[Congressional Record Volume 154, Number 90 (Tuesday, June 3, 2008)]
[Senate]
[Pages S4902-S4908]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
CLIMATE CHANGE
Mr. CORNYN. Mr. President, I heard the distinguished majority leader
criticize the Republicans for wanting to have a debate on this piece of
legislation. Frankly, I think we would be remiss in our duties if we
didn't discuss this important piece of legislation, as complex and
difficult a topic as it is and, frankly, ask questions that I know our
constituents would ask of us were
[[Page S4903]]
we to vote for or against this particular legislation.
I, for one, make no apologies for doing what I consider to be my
duty, and I think all of us would do well to ask questions about this
legislation, which proposes a $6.7 trillion pricetag--that is trillion;
not billion, not million but trillion, $6.7 trillion.
We talk about what Congress has been doing. Let me mention what
Congress has not been doing and what the Senate has not been doing.
It has been 109 days since the Foreign Intelligence Surveillance Act
was not reauthorized, which has hampered our ability to listen in on
terrorist-to-terrorist communications.
We have spent 560 days since American businesses and farmers have
been disadvantaged by not taking up the Colombia Free Trade Agreement.
For my State alone, it is roughly $2.3 billion a year. But my
producers, farmers, and manufacturers are disadvantaged by tariffs on
those goods when they are imported into Colombia, even though Colombian
goods bear zero tariffs coming into the United States. We ought to fix
that.
So it has been 560 days since that condition has existed. It has been
705 days since some judicial nominees have been waiting for a vote. It
has been 771 days since Speaker Pelosi went campaigning before the 2006
election and said, if elected, the Democrats would deliver a
commonsense solution to the price of gasoline and the pain consumers
were feeling at the pump. That was 771 days ago. Yet there has been no
proposal by our friends in the majority to actually come up with a
commonsense solution to help ease the pain at the pump. Instead, we
have a bill which--while I don't question the motivation for the bill
since we are all concerned about the environment, I do think it is
important that we ask questions about a bill that carries such a high
pricetag and which will have the impact of actually increasing the cost
of energy--gasoline and electricity--rather than reducing it.
I must say that last week, like all the rest of my colleagues, I went
back home and had a chance to visit with a number of my constituents.
Of course, high gasoline prices was the No. 1 issue on their minds.
Even though my State is doing relatively well compared to the rest of
the country, with about a 4.1-percent unemployment rate, we have seen
some softening in the housing market, but generally speaking, my State
is prospering. We are grateful for that. But even people who have jobs
and feel as though they are doing pretty well otherwise are still
feeling their paychecks shrink as a result of rising energy costs.
I am wondering why we are now on a piece of legislation that, rather
than reducing the cost of their gasoline or electricity, will actually
increase it. Right now, the average price of a gallon of gasoline
across the country is right at $4 per gallon.
As I talked to my constituents last week around the State, they asked
me: What is Congress going to do to finally take action to lower those
prices?
Well, unfortunately, I had to tell them we only got 42 votes on a
provision on a bill--the Domenici amendment--which would actually have
increased our use of American energy and reduced our dependency on
imported oil from some of our enemies, such as Hugo Chavez from
Venezuela and Ahmed Amadi Nejad from Iran, which are part of OPEC.
By our inaction in Congress, we are driving up that cost because,
since 1982, we have been putting vast American reserves of energy out
of bounds through a moratorium that was enacted on the Outer
Continental Shelf, through our unwillingness to explore and develop oil
shale in the West and our unwillingness to allow the State of Alaska to
develop its own energy reserves in the Arctic National Wildlife Refuge.
So it is easy for me to understand, seeing that disconnect between what
my constituents are concerned about--high prices of energy, including
gasoline--having to come back and debate a bill that will drive up
those costs even further--it is easy to see why more and more people
believe Congress is totally disconnected from reality. Congress appears
to have very little relevance to the issue that concerns the American
people the most, and that is the family budget.
I want to be clear about one matter though. The debate about our
environment is one well worth having. Of course, we can all do better
and should do better in being good stewards of the environment,
conserving energy and reducing waste. Reducing dependency on foreign
oil and bringing down prices at the pump are needed too. My fear is
that this important issue is rapidly becoming just another tired
political game.
Taking care of the environment is not a Republican versus Democrat
issue. It should not be about partisan politics. Haven't we learned by
now that the American people are fed up with the games in Washington
and want real solutions?
Well, yesterday, the majority leader and the chairman of the
Environment and Public Works Committee, Senator Boxer, were criticizing
the fact that we wanted to use some of the time today to ask questions
about this important legislation so that we could educate ourselves and
our constituents about what is in this very complex piece of
legislation. But I do have some questions I hope will be answered in
this week's debate.
First of all, how much will this bill cost? I have read estimates
that this bill's pricetag is somewhere in the $6.7 trillion range. I
fear that if that is correct, this is simply too costly of a burden to
put on the American people. This is especially true when I believe more
cost-effective solutions are available. I think we should balk at any
piece of legislation that carries a pricetag of $6.7 trillion. Perhaps
I have not been in Congress long enough to be jaded by such talk, and I
hope I never am, but I still have trouble grasping the enormity of a
number like $1 trillion. Now we are talking about $6.7 trillion. People
in Congress tend to toss those numbers around like it is pocket change.
