[Congressional Record Volume 149, Number 170 (Friday, November 21, 2003)]
[Senate]
[Pages S15335-S15358]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
INTELLIGENCE AUTHORIZATION ACT FOR FISCAL YEAR 2004--CONFERENCE REPORT
Mr. FRIST. Mr. President, I now move to proceed to the consideration
of H.R. 2417, the Intelligence authorization conference report. Before
the Chair puts the question, this conference report has been cleared on
both sides, and I hope that we can finish action on it very quickly.
The PRESIDING OFFICER. The question is on agreeing to the motion to
proceed.
The Senator from Nevada.
Mr. REID. Mr. President, in response to the leader's statement, we
also believe in energy independence and the security of the Nation.
The PRESIDING OFFICER. It is not a debatable motion.
Mr. REID. Fine. I will withhold.
The PRESIDING OFFICER. The question is on agreeing to the motion to
proceed.
The motion was agreed to.
The PRESIDING OFFICER. The report will be stated.
The legislative clerk read as follows:
The Committee of Conference on the disagreeing votes of the
two Houses on the amendment of the Senate to the bill (H.R.
2417) to authorize appropriations for fiscal year 2004 for
intelligence and intelligence-related activities of the
United States Government, the Community Management Account,
and the Central Intelligence Agency Retirement and Disability
System, and for other purposes, having met, have agreed that
the House recede from its disagreement to the amendment of
the Senate, and agree to the same with an amendment and the
Senate agree to the same, signed by a majority of the
conferees on the part of both Houses.
The Senate proceeded to consider the conference report.
(The conference report is printed in the House proceedings of the
Record of November 19, 2003.)
Mr. FRIST. Mr. President, I am happy to yield to the distinguished
assistant Democratic leader for a question.
Energy Policy Act
Mr. REID. Mr. President, I say through the Chair to my colleagues, we
also believe in energy independence. We also believe in the security of
this Nation. This was a bipartisan vote that just took place. I think
we would all be well advised, this late in the session, to recognize
that we should take this bill back to the committee, conference, if
necessary, but I suspect it would be better off going back to committee
and coming up with a different piece of legislation. People over here
want badly to have a bill. The 58 votes we have are firm votes. It
would not be advisable to have a vote, say, on Monday or Sunday.
Cloture is not going to be invoked.
But let's assume it were for purposes of this argument. Then we have
the situation where there are hours following that debate, and I just
think we should recognize where we are. The reality is, it is late in
the session. We need to go to some other matters. With this vote, we
did the Senate a favor, as everyone knows. There are points of order,
rule XXVIII. This bill was going nowhere. We just did it quickly rather
than prolong it. It doesn't help the Senate to prolong the inevitable.
The inevitable is this bill is history. It is not going to go anyplace.
We really did the Senate a favor. Cloture was not invoked. There are
points of order against this bill, as we all know. There would be
bipartisan votes on those matters. I think we should go on to something
else. This was a very good debate. I think we should look back at this
as something that is good for the Senate in the sense that the tone was
good, and look forward to the very important issues we have facing us,
difficult issues. We have the omnibus bill. We have the important
Medicare bill. I hope that we would not prolong things on this much
longer because this bill, in its present form, is just not going
anyplace.
The PRESIDING OFFICER. The majority leader.
Mr. FRIST. Again, to clarify for our colleagues, two votes short, as
I implied in my statement. This policy is too important to the American
people for us to desert. So we are going to come back. We are going to
come back with another opportunity, after I talk to the Democratic
leadership. And we will do that at the appropriate time.
For the information of our colleagues, we will be going to other
issues--right now, the Intelligence authorization conference report. It
is likely today we will be doing Healthy Forests shortly. We have a lot
of business today. Medicare will be addressed shortly. The two Houses
will be addressing that today.
It may well be that we will begin to address issues such as Medicare
later today and continue debate on energy today and look at both issues
over the course of tomorrow.
Again, in the intervening time, we will be addressing issues such as
Intelligence, Healthy Forests, and other conference reports as they
come to the floor.
The PRESIDING OFFICER. The Democratic leader is recognized.
Mr. DASCHLE. Mr. President, I, too, wish to have an opportunity to
comment briefly on the vote we have just taken.
Mr. President, for Senators like me, who support enactment of a
comprehensive energy bill, the Senate's failure this morning to break
this filibuster was as unnecessary as it is unfortunate.
It is a classic example of insisting on provisions that were simply
too much for the traffic to bear.
The Senate's lead negotiator, Senator Domenici, was, I believe,
prepared to work in good faith with his House counterparts to craft a
comprehensive energy bill that could attract broad bipartisan support
in this body.
Regrettably, his best intentions were undercut by the cynical
manipulations of the House Republican leadership during the conference
proceedings, which cut Senator Bingaman out of the conference process
and produced a product that was a far cry from the bipartisan energy
bill that passed the Senate in July.
I am convinced that a true conference would have produced a much more
balanced energy bill than that before us today.
Make no mistake, however, the overriding reason for the failure of
this bill today was not what I consider to be its disturbing lack of
balance between production and conservation or between promotion of
fossil fuels and renewable energy sources. It was the House Republican
leadership's insistence on inclusion of retroactive liability
protections for MTBE shielding MTBE producers from legal exposure.
[[Page S15336]]
The provision was not contained in either the House or Senate-passed
energy bills. In an effort to aid a major special interest, the House
Republicans wrote the provision so that it would specifically
invalidate the State of New Hampshire's lawsuit against the MTBE
industry.
So it is no surprise that New Hampshire's two Republican Senators
chose to filibuster this bill.
The drive to placate a narrow special interest not only came at the
expense of the public, it trumped the Republican Party's own
legislative strategy.
I personally--on numerous occasions--warned Chairman Domenici,
Chairman Tauzin, and others responsible for the closely held Republican
energy bill conference deliberations that inclusion of this provision
threatened enactment of this legislation.
This scenario has, unfortunately, come to pass, ironically because
the inclusion of MTBE liability waiver was the straw that broke the
camel's back for many Republicans.
While the drumbeat of recriminations about who bears responsibility
for this setback had begun even before the vote, the question I am
concerned about is what we can do to enact a comprehensive energy bill
quickly.
My first preference would be to adopt something close to the
bipartisan energy bill that passed the Senate by overwhelming
bipartisan votes in the current and past Congresses under the
leadership of both parties. But experience tells us that won't happen.
While I fully appreciate that the current bill without MTBE liability
relief would still be objectionable to many Senators, there should be
no doubt that if this provision was not included, the bill would pass
the Senate today and be enacted into law.
Therefore, Mr. President, I call on the White House, and the House
and Senate Republican leadership, to join with me to immediately strip
out the offending safe harbor language now in the bill.
Further, as a demonstration of good will, I propose that safe harbor
language be eliminated for ethanol as well as MTBE.
Once these changes are made, the comprehensive energy bill could be
brought back to the Senate and the House, either as a new conference
report or as part of the Omnibus Appropriations bill now being readied
for final passage in both Chambers.
This simple action would have this energy bill, as imperfect as it
is, ready for the President's signature yet this session.
I yield the floor.
Mr. INOUYE. Mr. President, after much deliberation, I have decided to
oppose the conference report to H.R. 6, the Energy Policy Act.
The conference report before us today is a serious departure from the
comprehensive and balanced approach to energy policy passed by the U.S.
Senate earlier this year by an overwhelming bipartisan vote of 84 to
14. The Senate bill carefully weighed many competing interests and
struck a fair and even-handed balance that would have strengthened our
national security, safeguarded consumers, and protected the
environment.
The conference report has tipped the studied balance of the Senate
bill drastically in favor of short-term business interests.
Regrettably, I am not surprised by the sweeping changes made to the
Senate bill because the conference report was prepared by the
Republican leadership behind closed doors, without the participation of
their Democratic counterparts. Under these circumstances, one cannot be
surprised that balance was lost, and a flawed conference report
emerged.
Upon review of the bill, I was initially pleased to note its positive
aspects. My completed review of the conference report, however,
revealed that these few beneficial provisions were far outweighed by
the many items injurious to the American people as a whole. The
conference report erodes the careful web of environmental protections
that safeguard the public health and our natural resources. It promotes
a static energy industry by failing both to encourage the development
of alternate fuel sources and energy efficient technologies, and does
nothing to police the energy industry to prevent a recurrence of the
Enron debacle. For example, the conference report does not include the
broad, effective prohibitions against price gouging schemes used by
Enron and other energy trading firms, included in the Senate version of
the Energy bill.
As science has helped to illuminate the negative impacts of
environmental pollutants on public health, Congress has responded by
enacting a series of statutory protections designed to safeguard the
American people by restricting the levels of pollutants that enter our
environment. The conference report substantially undermines these
protections.
For example, the report would exempt three major metropolitan areas
from meeting the Clean Air Act's ozone-smog standard. While industry in
these areas may enjoy a respite as a result of the conference report,
people with asthma and other respiratory diseases will not. Moreover,
it should be noted that this particular provision appeared for the
first time in the conference report, and was never debated by the
Senate or the House. Without such debate, my colleagues and I are
unable to judge whether there are any mitigating factors that might
justify a rollback of the Clean Air Act in these three cases.
Of direct concern to my home state of Hawaii is the treatment of
methyl tertiary butyl ether, MTBE, and producers of this common
gasoline additive. As a fuel additive, MTBE helps gasoline to burn more
cleanly, but outside of our gas tanks, MTBE is a proven cancer causing
agent that has contaminated groundwater supplies across the country. In
Hawaii alone, there are approximately 500 known contamination sites,
and in a state completely dependent on its isolated groundwater, this
is an alarming statistic. Under this conference report, the State and
its counties would have no legal recourse against the producers of MTBE
for the expensive process of environmental cleanup, including the
remediation and clean up of contaminated soil, water supplies and
wells.
The conference report also exempts all construction activities at oil
and gas drilling sites from coverage under the Clean Water Act. It goes
further and completely removes hydraulic fracturing--an underground oil
and gas recovery method from coverage under the Safe Drinking Water
Act. Domestic oil and gas production contributes significantly to the
short-term security of our national energy infrastructure, but I do not
believe that our security interests outweigh our health interests. Nor
do I believe that conventional fuel sources can ever provide a long-
term solution to our energy security.
As a further blow to ongoing efforts to reduce our nation's
dependence on conventional fuels, the Republican conferees dropped
Senate-passed provisions that would have encouraged further research,
development, and demonstrations of hydrogen fuel resources, for which
Hawaii is rapidly developing a keen expertise. The measure also
eliminated the broadly-supported goals for introduction of hydrogen
fuel cell vehicles.
I support strong renewable portfolio standards, RPS, that provide
incentives for producing renewable energy in this country. These
measures--such as RPS for electricity, requirements for measures to
reduce dependence on foreign oil, climate change policy, and
technology--have been dropped from the conference report.
The conference report further dilutes efforts to reduce our
dependence on fossil fuels by weakening Corporate Average Fuel
Efficiency, CAFE standards. I believe that strong CAFE standards drive
the development and implementation of fuel efficient technologies for
use in cars and trucks, and history has proven the strength of this
approach. With the volatility of international fossil fuel sources, and
the decline of our worldwide stock of this resource, strong CAFE
standards are more important than ever. By introducing a variety of new
and difficult criteria for the administrative development of CAFE
standards, it will prove difficult or impossible for any President to
strengthen the current set of standards before being halted by industry
lawsuits.
As a Senator from an island state, I am also concerned about
provisions that seek to weaken the laws that protect our coastlines
such as the Coastal Zone Management Act, CZMA. For example, the
conference report shortens
[[Page S15337]]
the time within which states can appeal state consistency review
determinations made by the Secretary of Commerce, thus limiting the
rights of states under the CZMA.
The conference report also jeopardizes federal conservation lands by
allowing the Secretary of Energy to determine the siting of
transmission lines through certain national forests and national
monuments--even over the objections of the Federal agency charged with
maintaining and preserving these natural treasures.
Mr. President, I must also express my serious concern with regard to
the provisions of H.R. 6 as they relate to the development of energy
resources on Indian lands and the impact of these provisions on the
United States trust responsibility for Indian lands and resources. To
allow this bill to be passed without amendment, would, in my view,
alter the bedrock principles upon which relations between the United
States and the Indian nations are founded.
The United States trust responsibility is perhaps the most
fundamental principle of Federal Indian law. It was first enunciated in
1832 by United States Supreme Court Chief Justice Marshall. It is the
polestar which has guided the course of dealings between the Indian
tribes and the United States over the last two centuries.
The United States trust responsibility for Indian lands and resources
is derived from treaties and agreements between the Indian nations and
the United States, statutes, executive orders, court rulings, and
regulations. The Congress has legislated on this basis. The Federal
courts have ruled on that basis, and the Executive branch has premised
policy on this basis and promulgated regulations based upon this
fundamental principle of Federal-Indian law.
The Federal Government's trust responsibility for Indian lands and
resources is based on the fact that the United States holds legal title
to lands that are held in trust for Indian tribal governments. As the
principal agent of the United States as trustee for Indian lands and
resources, under current law, the Secretary of the Interior must
authorize and approve any activities affecting Indian lands and trust
assets.
However, recently the United States Supreme Court ruled in the United
States v. Navajo Nation case that tribal governments may not hold the
Secretary of the Interior accountable for mismanaging trust assets
except if there is a specific authorization contained in a Federal
statute. As a result of this ruling, tribal governments are looking to
the Congress to protect longstanding principles of established trust
law and to clarify with certainty the meaning of the trust
responsibility after the Court's pronouncement in the Navajo Nation
case.
The Indian provisions of H.R. 6 unfortunately fail to provide a means
for tribal governments to call upon the United States, as trustee for
Indian lands and resources, to assist them in remedying any damages
incurred to tribal lands, nor do they establish express statutory
standards for the administration of the U.S. trust responsibility.
The bill requires that any tribe attempting to avail itself of the
powers to regulate and develop its own energy resources must waive its
rights to seek any recourse against the Secretary of the Interior. This
requirement signals a dramatic departure from existing law, and tribal
governments across the country have expressed serious concern that this
bill will erode the United States' trust responsibility, especially in
the aftermath of the Supreme Court's ruling in the Navajo Nation case.
As tribal governments seek to further their rights to self-
determination in new areas, such as the leases, agreements, and rights-
of-way affecting tribal lands that are addressed in this bill, there
must also be an evolution of the duties that the trustee for Indian
lands and resources--the United States--undertakes on behalf of tribes
desiring to develop energy resources.
My view is that there is a well-founded and long-established
partnership between Indian tribal governments and their trustee--and
that it is this relationship which assures that if there is any harm or
damage done to tribal lands and resources caused by other parties, the
tribes will have the full force of the United States government to
assist them in securing redress for such harm.
With this end in mind, I respectfully suggested that those standards
applicable under the Indian Self-Determination Act be incorporated into
this bill, such as the annual trust asset evaluation that is authorized
in that act to be conducted by the Secretary of the Interior as a
condition of the Secretary's approval of a tribal government's right to
enter into leases, business agreements, and rights-of-way without the
Secretary's approval.
Unfortunately, this language was not adopted, and instead the bill
provides that the Secretary will have the discretion to determine the
manner in which trust resources will be managed, and what, if any,
ongoing oversight there will be as tribal governments move into an
arena that is associated with serious financial and environmental
risks.
In addition, in the wake of the Supreme Court's ruling in the Navajo
Nation case, the absence of expressly-stated statutory standards for
the administration of the government's trust responsibilities as they
relate to the development of energy resources on Indian lands is, I
believe, a further derogation of the trust relationship that cannot be
overstated.
In another section of the bill, state and tribal governments are
effectively excluded from the process by which conditions for the
operation of hydropower projects are established, and as a result, the
protection of fish and wildlife resources is left up to those for whom
the financial incentives to reduce costs at the expense of the survival
of fish and wildlife resources are great.
There are many in Indian country who share these concerns, and would
perhaps express them more strongly than I have been able to do. We do
not have a record of which we can be proud when it comes to our
dealings with the first citizens of this land, and I fear that this
measure will not mark a new, more constructive direction in Federal-
Indian relations.
Mr. President, two men involved in the process of bringing this
conference report to the floor for a vote--Senator Pete Domenici and
Senator Ted Stevens--are very dear to me and I have the honor of
working with them on a daily basis. I hope they will understand that,
as much as I would like to support them and their interests, I must
oppose this conference report.
ethanol subsidy
Mr. BAUCUS. Mr. President, for several years now I have worked with
the highway community to hold the Highway Trust Fund harmless with
respect to the ethanol subsidy. While it is good agriculture and energy
policy to encourage alternative fuels, it should not be the Highway
Trust Fund, and therefore the Nation's transportation system, that
bears the burden of the ethanol subsidy.
A few years ago I introduced a bill that transferred revenue from the
general fund to the Trust Fund so it could be the general fund that
would bear the responsibility rather than the Trust Fund.
This Congress, Senator Grassley and I introduced a bill, S. 1548,
that replaced the ethanol exemption with a credit and that transferred
the 2.5 cents, currently retained by the general fund to the Highway
Trust Fund. Although other provisions in S. 1548 are now contained in
the energy bill conference agreement, including the new ethanol credit,
the provisions most important to me did not make it in.
I appreciate your commitment and that of Speaker Hastert and Ways and
Means Chairman Thomas to ensure that the provisions in S. 1548,
regarding the Highway Trust Fund will be enacted no later than February
29, 2004 which is the day that the TEA 21 extension expires.
In fact, Speaker Hastert sent out a press release today that confirms
his commitment to enacting these important provisions from S. 1548.
I thank Senator Frist for working with me to ensure that the Highway
Trust Fund will receive all the taxes due to it and that our Nation's
transportation program will thrive.
Mr. FRIST. Mr. President, I extend my gratitude to Senator Baucus for
working together with the Vice President, the Speaker of the House and
myself to reach a compromise on the ethanol issue in the energy bill
conference
[[Page S15338]]
agreement. We understand this is a very important issue to him and to
the country and his efforts on this matter have been crucial to
developing a strong energy policy.
As per the agreement, I would like to reiterate our commitment
regarding the portions of the ethanol issue which are not currently in
the conference agreement. In the next highway bill, we will make
certain that the 2.5 cents that currently goes into the General Fund,
as well as the proceeds from repealing the 5.2 cents from the ethanol
tax exemption, are credited to the Highway Trust Fund. Moreover, it
would be my desire to hold the Highway Trust Fund harmless with respect
to this late date of enactment.
Once again, I thank Mr. Baucus for working closely with us to resolve
this very important issue. We look forward to enacting these
provisions.
Mr. COCHRAN. Mr. President, there are several provisions in this
conference report that amend the Commodity Exchange Act, which is
administered by the Commodity Futures Trading Commission.
I appreciate the Energy Committee's consultation with the Agriculture
Committee with respect to the amendments to the Commodity Exchange Act.
