EXTEND the Energy Efficiency Incentives Act of 2006

Mr. President, today I am introducing another piece of legislation with Senator Feinstein that addresses the critical issue of the Nation's energy policy, the EXTEND the Energy Efficiency Incentives Act of 2006. The Senator from California and I have come together once again--given where we are as a Nation in terms of reliance on foreign oil, the historically high costs of energy, the state of our environment, and the status of our technological know-how--to introduce realistic, doable legislation that represents one of the best opportunities for developing bipartisan consensus on tax policy to further securing our Nation and its future.

The EXTEND Act, also cosponsored by Senator Kerry, takes a comprehensive and practical approach to assure that America gets the maximum possible energy savings and relief from high energy prices at the lowest cost. It builds on the incentives for efficient buildings adopted in the Energy Policy Act of 2005, EPAct 2005, and modifies them where necessary to achieve these policy goals.

The bill extends the temporary tax incentives for energy efficiency buildings established in EPAct 2005, providing 4 years of assured incentives for most situations, and some additional time for projects with particularly long lead times, such as commercial buildings. A sufficient length of time is needed by the business community to make rational investments. The bill is meant to incentivize not discourage. I want to encourage businesses to make investments to qualify for energy efficiency tax incentives. Commercial buildings and large residential subdivisions have lead times for planning and construction of 2 to 4 years. This is why the EXTEND Act provides 4 years of assured incentives for most situations, and some additional time for projects with long lead times.

I am pleased to have the support of Finance Committee Chairman Grassley for crafting the correct policy for large-scale commercial projects, recognizing that these large commercial building projects take years to design and build. As a mater of fact, I entered into a colloquy with the chairman the day EPAct 2005 passed the Senate and received his assurance that he will continue to work with me to make this a long-term policy of the Tax Code.

Also, the EXTEND Act makes modifications to the EPAct 2005 incentives so that the incentives are not based on cost but based on actual performance. These are measured by on-site ratings for whole buildings and factory ratings for products like solar water heaters and photovoltaic systems as well as air conditioners, furnaces, and water heaters. The EXTEND bill provides a transition from the EPAct 2005 retrofit incentives, which are based partially on cost and partially on performance, to a new system that can provide larger dollar amounts of incentives based truly on performance.

The Snowe-Feinstein legislation also extends the applicability of the EPAct 2005 incentives so that the entire commercial and residential building sectors are covered. The current EPAct 2005 incentives for new homes are limited to owner-occupied properties or high rise buildings. Our bill extends these provisions to rental property and offers incentives whether the owner is an individual taxpayer or a corporation. This extension does not increase costs significantly, but it does provide greater fairness and clearer market signals to builders and equipment manufacturers.

I have worked hard over the past 5 years for performance-based energy tax incentives for commercial buildings--one-third of energy usage is from the building sector, so there are great energy savings to be made with the extension of these incentives. My energy efficiency tax incentives provisions for commercial buildings that came to fruition in the EPAct 2005 were tasked to Treasury to promulgate regulations to harmonize with the law. On June 2, 2006, the Internal Revenue Service issued guidance on how to comply with section 179D of the Internal Revenue Code establishing a deduction for commercial buildings that achieve a reduction in energy consumption of 50 percent.

Unfortunately, the guidance is inadequate, according to energy efficiency experts, which may stem from the fact that we are into some uncharted territory and there may be a basic lack of understanding of what it takes to make energy efficiency tax incentives work, and specifically those based on performance, not cost. It is critical that the IRS guidance is written correctly so as to actually incentivize greater energy efficiencies while making sure any guidance promotes the best use of taxpayer dollars. I brought these issues to the attention of the now Secretary of the Treasury Paulson at his nomination hearing in the Senate Finance Committee on June 27, and I look forward to working with his people at Treasury to resolve these important issues relating to the IRS guidance.

It is reasonable to expect many annual benefits after 10 years if we put into place the appropriate incentives. For instance, direct savings of natural gas would amount to 2 quads per year or 7 percent of total projected natural gas use in 2017. And, to this figure must be added the indirect gas savings from reduced use of gas as an electricity generation fuel. Total natural gas savings would be 35 quads per year, or 12 percent of natural gas supply. Total electric peak power savings would be 115,000 megawatts; almost 12 percent of projected nationwide electric capacity for the year 2017.

In addition, reduction in greenhouse gas emissions would be 330 million metric tons of carbon dioxide annually, about 16 percent of the carbon emissions reductions compared to the base case necessary to bring the U.S. into compliance with the Kyoto Protocol; or roughly 5 percent of projected U.S. emissions in 2017. Also, importantly, the bill will result in the creation, on net, of over 800,000 new jobs.

The value of energy savings should not be overlooked as both business and residential consumers will be saving over $50 billion annually in utility bills by 2017, as a direct result of the reductions in energy consumption induced by the appropriate incentives. Also, the projected decrease in natural gas prices will be saving businesses and households over an additional $30 billion annually.

I would also like to take this opportunity to comment on the Feinstein-Snowe 10 in 10 CAFE standards legislation introduced this past week as the bill is yet another piece for solving the Nation's energy crisis.

The ten in ten measure is straightforward--we increase the average mileage of each company's vehicles fleet by 10 miles per gallon in 10 years--10 in 10. This would save 2.5 million barrels of oil a day by 2025--the same amount we currently import daily from the Persian Gulf-- while eliminating 420 million metric tons of carbon dioxide emissions, a climate change-causing greenhouse gas, from entering the atmosphere.

Certainly, we ought to be able to at least meet these goals. Yet, thus far, Congress and the administration have regrettably sent exactly the wrong message at a time when we have already witnessed a crisis-- and that is, a ``can't do'' attitude, rather than the ``can do'' spirit that has defined progress in America since our fledgling days as a nation. We have the means, we have seen the demonstrated necessity, we possess the entrepreneurial spirit, what exactly is there left not to get?

There should be no question that increasing fuel economy standards an average of 1 mile per gallon across a manufacturer's fleet for the next 10 years is a challenge to which this country can rise--in fact, it is long overdue. We are long past the point of watching and waiting it out while the U.S. auto makers dither--Congress has a responsibility to provide leadership on this issue by refusing to accept the notion that ``this is as good as it gets.''

We must reject the administration's request that we just cede to the Department of Transportation our statutory authority to reform CAFE standards for passenger cars--especially as DOT has had the opportunity to increase CAFE standards for SUVs, minivans, and light pickups, but only incrementally increased the miles per gallon to 22.2 mpg by model year 2007 that is an increase of less than 1 mile per gallon. This minimal increase will save less than 2 weeks worth of gasoline each year for the next 2 decades. We can do better and under our legislation we will do better.

A wide variety of experts, including some of those who took part in the 2001 congressionally mandated National Academy of Sciences report on CAFE standards, agree that the most effective action we could take today to decrease the price of gasoline is to increase fuel economy standards for all vehicles--passenger cars and light trucks. Yet the only time we raised fuel economy standards for passenger cars was back in 1976. Think about it--in 1976, our computers were about the size of cars--and now we hold them in the palm of our hand--are we really saying the United States of America doesn't have the technological wherewithal to provide 10 more miles-per-gallon over the next 10 years, at a time when the transportation sector accounts for fully 40 percent of all the Nation's fossil fuel consumption?