But this is real money coming out of the budgets of real people--the
American people.
I would like to know why $6.7 trillion, and what is that money going
to be spent for?
Why do we have to opt for a cost in that range when there are more
cost-effective solutions available, such as tax credits for developing
renewable energy, clean energy, like solar energy and wind energy? Why
aren't we doing more to develop our nuclear energy capacity to create
electricity, which is carbon free? Why aren't we doing that instead of
spending $6.7 trillion?
I want to know what the impact of this legislation would be on our
economy and on the family budget. Already we have seen--as a result of
the inaction of Congress over this last 771 days, since our Democratic
colleagues said they had a commonsense plan to reduce the price of
gasoline at the pump--the average American family lose $1,400 in
increased gasoline costs as a result of the rise in gasoline prices
over that same period of time.
Now, some estimates are that Texas families--my constituents--would
pay an additional $8,000 if we pass this piece of legislation. That
includes, some estimates say, a 145-percent increase in electricity
costs and a 147-percent increase in gasoline costs. That is at least
$5.30 a gallon at a time when gasoline is $3.98 a gallon.
Is it really true the proponents of this legislation want to raise
that to $5.30 a gallon? It seems to me we are going in the wrong
direction, not the right direction.
At the same time, it is estimated this legislation, if passed, would
actually cause more than 300,000 Texans to lose their jobs. Overall,
estimates indicate this bill could cost the economy in my State--one of
the States that is actually doing very well from an economic point of
view--more than $50 billion in additional costs.
Mr. President, we cannot afford another wet blanket on our economy
caused by higher taxes and more expenses coming out of the family
budget and more pressure on our job creators that provide people an
opportunity to put food on the table.
Another question I have is, if the United States of America decides
to impose this costly burden on ourselves, will China and India
likewise impose the same burden on their energy industry? Of course,
booming industrial giants such as China and India both have 1 billion-
plus people. We know we are increasingly in a global competition and
not only with India and China but the entire planet.
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Why in the world would we impose a costly piece of legislation in the
amount of $6.7 trillion on the American people and raise electricity
costs and gasoline costs and depress the gross domestic product of this
country, putting people out of work, if our major global competitors
are going to get off scot-free and not likewise constrain their economy
by imposing these sorts of burdens on themselves?
Finally, Mr. President, I would like to know on what basis do the
proponents of the legislation believe this bill will have its intended
effect? If human beings contribute to climate change, which I will not
debate--I assume we do in some way or another--why have these targets
been proposed? What is the science to justify those? What if those
targets are reached, albeit at a cost of $6.7 trillion, with rising gas
and electricity costs and a depression effect on our gross domestic
product? How do we know, and where is the science that says, this bill
will actually have its intended effect, particularly if China and
India, our global competitors, don't participate?
The Wall Street Journal has dubbed this legislation ``the most
extensive Government reorganization of the American economy since the
1930s.'' It seems to me this is something we should debate and examine
and we should ask questions about so that we will know what the effect
of this bill will be if it is passed.
We have already seen that Congress is not exactly omniscient when it
comes to the energy area, where we have subsidized corn-based ethanol
as an alternative to renewable sources of energy. The fact is, we found
there are unintended consequences when we use food for fuel.
How do we know this particular bill, the Boxer climate tax bill, will
not have unintended consequences? I fear it may not have the intended
effect of reducing carbon emissions, and it may have some of the
unintended and disastrous side effects I have already outlined.
If we are certain this is the right approach to protecting the
environment, where is the evidence? Yesterday, the distinguished
chairman of the Environment and Public Works Committee, and today the
majority leader, complained about the fact that we want to use some
time today to ask these questions and get answers. We should not be
asked nor should the American people be asked to accept this on faith:
Don't worry, trust us. It reminds me of the most fearsome words in the
English language: We are from the Government, and we are here to help.
If that is true, the American people ought to see the evidence that
will justify this huge expenditure of their money, the huge increase in
prices of energy, and the depressing effect on the economy, why that is
necessary, and whether it will actually work as intended. Where is the
evidence?
Senator Boxer, the distinguished chairman of the Environment and
Public Works Committee, said the rising cost would not be a problem
because of tax offsets she has included in this bill. She assured us
this bill contained almost $1 trillion of tax relief, so that if we do
see some of the increases in energy costs in the early years--
electricity, for example--we can offset that. It almost boggles the
imagination that the primary author of this legislation, Senator Boxer,
would essentially concede that there will be rising energy costs as a
result of this legislation and say we ought to spend $1 trillion more
of the taxpayers' money to provide offsets for relief. This huge,
complex bill deserves all the scrutiny we can give it.
Mr. President, I yield the floor.
The ACTING PRESIDENT pro tempore. The Senator from Ohio.
Mr. VOINOVICH. Mr. President, I would like to say, first of all, that
I share some of the great concerns of my colleague from Texas.
Today, I rise to address the legislative proposal introduced by
Senators Lieberman and Warner to address global climate change. Like
many of my colleagues, I share the urgency to take proactive steps to
address this challenge we have.
