[Congressional Record Volume 149, Number 85 (Wednesday, June 11, 2003)]
[Senate]
[Pages S7679-S7689]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
ENERGY POLICY ACT OF 2003--Continued
Amendment No. 876, as Modified
Mr. REID. Madam President, I ask unanimous consent that the time be
equally divided and that Senator Feinstein control our time and Senator
Cochran control the time on the other side.
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.
Who yields time?
Mr. REID. Madam President, on behalf of Senator Feinstein, I yield to
the Senator from Washington 4 minutes.
The PRESIDING OFFICER. The Senator from Washington is recognized.
Ms. CANTWELL. Thank you, Madam President.
I am here to support the Feinstein amendment, which I am pleased to
cosponsor. It is a very important piece of legislation. I thank my
colleague for her hard work on this very important issue. We have all
heard about the dysfunctions in our western regional power market and
how it has cost our western economy more than $35 billion.
Madam President, it was more than a year ago that the Senator from
California and I stood on the floor to have this debate with many of my
colleagues. During the Omnibus Appropriations bill in 2000, Congress
granted an exemption from regulatory scrutiny for businesses such as
EnronOnline and electronic trading platforms. Unsurprisingly, Enron was
chief among its boosters in lobbying for this language. Even though
Congress listened to Enron and not the President's Working Group on
Financial Markets, which opposed this exemption.
Now we have history. What has happened? We know that the Enron
loophole has caused quite a bit of a problem. In fact, in light of
evidence which during last year's debate was just beginning to emerge,
we have found that the markets for energy derivatives and the physical
energy prices and supplies have caused a problem. In the West, we had
huge spikes. We have had a long and vigorous floor debate about this
amendment.
There were many detractors who basically said at the time there was
no conclusive evidence that Enron manipulated western energy markets
and there was no need to proceed. This year, we have heard a lot about
how Enron in fact has manipulated markets.
Less than a month after the Senate passed this comprehensive Energy
bill with this language in it, Enron's ``smoking gun'' memos were
released detailing a number of the company's schemes for driving up the
prices. My colleagues are aware that Enron has continued to release
various amounts of information about this unbelievable scandal and
manipulation of prices.
Just last week, another Enron trader was arrested. And the complaint
of Federal prosecutors said they are uncovering even more details of
ploys to manipulate energy prices. We wanted evidence. We got it. In a
long-awaited report, the Federal Energy Regulatory Commission concluded
this spring that manipulation was ``epidemic'' in the western market
during the crisis of 2000-2001.
But more specifically, in a staff report the Federal Energy
Regulatory Commission detailed the manner in which EnronOnline helped
Enron to game the California markets. The Commission concluded that
``the relationship between the financial and physical energy products .
. . provides the opportunity to manipulate the
[[Page S7680]]
physical markets and profit in the financial markets.''
Further, the Federal Energy Regulatory Commission estimated that
EnronOnline allowed the company to reap more than $500 million in
additional profits. There it is, right from the Federal Commission:
EnronOnline allowed them to reap those additional profits.
As we approach this very important issue in a vote here in a few
minutes, my colleagues need to step up and close this loophole that the
President's Working Group on Financial Markets first argued against
because it said we didn't have real credibility on manipulation. Now we
have the credibility, and we have a Federal Commission pointing to the
fact that EnronOnline was responsible for part of this market
manipulation.
I urge my colleagues to support the Feinstein amendment.
The PRESIDING OFFICER. Who yields time?
Mr. COCHRAN. Madam President, I yield such time as he may consume to
the Senator from Idaho, Mr. Crapo.
The PRESIDING OFFICER. The Senator from Idaho.
Mr. CRAPO. Thank you, Madam President. I will be very brief.
I want to reiterate, once again, we are not here dealing with a
question of whether those who did try to and succeeded in manipulating
markets should be held accountable for that. We are talking about what
is the correct way to regulate the derivatives market in our country.
I would like to read into the Record, once again, a portion of a
letter which we have just received signed by the Secretary of the
Department of the Treasury, John W. Snow; Alan Greenspan, Chairman of
the Board of Governors of the Federal Reserve System; William H.
Donaldson, Chairman of the U.S. Securities and Exchange Commission; and
James E. Newsome, Chairman of the Commodity Futures Trading Commission.
They write:
Dear Senators Crapo and Miller:
Thank you for your letter of June 10, 2003, requesting the
views of the President's Working Group on Financial Markets
on proposed Senate Amendment # 876 to S. 14, the pending
energy bill. As this amendment is similar to a proposed
amendment on which you sought the views of the PWG last year,
we reassert the positions expressed in the PWG's response
dated September 18, 2002, a copy of which is enclosed. The
proposed amendment could have significant unintended
consequences for an extremely important risk management
market--serving businesses, financial institutions, and
investors throughout the U.S. economy. For that reason, we
believe that adoption of this amendment is ill-advised.
And this next paragraph responds directly to the allegations that
there is some manipulation in the market and there is a loophole there.
They go on to say:
We would also point out that, since we wrote that letter
last year, various federal agencies have initiated actions
against wrongdoing in energy markets.
I do not have time to go through the list of wrongdoing they have
initiated action against, but they conclude in their letter:
These initial actions alone make clear that wrongdoers in
the energy markets are fully subject to the existing
enforcement authority of federal regulators.
This amendment will not be helpful to our economy. It will take away
one of the needed elements of our economy that gives it the dynamic
nature that it has, to be able to resist some of the difficult burdens
that the economy has faced in the last several years.
Madam President, I ask unanimous consent that the letter I just
referred to dated June 11, 2003, and an additional letter dated
September 18, 2002, be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Department of the Treasury, Board of Governors of the
Federal Reserve System, U.S. Securities and Exchange
Commission, Commodity Futures Trading Commission,
Washington, DC, June 11, 2003.
Hon. Micahel D. Crapo,
U.S. Senate, Russell Senate Office Building, Washington, DC.
Hon. Zell B. Miller,
U.S. Senate, Dirksen Senate Office Building, Washington, DC.
Dear Senators Crapo and Miller: Thank you for your letter
of June 10, 2003, requesting the views of the President's
Working Group on Financial Markets (PWG) on proposed Senate
Amendment No. 876 to S. 14, the pending energy bill. As this
amendment is similar to a proposed amendment on which you
sought the views of the PWG last year, we reassert the
positions expressed in the WPG's response dated September 18,
2002, a copy of which is enclosed. The proposed amendment
could have significant unintended consequences for an
extremely important risk management market--serving
businesses, financial institutions, and investors throughout
the U.S. economy. For that reason, we believe that adoption
of this amendment is ill-advised.
We would also point out that, since we wrote that letter
last year, various federal agencies have initiated actions
against wrongdoing in the energy markets. As you note, the
CFTC has brought formal actions against Enron, Dynegy, and El
Paso for market manipulation, wash (or roundtrip) trades,
false reporting of prices, and operation of illegal markets.
The Securities and Exchange Commission, the Federal Energy
Regulatory Commission, and the Department of Justice have
also initiated formal actions in the energy sector. Some of
these actions have already resulted in substantial monetary
penalties and other sanctions. These initial actions alone
make clear that wrongdoers in the energy market are fully
subject to the existing enforcement authority of federal
regulators.
The Commodity Futures Modernization Act of 2000 brought
important legal certainty to the risk management marketplace.
Businesses, financial institutions, investors throughout the
economy rely upon derivatives to protect themselves from
market volatility triggered by unexpected economic events.
This ability to manage risks makes the economy more resilient
and its importance cannot be underestimated. In our judgment,
the ability of private counterparty surveillance to
effectively regulate these markets can be undermined by
inappropriate extensions of government regulation.
Yours truly,
John W. Snow,
Secretary, Department of the Treasury.
William H. Donaldson,
Chairman, U.S. Securities and Exchange Commission.
Alan Greenspan,
Chairman, Board of Governors of the Federal Reserve System.
James E. Newsome,
Chairman, Commodity Futures Trading Commission.
____
Department of Treasury, Board of Governors of the Federal
Reserve System, U.S. Securities and Exchange
Commission, Commodity Futures Trading Commission,
Washington, DC, September 18, 2002.
Hon. Michael D. Crapo,
U.S. Senate, Russell Senate Office Building, Washington, DC.
Hon. Zell B. Miller,
U.S. Senate, Dirksen Senate Office Building, Washington, DC.
Dear Senators Crapo and Miller: In response to your letter
of September 13, we write to express our serious concerns
about the legislative proposal to expand regulation of the
over-the-counter (OTC) derivatives markets that has recently
been proposed by Senators Harkin and Lugar.
We believe that the OTC derivatives markets in question
have been a major contributor to our economy's ability to
respond to the stresses and challenges of the last two years.
This proposal would limit this contribution, thereby
increasing the vulnerability of our economy to potential
future stresses.