Morever, we give manufacturers the flexibility to develop an entire fleet that accomplishes the overall fuel economy standard in the most cost-effective manner--it can be done and it must be done. And with a third of American drivers now considering trading their current vehicle for another that gets great fuel economy, frankly, if our auto makers had embraced higher fuel economy standards when our SUV loophole bill was first introduced in 2001, or way back in the early 1990s when an increase in CAFE was a compelling argument for that decade's energy bill, perhaps the U.S. industry would be in better shape today. Consumers certainly would be.

And how can there be any question--at this time when our reliance on foreign oil has skyrocketed from 44 percent 3 decades ago to 72 percent this year--and prices hover at near historic highs of $70 per barrel-- that we must take a page from America's greatest quests--like putting a man on the Moon--to finally reduce our consumption of precious fossil fuels. We are financing the ambitions of radical leaders in some of the most volatile regions of the world to supply the energy to power America's future. This makes no sense--not when our bill, through its resulting fuel savings, would effectively develop Middle Eastern oil production within our own country within just the next 19 years.

Mr. President, these two bills, the EXTEND Act and the 10 in 10 Act, are synonymous with the security of America's future. These bills are two pieces of an overall national energy picture that we need to address now. Consumers throughout the United States, from small businesses to families, are demanding leadership on energy prices. Congress should advance past rhetoric, gimmicks, and photo-ops and move to substantive legislation such as the EXTEND Act and the 10 in 10 CAFE bill. It is imperative that Congress begin these policy discussions--we cannot wait for yet another crisis.

I look forward to working with my Senate colleagues and the administration to provide the American people the leadership they deserve on these issues.

Mr. President, today I am introducing another piece of legislation with Senator Feinstein that addresses the critical issue of the Nation's energy policy, the EXTEND the Energy Efficiency Incentives Act of 2006. The Senator from California and I have come together once again--given where we are as a Nation in terms of reliance on foreign oil, the historically high costs of energy, the state of our environment, and the status of our technological know-how--to introduce realistic, doable legislation that represents one of the best opportunities for developing bipartisan consensus on tax policy to further securing our Nation and its future.

The EXTEND Act, also cosponsored by Senator Kerry, takes a comprehensive and practical approach to assure that America gets the maximum possible energy savings and relief from high energy prices at the lowest cost. It builds on the incentives for efficient buildings adopted in the Energy Policy Act of 2005, EPAct 2005, and modifies them where necessary to achieve these policy goals.

The bill extends the temporary tax incentives for energy efficiency buildings established in EPAct 2005, providing 4 years of assured incentives for most situations, and some additional time for projects with particularly long lead times, such as commercial buildings. A sufficient length of time is needed by the business community to make rational investments. The bill is meant to incentivize not discourage. I want to encourage businesses to make investments to qualify for energy efficiency tax incentives. Commercial buildings and large residential subdivisions have lead times for planning and construction of 2 to 4 years. This is why the EXTEND Act provides 4 years of assured incentives for most situations, and some additional time for projects with long lead times.

I am pleased to have the support of Finance Committee Chairman Grassley for crafting the correct policy for large-scale commercial projects, recognizing that these large commercial building projects take years to design and build. As a mater of fact, I entered into a colloquy with the chairman the day EPAct 2005 passed the Senate and received his assurance that he will continue to work with me to make this a long-term policy of the Tax Code.

Also, the EXTEND Act makes modifications to the EPAct 2005 incentives so that the incentives are not based on cost but based on actual performance. These are measured by on-site ratings for whole buildings and factory ratings for products like solar water heaters and photovoltaic systems as well as air conditioners, furnaces, and water heaters. The EXTEND bill provides a transition from the EPAct 2005 retrofit incentives, which are based partially on cost and partially on performance, to a new system that can provide larger dollar amounts of incentives based truly on performance.

The Snowe-Feinstein legislation also extends the applicability of the EPAct 2005 incentives so that the entire commercial and residential building sectors are covered. The current EPAct 2005 incentives for new homes are limited to owner-occupied properties or high rise buildings. Our bill extends these provisions to rental property and offers incentives whether the owner is an individual taxpayer or a corporation. This extension does not increase costs significantly, but it does provide greater fairness and clearer market signals to builders and equipment manufacturers.

I have worked hard over the past 5 years for performance-based energy tax incentives for commercial buildings--one-third of energy usage is from the building sector, so there are great energy savings to be made with the extension of these incentives. My energy efficiency tax incentives provisions for commercial buildings that came to fruition in the EPAct 2005 were tasked to Treasury to promulgate regulations to harmonize with the law. On June 2, 2006, the Internal Revenue Service issued guidance on how to comply with section 179D of the Internal Revenue Code establishing a deduction for commercial buildings that achieve a reduction in energy consumption of 50 percent.

Unfortunately, the guidance is inadequate, according to energy efficiency experts, which may stem from the fact that we are into some uncharted territory and there may be a basic lack of understanding of what it takes to make energy efficiency tax incentives work, and specifically those based on performance, not cost. It is critical that the IRS guidance is written correctly so as to actually incentivize greater energy efficiencies while making sure any guidance promotes the best use of taxpayer dollars. I brought these issues to the attention of the now Secretary of the Treasury Paulson at his nomination hearing in the Senate Finance Committee on June 27, and I look forward to working with his people at Treasury to resolve these important issues relating to the IRS guidance.

It is reasonable to expect many annual benefits after 10 years if we put into place the appropriate incentives. For instance, direct savings of natural gas would amount to 2 quads per year or 7 percent of total projected natural gas use in 2017. And, to this figure must be added the indirect gas savings from reduced use of gas as an electricity generation fuel. Total natural gas savings would be 35 quads per year, or 12 percent of natural gas supply. Total electric peak power savings would be 115,000 megawatts; almost 12 percent of projected nationwide electric capacity for the year 2017.

In addition, reduction in greenhouse gas emissions would be 330 million metric tons of carbon dioxide annually, about 16 percent of the carbon emissions reductions compared to the base case necessary to bring the U.S. into compliance with the Kyoto Protocol; or roughly 5 percent of projected U.S. emissions in 2017. Also, importantly, the bill will result in the creation, on net, of over 800,000 new jobs.

The value of energy savings should not be overlooked as both business and residential consumers will be saving over $50 billion annually in utility bills by 2017, as a direct result of the reductions in energy consumption induced by the appropriate incentives. Also, the projected decrease in natural gas prices will be saving businesses and households over an additional $30 billion annually.

I would also like to take this opportunity to comment on the Feinstein-Snowe 10 in 10 CAFE standards legislation introduced this past week as the bill is yet another piece for solving the Nation's energy crisis.