The most important change to the act is to the CFTC's antifraud
authority in section 4b, which is found in section 33 of the conference
report. Section 4b is the CFTC's main antifraud weapon. In November,
2000, the U.S. Court of Appeals for the Seventh Circuit ruled in
Commodity Trend Service, Inc., v. CFTC, 233 F.3d 981, 992 (7th Cir.
2000) that the CFTC could only use section 4b in intermediated
transactions, thus prompting this clarification. We are amending
section 4b to provide the CFTC with clear antifraud authority over non-
intermediated futures transactions. Newly revised subsection 4b(a)(2)
prohibits fraud in transactions with another person that are within the
CFTC's jurisdiction. This new language will make it clear that the CFTC
has the authority to bring antifraud actions in off-exchange principal-
to-principal futures transactions, including retail foreign currency
transactions and exempt commodity transactions in energy and metals. In
addition, the new section 4b also clarifies that this fraud authority
applies to transactions conducted on derivatives transaction execution
facilities as well. The amendments to section 4b(a) of the CEA
regarding transactions currently prohibited under subparagraph (iv) are
not intended to affect in any way the CFTC's historic ability to
prosecute cases of indirect bucketing of orders executed on designated
contract markets. See, e.g., Reddy v. CFTC, 191 F.3d 109 (2nd Cir.
1999); In re DeFrancesco, et al., CFTC Docket No. 02-09 (CFTC May 22,
2003) (Order Making Findings and Imposing Remedial Sanctions as to
Respondent Brian Thornton).
The next important changes, or clarifications, come in section 9 of
the Commodity Exchange Act that deals with CFTC's false reporting
authority. These clarifications are also found in section 332 of the
conference report.
In the last 12 months the CFTC has received approximately $100
million in settlements from energy trading firms accused of filing
knowingly inaccurate reports. Despite these successes, the amendment to
section 9(a)(2) has been included in the legislation in response to a
recent U.S. Federal District Court decision in the criminal case of
U.S. v. Valencia, No. H-03-024 (S.D. Tex.). In this case, the U.S.
attorney brought a criminal case against an energy trader for filing
false reports regarding fictitious natural gas transactions in an
attempt to manipulate natural gas price indexes. The Court, recognizing
that the U.S. attorney had to show intent for knowingly inaccurate
reports, dismissed some of the false reporting counts because there
arguably was no intent requirement for false or misleading reports. The
CFTC consistently has maintained that an intent to file a false report
is necessary for there to be a violation of section 9(a)(2).
Accordingly, to address the concerns of the Court in Valencia, section
9(a)(2) will be revised by inserting the word knowingly in front of
both false and misleading so it is clear that the CFTC and the U.S.
attorneys must show intent.
The legislation also includes an amendment clarifying Congress'
intent that section 9 provides a civil enforcement remedy to the CFTC,
in addition to criminal prohibitions. This amendment merely clarifies
and confirms the CFTC's longstanding use of section 9, as the CFTC has
brought over 60 enforcement actions charging violations of its
provisions, including but not limited to false reporting charges under
subsection (a)(2).
These amendments will permit the CFTC and U.S. Attorneys to continue
to bring false reporting cases in the energy arena for acts or
omissions that occurred prior to enactment. The bill expressly provides
that these amendments simply restate, without substantive change,
existing burden of proof provisions and existing CFTC civil enforcement
authority, and do not alter any existing burden of proof or grant any
new statutory authority.
The last amendment I will mention is a set of savings clauses for the
Natural Gas Act and the Federal Power Act. These savings clauses are
intended to help clarify the dividing line between the jurisdiction of
the CFTC and the Federal Energy Regulatory Commission. The two savings
clauses, which are virtually identical, can be found in section 332 and
section 1281 of the conference report.
The savings clauses have two purposes. The first purpose is to make
it clear that nothing in the Natural Gas Act or the Federal Power Act
affects the exclusive jurisdiction of the CFTC with respect to
accounts, agreements and transactions involving commodity futures and
options. The CFTC, not FERC, has exclusive jurisdiction over commodity
futures and options. This exclusive jurisdiction extends to futures and
options on natural gas, electricity and other energy commodities,
regardless of whether the futures or options contract goes to delivery,
is cash settled or offset in some other fashion.
The second purpose of the savings clauses is to clarify that FERC
should follow the existing Commodity Exchange Act statutory scheme for
requesting futures and options trading data from futures exchanges
through the CFTC. Section 8 of the Act recognizes the highly sensitive
nature of futures and options trading data and specifically restricts
its public disclosure except in very limited circumstances. The
regulatory scheme of the act ensures the confidentiality of futures and
options trading data and is one of the reasons that investors have such
confidence in the U.S. futures markets. FERC can and should be able to
obtain futures and options trading data by directing its request to the
CFTC not to a futures exchange such as the New York Mercantile
Exchange. The CFTC has a long history of sharing futures and options
trading data with other Federal and State regulators that agree to
abide by the public disclosure restrictions found in section 8. The
savings clauses assure that requests for futures and options trading
data will be processed in the same way and be subject to the same
protections.
I believe the clarifications to the Commodity Exchange Act included
in the conference report will only strengthen what is already a strong
and sensible regulatory program administered by the Commodity Futures
Trading Commission, and I support passage of the conference report to
accompany H.R. 6, the Energy Policy Act.
Mr. CAMPBELL. Mr. President, I rise today in strong support of the
energy bill conference report and urge its quick passage. I am deeply
troubled by the misinformation being cast about by opponents of this
bill on the Senate floor and in the press. I would like to take just a
moment and distinguish some of the fact from fiction.
First, opponents of the bill have been criticizing the energy bill's
electricity provisions. They have made sensationalistic allegations
about Enron and the August blackout, among others, and conclude that
this bill does nothing to improve our Nation's electricity grid. If
opponents of this bill were to take the time to read the bill they have
been so fervently criticizing, they would have reached far different
conclusions.
Opponents have been desperately trying to color a good piece of
legislation with known bad guys. I don't know how many times I have
heard Enron thrown around, but never have those folks mentioned that
this bill includes significant market transparency, consumer
protection, and improved enforcement provisions. The fact: this bill
improves matters.
[[Page S15339]]
Second, critics have criticized this bill for shielding MTBE
producers from product liability lawsuits. Many of those Senators
represent States that have sued MTBE producers for contaminating
groundwater. On one hand, I appreciate why they object to that
provision. My State of Colorado too is searching for ways to meet
funding shortfalls, and groundwater out West is always a premium.
However, MTBE isn't in groundwater because someone put it there. MTBE
is in groundwater because the underground storage tanks made to hold
gasoline with MTBE leaked.
Another fact: Congress mandated MTBE's use, requiring the oxygenate
be added to gasoline to meet Clean Air Act requirements.
My friends on the other side should focus on fairness, and not just
the deep pockets their trial lawyer friends are after. Fairness is the
special interest opponents of the bill are so adamant on vilifying.
Opponents of the energy bill conference report have made outlandish
claims that this bill does nothing for renewable energy. Again, such
statements beg the question; have they bothered to read the bill? The
fact of the matter is that this bill includes significant financial
incentives for wind, biomass, and solar energy, and has the full
support of the Solar Energy Industries Association. Further, the bill
requires that 7.5 percent of electricity purchased by the Federal
Government come from renewable energy.
Opponents have criticized the Indian energy title of the bill as
offensive to the environment. They claim that if Indians opt-in to the
voluntary provisions, then those tribes can skirt NEPA. Without
touching the prejudicial nature of that statement--the assumption that
Indians would violate the environment--I seriously doubt that opponents
know why NEPA might apply at all. Under current law, if a tribe wanted
to build an energy production facility on their own land with their own
money, NEPA would not apply. NEPA only applies on Federal land or when
there is some Federal action. Although some critics may like to think
otherwise, Indian land is treated as their own land. In the example
above, there is no Federal action.
However, if the Nation's most disenfranchised and poverty stricken
group seeks third-party funding to develop their own resources, then
the Secretary of Interior must review the proposed project. This
paternalistic Secretarial review, a historical construct in the law, is
tantamount to Federal action triggering NEPA. Indians believe that
their lands should be treated like other private land under the law.
Opponents of this bill are playing a cruel joke on Indians. On one
hand, they argue that Indians should be free to exercise their right to
self-determination. Yet, on the other hand they tell the poorest of the
poor that they must do so without any third-party financing. It seems
that opponents of this bill believe that, for Indians, self-
determination may only be exercised through posing for tourist photos
and making handcrafts.
The Indian Energy title in the bill under discussion provides Indians
with a completely voluntary tool that could help them to develop their
own resources. This title could be a significant empowerment vehicle
providing much needed jobs and economic development.
Last, my friends on the other side have made several statements
criticizing this bill's process. In part, I have to agree with them.
Similar to the failed energy bill of the democratically controlled
107th Congress that never benefited from being drafted in the Energy
and Natural Resources Committee, the current energy bill has reached
the floor in an imperfect way.
However, the fact of the matter is that the energy bill of the 108th
Congress is a far reaching piece of legislation that is good for the
country, good for my State of Colorado, which still relies heavily on
the agricultural industries, and good for workers. It is important to
note that all manner of farm groups support this bill, including the
American Farm Bureau, the American Corn Growers, the National Farmers
Union, and the National Cattleman's Beef Association. Furthermore, this
bill is supported by a host of labor organizations; the Brotherhood of
Locomotive Engineers, the United Mine Workers, and the United
Transportation Union, to name just a few.
Mr. President, the comprehensive energy bill before the Senate is a
critical piece of legislation for the country. Its writers had the
unenviable task to ask the questions that most in the Nation are never
required to consider--where does our energy come from, and how can we
meet future demand? This bill provides important answers and plans for
the future. I urge its passage.
Mr. NELSON of Florida. Mr. President, I rise to oppose the energy
bill. I wanted to support this bill, but the many environmentally
questionable provisions and the large price tag prevent me from doing
so.
This bill is not an energy policy bill. It is a special interest
bill. We are at war in two countries, and we receive more than 50
percent of our oil from sources beyond our shores. But this bill does
not provide a way for us to break free from the security threat that
poses. It lacks clear vision for how this country moves away from our
dependence on foreign oil and dirty fuel and towards new, cleaner
sources of energy.
There are no oil saving provisions or climate change provisions. I do
support the incentives for nuclear energy, wind energy, solar energy
and other renewable energy sources. I also support the provisions for
tax credits for the sale of hybrid and alternative fuel vehicles. The
repeal of the Public Utility Holding Company Act and reform of the
Public Utility Regulatory Act's mandatory purchase obligation are
positive changes. But I can't get past the MTBE liability waiver, the
coastal zone management changes, and the huge tax credits for the oil
and gas industry. Half of the tax benefits--approximately $11.9 billion
of the $22.9 billion--in tax provisions will go to the oil and gas
industries, some $72 billion in authorized spending, a 50 percent
increase over the price tag going into conference. And this price tag
is not offset anywhere in this budget.
With regard to MTBE, my State of Florida has more MTBE spills than
any other State in the country--more than 20,000--and those communities
in Florida may be held responsible for the cleanup of those sites if
the liability waiver in this bill passes. And the ratepayer in these
communities, instead of the producers of MTBE, will have to pay the
price for the cleanup.
In fact, a lawsuit filed by Escambia County Utilities Authority would
be nullified by this bill. And at least 11 other water systems serving
629,000 people will be prevented from seeking redress from the refiners
of MTBE who caused the contamination.
My staff talked to the Executive Director of the Escambia County
Utilities Authority, Steve Sorrell, and he told my staff that if
Escambia's suit cannot go forward the County will be on the hook for an
expensive cleanup and the ratepayer will have to pay the price. So if
this energy bill passes, the main cause of action in Escambia County
FL's suit will be taken away and the ratepayers, the citizens of
Escambia County, not the producers or oil refiners, who knew this
substance was a health and environmental hazard when it was introduced,
will pay the price.
Some have said that we shouldn't hold the producers responsible for
the contamination, they just produced the MTBE. They didn't know it was
a health risk or environmental hazard.
But the successful lawsuits have uncovered that the refiners did know
it was a health and environmental risk and why not let the courts
decide whether they are at fault instead of the U.S. Congress. In a
document dated April 3, 1984 an MTBE producer employee said:
We have ethical and environmental concerns that are not too
well defined at this point; e.g., 1. possible leakage of
[storage] tanks into underground water systems of a gasoline
component that is soluble in water to a much greater extent
[than other chemicals], 2. potential necessity of treating
water bottoms as a ``hazardous waste,'' [and] 3. delivery of
a fuel to our customers that potentially provides poorer fuel
economy . . .
Another memo by an energy company engineer in 1984 is even more
egregious.
This memo says:
Based on higher mobility and taste/odor characteristics of
MTBE, Exxon's experiences with contaminations in Maryland and
our knowledge of Shell's experience with
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MTBE contamination incidents is estimated to increase three
times following the widespread introduction of MTBE into
Exxon gasoline . . .
Later the memo notes:
Any increase in potential groundwater contamination will
also increase risk exposure to major incidents.
These memos were written more than 5 years before the Clean Air Act
amendments passed that ushered in the widespread use of MTBE in
gasoline. These documents were uncovered in lawsuits in California in
which manufacturers and distributors of MTBE, the very entities
immunized from product liability suits in this bill, were found guilty
of irresponsibly manufacturing and distributing a product they knew
would contaminate water. The jury found by ``clear and convincing
evidence'' that these companies acted with ``malice'' by failing to
warn customers of the almost certain environmental dangers of MTBE
water contamination.
The coastal provisions of this bill are also troubling. Under section
321, of the Oil and Gas title, the Secretary of the Interior will be
given broad new authority to grant leases, easements or right-of-ways
on the Outer Continental Shelf in moratorium areas. Interestingly, this
provision left the Senate prohibiting these oil and gas activities in
the moratorium areas, but came back allowing those projects to go
forward in moratorium areas--without input from the Department of
Commerce as required under the Outer Continental Shelf Lands Act.
Section 325 restricts the appeals process for coastal states appealing
an oil or gas exploration or development plan to the Department of
Commerce. The timeline put in place by this provision is even shorter
than that requested by the Bush administration. Section 330 circumvents
the Coastal Zone Management Act and deems the Federal Energy Regulatory
Commission record the record for a Coastal Zone Management Act appeal--
limiting a State's input into the process. For these reasons, I cannot
support the bill.
Mr. ENZI. Mr. President, there is an old adage we have heard many
times that says that the journey of a thousand miles begins with a
single step. Today we are taking another one of those steps in a long
journey that will hopefully lead to an increase in our energy
independence, more reliable sources of energy, and more stable prices
that are not so subject to fluctuations in the energy market.
The bill we have before us is something that will truly affect every
American, no matter their age, where they work, where they live, or
what activities they pursue in life. One of the many things that bonds
us as Americans is our love of so many things that makes us consumers
of energy. No matter who you are, you are a strong and vital part of
that market.
If you drive a car, you won't get very far without a full tank of
gas.
If you use a computer, you have to tie it to some source of
electricity to get the power you need to access the Internet or the
information stored on your hard drive.
If you live in a mobile home, or in a cabin in the woods and cook
your food over an open fire, you are still an energy consumer who is
using a resource to make your dinner.
Every lifestyle has its own energy needs and we have been incredibly
blessed to have had access to an abundance of energy for many, many
years.
In fact, we had such relatively easy access to energy we started to
take it for granted. That led to calls for conservation and more wise
use of our resources when energy costs first started to rise. That was
the start of our journey to create an energy policy--one that has seen
us through these past years. Unfortunately, it has taken quite a long
time to agree on an update to our policy, one that takes into
consideration the changes we have seen in our society and in the
availability of energy both here and abroad.
Our dependence on foreign sources of energy continues to be a
national concern, one that had me and many others calling for the
creation of a national energy policy, which we have done since 1973
when OPEC and the Saudi Arabians first pulled the plug on our supply of
crude oil.
The irony was the fact that we had an abundance of oil here in the
United States at the time. In fact, we still have a huge supply of oil
in the country today, but that oil has not been made available for
exploration. Because we hadn't taken the steps to develop it, we
allowed a foreign government to disrupt and control part of our daily
lives. We became vulnerable to their manipulations and it took us
months to recover. In some ways, we are continuing to recover from
those days of the long gas lines, high prices and short supplies that
we saw in the 1970s.
Things were bad enough back then when we didn't have an energy
policy. Still, they could have been much worse. I shudder to think what
might have happened if we'd had a situation like 9/11 occur at the
heart of that crisis. If the terrorists had struck when we were
economically crippled and energy supplies were low, what effect could
they have had on our national security?
That kind of scenario is exactly the kind of thing that a national
energy policy like the one we are taking up today is supposed to avoid.
It has taken us quite a while to get where we are, but we finally
have something before us that will provide us with a plan, a blueprint
for the future that will also address our needs in the present. It is
time now for us to take it off the planning board and put it into
action. After all, 30 years ought to be enough time to put the basics
of a plan together, and that is how long we have had since the energy
crisis of the 1970s to work out a plan like this. Now we have before us
the beginning of what will be a long and continuing effort to stabilize
our energy markets and protect our national security.
This bill isn't perfect, but it is a good start. It is more than a
beginning, but it is not the final answer. It is a temporary remedy
that will start producing results immediately while it lets us continue
working on a more permanent solution. In other words, it is a chance to
grab the brass ring and get another ride on the energy merry-go-round,
while providing for the ride we are currently on.
I am pleased that this bill includes a number of important provisions
that support and promote clean coal development. Coal is an important
product of Wyoming, and one of the most important ways we can reduce
our dependence on foreign energy is to find ways to diversify our
energy supplies and better utilize our Nation's abundant coal
supplies--especially clean burning coal like what we mine in Wyoming.
In addition to our coal supplies, in recent years our new energy
development has focused on the increased use of natural gas. I support
natural gas development and I hope that our gas industry continues to
grow and flourish. IO am also keenly aware of the fact that there isn't
enough natural gas or infrastructure available to supply all of the
world's energy needs so we are going to have to continue relying on
coal for some of our energy uses.
That does not mean we have to continue doing business as usual and
continue to push our aging coal-fired power plants well beyond their
originally designed lifetimes. We have the technology and the ability
to design and build cleaner and more efficient power plants that
utilize new clean coal technology, but we won't be able to do that if
we cripple our economy and prohibit new development.
This won't surprise anyone, but none of us are going to be
enthusiastic about everything in this bill. Again, it is not a perfect
bill, but it is a good start on a policy. It does not have everything I
want in it, but it does have more than enough to make it worth our
support. There is a provision that would have greatly helped Wyoming
get the more than $400 million that it is owed by the Federal
Government through the Abandoned Mine Lands Trust Fund, but that
provision was not included in this bill. We have received assurances
from the Finance and Energy Committees that they would take up this
matter early next year, and we are grateful for their commitments.
However, I would have preferred that the provision had been included in
this bill and we didn't have to take up any of the committee's time
next year. Still, again, on balance, and taking the whole bill into
consideration, it is a good bill and it deserves our support.
