[Congressional Record Volume 151, Number 121 (Monday, September 26, 2005)]
[Senate]
[Pages S10436-S10437]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. INHOFE (for himself, Mr. DeMint, Ms. Murkowski, Mr. 
        Voinovich, Mr. Isakson, Mr. Thune, and Mr. Bond):
  S. 1772. A bill to streamline the refinery permitting process, and 
for other purposes; to the Committee on Environment and Public Works.
  Mr. INHOFE. Mr. President, by design, politicians are largely a 
reactive bunch--our constituents voted us in to our offices to 
represent their interests, and when they are unhappy we too are 
unhappy. One issue that certainly makes all constituents unhappy or 
even angry is high fuel prices. Therefore, policymakers at all levels 
of government have been struggling with ways to address high prices--
some have advocated for repealing fuel taxes, the Administration 
reacted in many critically important and helpful ways such as releasing 
oil from the Strategic Petroleum Reserve. After Hurricane Katrina 
disabled a large portion of our refining capacity and Rita threatened 
an additional 27.5 percent, several members have talked about the need 
to build new refineries.
  In May 2004--Before the hurricanes, and before EPACT 2005 (The Energy 
Policy Act of 2005), the Environment & Public Works Committee, which I 
chair, considered the challenges facing the refining industry. At that 
hearing, we learned how the industry has been struggling to balance the 
public's increasing demand for cheap transportation fuels while also 
meeting legal and regulatory requirements to produce cleaner fuels.
  Federal Reserve Chairman Alan Greenspan stated in a May 2005 speech 
that, ``the status of world refining capacity has become worrisome. Of 
special concern is the need to add adequate coking and desulphurization 
capacity to convert the average gravity and sulphur content of much of 
the world's crude oil to the lighter and sweeter needs of product 
markets, which are increasingly dominated by transportation fuels that 
must meet ever-more stringent environmental requirements.''
  Make no mistake, significant investments have been made to achieving 
environmental objectives--however, investments into increasing capacity 
have been inadequate to meet demand, and no new domestic refinery has 
been built since 1976.
  A critical hurdle to constructing anything these days, especially 
refineries, is overcoming the ``Not-In-My-Backyard'' or NIMBY 
interests. The President recognized the need to build new refineries 
while overcoming local opposition when he recommended that policymakers 
consider constructing on BRAC sites.
  Building upon what we learned in our hearing while balancing 
potential local opposition to refineries and answering the President 
and the public's call, I rise today to introduce the Gas Petroleum 
Refiner Improvement and Community Empowerment Act or Gas PRICE Act. 
This Gas PRICE Act seeks to address fuels challenges in the short, mid 
and long-term range in several key ways.
  First, the bill encourages communities who are about to lose jobs as 
a result of BRAC to consider building refineries on those properties. 
The legislation directs the Economic Development Administration to 
provide additional resources to communities considering new refineries 
on those sites. Refineries are not just a good source of high paying 
jobs, but they are an area of national interest so those communities 
acting in that interest should be benefited.
  Second, States have a significant if not dominant role in permitting 
existing or new refineries. Yet, States face particular technical and 
financial constraints when faced with these extremely complex 
facilities. Therefore, the Gas PRICE Act establishes a Governor opt-in 
program that requires the Administrator to coordinate and concurrently 
review all permits with the relevant State agencies to permit 
refineries. This program does not waive or modify any environmental 
law, but seeks to assist States and consumers by providing greater 
certainty in the permitting process.
  Third, the Gas PRICE Act answers the call for increasing efficiency. 
Today's recent reports show that natural gas prices this winter are 
projected to increase 75 percent. This bill requires the EPA's Natural 
Gas Star Program to provide grants to identify and use methane emission 
reduction technologies.
  Further, it requires the Administrator to conduct a series of methane 
emission reduction workshops with the Interstate Oil and Gas Compact 
Commission to officials in the oil and gas producing states.
  Fourth, the supply disruptions caused by hurricane Katrina required

[[Page S10437]]

EPA to issue fuel waivers to allow the use of conventional fuel in 
special or boutique fuel areas. The bill provides that States acting 
pursuant to an emergency will be held harmless under the law. 
Additionally, some members have called for the reduction of the total 
number of fuels used to increase the overall fungibility. In principle, 
I agree with my colleagues, however the special or boutique fuel blends 
address environmental and health needs of each region. Therefore, I 
have proposed a more cautious approach that will allow for the 
reduction of fuel blends pursuant to the environmental and consumer 
preferences in each State.
  Fifth, policymakers, businesses, and the public have struggled to 
balance increased demand for transportation fuels against preferences 
for ever more stringent environmental quality all while preserving low 
prices at the pump. Most ``solutions'' have focused on technologies 
that may not be realized for decades or other measures that would hurt 
U.S. manufacturers.
  Fischer-Tropsche fuels are the likely answer. F-T fuels use petroleum 
coke, a waste product from the refining process, or domestic coal to 
produce ultra-clean, virtually sulfur free diesel or jet fuel, and are 
price competitive at $38/barrel of oil.
  The Gas PRICE Act requires EPA to establish a demonstration project 
to use Fischer-Tropsche, diesel and jet, as an emission control 
strategy; and authorizes EPA to issue up to two loan guarantees to 
demonstrate commercial scale F--T fuels production facilities using 
domestic petroleum coke or coal.
  Of course, Congress should have taken many actions in anticipation of 
the current refining capacity crunch over last several years. Yet, as I 
indicated earlier, elected officials in large measure react to the will 
of their constituents. The good news is that we are not too late to 
make sure that the economy-wide stifling high prices are only 
temporary.
  The Gas PRICE Act that we are introducing today can go a long way in 
addressing the nation's short, mid, and long-term fuels challenges. 
Furthermore, it does so by empowering local communities and States, 
establishing greater regulatory certainty without changing any 
environmental law, improving efficiency, and establishing a future for 
the use of ultra clean transportation fuels derived from abundant 
domestic resources.
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