[Congressional Record Volume 149, Number 68 (Thursday, May 8, 2003)]
[Senate]
[Pages S5888-S5899]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       ENERGY POLICY ACT OF 2003

  The PRESIDING OFFICER. The clerk will state the bill by title.
  The assistant legislative clerk read as follows:

       A bill (S. 14) to enhance the energy security of the United 
     States, and for other purposes.

  Mr. DOMENICI. Mr. President, I will proceed to discuss a proposed 
ethanol amendment that will be offered to this pending bill later in 
the proceedings when it is in order. When I am finished within a few 
moments, I will yield to the minority leader who will speak, and 
thereafter we will rotate back and forth for as long a time as we have 
this morning to discuss this measure.
  Today the Senate will consider what will soon be offered as an 
amendment to S. 14, which I hope will become the renewable fuel 
standards portion of the comprehensive energy bill. The amendment 
offered today by the majority leader and the minority leader, and 
Senators Inhofe, Dorgan, Lugar, Johnson, Grassley, Harkin, Hagel,

[[Page S5889]]

Durbin, Voinovich, Nelson of Nebraska, Talent, Dayton, Coleman, 
Edwards, Crapo, and DeWine--and if there are any others who desire to 
join in the amendment, it is obviously open for submitting their names 
as additional cosponsors.
  This represents the culmination of a long and difficult debate about 
the U.S. transportation fuels policy. The amendment is the product of 
more than 4 years of work by the stakeholders and Members of this body 
and represents a solid compromise between disparate groups.
  The amendment establishes a renewable fuels standard providing that a 
portion of the U.S. fuel supply will be provided by renewable domestic 
fuels, primarily ethanol, growing to 5 billion gallons a year by the 
year 2012. In addition to full support from the affected parties, the 
amendment also enjoys the administration's full support.
  The Frist-Daschle amendment will promote increased domestic energy 
development, reduce oil imports, protect the environment, bolster our 
economy, and stimulate rural economic development by increasing 
production and use of domestic renewable fuels. I know there are a 
number of Senators who strongly opposed a similar amendment when it was 
offered and adopted last year. I expect them to offer a number of 
second-degree amendments this year again. This is their right, but I do 
expect--as the Senate did last year--the Senate to adopt the language 
of the Frist-Daschle amendment.
  In view of the significant amount of work that has been put into this 
amendment and the consensus it represents among the affected parties, I 
urge my colleagues to adopt the amendment as offered, without 
amendments.
  I yield the floor at this point.
  The PRESIDING OFFICER. The Democratic leader is recognized.
  Mr. DASCHLE. Mr. President, I first want to commend the chairman of 
the Energy Committee for his strong statement in support and for his 
leadership on this and on so many of the issues pertaining to energy. I 
look forward to continuing to work with him as we proceed in 
consideration of this legislation.
  I am also delighted to join with the distinguished majority leader in 
introducing the first amendment to the Energy Policy Act of 2003.
  The fact that this is the first amendment reflects the importance of 
the subject that we will be discussing. It is my hope that the majority 
leader's endorsement will help assure enactment of this proposal at the 
earliest possible date.
  It was 1990 when a number of us joined together, Republicans and 
Democrats, including then-Senate minority leader, Bob Dole, and Tom 
Harkin, and we introduced the reformulated gasoline, or RFG, 
legislation as a provision of the 1990 Clean Air Act amendments.
  The RFG provision, with its minimum oxygen standard, was adopted in 
the Senate by an overwhelming vote of 69-30. Eventually, it was signed 
into law by President George H.W. Bush.
  I am proud to say that this program resulted in substantial 
improvement of air quality all over the country. It stimulated 
increased production of renewable ethanol and other oxygenates needed 
to meet the minimum oxygen standard.
  In fact, between the onset of RFG in January of 1995 and January of 
2003, production of ethanol has increased from 1 billion gallons per 
year to nearly 2.5 billion gallons.
  This increased farm economy by hundreds of millions of dollars 
annually and reduced our dependence upon foreign oil by more than 
100,000 barrels per day. Unfortunately, the detection of MTBE in ground 
water in the late 1990s required us to find a way to get MTBE out of 
gasoline without sacrificing the air quality and public health benefits 
of the RFG program.
  The answer that my good friend, Dick Lugar, and I conceived several 
years ago was the renewable fuels standard, which would eliminate the 
minimum oxygen requirement that some of our colleagues find problematic 
for urban centers and replace it with a nationwide renewable fuels 
standard.
  This standard increases ethanol production and protects consumers by 
creating a credit trading system that provides an economic incentive to 
use the type of fuel that is most cost effective in the various regions 
of the country.
  On May 4, 2000, I was proud to introduce, along with Senator Lugar, 
the first iteration of the amendment that is before us today.
  That proposal--similar to the one we are considering today--
reconciled historically competitive interests in a manner that promoted 
a broad range of national policies.
  It would protect ground water, enhance our national energy security, 
reduce greenhouse gas emissions, and promote investment and job 
creation in rural communities by tripling production of ethanol over 
the course of the next 10 years.
  The essence of that proposal was incorporated into legislation 
reported by the Senate Environment and Public Works Committee in 
September 2000. Unfortunately, time ran out in the 106th Congress 
before final action could be taken on that Committee bill.
  In the 107th Congress, Senator Lugar and I again joined to introduce 
the Renewable Fuels Act. This legislation was incorporated into last 
year's Senate-passed energy bill as part of the fuels agreement with 
the support of 69 Senators. Unfortunately, time again ran out before 
the energy bill could be enacted into law.
  This February, Senator Lugar and I, Senator Hagel, one of the real 
movers on this legislation early on, along with a growing number of our 
colleagues, re-introduced this latest iteration of the renewable fuels 
standard that we have now incorporated in this amendment. I am pleased 
that the Senate Environment and Public Works Committee has once again 
embraced it and reported it out of committee. That proposal, S. 791, is 
currently on the Senate calendar.
  This chronology underscores the point that the time to pass this 
important legislation is now. The groundwork has been laid, and the 
case for the bill is established. The benefits of the renewable fuels 
standard for agriculture, the rural economy, energy and the environment 
are dramatic.
  The legislation benefits agriculture. Next year, one in every three 
rows of corn grown in South Dakota will go into ethanol production. 
There are currently nine ethanol plants operating in South Dakota with 
two more under construction. Local corn prices have increased 10 cents 
per bushel near these plants, and USDA estimates that corn prices will 
increase 50 cents per bushel under the RFS. As a result, USDA has 
estimated that the RFS will raise farm income by $1.3 billion annually. 
Taxpayer outlays would drop dramatically because of resulting farm 
program savings.
  This legislation benefits the rural economy. Over 5,000 South 
Dakotans have invested in these plants, and over 500 people are 
directly employed by the ethanol industry in the state. USDA estimates 
that for every 100-million-gallon ethanol plant built, 2,250 local jobs 
can be created throughout a community.
  This legislation also enhances our energy security. Look at America's 
energy situation today: gasoline prices are high and America is 
importing close to 60 percent of the oil we use. At the same time, our 
substantial appetite for energy continues to grow. Over the next 10 
years, the United States is expected to consume roughly 1.5 trillion 
gallons of gasoline. At the same time, we hold only 3 percent of the 
known world oil reserves.
  The Renewable Fuels Standard will save the U.S. $4 billion in 
imported oil each year because we triple the use of renewable fuels 
over the next 10 years.
  As for the environment, this legislation ensures that the clean air 
benefits that we have achieved because of the oxygenate standard are 
maintained through strong anti-backsliding language and addresses the 
serious problems of MTBE contamination.
  Specifically, the amendment bans MTBE in 4 years, authorizes funding 
to clean up MTBE contamination and fix leaking underground tanks, 
allows the most polluted states to opt into the reformulated gasoline 
program, and provides all States with additional authority under the 
Clean Air Act to address air quality concerns.
  The amendment also eliminates the oxygen requirement from the RFG 
program, a change that is very important to the efforts of States such 
as California and New York that are planning

[[Page S5890]]

