[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.

                          ____________________