That said, I have serious reservations about the proposal. I think it
is overly aggressive, vastly outpacing what technology can provide and
thus ensuring enormous economic pain on the country, and it is overly
bureaucratic and cumbersome in its implementation, representing an
unprecedented expansion of Government power and a massive bureaucratic
intrusion into American lives that will have a profound effect on
businesses, communities, and families.
The EPA has stated in answer to a letter I sent them that this
program will take between 300 and 400 people to implement, whereas the
acid rain provision takes just under 30.
The major failure of this legislation is it fails to harmonize our
country's economic energy and environmental objectives, and the
consequences to American interests could be devastating.
The international aspect of this problem is particularly troublesome.
The developing world is currently undertaking an intensive expansion of
energy infrastructure and escalating industrial and commercial
expansion to meet the demands of growing domestic and international
markets. The developing nations' combined emissions shortly will exceed
the developed nations' combined emissions.
In 2007, ``[t]he International Energy Agency issued a . . . report
projecting global energy demand would increase by more than one-half by
2030, and that `Developing countries . . . contribute 74 percent of the
increase in global primary energy use . . . China and India alone
account for 45 percent of that increase.' ''
China puts on line two coal-fired plants every week--two coal-fired
plants every week. In June, the Netherlands Environmental Assessment
Agency announced that China's 2006 CO2 emissions surpassed
those of the United States by 8 percent. With this, China tops the list
of CO2-emitting countries for the first time and, by the
way, years ahead of the projections that were made a couple of years
ago.
Much like China, those countries with large domestic reserves of
coal--and that includes the United States--will continue to use it. It
is unrealistic to assume that the world would turn its back on this
abundant resource. We must take this reality into account, and this can
be done by jump-starting the technology that is needed to produce the
energy we need in an environmentally sound manner.
Recognizing the international dynamic of this problem, the Lieberman-
Warner proposal attempts to impose a tariff-like requirement to hold
carbon credits for goods entering the United States from countries that
do not control their emissions. The U.S. Trade Representative has
questioned the plan's efficacy, and China, Mexico, and Brazil have
signaled that the policy could begin a trade war. Indeed, top officials
from the European Union and the United Nations have also raised doubts
about whether the U.S. trade penalties would harm the prospects of a
new global warming agreement.
But even if the provision is WTO compliant, it will not address the
underlying competitiveness issues the United States would face from the
higher fuel, feedstock, and electricity prices the bill would impose on
U.S. manufacturers.
A better approach is needed. Americans are already struggling with
the increase in their cost of living due to higher prices for gasoline,
home heating fuel, electricity, food, and health care, and this bill
would only make things worse. I wish some of the sponsors would go back
into their respective constituencies to hear the complaints from most
people--middle-class people, poor, the retirees--whose standard of
living is being reduced in the country today because of these costs.
We cannot tolerate policies that harm our economy and drive
businesses overseas. If those businesses locate in countries that do
not share our environmental objectives, then we are worse off on two
counts: Fewer jobs in the United States and no benefits at all to the
environment.
Over my strenuous objections, this bill was voted out of the
Environment and Public Works Committee without an analysis of the
economic impacts on the country from either the EPA or the Energy
Information Office. Today, we have at least a dozen analyses of the
bill from a wide variety of groups, and they are all about the same.
EPA's analysis predicts that by 2030, annual losses in gross domestic
product could be as high as $983 billion, and by 2050, those losses
would grow to $2.8 trillion. To put this into perspective,
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CBO projects the Federal budget for this year will be $2.9 trillion.
That means the potential impact losses from this legislation in 2050
would equal that spent on everything we intend to spend this year from
Social Security to national defense. Think about it.
In order to meet the caps of the bill, the analysis assumes
aggressive growth in nuclear and other clean energy technologies at
rates that are widely regarded as unachievable and, from my
perspective, unbelievable. For example, they predict a 150-percent
increase in nuclear power by 2050. Today, there are 104 operating
plants, meaning that we have to build up to another 150 new plants by
2050. The Energy Information Office said, when they did the analysis,
that we would have to build 220 of them by 2030 in order for these caps
to be realistic. These assumptions are unrealistic and mask the true
cost of implementing the bill.
In regard to nuclear power, I recently published a paper in the
Nuclear News on the steps we need to take to launch a nuclear
renaissance. I am going to make certain that each Member receives a
copy of this paper. But bringing vast amounts of new nuclear power on
line will not be a layup shot. For example, there is only one company
and one plant in the world that makes the vessels and forges for
plants. Recently, we anticipated new plants would cost about $5
billion. The new cost is $7 billion per copy. Today, we have pending at
the Nuclear Regulatory Commission 9 applications for 15 new plants
that, if constructed, would not come on line until 2015, 2016, and
2017. Honestly, we are going to be lucky to have 30 new nuclear
powerplants by 2030.
In regard to what we call capture carbon and sequestration--the
technology that is needed--no commercial experience or testing at scale
has been done. DOE says it will take 10 years before the seven large-
scale demonstration tests are complete to look at sequestration. DOE
said that a more robust geological assessment will not be complete
until 2015. Liability and critical infrastructure issues remain
unanswered, and DOE says commercial CCS may not be available for 20
years.