to eliminate MTBE from their gasoline supplies in the near future.
  To preserve the hard-fought air-quality gains that have resulted from 
the implementation of that requirement, the bill creates a renewable 
fuels standard that will nearly triple the use of renewable fuels like 
ethanol and biodiesel over the next 10 years.
  Finally, the bill provides special encouragement to biomass-based 
ethanol, which holds great promise for converting a variety of organic 
materials into useful fuel, while substantially reducing greenhouse gas 
emissions.
  This will have substantial benefits for the environment and for rural 
economies, while helping to lower our dangerous dependence on foreign 
oil.
  Some of my colleagues from large coastal states have expressed 
concern that this amendment treats their constituents unfairly and seek 
a carve-out from its requirements. I respectfully suggest that their 
concerns are not supported by the facts.
  Governors Gray Davis and George Pataki, one a Democrat and one a 
Republican, leaders of the two most populous States in the country, 
have stated publicly that their States are better off under the 
Renewable Fuels Act than they are under current law.
  Their first priority by far is to get out from under the minimum 
oxygen standard that will force them to use ethanol when MTBE is 
eliminated from the gasoline supply. The amendment before us allows 
them that flexibility which they so desperately seek. Moreover, my 
colleagues from California and New York worry that even though their 
States will no longer be required to purchase ethanol as a result of 
the oxygen standard, the cost of gasoline will rise precipitously as a 
result of the RFS.
  That is simply not the case. Last April the Energy Information Agency 
issued a report stating that the cost of establishing a renewable fuels 
standard is less than 1 cent per gallon for reformulated gasoline and 
less than 0.5 cent per gallon for all gasoline.
  Just last month, the California Energy Commission issued a report 
stating that the recent increase in California's gasoline prices cannot 
be attributable to availability or cost of ethanol which is consistent 
with the EIA projections.
  What is even more compelling is that California is using nearly twice 
the amount of ethanol this year than they would be required to under 
the RFS.
  I understand that my colleagues are fighting for what they believe is 
in the best interests of their constituents, and I respect that. But my 
goal in promoting the renewable fuels standard is to solve a nationwide 
problem with a nationwide solution. My constituents would prefer not to 
give up the oxygen standard, which has played such an important role 
historically in expanding the production of ethanol. But I understand 
that states like California need greater flexibility in their gasoline 
supply. That is why I am willing to look for new prescriptions that 
allow States to use alternatives to ethanol and continue to promote the 
development of the domestic ethanol industry, which I believe is in the 
national interest.
  The renewable fuels amendment meets that test. This legislation is a 
careful balance of often disparate and competing interests--and a 
compromise in the finest tradition of the U.S. Senate. Meeting our 
energy challenges is a difficult problem, but is also a great 
opportunity to demonstrate American strength and ingenuity.
  This amendment takes advantage of both, and I look forward to its 
passage.
  I thank the Chair for his support and effort, and I yield the floor.
  The PRESIDING OFFICER. The Senator from New Mexico.
  Mr. DOMENICI. Mr. President, I failed to indicate at the outset what 
has been mentioned by the distinguished minority leader at the outset. 
This is a jobs-producing measure. The entire energy bill, as we 
consider it, is a measure that will produce literally thousands of jobs 
for the American people. Right at the outset, the very first amendment 
is a clear indication of how in this bill we intend to produce, in this 
instance, agricultural jobs but not pure agriculture--industrial, as it 
relates to agriculture with the construction of ethanol plants in and 
out and around and about agricultural America.
  Having said that, I know there are a number of Senators who want to 
speak. It was not for me to say that we have no consent agreement as to 
how we will proceed, but I saw the distinguished Senator, Senator 
Talent, standing first. I might suggest, just for some orderliness, he 
proceed next, and the distinguished Senator from Nebraska follow that. 
Then, if other Senators are here, and they seek recognition--
  Mr. BOND. Mr. President, may I ask my good friend if he would mention 
my name in that list?
  Mr. DOMENICI. I wonder, considering the condition of the 
distinguished Senator, if he might proceed first.
  Mr. TALENT. I was going to suggest that to the Senator from New 
Mexico and the Chair.
  Mr. DOMENICI. Might we amend that, then, and have Senator Bond go 
first, Senator Talent, and then the Senator from Nebraska? Is that all 
right? We will proceed in that manner.
  I yield the floor.
  Mr. BOND. Mr. President, I thank my friend from New Mexico and I 
appreciate his kindness, and also my colleagues from Missouri and 
Nebraska.
  I rise today in support of the renewable fuels standard, as passed by 
the Senate Environment and Public Works Committee on which I have the 
privilege of sitting.
  This package provides a means for significant reductions in our 
dependence on foreign oil while we pursue cheaper energy for consumers 
that is produced in rural America by our hard-working farmers and 
ranchers.
  I have spent a lot of years in the Senate Chamber talking about these 
issues. Recently a friend complained to me that he was tired of me 
talking about biodiesel. We first started talking about it a long time 
ago. But I am pleased to have the burr under the saddle to point out 
that biodiesel and ethanol are vitally important elements for our 
energy program.
  I am pleased to see so many of our colleagues joining in the fight 
today. My good friend Senator Jim Talent from Missouri has been a 
leader on the Energy Committee. I know my colleague Senator Hagel from 
Nebraska has long been a champion of ethanol. I add my thanks and my 
appreciation to the distinguished chairman of the Environment and 
Public Works Committee, Senator Inhofe of Oklahoma, for taking the 
leadership position on this issue.
  Increasing the use of renewable fuels such as ethanol and biodiesel 
diversifies our energy infrastructure, making it less vulnerable to 
acts of terrorism while increasing the number of available fuel 
options, enhancing competition, and potentially reducing consumer costs 
of fuel.
  Speaking of decreased fuel costs, I am reminded of some of the 
comments of my colleagues during consideration of this package in the 
Environment and Public Works Committee. At that time, it was suggested 
that ethanol as an oxygenate was the cause of high fuel prices in 
California and other areas. I bet we will hear that argument again.
  Just as a marker, note this fact. I refer my colleagues to the recent 
California Energy Commission report promulgated by Gov. Gray Davis. In 
discussing the report's findings, California Energy Commission chairman 
William Keese indicated that ``Ethanol, the ingredient, did not have an 
impact that we can see on prices. . . .''
  Frankly, that ought to answer the questions and concerns that 
undoubtedly will be raised on the floor. In fact, I would argue that 
ethanol and biodiesel actually reduced the consumer cost of fuel by 
extending supplies, offering alternatives to more costly imported oil, 
and providing leverage for independent fuel marketers to compete 
against the larger, more powerful integrated oil companies.
  The renewable standard will more than double the amount of renewable 
fuel we use. I am told that renewable fuel use will increase to about 3 
percent of our total transportation fuel supply, replacing roughly 66 
billion gallons; that is, 1.6 billion barrels of foreign crude oil by 
2012.
  Of course, the environmental benefits of transitioning from petroleum 
fuels to clean, domestically produced renewable ethanol and biodiesel 
is clear. Not only can we reduce our dependence on foreign oil but with 
the renewable standard our environmental goals of

[[Page S5891]]

reducing hydrocarbon, particulate sulfur, and other polluting emissions 
would be pursued.
  This RFS will also have a positive impact on the economy, 
particularly in rural areas which have been hardest hit in the economic 
slowdown.
  According to studies, the renewable standard would create as many as 
300,000 American jobs, increase net farm income by $6.6 billion a year, 
and reduce farm program payments by $7.8 billion. In other words, we 
can reduce farm program payments and increase net farm income by a 
combined total of $14.4 billion. Not many programs give you that much 
bang for the buck.
  One farm analyst said that as many as 13.1 million acres of corn can 
be used to supply ethanol by 2012. That is almost 19 percent of last 
year's corn production. Today, only 6 percent of the crop goes into 
ethanol.
  In our home State, Missouri corn farmers could see an average 
increase of about 12 cents per bushel over the next 10 years. 
Similarly, our soybean farmers will see increased benefits as biodiesel 
use will increase dramatically.
  I encourage and invite my colleagues to come out to the heartland to 
see what we have. Come out and visit Nebraska, Missouri, and Iowa and 
see what this industry is all about. We could all learn the benefits of 
ethanol, soy diesel, and biodiesel. We will see how the homegrown 
renewable fuel benefits the environment, the economy, and our 
communities. Come out to my State and see what farm leaders have done 
to provide value-added opportunities for Missouri farmers.
  In 1994, Golden Triangle Energy of Craig, MO, and Northeast Missouri 
Grain Processors of Macon, MO, organized as new generation 
cooperatives. Northeast Missouri Grain Processors opened their plant on 
April 29, 2000. I was pleased to be there. It had been producing 22 
million gallons of ethanol per year. They have just flipped the switch 
on an additional capacity to make over 40 million gallons a year.
  Come to Missouri and visit the communities and areas where ethanol 
production is underway and see the impact of the expanding usage of 
fuel through this renewable standard on Main Street, U.S.A.
  I now defer to my colleagues. I thank them for their kind 
accommodation. I express my thanks also to the distinguished manager of 
this bill, who is doing an outstanding job. We look forward to seeing a 
good energy bill passed. But a good energy bill must have a good 
renewable fuel standard.
  I thank the Chair.
  The PRESIDING OFFICER. The Senator from Missouri.
  Mr. TALENT. Mr. President, I thank my colleague from Missouri for his 
kind comments.
  It is a great pleasure to be here today to talk on behalf of such an 
important amendment and to recognize that we certainly have come a long 
way.
  For many years, our Nation has needed a sound and balanced energy 
policy that includes a renewable fuels standard. For many years, we 
have all talked and talked about alternative energy, about renewable 
energy, and today with the first bipartisan leadership amendment of 
this Congress, the Republican and Democratic leaders have introduced 
the renewable fuels standard legislation as an amendment to S. 14.
  I believe what has happened today stands on the shoulders of the work 
by many of the most distinguished Members of this body in the last 
decade. We heard from the senior Senator from Missouri. We are going to 
hear from the Senator from Nebraska and the compromise, if you will, in 
the last Congress.
  The renewable fuels standard is the biggest single reason I sought to 
get on the Energy Committee. I am proud to be one of the cosponsors of 
the amendment and to be associated with what is going to happen today. 
I know there are going to be many chances to come to the floor and fend 
off various second-degree amendments from opponents of renewable fuels. 
So I will keep my initial comments brief today. I look forward to 
future opportunities to discuss other aspects of the amendment.
  I note also at the outset that this legislation is supported by a 
historic coalition. When you get a coalition that ranges from the Farm 
Bureau to the American Petroleum Institute, it tells you the consensus 
that has been created finally on behalf of this idea. It is because it 
is a good idea. It is because it is the right thing to do. It is at the 
crux of so much we all want for Americans. It is at the crux of 
economic growth in jobs. It is at the crux of energy security. It is at 
the crux of environmental quality and value-added agriculture and 
family farming.
  An article ran on April 23 in the Daily Statesman, which is the daily 
paper in Dexer, MO. The headline was ``Missouri Job Loss Rate Number 
One in the Nation.'' Last year, Missouri lost 77,000 jobs. The 
enactment of the renewable fuels standard will, first and foremost--and 
right away--bring thousands of jobs to Missouri, and tens and tens of 
thousands of jobs--hundreds of thousands of jobs--to the country.
  We are talking about long-term good jobs in agriculture, in trade, in 
transportation, in energy, and in food processing. We are talking about 
jobs on the farm. We are talking about construction jobs to build these 
plants and maintain them. We are talking about jobs for the suppliers 
of these ethanol plants. We are talking about jobs for those who buy 
the ethanol and the by-products. We are talking about transportation 
jobs in shipping the ethanol. We are talking about trade opportunities 
for the United States. It will happen as a result of what I believe the 
Senate is going to do today.
  A recent study found that increasing ethanol production to 5 billion 
gallons annually would create 214,000 jobs in the country, $5.3 billion 
in new investment, and increase household income by $51 billion. I want 
those benefits for this country, and I want those benefits for 
Missouri.