The proposal would subject market participants to
disclosure of proprietary trading information and new capital
requirements. We do not believe a public policy case exists
to justify this governmental intervention. The OTC markets
trade a wide variety of instruments. Many of these are
idiosyncratic in nature. These customized markets generally
do not serve a significant price discovery function for non-
participants, nor do they permit retail investors to
participate. Public disclosure of pricing data for customized
OTC transactions would not improve the overall price
discovery process and may lead to confusion as to the
appropriate pricing for other transactions, as terms and
conditions can vary by contract. The rationale for imposing
capital requirements is unclear to us, and the proposal's
capital requirements also could duplicate or conflict with
existing regulatory capital requirements.
The trading of these instruments arbitrages away
inefficiencies that exist in all financial and commodities
markets. If dealers had to divulge promptly the proprietary
details and pricing of these instruments, the incentive to
allocate capital to developing and finding markets for these
highly complex instruments would be lessened. The result
would be that the inefficiencies in other markets that
derivatives have arbitraged away would reappear.
It is also unclear who would benefit from the proposed
disclosures and regulations other than whoever simply copied
existing products and instruments for their own short-term
advantage. Weakening the protection of proprietary
intellectual property rights in the market arena would
undercut a complex of highly innovative markets that is among
this nation's most valuable assets.
[[Page S7681]]
While the derivatives markets may seem far removed from the
interests and concerns of consumers, the efficiency gains
that these markets have fostered are enormously important to
consumers and to our economy. We urge Congress to protect
these market's contributions to the economy, and to be aware
of the potential unintended consequences of current
legislative proposals.
Yours truly,
Paul H. O'Neill,
Secretary, Department of Treasury.
Harvey L. Pitt,
Chairman, U.S. Securities and Exchange Commission.
Alan Greenspan,
Chairman, Board of Governors of the Federal Reserve System.
James E. Newsome,
Chairman, Commodity Futures Trading Commission.
Mr. CRAPO. Madam President, I encourage my colleagues to vote against
the amendment.
The PRESIDING OFFICER. Who yields time?
The Senator from New Mexico.
Mr. DOMENICI. Madam President, do they have any time left on their
side?
The PRESIDING OFFICER. Fifty-five seconds.
Mrs. FEINSTEIN. I yield our time to the Senator from Iowa.
The PRESIDING OFFICER. The Senator from Iowa.
Mr. HARKIN. Madam President, I join Senator Feinstein as a cosponsor
of her amendment to strengthen Federal oversight of energy markets. I
strongly support the amendment's provisions enhancing the ability of
the Commodity Futures Trading Commission to investigate and punish
fraud and manipulation in over-the-counter markets in energy
derivatives and derivatives based on other ``exempt commodities'' under
the Commodity Exchange Act.
As chairman of the Committee on Agriculture, Nutrition and Forestry
during the last Congress, I held a hearing on the scope of the CFTC's
authority to insure market transparency and prevent fraud and
manipulation in markets in OTC derivatives based on ``exempt
commodities,'' such as energy and metals, following passage of the
CFMA. Following that hearing, Senator Lugar and I worked closely with
Senator Feinstein on an earlier version of this amendment to improve
it. At the beginning of the 108th Congress, Senator Feinstein
introduced S. 509, incorporating the work we did within the Agriculture
Committee last summer and fall. The only difference between S. 509 and
this amendment is that S. 509 was drafted to fill a gap in oversight
created by the CFMA and fully and clearly affirm the CFTC's authority
to oversee trading in all ``exempt commodities''--OTC energy and metals
derivatives as well as derivatives based on other commodities such as
broadband and weather--whereas this amendment now does not change the
treatment of metals derivatives. I have some concerns about this
approach. Metals, like energy, are commodities of finite supply. They
are equally susceptible to market manipulation and should therefore be
subject to the same level of oversight. The legislative process often
requires compromise in order to make progress toward important policy
goals, however, and because I hope this amendment will result in
significant progress in addressing a problem created by the CFMA, I
support it.
The CFMA amended the Commodity Exchange Act in a number of positive
ways, based for the most part on the recommendations of the President's
Working Group on Financial Markets issued in 1999. The President's
Working Group recommended that certain transactions involving financial
derivatives be excluded from the CFTC's jurisdiction. The President's
Working Group did not recommend a similar exclusion for transactions
involving energy and metals derivatives, or other commodities of finite
supply.
During 1999 and 2000, as legislation was being developed in the
Senate, there was discussion of the issue of oversight of energy and
metals derivatives markets, and Senator Lugar who was at the time
chairman, and I both supported, in the committee, a version of the
legislation that was consistent with the recommendations of the
President's Working Group, and excluded only financial derivatives--not
energy and metals derivatives--from the CFTC's jurisdiction. The bill
codified an exemption, with specific safeguards, for certain
commodities such as energy and metals, but clearly retained the CFTC's
authority to investigate and act against fraud and manipulation.
The final version of the CFMA included in the omnibus appropriations
bill in December 2000 differed from our committee bill regarding energy
and metals derivatives markets. I supported the CFMA, although I had
some concerns about its treatment of energy and metals products,
because I thought it had a number of very positive features, and on the
whole was a good bill. I still believe so. It is important that we not
undermine the legal certainty that legislation brought to the OTC
derivatives markets. I would not support this amendment if I thought it
would do that. But I do believe it is important to close the loophole
that has resulted in an important segment of the overall OTC
derivatives market--that is, derivatives based on energy and other
``exempt commodities,'' as the CFMA defined them--being completely
excluded from oversight. At the time of passage of the CFMA, many
Members of Congress believed these exempt commodities would no longer
be subject to most requirements of the Commodity Exchange Act, but they
certainly did not believe these commodities would be removed entirely
from oversight by the CFTC or any other agency, which is what has
happened.
We know now that this lack of oversight has resulted in harm to
consumers. Last August, the Federal Energy Regulatory Commission, FERC,
issued a report finding significant evidence that Enron used its
unregulated OTC electronic trading platform, Enron Online, to
manipulate natural gas prices to increase its revenue. This
manipulation affected prices not only for Enron's trading partners but
industry-wide, as reporting firms used price information displayed
electronically on Enron Online as a significant source of natural gas
pricing data. And a recent report prepared by the Minority Staff of the
U.S. Senate Permanent Subcommittee on Investigations, after a year-long
investigation on crude oil price volatility, found that crude oil
prices are similarly affected by trading on unregulated OTC markets,
and that the lack of information on prices and large positions in OTC
markets makes it difficult if not impossible to detect price
manipulation. This report concluded that routine market disclosure and
oversight of the OTC energy derivatives markets are essential to halt
manipulation before economic damage is inflicted upon the market and
the public.
This amendment will provide the CFTC with the authority it needs to
require routine market disclosure and ensure effective oversight of the
OTC energy derivatives markets and markets for other ``exempt
commodities,'' such as broadband and weather derivatives. The amendment
clarifies that the CFTC has anti-fraud and anti-manipulation authority
over transactions in ``exempt commodities'' other than metals. This
amendment is not regulatory overreaching by any means. It just gives
the CFTC the authority it needs to establish adequate notice,
transparency, reporting, record-keeping, and other transparency
requirements which are the minimum needed to allow the agency to
effectively police OTC markets in energy derivatives, and thereby
detect and deter fraud and manipulation of these markets. It also
increases criminal and civil penalties for manipulation, including
``wash'' or ``round trip'' trades.
It is clear that the impact of OTC energy derivatives markets reaches
well beyond the immediate parties to the transactions. Derivatives play
an increasingly important role in the diverse range of energy markets,
which are in turn critical to our overall economy. We must ensure the
integrity of these markets and restore shareholder, investor, and
consumer confidence in them. This amendment moves us in that direction,
and I urge my colleagues to support it.
Madam President, this amendment basically closes a small loophole
that was left in the Commodity Futures Modernization Act passed in the
year 2000. We saw what happened with Enron. And what happened is, Enron
Online was used to influence energy prices far beyond Enron. This
impacted
[[Page S7682]]
consumers not only on the West Coast but in my State and all over the
United States.
As a result, we looked at this amendment last year. Both Senator
Lugar and I looked at it. We had a hearing on it last year in the
Agriculture Committee.
This amendment, I believe, does exactly what we want it to do; that
is, to make sure the Commodity Futures Trading Commission----
The PRESIDING OFFICER. The Senator's time has expired.
Mr. HARKIN. Madam President, I ask unanimous consent for 30 more
seconds to complete my sentence.
Mr. DOMENICI. I object.
The PRESIDING OFFICER. Objection is heard.
Mr. DOMENICI. Madam President, how much time is on this side?
The PRESIDING OFFICER. Two minutes 39 seconds.
Mr. DOMENICI. I have no objection.
The PRESIDING OFFICER. Without objection, it is so ordered.
The Senator from Iowa.
Mr. HARKIN. I just wanted to say, this gives the CFTC the authority
again to provide the oversight they need to make sure we have integrity
in these markets for derivatives based on energy, but also for
derivatives based on other things, too, such as weather and broadband.
