would be benefits by having some
CFTC oversight. There would be greater transparency. It would be easier
for prices to be discovered.
I think Senator Feinstein's amendment accomplishes a great deal. It
repeals the exemptions and exclusions for bilateral derivatives in
multilateral markets in energy commodities. All would be again subject
to direct CFTC oversight. That was the case prior to our
reauthorization of the Commodities Exchange Act. We would correct that.
Also, it ensures that energy dealers in derivatives markets cannot
avoid full price transparency and escape regulatory oversight.
Third, the amendment subjects all multilateral markets and bilateral
[[Page S1654]]
dealer markets in energy commodities to registration, transparency,
disclosure, and reporting obligations and requires entities running
online trading forums to maintain sufficient capital to carry out their
operations. It seems very reasonable to me.
Fourth, parties engaging in bilateral energy transactions must keep
books and records. That does not seem so onerous to me.
Fifth, all energy transactions not regulated by FERC would be
regulated by the CFTC.
And sixth, the amendment requires FERC and the CFTC to meet quarterly
and discuss how energy derivatives markets are functioning and
affecting energy deliveries. I do think that is reasonable in light of
the great runup we saw in energy prices last year, particularly in
Senators Feinstein and Boxer's great State of California.
It is unclear why the price rose so quickly and why then ultimately
it plummeted again back to reasonable levels. Whether this amendment,
had it been law at the time, would have prevented that I do not know.
But I think it will promote greater price transparency. I think that
can't hurt. I think there is a minimal burden here, and I think it is
worthy public policy. I compliment my friend from California, and I am
proud to stand in support of her amendment.
I thank the Chair.
The PRESIDING OFFICER. Who seeks recognition?
The Senator from New Jersey.
Mr. CORZINE. I thank the Chair.
I, too, rise to strongly support the amendment the Senator from
California is offering to roll back this Enron exemption in the
derivatives market. Being an old bond trader who operated in the
derivatives markets for many years, the idea that we do not need basic
registration of dealers, we do not need capital adequacy or capital
rules, that there is no price transparency, whether in over-the-counter
markets or on electronic exchanges, or there are not audit trails that
are fundamental to any kind of regulation of financial transactions
anywhere in the world, seems strange to me and offers an opportunity
for those who want to take advantage of the lack of transparency and
create patterns of manipulation to easily operate in these markets. It
seems very strange that we pick a very narrow slice, the energy
markets, to have such a gaping lack of transparency.
I have heard people say there is no creativity in markets, that they
will not develop, there will not be the liquidity in overseeings. That
is just flatout not the fact. If you look at the derivatives markets in
financial securities, or financial instruments, you will see some of
the deepest, broadest, most liquid markets in the world. As a matter of
fact, confidence comes when the participants who enter into markets
will know where prices are taking place, the price discovery mechanism
is quite obvious, where there are audit trails, so that if there are
differences of views about whether transactions were actually executed,
you can go back and find out where those prices actually took place.
And you know your counterparts have enough capital to be able to stand
behind the transactions. And then you have some simple qualifications
to be a participant in those markets.
I think all these are simple, straightforward fundamentals in finance
101 for anyone who deals with financial transactions, whether it is
derivative transactions that relate to hog bellies, Treasury bills, or
stocks, and no different for energy in my mind, and I find it
incredibly lacking in consistency with our oversight regime which has
produced maybe the broadest, deepest markets we have anywhere in the
world, in the history of the world, frankly, and I see no reason why we
should not have that applying to energy markets just as we do any other
market.
On that basis, I strongly support the amendment. I think Senator
Feinstein is definitely on the right trail to produce markets that will
provide consumer protection, protection against price manipulation, and
a greater quality of activity in the underlying energy markets. I think
they will be broader and deeper because of it.
So I am proud to stand in support of the amendment of the Senator
from California.
Mrs. FEINSTEIN. Madam President, I thank the distinguished Senator
from New Jersey for his support. In view of his background, his
knowledge, and his expertise, I am particularly grateful for that
support. It is one thing to stand here and feel in your gut what is
right for the consumer, but it is another in the mystical world of
finance. His wisdom and his knowledge hopefully will gain additional
votes for this amendment. I am very grateful to the Senator. I thank
him very much.
