[Congressional Record Volume 148, Number 39 (Thursday, April 11, 2002)]
[Senate]
[Pages S2507-S2516]
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
[[Page S2508]]
Senate will now resume consideration of S. 517, which the clerk will
report.
The assistant legislative clerk read as follows:
A bill (S. 517) to authorize funding the Department of
Energy to enhance its mission areas through technology
transfer and partnerships for fiscal years 2002 and 2006, and
for other purposes.
Pending:
Daschle/Bingaman further modified amendment No. 2917, in
the nature of a substitute.
Kerry/McCain amendment No. 2999 (to amendment No. 2917), to
provide for increased average fuel economy standards for
passenger automobiles and light trucks.
Dayton/Grassley amendment No. 3008 (to amendment No. 2917),
to require that Federal agencies use ethanol-blended gasoline
and biodiesel-blended diesel fuel in areas in which ethanol-
blended gasoline and biodiesel-blended diesel fuel are
available.
Lott amendment No. 3028 (to amendment No. 2917), to provide
for the fair treatment of Presidential judicial nominees.
Landrieu/Kyl amendment No. 3050 (to amendment No. 2917), to
increase the transfer capability of electric energy
transmission systems through participant-funded investment.
Graham amendment No. 3070 (to amendment No. 2917), to
clarify the provisions relating to the Renewable Portfolio
Standard.
Schumer/Clinton amendment No. 3093 (to amendment No. 2917),
to prohibit oil and gas drilling activity in Finger Lakes
National Forest, New York.
Durbin amendment No. 3094 (to amendment No. 2917), to
establish a Consumer Energy Commission to assess and provide
recommendations regarding energy price spikes from the
perspective of consumers.
Dayton amendment No. 3097 (to amendment No. 2917), to
require additional findings for FERC approval of an electric
utility merger.
Amendment No. 3114 To Amendment No. 2917
Mrs. FEINSTEIN. Mr. President, I rise today to open the debate on the
so-called renewable fuels or ethanol mandate in the Senate energy bill.
I strongly believe the fuel provisions in this legislation are
egregious public policy, that they amount to a wish list for the
ethanol industry, and the Senate has to consider the impact of these
provisions on the rest of the Nation.
Frankly, I believe it is terrible public policy. Frankly, I believe
this amounts to a wealth transfer of literally billions of dollars from
every State in the Nation to a handful of ethanol producers. Frankly, I
believe this mandate amounts to a new gas tax in the Nation.
Here are my objections to the renewable fuels requirement in the
Senate energy bill: First, despite limited clean air benefits, the
mandate will almost triple the amount of ethanol in our Nation's fuel.
Second, even if States do not use this ethanol, they are required--
forced--to pay for it anyway.
Third, forcing more ethanol into gasoline will only drive prices up
at the pump.
Fourth, since over 98 percent of the production capacity of ethanol
is based in the Midwest, it is extremely difficult to transport large
amounts of ethanol to States where it is not produced.
Fifth, I am very concerned the limited number of ethanol suppliers in
the United States will be able to exercise their market power and drive
up price. This is exactly what happened last year in the West when
electricity and natural gas prices soared due to supply manipulation by
out-of-State energy companies.
Sixth, there may not be enough ethanol produced in the United States
to meet future demand.
Seventh, almost tripling the amount of ethanol we produce raises
serious health and environmental questions. Tripling it is a big step
into the unknown, environmentally and health-wise. I hope to show this
in my remarks.
Finally, because ethanol is subsidized, mandating more of it will
divert money from the highway trust fund. What I mean by this is there
is a 5.4-cent-per-gallon tax credit for ethanol that will continue to
divert more and more resources to ethanol instead of the highway trust
fund where every State gets its essential resources to reduce traffic
congestion and improve the safety of roads and bridges.
Let me explain each objection, one at a time. Let me begin by talking
about my concerns with mandating more ethanol than is needed. This bill
forces California, my State, to use 2.68 billion gallons of ethanol
over the 9 years it does not need to meet clean air standards.
Look at this chart. The red is the amount of ethanol California will
be forced to use from 2004 to 2012 under the mandate in the Senate
energy bill. The blue is the amount of ethanol we would use without the
mandate, largely in the winter months in the southern California
market.
Here you see, to meet clean air standards, by 2004, we will be forced
to use 126 million gallons. This bill forces us to use 276 million
gallons in 2004 and it forces us to use 312 million gallons in 2005 and
it ratchets up every year until we are forced to use, by the end of
this mandate, 600 million gallons of ethanol in 2012 when we only need
to use 143 million gallons to meet clean air standards.
What kind of public policy would do that? What kind of public policy
would require a State to use a dramatic amount more of ethanol, an
untested health and environmental additive to gasoline, that it doesn't
really need? Is that good public policy? I do not think it is.
What makes it even more egregious--and the reason I use the word
``egregious'' is if we do not use it, if we trade it, we are forced to
pay for it anyway. That is the massive transfer of wealth that takes
place under this amount. No one knows how much more consumers will be
forced to pay, but a recent study by the Department of Energy indicates
that prices will increase 4 to 10 cents a gallon across the United
States if this ethanol mandate becomes law.
A study sponsored by the California Energy Commission indicates that
in a State such as California, where ethanol is not produced, gas
prices could double and even reach $4 per gallon. This chart shows the
real hazard this mandate is on both coasts. In California, where it is
estimated the price increase is .096 cents per gallon. Then in other
states: Connecticut, it will increase the price of gasoline 9 cents a
gallon; Delaware, 9 cents a gallon; New Hampshire, 8 cents a gallon;
New Jersey, 9 cents a gallon; New York, 7 cents a gallon; Pennsylvania,
5 cents a gallon; Rhode Island, 9 cents a gallon; Virginia, 7 cents a
gallon; Massachusetts, 9 cents a gallon; Missouri, 5 cents a gallon--
and on and on and on. This is bad public policy.
California does not have the infrastructure in place to be able to
transport large amounts of ethanol into the State, therefore any
shortfall of supply--either because of manipulation or raw market
forces--will be exacerbated because the State will be reliant on
ethanol from another area of the United States.
According to a recent report issued by the GAO, over 98 percent of
the U.S. ethanol production capacity is located in the Midwest. Here it
is: In the West, 10 million gallons--that is all we produce; in the
Rocky Mountain region, 12 million gallons; the South, here, 15 million
gallons; and the east coast, 4 million gallons.
In the Midwest, which is the big beneficiary of this ethanol
mandate--nobody should doubt that--they produce 2.27 billion gallons of
ethanol. So the ethanol is all produced in the Midwest.
There is only one ethanol plant in California today, so it is going
to be impossible for California to respond to any ethanol shortage. As
the GAO reports:
Ethanol imports from other regions are vital. However, any
potential price spike could be exacerbated if it takes too
long for supplies from out-of-State (primarily the Midwest
where virtually all the production capacity is located) to
make their way to California.
Since there is no quick or effective way to send ethanol to
California as of yet, more time is needed to develop the proper ethanol
delivery infrastructure. One of the amendments I will be sending to the
desk essentially delays the beginning of this by an additional year to
give us the time to get the infrastructure.
This is why it is important. Because moisture causes ethanol to
separate from gasoline, this fuel additive cannot be shipped through
traditional gasoline pipelines. So it needs a whole new infrastructure.
Ethanol needs to be transported separately by truck, by boat, and by
rail, and blended into gasoline after arrival. Unfortunately, this
makes the 1- to 3-week delivery time from the Midwest to either coast--
either to California and the west coast, or to the east coast--
dependent upon good weather conditions as well as
[[Page S2509]]
available ship, truck, and train equipped to handle large amounts of
ethanol. Again, this is a tripling of the ethanol use in America over
the next 9 years.
