Congressional Record, Volume 149 Issue 113 (Monday, July 28, 2003)

[Congressional Record Volume 149, Number 113 (Monday, July 28, 2003)]
[Senate]
[Pages S9993-S10012]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

ENERGY POLICY ACT OF 2003

The PRESIDENT pro tempore. Under the previous order, the Senate will
resume consideration of S. 14, which the clerk will report.
The assistant legislative clerk read as follows:

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

Pending:

Campbell amendment No. 886, to replace ``tribal consortia''
with ``tribal energy resource development organizations.''
Durbin amendment No. 1384, to amend title 49, United States
Code, to improve the system for enhancing automobile fuel
efficiency.
Durbin modified amendment No. 1385, to amend the Internal
Revenue Code of 1986 to provide additional tax incentives for
enhancing motor vehicle fuel efficiency.
Bond amendment No. 1386, to impose additional requirements
for improving automobile fuel economy and reducing vehicle
emissions.

The PRESIDENT pro tempore. The acting leader.
Mr. THOMAS. Mr. President, this morning the Senate has resumed
consideration of S. 14, the Energy bill. The chairman and ranking
member will continue to consider amendments during today's session.

Schedule

On behalf of the leader, I encourage Members who want to offer
amendments to do so as early as possible this week. Those Members
should contact the bill managers for an orderly consideration of those
amendments.
Under a previous agreement, at 5:20 p.m. the Senate shall proceed to
executive session to consider the nomination of Earl Yeakel to be U.S.
District Judge for the Western District of Texas. The Senate will vote
on the Yeakel nomination at 5:30. That will be the first rollcall vote
of the day. Members should anticipate additional votes in relation to
Energy amendments or any other items that can be cleared for action.
In addition, the Senate will consider the trade amendments with Chile
and Singapore. If all debate can be completed on those bills, the votes
will also occur during today's session of the Senate.
Today begins the final week prior to the August recess. Senators can,
therefore, expect busy sessions with rollcall votes throughout each day
and Members should schedule themselves accordingly.
The PRESIDENT pro tempore. The Democratic whip.
Mr. REID. Mr. President, I just received a phone call from a Senator,
and the Senator is on an airplane. Therefore, I will have to protect
her rights. She has indicated she does not wish us to move off the
amendment that is now before the Senate, so there will be no way to
offer other amendments until

[[Page S9994]]

we have this matter resolved. I am not able to speak to her at this
stage, but I will attempt to do so.
She simply will not allow anything to be set aside until we dispose
of the amendment that is before us.
The other thing I want to say is, if the distinguished acting
majority leader would be generous, the Senator from Florida is here and
wishes to speak for up to 3 minutes as in morning business prior to our
getting on to the legislation. I would ask if that would be OK with the
acting majority leader.
Mr. THOMAS. Mr. President, I have no objection to the 3 minutes. I
would like to ask unanimous consent that we be able to go ahead and
speak on the electricity amendment even though we will not be able to
offer it.
Mr. REID. We would not need unanimous consent to do that anyway, so
that would be fine.
Mr. THOMAS. Very well. I have no objection.
Mr. REID. Mr. President, I ask unanimous consent that the Senator
from Florida be recognized to speak for up to 3 minutes.
The PRESIDENT pro tempore. Without objection, it is so ordered.
The Senator from Florida is recognized.
(The remarks of Mr. Nelson of Florida are printed in today's Record
under ``Morning Business.'')
The PRESIDENT pro tempore. The Senator from Wyoming is recognized.
Mr. THOMAS. Mr. President, in keeping with the agreement with the
minority leader, I will not introduce the amendment at this time, but I
would like to talk about the amendment.
Mr. President, what we are going to deal with today is an amendment,
which will be a second-degree amendment and substitute for the electric
title in the Energy bill. As you know, we have talked about the Energy
bill for a good long time on the Senate floor. We have talked about it
in committee, and we talked about it last year. So what has happened is
the chairman of the committee has done a great job of seeking to take
the information that came forward in our discussions in the past about
the electric title of the Energy bill and make it more compatible with
the issues that have arisen during the previous discussions, and to put
it together into an amendment. That is what we will be dealing with.
I am very pleased we have come together on the committee with an
amendment that deals with most of the concerns about people, with a
recognition that there is a changing world in terms of electrical
supply and the way it is distributed throughout the country. If we are,
in fact, to develop an Energy policy that is designed to give guidance
to what happens regarding energy over the next several years, then this
is a very important amendment and very important portion of the Energy
bill.
As we look at ourselves and our families and businesses and our
economy, there is probably nothing that impacts us more than
electricity. It is in everything we do--whether it is lights, heat,
businesses, whatever, we are involved with electricity. Each of us
wants to have it for ourselves and our families. So we need to make
some changes and some policy that moves us in that direction. The
challenges facing the electric industry affect our economy and our
environment, and developing a policy on this electric component is one
of the most challenging aspects of the entire energy debate.
Chairman Domenici's efforts and his leadership on this issue have
been tremendous. He has worked with all the interested parties to
develop a very carefully crafted and balanced product. I will comment a
little later on the whole package of letters of support we have
received from various associations and users. These letters of support
come from the National Rural Electric Cooperative Association, American
Public Power Association, the Large Public Power Council, each
advocating passage of the electric substitute amendment without
modification.
We have talked about the number of amendments that are out there.
Here is one we have already gone through, seeking to talk about and
having opportunity for input from all the various interests. We believe
this section is ready for adoption without modification. There are
letters of support from the electric industry itself. The
administration has also expressed its support for the electricity
amendment.
In a letter dated July 25, the Secretary of Energy wrote that the
Domenici amendment ``will effectively modernize our Nation's antiquated
electricity laws.'' Secretary Abraham stated that the amendment
``protects consumers, ensures the development of wholesale markets that
are transparent and free of manipulation, facilitates open access to
the transmission system, increases electric supply, promotes energy
efficiency, improves reliability, encourages demand response, and
appropriately balances Federal and State responsibilities.''

These supporters in the administration are right. The proposed
electricity title is much needed and will accomplish some of the
following: It establishes mandatory reliability rules. What is more
important to us in electricity than reliability? It expands the
transmission system efficiently on a regional basis. It will promote
more open access to the transmission grid. The way things have changed,
more and more electricity is developed in market generators and has to
be moved to the market in order to make it work. You have to have a
transmission grid.
It ensures priority on transmission lines for native load customers.
This is so that where transmission lines serve certain areas, they are
the first priority, and later you can add to the transmission grid.
It will allocate the costs of expanding the transmission system
fairly, so that the cost doesn't have to be shared excessively by those
already on the line with new users.
It repeals the PUHCA to allow for more investment. This law was
passed some time ago. It limits who can be involved in the ownership
and investment of electric utilities and transmissions. It changes that
so that there still are restrictions to be enforced by the enforcement
agencies, but it allows for more investment.
It reforms PURPA. That is the law that required the purchase of
various kinds of alternative energies at a lower price than the market
might demand. It still allows for that purchase, and it will require it
in some instances, but it takes away that mandatory aspect and allows
competitive markets to work. It strengthens consumer protection also
with increased transparency and oversight.
In the last several years, on the west coast we have seen the need
for oversight and transparency. This provides for that. These are
important issues that need to be addressed as part of a comprehensive,
integrated, strategic energy policy.
Let me remind us that this is a policy we are talking about. So we
need to have some foresight into it. It is not daily detail, it is a
policy for where we go in the future to provide the kind of result that
we would like to see.
Our action now on this amendment will help reduce regulatory
uncertainty. It will provide much needed direction in an industry that
is at a crossroads. That is where we are. The Domenici electricity
amendment is the best solution available, and it deserves all of our
support. It also deserves it soon, so that we can complete this job and
get it out on the ground in the country.
Let me take some time to describe the electricity amendment in a
fairly broad sense. The first part of the electricity amendment
proposes modifications and additions to the Federal Power Act's
definitions. These proposed changes are needed to accommodate
conforming changes and defining terms of art used by the industry.
Specifically, the terms affected are: electric utility; transmitting
utility; regional transmission organizations, RTOs; independent
transmission organizations, or ITOs.
Subtitle A has to do with reliability. The reliability subtitle sets
forth a new framework to ensure greater reliability in the transmission
grid. Today, transmission grid stability is maintained through
voluntary compliance with reliability rules promulgated by the North
American Electric Reliability Council.

This subtitle directs FERC, the Federal Energy Regulatory Commission,
to implement a final rule to certify an electric reliability
organization that will set and enforce mandatory reliability rules for
the safe operation of the transmission grid.

[[Page S9995]]

Mandatory reliability rules are needed due to the increased number
and the complexity of transmission on the grid and more extensive
wholesale competitive markets. This reliability subtitle is based on
consensus language developed by the North American Electric Reliability
Council and the Western Governors Association.
I will point out here that there are substantial differences in
different parts of the country with respect particularly to the
movement of energy. In the West where there is more generated,
sometimes the movement is out of the generation market into the
consumptive market, where in the Northeast, for example, there is less
generation and more movement there. So you need to make these changes
and that is what the reliability subtitle seeks to do.
The provision is supported by a number of other groups and
associations because they know greater reliability means greater
opportunity--greater opportunity for investment.
In addition to NERC and the Western Governors Association, supporters
of the reliability section include the Edison Electric Institute, the
Institute of Electrical and Electronics Engineers, the Canadian
Electricity Association, the National Association of Regulatory Utility
Commissioners, the National Association of State Utility Consumer
Advocates, the American Public Power Association, the National
Electrical Manufacturers Association, the National Rural Electric
Cooperative Association, American Electric Power, Pepco Holdings, Inc.,
the Transmission Access Policy Study Group, TXU Corporation, and the
Western Electricity Coordinating Council.
That is a broad representation of the whole Nation in terms of what
we need to be doing with reliability.
As to subtitle B, regional markets, here again the subtitle
recognizes the regional differences and seeks to promote the regional
market in a careful and fair manner.
The first section of this subtitle delays the finalization of the
Federal Energy Regulatory Commission's standard market design proposed
rulemaking until July 1, 2005. This was a rule that came out from FERC
some time ago that, in the view of most people, took too much authority
to the national level and did not leave enough with the local and
regional level. This is designed to change that situation. FERC seems
agreeable to that change. This delays any order of that kind until July
1, 2005.
Given the controversy surrounding SMD and FERC's willingness to
revisit and revise its approach in the white paper, a delay until July
1, 2005, preceded by a notice of proposed rulemaking and opportunity
for public comment is, we believe, a balanced solution. The timeframe
allows FERC to develop a rulemaking true to the principles and terms
outlined in the white paper regarding deference to the States--that is
very important, deference to the States--and permits those regions that
are working on their own unique marketing designs to continue to do so.
This is a recognition of the fact there needs to be some Federal
oversight. We are going to have a national movement of electricity and,
at the same time, recognize those unique aspects of various regions,
and this is designed to balance that situation.
This subtitle includes a sense of Congress that RTO formation be
voluntary. The subtitle also provides that nothing in the Energy bill
authorizes FERC to mandate the formation of RTOs. We will hear more
about that point, I am sure. The fact is it does not mandate; it allows
the States and regions to make these decisions, which I think is very
important.
This subtitle emphasizes RTO formation, which is very important, and
it promotes fair and open access to electric transmission service;
benefits retail consumers; facilitates wholesale competition; improves
efficiencies in the transmission grid management; promotes grid
reliability; removes opportunities for unduly discriminatory or
preferential transmission practices; and provides for efficient
development of transmission infrastructure needed to meet the growing
demands of competitive wholesale markets.
There has been a great change in how electricity is generated and
distributed. A number of years ago, a company had the job of being a
distribution unit, to go to the retail, to go to your house, my house,
and businesses in a community. They generated their own electricity,
and it was a confined package right there. Over the last number of
years, more than 30 percent of wholesale power is generated by what we
call market generators that do not make retail distribution. Therefore,
to be competitive and to give us a better price, that electricity has
to move about to the companies that do the distribution, and that is
what this whole issue is about.
This subtitle authorizes Federal power marketing agencies, such as
the Bonneville Power Administration and Western Area Power
Administration, to join RTOs. They are a very important part of the
generation and distribution in these areas, and they, too, can come
along with the States to put together these regional organizations.
This subtitle includes a regional consideration section which
encourages discussion between States and FERC on how to improve
transmission and wholesale markets. Issues to be considered include
elimination of pancake rates, that is, multiple cumulative charges for
transmission service across successive locations in a single region,
and the resolution of seams issues, to improve transmission exchanges
between regions. These are very important to a uniform statewide
average rate of transmission pricing.

Subtitle C, which involves transmission access and protecting service
obligations, is very important. The first section of this subtitle is
designed to ensure load-serving entities are a priority on the
transmission grid to fulfill their service obligation to the native
load end users. This section balances the service obligation needs of
both transmission owners and transmission-dependent entities, such as
municipals and co-ops. The section allows this priority only to the
extent required to provide the load-serving entities' native load
obligation. This means if you have powerplants, retail merchants, and
customers, and you want to use that line to go on to new customers, the
first priority is to those being served, the native load, and that is
important to our part of the country.
FERC-lite is just what it says: The ideas that were put forth by the
Federal agency now are toned down with more emphasis given to the
opportunity for States and regions to have input.
The open access, or FERC-lite section, promotes principles of fair
access to the transmission system by requiring that all transmitting
utilities, regulated or unregulated, have rates, terms, and conditions
for transmission service that are not discriminatory or preferential.
The FERC-lite provision will not diminish the local control benefits
upon which many unregulated transmitting utilities depend. Small
unregulated transmitting utilities, such as distribution co-ops, as
well as unregulated transmitting utilities that do not own or operate
significant transmission facilities, are exempt from the FERC-lite.
The section on participant funding directs FERC to issue regulations
about the allocation of costs associated with transmission expansion.
This section clarifies who has to pay for what in transmission
expansion. This clarification will promote certainty and investment in
our energy infrastructure. It really defines benefits. Those who
benefit from the expansion will be expected to pay for the expansion.
Under this section, a regional transmission organization, an RTO, or
an independent system operator may submit a plan regarding transmission
costs to FERC, and FERC will give substantial deference to the comments
filed by State regulatory authorities, other appropriate State
officials, and stakeholders of the RTO or ISO regarding such a plan.
With regard to subtitle D, amendments to the Public Utility
Regulatory Policies Act of 1978, the most challenging part of the PURPA
reform addressed in this section has to do with mandatory purchase and
sale requirements affecting qualified facilities, or QF. Many have
argued that PURPA has resulted in above-market electricity prices
because it forces utilities to buy power they may not need. Thanks to
the hard work of Senators Nickles, Landrieu, and Alexander, a
compromise was reached which will ensure

[[Page S9996]]

that qualifying facilities are legitimate and not just generation
facilities masquerading as QFs and abusing QF benefits.
The compromise prospectively terminates the mandatory purchase and
sale requirements affecting QFs when a competitive wholesale market
exists and sets forth new criteria for future QFs to ensure they are
fundamentally designed to support commercial or industrial processes.

