[Congressional Record (Bound Edition), Volume 147 (2001), Part 2]
[Senate]
[Pages 2223-2226]
[From the U.S. Government Publishing Office, www.gpo.gov]



                             ENERGY POLICY

  Mr. BINGAMAN. Mr. President, I rise to speak about the subject of 
energy, the energy prospects we face as a nation, and the need to 
develop new energy policies here in this Congress. The United States is 
currently experiencing unusually high and volatile energy prices. We 
have seen that in my State of New Mexico, and I assume we have seen 
that in the State of Florida, where the Presiding Officer lives.
  During most of the 1990s, in spite of robust economic growth and 
increased demand for energy, increased productivity, and reduction in 
energy use per dollar of gross domestic product, along with the 
introduction of market competition, all of those factors acted to hold 
down prices, but now we have finally exhausted the buffer of excess 
capacity that kept the system functioning with low prices and 
relatively minor bumps along the way. So that excess capacity is gone, 
and there are a number of factors and circumstances that have 
contributed to the current situation we face--the situation of 
inadequate supply, too much demand.
  Remedies are not as apparent as some would argue. The Republican 
energy package, which was introduced today by my colleague, Senator 
Murkowski, contains a number of provisions that I and many Democrats, I 
am sure, would be glad to support. In fact, many of those proposals are 
similar to, if not the same as, provisions originally introduced by 
Democrats in the last Congress. Much of what has been introduced today 
involves proposals to change the tax laws; and in some cases those 
proposals are meritorious; in other cases, they are not an adequate 
substitute for changes in actual energy policy.
  Just last week, President Bush made a very strong statement about tax 
policy and his determination not to modify his income tax proposals 
with other unrelated tax measures. This bill that was introduced today, 
with over 180 pages of tax proposals, seems to reflect some disconnect 
between the administration's views on the subject of tax provisions 
directed or targeted at this particular industry and the views of some 
of my colleagues on the Republican side in the Senate.
  I had hoped, and still hope, we can proceed on a bipartisan and 
collaborative basis to develop solutions to these critical problems. I 
strongly believe that a package with equal emphasis on both supply and 
demand measures, developed with bipartisan support, is the only way we 
can pass responsible energy legislation in this Congress. I hope we can 
proceed with the input of this new administration and with the input 
from the States and various stakeholders to develop such consensus 
legislation.
  It is important to step back and look at the current context. The 
restructured electricity and natural gas markets of today pose very 
different public policy challenges from the old regulatory models. 
Ever-increasing consumer demand for transportation fuels, compounded by 
the recession in Asia and subsequent determination by OPEC to actively 
intervene in the market, has increased the volatility and high prices 
of oil and natural gas.
  As the economic growth of recent years has used up the excess 
capacity in the fuels, power, and natural gas sectors, the frictions 
and imperfections in those markets have become very apparent.
  The old model of split responsibility between States and the Federal 
Government is no longer adequate. We need new mechanisms and policies 
to address regional needs and circumstances. We need a new model for 
ensuring short-term and long-term energy demand and supply needs and 
managing weather-related and supply emergencies.
  There are several regional energy boards and various planning 
commissions that could be reviewed as models for new legislation in 
this area. In consultation with the States, we need to determine how to 
ensure regional entities have adequate authority to do what is needed 
in those regions. We should evaluate whether an additional grant of 
authority from the Federal Government or a specific authorization of 
responsibility should be written into Federal statute.
  I will speak for a moment about infrastructure needs. Electric 
transmission lines, natural gas and oil pipelines, powerplants, and 
refineries have all become increasingly difficult to site. The No. 1 
problem is not environmental permitting, as some persistently argue in 
public debate today. As our society has become increasingly urbanized 
and congested, local communities have become increasingly active in 
opposing the siting of new infrastructure, and tax incentives do not 
address this major hurdle.
  Certainly the environmental rules governing the permitting process 
could be streamlined to expedite processing and facilitate investments 
in new technologies not in the marketplace when the existing rules were 
written. We should consider the possibility of siting new 
infrastructure on existing rights-of-way or at Federal facilities or on 
brownfields.
  We also need to evaluate whether incentives or different policies at 
the State or Federal level are necessary to ensure adequate investment 
in new capacity. Overemphasis on short-term and spot contracts 
compounded by ongoing uncertainty with respect to the future regulatory 
environment have had a stifling effect upon investment. We need to 
develop a consensus on policies that provide greater certainty and a 
mechanism to address the public's growing resistance to siting new 
facilities.
  On the subject of supply diversity and efficiency, the counter to 
major new infrastructure projects is to emphasize increasing energy 
efficiency and development of smaller distributed generation. We need 
to enact national standards and policies for interconnection of 
distributed generation technologies to ensure diversity of fuels and 
technologies for the future. Commercial investment in new technologies 
and nonconventional fuels will require some degree of additional 
incentives. I introduced legislation in the last Congress to address 
these issues, and I am pleased to see similar provisions included in 
this Republican legislation today.
  Increasing the efficient use of energy is the single most effective 
and least-cost policy for both the short term and the long term. 
Investments in more energy-efficient lighting, more energy-efficient 
appliances, and more energy-efficient buildings generate benefits in 
terms of energy savings, emission reductions, and human health 
improvements. Improvements to installation

