[Congressional Record (Bound Edition), Volume 149 (2003), Part 8]
[Senate]
[Pages 11243-11249]
[From the U.S. Government Publishing Office, www.gpo.gov]




                   ENERGY POLICY ACT OF 2003--Resumed

  The PRESIDING OFFICER. The clerk will report the pending business.
  The legislative clerk read as follows:

       A bill (S. 14) to enhance the energy security of the United 
     States, and for other purposes.

  Pending:

       Frist-Daschle amendment No. 539, to eliminate methyl 
     tertiary butyl ether from the United States fuel supply, to 
     increase production and use of renewable fuel, and to 
     increase the Nation's energy independence.

  The PRESIDING OFFICER. The Senator from New Mexico is recognized.
  Mr. DOMENICI. Mr. President, I think the Senate now knows that S. 14, 
a comprehensive energy policy, is before the Senate. Obviously, we are 
going to have to take some time in this calendar of ours to get it 
done.

[[Page 11244]]

  We always speak of a comprehensive energy bill and we tell the 
country we need one. We have one before us. There are many of us who 
think it is very good. We won't know how good the Senate thinks it is 
until we have had a chance to go through it and vote on it. I am very 
hopeful that those who have amendments will start thinking about coming 
down here to offer them.
  The pending amendment is a major one--the so-called ethanol 
amendment. That is the bill which establishes a national goal of 5 
billion barrels by the year 2012. It is a very important contribution 
to America's independence and a component of the bill, if adopted, when 
adopted, that will create diversification. It will be moving toward 
independence rather than dependence. Obviously, it has fantastic side 
effects for rural America, agricultural America, which those who have 
been working on it for years have already spoken to, and many more 
will.
  Nonetheless, there are Senators who have concerns about the pending 
amendment. There are Senators who want to amend it. I urge and ask 
those Senators who have amendments to get them down here and let the 
Senate pass judgment on whether it wants the ethanol package that has 
been worked on for years, which is bipartisan and was introduced 
essentially by the majority and minority leaders, with cosponsors in 
ample numbers from both sides of the aisle as an indication of its 
support. I hope Senators who we understand have amendments will begin 
to bring them down so we can debate and vote on them.
  I understand that at this point the distinguished Senator from Ohio, 
Mr. Voinovich, desires to speak in favor of the amendment. As manager 
of the bill, even though we are operating under no time agreements, I 
yield the floor at this point, assuming he will give his 15-minute 
address.
  The PRESIDING OFFICER. The Senator from Ohio is recognized.
  Mr. VOINOVICH. Mr. President, I thank the Senator from New Mexico for 
this opportunity to speak in favor of the ethanol amendment, No. 539.
  This amendment has been offered by the distinguished majority leader 
and the distinguished minority leader. As I have often stated, it is 
about time this Nation had an energy policy. I have said that, I think, 
3 years in a row. Last year, we worked very hard to come up with what 
we considered to be a decent package. Unfortunately, that package did 
not come out of conference committee and we are here today, this week, 
to see if we cannot resurrect part of that and enhance it with some of 
the improvements that were done in the Energy Committee under the 
chairmanship of Senator Domenici.
  When the President released his national energy policy in May of 
2001, he noted that America was too dependent upon foreign oil; that we 
needed to increase our use of renewable fuels, such as ethanol and 
biodiesel; and that we needed to protect the environment while 
producing the energy that drives our economy. President Bush was right 
about that 2 years ago and, quite frankly, the urgency is greater today 
than it was then.
  The United States has a responsibility to develop a policy that 
harmonizes the needs of our economy and our environment. These are not 
competing needs and too often are looked upon as if they are. A 
sustainable environment is critical to a strong economy. A sustainable 
economy is critical to providing the funding necessary to improve our 
environment.
  We need a policy that broadens our base of energy resources to create 
stability, guarantee reasonable prices, and protect America's security. 