It is a step in the right direction to provide that oversight and
transparency.
I thank the Chair.
The PRESIDING OFFICER. The Senator from Mississippi.
Mr. COCHRAN. Madam President, what this amendment really does is
transfer some new power and authority to the Federal Energy Regulatory
Commission to regulate some of these highly sophisticated and important
markets. They have never done this before. There is no expertise,
background, or experience in the Federal Energy Regulatory Commission
to do the things this amendment would have them do. So that is not
plugging a loophole. It may be creating a bigger one. It may be
counterproductive. That is what I am suggesting the Senate should
consider.
Look at the letter that has been signed by Alan Greenspan, by John
Snow, the Secretary of the Treasury, by the head of the Securities and
Exchange Commission. These are the people who understand the impact of
this amendment on our economy and on our economic power in the world
today.
This is serious business. I am hopeful the Senate will look
carefully. The amendment appears to grant FERC authority with respect
to derivatives, but it leaves a jurisdictional gap. The amendment would
replace regulatory certainty with regulatory uncertainty. It is a bad
amendment and it ought to be defeated.
The PRESIDING OFFICER. The Senator from New Mexico.
Mr. DOMENICI. Madam President, do we have any time remaining on our
side?
The PRESIDING OFFICER. One minute 21 seconds.
Mr. DOMENICI. I yield the Senator from Wyoming the remainder of our
time.
The PRESIDING OFFICER. The Senator from Wyoming.
Mr. ENZI. Madam President, I do want to point out we debated this
issue a year ago. The conclusion was these are professionals dealing
with professionals. The people who have the oversight over it do have
oversight and are taking advantage of that oversight.
We also passed Sarbanes-Oxley in the meantime. And if the Feinstein
amendment were to be adopted, it would lead to some confusion over
exactly who has jurisdiction.
I know this is an extremely difficult issue. This is my third time
debating it. I do know how to spell it now. But it is a very
complicated issue, and it is not something we ought to be doing in a
reaction that will result in overreaction. So I ask that we vote
against this amendment.
I yield the floor.
The PRESIDING OFFICER. The Senator from New Mexico.
Mr. DOMENICI. Madam President, I yield back any time we have on our
side.
The PRESIDING OFFICER. Time is yielded back.
Mr. DOMENICI. I move to table the amendment and ask for the yeas and
nays.
The PRESIDING OFFICER. Is there a sufficient second?
There appears to be a sufficient second.
The question is on agreeing to the motion.
The clerk will call the roll.
The assistant legislative clerk called the roll.
Mr. REID. I announce that the Senator from Massachusetts (Mr. Kerry)
is necessarily absent.
I further announced that, if present and voting, the the Senator from
Massachusetts (Mr. Kerry) would vote ``nay''.
The PRESIDING OFFICER. Are there any other Senators in the Chamber
desiring to vote?
The result was announced--yeas 55, nays 44, as follows:
[Rollcall Vote No. 218 Leg.]
YEAS--55
Alexander
Allard
Allen
Bayh
Bennett
Bond
Breaux
Brownback
Bunning
Burns
Campbell
Carper
Chambliss
Cochran
Coleman
Collins
Cornyn
Craig
Crapo
DeWine
Dole
Domenici
Ensign
Enzi
Frist
Graham (SC)
Grassley
Gregg
Hagel
Hatch
Hutchison
Inhofe
Kyl
Landrieu
Lincoln
Lott
McConnell
Miller
Murkowski
Nelson (NE)
Nickles
Pryor
Roberts
Santorum
Sessions
Shelby
Smith
Snowe
Specter
Stevens
Sununu
Talent
Thomas
Voinovich
Warner
NAYS--44
Akaka
Baucus
Biden
Bingaman
Boxer
Byrd
Cantwell
Chafee
Clinton
Conrad
Corzine
Daschle
Dayton
Dodd
Dorgan
Durbin
Edwards
Feingold
Feinstein
Fitzgerald
Graham (FL)
Harkin
Hollings
Inouye
Jeffords
Johnson
Kennedy
Kohl
Lautenberg
Leahy
Levin
Lieberman
Lugar
McCain
Mikulski
Murray
Nelson (FL)
Reed
Reid
Rockefeller
Sarbanes
Schumer
Stabenow
Wyden
NOT VOTING--1
Kerry
The motion was agreed to.
Mr. DOMENICI. Madam President, I move to reconsider the vote.
Mr. REID. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
Amendment No. 880
The PRESIDING OFFICER. The Senator from Tennessee.
Mr. ALEXANDER. Madam President, I send an amendment to the desk and
ask for its immediate consideration.
The PRESIDING OFFICER. The clerk will report.
The legislative clerk read as follows:
The Senator from Tennessee [Mr. ALEXANDER], for himself,
Mr. Santorum, Mr. Cornyn, Ms. Landrieu, Mr. Bingaman, and Mr.
Domenici, proposes an amendment numbered 880.
Mr. ALEXANDER. Madam President, I ask unanimous consent that the
reading of the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:
(Purpose: To require a report from the Secretary of Energy on natural
gas supplies and demand)
Page 52, after line 22, insert:
``SECTION . NATURAL GAS SUPPLY SHORTAGE REPORT.
``(a) Report.--Not later than six months after the date of
enactment of this act, the Secretary of Energy
(``Secretary'') shall submit to the Congress a report on
natural gas supplies and demand. In preparing the report, the
Secretary shall consult with experts in natural gas supply
and demand as well as representatives of State and local
units of government, tribal organizations, and consumer and
other organizations. As the Secretary deems advisable, the
Secretary may hold public hearings and provide other
opportunities for public comment. The report shall contain
recommendations for federal actions that, if implemented,
will result in a balance between natural gas supply and
demand at a level that will ensure, to the maximum extend
practicable, achievement of the objectives established in
subsection (b).
``(b) Objectives of Report.--In preparing the report, the
Secretary shall seek to develop a series of recommendations
that will result in a balance between natural gas supply and
demand adequate to--
``(1) provide residential consumers with natural gas at
reasonable and stable prices;
``(2) accommodate long-term maintenance and growth of
domestic natural gas dependent industrial, manufacturing and
commercial enterprises;
``(3) facilitate the attainment of natural ambient air
quality standards under the Clean Air Act;
[[Page S7683]]
``(4) permit continued progress in reducing emissions
associated with electric power generation; and
``(5) support development of the preliminary phases of
hydrogen-based energy technologies
``(c) Contents of Report.--The report shall provide a
comprehensive analysis of natural gas supply and demand in
the United States for the period from 2004 to 2015. The
analysis shall include, at a minimum,--
``(1) estimates of annual domestic demand for natural gas
that takes into account the effect of federal policies and
actions that are likely to increase and decrease demand for
natural gas;
``(2) projections of annual natural gas supplies, from
domestic and foreign sources, under existing federal
policies;
``(3) an identification of estimated natural gas supplies
that are not available under existing federal policies;
``(4) scenarios for decreasing natural gas demand and
increasing natural gas supplies comparing relative economic
and environmental impacts of federal policies that--
``(A) encourage or require the use of natural gas to meet
air quality, carbon dioxide emission reduction, or energy
security goals;
``(B) encourage or require the use of energy sources other
than natural gas, including coal, nuclear and renewable
sources;
``(C) support technologies to develop alternative sources
of natural gas and synthetic gas, including coal gasification
technologies;
``(D) encourage or require the use of energy conservation
and demand side management practices; and
``(E) affect access to domestic natural gas supplies; and
``(5) recommendations for federal actions to achieve the
objectives of the report, including recommendations that--
``(A) encourage or require the use of energy sources other
than natural gas, including coal, nuclear and renewable
sources;
``(B) encourage or require the use of energy conservation
or demand side management practices;
``(C) support technologies for the development of
alternative sources of natural gas and synthetic gas,
including coal gasification technologies; and
``(D) will improve access to domestic natural gas
supplies.''.
Mr. ALEXANDER. Madam President, I offer an amendment on behalf of
Senator Santorum, Senator Cornyn, Senator Landrieu, Senator Bingaman,
the ranking member of our committee, and Senator Domenici, the chairman
of our committee has joined the amendment as well, which I deeply
appreciate.
This is an amendment about the emerging natural gas crisis. It would
require the Secretary of Energy, within 6 months from the date of
enactment of this Energy bill, to submit a report on natural gas
supplies and demand. I offer this amendment because I believe it will
help us deal with what I am afraid is an emerging natural gas crisis.
If that were to occur, we would be able to protect our jobs, heat or
cool our homes at reasonable costs, and clean our air to the standard
that we wish.
As chairman of the Subcommittee on Energy, working with our chairman
of the full committee, I intend to help schedule hearings as soon as
possible on this emerging crisis. This report and these hearings should
help us take a hard, honest look at what we do short term and long
term.