[[Page 2224]]

practices for heating and cooling systems, including duct work, could 
take considerable pressure off the power grid and off natural gas 
supplies in the coming months. Expediting the replacement of older 
appliances with newer high-efficiency models would not only reduce 
energy consumption, it would create new manufacturing jobs.
  Projections of capacity constraints and high electricity prices in 
the New York urban area could be mitigated with a concerted effort to 
upgrade lighting, heating, and cooling systems in commercial buildings 
even before this summer is upon us. These improvements would 
immediately reduce pressure on the grid and save businesses money in 
the process.
  The National Conference of Mayors, at its recent meeting here in 
Washington, called for an increase of 10 percent in the efficient use 
of energy.
  Over the past decade or so, sales of sport utility vehicles and light 
trucks grew to become fully half the passenger vehicles sold in this 
country. Meanwhile, a moratorium on even studying increasing fuel 
efficiency was imposed by the Republican-controlled Congress in the 
last 2 years. I do not think we can even talk about a comprehensive 
energy policy without concrete policies to reduce oil demand. We cannot 
just produce our way to independence from foreign oil supplies.
  I call my colleagues' attention to this chart. The chart is entitled: 
``Petroleum Use Increases Mainly in the Transportation Sector.''
  This is for the period 1970 to the year 2020, and it shows a history 
and then a projection for consumption in the transportation sector, 
consumption in the industrial sector, consumption in the residential-
commercial sector, and finally consumption in the electricity 
generation activity.
  The obvious conclusion one draws from this chart is that the growth 
consumption is in the transportation sector. That is the top line. That 
is because of the inefficiency of the vehicles we are driving more and 
more each year in this country. There can be no serious discussion 
about reducing our dependence on foreign oil without a discussion of 
what can be done to reverse these trends. I hope that is part of the 
debate we have over the next few months in this Chamber about our 
energy policy.
  On the subject of supply, I do agree with my Republican colleagues on 
the need to increase the supply of petroleum products. The U.S. has 
domestic natural gas and oil resources that can be developed in an 
efficient and environmentally sensitive manner. In fact, under the 
previous administration, oil and natural gas production on Federal 
lands and in the Outer Continental Shelf increased substantially. Let 
me repeat that, Mr. President, because most people are not aware of 
that. In the previous administration, oil and natural gas production on 
Federal lands and on the Outer Continental Shelf increased 
substantially. Production on State and private lands did not keep pace 
with production on Federal lands.
  Policies should first emphasize maximizing the recovery of resources 
currently open to development. The North Slope of Alaska in the 
vicinity of Prudhoe Bay is estimated to contain at least 32 and maybe 
as much as 38 trillion cubic feet of natural gas that is ready for 
development. Until now, producing and transporting the gas from the 
North Slope has not been economical. Producers are currently conducting 
a feasibility study for a pipeline to bring the gas to market in Canada 
and also in the lower 48. The U.S. Geological Survey has estimated that 
with additional exploration in the area, the potential resources could 
be double the current estimate which I have given of 32 to 38 trillion 
cubic feet.
  Such a project will involve a number of Federal and State agencies, 
Native groups, the Government of Canada, and many private stakeholders 
in ensuring the efficient processing of all permitting and 
certifications necessary to be a top priority of this Congress. I have 
committed to Senator Murkowski to work with him to facilitate any 
legislative actions that are appropriate to accomplish this.