The connection between the costs of the program and the availability
of clean energy technology is clear. As EIA points out:
The . . . timing of the development, commercialization, and
deployment of low-emissions electricity generating
technologies such as nuclear power, coal with CCS, and
dispatchable renewable power is a major detriment of the
energy and economic impacts of 2191.
I want to repeat that.
The . . . timing of the development, commercialization, and
deployment of low-emissions electricity generating
technologies such as nuclear power, coal with [carbon capture
sequestration], and dispatchable renewable power is a major
detriment of the energy and economic impacts of 2191.
The Cleveland Plain Dealer, which is the largest newspaper in the
State of Ohio, this Sunday editorialized on this bill. The title is
``This carbon bill isn't the answer.'' It goes on to say:
The bill, as conceived, will just bore new holes into an
already battered economy. . . .
Coal-dependent states with partially deregulated energy
prices--Ohio, for instance--would take a double hit in
economic dislocations and electricity price spikes, with
barely any financial cushions to make the disruptions more
palatable. The bill also lacks the kind of consumer fairness
and flexibility necessary to avoid fuel-price shocks and
damage to manufacturing nationwide.
I ask unanimous consent to have this editorial printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
[From the Plain Dealer, June 1, 2008]
This Carbon Bill Isn't the Answer
The latest version of a bill that would mandate a carbon
emissions cap-and-trade system for utilities and others using
high-carbon coal is due to come before the full U.S. Senate
on Monday. It could be voted on before the end of the week.
To judge from the intensity of lobbying, you'd think it was
a proposal to make it easier to exit Iraq, corral oil prices,
revive the economy, spur renewable energy investments and end
unemployment.
You'd be wrong on all counts.
The bill, as conceived, will just bore new holes into an
already battered economy.
It also doesn't have a prayer of becoming law. There is no
companion legislation in the House, and President Bush
threatens a veto if one materializes.
Neither of Ohio's senators has said he supports it, and the
big push by environmentalists to try to swing one of those
likely nays--the one belonging to freshman Democrat Sherrod
Brown--is all about symbolism over substance. In failing to
compromise on issues of regional equity repeatedly
highlighted by Ohio's other senator, George Voinovich, the
bill's supporters evince crass disregard for the economic
realities of hard-hit manufacturing states.
Neither Brown nor Voinovich denies the need to reduce
carbon emissions and address global warming.
That need is increasingly urgent, given recent findings by
scientists within the formerly skeptical Bush administration
on how accelerating climate change is beginning to impact
Americans' well-being.
Yet the hammer-and-tong approach of the Senate bill--
originally sponsored by Democrat Joe Lieberman of Connecticut
and Republican John Warner of Virginia and recently tweaked
by Democrat Barbara Boxer of California--lacks even a
semblance of balance.
Coal-dependent states with partially deregulated energy
prices--Ohio, for instance--would take a double hit in
economic dislocations and electricity price spikes, with
barely any financial cushions to make the disruptions more
palatable. The bill also lacks the kind of consumer fairness
and flexibility necessary to avoid fuel-price shocks and
damage to manufacturing nationwide.
Those who have watched the Europeans' cap-and-trade system
deteriorate into a nightmare of bureaucratic costs,
nonsensical investments in outdated factories in China and
puzzling price spikes in which the utilities were the only
clear winners can be excused for scratching their heads over
why cap-and-trade remains the ``only'' idea worth pursuing.
Surely there are less cumbersome, more equitable ways of
making carbon emissions more expensive, and thus spurring
investment in new technologies, without breaking the banks of
both small-town and industries Ohio.
Mr. VOINOVICH. Mr. President, I ask unanimous consent to have printed
in the Record the paper I have written on the nuclear renaissance.
There being no objection, the material was ordered to be printed in
the Record, as follows:
[From the Nuclear News, March 2008]
Making the Nuclear Renaissance a Reality
(By George V. Voinovich)
In September, for the first time in over 30 years, a
license application to build a new nuclear power plant was
filed with the Nuclear Regulatory Commission. Three more
applications soon followed. The NRC expects to receive 18
more applications within the next two years for a total of
more than 30 new reactors. Although no applicant has yet made
a firm commitment to build, a number of them have made
significant investments, such as ordering long-lead
construction items. Internationally, the resurgence seems to
be moving at a faster pace. According to the International
Atomic Energy Agency, there are 34 reactors in various stages
of construction in 14 countries.
The underlying political climate for nuclear power has
changed over the past several years, influenced by a
confluence of factors: the growing demand for electricity,
sharp increases in the prices of natural gas and oil, and the
increased emphasis on clean energy. Recent government
policies, such as the Energy Policy Act of 2005, have
certainly helped in stimulating private sector investment for
new nuclear as part of a portfolio of ``environmentally
clean'' energy projects. At the state level, legislation has
passed or is being considered in Georgia, Iowa, Wisconsin,
Florida, Virginia, Kansas, South Carolina, and Texas
recognizing the value of a diverse energy portfolio that
includes new nuclear plants. These factors have created an
environment in which nuclear has once again emerged as a
viable (perhaps one of only a few) energy source for baseload
generating capacity.