Alan Greenspan is usually a little difficult to interpret when he
testifies but he was not difficult to understand on May 21 when he
testified before the Joint Economic Committee. This is what he said
about natural gas:
In contrast, prices for natural gas have increased sharply
in response to very tight supplies. Working gas in storage is
presently at extremely low levels, and the normal seasonal
rebuilding of these inventories seems to be behind the
typical schedule. The colder-than-average winter played a
role in producing today's tight supply as did the inability
of heightened gas well drilling to significantly augment net
marketed production. Canada, our major source of gas imports,
has little room to expand shipments to the United States. Our
limited capacity to import liquefied natural gas effectively
restricts our access to the world's abundant supplies of
natural gas. The current tight domestic natural gas market
reflects the increases in demand over the past two decades.
That demand has been spurred by myriad new uses for natural
gas in industry and by the increased use of natural gas as a
clean-burning source of electric power.
I asked Mr. Greenspan to elaborate on that, and I will not read all
of his remarks but this is the way he began his response to my question
on May 21:
Senator Alexander, I am surprised at how little attention
the natural gas problem has been getting. Because it is a
very serious problem. It's partly the result of new
technologies employed in the areas of growing technologies
and the whole exploratory procedures which embarked over the
last decade or so.
He talked about our contradictory Federal policies. This is not some
abstract issue. The price of natural gas was $3.50 or so last summer.
It spiked to $9 or better in the winter. Today it is $6.25 or so. That
affects the cost of heating and cooling our homes, but it affects our
jobs in a big way.
For example, someone from a large chemical industry in our State came
to see me a few weeks ago when gas prices spiked up. The thousands of
employees there had taken a voluntary 3-percent cut in their pay. The
management had taken a 6-percent cut in their pay. They were worried
about the price of natural gas which is a raw material for that
chemical industry.
It does not just affect the chemical industry. In California, for
example, where not much coal is burned because it pollutes the air,
natural gas effectively sets the price of electricity. So this emerging
crisis in natural gas affects jobs in the whole economy, as we have
been debating.
There are answers but we have contradictory policies. We have plenty
of gas but no access to the gas. We have a lot of alternatives, and we
are trying to encourage them, but when we talk about windmills, we
think we may want a limit on the number of windmills we want to see.
When we talk about nuclear, we have very close votes because people are
skeptical about nuclear power. When we talk about coal, it pollutes the
air. When we talk about drilling more oil, we vote no about going to
Alaska. When we consider liquid gas from overseas, we are worried it
might blow up in big terminals on the sea coast. And hydrogen we all
are for but it is 20 years away.
The bottom line: We have contradictory policies short term. This
could slow down our recovery and keep unemployment high and hurt our
jobs long term. It could mean electric rates go sky high and our
manufacturing jobs go to Mexico and China. We need to take an honest,
hard look at the consequences of our failure to achieve a balance of
natural gas and its alternatives, and I hope this report required by
this amendment will help do just that. I will work with the chairman,
with the ranking member, to make certain our committee hearings help do
that, as well.
I yield the floor.
Mr. DOMENICI. Madam President, I understand that amendment will be
accepted on both sides.
Mr. BINGAMAN. Madam President, that is correct. We support the
amendment and urge its passage.
Mr. DOMENICI. The Senator from Louisiana asked if she might speak for
1 minute.
Ms. LANDRIEU. I understand the amendment offered by my colleague from
Tennessee will be accepted. That is good. It is a good amendment and
certainly should be part of this bill.
Since I am in the Chamber, I wish to speak a minute in support of the
amendment and add to the record he has so ably outlined. In one case in
Louisiana--and there are many cases, but in one case Louisiana Ammonia
Producers has gone from, in 1998, 9 companies employing more than 3,500
people to 3 companies employing fewer than 1,000 people. Part of the
reason for this tremendous decline at a time when we are trying to
create jobs instead of losing them is the rising price of natural gas.
The price of natural gas, because supplies are so tight, in the first
quarter of 2003, was $5.91 a million Btu's, a 129 percent increase over
the average price for the first quarter of the previous 10 years.
The Senator from Tennessee is absolutely right. A commission to study
ways to increase the supply of natural gas is critical and important if
we are going to keep the companies, large and small, in this country
competitive.
I yield the floor.
Mr. DOMENICI. Madam President, I congratulate the Senator. The first
comment was on a question the Senator put to Dr. Greenspan and his
response about being surprised at how little attention was being paid
to matters. We are quite proud that this committee started paying
attention to natural gas as soon as we convened this year. Our first
hearings indicated, through our experts, that we were going to have a
serious shortage. We were questioning even then; that was only 3 or 4
months ago.
We have nothing further.
The PRESIDING OFFICER. If there is no further debate, the question is
on
[[Page S7684]]
agreeing to the amendment of the Senator from Tennessee.
The amendment (No. 880) was agreed to.
Mr. DOMENICI. I move to reconsider the vote.
Mr. BINGAMAN. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
Mr. REID. Madam President, staff is retyping the proposed agreement,
but to save time I wonder if we could go to the Bingaman amendment.
Originally, the plan was to vote on Bingaman and the Burma matter after
debate was completed on both issues. We have an objection on our side
to doing that. We could go to the Bingaman amendment immediately, have
40 minutes of debate equally divided, then following that have a vote
on or in relation to the Bingaman amendment, and then go to the Burma
matter after that.
Mr. DOMENICI. I ask Senator Campbell if that is all right.
Mr. CAMPBELL. That is fine.
Mr. DOMENICI. We have no objection.
Amendment No. 881
(Purpose: To provide for a significant environmental review
process associated with the development of Indian energy
projects, to establish duties of the federal government to
Indian tribes in implementing an energy development program,
and for other purposes)
Mr. BINGAMAN. I send an amendment to the desk and ask for its
immediate consideration.
The PRESIDING OFFICER. The clerk will report.
The legislative clerk read as follows:
The Senator from New Mexico [Mr. Bingaman], for himself,
Mr. Inouye, and Mr. Daschle, proposes an amendment numbered
881.
Mr. BINGAMAN. Madam President, I ask unanimous consent that the
reading of the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
(The amendment is printed in today's Record under ``Text of
Amendments.'')
Mr. BINGAMAN. Madam President, this is an amendment I am offering on
behalf of myself and Senator Inouye. It is an amendment that will make
several changes in section 303 of the Indian energy title in this
legislation that is pending before the Senate.
First, a little background on these issues so my colleagues
understand what is at stake. Title III of S. 14 contains a very strong
Indian energy title. It would provide tribes with the financial and
technical assistance they need to help them develop and utilize energy
resources on Indian land.
This title III represents a combination of sections from two separate
bills. One was introduced by Senator Campbell; the other was introduced
by Senator Inouye and myself. I very much appreciate the willingness of
the majority to work with us and include in the bill now before the
Senate a number of sections from the Bingaman-Inouye bill. Most of
these measures were included as part of last year's Senate-passed
Energy bill and were generally agreed to in the House-Senate conference
without controversy. Unfortunately, as we all know, those sections did
not become law.
Notwithstanding the general support that exists for the Indian energy
title in this bill, there is one section that is fairly controversial.
That is the subject of our amendment. It is section 2604. It would
authorize tribes to enter into leases and business agreements and issue
rights-of-way for energy development projects on tribal lands without
the separate approval of the Secretary of the Interior. These leases
and business agreements and rights-of-way would involve a broad range
of energy projects, including oil and gas extraction, powerplants
development and construction, and even some mining activity would be
covered under the language in the bill. This activity could take place
on any tribal trust lands, not just those on reservation but also lands
that have been designated as tribal trust lands off reservation. There
are many of those, as we know.
There is no disagreement on whether we should allow tribes to
exercise more control over development on tribal lands. There is,
however, a disagreement on how we go about that.
The present language in section 2604 raises two significant issues.
The first is that by eliminating the Secretarial approval of leases and
agreements and rights-of-way, section 2604 eliminates the ``major
Federal action'' determination that triggers the application of the
National Environmental Policy Act, NEPA. This effectively waives the
analysis and the public participation requirements that are in that
law. It thereby reduces the ability to protect the interests of both
those residing on reservations and those residing in adjacent
communities.
While a substantial environmental review process is included in
section 2604, it is limited in the range of impacts that require
review. It does not require the implementation of mitigation measures.
It does not require any changes in response to the concerns of affected
tribal members or the concerns of local communities.
Obviously, eliminating NEPA is a concern to many national and local
environmental groups and also to some Native American organizations
that have weighed in with strong letters on the issue. It is also of
concern to the counties around the country. In a letter dated May 14 of
this year, the National Association of Counties is calling for section
2604 to be modified so that a NEPA analysis is completed for each new
energy project that goes forward on Indian lands.
