[Congressional Record (Bound Edition), Volume 150 (2004), Part 7]
[Senate]
[Pages 8924-8929]
[From the U.S. Government Publishing Office, www.gpo.gov]




         JUMPSTART OUR BUSINESS STRENGTH (JOBS) ACT--Continued

  The PRESIDING OFFICER. The Senator from Arizona.


                           Amendment No. 3129

  Mr. McCAIN. I have an amendment at the desk, and I ask for its 
immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Arizona [Mr. McCain], for himself, Mr. 
     Gregg, Mr. Sununu, and Mr. Graham of Florida, proposes an 
     amendment numbered 3129.

  The amendment is as follows:

   (Purpose: To strike provisions relating to energy tax incentives)

       Strike title VIII.

  Mr. McCAIN. Mr. President, the amendment is rather straightforward. 
It strikes the energy tax provisions in this bill which are estimated 
to cost nearly $18 billion. I read from an April 19 article from the 
Washington Post:

       Congress's task seemed simple enough: Repeal an illegal $5 
     billion-a-year export subsidy and replace it with some modest 
     tax breaks to ease the pain on United States exporters.

  This article is entitled ``Special-Interest Add-Ons Weigh Down Tax-
Cut Bill.''

       But out of that imperative has emerged one of the most 
     complex, special-interest-riddled corporate tax bills in 
     years, lawmakers, Senate aides and lobbyists say. The 930-
     page epic is packed with $170 billion in tax cuts aimed at 
     cruise-ship operators, NASCAR track owners, bow-and-arrow 
     makers, and Oldsmobile dealers, to name a few. There is even 
     a $94 million break for a single hotel in Sioux City, Iowa. 
     Even one of the tax lobbyists involved in drafting it 
     conceded the bill ``has risen to a new level of sleaze.''

  I agree with that lobbyist. This has risen to a new level of sleaze.
  The lobbyist goes on to say:

       ``I said a few months ago, any lobbyist worth his salt has 
     something in this bill,'' said the lobbyist, who would only 
     speak on condition of anonymity. ``Now you see what I'm 
     talking about.''

  The Wall Street Journal, Wednesday, May 5, in an article entitled 
``Export Tax Follies:''


[[Page 8925]]

       But instead of solving the problem, congressmen are 
     engaging in one of their epic tax-bidding wars . . . 
     including a $482 million sop to the insurance company, $189 
     million in ``transitional assistance'' for Oldsmobile 
     dealers, and an $8 million tax break for makers of children's 
     bow and arrows.
       Not only that . . . $15 billion in energy tax breaks were 
     thrown in as an added sweetener. The Senate couldn't pass the 
     energy bill as a stand alone measure, so he's looking for any 
     shipwrecks that will sail this year. The measure includes an 
     overhaul of tax treatment for ethanol and subsidies for 
     ``clean'' fuels. . . .