Currently, 50 percent of our electricity comes from coal,
19 percent from nuclear, 19 percent from natural gas, 9
percent from renewable sources such as hydro, solar, and
wind, and 3 percent from oil. Of these, coal and nuclear
(with average capacity factor of about 90 percent) have been
the backbone of baseload generating capacity, since they are
capable of providing a steady flow of power to the grid at
low cost and high efficiency. Solar and wind power plants
produce electricity only when conditions are right; when the
sun sets or the wind calms, their output drops, regardless of
the demand for electricity. Natural gas power plants are too
expensive to run as baseload plants due to volatility in
natural gas prices.
According to the Energy Information Agency, U.S.
electricity consumption is projected to grow from 3821
billion kilowatt-hours in 2005 to 5478 billion kilowatt-hours
by 2030, an increase of more than 43 percent. To be sure, we
must have greater efficiency, more demand-side management,
and more renewable energy, but we must also have clean coal
and nuclear generating capacity to sustain our $ll-trillion-
a-year economy. With increasing environmental constraints,
particularly the desire for caps on carbon emissions,
expanding nuclear's share of baseload seems logical. The 104
nuclear power plants operating today represent over 70
percent of the nation's emission-free generation portfolio,
avoiding 681 million metric tons of CO2, compared
with 13.1 million tons for wind and 0.5 million tons for
solar.
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So it is no accident that there is a growing realization
among environmentalists, scientists, the media, think tanks,
and policymakers that nuclear power must play an important
role in harmonizing the country's need for energy
independence, economic competitiveness, and a healthy
environment. Sen. Barbara Boxer (D., Calif.), chairwoman of
the Environment and Public Works Committee, recently stated:
``I am a pragmatist. The vast majority of the members on my
committee support nuclear power, and so do the majority in
the Senate. . . . I don't think there is any question that we
are going to be seeing new plants.'' Patrick Moore, one of
the founders of Greenpeace, also caused a stir last year when
he declared that ``nuclear energy is the only large-scale,
cost-effective energy source that can reduce emissions while
continuing to satisfy a growing demand for power . . . and
these days it can do so safety.'' They have come to a similar
conclusion: If we are to meet the growing electricity needs
in this country and also address global climate change,
nuclear power has a crucial role to play.
Despite these positive developments, a number of formidable
challenges to realizing a nuclear renaissance remain,
particularly in the areas of regulatory uncertainty,
financing, availability of human capital, expansion of the
domestic supply chain infrastructure, and nuclear waste
management. I intend to take steps, together with other
stakeholders, to turn these challenges into opportunities. My
hope is that these steps will serve as a road map to making
the nuclear renaissance a reality.
regulatory uncertainty
Processing 22 or more new plant license applications
concurrently on schedule in a thorough manner will be a
monumental challenge for the NRC, which has not seen this
type of major licensing action in the past 25 years or so.
That is why as chairman of the Senate Environment and Public
Works Committee's Subcommittee on Clean Air and Nuclear
Safety between 2003 and 2006, and now as ranking member, I
have focused a great deal of time and effort on making sure
that the NRC is gearing up to meet this challenge and avoid a
bottleneck. My management philosophy since my days as mayor
of Cleveland and governor of Ohio hasn't changed: Place the
right people to run the agencies and departments, provide
them with the resource and tools necessary to do their jobs
effectively and efficiently, and then hold them accountable
for results.
Together with Sen. Tom Carper (D., Del.) and Sen. Jim
Inhofe (R., Okla.), I introduced a number of bills--the
Nuclear Fees Reauthorization Act of 2005 (S. 858), the
Nuclear Safety and Security Act of 2005 (S. 864), and the
Price-Anderson Amendments Act of 2005 (S. 865)--to provide
the NRC with what it needs in terms of legislative reforms,
human capital, and other resources to do its job effectively
and efficiently. These pieces of legislation were enacted
into law as part of the Energy Policy Act of 2005. Among
other things, these bills authorized the NRC to take
innovative steps to attract both young talent and retired
experts to address the agency's anticipated shortages in
technical capabilities.
The NRC's licensing process has been completely overhauled.
All regulatory approvals are now received up front based on a
completed plant design, before construction starts and
significant capital is placed at risk. Under the old process,
repeated construction delays and massive cost overruns were
common as applicants struggled to stay ahead of evolving
regulatory requirements and design changes. The old process
required two separate permits--one to begin construction of
the plant, and one to operate it--allowing multiple
opportunities for delay. Some multibillion-dollar facilities
stood idle for years while licensing proceedings ground
slowly to completion. The new process requires only a single
combined construction and operating license (COL) for both
functions. There are opportunities for public participation
in the new process, but most of those occur before
construction begins, when such participation is most
productive.
While the new licensing process is a significant
improvement over the old process, a level of healthy
skepticism remains by virtue of the fact that the new process
has not yet been tested. Given the complexities involved, it
is perfectly reasonable to expect some wrinkles during the
NRC's review of the first few applications under the new
process. In my view, the level of success and certainty in
the process will depend in large part on the discipline with
which the process is implemented by both the NRC and the
applicants.