There is a bipartisan group of attorneys general representing the
States of Arizona, New Mexico, Nevada, North Dakota, Utah, Wyoming, and
Connecticut that have also expressed strong concerns about the
diminishment of environmental review for tribal energy resource
development projects. They have expressed their views in a letter dated
June 9 of this year. In that letter they wrote:
While we understand that this provision is intended to
promote the worthy goals of tribal self-determination and
sovereignty, we are concerned that it goes too far in
facilitating significant development activity without
ensuring that adequate protections exist for affected
communities and adjacent lands. Section 2604 represents a
significant change in the law that could have serious
implications for the States that we represent. We therefore
urge the provision be amended to ensure that significant
energy development activity on tribal lands continues to be
subject to meaningful environmental review, including an
ability for State and local governments to participate in the
process.
The concern expressed by those attorneys general and the counties
underscores the fact that without some applicable Federal law related
to the significant development activity contemplated under this section
2604, it is unclear what standard is to apply. Some have argued that
tribal lands should be treated just as private lands are and tribes
should be free, as private landowners are, to go forward with
development projects. In my view, that is not a good analogy because
private lands are subject to State and local laws; tribal lands are
not. We are all aware that a private landowner has requirements by
virtue of State and local law that do not apply on tribal lands. Tribal
law can and should apply to energy development on tribal lands, but at
the same time Congress has a responsibility to ensure that certain
Federal parameters are in place.
The second issue that is raised by this section 2604 is that the
language in the section undermines the Secretary's trust responsibility
to Indian tribes. A number of tribes have expressed strong concerns
about the language which appears to change the traditional trust
relationships between the Federal Government and Indian tribes. Tribal
concern is driven by a decision 3 months ago by the U.S. Supreme Court
in the case of United States v. Navajo Nation. The Supreme Court
specifically addressed the Federal trust responsibility and the
standard for ensuring that statutes affecting Native Americans contain
fiduciary duties by which the Federal Government as trustee can be held
accountable for its actions that may have serious and negative impacts
on tribal interests.
Section 2604, the subject of our amendment here, as currently drafted
does not meet the standards established by the Supreme Court. In fact,
it goes in the opposite direction. It diminishes the Federal
Government's trust responsibility and accountability to tribes. This is
inconsistent with the current Federal policy of tribal self-
determination and self-governance. These policies, in effect since the
landmark Indian Self-Determination Act of 1975,
[[Page S7685]]
clearly preserved the Federal trust responsibility and accountability
to tribes while facilitating tribal control over Federal Indian
programs.
The amendment Senator Inouye and I are offering addresses both the
environmental review question I talked about and the trust
responsibility issues, as well as other miscellaneous matters, in the
hope that we can improve the final Indian energy title from a tribal
perspective, from an environmental perspective, from a State
perspective, and from a local perspective.
With respect to the environmental issue, the amendment does the
following four things:
No. 1, it ensures sufficient time for the Secretary to review the
proposed tribal energy resource agreements without a waiver of Federal
environmental laws.
No. 2, it improves the environmental review process so that it is
comparable to the standards required under NEPA, while maintaining
tribal control over that review.
No. 3, it removes language limiting who can petition for a review of
the implementation of tribal energy resource agreements.
No. 4, it requires Congress to review and reauthorize this section of
the program 7 years from now, without it just continuing indefinitely.
With respect to trust responsibility, the amendment deletes language
that would prevent the tribes from asserting claims against the
Secretary of the Interior related to the Secretary's approval of tribal
energy resource agreements. It also eliminates a broad waiver that
limits the liability of the United States for any losses associated
with the leases or with agreements or with rights-of-way.
The language being eliminated is unacceptable to a large number of
Indian tribes. Because of the language, the Navajo Nation, the largest
tribe in our country and the one involved in this recent Supreme Court
decision that I described, stated in a letter they sent to us dated
June 4 that the ``tribal energy proposal must be defeated.''
The letter goes on to say that the language, if successfully included
in the bill:
. . . would be a virtual endorsement by the Indian tribes'
trustee itself [of course, that is the Federal Government],
of the fraud, dishonesty, and unethical treatment that was
the subject of the Navajo Nation's claim against the United
States, and would open the door for future similar conduct by
federal officials.
The Jicarilla Apache Tribe, in a letter dated April 28, stated that
the provisions currently in the bill ``are inconsistent with the United
States' trust relationship with Indian tribes . . .'' This is a
quotation from their letter. They go on to say they would ``actually
turn the current legal and political relationship between Indian tribes
and the United States Government on its head.''
In addition to deleting most of the offending language, our amendment
also established Secretarial duties to the tribes in implementing
section 2604. In light of the United States v. Navajo Nation decision,
we view this language as necessary to maintain a trust relationship in
which the Federal Government has some accountability to the tribes
electing to enter into agreements under section 2604. The language we
are proposing to add is taken directly from the existing self-
determination law and therefore relies on longstanding precedent.
Finally, our amendment includes a number of minor changes that are
technical. I believe it is a good, constructive improvement to the
bill, and I urge my colleagues to support it.
Madam President, let me ask, how much time remains on our side?
The PRESIDING OFFICER. The Senator has used 10 minutes.
Mr. BINGAMAN. I reserve the remainder of my time and yield the floor.
The PRESIDING OFFICER. Who yields time?
The Senator from Colorado.
Mr. CAMPBELL. Madam President, I rise in opposition to the Bingaman
amendment. I will try to go through this as quickly as I can because I
know Senator Domenici also wants to speak.
On Thursday I introduced an amendment and withdrew it yesterday. That
amendment was supported by the National Congress of American Indians,
which is over 300 tribes, the Council of Energy Resource Tribes, which
represents 50 additional tribes, and the U.S. Eastern and Southern
Tribes, which represents 50. It was supported by five New Mexico
Pueblos, including the Jicarilla Apache Tribe of New Mexico, the
National Tribal Environmental Council, which represents 180 tribes, and
the U.S. Chamber of Commerce.
I pulled that back yesterday to refine some of the language but will
be reintroducing it shortly--tomorrow or as soon as I can, as soon as
we revise a little bit of the language.
Let me point out this chart I have over here. Under existing law,
current law, we have a real disparity among tribes. Tribes are treated
like individuals in that, if they own land and want to develop the land
for minerals or oil or gas, they could do it without complying with
NEPA as individual owners or States can. If the Secretary gets involved
by virtue of the tribe signing some agreement with an outside entity,
she has to then approve the lease or not approve the lease.
What has happened is that wealthy tribes have had the ability to
develop their own resources. I live on one reservation, the Southern
Ute Reservation, and they do that; they don't have to comply with NEPA.
Most tribes are not that wealthy and have to seek an outside partner.
Basically, that puts them at a terrific disadvantage for developing
their own resources.
I will not go into all resources now under Indian land because I did
go through that the other day, but it is very clear that a great deal
of American unutilized oil, natural gas, coal, and other minerals are
under Indian land now. We are talking about a people who have 70
percent unemployment in some cases, so they definitely need the jobs
and help as well as America needs the energy to become less dependent
on foreign energy.
In any event, let me go through the Bingaman amendment a little, if I
may. We spoke about 2604 primarily. As I understand it, and as I
believe, Senator Bingaman's amendment would force the statutory NEPA
equivalent upon all tribes. As it is now, some are not required to go
through NEPA, as I just mentioned.
Also, it will create an unfunded mandate that will completely defeat
the goal of facilitating energy development on tribal lands and
diminish tribal sovereignty.
I take strong issue with another aspect of the Bingaman amendment
having to do with the liability of the United States for tribal
decisions. Under title III, along with the power to create approved
leases, agreements, and rights-of-ways without Secretarial approval,
the tribes have the responsibility for the decisions they make.
Mr. Bingaman's amendment in effect de-links the two, eliminating the
language that says the Secretary will not be liable for losses arising
under the terms of the leases the tribe negotiates on its own. That
would mean he would keep the Secretary on the hook for those losses
arising from lease terms negotiated by the tribe, even though the
Secretary had nothing to do with the negotiations. I don't think that
is very good policy, frankly.
Paradoxically, Senator Bingaman's amendments would give the Secretary
of the Interior authority to negotiate a tribe's remedies against the
United States for breach of its duties under the tariff on a tribe-by-
tribe basis.
I know of one tribe--I believe two now--the Navajo, that supported
the Bingaman amendment but opposes this one. But I think it has very
little to do with section 2604. It has more to do with court cases
recently which did not go their way. As I understand it, they really
want some language that would effectively bail them out of losing that
court case.
The vast majority of tribes support the amendment that I introduced
the other day.
I think it is a particularly dangerous idea. In some instances,
speaking of the Secretary's obligations, the Secretary might
effectively negotiate away her obligations, although by including a
provision that says the tribe will have no remedies against the United
States, the Bingaman amendment expressly allows her to do that without
limitation.
Do the obligations referred to in the Bingaman amendment include the
trust obligation? They must because there are no obligations on the
part of the Secretary mentioned in his amendment other than duty to
conduct annual trust evaluations.