  Mr. President, there is an abundance of media coverage of this 
legislation. It reaches, as the lobbyist said, in my view, a new level 
of sleaze.
  We have to consider what we are doing. We had a $170 billion tax 
break, which really is $170 billion that will not go into the U.S. 
Treasury. So Alan Greenspan, last week, says the greatest threat to our 
Nation's economy is the deficit, and that a free lunch you don't have 
to pay for hasn't been invented yet. Yet here we are with $170 billion 
worth of tax breaks, tacking on to it $18 billion in tax breaks on an 
energy bill that this body could not pass.
  It is remarkable, with a half trillion deficit, and we are enacting 
new tax credits, for--guess who--the oil and gas industry in America 
which, the last time I checked, is doing pretty well.
  The majority of my colleagues on this side of the aisle just voted 
against an extension of the unemployment benefits for Americans who 
remain unemployed and haven't profited by this reemerging and 
strengthening economy. My God, we won't give them an extension of their 
unemployment benefits. But if the ethanol people of Archer Daniels 
Midland need it, by God, we will give it to them. Mr. President, $170 
billion in tax credits but no extension of unemployment benefits for 
people who have been out of work, it is a remarkable commentary.
  Out of all the provisions that have been added to this bill since it 
was first brought to the floor of the Senate on March 3, I find the 
energy tax title the most egregious. That is why I am offering this 
amendment to strike it. What do these provisions have to do with the 
underlying bill? Nothing. What do they have to do with ensuring that 
tariffs that have been placed on our Nation's manufacturers since March 
1 are lifted? The answer is nothing.
  I understand how sweet this is--how sweet this is--for these 
lobbyists who are doing so well here in Washington. But if the Senate 
is to consider an energy tax incentive bill or an energy authorizing 
bill, we should be following regular order, bringing legislation to the 
Senate floor, and debating it in its own right. Instead, a 319-page 
energy tax title was incorporated without a vote.
  The proponents of this bill contend it is ``revenue neutral'' and 
that all the tax cuts in the bill are paid for with offsets. How many 
times have we played that game? How many times have we used the same 
old offsets on the same old bills, and somehow, with all these offsets, 
we now have a half-trillion-dollar deficit? It is hard to imagine. For 
example, 66 provisions of offsets are identical to provisions that were 
included in the highway bill. So we are using the same offsets for the 
highway bill, the same offsets for the energy bill. And as some more 
pork comes rolling in here--squealing in here--we will probably use 
those same offsets again. I understand the duplicative offsets total 
about $5 billion. Of course, if these bills ever get to conference and 
conference agreements are reached, only one measure could include these 
offsets.
  Again, the amendment I am offering would strike title VIII of the 
pending bill.
  By the way, I have no illusion as to how this vote is going to turn 
out. The Senator from Michigan just came up to me and said: Well, don't 
take away my tax break. I want to take away every tax break, I say to 
the Senator from Michigan.
  The oil and gas subsidies are estimated to cost about $5 billion and 
are illustrative of what TIME magazine referred to as the great energy 
scam on the American taxpayers. This graphic is from an investigative 
report on synthetic fuel credits which appeared in the October 2003 
issue of TIME magazine. While synthetic fuel credits are only one 
indefensible part of this energy tax title, the entire oil and gas 
subtitle is a shameless scam that benefits the already enormously 
profitable oil and gas industries with little or no benefit to the 
American public.
  I would like to highlight a few provisions that defy both fiscal and 
common sense. First, there is about $835 million provided to wealthy 
oil and gas corporations to write off the cost of looking for domestic 
oil and gas reserves. As if the oil and gas companies do not have 
sufficient incentives or resources of their own, we are going to make 
the taxpayers pay for the basic cost of doing business. This provision 
sweetens the already generous tax treatment and would allow businesses 
to recoup their costs for both successful and unsuccessful projects. So 
failure will be as financially sweet as success.
  I suppose some of my colleagues may maintain that providing this 
opportunity for greater riches to oil and gas corporations could result 
in more supply for the American public. Well, the Energy Information 
Administration reports that such claims are not backed by the facts. 
According to a February 2004 EIA report, these subsidies do not impact 
supply. The EIA report states:

       The tax provision is expected to have a negligible impact 
     on oil and gas production because . . . year-to-year cash 
     flow can be at least 35 times larger than the tax value and 
     consequently the provision is unlikely to appreciably sway 
     drilling decisions.