  These increasingly modern ethanol plants are equipped to produce 40 
million gallons of ethanol a year. I have visited the plants, as has my 
colleague, Senator Bond, in Missouri, plants we already have in Craig 
and Macon. The economic benefits of one of those plants are 
significant. They include an increase of household income for the 
community, the county in which these plants are operated; many of these 
counties have been struggling economically. It includes an increased 
household income of $20 million for these counties annually. Additional 
farmer cooperatives around the State of Missouri are organizing funding 
in an effort to produce even more ethanol in Missouri. I know this is 
happening in Nebraska. It is happening all over the Midwest. It is 
going to continue happening.
  Ethanol is also at the crux of energy security for America. Ethanol, 
biodiesel, and other renewable fuels are going to be playing an 
increasing role in reducing the need for imported oil. This is an area 
where I have to respectfully disagree with the opponents of the 
renewable fuels standard.
  I am very strongly in support of providing incentives for increased 
exploration and recovery of oil reserves in this country. And we have a 
progrowth, proenergy energy bill, largely because of the efforts of the 
distinguished chairman of the Energy Committee. I have supported every 
effort to increase the amount of oil reserves we have in the United 
States and that we can practically explore and recover.
  But it is clear that we cannot just drill our way out of our 
dangerous oil dependency. We have to have other alternatives, and 
ethanol and biodiesel are the alternatives we have now--not 5 years, 
not 10 years, not 15 years from now, but now--to reduce our dependence 
on oil imports. I do not ever want to be in a situation again where we 
are sending $4 billion a year to somebody like Saddam Hussein to buy 
oil, and depending on regimes like that one for the health of our 
national economy.
  Ethanol is a key to energy independence for the United States. The 
United States is increasingly dependent on imported energy to meet our 
personal, transportation, and industrial needs. As a domestic, 
renewable source of energy, ethanol can reduce our dependence on 
foreign oil and increase the United States' ability to control its own 
security and economic future. Our energy policy should first and 
foremost promote domestic, renewable fuels, not foreign oil imports.

  This is an area where I respectfully disagree with the opponents of 
renewable fuels standard. It is clear that we cannot drill our way out 
of our dangerous oil dependency--especially

[[Page S5892]]

without access to the oil in Alaska's ANWR. America's national, energy, 
and economic security are vulnerable due to our dangerous dependence on 
oil imports.
  In 1999, America was importing over 55 percent of its oil and 
petroleum products. Just 2 years later, our dependency increased to 
over 59 percent. By 2025, the Energy Information Administration 
projects the U.S. will import nearly 70 percent of its petroleum. 
Something must be done.
  It is absolutely necessary that we take steps to reduce our 
dependence on foreign oil. Over the next decade the RFS will reduce 
crude oil imports by an estimated 1.6 billion barrels.
  In addition to the establishment of a national ethanol standard, the 
amendment has other important provisions that include an orderly phase-
down of MTBE use and removal of the oxygen content requirement for 
reformulated gasoline. That is very important, and it is very important 
to the environment.
  I am sure that over the coming weeks we are going to have a lot of 
opportunities to debate things such as climate change and CAFE 
standards. I remind opponents of this amendment that ethanol is one of 
the best tools we have to fight air pollution from vehicles. I 
encourage all proenvironment organizations to score this amendment as a 
vote in favor of America's air quality.
  The use of ethanol-blended fuels reduces greenhouse gas emissions by 
12 to 19 percent compared with conventional gasoline. The American Lung 
Association of Chicago credits ethanol-blended reformulated gasoline 
with reducing smog-forming emissions by 25 percent since 1990. Again, 
this is an alternative which we have today to protect the environment.
  The chairman's energy bill contains many exciting opportunities for 
the development of clean hydrogen vehicles. I support that. But those 
technologies are a long way off.
  My children may drive hydrogen cars. Today I can drive a car fueled 
by ethanol. A couple weeks ago, I visited a Break Time convenience 
store in Columbia, MO, that is selling ethanol at the same price that 
it is selling regular gasoline.
  Renewable fuels such as ethanol and biodiesel provide a solution to 
our air quality problems that we can use now. Today you could fill your 
car with an ethanol blend or a biodiesel blend--without any changes to 
your vehicle. The chairman's energy bill contains many exciting 
opportunities for the development of a clean, hydrogen vehicle, but we 
all know these technologies are a long way off. My children may be 
driving these hydrogen cars, but today I can drive a car fueled by 
ethanol. Fleet vehicles in Missouri can run on ethanol or biodiesel 
without any costly engine upgrades--today.
  The use of these renewable fuels will bring environmental benefits in 
the short term while we continue to explore long-term opportunities 
such as hydrogen cars and other technologies.
  As I said, I recently toured both of the ethanol plants in Missouri 
and visited an ethanol fueling station during the April recess. I have 
to tell you, this is an exciting and innovative way to add value to 
traditional commodities. The use of grain for ethanol production adds 
up to 30 cents to every bushel of corn. Not only do farmers benefit 
from the higher price but also by joining cooperative and building 
ethanol production facilities. They are able to directly take advantage 
of the value-added market through ownership of the plant. They continue 
to make money during times of price volatility.
  There is no question that the renewable fuels standard will reduce 
our dependence on foreign oil. It will slow the deterioration of the 
environment through the reduction of fossil fuel emissions, enhance 
national, energy and economic security, create a new industrial base 
with tens of thousands of new, high quality jobs, and add value to 
traditional commodities.
  I am happy to join Senate Leadership in offering this amendment. It 
is time that we make the RFS a part of our national energy policy.
  Mr. President, I want to say how pleased and proud I am to be a part, 
in a small way, of this effort. I am especially pleased that this is 
the first bipartisan amendment that is being offered on the Senate 
floor. It will strengthen this energy bill we put together under the 
leadership of Senator Domenici. It is something we can all stand up and 
support.
  I hope we will get a thumping, bipartisan majority in support of this 
amendment. Again, it is a key to jobs. It is a key to energy 
independence. It is a key to environmental quality. And it is a key to 
value-added agriculture and the family producers in Missouri and around 
the country. I am pleased to speak in favor of it.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from New Mexico.
  Mr. DOMENICI. Mr. President, we are going to hear now from one of the 
early proponents of ethanol and of this bill and of this composite that 
ultimately got such broad bipartisan support. It is my privilege to 
have as a supporter of this amendment and of the energy bill the 
distinguished Senator from Nebraska, Mr. Hagel.
  I thank the Senator for all the work he has done in this area and for 
all the help he has given me by way of advice on the energy bill, which 
is pending before the Senate, of which this will become an integral and 
vital part. Thank you so much.
  The PRESIDING OFFICER. The Senator from Nebraska.
  Mr. HAGEL. Mr. President, I first want to recognize the comments of 
the distinguished chairman of the Energy Committee. He is far too 
generous, but that is usually his nature. And I appreciate very much 
his thoughtful words.
  I appreciate the comments of my friend from Missouri. I think they 
cut to the essence of what this issue is about, as well as the comments 
of our dear friend, the senior Senator from Missouri.
  (Mr. DOMENICI assumed the chair.)
  Mr. HAGEL. Mr. President, I am privileged to be part of this effort 
because I do not believe there is anything more important for the 
future of this country than to establish an energy policy that we can 
build upon; that does, in fact, move right to the core of our national 
security, our economic growth, and all of the elements that are 
interconnected for the future of this country.
  So I come to the floor this morning to address briefly some of the 
elements of this amendment that will be offered and to, once again, 
register my strong support of the renewable fuels standard amendment to 
the energy bill.
  I, like my colleagues who have spoken prior to me, wish to recognize 
and thank the leadership of Majority Leader Frist and Minority Leader 
Daschle for getting this amendment to the floor, and, of course, the 
distinguished chairman of the Energy Committee, Senator Domenici, for 
allowing us to have what many of us believe is a very important 
amendment to be the first amendment up on the energy bill, of which I 
am a strong proponent and supporter.
  This amendment, as we have heard, would enhance air and water 
quality, reduce supply and distribution challenges in the gasoline 
market, and increase energy security by expanding the use of clean, 
domestically produced renewable fuels.

  Specifically, this amendment follows the advice of the EPA's Blue 
Ribbon Panel on Oxygenates by repealing the Federal oxygenate mandate 
and phasing out the use of MTBE nationwide. It also contains a 
reasonable renewable fuels standard, which would gradually increase the 
Nation's use of renewable fuel to 5 billion gallons a year by 2012--all 
of this while protecting the environmental gains already made by the 
reformulated gasoline program.
  This legislation mirrors the bipartisan fuels agreement in last 
year's Senate energy bill, of which it has been stated here this 
morning gained the votes of 69 Senators. This year, we have worked to 
build an even broader bipartisan coalition of cosponsors. Much has 
happened since the Senate passed its energy bill last year. The 
renewable fuels industry has expanded considerably to meet growing 
demand.
  The ethanol industry opened 12 new plants last year, with 10 
additional plants now under construction. Sixteen of these new plants 
are farmer owned--farmer owned--individually owned cooperatives.
  By the end of 2003, annual ethanol production capacity is expected to 
exceed 3 billion gallons. In December, the ethanol industry wrapped up 
a record year--2.13 billion gallons in 2002, up by more than 20 percent 
over 2001.