[[Page S7686]]
I point out that in the amendment I offered the other day, in section
2604 there was some question about whether it decreased trust
responsibility. I know my colleagues can read as I can. Let me read, on
page 14, section (6)(a), line 19:
Nothing in this section shall absolve the United States
from any responsibility to Indians or Indian tribes,
including those which derive from the trust relationship or
from any treaties, Executive Orders, or agreements between
the United States and any Indian tribe.
The Secretary shall continue to have trust obligation to
ensure the rights of an Indian tribe are protected in the
event of a violation of Federal law or the terms of any
lease, business agreement or right-of-way under this section
or any other party to any such lease, business agreement or
right-of-way.
Under the amendment which I introduced and which I will reintroduce,
these trust responsibilities are very well protected.
Finally, Senator Bingaman's amendment would sunset section 2604 in 7
years. I think that has somewhat of a chilling effect. First of all, if
a tribe wants to avail itself of section 2604 as an alternative to the
status quo, it will have to make considerable effort to develop this
relationship and agreement to demonstrate its capacity to be able to
develop its minerals resources.
Under the Bingaman amendment, the alternative procedure would
evaporate in 7 years. Very frankly, the tribe advances to self-
determination would evaporate right with it. I think that would
effectively prevent any tribe from pursuing the section 2604
alternatives.
Senator Bingaman, as I understand his amendment, believes that
section 2604 effectively waives NEPA. It does not. The language in the
amendment expressly states that the Secretary must review the direct
effects of her approving agreement under the provisions of NEPA. That
means even though the tribe, when it is making agreements with an
outside entity, will have to comply with NEPA upfront, before the
Secretary can approve that agreement, she has to subscribe and conform
to all NEPA provisions.
The other provisions in the section require an opportunity for public
and local governmental input and comment.
The Senator mentioned some opposition from local communities. This is
also taken care of under 2604, and it must ensure compliance with all
applicable environmental laws in 2604.
The Bingaman amendment also states that there is a tribal concern for
section 2604 as it undermines the trust responsibility. I have already
dealt with that.
But, clearly, the United States is only held harmless from losses
arriving from terms negotiated by a tribe operating under an approved
agreement. Hopefully, as we move forward, we will be able to deal with
the Navajo problem.
I understand the Navajo. It is a very important tribe. And I have
many friends in the tribe who are very willing to do that.
Very frankly, when we talk about the responsibility of the Federal
Government to Indians, let me go back a little bit and refresh my
colleagues' memory about how tough they have had it in this Nation.
This Government, as you know, took by hook or crook--and usually at
gunpoint--roughly 98 percent of all the land from the American Indians.
This Government also reduced the very proud, independent people to the
poorest ethnic group in America with the highest unemployment rate, the
highest degree of poor health, the highest high school dropout rate,
and the highest suicide rate among any other group. This Government
also has time and again told the Indians: We know what is best for you
whether you like it or not.
That is basically what I think the Bingaman amendment does. We will
stifle your religious beliefs, destroy your culture, relocate and
relegate you to a life of poverty and deprivation, as happened in the
1950s under the Terminations Act and the Relocation Act. We will drive
you through a time bordering on ethnic cleansing, and we will not let
you be a citizen in your own land--until 1924. That is when Indians got
the right to vote in the United States.
Through all of those years, the few threads of hope Indians clung to
were that they would not lose what little they had left. And a few
things that gave them hope were closely held beliefs about so-called
Mother Earth, their belief in a creator, and that all things will get
better. And one in particular was that U.S. Government promise; that
promise is called ``trust responsibility.''
For the past 30 years, since the Nixon Doctrine of Self-
Determination, American Indians have been making small strides. But in
their culture, they are rather big gains considering how far they have
come. It has been an endless struggle to try to share in the same
American dream that Members of this body take for granted.
In my view, the Bingaman amendment would literally strip tribes of 30
years of that direction of self-determination and would circumvent the
trust responsibilities this Government has to tribes because it would
force the statutory equivalent of NEPA on all decisions they make with
their own land. As I mentioned, it is an unfunded mandate.
I say to my colleagues in this body that if you want to keep American
Indians on their knees, unable to provide jobs for their families and
facing a dead end future, then vote for the Bingaman amendment. If you
believe that fairness should be right for all Americans, including
Indians, to do best what they can with their own resources and for
their own people, vote against the Bingaman amendment and help me craft
a better alternative, which is the one I mentioned that I introduced
and pulled back and which I am going to reintroduce, and which already
has the support of the vast majority of Indian people in this Nation.
I yield the floor. I thank my colleague, Senator Domenici, for giving
me time.
Mr. DOMENICI. Mr. President, how much time do we have on our side?
The PRESIDING OFFICER. Ten minutes 30 seconds.
Mr. DOMENICI. I will use 7 minutes and leave 3 minutes.
First, I congratulate the distinguished Senator Campbell from the
State of Colorado. I don't believe I could say it any better.
In a nutshell, the Bingaman amendment is not good for the Indians in
the United States. If we are crafting a bill here that says we want
them to develop their energy resources, the amendment before us takes
the unprecedented step of applying the NEPA process to the Indian
tribes just as if they were the Federal Government.
This amendment goes well beyond current environmental regulations and
adds unnecessary regulations and costs to the tribal energy projects.
This proposal is opposed by numerous Indian tribes and tribal
associations that are already burdened by the lease approval process
through the Federal bureaucracy.
I will read a list of Indian tribes and associations that I would
assume do not favor the Bingaman amendment because they were in favor
of the amendment alluded to by the distinguished Senator, Mr. Campbell,
with whom I was going to cosponsor, for they all refer to it:
The National Congress of American Indians, the Council of Energy
Resource Tribes, National Tribal Environmental Council, Southern Ute
Tribe, Cherokee Nation, Chickasaw Nation, Native American Energy Group,
Mohegan Tribe, Five Sandoval Indian Pueblos, Dine Power Corporation,
Jicarilla Apache Nation, and the U.S. Chamber of Commerce.
I ask unanimous consent that this list be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Tribal Letter Supporting Campbell/Domenici Amendment to Title III
1. National Congress of American Indians (NCAI)--Is the
largest and oldest Tribal organization.
2. Council of Energy Resource Tribes (CERT)--Represents
over 50 tribes interested in developing energy resources.
3. National Tribal Environmental Council--Represents 180
tribes on environmental matters.
4. Southern Ute Tribe (Colorado).
5. Cherokee Nation (Oklahoma).
6. Chicasaw Nation (Oklahoma).
7. Native American Energy Group (Wyoming).
8. Mohegan Tribe (Connecticut).
9. Five Sandoval Indian Pueblos (New Mexico).
10. Dine Power Corporation--A Navajo Corporation (New
Mexico, Arizona).
[[Page S7687]]
11. Jicarilla Apache Nation (New Mexico).
12. U.S. Chamber of Commerce.
Mr. DOMENICI. Mr. President, the amendment will do the following:
It will force the tribes to pay the cost of NEPA, extend the
bureaucratic delays of energy projects, and diminish tribal
sovereignty.
There isn't a tribe in the country that would volunteer for this
program because it doesn't do anything to improve their current
process. So why would they volunteer to join it?
I am confused by the purpose of the amendment. If the intention is to
mandate that the tribes comply with NEPA for every single lease or
permit, why not offer an amendment to strike the entire Indian energy
title and argue for the status quo?
This amendment goes far beyond existing law and expands NEPA beyond
the scope of the Federal Government to cover tribes, independent of any
Federal action.
By requiring an environmental impact statement to be performed for
every lease, it will impose a cost of hundreds of thousands of dollars
to be financed by the tribes. A cost they should not have to afford.
If adopted, the amendment would encourage the generation of paper,
not the generation of natural gas and crude oil and coal, which I
thought we were here supposed to do.
The objective of title III has to be to help the tribes by
streamlining current lease approval processes that have hampered
investment and the development of the Indian tribal lands as far as
energy is concerned.
Senator Campbell and I have worked closely with the tribes to craft a
careful compromise that will protect the trust responsibility of the
Secretary and the environment. That bill will be offered later, but it
is not the bill pending before the Senate. It is a bill you will know
because it will bear the name of the distinguished chairman of the
Committee on Indian Affairs, Senator Campbell.
The Secretary's approval of the tribes' energy resource agreement
will trigger NEPA if the Secretary of the Interior believes it will
have a significant impact on the environment. Once an energy resource
agreement is approved, tribes will not be required to seek Secretarial
approval but will be required to comply with relevant environmental
laws, just like any other landowner.
Senator Campbell and I have worked with tribes to ensure that the
trust relationship between tribes and the Secretary of the Interior is
protected.
This proposal is embodied in the Campbell-Domenici amendment which
will be offered at a later date.
The Bingaman amendment, however, would require the Secretary of the
Interior to take full responsibility for all liability incurred by
tribes--even if the Secretary wasn't party to the negotiations. That
simply doesn't make sense.
