[Congressional Record Volume 154, Number 25 (Thursday, February 14, 2008)]
[Senate]
[Pages S1059-S1061]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. KLOBUCHAR (for herself, Ms. Snowe, and Ms. Cantwell):
  S. 2642. A bill to establish a national renewable energy standard, to 
extend and create renewable energy tax incentives, and for other 
purposes; to the Committee on Finance.
  Ms. KLOBUCHAR. Mr. President, I am here to talk about the American 
Renewable Energy Act which I am introducing today, along with my 
colleagues, Senator Snowe from Maine and Senator Cantwell from 
Washington.
  Last week, we passed a short-term stimulus package that will help 
change the economic direction of this country by putting money in the 
hands of American families, including our seniors and veterans. Last 
week's action was a start, but we must begin focusing on long-term 
policies that will help our economy long after these rebate checks have 
been cashed. If we do not do that, we are going to be back exactly in 
the place we were before. We need long-term policies that will 
encourage sustainable economic growth in every corner of this country.
  In January, I traveled all around my State on a Main Street tour of 
Minnesota. We talked about the economic challenges facing the people of 
our State, but we also talked about the opportunities. Energy was a 
topic that came up everywhere. It came up when people were filling up 
their cars and trucks with gas, and it came up when we talked about the 
opportunities.
  I visited southwestern Minnesota, which is home to hundreds of large-
scale wind turbines, helping to make Minnesota the Nation's third 
largest producer of wind energy. Along with ethanol, these wind-energy 
farms have spurred a rural economic renaissance in our part of the 
State.
  For example, in 1995, SMI & Hydraulics, Inc., began their business in 
Porter, MN, primarily as a welding and cylinder repair shop for local 
farmers and businesses. Today, SMI & Hydraulics manufactures the bases 
for the wind towers we sell all across this country. It just recently 
expanded its facility to 100,000 square feet and created over 100 new 
jobs, many of which are traditional manufacturing jobs.
  My colleagues have to understand, these places are like barns. They 
started out as farmers' barns and have expanded and expanded as they 
have been able to meet this country's rising energy needs.
  The success of companies such as SMI & Hydraulics is not unique to 
Minnesota. Renewable energy has been a bright spot in an otherwise 
lagging economy. Last year, the renewable electricity sector pumped 
more than $20 billion into the U.S. economy, generating tens of 
thousands of jobs in construction, transportation, and manufacturing.
  Throughout the country, renewable energy has led us down a path 
toward new jobs, lower energy bills, and enhanced economic development. 
That is

[[Page S1060]]

