[Congressional Record (Bound Edition), Volume 159 (2013), Part 4]
[Senate]
[Pages 6024-6026]
[From the U.S. Government Publishing Office, www.gpo.gov]




                            ENERGY STRATEGY

  Mr. COONS. Madam President, Senator Murkowski of Alaska is a strong 
leader on energy issues, and I am proud to work with her on the Energy 
and National Resources Committee. It is fitting that we are here 
despite representing different States from different regions of the 
country to talk about an issue we believe can bring us together.
  Republicans and Democrats alike can agree that when it comes to 
American energy, we need a comprehensive, all-of-the-above strategy, 
and that is the only way we are going to succeed in securing homegrown 
and affordable sources of energy for the next generation.
  In my view, oil and gas are not going away anytime soon. If renewable 
sources of energy are going to grow and become central players in the 
American energy marketplace, we have to make sure they are operating on 
a level playing field. Right now the playing field is anything but 
equal.
  For nearly 30 years, traditional sources of energy have had access to 
a very beneficial tax structure called Master Limited Partnerships. 
This is a financing arrangement that taxes projects like a partnership, 
a passthrough, but trades their interests like a corporate stock. This 
prevents double taxation and leaves more cash available for 
distribution back to investors.
  This allows limited partners and general partners to come together 
and invest capital in a Master Limited Partnership and form an 
operating company. For the last 30 years, that has been used in natural 
gas, oil, and coal mining, predominately in pipelines but also in 
fossil fuels.
  Not surprisingly, this structure means MLPs have had access to 
private capital at a lower cost, and that is something capital-
intensive projects, such as oil pipelines, badly need. Frankly, it is 
something alternative energy projects in the United States need more 
than ever.
  Let's work together and level this playing field. Let's remove the 
restriction that allows only traditional energy projects, such as, oil, 
gas, coal, and pipelines, to form MLPs. It is literally in the original 
statute that only nonrenewable forms of energy are eligible. In my 
view, we should open it up to include clean and renewable energy and 
then let the free market take it from there. So this week, Senator 
Murkowski and I joined Republicans and Democrats from the House and the 
Senate to introduce the Master Limited Partnerships Parity Act of 
2013--a bill that will do just that. We are grateful for the support of 
Senators Jerry Moran of Kansas and Debbie Stabenow of Michigan, as well 
as Congressman Ted Poe of Texas, Mike Thompson of California, Peter 
Welch of Vermont, and Chris Gibson of New York, who are original 
cosponsors.
  Our bill does not change these benefits for traditional energy 
sources at all. It doesn't touch existing MLPs and their well-
established benefits for coal and oil and natural gas; it just allows 
renewable energy projects to compete fairly by also accessing this tax 
advantage capital formation field. It gives an equal chance for success 
for projects using energy from wind and the Sun, the heat of the Earth, 
and biomass; breakthrough technologies to consumers with affordable 
homegrown energy for generations to come.
  This bill is this year a new and improved version of the Master 
Limited Partnership Parity Act from last year. We introduced a version 
last year that earned strong support from Republicans and Democrats, as 
well as outside experts and the business community. This year we are 
expanding the scope of the bill to also include additional energy 
projects that qualify as MLPs: waste heat to power, carbon capture and 
storage, biochemicals, and energy efficiency in buildings. We wanted to 
include a broader array of clean energy resources because that is how 
we can get the best competition and deliver the most affordable and 
efficient energy to consumers from Delaware to Alaska and across our 
whole country.
  MLPs are complicated financial structures, but our bill is very 
simple. It is just a few pages long. It makes one simple tweak to the 
Tax Code to bring these renewable energy and clean energy projects into 
the existing structures of MLPs. It is the embodiment of what I have 
heard from many colleagues in the last 3 years, that we should not be 
picking winners and losers in energy technology, and we should have an 
``all of the above'' strategy.
  This change, in my view, will bring a significant new wave of private 
capital off the sidelines and into the renewable energy marketplace. It 
allows the private sector to look at clean energy in a whole new way. 
Today, master limited partnerships have reached a market capitalization 
of close to $450 billion with about 80 percent of it devoted to 
traditional energy projects--oil and gas--and the majority of that to 
pipelines. Access to this kind of scale of private capital could drive 
the investment that is essential to creating new jobs in a fast growing 
new field.
  It would also, in my view, bring some fairness, some modernization to 
this well-established section of our Tax Code. As the Presiding Officer 
knows, our Tax Code hasn't been broadly modernized in decades. In the 
mid-1980s, Congress enacted provisions to establish MLPs for oil and 
gas, timber and coal, and midstream energy industries. This tax benefit 
hasn't been significantly changed, expanded, or modernized in nearly 30 
years.
  Just to be clear, we are not talking about taking away any of these 
benefits for any existing beneficiary industry, just updating them to 
recognize the modern market reality of new energy technologies and to 
reflect the changing investment opportunities in the emerging markets 
of renewable energy. In fact, one of the lead cosponsors of this 
legislation in the House, Congressman Ted Poe--Judge Poe--a Texas 
Republican, said at a recent press event we did that over the course of 
his career, he has represented as many oil refineries as any other 
Member of Congress. Yet he sees this as an efficient and effective 
opportunity to expand from its traditional use of pipelines of oil and 
gas to the broader energy marketplace of the United States, and he is 
confident expanding this structure to include clean sources of energy 
would create jobs.
  I wish to ask the Senator from Alaska, Ms. Murkowski, if she has seen 
the same thing in Alaska. Does the Senator from Alaska see this as an 
opportunity that will help us grow an ``all of the above'' energy 
strategy for the United States?

