[Congressional Record (Bound Edition), Volume 149 (2003), Part 22]
[Senate]
[Pages 30497-30500]
[From the U.S. Government Publishing Office, www.gpo.gov]




                           ENERGY POLICY ACT

  Mr. REED. Mr. President, we have just concluded a cloture vote which 
will give us the opportunity to look more carefully at the Energy bill 
that is before the Senate. I believe such a careful and thorough review 
of the bill is entirely warranted. Indeed, it is not just my opinion 
but the opinion of countless numbers of Americans and also countless 
numbers of opinion leaders throughout the country.
  These are a sample of some of the editorials that have appeared with 
respect to the Energy bill. The Washington Post calls the bill 
``depleted energy.'' The New York Times says ``a shortage of energy''. 
The Atlanta Journal-Constitution directs: ``Put backroom energy bill 
out of the country's misery.'' The Houston Chronicle: ``Fix the flaws--
this proposed energy bill is half a loaf, half baked.''
  The American people deserve good national energy policy, created 
through an open and democratic process. Sadly, the legislation before 
the Senate is not such a policy nor has it been achieved through an 
open and transparent and collaborative process. The Energy bill was 
crafted behind

[[Page 30498]]

closed doors by members of one political party who chose to involve 
industry but not elected Senators and Congress men and women. It looks 
as if the industry got the bill they wanted.
  We have been told ``take it or leave it.'' I hope we can leave this 
bill behind. I hope this cloture vote signifies such a development.
  If we leave it behind, one of the salient aspects of the Energy bill 
presented to Members is that it does not leave any lobbyist behind. In 
fact, to borrow a statement from my colleague from Arizona, this bill, 
indeed, leaves no lobbyist behind.
  There is an Archer Daniels Midland ethanol provision adding $8.5 
billion to gas prices over each of the next 5 years while cutting $2 
billion a year from the highway trust fund. It seems to me to be 
implausible, indeed irrational, that we would enhance an industry while 
at the same time depriving our local cities and towns and States of the 
money they need to maintain the roads and bridges of America.
  According to the Denver Post, there is $180 million to pay for 
development projects in Shreveport, LA, including the city's first ever 
Hooters restaurant. I am not sure how that will help our energy policy.
  Let's not forget the $2 billion that taxpayers bear to clean up the 
mess left by MTBE producers.
  As the Wall Street Journal wrote:

       We'll say this for the energy bill that is about to come to 
     a final vote in Congress: It's certainly comprehensive. It 
     may not have all that much to do with energy anymore, but it 
     does give something to every last elected Representative.