Finally, and perhaps most important, the composition and
the stability of the commission will be more critical than
ever before. Senator Carper and I will work with the
administration and the Senate leadership to ensure that
future appointees have a balanced and objective view
regarding nuclear power and its role in harmonizing the
country's need for energy independence, economic
competitiveness, and a healthy environment.
Financing
The nuclear industry's major financing challenge is the
cost of new baseload nuclear power plants relative to the
size of the companies that must make those investments.
Unregulated generating companies and regulated integrated
utilities represent different business models, and those
differences influence how these companies approach nuclear
plant financing. Regulated companies expect to finance
nuclear plants in the same way they finance all major capital
projects, with state regulatory approval and reasonable
assurance of investment recovery through approved rate
charges. These companies must know--before construction
begins--that their investment in a new nuclear plant is
judged prudent and can be recovered. Unregulated companies
rely on debt financing with a highly leveraged capital
structure. Since the estimated cost of a new nuclear plant
($5 billion to $6 billion) is a significant fraction of the
company's assets, it is in effect a bet-the-company decision.
To help overcome these obstacles, the Energy Policy Act of
2005 provides key incentives for investments in new nuclear
plants: a production tax credit of $18 per megawatt-hour for
the first 6000 megawatts of new nuclear capacity; regulatory
risk insurance against delays in commercial operation caused
by licensing or litigation for up to $500 million for the
first two plants and $250 million for the next four; and loan
guarantees up to 80 percent of the cost of projects, such as
nuclear plants, that reduce emissions. While the production
tax credit certainly improves the financial attractiveness of
a project during its commercial operation, and regulatory
risk insurance provides a safety net in case of regulatory
delays, it is the loan guarantee provision that makes the
difference for unregulated companies in deciding whether or
not to build. Properly implemented, this loan guarantee
program allows unregulated companies building nuclear plants
to employ a more leveraged capital structure at reduced
financing costs, which then benefits consumers through lower
rates for the price of electricity.
I have worked hard to make the loan guarantee program
perform as Congress intended in the Energy Policy Act of
2005--that is, to attract sufficient private capital at low
cost. In addition to meeting with key administration
officials, including then Office of Management and Budget
Director Rob Portman and Energy Secretary Sam Bodman, in
2007. I introduced the Voinovich-Carper-Inhofe Amendment (SA-
1575) to the Energy Bill (H.R. 6) to allow loan guarantees of
100 percent of the loan amount for capital-intensive projects
such as nuclear and clean coal, provided that the borrower
pays for the loan subsidy costs. Although this amendment did
not make it into the final version of the Energy Bill, the
administration recently issued a final rule that in effect
adopts the intent of the Voinovich-Carper-Inhofe amendment.
I have also been working with the Senate appropriators to
increase the fiscal year 2008 cap on the aggregated value of
the guaranteed loans. On June 15, together with Senators
Carper and Inhofe, I sent a letter to the appropriators
urging them to increase the cap from $9 billion (as called
for in the president's budget) to an amount sufficient to
cover all qualified and worthy energy projects, including new
nuclear, clean coal, renewable energy, and energy efficiency
projects. The appropriators responded by increasing the cap
to $38.5 billion, with $18.5 billion for new nuclear, $6
billion for clean coal-based power generation and
gasification plants that incorporate carbon capture and
sequestration, $2 billion for advanced coal gasification, $10
billion for renewable energy, and $2 billion for a uranium
enrichment facility.
Another critical factor for the successful implementation
of the loan guarantee program is a transparent methodology
for calculating the credit subsidy cost to be paid by project
sponsors. Such costs should be reasonable and commercially
viable. I will continue to work with my Senate colleagues and
the administration to make sure the loan guarantee program is
working the way it is intended to work. The need for
government-sponsored investment incentives should be only
temporary. Once it is shown that new plants can be built to
schedule and budget, the sector will take care of itself. I
don't want to create a ward of the state, but rather to
overcome initial hurdles and nurture a sector that makes
economic and policy sense on its own.
Human capital and job opportunities
Senator Carper and I recently held a nuclear energy
roundtable with representatives from organized labor,
industry, academia, professional societies, and government
agencies. The roundtable was very productive as it raised an
awareness of the impending shortage of the skilled workers
needed to support the nuclear renaissance. Government,
industry, and labor efforts in the development of a skilled
workforce must be coordinated in order to align with
anticipated investment in new plants. Each new nuclear plant
will require 1400-1800 workers during construction, with peak
employment of as many as 2300 workers. Skilled tradesmen in
welding, pipefitting, masonry, carpentry, sheet metal, and
heavy equipment operations--among others--all stand to
benefit. If the industry were to construct the 30 reactors
that are currently projected, 43,400 to 55,800 workers would
be required during construction, with peak employment of up
to 71,300 workers. Everyone at the roundtable agreed that the
construction of more than 30 new reactors over the next 15 to
20 years could present an enormous challenge for the nuclear
industry.
The roundtable resulted in a number of recommendations to
turn this challenge into an opportunity, including the
following: (1) use recent retirees as instructors, mentors,
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and advisors; (2) provide more flexibility to a younger
generation of workers; (3) invest in building a pipeline of
future workers by front-loading recruitment and training--the
philosophy of ``just-in-time'' inventory does not work
with human capital; (4) identify all existing public and
private-sector training programs, and then leverage and
fund those that are successful (e.g., Helmets to Hardhats
and the Building Construction Trade Department's training
program); and (5) provide adequate and consistent funding
in science and technology for universities and colleges.