[[Page 6025]]


  Ms. MURKOWSKI. I say to my friend, the Senator from Delaware, yes. In 
fact, I view this as an opportunity. I view this as a positive 
direction as we build out an energy policy that works for the entire 
country.
  The Senator's question is specific to my home State of Alaska, an 
area that is known for its enormous potential with our fossil fuels, 
our oil, our natural gas, and the opportunities that have been 
available to a State such as mine where we have the more traditional 
fossil fuels. But we are also a State that is rich with potential for 
renewable energy resources whether it is geothermal, whether it is 
marine hydrokinetic, whether it is ocean energy potential, harnessing 
the tides, harnessing the waves; whether it is biomass, whether it is 
wind, which we have abundant capacity for; whether it is solar, which 
we don't often get a lot of credit for, but, yes, we, too, have solar.
  So from my perspective as a Senator from Alaska, I am looking to try 
to find those areas where we can branch out, where we can move the 
energy discussion to what we are all talking about now, which is an 
``all of the above'' policy. In order to truly have an ``all of the 
above'' policy and to avoid picking winners and losers, as the Senator 
from Delaware has noted, then it is important that when we talk about 
how we finance these energy projects--and we all know there are 
considerable dollars at stake with any energy project--then let's work 
to provide a level of parity, and that is exactly what this bill does.
  My hat goes off to the Senator from Delaware. His leadership on this 
bipartisan measure is extremely important. I can recall when the 
Senator first came to talk to me about it, and I said: We need to 
really do wholesome tax reform. I haven't changed my mind on that. But 
what I have recognized is that if we are to work to build out our 
energy sector, if we are to work to advance our ``all of the above'' 
policy, then we need to be a little more expansive in how we are going 
to look to the financing opportunities.
  So I agreed to join the Senator from Delaware as a cosponsor of the 
Master Limited Partnership Parity Act because fundamentally, at its 
base, it is about fairness and opportunity. That is a pretty good place 
to be sitting.
  I think too often in this Nation debates about our energy policy kind 
of devolve into this advocacy where we show preferential treatment for 
one sector or another sector. As the Senator from Delaware and I have 
discussed, I am absolutely an advocate for an ``all of the above'' 
approach. I have spelled that out in a blueprint that I have shared 
with so many of my colleagues called ``Energy 2020,'' which we released 
earlier this year. But I do think that with the legislation the Senator 
from Delaware has spearheaded, we have identified a way to further our 
progress in that direction.
  Right now, the oil and gas sector is able to benefit from the master 
limited partnership structure, and it is a good thing because it has 
helped to raise billions of dollars in private markets for much needed 
pipeline infrastructure. We are going to need that as we work to keep 
up with the natural gas boom we are having in this country--how we 
build new infrastructure, how we take care of existing infrastructure. 
So we need to have these financing mechanisms. That is all great. But 
why not expand that out to the renewable sector? Currently, as the 
Senator from Delaware points out, the law does not allow for that. It 
is time to fix that. So what we do with this legislation is extend the 
parity to the renewable sector so that businesses that are pursuing 
investments in biomass, energy efficiency, and other areas are able to 
structure as an MLP.
  I wish to pause here for a moment because I just came back from a 
bipartisan, bicameral meeting where we were talking about the energy 
agenda for this Congress moving forward. Of course, as a nation looking 
at a $16.8 trillion debt, everything we do we have to figure out how we 