I believe everyone outside of the Midwest will have to grapple with
how to bring ethanol to their States. According to the California
Energy Commission:
The adequacy of logistics to deliver large volumes of
ethanol to California on a consistent basis--
This is the key. Gasoline is sold every day. You can't just import it
once and then forget it for 3 weeks. Every single day on a consistent
basis is uncertain.
A recent report sponsored by the same energy commission predicts that
there will be future logistical problems since the gasoline supply is
currently constrained with demand exceeding the existing infrastructure
capacity.
This means that California is already at its refining capacity. It is
actually at about 98 percent of refining capacity. If there is
insufficient transportation infrastructure to ship large amounts, this
just makes the problem worse.
I don't see any way for California to avoid experiencing a new energy
crisis. This one would be a direct result of an unnecessary Federal
requirement that increases our mandatory use of ethanol far beyond what
we need to use to meet the clean air standard.
The fact that there are limited numbers of suppliers in the ethanol
market reminds me of the situation with electricity a year ago when
prices soared in the West because of a few out-of-State generating
firms dominating the market. What do I mean by that?
According to the GAO, the largest ethanol producer is Archer Daniels
Midland. That is this company. They have a 41-percent share of the
ethanol market. The entire ethanol market really consists of these
companies: Minnesota Corn Producers, 6 percent; Williams Bio-Energy, 6
percent; Cargill, 5 percent; High Plains Corporation, 4 percent; New
Energy Corporation, 4 percent; Midwest Grain, 3 percent; and, Chief
Ethanol, 3 percent.
These eight companies corner the market on ethanol. There is a market
concentration of ethanol. That is a danger signal for all of us--a
concentrated market, and a huge mandate that triples.
ADM has a 41-percent market share. The top eight firms have a 71-
percent market share. The GAO finds their market share to be ``highly
concentrated.''
How can those in the West who suffered last year believe these firms
will not abuse their market power to drive prices up? If we learned
anything from the energy crisis last year, it is that when there is not
an ample supply or adequate competition in the marketplace, prices will
soar, and consumers will pay.
Mr. President, I ask unanimous consent to have printed in the Record
an op-ed by Peter Schrag that appeared in the Sacramento Bee on January
30.
There being no objection, the material was ordered to be printed in
the Record, as follows:
[From the Sacramento Bee, Jan. 30, 2002]
Can California Avoid the Next Energy Mess?
(By Peter Schrag)
The two sets of terms aren't corollaries, but close enough.
The Bush administration has ruled that without an
``oxygenate'' additive such as ethanol or MTBE, now being
phased out because of water pollution problems, California
gasoline won't burn cleanly enough to meet air-quality
standards. It thus won't give the state a waiver from the
federal requirement. But as a leading environmentalist says,
the decision is based a lot more on political science than
science. And it could cost California motorists close to a
half-billion a year.
And that's where ADM comes in. The monster agribusiness
company, which calls itself supermarket to the world, markets
about half the ethanol produced in this country. ADM's
contributions to politicians of both parties--some $4.5
million in the 1990s, plus some $930,000 in soft money in the
2000 election cycle alone, including $100,000 for the Bush
inauguration last year--put it ahead of Enron on many lists
of political-influence peddlers.
The investment, bolstered by intensive lobbying from
Midwest farmers, is paying off handsomely. The president says
that ethanol, a ``renewable'' fuel that comes mostly from
corn, not only reduces emissions but also fosters energy
independence.
The claim is dubious. Many studies indicate that ethanol,
while reducing carbon monoxide emissions, increases the
emission of smog-producing and other toxic compounds. A 1999
report commissioned by the U.S. Environmental Protection
Agency itself called for an end to the requirement. That, the
panel said, ``will result in greater flexibility to maintain
and enhance emission reductions, particularly as California
pursues new formulation requirements for gasoline.
The Sierra Club, the Natural Resources Defense Council, the
Clean Air Trust and other environmental groups echo the
findings. But Washington hasn't paid much attention. Despite
evidence that ethanol has contributed nothing to energy
independence, every gallon of gas with ethanol gets a 5.4-
cent federal subsidy (without costs $600 million a year in
federal highway funds). And as MTBE is being phased out--in
California, Gov. Gray Davis has set Jan. 1, 2003, as the
deadline--ADM and other ethanol producers stand to gain
handsomely.
Davis has lobbied vigorously for a waiver of the ethanol
requirement, arguing, with considerable evidence, that
California's auto and fuel standards will achieve the same or
even better results without ethanol. He's also suing the
federal EPA.
According to a North American Free Trade Agreement claim by
Methanex Corp., a Canadian producer of MTBE, Davis himself
got $200,000 from ADM during the 1998 gubernatorial campaign
and allegedly was flown to ADM headquarters in Decatur,
Ill., to meet with company officials. MTBE didn't have to
be phased out, Methanex says; the problem is not the
compound but the flawed underground tanks from which it
leaks. Davis' phaseout order, says the claim, suggests
still more influence peddling.
But in this case, ADM's investment hasn't paid off. There's
been overwhelming pressure in California, as elsewhere, to
get MTBE out of gasoline as quickly as possible. Davis is not
doing ADM's bidding; he's trying to straddle a line between
cleaner water and higher gas prices. Chances are he'll extend
the MTBE phaseout and try to negotiate with Congress for (at
least) more flexibility on ethanol.
Unlike Enron, ADM is not likely to implode; there's no sign
of accounting shenanigans, no ``partners'' where red ink can
be hidden. But six years ago, ADM was forced to pay $100
million in what was then the largest price-fixing fine ever
imposed. In 1998, three of its senior executives, including
Chief Operating Officer Michael Andreas, son of former board
chairman Wayne Andreas, were sentenced to prison.
The case, said a federal appeals court, reflects ``an
inexplicable lack of business ethics and an atmosphere of
general lawlessness. . . . Top executives at ADM and its
Asian co-conspirators . . . spied on each other, fabricated
aliases and front organizations to hide their activities,
hired prostitutes to gather information from competitors,
lied, cheated, embezzled, extorted and obstructed justice.''
These are not the kind of guys you want to depend on when you
fill your tank.
California's gasoline situation will probably never become
the crisis that electricity was last year--and in this case,
no one can blame the state or its politicians. But if
something doesn't give before the end of the year, the state
will not only be paying for ethanol it doesn't need, but also
be subject to sudden supply shortages.
California may be able to produce some of its own ethanol,
but most will have to come from the Midwest, either by ship
(down the Mississippi, which sometimes freezes) or by train.
Without a federal waiver, every gallon of ethanol not
available at the refinery means a shortage of 14 gallons of
gas. If ever there was a price-spike formula, this one is it.
Last week, California's Republican gubernatorial candidates
once again rehashed last year's energy crisis. Somebody ought
to start asking what they'd do about the next one.
Mrs. FEINSTEIN. Mr. President, in this article, Schrag mentions:
Now that ``energy crisis'' and Enron have become household
words, Californians had better get familiar with ethanol and
Archer Daniels Midland.
ADM is already an admitted price-fixing firm. Three of its executives
have served prison time for colluding with competitors.
In 1996, ADM pled guilty and paid a $100 million fine for conspiring
to set the price of an animal feed additive. That is the company that
has a 41-percent share of ethanol.
The ethanol industry tells us they will be able to produce enough
ethanol to meet future demands under this mandate. But what if some of
the planned ethanol plants fail to be built? This is a key point.