However, a separate and conflicting provision in this amendment
allows the Secretary to negotiate all remedies to the Secretary's trust
responsibility in the energy resource agreement.
As I read it this will give the Secretary authority to drive a hard
bargain with individual tribes that are desperate to gain the
Secretary's approval of their energy resource agreement. Of course,
this will vary from tribe to tribe and further confuse the trust
issues.
I believe a more simple solution is to ensure that tribes take full
responsibility for the leases and business agreements they negotiate.
The Secretary will not be liable for anything she is not a party to,
but will continue to conduct annual trust evaluation to ensure that the
assets are protected.
Such a solution as included in the Campbell amendment has the support
of many tribes.
I am not aware that the administration has reviewed the Bingaman
amendment and I am not aware of how many tribes support Senator
Bingaman's amendment.
The current system has failed to stimulate investment on Indian land,
despite the resource potential.
The Bingaman amendment will only exacerbate this problem and continue
to restrict the quest for Tribal self-determination.
I urge my colleagues to oppose the Bingaman amendment.
I will state, I would not be offering these kinds of remarks in any
normal situation regarding the relationship between the Indian people,
the Federal Government, and third parties. But clearly when you have an
energy bill, and the purpose of the bill is to have a section in it
that will encourage, will cause, will say to the Indian people, we want
you to be players, participants, owners of energy, so that you can be
part of America's energy solutions and become owners in that solution,
then I think we cannot adopt the laws that are as restrictive as the
ones proposed in the amendment that is pending.
I yield the floor.
The PRESIDING OFFICER (Mr. Graham of South Carolina). The Senator
from Hawaii.
Mr. INOUYE. Mr. President, I rise this moment to speak in favor of an
amendment proposed by my dear friend from New Mexico, Senator Bingaman.
I find it rather uncomfortable and sad that my remarks may be counter
to that of my colleague from New Mexico, my dear friend, Mr. Domenici,
and my colleague, the chairman of the Indian Affairs Committee.
Mr. President, as you know, there is a longstanding relationship
between the United States and the sovereign Indian nations that won
exercise, exclusive dominion, and control over lands that now comprise
our great country.
The large body of Federal Indian law is known as trust
responsibility, and it was first given expression by the Chief Justice
of the United States Supreme Court, John Marshall, in 1832. This
relationship is premised upon the sovereignty of the Indian nations, a
sovereignty that existed well before the U.S. Government was formed,
and it is memorialized in the United States Constitution.
This trust relationship that has always formed the course of dealings
between the U.S. and Indian tribes is well understood and beyond
debate. The United States holds legal title to lands that it held in
trust for Indian tribes. Accordingly, activities affecting Indian lands
and resources have always been subject to approval by the Secretary of
the Interior Department, acting as the principal agent for the United
States. That is the law of the land.
In the Congress, we have always understood the United States trust
responsibility as being derived from treaties, statutes, regulations,
executive orders, rulings, and agreements between the Federal
Government and Indian tribal governments. We have legislated on this
basis. The courts have issued rulings on this basis. And until recently
the executive branch has premised policy on this basis and promulgated
regulations on this fundamental principle of law.
However, in the arguments before the U.S. Supreme Court earlier this
year, the Government took the position that the duties of the U.S., as
trustee for Indian lands and resources, exist only as they may be
spelled out in statute, and are legally enforceable only if a statute
provides a remedy for any breach of the trust.
The Supreme Court accepted the Government's argument that the duties
of the trustee must be spelled out in statute, but ruled that as long
as the Government had complete management control over the trust land
or trust resources at issue, then the trustee's duties could be legally
enforced and there could be a damage remedy for a breach of the
Government's trust duties.
Tribal governments are also paying keen attention to the arguments
that are being advanced by the Government in pending legislation over
the management of funds which are held in trust by the United States
for individual Indians and Indian tribes. Most of us have heard of the
assertions in this case in which it maintained that the Government is
unable to account for more than $2 billion in Indian trust funds.
With the Government's advocacy for a new perspective on the United
States trust responsibility, it is readily apparent why the eyes of
Indian country are sharply focused on the tribal provisions of this
bill and the amendments that are the subject of our discussion today.
Native America wants to see what position the Congress will adopt as
it relates to the ongoing viability of the trust relationship. They are
closely scrutinizing our words and our actions in the context of this
measure to determine whether they signal a departure from the
traditional and well-established principles of the United States trust
responsibility.
[[Page S7688]]
That is why I believe it is incumbent upon us to make sure we
understand what is at stake in this debate. There has always been, and
likely always will be, a tension between a greater measure of tribal
control and a diminished Federal presence in Indian country, one that
has to be reconciled in each distinct area. But the reality is that as
long as the United States holds legal title to Indian lands, the
Federal Government and tribal governments will have to work together on
these matters.
Not all tribal governments have managed their resources, and not all
of those who do seek to develop those resources. But for those that do,
we well understand that they would want to reduce the amount of time
that is customarily involved in securing the Secretary's approval of
leases of tribal land and grants of right of way over Indian lands.
Can this be accomplished without altering or diminishing the trust
relationship? I believe it can. The tribal industry resource agreements
that are authorized, the amendment that we consider today, can serve as
an instrument for defining and adapting this relationship to
accommodate the unique circumstances of each tribe's energy resource
development objectives.
But should the United States trust responsibility for Indian lands
and resources be waived? I am not aware of any tribal government that
supports an unlimited waiver of the United States trust responsibility.
Certainly, one of the largest land-based tribes in the United States,
the Navajo Nation, has made it clear that it will not countenance such
a waiver.
Indian country has a long history and a long memory. That history
documents the sad reality that there have been too many times in the
past when those who did not have the best interests of Indian country
in mind have exploited tribal lands and resources and then walked away.
In those instances, tribal governments and the United States shared a
common interest in addressing the damage to tribal lands and in
pursuing those who caused the damage.
Mr. President, I think it is clear that the provisions of this title
as currently formulated, and if not further amended, will foreclose the
cause of action when there is damage to tribal lands. So I join my
colleague, Senator Bingaman, in sponsoring this amendment because I
believe strongly in Federal Indian responsibility for Indian lands, and
the resources must be maintained and strengthened, not diminished.
I yield the floor.
The PRESIDING OFFICER. Who seeks recognition?
The Senator from Colorado is recognized.
Mr. CAMPBELL. How much time do we have?
The PRESIDING OFFICER. The Senator has consumed 16 minutes.
Mr. CAMPBELL. We have 20 minutes; correct?
The PRESIDING OFFICER. It is the understanding of the Chair that no
agreement has been reached about the time limit on this amendment.
Mr. CAMPBELL. Mr. President, I will just make a couple of comments.
Senator Inouye and I have been friends for a great number of years.
When he was chairman, and now as the ranking member, we have worked on
an awful lot of Indian legislation together.
With all due respect, I think he might be mistaken about what 2604
did. In fact, maybe something else, too, and that is simply this.
Tribes, generally, if they are not absolutely sure of themselves when
they enter into agreements, or when they are dealing with the Federal
Government, hire pretty sophisticated attorneys to do the research for
them. All of these different groups, including the National Congress of
American Indians, representing over 300 tribes; the Council of Energy
Resource Tribes, representing over 50 tribes; the U.S. Eastern and
Southern Tribes, representing over 50 tribes; the Pueblos of New
Mexico; the Jicarilla Apache Tribe of New Mexico; and the National
Tribal Environmental Council have had attorneys look at 2604 and,
clearly, none of them has said anything about erosion of trust
responsibility because--and I mentioned earlier--it is stated in 2604,
on page 14, line 18 through page 15, line 3, that, if anything, tribal
trust relationship is strengthened under 2604, which is the amendment I
introduced the other day and am going to reintroduce.
Unlike the Bingaman amendment, which I think, frankly, weakens trust
responsibility--as near as I can tell, the language in his amendment
weakens it. That is one of the questions: which one strengthens it and
which one weakens it? My belief is that 2604 would be strengthened with
the language I will be reintroducing.
The other one is NEPA. I do not believe, frankly, that tribes are off
the hook for NEPA unless they want to develop resources with their own
money on their own land without outside agreements or Secretarial
approval. Once the Secretary looks into it, or agrees to take it up
after they have reached some negotiated agreement, she has to conform
with all NEPA requirements. That is clear in 2604. Nobody is off the
hook from NEPA for trust responsibility.
One more thing. Under 2604, which hasn't been mentioned, and the
amendment that I introduced and will reintroduce, no tribe needs to
participate in this agreement at all. It is totally voluntary, tribe by
tribe. Senator Bingaman mentioned that the Navajo Nation was not
supportive of 2604 and my amendment. That is all right; they don't have
to participate. This is open for the tribes that want to, and those
that do not want to don't have to.
As I understand the Bingaman amendment, they are all going to be
caught in the same net. That is, they will all be required to come up
with the money, as Senator Domenici mentioned, to subscribe to NEPA
even before they reach an agreement. They don't have the money to do
that. All it is going to do is prevent tribes from moving forward in
this Nation.