are going to pay for it. When we think about the energy efficiency 
initiative--and I note our colleague, Senator Shaheen from New 
Hampshire, is on the floor with us.
  Senator Shaheen and Senator Portman have spearheaded a great piece of 
legislation focusing on energy efficiency. We think about how we move 
that forward because that is going to require dollars. Where do we find 
those dollars? There are not enough rocks with enough money underneath 
them to advance this. So if we can expand the opportunities for 
financing to include our renewables and to include energy efficiencies, 
this is how we move it forward.
  Bottom line, when we are talking about the dollars. This is only 
going to happen if the private markets think the math makes sense. The 
investments and the structures of the entities that are making them 
very well might not occur, but, again, that is not our job. We are not 
here to pick winners and losers. If it is good, if it works, it will 
happen. But we are helping to provide a financing mechanism that is 
fair and creates opportunities. Our job, which this bill highlights, is 
to provide that level playing field. This is about equality of 
opportunity, not equality of outcome. We can't guarantee that outcome, 
but what we can do is kind of level the playing field in terms of what 
options are available.
  This bill enables the renewable sector to structure a certain way. I 
am certainly glad to be supporting it with the Senator from Delaware. I 
think we have some momentum. I was talking to some folks up in New York 
where I addressed an energy financial forum, and what everybody was 
interested in was not what is happening on the R&D side; it was so much 
interest in the master limited partnership and its ability to expand to 
other areas; how we can take a tool that has worked very well for us in 
the oil and gas sector and push it out to renewables and efficiency.
  So I think the momentum is there, and I applaud Senator Coons for his 
leadership in that regard.
  The Senator from Delaware also mentioned the expanded scope. Again, I 
think that is an important aspect of this bill. I am excited about 
where we are right now, and I look forward to working with the Senator 
from Delaware as we build out our renewable energy future here.
  Mr. COONS. Madam President, I thank the Senator from Alaska. I am 
grateful for her joining me as an original cosponsor and for her being 
a strong and engaged advocate for this approach at the conference in 
New York and in conversations with colleagues and in the image she has 
laid out. She has been a real champion for a commonsense, ``all of the 
above'' visionary path forward that will move us on the committee and 
in the Congress.
  As the ranking member of Energy and Natural Resources, the support of 
the Senator from Alaska is central and significant. I am also glad the 
chairman is working with me. Senator Wyden, in a recent public setting, 
referred to this as ``exactly the right approach.'' I believe, as does 
the Senator from Alaska, the bill will unleash private capital; that it 
will help create jobs, modernize our Tax Code, and make it more fair; 
and I think that is why it has earned support from Republicans and 
Democrats in the House and in the Senate, but also at some senior 
levels in the administration.
  Former Secretary of Energy Steven Chu said the MLP Parity Act would 
make ``a world of difference and have a profound effect on private 
capital and investment.'' Our, hopefully, incoming Energy Secretary, 
Ernest Moniz, also pointed toward the MLPs as a great opportunity to 
increase clean energy financing and put it on a level platform.
  This legislation has earned backing from business leaders, from 
investors, from outside experts, from academics. Two experts in energy 
finance, Felix Mormann and Dan Reicher, from Stanford's Steyer-Taylor 
Center for Energy Policy and Finance, shared their thoughts in an 
editorial in the New York Times.
  They wrote:

       If renewable energy is going to become fully competitive 
     and a significant source of energy in the United States, then 
     further technological innovation must be accompanied by 
     financial innovation so that clean energy sources gain access 
     to the same low-cost capital that traditional energy sources 
     like coal and oil and gas enjoy.


[[Page 6026]]


  Our financial innovation has to keep up with our energy innovation. 
It is just that simple. That is why more than 250 companies and 
organizations have recently signed a letter supporting our Master 
Limited Partnerships Parity Act. They range from Fortune 500 NRG to the 
American Wind Energy Association, the Solar Energy Industries 
Association, the American Council on Renewable Energy, and many more.
  Just one more quote, if I might. David Crane, who is the CEO of NRG 
Energy, said:

       The MLP Parity Act is a phenomenal idea. It's a fairly 
     arcane part of the tax law, but it's worked well and has been 
     extremely beneficial to private investment in the oil and gas 
     space. The fact that it doesn't currently apply to renewables 
     is just a silly inequity in our current law.

  Well, one of the things the folks we work for expect us to do is to 
find ways to move forward together, to find ways to nail down and 
address inequities in the law, and this is one we can fix with a 
simple, straightforward bill.
  I am so grateful for the cosponsorship of the Senator from Alaska and 
her leadership, and I agree with her that we are seeing growing 
momentum behind this free market approach. Does the Senator from Alaska 
wish to add anything else as we advocate for this bill?
  Ms. MURKOWSKI. I thank the Senator from Delaware for his leadership 
as well as for the opportunity to speak to this issue on the floor 
today. As we talk about the momentum, I think we recognize that 
oftentimes there will be good ideas that are discussed and debated but 
often don't get that full body support that allows a good thought to 
materialize into policy. I want to let the Senator from Delaware know 
how committed I am to advancing this good policy.
  The Senator mentioned the reference to financial innovation, and I 
think, perhaps, in view of what we have seen in past years with a 
little bit of chaos on Wall Street and in our banks with derivatives, 
et cetera, that some people might be concerned about this new financial 
innovation. We are not recreating the wheel. This has been, as the 
Senator from Delaware points out, a financing mechanism that has been 
available to a certain sector of the energy industry for a considerable 
period of time. And it has benefited them.
  This is not financial innovation in that we are building something 
out of whole cloth and hoping it works. We know it works. What we are 
trying to do with this is contained in the title. This is bringing 
about parity, allowing for an extension of a good financing mechanism 
that will benefit our energy sector throughout the country.
  Again, I do not mean to repeat myself, but when we talk about an 
``all of the above'' energy policy, I think we need to appreciate that 
there are some things we do from a policy perspective that hinder us 
from achieving that ``all of the above.'' When we put in regulatory 
hurdles or when we put in place limitations that would limit our 
ability to move that ``all of the above,'' then we need to look 
critically at that, we need to look at how we could address this. So I 
think the effort, again, to allow for real fairness, equal opportunity, 
is critical to us.
  I want to wrap up my remarks by saying that I think it is important 
that what we are doing is allowing for this level playing field within 
the energy sector. So we are not talking about stripping oil and gas 
pipelines of their eligibility for the MLP status and replacing it with 
renewables. This is not a swapping-out deal. I would not support that 
if that were the case. I would also not support it if it extended a 
false sense of parity by making, let's just say, only wind available 
for MLP status or only solar. But, as the Senator has noted, this bill 
includes it all.