Plants could be delayed, or not coming online at all. We are finding
this with the electricity-generation facilities right now in
California. Plants that said they were going to come in, because of the
economy, or because of their own financial conditions, or one thing or
another, have decided no--they are not really going to go ahead with
it. What is to preclude that same thing from happening with respect to
ethanol? The answer to the question is nothing precludes it.
[[Page S2510]]
The GAO reports:
Projected capacity may be lower if some plants cease
production, plants under construction don't come online in
time, or some new plants' plans do not materialize.
The ethanol industry is asking this Nation to make a blind leap of
faith that there will be a sufficient amount of ethanol in the future.
In fact, projections of the future domestic ethanol supply are based
upon numbers supplied by ethanol producers themselves. We are taking a
very big risk here. We should know it.
I am also particularly concerned about the long-term effect of nearly
tripling the amount of ethanol in our gasoline supply. What effect will
this have on our environment? What are the health risks of ethanol?
The answers are truthfully largely unknown. That is the rub, too. I
believe it is bad public policy to mandate an amount of ethanol that is
way above what is required to meet clean air standards before
scientific and health experts can fully investigate the impact of
ethanol on the air we breathe and the water we drink.
There was a 2-percent oxygenate requirement put in some time ago. One
of the oxygenates that was chosen was MTBE. Now we find that MTBE has
contaminated 10,000 wells in California, the water supply for Santa
Monica, the Santa Clara Valley reservoirs, Lake Tahoe, and a number of
other places in California. We now find that MTBE may well be a human
carcinogen. We learned all of this, the horse is out, and the barn door
is shut. Now we are going to do the same thing with respect to ethanol.
Just what are the environmental ramifications of more ethanol in our
fuel supply?
Although the scientific opinion is not unanimous, evidence suggests
that, one, reformulated gasoline with ethanol produces more smog
pollution than reformulated gas without it. We have reformulated
gasoline. That is why we don't need to use it. The finding is that
there is more smog pollution with ethanol than if States simply went to
reformulated gasoline.
Second, ethanol enables the toxic chemicals in gasoline to seep
further into ground water and even faster than conventional gasoline.
Ethanol is also made out to be an ideal renewable fuel, giving off
fewer emissions. Yet on balance, ethanol can be a cause of more air
pollution because it produces smog in the summer months. Smog is a
powerful respiratory irritant. It affects a large amount of the
population. It has an especially pernicious effect on the elderly, on
children, and individuals with existing respiratory problems such as
asthma. And asthma is going up in America. It is time we begin to ask
why.
A 1999 report from the National Academy of Sciences found:
[T]he use of commonly available oxygenates [like ethanol]
in [Reformulated Gasoline] has little impact on improving
ozone air quality and has some disadvantages. Moreover, some
data suggests that oxygenates can lead to higher Nitrogen
Oxide (NOX) emissions.
Nitrogen oxides are known to cause smog.
The National Academy report also found that ethanol-blended gasoline
will ``lead to increased emissions of acetaldehyde''--a toxic
pollutant.
Thus, ethanol is both good and bad for air quality. And we triple it.
That is the unknown. That is the big step into the unknown we are
taking. To me, it would make sense to maximize the advantages of
ethanol and minimize the disadvantages. This bill, this mandate does
not do that. This is exactly why States should have flexibility to
decide what goes into their gasoline in order to meet clean air
standards. Ethanol should not be mandated, certainly not at this level.
Why are some forcing smog pollution into our air during the summer?
Evidence also suggests that ethanol accelerates the ability of toxins
found in gasoline to seep into our ground water supplies. The EPA Blue
Ribbon Panel on Oxygenates found that ethanol ``may retard
biodegradation and increase movement of benzene and other hydrocarbons
around leaking tanks.''
Now, benzene is a carcinogen. Just know what we are doing.
Let me quote the EPA Blue Ribbon Panel on Oxygenates. Ethanol ``may
retard biodegradation and increase movement of benzene and other
hydrocarbons around leaking tanks.''
According to a report by the State of California entitled, ``Health
and Environmental Assessment of the Use of Ethanol as a Fuel
Oxygenate,'' there are valid questions about the use of ethanol and its
impact on ground and surface water. An analysis in the report found
that there will be a 20-percent increase in public drinking water wells
contaminated with benzene if a significant amount of ethanol is used--a
20-percent increase in public drinking water wells contaminated with
benzene, a known carcinogen.
We are tripling the amount of ethanol, and we are tripling it when it
isn't needed to meet clean air standards. What kind of public policy is
this? It is egregious public policy. It is wrong public policy. If you
think I am passionate about it, you are right.
So what is the rush to force more ethanol on the American motorists
if it will only drive up the price of gasoline and produce mixed
environmental results?
On top of that, how can the Senate favor protecting the ethanol
industry from liability? And this is the clincher in this bill: They
are protected from liability. So if you get sick from it, if it
pollutes our wells, if benzene increases, you cannot sue. What kind of
public policy is this?
I urge my colleagues to look at pages 204 and 205 of the energy
legislation where a so-called safe harbor provision gives the ethanol
industry unprecedented protection against consumers and communities
that may seek legal redress against the harm ethanol may cause. I am
very pleased to say that my colleague, Senator Boxer from California,
will have an amendment which will eliminate this safe harbor provision.
More ethanol will force the Government to collect less gasoline tax
revenue for the highway trust fund. This is a very big consideration.
It is huge.
Let me argue this point. Ethanol is exempted from 5.3 cents of the
Federal motor fuels tax. The Congressional Research Service has
indicated that the ethanol mandate in this bill will divert $7 billion
over the 9 years away from the highway trust fund, which States use to
pay for essential transportation projects. And that is on top of the
cut that is in the Bush budget.
So per gallon of gasoline today, 18.4 cents goes into the trust fund.
With the tripled amount of ethanol, CRS estimates there will be a $7
billion loss in the highway trust fund over the next 9 years--a $7
billion loss. That is enough in itself to vote against this
legislation.
California is able to produce special gasoline that is the cleanest
burning gasoline in the country today. We meet clean air standards with
reformulated gasoline. The State only needs to use ethanol in the
winter months to meet clean air requirements. That is why the State has
continually asked the Federal Government for a waiver of the 2-percent
oxygenate requirement.
Yet time and time again, the ethanol industry has flexed its
political muscle in the White House, in the Senate, and in the House to
force California to use fuel additives the State does not need. This
time is no different. And it is clear to me that all of this is merely
serving to prop up an industry that would fall apart without
overwhelming Government subsidy and action.
I am very concerned about the repercussions this mandate may have on
the price and supply of gasoline. I cannot vote for this bill with this
mandate in it. It is bad public policy. It is egregious public policy.
The California Energy Commission again points out:
The combination of limited local capacity, restrained
imports, limited storage, and a strong demand, has caused the
California gasoline market to become increasingly unstable,
with wild price swings.
The bottom line is that my State's gasoline market is extraordinarily
volatile and vulnerable. And this is the fifth largest economic engine
in the world. People have to get to work, and gasoline fuels the
economy as well as automobiles. And we are going to do this to it?
In 1999, fires at Tosco and Chevron refineries during the summer
forced the price of gasoline to double in California.
This bill will strain California's gasoline supply even further with
a Federal
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ethanol mandate that risks plunging California and other States into
the next energy crisis. Every indicator I have seen points to this
ethanol requirement as having unanticipated side effects, such as
supply problems and resulting in higher gasoline prices for the
consumer.
So by passing this legislation, the Senate will be making
California's and the Nation's gasoline more expensive by mandating a
fuel additive with a negative value as an energy source and a mixed
value for the environment.
