[Congressional Record Volume 153, Number 86 (Thursday, May 24, 2007)]
[Senate]
[Pages S6866-S6867]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. INHOFE (for himself and Mr. Thune):
  S. 1503. A bill to improve domestic fuels security; to the Committee 
on Environment and Public Works.
  Mr. INHOFE. Mr. President, today I rise to introduce the Gas 
Petroleum Refiner Improvement and Community Empowerment Act or Gas 
PRICE Act. While chairman of the Committee on Environment and Public 
Works, I sought to move a similar measure. Unfortunately, my colleagues 
on the other side of the aisle managed to block the bill at that time.
  Today, motorists are facing record high gas prices and according to 
Labor statistics, those higher fuel prices are hurting the national 
economy as a whole. Unfortunately, the pain at the pump, the grocery 
store, and the shopping mall were predicted long ago and are largely a 
function of politicking, rhetoric, and finger pointing, actions that 
continue today.
  According to Deutsche Bank energy experts Paul Sankey and Rich 
Volina, who testified May 15, 2007 before the Senate Energy Committee, 
``Anybody who blames record high U.S. gasoline prices on ``gouging'' at 
the pump simply reveals their total ignorance of global supply and 
demand fundamentals.'' Yet yesterday the House narrowly passed a bill 
that; goes just that; goes after so called ``gougers'' while doing 
nothing to affect supply.
  I am hopeful that my colleagues in the Senate will join me and 
quickly pass the bill I am introducing today. Our constituents elected 
us to solve problems and make their lives better, not to name call and 
demagogue.
  I have been talking about the lack of adequate refining supplies for 
some years. In May 2004, while chairman of the Committee on Environment 
and Public Works, I held a hearing on the environmental issues 
regarding oil refining. The committee received testimony about the lack 
of adequate refining capacity and the obstacles the industry faced in 
order to meet consumer demand.
  In a May 2005 speech, then-Federal Reserve Chairman Alan Greenspan 
stated, ``The status of world refining capacity has become worrisome as 
well. 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.''
  The fact of the matter is that, like it or not, the U.S. needs to 
increase its

[[Page S6867]]

refining capacity if we are to solve the economic struggles facing 
every family.
  The bill I am introducing today redefines and broadens our 
understanding of a ``refinery'' to be a ``domestic fuels facility.'' 
Oil has been and will continue to play a major role in the U.S. 
economy, but the future of our domestic transportation fuels system 
must also include new sources such as ultra-clean syn-fuels derived 
from coal and cellulosic ethanol derived from home-grown grasses and 
biomass.

  Expanding existing domestic fuels facilities like refineries or 
constructing new ones face a maze of environmental permitting 
challenges. The Gas PRICE Act provides a Governor with the option of 
requiring the Federal EPA to provide the state with financial and 
technical resources to accomplish the job and establishes a certain 
permitting process for all parties. And it does so without waiving 
environmental laws and working with local governments.
  The public demands increasing supplies of transportation fuel, but 
they also expect that fuel to be good for their health and the 
environment. To that end, the bill requires the EPA to establish a 
demonstration to assess the use of Fischer-Tropsch FT diesel and jet 
fuel as an emission control strategy. Initial tests have found that FT 
diesel emits 25 percent less NOX, nearly 20 percent less 
PM1O, and approximately 90 percent less SOX than low sulfur 
petroleum diesel. Further, U.S. Air Force tests at Tinker base in my 
home state found that blends of FT aircraft fuel reduced particulate 
47-90 percent and completely eliminated SOX emissions over 
contemporary fuels in use today.
  Good concepts in Washington are bad ideas if no one wants them at 
home. As a former Mayor of Tulsa, I am a strong believer in local and 
state control. The Federal Government should provide incentives to not 
mandate on local communities. Increasing clean domestic fuel supplies 
is in the nation's security interest, but those facilities can also 
provide high paying jobs to people and towns in need. My bill provides 
financial incentives to the two most economically distressed 
communities in the Nation, towns affected by BRAC and Indian tribes 
consider building coal-to-liquids and commercial scale cellulosic 
ethanol facilities.
  I am very proud that my home state of Oklahoma is a leader in the 
development of energy crops for cellulosic biofuels, and specifically 
coordinated programs through the Noble Foundation in Ardmore. The key 
now is to promote investment in this exciting area, and nothing would 
speed the rapid expansion of the cellulosic biofuels industry more than 
investment by the Nation's traditional providers of liquid 
transportation fuels.
  Many integrated oil companies have formed or substantially expanded 
their biofuels divisions within the past year to prepare for the 
eventuality of cost-competitive cellulosic biofuels. Cellulosic 
biorefineries will want to create an assured supply of feedstock and 
will enter into long-term contracts with surrounding biomass producers.
  One of the incentives for oil companies to invest in exploration is 
that their stock prices are affected by their declared proved reserves. 
Creating a definition of renewable reserves would create a similar 
incentive for them to invest in cellulosic biofuels.
  In 1975, Congress directed the SEC to promulgate a definition of 
proved reserves. At that time, the SEC based its definition upon 
broadly-accepted industry standards established by the Society of 
Petroleum Engineers 1978 FASB System. While no broadly 
accepted industry standards yet exist for thinking about dedicated 
energy crops, industry, growers and agronomists could be brought 
together to agree on standards and practices. Agronomists could play a 
similar role in estimation of renewable reserves to that of petroleum 
engineers in proved reserves by providing independent projections of 
biomass yields.

  The Energy Policy Act of 2005 directed the Department of Energy to 
accelerate the commercial development of oil shale and tar sands. As 
these unconventional fuel sources reach viability, the SEC will be 
pressured to develop methodology to incorporate them into its reserves 
hierarchy. Given the country's interest in developing renewable 
alternatives to fossil fuels, it is logical that the SEC would develop 
criteria for the incorporation of biomass feedstock sources into its 
hierarchy at the same time.
  This is Congress's least expensive way to jumpstart the cellulosic 
biofuels industry.
  Much has changed in Washington since I was chairman of the 
Environment Committee and held hearings on the need to improve our 
domestic transportation fuels system. I hope that the new majority 
joins me in quickly passing the Gas PRICE Act doing so would be a 
material and substantive action toward their stated goal of ``energy 
independence'' and would go far beyond more partisan symbolism.
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