  In other words, these companies are too rich to pay attention to a 
paltry $835 million.
  Another provision of this bill, which is perhaps even more egregious 
than picking up the tab for oil and gas exploration, would provide 
nearly $2 billion for the extension and modification of tax credits for 
producing fuel from a nonconventional source. ``Nonconventional'' is 
the operative word when we talk about synthetic fuels. There is nothing 
conventional about this so-called fuel, a creation of Congress in 1980. 
Now that this tax credit scam has been exposed by not only TIME but by 
our own IRS, Congress has no excuse to perpetuate this expensive hoax, 
which has cost the taxpayers $4 billion since 1999.
  If there is anyone who does not know how synthetic fuel is made, the 
process conjures up images of Rumplestiltskin turning straw into gold, 
except in this case it is not turning something into anything 
different. But this is not a fairytale.
  Here is how the process goes. First, you start with coal, and then, 
since IRS rules require a chemical change to occur, you must spray the 
coal with something other than water--usually it is diesel fuel or pine 
tar--and, magically, you now have a ``synthetic fuel,'' which sounds 
better than ``sprinkled'' coal, I guess. The company then sells the 
coal to a user, such as a powerplant, for a slightly lower cost than 
untreated--or unsprinkled--coal and claims a huge tax credit for 
``manufacturing a synthetic fuel.'' If anyone missed a step of this 
miraculous process, it is coal, to sprayed coal, to gold.
  I would like to show you how golden this tax credit can be. This 
graphic shows the reduced tax rate of one multinational hotel 
corporation that also produces synthetic fuel. This corporation is not 
the biggest beneficiary of the synthetic shelter, but it is 
illustrative of the point that one does not need to be in the oil or 
gas business to strike it rich with synthetic fuels.
  The IRS has struggled mightily with this tax shelter that grows ever 
more expansive and expensive. It has undertaken two formal reviews of 
synthetic fuel production and testing facilities and concluded that 
there is not any synthetic fuel being produced. This remarkable finding 
is presented in a November 2003 IRS bulletin, and I quote:

       The Service believes that the processes approved under its 
     long-standing ruling (that a synthetic fuel must differ 
     significantly in chemical composition from the substance used 
     to produce it) do not produce the level of chemical change 
     required.

  Incredibly it goes on to say:

       Nevertheless, the Service continues to recognize that many 
     taxpayers and their investors have relied on its long-
     standing ruling to make investments.

  So basically the IRS is going to give this lucrative hoax a ``wink 
and a nod''

[[Page 8926]]

while it waits for Congress to end this sham, which is very unlikely.
  Another objectional provision would provide subsidies for the highly 
profitable gas production method called coalbed methane. According to 
the Department of Energy, coalbed methane accounted for 57 percent of 
the growth in U.S. natural gas production between 1990 and 1999. 
Coalbed methane wells are proliferating in western coalfields and 
wherever else coalbeds exist, without a tax incentive.
  As you can see from these tables, the number of wells drilled in the 
Powder River Basin in Wyoming has skyrocketed. The tremendous growth in 
production from 1993 to 2002, with 10,718 wells in this Wyoming field, 
occurred without a tax credit, and the BLM expects that another 40,000 
new wells will be drilled in this area over the next decade. So I think 
it is clear that this industry has not been waiting around for taxpayer 
dollars.
  If any of my colleagues believe that by making a very profitable 
industry even more profitable, these tax breaks will help increase gas 
supply and bring down prices, they are wrong. According to the 
Congressional Research Service:

       [V]irtually all of the added gas output (from coalbed 
     methane) has substituted for domestic conventional gas rather 
     than imported petroleum, meaning that the credit has 
     basically not achieved its underlying policy objective of 
     enhancing energy security.

  In other words, the gas industry has turned from conventional 
production to coalbed methane with its higher margin of profitability 
without an increase in total supply.
  Additionally, the Congressional Research Service found:

     that from an economic perspective, the Sec. 29 credits 
     compound distortions in the energy markets rather than 
     correcting for preexisting distortions due to pollution, oil 
     import dependence, ``excessive'' market risk, and other 
     factors.