On balance, it makes no public policy sense. I want to make clear,
once again, my strong opposition to this greedy and misguided renewable
fuels requirement. The mandate is a dangerous step that could force
gasoline prices to soar, cause shortages of fuel, create more smog, and
usher in the next energy crisis.
Plain and simple, it is bad policy to charge all consumers more to
benefit a collection of very few ethanol producers. I hope this
commentary will begin an honest debate in the Senate about the ethanol
provisions of the Senate energy bill and what they will really do.
I know Senator Schumer is going to follow up on this. However, I take
this opportunity to indicate that there will be a number of amendments
from those of us on the west coast and those of us on the east coast.
We intend to press this debate. We do not intend to let this bill go
forward if we can prevent it.
I begin with one of my first amendments. Another diabolical thing in
this bill is essentially to state that if a waiver is provided, if a
State asks to waive--this is on page 195 of the bill--the
Administrator, in consultation with the Secretary of Energy, may waive
the renewable fuels requirement in whole or in part on petition by one
or more States by reducing the national quantity of renewable fuel
required under this section based on a determination by EPA, after
public notice and opportunity for comment, that implementation of the
requirement would severely harm the economy or the environment of a
State or a region or the United States; and that based on a
determination by the EPA Administrator, after public notice and
opportunity, there is an inadequate domestic supply or distribution
capacity to meet the requirement.
In simple English, this means that if there is an emergency, the
ethanol mandate can be temporarily suspended.
This is the rub: The bill, as currently drafted, gives EPA 240 days
in an emergency to make a decision. That is a good part of a year to
decide whether or not to grant a waiver. This is unconscionable. In
other words, if you can't obtain enough ethanol and you have an
emergency and you petition to waive it, it takes 240 days. What do you
do for 240 days?
This, in my view, is ridiculous. Can you imagine if in a few years
there is an ethanol shortage, there are problems getting enough ethanol
to New York or to California and our two Governors ask for a waiver and
we have to wait 240 days to get it? Our economy would take a
devastating blow if such a situation were to occur.
To make this waiver more reasonable, I am offering this amendment to
require the EPA to respond in a reasonable time to an emergency request
by a State for a waiver. This amendment will give the EPA 30 days to
rule on a waiver so consumers will not unduly suffer. By reducing the
time period, the Administrator will have not 240 days but 30 days to
decide whether or not an emergency waiver should be approved. We can
ensure that any price spikes or supply shortage will be as temporary as
possible.
I believe that 240 days is in there for a reason: Because if your
gasoline spikes in price, as we think it is, you can't stop it. It goes
on for the 240 days.
I will end my remarks. I reserve the right to come back for
additional remarks. One of the things I would like to go into is how
energy inefficient this ethanol proposal really is because ethanol
increases the need for gasoline, it does not reduce it. MTBE reduces
the amount of gasoline you need. So if you are short refinery capacity,
MTBE works to your advantage. Ethanol does exactly the opposite. If you
don't have that refinery capacity, you are stuck. It is a big problem.
I would like to do more on that, but at the present time I send an
amendment to the desk and yield the floor. I notice the distinguished
senior Senator from New York is here and will continue our opposition
to this ethanol mandate.
I yield the floor, if I might, to the Senator from New York.
The ACTING PRESIDENT pro tempore. Without objection, the pending
amendments are set aside and the clerk will report the amendment.
The assistant legislative clerk read as follows:
The Senator from California [Mrs. Feinstein] proposes an
amendment numbered 3114.
Mrs. FEINSTEIN. Mr. President, I ask unanimous consent that 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 reduce the period of time in which the Administrator may
act on a petition by 1 or more States to waive the renewable fuel
content requirement)
Beginning on page 195, strike line 19 and all that follows
through page 196, line 4, and insert the following:
``(B) Petitions for waivers.--
``(i) In general.--The Administrator, in consultation with
the Secretary of Agriculture and the Secretary of Energy,
shall approve or disapprove a State petition for a waiver of
the requirement of paragraph (2) within 30 days after the
date on which the petition is received by the Administrator.
``(ii) Failure to act.--If the Administrator fails to
approve or disapprove a petition within the period specified
in clause (i), the petition shall be deemed to be approved.
Amendment No. 3030 To Amendment No. 2917
The ACTING PRESIDENT pro tempore. The Chair recognizes the senior
Senator from New York.
Mr. SCHUMER. Mr. President, I thank my colleague for her strong and
eloquent remarks. I ask unanimous consent to lay aside the pending
amendment and call up amendment No. 3030 and ask for its consideration.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered. The clerk will report.
The assistant legislative clerk read as follows:
The Senator from New York [Mr. Schumer] proposes an
amendment numbered 3030.
Mr. SCHUMER. Mr. President, I ask unanimous consent that 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 strike the section establishing a renewable fuel content
requirement for motor vehicle fuel)
Beginning on page 186, strike line 9 and all that follows
through page 205, line 8.
On page 236, strike lines 7 through 9 and insert the
following:
is amended--
(1) by redesignating subsection (o) as subsection (p); and
(2) by inserting after subsection (n) the following:
``(o) Analyses of Motor Vehicle Fuel Changes''.
The ACTING PRESIDENT pro tempore. The Senator from New York.
Mr. SCHUMER. Mr. President, I compliment my colleague from California
for her fine remarks on this issue, which I share. We have a serious
problem in this bill, a problem that most Members don't know about.
There is a hidden gas tax in this bill. It is not going to be hidden
after today.
This bill will raise the cost of gasoline on average in America more
than the nickel gas tax did back in 1993, when I was not a Member of
this distinguished body but which caused so much controversy.
I urge my colleagues to pay careful attention over the next few days
as many of us bring up this issue. It is complicated. It is anti-free
market, I say to my friend from Oklahoma who I know has been a strong
defender of free market principles, when I agree with him and when I
disagree with him. It is something that should not be in this bill. I
think it could be the death knell of this bill, as the Senator from
California said. I myself--and I know many others--cannot vote for this
final bill with this provision included.
Let me express my concerns about this unprecedented new ethanol
mandate provision which was quietly inserted into the Senate energy
bill a few weeks ago without any debate. The provision accomplishes two
goals not being disputed by my amendment. One
[[Page S2512]]
is banning the use of MTBEs which has resulted in groundwater pollution
all over the country. The second is scrapping the oxygenate mandate
that led so many States to make such heavy use of MTBEs in the first
place.
The proposal in the bill provides an anti-backsliding provision to
require continued efforts on clean air. Though those provisions could
be stronger, we are not opposing any of those parts of the bill. But
beyond those provisions, this new amendment adds an astonishing new
anti-consumer, anti-premarket requirement that every refiner in the
country, regardless of where they are located, regardless of whether
the State mandates it or not, regardless of whether the State chooses a
different path to get to clean air, must use an ever-increasing volume
of ethanol. If they don't use the ethanol--and this is the most amazing
part of the bill--they still have to pay for ethanol credits.
Now, our amendment--the amendment I have introduced--would simply
strike that provision, plain, simple, and clean. As to the provision we
are striking, simply put, what it does is it requires all gasoline
users, our consumers, to pay for ethanol whether or not they use it. It
is nothing less than an ethanol gas tax levied on every driver--the mom
who is driving the kids to school, a truck driver who earns a living.
Every gasoline user in this country will pay.