[[Page S5893]]

  Also, Chevron Texaco announced earlier this year it will switch from 
blending MTBE to blending ethanol in the southern California market, 
making Chevron the last of the large California refiners to make the 
switch to ethanol. This means that this year approximately 80 percent 
of California's federally reformulated gasoline will be blended with 
ethanol.
  We should not forget that biodiesel, made primarily from soybeans, 
and still a developing fuel technology, has grown enough that it is now 
used in more than 200 State and Federal automobile fleets, using a 20-
percent blend or higher.
  Today, 16 States have already banned or are in the process of banning 
MTBE. With State MTBE bans will come increased challenges to fuel 
distribution and supply.
  The national phase-down of MTBE proposed in this bill will help us 
meet these challenges. And a national renewable fuels standard with a 
credit and trading program--that makes sense, which is relevant, which 
has common sense--will ensure that renewable fuels are used where they 
make the most sense--not a mandate, where they make the most sense.
  In fact, according to a recent analysis by the Department of Energy, 
enacting this fuels bill would even reduce refiner costs at least by .2 
percent per gallon compared to current law.

  The standard in this amendment is a fair and workable compromise we 
crafted over a year ago. My friend from Missouri, Senator Talent, 
referenced the compromise, referenced the organizations that came 
together over a long period of time to fashion a very workable 
alternative, built upon the good work of many you have heard referenced 
this morning: Senator Daschle, Senator Lugar, so many who have worked 
so hard for so many years, Senator Dole. It has not just come from corn 
and soybean-producing States. It has come from the leadership of 
individual Senators with a wider lens of understanding of national 
security issues, environmental issues, and economic issues, because 
they are all interconnected.
  This effort was bolted together by many people who deserve much 
credit: The American Petroleum Institute, National Farm Bureau, the 
environmental community, Northeast air directors, agriculture groups 
from all over the country, DOE, EPA, and many others. Senator Daschle 
and I helped facilitate those talks last year, as well as a number of 
our colleagues who are here today and will most likely speak today.
  Contrary to the opponents of this amendment, this is not a per-gallon 
mandate. It will not force a specific level of compliance in places 
where compliance may be difficult. In fact, the credit trading 
provision in this amendment will give flexibility to refiners who 
utilize ethanol or biodiesel where it is most economically attractive.
  Our Nation needs a broader, deeper, and more diverse energy 
portfolio. Today less than 1 percent of America's transportation fuel 
comes from renewable sources. Under this amendment, renewable fuel 
would increase to approximately 3 percent of our total transportation 
fuel supply, tripling the amount of renewable fuel we now use. Today 
America imports nearly 60 percent of the crude oil it consumes. The 
Senator from Missouri defined in some detail the numbers. We continue 
to hold our economy, our national security, hostage to foreign oil.
  This country consumes more than 300 billion gallons of crude oil a 
year. Of that, 165 billion gallons is refined into gasoline and diesel. 
This amendment says that by 2012, not less than 5 billion gallons of 
that 165 billion gallons shall come from renewable sources.
  By enacting this legislation, we would replace 66 billion gallons of 
foreign crude oil by 2012, reduce foreign oil purchases by $34 billion, 
create more than 250,000 jobs nationwide, and boost U.S. farm income by 
more than $6 billion a year.
  I join my other colleagues who have spoken this morning--and others 
who will speak today--to enthusiastically encourage all our colleagues 
to pay attention to the amendment, to be aware of its consequences, 
have some sense of why this is just not another renewable fuels 
amendment. It has dramatic implications for the future of the economy, 
for our national security, and our independence. It also helps America 
address the additional and important environmental challenges that lie 
ahead. This is an amendment about America's future.
  I thank the Chair and yield the floor.
  The PRESIDING OFFICER (Mr. Burns). The Senator from Minnesota.
  Mr. COLEMAN. Mr. President, I want to add my voice in support of the 
renewable fuels standard amendment that has been offered by the 
majority leader and the Democratic leader.
  This may be a bit unconventional for a place like the Senate floor, 
but I want to begin my remarks by talking about duct tape. I am not 
talking about it in connection to homeland security, or even the fact 
that one of the largest producers, 3M Corporation, is in my home city 
of Saint Paul.
  Duct tape is probably in every garage in Minnesota and on most work 
benches. Why? Because you can do so many things with it. For those of 
us who are mechanically challenged it is essential. It is cheap. It is 
simple. You can use it for temporary car repair, plumbing, picture 
hanging . . . I even heard of a guy who used it on a duct! The point is 
that it is valuable because it can do many things well.
  The renewable fuels standard we are talking about today is a duct 
tape kind of proposal. It will decrease our dependence on foreign oil. 
It will help keep America's air and water cleaner. It will increase the 
income of our hard working farm families. And it will provide economic 
development and jobs for rural Minnesota. I am not sure if there is one 
other thing we could do as a national government that would do more 
good, for more people, at less expense and with no down side than set a 
renewable fuels standard. Allow me to explain in further detail.
  Today 56 percent of our oil comes from foreign sources. As 
frightening as that statistic is, we are heading in the wrong 
direction: becoming more dependent as the years go by. When George 
Washington gave his Farewell Address, he warned us solemnly to ``avoid 
entangling alliances.'' We compromise the sovereignty of our Nation by 
giving other nations that powerful leverage on our people.
  This reasonable renewable fuels standard would reduce our dependence 
on foreign oil by 1.6 billion barrels over the next 10 years. That 
would make us an even stronger nation because we would be winning back 
the power to determine our own destiny.
  In Minnesota, we put a high value on clean air and clean water. 
Carbon monoxide, hydrocarbons, Nitric Oxide, and other toxins and 
particulates are responsible for countless environmental and health 
problems. As a matter of compassion, we must act to reduce these 
pollutants to avoid the suffering they cause. As a matter of health 
policy, the best way to contain costs is to prevent people from 
becoming sick in the first place.
  Studies have shown that ethanol can reduce emissions of hydrocarbons 
by 20 percent and particulates by 40 percent. I believe biodiesel holds 
out the same promise. Right down the road from Minnesota in Chicago, 
ethanol use helped bring that huge city under the federal standard for 
ozone. Phasing out MBTE will have a dramatic impact all by itself.
  As I spend time with Minnesota's farm families, they don't beat 
around the bush--whom they support, I might add, in large numbers. They 
don't care to listen to a lot of fancy speeches. They say, ``Senator 
you can help us if you do two things: lower our costs and raise our 
prices. We'll do the rest.'' The great folks who feed the world and 
undergird our economy--at great personal risk and sacrific--deserve to 
be heard and listened to.
  Pure and simple: it is better to send corn and soybeans to ethanol 
and biodiesel plants to create energy then it is to send too much to 
the elevators and depress prices.
  The Department of Agriculture estimates that ethanol adds 30 to 50 
cents of additional value to every bushel of corn produced in the 
United States. That is a difference consumers of corn flakes will never 
notice, but it is a huge change at the margin for hundreds of thousands 
of hard working American farmers.

  And make no mistake: farmers need help right now. In recent years, 
those who provide us with the safest, most abundant, most affordable 
food supply

[[Page S5894]]

in the world have been struggling with the lowest real net cash income 
since the Great Depression, record low prices, record high costs of 
production, and foreign tariffs and subsidies some 5 and 6 times higher 
than our own.
  President Kennedy once said that ``the farmer is the only man in our 
economy who buys everything he buys at retail, sells everything he 
sells at wholesale, and pays the freight both ways.'' The RFS is an 
opportunity to turn things around for our farm families: to give them a 
chance to earn a living off the market while yielding huge economic, 
environmental and energy dividends.
  As every Senator should know, farm policy and rural development go 
hand in glove. The key to so many rural communities is for them to reap 
a greater economic benefit from the things they produce. If they just 
harvest the crops or raise the cattle and watch them roll over the hill 
for someone else to process and profit from, that is not going to 
maximize economic development and job growth potential in the area. 
They need to add value to those products.
  There are no better examples of this than ethanol and biodiesel. Let 
me talk for a moment about what many call the ``Minnesota Miracle.'' I 
hold it out to Members of other States as an incentive for what 
approving an RFS could mean to your communities.
  The State of Minnesota leads the Nation in promoting the production 
and use of ethanol. Nearly all of Minnesota's 2.6 billion gallons of 
gasoline are blended with 10 percent ethanol, reducing fuel imports by 
10 percent. Today, Minnesota boasts 14 ethanol plants--13 of which are 
owned by Minnesota farmers. And, what these 14 plants have produced--
besides ethanol--is truly phenomenal: 40,000 jobs, over a half billion 
a year in economic activity, and $15 million in tax revenues.
  Now, on a national scale, studies suggest that the RFS will, over the 
next decade, reduce our Nation's trade deficit by more than $34 
billion, increase our gross domestic product by $156 billion, create 
more than 214,000 new jobs, expand households income by some $51 
billion, increase net farm income by nearly $6 billion per year, while 
cleaning our air and water and displacing 1.6 billion barrels of 
foreign oil. In short, the RFS will allow Minnesotans to build on our 
State's success while creating new opportunity and promise throughout 
the country.
  Mr. President, I am proud to stand here today in the shadow of the 
work Senator Hagel has done, the work the chairman of the Energy 
Committee has done, and stand in support of the amendment offered by 
the majority leader and Democratic leader, an amendment that will 
promote energy independence, cleaner air and water, stronger farm 
prices, and viable rural communities. Renewable fuel standards will do 
all these things. That does duct tape one better.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Indiana is recognized.
  Mr. LUGAR. Mr. President, I compliment the distinguished Senator from 
Minnesota not only on his remarkable statement, but likewise on the 
Minnesota miracle. The work in his State is truly a manifestation of 
all that can come from the legislation we are discussing today in terms 
of jobs, income for farmers and, most important, greater energy 
independence and cleaner air for our country.
  I am delighted to join my colleague from Minnesota in presenting and 
sponsoring and commending the majority leader and the minority leader 
for presenting this legislation to us today.
  I am a strong advocate of this initiative to establish a nationwide 
renewable fuels standard as a part of America's national energy policy. 
Moving from a hydrocarbon to a carbohydrate economy will increase 
energy independence, reduce oil imports, protect air and water, reduce 
greenhouse gas emissions, and stimulate rural economies. The renewable 
fuels amendment we are considering today does all of these things, 
which is why I regard it as an essential component of the Energy Policy 
Act of 2003.
  The renewable fuels amendment is the culmination of years of effort. 
As a result of the hard work, today's amendment enjoys strong support 
from both parties and a broad array of interest groups.
  Several years ago, Senator Daschle and I first introduced a bill 
creating a renewable fuels standard. It has been my privilege to speak 
with Senator Daschle for many years on behalf of this concept, in front 
of various groups in our country, as well as with our colleagues in the 
Senate. I have treasured my friendship with Senator Daschle on the 
Agriculture Committee of the Senate. There we have had many hearings 
and productive discussions. The Renewable Fuels Act of 2001, the bill 
Senator Daschle and I introduced, represented an important step toward 
reducing our dependence on foreign oil and improving our Nation's 
energy security. At the same time, this proposal went far toward 
protecting the environment, supporting rural economic development, and 
increasing the flexibility of the national fuel supply to reduce the 
impact of future price spikes. Last year Senator Daschle and I 
incorporated that legislation into the Senate Energy bill. I am hopeful 
this year my colleagues will again demonstrate that they appreciate the 
importance of the renewable fuels standard to our country, and I am 
confident we will do so.

