[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.

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