  Therefore, one must ask, what is the American public actually 
receiving from these tax incentives? Economic distortions which 
translate into higher gas prices. I am certain my colleagues do not 
want to perpetuate the perverse price effect of this tax credit.
  In the Western U.S., most lands operate on the doctrine of ``split 
estates'' with different owners of the surface property rights and 
underlying mineral rights. As the number of coalbed methane wells has 
skyrocketed, the conflicts with thousands of property owners has 
intensified. That is due to the extensive environmental damage caused 
by coalbed methane production, which involves pumping massive volumes 
of groundwater to release the methane held by hydraulic pressure.
  Clean coal. The energy tax title would provide an estimated $1.6 
billion for the so-called clean coal program. Since 1984, the 
Department of Energy has already invested $1.8 billion in the clean 
coal program to ``explore technologies,'' making it the largest 
environmental technology development effort the Federal Government has 
ever conducted. But we cannot stop there. This bill would provide an 
additional $1.6 billion toward the development of still more clean coal 
technologies. Before we require the taxpayers to pay even more for this 
program, should we not first consider what we have received in return 
for the first $1.8 billion?
  According to the Department of Energy, the $1.8 billion worth of 
investments went to Bechtel, Westinghouse, General Electric, Texaco, 
and other companies that produced technology patents and products that 
have been sold around the world, generating billions of dollars for 
these companies. Besides the enormous profits these companies made by 
using taxpayer dollars for their research and development, serious 
deficiencies in the program explain why a new project has not been 
added in the last 5 years, and why this program should not be funded 
again.
  One of the primary goals of the clean coal program was to produce 
technologies that scrub emissions from powerplants that result in 
cleaner air. However, according to a 2001 GAO report, new technologies 
produced from the $1.8 billion allocated for new clean air technologies 
have ``limited potential for achieving nationwide emission reductions 
when used at existing coal-burning facilities.''
  The clean coal program management shows more deficiencies. The GAO 
reports many of the clean coal technology demonstration programs have 
shown severe problems in meeting costs, schedule, and performance 
goals.
  Biomass. Nestled within the provisions of this bill is one of the 
more ironic and bizarre U.S. policies to be considered. Under the false 
guise of exploring environmentally friendly alternative energy sources, 
this bill extends and expands a subsidy offered to facilities that burn 
animal droppings. I realize a handful of States are facing legitimate 
environmental challenges stemming from massive amounts of poultry 
manure and need to find a way to manage the toxic substances that are a 
byproduct of these droppings. I favor determining the most effective 
method of addressing this environmental concern within the proper land 
management context. However, it would be ironic indeed if, in ordinary 
to satisfy the need for a clean, renewable energy source, the Senate 
passes legislation subsidizing the burning of animal droppings, a 
process which has been found to emit toxic heavy metals such as lead, 
mercury, and arsenic.
  No less green an organization than Friends of the Earth opposes 
burning these droppings as an energy source because the process 
``cause[s] serious environment and community health problems.'' 
Moreover, EPA studies have suggested these facilities have the 
potential to cause more air pollution than a coal plant. On top of all 
this, these facilities drive up prices on natural fertilizers used on 
American farms, actually detracting from an environmentally friendly 
farming process that requires no Government subsidy.
  Why on earth are we wasting valuable money on such a ridiculous, 
irrational program, especially when such dire financial and energy 
needs are facing this country today?
  Another interesting provision concerns the proposed Alaska natural 
gas pipeline. There is a good deal of support for this new pipeline 
from Alaska to the lower 48 States, but to what extent are we willing 
to mortgage the Federal budget to help ensure its reality? The energy 
tax title would provide a huge subsidy to the natural gas companies 
proposing the construction of the Alaska natural gas pipeline. In the 
case of a drop in the price of natural gas, the energy title 
establishes a price floor--how many manufacturers in America would like 
to have a price floor for their product?--of $1.35 per thousand cubic 
feet. If the market price falls below that amount, the Federal 
Government would have to pay the difference to the private companies 
for a maximum benefit of 52 cents per thousand cubic feet. The credit 
would be in effect for the next 25 years. Even the conferees on the 
energy conference committee refused to include this provision in its 
final agreement on H.R. 6, which, considering the wasteful special 
interest giveaways included, should make one wonder about the merits of 
this provision.
  I could go on and on about this bill. I could cite many examples, 
such as dog-track owners and all the other provisions. But this is 
probably the most egregious we have and it is quite remarkable. It is a 
very unfortunate way of doing business, because if we establish this 
precedent of tacking on anything we want to legislation that is totally 
irrelevant, then I fear the process has broken down even more badly 
than I first suspected.
  Let me again put this in the context of the environment in which we 
exist today. This bill, which was designed to provide $5 billion in 
order to satisfy our European friends' concerns, has now grown into a 
$170 billion ``Christmas tree'' of goodies for every conceivable 
special interest. When we are running multitrillion-dollar surpluses, I 
guess you could argue it wasn't such a bad idea.
  Last week Alan Greenspan said the greatest danger to America's 
economy is these burgeoning multitrillion-dollar deficits. We have 
never enacted tax cuts while we are in a war. If one thing has been 
made abundantly clear, it is the cost of the Iraq war is going to be