I know I am not the only one who feels that one provision or another
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could have been added or left out and it would have made for a better
bill. Like me, almost every State can point at something that they wish
could have been included but was not. It is a reason to be
disappointed, but it's not a reason to ignore the task at hand, which
is to continue the process and develop a national energy policy.
There are just too many positive things that the bill would do for
the country in the long and short term. To begin with, the bill would
create nearly 1 million jobs and implement mandatory electricity
reliability standards that we believe may prevent future massive
blackouts as was experienced in August by the Northeast.
It would encourage the Federal Government to increase energy
efficiency in Federal installations.
It would increase assistance for lower income families by raising the
base authorization of LIHEAP to $3.4 billion. The bill also includes
incentives to increase solar, wind, geothermal and other biomass
technologies.
It encourages modernizing and streamlining our Nation's hydropower
laws.
It provides incentives for responsible oil and gas development and
royalty relief for marginal wells. In other words, it helps keep wells
that are slow, but long-term energy suppliers going so we don't always
have to rely on short-term, get-rich-quick wells for all of our energy
needs.
It provides incentives to encourage consumers to purchase more hybrid
and alternative fuel vehicles and authorizes two new programs that
would improve the efficiency and quality of our Nation's fleet of
school buses.
There are a number of other provisions included in this bill that
will contribute to our Nation's energy security and I hope my
colleagues will take the time to look at what is in this bill for what
it really is: A desperately needed and all-important first step toward
a policy that will increase our energy independence, ensure we have a
more reliable supply of energy available, and a more stable energy
market for consumers to purchase from with prices that are not so
subject to as much fluctuation and change.
Mr. BURNS. Mr. President, I would like to commend the chairman of the
Energy Committee for his leadership on this challenging bill both on
the Senate floor and through the conference. This is the first
comprehensive energy legislation this country has seen in more than a
decade, and it is a huge step forward for America. This energy bill is
about looking forward to our future, and creating the energy and the
jobs that will keep this country best in the world.
This is a large and complicated bill. It addresses everything from
energy efficiency and conservation, to research and development for new
technologies, and policies to encourage a wide variety of energy
sources nationwide. People will always find something to criticize in a
sweeping piece of legislation, but we need to focus on the huge
accomplishments this bill will achieve.
We will advance cutting-edge technologies such as hydrogen fuel cells
and improve clean technologies already in place like nuclear power,
hydropower, wind, and solar energy. At the same time we will shore up
our own domestic production of the resources we use most, including
clean coal, oil, and natural gas. We will begin to use 5 billion
gallons of ethanol and biodiesel annually as a result of this bill, and
that is a very good thing for farmers and consumers across America.
Real reforms in the electricity title will result in more reliable
service and more investment in the backbone of our electricity
infrastructure.
I would especially like to acknowledge Senator Domenici's wise
counsel in regard to an amendment I had intended to propose to enhance
the economic growth of western States. My amendment would have provided
for the study and creation of National Interest Electric Transmission
Corridors by the Secretary of Energy, based on national security and
energy policy grounds. Pursuant to those designations, the permitting
and siting of needed electric transmission lines would be provided for.
While most of this additional capacity would probably be achieved by
broadening existing rights-of-way, there would no doubt be some need
for additional rights of way. Upon the advice of the chairman and his
assurance that he would pursue these concepts, I declined to offer that
amendment on the Senate floor.
I am very encouraged that the chairman has been successful in having
the concept of National Interest Electric Transmission Corridors
included in the bill, for any area experiencing electric energy
transmission constraints or congestion. Transmission capacity in these
western States is one of the significant issues regarding their future
economic expansion. Furthermore, if we could unlock the tremendous
coal, wind and other resources of these States through mine-mouth
electric generation and provide for the transmission of that
electricity to load centers it would take significant pressure off our
increasing reliance on natural gas as a power source. This is one of
the keys to a balanced energy portfolio and lessened reliance on
foreign energy sources.
My home State of Montana can make a significant contribution to our
Nation's energy independence, provided we can develop the needed
transmission infrastructure to move electricity to market if we
generate it from our coal and wind resources. This is very important
for both the generating States and the end-user markets and is simply
good national energy policy and good national security policy.
This energy bill isn't perfect, but it helps us transition into
tomorrow's economy without sacrificing our quality of life today. It is
a good balance, and a good compromise between the countless demands
that have been made by those with opposing viewpoints. No one can win
every battle, but without this energy legislation the entire country
loses. I am disappointed there are Members in this body who would
rather complain about this bill than enact it. We shouldn't let
partisanship get in the way of progress, and this bill is progress. No
one got all they wanted, but every State in the Union will benefit, and
every American will be better off if we ensure this country's energy
security by passing this legislation.
Mr. HATCH. Mr. President, I rise today to express my strong support
for H.R. 6, the Energy Policy Act. It has been a long, long time since
we could claim to have a national energy policy, and I am very proud to
say that we are about to deliver an energy plan to the American people
that is comprehensive and forward looking. It is a balanced bill that
promotes greater energy independence and cleaner air.
It is no simple task to construct complex legislation of such a broad
scope. A good deal of the credit for the fact that we have a conference
report today goes to the heroic leadership of Chairman Domenici and
Chairman Grassley, and the respective Democratic ranking members
Senator Bingaman and Senator Baucus. I congratulate our colleagues for
their leadership.
And when it comes to leadership, we all know that it was President
George W. Bush who first put us on the path to a national energy plan.
One of the President's earliest acts was to establish the National
Energy Policy Development Group, which produced the National Energy
Policy Report, an early template for the legislation we have before us
today.
We don't have to convince the American people that we need this
energy bill. They already know. They are the ones who paid more than $2
per gallon to fill their cars this summer. They are the ones who sat in
blackouts for days. And, they are the ones who have watched their
natural gas bills go through the roof.
I am pleased to report to the American people that the Energy Policy
Act addresses each of those problems--and more.
My State of Utah is an energy resource State. Utah has long helped to
fuel our Nation's growth, whether it be by supplying the uranium that
fueled our early nuclear industry, the oil and natural gas for our
vehicles and homes, or the clean coal which powers our coal-fired
electricity plants. Utah has also been a leader in producing renewable
electricity with our large hydro-power facilities and our significant
geothermal plants. Thanks to environmental protections, labor laws, and
health and safety regulations, our Nation is cleaner and stronger than
ever before. And I am glad these protections are in place. However, the
many layers
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of these rules and regulations do make energy production more
expensive. In Utah, where we have many millions of acres of beautiful
public lands, we have the extra difficulty of developing energy while
trying to preserve significant portions of scenic areas. In my State we
want all the protections our laws provide, but we recognize the need
for assistance from the Federal Government to keep this activity going
in this country. And in doing so, this legislation leaves almost no
stone unturned.
The act will help us to leap forward in creating more efficient
buildings and homes in this Nation, and it starts at home by addressing
congressional and other Federal buildings. The act takes large strides
forward in promoting the use of renewable energy in the United States.
The bill also covers solar energy, wind energy, hydro power, and
geothermal energy, the latter being particularly important in my State
of Utah.
I am pleased that the Energy Policy Act includes important provisions
to increase the reliability of our electricity system.
We have seen what happens when we lack a reliable affordable
electricity supply; our modern society comes to a near standstill.
Reliable electricity is one of the most important services we can
provide our Nation. Most of the electricity produced in the United
States comes from coal-fired power plants. The newer coal plants which
are prevalent in the West are very clean and very efficient. This
legislation promotes the most advanced technologies in this industry
which will lead to further improvements in the reliability of our
electricity system and in the quality of our air. The bill also
provides programs to improve electricity service to our Native
Americans.
Importantly, the Energy Policy Act addresses our need for a more
reliable fossil fuel supply. This includes home heating oil, natural
gas, and our other basic transportation fuels, petroleum and gasoline.
The transportation sector in the U.S. accounts for nearly two-thirds
of all oil consumption, and we are almost entirely dependent on
petroleum for our transportation needs. Is it any wonder, that 50
percent of our urban smog is caused by mobile sources? If we want to
clean our air and address our Nation's energy dependency, we must focus
on the transportation sector. And we must focus first on those
technologies and alternative fuels that are already available and
abundant domestically.
To that end, 14 cosponsors and I introduced S. 505, the Clean
Efficient Automobiles Resulting from Advanced Car Technologies Act of
2003, or the CLEAR Act. The CLEAR Act is the most comprehensive and
effective plan we have seen in this country to accelerate the
transformation of the automotive marketplace toward the widespread use
of fuel cell vehicles. And it would do so without any new Federal
mandates. Rather, it would offer powerful market incentives to promote
the advances in technology, in our infrastructure, and in the
alternative fuels that are necessary if fuel cells are to ever reach
the mass market. As a result our Nation benefits from cleaner air and
greater energy independence.
I am very pleased to report that a large portion of the CLEAR Act was
included in the Energy Policy Act. And for that I give my heartfelt
thanks to Finance Committee Chairman Grassley and Senator Baucus.
First, the bill offers CLEAR Act credits to consumers who purchase
alternative fuel and advanced technology vehicles, such as hybrid-
electric vehicles. These credits would lower the price gap between
these cleaner and more efficient vehicles and conventionally-fueled
vehicles of the same type. This is a direct attack on our Nation's huge
appetite for petroleum as a transportation fuel, and I am confident
that the CLEAR Act credits will accelerate our shift toward a more
efficient and cleaner transportation future.
When I introduced the CLEAR Act, it contained a significant tax
credit for the installation costs of retail and residential refueling
stations. I was disappointed that this provision was weakened in
conference and replaced with a provision that extends and expands an
existing tax deduction for infrastructure. However, I am pleased that
an infrastructure incentive did survive in the Energy Policy Act.
As originally introduced, the CLEAR Act also provided a very
important tax credit of 50 cents per gasoline-gallon equivalent for the
purchase of alternative fuel at retail. This would have brought the
price of these cleaner fuels much closer in line with conventional
automotive fuels and contributed significantly to the diversity of our
fuel supply.
This was a very important component of the CLEAR Act that did not
survive the conference process. It was important because of the
combination of this incentive, the infrastructure incentive, and the
alternative fuel vehicle credit working together was meant to have a
larger effect on the market than could have been accomplished by
providing these incentives alone at different times. For instance, the
fuel credit would have combined with the vehicle credit for an added
incentive to consumers to buy cleaner cars. The fuel credit also would
have combined with the infrastructure credit for a very powerful
incentive to install new fueling stations. The presence of more fueling
stations also opens the way for the purchase of more clean vehicles,
and so on. Because all three incentives are not in the final bill, we
will not achieve the synergy that would otherwise have been possible,
and the potential benefits of the CLEAR Act may not be fully realized.
In spite of this disappointment, I am very pleased that such a large
portion of the CLEAR Act was included in the energy bill. I can see the
day when alternative vehicle fuels, fuel cells, and other advanced car
technologies will be common. And considering the environmental and
security costs associated with our petroleum-based transportation
system, that day cannot come too soon.
As I have outlined in my statement, the Energy Policy Act will go a
long way to bringing our nation into the future. It will increase our
energy security and clean our air. I urge my colleagues to support
these goals and throw their support behind it.
Mr. CONRAD. Mr. President, I come to the floor today to support the
energy bill conference report.
I have long believed we need a comprehensive national energy policy.
The reality is that our economy depends on affordable energy. We often
take it for granted, but just imagine how different our daily lives
would be if we did not have plentiful, affordable oil, natural gas, and
electricity. We depend on energy in almost everything we do in our
lives, from turning on the light in the morning, to driving our cars to
work, to cooking our dinner, to watching TV at the end of the day.
And energy is absolutely critical to the functioning of our economy.
Our manufacturing sector uses vast amounts of energy to produce the
whole range of products we take for granted in stores all across the
country. Our services sector--and particularly our high tech sector--
rely on electricity. Our agriculture economy uses enormous energy
inputs for planting, harvesting and processing its bountiful
production. And without energy, we could not transport these goods and
services to consumers.
It is virtually impossible to understate the importance of energy to
our daily lives and to our economy. Yet our energy policy is seriously
lacking.
As the blackout in the northeast demonstrated last summer, our
national electricity infrastructure is decades old and dangerously
overloaded. Quite simply, we have under-invested in making sure that
the national electricity grid can keep up with demand for electricity.
Since 1992, demand for electricity has been growing at 2-3 percent per
year while transmission capacity has been growing at only .7 percent
per year. At the same time, deregulation of the electricity industry
has led to a hodgepodge of control over transmission capacity, without
clear rules and responsibility for maintaining the reliability of the
system. We need new rules to improve the reliability of the grid and
new incentives to increase transmission capacity if we're to avoid
future meltdowns.
And, we remain overly dependent on foreign oil. Oil imports now
account for nearly 60 percent of consumption, and the projection is for
that percentage to continue increasing inexorably. That puts our
economy at risk, because it is vulnerable to price spikes caused by
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OPEC or supply disruptions in foreign trouble spots. And it creates
national security challenges. We currently rely on the vast oil
reserves in the Middle East to meet our import demands, and that makes
ensuring the free flow of oil from that unstable, undemocratic part of
the world a vital national security interest. So we need an energy
policy that will reduce our reliance on imported oil.
For these reasons, I have long believed we need to update our
national energy policy. The bill we have before us begins to address
these challenges. It will improve the reliability of our electric grid.
It provides positive incentives for renewable energy. And it promotes
conservation.
Let me be clear, though. This is not a perfect bill. It does not go
nearly as far as I would like in addressing the issues I have outlined
and other critical elements of a comprehensive national energy policy.
It contains several provisions that I do not think should be in an
energy bill. But on balance, it is a positive step for North Dakota and
the national economy, and it will mean additional jobs in my State.
Let me first talk about the provisions I support that will help
ensure our national energy security and benefit North Dakota.
First, the bill strongly promotes the use of ethanol and other bio-
fuels. The bill will require 5 billion gallons of ethanol by 2012. And
it will create a biodiesel tax credit of $1 per gallon for feedstocks
such as canola and 50 cents a gallon for recycled feedstock such as
restaurant grease. These are clean and renewable fuels, and these
provisions are good for the environment, good for our energy
independence, and good for North Dakota farmers.
Second, I am very pleased that the bill contains a provision I fought
for to extend the production tax credit for wind for 3 years. North
Dakota has the highest potential for wind energy of any State in the
Nation. This provision will spur the production of wind energy
facilities and equipment in North Dakota. That is good for electricity
consumers, good for the environment, good for wind energy equipment
manufacturing workers, and good for farmers and others who will benefit
from having wind turbines on their land.
Third, the bill contains a 15 percent investment tax credit to
support the development of clean coal technology that will benefit
North Dakota's lignite coal industry. We have a thriving lignite coal
industry in North Dakota, with seven lignite plants that use 30 million
tons of lignite each year. And jobs in the lignite industry are among
the highest paying jobs in my State.
Fourth, the bill contains incentives for adding pollution control
equipment on older coal plants and incentives for building new, more
environmentally friendly coal plants. This could be a big help in
getting a new lignite plant in western North Dakota while maintaining
our pristine environment, something I have been working on for years.
Fifth, the bill contains modest steps to promote energy conservation,
including a tax credit of up to $2000 to encourage people to better
insulate their homes, and provisions to encourage the purchase and use
of more energy efficient appliances.
Sixth, there are provisions to encourage small producers of oil and
gas. Many people do not think of North Dakota as an oil and State, but
we have significant reserves that can be tapped to help reduce our
dependence on foreign oil and address the shortage of domestic natural
gas production. The bill includes a tax credit for marginal wells,
provisions to speed up permitting on Federal lands, and a section to
encourage a particularly important process for natural gas extraction.
Seventh, the bill includes a set of provisions to improve the
reliability of the national electric transmission grid, reducing the
chances of a massive failure like the one that affected the northeast
last summer.
Eighth, the electricity title also ensures that small cooperatives
will not be subject to burdensome FERC jurisdiction and contains native
load protections for co-operatives, which are a major source of
electricity in North Dakota. These provisions ensure that North Dakota
rural electric co-ops can continue to provide low-cost power to their
consumers.
Finally, the bill expands and extends assistance to low income
families in meeting their home heating needs. The Low Income Home
Energy Assistance Program, LIHEAP, has provided valuable assistance to
thousands of North Dakota families in paying their winter heating
bills.
Because of all these important provisions, a number of North Dakota
groups support the bill. These include the North Dakota Farmers Union,
the North Dakota Farm Bureau, the North Dakota Rural Electric
Cooperative Association, the Lignite Energy Council, and the Greater
North Dakota Association.
As I said earlier, however, this bill is far from perfect. There are
a number of areas where it could and should have been much better.
For example, the conference report does not contain a Renewable
Portfolio Standard. The bill that passed the Senate required that 10
percent of electricity be produced from renewable energy sources by
2020. This modest RPS would have helped to clean up our environment and
spurred wind energy development. I supported this provision and wish it
had been included in the conference report.
More generally, the conference report falls short on promoting the
use of renewable fuels and emphasizing conservation. If we are ever to
overcome our dependence on foreign oil imports, we will need to be more
aggressive on these fronts. The conference report could and should have
done more in this area.
I am also disappointed that the bill does not contain tradeable tax
credits to encourage cooperatives and municipal utilities to further
invest in renewable energy sources. Tradeable credits would have
leveled the playing field for these electricity suppliers as we build
wind farms and other renewable energy facilities. The conference report
could and should have included this provision.
And I do not believe the conference report goes nearly far enough in
creating new incentives for expanding transmission capacity to reduce
the risk of blackouts. I had hoped the conference report would contain
provisions to eliminate the transmission bottleneck that is preventing
my state from expanding lignite and wind energy plants to export more
electricity to regional markets. Here again, the conference report
could and should have done more.
Finally, the bill contains a number of unnecessary provisions that I
do not support. The liability waiver for the dangerous fuel additive
known as MTBE--or methyl tertiary butyl ether--is troubling. Clean Air
Act changes that will allow certain cities to postpone compliance with
reductions in ozone damaging pollutants have nothing to do with
promoting sound energy policy and should not be in the bill.
I believe we have more work to do to produce a truly comprehensive
energy policy that addresses our energy, economic and national security
challenges. In particular, I will continue to push for an expansion of
transmission capacity to protect against the failure of our electricity
grid and allow North Dakota to increase its exports of electricity. It
is my hope that we will be able to work on these issues in a bipartisan
manner.
Despite its shortcomings, on balance the bill before us takes
positive steps to address our Nation's energy needs. It will encourage
domestic energy production, promote renewable fuels, and modestly
encourage conservation to help reduce our reliance on foreign oil. It
will help to reduce the likelihood of major transmission breakdowns.
And it will provide significant benefits to my State of North Dakota.
Energy is the second largest sector of the North Dakota economy, and it
will benefit very directly from a number of provisions in the bill. And
agriculture, the largest sector of the North Dakota economy, will also
see important benefits from the various renewable fuel incentives.
For those reasons, I support the conference report.