The stakeholders, which include the American Chemistry Council,
International Paper, and the Alliance for Competitive Energy, worked
together to help craft this language with the Senators and strongly
support the principles of ensuring fair and legitimate practices.
This subtitle also includes provisions on net metering, smart
metering, and demand response that require States to consider the
benefits of these policies. What this really means is instead of being
forced to buy the energy that is excessive to some manufacturing group,
it will have to be in a competitive market. They will be legitimate
qualifying facilities and will not be forced, as it was in the past,
but yet will still be able to include these producers as available
energy.
Subtitle E is provisions regarding the Public Utility Holding Company
Act of 1935. This is an outdated statute that imposes barriers to
competition and discourages investment in generation and transmission.
PUHCA limits that are now in place limit geographic and product
diversification and impose many burdensome filing requirements.
PUHCA is also a barrier to the formation of regional energy markets
because it would apply to regional transmission organizations.
Repealing PUHCA does not preclude State and Federal regulators from
protecting ratepayers. They can still take a look at who is doing the
investing and whether the returns generated go back to the right group
and create a good price for users, and they will be able to invest, not
divert, the money, but they will continue to be overseen by existing
regulators. The Department of Justice and the Federal Trade Commission
will continue to protect against antitrust violations.
The Securities and Exchange Commission, which currently oversees
PUHCA, has recommended on a number of occasions that PUHCA be repealed
and certain consumer protections transferred to FERC. That is what we
seek to do here.
Market transparency and antimanipulation enforcement, of course, are
very important subjects, now more than ever because of what happened in
California and elsewhere on the west coast.
This subtitle directs FERC to issue rules to establish an electronic
information system to provide information about the availability and
the price of wholesale market and transmission services to ensure that
such information will be treated with confidentiality, when necessary,
and used to protect consumers in competitive markets.
Here again the allegation--and I am sure to some extent it is true--
was these are the kinds of manipulations that happened in California
and on the west coast, and this is designed to prohibit the filing of
false information regarding the price of wholesale electricity and the
availability of transmission capacity. It prohibits round-trip trading,
where there were apparently some funny tricks played on the west coast.
This will prohibit those kinds of things. It expands those who can file
complaints and who will be subject to FERC investigation; increases the
penalty under the Federal Power Act and the National Gas Act; amends
the Federal Power Act refund effective date to the date of filing. It
makes it work so the purpose for which it was designed can be carried
out.
Subtitle G is consumer protections. Of course, all of us are
interested in that. A number of consumer protections are included in
the amendment. The first one includes a revised section 203 of the
Federal Power Act which will offer FERC limited expansion of its merger
review authority. Justification for this expansion review is needed to
balance the repeal of PUHCA, which we just talked about, and the
potential effects on holding company structures. So we are making some
of the changes that need to be made because of outdated laws and we are
replacing the oversight that needs to be there so it will still be
transparent and visible.
The new section would apply to transactions only that are in excess
of $10 million. So this is designed to deal with major transactions.
In addition, 203 would highlight factors such as consumer protection
financial integrity, evaluating whether a transaction is consistent
with the public interest. These are things that all of us recognize
need to be there. That is why utility commissions have been in effect
in States to sort of have an oversight. Even though we want the private
market to be stronger and more effective, there still needs to be
protection for consumers because there are not lots of choices always
in terms of energy.
A new section requires FERC to adopt rules for consideration of
applicants. It also directs the Federal Trade Commission to issue rules
regarding information disclosures.
So overall, the Domenici electricity amendment is balanced. It is a
fair package that creates a more efficient electricity grid, increases
investment in utility infrastructure, and enhances consumer
protections. These are basically the issues we will be faced with again
in the future. We want electricity available. We want it at a
reasonable price. We know the market can have something to do with that
if there is competition, but if there is competition there has to be
oversight.
If we are going to be able to move electricity, there has to be a
grid. If there is going to be a grid, there has to be agreement among
States in regions. These are the kinds of things we deal with. It is
fairly complicated. On the other hand, there are pretty basic things
that need to be done and have not been done for a very long time.
Of course, we must keep in mind, as we do all of these things, some
of the basic fundamentals we want to protect, and that is there are
State opportunities to make a decision for local power; that we can
show the difference between regional needs by having RTOs that have the
authority to do this. If we are going to have a nationwide grid to be
able to move power to make it more efficiently used, there has to be
some Federal authority as well. This seeks to develop that balance.
This amendment is balanced. It is a fair package. It creates a more
efficient grid, increases investment, and enhances consumer
protections. The amendment is supported by the administration as well
as a number of stakeholders' groups such as the National Rural Electric
Cooperative.
I have a number of letters in support of the amendment and I ask
unanimous consent that they be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

The Secretary of Energy,

Washington, DC, July 25, 2003.
Hon. Pete V. Domenici,
Chairman, Committee on Energy and Natural Resources, U.S.
Senate, Washington, DC.
Dear Mr. Chairman: The purpose of this letter is to provide
the Administration's views on your proposed electricity
substitute amendment to the Energy Policy Act of 2003. The
Administration applauds your efforts and leadership to ensure
that a balanced electricity title is included in the energy
bill under consideration by the Senate.
We support your substitute electricity amendment and
believe it will effectively modernize our Nation's antiquated
electricity laws. Your amendment promotes transmission
expansion, facilitates open access to the transmission
system, increases electricity supply, promotes energy
efficiency, improves reliability, encourages demand response,
and appropriately balances Federal and State
responsibilities.
Furthermore, we believe your amendment will protect
consumers and ensure that developing wholesale markets are
transparent and free of manipulation. Repealing the Public
Utility Holding Company Act (PUHCA) and reforming the Public
Utility Regulatory Policies Act (PURPA) will eliminate
outdated laws on the books and infuse much needed capital
into this sector.
The Administration applauds your commitment to passing
comprehensive energy legislation and looks forward to working
with you in conference to ensure the final bill reflects the
President's priorities as set forth in the National Energy
Policy and promotes energy and economic security for America.
Sincerely,
Spencer Abraham.

[[Page S9997]]

____
U.S. Senate,

Washington, DC, July 24, 2003.
Hon. Pete V. Domenici,
Chairman, Committee on Energy and Natural Resources, Dirksen
Senate Office Building, Washington, DC.
Dear Chairman Domenici: I am writing to express my support
for your efforts to develop comprehensive energy legislation
and to share my views on some issues which I believe to be
critical to the establishment of a competitive electricity
market that will benefit our nation's consumers.
The Senate Committee on Energy and Natural Resources with
your leadership has grappled with a number of complex and
contentious issues with respect to electricity. From my
perspective, the central issues at stake in the debate
surrounding the energy bill's electricity title involve the
Federal Energy Regulatory Commission's (``FERC'') authority
over regional transmission organizations (``RTO''), its
proposed rules for the implementation of standard market
design (``SMD''), and the repeal of the Public Utility
Holding Company Act of 1935 (``PUHCA'').
As you know, in an effort to bring greater order to the
currently balkanized national grid, the Federal Energy
Regulatory Commission issued FERC Order No. 2000, which
directed utilities with transmission assets within their
jurisdiction to join RTOs on a voluntary basis. Although FERC
Order No. 2000 contained permissive language with respect to
participation in an RTO, FERC maintains authority under the
Federal Power Act to mandate participation. While most
utilities have joined an RTO, some still have not, and the
FERC, in the interests of promoting open and competitive
interstate markets for electricity, may deem it necessary to
compel a utility's participation in an RTO. Further, FERC's
ability to mandate participation in an RTO serves as an
important remedy where a utility is found to have abused
market power. I am concerned that legislation might be
adopted to eviscerate this agency's existing authority and
thwart its efforts at promoting competition and a level
playing field. I encourage you to preserve the FERC's
authority with respect to RTOs.
I am also concerned about efforts to curtail the FERC's SMD
rules. As you are aware, the rulemaking that is presently
underway at the FERC seeks to establish a single cohesive set
of rules governing the procedures and pricing of the
transmission of electricity. SMD represents an important step
toward a truly seamless and competitive national grid. Any
delay in this effort would only slow our nation's progress
toward this important goal. I urge you to omit language
delaying the implementation of this rule from comprehensive
energy legislation.
I would also like to express my support for the repeal of
the Public Utility Holding Company Act of 1935 (``PUHCA'').
PUHCA was enacted to eliminate unfair practices and other
abuses by electricity and gas holding companies by requiring
federal control ad regulation of interstate public utility
holding companies. However, in the decades following the
passage of this Depression-era law, the proliferation of
federal, state, and local regulators and changes in market
conditions have led to questions regarding the relevance of
PUHCA in today's marketplace. As electricity markets have
grown more competitive, PUHCA has hampered investment in new
transmission lines, rendering our already taxed transmission
assets more burdened than they need be. PUHCA repeal, in
conjunction with reasonable safeguards for consumers, is an
essential ingredient in moving towards a competitive national
marketplace for electricity.
As you work to complete comprehensive energy legislation, I
urge you to resist efforts to curtail FERC efforts to promote
competition and support the repeal of PUHCA. Thank you for
your attention to this matter.
Very truly yours,
Peter G. Fitzgerald.
____

U.S. Senate,

Washington, DC, July 25, 2003.
Hon. Pete V. Domenici,
Chairman, Committee on Energy and Natural Resources, U.S.
Senate, Washington, DC.

Hon. Jeff Bingaman,
Ranking Member, Committee on Energy and Natural Resources,
U.S. Senate, Washington, DC.
Dear Chairman Domenici and Ranking Member Bingaman: We are
writing to urge you to continue our nation's efforts to move
toward competitive wholesale electricity markets that will
benefit consumers and businesses. National competitive
markets, where multiple buyers and sellers can negotiate
bargains and pass cost savings along to consumers, are the
best approach to the challenges facing the electricity
industry.
We would like to bring to your attention a number of issues
addressed in the electricity title of the Senate Energy Bill
(S. 14) that have implications for residents and businesses
in the Northeast-Midwest region.
Delay of Standard Market Design--S. 14 and the proposed
substitute amendment delays the implementation of the Federal
Energy Regulatory Commission's (FERC) standard market design
until July 2005. Electricity markets have outgrown state
boundaries. We are writing to express our concern with the
proposed delay of standard market design and the provision to
make participation in regional transmission organizations
voluntary. The delay has serious implications for residents
and businesses in the Northeast-Midwest region and throughout
the nation.
A standard market design would streamline the wholesale
electricity industry, encourage transmission investments and
move the lower 48 states toward a more competitive
electricity market. Congested power lines, which are the
result of the current electricity system, cost customers and
businesses throughout the United States billions of dollars
each year, whereas competitive wholesale power markets could
deliver billions of dollars in economic benefits.
Schwab Capital Markets detailed the importance of
standardized markets to increasing investment in our nation's
transmission grid and electricity generation. Testifying
before the House Subcommittee on Energy and Air Quality,
Christine Tezak with Schwab stated: ``We believe that capital
will be less expensive for all market participants if FERC
continues (and is permitted to continue) its efforts to
provide reasonably clear and consistent rules for this
business . . . Schwab WRG continues to view continued efforts
to move forward with the restructuring of the electricity
industry to be the best investment environment for the widest
variety of participants in the electricity marketplace--
whether they provide generation, transmission, distribution
or a combination of these services--and most importantly, the
most likely to provide sustained long-term benefits to
consumers.'' Further, Ms. Tezak stated: ``Congress needs to
decide whether or not it still believes in the 1992 Energy
Policy Act. Today, Congress is becoming an increasing part of
the reason capital is hard to attract to this business.
Congress is calling for FERC to slow down, Wall Street is
frustrated FERC won't move faster.''
S. 14 makes participation of Federal utilities in Regional
Transmission Organizations voluntary. Federal taxpayer
dollars were used to develop and maintain Federal power
marketing agencies such as the Tennessee Valley Authority and
Bonneville Power. The energy generated by these facilities
should benefit all Americans. TVA and Bonneville should be
required to participate in RTOs so communities throughout the
United States have access to the power generated at these
Federal facilities.
The Energy Bill must put national interest above the
interest of a few vertically-integrated utilities that want
to maintain regional monopolies. We encourage you to support
standardizing electricity markets and prevent further delay
of these efforts.
Participant Funding--S. 14 and the proposed substitute
amendment directs FERC to establish rules to ``ensure that
the costs of any transmission expansion or interconnection be
allocated in such a way that all users of the affected
transmission system bear the appropriate share of costs.''
The language requires FERC to fairly align the costs and
benefits of transmission upgrades, a judgment that can
include a consideration of relevant local factors. This is
not only the most equitable approach but also the one most
likely to ensure that transmission development will keep pace
with growing electricity demand.
Combined Heat and Power--S. 14 currently contains the
``Carper-Collins'' language which keeps in place incentives
to operate combined heat and power facilities until true
competition exists in electricity markets. This language
retains, for a limited time, the provisions of the Public
Utility Regulatory Policy Act (PURPA) which requires
utilities to provide back-up power and buy electricity from
qualifying combined heat and power facilities. As soon as
competitive electricity markets are established, these
requirements are repealed. Since combined heat and power
saves energy, reduces greenhouse gas emissions, increases
energy independence, and is good for the competitiveness
of American manufacturing, we urge you to retain such
provisions.
We urge you to complete the work Congress started with the
Energy Policy Act of 1992 to provide reliable, low-cost
electricity to customers. Please stand strong against
pressure to reverse course on Congress' efforts to establish
better working, competitive markets, and to continue working
towards competitive electricity markets.
Sincerely,
Jack Reed.
Olympia J. Snowe.
Edward M. Kennedy.
Arlen Specter.
Susan Collins.
Debbie Stabenow.
Frank R. Lautenberg.
Carl Levin.
____

American Public Power Association,

Washington, DC, July 24, 2003.
Hon. Pete Domenici,
U.S. Senate, Senate Hart Building, Washington, DC.
Dear Senator Domenici: On behalf of the American Public
Power Association (APPA), I want to express our strong
support for your substitute amendment for the electricity
title of S. 14, the Energy Policy Act of 2003.
The substitute represents a balanced approach that makes
several improvements to the electricity title as it was
reported out of your Committee. In particular, APPA
appreciates your inclusion of additional consumer protections
by providing the Federal Energy Regulatory Commission (FERC)
with additional authority to review mergers while not
including inflexible time constraints upon FERC review of
merger applications. In addition, your substitute provides
clear direction to FERC to establish a policy on market-

[[Page S9998]]

based rates that assures rates will be just and reasonable.
While we remain concerned over the repeal of the Public
Utility Holding Company Act, the inclusion of these
additional consumer protections helps to mitigate those
concerns.
We also commend you for your efforts in drafting service
obligation/native load language that preserves the existing
firm transmission rights of load-serving entities. APPA
strongly supports the service obligation/native load language
in your substitute as it equally protects the rights of
transmission owners and transmission dependent utilities.
Your substitute is a very carefully crafted package. While
we do not necessarily support each individual provision, we
do strongly support the compromise in its totality without
modification. In addition, we will ask APPA members to urge
their Senators to support your substitute. We anticipate that
you will resist changes to your substitute during floor
consideration and that you will support all aspects of the
substitute in the House-Senate conference.
We appreciate your efforts to improve the electricity title
and look forward to working further with you and your staff
to preserve the language in your substitute through
conference committee.
Sincerely,
Alan H. Richardson,
President & CEO.
____

The Large Public Power Council,

Washington, DC, July 24, 2003.
Hon. Pete V. Domenici,
Chairman, Senate Energy and Natural Resources Committee,
Senate Dirksen Office Building, Washington, DC.
Dear Chairman Domenici: On behalf of the Large Power Public
Council (LPPC) I am writing to let you know that we support
the electricity substitute, without modification, which you
plan to offer during Senate consideration of the Energy
legislation.
We are grateful for your attention to our concerns and your
willingness to craft solutions to the problems of large
public power systems. It has been a pleasure working with you
and with your staff.
LPPC is comprised of 24 of the largest locally owned and
operated electric systems in the nation. LPPC members have
long supported a truly competitive electricity market that is
designed to benefit consumers. Your tireless efforts toward
that end deserve our endorsement.
As a separate matter, we would urge you to consider
favorably efforts to modernize TVA's organic statute.
Thank you again for your hard work. We look forward to
helping you pass this substitute next week on the Senate
floor.
Sincerely,
Jan Schori,
Chair.
____

National Rural Electric

Cooperative Association,

Arlington, VA, July 25, 2003.
Re Domenici amendment to the Electricity Title of S. 14.