Under this ethanol gas tax, gas prices will rise significantly, even
under the best of circumstances. I am first going to bring this part
out because I think this part will get the most attention in terms of
people understanding how bad this provision is. Using Department of
Energy numbers, impartial Hart/IRI Fuels Information Services estimates
that gasoline prices will increase by a staggering 4 cents to 9.7 cents
per gallon, depending on the region. Should there be market
disruptions, which my friend from California brought up, the price
would go much higher because without the gasoline they need, the
ethanol they need, boom, it goes way up. It also favors some regions
over others, so that California would pay the most--about 9.7 cents a
gallon. So would New England. My State of New York would pay about 7
cents. But every part of the country would pay more--every single part.
Even in the Midwest, where there is lots of ethanol production, the
average price of gasoline would go up 4 or 5 cents a gallon.
Listen to this, my colleagues. In the heart of farm country--and I
want to help farmers, as I think I have shown in my few years here--
both Iowa and Nebraska had a referendum on the ballot to require this
kind of provision and rejected it. Well, if the voters in the heart of
farm country, in the heart of ethanol country, were against this
provision, how are we in the Senate imposing this on every part of the
country? I don't know what their philosophy is, but let me read from
the Des Moines Sun Register:
An ethanol mandate would deny Iowans a choice of fuels and
short circuit the process of establishing its own worth in
the marketplace. The justification is to marginally boost the
price of corn. If that were the goal, other measures would be
far more effective.
How about the Quad City Times editorial entitled ``Ethanol Only
Proposal Doesn't Help Consumers.''
How about the Grand Island (Nebraska) Independent: ``Ethanol use
should not be a forced buy.''
How about the Omaha World Herald: ``More Alcohol, Less Choice.''
These are all editorials. I don't know about these newspapers. I
doubt they are philosophically like the New York Times; yet they are
thinking this is a bad proposal. I want to read for you about your
States. This is a low estimate, but this is how much the price of
gasoline will go up if this provision is kept in the bill, if our
amendment is defeated. I will read every State. I think you ought to
know it. This is important. The minimum is 4 cents, and in many it is 4
cents. In many it is higher. Keep your ears perked. Alabama would go up
4 cents a gallon; Alaska, 4 cents; Arizona, 7.6 cents; Arkansas, 4
cents; California--the senior Senator from California is here--9.6
cents a gallon; Colorado, 4 cents; Connecticut, 9.7 cents a gallon;
Delaware, 9.7 cents; District of Columbia, 9.7 cents; Florida, 4 cents
a gallon; Georgia, 4 cents a gallon; Hawaii, 4 cents a gallon; Idaho, 4
cents; Illinois--I just read in today's newspaper how the price of
gasoline is going through the roof in Illinois. That would be an
additional 7.3 cents a gallon. We are going to tell the drivers in
Chicago and Springfield and East St. Louis, where the price is through
the roof already, we are going to impose a mandate that will raise
their price 7.3 cents a gallon. How can we?
Indiana, 4.9 cents; Iowa, 4 cents; Kansas, 4 cents; Kentucky, 5.4
cents; Louisiana, 4.2 cents a gallon; Maine, 4 cents; Maryland, 9.1
cents; Massachusetts, 9.7 cents a gallon; Michigan, 4 cents a gallon;
Minnesota, 4 cents a gallon; Missouri, 5.6 cents a gallon; Mississippi,
4 cents; Montana, 4 cents; Nebraska, 4 cents a gallon for a product we
don't make in New York, that we might not even use?
I have spoken to some of the refiners in our area. They think we can
meet the clean air mandate in a lot cheaper and better way. If we
choose to, we still have to buy the ethanol credit. My goodness.
Nevada, 4 cents; North Carolina, 4 cents; North Dakota, 4 cents;
Ohio, 4 cents; Oklahoma, 4 cents; Oregon, 4 cents; Pennsylvania, 5.5
cents a gallon; Rhode Island, 9.7 cents; Tennessee, 4 cents a gallon;
Texas, 5.7 cents a gallon; Utah, 4 cents a gallon; Vermont, 4 cents a
gallon; Virginia, 7.2 cents a gallon; Washington, 4 cents a gallon;
West Virginia, 4 cents; Wisconsin, 5.5 cents a gallon; Wyoming, 4 cents
a gallon.
The reason it varies, of course, is the availability of ethanol. It
is very hard to ship. You can't create a pipeline--even though that
could be expensive to do--the way you can for oil. So the ethanol has
to be reduced, and you can see it is mainly in a few States in the
heartland, where nice, hard-working people live, in the middle of the
country.
If you are far away from these ethanol plants, it is hard to get to;
it is hard for you to get the ethanol. It usually has to be produced,
put on a truck, a barge, sent down to Mississippi, and then, by boat,
sent all around the country and then loaded back, put on a truck, and
put into the gasoline. You can see why it is so expensive.
Now, that is in normal times. Should there be market disruptions, of
which you can be sure-as-shooting, if we are going to impose this huge
mandate requiring more ethanol to be added to gasoline than we produce
in the United States right now, there are going to be disruptions and
the price of gasoline could double.
This is one of these quiet little amendments that could come back to
haunt every one of us. I have been here in the Congress--only 4 years
in the Senate but 18 in the House. Every so often, there is an
amendment and people vote for it and don't pay much attention, and a
year later the public gets wind and says: What the heck have those guys
done? Everybody here says: I didn't know or, oh, we didn't realize it.
The Senator from California, I, and the others joining us in this
debate are putting you on notice: This is one of those amendments.
Beware. If there was ever an amendment quietly put in a bill that
should have a skull and crossbones on it, be careful, this is it. So
pay attention.
Now, my State has already banned the use of MTBEs. We don't take that
out in this bill. So have 12 other States, including Arizona,
California, Colorado, Connecticut, Illinois, Kansas, Michigan,
Minnesota, Nebraska, New Hampshire, South Dakota, and Washington. All
have banned MTBEs. A number of other States are in the process of
taking action as well because MTBEs pollute the ground water.
Every one of those States that has banned MTBEs is going to be in an
impossible dilemma. Their citizens are demanding they ban MTBE, but
with the oxygenate requirement in place, they cannot successfully do
so.
Last year President Bush's administration denied California's
petition to waive the oxygenate requirement, despite the State's
ability to comply with air quality standards without it. In New York,
we are in the same position. This denial forced the State to defer its
critical ban on MTBE and suffer ground water contamination. New York
State is now considering requesting a waiver, and I expect their
request will be met with the same denial.
We are between a rock and a hard place. Our citizens' health and the
environment are being held hostage to the desire of the ethanol lobby
to make
[[Page S2513]]
ever larger profits. We all know one company is way ahead of everybody
else in producing ethanol. That was brought out by my colleague from
California. I am not going to bring it out--maybe I will since we are
at the beginning of the debate.
This chart, which was prepared by my colleague from California, shows
that 41 percent of the ethanol comes from one company. This is what we
are doing in this great free market, capitalistic economy: We are
requiring everybody to buy this stuff, and one company has 41 percent
of the market--one company.
We are setting ourselves up for a huge fall, the kind of price spikes
we have seen occasionally in California, in Illinois, and in other
places. We are going to see them everywhere. They are going to pop up
like weeds if we increase the demand for ethanol when only one company
is making it and there is a natural bottleneck. It is not quite like
electricity, but it is not that far away, electricity being an actual
monopoly.
The bottom line is for many States that are outside the Corn Belt and
lack the infrastructure to transport and refine ethanol, the most
efficient method of achieving clean air goals will be to reformulate
gasoline without using large amounts of ethanol.
Again, I have talked to leaders in the refining industry in my area,
and they believe they can do it and do it rather easily. States outside
the Corn Belt that do not currently use much ethanol will have to pay
to have the ethanol, as I say, trucked across the country or floated on
barges to the Gulf of Mexico and loaded on to tankers.