Mrs. LINCOLN. Mr. President, I rise today to announce my support for
the Energy Policy Act of 2003. I want to thank Chairmen Grassley and
Domenici and Senators Baucus and Bingaman for working with me to
include renewable energy and energy efficiency provisions important to
my home State of Arkansas. While some may say this bill is not perfect,
it is a step toward reducing our dependence on foreign oil and
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increasing the use of renewable resources in this country.
Nine months ago, I stood before this body and spoke on the dangers of
continued reliance on foreign sources of energy. Today, I am pleased to
stand here in support of a bill that includes several provisions I
believe will take our country's energy policy in the right direction. I
know this bill is not perfect, and I am disappointed that some of my
colleagues who have been leaders on this issue for many, many years
were excluded from the drafting of this bill.
But I am pleased that those who did draft this bill made an effort to
address energy concerns in every sector of this industry. In Arkansas,
we have investor owned utilities and co-operatives. This bill will help
both of these providers serve their customers in a more efficient and
reliable manner. And while this bill may not go as far as some would
like in the direction of renewable energy, there are many provisions in
this package which will help the United States begin the long process
of eliminating our dependence on foreign oil. I believe the renewable
fuel standard, requiring our government to purchase at least 5 percent
of its energy from renewable sources, represents a positive step toward
this goal. I personally fought to include provisions that will
encourage greater use of renewable resources, increased production of
efficient appliances, and greater investment in delivering fuels to
rural America.
In Arkansas, we recognize the importance of renewable fuels in
helping the United States to become more energy-independent. That's why
I am excited about the provisions in this bill that will encourage
greater use of a valuable new alternative fuel, biodiesel. Biodiesel,
which can be made from just about any agricultural oil, including oils
from soybeans, cottonseed, or rice, is completely renewable, contains
no petroleum, and can be easily blended with petroleum diesel. It can
be added directly into the gas tank of a compression-ignition, diesel
engine vehicle with no major modifications. Biodiesel is completely
biodegradable and non-toxic, contains no sulfur, and it is the first
and only alternative fuel to meet EPA's Tier I and II health effects
testing standards. Biodiesel also stands ready to help us reach the
EPA's new rule to reduce the sulfur content of highway diesel fuel by
over 95 percent. These tax credits are necessary as biodiesel is not
yet cost-competitive with petroleum diesel.
This legislation will provide tax incentives for the production of
biodiesel from agricultural oils, recycled oils, and animal fats and
will ensure that biodiesel becomes a central component of this Nation's
automobile fuel market. This legislation is identical to language
authored by myself and Senator Grassley included in the last Congress's
Energy Bill. It is intended to be a starting point for our debate and
discussion as we draft an energy bill for consideration in this
Congress.
This legislation will provide a partial exemption from the diesel
excise tax for diesel blended with biodiesel. Specifically, the bill
provides a one-cent reduction for every percent of biodiesel from
virgin agricultural oils blended with diesel up to 20 percent.
The legislation will also provide a half-cent reduction for every
percent of biodiesel from recycled agricultural oils or animal fats.
With today's depressed market for farm commodities, biodiesel will
serve as a ready new market for surplus farm products. Investment now
in the biodiesel industry will level the playing field and create new
opportunities in rural America. This bill also contains a provision I
fought for that will provide a tax credit for production of fuels from
animal and agricultural waste.
Thanks to new technological developments, we can now produce
significant quantities of alternative fuels from agricultural and
animal wastes in an environmentally-friendly manner. The production
incentives included in this bill will assure implementation and
commercialization of this new generation of technology. I am also
pleased this bill includes language to encourage additional collection
and productive use of methane gas generated by garbage decomposing in
America's landfills. Landfill gas is a renewable fuel that can be used
directly as an energy source for heating, as a clean burning vehicle
fuel, and as a hydrogen source for fuel cells. Furthermore, it can
power generators to produce electricity. There are compelling
environmental reasons to encourage these projects.
Even the large landfills that are required under the Clean Air Act to
collect their gas and control non-methane organic compounds often find
it more cost-effective to simply flare or otherwise waste the gas
rather than use the methane to produce electricity. Some smaller
landfills are not required to collect the gas, and may continue to emit
it for decades under the Clean Air Act. Thus, landfill gas projects
will not only reduce local and regional air pollution while yielding a
renewable source of energy, they will also reduce the country's yearly
emissions of greenhouse gases by a very substantial amount at a
relatively small cost. I also worked to include a provision that will
encourage new waste-to-energy facilities to produce electricity
directly from the combustion of our trash. Arkansas stands with other
environmentally conscious States in understanding that waste-to-energy
technology saves valuable land and significantly reduces the amount of
greenhouse gases that would have been released into our atmosphere
without its operation. The volume of waste generated in this country
could be reduced by greater than 90 percent by utilizing waste-to-
energy facilities, and EPA has confirmed that more than 33 million tons
of greenhouse gases can be avoided annually by the combustion of
municipal solid waste. Municipal solid waste is a sustainable source of
clean, renewable energy and I am proud to see this measure enacted into
law.
Another provision I am extremely proud of is one that will provide a
tax credit for the production of super energy-efficient clothes washers
and refrigerators if those appliances exceed new Federal energy
efficiency standards. Conservation and efficiency are the most
effective and immediate ways to limit our energy consumption and reduce
pollution. I am confident this provision will spur manufacturers to
develop super-efficient appliances that will be affordable for
consumers.
Another provision of which I am particularly proud relates to the
clean-up of Southwest Experimental Fast Oxide Reactor, a decommissioned
nuclear reactor near the community of Strickler, Arkansas, in the
northwest corner of my State. The site is contaminated with residual
radiation, liquid sodium, lead, asbestos, mercury, PCBs, and other
environmental contaminants and explosive chemicals. I have been
fighting to rehabilitate this site since I came to the Senate, and now
we know that persistence pays off.
SEFOR was built by the Southwest Atomic Energy Associates, a
consortium of investor-owned electric utilities, and the U.S. Atomic
Energy Commission for testing liquid metal fast breeder reactor fuel.
SEFOR began operations in 1969 and was permanently shut down in 1972.
After the reactor's useful life, the ownership of the site was
transferred to the University of Arkansas. The Federal Government
helped create these contaminants, and therefore should pay to help
clean them up. This is great news for northwest Arkansas, because this
site has threatened public health and the environment in one of our
state's most beautiful areas for too long. I thank the conferees for
retaining my provision related to cleaning up this site.
The final provision I would like to praise relates to improving our
country's natural gas infrastructure. I am proud that this bill
contains provisions to make it easier for natural gas companies to
deliver clean-burning natural gas to this Nation's rural homes, by
decreasing the depreciation time for natural gas pipelines.
America's demand for energy is expected to grow by 32 percent during
the next 20 years and consumer demand for natural gas will grow at
almost twice that rate, due to its economic, environmental, and
operational benefits. That level of natural gas use is almost 60
percent greater than the highest recorded level. To satisfy this
projected demand, we must substantially expand our existing gas
infrastructure and this provision will do that. These are provisions in
this bill that I am very proud of, but there are also provisions in
this bill that I am not proud of. I am very disappointed by the way in
which the
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issue of MTBE liability is handled in this bill. I am also disappointed
by the lack of a renewable portfolio standard in this bill and I will
continue to work to see that a RPS is enacted in coming years.
Our current global situation shows us just how important it is that
we takes steps to reduce our dependence on foreign oil. I hope that
this bill is taken for what it is: not a comprehensive solution, but a
certain step in the right direction. Much more work needs to be done if
we ever expect this country to lose its dependence on fossil fuel and
foreign sources of energy and I urge my colleagues to continue to work
hard until we achieve this goal.
Mr. BIDEN. Mr. President, for our national security, for our economic
future, for the health of our environment, our country needs an
effective, comprehensive national energy policy. We must free ourselves
from dependence on foreign sources of energy. We must leave behind
costly, inefficient energy practices and invest in cutting-edge
technologies that will keep our economy the most productive in the
world. And we must protect and heal the natural environment that we
will leave to our children and grandchildren.
The legislation before us fails to meet those needs. When I, and 83
other Senators, voted for the Energy Policy Act on July 31, it was very
a different piece of legislation. Unfortunately, the bill has been
drastically changed since then. Without sufficient discussion and input
from our side of the aisle, unacceptable parts were added to this
legislation and crucial parts were taken away. We have been left with a
bloated symbol of lost opportunity. I cannot support it.
This is not a trivial matter. This bill would set our energy policy
for the next 10 years; we must get it right. Consider how things have
changed since we last enacted an energy policy in 1992 and what new
challenges we will face in the next 10 years.
Cracks in our energy policy, both in infrastructure and regulation,
have become evident in the last few years. They have been most clearly
shown during the Enron scandal and the August blackout in the Northeast
and Midwest. These were clear signals of serious problems in the
current system. Sixty million people were affected by the blackout, and
it cost New York City alone $1 billion. This should have been a call to
action, but it was not. This bill fails to address the weaknesses in
our electrical grid that were exposed over the summer.
The Federal Energy Regulation Commission is prohibited in this bill,
until 2007, from reforming the national power grid through mandating
Regional Transmission Organizations, which would be necessary to ensure
that further blackouts don't occur. This legislation also requires
those who want to construct a Regional Transmission Organization to
foot the full bill themselves, basically guaranteeing that it won't
happen. I have received complaints from the Public Service Commission
in Delaware on this very provision.
As our colleagues from the West Coast have reminded us so forcefully,
Enron-style energy market manipulation was a major force in undermining
the energy system in that part of the country. But this bill does not
close the loopholes, with cute names like ``Fatboy'' and ``Get
Shorty,'' that allowed Enron to inflate their profits, and that
directly caused some of the disruptive and costly power shortages.
The bill also rescinds the Public Utility Holding Company Act without
providing an adequate replacement. PUHCA has for decades protected
energy customers from energy corporations, like Enron, who might
undertake predatory actions or make risky acquisitions or mergers. The
repeal of this legislation leaves consumers holding the bag if a power
company loses money on a non-energy investment. They could just put it
on their customers' electric bills.
Not only does this bill not address the problems of the past, it
doesn't plan at all for the future. Our reliance on oil and gas today
is inescapable, but the need to move toward something better is
undeniable. We will invest billions of taxpayer dollars in this bill
for a resource that can't possibly sustain us. Our dependence on oil
ties us to internal politics of unstable countries around the world. It
condemns us to unsustainable levels of pollution. It should not be a
very radical idea to suggest that we need to shift the type of energy
that we use in this country. We consume almost 25 percent of the
world's daily production of oil, though we hold only 3 percent of the
world's oil reserves. This is a deficit that we will pay for with lack
of control over our own economy and security. We are bound to the price
fixing of Middle East suppliers and unrest in South America and the
states of the former Soviet Union, and we will continue to be unless we
invest in alternate sources of energy and curb the rate at which we
consume.
Unfortunately, this bill takes no major steps toward these goals. In
fact, the conference refused to include renewable portfolio standards,
supported by 52 Senators, which would have required utilities to
generate 10 percent of their electricity from renewable energy sources
by 2020.
To deal with our dependence on fossil fuels, we must address both
supply and demand. But this bill fails to provide us with a sensible
energy conservation program. It doesn't address the need to improve
fuel efficiency in our cars and trucks. In that regard, we can now
count China among the countries with more foresight than this
legislation provides on the issue of automobile efficiency. And this
bill simply dropped a measure, accepted 99 to 1 by the Senate, that
would have instructed the President to reduce our daily oil consumption
by a little more than 5 percent by 2013.
Instead of a forward-looking policy on energy, this bill has been
turned into a vehicle to undermine our Nation's environmental laws to
the benefit of fossil fuel producers. The bill spends $1.8 billion in
taxpayer dollars for the purchase of conventional coal-burning
technologies, which reduces future demand for ``clean-coal.'' At the
same time, subsidies to promote the cleanest coal technologies have
been cut by 20 percent.
It rolls back provisions of the Clean Air Act, by allowing
communities to bypass compliance deadlines on ozone attainment
standards if they can prove that some of the pollution drifts into
their area from upwind locations. Unfortunately, almost all communities
with poor air quality can meet this test. The result is a significant
weakening of the Clean Air Act and a slap in the face to cities, like
Wilmington, DE, who have met clean air standards despite dealing with
upwind pollution.
This is not only an environmental problem. Currently, 130 million
Americans are living in areas that don't comply with the air quality
standards, and non-compliance has been linked to an increased
occurrence of respiratory problems. A group of health organizations
including Physicians for Social Responsibility and the American Lung
Association have estimated that this rollback would cause more than
385,000 asthma attacks and nearly 5,000 hospital admissions per year.
The Clean Water Act has likewise been weakened. Oil and gas drilling
sites are exempted in this bill from run-off compliance, and hydraulic
fracturing, an oil and gas recovery technique, has been completely
removed from regulation under the Safe Drinking Water Act.
These are two major changes, but there are other assaults on the
environment. For instance, royalties charged to oil and gas recovery
units on public land were reduced; offshore oil drilling in the Outer
Continental Shelf was authorized; and, a Senate-approved provision,
authorizing research on global climate change, was eliminated. This
bill prefers ignorance to understanding when it comes to the most
important environmental issues that our planet faces today.
And, in perhaps the most transparent concession to special interests,
this bill not only waives liability, retroactively to September 5, for
those who have produced the toxic substance, MTBE, that is polluting
our ground water supply, but it grants its manufacturers $2 billion in
transition funds and doesn't ban the additive until 2014, a provision
which can be easily waived by the President or any Governor. This
leaves those affected communities with a $29 billion clean up tab.
But, that is not the only tab that this bill leaves with the American
people. It leaves us to pay $25 billion,
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mostly in pork, almost half in backward-looking tax breaks to fossil
fuel producers. That is simply too much to be spent on a bad idea. This
is not a roadmap, a vision on the horizon, to guide us for the next
decade.
This bill fails to give us the comprehensive energy policy our Nation
needs in this new century. It does nothing to free us from our
dangerous dependence on fossil fuels. It does not set a clear course
toward cleaner, more efficient technologies. And it fails to protect
our environment. In too many ways it has sacrificed the long-term
interests that we all share for shortsighted special interests. We can,
we must do better.
Mr. KOHL. Mr. President I regret having to vote against this energy
package. The country needs a coherent energy policy to help us tackle
the challenges that come with economic growth. Our constituents need to
know that when they wake up in the morning, the lights will be on and
the energy to power our days will be available.
Our economy needs plentiful, affordable, reliable energy as we
struggle to climb out of a devastating period of slow growth and job
loss. Unfortunately, this bill does more to meet the needs of special
interests than the needs of a growing economy.
We need an energy bill that leads to lower prices, a clean
environment, and consumer protection. The bill before us today is a
missed opportunity to further any of those goals. It has come up short
in its effort to lower natural gas prices for Wisconsin consumers.
Natural gas prices have been a roller coaster for the people from my
State, and we need a large long term supply to come on line. The North
Slope of Alaska was the answer, but this bill has done little to make
that supply a reality.
Another problem plaguing consumers in Wisconsin is spikes in gas
prices brought on by our overdependence on boutique fuels. Most
recently, in southeastern Wisconsin, a fire at a refinery resulted in
consumers paying $2 a gallon for gasoline because we could not bring in
gasoline from other regions without violating the Clean Air Act. The
bill before us could have limited the different blends of gasoline in
use around the country, so that if one area had a supply disruption,
fuel could be imported from another region. I worked with members of
the Wisconsin delegation to include language to solve this problem in
the future, but that was not retained in the conference Committee
negotiations. Wisconsinites will continue to be held hostage to local
refineries during supply disruptions.
I supported provisions in the Senate energy bill that would have
created a renewable fuels portfolio standard or RPS. The RPS was going
to be an aggressive target that would have created a significant market
for renewable energy technologies. While the bill does contain tax
provisions to encourage the use of renewable energy, the RPS was a new
and exciting effort to wean us of our addiction to fossil fuels. The
RPS was dropped in conference, even though it had received several
strong votes in the Senate. Many States are creating their own RPS, but
a national requirement would have set the renewable energy industry on
a path to mainstream success. Instead, we are left with small changes
at the margins which will not significantly affect our energy
production mix.
High electricity prices over the last few years have made it clear
that consumers need better protection from unscrupulous companies.
Again the Senate bill contained provisions that would protected
consumers from the kind of price gouging schemes created by Enron. My
colleagues worked hard to make sure the Federal Energy Regulatory
Commission had the teeth and the oversight capability to protect
consumers in a world without the Public Utility Holding Company Act.
Again the conference turned their back on the Senate provision and
embraced House language that defends industry at the expense of State
and Federal regulators.
The Congress has squandered another opportunity to craft a far
reaching and progressive energy policy for this country. Instead we
have chosen to pander to special interests and create a particularly
unsavory piece of legislative sausage. The bill before has been laden
with three time the tax breaks the President requested, and more than
$100 billion in spending. We can do better than this. We should do
better than this, which is why I oppose the bill and support the
filibuster. Congress owes it to the American people to come back next
year and put together a bill that meets the needs of everyone,
consumers and industry alike, instead of playing favorites and leaving
the taxpayers with the bill.
Mrs. MURRAY. Mr. President, I want to take time to comment on the
Energy bill before us today.
It is disappointing that such a massive bill could do so little to
promote our energy independence, national security, economy, or
environment. It does nothing to protect our rate-payers from the type
of energy crisis we faced in the Pacific Northwest and California.
Those who claim otherwise are simply masking the real mission of this
bill which is a taxpayer giveaway to the big energy companies.
A 1,200-page bill has much to comment on, but I will not take time to
detail every concern I have. I want to discuss the electricity title,
the lack of a true energy policy, and threats to our environment.
First let me discuss the electricity title of the bill. For those of
us from the Pacific Northwest this title was of the utmost concern.
For over 2 years the Pacific Northwest has been struggling against
the Federal Energy Regulatory Commission's, FERC, effort to deregulate
the transmission system through its promotion of regional transmission
organizations, RTOs, and standard market design, SMD, rules.
Two simple points: First, FERC had proposed a solution in search of a
problem that doesn't exist in the Pacific Northwest. Second, the one-
size-fits-all approach being promoted by FERC would neither work nor be
cost-effective in our unique hydropower based system.
With those concerns in mind I have been working with many of my
colleagues in the Pacific Northwest and Southeast, who have similar
regional concerns, to keep FERC from moving forward with these plans. I
am pleased that the bipartisan group has been successful in delaying
until 2007 FERC's ability to move forward with SMD.
While the bill delays SMD implementation, it does not permanently
stop FERC from ultimately pursuing this power grab, and does nothing to
stop RTO development.
In fact, the bill is an outright endorsement of the RTO plan, going
so far as to provide incentives to utilities for joining such
transmission organizations.
FERC has not demonstrated that such a system in the Pacific Northwest
will be an economic benefit to the region and, to date, the majority of
Washington State utilities remain opposed to the RTOs. Even with the
SMD delay provision, this bill is a threat to the electricity system of
the Northwest, and I cannot add my voice to this bill's support of
RTOs.
Also of great concern in the electricity title is the bill's failure
to deal with market manipulation. The Pacific Northwest and California
are still feeling the direct effects of the 2000-2001 energy crisis
that we now know was caused, in large measure, by energy companies
manipulating prices.