The ten in ten measure is straightforward--we increase the average mileage of each company's vehicles fleet by 10 miles per gallon in 10 years--10 in 10. This would save 2.5 million barrels of oil a day by 2025--the same amount we currently import daily from the Persian Gulf-- while eliminating 420 million metric tons of carbon dioxide emissions, a climate change-causing greenhouse gas, from entering the atmosphere.

Certainly, we ought to be able to at least meet these goals. Yet, thus far, Congress and the administration have regrettably sent exactly the wrong message at a time when we have already witnessed a crisis-- and that is, a ``can't do'' attitude, rather than the ``can do'' spirit that has defined progress in America since our fledgling days as a nation. We have the means, we have seen the demonstrated necessity, we possess the entrepreneurial spirit, what exactly is there left not to get?

There should be no question that increasing fuel economy standards an average of 1 mile per gallon across a manufacturer's fleet for the next 10 years is a challenge to which this country can rise--in fact, it is long overdue. We are long past the point of watching and waiting it out while the U.S. auto makers dither--Congress has a responsibility to provide leadership on this issue by refusing to accept the notion that ``this is as good as it gets.''

We must reject the administration's request that we just cede to the Department of Transportation our statutory authority to reform CAFE standards for passenger cars--especially as DOT has had the opportunity to increase CAFE standards for SUVs, minivans, and light pickups, but only incrementally increased the miles per gallon to 22.2 mpg by model year 2007 that is an increase of less than 1 mile per gallon. This minimal increase will save less than 2 weeks worth of gasoline each year for the next 2 decades. We can do better and under our legislation we will do better.

A wide variety of experts, including some of those who took part in the 2001 congressionally mandated National Academy of Sciences report on CAFE standards, agree that the most effective action we could take today to decrease the price of gasoline is to increase fuel economy standards for all vehicles--passenger cars and light trucks. Yet the only time we raised fuel economy standards for passenger cars was back in 1976. Think about it--in 1976, our computers were about the size of cars--and now we hold them in the palm of our hand--are we really saying the United States of America doesn't have the technological wherewithal to provide 10 more miles-per-gallon over the next 10 years, at a time when the transportation sector accounts for fully 40 percent of all the Nation's fossil fuel consumption?

Morever, we give manufacturers the flexibility to develop an entire fleet that accomplishes the overall fuel economy standard in the most cost-effective manner--it can be done and it must be done. And with a third of American drivers now considering trading their current vehicle for another that gets great fuel economy, frankly, if our auto makers had embraced higher fuel economy standards when our SUV loophole bill was first introduced in 2001, or way back in the early 1990s when an increase in CAFE was a compelling argument for that decade's energy bill, perhaps the U.S. industry would be in better shape today. Consumers certainly would be.

And how can there be any question--at this time when our reliance on foreign oil has skyrocketed from 44 percent 3 decades ago to 72 percent this year--and prices hover at near historic highs of $70 per barrel-- that we must take a page from America's greatest quests--like putting a man on the Moon--to finally reduce our consumption of precious fossil fuels. We are financing the ambitions of radical leaders in some of the most volatile regions of the world to supply the energy to power America's future. This makes no sense--not when our bill, through its resulting fuel savings, would effectively develop Middle Eastern oil production within our own country within just the next 19 years.

Mr. President, these two bills, the EXTEND Act and the 10 in 10 Act, are synonymous with the security of America's future. These bills are two pieces of an overall national energy picture that we need to address now. Consumers throughout the United States, from small businesses to families, are demanding leadership on energy prices. Congress should advance past rhetoric, gimmicks, and photo-ops and move to substantive legislation such as the EXTEND Act and the 10 in 10 CAFE bill. It is imperative that Congress begin these policy discussions--we cannot wait for yet another crisis.

I look forward to working with my Senate colleagues and the administration to provide the American people the leadership they deserve on these issues.

Mr. President, yesterday, while the Senate was voting for cloture on S. 3711, a bill that could ultimately lead to exploration on the Outer Continental Shelf of the Georges Bank in the North Atlantic Ocean, the Maine lobster industry gathered on a picturesque fishing pier in Maine to launch the ``Certified Maine Lobster'' initiative that could bring an added value to the State's $300 million lobster industry. My State accounts for 80 percent of lobster landings and is known for its lobster boats, lobster shacks, lobster buoys and lobster dinners along its scenic coastline. As a matter of fact, the Maine Lobstermen Association was formed to fight OCS drilling off the coast of Maine.

It is because of its very pristine value that fisheries and tourism are important economic engines for the State

and I cannot stand by and let these natural resources be compromised through exploration and drilling. Last year, Maine lobstermen hauled in more than 60 million pounds for a boat price of $296 million.

While supporters of, S. 3711, the Gulf of Mexico Energy Security Act of 2006, say that this bill is only about the Gulf of Mexico, while at the same time stating that the bill is the first step toward opening up more areas to production. One supporter was even quoted as saying, ``The goal is to maximize over time the coastal production of America from a venue of stagnation.'' This does not sound like the bill pertains only to the Gulf of Mexico, as its supporters have stated and this has rightfully alarmed the people of my State, many who make their living directly or indirectly from the sea. Scientists, economists, and fishermen have worked for 20 to 30 years to restore the magnificent fish runs off the New England coast. To them, lifting the moratorium and allowing oil and gas drilling on the 185-mile-long broad, shallow and productive fishing ground of Georges Bank that stretches from Nova Scotia to Cape Cod is unconscionable.

As chairman of the Senate Commerce Subcommittee on Fisheries and the Coast Guard, the prospect of drilling in the Gulf of Maine and Georges Bank and risking New England's fisheries is unacceptable to me as well. I, along with Senator Menendez, wanted to offer a simple amendment to ensure that drilling within 200 miles of the coast of Maine and other coastal States would continue to be prohibited until 2022--the same protection as is given the State of Florida in this bill.

However, without following the usual amendment process, there can be no assurances that Maine's coast will be protected when this legislation is approved by a conference or that the Joint Ocean Commission's recommendation to convert current OCS revenues for ocean fisheries research will occur, and without those assurances, I have not supported moving forward.

I am extremely disappointed that the decision was made to prevent amendments during debate that ignores the need to address conservation. We were told it would take a week to get through amendments that would have been offered. Well, this bill was brought up 1 week ago, and, instead of having true and fair debates on conservation amendments this past week and up or down votes, we have spent it on moving to cloture and getting to final passage.

I believe that considering the leasing of additional OCS waters for oil and gas drilling should only be done with utmost caution and deliberation, and at the same time, I believe that our national energy policy should seriously focus resources on the development of renewable energy and an expansion of energy efficiencies as part of a national energy policy.

I have filed an amendment to this bill that is also my stand alone bill, S. 3628, the EXTEND Energy Efficiency Incentives Act of 2006, that would extend the EPAct 2005 energy efficiency tax incentives until 2010--they currently expire at the end of next year having been shortened by the House in conference. Experts have calculated that, if fully implemented, the EXTEND Act will, by 2010, save 7 trillion cubic feet, Tcf, of natural gas while the Gulf of Mexico drilling bill before us would extract 5.8 Tcf by 2010. We simply cannot continue to drill ourselves out of this problem, and threaten our natural resources--we can do it with bold ideas that save much more than we can get from drilling.