Those States will also have to pay to retrofit their refineries.
Every refinery that does not now use ethanol will have to be refitted
to add ethanol to the gasoline. Both of these would represent
significant increases in costs for refineries supplying my State.
Retrofitting would cost millions of dollars, and under this bill New
York would incur millions more in ethanol transportation costs.
What is the public policy for mandating the use of ethanol? I have
not heard one. If you believe ethanol works, as the Iowa, Nebraska, and
Illinois newspapers said, let the market determine it. This is a
mandate that sort of assumes we know ethanol is best for everybody, and
most people do not believe it is.
We all know what is going on here. The Senator from California
mentioned it. It is the ethanol lobby, their power. But we also have
one other thing. They made their deal with the petroleum industry, and
so we have this provision that does not allow one to sue. I am
surprised that so many people on both sides of the aisle who have
maintained the right to sue in every other area now say: Never mind.
The provision is renewable fuels safe harbor.
There is another reason, too, and this is probably the most
legitimate reason. I know many of my colleagues from the Midwest want
to help their farmers who are suffering. We know that. I want to help
those farmers. I have voted for large amounts of agricultural subsidies
to help the farmers in the West and the South with their row crops. I
did not used to do that when I was in the House, but as I traveled
around my State, I learned the burdens that farmers face.
It is a heck of a lot different if the Government makes a collective
decision to help support the price of a crop to keep farmers in
existence than an inefficient, jerry-built contraption that does not
just make this what the Government does but, rather, forces every
consumer to pay. When we have done agricultural subsidies, the
rationale has been cheap food. This is not cheap gasoline. This is more
expensive gasoline, and it absolutely makes no sense to help our
farmers in this way. If it did, I suspect this amendment would have
been debated in the open, but instead, as I said, there has been no
debate.
I, frankly, wrestled with my conscience whether to go forward. I do
want to help my colleagues in the farm areas, but this one was so far
off the charts and so deleterious to my constituents, in terms of
raising the price of gasoline, that I just could not come to do that.
I say to my colleagues from the Midwest, figure out better ways we
can help the farmers, and I say that as somebody who has been
supportive of doing that before.
Let me show my colleagues how crazy this proposal is. Currently,
refiners across the Nation use 1.7 billion gallons of ethanol. That is
what refiners use right now. Starting in 2004, a mere 2 years away,
they would be required to use 2.3 billion gallons of ethanol.
Right away we are asking them to use a lot more ethanol. If the
production does not happen, we know what is going to happen: a price
spike.
We ratchet up that number to 5 billion gallons of ethanol in 2012 and
increase it every year by a percentage equivalent to the proportion of
ethanol in the entire U.S. gas supply after 2012 in perpetuity. That
means that from 2012 on, the Nation's ethanol producers will have a
guaranteed annual market of over 5 billion gallons, which every
gasoline consumer in this country will pay at the pump.
It will stifle any development and new ways of finding cleaner
gasoline and cleaner burning fuels. It means if someone comes up with a
better way, it does not matter. It means a huge investment in
infrastructure. I would rather have that money go to build our
highways, for God's sake, than to build new ethanol refineries.
In my State, our highways are hurting, and we are going to be
debating in the appropriations bill whether to cut Federal highway
funding.
The ethanol mandate will reduce the amount of money that goes into
the highway trust fund. In addition, it will cost our consumers more as
well. If we want to build a big infrastructure, do not create a whole
new ethanol infrastructure which the market is not demanding, build
more highways. It makes no sense.
One other point I have made already, this safe harbor provision is
sort of the cherry on top of the icing on top of the cake, the evil
cake it is. The safe harbor provision gives unprecedented product
liability protection against consumers and communities that seek legal
redress from the manufacturers and oil companies that produce and
utilize defective additives in their gasoline. Not just ethanol; all of
them. That was the sort of deal, I guess, that was made.
So for those who believe in their consumers, God forbid, and a
refinery makes a huge mistake and puts something terrible in the
gasoline that either pollutes the air or is defective, you cannot sue.
We have held that insurance reform be over the right to sue. Much
legislation ends up shipwrecked on the shoals of the battle of tort
reform, and yet in this bill we say not only never mind, we put in a
safe harbor provision that makes one's jaw drop.
The Presiding Officer was out of the room, but as I stated, it will
raise the cost of gasoline in his great State of Delaware some 9.7
cents a gallon by the time this is implemented, something I think the
drivers in Dover, Wilmington, Rehoboth, and all the other beautiful
cities of Delaware would dare not want to pay.
For consumers throughout this country, this ethanol gas tax is a one-
two punch. First, consumers will be forced to pay more at the pump to
meet arbitrary goals that boost the sale of ethanol but are not
necessary to achieve the bill's air quality goals.
Second, consumers will face restrictions from suing manufacturers and
oil companies, and they will have less incentive to ensure the
additives they manufacture and use are safe. The provision denies
consumers and communities appropriate redress, eliminates an important
disincentive to pollute, and creates a dangerous precedent for future
environmental policy.
In conclusion, I support the anti-backsliding air quality provisions.
I want to see our air cleaner without dirtying our ground water. I do
not want to be put between that rock and hard place, but I strongly
oppose creating a mandatory ethanol market, whether it is used or not,
and providing the producers of that ethanol with extraordinary legal
protections to boot. The ethanol industry already benefits from
billions of dollars in direct farm subsidies and a 54-cent-per-gallon
subsidy. If my colleagues want to subsidize that more, let us debate
that in the Senate. Who knows? I might support it. But do not make our
drivers pay for it and do not mandate it.
Ethanol, which is twice as expensive as gasoline, right now would not
be
[[Page S2514]]
economically viable but for the massive Federal subsidies it already
receives. On top of that, with the phaseout of MTBEs, regardless, the
demand for ethanol by free market processes is going to go up. States
near the Corn Belt will probably use more ethanol. So ethanol is in
good shape.
All that is not enough to satisfy the ethanol lobby. As I said, do
not take the word of a New Yorker or a Californian. Look at the voters
in Iowa and Nebraska, the heartland--where if anyplace on the face of
this continent or in this country would benefit from this mandate, they
would--they both recently defeated efforts in those States to create a
statewide ethanol mandate.
They knew, as I hope we will learn in this body, that mandated
ethanol is an indefensible public policy and will unnecessarily hurt
consumers all across the country. To my colleagues, defeat the ethanol
gas tax.
I yield the floor.
The PRESIDING OFFICER (Mr. Carper). The Senator from California is
recognized.
Mrs. FEINSTEIN. Mr. President, I thank the Senator from New York for
his comments. I thought they were excellent. I appreciate him naming
every State that will have an effective gas tax, and stating that this
methanol mandate is a tax hike anyway one looks at it. I do not think
there is any doubt there is going to be an increase in gas prices. I do
not doubt them at all.
I also appreciate his concern for farmers. I come from a State that
is the largest farming State in the Union. I have spent time in the
central valley of California. I know what farmers go through, and I
appreciate it.
I am also faced with the problem in my State of forcing a tax hike
for something that we do not need to meet clean air standards, which
has questions about its environmental value as well as its real
questions about what it might do to the public health, that prevents
anybody's right to sue if there is a real hazard that comes about.
This, to me, is unbelievable.
I will take a couple of moments on the subject of what ethanol does
in gasoline. I mentioned in my remarks that ethanol is also
fundamentally different from MTBE because the two oxygenated additives
react differently when mixed with gasoline. I think this is an
important point because this is not going to help the energy shortage.
It is going to exacerbate it.
The same amount of ethanol, as opposed to MTBE, actually contracts
fuel so it takes more to produce the same amount of gasoline.
