[Congressional Record (Bound Edition), Volume 147 (2001), Part 12]
[Senate]
[Pages 16552-16554]
[From the U.S. Government Publishing Office, www.gpo.gov]



                             ENERGY POLICY

  Mr. BINGAMAN. Mr. President, I will take this opportunity to speak 
for a few minutes on the work that is currently underway in the Energy 
and Natural Resources Committee on which the Presiding Officer serves 
with great distinction. We are making an effort in that committee to 
develop a comprehensive and balanced energy policy. I want to inform my 
colleagues about the likely steps we will be following in the near 
future.
  As I see it, Congress has a real opportunity this fall to set an 
energy policy that will sustain our economic prosperity as we move into 
this new 21st century. The Senate has a key role to play in seeing this 
opportunity does not slip through our grasp.
  A great deal has changed since 1992, which is the last time Congress 
enacted major energy legislation. We have seen energy markets become 
more competitive and more dynamic. But we have also seen some 
significant bumps along the way.
  First of all, consumers are more vulnerable to the vagaries of the 
energy markets than they ever were before. I think the evidence we have 
of what happened in California with electricity prices is one example.
  Second, gasoline supplies are increasingly subject to local crises 
and price spikes due to the proliferation of inflexible local fuel 
specifications.
  Third, we rely more heavily each year on natural gas--natural gas to 
heat our homes and to produce electricity. But our system for producing 
and transporting that natural gas is showing signs that it is reaching 
its limits.
  Fourth, the need to address the fundamental connection between energy 
and global warming is something that is becoming a major concern of 
many of us, and I think rightly so.
  So I am pleased most of my colleagues in the Senate recognize these 
challenges. I believe there is a bipartisan consensus in favor of a 
sensible energy policy that will smooth out the bumps in the market by 
increasing energy efficiency, by boosting our energy supplies, by 
modernizing our energy infrastructure.
  Technology and policy innovations will be key to achieving this 
balanced outcome so Americans can have reliable and affordable energy 
choices that are sustainable over the long term. Our energy problems 
cannot be effectively addressed by packaging up a collection of tired 
old wish lists and passing that through the Senate floor in a day or 
two. Energy consumers and producers, and several committees here in the 
Senate, will need to focus on new energy approaches if we are to 
protect our national economic prosperity and do so through smarter ways 
to produce and use energy.
  For this reason, as the Senate takes up and considers energy 
legislation this fall, we will be talking about the need for proactive 
policies, about the need for technology-driven approaches to our energy 
problems. We have made a good start already in the Committee on Energy 
and Natural Resources. We began our markup in July, before the August 
recess--a markup of comprehensive energy legislation.
  The first part of the bill that we have substantially completed at 
this point is a comprehensive revitalization of the national 
capabilities for energy research and development. Putting research and 
development first reflects a broad consensus that new science and new 
technology are at the core of any solution to our national energy 
challenges. Despite the importance of energy R&D, our recent commitment 
to it leaves a great deal to be desired. The level of effort we are 
making today in Federal energy technology research and development is 
equivalent in constant dollars to what we were making in 1966. Yet our 
economy is three times larger today than it was in 1966. It is very 
hard to see how we can build a 21st century energy system on a 1960s 
level of effort in the research and development budgets.
  The committee will begin its deliberations beginning this next week 
and its effort to mark up a bill this next week. Major topic areas 
before the committee as we move forward in this markup will include 
policy proposals to improve energy efficiency, to improve our ability 
to produce energy from a great diversity of sources, and to tackle the 
tough issues related to electricity restructuring.
  Today I am releasing a detailed description of the proposed 
chairman's mark in these various areas. I am also releasing the text of 
the major portions of the bill we will be working on in committee--the 
next major portion of the bill. This part of the bill will deal with 
electricity, and it will provide a

