[Congressional Record Volume 151, Number 149 (Thursday, November 10, 2005)]
[Senate]
[Pages S12685-S12686]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. HARKIN (for himself, Mr. Lugar, and Mr. Obama):
  S. 1994. A bill to require that an increasing percentage of new 
automobiles be dual fueled automobiles, to revise the method for 
calculating corporate average fuel economy for such vehicles, and for 
other purposes; to the Committee on Commerce, Science, and 
Transportation.
  Mr. HARKIN. Mr. President, when we talk about moving toward energy 
independence in this country, we are really speaking to the issue of 
reducing America's dangerous dependence on imported oil. Our addiction 
to oil is most acute in the U.S. transportation sector where a stunning 
ninety-seven percent of our fuel comes from petroleum--97 percent. In 
the electricity sector we have largely turned away from oil but not so 
in transportation.
  Fortunately a growing percentage of transportation energy is now 
coming from clean, domestically-produced renewable fuels like ethanol 
and biodiesel. With the nearly 8-billion-gallon Renewable Fuels 
Standard now the law of the land, renewable fuels will supply 5 percent 
of the energy for our passenger vehicles by 2012, perhaps more. These 
home-grown, environmentally friendly alternatives made from corn, 
soybeans and other sources of biomass are helping to improve air 
quality, reduce greenhouse gas emissions and enhance the rural economy 
while substantially reducing dependence on foreign oil.
  The best part of this trend is that the health, community, and 
domestic security benefits of renewable fuels come with the bonus of 
price savings at the pump. Ethanol prices in this country can be as 
much as 70 cents a gallon less than regular gasoline. Drivers in my 
State of Iowa are saving as much as 10 cents a gallon on E10--a blend 
of just 10 percent ethanol and 90 percent gasoline. This is a savings 
of about $100 a year for a typical family.
  A report earlier this year by the Consumer Federation of America 
found that consumers throughout our country would experience similar 
savings if all refiners offered E10. That is a significant savings in 
all regions of the country. Now, consider the savings if ethanol and 
other renewable fuels were blended not at 10 percent, but at 85 percent 
or more. That $100 a year savings turns into hundreds of dollars each 
year for a typical family.
  Unfortunately, right now only about two percent of vehicles on the 
road in the United States can use ethanol blends of 85 percent--what we 
call E85. It turns out standard gasoline engines aren't designed for 
the different fuel to oxygen ratio.
  The good news is, manufacturing a new vehicle to run on E85 or other 
clean alternative fuel blends is simple--the manufacturer adds a fuel 
sensor and modifies the engine calibration and fuel line to allow the 
vehicle to run on gasoline or a combination of gas and alternative 
fuels.
  Right now, these ``flex-fuel'' vehicles cost at most an additional 
$100 or so to produce. Some cost estimates are as low as $50. Many auto 
manufacturers offer them to customers at no additional cost. But few 
Americans are even aware of the option.
  At a time of record-high gas prices and continued instability in the 
Middle East and other oil-producing countries of the world, I believe 
that all Americans deserve the option to choose the fuel they put in 
their car.
  In Brazil, all new vehicles on the road are expected to be flex-fuel-
ready by 2008--meaning every new vehicle owner will have the choice to 
fill up with gasoline, ethanol, or a combination of the two. If the 
Brazilians can do it, why can't we?
  That's why today Mr. Lugar, Mr. Obama and I are introducing the Fuel 
Security and Consumer Choice Act to require that automobile 
manufacturers equip a growing percentage of new vehicles sold in the 
U.S. for flexible fuel operation. Mr. Lugar is a leader in promoting 
research and development into the conversion of cellulosic biomass into 
useable fuels. Mr. Obama is a leader in promoting renewable fuels and 
in particular E85.
  Starting eighteen months after the bill's enactment, manufacturers 
will be required to equip 10 percent of their cars and light trucks 
with flex-fuel vehicle, FFV, capability. This is a modest proposal. 
Several manufacturers are close to meeting or beating this requirement 
already.