The report, sponsored by the California Energy Commission, predicts
replacement of MTBE by ethanol will result in a supply shortfall of 5
to 10 percent for the California gasoline pool as a whole. Thus,
California's gasoline supply is not going to go as far as it did.
That is critical because we are at 98 percent of refining capacity.
So I do not know how we meet the need without a huge price spike that
will result from a shortage of gasoline, and that is why I think for my
State this mandate actually produces a very egregious gas spike. It
also can impact refineries very critically.
So what I have tried to point out today is that essentially this
mandate triples the amount of ethanol from 1.7 billion gallons used
nationally today to 5 billion gallons nationally by 2012.
Secondly, because of the way the credit situation is set up, one pays
whether they use it or not.
Thirdly, what it does to gas prices.
Fourthly, the market concentration of ethanol: 41 percent from one
company, 71 percent from eight companies. That in itself creates a
problem that if there is a shortfall the price can be manipulated.
I have mentioned the environmental problems, that we can anticipate
the smell in the summer months will get worse, not better, because of
the use of ethanol. I also indicated that essentially over the 9 years
everybody should know that this is a $7 billion cut in the highway
trust fund.
There is another point I would like to make. The ethanol mandate
essentially helps the producer. Only 30 percent goes to the farmers,
and about 70 percent goes to producers. This is a windfall for those
companies, any way you look at it. The New York Times ran an editorial
pointing this out, mentioning that an energy economist estimated 30
percent of the cost will end up in the pockets of farmers, while about
70 percent will go to the processors, such as ADM. This mandate is a
ridiculously expensive way to subsidize farmers.
Additionally, it cuts imports by about only 9,000 barrels, of about 8
million barrels. So no one can say this saves a great deal of our
energy requirements related to fuel.
I ask unanimous consent this be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
[From the New York Times, July 8, 1994]
This Clean Air Looks Dirty
The Environmental Protection Agency has effectively ordered
refiners to add corn-based ethanol to make gasoline
environmentally friendly. But the added ethanol will not
clean the air beyond what the 1990 Clean Air Act would
already require; nor will it, as advocates claim, raise farm
income very much or significantly cut oil imports.
What the E.P.A.'s rule will do is take money from consumers
and taxpayers and hand it over to Archer Daniels Midland,
which produces about 60 percent of the nation's supply of
ethanol. It is certainly no coincidence that A.D.M.'s chief
executive, Dwayne Andreas, is a major political contributor;
he donated $100,000 to a recent Democratic fund-raising
dinner. The Clean Air Act requires high-smog areas to phase
in use of ``reformulated'' gasoline whose weight is at least
2 percent oxygen; the goal was to reduce pollution by
replacing gasoline with oxygenates. The E.P.A. order would
now add another requirement: 30 percent of the oxygenates
would have to come from ``renewable'' resources--which in
reality means corn-based ethanol.
Because the oxygen content of reformulated gasoline remains
unchanged, the order will not reduce smog-creating emissions.
But by forcing refiners to use ethanol rather than less
expensive oxygenates like methanol, the rule will drive up
the cost of gasoline. Indeed, ethanol remains a high-cost
additive even though it benefits from substantial tax breaks.
And some experts argue that ethanol may be environmentally
damaging because coal used in producing it contributes to
carbon dioxide emissions, adding to global warming.
David Montgomery, an energy economist for Charles River
Associates, estimates that only 30 percent of the cost of
ethanol will wind up in the pockets of farmers while about 70
percent will go to processors like A.D.M. So the rule is a
ridiculously expensive way to subsidize farmers. And the
addition of ethanol will cut imports by only 9,000 barrels
out of about eight million barrels a day.
Carol Browner, head of the E.P.A., asserts that the policy
will spur development of renewable energy sources. But the
impact looms small when stacked against the obvious defects.
President Clinton is twisting high-minded environmental
promises into low-minded favors for special interests.
additional gasoline costs from proposed renewable fuels standard for
years 2003-2007 (average increase in $/gal)
Hart Downstream Energy Services (Hart) compiled the
following information based on the recent analysis from the
Department of Energy, Energy Information Administration
(EIA). According to EIA's analysis, the impact of the fuels
provisions contained in S517 will cause conventional gasoline
prices to rise by 4 cents per gallon, and Reformulated
Gasoline (RFG) prices to rise by approximately 9.75 cents per
gallon.
Assuming annual growth in U.S. gasoline demand of 2
percent, Hart measured the impact on each individual state by
calculating the total gasoline cost increase and the total
gallons of conventional gasoline and/or RFG sold in each
state.
------------------------------------------------------------------------
Gasoline
State price
increase
------------------------------------------------------------------------
Alabama..................................................... 0.04
Alaska...................................................... 0.04
Arizona..................................................... 0.076
Arkansas.................................................... 0.04
California.................................................. 0.096
Colorado.................................................... 0.04
Connecticut................................................. 0.097
Delaware.................................................... 0.097
District of Columbia........................................ 0.097
Florida..................................................... 0.04
Georgia..................................................... 0.04
Hawaii...................................................... 0.04
Idaho....................................................... 0.04
Illinois.................................................... 0.073
Indiana..................................................... 0.049
Iowa........................................................ 0.04
Kansas...................................................... 0.04
Kentucky.................................................... 0.054
Louisiana................................................... 0.042
Maine....................................................... 0.04
Maryland.................................................... 0.091
Massachusetts............................................... 0.097
Michigan.................................................... 0.04
Minnesota................................................... 0.04
Missouri.................................................... 0.056
Mississippi................................................. 0.04
Montana..................................................... 0.04
Nebraska.................................................... 0.04
New Hampshire............................................... 0.084
New Jersey.................................................. 0.091
New Mexico.................................................. 0.04
New York.................................................... 0.071
Nevada...................................................... 0.04
North Carolina.............................................. 0.04
North Dakota................................................ 0.04
Ohio........................................................ 0.04
Oklahoma.................................................... 0.04
Oregon...................................................... 0.04
Pennsylvania................................................ 0.055
Rhode Island................................................ 0.097
South Carolina.............................................. 0.04
South Dakota................................................ 0.04
Tennessee................................................... 0.04
[[Page S2515]]
Texas....................................................... 0.057
Utah........................................................ 0.04
Vermont..................................................... 0.04
Virginia.................................................... 0.072
Washington.................................................. 0.04
West Virginia............................................... 0.04
Wisconsin................................................... 0.055
Wyoming..................................................... 0.04
Aggregate Annual Cost Impact of All 50 States: $8,389
Billion
------------------------------------------------------------------------
Source: Energy Information Administration (EIA), ``Impact of Renewable
Fuels Provisions of S1766,'' March 12, 2002. Compiled by Hart
Downstream Energy Services.
Amendment No. 3115 to Amendment No. 2917
Mrs. FEINSTEIN. I send another amendment to the desk which delays the
beginning date from 2004 to 2005. It is sent to the desk on behalf of
Senator Boxer and myself.
The PRESIDING OFFICER. Without objection, the pending amendments are
set aside.
The clerk will report.
The legislative clerk read as follows:
The Senator from California [Mrs. Feinstein], for herself
and Mrs. Boxer, proposes an amendment numbered 3115.
Mrs. FEINSTEIN. 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 relating to the renewable content of
motor vehicle fuel to eliminate the required volume of renewable fuel
for calendar year 2004)
On page 189, line 3, strike ``2004'' and insert ``2005''.
On page 189, line 5, strike ``2004'' and insert ``2005''.
On page 189, line 8, strike ``2004'' and insert ``2005''.