Hon. Pete V. Domenici,
U.S. Senate, Dirksen Senate Office Building,
Washington, DC.
Dear Senator Domenici: The National Rural Electric
Cooperative Association (NRECA) supports passage of the
carefully crafted Domenici amendment without modification.
NRECA represents over nine hundred consumer-owned electric
cooperatives that serve more than 36,000,000 electric
consumers. Our priority in the national energy policy debate
is consumers. NRECA believes that S. 14, as modified by the
Domenici amendment, protects consumers while providing the
opportunity for growth and stability in competitive wholesale
electric markets.
The language in the Domenici amendment will protect
electric cooperatives from unnecessary costs and regulations.
Your amendment closely parallels the small utility provisions
included in last year's electricity title (HR 4).
The merger review language in your amendment establishes a
framework ensuring that utility mergers adequately protect
the public interest. This consumer protection package is
vitally important to offset the potential consequences of the
repeal of the Public Utility Holding Company Act.
We commend you for your work in the difficult drafting of
the service obligation and native load language that
preserves the existing firm transmission rights of load-
serving entities. NRECA supports the equal protection for the
rights of transmission owners and transmission dependent
utilities.
On behalf of electric consumers, NRECA urges adoption of
the Domenici amendment to S. 14 and applauds you for your
leadership.
Sincerely,
Glenn English,
Chief Executive Officer.
____

July 18, 2003.
Hon. Pete Domenici,
U.S. Senate, Hart Senate Office Building,
Washington, DC.
Dear Senator Domenici: Over the past several years,
Congress and the Federal Energy Regulatory Commission have
struggled to create a definitive set of rules with respect to
establishing restructured wholesale electricity markets. As
state regulators from diverse regions of the country, we are
concerned that continued and prolonged uncertainty at the
federal level could ultimately impede our efforts to provide
reliable and affordable power to our states' homes and
businesses.
Positive steps in recent months taken by the Federal Energy
Regulatory Commission have begun to establish clear rules and
defined roles for market participants and stakeholder
organizations, opening the door for increased benefits in our
states for consumers and industries. FERC has been working
closely with state regulators, and in regional technical
conferences, to cooperatively develop the flexible tools
needed to strengthen our electric markets.
The U.S. Congress is positioned to empower the FERC to move
forward with necessary reforms by adopting language in S. 14,
The National Energy Policy Act that would promote the
development of wholesale markets and electricity grids.
Supporting the creation of dynamic wholesale power markets
could be one of the most significant legacies of this Act.
That said, as Congress considers the electricity title of
the National Energy Policy Act, we are concerned with two
specific points that are being raised in the debate on this
legislation:
1. There should be no language that would delay FERC's
efforts to develop rules governing the wholesale electricity
market, as these rules are essential to ensuring the creation
of robust wholesale markets that benefit consumers. Delay may
seem like a safe or appealing compromise, however, this will
undoubtedly lead to lengthy and costly regulatory and
judicial challenges that could impact pending docket items
and cost consumers millions of dollars. Congress should not
create further roadblocks to the regulatory process of
creating RTOs. States and regions, working with FERC, must
begin the formation of RTOs without delay.
2. We oppose any Congressional action that would make RTO
participation voluntary, as this would be harmful to existing
and emerging RTOs. FERC should be permitted to oversee the
process of RTO formation and serve as regional traffic cop to
ensure that consumers benefit from competition in terms of
competitive prices, increased choices, and improved services
and reliability.
America's electricity network is at a crossroads.
Individual states are moving forward, but the FERC must be
empowered to take the necessary steps to ensure our nation
has the electricity and transmission grid to meet the needs
of our states' consumers and industries. Wholesale markets
are putting downward pressure on prices and leading to
greater investment in infrastructure and supply, resulting in
greater reliability. We encourage Congress to adopt national
energy legislation that would advance the nation's electric
systems and the development of RTOs.
Thank you for your consideration of our thoughts and
concerns. Please do not hesitate to contact us if you have
any questions regarding this issue or the perspective and
views of our states.
Sincerely,
Thomas L. Welch, Chairman, Maine Public Utilities
Commission.
Laura Chappelle, Chairman, Michigan Public Service
Commission.
Roy Hemmingway, Chairman, Oregon Public Utility Commission.
Rebecca A. Klein, Chairman, Texas Public Utility
Commission.
Kevin Wright, Commissioner, Illinois Commerce Commission.
Carol M. Murphy, Commissioner, New Jersey Board of Public
Utilities.
Glen R. Thomas, Commissioner, Pennsylvania Public Utility
Commission.
Jay O. Stovall, Commissioner, Montana Public Service
Commission.
____

MidAmerican Energy Holdings Co.,

Omaha, NE, July 25, 2003.
Hon. Pete V. Domenici,
Chairman, Committee on Energy and Natural Resources, U.S.
Senate, Washington, DC.
Dear Chairman Domenici: I am writing to express MidAmerican
Energy Holding Company's unqualified support for the
substitute electricity title you have developed for the
comprehensive energy bill, MidAmerican is a diversified
energy company operating in twenty-five states, with electric
and gas utility, interstate natural gas pipeline, renewable
energy, and independent generation operations.
These electricity modernization provisions will create a
more efficient electricity grid, increase investment in
utility infrastructure, and enhance our nation's consumer
protection laws. The United States' electricity system
desperately needs new infrastructure to support the
competitive wholesale electricity markets that the Energy
Policy Act of 1992 created. By eliminating existing barriers
to investment and clarifying the regulatory landscape, the
provisions of this title will help open the doors to new
capital entering the industry.
We strongly support your efforts and oppose any amendments
that would upset this carefully balanced proposal. Having
spent much of the last ten years working to help build
consensus on the need to modernize our electricity laws, I
hope the Senate will move quickly to approve the substitute
electricity title and the comprehensive energy bill.
Sincerely,
David L. Sokol,
Chairman and CEO.

[[Page S9999]]

____
North American

Electric Reliability Council,

Princeton, NJ, July 25, 2003.
Hon. Pete Domenici,
U.S. Senate, Hart Senate Office Building,
Washington, DC.
Dear Senator Domenici: As the Senate resumes consideration
of the energy legislation, we are writing to reaffirm our
continuing support for the reliability language contained in
section 1111 of S. 14 and in the amendment in the nature of a
substitute for the electricity title of S. 14 that you
released on July 24, 2003. Joining NERC in support of the
reliability language are the following: American Electric
Power, American Public Power Association, Canadian
Electricity Association, Edison Electric Institute, Institute
of Electrical and Electronics Engineers--USA, National
Association of Regulatory Utility Commissioners, National
Association of State Utility Consumer Advocates, National
Electrical Manufacturers Association, National Rural Electric
Cooperative Association, Pepco Holdings, Inc., Transmission
Access Policy Study Group, TXU Corporation, Western
Electricity Coordinating Council, and the Western Governors
Association.
These provisions meet the fundamental need for
establishment of a system of mandatory and enforceable
reliability rules applicable to all users, owners, and
operators of the North American bulk power grid. The
provisions build on the existing voluntary reliability system
by authorizing an independent, industry-led organization to
set and enforce such mandatory reliability rules, subject to
Federal Energy Regulatory Commission oversight in the United
States.
The legislative provisions are carefully crafted to bring
the expertise of industry to bear in the formulation,
implementation, and ultimately enforcement of the reliability
rules. The amendment in the nature of a substitute adds a
savings clause to the reliability language clarifying that
the Electric Reliability Organization provided for in the
legislation will not be considered an agency of the United
States Government. We support that addition. That
clarification is fully consistent with the determinations
already made regarding the functions to be exercised by the
Electric Reliability Organization in the new mandatory
reliability system.
We commend you for your commitment to passage of this vital
legislation before the upcoming Congressional recess, and
look forward to working with you to support enactment of the
reliability language as soon as possible.
Sincerely,
Michehl R. Gent,
President and CEO.
____

Interstate Natural Gas

Association of America,

Washington, DC, July 25, 2003.
Hon. Pete Domenici,
Chairman, Committee on Energy and Natural Resources, U.S.
Senate, Washington, DC.
Dear Mr. Chairman: The Interstate Natural Gas Association
of America (INGAA) wants to thank you for your tenacious
efforts to move comprehensive energy legislation through the
Senate. We believe that the Energy Policy Act of 2003 (S. 14)
strikes a fair balance between energy efficiency,
environmental protection, and the need for increased energy
resources. This legislation will also play an important role
in addressing the nation's tight natural gas supply
situation, and INGAA urges its swift adoption.
As you know, North America is blessed with abundant natural
gas supplies. Unfortunately, conflicting government policy
has both encouraged the increased use of natural gas, while
hindering the further development of natural gas supplies and
infrastructure. As Federal Reserve Chairman Alan Greenspan
has observed, the conflict between increasing demand and
decreasing supply has to be resolved in some way, and it is
currently being resolved through higher natural gas prices.
INGAA strongly supports your efforts to increase natural
gas exploration and production on federal lands. We also
support your provisions regarding natural gas market
transparency and prohibitions on fraudulent and/or
manipulative trading practices, which will help to restore
stability and confidence to the market. With respect to
natural gas infrastructure, INGAA supports provisions
encouraging the construction of an Alaska natural gas
pipeline and the development of new LNG importation
facilities.
We appreciate the comprehensive approach you have taken in
addressing natural gas supply and infrastructure needs. INGAA
will continue supporting your efforts to enact balanced
energy policy legislation during the current session of
Congress. Please let us know if we assist in your efforts.
Respectfully,
Donald F. Santa, Jr.,
Executive Vice President.
____

July 25, 2003.
Hon. Pete Domenici,
Senate Energy and Natural Resource Committee, U.S. Senate,
Washington, DC.
Dear Mr. Chairman: The Natural Gas Supply Association
(NGSA) and the Independent Petroleum Association of America
(IPAA) representing the majority of natural gas producers in
the United States want to take this opportunity to comment on
your legislative proposal to ban fraud and manipulative
behavior during the reporting of natural gas transactions to
energy price indices.
As you know from our previous communications, we have been
working hard to find workable solutions for greater market
transparency, which should enhance the confidence of
stakeholders in the natural gas markets. In fact, the
industry has been successful in crafting an industry
consensus document (also referred to as the ``Kennesaw
agreement'') supported by many stakeholders in the natural
gas market. Attached is a copy of that document.
We fully support your desire to bring greater transparency
to the energy markets, prevent manipulative behavior in those
markets, and punish those that knowingly and willfully report
false information. Consequently, we support your proposal and
look forward to working with you to ensure that the energy
marketplace reflects these objectives.
Sincerely,
Independent Petroleum Association of America.
Natural Gas Supply Association.

Mr. THOMAS. There is a letter from the Secretary of Energy:

We support your substitute electricity amendment and
believe it will effectively modernize our Nation's antiquated
electricity laws.

There is also a letter from Senator Fitzgerald of Illinois. There is
another letter that talks about the amendment. It is signed by eight
Senators who are looking more for the effects of a competitive
wholesale electric system, and a standard market design. They are
supporting what is done with respect to the standard market design.
Another letter is from the American Public Power Association. It
says:

. . . I want to express our strong support for your
substitute amendment . . .

They are a very important player, of course, in this.
The Large Public Power Council also says:

. . . we support the electricity substitute, without
modification . . .

According to this group, we do not get into trying to make a number
of changes now.
The National Rural Electric Cooperative Association, which, of
course, serves more than 36 million electric consumers, particularly
for those of us who live in rural States, supports the passage of the
carefully drafted Domenici amendment without modification.
We also have a letter from the Interstate Natural Gas Association of
America. Remember that natural gas people have a real interest in this
as well in terms of the generation of electric power. They say:

We believe that the Energy Policy Act of 2003 strikes a
fair balance between energy efficiency, environmental
protection, and the need for increased energy resources.

America's Oil and Gas Producers Independent Petroleum Association,
the American Gas Association, all of these groups are in complete
support of moving ahead with the amendment without modification. I
think it is pretty impressive that all of these groups are in support,
such as the North American Electric Reliability Council, which is the
one that has to do with reliability. So these are some of the areas
that are covered and are supported on this particular amendment.
I know this is detailed and lengthy, but this is a very important
aspect and a very important element. It is something that has been
worked on for a couple of years, by both the committee and on the
floor. This whole title having to do with the electricity part of
energy has been redrafted and this institution will bring it together
so that hopefully we can move forward with very few, if any,
amendments, to this section.
I yield the floor and I suggest the absence of a quorum.
The PRESIDENT pro tempore. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. NELSON of Florida. Mr. President, I ask unanimous consent that
the order for the quorum call be rescinded.
The PRESIDENT pro tempore. Without objection, it is so ordered.

IRAQ

Mr. NELSON of Florida. Mr. President, I thank the distinguished
presiding Senator, the great Senator from the State of Alaska. I had
the privilege of visiting his State en route to China with the majority
leader a couple months ago. We used, as a convenient place for
refueling, the Air Force base in Anchorage. That is a wonderful land
the Presiding Officer comes from. It

[[Page S10000]]

was a great privilege to visit, especially with our troops that are
providing for the defense of our country.
Speaking of that, I continue to be amazed at the courage and the
ability of our men and women in uniform in service to this country and
those not in uniform in places such as Iraq, where I visited 2 weeks
ago. In talking with those soldiers, anyone could see how dedicated
they are. At the same time, we recognize those soldiers are
uncomfortable. It is hot, 120 degrees, and it is dangerous.
As a matter of fact, we see the effects of premeditated
assassination, the so-called resistance. It is taking form in three
different ways. It is extremely lethal. Indeed, over the past week, on
the average, two of our American soldiers per day have been murdered,
some of them by RPGs, rocket-propelled grenades, often fired into
armored convoys; some of them by landmines detonated by remote control
device placed usually where the road narrows; and some of them purely
by assassination with a small handgun, as in the case of the Florida
soldier killed the night before I arrived. The Florida soldier was
pulling guard duty. A delegation had gone into the university and they
were protecting them, looking out for their interests. In the midst of
the melee, someone in the crowd comes up behind him and taps him on the
shoulder. He turns around and they shoot him in that unprotected area
above the body armor and below the helmet.
This is the kind of premeditated assassination we see. It is clearly
my hope, and the hope of everyone, that we would have some diminution
of this killing as the Saddam Hussein regime is brought to account now
with the demise of the two sons and along with what I think will be the
capture--whether alive or not, I don't know--of Saddam Hussein himself.
Iraq has become a place, as reports in the press have indicated,
where others are coming into Iraq to try to do damage to American
interests. So it is going to cause us to be all the more vigilant.
Clearly, the stakes have never been higher for the United States to
stabilize Iraq, both politically and economically, just as we need to
do so in Afghanistan in our war against terror.

I came here today to speak on the Energy bill which is before us. I
want to discuss this issue that not only affects the lives of every
American but also impacts the Nation's security. That is what we are
debating, energy policy. These energy issues we are going to be
debating this week affect everyone. They affect the air we breathe. The
policy affects the cars we drive, the lights that illuminate our lives,
and the electricity bills we pay.
I would like to be able to go home this August, after we recess, and
tell people in my home State of Florida that the Senate made a
difference, that we have changed some of the energy policy so that we
are going to, hopefully, have more efficient homes and more efficient
cars and cleaner air and, most importantly, more peace of mind. It is
my hope what this Senate will do is decrease our dependence on foreign
oil.
I served in the House of Representatives years ago. I had come into
the Congress in 1978. We were in an energy shortage. A bunch of nations
on the other side of planet Earth had joined a cartel and decided to
reduce production. That had caused panic buying, it caused the price of
energy--the price of oil--to go way up. The United States, as it was
trying to enact an energy policy at the time, looking for alternative
fuels, looking toward encouraging renewable sources of energy such as
wind and Sun, also did something else. We have salt domes underneath
the ground, down in Louisiana. We started filling those salt domes with
a strategic petroleum reserve so we would be able to tap into an
instantly ready source of oil if the spigot in those foreign lands was
shut off. What is the likelihood of that in the future?
A study of military history will teach us about certain chokepoints,
geographical chokepoints. For example, the Straits of Gibraltar are
considered a military chokepoint. Let me tell you about one of the most
dramatic chokepoints I ever saw, and I saw it from the window of a
spacecraft, 203 miles above the Earth as our ground track on the orbit
came right down the Persian Gulf, looking straight down at the Strait
of Hormuz, a 19-mile-wide area, a chokepoint, a military chokepoint of
the Persian Gulf, that 19-mile-wide strait through which most of the
supertankers of the world have to pass.
Talk about a target for a terrorist. Indeed, the Strait of Hormuz--if
the terrorists were ever to be successful in sinking a couple of
supertankers there, you can imagine what would happen to the flow of
the oil to the industrialized world. We would immediately be in crisis.
Are we going to continue to rely on foreign oil for our daily
consumption?
Remember back a while, we made a commitment that we would stabilize
our greenhouse gas emissions. That was done over 10 years ago. I hope
now the Senate has decided to make good on that promise and put in
place a climate change policy and a modest cap and trade system that is
going to help us stop our ever increasing emission of harmful
pollutants into our fragile atmosphere.
I am somewhat amused and perplexed that there continues this debate
over whether or not global warming is real. About 98 percent of the
scientists say it is real. If you come from a State such as mine,
Florida, with its hundreds and hundreds of miles of coastline, you had
better be prepared for it being real. Yet almost all of those
affected--the business industry, the insurance industry--are ignoring
the fact the climate on planet Earth is warming.