A reliance on only fossil fuels retards progress in developing a sustainable and comprehensive 21st century energy policy. Furthermore, the recent fluctuation of the world oil and natural gas markets indicates that this commodity is not a reliable long-term energy source. There are uncertainties involved with fossil fuels that threatens the energy security of the United States and it is important that our nation recognize the situation and develop a diverse, sustainable and progressive energy plan through a market basket of fossil fuels, renewable energy and energy efficiencies.

Senator Feinstein and I were not allowed to offer our 10 in 10 bill as an amendment to this bill to require U.S. automakers to increase their average CAFE standards by 10 miles per gallon in 10 years. The bill would save 2.5 million barrels of oil per day by 2025, the same amount of oil we currently import from the Persian Gulf; and 420 million metric tons of carbon dioxide emissions by 2025, the equivalent of taking 90 million cars--or 75 million cars and light trucks--off the road in one year. Again, we can save rather than drill.

Exxon Mobil, the world's largest traded oil company, just reported a 36 percent gain in 2nd earnings. Exxon has prospered because of the high gasoline prices bolstered by the demand for supply. Increasing CAFE standards will decrease demand, lower prices and begin to put some of this money in the pockets of consumers rather than the large oil companies, who have increased output and taken advantage of the increase in oil prices, which remain over $70 a barrel.

The small increase from the latest NHTSA rule for CAFE standards for SUVs does little to save gasoline and only gives lipservice to an issue that deserves more serious consideration. Even a modest increase of only five miles per gallon in the fuel efficiency of our domestic automotive fleet would save approximately 23 billion gallons of gasoline each year and reduce oil imports by 14 percent.

This percentage is more than the 11 percent Venezuela provides for U.S. oil imports. The GAO reports that the U.S. is inadequately prepared to face the possibility of President Hugo Chavez' threat to cut off its oil imports to the U.S. The GAO reports that this disruption would cause an increase of $11 per barrel. So we are allowing Chavez to put us over a diplomatic oil barrel, so to speak. Why are we taking this risk with the trust of the American people and the economy when there are options that can be put in place to make us independent of Venezuela's oil--and political maneuvering?

Currently, the combined fleet average for all automobiles, SUVs, light trucks and passenger cars, is approximately 25 miles per gallon-- that is down from the peak of 26.2 miles per gallon in 1987. The Feinstein-Snowe-Inouye-Chafee 10 in 10 bill would increase that combined fleet average to 35 miles per gallon by Model Year 2017--or ten mpgs 10 years from today.

Also, according to the 2002 National Academy of Sciences Report on CAFE, adequate lead time can bring about substantive increases in fuel economy standards. The NAS concluded that automakers can meet higher CAFE standards with existing technologies. We have the technologies today to increase our fuel economy standards. We have hybrids, more efficient engine technology, improved transmission technology, and composite materials that reduce the weight of the vehicle will all increase fuel economy standards without sacrificing safety.

I fear that the Senate conferees will come back from a conference with many of the provisions in the House bill, the Deep Ocean Resources Act, H.R 4761, a bill that replaces the moratorium that currently protects most of the nation's coastline from oil and natural gas drilling and develops a leasing system that would provide the option for states to allow drilling within 50 miles of their coastlines and allow drilling throughout the OCS beyond 100 miles. Currently, the moratorium protects the coastal area up to 200 miles out.

In passing this OCS drilling only bill today, the Senate has created lost opportunities that could have addressed how much we could save-- along with how much we can drill. This is what the consumers want to hear--that we are addressing every avenue possible to keep money in their pockets the next time they go to the gas pump or pay their electricity bill or purchase heating oil for the coming winter. The Senate has let the consumers down once again. And, the bill does nothing to protect Maine's tourist and fishing economies and its 3,500 miles of coastline.

Mr. President, I rise to strongly support S. 3711, the Gulf of Mexico Energy Security Act of 2006, and I also rise to put its provisions in perspective and to dispel some of the myths and simple inaccuracies that, unfortunately, have been propagated in many places, including on the Senate floor.

It is important to understand what this important Energy bill does because it does do significant and important things, and it is also important to understand what this bill does not do because it does not do several things that opponents have claimed. So let's go down these two simple lists.

This Energy Security Act does many important things. It brings new sources of domestic energy to the market over the next few years. All of us should agree that is a very important and necessary component of securing our energy future--not the only component, not the only thing we must do but a very important component of what we must do.

This bill generates new revenue for the U.S. Treasury. There has been enormous misinformation about that. There have been claims that the producing States are somehow raiding the Federal Treasury. What the States are doing is producing more Federal revenue for the Federal Treasury. If that is a raid, let the raids begin, and we will soon erase the deficit.

This bill promotes parity with nearly 90 years of onshore energy production policy by recognizing the importance of reinvesting in our offshore energy-producing areas to ensure the sustainability and liability of domestic energy production and independence.

For decades and decades, producing States onshore, on Federal land, have shared 50 percent of the royalty produced on those Federal lands. This begins to achieve some parity with that by allowing coastal producing States 37.5 percent.

This provides dedicated revenue streams for the State side of the Land and Water Conservation Fund. That fund makes grants available to all of our States for 50 percent of the costs of parks, soccer fields, and other recreational opportunities.

This fully complies with the budget resolution we passed last year and the reserve fund amendment I included in the Senate's budget resolution this year, and it all reduces America's dependence on volatile foreign energy sources.

Those are all very important goals. Those are all goals achieved by this bill.

Just as importantly, there are many things this bill does not do which opponents have confused in the debate.

This bill does not in any way affect offshore California, the west coast, the Northeast, or anywhere on the east coast. This bill is focused on the Gulf of Mexico and has the support of the Senators from all of those Gulf Coast States.

This bill does not change offshore policy in any area other than the Gulf of Mexico, which today provides up to 30 percent of our energy.

This bill does not raid the Federal Treasury of funds from current revenue streams. It does not increase the deficit. As I said, what this bill does is the opposite. It allows production activity which would not occur otherwise. What does that mean? That means increased Federal revenue--$1 billion toward deficit reduction--not decreased Federal revenue.

This bill does not provide funds for the expansion of Federal land acquisition programs through the Land and Water Conservation Fund.

I find, quite frankly, the opposition to this bill enormously frustrating. So many of these same Members of the Senate--others in the broader debate--are some of the loudest voices about high, increasing energy prices, oil prices at the pump, natural gas prices and what that does to our competitiveness. I agree with those concerns. Those are very legitimate concerns. Yet we bring a bill to the floor of the Senate that can absolutely have a short-term impact, a positive impact, bringing prices down, and, no, they have to oppose it. That is not good. That cannot be part of the solution.

The cost of natural gas has increased 400 percent over the last several years. Natural gas is a mostly continental commodity. Its importation through LNG is possible, but that alone cannot have enough of an impact to bring down prices the way we want to see them come down. So we need to produce more domestically. This bill will do that and help bring down natural gas prices.