Given the lessons we have learned over the past 3 years, one would
have hoped that this Energy bill would aggressively attack these known
methods of market manipulation. But that is not the case. This bill
only bans one type of manipulation and ignores all the other
methodologies we know were used.
By remaining virtually silent on market manipulation, this bill is
giving a nod to energy companies to once again employ Fat Boy, Get
Shorty, and other infamous price-gouging schemes.
This bill is an open invitation for companies to once again seek to
fatten shareholders' wallets at the expense of ratepayers. This is more
true now that the bill repeals the Public Utility Company Holding Act,
PUHCA, without implementing any countervailing laws to protect against
abuse in the industry.
In total, this bill promotes schemes that are counter to Washington's
rate-payers and fails to protect them against the manipulative
practices that have already raised their rates.
The bill also lacks a comprehensive energy policy.
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During the past 3 years of debate on energy I have acknowledged we
should recognize the current importance of oil, gas, and coal in our
energy production today. But to ensure America's energy security for
the future, it must strongly promote energy efficiency, conservation,
clean, and renewable energy sources, and should diversify our energy
sources.
But rather than aggressively promoting renewable energy and
conservation, this bill maintains the status quo. This bill directs
billions of taxpayer dollars to traditional energy producers who
already have healthy market shares and hardly need Government support.
Of the roughly $23 billion in tax credits in this bill, only $4.9
billion, or 20 percent, would go towards renewable energy or
conservation.
I support the production tax credits for wind, solar, geothermal, and
biomass renewable energy in this bill, but unfortunately public power
is left out of the equation.
Many Washington residents are served by publicly owned utilities and
cooperatives and they should receive the same incentives to invest in
renewable energy as this bill gives to the for-profit utilities.
Earlier drafts of the tax title included a tradable tax credit for
public power investment in renewables. I know that Senate Finance
committee members fought for this provision, but unfortunately the
President and House objected to the provision.
With so much of Washington and the Pacific Northwest served by public
power utilities, it will be much harder to get these type of
investments made.
We hear constantly that we need to decrease our reliance on oil from
the Middle East and yet this bill does nothing substantive to increase
automobile efficiency standards. The United States is the most
technologically advanced country in the world. There is no reason we
cannot build and produce more fuel-efficient cars.
Without addressing fuel efficiency standards, it is hard to praise
this bill for promoting energy efficiency or national security.
In the end, this bill does nothing more than preserve the status quo
of energy production in the United States. We are not more secure, we
are not more independent, and we have not truly diversified our
production sources. All we have done is promote the traditional energy
sources of oil, coal, and gas at the expense of our national security
and environment.
This bill does serious harm to our environment and our health by
effectively turning back the clock on decades-old environmental
protections.
First, the bill includes a provision that would amend the Clean Air
Act to allow more delays for adhering to the EPA's smog regulations.
This provision is not just illogical, it is dangerous.
Second, the bill's provisions for our coastal regions present a
threat to an area my State wants protected.
For Washingtonians, the coastal areas are some of the most pristine
and cherished natural areas in the State. Under this bill, these areas,
along with coastal areas in many other States, would be placed in
serious jeopardy.
The bill would grant new authority to the Department of the Interior
to authorize energy development projects on the Outer Continental
Shelf, OCS, including the transport and storage of oil and gas. At the
same time, it would undermine the rights of States to manage their
coasts. Under the Coastal Zone Management Act, CZMA, States were given
the right to have a say in Federal projects that impacted their coastal
regions. This bill would severely compromise these rights.
Third, the bill has alarming environmental implications for drilling
and construction projects. It would allow an expedited application
process for drilling on Federal lands by requiring the Department of
the Interior to automatically approve applications once they have met
certain standards, regardless of any outstanding environmental
concerns.
It also exempts companies from adhering to the Clean Water Act's
runoff regulations for construction and drilling sites. Without
adherence to these guidelines, the risk of ground water contamination
increases dramatically.
Fourth, I am concerned about a measure to provide legal immunity to
chemical companies that produce the gasoline additive MTBE. The toxic
substance is known to have caused ground water contamination, and this
bill shifts costs for cleanup to taxpayers.
Lastly, this bill contains huge amounts of subsidies for the oil and
coal industries. Nearly half of this bill's incentives are given to the
oil and coal industries, two of the most environmentally destructive
fossil fuels that have contributed to global warming. This is not just
irresponsible; it is wrong.
We must actively work to reduce our dependence on foreign oil, but
subsidizing the industries and rolling back environmental protections
is not a logical methodology.
In contrast, the bill provides less than one-quarter of its
incentives to industries that produce renewable energy. The facts are
clear. Renewables are simply not the top priority of this piece of
legislation.
These are some of the many reasons I cannot support this piece of
energy legislation. Not only does it put consumers at risk by repealing
necessary protections, but it seriously puts at risk our own health and
the health of our environment with the special interest giveaways to
the oil, gas, and coal industries.
Finally, let me address the claims about job creation in this bill.
For Washington State, a more aggressive promotion of renewable energy
could have been a boost to local companies involved in this area of
generation, but this bill did not provide that direction.
Proponents have argued that the bill encourages the construction of a
natural gas pipeline from Alaska, which would create jobs in Washington
State. Unfortunately, the bill does not provide the guarantees needed
for what could have been an important project. To construct the
pipeline, its builders say they would need some protection against gas
prices falling below a certain level. But, this bill provides no
mechanism for risk mitigation, so according to its own builders, the
pipeline will not be built.
The negative aspects of this bill are overwhelming. It fails to
adequately address the real problems that we all face. It threatens the
environmental progress we have made in the past and the progress we
hope to make in the future. Without measures that substantively promote
responsible energy use, increased conservation, energy independence,
consumer protection, and environmental safeguards, this bill is simply
unacceptable.
I cannot support legislation that puts us all in danger, and that is
exactly what this bill does. The people of Washington State deserve
better, and the people of America deserve better.
Mr. LEVIN. Mr. President, it is difficult to oppose a bill that has a
number of provisions that I not only support, but worked to have
included in the bill. However, the process and the product are deeply
flawed and I cannot support it.
There are many objectionable provisions that were added to this bill
that were not in either the House or Senate versions of this
legislation; for instance the retroactive MTBE liability waiver,
underground storage tank provisions that would require taxpayers,
rather than polluters, to pay $2 billion to clean up leaking
underground storage tanks containing gasoline and other toxic
chemicals, even at sites where viable responsible parties are
identifiable, and the numerable State-specific projects that will cost
billions of dollars and were, again, not considered by the House or the
Senate.
The Senate passed a comprehensive and balanced Energy bill in July.
Then, after weeks of closed-door meetings with virtually no input from
Democratic conferees, the Republicans put forward this ``take it or
leave it'' Energy bill that is drastically different than the bill that
the Senate passed. We have no opportunity to amend this bill, or choose
among its good and bad provisions. It is all or nothing.
There are simply too many provisions on the negative side of the
ledger. The massive power failure of August 2003, on top of the massive
price manipulation perpetrated by Enron and others, provided additional
proof, proof that shouldn't have been needed, that the United States'
deregulated energy markets are not functioning well. This bill doesn't
help that problem. It may make it worse.
The Conference report would repeal the Public Utility Holding Company
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Act of 1934, PUHCA, longstanding consumer and investor protection
legislation governing energy industry structure and consolidation, 1
year after enactment of this bill. Unfortunately, the bill fails to
provide adequate protections to prevent industry market manipulation
and consumer abuses. Governor Granholm of Michigan has said that
replacing PUHCA with ``weaker anti-fraud and market manipulation
rules'' could weaken the States' ability to protect consumers. Further,
while the enactment of this legislation's mandatory reliability
provisions would be an improvement over the current voluntary system of
standards, the bill fails to ensure that regional transmission
organizations will have the authority to enforce those standards in
order to prevent, or respond effectively to, another blackout.
Uncertainty in the power industry threatens our economy and security
and creates the loss of investor confidence in U.S. energy markets. If
necessary, we should adopt a stand-alone bill that sets mandatory
reliability standards, requires utilities to join regional transmission
organizations and establishes consistent rules for the enforcement of
standards nationwide than pass an Energy bill filled with so many
harmful provisions.
In addition, two provisions in this conference report would
significantly impede the ability of Federal and State agencies to
investigate and prosecute fraud and price manipulation in energy
markets. These provisions would make it easier to manipulate energy
markets without detection.
Section 1281 of the electricity title states: ``Any request for
information to a designated contract market, registered derivatives
transaction execution facility, board of trade, exchange, or market
involving accounts, agreements, contracts, or transactions in
commodities (including natural gas, electricity and other energy
commodities) within the exclusive jurisdiction of the Commodity Futures
Trading Commission shall be directed to the Commodity Futures Trading
Commission.'' Section 332(c) of the oil and gas title contains similar
language specifically applicable to investigations by the Federal
Energy Regulatory Commission, FERC.
If adopted, this would curtail all State and Federal authority, other
than CFTC, to investigate wrongdoing in CFTC-regulated markets. This
would impede FERC, Department of Justice, and State investigations of
fraud and manipulation in these markets. It would turn the CFTC into an
impediment for all other Federal and State investigations into matters
within CFTC-regulated markets, which would be an unprecedented
intrusion into the enforcement of State and Federal consumer protection
laws. Had this approach been in effect in recent years, FERC would not
have been able to investigate manipulation of the energy markets,
including the fraud and manipulation perpetrated by Enron through
EnronOnline.
Section 1282 of the electricity title would impose a higher criminal
standard, ``knowingly and willfully,'' for filing false information and
for improper round trip trading than exists under current law. The new
round trip trading provision is inconsistent with current law and the
Cantwell amendment, which prohibited market manipulation in electricity
markets, and which recently passed the Senate.
For example, section 4c of the Commodity Exchange Act states it is
``unlawful for any person to enter into . . . a transaction . . .
involving the purchase or sale of any commodity for future delivery''
if the transaction ``is, of the character of, or is commonly known to
the trade as a `wash sale' or . . . is a fictitious sale.'' There is no
requirement that the violation be ``willful.''
Manipulation is difficult to prove even under current law. By raising
the burden of proof, this provision will make it nearly impossible to
prove illegal round trip trading or wash sales. Rather than weakening
the laws preventing fraud and manipulation in energy markets, the
Congress should be strengthening these prohibitions.
There are other provisions that would affect FERC's ability to ensure
markets are transparent and fair.
The ``Enron loophole'' was attached during the conference on an
omnibus appropriation bill in 2000, and was a factor underlying the
massive manipulation of the energy markets in 2000 and 2001. The
provisions in this bill, attached under hurried circumstances would
widen the loophole and increase the chances of more manipulation and
dysfunctional markets. This is the wrong response to the current crisis
of confidence and integrity in our energy markets.
I am also disappointed that the conference report on this bill
directs the Department of Energy, DOE, to ``as expeditiously as
practicable, acquire petroleum in amounts sufficient to fill the
Strategic Petroleum Reserve to the [1 billion] barrel capacity,'' but
does not include any direction to DOE to fill the SPR in a manner that
minimizes the cost to the taxpayer or maximizes the overall supply of
oil in the United States. That second direction is critical--otherwise
the filling of the SPR could lead to continuing high gas prices.
The Levin-Collins amendment, which was adopted unanimously by the
Senate last month, directed DOE to develop procedures to fill the SPR
in a manner that minimizes the cost to the taxpayer and maximizes the
overall supply of oil in the United States. The Levin-Collins amendment
expressed the sense of the Senate that the DOE's current procedures for
filling the SPR are too costly for the taxpayers and have not improved
our overall energy security.
DOE's internal documents state that filling the SPR without regard to
the price and supply of oil in the global markets exacerbates price
problems in those markets. By increasing demand for oil at a time when
oil is in scarce supply, the SPR program pushes the price of oil up
even further. Moreover, when near-term prices are higher than future
prices, oil companies will meet the additional demand for crude oil by
removing oil from their own inventories rather than purchasing high-
priced oil on the spot market. Thus, under these price conditions,
which have generally prevailed over the past year and a half, adding
oil to the SPR will lead to a corresponding decrease in private sector
inventories. Since market prices are so closely tied to inventory
levels, filling the SPR under these market conditions both depletes
private sector inventories and pushes up prices for America's
consumers.
Furthermore, according to the Department of Energy's own analyses,
taking costs into consideration--as the DOE did prior to early 2002--
can save taxpayers several hundreds of millions of dollars over the
span of a few years. Acquiring more oil when prices are low will
increase revenues to the Treasury from the sale of high-priced royalty
oil that is not needed to fill the SPR. Secondly, allowing oil
companies to defer deliveries to the SPR when prices are high in return
for the delivery of additional barrels of oil at a later date--as DOE
did prior to early 2002--enables the DOE to increase the amount of oil
in the SPR without any additional costs.
In summary, the unqualified direction in the bill to DOE to fill the
Strategic Petroleum Reserve to 1 billion barrels is likely to increase
the cost of crude oil and crude oil products, such as gasoline, home
heating oil, and diesel and jet fuel, to American consumers and
businesses, as well as to the taxpayer, with uncertain benefits to our
national security.
Also, while I support the provision in this legislation that would
increase the use of ethanol to 5 billion gallons by 2012 and 3.1
billion gallons by 2005, it needs to be reasonable in a way that
ensures the continued viability of the Highway Trust Fund.
Twice the Senate passed legislation that included a Volumetric
Ethanol Excise Tax Credit, VTEEC, that would address the shortfall in
revenue to the Highway Trust Fund that was caused by the ethanol tax
exemption. In addition to taxing ethanol, the VTEEC, as passed by the
Senate, would maintain the credit for ethanol production by paying for
it from the general treasury, create a biodiesel credit and ensure that
all taxes charged on ethanol go to the highway trust fund.
Unfortunately, the arrangement worked out by House and Senate
Republicans gives ethanol blenders the new option to receive a 5.2 cent
tax credit after paying the federal gas tax or they could continue
receiving the current ethanol exemption of 5.2 cents. Since most
blenders likely would continue to choose to receive the exemption up
front rather than wait for a tax
[[Page S15349]]
credit, the highway trust fund would still lose billions of dollars per
year. Efforts by Senator Baucus to address this problem were approved
by the Senate conferees, but was refused by the House. While I support
increased ethanol production, it is imperative that increased ethanol
production does not diminish the Highway Trust Fund.
Additionally, I am troubled that this legislation exempts producers
of MTBE from liability. MTBE, an oxygenate that can and should be
replaced by ethanol, is a potentially harmful product and its producers
should not be exempt from liability. In Michigan, it has been estimated
that MTBE has contaminated ground water around over 700 leaking
underground storage tank sites. Further, as many as 22 water supply
wells have been deemed unusable due to MTBE contamination. Because of
this MTBE liability waiver, the State of Michigan may have to pay over
$200 million to clean up those sites. Governor Granholm has strongly
protested that we need to hold manufacturers accountable for the damage
that MTBE does to public health and the environment, not guard them
from liability which then allows them to pass the cleanup costs on to
the States.
As I stated earlier, this bill has a number of provisions that I
support and that I worked to have included in it. These include tax
credits for advanced technology vehicles and joint research and
development between the Government and the private sector to promote
the expanded use of advanced vehicle technologies. But in the end, the
good provisions must be weighed against the large number of bad
provisions, and there are too many objectionable provisions for me to
support this bill.
The Senate has worked to create a national energy policy for years.
In just a few weeks, without bipartisan negotiation, this piece of
legislation was created. We should work to complete a long-term,
comprehensive energy plan that provides consumers with affordable and
reliable energy, increases domestic energy supplies in a responsible
manner, invests in energy efficiency and renewable energy sources and
protects the environment and public health.
Mr. LIEBERMAN. Mr. President, I rise in the strong opposition to the
bill before us, the conference Energy Policy Act of 2003. The bill
before us is a pork-laden, budget-busting, fossil-fuel promoting
vestige of the past, developed largely in secret by a handful of GOP
Members. This legislation is a mere shadow of what it was and could be.
This could have been a proud moment for this Congress and for the
Nation. Rather than caving to special interests and wallowing in pork
barrel politics, we could have risen to the challenge and met our
obligation to help prevent such crises as the Enron energy scandal and
the blackout of 2003 from reoccurring. We could have acted to promote
our economic prosperity, strengthen our national security, and protect
the health and welfare of all Americans through bold, balanced
legislation. We could have finally tackled global warming--the greatest
environmental challenge of our time. We could have considered a real
jobs bill, based on opening new markets and spurring new technologies.
We could have set American energy policy on a better, brigther course.
Instead, we are stuck with this--a sewer of an Energy bill. The bill
that has emerged from the closed door, Republican-only conference, and
which we consider today is a legislative disaster. Sadly, it bears
little resemblance to the balanced, bipartisan legislation that passed
the Senate last July. The Senate bill, which originally passed this
body in the 107th Congress, strengthened our national security,
safeguarded consumers, and protected the environment, and was developed
in open, meaningful, bipartisan fashion.
Before I move to the substance of the conference bill, I must offer a
few harsh words with the process of GOP majority employed to produce
it. In all my time in the Senate, I have never witnesses a more unfair
and unstatesmanlike spectacle. With the exception of the tax provisions
of this bill, in which Senator Grassley seized every possibility to
involve his Democratic colleagues, this is a thoroughly partisan
product.
Here is the way the conference went: One conference meeting at which
Democratic conferences offered opening statements only: complete shut
out of Democratic conferences from negotiations over the substance of
the bill: a few staff-level meetings for show after policy decisions
had already been made and reflected in GOP-only developed text;
special-interest lobbyists exerting extraordinary influence over the
bill; release of a more than 1,000-page document only 48 hours before
the scheduled meeting to adopt it--40 percent or more of which was new
text. It is inconceivable to me that legislation of this import was
developed this way. Quite simply, this process afforded no
real opportunity for Democrats to influence the final product and no
opportunity for the American public--whom this body is charged to
represent--to view and comment on the final product. I second the
comments of many of my Democratic colleagues that we will never be
subject to a conference like this again.
In dissecting the pork-laden bill that emerged from the smoke-filled
back rooms of the conference committee, let me first highlight one
provision of extraordinary importance to the State of Connecticut.
Connecticut has worked for decades to ensure that the construction and
operation of natural gas pipelines and electric cables across our
national treasure, the Long Island Sound, fully comply with State and
Federal environmental and energy laws. The bill before us contains a
provision to permanently activate the Cross Sound Cable--a provision
that did not appear in either the House or the Senate bill and as to
which no one received advance notice. The Cross Sound Cable had been
temporarily activated by Federal order in emergency response to the
summer's massive blackout, but had been prevented from permanent
activation by the State of Connecticut until it complies with State
laws. So much for States rights and environmental and consumer
protection. Shameful.
That is only the tip of the iceberg. Let me review the most egregious
offenses buried in this bill.
First, subsidies and giveaways to industries and special interests.