  When reflecting back on recent history, one trend that should disturb 
every American is our growing dependence on oil imports. Set that trend 
against the many political crises erupting in oil-rich regions around 
the world, and it is clear our addiction to oil must be curtailed. I 
believe part of the answer lies with the development of cheap, 
plentiful, renewable sources of energy. The current tax incentive for 
ethanol has helped foster creation of a strong domestic renewable fuels 
industry. But more needs to be done to reduce the cost of ethanol 
production and to make the commodity more competitive with fossil 
fuels. It is time for a nationwide renewable fuels standard.
  Recent and prospective breakthroughs in genetic engineering and 
processing are radically changing the viability of ethanol as a 
transportation fuel. It is now possible to use biomass, meaning 
virtually any plant or plant product, to produce renewable fuels. So-
called cellulosic ethanol may decisively reduce the cost of ethanol, to 
the point where petroleum products may soon face vigorous competition.
  In 1999, James Woolsey, former director of the CIA, and a consultant 
on many important issues, and I coauthored an article in Foreign 
Affairs magazine that talked about our strategic need for energy 
independence--at least outlined how a biomass strategy, which included 
ethanol from many sources, was a critical part of that strategy.
  In 1999, following publication of that article in Foreign Affairs, I 
introduced a bill that now drives many of these scientific 
breakthroughs. The Biomass Research and Development Act accelerated and 
coordinated the biomass research and development activities of Federal 
agencies. Soon after this bill was enacted into law as Title III of the 
Agricultural Risk Protection Act of 2000, a bill that came out of the 
Senate Agriculture Committee, its competitive research and development 
program began accelerating production of biofuels, biochemicals, and 
biopower. Today's amendment will build on that initiative in a very 
large way by offering an incentive to producers of cellulosic ethanol.
  I am proud of the significant progress we have already made to 
support renewable fuels. We have made great strides toward 
strengthening our national security, improving our rural communities, 
and protecting our natural environment.
  With today's amendment, we will move still closer to a safer and more 
prosperous tomorrow for our country and for the world. I strongly 
encourage my colleagues to support this important initiative.
  I thank the Chair, and I yield the floor.
  Mr. DOMENICI. 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. DOMENICI. 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. DOMENICI. Mr. President, I say to fellow Senators, we are on this 
bill

[[Page S5895]]

until 11:30 a.m. for purposes of discussing the pending amendment. So I 
say to anybody who wishes to discuss it, we have this additional time 
now. There may be time in the future, but this is assured time now for 
anybody who wishes to speak.
  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. KYL. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mrs. FEINSTEIN. Mr. President, I want to take this opportunity to 
make a few comments as a member of the Energy Committee on the energy 
bill that is on the floor and which will be subject to amendment 
tomorrow morning. I believe the ethanol amendment will be taken up.
  There is an overarching possibility in this energy bill. It can 
provide the opportunity to properly fix the badly broken energy market, 
to reduce our consumption of oil, and to increase energy production 
while protecting our environment and addressing climate change. But at 
this point, the Energy Policy Act of 2003 is missing much of what is 
needed for a balanced, comprehensive energy policy for this Nation.
  I voted against the bill in the Energy Committee because of what is 
missing. I look forward to the opportunity to amend this legislation.
  First, I believe the bill needs stronger consumer protection to fix 
our broken energy market and to prevent another energy crisis like the 
one we experienced in the West.
  Second, we must increase the fuel efficiency of our vehicles to 
reduce the amount of oil we consume, to lessen the amount of carbon 
dioxide, the No. 1 greenhouse gas released into our atmosphere, and to 
save families and businesses money at the pump.
  Third, we must increase our energy production while protecting our 
environment. This means not infringing on environmentally sensitive 
areas such as the Alaska National Wildlife Refuge or the water off the 
California and Florida coasts.
  Fourth, we should address global warming and establish plans to 
combat climate change.
  Fifth, we must encourage the development of new renewable power from 
solar, from wind, and from geothermal resources instead of continuing 
to subsidize traditional production from nuclear power, for example.
  Three years ago this month, California's energy market began to 
spiral out of control. In May of 2000, families and businesses in San 
Diego saw their energy bill soar. The Western energy crisis forced 
every family and business to pay for more energy. The crisis forced the 
State of California into a severe budget shortfall. It forced the 
State's largest utility into bankruptcy and nearly bankrupted the 
second largest utility. Now, 3 years and $45 billion in cost later, we 
have learned how the energy market in California was gamed and abused.
  In March, the Federal Energy Regulatory Commission issued the ``Final 
Report on Price Manipulation in Western Markets which confirmed that 
there was widespread and pervasive fraud and manipulation during the 
Western energy crisis. The abuse of our energy market was so pervasive 
and unlawful. Yet this energy bill does not go far enough to prevent 
another Western energy crisis and to curb illegal Enron-type 
manipulation.
  Remember, this type of fraud and abuse was not limited to just Enron. 
There was fraud and abuse across the board, according to the Federal 
Energy Regulatory Commission. One of the best examples of this illegal 
behavior is demonstrated by the transcript from Reliant Energy that 
revealed how their traders intentionally withheld power from the 
California market in an attempt to increase prices. This is one of the 
most egregious examples of manipulation, and it is clear and convincing 
evidence of coordinated schemes to defraud consumers.
  Let me read one part of the transcript to demonstrate the greed 
behind the market abuse by Reliant and its traders.
  On June 20, 2000, two Reliant employees had the following 
conversation that revealed the company withheld power from the 
California market to drive prices up.

       Reliant Operations Manager 1: I don't necessarily foresee 
     those units being run the remainder of this week. In fact you 
     will probably see, in fact I know, tomorrow we have all the 
     units at Coolwater off.

  The Coolwater plant is a 526 megawatt plant.

       Reliant Plant Operator 2: Really?
       Reliant Operations Manager 1: Potentially. Even number 
     four. More due to some market manipulation attempts on our 
     part. And so, on number four it probably wouldn't last long. 
     It would probably be back on the next day, if not the day 
     after that. Trying to uh. . .
       Reliant Plant Operator 2: Trying to shorten supply, uh? 
     That way the price on demand goes up.
       Reliant Operations Manager 1: Well, we'll see.
       Reliant Plant Operator 2: I can understand. That's cool.
       Reliant Operations Manager 1: We've got some term positions 
     that, you know, that would benefit.