Gasoline prices have increased from $1.28 in 1996 to over $3.60 in some areas of the country today. Of course, these surges were exacerbated by Hurricanes Katrina and Rita.

These huge spikes don't impact us just at the gas pump or when we pay our heating and cooling bill. They affect us everywhere--at the grocery store, when we buy clothes, at the hardware store, the airlines when we go on trips, restaurants when they pay higher energy bills, and also in the job picture. When we decry jobs moving overseas, high natural gas prices in this country are a huge factor, particularly in select industries such as our chemical industry.

Yet, again, the folks who run to the floor of the Senate to beat on these issues and try to take advantage of them politically the most are among those who are opposing this bill. It makes no sense to me, and it is enormously frustrating to me.

They also seem to be opposed to this bill because they are just opposed on virtual religious grounds on more oil and gas production.

We need to do a lot of things to secure our energy future, and certainly that involves research and new technology and new forms of energy. But as we do that--and we are doing that, and we will do more, and we must do more--as we do that, the fact is, for the next several years and several decades we will have an economy in some ways dominated by oil and gas.

So if we want to give consumers relief, if we want to secure our energy independence in the short term, we also at the same time need to attack that side of the question, and this bill does that, domestically increasing our independence.

It is just completely irresponsible for people to say we can't address that side of the equation. We must, as we must address the longer-term side of the equation, with new technology, new sources of energy, new science and engineering. Those both have to be necessary components of a solution.

I would have a little more sympathy with some of these arguments if Senators from many of these other States,

not in the directly affected region in the gulf, were producing at least other forms of energy. They don't like oil? They don't like natural gas? There are other things folks in different parts of the country can do. There is nuclear. There is solar. There is windpower. The fact is, so many of the critics from these other places do not contribute to the Nation's energy needs in any of these categories.

The Department of Energy has some interesting statistics. State by State, what does a State consume in energy and what does it produce? California consumes eight times more energy than it produces. Massachusetts is the winner. It consumes 65 times more energy than it produces. Florida consumes 11 times more energy than it produces.

This is not being part of the solution. This is not sustainable. It is particularly ironic when some voices from these very same places decry a bill as we have on the floor which can be part of the solution, which can lower energy prices even in the short term and can get us to the longer term as we transition to new energy sources.

Finally, as I mentioned, there is a whole myth that many of these same opponents bring up that somehow we are raiding the Federal Treasury. If bringing in more Federal revenue is raiding the Federal Treasury, then let the raid begin. That is what this bill does. It increases Federal revenue--$1 billion more for the Federal Treasury, $1 billion more of deficit reduction. That is the plain and simple fact. Why is that? Because this bill expands production which expands revenue which, even in the new rules of revenue sharing under this bill, increases Federal revenue and decreases the deficit.

For any opponents to claim that this somehow increases the deficit and raids the Federal Treasury is simply untrue. It is factually incorrect. There is more Federal revenue, bringing down the deficit.

S. 3711 is positive. It is concrete, it is taking action now. It is a step forward. It can have an impact that can make life better for average Americans, even in the short term, and help bring down energy prices, help increase our energy independence, help produce new revenue, not just to the producing States; but also to the Federal Treasury--help reduce the Federal deficit.

This is a win-win-win-win, and I urge my colleagues to support this important energy legislation.

I yield the floor.

Mr. President, today, the Senate will vote on final passage of S. 3711, the Gulf of Mexico Energy Security Act. I will be voting against passage because I believe this bill is poor energy policy, irresponsible fiscal policy, and faulty environmental policy.

The Gulf of Mexico Energy Security Act is a misnomer. The bill will not offer energy security to the United States. The United States consumes 25 percent of the world's energy and yet we have less than 3 percent of the world's oil supplies. While I agree that we must increase the domestic supply of oil and natural gas, this cannot be our Nation's only approach. Yet it is the only approach offered in S. 3711, and it is the only approach that the administration and Republican leadership continue to propose as our Nation's energy solution. Our Nation's energy security depends on reducing our dependency on fossil fuels through increased energy efficiency, greater investment in renewable energy, and development of alternative fuels to replace oil. But this bill does nothing to increase fuel efficiency standards for automobiles, create a national renewable energy standard for electricity, or promote energy efficiency or renewable energy. In fact, Federal investment in energy efficiency and renewable energy continues to decline. It is imperative for our Nation's energy and economic security that an energy policy that increases supply must be married to meaningful investments in energy efficiency and renewable energy. This is the energy policy that our Nation deserves, but it is not the one before us today.

S. 3711 is also not sound fiscal policy. This legislation would mandate that almost 38 percent of revenue from Federal resources generated by new leases in the Gulf of Mexico be given to four States-- Alabama, Louisiana, Mississippi, and Texas. These are revenues that currently would be provided to the U.S. Treasury for the benefit of the Nation as a whole. Reducing revenue to the Treasury means that we, as a nation, will have fewer resources available in the future to respond to a call for help should there be another devastating natural disaster or terrorism attack. Our Nation faces a deficit of $8.4 trillion due to this administration's poor fiscal management and irresponsible tax policies. Large Federal budget deficits going forward are bad for the economy. They reduce national saving, which depresses future standards of living. Reducing Federal receipts and increasing the budget deficit at the same time as the baby boom generation retires will put increased strains on the Federal budget and makes no sense. This bill, if passed, will cost the Federal Treasury billions of dollars. I am not alone in my opposition to this legislation; taxpayer advocates share my concerns over its fiscal impact.

In the early 1950s, Congress considered the allocation of revenues between the Federal Government and States resulting from drilling in our Nation's waters. During the debate last week on S. 3711, I quoted from a speech that Senator Truman gave at the National Convention Banquet of the Americans for Democratic Action on May 17, 1952. President Truman stated in this speech, ``The minerals that lie under the sea off the coasts of this country belong to the Federal Government''----that is, to all the people of this country. The ownership has been affirmed and reaffirmed in the Supreme Court of the United States. Those rights may be worth as much as somewhere between $40 billion and $100 billion.

If we back down on our determination to hold these rights for all the people, we will act to rob them of this great national asset. That is just what the oil lobby wants. They want us to

turn the vast treasure over to a handful of States, where the powerful private oil interests hope to exploit it to suit themselves.

Twice President Truman vetoed quitclaim legislation passed by Congress to turn these resources over to the coastal States. In his May 29, 1952, veto statement, President Truman said ``[T]he Congress should provide for the disposition of the revenues obtained from oil and gas leases on the undersea lands. S.J. Res. 20, as introduced by Senators O'Mahoney and Anderson, would have granted the adjacent coastal States 37\1/2\ percent of the revenues from submerged lands of the marginal sea. I would have not object to such a provision, which is similar to existing provisions under which the State receive 37\1/2\ percent of the revenues from the Federal Government's oil-producing public lands within their borders.'' In his veto statement, it is clear that President Truman did not support giving coastal States revenue from the Outer Continental Shelf.