why today I am introducing this bill, along with my friends Senator 
Snowe and Senator Cantwell, to help lead us further down the path to a 
better, cleaner, more prosperous energy future, with new opportunities 
for investment, innovation, and job creation.
  Our bill, as I said, is called the American Renewable Energy Act. 
There are two key elements of this legislation.
  First, the American Renewable Energy Act creates strong, consistent 
incentives for private sector investment in renewable energy resources 
and technology by extending tax incentives, such as the production tax 
credit, for 5 years. Of course, this covers wind, solar, geothermal, 
hydro, and other forms of renewable energy, and making sure that is in 
place so we can spur the kind of investment that will create jobs and 
allow us to be on the same path other countries around the world are 
on.
  Second, the legislation establishes a national renewable energy 
standard requiring that 20 percent of our energy come from renewable 
sources, such as wind, solar, and biofuels, by the year 2025. A 
national renewable energy standard will create a large market for clean 
sources of energy, reducing global warming pollution, and strengthening 
our economy.
  Let me briefly describe each of these elements. First, the renewable 
energy tax incentives. Already the industries for solar, wind, and 
biomass are expanding at annual rates exceeding 30 percent. But at the 
same time, we are no longer the world leader in two important clean 
energy fields. Even though all the technology was developed in our 
country, we rank third in wind power production behind Denmark and 
Spain, and we are now third in photovoltaic power installed, behind 
Germany and Japan.
  Ironically, these countries surpassed us largely by adopting 
technologies that had been first developed here in the United States. 
We came up with the right ideas, but we didn't capitalize on these 
incentives by having these innovations, by having the right policies in 
place to support their commercial development and rise and support the 
jobs that would have come with developing the technology. Our foreign 
competition was able to leapfrog over American businesses because these 
other countries have government-driven investment incentives, 
aggressive renewable energy targets, and other bold national policies.
  What I am proposing with my legislation is a package of tax 
incentives to spur investment in advanced clean technologies to serve 
the growing market for renewable energy sources. Specifically, in the 
bill Senator Snowe and Senator Cantwell and I are introducing today, we 
want to extend and expand the existing Federal production tax credit 
for renewable energy, and I want to make sure it is a long-term credit 
and businesses will have the clarity and certainty they need to make 
their own large-scale, long-term capital investments in these 
technologies.
  Currently, the production tax credit and other key energy efficiency 
tax incentives are set to expire at the end of this year. Our 
legislation will extend these tax incentives for 5 years.
  To pay for these incentives, the legislation will repeal several tax 
giveaways that currently go to the major oil companies. ExxonMobil 
shattered another record profit, earning $11.7 billion last quarter and 
totaling over $40 billion in profits in 2007. Big oil doesn't need 
these tax incentives, but our rural economies do.
  Over the years, the production tax credit has been a problem because 
of its short-term green light-red light nature. The cycle begins with 
strong investment and growth in the renewable power industry, thanks to 
the tax incentive, but then the investment and growth slow down as the 
tax incentive nears expiration and is allowed to lapse. When the 
incentive gets restored, the renewable power industry takes time to 
regain its footing, and then experiences strong growth again until the 
incentive nears expiration again. Up and down, up and down, up and 
down. It is no way to run a government policy that should be geared 
toward creating more jobs in our country.
  In fact, the American Wind Energy Association has recently noted that 
the slowdown in wind industry activity actually starts about 8 months 
before the tax credit's expiration date. These are large-scale, 
capital-intensive projects that often take long years to develop. But 
uncertainty about the future of the production tax credit discourages 
project development and investment. Extending the tax credit for 5 
years would create a much stronger incentive and investment environment 
for renewable energy development.
  Simply put, a new economic sector is emerging. It is one that can 
shift the Nation's economy to clean energy production, generation, and 
use. But without the continued support of tax incentives to help this 
emerging industry compete on a level playing field, the opportunity 
will be lost.
  Over the past few years, the solar energy industry has witnessed 
unprecedented growth. This growth pumped over $2 billion into the U.S. 
economy and created 6,000 new jobs. Developing solar energy is an 
economic engine for our country. From 2006 to 2007, the job base in the 
solar energy industry grew by 103 percent. Almost all of this growth is 
directly attributable to the solar investment tax credits that are 
scheduled to expire at the end of this year. If we allow these credits 
to expire, those jobs will dry up. We will lose out on creating new 
companies and we will lose out on creating new opportunities for clean 
energy.
  I have focused on wind and solar, but there are amazing opportunities 
in other renewable energy fields, including hydro. There are amazing 
opportunities with geothermal. But we are never going to reach the full 
potential for jobs in this country if we keep going back and forth, up 
and down. We have to have a policy that is geared to the long term.
  I will also say that in visiting with farmers and ranchers around our 
State, the other thing we need to do--but we will have to focus on in 
another bill--is look at creating incentives for individuals and small 
businesses that may want to put up their own wind turbine. That is a 
subject for another day, but we have to do everything we can to promote 
this renewable energy.
  The second element in this legislation would provide an additional 
incentive for investment in renewable energy technology and resources. 
It would establish an aggressive, nationwide renewable electricity 
standard, one requiring that all electricity providers generate or 
purchase 20 percent of their electricity from renewable sources by the 
year 2025.