It has to be a policy that will keep energy affordable. Finally, it has 
to be a policy that won't cripple the engines of commerce that fund the 
research that will yield environmental protection technologies for the 
future.
  I believe that increasing our use of alternative and renewable fuels, 
such as ethanol and biodiesel, is a key element in our effort to 
construct a viable energy policy.
  During the last Congress, I worked with a number of my colleagues, 
including Senators Hagel, Daschle, Jeffords, Inhofe, Grassley, Bond, 
and Bingaman, to develop an ethanol package that would not only 
increase the use of renewable fuels in America but would provide other 
tangible benefits for the American people. That package was included in 
the comprehensive energy bill passed by the Senate in an overwhelming 
bipartisan vote.
  This year, thanks to the leadership of Chairman Inhofe, we were able 
to vote language out of the Environment and Public Works Committee that 
reflects that bipartisan agreement we reached last year on a bipartisan 
basis. Thanks to the leadership of our distinguished majority and 
minority leaders, as well as a large number of Senators, we again have 
the opportunity to pass legislation that contains a renewable fuels 
package.
  Mr. President, passage of an ethanol bill will protect our national 
security, economy, and our environment. Amendment No. 539 contains the 
language in S. 791, the Renewable Fuels Act of 2003, which was 
introduced and shepherded through the EPW Committee by Chairman Inhofe. 
This language establishes a nationwide renewable fuels standard of 5 
billion gallons by 2012, repeals the Clean Air Act's oxygenate 
requirement for reformulated gasoline, and phases down the use of MTBE 
over a 4-year period.
  This language has strong, bipartisan support and is the result of 
long negotiation between the Renewable Fuels Association, the National 
Corn Growers Association, the Farm Bureau Federation, the American 
Petroleum Institute, the Northeast States for Coordinated Air Use 
Management, and the American Lung Association.
  It is hard to get all those people together on any piece of 
legislation. I think it is wonderful.
  I happen to come from a State that is an oil State. We have Ashland 
Marathon Oil in Ohio. I also come from a State that has a large number 
of people who belong to the Corn Growers Association. I think we are 
fifth or sixth in the Nation in producing corn.
  I recall a couple of years ago them coming to me and asking me to 
take their cause on this particular issue. I suggested to them, rather 
than do that, I wanted them to go into a room and start to negotiate 
and start talking to each other.
  I will never forget it. We were in the LBJ Room. I saw a bunch of 
people on stage at a big news conference. A year before, if anyone had 
said those people would stand on the same stage together, they had to 
say they had something wrong with their head.
  My colleagues in the Senate should realize this is an unusual 
situation for all of these people to get together, and that is why it 
is so important that we do not allow any amendments to this very 
carefully put together compromise by all of these various organizations 
and groups.
  In fact, I suggest we ought to be looking to do that in so many more 
instances around here where people just talk past each other instead of 
talking to each other.
  It is with no small irony we are discussing issues affecting our 
gasoline supply so shortly after our troops were engaged in a war in 
the Middle East. As we know, they are still engaged and will be for a 
long time.
  While our purpose in Iraq was to end a regime that sought to become 
the arsenal of terrorism and liberate the Iraqi people from oppression 
and violence, our mere presence in that part of the world highlights 
the fact that we are entirely too dependent on the oil we import from 
the Middle East.
  The amendment the majority leader has offered, a compromise that will 
triple the amount of domestically produced ethanol used in America, is 
one essential tool in reducing our dependence on imported oil.
  It is no secret we currently import over 58 percent of the oil we 
use. Last year, we imported an average of 4,558,000 barrels per day 
from OPEC countries and 442,000 barrels per day from Iraq. It is 
interesting; all during the last several years while we were bombing 
Iraq occasionally and maintaining the no-fly zone, we were getting an 
enormous amount of oil from Iraq. In some instances, almost 5 percent 
of our oil for this country was coming from Iraq.