  Six months after this incident, as the Senate Energy Committee was 
attempting to get to the bottom of why energy prices were soaring in 
the West, the president and CEO of Reliant testified before Congress 
that the State of California ``has focused on an inaccurate perception 
of market manipulation.''
  Reliant's president and CEO went on to say, ``We are proud of our 
contributions to keep generation running to try to meet the demand for 
power in California. Reliant Energy's plant and technical staffs have 
worked hard to maximize the performance of our generation.''
  These transcripts prove otherwise and reveal the truth about market 
manipulation in the energy sector.
  Yet FERC refused to find and consider all evidence of fraud and 
manipulation and the State of California was forced to take the 
commission to court to ensure FERC would carry out its public duty to 
fully investigate the western energy crisis and punish wrongdoing. Only 
when the Ninth Circuit Court of Appeals ruled FERC had to allow the 
California parties to collect and submit evidence did we find more 
instances of pervasive illegal behavior.
  After a 100-day discovery period that ended March 3, 2003, the State 
of California, the California attorney general's office, and the 
state's largest utilities filed over 3,000 pages of evidence at the 
Federal Energy Regulatory Commission to show how fraud and manipulation 
was pervasive throughout the western energy crisis of 2000-2001. The 
market abuse was not limited to a few rogue traders at one firm, but 
was a widespread series of schemes perpetuated by many employees across 
most companies that supplied and traded in the West.
  During their discovery period, the ``California parties'' found the 
following information:
  Details on new specific incidents when energy companies intentionally 
held their plants offline to drive prices up during 2000 and 2001; new 
transcripts of conversations between energy company employees revealing 
an intent to defraud and manipulate the California market; new evidence 
of document destruction by energy companies to hide details of their 
behavior in the western energy market; and new evidence laying out 
possible anti-trust violations by energy companies.
  I ask unaminous consent that a copy of the report my office issued 
when the ``Protective Order'' was lifted by the Federal Energy 
Regulatory Commission be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

   New Evidence That Energy Companies Besides Enron Manipulated the 
                         Western Energy Market

        [Unofficial Report--Office of Senator Dianne Feinstein]

       After a 100-day discovery period that ended March 3, 2003, 
     the State of California, the California Attorney General's 
     Office, and the state's largest utilities filed over 3,000 
     pages of evidence at the Federal Energy Regulatory Commission 
     to show how fraud and manipulation was pervasive throughout 
     the Western Energy Crisis of 2000-2001. The market abuse was 
     not limited to a few rogue traders at one firm, but was a 
     widespread series of schemes perpetuated by many employees 
     across most companies that supplied and traded in the West.


     highlights of the information filed by the California parties

       (This information from the California Parties was under a 
     ``Protective Order'' at FERC.)
       Details on new specific incidents when energy companies 
     intentionally held their

[[Page S5896]]

     plants offline to drive prices up during 2000 and 2001.
       New transcripts of conversations between energy company 
     employees revealing an intent to defraud and manipulate the 
     California market.
       Reliant knew about transcripts proving their employees held 
     power offline, but the company sat on the evidence for over a 
     year before turning them over to FERC. (CA Parties brief, 
     p122, footnote 375/Exhibit CA-218).
       New evidence of document destruction by energy companies to 
     hide details of their behavior in the Western Energy Market.
       New evidence laying out possible anti-trust violations by 
     energy companies.
       The filing by the California parties shows that there was 
     an extensive and coordinated attempt by energy companies to 
     game the Western market to drive prices up by engaging in the 
     following:
       (1) Withholding of Power--driving up prices by creating 
     false shortages.
       New evidence of Withholding of Power according to the 
     California parties: (CA Parties brief, p28-31/Exhibit CA-9).
       On August 15, 2000 Williams reported that its plant in Long 
     Beach called Alamitos 7 was unavailable due to NOX 
     limitations, but AES's real-time logs from that day show the 
     plant was shut down because Williams directed it to be.
       Reliant failed to return its Etiwanda Unit 2 in Rancho 
     Cucamonga to service for two days after repairs were 
     completed on January 26, 2001, even though the ISO system was 
     experiencing continuous Stage 3 emergencies in California.
       Redondo Beach Unit 6 power plant was shut down by Williams 
     and AES April 3-April 6, 2000. Although the ISO was told the 
     plant was offline due to a boiler tube leak, the plant 
     records indicate this was a planned shutdown and the leak was 
     an excuse concocted two days later.
       Dynegy shut down its El Segundo Unit 1 plant August 30-
     September 3, 2000 for repairs, but the repairs had been done 
     and the plant was shut down to force prices up.
       Mirant held its Pittsburgh Unit 1 plant offline until 
     October 22, 2000 even though an external tube leak ended 
     October 20, 2000.
       Duke delayed returning Oakland Unit 1 to service after 
     repairs to a lube oil cooler and a cooling fan in November, 
     2000 despite ISO-declared emergencies.
       During an ISO-declared emergency December 19 and 20, 2000, 
     Williams declared Redondo Unit 5 a forced outage due to a 
     boiler tube leak. However, the control operator logs 
     uncharacteristically put quotation marks around the outage 
     reason, ``Blr. Tube Leak'' and later, after tests were done, 
     the logs indicate that no leaks were found.
       Reliant delayed reporting the end of an outage at its 
     Ellwood Unit in Goleta for more than twelve hours during peak 
     demand in early April 2001.
       Between November 19 and December 5, 2000 Dynegy reported 
     that its El Segundo 1 and 2 units (with a capacity of about 
     350 MW) were on ``forced outage,'' but these units were 
     actually shutdown because Dynegy claimed its operating staff 
     was on vacation. Forced outages should not include vacation 
     days--especially during ISO emergencies, which occurred on 
     November 19 and 20.
       (2) Bidding to Exercise Market Power--suppliers bid higher 
     after the California ISO declared emergencies, knowing the 
     State would need power and be willing to pay any price to get 
     it.
       New evidence of Bidding to Exercise Market Power according 
     to the California parties:
       A Mirant email to eleven traders in July of 2000 reveals 
     this strategy: ``load is avg above 40 thousand during peak. 
     So, submit revised supp. Bids and `stick-it to `em!!' '' (CA 
     Parties brief, p42-43/Exhibit CA-141).
       (3) Scheduling of Bogus Load (aka ``Fat Boy'' or ``Inc-
     ing'')--suppliers submitted false load schedules to increase 
     prices.
       New evidence of Scheduling Bogus Load according to the 
     California parties:
       A Dynegy trader confirms that Dynegy's load deviation in 
     August 2000 is ``probably because [the traders] are just 
     doing some dummy load scheduling.'' (CA Parties brief, p48/
     Exhibit CA-202).
       A conversation between a Mirant trader and a trader from 
     Public Service of Colorado reveal a joint effort to engage in 
     ``Fat Boy.''
       The trader from Public Service of Colorado states, ``Why 
     don't we just do something where we overschedule, 
     overschedule load and share an upside, dude.''
       The Mirant trader responds, ``That's fine.'' (CA Parties 
     brief, p49/Exhibit CA-204)
       A Sempra trader states Sempra should submit ``fake load'' 
     to the day ahead market. (CA Parties brief, p49/Exhibit CA-
     71)
       A Williams trading strategy is identified as ``scheduling 
     bogus load.'' (CA Parties brief, p49/Exhibit CA-22).
       An internal Powerex memo documents that Powerex entered 
     into a contract with the explicit purpose of 
     ``overscheduling'' and ``underscheduling'' and for congestion 
     manipulation. (CA Parties brief, p49).
       (4) Export-Import Games (aka ``Ricochet'' or ``Megawatt 
     Laundering'')--suppliers exported power out of California and 
     imported it back into the State in an attempt to sell power 
     at inflated prices.
       New evidence of Export-Import Games according to the 
     California parties:
       Powerex's head trader congratulated its daily traders on 
     their successful use of strategies to buy-ahead and sell back 
     real-time. (CA Parties brief, p53/Exhibit CA-40).
       Reliant had ``camouflage transactions'' where the company 
     sold power out of California day-ahead to Arizona and New 
     Mexico utilities, and bought it back for sale in the real-
     time market. (CA Parties brief, p55/Exhibit CA-56).
       (5) Congestion Games (aka ``Death Star'')--suppliers 
     created false congestion and were then paid for relieving 
     congestion without moving any power.
       New evidence of Congestion Games according to the 
     California parties:
       Other names like ``Death Star'' were given to these 
     schemes: EPMI^Star, CISO^Death, Curious and George, Red and 
     Green, Hungry and Hippo, James and Dean or Chinook and 
     Atlantic and SCEM^Loopy. (CA Parties brief, p59/Exhibit CA-
     1).
       These congestion games were called ``free money.'' (CA 
     Parties brief, p59/Exhibit CA-145).
       A Mirant trader summed up the scheme, ``I mean its just 
     kind of loop-t-looping but it's making money . . . [laugh].'' 
     (CA Parties brief, p48/Exhibit CA-204).
       (6) Double-Selling--suppliers sold reserves, but then 
     failed to keep those reserves available for the ISO.
       (7) Selling of Non-Existent Ancillary Services (aka ``Get 
     Shorty'')--suppliers sold resources that were either already 
     committed to other sales or incapable of being provided.
       (8) Sharing of Non-Public Generation Outage Information--
     the largest suppliers in California shared information from a 
     company called Industrial Information Resources that provided 
     sellers detailed, non-public information on daily plant 
     outages. A one-year subscription to Industrial Information 
     Resources cost $70,000. Providing multiple competitors the 
     same, non-public, outage information signals all competitors 
     to act in a parallel manner.
       New evidence of Sharing of Non-Public Information according 
     to the California parties:
       Duke energy traders called Industrial Information Resources 
     ``the mole.''
       For example, Duke trader James Stebbins emailed: ``I just 
     heard back from the mole. He is reporting that the PV3 will 
     be coming back on line 6 days earlier than expected. The new 
     return date is March 3. Good luck and happy selling.'' (CA 
     Parties brief, p70/Exhibit CA-95 and Exhibit CA-253).
       (9) Collusion Among Sellers--sellers were jointly 
     implementing or facilitating Enron-type trading strategies.
       New evidence of Collusion Among Sellers according to the 
     California parties:
       Glendale traders learned manipulation from Enron and Coral 
     traders. (CA Parties brief, p77/Exhibit CA-105 and Exhibit 
     CA-1).
       Sempra provided Coral with advance information regarding 
     the status of a plant. (CA Parties brief, p78/Exhibit CA-1).
       Transcripts of calls show traders from Public Service of 
     Colorado and Mirant discussing ``sharing'' or ``splitting'' 
     ``the upside. (CA Parties brief, p79/Exhibit CA-204).
       (10) Manipulation of NONOX Emission Market--
     sellers manipulated the market for NONOX emissions 
     in the South Coast Air Quality Management District through a 
     series of wash trades that created the appearance of a 
     dramatic price increase that may have been fabricated.
       For example, Dynegy, together with AES and others, entered 
     into a series of trades of NONOX credits in July 
     and August 2000 by which Dynegy would sell a large quality of 
     credits and then simultaneously buy back a smaller quantity 
     of credits at a higher per credit price. (CA Parties brief, 
     p90-93/Exhibit CA-11).
       (11) Wanton Document Destruction--sellers (not just Enron) 
     flagrantly destroyed documents detailing behavior in the 
     Western Energy Market.
       New evidence of Wanton Document Destruction according to 
     the California parties:
       Mirant--an ex-Mirant employee disclosed that he was 
     instructed to delete certain files relating to the California 
     markets from hard drives and that key Mirant executives were 
     instructed to turn in their laptops so that Mirant could 
     clear their hard drives. (CA Parties, brief, p129/Exhibit CA-
     178).
       City of Glendale, California--A Glendale employee, Jack 
     Dolan, told an ex-Glendale employee, Carl Edginton, that Mr. 
     Edginton could destroy one of the documents that contained 
     information about Enron's gaming strategies. (CA Parties 
     brief, p129-130/Exhibit CA-213).
       (12) Negligent Document Destruction--sellers failed to 
     retain documents detailing behavior in the Western Energy 
     Market in accordance with FERC rules and the Federal Power 
     Act.
       According to the California parties, new evidence of 
     Negligent Document Destruction by: Power, Portland General 
     Electric, Reliant, Bonneville Power Administration, City of 
     Glendale, Northern California Power Agency. (CA Parties 
     brief, p130-132).
       (13) Traders Did Not Care How High Prices Went--sellers 
     said that it did not matter how high prices went, as long as 
     Californians paid and generators made money.
       New evidence Traders Did Not Care How High Prices Went in 
     the filing:
       Conversation between two Reliant employees on May 22, 2000:
       Kevin: ``Hey, guys, you know when we might follow rules? If 
     there's some sort of penalty.''
       Walter: ``That's right.''
       Kevin: ``I would never suggest it, but it seems like the 
     writing would be on the wall.''
       Walter: ``Well, I mean, there's--you know, our position is 
     if it's a reliability issue, then the reliability comes over 
     the economics.