My good friend, Senator McCain, has labeled this bill the porkiest of
the porkbarrel, budget-busting bills. CBO estimates that the bill will
cost more than $30 billion in industry tax incentives and direct
spending. Taxpayers for Common Sense has estimated that it will cost in
excess of $90 billion. This stunning price tag includes millions of
dollars in direct incentive payments to mature energy industries,
including payments to undertake equipment upgrades they would have to
do anyway. The bill authorizes $1.1 billion for a nuclear reactor in
Idaho to demonstrate uneconomic hydrogen production technologies. It
has loan guarantees to build coal plants in several States, provided as
last-minute sweeteners to secure Senatorial support for the bill. The
bill contains interesting new ``green bonds'' for five projects
throughout the country, by which projects would get financial benefits
for ``green'' construction of primarily shopping centers. One project,
in Shreveport, LA includes a new Hooters restaurant. Is this
groundbreaking energy legislation? How can we approve legislation
gushing money this way given the mushrooming budget deficit? Our
neediest citizens will surely pay the cost.
Second, inadequate consumer protections. The bill does not adequately
protect consumers against utility mergers and electricity market
manipulation. For example, broad, effective prohibitions against price
gouging schemes used by Enron and other energy trading firms, which
passed the Senate 57 to 40 earlier this month, are excluded from the
bill. The legislation repeals the requirements of the Public Utility
Holding Company Act, PUHCA, without putting adequate consumer
protections in place.
Third, electric transmission line and natural gas pipeline and
construction. The bill allows the Secretary of Energy to determine the
siting of transmission lines through Federal lands, including national
forests and national monuments, except those in the National Park
System, over the objection of the responsible Federal agency. The bill
overrides State energy and environmental legal authorities to give the
Federal Government power to site and construct transmission lines and
natural gas pipelines.
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Fourth, MTBE liability protection. In a provision added in conference
to benefit companies primarily based in Louisiana and Texas, the bill
provides retroactive and prospective liability protection for producers
of methyl tertiary-butyl ether, MTBE, cutting off the rights of injured
Americans across the country and imposing a huge financial burden for
cleanup on our States and local communities. Simply unbelievable.
Fifth, environmental protection rollbacks and giveaways. The icing on
the cake for this bad bill is the significant environmental protections
it strips away for the benefit of energy producers. The bill also
contains new provisions to make our air much dirtier. The conference
bill would exempt metropolitan areas from meeting the Clean Air Act's
ozone-smog standard. This issue was never considered by the Senate or
the House and was inserted into the conference report during
``conference committee'' meetings. A new report from Clean the Air
reveals that the ill-conceived Energy bill would have severe public
health consequences around the country, especially for children. Delays
in implementing the Clean Air Act could lead to nearly 5000
hospitalizations due to respiratory illness and more than 380,000
asthma attacks and 570,000 missed school days each year. The bill
exempts all construction activities at oil and gas drilling sites from
coverage under the Clean Water Act and removes hydraulic fracturing, an
underground oil and gas recovery method, from coverage under the Safe
Drinking Water Act. The conference bill expedites energy exploration
and development at the expense of current National Environmental Policy
Act, NEPA, requirements. Environmental review is waived for all types
of energy development projects and facilities on Indian land.
I want to be fair. The conference bill does contain provisions that
make limited progress--baby steps only--toward achieving energy goals.
And the bill recognizes the political reality that the Senate has
spoken forcefully to the fact that it will not permit the Bush
administration to drill in another of our Nation's treasures, the
Arctic National Wildlife Refuge. You can search the bill to find
requirements for renewable fuels, (increase in sales of renewable
fuels, including ethanol, from 2 billion gallons to 5 billion gallons
by 2012); Federal energy efficiency standards for energy use and
appliances; increase in Federal Government purchase of renewable
energy, 7.5 percent of electricity from sources such as wind, solar,
geothermal, and biomass; funding for energy research and development,
including related to hydrogen fuels; and limited tax incentives for
alternative vehicles, renewable energy sources, and energy efficiency.
That is why some of my colleagues claim this bill articulates an energy
program for the 21st century. Hogwash. These weak provisions do not
even register on the scale against the predominant special interest,
fossilized provisions of the conference bill.
What is this bill missing? Frankly, the list is staggering. I have
time to highlight five key areas:
First, renewable portfolio standards. Our Senate-passed bill required
utilities to generate 10 percent of their electricity from renewable
energy facilities by 2020. Such a provision would spur new technology
development and work to wean the country off foreign oil dependence and
the drilling-first-and-only mindset that has predominated American
energy policy for generations. In addition, the majority touts this
bill as a great jobs creation bill; according to studies of the Tellus
Institute and Union for Concerned Scientists, the renewable industry
would create new, sophisticated job opportunities for hundreds of
thousands of Americans.
Second, climate change. Greenhouse gas emissions from the burning of
fossil fuels threaten not only our environment, but also our economy
and our public health. Should we continue unabated our current rate of
polluting, we threaten to disrupt the delicate ecological balance on
which our livelihoods and lives depend. This bill is so short-sighted
that it contains no provisions of any kind to address climate change.
Third, fuel economy improvements. No credible Energy bill can lack
means to improve fuel economy for automobiles and trucks. This is key
to reducing our dependence on foreign oil because the transportation
sector is the single largest user of petroleum.
Fourth, oil savings provision and specific hydrogen standards.
Amendments agreed to by the Senate last summer contained provisions
with specific deadlines--real teeth--to reduce our dependence on
foreign oil and to move us to the hydrogen fuel program of the future.
Neither appears in this bill.
Fifth, Alaska natural gas pipeline. I strongly support the
construction of this pipeline, which will bring millions of gallons of
natural gas to the lower 48 States and create almost half of the new
jobs, 400,000, touted under this bill. The conference bill, however,
fails to provide the necessary incentives to enable construction of the
Alaska natural gas pipeline, which would prevent the U.S. from becoming
more dependent on natural gas imports.
This abominable bill must not be made law. Any Senator serious about
advancing America's energy and environmental policies and curtailing
Government waste is compelled to vote against the Energy bill before
us. We can and must do better. Americans deserve a real Energy bill,
one that we can be proud of. This is not it. Let us reject this
legislation and return to the drawing board, recommitting ourselves to
producing a balanced, innovative, and responsible energy policy for the
21st century.
Ms. SNOWE. Mr. President, as I rise to speak to the issue of the
conference report to H.R. 6, the Energy Policy Act of 2003, I want to
first recognize the efforts of Energy Committee Chairman Domenici and
Finance Committee Chairman Grassley for the extraordinary time and
effort they have devoted to developing a national energy policy for a
21st century America. Theirs was an arduous task in addressing not only
political differences with the bill but also regional ones as well. So
I thank them for their work.
This has certainly been a long road. Congress has been debating and
voting on a number of energy issues over the past two Congresses, one
when under Democratic control and one under Republican leadership.
There have been a myriad of issues to consider as we have attempted to
shape appropriate policy, and to help increase the public's awareness
of the benefits to our health and national security in shifting from
foreign fossil fuel imports toward renewable, efficient, and
alternative energy sources and manufacturing technologies. Yes, it has
been a long, hard road but this conference report simply does not put
us on the right road to accomplish these goals for the good of the
Nation. We have yet to find that new direction, but we must keep
seeking it.
As Theodore Roosevelt once said, ``Conservation is a great moral
issue, for it involves the patriotic duty of ensuring the safety and
continuance of the nation.'' The conferees had the opportunity to raise
the bar for the Nation's future domestic energy systems through new
energy policies, through the creation of tax incentives for available
and developing technologies, and most of all for incentivizing the
entrepreneurial spirit of the American people. But, this goal, in my
opinion, has not been reached in the Energy conference report before
us.
Since we started to develop new strategies for the Nation's energy
policy for the 21st century, we have had to undergo a fundamental
reassessment of our energy infrastructure in the aftermath of the
horrific events of 9/11 and the ongoing turmoil in the Middle East. We
realize now more than ever that we must reduce our vulnerabilities to
terrorism with more secure, localized, and reliably distributed energy
delivery systems rather than relying solely on our current centralized
infrastructure of pipelines, refineries, powerplants, patchwork of
electricity grids, and oil tankers berthed in our harbors. The United
States simply cannot afford to continue to spend at least $57 billion a
year buying oil from the Middle East and continue its upward trend of
fossil fuel usage.
The entire world--particularly the developing and fast-growing
nations of China, India, and Brazil--desperately needs access to clean,
low-cost, energy-efficient and renewable resources. The key is to make
the best alternate energy systems that are competitive with today's
nonrenewable sources of energy
[[Page S15351]]
so that they can be developed and used both at home and sold abroad.
Since 2000, I have been proud to have been a member of the Finance
Committee where I worked to develop responsible tax incentives to
increase the efficiencies of the electricity we produce, the vehicles
we drive, the appliances we use, the homes in which we live, and, in
turn, enhance the competitiveness of our domestic manufacturers. Our
task is to incentivize, through the Tax Code, our U.S. manufacturers to
develop and employ the most promising and cost-effective technologies
to the U.S. and global marketplace with all due speed.
Unfortunately, the conference report increases oil and gas tax
credits to $11.9 billion while conservation and energy efficiency
incentives were decreased to $1.5 billion. An equitable balance has not
been achieved nor is it a step forward.
We need to expand the mix of the country's energy sources with the
realization that power from nuclear and fossil fuels will continue to
be a large part of the energy basket in the next decades--but, at the
same time, we must encourage safer, cleaner and decentralized sources
as well. The conference report before us simply does not progress far
enough in this direction, instead maintaining more of a ``business as
usual'' approach to the Nation's energy future.
One of my greatest disappointments is the absence of provisions from
the Feinstein-Snowe SUV loophole legislation that would have phased-in
changes in CAFE standards requirements in four, attainable stages that
would have brought the standards for SUVs in line with passenger cars
within the next 8 years. Closing this loophole alone would save our
nation approximately 1 million barrels of oil, or fully 10 percent of
the oil our vehicles consume on a daily basis.
Right now, all our vehicles combined consume 40 percent of our oil,
while coughing up 20 percent of U.S. carbon dioxide emissions--the
major greenhouse gas linked to global climate change. To put this in
perspective, the amount of carbon dioxide emissions just from U.S.
vehicles alone is the equivalent of the fourth highest carbon dioxide
emitting country in the world. Given these stunning numbers, I cannot
fathom why we continue to allow SUVs to spew three times more pollution
into the air than our passenger cars.
Like Senator Feinstein and I, other nations have realized the value
of these changes. Even China--a developing country--has great concerns
about its increased reliance on foreign oil, so much so that Chinese
officials say they have to save energy--and how are they prepared to
accomplish this? By implementing more stringent CAFE standards for new
vehicles--including those manufactured in the United States--in their
country than we currently have in the United States or in this
conference report. How ironic that China is more progressive than the
United States in their attempts to save energy and decrease dependency
in oil imports at the same time that the United States overall fuel
economy has actually fallen to its lowest level since 1980.
According to a November 18 New York Times article, vehicles made by
Western automakers that do not meet the standards the Chinese
Government has drafted may have to be modified to get better gas
mileage before the first phase of the new rules becomes effective in
July of 2005. I ask unanimous consent to print the November 18 article
in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
China Set To Act on Fuel Economy; Tougher Standards Than in U.S.
(By Keith Bradsher)
Guangzhou, China, Nov. 17--The Chinese government is
preparing to impose minimum fuel economy standards on new
cars for the first time, and the rules will be significantly
more stringent than those in the United States, according to
Chinese experts involved in drafting them.
The new standards are intended both to save energy and to
force automakers to introduce the latest hybrid engines and
other technology in China, in hopes of easing the nation's
swiftly rising dependence on oil imports from volatile
countries in the Middle East.
They are the latest and most ambitious in a series of steps
to regulate China's rapidly growing auto industry, after
moves earlier this year to require that air bags be provided
for both front-seat occupants in most new vehicles and that
new family vehicles sold in major cities meet air pollution
standards nearly as strict as those in Western Europe and the
United States.
Some popular vehicles now built in China by Western
automakers, including the Chevrolet Blazer, do not measure up
to the standards the government has drafted, and may have to
be modified to get better gas mileage before the first phase
of the new rules becomes effective in July 2005.
The Chinese initiative comes at a time when Congress is
close to completing work on a major energy bill that would
make no significant changes in America's fuel economy rules
for vehicles. The Chinese standards, in general, call for new
cars, vans and sport utility vehicles to get as much as two
miles a gallon of fuel more in 2005 than the average required
in the United States, and about five miles more in 2008.
This country's economy is booming, and a growing upper
class in big cities like this one is rapidly buying all the
accouterments of a prosperous Western life, including cars.
As China burns more fossil fuels, both in factories and in a
rapidly growing fleet of motor vehicles, its contribution to
global warming is also rising faster than any other
country's.
But Zhang Jianwei, the vice president and top technical
official of the Chinese agency that writes vehicle standards,
said in a telephone interview on Monday that energy security
was the paramount concern in drafting the new automotive fuel
economy rules, and that global warming has received little
attention.
``China has become an important importer of oil so it has
to have regulations to save energy,'' said Mr. Zhang, who is
also deputy secretary of the 39-member interagency committee
that approved the rules at a meeting this month.
China was a net oil exporter until a decade ago, but its
output has not kept up with soaring demand. It now depends on
imports of oil for one-third of its needs, mainly from Saudi
Arabia and Angola. Before the war, Iraq was also an important
supplier. By comparison, the United States now imports about
55 percent of the oil it uses.
The International Energy Agency predicts that by 2030, the
volume of China's oil imports will equal American imports
now. Chinese strategists have expressed growing worry about
depending on a lifeline of oil tankers stretching across the
Indian Ocean, through the Strait of Malacca, a waterway
plagued by piracy, and across the South China Sea, protected
mainly by the United States Navy.
Various Chinese government agencies still have three months
to review the legal language in the fuel economy rules,
giving automakers some time to lobby against them; as yet,
there has been no mention of the approval of the new rules in
the government-controlled Chinese media.
But Mr. Zhang said that the rules in draft form were the
product of a very strong consensus among government agencies
and that ``the technical content won't be changed.''
Two executives at Volkswagen, the largest foreign automaker
in China, said that representatives of their company and of
domestic Chinese automakers attended what they described as
the final interagency meeting to approve the rules. Under
pressure from the government, these auto industry
representatives agreed to the new rules despite misgivings,
the executives said. ``They had no choice but to agree,'' one
of the Volkswagen executives added.
The executive said that Volkswagen's vehicles would meet
the first phase of the standards in 2005, while declining to
comment on compliance with the second, more rigorous phase,
which is to take effect in July 2008.
The new standards are based on a vehicle's weight--lighter
vehicles must go the farthest on a gallon--and on the type of
transmission, with manual-shift cars required to go farther
than those with less efficient automatic transmissions.
In a major departure from American practice, all new sport
utility vehicles and minivans in China would be required to
meet the same standards as automatic-shift cars of the same
weight. In the United States, standards for sport utilities
and minivans are much lower than for cars.
The Chinese rules do not cover pickups or commercial
trucks. According to General Motors market research, there is
little demand for pickup trucks in China except from
businesses, because the affluent urban consumer who can
afford a new vehicle regards pickup trucks as unsophisticated
and too reminiscent of the horse-drawn carts still used in
some rural areas.
Typically, heavy vehicles are much harder on fuel than
light ones, but the new Chinese standards permit the heavy
vehicles to get only slightly worse gas mileage. As a result,
they provide an incentive for manufacturers to offer smaller,
lighter vehicles, which will be easier to design.
The new standards would require all small cars sold in
China to achieve slightly better gas mileage than the average
new small car sold in the United States now gets, according
to calculations by An Feng, a consultant who advised the
government on the rules. But officials in Beijing would
require much better minimum gas mileage for minivans and,
especially, S.U.V.'s than the average vehicle of either type
now gets in the United States.
American regulations call for each automaker to produce a
fleet of passenger cars
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with an average fuel economy of 27.5 miles a gallon under a
combination of city and highway driving with no traffic;
window-sticker values for gas mileage, which include the
effects of traffic, are about 15 percent lower. Light trucks,
including vans, S.U.V.'s and pickups, are allowed an average
of 20.7 miles a gallon without traffic.
But the Bush administration has raised the comparable
American standard to 22.2 miles a gallon for the 2007 model
year and is now completing a review of whether to raise
limits further for 2008. The administration is also
considering adopting different standards for different weight
classes of light trucks.
Over all, average fuel economy in the United States has
been eroding since the late 1980's as automakers shifted
production from cars to light trucks. It fell in the 2002
model year to the lowest level since 1980. Automakers in
Europe have accepted European Union demands to increase fuel
economy under different rules that could prove at least as
stringent as China's minimums.
The Chinese standards would require the greatest increases
for full-size S.U.V.'s like the Ford Expedition, which would
have to go as much as 29 percent farther on a gallon of fuel
in 2008 than they do now in the United States, Mr. An
calculated. Sport utility sales in China have more than
doubled so far this year, but are still a much smaller part
of the overall market than they are in the United States.
Because the American standards are fleet averages while the
Chinese standards are minimums for each vehicle, the effect
of the Chinese rules could be considerably more stringent. A
manufacturer can sell vehicles in the United States that are
far below average in fuel efficiency if it has others in its
product line that offset it by being above average. But under
the Chinese rules, the fuel-inefficient models--especially
new ones introduced after the standards take effect--would be
subject to fines no matter how well their siblings do, Mr.
Zhang said, and the maker would not be allowed to expand
production of the gas-guzzling models. In Garrison Keillor's
phrase, China plans to require that every vehicle be above
average.
Mr. An said that at the final meetings on the new rules,
the only outspoken objections had come from a representative
of the Beijing Automotive Industry Holding Company, which
makes Jeeps in a joint venture with DaimlerChrysler.
According to people who have seen the new standards, many
Jeep models sold in China do not now comply with them;
neither do the Chevrolet Blazer sport utilities built by a
General Motors joint venture in Shenyang. Some of
Volkswagen's car models also fall slightly short, these
people said. By contrast, Honda's cars, built at a sprawling
factory complex here in Guangzhou, the commercial hub of
southern China, would comply easily because they use advanced
engine technology, these people said.
Trevor Hale, a DaimlerChrysler spokesman, declined to
comment in detail. ``DaimlerChrysler complies with local
regulations where it does business,'' Mr. Hale said in an e-
mail response to an inquiry. ``It continues working to
improve fuel economy in the vehicles it develops, builds and
sells around the world.''
Bernd Leissner, the president of Volkswagen Asia Pacific,
said that his company's cars would comply because ``it's just
a question of how to adapt the engine--it's something that
could be done quickly.''
The fastest way to improve fuel efficiency is to switch
from gasoline to diesel engines, as Volkswagen is starting to
do in China. The latest diesel engines are much cleaner then
those of a decade ago, but are still more polluting than
gasoline engines of similar power.
