[Congressional Record Volume 155, Number 122 (Thursday, August 6, 2009)]
[Senate]
[Page S9044]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. SNOWE (for herself and Mr. Bingaman):
  S. 1643. A bill to amend the Internal Revenue Code of 1986 to allow a 
credit for the conversion of heating using oil fuel to using natural 
gas or biomass feedstocks, and for other purposes; to the Committee on 
Finance.
  Mr. BINGAMAN. Mr. President, addressing our Nation's dependence on 
imported oil and our greenhouse gas emissions will require policies 
that extend across the economy, as well as policies that are more 
narrowly tailored to specific sectors. Today, I rise with my colleague 
from Maine, Senator Snowe, to offer a bill that would enhance energy 
security and reduce greenhouse gas emissions associated with heating 
our nation's homes and buildings. Our bill, the Cleaner, Secure and 
Affordable Thermal Energy Act, creates significant incentives for 
consumers, businesses, and tax-exempt entities that now rely on heating 
oil to convert to energy-efficient natural gas or biomass heating 
systems.
  Across the country, and particularly in the Northeast and Midwest, 
many homes and buildings still derive heat from oil-burning furnaces. 
According to the Energy Information Administration, in 2007, our Nation 
consumed nearly 160 million barrels of oil for heating fuel. This use 
of heating oil continues despite the existence of widely available 
alternatives that are cleaner, more secure, and more affordable.
  On April 22, I held a hearing in the Energy and Natural Resources 
Committee on the Energy Efficiency Resource Standards. The Committee 
heard from several witnesses about the advantages of and efforts to 
convert residential, business, and public users from fuel oil to 
natural gas and biomass heating systems. For each household that 
converts from fuel oil to a natural gas heating system, we avoid 2.1 
metric tons of greenhouse gas emissions. For each commercial building, 
we avoid 9.9 metric tons, and for each industrial facility, we avoid as 
much as 2,984 metric tons. These emission reductions are even more 
significant for conversions to heating systems that are fired by 
biomass resources.
  Besides being cleaner, natural gas and biomass are far more secure 
resources. Ninety-eight percent of domestically consumed natural gas is 
produced in North America, and domestic reserves of natural gas are 
estimated at 100 years based on current consumption.
  Finally, since the price of natural gas and biomass is lower and less 
volatile than the price oil, converting offers significant short- and 
long-term cost savings to consumers. For instance, while the average 
annual cost of using fuel oil for home heating averages $1,734, the 
average annual cost of operating a natural gas furnace is $1,004.
  But significant up-front costs prevent many families and businesses 
from converting their heating systems.
  The Cleaner, Secure and Affordable Thermal Energy Act will make these 
conversions more affordable for American families, businesses, and tax-
exempt entities.
  First, for residential consumers, the Act establishes a 30 percent 
tax credit for costs associated with converting from a fuel oil to 
natural gas or biomass heating system. The credit is capped at $3,500, 
$4,000 in the case of biomass stoves. To qualify, the replacement 
equipment must be energy efficient; a natural gas boiler must have an 
AFUE rating of at least 85 percent, a replacement natural gas furnace 
must have an AFUE rating of at least 92 percent, and a replacement 
biomass appliance must have a thermal efficiency rating of more than 75 
percent.
  For business taxpayers, the act authorizes bonus depreciation for 
property installed before 2012. This would enable business taxpayers to 
expense--that is, immediately write-off--half of the cost of qualifying 
property, and depreciate the remaining balance over the typical cost-
recovery period.
  Many of the Nation's heating oil systems are used by public entities, 
particularly school systems. To help public entities finance their 
conversions to natural gas and biomass heating, the Act adds conversion 
programs as an activity eligible for Qualified Energy Conservation 
Bonds.
  Finally, to encourage expansion of natural gas service capabilities, 
the act includes a two-year extension of the 15-year depreciation 
schedule created for distribution facilities under the Energy Policy 
Act of 2005.
  The act would move us significantly in the direction of a low-carbon 
economy while enhancing energy security and reducing heating costs. I 
look forward to working with Senator Snowe to enacting our bill into 
law.

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