Let me tell you what that will do for a place such as Florida. As the
seas rise, as the temperature rises, the coastal areas are threatened.
They are threatened not only by the rise of the level of the sea but by
the rise of the level in temperature which brings about much more
violent storms and much greater plague and pestilence.
So often we do not confront a problem until it is upon us. Yet the
fact is, global warming is upon us. So what should we do? We should be
concerned about that outer layer of the atmosphere, of it having the
appropriate environmental ability to deflect the ultraviolet rays that
come into the atmosphere and eat up the atmosphere. Emissions from
fossil fuel burning go into the atmosphere, and they start to diminish
that ozone layer which protects against the ultraviolet rays, the
result of which is that it has this greenhouse effect on planet Earth,
starting to warm up the planet.
Sooner or later, we are going to have to face the music. That is what
is happening to our planet. Yet are we enacting governmental policies
that will protect us? That is what I am hoping, that we will have a
Senate that will stand up, before the heat of this August recess, and
say we are going to do something about it.
I would also like to go home this August and say to my constituents
that, although we have been talking about diversifying our fuel sources
for years, we are now starting to make progress; we have tax credits;
we have tax incentives; we have loan guarantees; we have renewable
portfolio standards in place to spur production and use of clean and
renewable fuels. I hope this is possible because we are living in
historic times and the policies we enact should reflect the gravity of
the issues we face.
I am intrigued that all across this land, particularly in areas of
high wind velocity, now we are building wind farms. To farmers, a wind
farm can now be a profitable venture, leasing their land for the
erection of high-technology windmills that will generate electricity.
Sooner or later, we are going to figure out how to harness another
major source of energy, the energy of the tides of the ocean.
We already know how to harness the energy of the sun. Everything here
is a question of economics. Is it economical to do so? It is, the more
the price of oil goes up. As the cost of oil goes up because of
diminishing supply--be that just by virtue of time or be that by virtue
of interdiction of that supply such as a terrorist sinking a
supertanker or whatever the reason is--we ought to be looking to these
alternative and renewable fuels.
Over and over again, Members of the Senate and Members of the House
have decried the fact that our Nation's energy consumption is held
hostage by the oil production of these other nations, some of which we
don't get along

[[Page S10001]]

with too well. That should bother us. It should make us want to enact
policies we know will lessen our consumption of foreign oil.
(Mrs. DOLE assumed the Chair.)
I would like to go home this August and tell our constituents we are
enacting changes in those policies, and we are going to protect
ourselves.
I see our new Presiding Officer, the great Senator from the State of
North Carolina. I will never forget when I was in the House and one of
the first wind energy systems was built in Boone, NC. This is going
back 20 years. I will never forget it. Everybody was upset because the
more the windmill turned, the more it disrupted the television coverage
in Boone, NC. But today we have the benefit of propeller technology in
the placing of these wind energy systems, which are these tall
windmills with propellers which are as sophisticated in their design as
those for airplanes. So we don't have to have all of that outcry that
occurred in Boone two decades ago. Boone, NC was a pioneer. It was part
of a NASA research project. We were looking for opportunities other
than the consumption of foreign oil then. We are doing a lot better in
our technology today. But we have to enact policies that will wean us
from our dependence on that foreign oil.
One policy that has a proven track record for decreasing our
consumption of oil is increasing the miles per gallon on our
automobiles. It has a fancy name. It is called Corporate Average Fuel
Economy, otherwise known as CAFE. From 1975 to 1985, when CAFE or the
mileage-per-gallon increases were mandated, we dramatically lowered our
consumption of foreign oil.
According to the National Academy of Sciences, the increase in fuel
economy standards in that decade, 1975-1985, saved--get this--43
billion gallons of gasoline, which is the equivalent of 2.8 million
barrels of oil per day. But since 1985, our Nation's fuel economy has
stagnated, and our consumption of foreign oil has skyrocketed. Indeed,
between 1990 and 1999, oil consumption in the United States rose 15
percent and, unfortunately, American oil imports from foreign lands
rose 40 percent. Why? Because we stopped requiring increases in fuel
economy standards.
In our last few attempts to restart the program, we were stopped by a
combination of very powerful lobbying groups. One of them--the
automobile makers--said they could not do it. They said it was going to
cost jobs. They said it was going to decrease consumer choice and that
it was going to hurt vehicle safety. But that is exactly what they said
in the 1970s. The auto makers successfully rose to the challenge then,
and they can successfully rise to that challenge now. In fact, the
increase in the fuel economy standards helped the auto makers stay
competitive with their Japanese competitors in the 1970s and the 1980s.
Smaller vehicles did not take over their fleets as they predicted.
Eighty-five percent of the historical fuel economy gains came from
technology with no impact on the vehicle weight or the vehicle size.

I encourage this Senate on the eve of us going home to be forward
thinking and not backward looking. This is the 21st century. We know
that American auto manufacturers have the technological capability to
increase CAFE standards and to maintain safety without denying the
American public any choices in the type of vehicle they drive. It can
be done. We just have to have the will to do it.
The American people, after this traumatic experience of losing over
3,000 people on September 11 of 2001, clearly have a renewed desire to
see their Members of Congress act in the best interests of national
security. Is weaning ourselves from our dependence on oil from foreign
lands in the interest of national security? Can you imagine what our
Middle East policy would be if we didn't have to import oil from the
Persian Gulf region? Our foreign policy would be a lot easier to
conduct.
Senator Durbin is going to have an amendment that will require cars
and SUVs and minivans and cross-over utility vehicles to achieve CAFE
standards of 40 miles per gallon by when, by next year? No. By 2015.
That would be 11 or 12 years from now. It would require by the same
year of 2015 trucks and vans to have a mile-per-gallon standard of 27.5
miles per gallon. It can be done. I certainly urge our colleagues here
to support Senator Durbin's amendment.
I guess one of the bigger disappointments I have had legislatively in
the 2\1/2\ years I have been in the Senate is that we can't come
together and recognize something that has so much common sense. We
already have hybrid vehicles driving around getting 50-plus miles per
gallon, and they get it not only on the open road but they get it in
city driving. That is because the technology has developed to the point
where a computer will switch that engine from a gasoline engine over to
an electric engine and back and forth.
When we are using the gasoline engine we are powering the battery so
the electric engine can be used, and it goes back and forth without any
notice to the driver or the passenger and with no diminution on the
electrical needs of the automobile and no diminution on any sane driver
who doesn't want to squeal their wheels at every stoplight. The
technology is there.
I urge the Senate to go beyond with technology.
On board every space shuttle is a machine that makes electricity. It
makes electricity from a combination of two fuels: hydrogen and oxygen.
And it has as a byproduct--water. As a matter of fact, so much water is
produced that at the end of every flight day, the crews will have to
dump excess water. It is amazing, when you dump that water out into the
cold vacuum of space, you see that dumped water spray out, and all of a
sudden those water particles crystallize. In the glint of the sunlight,
it is a beautiful view.
But what started this process was that we were making electricity on
board for the space shuttle with the fuel of hydrogen. We can do the
same to power our vehicles. We know most of our consumption of energy
is done in the transportation sector--airplanes, trains, buses, cars,
ships. We know most of the consumption of that energy is automobiles
and trucks. So can you imagine, if we would put our minds to it--just
like we put our minds to it when President Kennedy said: We are going
to the moon and back within the decade of the 1960s--and we did it--can
you imagine, if we would put our minds to it, in an Apollo-like
program, if we developed a hydrogen engine that was cheap enough that
could power our automobiles, the new ones, and the trucks? The
technology is there. The capability is there. The application of the
new technologies can bring the cost down. The only thing we are lacking
is the will.
Can you imagine if, suddenly, we did not have this dependence on
foreign, imported oil how much freer the United States would be in our
conduct around the world, in our military policy, in our foreign
policy, in our ability to be self-sustaining in our own energy needs,
and not giving up any of the creature comforts that we Americans are so
blessed to have to our advantage? Yet when we get to a vote on some of
these items on this Energy bill, we may get beat. I just simply do not
understand that.
So I am pleading with our colleagues in the Senate, as we debate this
Energy bill, let's think about America in the future, over the course
of the next decade, over the course of the next 25 years. Let's think
about the decisionmakers on this floor in future decades and what we
are shackling them with as a matter of military and foreign policy if
we do not break our habit of depending on foreign oil. We can do it. We
just have to have the will.
Madam President, I thank you for this opportunity to share these
ideas. Unless the manager of the bill wants otherwise, I suggest the
absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The bill clerk proceeded to call the roll.
Mr. THOMAS. Madam President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. THOMAS. Madam President, I am pleased that we are able to go
ahead and talk about energy. I must say, I am not as pleased by the
fact that we seem to be holding things up a bit. We have been on this
issue now for 2 years. We have also, this year, already been on the
Senate floor for 10 or 12 days on this issue.
Last year, we were not able to complete the Energy bill because it
was pulled out of committee. We did not go through the committee. This
year, we

[[Page S10002]]

went through the whole process in committee. We brought forth a bill
that was approved by the committee. Now we find ourselves, however,
held up because somebody objects to moving forward.
Really, we have a week to do a job that deals with one of the most
important bills we have before us. Frankly, it is discouraging when we
find obstacles to moving forward simply because somebody has to wait
until they get here on the Senate floor before an amendment can be
offered. In any event, that is where we are. I object to the obstacles
that are being put forward to the idea that we ought to move forward
with this bill.
In any event, let me talk just generally about the bill. The Senator
from Florida has talked about some of the needs that are required.
There is nothing more important to our economy, to employment, and to
our families in this country than energy. We have an opportunity to
deal with some of the problems that obstruct us from moving forward
with energy. We seem to become all wrapped up in little regional
political issues that keep us from accomplishing the goal of moving
forward, and it is frustrating. But there is a need to have a policy
that moves us forward.
One of the things, of course, we hear about more than anything else,
in terms of energy, is natural gas. We had our Federal Reserve Chairman
here to talk about the need for gas supply and the potential shortage
of gas we anticipate, partly because of the need for air-conditioning
in the heat of summer and, certainly, the need for heat in the cold of
winter. So natural gas is one of the things we have talked about the
most.
Quite frankly, there are some opportunities for increased domestic
production of gas. The idea of importing gas is not, in my view, the
best solution. We have an opportunity to have domestic production. We
can do that. That is partly what this bill is about. We have provisions
in the finance section of this bill that are incentives for production.
We also find that we have a substantial amount of natural gas
resources in the West. Much of it is on Federal land. We find
ourselves, however, inhibited by the permitting process and the time it
takes to do permitting in order to get gas on to the market. That is an
area of potential. We can do that and, at the same time, protect the
environment. We have already shown we can do that.
There has to be a movement of gas from the source to the supplier.
That requires pipelines. It is very clear that some of these things
need to be done.
This bill is a comprehensive and balanced bill. It deals with
conservation. The Senator from Florida was talking about CAFE
standards, but we have been through CAFE standards a number of times.
There will be bills on the Senate floor that have to do with CAFE
standards, and we will be supporting the movement of CAFE standards.
This bill talks about alternative sources of energy, which is
something we ought to be looking at, whether they be wind or sun or
hydrogen. The President has in his budget proposal over $1 billion to
do research on hydrogen. Well, it is great to talk about hydrogen and
to talk about using those types of automobiles, but we are not ready
for that. Not only do we not have the system to produce it, we do not
have the distribution system. But we will have it, and it is something
we ought to work on. It is already in the process; it isn't as if it is
a brand-new idea. We are looking for some opportunities to use the coal
supply to develop hydrogen, which would give us a fuel more easily
moved about than coal. Hydrogen can be made from coal. So there is a
good deal of attention in this bill for alternatives.
We talk about conservation, alternatives, and also research and
cleanliness in our energy supply. Again, coal is the largest fossil
fuel supply we have in this country.
We need to continue to work on clean coal. We need good air quality.
There is a good deal of money in this bill for moving forward.
One of the problems with our gas supply is, over the last number of
years the 30 plants that have been developed for electric generation
are all gas fired. On the other hand, coal is really, for a number of
reasons, probably the best source. You can see that in prices, in the
supply available. But still, because of not having a policy, we have
used small gas plants close to the market and have used the wrong fuel.
We need domestic production. Sixty percent of our oil is brought in
from other places. We can do something about that. We can do it with
domestic production and other uses.
Certainly, this bill also addresses the modernization of the system
of electricity, the modernization of the system of oil and gas. That is
one of the most vital issues before us, to get a policy and a plan to
move forward to make sure that energy is available, to the extent
possible, domestically and that we don't depend on other countries for
oil.
Wyoming, of course, is a State that has a good deal of energy
resources. A number of years ago, I attended a meeting. Someone was
there from England saying: We have never run out of a fuel. That is
interesting, isn't it? We started with wood. We moved to coal. We moved
to others. But after a while, we always find some other fuel to go
forward. That is part of the science and research that is in this bill,
so that as we find shortages, as we find more efficiencies, we can move
forward into other kinds of opportunities.
I hope we can move forward and are not held up excessively to get the
job done. It is here. We have a challenge to get it done this week. We
have already discussed all these issues. We should be able to come to a
decision on those issues that are still controversial, or, where there
are different views, everyone who has a different view should be able
to express that and vote on them when we have to. But we need to move
forward. The idea that we are unable to get together to move seems to
me to be inconsistent with the purpose of our being here.
I yield the floor.
The PRESIDING OFFICER. The Senator from North Dakota.
Mr. DORGAN. Madam President, I am a member of the Energy Committee
along with my colleague from Wyoming. I happen to share his desire to
get the Energy bill done. With regard to the statement by the majority
leader that it is going to have to be done this week, with the number
of amendments out there and the difficulty we have, it is very unlikely
it will get done this week. My hope is that we can find a way to move
most of the way down the road, and understand that, if necessary, when
we come back we will finish it quickly.
We need to get an Energy bill to the President's desk on a timely
basis. It should not be just any Energy bill. It has to be an Energy
bill that works, one that advances the interests of America. We have 5
days in the workweek. We end on Friday. Today the chairman and ranking
member are both out for a funeral. That is something no one can
control. So at least much of today is not going to be particularly
productive in advancing the bill.
Given what we are going to face this winter in natural gas prices,
given the problems we have in a range of areas, it would be in the
interest of the country, Republicans and Democrats, to finish an Energy
bill.
Let me mention a couple things we need to do in a serious way. Simply
to paste together an electricity title and say, let's get it out there
and get it voted on--if you missed what happened in California and this
``restructuring'' notion that has been around, you missed one of the
largest bilking of consumers ever to occur. A circumstance existed in
California where some companies were able to control supplies and, as a
result of controlling and manipulating supplies and recreating
congestion, they bilked California and west coast consumers to the tune
of billions of dollars.
We need some consumer protection. I need to understand what the
electricity title does. This headlong rush to restructure in
electricity is one that can pose some significant problems for
consumers. Restructuring means you will move electricity around the
country from low-cost areas to high-cost areas and replace electricity
from low-cost areas with more expensive electricity. Studies I have
seen tell us that rural States such as North Dakota and others are
going to lose and will have to pay much higher costs for electricity.
Perhaps if we are past the urge

[[Page S10003]]

to restructure and to create the circumstance that allowed what
happened on the west coast, particularly in California, we can have an
electricity title that really works for energy and for consumers.
There are four steps to this bill that are necessary. One is to
incentivize production. I agree with my colleague from Wyoming. Oil,
natural gas, coal--all can and will play a significant role in our
future. We should incentivize that in thoughtful ways. If debate on the
Energy bill this year becomes a debate about ANWR and CAFE, then the
American people lose. These are just two hood-ornament debates, and we
will lose.
What we need to do is find a way to pole-vault over what we have been
doing and do something dramatically different in the future.
I introduced the first bill this year, before the President called
for it in his State of the Union Address, to move us towards a hydrogen
fuel cell future. We have been putting gasoline through America's
carburetors for almost a century. If our future is to find a way to
keep putting gasoline through carburetors and debate how efficient they
are, in my judgment we don't have much of a future with respect to
energy; we will always be dependent on finding energy from off our
shores.