  Another producing area with great potential is the deep water Gulf of 
Mexico. The gulf has had an explosion of development in recent years, 
in part due to royalty incentives to offset the higher costs of 
developing a frontier area.
  The Minerals Management Service is scheduled to hold a lease sale 
later this year for an area in the eastern planning area of the gulf. 
This chart shows what I am talking about. The green area is the sale 
1881. The lease sale would cover a narrow strip of Federal waters 
directly south of the Alabama coastline which expands into a broader 
area 100 miles out in the gulf.
  The MMS, the Minerals Management Service, estimates 240 million 
barrels of oil and 1.8 trillion cubic feet of natural gas will be 
developed from this area. Those figures could go as high as 370 million 
barrels of oil and 3.2 trillion cubic feet of natural gas.
  Unfortunately, the Governor of Florida, Jeb Bush, the President's 
brother, has written to the Department of the Interior urging 
cancellation of this lease sale and any future lease sales in this 
entire eastern planning region. I certainly understand that Floridians 
may have concerns about the development close to their beaches, but 
most of this area is more than 100 miles from the State and in Federal 
waters.
  When the Minerals Management Service prepared the leasing plan for 
this 5-year-period, they had extensive public meetings and 
consultations with States. The State of Florida supported proceeding 
with this sale. This is not a wildlife refuge. It is a huge expanse of 
Federal water where industry has developed oil and gas for years and 
has developed it in a safe and environmentally sound manner. This is a 
sale which we should go forward with in order to meet the needs the 
country will have for additional supply in the future.
  A serious, long-term commitment to research and development of the 
next generation of powerplants is essential. Such a program should 
include all feasible fuels and technologies, with an emphasis on a 
fleet of technologies to ensure fuel diversity while meeting energy 
supply and emission reduction targets. Development and deployment of 
more efficient generating and end-use technologies are critical.
  Commitment to a coordinated research, development, and deployment 
program to ensure the safe and reliable operation of pipelines and 
transmission lines is also essential to restore public confidence in 
the safety of these systems. The Pipeline Safety Act, S. 235, which 
passed the Senate by a vote of 98-0 earlier this month, contains the 
framework for such a program for natural gas and oil pipelines. A 
parallel program exists within the Department of Energy for the 
electric transmission system, and I hope we will see a serious 
commitment to these programs in the budget that the President sends to 
Congress in the next week or so.
  The oil and gas industry has made great strides in increasing 
productivity and bringing down exploration and production costs. 
Development of 3D and 4D seismic analysis techniques, horizontal 
drilling, and deep water production systems are some examples that have 
enabled the industry to continue producing more oil and gas from the 
mature fields on shore and to set world records in deep water 
development in the Gulf of Mexico. A robust R&D program to maximize 
recovery, to address problems of operations in ultra deep waters, and 
to evaluate the potential of methane hydrates will be critical to 
future development of affordable natural gas supplies.
  I am concerned that the President maintain a serious commitment to 
funding critical energy research and development. We have shortchanged 
ourselves in the past by cutting investment in R&D to meet other budget 
objectives. We should not make that same mistake again this year.
  On tax policy, the Finance Committee will soon begin hearings on the 
President's budget and tax proposals. These hearings will give the 
Senate an opportunity to evaluate a range of tax incentives to enhance 
investment and distribute a generation from combined heat and power 
systems and fuel cells to renewable technologies and energy-