  This bill utterly fails to establish an energy policy for the 21st 
century. It does nothing to address our country's dependence on foreign 
oil, an issue I will discuss at length in a few minutes.
  In addition, it contains so many provisions that will hurt consumers 
and damage the environment that it is impossible to list them all. Here 
are just a few:
  The bill doubles the use of ethanol in gasoline, which will drive up 
gasoline prices and deny valuable revenue to fix our roads.
  The bill fails to make the reforms necessary to modernize our 
electricity grid and enhance reliability by providing a standard set of 
rules for our electricity markets. These rules would have provided 
greater efficiencies, greater reliability, and reasonably priced 
electricity that our homes and businesses need.
  The bill increases air pollution by delaying rules to control mercury 
and ozone pollution, putting millions of Americans at risk for health 
problems.
  The bill increases water pollution by exempting oil and gas 
exploration and production activities from the Clean Water Act storm 
water program.
  The bill allows drilling on our coastlines by diminishing States' 
rights to review offshore oil development projects and other proposed 
Federal activities to determine if the projects are consistent with the 
State coastal management plans.
  The bill threatens our national security by failing to reduce the 
Nation's dependence on foreign oil and providing billions of dollars in 
subsidies to build new nuclear powerplants. And the list goes on and on 
and on.
  The American public deserves an economically sound Energy bill that 
will strengthen our economy and create good-paying jobs for Americans. 
But that is not this Energy bill before us.
  This Energy bill is business as usual. It is a special interest grab 
bag cloaked in the rhetoric that it would create jobs and spur the 
economy. The cost of the entire bill is estimated to exceed $100 
billion, more than $120,000 for each job that the authors claim the 
bill will create. With the tax breaks alone costing American taxpayers 
over $25 billion, this bill adds to the deficit and further reduces 
spending for vital programs, such as education, health care, and water 
infrastructure.
  The American public also deserve an environmentally friendly Energy 
bill that will protect our air and water and reduce greenhouse gases. 
But that is not this Energy bill.
  This Energy bill will endanger the public's health by allowing the 
energy industry to increase the pollution it emits into the air and 
water and limiting environmental review of energy projects.
  One of the most egregious giveaways to corporations, at the expense 
of the environment and public health, is the product liability 
protection for MTBE. MTBE is known to cause serious damage to water 
quality nationwide. This immunity provision--which is retroactive to 
September 5, 2003, before virtually all the recent lawsuits involving 
MTBE--would shift $29 billion in cleanup costs from polluting 
corporations to taxpayers and water customers.
  My State of Rhode Island and our residents are all too familiar with 
the dangers of MTBE. After MTBE leaked from an underground storage tank 
at a gas station and found its way into the water system of the Pascoag 
Utility District in Burrillville, RI, in the summer of 2001, more than 
1,200 families were forced to use bottled water for drinking, cooking, 
and food preparation for several months. Subsequent tests showed MTBE 
at such high levels that the State department of health recommended 
residents reduce shower and bath times and ventilate bathrooms with 
exhaust or window fans. Fortunately, Pascoag's lawsuit against 
ExxonMobil to pay for the cleanup was filed before the September 5, 
2003, cutoff date, but many similar suits filed on behalf of residents 
in New Hampshire and other States will be thrown out by this bill. 
That, to me, is a tragedy.
  The American people deserve a meaningful Energy bill that will ensure 
our national security by ending our dependence on foreign oil, 
diversifying our energy resources, and increasing our Nation's energy 
efficiency. But that is not this Energy bill.
  This Energy bill perpetuates the failed policies of the past 30 
years, focusing almost exclusively on squeezing what little domestic 
energy production is available and offering generous incentives to the 
oil and gas industry while giving little attention to developing 
alternative sources of energy and reducing consumption. We have to face 
the facts: We cannot drill our way to energy independence.
  Furthermore, the bill creates new security threats by reversing a 
longstanding ban on the reprocessing of spent fuel from commercial 
nuclear reactors. It promotes, through the Department of Energy's 
advanced fuel cycle initiative, joint nuclear research efforts with 
nonweapon states, undermining efforts to curtail new weapons systems. 
The proliferation of nuclear weapons is one of the most challenging and 
difficult and serious problems we face, and we are now involving 
ourselves with states that do not have nuclear weapons, but we are 
doing so in a way that we could inadvertently and unintentionally give 
them insights that are advantages. This is poor proliferation policy as 
well as, I believe, poor energy policy.
  Our Nation needs a comprehensive Energy bill, but we must reorder our 
priorities if we want to achieve greater energy independence. 
Yesterday's solutions will not meet today's urgent need for energy 
security. Increased efficiency in our homes, our cars, and our 
industries, renewable energy resources, and new technologies will 
secure our energy independence.
  We are on a collision course that threatens our economic and national 
security. Worldwide oil consumption is projected to grow by 60 percent 
over the next two decades. For developing countries, the growth is 
expected to be much higher, possibly as much as 115 percent. China and 
India will be major contributors to these increases in demand and will 
require imports to meet their needs.
  Chinese economic expansion is rapidly changing the oil demand map 
throughout the world. The International Energy Agency estimates that 
Chinese demand for oil next year will rise to 5.7 million barrels per 
day. This would account for about a third of global demand growth. 
Growing global demand will raise prices for U.S. consumers as countries 
race for the world's remaining oil supply.
  Two-thirds of the world's proven crude oil reserves are in the Middle 
East. While experts disagree about when global oil production is likely 
to peak, they agree that when it does, the