[[Page 11245]]

  Again, last year we imported nearly a half million barrels from Iraq. 
This dependence is not getting better. The Energy Information 
Administration estimates that our dependency on imported oil could grow 
to nearly 70 percent by 2020.
  Although our troops were successful in the liberation of Iraq, our 
greatest energy challenge remains the need to reduce our reliance on 
foreign sources and to meet our energy needs.
  President Bush has stated repeatedly that energy security is a 
cornerstone for national security, and I agree. It is crucial that we 
become less dependent on foreign sources of oil and look more to 
domestic sources to meet our energy needs, and ethanol is an excellent 
domestic source. It is a clean-burning, home-grown renewable fuel that 
we can rely on for generations to come. The renewable fuels standard in 
this language will displace 1.6 billion barrels of oil.
  Ethanol is not only good for our Nation's economy, tripling the use 
of renewable fuels over the next decade will also reduce our national 
trade deficit by more than $34 billion. A lot of our trade deficit has 
to do with importing oil. It will increase the U.S. gross domestic 
product by $156 billion by 2012. It will create more than 214,000 new 
jobs. It will expand household income by an additional $51.7 billion. 
It will save taxpayers $2 billion annually in reduced Government 
subsidies due to the creation of new markets for corn.
  The benefits for the farm economy are even more pronounced. Ohio is 
sixth in the Nation in terms of corn production and is among the 
highest in the Nation in putting ethanol into its gas tanks. Over 40 
percent of all gasoline in Ohio sold contains ethanol.
  An increase in the use of ethanol across the Nation means an economic 
boost to thousands of farm families across my State and across the 
States throughout this country.
  Currently, ethanol production provides 192,000 jobs and $4.5 billion 
to net farm income nationwide. Passage of this amendment will increase 
net farm income by nearly $6 billion annually. Passage of this 
amendment will create $5.3 billion of new investment in renewable fuels 
production capacity.
  Phasing out MTBE on a national basis will be good for our fuel supply 
because refiners are under tremendous strain from having to make 
several different gasoline blends to meet various clean air 
requirements. And no new refineries, as you know, Mr. President, have 
been built in the last 25 years.
  The effects of various State responses to the threat of MTBE 
contamination, including bans and phaseouts on different schedules, 
will add a significant burden to existing refineries. That is why we 
have to get this bill done this year. States are banning it, and 
refiners are trying to figure out how they are going to deal with this 
new marketplace.
  We went through this a couple of years ago when we had a shutdown of 
one of the oil supplies from Michigan and then from Texas. They were 
reformulating gas, and we saw the price of gasoline skyrocket at that 
time.
  The MTBE phaseout provisions in this package will ensure that 
refiners will have less stress on their system and that gasoline will 
be more fungible nationwide. That is very important.
  Expanding the use of ethanol will also protect our environment by 
reducing auto emissions, which will mean cleaner air and improved 
public health. Use of ethanol reduces emissions of carbon monoxide and 
hydrocarbons by 20 percent. Ethanol also reduces emissions of 
particulate by 40 percent. Use of ethanol reformulated gas helped move 
Chicago into attainment of the Federal ozone standard, the only RFG 
area to see such an improvement.
  In 2002, ethanol use in the United States reduced greenhouse gas 
emissions by 4.3 million tons, the equivalent of removing more than 
630,000 vehicles from the road.
  It is my hope and expectation that the Senate will adopt this fuels 
package. These issues have been in front of us for far too long, and 
now that we have everybody in the same room at the same time agreeing 
to the same legislation, we need to move it. We need to get this 
amendment done. I urge my colleagues to support amendment No. 539.
  Mr. DOMENICI. Mr. President, I ask the Senator from Ohio if he can 
remain in the Chamber for a few moments. An amendment is going to be 
offered to the bill, and I have to be elsewhere. Will the Senator do 
that for the Senator from New Mexico?
  Mr. VOINOVICH. I will be happy to.
  The PRESIDING OFFICER (Mr. Sessions). The Senator from California.


                 Amendment No. 542 to Amendment No. 539

  Mrs. FEINSTEIN. Mr. President, I very much respect the Senator from 
Ohio. He has been both a distinguished mayor and a distinguished 
Governor of his State. I hate to disagree with him, but in this case I 
find the ethanol mandate in this bill to be egregious, to be 
wrongheaded, to be just terrible public policy. I will go through my 
concerns about this mandate point by point, and then I will end by 
offering a second-degree amendment.
  My first concern is this: Only 2.1 billion gallons of ethanol were 
produced in 2002. The ethanol mandate before us requires 5 billion 
gallons by 2012.
  This fuel additive is not necessary to make clean-burning gasoline. 
Yet it is mandated into our fuel supply. Under the credit trading 
provisions of the ethanol mandate, States are going to be forced to pay 
for ethanol whether they use it or not. Let me repeat that. Under the 
credit trading provisions in this bill, States are going to be forced 
to pay for it, whether they use it or not.
  Secondly, this is going to drive up the price of gasoline. It can 
only do so. The Council of Economic Advisers and the Federal Trade 
Commission have advised President Bush that the ethanol mandate is:

       Costly to both consumers and the Government and will 
     provide little environmental benefit.

