[Congressional Record Volume 157, Number 33 (Monday, March 7, 2011)]
[Senate]
[Pages S1326-S1327]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
ENERGY
Mr. GRASSLEY. Mr. President, the American economy remains on an
unsettled footing, as we all know. There are some real signs of
economic recovery, but it shows a very fragile recovery. The consumer
confidence level seems to be increasing, and that is good news. U.S.
factory activity is up. That is good news. But also we are very nervous
about the housing market remaining weak. The Nation's unemployment rate
stands at 9 percent--maybe officially now 8.9 percent--and now our
economy is facing a significant head wind due to rising energy prices.
Since the unrest began in Tunisia, our energy markets have rocked
upward by the uprisings in Egypt and now in Libya. Libya produces only
roughly 2 percent of the world's crude oil, with much of that going to
Europe. But even with Libya producing such a small amount, it still
makes a tremendous impact on the world market of oil. The uncertainty
and fear about supplies, according to oil speculators, has driven crude
prices to more than $100 a barrel. Prices at the pump were already high
before the unrest in the Middle East. The events going on in North
Africa and the Persian Gulf area just worsened the problem.
According to the Energy Information Administration, gas prices jumped
19 cents during a 1-week period at the end of February. This is the
second largest 1-week jump in more than 20 years. I think over the
weekend we learned that gasoline, in a 2-week period of time, is up 33
cents. So Americans are now paying, on average, $3.51 a gallon for gas.
That, obviously, is about 80 cents higher than this time last year.
The average cost to fill a tank of gas is likely around $50. We all
know that for a family struggling to make ends meet, these are valuable
dollars spent at the pump, with most of those dollars going overseas.
I am sure the Presiding Officer probably knows that before this rapid
rise in the price of oil, we were spending $730 million a day to import
oil. Obviously, that is now a much higher figure, probably close to $1
billion a day right now. Our country is at risk, our economy is at
risk, our Nation's security is at risk; that is, economic security, but
also it is related to our national security. Our ever-increasing
reliance on foreign sources for energy is undermining our Nation's
economic and national security. The activities in the Middle East over
the last 6 weeks should be an alarm bell going off. It should, in fact,
be a wake-up call. Let me be clear. I know that for our economy to grow
and for business and individuals to thrive, we need access to reliable,
affordable energy. I support an energy policy that I like to say is
akin to a four-legged stool or another way of saying it is all of the
above--obviously, all the sources of petroleum we can get our hands on,
and more domestically, obviously, than import, all sorts of alternative
energy. Conservation has to be a leg of that stool and, obviously,
nuclear energy.
So to be repetitive: First, we have to have access to oil and gas
resources here at home. Two years ago, when gas prices were so high,
the rallying cry was ``drill here, drill now.'' It seems to me that
still is a legitimate rallying cry for us with gas at $3.51 a gallon.
The idea that we limit our access to our own resources, which in turn
leads us to go hat in hand to foreign dictators such as Hugo Chavez and
oil sheiks is ludicrous. It is silly to be sending more money overseas
to give people resources to train terrorists to kill Americans.
We currently import more than 60 percent of our crude oil, and it
doesn't have to be that way. I know we can't get to energy independence
by drilling here and drilling now all by itself, but isn't it a little
foolish to have our economy held hostage by events in Libya--North
Africa generally--or the Persian Gulf area and particularly with Libya
only supplying 2 percent of the world's oil?
The Obama administration needs to put an end to the existing policy
of a de facto moratorium through permitting; that is, for drilling
onshore and offshore of our own domestic supply. We need to make sure
we are doing everything we can to protect workers and the environment.
But permitting delays and obstacles should not prevent our Nation from
moving forward to developing resources here at home.
I also support efforts to expand the use of clean coal and nuclear
energy. I also support conservation efforts. I agree that the cheapest
form of energy is the energy that doesn't have to be used. That is
conservation. Here in the Senate, I have supported policies aimed at
reducing energy use in homes and buildings through conservation and
energy-efficient technologies. I see the value in reducing overall
energy consumption.
I have also been a leader in the Senate in promoting alternative and
renewable energy. Why? Because the supply of fossil fuels is a finite
quantity. We must look to alternative and renewable resources so we can
improve our energy and our national security. This includes supporting
energy from wind, biomass, hydroelectric, solar, geothermal, and
biofuels.
I would like to focus now on the effort to develop homegrown
biofuels. For many years, Congress has realized the need to develop an
alternative to fossil fuels, particularly as a means of reducing our
dependence on that fossil fuel. One of the first priorities was a tax
incentive to encourage the use of
[[Page S1327]]
homegrown ethanol. For over 100 years, the fossil fuel industry has had
a monopoly on our transportation fuel. They built the market. They own
the infrastructure. They weren't about to use a product they didn't
manufacture, own or profit from. So Congress created a tax incentive to
encourage big oil to use the product and make it available to their
consumers. It was paired with an import tariff to make sure that only
domestic ethanol receives the benefit of the tax incentive.
So the tax incentive and the tariff worked together to do two things:
The incentive exists to encourage the use of domestic ethanol. The
tariff exists to ensure that we aren't giving a tax incentive to
already subsidized foreign ethanol.