Madam President, I note the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The senior assistant bill clerk proceeded to call the roll.
Mr. BINGAMAN. Madam President, I ask unanimous consent the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. BINGAMAN. Madam President, I ask unanimous consent the pending
amendment be set aside so that I can send an amendment to the desk for
consideration.
The PRESIDING OFFICER. Without objection, it is so ordered.
Amendment No. 2990 To Amendment No. 2917
Mr. BINGAMAN. Madam President, I send an amendment to the desk.
The PRESIDING OFFICER. The clerk will report.
The senior assistant bill clerk read as follows:
The Senator from New Mexico [Mr. Bingaman], for himself and
Mr. Domenici, proposes an amendment numbered 2990 to
amendment No. 2917.
Mr. BINGAMAN. Madam President, I ask unanimous consent reading of the
amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:
(Purpose: To promote collaboration between the United States and Mexico
on research related to energy technologies)
After section 1413 insert the following:
SEC. 1414. UNITED STATES-MEXICO ENERGY TECHNOLOGY
COOPERATION.
(a) Finding.--Congress finds that the economic and energy
security of the United States and Mexico is furthered through
collaboration between the United States and Mexico on
research related to energy technologies.
(b) Program.--
(1) In general.--The Secretary, acting through the
Assistant Secretary for Environmental Management, shall
establish a collaborative research, development, and
deployment program to promote energy efficient,
environmentally sound economic development along the United
States-Mexico border to--
(A) mitigate hazardous waste;
(B) promote energy efficient materials processing
technologies that minimize environmental damage; and
(C) protect the public health.
(2) Consultation.--The Secretary, acting through the
Assistant Secretary for Environmental Management, shall
consult with the Office of Energy Efficiency and Renewable
Energy in carrying out paragraph (1)(B).
(c) Program Management.--The program under subsection (b)
shall be managed by the Department of Energy Carlsbad
Environmental Management Field Office.
(d) Cost Sharing.--The cost of any project or activity
carried out using funds provided under this section shall be
shared as provided in section 1403.
(e) Technology Transfer.--In carrying out projects and
activities under this section to mitigate hazardous waste,
the Secretary shall emphasize the transfer of technology
developed under the Environmental Management Science Program
of the Department of Energy.
(f) Intellectual Property.--In carrying out this section,
the Secretary shall comply with the requirements of any
agreement entered between the United States and Mexico
regarding intellectual property protection.
(g) Authorization of Appropriations.--There are authorized
to be appropriated to carry out this section $5,000,000 for
fiscal year 2003 and $6,000,000 for each of fiscal years 2004
through 2006, to remain available until expended.
Mr. BINGAMAN. Madam President, this is an amendment which tries to
address some very serious health and energy production issues,
environmental issues, along the 2,000-mile common border that we have
with Mexico.
There are tire dumps in that region that routinely catch fire and
which have been determined to breed airborne dengue fever, which is a
major health risk that we will face in the next decade.
There are brick kilns that use wood and plastic and cause serious
health-related problems in the metropolitan area of Juarez/El Paso.
There are serious water contamination issues with regard to ground
water along the United States-Mexico border.
[[Page S1655]]
This amendment, which I am offering on behalf of myself and Senator
Domenici, is one which directs the transfer of Department of Energy
environmental management technologies to help clean up many of these
serious and pressing health-related problems along the border.
The amendment will develop joint research programs between U.S. and
Mexican universities on technologies to help develop clean materials
processing technologies such as leadless solders for microelectronics
plants, techniques to control air pollution from border region heavy
manufacturing plants, and energy-efficient methods to recover
nonpotable water for irrigation.
This is an amendment that was passed unanimously as S. 397 in the
last Congress, the 106th Congress. That was after we had a full markup
of the legislation in the Energy Committee.
It is consistent with the current administration's views on
developing close ties with Mexico in both the fields of environmental
sciences and energy production.