[[Page 16553]]

framework to integrate new technologies into electricity markets to 
provide high-quality, efficient electricity generation in every 
community and to give consumers new ways to manage and control energy 
use and energy costs.
  I would like to take an opportunity to describe some of the key 
proposals in the mark that we will be considering in a little more 
detail. With respect to energy efficiency, the chairman's mark that we 
will be considering for the energy policy bill will contain provisions 
that will improve energy efficiency in household appliances--also 
provisions that will improve energy efficiency in Federal and other 
facilities and industry itself.
  Let me state my belief, though, that increasing vehicle fuel 
efficiency is one of the highest legislative priorities that the Senate 
should have in energy legislation. In addition to our growing 
dependence on foreign imported oil, we have reached the limits of our 
current infrastructure to refine and distribute fuels. A policy of 
simply continuing to increase the demand for gasoline is not 
sustainable. Fortunately, advanced technology in a variety of areas to 
improve automotive fuel efficiency offers a better answer, and we need 
to move in that direction.
  The National Academy of Sciences has given us some very useful ways 
of thinking how to reformulate the CAFE program. Clearly, consumers 
want the option to choose the type of vehicle that suits their needs 
and preferences. They also want to be able to count on reliable and 
affordable fuel supplies.
  While CAFE standards are not in the Energy Committee's jurisdiction, 
a number of other mechanisms to encourage greater fuel efficiency in 
cars and trucks are in our jurisdiction. The mark will contain purchase 
requirements for Federal fleets that will provide greater incentive to 
automobile and truck manufacturers to produce more highly efficient 
vehicles.
  A topic closely allied to vehicle fuel efficiency is the question of 
the fuels that we will need in the future to power cars and trucks. 
Here, the Congress has a clear duty to address the growing multiplicity 
of fuel specifications around the country. Part of the solution to this 
problem will be provided by a bill in the Committee on Environment and 
Public Works, sponsored by Senators Smith and Reid. I hope that these 
provisions find their way into our overall energy bill in the Senate.
  The Chairman's mark will include a number of energy efficiency 
provisions relating to appliances. Perhaps the most visible proposal in 
this regard will be one that enacts a 13 Seasonal Energy Efficiency 
Rating for central air-conditioning units. Such a standard was 
finalized earlier this year, but since then the Bush Administration has 
attempted to withdraw it and substitute a lesser standard. The 
Committee on Energy and Natural Resources held hearings on this topic 
and the record before the committee has persuaded me that the 
administration based its decision on economic information that was 
outdated and inaccurate.
  A 13 SEER rating for central air-conditioning units can do a lot to 
help avoid summer blackouts and brownouts when high temperatures send 
electricity demand soaring. During the intense heat wave we had in 
early August, which was felt nationwide, peak demand from air-
conditioning did, in fact, lead to problems in electricity availability 
in some parts of the country, while others were uncomfortably close to 
the margin. We need to build more efficiency into this part of our 
system over the long term, and a higher standard for these large air-
conditioning units will help.
  The Chairman's mark will also require the Federal government to 
purchase Energy Star or other efficient products designated by the 
Federal Energy Management Program. This is a requirement that, again, 
makes eminent sense. Taxpayers save money, and the cost of energy-
efficient appliances to consumers comes down, when the Federal 
government takes a leadership role in purchasing highly energy 
efficient computers, office machines, and other appliances.
  The mark also authorizes a grant program to help build energy-