  Each model year thereafter, the requirement increases 10 percentage 
points, so in the second year the manufacturers would have to make at 
least 20 percent of their vehicles FFVs, and so on, until in about ten 
years' time 100 percent of new vehicles sold in the United States are 
flex fuel. I recognize that we could be more aggressive in our 
timetable, but I believe we've struck the right balance here in pushing 
and prodding.
  In addition, the bill allows auto manufacturers to bank and trade FFV 
credits toward meeting the requirements. In other words, if one company 
produced more than its required percentage of FFV vehicles in a given 
year, it could trade or sell extra credits earned to another company 
that would then use them to meet the bill's requirements. Credits would 
have a three-year window if banked or traded. This banking and trading 
provision is similar to others in law, in the RFS for example, making 
it that much easier for companies to meet statutory obligations at the 
lowest possible cost.
  Finally, the bill would leave intact the corporate average fuel 
economy (CAFE) credits for FFV production. However, the bill would 
change the way the credits are calculated for vehicles produced above 
the required percentages. Rather than keeping the assumption that the 
vehicle runs 50 percent of the time on fuel like E85, which isn't an 
appropriate figure since most don't run yet on E85, we phase-down the 
assumed use from 50 percent in the first model year the requirement 
applies to 30 percent in the second year, 10 percent the third year, 
and 0 percent thereafter. This should still spur interest among 
automakers in the early years of the requirement to go beyond the 
minimum FFV production levels outlined in the bill to get the extra 
credits. And in the meantime the FFV requirement is kicking in and the 
ramp up of FFVs won't dilute or weaken CAFE.
  This bill will give American consumers true choice in fuel selection 
for the first time. Drivers will have the option to choose low-price, 
high-performance E85, or another fuel. My firm belief is that consumers 
will choose to buy home-grown renewable fuels that directly reduce oil 
dependence rather than buy traditional fossil fuels often derived from 
unstable regimes around the globe.
  Now, I don't doubt some automobile manufacturers will complain that 
this requirement is unduly onerous, that it will hurt the industry 
somehow. Well, I heard the same thing back in 1989 when I proposed 
another revolutionary idea: closed captioning for TV sets. Industry was 
in an uproar when I suggested that the hearing impaired should have 
access to television programming on the public airwaves. The industry 
said closed captioning would bankrupt it and drive the price of 
televisions through the roof.
  But then, an amazing thing happened. Electronics manufacturers 
realized that they could reach a broad range of new audiences, 
including not just the hearing impaired, but also the learning 
disabled, and immigrants for whom English is a second language. Sales 
for several companies reached an all-time high, and with implementation 
across the electronics industry, the cost of the closed captioning chip 
dropped dramatically to less than a dollar a set.
  I have no doubt that vehicle manufacturers will discover similar 
unexpected efficiencies and benefits with flex fuel vehicles. As more 
Americans discover the savings from flexible fuels, the more they will 
seek them out. What better way to boost car sales than to market the 
fuel cost savings that flexible fuel vehicles offer? Any very small 
additional cost of the flex-fuel vehicle will be more than offset by 
the price benefits drivers will achieve from a flexible fuel supply 
over time, not to mention the tremendous energy security benefits for 
our Nation.
  The country will benefit from cleaner air, reduced greenhouse gas 
emissions, reduced dependence on foreign oil, and an enhanced rural 
economy. Simply, put, this is a low-cost measure with a tremendous 
payoff.
  It is already well-established that federal auto standards for the 
benefit of our Nation are an appropriate policy option. It's also 
important to note that auto manufacturers already comply

[[Page S12686]]

with literally dozens of other requirements having to do with the make-
up, design, and performance of their vehicles. Making an FFV is a lot 
cheaper than putting in air bags, or many other components.
  Agriculture and renewable fuels producers are ready to provide the 
fuel. Automobile manufacturers have the technology to do it. Given the 
country's great energy and security challenges, all sectors must do 
their part to chart a path toward energy independence: government, 
individual citizens, energy companies, and yes, auto manufacturers.