Fifty-five percent of the oil is now found outside our borders, much
of it from very troubled areas of the world. We could wake up one
morning and discover that the supply of oil coming in has been
interrupted by the concerted act of terrorists, and we could find our
economy flat on its back, because the American economy runs on energy.
The assured future supply of energy is essential to jobs and economic
opportunity. Fifty-five percent of our oil now comes from offshore.
That is set to go to 68 percent. It is an unforgivable dereliction of
duty if we policymakers don't decide that that has to change. That is
dangerous to our future, and we must change it.
How do we do it? Four steps: Incentivize additional production in a
thoughtful way and compatible with our environmental interests. Two,
promote conservation. We waste an enormous amount of energy.
Conservation should be a significant part of any Energy bill. Three, an
efficiency title that provides efficiencies with respect to all those
appliances we use every single day. And four, the development of
incentives for limitless and renewable sources of energy.
Let me talk for a moment about that because that is one of the
reasons I believe so strongly this bill must move. I am a big believer
in wind energy. My State is ranked No. 1 by the Department of Energy in
wind energy potential. We understand that the new turbines with which
you can take energy from the wind and turn it into electricity are much
more effective and much more efficient than they have ever been in the
past. The ability to put up a 1-megawatt turbine and take energy from
the air and turn it into electricity and put it on the line and use it
to extend the energy supply makes great sense. It is nonpolluting. It
is available wherever the wind blows. That makes great sense.
The problem is, we have a lot of interests and a lot of projects on
wind energy on the drawing boards ready to go, and we have this
production tax credit that starts and stops and starts and stops, that
is available for a year, 2 years, 3 years--maybe 1 year, and by the
time it is implemented, if you put a new 3-year provision in, you may
only get a year and a half or 2 years out of it because by the time the
bill is implemented, you have already wasted part of that.
For those who are interested in developing these new sources of
energy, renewable and limitless sources of energy, this Congress ought
to pass an Energy bill, and that Energy bill should have a 5-year
extension on the production tax credit. This one only has 3.
Nonetheless, whether it is 3 or 5, you need to get a bill passed in
order for that to be part of the calculation of those who have projects
on the boards and want to build these projects.

Speaking for me, although I regret I don't think we will be able to
finish the Energy bill this week, I want an Energy bill. I want one
that works. I want a good bill, one that goes to the White House for
signature. I don't know what we are going to get done this week. I know
today, as I said, the chairman and ranking member are necessarily
absent for a funeral. Tomorrow there is a meeting at the White House
that, I suppose, will take an hour and a half or 2 hours out of the day
for Energy Committee members. There are a series of things going on. I
feel strongly we need to send some signals to our country, to the
American people, that we are putting together policies for the future.
I mentioned a moment ago that a hydrogen fuel cell future is very
important for our country. This Congress passed my amendment--frankly,
I was surprised by it--that said let's set targets and timetables for
this. We all say use hydrogen, which is ubiquitous--use it to power
fuel cells and then to power our vehicles. It is twice as efficient in
getting power to the wheel as putting gasoline through a carburetor. So
let's do that, we say. In order to do that, you cannot decide tomorrow
that is going to happen because we are still in the development stage
of fuel cells. There are fuel cells that are commercially available and
operating. I have ridden on a fuel cell bus, driven a fuel cell car run
by hydrogen. They exist, but they still literally are in the
developmental stage.
Then, in addition to deciding here is our future, you have to do a
number of other things. You have to deal with the issues of the
production of hydrogen, exactly how to produce it and from what. There
are a series of opportunities. You can produce it from natural gas or
from coal. You can take electricity from the wind and use the
electricity in electrolysis and separate hydrogen from oxygen and water
and pull the hydrogen out of the water.
In addition to production, you have storage, transportation, and
infrastructure. Who will build the service stations where you can fill
up with hydrogen? These are things I think will last some while in
terms of their early stages to solve and to create an infrastructure
that leads us to a new energy day. The President spoke about it in the
State of the Union Address. Prior to that, I offered legislation in the
Congress calling for a fuel cell hydrogen future. So I embrace the
President's goals. In fact, I significantly enhanced them with my
colleagues on the Energy Committee, nearly tripling the amount of money
the President suggested. I got the full Senate to set targets and
timetables--150,000 vehicles by 2010, 2 million vehicles by 2020--
saying let's set targets and timetables, instead of saying 20 years
from now, where are we, and saying that is where we are. We need to set
up a road map and say, here is what we as a country aspire to do, here
is what we aspire to achieve for our country's energy future.
The reason using a hydrogen fuel cell economy to solve this country's
energy future is important is these significant increases in energy use
in the country are through transportation--particularly vehicles, but
transportation. That is where the line is. That is the line that is
going up. With CAFE standards, which we will debate on the floor of the
Senate, people will say, let's solve that line that goes up with more
efficient carburetors or engines. Look, I am for more efficient
carburetors and engines, but that will not solve the problem, as long
as we have gasoline that costs less than bottled water. By the way, you
can do that with an SUV. You may have four kids in the back and you
drive up to the gas station and buy gas and then buy bottled water for
the occupants in the car. Per gallon, it will cost you more for the
water. As long as gasoline costs more than water, people are going to
want to drive 5,000-pound vehicles.

The fact is, they are going to want to drive the big vehicles. That
is a fact. That is what is happening in this country. The conversion
has been quite extraordinary. Although I think CAFE standards are
useful, and it is a provocative debate, and to the extent we can
encourage additional efficiencies with internal combustion engines and
carburetors through which all of the gasoline flows, that is fine, but
that is not going to solve the problem of the increasing transportation
line of energy usage. As long as we import most of our oil, with much
of it coming from troubled parts of the world, this country is held
hostage. How do you resolve that? You pole-vault to a different ground,
it seems to me.
After three-quarters to one whole century of putting gasoline through

[[Page S10004]]

carburetors, I agree with the President; let's decide to have a
different energy future and use hydrogen and fuel cells that are twice
as efficient as now exist in getting power to the wheel from an
internal combustion engine. Let's use the fuel cells and hydrogen as a
fuel source and have our children and grandchildren be able to escape
being held hostage from foreign supplies of oil.
Now, let me say again, I want to end where I started. I want this
bill to pass. I want a bill to pass and I want it to be a good bill.
That means the bill can be improved with amendments. You have to have
debate on issues on which Senators have a right to offer amendments. I
would like to see a bill pass the Senate and the House. If we can get
to conference in September, perhaps we can get a bill to the President
and have it signed in late September or October.
I would like to be able to say--especially in my State, where we have
these promising wind energy projects--that the production tax credit
has been extended, it is certain, and it is done, and you can count on
it. As a result of that, we are going to produce more energy.
As I conclude, I will say, incidentally, we have had a rewrite of the
electricity title. I believe that was made available Thursday night.
There were rumors the majority party was rewriting an electricity
title, but I was not aware of how it was being written or by whom.
Someone just pushed aside all these issues that have been raised about
restructuring.
As you know, for 4 or 5 years, we have had this urge for
restructuring. Where does that come from? From some of the biggest
users of electricity who want to pay lower costs for electricity. They
want there to be retail competition for electricity. That retail
economy situation--called restructuring--would embrace wholesale and
retail competition for electricity and would give the opportunity in
this country for electricity to flow to various marketplaces unimpeded.
There has been a study by the U.S. Department of Agriculture about the
ultimate impact of restructuring. I can tell you what it says about my
State. It says consumers of North Dakota would end up paying a
substantial additional price for electricity under so-called
restructuring. Aside from the dislocations of it all, if you want to
wonder about what restructuring might mean, especially when you have
very big interests controlling energy--and that is not like a phone
call, by the way, when you make a phone call and you may get a busy
signal. Energy is different. When you need energy and energy isn't
there, you are cold or hot. They are both universal in nature in terms
of need, but energy is different.

We need a supply of energy in this country that moves to the areas of
need in a way where you don't have large interests in supply and
manipulating the marketplace. The FERC has just released a study with
respect to the west coast. We all know what happened there. We know
people colluded with--Enron had plans and they were named and we
uncovered them--Fat Boy, Get Shorty, Death Star. Sounds like comic
books, doesn't it? Those are not comic books; they are internal memos
from one corporation that was using strategies to cheat and to steal.
That cheating and stealing from west coast consumers amounted to
billions and billions and billions of dollars.
Now, is it important to have in an energy bill protections for
consumers to make sure that doesn't ever happen again? Some would push
it away and say let's put some soft words in here. We will get a
thesaurus and find out what seems appealing, and we will put all these
soft words and say we have done it. Well, take a hard look at the
energy title and make sure that even as we have done what is necessary
to make sure we have a supply of energy, we have also done what is
necessary to protect the American consumer against the manipulation of
that supply and the overpricing of that supply to the detriment of the
American consumers.
There is a lot to do. I followed my colleague from Wyoming in his
presentation, and I must say to Senator Thomas, we don't disagree that
we should do this bill. Speaking for myself, I will do everything I can
this week to try to cooperate.
I hope we can offer amendments, have the debate, dispose of
amendments, and move on to the next subject. I hope at the end of the
day we have passed an Energy bill of which we are proud, one that
really does advance this country's energy interests because as we head
into this fall, we understand, more than ever, what is going to happen
to natural gas prices. They are going to spike dramatically. But even
more than that immediate natural gas price spike, we understand, with
the mosaic of what we see in the Middle East and elsewhere around the
world, this country will be enormously foolish if it does not pay
substantial attention to the fact that we are held hostage to foreign
supplies of oil in a way that is very detrimental to our long-term
economic outlook.
I hope we can work together. Speaking for myself, I want us to move
and get our work done, get a bill to the President's desk, and when his
signature is put on that bill, we can all say: We really did advance
this country's energy future in a significant way.
Madam President, I yield the floor.
The PRESIDING OFFICER. The Senator from Wyoming.
Mr. THOMAS. Madam President, I thank my friend from North Dakota for
joining in wanting to get our work done and pointing out the importance
of doing that work. Certainly that is what we are here to do, and I
hope we can continue to do our work.
I agree with the point of view of the Senator from North Dakota in
terms of transparency, antimanipulation, and enforcement. Actually,
this subtitle deals with that issue. Certainly, there is no reason why
we should not deal with it. It directs FERC to issue rules to establish
an electronic information system to provide information on the
availability and the price of wholesale energy and transmission
services, to ensure such information is treated confidentially, and
prohibit the filing of false information regarding the price of
wholesale electricity and availability of capacity. These are some of
the items that were used in the California/west coast experience.
It prohibits round-trip trading, which was one of the issues Enron
was most involved with apparently--at least that is what they were
accused of doing. This subtitle expands who can file complaints in a
case which is the subject of a FERC investigation. It deals with this
whole question of what happened in California. It amends the Power Act
to refund effective dates of filing. Many of these items in this
chapter were designed to deal with the issue in California.
I think it would be a mistake to seek to blame the California crisis
solely on manipulation. There were a number of issues involved in the
California case. California designed their own market rules, if we
recall, when they insisted there be a limit on the price for retail but
did not do so on wholesale. Those are issues that cannot continue. It
was flawed. They also had a shortage of supply. They did not want to
work on supply at all. They expected somebody else to bring in the
supply, and it did not happen.

Mr. DORGAN. Will the Senator yield?
Mr. THOMAS. Certainly.
Mr. DORGAN. The Senator makes two important points. On the supply
side, we have evidence that the supply was manipulated. That has been a
great concern to FERC. While supply is important in terms of price,
when there are large participants in the marketplace that take plants
offline for the purpose of reducing supply and jacking up the price
they receive, that is manipulation. We want to have an electricity
title which deals with all of these issues, all forms of manipulation.
The Senator mentioned supply, and I wanted to make the point, that
especially in California substantial criminal behavior existed. As we
know, FERC has already prevented some companies now from trading.
Enron, of course, is essentially bankrupt and cannot trade there. There
was substantial wrongdoing and criminal activity, much of which is
still under active investigation by the Department of Justice. That is
why having an electricity title that is good and well done is very
important.
I thank the Senator for yielding.
Mr. THOMAS. Madam President, I certainly agree with the Senator's
point. That, of course, is one of the reasons we need to finish this
bill. We talk

[[Page S10005]]

all the time about restructuring. Frankly, the fact is, the electric
industry and the suppliers have already changed, and we are behind
times.
This is not so much a matter of restructuring as it is to design a
set of policies and a set of restrictions and constraints that fit with
what is happening in the industry. Much of that a few years ago--
selling power three times and going through a number of people and
different hands--did not happen. Now it is happening. Now we have to do
something to catch up. That is part of what we are doing in this bill.
Mr. DORGAN. If the Senator will yield further, if, in fact, these are
image trades or virtual trades to crank up a price and injure the
consumer, in which a company is moving a kilowatt hour or MCF to
another State, then back in, buying and selling to and from itself to
jack up the price and cheat the consumer, in some cases, I am sure the
Senator from Wyoming agrees, we should not conform to a new practice,
but when we think the new practice is stealing from consumers, we ought
to stop it and prevent it from ever happening again.
Mr. THOMAS. That is exactly what we are seeking to do, and that is
what price transparency will help eliminate. I could not agree more.
Also, there has been a good deal of discussion about CAFE standards.
Obviously, that has to do with conservation. It has to do with being
more efficient in our use of fuel. We will be talking about CAFE
standards. In fact, there will be a number of different amendments
offered on CAFE standards. We look forward to those amendments. We
spent a good deal of time last year discussing three amendments, and,
as a consequence, we should be able to discuss and dispose of these
amendments more easily this year because we have already been through
the debate.
The Senate has already adopted an amendment by Senator Landrieu that
will require the President to develop a plan to reduce domestic
petroleum consumption by 1 million barrels a day by 2013. A major
reduction in oil consumption most likely will be achieved through
reduction in the use of transportation fuels. As a result, the Landrieu
amendment probably will focus on measuring fuel economy. That amendment
may take the place of other amendments that will be offered.
I think we will support an amendment offered by Senators Bond and
Levin. Under that amendment, standards will be based on sound science
and solid technical data. It is one thing to say, Gee, we would like to
have increased mileage; we would like to make 40, 50 miles on SUVs, but
the idea of using sound science and technical data is something we have
to consider.
This amendment we will support mandates the experts to set new CAFE
numbers considering jobs, safety, technology, and other factors because
there are factors that go into what we can do, what will be available
to consumers, what will be possible in the marketplace. This amendment
we will support has a commonsense approach which will not adversely
affect employment, safety, and consumer choice.
The Bond-Levin amendment is supported by the National Chamber of
Commerce, AFL-CIO, National Manufacturers Association, and the National
Farm Bureau, and 30 other organizations. It is combined with tax
incentives for advanced vehicle technologies. That provision,
obviously, has to be in the bill. That is in the finance package.
The amendment offers a sensible way to achieve fuel efficiency and
reduce dependency on foreign oil. It does it in a way that will not
hurt the economy, increase the cost of vehicles to consumers, or
endanger lives by reducing the safety aspects.
By comparison, there is another amendment that will increase the cost
of new cars, trucks, and SUVs by as much as $1,200, according to the
Energy Information Administration. It would limit consumer choice by
forcing automakers to produce smaller vehicles that do not meet the
consumers' needs; it will lead to the loss of hundreds of thousands of
jobs of hard-working Americans; reduce economic growth by as much as
$107 billion over 20 years and have adverse impacts.
Again, we are faced with finding a goal we want to achieve and a
sensible, legitimate way to reach that goal. We will continue talking
about that issue.
We will be looking at new fuels, such as hydrogen. As I said before,
the President has already in his budget a tremendous amount of money
for that kind of research. We will be looking for the opportunity to
make sure there are positive opportunities to review how sales of
energy are being made so that what happened in California will not
happen again.
We will be looking at ways to conserve energy, such as CAFE
standards, without impeding the safety and the marketability of
vehicles. So these are all things that go there. We are ready to talk
about them. We have some plans to accommodate them and to achieve them,
but, quite frankly, in order to do that, we have to get at it, get our
amendments in, and take away some of the objections to moving forward
so that we are not caught up in another sort of quiet filibuster.
I yield the floor and I suggest the absence of a quorum.
The PRESIDING OFFICER (Mr. Roberts). The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. DORGAN. 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. DORGAN. I ask unanimous consent to speak in morning business for
5 minutes.
The PRESIDING OFFICER. Without objection, it is so ordered.
(The remarks of Mr. Dorgan are printed in today's Record under
``Morning Business.'')
Mr. DORGAN. I yield the floor and 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. THOMAS. Mr. President, I ask unanimous consent the order for the
quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. THOMAS. I think, while we are waiting, I would like to review
again some of the general concepts that are in the bill. We have talked
some, of course, and will continue all week, to talk about energy. That
is what we are focused on. Unfortunately, we seem to be held up moving
forward. However, that is not always a new thing on Mondays.
I would like to briefly comment on what we hope will be the pending
amendment, the electric title, but there is much more to the bill than
that, of course. I would like to comment on what I think generally are
the titles and the highlights of the Energy bill.
Title I is on oil and gas. It does a lot. No. 1, it permanently
authorizes this strategic petroleum reserve, the reserve held by the
Government in case there are crises. This will permanently authorize
that strategic reserve.
It provides for production incentives for marginal wells. We find in
Wyoming, where we have had oil production for a good many years, when
marginal wells get down to having low production they become uneconomic
to produce. Yet the accumulation of all the production from small
producing wells is substantial. This provides for incentives to
encourage continued production--done mostly by taxes.
Royalty relief for deepwater production, that is exactly the same
kind of thing. They can be in the gulf, for example. They are sometimes
more expensive, but a great opportunity for more energy production.
That is part of it as well, incentives for those kinds of wells.
Streamlining permitting is also something that is very important. We
have a great opportunity, particularly in the West, to produce more oil
and gas. We have people willing to do that. One of the problems right
now in the Powder River Basin of Wyoming, where they are having a
substantial amount of production on coal bed methane, which is a new
process, it is taking an excessive amount of time to get permitting to
do that. Therefore, the production has not gone on as it might. So
there are efforts to streamline the permitting for critical energy
corridors.
I have to also add it is not done to the detriment of the
environment. The same rules are there. It is simply that it can be done
by the agencies much more quickly than it has been in the past.