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vast majority of remaining untapped reserves will be left in the Middle 
East and imports to feed our growing global demand for oil will come 
from the Persian Gulf.
  What is the result of this increasing global demand? Many countries, 
including our allies and trading partners, will compete with us for 
finite oil supplies as their and our economies rely more heavily on 
imports. This will inevitably stress the delicate balance that exists 
among national interests in the world and give the Middle East a 
disproportionate leverage in the international arena.
  America's dependence on imported oil is a major constraint on our 
foreign policy. A substantial portion of our Nation's military budget 
is spent in the Middle East for the defense of oil. Our policy toward 
the Middle East will not change as long as our economy remains 
dependent on oil from the region. The United States has less than 5 
percent of the world's population but consumes 26 percent of the 
world's oil. Oil imports contribute to our trade deficit and heighten 
our economy's vulnerability to oil price spikes. According to the Rocky 
Mountain Institute, 53 percent of the U.S. oil supply is imported and 
one-fourth is from the 11 countries of the OPEC cartel.
  Net oil imports cost the United States $109 billion in the year 
2000--29 percent of the then-record trade deficit. Retail oil products 
cost Americans more than one-quarter trillion dollars per year. As long 
as the U.S. economy is dependent on oil, we remain vulnerable to major 
oil disruptions anywhere in the world and to domestic price spikes. 
According to the Department of Energy, every million barrels of oil per 
day taken out of production increases world oil prices by $3 to $5 per 
barrel. The Organization of Economic Cooperation and Development 
estimates that an increase of $10 per barrel would cut U.S. economic 
growth by .2 percent and boost consumer prices by .4 percent. A .2 
percent drop in growth would cost the economy $22 billion.
  Our economy is extremely vulnerable to variability in oil prices, and 
we are doing nothing in this legislation to give ourselves a hedge 
against those variable oil prices.
  To achieve energy security, we must wean our economy off its heavy 
reliance on oil. The immediate priority must be to head off growth in 
demand. Efficiency is the cheapest energy source. Let me say that 
again. Efficiency is the cheapest energy source--not drilling in Alaska 
or the gulf or any place else.
  In 2000, America used 40 percent less energy and 49 percent less oil 
to produce each dollar of GDP than in 1975. Why? Because after the 1973 
oil embargo, we were shocked into taking steps to improve our 
efficiency. We raised gas mileage standards. We provided support 
incentives for energy improvements and efficiencies throughout our 
society. This savings we have been able to develop since 1975 has been 
five times our domestic output of oil in that period.
  So we essentially saved five times more oil than we produced in the 
period. We need to use energy in a way that saves money. It is much 
cheaper to conserve energy and increase efficiency than build a nuclear 
powerplant. It is much cheaper and much less deadly to conserve energy 
and increase efficiency than to send troops to protect oil interests in 
the Middle East, as we have done since the first Persian Gulf war. 
While our soldiers in Iraq are fighting for many reasons, we cannot 
divorce what is happening in the Middle East from our dependence on 
oil. This bill may create a few jobs, but will it save lives? Will it 
prevent future military conflicts undertaken to feed America's 
addiction to oil? I don't think so. I think a bill like this should do 
precisely that.
  The Energy conference report that we are considering is too heavily 
weighted towards production with minimal emphasis on increasing energy 
efficiency. According to the American Council for an Energy-Efficient 
Economy, the conservation savings in the bill will amount to only about 
3 months of U.S. energy consumption between now and the year 2020. That 
fact bears repeating. Over the next 17 years, this bill conserves only 
3 months worth of energy or 1.5 percent of energy use. The bill could 
have and should have saved at least four times as much energy through 
conservation.
  This bill could have taken meaningful steps to secure our energy 
future, but the drafters of the bill chose not to. The energy 
conference could have reduced our dependence on foreign oil by 
increasing CAFE standards, but they did not. In model year 2002, the 
average fuel economy for cars and light trucks was 20.4 miles per 
gallon, a 22-year low. Yet if performance and weight had stayed 
constant since 1981, the average fuel economy would have improved 33 
percent, enough to displace the amount of oil we import from the 
Persian Gulf 2.5 times over. To displace Persian Gulf imports would 
only take a 3.35 mile-per-gallon increase in the 2000 light vehicle 
fleet. We are risking our soldiers in the Persian Gulf, but we are 
unwilling to raise mileage standards in the United States. If we don't 
do that, I fear we will be at risk again and again and again--our 
troops, our economy, and our society.
  According to the Rocky Mountain Institute, since 1975, the U.S. has 
doubled the economic activity wrung from each barrel of oil. Overall 
energy savings, worth about $365 billion in 2000 alone, are effectively 
the Nation's biggest and fastest growing major energy source, 
equivalent to three times our total oil imports or 12 times our Persian 
Gulf imports. Let me say that again. We have the greatest resource 
available to us. It is not oil under the ground or under the sea. It is 
energy efficiency. Yet this bill refuses to tap that great resource.
  During 1977 to 1985, gross domestic product rose 27 percent. Oil use 
fell 17 percent. Net oil imports fell 42 percent, and imports from the 
Persian Gulf fell 87 percent. When we were forced by the embargo in 
1973 to take steps to improve efficiency, the results were palpable, 
dramatic, and beneficial. The key to the huge 1977-85 oil savings was 
better mileage for our automobiles. Unfortunately, light vehicle 
efficiency stagnated through the 1990s. And we refused to do the 
obvious and increase those standards.
  Taking steps to reinvigorate the CAFE program is the best way to 
produce dramatic savings in oil consumption, those savings that we 
witnessed in the 1970s and 1980s. That is why I am an original 
cosponsor of S. 794, which would increase fuel economy standards for 
passenger vehicles to 40 miles per gallon by 2015 and for pickup trucks 
by 27.4 miles per gallon. This would save 1.8 million barrels of oil a 
day by 2015, and 3.1 million barrels a day by 2020. This is the Energy 
bill we need, not the one we are considering.
  Indeed, this approach, a technological approach, is most suited to 
our greatest advantages. We are the Nation of technological innovation. 
We are the Nation that first ventured into space dramatically and went 
to the moon. I cannot believe that if we give them the simple mission 
of raising gas mileage standards, that our automobile industry cannot 
do so and do so promptly without losing jobs, without losing market 
share.
  While we fail to take action to increase fuel economy standards and 
provide $100,000 tax loopholes for SUVs, China, already a growing 
economic power, recognizes the need to reduce its oil demands from the 
Middle East. In contrast to this bill, China is preparing fuel 
efficiency rules that will be significantly more stringent than those 
in the United States. The Chinese standards call for new cars, vans, 
and sport utility vehicles to get as much as 2 miles a gallon of fuel 
more in 2005 than the average required in the United States and about 5 
miles more in 2008.
  Let me guarantee you, our automobile manufacturers will be trying 
desperately to sell in that market, and we will be producing cars that 
go into that market. Yet they will turn to us and say: It is impossible 
to do that here in the United States.
  The Chinese are more sensitive to the global imbalance in supply and 
demand for petroleum products than we are. They are taking action--and 
we can't--