A spokeswoman for General Motors, which is beginning to
introduce Cadillac luxury cars in China, said she did not
have enough information about the newly drafted rules to
comment on them, but that her company's vehicles were
comparable in fuel economy to those of rival manufacturers in
the same market segments. Executives of G.M. were preparing
for an event in Beijing on Tuesday and Wednesday when the
company plans to showcase examples of its work on gasoline-
saving fuel-cell and hybrid engines for cars.
In the United States, G.M. has argued that tighter fuel
economy rules are unnecessary because technological
improvements will someday improve efficiency anyway. G.M. and
other automakers have also contended in the United States
that higher gasoline taxes would represent a better policy
than higher gas mileage standards, because it would give
drivers an economic incentive to choose more efficient
vehicles and to drive fewer miles.
China is still considering its policy on fuel taxes, but
has not acted so far, because higher fuel taxes would impose
higher costs on many sections of society, Mr. Zhang said.
Another company that could run into trouble over the
Chinese mileage standards is Toyota, which on Nov. 6 began
selling a locally produced version of its full-sized Land
Cruiser sport utility vehicle in China. A spokesman said on
Monday that Toyota had not yet heard about the new Chinese
fuel economy regulations, which has been prepared with a
level of secrecy typical of many Chinese regulatory actions.
Japan is also phasing in new fuel efficiency standards
based on vehicle weight that allow heavier vehicles only
slightly worse gas mileage than lighter ones. American
automakers have complained that the Japanese rules
discriminate against them because Japanese automakers tend to
produce slightly lighter cars anyway.
China has more than 100 automakers, as Detroit did a
century ago, but the bulk of its output comes from a small
number of joint ventures with multinational companies. Total
production has more than doubled in the last three years, to
about 3.8 million cars and light trucks in 2002, nearly as
many as Germany. The United States builds about 12 million a
year, Japan about 10 million.
The cars that Chinese automakers produce on their own tend
to very small and lightweight, but the engines are built on
older technology, and may not have an easy time complying
with the new fuel economy standards.
The government has been encouraging the industry to
consolidate, and the new rules may hasten that process by
forcing investment in engine designs that small companies may
not be able to afford on their own.
Ms. SNOWE. Mr. President, just consider for a moment how much the
world has changed technologically over the past 25 years. We have seen
the advent of the home computer and the information age. Computers are
now running our automobiles, and global positioning system devices are
guiding drivers to their destinations. Are we to believe that
technology couldn't have also helped those drivers burn less fuel in
getting there? Are we going to say that, while even a developing
country like China is transforming, America doesn't have the
wherewithal to make SUVs that get better fuel economy?
We should keep in mind that China is expected to pass the United
States in the next 10 years as the largest emitter of manmade carbon
dioxide, the major greenhouse gas that the vast majority of
international scientists believe is causing global climate change. And,
it is interesting to note that there is not one mention of climate
change in the entire conference report. Not one reference in a report
of over 1,000 pages that is supposed to shape the Nation's energy
policy for the 21st century.
Last year's Energy bill--which I remind my colleagues is the bill the
Senate actually passed this year--had at least three different titles
addressing climate change, including research on abrupt climate change.
Also, the administration's National Energy Policy of May, 2001, stated,
``Energy-related activities are the primary sources of U.S. man-made
greenhouse gas emissions representing about 85 percent of the U.S. man-
made total carbon-equivalent emissions in 1998.''
Other grave concerns I have involve provisions in the report that
will threaten coastal and marine environments and lead to further
degradation of our oceans. As Chair of the Subcommittee on Oceans,
Fisheries, and Coast Guard, I am troubled by the ramifications of these
provisions, as I strongly believe that any changes to U.S. marine
policy should only be developed with contributions and oversight of the
subcommittee.
For example, under section 321 of title III, the bill grants sole
authority for all energy-related projects in the Outer Continental
Shelf to the Secretary of the Interior. Currently, protecting these
ecosystems is the responsibility of the Department of Commerce. This
section does not suggest that the Department of the Interior should
even consult with Commerce.
Two other sections in this bill would limit the ability of the
Secretary of Commerce and coastal States to guide, plan, and regulate
activities that affect coastal and ocean resources and that occur in
offshore areas-- a right they currently have under the Coastal Zone
Management Act.
Further, section 325 would shorten the timeframes for submitting
information and appealing the permitting decisions for offshore
activities that are inconsistent with States' coastal management
plans--regardless of the quality or quantity of information received.
Another section, section 330 would limit all appeals or reviews of
offshore energy action to the Federal Energy Regulatory Commission
record. I believe that the Secretary of Commerce should have the
discretion to develop a record that is relevant to issues on appeal.
These provisions are inconsistent with the administration's proposed
rule amending the appeals processes, and they conflict with the goals
and purposes of the Coastal Zone Management Act reauthorization bill,
S. 241, I introduced last January. Moreover, the U.S. Commission on
Ocean Policy, established and appointed by President Bush pursuant to
the Oceans Act of
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2000, is poised to present its recommendations to Congress on offshore
energy and other ocean-related issues.
All of these provisions have serious consequences for marine
environmental health, and they should not be hastily adopted without
the thoughtful input of the Commerce Committee, the administration, and
the U.S. Commission on Ocean Policy.
Moving from our oceans to our air, there are other disturbing
provisions in the conference report that have been raised by many of my
colleagues. For instance, the report contains a provision delaying
clean air protections for millions of Americans, leading to thousands
of additional asthma attacks--and that is of particular concern to me
as my State of Maine leads the Nation in per capita cases of asthma.
Also, I am disappointed that the conference report contains no
renewable portfolio standard, or RPS, to raise the amount of renewable
energy as a source of electricity nationwide by increasing the
percentage of electricity produced from wind, solar, geothermal,
incremental hydropower, and clean biomass that produces electricity
from burning forest waste.
The conference report does not ban MTBE that is polluting our ground
water for another decade rather than the 4 years in the Senate bill,
while at the same time virtually dismissing pending lawsuits states
already have filed against MTBE producers for cleanup. State officials
in Maine do not approve of extending the ban on MTBE or the fact that
the heavy financial burden of cleanup will shift to the communities and
water users because MTBE producers receive a safe harbor from lawsuits
in the report.
For hydropower, the conference report provisions give the last say
for hydropower permits to industry and does not give equal weight to
the agencies/stakeholders process that has worked so well in Maine for
reaching consensus on hydropower decisions, especially for dam
removals.
On electricity reliability, the report holds up FERC's ability to go
forward with its standard market design for regional transmission
organizations--or RTOs except on a voluntary basis, until 2007. A
voluntary only program, however, does not spur the capital needed right
now for increased electricity transmission in New England, for
instance. I hope my colleagues are aware that the New England RTO kept
the great majority of New England's electricity grid working and the
lights on during the blackout of August of 2003. Actually, the only
component of the electricity title that effectively addresses the basic
causes of the 2003 blackout is the establishment of electric
reliability organizations that would enforce reliability standards
through improved communication standards and would be overseen by FERC.
Regarding consumer protections, the conference report repeals PUHCA,
the Public Utility Holding Company Act, that currently protects
consumers from higher electricity prices. However, the conference
report contains little language that ensures that consumers are
shielded from higher bills resulting from, for instance, large
electricity and gas convergence mergers. Public Power, co-ops and
municipalities, who represent 25 percent of the industry, are
especially vulnerable to the lack of adequate consumer protections in
the report.
Also, the conferees stripped the tradable tax credits for Public
Power that I and others had included in the Senate Finance Committee
amendment. These tradable tax credits would have allowed Public Power
to invest in renewable energy and assist them in decreasing their CO2
emissions by moving away from burning as much coal as they currently
do.
On fiscal policy, I do not believe the conference report shows fiscal
restraint or uses taxpayer dollars wisely. The fiscal year 2004 budget
resolution calls for approximately $15.5 billion to be spent on tax
incentives, and the Senate Finance Committee stayed within this budget
blueprint. The conference report contains $24 billion in tax incentives
plus another $5.4 billion in spending and with no offsets.
One of my concerns is that important tax incentives that appeared in
the Senate and House Energy bills over the past 2 years have not been
included in the conference. Where they have been included, they are so
pared back that I question whether the various industries will take
advantage of the smaller energy efficiency tax incentives provided,
particularly for the construction, lighting, and heating, ventilation
and air-conditioning, or HVAC, for commercial buildings.
Gone are provisions for tax incentives to promote the use of more
efficient air-conditioners, even though 70 percent of the energy demand
in peak periods is for air-conditioners, and that was a significant
factor in last August's major blackout in the Northeast. The lack of
these provisions that could be instrumental in the short term for
energy savings simply does not move the Nation's energy policy forward
into this century.
The knowledge of alternative and renewable sources has been known for
over a century as the simple principle of fuel cells --combining
hydrogen and oxygen to produce electricity and pure water--and the
photovoltaic principle behind the solar power of the sun, were both
discussed in 1839--164 years ago. We should ask ourselves why, instead
of our daily diet of approximately 19 million barrels of oil a day, we
are not also choosing to bolster even more the development of these
sources of renewable energy for our consumption and to grow our
economy.
Imagine automobiles driven by fuel cells--our U.S. auto manufacturers
and the Federal Government are beginning to invest in fuel cells.
Imagine businesses and homes having their own free-standing and
reliable fuel cells--one of the cleanest means of generating
electricity--that Senator Lieberman and I have promoted. Fuel cells can
provide electricity instead of our current vast, centralized fossil
fuel systems that make our air dirtier and less healthy, causing us to
spend millions more on health care each year. We need to be more
serious about promoting these technologies.
I do not believe that the Energy conference report before us sets the
Nation on the right course for the future and well being of the Nation,
and I will, regretfully, vote against the conference report with the
hope that Congress can continue working toward a more meaningful,
secure, and balanced energy-efficient future for the Nation.
Mr. DORGAN. Mr. President, I rise to support the Energy conference
report. While I have some serious concerns about the way this bill was
created, I believe our country will be better off with this bill than
without it. On balance, it will advance our interests.
This bill takes important, major steps toward developing renewable
and limitless sources of energy such as ethanol, wind, and biodiesel.
It puts us on the road to the development of a new hydrogen fuel cell
economy, which is essential if we are to lessen our dependence on
foreign oil. And it contains important conservation measures by
improving efficient standards on appliances and other devices we use in
our daily lives. If we are serious about security our energy future, I
believe we must implement these measures without delay.
Additionally, this bill enhances our ability to develop more
traditional sources of energy, while protecting our environment. It
contains strong provisions to promote clean coal technology so that we
can more effectively use our coal resources without degrading our
environment. The bill also funds a pipeline to access over 30 million
cubic feet of natural gas in Alaska and bring it to the lower 48
States. And it provides additional incentives for the discovery and
recovery of oil and natural gas.
There is much in this bill that is positive, and I intend to vote for
it. Having said that, I know this bill is far from perfect. But in some
important matters, it is a step in the right direction.
The bill omits a renewable portfolio standard, RPS, that would have
required utilities to produce 10 percent of their electricity from
renewable sources. That is a serious omission. A majority of the Senate
conferees voted to add this amendment to the conference measure and it
passed. Unfortunately, the House stripped this amendment out without
even debating it. I want to make it clear that I have not given up on
this issue. I want to inform those who blocked this provision--get
ready. I am going to keep fighting until we get an RPS standards
enacted into law.
[[Page S15354]]
Unfortunately, this bill also provides liability protection for the
producers of the fuel additive, MTBE. This is a major mistake.
Insulating the big oil companies, while making the mom and pop gas
stations of America liable for the costs of cleaning up these
contaminated sites is simply wrong and bad policy.
I also want to address concerns that the bill waives a number of
other important environmental provisions. For years, the administration
has complained that the process of siting and permitting new energy
projects is cumbersome and in the name of efficiency needs to be
modified. This measure does that. But let me caution the administration
for a moment. While Congress has provided discretion to the appropriate
agencies in an effort to streamline the process, these agencies will be
held accountable if they violate the spirit and trust we have given
them. I expect these agencies to make informed decisions based on
public input, sound science, and common sense.
Additionally, as a member and former chairman of the Commerce
Committee's Consumer Affairs Subcommittee, let me address the issue of
consumer protection. This bill repeals the Public Utility Holding
Company Act and does not, in my opinion, go far enough to protect
consumers from price gouging. Congress will be watching very closely to
ensure that the agencies responsible for preventing market
consolidation and market manipulation are doing their job. I believe we
must keep pushing to get better protections for consumers. The
experience on the west coast in recent years is a painful reminder that
corporate power, if left unchecked, can cause serious injury to our
consumers.
These deficiencies in the Energy bill could have been avoided had the
majority party included Democratic conferees in a meaningful dialogue.
Instead, Democrats were frozen out of the Energy conference. It was a
flawed and arrogant process that prevented the American people from
getting the best of what both political parties had to offer in the
development of a national energy policy.
However, does the lack of involvement lessen the need for us to take
steps to reduce our dependence on foreign oil? Does it lessen our need
to promote energy efficiency and energy conservation? Does it lessen
our need to promote the use of renewable energy and renewable fuels and
vehicles? I believe the answer to all of these questions is no.
I will vote for the conference report, because on balance, this bill
is a net plus for America. But my vote is in no way an endorsement of
the manner in which the majority conducted this conference. In the
future, before conferees are appointed, we will insist on a commitment
that both political parties be represented in the deliberations of the
conference.
These concerns aside, we must remember that energy is vital to our
economy and our way of life. We count on a reliable energy supply for
our everyday needs--heat, light, electricity, and all of the things
that keep our society productive. Our economy would be devastated if we
lost access to that supply, and were left without alternatives.
If, God forbid, terrorists would shut off the supply of oil to our
country tomorrow, our economy would be flat on its back. We now import
55 percent of the oil we use, much of it from troubled parts of the
world. That holds our economy hostage to this growing dependence on
imported oil, in particular to the Middle East.
We need a new energy future that contains strong provisions dealing
with conservation, aggressive approaches to renewable and limitless
sources of energy, and embraces a new hydrogen fuel cell future which
can allow us to break our dependence on foreign oil.
If a meaningful energy policy is analogous to a novel, then this bill
is just a first chapter. It is not as comprehensive, as wise, or as
bold as the American people have a right to expect. Let me reiterate,
this is not a be-all-end-all comprehensive Energy bill, no matter who
tells you it is. I am prepared to continue to modify, amend, and reform
this measure as many times and as long as it takes in order to ensure
it does what it is supposed to do: create a fair and balanced national
energy policy, one that works to advance our country's interest.
In closing, we are left with two choices: one, do nothing and pray we
don't have further blackouts, further price spikes, or God forbid, a
terrorist strike on our supply of foreign oil; or two, enact the
proposed energy legislation and use it as the first brick in the
foundation of crafting a comprehensive energy policy that will reduce
our dependence on foreign oil and strengthen our energy diversity and
security.
Given these two choices, I choose action over inaction and urge my
colleagues to do the same.
The PRESIDING OFFICER. The Senator from Kansas is recognized.
Mr. ROBERTS. Mr. President, it is my understanding that the pending
business before the Senate is the Intelligence conference report; is
that correct?
The PRESIDING OFFICER. The Senator is correct.
Mr. ROBERTS. Mr. President, I rise today to urge Senate passage of
the conference report for the Fiscal Year 2004 Intelligence
Authorization Act.
On November 20 the conference report was approved by the House of
Representatives. In order to quickly provide the Intelligence Community
the authorities it requires in order to pay, house, and equip its
personnel for our most sensitive and critical national security work,
this legislation should be sent to the President without delay. The
horrible terrorist attacks in Turkey underscore the urgency of our
task.
This conference report is good legislation with important management
and budget authorities. I will review just a few of them for you.
In the conference report, the Senate receded to a number of
significant House provisions of interest. The most significant of these
is a provision that will consolidate and organize existing
intelligence-related functions in the Department of the Treasury by
creating a new Office of Intelligence and Analysis. This
administration-supported provision also creates a new Assistant
Secretary position.
Senate managers also accepted a House provision intended to foster
better information-sharing among Federal, State and local government
officials. The bombings in Turkey illustrate that terrorists remain
capable of striking at the heart of peaceful societies. We must be
prepared to meet this continuing threat.
The conference report retains a Senate provision on Central
Intelligence Agency Compensation Reform, with a House amendment to
ensure that Congress will have an opportunity to assess the impact of
such reform before it becomes permanent.
The conference report provides important new personal services
contracting authority to the Director of the Federal Bureau of
Investigations. This authority is intended to permit the Director to
exercise greater hiring flexibility as was recommended post-9/11 in
order to bring aboard certain categories of critically-needed skills
more quickly.
Turning to the budget, when we began to review the President's fiscal
year 2004 request I became very concerned at the recent growth in
intelligence funding. I am still concerned.
There is clearly not enough money in future years to fully fund the
intelligence programs in this year's budget request. That is the sad
reality of this budget. The intelligence community is stretched thin,
with far more requirements than available funds. Too many projects and
activities have been started that cannot be accommodated in the top
line. It does not matter what caused this problem. The problem exists.
Unless the President directs a dramatic and sustained increase to the
intelligence budget next year, we will have to make the hard choices
ourselves.
A significant issue that must be addressed by the executive branch is
the manner in which cost estimates for the procurement of major
intelligence community systems are conducted. The magnitude and
consistency in the cost growth on recent acquisitions indicates a
systemic intelligence community bias to underestimate the cost of major
systems.
This ``perceived affordability'' creates difficulties in the out
years as the National Foreign Intelligence Program becomes burdened
with content that is
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more costly than the budgeted funding. This underestimation of future
costs has resulted in significant re-shuffling of NFIP funds to meet
emerging shortfalls.
In an attempt to correct this problem, the conference report contains
a provision which would mandate a fundamentally more sound approach to
cost estimates for major systems. The business-as-usual approach must
end.
There is another area I wish to mention in general terms concerning
the analytical capabilities of the intelligence community. All recent
after-action reports or studies of intelligence failures point to the
inability of analysts to process ever-growing quantities of
information. In an effort to correct this problem, the conferees agreed
to move funds to programs at the Defense Intelligence Agency, the
National Security Agency, and the CIA to improve the community's
analytic capabilities.
My key objectives in formulating the conference report were to ensure
our Nation's continuing effort to prosecute the war on terrorism and to
ensure that the ``longer view'' about intelligence community
requirements is taken into account. I believe that this conference
report meets both objectives.
We met those objectives because we had bipartisan cooperation when
and where it counted. I wish to thank the distinguished vice chairman,
Senator Rockefeller, as well as the distinguished House chairman,
Representative Goss, and his ranking member, Representative Harman, for
their assistance in making the conference report possible. The staff of
both intelligence Committees must also be commended for their diligent
work on this important legislation.
There is no opposition on our side of the aisle. We have worked very
hard with the House to come up with a good compromise. This bill is
vitally needed on behalf of national security. A similar bill passed
the Senate several weeks ago by unanimous consent.
I yield to my distinguished colleague, the vice chairman, Senator
Rockefeller.
The PRESIDING OFFICER. The Senator from West Virginia is recognized.
Mr. ROCKEFELLER. Mr. President, I agree with the chairman of the
committee, the Senator from Kansas. There is no objection on this side.
