[Congressional Record Volume 150, Number 100 (Monday, July 19, 2004)]
[Senate]
[Pages S8412-S8413]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                             ENERGY POLICY

  Mr. REID. Mr. President, this is a time when American families take 
their vacations. I can remember as a young man working in a service 
station in Las Vegas and Henderson. This was a busy time of the year. 
It was always interesting to see the cars loaded with kids going every 
place. Even today, these many years later, families still drive. This 
summer, although the price of gas is not quite as high as it was a few 
months ago, it is still near record levels in many parts of the 
country, including the State of Nevada. Every time a family stops for 
gasoline, it is a reminder that our country needs reliable sources of 
energy that are not subject to wild price swings.
  Every time we see a scene from the Middle East on TV news--and that 
is

[[Page S8413]]

often--it is a reminder that our Nation depends too heavily on oil from 
that volatile region. Every time a parent tells a child with asthma 
that he cannot play outside because the air is unsafe, we are reminded 
that fossil fuels do tremendous harm to our environment and to 
ourselves.
  Our Nation desperately needs a new energy policy, one that protects 
consumers, safeguards our environment, and makes us stronger by 
reducing our dependence on Mideastern oil. We cannot create an energy 
policy for the future by simply repeating the past. We need new ideas. 
We need some new approaches.
  We use about 25 percent of the oil that is produced worldwide, but we 
only have less than 3 percent of the proven oil reserves in the world, 
including ANWR. So it is a cinch we cannot drill our way out of the 
problems we have dealing with the production of fossil fuel. We need to 
remember the words of Benjamin Franklin who said a penny saved is a 
penny earned. In the case of oil, a barrel saved is better than a 
barrel drilled and consumed. Why? Because it does not pollute the air 
or contribute to global warming.
  After the Arab oil embargo of 1973, our Nation got serious about 
conserving oil. By 1990, less than 20 years later, our vehicles were 
using about 40 percent as much fuel as they did in 1973. We can do this 
again.
  America's talented engineers and scientists can still design vehicles 
that save fuel without sacrificing safety if we make conserving oil a 
national priority. We have to do a better job of conserving oil and we 
have to develop new sources of energy that are clean and reliable.
  Again, we in America are fortunate because this great land of ours is 
blessed with an abundance of clean, renewable energy sources. We can 
harness the warmth of the Sun, the power of the wind, and the heat 
within the Earth. All it takes is good old American ingenuity, and a 
little bit of incentive but we should be clear. For decades we have 
provided subsidies and tax breaks for the big oil companies. Today we 
need some incentives to help spur production of renewable energy.
  I have been in Congress a long time, and I know how things work. It 
takes time to get things done. I try to be very patient, but when we 
not only fail to make progress on an important issue but actually move 
backward instead of forward, then I think an alarm must be sounded, and 
that is what has happened on renewable energy. Instead of making 
progress, we seem to be taking steps backward.
  Over the last 15 years, wind power has been the fastest growing 
source of renewable energy, thanks to the section 45 production tax 
credit. This incentive spurred billions of dollars of investment in new 
technology. As a result, wind energy has become increasingly cost 
effective and it provides jobs and electricity. In parts of the 
Midwest, some farmers make more money producing electricity from wind 
turbines than they do selling their crops.
  I worked for years to expand this incentive to other forms of 
renewable energy, especially solar and geothermal power. But instead of 
expanding the tax credit that has been so successful in promoting wind 
power, we have allowed it to expire. It is hard to believe but it is 
true. This seems crazy. It is like allowing insurance on one's home to 
lapse for failing to properly maintain a vital piece of equipment, 
equipment that is used every day.
  The tax incentive for wind energy expired 31 December 2003. We need 
to restore it as soon as possible, and we need to extend it to solar, 
geothermal, and biomass energy.
  I was encouraged that the FSC bill passed by the Senate last month 
contains these section 45 production tax credits. That is great work by 
Senators Grassley and Baucus, and I have told them personally how much 
I think they have the right idea of what it is going to take to help 
this country from an energy perspective.
  Unfortunately, the companion House bill would only extend the 
production tax credit for wind. We are beginning to see again, as we 
always do, the powerful interests of the oil companies who want all the 
subsidies, but we now have another chance to get it right because this 
bill is going to conference. That was agreed last week. We must not 
squander this opportunity. We must get back on the path to renewable 
energy and energy independence.
  America, our Nation, is blessed with abundant renewable energy 
resources, especially in the western part of the United States. Last 
month, the Governors of nine Western States, including Nevada, formally 
signed a plan that commits the region to developing 30,000 megawatts of 
electricity. That is about 15 percent of current demand from renewable 
sources by the year 2015, which is going to be soon.
  I applaud their determination. I applaud their vision. They know that 
developing renewable energy is not only good for consumers and the 
environment but also for creating jobs.
  Because renewable energy is ``Made in the USA,'' it can reduce our 
dependence on oil from the Middle East. Many Western States have 
already adopted renewable portfolio standards requiring a fixed 
percentage of energy sold in-State come from renewable energy 
resources. As we speak, 13 States have set these goals, and the number 
will increase.
  I am happy that Nevada has adopted one of the most aggressive 
renewable portfolio standards of any place in the country. It commits 
the State of Nevada to produce 15 percent of our electricity from 
renewable sources by the year 2013. A goal had been set of 5 percent by 
the end of 2003. We didn't do that. We could have. We didn't. There 
were a number of reasons. One was there was uncertainty about whether 
the tax incentive for wind power would be extended or expanded to solar 
and geothermal power. The other reason is utilities in Nevada and other 
Western States are still reeling, they are in bad shape, from the 
western energy crisis of 2000-2001, when Enron and other traders 
manipulated the energy market to jack up prices for no reason other 
than to generate obscene profits. Because of the exorbitant contracts 
with Enron, the State of Nevada's utilities are near bankruptcy. As a 
result, companies that want to develop renewable energy and sell it to 
these utilities have not been able to attract the investment they need. 
The investment community evaluates renewable energy projects based on 
the strength of long-term purchase agreements between the proposed 
facilities and the local utility, but if the utility is in trouble, 
investors shy away.
  To address this problem, Kenny Guinn, the Governor of Nevada, will 
ask the legislature which meets next year to create a temporary 
renewable energy development trust that will provide some protection to 
renewable energy power plants if our utilities file for bankruptcy.
  We need action at the Federal level also. The Federal Energy 
Regulatory Commission, referred to as FERC, must provide relief to 
utilities and ratepayers in Nevada and other Western States. FERC needs 
to act, and now, to vacate the exorbitant contracts of the energy 
crisis. We know that two of the FERC Commissioners were recommended by 
Kenny Lay, the Enron CEO, who was a major contributor of the 
President's campaign, and the President referred to him as ``Kenny 
Boy.'' These Commissioners should either step down or clean up this 
mess. I am happy to report that Kenny Boy is now under indictment.
  Our Nation must have energy markets that function properly. We must 
have incentives to develop our clean, renewable energy resources, and 
we must apply American ingenuity to do a better job conserving energy. 
These are critical steps toward the kind of farsighted energy policy 
this country needs. These steps will protect consumers, they will 
safeguard the environment, and they will make our Nation stronger by 
moving us closer to energy independence.

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