[[Page 8927]]

incredibly high--far higher than we ever anticipated. Around here, it 
is business as usual--well, it is not business as usual; this is 
probably about the worst I have seen.
  I won't say the worst because I probably could think of something. It 
is as bad as anything I have ever seen. We have no fiscal discipline in 
this body, and our kids are going to pay a very high price for it. When 
the bow-and-arrow manufacturers and all of the other things that are 
stuffed into this, such as horse and dog-track owners, and all of the 
others--cars, automobiles, Oldsmobiles, all of these things are now 
amassing. I urge my colleagues to vote for the amendment.
  I yield the floor.
  Mr. GRASSLEY. Mr. President, Senator McCain has filed a motion to 
strike all of the Energy tax provisions from the JOBS bill. Senator 
McCain has a right to his opinion, but I overwhelmingly disagree with 
his opinion and I urge all of my fellow Senators to vote ``No'' on this 
amendment.
  In order to secure our country's economic and national security, we 
need to have a balanced energy plan that protects the environment, 
supports the needs of our growing economy, and reduces our dependence 
on foreign sources of energy.
  Every man, woman and child in the United States is a stakeholder when 
it comes to developing a responsible, balanced, stable, long-term 
energy policy.
  The events of September 11 have made very clear to Americans how 
important it is to enhance our energy independence. We can no longer 
afford to allow our dangerous reliance on foreign sources of oil to 
continue.
  But ``wait'' we do, and we do it well. It has been over 10 years 
since we have passed energy legislation.
  And if we wait until we get that ``perfect'' bill, the wait will be 
forever.
  Today, we have the opportunity to correct that because we have added 
all of the Energy Tax provisions to this JOBS bill. Our energy tax 
provisions obviously are not perfect. And to those who complain about 
various provisions, I say, so what do we do? Do nothing? Wait for the 
``perfect'' bill?
  These provisions may not be perfect but let me tell you what we do 
have. We have energy tax provisions that were crafted from inception in 
a bipartisan manner. From the beginning, both Democrat and Republican 
staffs from both Finance and Energy Committees worked side by side to 
craft a fair and balanced energy tax package.
  I may not personally believe in every one of these provisions, but 
the process has worked to craft an energy tax package that is good for 
all 50 States and all forms of energy production, both renewables and 
traditional oil and gas and conservation and energy efficiency.
  Some of the amendments pending on this bill suggest the energy tax 
provisions will pick winners and losers. Is that true? Am I OK with 
that?
  The answer is a definite ``yes.'' Remember, the winners we pick in 
this bill are all Americans, all of whom have a stake in reducing our 
dependence upon foreign energy. We do this by favoring domestic 
producers over foreign producers.
  It is well past time to get serious about implementing energy 
efficiency and conservation efforts, investing in alternative, 
renewable fuels and improving domestic production of traditional 
resources.
  As you know, Mr. President, I support a comprehensive energy policy 
consisting of conservation efforts, development of renewable and 
alternative energy resources, and domestic production of traditional 
sources of energy.
  And we will have an opportunity under Senator Domenici's leadership 
to address the energy policy issues at a later date, but for now we 
will only be considering the energy tax provisions.
  As my colleagues well know, I have long been a supporter of 
alternative and renewable sources of energy as a way of protecting our 
environment and increasing our energy independence.
  I strongly support the production of renewable domestic fuels, 
particularly ethanol and biodiesel. As domestic, renewable sources of 
energy, ethanol and biodiesel can increase fuel supplies, reduce our 