In the end, the coastal States received much more generous compensation than the provision offered by Senators O'Mahoney and Anderson and President Truman. When President Eisenhower signed the Submerged Lands Act, the coastal States were given title to and ownership of the lands beneath the territorial seas and the right to manage the natural resources within the States' boundaries. This law gave the States 100 percent of the revenue from coastal drilling in State waters. Importantly, the law affirmed the Federal Government's ownership in lands seaward of the State boundaries. Revenues from Outer Continental Shelf drilling belong to the American people in all 50 States. The legislation that the Senate is considering today violates this pact with the American people, and denies the Federal Treasury and American people of essential revenue to address the needs of our Nation it violates. It also is contrary to our national motto, E pluribus unum, from many one. Revenues from Federal resources should, and must, benefit all Americans.

Lastly, I believe this bill is not responsible environmental policy. The bill threatens our coastal ecosystems with the risk of pollution and oilspills which will harm the economies and families that rely on these resources. Unfortunately, the Senate is likely to pass this bill. This will pave the way for the Senate bill to be conferenced with H.R. 4761, the Deep Ocean Energy Resources Act. This legislation would lift the moratorium on offshore drilling for all of our coastlines the Atlantic, Pacific, Gulf of Mexico, and Alaska--and, it would allow drilling for oil and gas in coastal national parks and marine sanctuaries. This would put our coastal communities at risk to oilspills, onshore damage of sensitive coastal habitat, and air and water pollution.

Oil is extremely toxic and our current cleanup methods are incapable of removing more than a small fraction of the oil spilled into our marine waters. Offshore drilling platforms and pipelines spilled 1.8 million gallons of oil in U.S. waters from 1990 to 1999, for an average of 500 gallons a day, which causes irreversible harm.

Narragansett Bay and our coast support vital commercial fisheries, tourism important to our economy, and an abundance of wildlife. Our economy and environment are vulnerable to oilspills. My State remembers the devastating effects that the North Cape oil-spill had in southern Rhode Island. Oil spread throughout a large area of Block Island Sound, including Trustom Pond National Wildlife Refuge, resulting in the closure of a 250-square mile area of the sound for fishing. There were hundreds of oiled birds in the weeks following the spill and large numbers of dead lobsters, surf clams, and sea stars were found on area beaches. There was also the World Prodigy oilspill off Newport, RI, which spread over 123 square miles, killing marine life and closing beaches and fishing grounds throughout Narragansett Bay. The spill hit during a peak spawning period. Eggs and larvae of fish and shellfish lobsters, quahogs, tautog, and others--were exposed to the oil as they floated at the surface.

Before opening new lands to development and denying the American people of a great asset and Federal revenues, we need to take meaningful action to reduce our consumption and increase renewable energy supplies. The only way to achieve greater energy independence is to reduce our consumption of fossil fuels overall. This is the energy policy that our Nation deserves, and this is the policy I will continue to fight for. I urge the Senate to reject S. 3711, and instead, pursue the vehicles and rule choices and the clean EDGE legislation that will set America on a true road to energy independence.

Mr. President, today I rise to introduce mine and Senator Gordon Smith's bill, The Affordable Housing Preservation Act of 2006. Our bill provides a solution to preserve federally assisted affordable multifamily housing.

I want to thank all of our colleagues-- Senators Bond, Reed, Murray, and Sarbanes--for realizing the importance of this issue and agreeing to cosponsor our legislation.

I have often said that few Federal programs have helped mothers and fathers keep their families together more than our low income and public housing programs. And while I always fight to make sure New York and the country at large gets all the money it can from Washington, frankly I am not the kind of elected official who believes that all government programs are equally good. But low income housing programs are some of the best things our government has ever done to help families, mothers, the elderly, and the disabled.

Unfortunately--the current housing climate has reached a crisis point and the good that we are doing just is not enough anymore. Consider that in 2001, 95 million people--a whopping one third of the nation-- had housing problems: ranging from high cost burden, to overcrowding, to poor quality, or worse to homelessness.

In the same year, 41 million people, 14.6 percent of the U.S. population, were without health insurance and 12 percent of all people in the U.S.--33.6 million--lacked food security. These are all interrelated. If rent is too high--you go without health insurance. Maybe you trim down spending on groceries.

Sixty-five million Americans with housing problems are low income, and 87 percent of them face high housing cost burdens. In New York, the numbers are even worse. New York State ranks 47th out of the 50 States in renter affordability.

Across the board, housing problems are plaguing low income people who live in both renter and owner households, and by people in all age groups, including children and seniors.

The bottom line is that twice as many people who lack health insurance and three times more people who struggle on a regular basis to put food on their table have housing problems.

But for whatever reason, the housing issue does not attract the same level of public concern and political attention as other programs. And that's why housing programs have been cut back by more than just about any other program over the last decade.

Whenever I speak to New Yorkers--there is a common refrain: from gas prices to milk costs to rent hikes, the cost of living in New York keeps going up and up.

It is a demonstrated pattern and we have worked diligently to try to defend every penny. We have had some successes but it is a yearly battle and I unfortunately have no doubt that we will continue to fight to defend every penny of funding for housing programs.

But scraping our pockets for money is not enough. I served on the Housing Subcommittee for my entire 25 years in Congress and I'm tired of just playing defense and preventing things from happening.

If we want to actually get something done to improve the housing market and prospects for millions of low income families we've got to not just be satisfied with a good defense.

What we need right now is a good offense. As the newest member on the Senate Finance Committee in addition to my current post on the Banking, Housing and Urban Affairs Committee, I intend to use this position to help fight for housing and particularly new funding for housing for New York and America.

Today I am introducing legislation with my fellow Finance Committee member, Senator Gordon Smith--proposing that we bring this fight to a playing field many more are comfortable on. We should focus on housing tax incentives rather than just relying solely on new spending to expand the number of affordable housing units.

Since its inception the Tax Reform Act of 1986, the low-income housing tax credit, for example, has helped build and convert 1.6 million apartments with rents affordable to low income families, by providing investors in affordable housing developments with a dollar- for-dollar reduction in their Federal tax liability.

We anticipate that the Affordable Housing Preservation Act of 2006 will afford renters and developers similar benefits. Our legislation will work to ensure that we can preserve the current supply of affordable housing by providing tax relief to owners.

At the moment the inadequate present stock of affordable housing might shrink even further--much of it was built in the 60s and 70s and is aging and needs to be rehabilitated.

Under normal circumstances--developers who own this housing and have no interest in rehabilitating it themselves would sell it to another developer who would refinance and rehabilitate it for affordable housing.

But because a so called ``exit tax'' is placed on any developer who plans to sell their subsidized property--more and more are deciding not to sell and to just sit on the property until they die.

Let's say back in the 70s Developer Dan purchased a plot of land in Queens for $200,000 and built $800,000 worth of affordable housing on it--for a total investment of $1 million.

