[Congressional Record Volume 153, Number 54 (Wednesday, March 28, 2007)]
[Senate]
[Page S4054]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. LUGAR:
  S. 1007. A bill to direct the Secretary of State to work with the 
Government of Brazil and other foreign governments to develop 
partnerships that will strengthen diplomatic relations and energy 
security by accelerating the development of biofuels production, 
research, and infrastructure to alleviate poverty, create jobs, and 
increase income, while improving energy security and protecting the 
environment; to the Committee on Foreign Relations.
  Mr. LUGAR. Mr. President, I rise to introduce the ``United States 
Brazil Energy Cooperation Pact.'' This bill would direct the Secretary 
of State to work with the Government of Brazil and other foreign 
governments to develop partnerships that will strengthen diplomatic 
relations and energy security, including through accelerated 
development of biofuels production, research and infrastructure. This 
will help to alleviate poverty, create jobs, and increase income, while 
improving energy security and protecting the environment..
  Earlier this month President Bush and Brazilian President Luiz Inacio 
Lula da Silva agreed in Sao Paulo to cooperate to promote ethanol in 
the Americas as an alternative to oil. The agreement aims to increase 
cooperation on biofuels technology and to develop international 
biofuels standards. President Bush is following up by hosting President 
da Silva at Camp David this Saturday, March 31.
  President Bush intended his trip to rebuild bridges to Latin America. 
Many Latin Americans are critical, even hostile, over what they see as 
the administration's neglect of the region. Strained relationships 
often are repaired in small steps. The ethanol accord promises mutual 
benefits for the United States and Brazil, Latin America, and 
potentially, the rest of the world. If executed in a spirit of 
partnership and funded generously, it could have a significant regional 
and global impact on the development of ethanol markets, climate change 
and the ability of many poor countries to endure oil price shocks.
  Although the agreement is overall a win-win-win deal for Brazil, the 
United States and the region, it has been criticized. Some opponents 
are simply trying to thwart better U.S.-Brazilian cooperation. But 
others have raised concerns about the dislocations and unintended 
consequences of promoting biofuel crops.
  Only by addressing such worries and quelling the doubts can the 
Brazil-U.S. pact fully meet its promise to be a launching pad for what 
I envision as a transformational Americas-wide energy program that will 
radically improve the hemisphere's strategic and economic posture. 
Today I introduce the United States-Brazil Energy Cooperation Pact to 
capitalize on the opportunity it presents to reestablish strong U.S. 
relations with our neighbors while also building a more secure energy 
future.
  The bill calls on Brazil and the United States to help fund 
feasibility studies to assess each Latin American country's biofuel 
needs and biomass production potential, with special attention to food 
security and the environment. By encouraging cellulosic ethanol that 
does not rely on grains, it should help assuage fears, shared by 
American and Latin American livestock producers alike, that excessive 
reliance on corn for ethanol will further drive up animal feed costs 
and thus prices of beef, pork and chicken. For Mexico, where 
skyrocketing tortilla prices have been blamed on the diversion of corn 
for ethanol, the bill calls for special efforts to find non-corn 
sources of biofuels.
  The legislation envisions a special hemispheric carbon trading system 
to encourage preservation of tropical rain forests in the face of 
growing demand for energy crops, and it calls on the regional 
development banks, as well as U.S. foreign assistance, to support 
biofuel infrastructure projects.
  The bill contains special provisions to help our closest and poorest 
neighbors in the Caribbean and Central America revive their moribund 
sugar cane industries so they can produce their own ethanol. Currently 
nearly all the ethanol they sell is processed product from Brazil.
  And while biofuels are a key element of energy security, better 
utilization of conventional resources also plays a role. The bill seeks 
ways to help optimize Mexican oil output, which is lagging to the 
detriment of both countries, and encourages South America to exploit 
fully its natural gas supplies with new pipelines and liquefied natural 
gas facilities.
  Giving the United States easy access to foreign ethanol supplies, 
even as we increase domestic production, is an essential component to 
meet President Bush's target of 35 billion gallons of renewable fuels 
use by 2017, which cannot be met by U.S. corn ethanol alone. U.S. corn 
ethanol production will peak around 14 billion gallons in 2010, experts 
estimate. Reducing dependence on oil imported from unstable and often 
hostile regions is a paramount foreign policy imperative.
  The U.S. doesn't tax imported oil, but currently levies a 54-cents-
per-gallon tariff on imported ethanol to protect U.S. producers from 
cheaper Brazilian ethanol. It is clear that this barrier to trade in 
Americas-grown fuel is inconsistent with our political goals in the 
region, and with our long-term energy security.
  Altering the import tax would affect a number of industries and 
interests. Therefore, the bill calls for a comprehensive study on the 
current political and economic impacts of the tariff and the potential 
costs and benefits of repealing it or modifying it.
  In this way, I believe that passage of this bill would encourage 
Administration officials to rethink old policies in order to improve 
energy cooperation, and encourage other Governments in the region to do 
likewise. With this legislation, Congress can demonstrate to citizens 
of the Americas that the U.S. is ready to embark on an equal 
partnership for progress.
  In conclusion, I look forward to working with each of my colleagues 
to ensure the energy security of our country and the region.
                                 ______