  So this provision will force up prices. California's costs are 
already high. I just paid $50 for a tank of gasoline when I was home in 
California. Wait until this bill goes into operation.
  Ninety-nine percent of all ethanol production is based in the 
Midwest. States outside the Corn Belt have severe infrastructure and 
ethanol supply problems. This, too, means higher gas prices.
  Finally, we have a dangerously high market concentration in this 
bill. The ethanol industry today is highly concentrated, with the 
largest supplier, Archer Daniels Midland, controlling 46 percent of the 
market, and the top seven firms controlling 71 percent of the market. 
That is according to the GAO.
  ADM admitted to price fixing in 1996. Its executives went to jail. 
Last year, ADM purchased its largest competitor, Minnesota Corn 
Processers, which controlled 5 percent of the ethanol market. I believe 
we are taking a great risk by allowing one firm to control such a large 
percentage of the ethanol market, and this shows it: 46 percent, ADM; 
Williams Bio-Energy, 6 percent; Cargill, 5 percent; High Plains 
Corporation, 4 percent; New Energy Corporation, 4 percent; Midwest 
Grain, 3 percent; Chief Ethanol, 3 percent. These are the top seven 
ethanol producers in the United States.
  So you have a huge market concentration by a company that pled guilty 
to price fixing. It makes me, a Californian, very uneasy about what the 
future may bring under current law.
  Gasoline is taxed by the Federal Government at 18.4 cents per gallon. 
Yet gasoline blended with ethanol is only taxed at 13.1 cents per 
gallon. The other 5.3 cents per gallon is credited to ethanol producers 
instead of funding the highway trust fund. According to the 
Congressional Research Service, over the past 20 years, this ethanol 
subsidy has cost the highway trust fund over $11 billion in foregone 
income.
  Under the proposal in the Energy Tax Bill, these ethanol subsidies 
will be paid not from the highway trust fund, as was before us last 
year, but from the general fund, at the expense of taxpayers. So 
instead of spending money for education or Cops on the Beat, or parks, 
we are funding ethanol with billions in subsidies. It makes no sense to 
me.

[[Page 11246]]

  The Congressional Research Service has indicated that the ethanol 
mandate will cost approximately $7 billion. This means $7 billion is 
diverted away from either the highway trust fund or the general fund, 
which means either we will have fewer jobs and roads or taxpayers will 
have to pick up the tab.
  As I said, this future $7 billion loss is on top of the $11 billion 
in gas tax revenue that has already been lost by giving ethanol a 
partial exemption from the fuel tax.
  My sixth reason is that ethanol has mixed environmental and health 
results. Evidence suggests that ethanol reduces carbon monoxide air 
pollution. However, evidence also suggests that mandating more ethanol 
will produce more smog in the summer months because ethanol produces 
nitrogen oxide (NOX) emissions. Studies also show ethanol 
accelerates the ability of toxic gasoline additives, such as benzene, 
to break apart and seep into the ground water. Recently, the EPA 
disclosed that ethanol plants are emitting many more dangerous toxins 
than previously thought. I do not believe we should mandate so much use 
of something we know so little about.
  One other thing on the benzene plumes, once they break away, they 
actually spread faster in water and soil than MTBE plumes. We know 
benzene is carcinogenic.
  My seventh reason is that there is unprecedented liability 
protection. A safe harbor provision in the ethanol mandate will prevent 
legal redress if ethanol and other fuel additives harm the environment 
or public health. How will communities afford cleanup costs if there is 
liability protection for ethanol? I find this really egregious.
  This reduces carbon monoxide but it increases nitrous oxide. The 
benzene plumes will break away. They spread more rapidly than MTBE. 
They can pollute our ground water but there is no remedy. There is no 
liability. They are liability-free. One of the reasons you now have the 
large oil companies going along with this bill is because they have 
liability protection.
  So we are mandating something we do not know all of the results of in 
huge amounts, that are unnecessary in the first place, that may have 
adverse consequences, and then we are saying to the consumer, sorry, 
the damage is your problem, you cannot even go to court to get redress 