It has been cleared. There is no objection on our side. I presume the
bill will be voted through.
Mr. President, I am pleased to join the distinguished chairman of the
Select Committee on Intelligence in recommending passage of the
conference report on H.R. 2417, the Intelligence Authorization Act for
Fiscal Year 2004.
The bill authorizes appropriations for the Central Intelligence
Agency, the Defense Intelligence Agency, the National Security Agency,
and the intelligence components of the F.B.I. and other U.S. government
agencies. It also contains a number of important provisions intended to
lay the foundation for process and organizational changes in the
intelligence community.
The classified nature of U.S. intelligence activities prevents us
from disclosing publicly the details of our budgetary recommendations.
As I described to the Senate when our bill was considered in July, 10
years ago I joined a majority of Senate colleagues in voting to express
the sense of Congress that the aggregate amount requested, authorized,
and spent for intelligence should be disclosed to the public in an
appropriate manner. The House opposed the provision. I continue to
believe that we should find a means, consistent with national security,
of sharing with the American taxpayer information about the total
amount, although not the details, of our intelligence spending. In
holding the intelligence community accountable for performance, and the
Congress and the President accountable for the resources they provide
to the Intelligence Community, citizens should know the Nation's
overall investment in intelligence.
The bill includes a number of provisions intended to promote
innovations in information sharing, human intelligence, and
counterintelligence, among other things. Many of these initiatives
represent initial steps rather than solutions, but they are necessary
to raise the level of awareness in Congress and the executive branch
regarding a variety of urgent and complex challenges and to lay the
foundation for reforms the committee will be considering next year.
Section 351 of the bill requires a report on the threat posed by
espionage in an era when secrets are stored on powerful, classified
U.S. computer networks rather than on paper. A single spy today can
remove more information on a disk than spies of yesteryear could remove
with a truck. We have already suffered losses, for example, in the
Ames, Regan, and Hanssen cases, where sloppy computer security
permitted traitors to exploit large quantities of highly classified
information. Unfortunately, these cases provide a warning that appears
to have gone largely unheeded. We still do not have a cohesive set of
policies and procedures to protect our classified networks from cleared
insiders who seek to betray their country, Our reliance on classified
information systems for warfighting and intelligence is growing daily,
yet hundreds of thousands of individuals have virtually unrestricted
access to these critical networks.
All but a few Government personnel are honest and patriotic
Americans, but the sad fact is that there has not been a day since WWII
when we have not had spies within our Government. There have been over
80 espionage convictions in the last 25 years. They include personnel
from the Army, Navy, Air Force, Marine Corps, NSA, CIA, FBI, State
Department, the National Reconnaissance Office and the Office of the
Secretary of Defense. It is a very real and continuing problem and
there will undoubtedly be more espionage arrests in the months and
years ahead. Espionage is an unfortunate fact of life, and we simply
cannot afford to operate classified systems in which thousands of
individuals enjoy the ability to download or upload classified
information at will.
Other countries are seeking to exploit this situation to collect
defense secrets, and no doubt contemplate blinding our Government and
troops in time of war. We would never permit such broad access to
weapons in an armory, yet these classified systems are of much greater
strategic significance than M-16 rifles, tanks, or 500 pound gravity
bombs. We simply must develop the policies and capabilities necessary
to control input and output devices on these systems and monitor their
use.
Section 352 of the bill calls for a review of our cumbersome,
outmoded, and many would say ineffective personnel security system. It
is a fact that almost every spy has held high-level security
clearances. It is also a fact that few, if any of these individuals
were identified through routine security clearance updates.
Most people who become spies join the government with no intention of
betraying their country. Research by the Defense Department shows that
most spies are people who develop grievances as their careers progress,
at times having developed money and alcohol problems as well, and then
turn to espionage as a way of feeding their egos and their bank
accounts.
Yet, we give a young, single Navy recruit seeking an intelligence
assignment the same scrutiny as a 30-year intelligence operative with
financial troubles who routinely travels to countries of concern.
Further, even when derogatory information surfaces, sometimes even very
disturbing information which raises serious espionage issues, the
government rarely revokes the clearances we rely on so heavily and
which cost so much.
In the information age, we cannot wait 5 to10 years to identify
employee problems that may be related to espionage. Too much damage can
be done too quickly. We need fresh thinking and recommendations that
will provide more effective security for the large sums of money the
taxpayer is investing.
Section 354 of our bill calls for a review of classified information
sharing policies within the Federal Government. This is an issue
closely related to the foregoing provisions regarding inadequate
security policies. ATM machines, for example, are a wonderfully
convenient and effective means of providing access to banking
resources--but they could not exist without magnetic cards, personal
identification
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numbers, cameras and locks. Similarly, improved security is not a
barrier to more flexible information sharing, it is a fundamental
ingredient. The Joint Inquiry report on the 9/11 attacks highlighted
information sharing as a critical shortcoming that prevented the
interception of several hijackers. To help accelerate reform, the Joint
Inquiry requested an administration report by this past June 30 on
progress to reduce barriers among intelligence and law enforcement
agencies engaged in counterterrorism. Unfortunately, no report has been
submitted.
We have the technology for improved information sharing, and
significant progress is being made. A Terrorist Threat Integration
Center has been established, and new guidelines regarding sharing of
grand jury information have been promulgated. These are very important
steps forward. But to truly break down the barriers to information
sharing, rather than relying on work-arounds, we need revised policies
on sharing classified information which recognize and exploit the
opportunities provided by modern information technology. This is
especially important as we look to bridging the gap between the
Intelligence Community and organizations charged with Homeland
Security.
Section 355 of the bill identifies a problem that would probably stun
most taxpayers. Simply stated, notwithstanding the many billions of
dollars invested in complex intelligence systems, ranging from
satellites, to aircraft, to ships, and land-based collection platforms,
there is no capability in the executive branch to independently and
comprehensively model the performance of these systems. Consequently,
new multi-billion-dollar systems are procured without the ability to
rigorously evaluate potential trade-offs with other systems.
Questions such as these should be asked: Given projected satellite,
aircraft and UAV constellations, what is the marginal value of adding
space-based radar satellites? Are there alternative investments that
can better satisfy intelligence requirements? Don't senior policymakers
need the ability to systematically examine the interactions of these
many systems to identify trade-offs that can be achieved?
Currently, most of the analysis of proposed collection systems is
performed by the agencies seeking to justify their programs, or by
senior policy officials who struggle to apply common sense and spread-
sheet level analysis to systems that often have overlapping
capabilities. There is no reason that a rigorous, independent and
comprehensive capability cannot be developed to support the
programmatic reviews of the DCI and the Defense Department. This is but
one example, though an important one, of the ways in which we believe
the intelligence community can improve its strategic planning and
decisionmaking processes.
Section 356 of the bill raises an issue of profound strategic
significance for the United States, namely the growing reliance of our
country on hardware and software produced overseas. Although specific
cases are classified, this is clearly a growing problem.
After 1973, when the risks inherent in America's reliance on foreign
oil became clear, many positive steps were taken to ameliorate our
national vulnerabilities. Those steps included establishment of a
strategic petroleum reserve, establishment of the Central Command, and
research into alternative fuels. Unlike our dependence on foreign oil,
however, our rapidly growing dependence on foreign hardware and
software creates numerous opportunities for espionage and information
operations that are extremely difficult to detect. Ironically, the
countries identified by the FBI as most actively engaged in economic
espionage against the United States are leading producers of the
hardware and software we all use on a daily basis.
The plain truth is that even the Defense Department does not know
where most of the hardware and software it uses originates. Moreover,
the Government does not have the right to examine source code unless
voluntarily supplied. Further, at the present time, there are limited
capabilities for analyzing source code that is made available. This
situation requires serious attention by senior policymakers, including
Congress, and the report required by section 356 should help to prompt
a long overdue discussion of these issues.
In concluding my remarks, I would like to look beyond our current
bill to the issues the Intelligence Committee must contend with next
year. Other committees share responsibility for reviewing the funding
and systems needed by the intelligence community, but our committee is
uniquely positioned to evaluate the intelligence community's
performance--both its successes and failures--and to identify the
changes required to meet the challenges of the future.
In my view, money alone is not sufficient to enable the intelligence
community to reach its full potential. The current structure of the
intelligence community is fundamentally unchanged from its
establishment in 1947. Serious change is long overdue. I strongly
believe that new structures and authorities, coupled with able and
aggressive leadership, are required to dramatically improve our
intelligence community's efficiency and effectiveness.
In many respects, the organizational issues confronting the
intelligence community are analogous to those confronting the Defense
Department prior to the Goldwater-Nichols Act. The fundamental problem
confronting the Department of Defense prior to Goldwater-Nichols was
excessive military service control over military operations, policies
and budgets. In response, Congress strengthened the weak integrating
mechanisms in DoD, specifically the Chairman of the Joint Chiefs and
the Commanders of the Combatant Commands. The difference in military
performance before Goldwater-Nichols--e.g., Desert 1, Lebanon, and
Grenada--and after--Panama, Haiti, and Iraq--is stark and clear. In
fact, I am convinced that the Goldwater-Nichols Act did more to enhance
U.S. national security than any weapons system ever procured by the
Department of Defense.
Although the Goldwater-Nichols reorganization is not a precise
template for restructuring the intelligence community, the problems are
fundamentally similar: towering vertical structures--NSA, CIA, DIA,
NRO, NIMA, the service intelligence components--and relatively weak
integrating mechanisms--the DCI and his Community Management Staff. Any
reorganization proposal needs to address this fundamental problem of
inadequate integration and coordination. In that regard, I would
suggest that the intelligence community's lack of responsiveness to the
DCI's declaration of war on al- Qaida prior to 9/11 was in part a
result of the DCI's weak community management authorities and inability
to move the system. I am convinced that a strengthened DCI could more
effectively manage the intelligence community, leading to performance
improvements comparable to those achieved by the military in the wake
of the Goldwater-Nichols Act.
A conservative, incremental approach would involve the creation of a
permanent cadre to staff the DCI much as the Secretary of Defense has
an OSD staff. This simple change, coupled with aggressive business
process reengineering and ``year of execution budget authority'' for
the DCI over NFIP programs, would significantly strengthen the DCI's
ability to manage the intelligence community and respond to new threats
and opportunities.
A more aggressive and far-reaching plan would have to address the
fundamental changes that have occurred since the current structure was
established by the National Security Act of 1947. Specifically, it
would recognize that the once useful distinction between home and
abroad has become not only irrelevant, but dysfunctional. This is not
to suggest any need to reduce the protections afforded U.S. persons
under the Constitution, merely that globalization and the development
of cyberspace, combined with the rise of apocalyptic terrorists groups
empowered by lethal new technologies, require a different, more agile
structure that is not impeded by outmoded geographic distinctions. In
that regard, we should find ways to more effectively coordinate foreign
and domestic intelligence.
Achievement of any substantial reorganization will require meticulous
research by the congressional oversight committees, a substantial
hearing record, and sustained interest by the administration. At the
end of the day,
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incremental steps will be better than none, and a more aggressive
reorganization require a consensus not only on the Intelligence
Authorization Committees, but with the Armed Services Committees as
well. As challenging as these issues are, we simply cannot fulfill our
duty to the American people unless we confront these crucial issues
when Congress returns next year.
In conclusion, the important steps we have taken with this measure,
to include full funding of the administration's requests for
intelligence activities, are the result of lengthy deliberations on
matters as complex as they are vital. It is gratifying to see the work
that has been done in both Chambers come together today in a bill we
can send to the President. It is a useful first step, but only a first
step, towards the development of an intelligence community better able
to adapt to the rapidly evolving threats confronting our great nation.
Finally, I would like to thank the chairman and the Committee staff
for their arduous work on this bill. I look forward to making great
strides together next year.
I urge support for this measure.
OFFICE OF INTELLIGENCE AND ANALYSIS
Mr. SHELBY. Mr. President, I rise in my capacity as the chairman of
the Committee on Banking, Housing and Urban Affairs regarding the
Conference Report to accompany H.R. 2417, the Intelligence
Authorization Act of 2004. Section 105 of the act will create a new
Office of Intelligence and Analysis within the Department of the
Treasury. The Office is to be headed by a newly authorized Assistant
Secretary for Intelligence and Analysis appointed by the President and
confirmed by the Senate. It will enhance the Department's access to
intelligence community information and permit a reorganization and
upgrading of the scope and capacities of Treasury's intelligence
functions in light of the Nation's counterterrorist and economic
sanctions programs. This section was drafted with bipartisan
participation and close coordination with the Department of the
Treasury.
The particular terms governing the new office are important to me as
chairman of the Committee on Banking, Housing, and Urban Affairs over
legislative and oversight matters relating, inter alia, to the Nation's
economic sanctions laws and the Bank Secrecy Act, and, more generally,
because of the importance of carefully delineating the limitations on
any part of the U.S. intelligence community that lie within the
structure of an executive department of the Government. I have a letter
signed by the ranking member of the Banking Committee, Senator Paul S.
Sarbanes, and myself addressed to Secretary of the Treasury John W.
Snow, as well as Secretary Snow's response. This letter reflects the
agreement of Treasury about the organization, structure and role of the
new Office and Assistant Secretary position created and important
related organizational matters concerning the Financial Crimes
Enforcement Network and the Office of Foreign Assets Control.
I request unanimous consent that the two letters be included in the
Record. They provide, I believe, a good statement of congressional
intent with regard to the establishment of the new Office and the new
Assistant Secretary position. At this time I would yield the floor to
the ranking member of the committee on Banking, Housing and Urban
Affairs, Senator Sarbanes.
Mr. SARBANES. I thank the Senator. I simply want to note my agreement
with the chairman and with his request to include the two letters in
the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
U.S. Senate, Committee on Banking, Housing, and Urban
Affairs,
Washington, DC, November 20, 2003.
Hon. John W. Snowe,
Secretary of the Treasury, Department of the Treasury,
Washington, DC.
Dear Secretary Snowe: A proposed amendment to section 105
of the Intelligence Authorization Act of 2004, H.R. 2417,
would create a new Office of Intelligence and Analysis within
the Department of the Treasury, The Office would be headed by
a newly-authorized Assistant Secretary for Intelligence and
Analysis appointed by the President and confirmed by the
Senate. The Office would enhance the Department's access to
Intelligence Community information and permit a
reorganization and upgrading of the scope and capacities of
Treasury's intelligence functions in light of the nation's
counter-terrorist and economic sanctions programs.
We are writing to you to confirm formally, before
consideration of the amendment proceeds, your and our mutual
understanding of the role of the proposed new Office and
Assistant Secretary within the Department of the Treasury.
Such confirmation is necessary because of the authority of
the Senate Committee on Banking, Housing, and Urban Affairs
over legislative and oversight matters relating, inter alia,
to the Nation's economic sanctions laws and the Bank Secrecy
Act, and, more generally, to the Nation's financial system.
In that context, the Committee is necessarily concerned with
the careful delineation of the functions, and limitations, of
any part of the U.S. Intelligence Community that lies within
the structure of the Department of the Treasury.
Based on discussions between members of our staffs and the
Assistant Secretary of the Treasury (Legislative Affairs), we
understand that:
1. The new Office is to be responsible for the receipt,
collation, analysis, and dissemination of all foreign
intelligence and foreign counterintelligence information
relevant to the operations and responsibilities of the
Treasury Department, and to have such other directly related
duties and authorities as the Secretary of the Treasury may
assign to it. The new Office will replace and absorb the
duties and personnel of Treasury's present Office of
Intelligence Support (``OIS'') and will carry on OIS' work in
the provision of information for use of the Department's
senior policy makers.
2. The Assistant Secretary for Intelligence and Analysis
will report to an Under Secretary of the Treasury
(Enforcement) as required by the statute. The Assistant
Secretary for Intelligence and Analysis will at no time
supervise any organization other than the new Office or
assume any other policy or supervisory duties not directly
related to that Office.
3. The Secretary will seek prompt designation of a new
appointee for the vacant position of Under Secretary, and
ensure the chain of command will be organized and implemented
as outlined above.
4. Our mutual understanding is that Treasury plans to have
an official appointed to a vacant Assistant Secretary
position. The official appointed to that position will
supervise the Office of Foreign Assets Control (``OFAC'') and
the Financial Crimes Enforcement Network (``FinCEN'') as well
as other functions, but he or she will at no time supervise
the Office of Intelligence and Analysis. This Assistant
Secretary also will report to the Under Secretary referred to
in paragraphs 2. and 3., above.
5. The general responsibilities of OFAC and FinCEN will not
be changed in the course of creating the new Office and these
new positions. However, it is anticipated that the new Office
will coordinate and oversee all work involving intelligence
analysts who work in OFAC and FinCEN (or in other parts of
the Treasury) primarily with classified information, in the
interest of creating the more robust analytic capability at
Treasury that was the articulated reason for the
authorization of this new Office. One of the primary tasks of
the new Office will be to examine and analyze classified
information, in conjunction with the relevant unclassified
information already available to OFAC and FinCEN, so that the
resultant product can be of use to OFAC and FinCEN as well as
to other agencies, under applicable legal rules. Thus, the
new Office will have access to all relevant information held
by FinCEN and OFAC for national security and anti-terrorism
purposes.
The expertise of the Department of the Treasury is
necessary and integral to our Nation's security and to
success in the war on terrorism. We expect within the next
year to highlight your efforts in this area in one of the
series of Terror Finance hearings to be held by the
Committee, and we look forward to hearing at that time about
the innovative approaches to counter-terrorism efforts that
the proposed revitalization of Treasury's capacity for
financial intelligence analysis can produce.
Sincerely,
Richard C. Shelby,
Chairman, Committee on Banking, Housing and Urban Affairs.
Paul S. Sarbanes,
Ranking Member, Committee on Banking, Housing and Urban
Affairs.
____
Department of the Treasury,
Washington, DC, November 21, 2003.
Hon. Richard Shelby,
Chairman, Committee on Banking, Housing and Urban
Development, U.S. Senate, Washington, DC.
Dear Chairman Shelby: Thank you for your letter concerning
creation, in section 105 of the Intelligence Authorization
Act of 2004, of the proposed Office of Intelligence and
Analysis, to be headed by a new Assistant Secretary for
Intelligence and Analysis, within the Department of the
Treasury. I have reviewed your letter and it correctly states
the commitments made to you on behalf about the role of the
proposed new Office and new Assistant Secretary within the
Department of the Treasury.
I appreciate your input and look forward to working with
you, Senator Sarbanes, and
[[Page S15358]]
your House colleagues to make sure the Treasury Department
meets the Congress' expectations. An identical letter has
also been sent to Senator Sarbanes.
If there is anything that I can do to be of assistance to
you, please do not hesitate to contact me.
Sincerely,
John W. Snow.
Mr. ROBERTS. Mr. President, I ask that the Chair put the question to
the body.
The PRESIDING OFFICER. Is there further debate?
If not, the question is on agreeing to the conference report.
The conference report was agreed to.
____________________