It is a very good amendment, which I understand I will be given the
opportunity to explain again tomorrow morning before a vote occurs. It
is one of the amendments the majority leader has indicated he would
like to have a vote on tomorrow morning.
So I will not, at this point, belabor the issue but indicate to my
colleagues that it has been supported unanimously, on a bipartisan
basis, in the prior Congress. It is a good piece of legislation and one
that I would very much like to see added to this pending energy bill. I
hope we will do that tomorrow morning when the issue comes up for a
vote.
Madam President, with that, I once again yield the floor and suggest
the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. BINGAMAN. Madam President, I ask unanimous consent the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Amendment No. 2991 To Amendment No. 2917
Mr. BINGAMAN. Madam President, I send an amendment to the desk on
behalf of Senator Akaka and ask for its immediate consideration.
The PRESIDING OFFICER. Without objection, the pending amendment will
be set aside, and the clerk will report.
The senior assistant bill clerk read as follows:
The Senator from New Mexico [Mr. Bingaman], for Mr. Akaka,
proposes an amendment numbered 2991 to amendment No. 2917.
Mr. BINGAMAN. Madam President, I ask unanimous consent reading of the
amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:
(Purpose: To modify the provision requiring an assessment of the
dependence of the State of Hawaii on oil)
Strike section 1702 and insert the following:
SEC. 1702. ASSESSMENT OF DEPENDENCE OF STATE OF HAWAII ON
OIL.
(a) Assessment.--The Secretary of Energy shall assess the
economic implications of the dependence of the State of
Hawaii on oil as the principal source of energy for the
State, including--
(1) the short- and long-term prospects for crude oil supply
disruption and price volatility and potential impacts on the
economy of Hawaii;
(2) the economic relationship between oil-fired generation
of electricity from residual fuel and refined petroleum
products consumed for ground, marine, and air transportation;
(3) the technical and economic feasibility of increasing
the contribution of renewable energy resources for generation
of electricity, on an island-by-island basis, including--
(A) siting and facility configuration;
(B) environmental, operational, and safety considerations;
(C) the availability of technology;
(D) effects on the utility system, including reliability;
(E) infrastructure and transport requirements;
(F) community support; and
(G) other factors affecting the economic impact of such an
increase and any effect on the economic relationship
described in paragraph (2);
(4) the technical and economic feasibility of using
liquefied natural gas to displace residual fuel oil for
electric generation, including neighbor island opportunities,
and the effect of such displacement on the economic
relationship described in paragraph (2), including--
(A) the availability of supply;
(B) siting and facility configuration for onshore and
offshore liquefied natural gas receiving terminals;
(C) the factors described in subparagraphs (B) through (F)
of paragraph (3); and
(D) other economic factors;
(5) the technical and economic feasibility of using
renewable energy sources (including hydrogen) for ground,
marine, and air transportation energy applications to
displace the use of refined petroleum products, on an island-
by-island basis, and the economic impact of such displacement
on the relationship described in paragraph (2); and
(6) an island-by-island approach to--
(A) the development of hydrogen from renewable resources;
and
(B) the application of hydrogen to the energy needs of
Hawaii.
(b) Contracting Authority.--The Secretary may carry out the
assessment under subsection (a) directly or, in whole or in
part, through 1 or more contracts with qualified public or
private entities.
(c) Report.--Not later than 300 days after the date of
enactment of this Act, the Secretary shall prepare, in
consultation with agencies of the State of Hawaii and other
stakeholders, as appropriate, and submit to Congress, a
report detailing the findings, conclusions, and
recommendations resulting from the assessment.
(d) Authorization of Appropriations.--There are authorized
to be appropriated such sums as are necessary to carry out
this section.
Mr. BINGAMAN. Madam President, this amendment makes technical
corrections in section 1702 of the substitute bill that is before us,
which requires the Secretary of Energy to study the economic risk posed
by the dependence of Hawaii on oil as the State's principal source of
energy.
The changes in the original text were proposed by the minority. They
are acceptable to Senator Akaka, who was the original proponent of
section 1702. They have been cleared on both sides. So I urge that they
be agreed to at this point.