[[Page S5897]]

       Kevin: ``Right.''
       Walter: ``So we don't have a problem with that. But it 
     needs to be a reliability issue. If it's economics, and by 
     God, that's what rules.''
       Kevin: ``You'll let the California rate payers pay.''
       Walter: ``That's right. I don't have a problem with that. I 
     have no guilty conscience about that.''
       Kevin: ``All right, man.'' (CA Parties brief, p110-111/
     Exhibit CA-239).

  Mrs. FEINSTEIN. Mr. President, the evidence of fraud and abuse 
submitted is really quite extraordinary.
  Yet this energy bill doesn't prevent the type of gaming that went on 
during the energy crisis. The bill only bans one type of specific 
manipulation--wash trades in the electricity market--but it does not 
address the natural gas market, nor does it prevent other forms of 
fraud and manipulation that took place in California and were detailed 
in memos released by Enron--``Fat Boy,'' ``Ricochet,'' ``Death Star,'' 
and ``Get Shorty.''
  Furthermore, I am concerned that at this time of great crisis in the 
energy industry, this energy legislation rolls back the Public Utility 
Holding Company Act--PUCHA--without giving FERC the ability to review 
mergers and acquisitions in the energy sector. I will support an 
amendment to be offered by Senator Bingaman on this issue to ensure the 
consumer protections granted by PUCHA are not repealed.
  I am also disappointed that this bill does not increased automobile 
fuel efficiency to reduce our consumption of oil. The single most 
effective way to reduce our dependence on foreign oil is to equalize 
the fuel economy of SUVs and light trucks with that of passenger cars.
  Senator Olympia Snowe and I introduced bipartisan legislation in 
January to close the SUV Loophole and since that time 16 other Senators 
have signed onto our bill. Closing the SUV loophole would: Save the 
U.S. 1 million barrels of oil a day and reduce our dependence on 
foreign oil imports by 10 percent; prevent about 240 million tons of 
carbon dioxide--the top greenhouse gas and biggest single cause of 
global warming--from entering the atmosphere each year; and save SUV 
and light duty truck owners hundreds of dollars each year in gasoline 
costs.
  Corporate Average Fuel Economy--CAFE--standards were first 
established in 1975. At that time, light trucks made up only a small 
percentage of the vehicles on the road--they were used mostly for 
agriculture and commerce, not as passenger cars.
  Today, our roads look much different--SUVs and light duty trucks 
comprise more than half of the new car sales in the United States.
  As a result, the overall fuel economy of our nation's fleet is the 
lowest it has been in two decades--because fuel economy standards for 
these vehicles are so much lower than they are for other passenger 
vehicles.
  Rather than increasing fuel economy, however, this energy bill makes 
it more difficult for the Department of Transportation to increase CAFE 
standards in the future by including a new list of criteria the 
Department must consider when revising standards.
  We need to be responsible and increase fuel efficiency, not create 
more barriers to increase CAFE standards.
  I believe a comprehensive energy policy can promote the development 
of new energy supplies while protecting our most precious natural 
areas.
  Yet this energy bill requires an inventory of all oil and gas 
resources under the Outer Continental Shelf. This inventory is a thinly 
veiled attempt to undermine long-standing and bipartisan moratorium 
protection. Areas off the West and East Coasts are currently off limits 
to drilling, and we do not want that to change.
  Even if we ignore the implications of this study on moratorium areas, 
the inventory itself threatens precious coastal resources with invasive 
technologies. The coastal states have made it clear that they oppose 
oil development in these areas, and I believe the States' views should 
be respected.
  I strongly believe that a comprehensive energy bill cannot ignore 
global climate change, yet this bill does nothing to decrease global 
warming.
  The International Panel on Climate Change estimates that the Earth's 
average temperature could rise by as much as 10 degrees in the next 100 
years--the most rapid change in 10,000 years.
  This would have a major effect on our way of life. It would melt the 
polar ice caps, decimate our coastal cities, and cause global climate 
change.
  We are already seeing the effects of warming.
  In November, the Los Angeles Times published an article about the 
vanishing glaciers of Glacier National Park in Montana. Over a century 
ago, 150 of these magnificent glaciers could be seen on the high cliffs 
and jagged peaks of the surrounding mountains of the park. Today, there 
are only 35. And these 35 glaciers that remain today are disintegrating 
so quickly that scientists estimate the park will have no glaciers in 
30 years.
  This melting seen in Glacier National Park can also be seen around 
the world, from the snows of Mt. Kilimanjaro in Tanzania to the ice 
fields beneath Mt. Everest in the Himalayas. Experts also predict that 
glaciers in the high Andes, the Swiss Alps, and even Iceland could 
disappear in coming decades as well. These dwindling glaciers offer the 
clearest and most visible sign of climate change in America and the 
rest of the world.
  Yet the administration has walked away from the negotiating table for 
the Kyoto Protocol. This is a big mistake. The United States is now the 
largest energy consumer in the world, with 4 percent of the world's 
population using 25 percent of the planet's energy. We should be a 
leader when it comes to combating global warming.
  I strongly believe that we can do more to encourage the development 
of renewable power. Solar, wind, geothermal, and biomass are generating 
electricity for homes and businesses nationwide and we need an energy 
policy that not only provides tax incentives for their continued 
development, but also requires their use. I strongly believe it is in 
the public interest for our nation to stop subsidizing costly nuclear 
plants and require greater development of renewable resources.
  However, this energy bill does not include a Renewable Portfolio 
Standard to require the use of a certain percentage of energy to be 
generated from renewable resources. I support such a standard and 
believe it should be part of our energy policy. Unfortunately the 
energy bill currently has an over-reliance on promoting traditional 
energy resources.
  Take the nuclear power section of the bill for example. The energy 
bill provides a new subsidy program to provide loans, loan guarantees, 
and other forms of financial assistance to subsidize the construction 
of new nuclear plants. These subsidies will be allowed to cover up to 
half the cost of developing and constructing a nuclear power plant, 
including any costs resulting from licensing and regulatory delays. 
Since nuclear power plants cost approximately $6 billion to build, 
these subsidies could inflict a tremendous burden on the taxpayer.
  For these reasons I voted against this energy bill in the Senate 
Energy Committee. I look forward to the opportunity to improve it on 
the Floor.
  I strongly believe our nation needs an energy policy that will 
protect consumers, reduce our dependence on foreign oil, and promote 
new energy development while protecting our environment. If our energy 
legislation cannot accomplish these objectives it will be an unbalanced 
and incomplete energy policy.
  Thank you and I yield the floor.
  Mr. INHOFE. Mr. President, over the next few days, the Senate will 
consider legislation that will become the fuels title of comprehensive 
energy legislation to be enacted by the Congress later this year. As I 
have stated on other occasions, I firmly believe that the Nation needs 
comprehensive energy legislation and needs it quickly. One of our 
largest national security problems is our current energy dependence on 
foreign countries. I strongly agree with Deputy Secretary of Defense 
Paul Wolfowitz, who has called our energy dependence ``a serious 
strategic issue.''
  I think that most Members of the Senate would agree that expeditious 
action is needed to address our energy dependence concerns. There is 
much less agreement, however, on the specific fuels provisions that are 
best suited to respond to those concerns. As chairman of the 
Environment and Public Works Committee, I have worked