[[Page S10006]]

Another is the authorization for an Alaska natural gas pipeline. This
would facilitate bringing 35 trillion cubic feet of gas to the lower
States. There will be debate about how it is funded. Nevertheless,
certainly over the long period of time a lot of the resources can come
from there.
Title II deals with coal. I mentioned this morning, coal is our
largest supply of fossil fuels. Of course, one of the difficulties has
been making it a clean air proposition. We are certainly looking for
more research to do that. We are looking for more clear air regulation
that will allow for the production of electricity with coal without
damaging the air--and there is a good deal of dollars. The bill
authorizes $2 billion for the deployment of clean air technology.
There is a title on Indian energy. Many Indian reservations have
substantial supplies of energy, coal, and gas and other supplies that
have not been in production. Part of it is because of all the
requirements they have had to go through, even more than on other
Federal lands. They have to go through the BIA, as well as the Bureau
of Land Management, as well as the State, and the result of that has
been it has been higher cost to produce on reservations, so they have
not produced. Therefore we have not had the production for all of us in
the country and at the same time not had the economic assistance for
the tribes, which is also very important.

Nuclear energy is involved here, the permanent reauthorization of
Price-Anderson, a liability insurance system. There would not be any
nuclear plants without that assistance. The fact is, there have not
been new nuclear plants for a good long time, despite the fact that in
Illinois, for example, I think 28 percent--a good percentage of the
electricity is produced by nuclear plants. It is a clean air deal. It
is the best thing you can do in order to produce electricity and take
care of the air. But, of course, we are all a little skeptical of
nuclear and what to do with the waste. But there should be and will be
research as to how to better produce.
As we know, France, Norway, and the Scandinavian states do a great
deal of nuclear production. They also have better means of taking care
of nuclear wastes than we do here in the United States. So here is an
opportunity to do that.
Title V involves renewable energy. Here again, we have already heard
about some of it today. There is a great deal of interest in renewable
energy, whether it be wind energy or Sun energy, other kinds--
geothermal energy. All those things have great potential.
The fact is, production by renewables only amounts to about 3 percent
of total production in the country at this time, so it is not a major
element, but it has the potential to be, and therefore we need to be
continuing to work to provide an opportunity to make that more
efficient. We have a considerable amount of wind energy in Wyoming. We
have a lot of wind. As a matter of fact, the first windmill that was
put up in Medicine Bow, WY, was an experiment a number of years ago. It
had a huge propeller, and it blew away before it was able to be
effective. Now they have changed them. Some are even cylindrical pipes,
and the wind goes in and around. Perhaps those will be better over
time. We need more research on doing that.
Transportation, of course. We have already talked a great deal about
CAFE standards. There will be more discussion about that. I don't think
anyone is not agreeable to the idea that we ought to increase the
standard of fuel consumption for automobiles, but we have to do it
where the expectations of technology are such that you can do it, and
it has to be in a way that does not impose excessive costs on everyone
immediately. Again, that is a good one.
This bill authorizes $1.8 billion for the present hydrogen fuel cell
initiative, to develop clean, renewable hydrogen power for cars. I
don't think there is any doubt that we can do it. As a matter of fact,
there are hydrogen cars now. But there are some basic problems that we
have not yet resolved. How do you make hydrogen? From where do you get
it? Someone on the floor this morning was talking about doing it in
space vehicles. The cost for space vehicles is quite different from
that for my Ford Explorer. I think it will have to go a long way before
that analogy fits in the cars you and I want to use. The other real
issue is distribution. Think how many gasoline stations there are
around where we drive our cars. I suppose you are going to have to have
something similar to that for hydrogen, if that is going to happen.
Will it happen? Sure. I think it is one of the things that will
happen in the future. So that is here.
Research and development, of course, in general is here. There is a
good deal of authorization and funding authority there. Again, it is
the kind of thing we need to work on.
We have already talked this morning about the electric title, which
is very important.
We have not yet considered but will consider soon the tax incentives.
Here again is the effort we are making to increase domestic production.
That will be a result of the incentives that we put into place through
taxes. The same is true with alternative energy for vehicles and fuel
incentives. This will be done by tax incentives. Conservation
efficiency, clean coal, and all of those things are very important.

This is really a far-reaching bill. I think most people will agree
with most aspects of it. If we can get it going and get it to the
President soon, I think that is essential. I believe we are going to do
some other things this afternoon, but I hope we continue moving back to
energy. That is the challenge we have for this week. I hope we take
full advantage of it.
I suggest the absence of a quorum.
The PRESIDING OFFICER. The amazing clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. DORGAN. Madam President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER (Ms. Murkowski). Without objection, it is so
ordered.
(The remarks of Mr. Dorgan are printed in today's Record under
``Morning Business.'')
The PRESIDING OFFICER. The Senator from Michigan.

Amendment No. 1386

Mr. LEVIN. Madam President, I am speaking this afternoon in support
of the pending Bond-Levin amendment relative to fuel efficiency in our
automobiles and how we achieve that fuel efficiency.
Our amendment will increase fuel economy in automobiles. It will
protect the environment. It will decrease our dependence on foreign
oil. But it will do this in a way that will not harm the U.S. economy
or put hard-working Americans out of work.
Our amendment achieves the goal of better fuel economy with greater
reliance on positive incentives to advance leap-ahead technologies such
as hybrids and fuel cells. That includes promoting these technologies
with greater increases in joint research and development and Government
purchases.
Our amendment requires the Department of Transportation to increase
the CAFE standard. It is a mandate, but the key difference between our
amendment and some of the alternatives is that our mandated increase
will be left up to the Department of Transportation and will not be
just an arbitrarily determined number on the part of the Senate.
Let me go through some of the goals and how we achieve those goals in
the Bond-Levin amendment.
First, we need to improve fuel economy. We can, and we should, do it
in a way that protects the environment, that diminishes our dependence
on imported oil, and that allows the U.S. economy and our domestic
manufacturing industry to thrive.
Those goals are not in conflict with each other. We can improve fuel
economy, but we can do it in a way that does not harm domestic
manufacturing and the U.S. economy if we do it right. And that is a big
``if.'' If we do it wrong, we could have a very negative effect on jobs
and the American economy. And, as a matter of fact, if we do it wrong,
we not only can damage the American economy, but we could see little
improvement in the environment, given the way in which the current
structure of fuel economy mandates is set up.
It is a discriminatory structure that has discriminated against
domestics in ways that were probably unforeseen

[[Page S10007]]

when this structure was adopted 30 years or so ago, but nonetheless it
has had that effect.
What we do is ensure that fuel economy will be improved. But we do
not set an arbitrary standard. We require the agency that has the
expertise and the experience to set an increased fuel economy standard
for both trucks and for light vehicles.
This is not the place, on the Senate floor, to make a complex
decision that should involve a whole host of factors: What is
achievable technologically, what is the cost, what are the safety
impacts, what are the impacts on American jobs, and a whole host of
other factors that need to be considered before a new fuel economy
standard is set. That should not just be seized out of the air
arbitrarily and put into law on the Senate floor. That ought to be done
by an agency that has the expertise and experience to do it, that looks
at all of the factors that should go into the decision, and then does
it in an usual, regulatory way with notice and comment.
The second part of our three-part policy is to increase funding for
research, development, and demonstration of new, advanced, clean and
fuel-efficient vehicles. We provide $50 million. We would authorize
that in funds for the Department of Energy to develop advanced hybrid
vehicles. And that would be a significant increase.

Hybrids run on both gasoline and electricity and are far more fuel
efficient than conventional vehicles. We would provide an increase in
funds for the Department of Energy to work collaboratively with
industry to do some research and develop clean diesel technologies. It
would be a significant increase in what is otherwise provided.
Because diesel engines are much more fuel efficient than gasoline
engines, furthering clean diesel will help reduce gasoline consumption.
And because diesel vehicles must meet very stringent emissions
standards in the very near future, this will not be detrimental to the
environment. Again, diesel vehicles are subject to the new clean air
standards. These emissions standards must be met by diesels. If we can
advance clean diesel technology, we will be saving gasoline because
they are more fuel efficient than gasoline.
The third part of our policy harnesses the purchasing power of the
Federal Government. In order to try to get the vehicles we are talking
about--including hybrids and fuel cell vehicles--commercially adopted
onto the roads, we have to use the purchasing power of the Federal
Government. So we would require the Federal Government, when it is
purchasing vehicles, to purchase hybrid trucks for its fleets of light
trucks that are otherwise not covered by the Energy Policy Act.
Using hybrid trucks in Federal fleets will improve the fuel
efficiency of the Federal fleet because hybrids are far more fuel
efficient than conventional gasoline vehicles. And, at the same time,
we would be creating a significant and reliable market for hybrid
trucks. This is not buying vehicles that are otherwise not needed. This
would be a requirement to purchase vehicles that the Federal Government
is buying but to require that we buy the hybrids so we can help create
the market that is so essential for the auto industry in order to have
confidence that the vehicles will be purchased when they produce them.
In a related amendment, not part of the Bond-Levin amendment--I will
be offering an amendment to the energy tax amendment which will come
from the Finance Committee--we will be providing tax incentives to help
advance the purchase of clean vehicles and clean fuel.
Our tax amendment--again, this is not part of Bond-Levin; it will be
offered as an amendment to what is offered by the Finance Committee--
would increase the tax credit available to consumers who purchase
hybrid vehicles and provide a new tax credit for fuel-efficient lean-
burn vehicles, to help push these vehicles into the marketplace. We
would also extend the period of time for tax incentives for fuel cell
vehicles for 3 additional years, from 2011 to 2014.
We would also provide tax credits for consumers who buy heavy-duty
diesel vehicles that are significantly cleaner than what is required by
law.
Finally, we would provide producers with tax credits for purchasing
ultra-low-sulfur diesel fuel which the next generation of diesel
vehicles would need to meet the upcoming round of extremely low
emission standards.
I want to spend a few more minutes discussing the fuel economy part
of our amendment. Clearly, we all want to improve fuel economy. That is
a goal all of us share. But how we increase it is absolutely critical.
Our amendment increases it by requiring the Department of
Transportation to increase CAFE. However, rather than setting an
arbitrary number for fuel economy on the floor of the Senate, we
require the National Highway Traffic Safety Administration, NHTSA, to
conduct a rulemaking process to increase fuel efficiency. The resulting
rules will apply to both passenger cars and light trucks. Pickup
trucks, minivans, and SUVs are included in the definition of light
trucks.
But rather than legislating an arbitrary number, what the Bond-Levin
amendment does is to tell NHTSA--the agency designed to do this--to
rationally take into account a number of important considerations when
setting a new standard: safety; consumer choice; the need for oil
independence; the need for fuel savings; any unfair or competitive
disadvantage that is created or continued by use of the CAFE system;
impact on jobs; and a number of other factors. If NHTSA fails to act in
the required timeframe under our amendment, Congress can consider
legislation under expedited procedures to mandate an increase in fuel
economy standards.
If we fail to set fuel economy standards in a deliberate manner, if
we just do it arbitrarily by adopting a number in the Senate floor, we
create a further competitive disadvantage to domestic manufacturers.
From its inception, CAFE has given an unfair competitive advantage to
foreign manufacturers, not because they have more fuel efficient
technologies; they do not. I emphasize that because there are folks who
do believe that foreign cars are more fuel efficient than domestic
cars. In the same category of cars, the same weight classifications,
they are not. American-made cars are at least comparable in terms of
fuel efficiency, and in many cases they have superior fuel efficiency
to foreign-made models in that same weight class, the ones with which
they compete.
It is because foreign manufacturers have historically focused more on
smaller cars and smaller trucks than American manufacturers that they
have that advantage. It is not because their vehicles are more
technologically advanced or more fuel efficient in the same weight
class. The reason this has worked this way is that the CAFE system,
when it was designed, gave an advantage to manufacturers by looking at
the entire fleet of cars rather than dividing the fleet into comparable
size vehicles or comparable weight vehicles. Any automaker that built
primarily small cars found it easy to meet the CAFE standard, while the
manufacturers that built the full line of cars, including five-and six-
passenger cars that American families have traditionally bought, found
it much more difficult to meet the fleet average requirement of CAFE.
So the fleet average does not reflect the efficiency of comparably
sized vehicles.
In looking at the fleets as a whole, there is a built-in bias against
domestic manufacturers although, again, domestically built vehicles are
at least equally fuel efficient, pound for pound, in the same weight
classification, as are the imported vehicles.

Foreign car manufacturers have been able to expand their production
of larger cars and pickup trucks, minivans, and SUVs under the fleet
average methodology that is called CAFE.
CAFE did not constrain them. The historic focus of those
manufacturers on small vehicles gave them the headroom to sell large
numbers of larger vehicles while still meeting the CAFE requirements
for the fleet average; again, not because they are more fuel efficient.
So CAFE has had an unfair discriminatory impact against U.S. jobs
because of how it was designed. I hope that was an inadvertent design
and not an intended consequence when CAFE was designed many decades
ago, but it has been the consequence. It is utterly amazing that we
would tolerate the continuation, much less the expansion, of that
consequence without considering the impact of all the factors that go
into CAFE.

[[Page S10008]]

The proposals that have been supported by some in the Senate to
provide an arbitrary increase in CAFE standards do not solve the
problem of unfair competitive disadvantage. Instead, that arbitrary
selection of a number would make it worse. Manufacturers who have
traditionally produced smaller vehicles would have considerably less
difficulty meeting the new standards than domestic manufacturers would.
The National Academy of Sciences recognizes this in its 2001 report.
In talking about the current CAFE system, the National Academy of
Sciences said the following:

. . . one concept of equity among manufacturers requires
equal treatment of equivalent vehicles made by different
manufacturers. The current CAFE standards fail this test.

The National Academy went on to say the following:

A policy decision to simply increase the standard for
light-duty trucks to the same level as for passenger cars
would operate in this inequitable manner. . . .those
manufacturers whose production was concentrated in light-duty
trucks [that is SUVs, minivans, and pickups] would be
financially penalized relative to those manufacturers whose
production was concentrated in cars.