Successful follow-through on these suggestions requires a
collaborative effort from the federal and state governments,
industry, organized labor, and academia. Congress has
demonstrated leadership in addressing some of these workforce
challenges. The recently enacted America Competes Act
establishes a solid policy framework for addressing the
science, technology, engineering, and math workforce
challenges identified in the National Academies' report,
Rising Above the Gathering Storm: Energizing and Employing
America for a Brighter Economic Future. Sen. Jeff Bingaman
(D., N.M.) and I fought to restore federal funding to support
nuclear science and engineering programs at universities
across the country in FY 2007 and FY 2008.
Senator Carper and I are planning a follow-up roundtable in
mid-2008 to align investment and workforce development
initiatives to ensure the collaboration and coordination of
government, industry, and labor efforts in developing the
energy-related skilled work force, and to solicit input on
legislative support.
Expanding the domestic manufacturing base
In the three decades since the last nuclear plant was
ordered and the two decades since the bulk of the nuclear
plant construction was completed in the United States, the
nuclear design, manufacturing, and construction industry has
significantly declined. The leading U.S. firms have either
ceased operation, consolidated, or become subsidiaries of
non--U.S. parent companies. The companies that remain have
survived by retrofitting and maintaining existing U.S.
plants.
Initially, it will not be possible to manufacture all of
the major plant components required of new nuclear plants in
the United States. Successfully bringing the planned 30 or
more new nuclear reactors on line, however, requires the
reestablishment of the construction and component supply
industries, as well as the supplier network needed to support
those industries--from the steam generators and reactor
vessel heads to the thousands of valves, pumps, heat
exchangers, and other parts used in a nuclear plant. The
potential for growth in the manufacturing sector and
manufacturing jobs to support the construction of 30 new
nuclear plants is staggering.
I am a strong advocate for government policies that
encourage private-sector investment in the manufacturing of
various components and pieces of equipment for the energy
sector. This includes the nuclear industry, as well as other
energy technologies the nation will need, such as carbon
capture and sequestration. The United States has long been a
leader in innovation and advanced manufacturing. We need to
promote policies that take advantage of the growth of our
energy sector and of American ingenuity, productivity, and
entrepreneurship by encouraging the manufacturing industries
that will support future energy development to produce their
products in the United States.
I introduced the Voinovich-Carper-Inhofe Amendment (SA-
1683) to the Energy Bill (H.R. 6) to make American-
manufactured nuclear components, parts, and service-related
jobs available to foreign markets. The support of our House
colleagues--Chairman John Dingell (D., Mich.) and Ranking
Member Joe Barton (R., Tex.) of the House Energy and Commerce
Committee--was instrumental in getting this piece of
legislation passed and signed into law. This legislation is
anticipated to spur growth in U.S. manufacturing for new
international commercial nuclear power plants, create highly
skilled jobs across the United States, and provide American
companies and workers access to foreign markets that have
long been dominated by foreign competitors.
Managing nuclear waste
The U.S. high-level radioactive waste management program
under the Department of Energy has faced several challenges
for many years. First, a redirection of the program has
occurred with every change in administration. Second, a
majority of the Nuclear Waste Fund revenues are consistently
applied to support congressional budgetary priorities rather
than their intended purposes. Third, the annual
appropriations process provides for ongoing opportunities for
those opposed to the direction of the program to interfere
with its success.
At the time the Nuclear Waste Policy Act was signed into
law in 1982, the direct disposal of spent fuel as a national
policy was established on the premise that the existing fleet
of nuclear plants would operate only through their initial
40-year license and then be retired, with no new plants being
built. This was during the post-Three Mile Island accident
era, when nearly 100 planned nuclear plants were canceled.
Today, the story is vastly different, with most nuclear
plants likely to extend their operating lives to at least 60
years. Also, there may be as many as 30 new nuclear power
plants planned in the next 15 to 20 years.
I held a subcommittee hearing in September 2006 to examine
both short- and long-term options for the nuclear waste
issue. One of the options discussed was a program to
determine whether the reprocessing of spent nuclear fuel
should be adopted in some form, rather than the current
policy of direct disposal. Through reprocessing, uranium and
plutonium recovered from spent fuel can be recycled into new
fuel. Reprocessing also serves to significantly reduce the
volume of material requiring geologic disposal. Reprocessing
technology has been used on a commercial scale for many years
in a number of countries. The renewed interest in an expanded
role for nuclear power in the climate change debate further
emphasizes the importance of reexamining U.S. policies
related to the nuclear fuel cycle. I believe we should not
remain solely fixated on a waste solution that was designed
for a different day.
Another idea presented at the hearing involves long-term
interim storage perhaps complementing a spent fuel recycling
program. While permanent disposal at Yucca Mountain or a
similar facility remains a long-term imperative, the
combination of short-term on-site storage and longer-term
interim storage of spent fuel gives us time to complete the
technology development needed to safely and securely recycle
spent nuclear fuel.