At the time, Developer Dan was able to secure tax benefits as part of the accelerated tax depreciation program and was able to deduct 70 cents on every dollar invested in affordable housing over a 15-year period.

So now in 2004 his accelerated depreciation has expired and Dan is getting on in his years and wants to sell the property--simply to break even and get out of the business.

But he can't do it very easily. If Dan sells the property for $1 million he must then pay an exit tax. The exit tax for Dan will be 25 percent applied to the building that was subsidized. So Dan must pay a $200,000 tax when he sells the building. That is not a very appealing situation for our friend Dan.

So Dan entertains two other options--instead of keeping the units as affordable housing he sells his property into the traditional housing market where he can garner a greater price which includes the amount of the exit tax but removes the units from the affordable housing market.

Or even more likely, Dan holds onto the property and neglects its upkeep at a detriment to his tenants and waits until he dies because then the tax consequence is erased. The property is likely sold in the traditional market and lost to the affordable housing community.

The Local Initiatives Support Coalition estimates that there are 1 million housing units held in this manner because owners are unwilling to sell and take on the new tax burden.

That is 1 million housing units--many of which are rapidly deteriorating and not providing good homes for the people who are living in them and one million units that will eventually be removed from the affordable market if we don't do something to make it easier and more attractive for affordable housing owners to sell their properties to other affordable housing developers.

So today, we are proposing a plan to waive exit taxes for owners who sell their properties to buyers who agree to keep the properties affordable for no less than 30 years. It is a simple fix--and one that could save us 1 million affordable housing units.

While we await a full scoring of our proposal from the CBO, our back of the envelope estimate shows that waiving the exit taxes to preserve this supply of affordable housing represents a $422 million incentive program over a 10-year period.

We hope this bill will move quickly, especially since we have clear support in both the House and the Senate. Congressman Jim Ramstad has introduced a similar bill on the House side. In addition, we have widespread support from the housing, real estate and investment community

Before I close I want to make clear--this and similar types of housing tax proposals are not meant to replace funding for current housing programs. We will still fight for full funding of every housing program--from section 8 to CDBG. We just need to modify our strategy and operate more on the offense rather than the defense.

Mr. President, I thank the distinguished Senator from Louisiana for her kind remarks and for her great support in this effort.

The junior Senator from Louisiana, who is the Presiding Officer, I thank now for the support and dedicated commitment to what we are doing. It is not only for the State of Louisiana, but for all the coastal States surrounding Louisiana. It is very important for the United States. I commend the Senator for his participation.

I would like to thank a Senator who was vital. He was courageous. He stepped forward, as Senators from Florida have not been used to doing. That was Senator Mel Martinez, who came forward and said: I would like to work with you. And he ended up striking a balance for his people of Florida and for America. And he, along with the others we have mentioned, got us going.

It has been a pleasure taking this job on and to end up tonight, 10 minutes before the vote, with the full appreciation on the part of scores of Senators that we are about to do something very positive, very important. For a change, very few Senators will still have to say no. Most of the time it is hard to get 60 votes for cloture. Many times it is hard to get that 51 needed for a simple majority.

Over the weeks, and finally over the days, the point has come across to the bipartisan Senators in this Senate, this bill is welcome news for the consumers of the United States, for homeowners, families, people who work in all kinds of manufacturing businesses, chemical businesses, plastic businesses, all kinds of activities related to natural gas. Of course, there is oil involved, too, but that is secondary to the natural gas which is also involved.

It has finally dawned on everyone here, we own a piece of property. It has USA stamped all over it. It is off the coast of Florida, off the coast of Louisiana, Mississippi, Alabama, out there in the gulf. There are roughly 6 trillion cubic feet of natural gas owned by us, much of which is ready to be drilled, much of which can be drilled during the next decade. There is enough gas for 6 million houses for 15 years, to quantify it. That does not mean that is where it is going. It will be added to the availability of the supply and 1.250 billion barrels of oil. It has finally dawned on everyone. Now we will get their vote. That is all on our property. We have been sitting idly by, year after year, saying no, no, no, because we want a moratorium to protect something that needed no protection, the shoreline of Florida. I don't mean that literally. I mean we can drill on this property as provided in this bill with no damage yet, after we have sat here year after year saying no.

It does not happen very often, I say to my distinguished assistant Republican leader, but at the very time and day that we are voting, the best evidence you can get is right on the streets, in the homes, and on the television news for the American people to hear, see, and, incidentally, feel: We have had these enormous heat waves and the use of natural gas has jumped so much. That creates a scarcity; that creates an increase in price. Yesterday, the day before this vote, the price increased 11 percent in 1 day. Right now, it is $8.05 per million Btus. That price is four times higher than it was 6 years ago. That is incredible, but it is true.

Fellow Senators, when you vote tonight to add 1.2 million barrels, if this went to the President and got signed, we instantly add it to the ready reserves of America for crude oil waiting to be drilled and put into the system. Members would be voting to instantly add to our ready reserves of natural gas which we could start getting on the market in the not too distant future, almost 6 trillion cubic feet.

We have a crisis right in front of our nose and we have a partial cure right in front of our nose, but this time we decided we would go ahead and do it, not continue to say no and to worry ourselves to death over what could happen. This could happen, that could happen, do we need it, should we do it. That is what has happened in the United States recently when we are trying to make energy decisions. We do not want to recognize that there is a bit of a risk, but you have to take a bit of a risk for a big benefit. In this case, it is a very minimum risk and a very big benefit.

I am particularly pleased in this bill we are reinvesting in our environment. For decades, our coastal States have produced much of the oil and gas which the Nation consumes. They no longer sit back and go along with leasing without compensation needed for their infrastructure, the coastal environment. It is so critical to our domestic energy survival. We have changed direction and said ``share it with them.'' That is a good idea, a new precedent which we need not be embarrassed about.

We also have said we want to share some of this wealth with the Land and Water Conservation Fund, a very good national program. We have not done that before. That, too, is good precedent, good ground to break, and sets us on a good path.

For those who worry, again, about that and about sharing with the States, I regret if that concerns them so much they will not vote for this bill. I am very sorry about that. In this case, the benefits so outweigh the risks of changing policy or changing direction

that we should have a stampede, not a vote, when it comes time to count.

I am not going to do justice to all those who helped me by mentioning them all because I will not get to it. That is probably my mistake. I thank my friend and colleague from the State of Louisiana who is here in the Senate. She started working with me early as a member of the committee. Obviously, Senator Vitter, also, from Louisiana, an early participant. I thank him greatly for his efforts, as well as all the coastal State Senators. I also thank the distinguished leaders on our side who encouraged and urged passing. In fact, I would say about my good friend from Kentucky, I think he thought more about my proceeding to get this done than I did a few weeks ago. He kept saying it was a great day, get along with it, Pete, let's do it. So we are doing it.

This is a good bill. It took a little effort. It took a little time. Nonetheless, compared with other bills around here these days, it is not going to go to the graveyard. It is not going to die because Senators were able to talk the Senate into voting again to delay or kill a bill. They have not been able to do that on this bill. We are grateful.