  I'm grateful that this legislation has been endorsed by a wide array 
of renewable fuel, agriculture, clean energy and security 
organizations, including the Renewable Fuels Association, American 
Coalition for Ethanol, Alliance to Save Energy, Set America Free, and 
National Corn Growers Association.
  In closing I want to recognize Mr. Lugar and Mr. Obama for co-
sponsoring this legislation with me today. Mr. Lugar and I have teamed 
up many times over the years, most recently to enact the national 
Renewable Fuels Standard, which we did as part of the comprehensive 
energy bill. This bill builds upon the RFS, to guarantee that renewable 
fuels which are being produced in ever greater abundance can find a 
home in just about any vehicle on the market a few short years from 
now. I am thankful for his leadership on this and so many other 
important energy security issues. I am also grateful to Mr. Obama for 
his leadership.
  I hope we can rapidly enact this legislation.
  Mr. OBAMA. Mr. President, oil companies recently announced record 
profits. Those of us who drive cars and trucks could feel our wallets 
shrink at the news. Throughout most of this year, American drivers have 
paid the highest gas prices of all time--more so in the wake of 
refinery disruptions caused by Hurricane Katrina. While petroleum 
company shareholders enjoy healthy stock dividends, the rest of us 
hemorrhage the cash. Industry analysts explain it away as ``business is 
business.''
  Sound familiar? In the 1970s, political conflicts compelled Middle 
East oil sheiks to tighten their reins on oil production, sending 
shockwaves throughout our economy and creating long lines at the gas 
pump. Congress responded with laws promoting energy conservation and 
fuel efficiency that we thought would reduce our dependence on foreign 
oil.
  Unfortunately, 30 years later, here we are again. The Middle East 
remains in turmoil, and the engines of America remain firmly fueled on 
foreign oil. Exacerbating the problem is that the economies of China 
and India--two nations totaling over 2 billion citizens--are quickly 
expanding, and they are competing with the U.S. for the same pool of 
oil. Quite simply, worldwide production capacity cannot keep pace. And 
that means U.S. gas prices likely will remain high for the foreseeable 
future.
  More so than at any other time in a generation, our economy is 
exposed. In the year 2035, will the American market be shackled still 
to foreign oil? Will we question whether bolder past policies could 
have prevented future crisis?
  The response to these questions can be ``no'' if we begin now.
  For about $100 worth of hoses and sensors, we can make our cars run 
on ethanol made from homegrown corn. Automakers made 1 million of these 
cars this year. We have the technology, and it is proven. With 200 
million cars on the road, and 17 million more each year, why can't more 
cars run on ethanol?
  The answer is they can, and that is why I am pleased to join my 
colleagues from Iowa and Indiana, Senators Harkin and Lugar, in 
introducing legislation to require all cars made in the United States 
to be ethanol-capable vehicles within 10 years.
  Making ethanol cars is not expensive. It is less than the cost of 
airbags. It is less than the cost of a sunroof. It is less than the 
cost of foglights. It is less than the cost of a fancy CD player. It is 
less than the cost of heated seats.
  Making ethanol cars is not restrictive. These cars are known as 
flexible fuel vehicles. Where ethanol is not yet available, you simply 
fill up with regular gas.
  And making ethanol cars is good for American automakers, because 
American automakers have a head start. Already, 5 percent to 7 percent 
of their fleet can run on ethanol. We are only asking for an increase 
over a decade.
  I remind my colleagues that the renewable fuels standard enacted in 
the Energy bill of 2005 will incorporate enough ethanol into our fuel 
supply to reduce the use of foreign oil. The Harkin-Lugar-Obama bill, 
if enacted, would accelerate that reduction. And we can do it without 
hardship, without requiring drivers to purchase matchbox cars, without 
proposing futuristic technologies that only our great-great-
grandchildren's children will see.
  The Harkin-Lugar-Obama bill transforms existing, inexpensive, and 
simple technology into a genuine movement towards energy independence 
for the United States within a time period that we all can witness. I 
urge my colleagues' swift approval of this legislation.
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