[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

[[Page S15340]]

     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

[[Page S15341]]

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

[[Page S15342]]

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

[[Page S15343]]

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

[[Page S15348]]

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.

[[Page S15350]]

  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.

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  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

[[Page S15356]]

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,

[[Page S15357]]

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.

                          ____________________