[[Page 2225]]

efficient property used in business. Many of these proposals are 
included in the bill that was introduced today by Senator Murkowski. 
They have been included in legislation I have introduced and 
cosponsored in the past.
  We need to carefully analyze the need for policy measures versus 
changes in tax policies as we go through this debate over the next few 
months. The omnibus Republican energy bill is very generous in its 
modification of the Tax Code as a solution to many shortfalls, 
perceived and otherwise, in our energy policy. For example, at a time 
when oil and gas prices are at such high levels, with the major oil 
companies reporting record earnings, I believe it is valid to say that 
the industry does not need additional tax incentives in order to go 
forward and explore and produce petroleum products. What we do need are 
well-thought-out, countercyclical measures that give producers 
incentives to maintain investment in domestic exploration and drilling 
during a time of extremely low prices as we had a year or two ago.
  Top priority should be given to policies that correct market failures 
and meet major policy goals of increasing efficiency and diversifying 
technologies.
  We need to develop long-term policies, and I have been speaking about 
some of those long-term policies. In the interim, individuals and 
families and small businesses are suffering today from energy bills 
that they cannot pay. President Bush, during his campaign, made clear 
his support for ensuring adequate funds for the LIHEAP program--that is 
Low Income Home Energy Assistance Program--and for the low-income 
efficiency programs.
  In addition to the stress on families and individuals, higher energy 
prices are having an impact on our economy as well. Every dollar spent 
on these programs will be immediately and completely reinjected into 
the economy, unlike tax cuts that will not have an impact for months 
into the future. I urge the President to send those in Congress a 
request for a supplemental appropriation with his budget for next year, 
a supplemental appropriation so we can adequately fund the LIHEAP 
program and adequately fund the weatherization programs that are so 
important for many in our country.
  Our majority leader, earlier this afternoon, indicated we would not 
be addressing energy policy on the Senate floor until sometime this 
summer, June or July I believe was his estimate. That may be an 
appropriate time to address long-term energy policy because it will 
take several months to develop a good piece of legislation which we can 
support on a bipartisan basis. But that is too long to wait for 
attention to these immediate needs, the need to adequately fund the 
LIHEAP program and the weatherization programs.
  We are not at a crossroads where one path or the other needs to be 
taken in our national energy policy. The supply side only path that 
some have advocated would be both futile and destructive. The path of 
maximum efficiency--renewable and emission-free energy--is a very long 
road with many milestones along the way. It would be foolhardy to put 
all of our confidence in that path, as well.
  We need a commitment to parallel paths, with a focus on maintaining 
the core values of equity and affordability and environmental 
integrity. I believe we can do that if we get on with the consideration 
of the legislation I introduced the week before we had our recess to 
address our immediate needs for adequate funding of the programs that 
assist families to deal with the high cost of energy they are facing 
this winter. And then we need this bipartisan effort to develop some 
long-term policies.
  I am confident with good will on both sides of the political aisle we 
can come up with a bipartisan piece of legislation that will move our 
country forward and help us deal with these very real problems. I 
commend all of my colleagues for their interest in these energy issues. 
I hope we can work together constructively to address them in the 
months ahead.
  I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER (Mr. Voinovich). The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. BURNS. Mr. President, I ask unanimous consent that the order for 
the quorum call be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BURNS. Mr. President, we have been talking about energy today. I 
rise now to talk about this Nation's struggle to deal with a 
threatening energy situation that is affecting our economy.
  I don't think there is any other issue that will come before Congress 
that will have more to do with our daily lives than this one.
  For those of you who do not believe we are in a situation that makes 
us all very uncomfortable, I ask you to rethink that. The prevailing 
mind-set must change in order to solve this problem that has reached a 
crisis proportion.
  Don't let anybody tell you differently. We are in the midst of one of 
the worst energy shortages this Nation has ever experienced. The oil 
shortage will pale to the one of the 1970s because it entails all forms 
of energy. I remember the long gas lines and forced reductions in 
heating energy that we faced in the 1970s. I also remember the 
financial pain that it placed on all Americans--especially Montanans. 
We come from a large State. We are very mobile. In fact, if you look at 
the size of Montana from the northwest corner to the southeast corner, 
it is farther than the distance from Chicago to Washington, DC.
  All of us were hurt during those days. Families of farmers and 
ranchers, over-the-road truck drivers, manufacturing companies, 
loggers, and the mining industry were jolted by that energy shortage--
jolted to the point where some did not recover at all.
  When coupled with high interest rates at that time and runaway 
inflation, it was truly a double whammy. I do not want to see that 
happen again. But little did I know, although I should have, that our 
memories are very short on our understanding of energy and the role it 
plays in our everyday lives. We took it for granted too long, even 
though the signs of the impending dangers were there. It is still 
talked about in the Halls here, but the message fell on ears that did 
not want to listen.
  In Montana, we have already seen the impact. Columbia Falls Aluminum 
Company, one of the largest users of electrical power, closed its doors 
for a year. Montana Resources in Butte, MT, closed its doors, and we 
don't know when that will ever be open. Many others will have to do the 
same if price signals on the cost of commodities or the cost of power 
does not change. I am told that farmers placing orders for their spring 
fertilizer needs are stunned when they hear the price. Any increase in 
the cost of production would be devastating to grain growers in 
Montana.
  As you know, natural gas is used in the production of nitrogen for 
urea and fertilizer that is used across the country.
  Facing this problem is something within itself. We are in the midst 
of a crisis. We must use caution. We cannot succumb to the knee-jerk 
reactions that are of a temporary nature. Usually, that leads to a 
long-term nightmare.
  While I know the challenge that faces us, I plan to approach it with 
a great deal of caution.
  First off, there are some folks who are promulgating the idea that we 
impose Federal price caps on electricity. That will not work in the 
Northwestern United States at this time. Price caps discourage 
investment, generation and transmission at a time when we need all 
three.
  The National Energy Security Act of 2001 introduced by Senator 
Murkowski today is a piece of legislation that is pretty well thought 
out and is supposed to stabilize energy prices as we see them today.
  That is why I am adding my name as a cosponsor to that bill. But as 
with any bill, there are portions I would like to work on with Senator 
Murkowski,