efficient schools. School districts can ill afford to waste taxpayer 
funds on excessive energy bills because of the inefficiency of school 
buildings.
  With respect to new energy sources, it is important that the Senate 
look to policies that will truly improve our supplies of domestic 
energy security, including measures to improve our supply of natural 
gas and to diversify our energy mix to include a greater reliance on 
domestic renewable resources. These are the types of provisions that I 
will include in the Chairman's mark.
  I will not be including in the mark any provisions relating to 
drilling for oil in the Arctic National Wildlife Refuge. The debate 
over oil drilling in the Arctic National Wildlife Refuge--a long-
standing bone of contention in energy policy--is in many ways a 
distraction from more important opportunities to bolster our domestic 
energy security. Oil produced from the arctic refuge is not likely to 
influence the world price of oil, or the prices that U.S. consumers pay 
for gasoline. I plan to focus attention in the Energy Committee mark-up 
on a number of issues that will have a greater impact on our domestic 
production of oil and gas and a larger near-term impact than drilling 
in the Arctic.
  The first such issue is another Arctic resource that could be brought 
to U.S. markets--natural gas. The exploration for oil in the Prudhoe 
Bay region of Alaska has resulted in the discovery of abundant supplies 
of natural gas, but there is now no way to bring that gas to markets in 
the lower 48 States that could benefit from it. The projection of 
growing demand for natural gas has re-awakened interest in building a 
pipeline from Prudhoe Bay to Alberta, Canada, where it would join with 
existing gas pipelines that serve the United States. That pipeline 
would be an enormous construction project on the part of the private 
sector, requiring perhaps 2,000 miles of steel pipe and costing $20 
billion. A lot of spurious job numbers have been floated about drilling 
in the Arctic Refuge. The gas pipeline would be the real thing as far 
as job creation is concerned.
  If we do not act while there is substantial private-sector interest 
in building the Arctic gas pipeline, we will lose an important 
opportunity to bolster our national energy security in natural gas. If 
we do not bring the Alaska gas to market, then our growing demand for 
gas will be met by large-scale import of liquefied natural gas. At $3 
or less per million BTU, imported LNG will be cheaper than Alaska gas. 
But it would be foolhardy to look at the issue solely through the prism 
of short-term economics. We are already more than 50 percent dependent 
on foreign oil. If we do nothing about the Arctic gas, we could wind up 
being similarly dependent on foreign natural gas, from many of the same 
OPEC countries from which we import oil. That is an economic and 
national security issue.
  We face a clear moment of decision. The Chairman's mark that I will 
bring before the Committee will contain authorizing provisions to 
streamline the regulatory approval process to move forward with the 
pipeline. We may find a mechanism to ensure that the domestic option 
for a pipeline route is chosen. I hope to be able to work with my 
colleague from Alaska during the mark-up to help make that happen.
  The second key initiative for domestic production is to undertake a 
top-to-bottom review of both federal and State royalty and tax policy 
on domestic oil and gas production. Our current policies were put in 
place when the U.S. had abundant and easily accessible reserves. We 
have fewer such reserves now, and while technology for finding oil has 
continued to improve, we should consider whether the financial 
structure we have in place should change to one that enhances the 
economics of exploring for oil and gas in more challenging geological 
formations. It should also take into account the boom-and-bust nature 
of the industry, and provide incentives to maintain domestic production 
when prices are low.
  The third proposal is to provide adequate funding for the federal 
programs