  Currently, as I show on this chart here, there are 24 States, plus 
the District of Columbia, that have renewable electricity standards. 
Together, these States account for more than half of the electricity 
sales in the United States. You can see what these States are doing 
here. All on their own, the States have risen to the occasion, and 
said: Well, the Federal Government isn't doing anything, so I guess we 
will do it on our own.
  California is at 20 percent, Minnesota at 27.4 percent by 2025--one 
of the most aggressive standards in the country. Bipartisan agreement, 
a Democratic legislature, and a Republican Governor reached this 
agreement with our utilities, including Excel Industry signing on and 
not opposing this agreement. We have New York at 24 percent, Wisconsin 
at 10 percent by 2015; 15 percent by 2015 for Montana--15 percent by 
2020. Look at these States along the way, all over this country, and we 
are seeing these standards taking place.
  While Minnesota, Maine, Washington, and other States are already 
headed down the path toward a new clean energy economy, the Federal 
Government hasn't even made it to the trail yet. The Federal Government 
is still stuck in the fossil age. There is a famous phrase: ``the 
laboratories of democracy.'' That is how Supreme Court Justice Louis 
Brandeis described the special role of States in our Federal system. In 
this model, States are where new ideas emerge and innovative proposals 
are tested. But Brandeis did not mean for this to serve as an excuse 
for inaction by the Federal Government. Good ideas and successful 
innovations are supposed to emerge from the laboratory and serve as a 
model for national policy and action. The responsibility is on us.
  We know what is going on in these States around the country. The 
courage we are seeing in the States as they

[[Page S1061]]

seize opportunities offered by renewable energy should be matched by 
courage in Washington. I think it is time for the Federal Government to 
follow the lead of Minnesota, Washington, Maine, and other States 
around the country and adopt a forward-looking renewable energy 
standard.
  There are many benefits from having a strong national standard. It 
would save money for American consumers, as much as $100 billion in 
lower electricity and natural gas bills. It would aid in the fight 
against climate change by preventing well over 3 billion tons of carbon 
dioxide from being emitted into the atmosphere by 2030. It would create 
jobs and increase income across the country, especially in rural areas. 
Each large utility-scale wind turbine that goes on line generates over 
$1.5 million in economic activity. Each turbine provides about $5,000 
in lease payments for 20 years or more to farmers, ranchers, or other 
landowners.
  You can see from this chart the job creation with this national 
renewable electricity standard set at 20 percent--355,000 new jobs, 
nearly twice as much as generating electricity from fossil fuels; $72.6 
billion in new capital investment; $16.2 billion in income to farmers, 
ranchers, and rural landowners; $5 billion in new local tax revenues.
  Then look at these consumer savings--$49 billion in lower electricity 
and natural gas bills; a healthier environment; reductions in global 
warming pollution equal to taking nearly 71 million cars off the road; 
less air pollution, damage to land, and less water use. These are the 
benefits.
  We pay for it by taking back some of those tax giveaways we give to 
those oil companies--ExxonMobil, $11.7 billion in one quarter. So are 
we going to give them more money or try to create 355,000 new jobs in 
this country? That is the choice.
  I believe the combination of an aggressive renewable electricity 
standard and a strong package of tax incentives can begin to move our 
Nation to a new, cleaner, and more prosperous energy path. It is long 
overdue. The private sector is already beginning to invest in this 
energy future, and they are ready to invest more. But our Government 
must provide the right policies and incentives so they will be prepared 
to make the large-scale, long-term investments that are required to 
make it happen.
  The opportunities are enormous for creating new technologies, new 
industries, new businesses, and new jobs, while at the same time 
promoting our energy independence, strengthening our national security, 
and protecting our global environment. This piece of legislation, 
cosponsored by my friends Senator Snowe and Senator Cantwell, this 
bipartisan piece of legislation is about leading the new economy, not 
following along; not doing countless rebate checks after rebate 
checks--which we need to do right now, but we are never going to get on 
the path to a new economic future unless we lead the way, and this is 
Washington's time to lead. This is about making America the global 
energy leader instead of the lagger. It is about creating a better 
economy for the next generation by leading a whole new industry. It is 
about not being complacent. It is about getting on a new energy path.
  I believe an aggressive renewable electricity standard, coupled with 
strong tax incentives, leads us down this path. I urge all of my 
colleagues to support the American Renewable Energy Act.
                                 ______