dependence on foreign oil, and increase our national and economic 
security.
  As Chairman of the Senate Finance Committee, I continue to work 
closely with the ranking member, Senator Baucus, to defend an energy 
tax title that strikes a good balance between conventional energy 
sources, alternative and renewable energy, and conservation.
  Among others, it includes provisions for the development of renewable 
sources of energy such as wind and biomass, incentives for energy 
efficient appliances and homes, and incentives for the production of 
non-conventional sources of traditional oil and gas.
  I believe the energy tax provisions included in the JOBS bill does a 
good job to address our Nation's energy security in a balanced and 
comprehensive way.
  I am also pleased that with the JOBS bill we have finally gotten to a 
point to address this important issue that has such a direct impact on 
our national and economic security.
  For the sake of our children and our grandchildren, we must implement 
conservation efforts, invest in alternative and renewable energy, and 
improve development and production of domestic oil and natural gas 
resources. And we need all of the energy tax provisions to be included 
in the JOBS bill. I urge you to vote ``no'' on Senator McCain's effort.
  The PRESIDING OFFICER. The Senator from Montana is recognized.
  Mr. BAUCUS. Mr. President, we have so many Members on this side who 
want to speak in opposition to the amendment, as well as Senators on 
the other side, but we are quite restricted as to the time to allocate. 
First, I will begin with Senator Bunning, 4 minutes.
  The PRESIDING OFFICER. The Senator from Kentucky is recognized.
  Mr. BUNNING. Mr. President, I rise in strong opposition to the McCain 
amendment. We need these energy tax provisions now more than ever. The 
price of energy has risen sharply and is only expected to keep going up 
and up.
  The average price of a gallon of unleaded gasoline now is $1.84 a 
gallon. Natural gas prices are 70 percent higher than they were a year 
ago. Coal prices are up 30 percent since last year. These high prices 
are affecting Americans' pocketbooks at a time when our economy is on 
the rise.
  If Congress does nothing to encourage more production, Americans will 
continue to struggle financially and our economic recovery will 
evaporate.
  The energy tax package in the JOBS bill will help our country meet 
its future energy needs and will help kick our economy into gear.
  Whether you are a Republican or a Democrat, we all know we need more 
production. Having a cheap, ready supply of energy is now more critical 
than ever to our economy. These tax incentives in this bill are crafted 
to help this production supply. Striking them from the bill will only 
lead to higher prices and more energy inflation.
  The energy tax incentives will also mean more jobs and more money in 
Americans' wallets. I am certain every single Senator has talked to his 
or her constituents recently about the need for the economy to create 
more jobs. It is a staple of the Presidential race. It is what the 
American people are talking about. We know the energy incentives in 
this bill will induce and boost industries like the coal community in 
my State and put people to work.
  There is nothing wrong with that. Passing this bill and these energy 
amendments will give us all a chance to put our money where our mouth 
is.
  Congress has been playing political football with an energy bill for 
years now. I think it is time to end the game. Many of us would prefer 
to pass a stand-alone energy bill. We have been trying and trying, with 
no effect. But for one reason or another, this bill has not passed, and 
this is probably our last and best shot to pass changes that will make 
a difference right away to our Nation and to our economy.
  Finally, and most importantly, this is a national security issue. We 
all talk the talk when it comes to promoting America's energy 
independence and reducing our reliance on foreign oil and