in the form of damages. What a sweetheart bill. My goodness, people 
should be embarrassed.
  Ethanol already has a high tariff to keep imports out. If there is an 
ethanol shortage in the United States, States will not be able to 
import ethanol from countries abroad because of a high 54-cent-per-
gallon tariff on foreign ethanol. So what are they doing? They already 
have a high tariff on foreign ethanol. Now we are mandating 5 billion 
gallons? That is egregious. It is wrong public policy.
  My ninth reason is an ethanol mandate will strain the fuel supply. 
Using ethanol will constrict the overall gasoline supply because mixing 
MTBE with gasoline produces more fuel than mixing gasoline with 
ethanol. Consequently, in a State such as California where you have no 
extra refinery availability, you have to produce more than you did with 
MTBE because of the properties of ethanol which take more gasoline. 
That is going to be a real problem and that, too, will force up prices.
  Tenth, ethanol is not a renewable fuel. According to many scientists 
and experts, including Cornell Professor David Pimentel, it takes more 
energy to make ethanol than we save by using it. So we can hardly call 
ethanol a renewable fuel.
  Eleven, the ethanol mandate will largely benefit producers, not 
farmers. Ethanol subsidies pay more money to ethanol producers like ADM 
than farmers.
  Twelve, the bottom line, this is a very bad deal. The ethanol mandate 
reflects a deal worked out behind closed doors, between ethanol 
lobbyists and oil interests that is going to harm consumers. Mandating 
5 billion gallons by 2012 is terrible public policy. Since there are 
high costs for States like California to comply with any mandated 
Federal fuel requirement, these costs will only be passed on to drivers 
at the pump.
  The ethanol mandate, as I have said, will drive up the price of 
gasoline. Instead of imposing a new mandate on our fuel supply, we 
should be lifting the one that already exists.
  On July 29, 1999, the nonpartisan broad-based U.S. EPA blue ribbon 
panel on oxygenates and gasoline recommended that the 2 percent 
oxygenate requirement be removed in order to provide flexibility to 
blend adequate fuel supplies in a cost-effective manner while quickly 
reducing usage of MTBE and maintaining air quality benefits.
  It is long past the time for Congress to act on that. Instead of 
mandating ethanol into our fuel supply, we should be lifting all 
mandates or at least allow States a choice. We need to provide 
flexibility to refiners to allow them to optimize how and what they 
blend instead of forcing them to blend gasoline with MTBE or ethanol.
  California has long sought a waiver of the 2 percent oxygenate 
requirement. I have written and called former EPA Administrator Browner 
and the current Administrator, Christine Todd Whitman, both former 
President Clinton and President Bush, urging approval of the waiver for 
the State. Yet both the Clinton administration and the Bush 
administration have denied California's request. I know during the 
Clinton years an affirmative finding came from EPA to the White House. 
I also know that Members of both parties went to the White House to 
stop it from happening. I believe EPA would have no objection.
  In the campaign, when I heard both Al Gore and George Bush say: We 
are for ethanol--I thought, oh boy, here it comes. And here it is 
today.
  MTBE, methyl tertiary butyl ether, has been the oxygenate of choice 
by main refiners in their effort to comply with the Clean Air Act's 
reformulated gasoline requirements. Governor Davis of California has 
ordered a phaseout of MTBE in our State by the end of this year while 
the Federal law requiring 2 percent oxygenate remains, putting our 
State in an untenable position. This is because the most likely 
substitute for MTBE to meet the 2 percent requirement is ethanol, but 
it is tremendously costly to blend ethanol from the Midwest into the 
specially formulated California gasoline.
  Without eliminating these mandates, we can expect disruptions and 
price spikes during the peak driving months of this summer on top of 
the high prices motorists are already paying. Just remember, you heard 
it here.
  California has developed a gasoline formula that provides flexibility 
and provides clean air. Refiners use an approach called the predictive 
model which guarantees clean-burning RFG gas with oxygenates, with less 
than 2 percent oxygenates and with no oxygenates.
  As Red Cavaney, president of the American Petroleum Institute, said 
in March before the Energy Committee:

       Refiners have been saying for years that they can produce 
     gasoline meeting clean-burning fuels and federal reformulated 
     gasoline requirements without the use of oxygenates. . . . In 
     addition, reformulated blendstocks--the base into which 
     oxygenates are added--typically meet RFG requirements before 
     oxygenates are added.

  So they are not necessary. These facts demonstrate oxygenates are not 
necessary.
  I believe it is egregious to require this Nation to use more ethanol 
than we need in our fuel supply. Mandating 5 billion gallons into our 
fuel supply is terrible public policy. This amounts to a wealth 
transfer of billions of dollars from every State in the Nation to a 
handful of ethanol producers. It is families and businesses who will 
pay the higher costs that result from increased gas prices.
  This sweeping policy will have long-term repercussions in our 
environment, on our health, our fuel supply, and the price of gasoline. 
Since ethanol production is subsidized by the Government with a credit 
from the Federal motor fuels tax, $1 for ethanol firms like ADM means 
$1 less to improve our Nation's roads and bridges.
  The Congressional Research Service has indicated the ethanol mandate 
in this energy bill will divert $7 billion away from the highway trust 
fund. If the energy tax bill is passed into law,

[[Page 11247]]

this money will no longer come from the highway trust fund. It will 
come from the general fund. As I said, it will be paid for by 
taxpayers.
  This future $7 billion payout is on top of the $11 billion in gas tax 
revenue that has already been lost by giving ethanol a partial 
exemption from the fuel tax. Ethanol is a subsidized product. It is 
protected from foreign competition by high trade barriers. And now we 
are going to mandate a market for it. This is unconscionable. Forcing 
States to use ethanol we do not need, and forcing States to pay for 
ethanol we do not use amounts to a transfer of wealth from all States 
to Midwest corn States.
  Under the credit trading provisions in this bill, if we do not use 
ethanol, we still have to pay for it.
  Proponents of the ethanol mandate argue that gas price increases will 
be minimal, but the projections do not take into consideration the 
real-world infrastructure constraints and concentration in the market 
that can lead to price spikes. I believe everyone outside of the 
Midwest will have to grapple with how to bring ethanol to their States 
since the Midwest controls 99 percent of the production.
  California has done more analysis than any other State on what it 
will take to get ethanol to the State. The bottom line is that it 
cannot happen without raising gasoline prices.
  I am particularly concerned, as I pointed out, about the limited 
number of suppliers in the ethanol market. This leaves consumers 
vulnerable to price spikes as it did when electricity and natural gas 
prices soared in the West because a few out-of-State generating firms 
dominated the market. If we have learned anything from the recent 
western energy crisis, it is that when there is not ample supply and 
adequate competition in the market, prices soar and consumers pay.
  I also mention that Archer Daniels Midland is the dominant producer 
in the highly concentrated ethanol market. It has purchased its largest 
competitor. It controls 46 percent of the market, and that is only what 
is now produced. The company has an even greater control over how 
ethanol is distributed and marketed.
  I am also concerned about the long-term effects of mandating such a 
large amount of ethanol in our gasoline supply.
  I mentioned the health effects about which we do not know much. I 
mentioned the environmental effects.
  The scientific evidence is mixed. I believe it is bad public policy 
to mandate this amount before scientific and health experts can fully 
investigate the impact of ethanol on the air we breathe and the water 
we drink.
  We made this mistake with MTBE and now we have learned that MTBE may 
well be a human carcinogen.
  Ethanol is often made out to be an ideal renewable fuel, giving off 
fewer emissions. Yet, on balance, ethanol can be a cause of more air 
pollution because it produces smog in the summer months. Smog is a 
powerful respiratory irritant that affects large segments of the 
population, and it has an especially pernicious effect on the elderly, 
on children, and individuals with existing respiratory problems, as I 
mentioned, such as asthma.
  Earlier this month, the American Lung Association named California 
the smoggiest State, by listing nine counties and six metropolitan 
areas as having the worst conditions. A 1999 report from the National 
Academy of Sciences found:

       The use of commonly available oxygenates [like ethanol] in 
     reformulated gasoline has little impact on improving ozone 
     air quality and has some disadvantages. Moreover, some data 
     suggest that oxygenates can lead to higher Nitrogen Oxide 
     emissions.

  Nitrogen oxides, as we have said, cause smog.
  The American Lung Association report also noted that half of 
Americans are living in counties with unhealthy smog levels. Why would 
we want to take the chance of increasing these unhealthy smog levels by 
mandating billions of unnecessary gallons of ethanol into our fuel 
supply?
  Ethanol can be both good and bad for air quality. To me, it would 
make sense to maximize the advantages of ethanol while minimizing the 
disadvantages. This is exactly why States should have flexibility to 
decide what goes into their gasoline in order to meet clean air 
standards. All we should care about is if the clean air standards are 
met. Let the States have the flexibility. If we are mandating, why 
exempt manufacturers and refiners from their legal responsibility to 
provide a safe product?
  Evidence also suggests that ethanol accelerates the ability of toxins 
found in gasoline to seep into our ground water supplies. The EPA Blue 
Ribbon Panel on Oxygenates found ethanol:

       . . . may retard biodegradation and increase movement of 
     benzene and other hydrocarbons around leaking tanks.

  According to a report by the State of California entitled ``Health 
and Environmental Assessment of the Use of Ethanol as a Fuel 
Oxygenate,'' there are valid questions about the impact of ethanol on 
ground and surface water. An analysis in the report found that there 
will be a 20-percent increase in public drinking water wells 
contaminated with benzene if a significant amount of ethanol is used. 
Benzene is a known human carcinogen, and we are giving them liability 
protection.
  At a hearing held on the House side last year, Professor Gordon 
Rausser of UC Berkeley commented on the potential harm of ethanol in 
the ground water. Professor Rausser testified:

       When gasoline that contains ethanol is released into ground 
     water, the resulting benzene plumes can be longer and more 
     persistent than plumes resulting from releases of 
     conventional gasoline. Research suggests that the presence of 
     ethanol in gasoline will delay the degradation of benzene and 
     will lengthen the benzene plumes by between 25 percent and 
     100 percent.