Well, domestic manufacturers have a high concentration in light truck
production, and they will be unfairly disadvantaged by this approach.
Yet that is the approach advocated by some of our colleagues.
The competitive disadvantage of increased CAFE standards on domestic
manufacturers is an important factor, but it is ignored in CAFE
amendments that just set arbitrary standards. This competitive
disadvantage for domestic manufacturers is not some abstract issue,
this is an American jobs issue.
It is difficult to overestimate the importance of the automotive
sector to the American economy. The automotive manufacturing sector
alone is directly responsible for over 2 million jobs, and there are
about 10 million people who are employed in fields directly related to
motor vehicles.
Advocates of setting an arbitrary higher CAFE standard assert that
the economic impact of CAFE will be minimal.
They claim that lost auto industry jobs will be offset by jobs
created elsewhere. If they are wrong--and I believe they are--the
potential negative impacts are massive.
According to the National Academy of Sciences report on the impacts
of the CAFE program, union membership has fallen from 1.4 million
members in 1980 to only 670,000 by the year 2000. U.S. automakers are
losing jobs and market share partly due to the arbitrary CAFE program.
In the last 20 years, this hemorrhaging of over 700,000 U.S. jobs was
countered by the creation of only 35,000 jobs in assembly plants built
in the United States by foreign-owned manufacturers. That is a National
Academy of Sciences finding from their report.
Over the last 4 years alone, the big three have lost 34,000 jobs.
That is an 11-percent loss of jobs in just 4 years. There is a better
way than just an arbitrary increase by the Senate in the CAFE number.
We can achieve our shared goals of decreasing our dependence on foreign
oil and reducing carbon dioxide emissions by developing innovative, new
technologies that will, hopefully, ultimately eliminate or
significantly reduce the use of fossil fuels that create those
emissions.
Our approach, the Bond-Levin amendment, and a separate tax amendment
that will be offered, would require an increase in fuel economy by
NHTSA but require consideration of all the factors relevant to any
increase and not simply derive an arbitrary figure on the floor of the
Senate. We would ramp up public-private cooperative investment in
research and development of advanced vehicle technologies. We will use
the purchasing power of Government to speed up the commercial
production of these technologies. And, again, in a separate amendment,
we would use tax credits to provide powerful incentives for the
purchase of advanced clean technology vehicles.
I have been a supporter for a long time of developing fuel cell
vehicles. The Administration's FreedomCAR and FreedomFuel programs are
a good step but they are not sufficient to move us forward quickly to a
hydrogen future. So we offered an amendment in last year's Energy bill
that pushed the development of hydrogen vehicles and infrastructure.
This year, provisions such as these are already incorporated in the
underlying bill. The amendment that will be offered separately to the
tax section of the bill would extend the fuel cell vehicle credits
provided in the finance package from 2011 to 2014.
We must lay the groundwork for the development of a hydrogen future.
We also need to focus on the immediate future and provide incentives
for efficient hybrid vehicles and clean diesel vehicles. Hybrid
vehicles, which draw power from both electric motor and an internal
combustion engine, can be up to 100 percent more efficient than
conventional vehicles. Clean diesel vehicles, which new regulations
make just as clean vehicles running on gasoline, also provide important
efficiency gains that are important, especially in light and heavy-duty
trucks.
The Department of Energy has calculated that if diesel were used in
only 30 percent of potential light truck applications by the year 2020,
it would reduce U.S. crude oil imports by 700,000 barrels per day.
Clean diesel increases fuel economy by 20 to 40 percent and decreases
current engines' carbon dioxide emissions by that same percentage.
We must put the pieces in place today that will lead to revolutionary
breakthroughs in automotive technology tomorrow. If we take this
approach, we will do far more to make this Nation less dependent on
foreign oil and far more to reduce our emissions of greenhouse gases
than we will ever accomplish with increased CAFE standards. The
incremental gains are so costly to achieve and but use the resources
that otherwise would be used for leap-ahead technologies that would
achieve so much more.
Currently, auto companies around the world are working on longer
term, breakthrough technologies that will provide potentially dramatic
increases in vehicle fuel economy. This research work--on projects such
as fuel cells, advanced batteries, and hybrid technologies--requires
substantial resources.
These resources should be invested in leap-ahead technologies. The
more we spend on the very marginal increases in technology, which would
be at great cost required, we are going to be misusing the resources
this Nation should be placing on the leap-ahead technologies.
Technology changes require very long times to be introduced into the
manufacturer's product lines. Any policy that is implemented too
quickly and too aggressively has the potential to adversely affect
manufacturers, their suppliers, their employees, and consumers. If the
automakers are required to focus so much on dramatic near-term
improvements in vehicle fuel economy, resources will have to be
diverted from those promising longer term projects and from providing
the amenities desired by American families.
The Bond-Levin approach preserves the appropriate balance between
development of near-term technologies for fuel economy improvement and
the development of promising longer term projects. We use greater
incentives; we use partnerships; we rely less and less on these
arbitrary mandates. Where a mandate is appropriate, the agency with
expertise, the agency with experience, the agency that would use all of
the relevant factors in the determination of that new mandate would be
the one that would be given the responsibility to increase those fuel
standards. That is our approach. It is a positive approach toward
greater energy efficiency, and it does so in a way which does not cost
jobs--important jobs, manufacturing jobs in this country.

Amendment No. 1386, As Modified

Mr. LEVIN. Mr. President, I send a technical modification to the
Bond-Levin amendment to the desk, and I ask unanimous consent that the
amendment be modified.
The PRESIDING OFFICER. Is there objection? Without objection, the
amendment is so modified.
The amendment (No. 1386), as modified, is as follows:

On page 264, after line 21, add the following:

SEC. 716. PROVISION NOT TO TAKE EFFECT.

Section 711 shall not take effect.

[[Page S10009]]

SEC. 717. REVISED CONSIDERATIONS FOR DECISIONS ON MAXIMUM
FEASIBLE AVERAGE FUEL ECONOMY.

Section 32902(f) of title 49, United States Code, is
amended to read as follows:
``(f) Considerations for Decisions on Maximum Feasible
Average Fuel Economy.--When deciding maximum feasible average
fuel economy under this section, the Secretary of
Transportation shall consider the following matters:
``(1) Technological feasibility.
``(2) Economic practicability.
``(3) The effect of other motor vehicle standards of the
Government on fuel economy.
``(4) The need of the United States to conserve energy.
``(5) The desirability of reducing United States dependence
on imported oil.
``(6) The effects of the average fuel economy standards on
motor vehicle and passenger safety.
``(7) The effects of increased fuel economy on air quality.
``(8) The adverse effects of average fuel economy standards
on the relative competitiveness of manufacturers.
``(9) The effects of compliance with average fuel economy
standards on levels of employment in the United States.
``(10) The cost and lead time necessary for the
introduction of the necessary new technologies.
``(11) The potential for advanced technology vehicles, such
as hybrid and fuel cell vehicles, to contribute to the
achievement of significant reductions in fuel consumption.
``(12) The extent to which the necessity for vehicle
manufacturers to incur near-term costs to comply with the
average fuel economy standards adversely affects the
availability of resources for the development of advanced
technology for the propulsion of motor vehicles.
``(13) The report of the National Research Council that is
entitled `Effectiveness and Impact of Corporate Average Fuel
Economy Standards', issued in January 2002.''.

SEC. 718. INCREASED FUEL ECONOMY STANDARDS.

(a) New Regulations Required.--
(1) Non-passenger automobiles.--
(A) Requirement for new regulations.--The Secretary of
Transportation shall issue, under section 32902 of title 49,
United States Code, new regulations setting forth increased
average fuel economy standards for non-passenger automobiles.
The regulations shall be determined on the basis of the
maximum feasible average fuel economy levels for the non-
passenger automobiles, taking into consideration the matters
set forth in subsection (f) of such section. The new
regulations under this paragraph shall apply for model years
after the 2007 model year, subject to subsection (b).
(B) Time for issuing regulations.--The Secretary of
Transportation shall issue the final regulations under
subparagraph (A) not later than April 1, 2006.
(2) Passenger automobiles.--
(A) Requirement for new regulations.--The Secretary of
Transportation shall issue, under section 32902 of title 49,
United States Code, new regulations setting forth increased
average fuel economy standards for passenger automobiles. The
regulations shall be determined on the basis of the maximum
feasible average fuel economy levels for the passenger
automobiles, taking into consideration the matters set forth
in subsection (f) of such section.
(B) Time for issuing regulations.--The Secretary of
Transportation shall issue the final regulations under
subparagraph (A) not later than 2\1/2\ years after the date
of the enactment of this Act.
(b) Phased Increases.--The regulations issued pursuant to
subsection (a) shall specify standards that take effect
successively over several vehicle model years not exceeding
15 vehicle model years.
(c) Clarification of Authority To Amend Passenger
Automobile Standard.--Section 32902(b) of title 49, United
States Code, is amended by inserting before the period at the
end the following: ``or such other number as the Secretary
prescribes under subsection (c)''.
(d) Environmental Assessment.--When issuing final
regulations setting forth increased average fuel economy
standards under section 32902(a) or section 32902(c) of title
49, United States Code, the Secretary of Transportation shall
also issue an environmental assessment of the effects of the
increased standards on the environment under the National
Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.).
(e) Authorization of Appropriations.--There are authorized
to be appropriated to the Secretary of Transportation
$5,000,000 for each of fiscal years 2004 through 2008 for
carrying out this section and for administering the
regulations issued pursuant to this section.

SEC. 719. EXPEDITED PROCEDURES FOR CONGRESSIONAL INCREASE IN
FUEL ECONOMY STANDARDS.

(a) Condition for Applicability.--If the Secretary of
Transportation fails to issue final regulations with respect
to non-passenger automobiles under section 718, or fails to
issue final regulations with respect to passenger automobiles
under such section, on or before the date by which such final
regulations are required by such section to be issued,
respectively, then this section shall apply with respect to a
bill described in subsection (b).
(b) Bill.--A bill referred to in this subsection is a bill
that satisfies the following requirements:
(1) Introduction.--The bill is introduced by one or more
Members of Congress not later than 60 days after the date
referred to in subsection (a).
(2) Title.--The title of the bill is as follows: ``A bill
to establish new average fuel economy standards for certain
motor vehicles.''.
(3) Text.--The bill provides after the enacting clause only
the text specified in subparagraph (A) or (B) or any
provision described in subparagraph (C), as follows:
(A) Non-passenger automobiles.--In the case of a bill
relating to a failure timely to issue final regulations
relating to non-passenger automobiles, the following text:

``That, section 32902 of title 49, United States Code, is
amended by adding at the end the following new subsection:
`` `(__) Non-passenger automobiles.--The average fuel
economy standard for non-passenger automobiles manufactured
by a manufacturer in a model year after model year ____ shall
be ____ miles per gallon.' '', the first blank space being
filled in with a subsection designation, the second blank
space being filled in with the number of a year, and the
third blank space being filled in with a number.
(B) Passenger automobiles.--In the case of a bill relating
to a failure timely to issue final regulations relating to
passenger automobiles, the following text:

``That, section 32902(b) of title 49, United States Code, is
amended to read as follows:
`` `(b) Passenger Automobiles.--Except as provided in this
section, the average fuel economy standard for passenger
automobiles manufactured by a manufacturer in a model year
after model year ____ shall be ____ miles per gallon.' '',
the first blank space being filled in with the number of a
year and the second blank space being filled in with a
number.
(C) Substitute text.--Any text substituted by an amendment
that is in order under subsection (c)(3).
(c) Expedited Procedures.--A bill described in subsection
(b) shall be considered in a House of Congress in accordance
with the procedures provided for the consideration of joint
resolutions in paragraphs (3) through (8) of section 8066(c)
of the Department of Defense Appropriations Act, 1985 (as
contained in section 101(h) of Public Law 98-473; 98 Stat.
1936), with the following exceptions:
(1) References to resolution.--The references in such
paragraphs to a resolution shall be deemed to refer to the
bill described in subsection (b).
(2) Committees of jurisdiction.--The committees to which
the bill is referred under this subsection shall--
(A) in the Senate, be the Committee on Commerce, Science,
and Transportation; and
(B) in the House of Representatives, be the Committee on
Energy and Commerce.
(3) Amendments.--
(A) Amendments in order.--Only four amendments to the bill
are in order in each House, as follows:
(i) Two amendments proposed by the majority leader of that
House.
(ii) Two amendments proposed by the minority leader of that
House.
(B) Form and content.--To be in order under subparagraph
(A), an amendment shall propose to strike all after the
enacting clause and substitute text that only includes the
same text as is proposed to be stricken except for one or
more different numbers in the text.
(C) Debate, et cetera.--Subparagraph (B) of section
8066(c)(5) of the Department of Defense Appropriations Act,
1985 (98 Stat. 1936) shall apply to the consideration of each
amendment proposed under this paragraph in the same manner as
such subparagraph (B) applies to debatable motions.

Subtitle C--Advanced Clean Vehicles

SEC. 731. HYBRID VEHICLES RESEARCH AND DEVELOPMENT.

(a) Rechargeable Energy Storage Systems and Other
Technologies.--The Secretary of Energy shall accelerate
research and development directed toward the improvement of
batteries and other rechargeable energy storage systems,
power electronics, hybrid systems integration, and other
technologies for use in hybrid vehicles.
(b) Authorization of Appropriations.--Funds are hereby
authorized to be appropriated for each of fiscal years 2004,
2005, and 2006 in the amount $50,000,000 for research and
development activities under this section.

SEC. 732. DIESEL FUELED VEHICLES RESEARCH AND DEVELOPMENT.

(a) Diesel Combustion and After Treatment Technologies.--
The Secretary of Energy shall accelerate research and
development directed toward the improvement of diesel
combustion and after treatment technologies for use in diesel
fueled motor vehicles.
(b) Goals.--The Secretary shall carry out subsection (a)
with a view to achieving the following goals:
(1) Compliance with certain emission standards by 2010.--
Developing and demonstrating diesel technologies that, not
later than 2010, meet the following standards:
(A) Tier-2 emission standards.--The tier 2 emission
standards.
(B) Heavy-duty emission standards of 2007.--The heavy-duty
emission standards of 2007.

[[Page S10010]]

(2) Post-2010 highly efficient technologies.--Developing
the next generation of low emissions, high efficiency diesel
engine technologies, including homogeneous charge compression
ignition technology.
(c) Authorization of Appropriations.--Funds are hereby
authorized to be appropriated for each of fiscal years 2004,
2005, and 2006 in the amount of $75,000,000 for research and
development of advanced combustion engines and advanced
fuels.

SEC. 733. PROCUREMENT OF ALTERNATIVE FUELED PASSENGER
AUTOMOBILES.

(a) Vehicle Fleets Not Covered by Requirement in Energy
Policy Act of 1992.--The head of each agency of the executive
branch shall coordinate with the Administrator of General
Services to ensure that only alternative fueled vehicles are
procured by or for each agency fleet of passenger automobiles
that is not in a fleet of vehicles to which section 303 of
the Energy Policy Act of 1992 (42 U.S.C. 13212) applies.
(b) Waiver Authority.--The head of an agency, in
consultation with the Administrator, may waive the
applicability of the policy regarding the procurement of
alternative fueled vehicles in subsection (a) to--
(1) the procurement for such agency of any vehicles
described in subparagraphs (A) through (F) of section
303(b)(3) of the Energy Policy Act of 1992 (42 U.S.C.
13212(b)(3)); or
(2) a procurement of vehicles for such agency if the
procurement of alternative fueled vehicles cannot meet the
requirements of the agency for vehicles due to insufficient
availability of the alternative fuel used to power such
vehicles.
(c) Applicability to Procurements After Fiscal Year 2004.--
This subsection applies with respect to procurements of
alternative fueled vehicles in fiscal year 2005 and
subsequent fiscal years.

SEC. 734. PROCUREMENT OF HYBRID LIGHT DUTY TRUCKS.

(a) Vehicle Fleets Not Covered by Requirement in Energy
Policy Act of 1992.--
(1) Hybrid vehicles.--The head of each agency of the
executive branch shall coordinate with the Administrator of
General Services to ensure that only hybrid vehicles are
procured by or for each agency fleet of light duty trucks
that is not in a fleet of vehicles to which section 303 of
the Energy Policy Act of 1992 (42 U.S.C. 13212) applies.
(2) Waiver authority.--The head of an agency, in
consultation with the Administrator, may waive the
applicability of the policy regarding the procurement of
hybrid vehicles in paragraph (1) to that agency to the extent
that the head of that agency determines necessary--
(A) to meet specific requirements of the agency for
capabilities of light duty trucks;
(B) to procure vehicles consistent with the standards
applicable to the procurement of fleet vehicles for the
Federal Government;
(C) to adjust to limitations on the commercial availability
of light duty trucks that are hybrid vehicles; or
(D) to avoid the necessity of procuring a hybrid vehicle
for the agency when each of the hybrid vehicles available for
meeting the requirements of the agency has a cost to the
United States that exceeds the costs of comparable nonhybrid
vehicles by a factor that is significantly higher than the
difference between--
(i) the real cost of the hybrid vehicle to retail
purchasers, taking into account the benefit of any tax
incentives available to retail purchasers for the purchase of
the hybrid vehicle; and
(ii) the costs of the comparable nonhybrid vehicles to
retail purchasers.
(3) Applicability to procurements after fiscal year 2004.--
This subsection applies with respect to procurements of light
duty trucks in fiscal year 2005 and subsequent fiscal years.
(b) Inapplicability to Department of Defense.--This section
does not apply to the Department of Defense, which is subject
to comparable requirements under section 318 of the National
Defense Authorization Act for Fiscal Year 2002 (Public Law
107-107; 115 Stat. 1055; 10 U.S.C. 2302 note).

SEC. 735. DEFINITIONS.