[[Page 8928]]

sources of energy. Here is a chance to actually do something about 
that. By beating this amendment and passing the base bill, we will 
provide a significant boost to domestic energy production.
  We have a lot of problems in Iraq, but we cannot bury our head in the 
sand. We have to recognize that continuing to rely on energy supplies 
from that part of the world is a threat to our national security. We 
cannot change that overnight. We can start taking the first steps now 
by passing the energy tax provisions and stepping up domestic 
production.
  I urge a ``no'' vote on the McCain amendment. As a member of both the 
Energy Committee and the Finance Committee, I helped write the energy 
incentives in this bill. The incentives are good legislation and will 
help our economy. Our workers and our country need this bill.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Montana.
  Mr. BAUCUS. Mr. President, I yield 4 minutes to the Senator from 
Michigan, Ms. Stabenow.
  The PRESIDING OFFICER. The Senator from Michigan.
  Ms. STABENOW. Mr. President, I also rise to oppose this amendment. I 
first wish to thank those involved in the underlying bill and the tax 
bill for focusing on major provisions for manufacturing. I thank both 
the Senator from Iowa, the chairman, and the Senator from Montana, for 
their leadership on this bill.
  These tax credits in this bill relate directly to support for 
manufacturing. It is very important that the energy tax credits for 
consumers that are in this bill be passed so that we can lower purchase 
prices for vehicles and energy-efficient appliances and be able to help 
build market demand for more efficient, environmentally beneficial 
cars, appliances, and other products.
  Many of these credits are for consumers to help lower the prices 
because we know until there is a large demand and large production, the 
prices initially will be high. That is the reason for the hybrid 
vehicle tax credit for consumers, alternative fuel vehicle credits for 
consumers, and fuel cell credits.
  The Federal Government must partner with American businesses and 
consumers to encourage the development, purchase, and use of energy-
efficient technologies, and that is what is done through these energy 
tax credits.
  All of us want our automobiles to be more fuel efficient--and 
certainly, as we look at the skyrocketing gas prices, this has never 
been more clear--so we can be less reliant on foreign sources of energy 
as well, but we need to be doing those things that will encourage the 
production of alternative fuel vehicles to move us away from that 
dependency on foreign sources of energy.
  U.S. automakers have already invested hundreds of millions of dollars 
in developing better, cleaner technologies. For example, a hybrid 
version of the Ford Escape SUV, which has a fuel economy of 40 miles 
per gallon, will be available to consumers the end of this summer. It 
is very important that we put this in place as part of supporting that 
new effort. A hybrid electric version of the GM Sierra full-size pickup 
truck will also be available to consumers this year. And 
DaimlerChrysler will be producing a hybrid version of the Dodge Ram 
pickup truck starting this year as well.
  These moves into alternative fuel vehicles are part of the way we 
move away from foreign oil dependence. We need to partner to help 
create that market and help give consumers the ability to purchase 
these vehicles in order to make them available. Developing fuel cells 
and other more fuel-efficient technologies really does require a 
partnership with the Federal Government and with industry. In order to 
achieve maximum fuel efficiency, the Federal Government must take the 
role as partner, along with our companies, engineers, and workers, to 
make this happen. That is what the energy tax credits for fuel-
efficient vehicles in this bill do.
  I should also indicate that it is necessary to invest in 
infrastructure, such as hydrogen refueling stations, to support the 
development of fuel cell technology. Again, there are tax credits in 
this bill that allow that to happen.
  There are other important provisions, of course, for ethanol, of 
which I am very supportive, as well as the efforts to address energy-
efficient appliances. Again, we have consumer tax credits in this bill 
to help encourage the purchase and the development of energy-efficient 
appliances as well as items related to the home.
  Mr. President, I will strongly oppose this amendment, and I hope my 
colleagues will join in a bipartisan way to defeat it.
  Mr. BAUCUS. Mr. President, I yield 3 minutes to the Senator from New 
Mexico.
  The PRESIDING OFFICER. The Senator from New Mexico.
  Mr. BINGAMAN. Mr. President, I thank my colleague from Montana. As 
always, he is generous in yielding to other Members on these issues. I 
also join the previous two speakers in opposing the amendment of the 
Senator from Arizona.
  The energy tax incentives that are part of this bill is a package of 
incentives that we reported out of the Finance Committee and added to 
the Energy bill essentially in the same form we have in the 107th 
Congress, and we have done it again in the 108th Congress. It is my 
strong belief that there is broad bipartisan support in the Senate for 
this set of energy tax provisions.
  I cannot tell you that every single one of them is exactly as I would 
want it to be, but there are incentives to encourage more use of 
renewable energy, to encourage continued production of oil and gas and 
increase production in some cases, to provide incentives for a shift 
toward more use of hybrid cars and advance vehicles. All of those items 
are positive.
  As far as renewable energy is concerned, one very important provision 
contained in this bill that relates to my State and many States is the 
extension of the tax credit--1.8 cents per kilowatt hour tax credit--
for wind energy and other types of renewable energy. There are many 
wind energy projects that are ready to go around this country; people 
are waiting to see whether Congress will go ahead and extend this 
production tax credit for renewable energy that covers them. I think 
this is a good policy. We need to do that as part of this bill.
  There are other provisions that provide incentives for energy-
efficient homes, energy-efficient commercial buildings. They provide 
incentives for efficient appliances, smart meters which consumers can 
use to reduce their use of energy. There are a great many provisions in 
this bill that I believe would be useful and would move us in the right 
direction.
  This is not a silver bullet. This does not solve our energy problems. 
I do not want to represent that to anyone. These are, on balance, very 
positive actions that we can take, and this clearly, in my mind, is 
some of the most useful language that we are proposing to enact as part 
of this overall bill.
  Mr. President, I appreciate the chance to speak. I appreciate my 
colleagues allowing me to go ahead of them, particularly the Senator 
from Idaho, who yielded time to me.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Montana.
  Mr. BAUCUS. Mr. President, I yield 4 minutes to the Senator from 
Idaho.
  The PRESIDING OFFICER. The Senator from Idaho.
  Mr. CRAIG. I thank the Senator from Montana.
  Mr. President, the Senator from Arizona, in his amendment, suggests 
to those of us listening and to those who might be observing us on C-
SPAN that the oil industry is the most profitable industry in the 
country and somehow we are subsidizing them beyond reality or respect.
  Let me tell you what the oil industry did this last quarter.
  Their net earnings went up .6 percent to 6.9 percent. That was their 
net earnings. It is much more profitable owning a Starbucks on the 
street corner than it is to own a major oil company in America today. 
He did not say that the profit margins of the banking industry are 19.6 
percent return on investment.