[[Page S5898]]

closely with the issue surrounding this amendment and the impact they 
will have on our environment, as well as the economy. I understand the 
valid concerns on all sides of the debate.
  This amendment represents a compromise on a number of contentious 
issues. I want to thank the members and their staffs for their 
respective roles in shaping this compromise, particularly the majority 
and minority leaders, and Senator Voinovich, the Chairman of the Clean 
Air Subcommittee, which has jurisdiction over this amendment.
  This amendment has numerous environmental protection provisions, and, 
with the repeal of the oxygenate mandate, positive steps in removing 
barriers to allow refineries to make clean burning and affordable 
gasoline.
  As with all compromises, there are provisions in the document that 
are opposed by various committee members, including myself. Despite 
that, I hope we can move the proposal out of the Senate with a minimum 
of controversy. To that end, I intend to support the proposal against 
amendments even in circumstances where I might agree with the substance 
of the amendment. I urge others to do the same.
  This is something that has been of great concern for this country. I 
became involved with this issue of our energy dependence way back in 
the early 1980s when then-Secretary of Interior, Don Hodel, and I 
traveled and talked about the national security ramifications of our 
dependence on foreign countries for our ability to fight a war. 
Certainly, I felt after the 1991 war and after the most recent conflict 
in Iraq that people would be sensitive to that. I think the amendment 
that we are offering is one that is going to be of great help in 
getting us to lessen our reliance on foreign countries for our ability 
to fight a war.
  I look at this provision of the energy bill as a very significant 
provision. As I said, there are parts of it and provisions that, as 
chairman of the Environment and Public Works Committee, I do not agree 
with. However, I strongly urge the support of this provision to the 
energy bill and hope we can do it with minimum or with no amendments.
  I thank the Chair. I yield the floor.
  Mr. CAMPBELL. Mr. President, I rise today in support of S. 14, the 
comprehensive energy bill.
  The chairman and all the members of the Energy and Natural Resources 
Committee worked hard to produce a comprehensive energy bill. While no 
legislation is perfect, S. 14 is the product of careful debate and was 
subject to tough scrutiny through the committee process.
  Where the committee was uncertain or where significant consensus on 
particular issues proved difficult, deference was given to Senators so 
those issues could be addressed before the full Senate.
  The Committee-reported energy bill represents a careful balance of 
diverse and complex issues, and I am proud to have had a role in the 
process.
  No matter one's political leanings or personal opinions, two 
irrefutable facts are abundantly clear. First, energy is needed to fuel 
the economy. Second, America needs more energy.
  Between 1991 and 2000, Americans used 17 percent more energy than in 
the previous decade, while during that same period, domestic energy 
production rose by only 2.3 percent.
  Further, our Nation's energy consumption is projected to increase 32 
percent by 2020.
  Our projected demand increase translates to projected price 
increases. The Energy Information Administration estimates that oil 
prices will increase 20 percent and natural gas prices will increase 
more than 50 percent in the next 25 years. Price increases like these 
emphasize our need to embrace policies that consider our Nation's 
diverse fuel mix. This bill correctly encourages the consideration of 
all of our energy sources.
  Some in Congress would pursue policies choosing certain energy 
sources over others, resulting in fuel switching. I oppose such 
policies for several reasons. Principally, however, I oppose policies 
that would significantly reduce our Nation's fuel options because such 
policies would have catastrophic effects on our economy. It should be 
noted that the EIA projections cited earlier all assume a diverse 
portfolio of energy sources. We can only imagine the cost to ratepayers 
and the Nation if an energy source, such as coal, were no longer a 
viable option.
  To consider all of our energy options requires more than just lip 
service. It means taking action based upon stated positions.
  The Indian Energy Title of the bill moves beyond lip service. It 
incorporates several key reforms based on fundamental principles of 
American liberty and Indian self-determination.
  I imagine that many, if not all of the members of this body believe--
or at least say they believe--in the right to self-determination. Many 
of my colleagues celebrate and support the rights of indigenous peoples 
in the context of international law. In the case of Iraq, all agree 
that the Iraqi Government must be comprised of and run by Iraqis, for 
Iraqis, without U.S. interference.
  Unfortunately, if we are to ask the very same members to apply those 
recognized principles at home to our Nation's own indigenous peoples, 
their resolve and belief in self-governance seems to disintegrate.
  The Indian Energy Title in the bill before the Senate is not merely a 
reiteration of touchy-feely concepts. Concepts without action do not 
help people. And despite what many Americans, and many in this Chamber 
believe about Indian gaming and a few rich tribes, the truth is that 
Indians are still the poorest people in America; still have the worst 
health care; still have the fewest educational opportunities; and 
Indian children still suffer from sniffing glue, using ``canned heat,'' 
and committing suicide.
  The truth is often uncomfortable. The truth is undeniable.
  The Indian provisions in S. 14 are designed not only to respect 
tribes' right to self-determination, but to unshackle them from a 
regulatory and bureaucratic system that doesn't care whether an energy 
project goes forward; doesn't care whether a tribe's energy partner 
decides the bureaucratic hurdles are too high; and doesn't care whether 
jobs will be created to benefit Indians.
  Title III provides financial assistance, loan guarantees, hydro and 
wind power and wind power studies, and most importantly a 
liberalization of the Indian land leasing process.
  These provisions are wholly voluntary, allowing participating tribes 
greater flexibility in exercising their right to self-determination.
  Title III contains no NEPA exemptions and the Indian Energy Title 
does not circumvent environmental protections. What it does do, 
however, is empower Indian tribes with long-overdue authority to manage 
their land while, ``ensuring compliance with all applicable 
environmental laws.''
  The Indian energy provisions in S. 14 accepts that unfortunate 
reality and provides critical economic development opportunities to 
participating tribes.
  The chairman has a difficult task--to produce a balanced 
comprehensive energy bill during a Presidential election cycle. 
Politics and rhetoric run highest at times like these.
  Although it has happened since the days of the frontier, the powerful 
and wealthy should not manipulate the disenfranchised for political 
gain.
  I sincerely hope that my colleagues in the Senate regard the Indian 
energy provisions as what they are--a tool to exercise self-
determination.
  If it is good enough for Iraqis, shouldn't it be good enough for 
Americans?
  Mr. NELSON of Nebraska. Mr. President, this important renewable fuels 
legislation is one of the pillars for economic development for rural 
America--one segment of the population that has lagged behind during 
the economic surge of the 1990s and is suffering under the combined 
effects of the current economic slowdown and a 2-year devastating 
drought--Drought David.
  This legislation is important for rural America. Last year, we 
completed the farm bill--the first part of the economic revitalization 
plan for rural America. And while the Midwest has been blessed with 
rain over the past month, we continue to struggle with the ongoing 
effects of drought. Economic stimulus can come in many forms, and 
renewable fuels is certainly one of the viable options for increased 
economic stimulus in rural America, especially in my home State of 
Nebraska.

[[Page S5899]]

  We need to be working hard to craft a comprehensive rural development 
plan that will spur investment in agribusiness and promote economic 
activity in the agriculture center. This bill, the Fuels Security Act 
of 2003, is an important part of such a rural development plan.
  It is clear that use of ethanol, as part of a renewable fuels 
standard is a win-win-win situation: a win for farmers, a win for 
consumers, and a win for the environment. That is why I rise as an 
original cosponsor and strong supporter this renewable fuels 
legislation.
  If passed, the Fuels Security Act will establish a 2.3-billion-gallon 
renewable fuels standard in 2004, growing every year until it reaches 5 
billion gallons by 2012. There are many benefits to this legislation.
  It will dispute 1.6 billion barrels of oil over the next decade; 
reduce our trade deficit by $34.1 billion; increase new investment in 
rural communities by more than $5.3 billion; boost the demand for feed 
grains and soybeans by more than 1.5 billion bushels over the next 
decade; create more than 214,000 new jobs throughout the U.S. economy; 
and expand household income by an additional $51.7 billion over the 
next decade.
  It is quite apparent that increased use of ethanol will do much to 
boost a struggling U.S. agriculture economy and will help establish a 
more sound national energy policy.
  The greater production of ethanol will also be beneficial to the 
environment. Studies show ethanol reduces emissions of carbon monoxide 
and hydrocarbons by 20 percent and particulates by 40 percent in 1990 
and newer vehicles. In 2001 ethanol reduced greenhouse gas emissions by 
3.6 million tons, the equivalent of removing more than 520,000 vehicles 
from the road.
  A choice for ethanol is a choice for America, and its energy 
consumers, its farmers and its environment.
  Enactment of the Fuel Security Act--along with other provisions in 
this bill that emphasize new sources of energy production from 
renewables like wind power, as well as conservation to further reduce 
our dependence upon foreign sources of energy--will help us to reverse 
our 100-year-old reliance on fossil fuels a more pressing concern than 
ever given the possibility of military conflict in the Mideast and the 
continuing economic turmoil in Venezuela.
  I am unabashedly proud of what my home State has accomplished in this 
area. Within the State of Nebraska, during the period from 1991 to 
2001, seven ethanol plants were constructed and several of these 
facilities were expanded more than once during the decade. Specific 
benefits of the ethanol program in Nebraska include: $11.15 billion in 
new capital investment in ethanol processing plants; 1,005 permanent 
jobs at the ethanol facilities and 5,115 induced jobs directly related 
to plant construction, operation, and maintenance--the permanent jobs 
alone generate an annual payroll of $44 million----and more than 210 
million bushels of corn and grain sorghum is processed at the plants 
annually. These economic benefits and others have increased each year 
during the past decade due to plant expansion, employment increases, 
and additional capital investment.
  If each State produces 10 percent of its own domestic, renewable 
fuel, as Nebraska does, America will have turned the corner away from 
dependence on foreign sources of energy.
  When you take a hard look at the facts, you will see that this 
legislation is nothing but beneficial for America. The Fuels Security 
Act is balanced, comprehensive, and is the result of the dedication of 
so many, especially Senator Daschle and Senator Lugar.
  Now I ask my colleagues to join me in promoting new opportunities for 
the technologies that will put our Nation and the world's 
transportation fuels on solid, sustainable, and environmentally 
enhancing ground. We owe it to our country now--and to future 
generations-in pass this legislation.

                          ____________________