The American people ought to know that even with the hurdle of 60 votes which was required because of filibuster threats on this bill, we prevailed. We have learned also that when we vote tonight, I think we only need 51 votes for a change. That is a very good sign. Finally, we are at a point where a 51-vote majority would win. We thought it was that way all the time, but it wasn't. Finally, after all the hurdles, we will have many more than that, but this is going to pass.

For those who are watching, we are at a point where that old- fashioned majority would be enough. We learned about the majority in school. It has been thrown out the window because there is so much politicking going on. Every vote is 60 votes around here. In the next few years we will have a few more of those, Mr. Leader, with the tax bill, and it will be 60 votes because someone is screaming filibuster.

I used to think filibusters were great when I first came to the Senate. Then I almost changed and said: Throw them away. I don't know where I am now. I do know I am for using part of the Budget Act to get around filibusters.

I am through. It will be a nice evening. I am going to go back and sit down. Thank you, Senator Frist, for helping me. I want you to thank me for letting you have a happy day for a change.

I yield the floor.

Mr. President, I move to reconsider the vote.

Mr. President, every one of us in Congress has heard from our constituents about the high cost of gas. A gallon is now $3 or more in most parts of the country, and there is every

reason to believe that figure will continue to climb throughout the rest of the summer.

Americans are asking their Members of Congress to help lower some of these costs. And we should do that. But let us not kid ourselves. This is a problem that was decades in the making, and short-term political solutions--whether it is a tax rebate or more legislation to stop price gouging--aren't going to be the complete answer.

To be sure, most of these proposals would do no harm, and many would provide Americans some temporary relief at the pump. But in the long term, we can't rely solely on quick fixes designed to placate an anxious public.

We need solutions designed to permanently lessen our dependence on foreign oil. Unfortunately, both Congress and the White House have been unwilling to take the politically difficult steps necessary to confront one of the most pressing economic and national security challenges of the 21st century.

A perfect example is the bill before us. It does do some good things: it marginally increases the supply of oil, and it provides a financial boost to Gulf Coast States that could use the help.

But fundamentally, the bill only focuses on part of the problem--our inadequate supply of oil. Unfortunately, increasing supply can't be our only answer. Even if we opened up every square inch of this country for drilling, America only has 3 percent of the world's oil reserves. With our own Energy Department telling us that our demand for oil will jump 40 percent over the next 20 years and countries such as China and India adding millions of cars to their roads, this means that if we truly hope to solve this problem, we must focus on reducing demand.

Members on both sides of the aisle have suggested some innovative ways to do this. Senator Lugar and I introduced the America Fuels Act to increase the production of homegrown biofuels. And Senator Bunning and I have worked on a bill to produce liquid fuels from coal.

Unfortunately, we are not going to have a debate this week on how to reduce the demand for oil, because we weren't allowed to add any amendments to this bill that would focus on that problem. Because contrary to the judgment of every credible person who has examined our Nation's energy woes, the Republican leadership in the Senate believes we can solve our energy problems by just drilling more. That is not only dishonest; it is a disservice to our constituents who want us to work together to solve this crisis.

I would like to spend a few minutes today discussing two of the proposals that should have been part of this energy debate--two proposals that could have made this bill worthwhile.

First, we need to start producing cars that use less oil. Thirty- three years ago, this Nation faced an energy crisis that affected every American. In the shadow of a war against Israel, the Arab nations of OPEC chose to embargo shipments of crude oil to the West. The shocks were felt in national economies worldwide. Washington lawmakers responded by creating daylight savings time and a national speed limit. A new Department of Energy and a Strategic Petroleum Reserve was established. And Congress enacted Corporate Average Fuel Economy--or CAFE--standards, the first-ever requirements to reduce petroleum consumption in the vehicles we drive.

As a result, the gas mileage of cars doubled from 14 miles per gallon in 1976 to 27.5 mpg for cars in 1985. Today, CAFE saves us about 3 million barrels of oil per day, making it among the most successful energy-saving measures ever adopted. But that decade's worth of fuel consumption improvements ended more than 20 years ago, because CAFE standards are the same today as they were in 1985 27.5 mpg for cars.

To address this problem, I have joined with Senator Lugar and a bipartisan coalition of senators to propose the Fuel Economy Reform Act, which we have also filed as an amendment to the OCS bill.

This amendment would establish regular, continual, and incremental progress in fuel economy, but still preserve the expertise and flexibility of the National Highway Traffic Safety Administration--or NHTSA--to determine how to meet those targets.

Under this proposal, CAFE standards would increase by 4 percent every year unless NHTSA can justify a deviation in that rate by proving that the increase is either technologically unachievable, would materially reduce the safety of automobiles, or is not cost effective. For too long, the presumption has been that the public would have to prove to the auto industry why it should raise fuel economy standards. This proposal would flip that presumption by asking the auto industry to prove why it can't raise those standards.

Under this system, if the 4 percent annualized improvement occurs for 10 years, we would save 1.3 million barrels of oil per day--an astounding 20 billion gallons of gasoline per year. If gasoline is just $2.50 per gallon, consumers would save $50 billion at the pump in 2018. By 2018, we would be cutting global warming pollution by 220 million metric tons of carbon-dioxide-equivalent gases.

And yet, auto executives are right when they say that transitioning to more fuel-efficient automobiles would be costly at a time of sagging profits and stiff competition, and that's precisely why the Federal Government shouldn't let the industry face these challenges on their own.

The Fuel Economy Act provides tax incentives to retool parts and assembly plants. But we should do more than that. We need to help the Big Three automakers with one of their largest expenses, namely, retiree health care costs, which ran almost $6.7 billion just last year. For GM, these health care costs represent $1,500 of the price of every GM car that is made, which is more than what they pay for the steel.

To that end, I also have filed an amendment to this bill based on the Health Care for Hybrids Act that I introduced last year. That proposal would set up a voluntary program in which automakers could choose to receive Federal financial assistance towards their retiree health care costs. In return, the automakers would be required to reinvest these savings into developing fuel-efficient vehicles.

With the American consumer demanding more hybrid vehicles--and that demand currently being filled by foreign automakers--this proposal could jumpstart the Big Three to commercialize new technology. More American hybrid cars also ensure that there is competition in this growing market, and would help keep car prices affordable.

If we had adopted these two proposals decades ago, when the call for energy independence was first issued in this country, today we wouldn't be nearly as beholden to the whims of oil-rich dictators and surging gas prices. And if we don't take these steps now, we will someday look back on today's $3 per gallon gasoline as the good old days. At that point, no amount of drilling on the Outer Continental Shelf will solve our problems.

We could have taken these commonsense steps now to reduce the demand for oil. We have the need, we have the technology, we have the resources--but with this bill, we refused to find the political will to get it done. We still owe it to the American public to find that will.

Unfortunately, this bill sends the wrong message. Instead of making tough political decisions about how to reduce our insatiable demand for oil, this bill continues to lull the American people into thinking that we can drill our way out of our energy problems. We can't, and for that reason, I plan to vote against this bill.