[[Page 2226]]

the administration, and the Energy Committee when we begin the debate. 
But I am generally comfortable that the legislation is a positive move 
in the right direction for our country and American consumers.
  The bill aims to protect the energy security of the United States and 
decrease America's dependency on foreign oil sources to less than 50 
percent by the year 2010 by enhancing the use of renewable energy 
sources, conserving energy resources, improving energy efficiencies, 
and increasing domestic energy supplies. As written, it will improve 
environmental quality by reducing emissions of air pollutants, 
greenhouse gases, and it will, in effect, stunt the increased costs of 
energy to the American consumer.
  But let's take a closer and intensive look at what I perceive are the 
reasons we are in this energy situation today. Electricity prices are 
skyrocketing. We are seeing high gasoline prices, oil prices, natural 
gas prices, and heating oil prices as well. In fact, the price per 
barrel of oil has gone from $15.99 in 1992 to well over $30 this year. 
Natural gas prices have gone from $1.74 per thousand cubic feet at the 
wellhead to nearly $5 per thousand cubic feet today. Electricity prices 
in the Northwest have gone from roughly $20 per megawatt hour in 1992 
to nearly $250 per megawatt hour right now. I don't have a high enough 
math degree to figure how much of an increase that really is. Gasoline 
prices were around 93 cents per gallon in 1992 and now sit at nearly a 
$1.40 or $1.50 per gallon today. And these prices are before taxes are 
added. So prices have gone up across the board for all forms of energy.
  The policies of the past 8 years, or as some would say the lack of a 
clear national energy policy, has contributed to this predicament we 
find ourselves in today.
  In the Northwest, we have seen a 24 percent increase in electricity 
consumption since 1992, while generation has only increased 4 percent. 
If you add the California situation into the mix, the discrepancy grows 
even larger. Further, the Electric Power Research Institute recently 
found that there is going to be a 20 to 25 percent growth in 
electricity demand in the next 10 years, but, again, only a 4 percent 
increase in generation and also the transmission lines to carry that 
electricity, that power. The stats speak for themselves. If we do not 
see more generation and the ability to transmit it--if those do not 
come on-line--high energy prices are here to stay. We must lose the 
mentality that electricity comes from a switch like the mentality that 
milk comes from a jug.
  Common sense tells us that our regulation policies should allow the 
supply to meet the demand.
  We can and must identify and reform or, in some cases, remove some of 
the regulatory burdens. We now have a mandate to assess and improve 
agency performance, which could lead to more timely processing of 
permits and applications to produce power.
  Public lands in the West, what role do they play? Or should they play 
a role? They do have a role to play. They may hold the key to the 
dependency of foreign sources of oil and natural gas. We can and must 
improve the usage and management of our public lands, which means 
better coordination with local citizens affected by agency action. And 
there needs to be consistency within the agencies so that investors 
have some kind of idea about when they may see a return on their 
investment.
  We have seen that oil and gas exploration increased with the previous 
administration. That is true. It is a true statement. It is also true 
that more lands were withdrawn from exploration than in any other 
administration. Exploration might have increased but, I would ask, did 
production?
  Finally, we must reduce the time and cost for approving exploration 
and management of development projects. Our Federal agencies need to 
help ease the pain of regulatory burdens that have been placed on 
America's energy consumers.
  Next, we need to be able to access those vast resources on our public 
lands. The Federal Government currently manages--now listen to this 
figure--650 million acres of land. More than 90 percent of this land is 
west of the Mississippi River. In fact, 52 percent of the land in the 
West is managed by Federal and State Governments. In Montana, nearly 50 
percent of our land is owned by the Federal Government. Folks, 95 
percent of the undiscovered oil and 40 percent of the undiscovered gas 
is estimated to be located under these public lands. It is obvious to 
me that herein lies a part of our solution to energy dependence on 
foreign sources. We have the ways and means to manage our natural 
resources on public lands so that the environment is treated like we 
would treat our own homes.
  I am confident that the new administration, working with Energy 
Committee Chairman Frank Murkowski and the rest of the Congress, will 
develop a comprehensive plan that will take the step to solve the 
problems that we are facing. As I stated before, we must look at our 
regulations and regulatory burdens. We must be able to site generation 
facilities in a timely manner. We, as policymakers and acting in the 
best interests of all Americans, should be able to site transmission 
lines in a timely manner.
  Finally, we must remove the barriers that stifle incentives for 
investment in our power markets, while at the same time providing 
incentives to do the same. We have worked ourselves out of crisis 
situations in the past. American ingenuity and imagination will again, 
in a free market, take its role and provide us again with affordable 
energy, but it must be allowed to do so. It must be allowed in our 
shared American values.

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