The PRESIDING OFFICER. If there is no further debate, without
objection, the amendment is agreed to.
The amendment (No. 2991) was agreed to.
Mr. BINGAMAN. Madam President, I yield the floor and suggest the
absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Ms. LANDRIEU. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER (Mr. Johnson). Without objection, it is so
ordered.
Ms. LANDRIEU. Mr. President, I know there are amendments that have
been laid down and are open for discussion, but I want to take this
opportunity to give a statement for the record in regard to the energy
debate.
I will begin by thanking the chairman and our excellent leader,
Senator Bingaman, for laying down a bill that is a real building block,
a real stepping stone toward the kind of energy policy with which our
Nation could grow and prosper. I thank him for including many of the
issues I raised with him on behalf of the State of Louisiana and other
petroleum- and gas-producing States, as well as provisions that Senator
Domenici, Senator Voinovich, and I have worked on relating to
electricity generation, expansion of nuclear energy, and others. He has
been very open to many of the ideas we have suggested. The bill,
however, is only a starting point.
I believe we have to build some additional provisions into this
underlying bill.
To begin with, I am reminded of the words of Thomas Edison. He once
said:
Opportunity is missed by most people because it comes
dressed up in overalls, and it looks like work.
I think, as we begin this energy debate, that is an appropriate quote
of which to be mindful. The situation that presents itself here--energy
policy--rarely captures the attention of Congress, but at this very
moment it really is a wonderful opportunity for us. We have a real
opportunity--an opportunity to impact our economy and our environmental
and foreign policy, all through the adoption of an effective and
coherent national energy policy. But getting there is going to require
some real work and some real compromise.
I am concerned that this is an opportunity dressed up like hard work.
I am
[[Page S1656]]
hoping that the Senate is appropriately dressed. I am not quite sure. I
know many of us have worked diligently, and, hopefully, with leadership
on both sides and with strong leadership from the President, we can
actually get a bill that makes sense for where our Nation is today--
but, more importantly, where we need to be in the future.
The American people are ready for a different kind of energy policy.
A recent poll found that three-fourths of the public believes that if
we don't address our energy needs now, in 20 years Americans will not
be able to live their lives in the way they choose. I think the
American people, even prior to September 11, were very mindful of this
fragile situation in which we find ourselves. But now, post-September
11, I know the people in my State are very concerned about our
overdependence on foreign oil and energy sources. Of course, the
American people are right. They recognize our vulnerability. This is
the moment, and we must seize it.
I thank the chair of our committee again for his excellent work, and
I thank Senator Daschle for bringing this bill to the floor for our
consideration.
Many, including myself, have stated really inaccurately before that
we don't have a national energy policy. Unfortunately, we do have one.
The policy, whether expressed or implied, though, is perfectly clear.
That policy, unfortunately, is that this Nation is to try to import as
much cheap oil as possible. It doesn't seem to us that the sources of
this imported oil matter much. All other national policies, such as
human rights, conservation, and geopolitics, have seemingly taken a
back seat to this overriding policy.
Let's look at the nations we are willing to deal with in order to
secure cheap oil. The United States imports nearly 600,000 barrels of
oil a day from Iraq. This is a country that we have been bombing an
average of once a week. Can you imagine what the public would say if we
were buying steel from Germany while undertaking the D-Day invasion?
Yet that is the same kind of corrupting power that this shortsighted
policy has on other interests.
I believe it is time--and I know many of my colleagues join me in
saying this--for our country to forge a new ``declaration of
independence.'' About 226 years ago, we decided the people of our
Nation needed to control their own destiny politically and
economically. We need to do so again today. In order to have that
control, we must have energy independence. While we will never achieve
that 100 percent, we have to get much closer to that goal than we are
today. Getting there is going to be tough, but that is what this debate
is about. It is what it should be about; it is what the American people
want this debate to be about.
While we are achieving that end, it may require efforts equal to the
Manhattan project, or the Apollo project, but I believe it is within
our grasp. Again, with strong Presidential leadership, with a
bipartisan group of leaders on this floor and in the House, and with
the support of the American people, I believe we are up to the
challenge.