  We just had a hearing in the Energy Committee this week on 
hydropower. There is a great bill coming out of the Energy and Natural 
Resources Committee. I cannot wait until we get it to the floor. 
Hydropower holds enormous potential for our Nation. When we talk about 
kind of the backbone of the American energy system, fossil fuels are 
kind of it right now, but then hydropower is by far the backbone of the 
renewable energy sector. About 60 percent of our renewable energy comes 
from hydropower.
  So what we are doing is opening this MLP structure to our renewable 
resources. But it goes beyond. It is kind of like the Ginsu knife: 
there is more. It includes the marine hydrokinetics, the biorefineries, 
alternative fuels, biomass, energy efficient buildings, which I have 
spoken to, storage, solar, wind, and more.
  Again, there is no guarantee that we are going to see billions of 
dollars of private capital that is going to flood immediately into 
these sectors. We cannot guarantee the outcomes. But we are trying to 
ensure equal opportunity across an enormous scope of energy sources.
  I again thank the Senator for his leadership on this issue, his 
stick-to-itiveness. I do think that as we move the issues of tax reform 
forward, as we move more energy matters through the bodies of the 
Congress, folks will look at this as a sensible and rational way to 
approach how we build out an energy sector in this country of which we 
can all be proud. I thank the Senator for his leadership, and I am so 
pleased to be part of the effort.
  Mr. COONS. I thank Senator Murkowski.
  If we are going to lead on energy or in anything, we have to listen 
to each other and we have to work together. I have been so grateful for 
the way Senator Murkowski and Senator Wyden have worked closely 
together and moved the Energy and Natural Resources Committee forward.
  As the Senator referenced, we had a great hearing earlier this week 
on the Shaheen-Portman bill--the energy efficiency bill on which 
Senator Shaheen of New Hampshire has worked so well with Senator 
Portman of Ohio--and also some bipartisan bills on hydropower.
  It is my real hope that this strong bipartisan bill--opening up 
master limited partnerships to energy efficiency, to hydropower, and to 
a dozen other clean and renewable sources of energy--this sort of 
simple, straightforward, commonsense, bipartisan bill that creates 
opportunity, will allow the private sector to then marry up with the 
innovations of researchers and help with the deployment of new energy 
sources.
  At the end of the day, we in Congress--the Federal Government--have 
to set a realistic policy pathway forward to sustain innovations in the 
energy market and then let the financial markets work to their fullest 
potential. The Master Limited Partnerships Parity Act moves us closer 
to that goal and that day.
  I thank Senator Murkowski for her leadership and for being here with 
me today, and I thank Senator Moran and Senator Stabenow, our original 
Senate cosponsors, and our House counterparts. By leveling the playing 
field for fair competition, this market-driven solution can provide 
vital support to the kind of comprehensive, ``all of the above'' energy 
strategy we all need to power our country for generations to come.
  The PRESIDING OFFICER. The Senator from New Hampshire.
  Mrs. SHAHEEN. Madam President, I came to the floor this evening to 
address what is known as the Marketplace Fairness Act, but before I do 
that, I wish to applaud Senator Coons for his work on the master 
limited partnerships legislation. I think it is a great bipartisan 
approach to one of our energy needs. I also applaud Senator Murkowski 
for her leadership on the Energy Committee and for her willingness to 
work in a bipartisan way to try to move an energy agenda from which 
this country can benefit. I thank both Senators very much for their 
efforts, and I look forward to working with both of them on the 
Shaheen-Portman energy efficiency legislation, which I know that 
committee heard this week. I really appreciate the efforts to move that 
forward as well. So I thank both Senators very much.

                          ____________________