  This evidence on the potential harm of ethanol is extraordinarily 
troubling.
  For these reasons, I cannot support the amendment offered by the 
majority leader. I would like to offer a second-degree amendment that 
would require the Governor of a State to opt into the ethanol mandate. 
If the ethanol mandate is such a great mandate, then Governors should 
want to include their States in it. Why are we forcing them to do it? 
Everybody who comes down here for ethanol says it is the best thing 
since sliced bread. If it is so good, let that case be made to the 
Governors of States and let them opt into the program.
  The Senators from Alaska and Hawaii have worked it out so that their 
States are exempted from this mandate. I believe each and every State 
should have this choice, so I am sending an amendment to the desk at 
this time that would do the same thing that Alaska and Hawaii have 
achieved. The Governor is able to opt into the mandate. If this is so 
wonderful, Governors will opt in. If it is not, Governors will not.
  I yield the floor.
  The PRESIDING OFFICER. The clerk will report the amendment.
  The bill clerk read as follows:

       The Senator from California (Mrs. Feinstein) proposes an 
     amendment numbered 542 to amendment No. 539.

  Mrs. FEINSTEIN. I ask unanimous consent that the reading of the 
amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

    (Purpose: To authorize the Governors of the States to elect to 
               participate in the renewable fuel program)

       Section 211(o)(2) of the Clean Air Act (as added by the 
     amendment) is amended by inserting after subparagraph (B) the 
     following:
       ``(C) Election by states.--The renewable fuel program shall 
     apply to a State only if the Governor of the state notifies 
     the Administrator that the State elects to participate in the 
     renewable fuel program.''.

  Mrs. FEINSTEIN. I ask the floor leader, the distinguished Senator 
from New Mexico, what is his pleasure? I understand there are no votes 
today. Shall I ask the amendment be set aside?
  Mr. DOMENICI. No, I believe we will leave the amendment pending. The 
order is not that there will be no votes today but, rather, no votes 
until all Senators have returned. It could be this evening, but there 
is no order to do that or not to do it at this point, so it will remain 
the pending amendment.

[[Page 11248]]