Our new declaration must center around three principles. I will start
with the principle that I truly believe is the most important, and that
is that this country must produce more energy. We must produce cleaner
fossil fuels; more nuclear power generation; and, yes, more oil and gas
by small and independent companies; and, as Senator Bingaman has
advocated, significant new investments for alternative and renewable
fuels. The occupant of the chair has advocated using biomass and other
agriculturally-based projects.
There are tremendous incentives in this bill for us to expand our
supply of energy so that we are not held hostage or captive by only one
fuel supply. We have an ample and a varied supply, but that supply has
to be increased, not decreased and diminished.
Secondly, we will conserve energy wherever possible, particularly in
transportation and the industrial sector, and do it in a way that
enhances our chances of creating jobs in America, not driving them away
to other nations. We have to be more committed to a balance, of
conserving our natural resources, conserving our clean environment, and
making our environment even cleaner. But I strongly believe we have to
focus as intently on conserving and expanding jobs here--in my State of
Louisiana, in your State, Mr. President, and in all of our States--
because if we are not careful, changes that we make can drive good,
high-paying jobs away from our Nation to other nations. It is not fair
to our workers, and it is not fair to our communities when there are
good alternatives.
The principle of increased energy production really hearkens back to
a principle deeply ingrained in our American culture; namely--and I
remember studying this in my earliest grades--the dictum of Captain
John Smith: ``He who works eats; he who doesn't work doesn't eat.'' The
Jamestown colony would not have survived without following that simple,
clear and, in some ways, profound statement. We cannot allow mindless
energy consumption on one hand while allowing a ``not in my backyard,''
attitude toward energy production. We must restore balance to the
equation. Louisiana makes more than its fair share of a contribution
through oil and natural gas production.
We also house the Nation's Strategic Petroleum Reserve. However,
while every State should be free to determine how to make its
contribution--solar energy perhaps from New Mexico, hydroelectric power
from Washington, clean coal plants from West Virginia--every State
should be free to make its choices, but every State must make a
contribution.
If we are consuming 26 percent of the world's oil supply but
producing only a fraction, we clearly are eating without working.
Sixty-five percent of this Nation's energy supply comes from oil and
gas. Yet States continue to express a reluctance to contribute their
natural resources to our common needs. These natural resources belong
to all the people of our Nation. Yet we see a policy permitting repeal
of laws that were strict about using natural resources for our common
need, which is real and I would say urgent.
It is important to contrast this with our allies in Europe who have a
reputation for being more environmentally sensitive. While we have
moratoria on drilling for oil and gas all over this Nation, from the
west coast to the east coast, and in parts of the Gulf of Mexico,
France has high-sulfur petroleum production in Paris--in Paris; not in
the countryside but in Paris. The United Kingdom, the Netherlands, and
Norway all permit offshore oil and gas drilling in their fishing
grounds, some of the finest fishing grounds in the world. Yet there is
a tremendous amount of environmentally sensitive, very strictly
regulated production operating off those shores.
Such actions would set our environmental community in this Nation in
a frenzy. In Europe, however, they have managed to accept a fundamental
reality: If you need oil and gas, you must produce it. What is more,
every possibility needs to be on the table. If you need more power from
nuclear, you have to build the nuclear powerplants to produce it. You
cannot just wish it so and turn on the lights.
Our allies have recognized this, but in this country we have not
quite grasped this reality. We are seeing a trend toward creating
something like Fritz Lang's Metropolis, but on a statewide scale, with
some States getting to live in the clouds with an unspoiled
environment, consuming to their heart's desire, while other States must
live on Earth and bear the brunt of this carefree lifestyle.
This growing dichotomy must stop. We must have more domestic
production to balance out our consumption. It is just as simple as
that.
The second principle of our declaration, of course, is conservation.
We must consume less. Everyone knows the American economy is the
largest consumer of energy in the world.