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because they recognize the economic implications and the national 
security implications.
  The Energy bill before us could have reduced our dependence on 
foreign oil and strengthened national security by including a renewable 
portfolio standard for America's electricity industry. A strong 
renewable portfolio standard would diversify our fuel supply, clean our 
air, and better protect our consumers from electricity price shocks.
  According to the Energy Information Agency, gradually requiring 
utilities to produce 20 percent of electricity from renewable resources 
such as solar and wind is both affordable and feasible. In addition, it 
would create jobs by spurring $80 billion in new capital investment. 
Again, this is the Energy bill we need, not the one we are considering.
  For over 30 years, through four different Presidencies, Americans 
have been promised that our Government would end the national security 
threat caused by our dependence on foreign oil. But energy security 
means more than drilling in new places for oil and natural gas. It 
starts with using less energy far more efficiently. It means obtaining 
energy from sources that are less vulnerable to terrorism or world 
politics. Unfortunately, it appears that the American people will 
continue to wait for a meaningful energy policy that promotes national 
security and reduces our dependency on foreign oil.
  We faced an important vote today. I believe we made the right vote. 
We have given ourselves more time to improve this bill, to develop 
legislation that will meet our economic, our environmental, and our 
national security needs, to serve the American people in a way which 
will make them more secure and more prosperous. I hope we use this 
intervening time not simply to return to this legislation but to 
vigorously reform legislation so that we can present the American 
people a bill that will serve their needs and not the needs of special 
interests.
  I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. DASCHLE. Mr. President, I ask unanimous consent the order for the 
quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Thomas). Without objection, it is so 
ordered.

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