On page 189, in the table between lines 10 and 11, strike
the item relating to calendar year 2004.
On page 193, line 10, strike ``2004'' and insert ``2005''.
On page 194, line 21, strike ``2004'' and insert ``2005''.
On page 196, line 17, strike ``2004'' and insert ``2005''.
On page 197, line 4, strike ``2004'' and insert ``2005''.
On page 199, line 4, strike ``2004'' and insert ``2005''.
On page 199, line 17, strike ``2004'' and insert ``2005''.
Mrs. FEINSTEIN. This is modest and delays the implementation of the
ethanol mandate by a year, eliminating a requirement to use 2.3 million
gallons of ethanol in 2004 and will give States more time to make
essential infrastructure, refinery, and storage improvements.
This is an essential modification since virtually all ethanol, as has
been explained, comes by tank--not pipeline--from the Midwest.
Although the ethanol industry says they can meet the future demand,
virtually every single expert we have talked with has said delivery
interruptions and shortfalls are likely, if not inevitable.
I ask I be included as a cosponsor of the amendment of Senator
Schumer to strike the renewable fuels section of this bill.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mrs. FEINSTEIN. Mr. President, I send to the desk to be printed in
the Record an editorial from the Sacramento Bee entitled ``Highway
Robbery,'' which essentially characterizes what this does to the
highway trust fund, how it hurts the country, how energy experts show
that producing ethanol from corn requires more energy than the fuel
produces, and that the ethanol mandate would make the country more
fossil fuel dependent, not less.
There being no objection, the material was ordered to be printed in
the Record, as follows:
[From the Sacramento Bee, Apr. 8, 2002]
Highway Robbery--Corn Is for Eating, Not for Driving
Here's another piece of the ethanol idiocy in Washington:
Not only will Californians soon have to pay more for gasoline
laced with corn liquor, but as a result, we'll have less
money to alleviate congestion on our roads.
Blame this nonsense on Senator Majority Leader Tom Daschle,
D-S.D., and President Bush. They are pushing a provision for
the Senate energy bill that would require gasoline producers
to use rising amounts of ethanol. Ethanol is mostly made from
corn in states that Bush would dearly like to win in the next
election.
The measure would eliminate the current requirement in the
Clear Air Act that smoggy areas use gasoline containing an
oxygen additive--either ethanol or MTBE. But then it goes
ahead to require that refineries triple their purchases of
ethanol for gasoline by 2012.
The mandate hurts consumers in obvious ways: It will drive
up the cost of driving, taking dollars out of the pockets of
motorists and putting them into the coffers of Archer Daniels
Midland, the Enron of the Corn Belt, which dominates the
ethanol market. (Why is it that the politicians who are eager
to give back their Enron donations seem to have no trouble
taking money from--and giving billions in benefits to--a
company that was convicted of price fixing a few years ago?)
The mandate will also hurt the country. Although ethanol is
touted as a renewable fuel, a recent study by Cornell
University scientist David Pimentel shows that producing
ethanol from corn actually requires more energy than the fuel
produces. The ethanol mandate would thus make the country
more fossil-fuel dependent, not less.
But the mandate will also hit in a less obvious way: It
will take dollars away from transportation investment. That's
because ethanol already gets another federal subsidy--the
federal fuel tax at the pump is a nickel less on fuel
containing ethanol. If the Daschle-Bush ethanol mandate is
passed, federal revenues for transportation repair, operation
and construction will plummet by nearly $3 billion a year,
transportation experts estimate.
So this is what Californians get from the proposed Daschle-
Bush ethanol bailout--higher prices at the pump and more
crowded roads. It gives the term ``highway robbery'' a whole
new dimension.
Mrs. FEINSTEIN. Mr. President, I yield the floor and suggest the
absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. MURKOWSKI. 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. MURKOWSKI. Mr. President, I have listened to portions of the
debate this morning. Obviously, on the issue of ethanol we will have
extended discussion, but I am sympathetic to the concerns expressed by
the Senator from California and the Senator from New York. It addresses
an underlying situation in this country of which we should all be
aware. The mandate on ethanol in the energy bill is quite clear, and
the realization that the ethanol industry is not prepared, does not
have current capacity.
As a consequence, more gasoline will have to be used. That brings
into focus the reality of where our gasoline comes from; it comes from
crude oil. Where does crude oil come from? Most of it comes from
overseas. We are seeing a price increase for a couple of reasons. The
effectiveness of the OPEC cartel, which some time ago set a floor of
$22 and a ceiling of $28, is shown with the price of oil up to $27. We
are seeing a situation escalate in the Middle East. Saddam Hussein, who
is supplying this Nation with roughly a million barrels a day, has
indicated he is going to cease production for 30 days. Venezuela, our
neighbor, that we depend on from the standpoint of proximity, is on
strike. It is estimated the United States, in the last few days, has
lost 30 percent of its available imports. These are the underlying
issues associated with the debate in the sense of price.
Where does gasoline come from? It comes from crude oil. Where does
crude oil come from? From overseas, because we have increased our
dependence on those sources. It gets more complex when considering the
motivation occurring as a consequence of the policies of Saddam Hussein
and Iraq. He is paying the families of those who sacrificed their lives
to kill people in Israel. It used to be $10,000 per family; now it is
$25,000 per family. This whole thing is escalating. It is escalating as
a consequence of the costs of oil increasing because that is where the
cashflow emanates.
Procedurally, may I make an inquiry as to where we are on the timing
and so forth?
The PRESIDING OFFICER. There is an order to proceed to another
measure at 11:30.
Mr. MURKOWSKI. I ask unanimous consent for 4 more minutes, until such
time as I see Members are ready to proceed.
The PRESIDING OFFICER. The Chair will note the presence of the
manager for the majority. Is there objection to the request to proceed
for 4 minutes?
Mr. DODD. No objection.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. MURKOWSKI. Mr. President, let me summarize the dilemma. By our
own inaction, we are seeing, if you will, greater vulnerability as this
country increases its dependence on imported
[[Page S2516]]
oil. As I have indicated, Venezuela is on strike. Iraq has terminated
its production. We are told there is a grave threat in Colombia by
revolutionists who are threatening to blow up the pipeline. There are
complications now that the Saudis have been accused of funding, if you
will, terrorist activities associated with the deaths of Israelis and
the bombings, human bombings that have taken place.
As we address this vulnerability, we have to recognize the reality.
It focuses in on the current debate on ethanol. As we look at where we
are, we are going to have to have more gasoline in California; we are
going to have to have more gasoline in New York. The price is going to
go up.
Our alternatives, it seems to me, are quite obvious. We should reduce
our dependence on imported sources. That brings us to the ANWR debate
which will be taking place very soon.
Finally, the Schumer amendment would strike the renewable fuels
standards, as we know, contained in section 819 of the bill. That
portion called for mandated use of renewable motor fuels such as
ethanol and biodiesel. This mandate is part of a larger package of
provisions on MTBE and boutique fuels, and I am certainly supportive of
reducing the boutique fuels.
I am not usually a big fan of mandates, but the renewable fuel
standards will reduce our dependence on foreign oil.
I will have more to say later, but I encourage my colleagues to
participate in this discussion and recognize the significance of our
increased vulnerability and why we are going to be using the gasoline
when in reality we will be paying for it.
I find it ironic that California is dependent on Alaska, and as
Alaskan oil declines, that dependence is going to shift over to the
importation of oil to California from Iran, Iraq, wherever--Saudi
Arabia. Of course, New York is dependent on Venezuelan oil as well. If
we do not do something domestically, we are going to pay the piper.
I yield the floor.
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