Everyone also understands that we have the largest gross domestic
product in the world. While we produce more goods than any other people
on Earth and in the history of the world, the ratio between how much we
produce to how much energy we use to produce it is the worst in the
world. In other words, we are hugely inefficient when it comes to the
use of energy. This is not only an environmental dilemma, but it is an
economic dilemma as well.
We have squeezed efficiency out of our American workers through
greater productivity gains, longer work hours, a more flexible and
skilled workforce,
[[Page S1657]]
and particularly new technologies. However, we have not squeezed enough
efficiency out of our power distribution networks to make U.S.
manufacturing cheaper and, as a result, more competitive.
I congratulate Senator Bingaman, again, for making this a focus of
this legislation. It is truly one of the best pieces of this
legislation, and, if we can build on this piece, it will be a real step
in the right direction. I look forward to working with him in this
debate. Already we have accepted several amendments toward this end
that have strengthened this position so that we can make it even
stronger.
We must, as I said in the first principle, we must be committed to
robust domestic production. Then we also have to be committed to real
efficiencies in our electric market, on which Senator Voinovich and
others have worked so diligently.
Finally, we must institute the third principle, and that is, if you
are taking on the burden of production, whether it is in Louisiana,
which produces oil and gas and other energies for this Nation, or other
States, our Nation should compensate those regions fairly.
Louisiana is the second-highest energy-producing State in the
country. We have 16 percent of the total refining capacity, and we
supply about 25 percent of all domestic petroleum, half of the imported
liquefied natural gas, and about 13 percent of the crude oil shipped
into the United States comes through Louisiana. Yet this contribution,
while my State is proud of it, has not come without cost to our coast,
to our environment, and our infrastructure.
In the past 50 years, Louisiana has lost over 1,000 square miles of
its coast. Let me be clear, this loss is not 100 percent directly
related to this activity. This activity has been a portion of this
loss. There have been many other factors. But still the facts remain
that because of the drainage and the shipping we provide for the Nation
through the Mississippi River and the Delta so that all the Great
Plains States and our great interior can ship products out and receive
products, as well as the production taking place in this fragile
environment, it has had some environmental consequences.
This loss represents 80 percent of all wetlands loss within the
United States. While my State suffers these losses, we contribute to
the Federal Treasury anywhere from $2 billion to $4 billion a year,
just through oil and gas production. This figure does not take into
account the taxes and wealth and prosperity generated for the whole
Nation because of the shipping and the commerce allowed by our rivers.
In fact, since the year I was born, 1955, our State and other coastal
States have contributed $120 billion to the Federal Treasury, and
Louisiana has received nothing of this $120 billion directly. We have
received less than 1 percent of the money that has come into the
Treasury from offshore oil and gas drilling and yet bear most of the
cost of the infrastructure required.
Louisiana's coastal wetlands contribute 28 percent to the total
volume of U.S. fisheries. Our coastal wetlands are being lost at a rate
of one football field every 15 minutes. Let me restate that: One
football field every 15 minutes.
In short, we should sometimes ask ourselves: Why are we doing this?
Why don't others do it? We have developed a system of retrieving our
natural resources. In the old days, we did not do a very good job of
it, but in these days of new horizontal drilling, directional drilling,
with new technologies, new rules and regulations, some local and some
national, we have learned to pool our natural resources for the benefit
of our State and our Nation and minimize that environmental footprint.
We want to continue to do that, but we cannot continue under the
present regime or set of circumstances unless we are more fairly
compensated.
Interior States that produce their natural resources, whether it is
to contribute to the energy sector or other sectors, receive 50 percent
of their royalties in revenues. Two years ago the State of Wyoming,
through severance taxes that levied from their mining operations, kept
$200 million and spent it as they would to reinvest in their State and
the local communities that supported that mining operation.
Yet Louisiana and the Gulf Coast States that bear a tremendous
responsibility for the production now of oil and gas do not share a
penny of those offshore revenues, and yet serve as a platform for that
production.
The helicopters cannot get into the central gulf unless they take off
from somewhere. The pipes, the equipment, the computers, the people,
the technology are launched from the coast of Texas or Louisiana or
Mississippi or Alabama.