[[Page 8929]]

So let us get real and, most importantly, let us be honest.
  Let's talk about section 29, the synthetic fuels. What was just 
represented by the Senator from Arizona is not in this bill. What is in 
this bill, if one deals with synthetics, is there has to be a reduction 
in the stocks and the NOX by 20 percent or there has to be a 
reduction in mercury by 20 percent to qualify for the tax credits in 
this provision. That is the reality of what we are talking about.
  If we want to get America producing again, if we want to satisfy the 
consumer who in anger paid over $2 at the pump today, then we have to 
incentivize an investment community to get back into the business of 
producing.
  Fifteen years ago, there were 325 refineries in America. Today, there 
are less than 125. Why? Too much regulation, too much cost, going 
offshore. How do we get them back? Incentivize them to come home; 
incentivize them to begin to produce in this country. Because of 
Government regulations and costs, they either go offshore to produce or 
they quit producing.
  America's refineries today are at 94-percent capacity. What this tax 
incentive does is incentivizes our country to get back into the 
business of producing.
  Want to incentivize offshore deep oil drilling? When we did that for 
the gulf a decade ago, production went up 500 percent. Why? Because it 
was terribly expensive to drill out there, and so we said if they drill 
out there and if they find oil, they can write this off.
  Our country relies on almost 30 percent of our capacity now in the 
gulf and in the deep waters. It worked for America and it worked for 
America's consumers.
  So to suggest we are doing something wrong is not representing the 
reality of the energy sector of this country today as a piece of our 
economy and our willingness to incentivize it. That is why we are here. 
That is why this provision is in the FSC bill and that is why the 
McCain amendment ought to be rejected.
  I yield the floor.

                          ____________________