  Mrs. FEINSTEIN. I thank the Senator.
  The PRESIDING OFFICER. The Senator from New Mexico.
  Mr. DOMENICI. I am going to yield momentarily to the distinguished 
Senator from Ohio, Mr. Voinovich, who has worked for many years on this 
amendment. Suffice it to say, every argument the distinguished Senator 
from California made, and she made many of them, has been brought 
before the Committee on Environment and Public Works. They have been 
raised time and time again at many of the informal and formal hearings 
regarding this legislation. In the end, in the interest of getting 
something done that was uniform and that would work, they have all been 
denied. Efforts as she has put before us have been denied heretofore. I 
submit it is time for the Senate, at the earliest possible time, when 
we can, to vote. We should turn it down and leave in effect the 
national policy that is before us on ethanol, that has been so 
eloquently discussed on a number of occasions already in the Senate, 
and even today discussed by the distinguished Senator from the State of 
Ohio.
  With that, I yield to the Senator from Ohio for further comments. I 
yield the floor.
  The PRESIDING OFFICER. The Senator from Ohio.
  Mr. VOINOVICH. Mr. President, I thank the Senator from New Mexico.
  I respectfully disagree with some of the information that was 
provided to us by the distinguished Senator from California. First, I 
would like to say this second-degree amendment would create more 
balkanization of the fuel supply. We need a national fuel policy. This 
amendment, in my opinion, would further constrain the fuel supply in 
this country.
  The bipartisan agreement that was negotiated last year between 
various organizations was not done behind closed doors. It was 
relatively transparent. In spite of some of the comments made about the 
environmental threat of ethanol, that agreement was supported by the 
American Lung Association. I am sure if they had any concern that this 
was going to harm the environment, they certainly would not have signed 
on to the agreement that was entered into last year.
  The fuels agreement passed by the Senate last year includes the 
establishment of a renewable fuels standard. The RFS would provide for 
greater refinery flexibility in the fuels marketplace and the existing 
clean air oxygenate requirement, particularly as MTBE is phased out of 
gasoline. It does not require that a single gallon of renewable fuels 
be used in any particular State or region. Rather, the requirement is 
on refiners.
  The RFS will allow much greater flexibility in the use of oxygenates, 
which should reduce the chances that localized supply disruptions of 
gasoline or oxygenates will result in retail supply shortages and price 
spikes.
  The additional flexibility provided by the RFS credit trading 
provisions in the House and Senate bills would result in much lower 
costs to refiners and thus to consumers. The credit trading system will 
ensure that renewable fuels are used when and where it is most cost 
effective to do so.
  In California, according to the information I have, nearly all of the 
refiners have voluntarily switched from MTBE to ethanol in advance of 
the State's MTBE phaseout deadline of January 1, 2004. The results can 
only be described as seamless. There have been no ethanol shortages, 
transportation delays, or logistical problems associated with the 
increased use of ethanol in the State.
  In fact, according to an April 2003 California Energy Commission 
report, the transition to ethanol, which began in January of 2003, is 
progressing without any major problems. Today, approximately 65 percent 
of all California gasoline is blended with ethanol, and it is estimated 
that 80 percent of the fuel will contain ethanol by the summer.
  As a result, while only about 100 million gallons of ethanol were 
used in the State last year, California refiners will use between 600 
and 700 million gallons in 2003. Thus, efforts to carve out California 
from the RFS, while unjustified, are also completely unnecessary.
  I would also like to make the point that any State may petition EPA 
for a waiver of the renewable fuels requirement for any year. If EPA, 
in consultation with the Departments of Energy and Agriculture, finds 
that there would be substantial harm to the economy or environment of a 
State, region, or the United States, or that there would be an 
inadequate domestic supply for distribution capacity to meet the 
requirement, EPA may reduce the volume of renewable fuel required in 
whole or in part. Such a waiver would be good for 1 year but could be 
renewed. Under this circumstance, the overall renewable fuel volume 
requirement would be reduced nationwide.
  In addition, I would like to point out that the use of ethanol 
significantly reduces the tailpipe emissions of carbon monoxide, an 
ozone precursor, and VOCs and fine particulates that pose a health 
threat to children, seniors, and those with respiratory ailments. 
Perhaps that is one of the reasons the American Lung Association is 
supporting this compromise.
  Importantly, renewable fuels help to reduce greenhouse gases emitted 
from vehicles, including carbon dioxide, methane, and other gases that 
contribute to global warming--another answer to the problem of carbons.
  The fuels agreement included protects against any backsliding on air 
quality. First, the agreement tightens the toxic requirements of 
reformulated gasoline by moving the baseline that refiners must meet to 
1999-2000. Secondly, refiners have agreed to meet southern-tier RFG 
standards for VOC emissions.
  Other adjustments to the existing mobile source air toxics rule will 
ensure additional environmental protections. The agreement allows 
States and the Ozone Transport Assessment Group--I have been dealing 
with that group for many years and have had some large disagreements 
with them, but the agreement allows them to opt into RFG whether the 
State is in attainment for ozone or not.
  Finally, the bill allows EPA, as I mentioned before, to waive a 
State's volatility to tolerance for ethanol-blended fuels, if 
necessary, for air quality. In other words, if there is a problem with 
ethanol in a period of time, the State can waive out of the requirement 
during that period of time.
  I could say many other things, but I think most of the issues raised 
can be answered very easily. The last thing I would like to point out 
deals with the issue of cost. The Department of Agriculture has 
concluded that the ethanol tax incentive program actually--actually--
saves the Government money by reducing farm program costs and 
stimulating rural economies. This is a big deal for rural economies in 
the United States of America.
  I will also say that there was some statement about Archer Daniels 
Midland being the big supplier. In my State, the farmers and 
cooperatives are in the process of going forward with building 
processing plants for ethanol. You are going to have a lot more people 
in the marketplace when this legislation passes.
  The USDA has stated that the net impact of the tax incentive on farm 
programs is a net savings of more than $3 billion annually. I point 
out, just as I mentioned before, there are 11 new ethanol facilities or 
under construction in the United States. Twenty or more ethanol 
facilities are in the planning stages.
  Last but not least, the concern that has been raised regarding the 
Federal ethanol tax incentive's impact on the highway trust fund has 
been addressed in legislation introduced by Senators Grassley and 
Baucus. It is supported by a broad coalition of transportation, local 
government, business, and agricultural people. The proposal returns 
full funding to the highway trust fund while restructuring and 
preserving the Federal tax incentives for ethanol.
  So on all of these points, this amendment that we have offered, that 
is being sponsored by the majority leader and the minority leader, and 
so many Members of the Senate, is good for America, is good for our 
economy, is good for our security, and is good for

[[Page 11249]]

the environment. And the amendment from the Senator from California, I 
think, would certainly make it less effective, if it were agreed to by 
the Senate. I urge its defeat.
  The PRESIDING OFFICER. The Senator from Florida.
  Mr. NELSON of Florida. Mr. President, I ask unanimous consent that I 
be allowed to address the Senate for 2 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The remarks of Mr. Nelson of Florida pertaining to the introduction 
of the legislation are printed in today's Record under ``Statements on 
Introduced Bills and Joint Resolutions.'')
  The PRESIDING OFFICER (Mr. Voinovich). The Senator from Nevada.
  Mr. REID. Mr. President, I know the Chair is anxious to close the 
Senate for our caucuses. I ask the patience of the Chair. The majority 
will be here shortly. We have a very important unanimous consent 
request that we have to enter before the recess.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. McCONNELL. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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