[[Page 16554]]

that actually make new leases for oil and gas available to domestic 
producers. For all the rhetoric from the administration about the need 
to boost production, it has not asked for enough money in order to 
bring this about. The result is likely to be further delays and 
frustration on the part of U.S. oil and gas producers. In the mark that 
I will present to the committee, we will authorize a higher level of 
funding for the necessary personnel to make the decisions and to 
process applications for domestic production.
  The area of electricity, as I mentioned earlier in these remarks, is 
the next major topic that we will take up in the markup. We do need to 
provide for reliable and diverse electric power generation and 
distribution sources in the country. Electricity is a central part of 
modern life. Yet our electric system largely operates on a design that 
is nearly a century old. There are many problems in our electricity 
markets that need to be addressed. The problems faced by California and 
the West earlier this year should be a wakeup call to all of us.
  What the electricity crisis in California showed is that the 
institutions that developed in the last century have not evolved enough 
to ensure reliable and affordable supplies of electricity. We face a 
crucial turning point. During the next few years, billions of dollars 
of investment will be planned and committed to electric generation and 
transmission. Those investments will have a 30- to 50-year lifespan. 
Will we put in place a structure to maximize the chances that 
investments will go to new technologies that will give consumers real 
choices over their energy use or will Congress, by its inaction, 
perpetuate obsolete frameworks for managing electricity markets, with 
the result that we wind up with little improvement in the status quo?
  I believe that we in Congress and the President have a great 
opportunity to be visionary about the future of electricity. A 
transmission grid that is open to a wide variety of generation options, 
including distributed generation, will ensure the power quality and 
efficiency that our 21st century society will need in order to sustain 
our economic prosperity.
  That opportunity creates a great duty on the part of Congress and the 
President to focus on electricity as a major part of comprehensive 
energy legislation. Our task must be to build a regulatory structure 
that has adequate authority to resolve market defects, without 
interfering unduly in those markets.
  I believe we need to move forward now with a legislative solution to 
these problems. To leave electricity legislation for another day would 
be to perpetuate an obsolete system that will not provide the 
reliability, quality, affordability, and choice that consumers will 
want and need.
  The changes that I believe are needed, and that we are going to be 
trying to address in the chairman's mark, include the following:
  First, we will try to clarify who has jurisdiction over regulating 
electricity transmission in interstate commerce. That is a key part of 
what the legislation will do. That role is assigned to the Federal 
energy Regulatory Commission, or FERC. FERC will be given authority to 
ensure that all electric transmitting organizations in interstate 
commerce play by a consistent set of fair rules.
  Second, the chairman's mark will give FERC the responsibility for 
taking the current voluntary system for promoting reliability in 
electric transmission and making adherence to reliability rules 
mandatory.
  Third, the chairman's mark will give the FERC the tools to ensure 
that competitive markets work well to provide customers with affordable 
electricity.
  Fourth, the chairman's mark will address the tough issue of siting 
new transmission facilities. This is something the President has 
indicated his support for. A national transmission grid is a necessity, 
but cannot occur without a new approach to transmission planning, 
expansion, and siting. Federal eminent domain, by itself, is not likely 
to lead to an effective approach to meeting this need. What is needed 
is to use federal eminent domain as a backstop to a more cooperative, 
regionally based approach to transmission and siting issues. Thus, the 
chairman's mark will rely on regional transmission organizations to do 
the bulk of transmission planning, expansion and siting. Only if those 
regional entities are stymied will a federal eminent domain authority 
be invoked, and that authority will be used only to implement the 
decisions taken regionally.
  The chairman's mark will include a repeal of the 1935 Public Utility 
Holding Company Act, or PUHCA, but the protections in that act will be 
replaced by giving FERC jurisdiction over mergers of holding companies 
that own utilities and over acquisitions of generation assets.
  Finally, the chairman's mark will ensure that there is transparent 
information on market transactions.
  As part of a balanced and comprehensive legislative solution, the 
chairman's mark also includes numerous benefits and protections for 
consumers, so that we don't repeat the mistakes of telecommunications 
deregulation. These include an emphasis on ensuring future access by 
rural, remote, and Indian communities to electricity; protection of 
consumers from unfair trade practices; and a Public Benefits Fund to 
ensure that there is a way to fund electricity programs in the public 
interest.
  The chairman's mark also includes a series of provisions to ensure 
that we have a greater role in our electricity generating system of the 
future for renewables and distributed generation, while maintaining the 
contribution made by existing sources of baseload generation, such as 
hydropower and nuclear. Among the important tools for making sure we 
have diversity in our sources of electricity is a renewable portfolio 
standard, uniform interconnection standards to the electric grid, 
greater flexibility and predictability to the process of relicensing 
hydroelectric dams, and a reauthorization of parts of the Price-
Anderson Act.
  Finally, a common thread among may of the provisions that I have 
mentioned in this chamber today and that we will be considering in the 
bill is perhaps the most important public policy challenges of the 21st 
century, and that is climate change. Climate change policy and energy 
policy are inseparably linked, because energy production and the use of 
energy are leading sources of greenhouse gases that affect the 
atmosphere. The Senate must ensure that the energy legislation it 
passes makes a meaningful, positive contribution to dealing with this 
issue. Many of the provisions that I have already discussed--energy 
efficiency, the focus on more renewables--make a contribution to this 
goal. The mark that we will be considering in committee will contain 
some additional provisions to promote better information and policy on 
greenhouse gas emissions.
  Energy policy is a difficult and complex topic. Getting to a solution 
that gives America a vibrant energy infrastructure and the right 
policies for the 21st century will require careful work on complicated 
issues. Our Nation's future economic prosperity, and the jobs of 
millions of Americans, are at stake. I hope that the approach taken in 
the Senate combines a thoughtful analysis of our current energy 
challenges with a willingness to take some bold policy steps to address 
those challenges. That certainly is the spirit in which I will be 
making proposals before the committee.
  I look forward to working with all my colleagues in the Senate to 
produce constructive legislation for the future of our country.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER (Mr. Edwards). The Senator from Ohio.

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