I am going to be laying down amendments--there is already a provision
in this bill, thanks to Senator Bingaman--that would authorize for the
very first time a coastal impact assistance provision that will give
Louisiana and the Gulf Coast States a share of these revenues. It is an
authorization. I believe we need a direct appropriation, and I will be
working to strengthen that provision. But for the first time, the
Senate, I hope, will accept this responsibility and fashion part of our
overriding energy principle or declaration of independence that if you
are going to produce, you should be rewarded for that production.
Again, produce what you will, produce what you can, produce what you
choose, but whatever you do, you should be rewarded or compensated for
that production.
Frankly, for those States that refuse to produce and only want to
consume, then I think we should think very strongly about that
situation and what we might do to encourage those States to do more to
meet their obligation. It did not work 226 years ago, and that kind of
attitude is not going to work today. So for producing States, I believe
this is a very strong policy.
I look forward to this debate. It is a rare moment in our history. I
hope there is enough pressure that can be brought to bear to move us to
make the kind of compromises necessary. It is time for us to declare
our independence. We will not get there 100 percent, but we need to get
much closer to independence than we are today because not only is our
economy at stake, our environment is as well. The security of our
Nation rests on how successful we will be in getting more independent.
If another tragedy strikes or, shall I say, when another tragedy
strikes, with the new and emerging threats confronting our Nation, we
can make wise decisions based on our principles, based on America's
economic interests, based on what is right in terms of leading the
Nation, and not be held hostage because we have simply not learned how
to either live within our means so we can have the kind of independence
necessary to make wise decisions for ourselves as we help to lead this
world.
This is a very important debate. I have really appreciated working
again with Senator Domenici. He has almost singlehandedly reengaged us
in understanding the importance of nuclear energy for our Nation--it is
20 percent of the source today--and rallied many different entities to
realize we have safer nuclear reactors. The new technologies are quite
promising, with the production of hydrogen as well as the traditional
fuels and what that might mean to help us reach that independence.
Senator Voinovich and I will continue to work on building an electric
grid for this Nation much like our transportation grid, our interstate
system. No one would argue that without the interstate system our
economy could not grow. We could not move our products. We could not
build our businesses. We could not have the international trade that is
now the lifeblood of our Nation. That is the kind of electricity system
that we need to create.
It was not created that way initially. It was all State developed,
regionally developed, and we have to now open that up so our
electricity and power can get on onramps, off offramps, with limited
speed bumps, and move throughout this Nation to create the kind of
conservation and efficiency our businesses need to compete in the
world.
As I said, there are many goals and objectives. I have laid out some
of these principles, and I look forward to advocating for the people of
my State and for many States that are producing oil and gas to make
sure we are justly compensated so we can take those just compensations
and reinvest for our children and for our grandchildren.
One day these oil and gas wells are going dry up. We wanted to make
sure we were good stewards of the taxes
[[Page S1658]]
that were levied on those oil and gas wells. Therefore, we have laid
down new investments for cleaner technologies, for new opportunities
for Louisiana and for our Nation.
Mr. GRASSLEY. Mr. President, I am glad to have the opportunity today
to speak on the critical issue of energy security. In order to secure
our country's economic and national security, we need to have a
balanced energy plan that protects the environment, supports the needs
of our growing economy, and reduces our dependence on foreign sources
of energy.
Every man, woman, and child in the United States is a stakeholder
when it comes to developing a responsible, balanced, stable, long-term
energy policy.
When natural gas prices soared last winter, low-income families and
the elderly were the hardest hit. Not too long ago, $2-per-gallon gas
took a great toll on our economy. Trucking companies went bankrupt,
small businesses and factories were forced to lay off workers, and
farmers suffered a devastating blow of spiked input costs.
We found ourselves, after 8 years of inaction by the Clinton
administration, without a comprehensive energy policy. I questioned
officials from the Clinton administration and encouraged them to
provide to Congress a plan to deal with the rising cost of energy. I
even authored an amendment to require them to compile a report
detailing their plan to address the energy shortage. I never received
such a plan.