I have no further comments. I yield the floor.
Mr. DOMENICI. Mr. President, I thought we agreed to 20 minutes on
each side.
Mr. BINGAMAN. That is my understanding. I was hoping we would have a
vote right away. How much time remains on each side?
The PRESIDING OFFICER. The majority has consumed 20 minutes.
Mr. DOMENICI. They want to set it aside and go to the Burma measure.
We had 20 minutes on each side, but they want to proceed to the Burma
debate and vote, stacked, with yours going first.
Mr. BINGAMAN. I thought the agreement was that we would have a vote
on ours.
Mr. DOMENICI. They want to stack them.
Mr. REID. Mr. President, we entered into an agreement, and we all
thought there was going to be a vote following this 40 minutes of
debate. The majority leader was not part of that agreement. In
deference to him, we will not push our 40-minute vote. We will agree to
go to that. That time is gone now, isn't it?
The PRESIDING OFFICER. The majority has used 20 minutes.
Mr. BINGAMAN. We were anxious to get a vote. Senator Schumer wanted
to be here for a vote. He had to leave. He indicates he will have to
leave.
Mr. REID. He has left.
Mr. BINGAMAN. I request that we do our vote so he can be here later
on. Is that acceptable?
Mr. DOMENICI. What was the request again?
Mr. BINGAMAN. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. BINGAMAN. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. BINGAMAN. How much time would remain on our side if we had
entered into that agreement?
The PRESIDING OFFICER. Two minutes.
Mr. BINGAMAN. I will use those 2 minutes.
Mr. President, the underlying bill, which we are trying to amend
here, has in it really clear language that essentially lets the
Secretary of the Interior off the hook. It eliminates responsibilities
that the Secretary of the Interior would otherwise have. It says the
United States shall not be liable for any loss or injury sustained by
any party, including an Indian tribe, or any member of an Indian tribe,
to a lease,
[[Page S7689]]
business agreement, right-of-way, executed in accordance with the
tribal energy resource agreements approved under this subsection.
Then it says that on approval of a tribal energy resource agreement
of an Indian tribe, under paragraph 1, the Indian tribe shall be
estopped from asserting a claim against the United States on the
grounds that the Secretary should not have approved this agreement.
That is a clear statement by the Congress--if that becomes law--that
the Secretary of the Interior is off the hook. This may be on Indian
trust land. It may be that the Secretary of the Interior is the trustee
of that Indian trust land. We are saying in this language--if we don't
amend it by the amendment Senator Inouye and I have prepared, we are
saying that the Secretary of the Interior is off the hook and the
Indian tribe has no one to go to for any kind of remedy. I don't think
we intend to do that.
Senator Inouye and I have put together an amendment we believe keeps
trust responsibility with the Federal Government, where it should be.
It sets up a good procedure that the tribe can work with the Federal
Government. The tribe still has decisions, makes decisions over these
energy development projects, but clearly the Federal Government needs
to be part of that and needs to have responsibility for seeing that
decisions are in the best interest of the tribe.
Mr. President, I think this is a good amendment. I hope that once we
do get to a vote, whenever that occurs, we will see this amendment
adopted. It will strengthen the bill, and I hope very much we can
approve it.
I yield the floor.
Mr. JEFFORDS. I rise in support of the amendment offered by Senator
Bingaman.
His amendment does not go as far as I would wish, because it does not
fully preserve the integrity of NEPA or the Endangered Species Act.
These two Federal statutes, which are under the jurisdiction of the
Environment and Public Works Committee, have been cornerstones for the
protection of environmental quality for decades. Section 2604 of the
bill negates or weakens application of these laws to most energy
development on tribal lands.
Section 2604 would allow tribes to grant leases or rights-of-way for
mineral development, electric generation, transmission or distribution
facilities or facilities to process energy resources of any sort on
tribal lands.
The tribes could do this without the approval of the Secretary of the
Interior.
This would effectively remove the current legislative authority of
the Department of the Interior over these matters.
Under existing law, the oversight of the Secretary of the Interior
over energy development on tribal lands triggers a variety of Federal
permitting requirements which will ensure that NEPA, section 7 of the
Endangered Species Act, and a variety of other Federal laws will apply
to these activities.
Removal of the Secretary's approval authority over many of these
actions would have a number of consequences.
First, it would mean that Federal NEPA laws would no longer apply. It
would also mean that the section 7 Federal consultation provisions of
the Endangered Species Act would cease to apply.
This is particularly significant in that tribal lands are often
adjacent to some of the most protected and pristine Federal lands,
including wildlife refuges, wilderness areas, and National Parks.
Wholesale changes in the application of the Federal mineral leasing and
development laws--and potentially a host of environmental laws--to
tribal lands, could have significant impacts on adjacent sensitive
lands, air quality, water quality and wildlife.
Because of their sovereign immunity and special trust status, tribes
are also generally exempt from many State environmental and other laws,
to which private lands are subject.
Section 2604 represents a sweeping reversal of years and years of
established environmental and energy laws, many of which are within the
jurisdiction of the Senate Environment and Public Works Committee. Our
committee has never held hearings on this, nor had the opportunity to
examine the extent to which this language would weaken or amend Federal
environmental laws, or laws relating to the development of commercial
nuclear power.
My preference would be to insert language which I filed yesterday,
which would clarify that Federal environmental and nuclear laws would
continue to apply to these tribal lands, regardless of removing the
approval of the Secretary of the Interior under the Indian Mineral
Development Act.
However, because I think that the language offered by Senator
Bingaman has a greater chance for success, I will vote in favor of his
amendment.
At a minimum, his amendment would remove any implicit waiver of
Federal environmental laws and would create an environmental review
process to be conducted by tribes to ensure at lease some modicum of
public involvement in what could possibly be massive energy development
on tribal lands.
Section 2604 creates an unprecedented lack of Federal oversight for
development with potentially massive environmental impacts, and I urge
my colleagues to adopt Senator Bingaman's amendment.
The PRESIDING OFFICER. Who seeks recognition?
The Senator from New Mexico.
Mr. DOMENICI. Mr. President, we yield back our time on our side. I
move to table the Bingaman amendment and ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
There appears to be a sufficient second.
The question is on agreeing to the motion. The clerk will call the
roll.
The assistant legislative clerk called the roll.
Mr. REID. I announce that the Senator from Massachusetts (Mr. Kerry)
is necessarily absent.
I further announce that, if present and voting, the Senator from
Massachusetts (Mr. Kerry) would vote ``nay''.
The PRESIDING OFFICER (Ms. Collins). Are there any other Senators in
the Chamber desiring to vote?
The result was announced--yeas 52, nays 47, as follows:
[Rollcall Vote No. 219 Leg.]
YEAS--52
Alexander
Allard
Allen
Bennett
Bond
Brownback
Bunning
Burns
Campbell
Chafee
Chambliss
Cochran
Coleman
Collins
Cornyn
Craig
Crapo
DeWine
Dole
Domenici
Ensign
Enzi
Fitzgerald
Frist
Graham (SC)
Grassley
Gregg
Hagel
Hatch
Hutchison
Inhofe
Kyl
Lott
Lugar
McCain
McConnell
Miller
Murkowski
Nickles
Roberts
Santorum
Sessions
Shelby
Smith
Snowe
Specter
Stevens
Sununu
Talent
Thomas
Voinovich
Warner
NAYS--47
Akaka
Baucus
Bayh
Biden
Bingaman
Boxer
Breaux
Byrd
Cantwell
Carper
Clinton
Conrad
Corzine
Daschle
Dayton
Dodd
Dorgan
Durbin
Edwards
Feingold
Feinstein
Graham (FL)
Harkin
Hollings
Inouye
Jeffords
Johnson
Kennedy
Kohl
Landrieu
Lautenberg
Leahy
Levin
Lieberman
Lincoln
Mikulski
Murray
Nelson (FL)
Nelson (NE)
Pryor
Reed
Reid
Rockefeller
Sarbanes
Schumer
Stabenow
Wyden
NOT VOTING--1
Kerry
The motion was agreed to.
Mr. DOMENICI. Mr. President, I move to reconsider the vote.
Mr. CAMPBELL. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
Mr. DOMENICI. I yield to the Senator from Colorado.
The PRESIDING OFFICER. The Senator from Colorado.
Mr. CAMPBELL. I thank my colleagues for voting for this on the last
motion to table. I know it is a difficult vote for some of my
colleagues. I want to reintroduce tomorrow the amendment I spoke to
earlier. I want to assure Senator Bingaman and Senator Inouye, who have
worked on a lot of different Indian issues with us in the past, that if
the language on trust is not strong enough, I will be more than happy
to review that and work with you to make it even stronger and also to
try to clarify the language dealing with NEPA.
The PRESIDING OFFICER. The Senator from Kentucky.
____________________