In other words, wouldn't it be silly to have a tax incentive for the
production of a domestic alternative energy and then allow the import
of it, which would have taxpayers subsidizing an alternative form of
energy coming in from another country? Well, that wouldn't make sense.
Together, these two approaches ensure that we don't replace our
dependence on foreign oil with a dependence upon foreign ethanol. The
incentive was created to encourage big oil to use a domestically
produced product and a renewable product. In 2005, Congress created the
Renewable Fuels Standard. The standard was created to ensure a minimum
amount of renewable fuels was used in the fuel supply. It was strongly
opposed by big oil, but it was enacted over their opposition.
In 2007, it was greatly expanded. It mandates the use of 36 billion
gallons of renewable fuel annually by 2022. But that decision, made in
2007, also limited the amount of ethanol that can be made from grain to
15 billion gallons.
One of the criticisms I hear occasionally is that the ethanol
receives both an incentive and a mandate. So I think we should address
that point.
First, while the mandate requires that the fuel be used, it does not
mandate that the ethanol be produced domestically. The incentive acts
as an encouragement to use homegrown products. It increases economic
activity at home and works to reduce our dependence upon foreign oil.
It doesn't do any good if you are importing a domestic renewable fuel
if it can be done here locally, creating the jobs here.
Secondly, the mandate acts as a floor to ethanol use. Without the
incentive, we would consume a bare minimum. The incentive encourages
ethanol use beyond the mandate.
Some in the environmental community are quick to raise objections to
the biofuels mandate as well as the incentive. I would like to suggest
to them that this is a clear example of limitless hypocrisy and
intellectual dishonesty in this town. Many of the loudest voices
against these policies are the same voices who lobby me for tax
incentives and also mandates for wind, solar, geothermal, and other
renewable energy.
I happen to be a strong supporter of electricity generated from wind
and other renewable sources. I first authored the production tax credit
for wind in 1992. Over the years, it has been expanded to include other
types of resources. Since as far back as 2003, environmental advocacy
groups have been pushing for a renewable portfolio standard, which is a
mandate that utilities around the country use a certain amount of wind
or other types of alternative energy instead of coal in the production
of electricity.
So now what do we hear? They want the production tax credit for wind
and other renewable electricity and a mandate that it be produced. Yet
they oppose these same policies for biofuels. That is an inconsistency.
That seems to be an intellectually dishonest approach; that they would
like to have this Senator support mandates for wind as well as a tax
incentive for wind but lobbying against this Senator's approach to
having a tax incentive for other alternative energies as well as a
mandate.
I have been a champion of ethanol and biofuels for a long time. I am
well aware of the positive role ethanol is playing to create a cleaner
environment. It is improving our economic and national security and it
is creating jobs and economic activity in rural America. In 2010,
nearly 90 percent of all gasoline sold in the United States contained
some ethanol. The 13 billion gallons of ethanol produced in the United
States reduced our oil imports by 445 million barrels of oil.
After domestic oil production and imports from Canada, U.S. ethanol
production is the third largest source of transportation fuel--what we
use in internal combustion engines. U.S. ethanol production is larger
than what we import from Saudi Arabia or even from Hugo Chavez's
Venezuela. Without domestic biofuels, we would be on bended knees even
more than we are today, begging others for oil.
Just think what has developed in the 2 weeks of Libya. We have OPEC
having to go to Saudi Arabia to make up the difference, just because of
2 percent of the oil production being affected. Why would we want to be
more dependent upon foreign sources of energy, particularly for our
national security?
Without domestic biofuels it seems to me that we would be on bended
knees even more than we are today, begging others for oil. Ethanol is
the only reliable, legitimate alternative to crude oil. Domestic
ethanol currently accounts for nearly 10 percent of our transportation
fuel. There is no other renewable fuel that comes close to achieving
the economic, environmental, and national security benefits currently
delivered by this biofuel that we call ethanol.
There are other well-funded misinformation campaigns underway to
undermine the only alternative to crude oil. Big oil has been joined in
recent years by opportunistic grocery manufacturers who hope to find a
scapegoat in their desire to increase profits and raise food prices.
They did this just 2 years ago, when corn was $7. They scapegoated
ethanol. They needed a cover to raise the price of food and then,
within 7 months, when the price of corn was down to half that price,
$3.50 per bushel, did you see the price of food come down? No. You are
going to find the same thing now.
These people continue to perpetuate the same tired, baseless
arguments to try to undermine our efforts toward energy independence.
They are more interested in protecting market share and profits than
national economic security.
Over the next few weeks I am going to do everything I can to talk
about this issue, to educate the public on the benefits of domestic
biofuels. I am not going to sit quietly while the energy,
environmental, and national security benefits of ethanol are scoffed
at. I intend to beat back every false attack. The American public
deserves an honest, fact-based discussion about the benefits of
reducing our dependence on people such as Hugo Chavez and Muammar
Qadhafi. They deserve to hear the benefits of reducing our dependence
on dirty fossil fuel.
I look forward to continuing this effort and invite dialog from any
of my colleagues.
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