Senator Carper and I plan to hold a roundtable to solicit
input from various stakeholders to help us develop a
legislative proposal with the following objectives in mind:
(1) implement an accountable and sustainable governance
structure to execute the federal government's
responsibilities under the Nuclear Waste Policy Act; (2)
enable the investigation of recycling spent nuclear fuel with
appropriate consideration of safety, nuclear proliferation,
environmental, energy supply, and economic factors; and (3)
ensure that the fees paid into the Nuclear Waste Fund are
applied for their intended purpose--i.e., the disposal of
radioactive wastes produced by the generation of electricity
from nuclear power--in a manner insulated from political
influences.
I believe that the safe and secure growth of nuclear energy
is essential if we are to harmonize the country's need for
energy independence, economic competitiveness, and a healthy
environment. Nuclear power is growing in the world, and our
own energy needs can serve as a springboard to rebuild U.S.
technology and manufacturing capabilities to something
approaching the leadership the nation once enjoyed,
contributing to foreign markets as well as supporting our
own. I intend to work with my colleagues in the Senate to
build bipartisan support and leadership for making the
nuclear renaissance a reality.
Mr. VOINOVICH. Mr. President, while coal and manufacturing States pay
their neighbors and the Government to stay in business, the bill
establishes trillions of dollars in new entitlements, earmarks--
earmarks--with money flowing to over 30 new Government spending
programs, constituting, as the Wall Street Journal recently pointed
out, one of the largest tax-and-spend bills in the Nation's history.
Based on EPA's analysis, this bill would raise over $6 trillion from
the allowance auction from owners and operators of utilities and
factories that have to purchase allowances to stay in business. But the
cost of purchasing these allowances would be passed on to consumers as
higher prices, which will, as the CBO points out, amount to a
regressive tax hitting low- and middle-income working families. In my
State, they predict that by 2012, the cost of electricity will go up 50
percent, the cost of natural gas 80 percent, and the cost of gasoline
will go up 30 percent. Some of my constituents say: How can the cost of
gasoline go up? I point out to them that we have refineries that refine
oil. With this bill, they are going to have to buy allowances, and
those allowances will increase the cost of your gasoline 30 percent.
Did you hear that? A 30-percent increase in gasoline costs as a result
of this legislation. Give me a break.
Despite the severe economic damage Lieberman-Warner would impose on
the U.S. economy, the policy would do little to address global climate
change. EPA's--this is not some conservative group out there--analysis
indicates the policy will reduce global concentrations of
CO2 less than 5 percent by 2095.
Addressing climate change will require a technology revolution
centered on the way we produce and use energy. The theory behind
Lieberman-Warner is that the more painful it is on business, the faster
CO2 reductions will occur. I believe the solution to this
problem lies in our ability to increase access to clean energy. Instead
of using the power of the Government to increase energy cost, we should
use it to decrease barriers to investments and clean energy solutions.
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The United States took a lot of flak from countries for our not
signing Kyoto, but I am pleased the Bush administration has been moving
forward with some new initiatives. And while we didn't sign Kyoto, we
do have a base of international activities to build on, and one of them
could provide the basis for becoming a multinational effort, giving all
countries a vested interest in technology advancement and deployment.
The thing we have to remember is that, above all, the developing
world desires sustained economic growth. Slowing down economic
development to address climate change is not an option they are willing
to pursue, and we cannot force it upon them. If we are going to be
successful in addressing the challenge of climate change, we have to
set a realistic vision for the developing world, using what Richard
Armitage and Joseph Nye referred to as smart power. When they testified
before the Senate Foreign Relations Committee on April 24, 2008, they
argued that the world:
. . . looks to the U.S. to put forward better ideas rather
than just walk away from the table.
This was the perception after Kyoto, and it could be the perception
again today if we do not find a way to engage the developing world.
They go on to say:
The United States needs to rediscover how to be a smart
power, which matches vision with execution and
accountability, and looks broadly at U.S. goals, strategies,
and influence in a changing world.
And they rightly conclude that our:
. . . challenges can only be addressed with capable and
willing allies and partners.
Without willing partners in China and India, we cannot be successful
in addressing climate change. Technologies development and promotion
should drive our national climate policy. It is the only rational path
forward. It is the only way to deal with emissions from rapidly
expanding coal-based economies such as China and India, that readily
admit they have no intention of accepting binding emission targets.
The public interest and private sector communities agree that the
crucial factor that will determine whether we have an effective climate
policy is the extent that policy will encourage the development and
deployment of needed technology. Regulation without sufficiently
available technology will result in high cost for American consumers
while offering little hope that developing nations will answer the call
to reduce their emissions.
In conclusion, I agree that we need to act quickly to address climate
change, but we must be smart about how we proceed. I am hoping after
this year's debate, we can come together--come together--on a
bipartisan basis, to draft a bill that doesn't impose unilateral
actions that hurt our economy and drive jobs overseas but rather jump-
starts technology, engages our international partners through
collaborative multinational efforts to develop and deploy the clean
energy technologies that everyone recognizes are necessary to solve
this global environmental problem.
I appreciate the Chair giving me an extra minute.
The ACTING PRESIDENT pro tempore. The Senator's time has expired.
The Senator from Florida.
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