In this subtitle:
(1) Alternative fueled vehicle.--The term ``alternative
fueled vehicle'' means--
(A) an alternative fueled vehicle, as defined in section
301(3) of the Energy Policy Act of 1992 (42 U.S.C. 13211(3));
(B) a motor vehicle that operates on a blend of fuel that
is at least 20 percent (by volume) biodiesel, as defined in
section 312(f) of the Energy Policy Act of 1992 (42 U.S.C.
13220(f)); and
(C) a motor vehicle that operates on a blend of fuel that
is at least 20 percent (by volume) bioderived hydrocarbons
(including aliphatic compounds) produced from agricultural
and animal waste.
(2) Heavy-duty emission standards of 2007.--The term
``heavy-duty emission standards of 2007'' means the motor
vehicle emission standards promulgated by the Administrator
of the Environmental Protection Agency on January 18, 2001,
under section 202 of the Clean Air Act to apply to heavy-duty
vehicles of model years beginning with the 2007 vehicle model
year.
(3) Hybrid vehicle.--The term ``hybrid vehicle'' means--
(A) a motor vehicle that draws propulsion energy from on
board sources of stored energy that are both--
(i) an internal combustion or heat engine using combustible
fuel; and
(ii) a rechargeable energy storage system; and
(B) any other vehicle that is defined as a hybrid vehicle
in regulations prescribed by the Secretary of Energy for the
administration of title III of the Energy Policy Act of 1992.
(4) Motor vehicle.--The term ``motor vehicle'' means any
vehicle that is manufactured primarily for use on public
streets, roads, and highways (not including a vehicle
operated exclusively on a rail or rails) and that has at
least four wheels.
(5) Tier 2 emission standards defined.--The term ``tier 2
emission standards'' means the motor vehicle emission
standards promulgated by the Administrator of the
Environmental Protection Agency on February 10, 2000, under
section 202 of the Clean Air Act (42 U.S.C. 7521) to apply to
passenger automobiles, light trucks, and larger passenger
vehicles of model years after the 2003 vehicle model year.
(6) Terms defined in epa regulations.--The terms
``passenger automobile'' and ``light truck'' have the
meanings given such terms in regulations prescribed by the
Administrator of the Environmental Protection Agency for
purposes of the administration of title II of the Clean Air
Act (42 U.S.C. 7521 et seq.).

Mr. LEVIN. Mr. President, I yield the floor.
The PRESIDING OFFICER. The Senator from Oklahoma is recognized.
Mr. INHOFE. Mr. President, I ask unanimous consent that following the
remarks by the distinguished Senator from Idaho, I be allowed to speak
as in morning business for such time as I may consume.
The PRESIDING OFFICER (Mr. Sununu). Is there objection?
Without objection, it is so ordered.
The Senator from Idaho is recognized.
Mr. CRAIG. Mr. President, I thank the Senator for his comments on the
Levin-Bond, Bond-Levin amendment, which is critical to a clarification
and establishment of the CAFE standards as we understand them and that
fit the industry of our country--the automobile industry--and that
effectively match up with where we want to take fleet averages and all
of that over the course of time. It is certainly, in my opinion, a much
more responsible approach than that which is being proposed by the
Senator from Illinois, Mr. Durbin.
I do believe the Durbin amendments on CAFE standards would have a
devastating impact on the automobile industry. As the Senator from
Michigan has said, new technologies introduced into the automobile
transportation fleets of this country not only take time but cost a
tremendous amount of money and, in the course of that, oftentimes
change the whole character of industries. We need to be extremely
careful about that.
For example, the Durbin amendment proposal calls for passenger cars
and light truck CAFE standards to be set at 40 miles per gallon and
27.5 miles per gallon, respectively, by 2015. At the same time,
minivans and other SUVs are shifted from a light truck fleet to a car
fleet; vehicles up to 14,000 pounds are added to the regular fleet. It
is a combination and a formula that, while I have spent a good deal of
time over the years trying to understand, I am not at all confident I
can effectively explain it for the record or for those who are
advocating it or for those who are simply listening and trying to
understand the importance of this debate.
We do have an alternative in the Bond-Levin approach, which I think
balances out what we have said historically in CAFE standards that
cause our industry, in a progressive fashion, to drive in the right
direction, to do what is appropriate and necessary within the confines
of not only building safe automobiles, safe transportation, but that
which is increasingly efficient for the consuming public.
We are on S. 14, a comprehensive Energy bill for this country. The
Senate has been working to pass a comprehensive Energy bill for 3
years. I find it fascinating that it is so impossible to do. We passed
the Department of Homeland Security bill in 1 day. In 1 day of debate,
the Senate took a very huge portion of Government and over 100,000
employees and changed their direction and future. We have already been
on an Energy bill this year and in this session for several weeks. Yet
we are being told we cannot get it done this week, with some 300
amendments offered.
Then when we suggested we would come in and start early and work
late, the minority recommended that they would offer optimum
flexibility, and

[[Page S10011]]

they have just denied us now in the last several hours the very
flexibility they promised--that we could offer amendments, lay them
aside, go to other amendments, debate those, lay them aside until the
appropriate number were assembled, and then we could use the process of
stacking and do so to bring about the votes that would expedite the
time and effectively utilize the very limited time we have--the time
that we think is extremely necessary and that we can, in fact, complete
our work.
The Senate already this year, as I have mentioned, has considered an
Energy bill for 12 days, and the bill before us is not some secret. It
is not like the bill last year that was crafted in the office of then-
Majority Leader Daschle and was brought to the floor and substituted
several times in a way we did not know what it was made up of or where
it was going until we saw it when it was before the Senate for
consideration.
This bill was crafted in the committee. It was brought up in a normal
fashion, it was voted out in a bipartisan fashion, and the only real
unknown was the electrical title which was available by Friday of this
past week to all who had not been involved in its crafting. My
colleagues had the opportunity over the weekend to look at it.
We wanted to offer that electrical title amendment to the bill this
afternoon so we could all see it, begin to understand it, debate it,
and, if necessary, leave it before the Senate a day or so to be sure we
could clearly deal with it in the appropriate fashion.
I hope that what happened several hours ago, denying us the ability
to lay aside amendments and move to other amendments, does not become a
pattern. If it does, then this Senator will come to the Chamber and
talk about the good faith or the lack thereof, the desire or the lack
thereof, in wanting to produce a national energy policy for our
country. I wish to talk about the need of that policy now and into the
future.
If one reads the St. Louis newspaper today, one will read about
natural gas prices taking a Missouri farmer from $295 a ton for
nitrogen fertilizer to as much as $430 a ton because of the runup in
gas prices. If that is happening in Missouri, I darn well bet it is
happening to my farmers in Idaho or the U.S. chemical companies closing
plants and laying off workers and looking to expand their production
overseas as a result of high gas prices. The Wall Street Journal said:
The United States is expected to import approximately $9 billion more
in chemicals this year than last year. Why? Because we are running the
chemical industry out of our country because this Congress, this
Senate, in 3 years has refused to produce a national energy policy for
our country that, once again, not only recognizes that energy will be
available but that it will be stable, that there will be a reliable
supply at a predictable cost, and not one that goes from $3 a cubic
thousand feet to $6, as we have seen gas spike in just the last several
months, totally disallowing any industry that uses large volumes of
natural gas any way of predicting or projecting costs of development,
costs of refinement and, therefore, price to consumer in the market.
We cannot afford for this country to increasingly buy its chemicals
overseas as we buy our crude oil from overseas. It will result in $9
billion more in the imbalance of our trade simply because Congress
cannot function. The blame will lie at our feet because we have been 3
years trying to perfect a national energy policy for our country.
I oftentimes remember the first meeting I had with President-elect
George W. Bush in the majority leader's office. He had been talking
about a lot of issues for our country--education, Leave No Child
Behind, a whole combination of issues. But that day he said: While all
of these other issues are important, and we will get to them--and, of
course, we all remember his high priority in the campaign about
delivering tax cuts--what we have to do right now is develop a national
energy policy. He said: I know of nothing more critical to our Nation
and its future than doing just that.

As we know, the moment he was our President, he immediately appointed
our Vice President to head up a task force to build a national energy
policy strategy and, out of that strategy, to recommend to Congress
changes in law and provisions we might undertake to build a strong,
stable national energy base for our country.
Oh, my goodness, that was well over 2 years ago. They got their work
done in less than 6 months, and yet we cannot get our work done here at
a time when gas prices are spiking, at a time when the memories of the
blackouts and brownouts in California are still very much alive in the
minds of most citizens on the west coast who either lost their jobs or
had their jobs damaged and which created less security.
I was in San Jose, CA, about a month ago talking to the high-tech
community. Oh, they had a lot of priorities, but their first priority
was energy, and they needed to know if there was going to be a stable
supply of energy because if there was not, they knew they would have to
move their production facilities to a location where that energy supply
existed.
The Silicon Valley not the high-tech hub of the Western World? It is
very feasible that could happen someday because the State of California
and our country as a whole have not developed a national energy policy.
If chemical companies move offshore because of the price of energy,
high-tech can follow, and will follow, and shame on us as a people and
shame on us as a Senate if we cannot produce a national energy policy
and put it on the President's desk so that those fears can be laid
aside and we produce a source of energy for our country that is highly
stable and secure.
``Rising prices, combined with a cold winter, are adding an extra
$500 to $700 per month to the gas bill of the Villa Pizza Restaurant in
Hanford, CT.'' So speaks the Hanford newspaper.
``Eighty percent of our Nation's 35,000 laundromats have raised
prices in the past year due to high natural gas prices.'' That is
according to the Associated Press.
Mr. President, did you ever think your laundry bill was going to go
up because the Congress of the United States could not act? It is
happening, and that is exactly what the Associated Press is saying.
Because of the gas that feeds the dryers at the laundromat, it now
costs double what it cost a year ago. A couple more quarters need to go
into the machine every time someone activates it.
We do not think about that at the time, but collectively, for the
economy of our country, these kinds of implications in an energy
policy, or absence thereof, are devastating in the broad sense.
Alan Greenspan, Chairman of the Federal Reserve, before the Energy
Committee just a few weeks ago, was talking about the stability of an
economy and the growth of an economy built upon the foundation of a
stable supply of energy of all kinds for this Nation.
S. 14 is the most comprehensive national energy policy statement I
believe the Senate has produced in my time in the Senate. It talks
about production of all kinds of energy--from wind to solar, nuclear,
hydro, coal, and gas. It talks about restructuring in the new
electrical title to create greater uniformity and to create a national
transmission system for wholesale electricity in this country, about
which we ought to be talking.
It talks about conservation because while we are producing more
energy for a growing economy, we ought to be using less energy per item
of work, per unit of production. That is called conservation, and any
one of us who has ever studied national energy policy in our country
clearly recognizes the value and the importance of conserving while we
produce more. We cannot conserve our way out, and we cannot conserve
ourselves into a growing economy, but at the same time the balance and
the greater efficiencies produced by conservation are critical as we
combine them with new and increased production.
S. 14 is clearly written in the backdrop and the understanding that
the American people want clean sources of energy, that our environment
is critical and important, that we want to be able to work, we want to
be able to produce jobs, and we want to be able to do so in a clean
environment.

America's environmental ethic is profound today and S. 14 clearly
reflects the importance of that. It clearly

[[Page S10012]]

reflects the importance of producing new energy sources and old energy
sources made cleaner, and all of that being strong and important as it
relates to new jobs.
Let's talk about jobs for a moment. I am very pleased we passed new
tax laws. I am very pleased those new tax incentives and rewards are
hitting the marketplace at this moment and the consumer's and
investor's pocket. I believe out of that, new jobs will be created and
possibly there will be a bit more consumer spending.
That child tax credit check that is hitting America's homes, I see
Home Depot has picked up on it. They are saying, come out and spend
your money and build a better home, make an addition, do some
remodeling, and we will help you do it. That is called the free
enterprise system at work, and that will generate jobs.
If we want to talk about a jobs bill, then pass S. 14. Pass a bill
that will bring natural gas out of Alaska through Canada and into the
lower 48. There will be hundreds of thousands of new jobs that will be
created for the construction of that pipeline--not only those who will
manufacture the pipe, but those who will clear the right-of-way and
build the foundation and create the connectivity that will be combined
to bring that gas to the lower 48, and of course, all of the other
kinds of jobs, exploration, development and the new technologies.
The Senator from Michigan was talking about fuel cells a few moments
ago. I was up in his State. I was at the Ford Laboratories at Dearborn
a couple of years ago and drove a new hydrogen fuel-celled car. I hope
that in my senior years I can buy a hydrogen fuel-celled car; its only
pollution is a drop of water being emitted out the tailpipe of the car.
I hope that is a form of new transportation for the future. If it is,
it will create hundreds of thousands of new jobs; not just in crafting
the car but in producing the hydrogen, in supplying the hydrogen, in
building the refuel stations and the combination of things that go
along with building a new energy source for a transportation fleet for
our country.
That is what this bill is all about. Why is there so much resistance
to it? Why some 300-plus amendments? I have looked at many of them, and
from what I could see there are 25 or 30 amendments within that 300
that are legitimate, that have reasonable concern. I believe there are
at least 200 of them that are there for a political statement or for
blocking purposes.
The other side argues that we just cannot get our work done, that we
need weeks more to deal with something we have already spent 12 days
on, that we have already spent 3 years on. Why do we need 3 weeks more?
Why can we not begin to work at 9 tomorrow morning and work until 8
tomorrow night and everybody come to the floor and, in a timely way,
debate amendments, vote them up or down, move to table them, move
ourselves through this issue, and offer to the American people a
comprehensive national energy policy that can make it to the
President's desk, that can become law, that begins to put the kind of
effort together to produce the nearly 400,000-plus jobs that are
available inside this bill spread over a decade of development and
growth of the kind reflective in S. 14?

How many of us got up this morning and simply walked over and flipped
on the light switch and the lights came on? And how many mornings in
one's life have they done that and the lights came on? Why, they come
on every morning. We expect them to. We Americans have grown to believe
that our energy is always there and always around us, and we take it
for granted.
My wife and I flew back from Idaho yesterday. With my wife and I
sitting on that jet airliner, it consumed hundreds of gallons of jet
fuel just to get us from Idaho to Washington, DC. We took it for
granted. Thousands of other Americans were doing the same thing
yesterday. They do it every day of the week. They go to the airport.
They get on an airplane. Thousands of gallons of jet fuel later, they
arrive at their destination and they take it all for granted.
Somebody had to find it. Somebody had to transport it. Somebody had
to refine it and somebody had to put it in the airplane. It is all
energy.
Our great country is as rich as it is today, and our people are as
fortunate as they are, in large part because we have always been able
to look 10, 15, and 20 years down the road and build the infrastructure
and do the research and do the exploration that brought on continual
flows of abundant, reasonably priced energy. It has only been in the
last two decades that we stopped producing, but we kept on consuming,
and gas prices began to go through the roof. Brownouts and blackouts
began to occur because we were not allowed to look into the future and
say: Here is where we are going and here is what we are going to
produce.
That is what S. 14 does. That is why it is so critical to our country
at this moment in time that we become less dependent on foreign
sources, more dependent on ourselves and our own production, our own
initiative, our own capability, and we do so with conservation, with
production, and that we are environmentally sensitive when we do it.
That is all embodied in S. 14.
Why are we going to let this languish when we need to be passing it
and getting it to the President's desk? One more year? Two more years?
Let gas prices to the average consumer go up $200 or $300 a month and
just say that is okay when we know that through increased exploration
and development that does not have to happen?
So I challenge my colleagues over the course of the week that is at
hand that we start tonight and we work through Tuesday, Wednesday,
Thursday and, as our leader said, Friday and Saturday and beyond if
necessary, and let's get our work done for the American people, let's
amend, let's pass S. 14, a national energy policy, and get ourselves to
conference with the House to make this issue happen.
I yield the floor.
The PRESIDING OFFICER. The Senator from Oklahoma.
Mr. INHOFE. Mr. President, I understand there is a unanimous consent
that I be recognized for such time as I shall consume.
The PRESIDING OFFICER. The Senator is recognized.
Mr. INHOFE. I say to the Senator from the great State of Idaho how
accurate he is. If there is anything he overlooked, it was in addition
to our having electricity, power, and energy in the country, it is also
the No. 1 national security issue.
I can remember, as can the Senator from Idaho, way back in the Reagan
administration when we were about 37 percent dependent on foreign
countries for our ability to fight a war, and we still did not have an
energy policy. As did the Senator from Idaho, I talked to President
Bush, then-Governor Bush, before he ran, and he committed himself to an
energy policy. It is absolutely essential. I agree we should stay
whatever time it takes to get it done.

____________________