I was pleased that President Bush, soon after taking office, pledged
to make the energy security of our country one of his highest
priorities.
It is unfortunate that since the release of the President's National
Energy Policy report last year, it took over 10 months for the Senate
to begin this debate. Even more troubling is the process by which this
bill was put together. In October, the majority leader and the chairman
of the Energy Committees chose to remove this bill from further
consideration by the committee, and instead put together this bill
without the input of the minority members of the Senate Energy
Committee, and that is also unfortunate.
The events of September 11 have made very clear to Americans how
important it is to enhance our energy independence. We can longer
afford to allow our dangerous reliance on foreign sources of oil to
continue.
It is time to get serious about implementing energy efficiency and
conservation efforts, investing in alternative, renewable fuels and
improving domestic production of traditional resources.
I support a comprehensive energy policy consisting of conservation
efforts, development of renewable and alternative energy resources, and
domestic production of traditional sources of energy.
As my colleagues well know, I have long been a supporter of
alternative and renewable sources of energy as a way of protecting our
environment and increasing our energy independence.
In 1992, I authored legislation to provide the first-ever tax
incentive for wind energy production. In 1997, I led the successful
effort to extend for 10 years the tax credit for corn-based ethanol.
The energy bill we are currently debating includes a number of
provisions regarding conservation and renewable energy development. For
example, included in this legislation is a renewable fuels provision
which requires a small percentage of our Nation's fuel supply to be
provided by renewable fuels such as ethanol and biodiesel.
I strongly support the production of renewable domestic fuels,
particularly ethanol and biodiesel. As domestic, renewable sources of
energy, ethanol and biodiesel can increase fuel supplies, reduce our
dependence on foreign oil, and increase our national and economic
security.
I thank the majority leader and Chairman Bingaman for including this
renewable fuels standard, which is very similar to the standard that
the Senate Energy Committee Republicans supported early last fall.
The renewable fuels standard, supported by a broad coalition, is good
for America's farmers, good for the environment, good for consumers,
and good for national security.
However, while this bill addresses conservation efforts and
alternative energy, it falls well short on domestic energy development
of traditional sources. Critical provisions to support new development
of nuclear energy and domestic oil and gas exploration and production
were unfortunately left out of the package.
At a time when the United States is dependent on foreign countries
for over 58 percent of our oil needs, this legislation does little to
support development of resources on our own land. We currently import
more than 750,000 barrels of oil a day from Saddam Hussein's Iraq. Yet
this bill remains silent on the development of just 2,000 acres of land
in Alaska that could supply the equivalent of the oil we import from
Saudi Arabia for 30 years.
We must do more to develop, in an environmentally sensitive way, the
resources that God gave us. I look forward to working with my
colleagues to ensure that the bill before the Senate does more to
protect our national security, and reduce our dependence on foreign
oil.
I also look forward to debate on an amendment that I plan to offer
with Senator Baucus. As ranking member of the Finance Committee, I have
had the opportunity to work with Chairman Baucus to develop an energy-
related tax amendment.
Unlike the underlying bill, this amendment strikes a good balance
between conventional energy sources, alternative and renewable energy,
and conservation.
Among other things, it includes provisions for the development of
renewable sources of energy like wind and biomass, incentives for
energy efficient appliances and homes, and incentives for the
production of non-conventional sources of traditional oil and gas.
I believe the Finance Committee did a good job to address our
nation's energy security in a balanced and comprehensive way, and I
look forward to the Senate's consideration of the energy-related tax
package.
In conclusion, I am please that the Senate has finally begun to
address an issue with such a direct impact on our national and economic
security.
For the sake of our children and our grandchildren, we must implement
conservation efforts, invest in alternative and renewable energy, and
improve development and production of domestic oil and natural gas
resources. I hope that during this process we can develop a bill that
is truly comprehensive.
I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The bill clerk proceeded to call the roll.
Mr. REID. Madam President, I ask unanimous consent the order for the
quorum call be rescinded.
The PRESIDING OFFICER (Ms. Cantwell). Without objection, it is so
ordered.
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