Mr. President, I ask that I be allowed to use 3 minutes from the time of the Senator from California. Mr. President, I would like to speak briefly against the Inhofe amendment. I do believe there are…
Mr. President, I ask that I be allowed to use 3 minutes from the time of the Senator from California.
Mr. President, I would like to speak briefly against the Inhofe amendment. I do believe there are several substantial problems with it. First of all, the underlying assumption is that the reason we do not have enough refining capacity in this country is we cannot find places to put refineries. That is not the reality. We have had various hearings in the Energy Committee. The companies that are engaged in refining oil into gasoline and other products are not short of places to put those refineries. They look at a whole variety of issues--the economics in particular--to determine whether to build new refineries or expand refining capacity. It is not a failure to have a BRAC military base or a failure to have an Indian reservation they can put these on.
The other thing is location. They need to locate refineries where the pipelines are. They need to locate refineries where the demand is. Clearly, that is not contemplated as part of this as well.
Another part that concerns me greatly is the notion that we would be making grants to support these projects which exceed the cost of the projects. That strikes me as very unusual. In the underlying bill, we do have some lien programs, where the Government will step in and guarantee 80 percent of the loan that is required to build a project, for example. We do not have anything similar to the provisions that are in this bill, which say the Federal share
for an EDA grant, under this program, shall be 80 percent of the project cost, assuming that the project is not on Indian land, and it will be 100 percent of the project cost if it is on Indian land, and, by the way, there can be an additional award in connection with the grant to the recipient of an additional 10 percent on top of that.
How it benefits the American taxpayer to pay 110 percent of the cost of one of these refineries I cannot see. So I think the amendment is flawed in several respects.
Obviously, we all want to see additional refining capacity built. I think what we need to be sure of is that the regulatory regime in place is such that it encourages and provides an incentive for the companies that are in the refining business to build that additional refining capacity. It is not efficient to say we, the Federal Government, are going to finance 100 percent of a project to an Indian tribe and they are going to go into the refining business; or we, the Federal Government, are going to provide 80 percent plus 10 percent, or 88 percent of the cost to some kind of local municipality and they are going to go into the refining business. That is not going to happen.
I urge my colleagues to oppose the amendment.
I yield the floor and reserve the remainder of Senator Boxer's time.
I suggest the absence of a quorum.
Mr. President, I ask unanimous consent that Senator Reid of Nevada, Senator Salazar, and Senator Cardin be added as cosponsors to my amendment that was recently sent to the desk.
Mr. President, I see the Senator from Pennsylvania is in the Chamber. I know he wishes to speak on another matter. I ask him how long he will need to speak, and maybe we could defer to him to make whatever statement he wanted.
Mr. President, I know Senator Reed from Rhode Island also would like to speak for 15 minutes on the bill.
Mr. President, why don't we have that be the order then: the Senator from Pennsylvania have 15 minutes on his amendment, which is not pending but which he intends to offer later, and then Senator Reed on the bill.
Mr. President, first, let me thank my friend and colleague from North Dakota for his kind words and for his strong support for this legislation. He has been a leader on this whole set of energy issues and proposed very strong legislation in the last Congress on this very set of issues. We are hopefully moving ahead on some of the policy recommendations and proposals he has made here in the Senate in the last year or two. I congratulate him on that and look forward to continuing to work with him.
We are now on what is called the renewable portfolio standard and the renewable electricity standard amendment. This is an amendment I offered. Senator Domenici has now offered a second-degree amendment to it, which is really a substitute, which is really a very different piece of legislation than the amendment I offered.
I thought I would take a few minutes. I know Senator Domenici will be returning to the floor here in a few minutes, and he will want to speak on his proposed substitute amendment. I thought I would take a few minutes right now to describe the amendment I have offered on the renewable portfolio standard.
In each of the last three Congresses, we passed a major energy bill in the Senate. In each of those energy bills, we have included a provision to require that a certain percentage of the electricity sold by electric utilities throughout the Nation come from renewable energy sources. That is the nature of the amendment I am offering again today. The Senate has approved this proposition again and again.
In the 107th Congress, we included such a portfolio standard. That is the phrase which has been used historically to describe this amendment, a portfolio standard. It is really an electricity standard or electricity requirement on utilities. But in the 107th Congress, we included such a portfolio standard as part of the Energy bill, and strong votes on the floor affirmed the Senate's determination that the standard we proposed there should not be weakened.
In the 108th Congress, there was a letter signed by 53 Senators that went to the chairs of the conference on the Energy bill. The Senate conferees went on to approve the portfolio standard and sent it on to the House as part of our bill.
In the 109th Congress, the same thing happened.
In all three cases, the House conferees rejected the proposal that had been passed by the Senate. Now we have an opportunity to renew our support for this proposal and to place it in a bill that hopefully can garner strong bipartisan support and finally reach the President's desk.
There are good reasons for the Senate to support this proposal. A strong renewable portfolio standard is an essential component of any comprehensive national energy policy. It is not just an important part of such a strategy but an essential component of such a strategy.
The benefits are clear. This portfolio standard would reduce our dependence on traditional polluting sources of electricity. It would reduce our dependence on foreign energy sources. It would reduce the growing pressure on natural gas as a fuel for the generation of electricity. It would reduce the price of natural gas. It would create new jobs. It would make a start on reducing our greenhouse gas emissions, and it would increase our energy security and enhance the reliability of the electricity grid. Those are some of the benefits.
Mr. President, I failed at the beginning of my comments to ask unanimous consent that Senator Durbin be added as an original cosponsor of this amendment.
This portfolio standard we have offered is a flexible, market-driven approach to achieving all of the goals I have enunciated here and to do so at a negligible cost to consumers. The proposal would require retail sellers of electricity who sell more than 4 million megawatt hours per year to provide 15 percent of that electricity from renewable sources by the year 2020. The requirement would be ramped up. There would be an increase in the requirement each year, in 3-year increments to allow planning flexibility for those utilities.
The Secretary of Energy would be required to develop a system of credit for renewable generation that could be traded or sold, again making the program easier to comply with. Utilities could use new or existing generation to comply with the program or they could comply with the program by buying credits from someone who has produced more renewable energy than they were required to produce. New renewable producers could receive the credits to trade or to sell.
Let me just summarize at this point and interject. The way we have drafted this, the flexibility is that an electric utility can comply with the requirement--the requirement being to ensure that 15 percent of the electricity they sell comes from renewable sources--in any of four ways:
First, they can produce the electricity themselves. They could put in a wind farm or a biomass facility or whatever and produce that energy from renewable sources themselves.
Second, they could buy that energy from someone else who is producing that renewable energy.
Third, they could buy credits from someone who has produced more renewable energy than they themselves are required to have in order to meet their requirements under the law.
Fourth, there is a compliance fee that they could pay the Secretary of Energy if they are not able to do any of the previous three. That would be at a rate of 2 cents per kilowatt-hour. So the cost of the program to utilities would be capped by allowing utilities to make this alternative compliance payment of 2 cents per kilowatt-hour, which is adjusted for inflation. As long as the difference between the cost of renewable generation and the cost of other generation resources is less than 2 cents per kilowatt-hour, the utility could buy or generate renewables or buy credits in the open market. When it reaches or exceeds that 2-cent price, the cap would kick in.
We also would create a program from the alternative compliance payments so that, to the extent a utility chose to go ahead and just pay the 2 cents per kilowatt-hour, those funds would go into a State program for development of renewable energy in that State.
Congress has tried before to spur the development of renewables. In 1978, we passed the Public Utility Regulatory Policies Act. That bill required utilities to buy renewables if the generators could meet the avoided cost of the utilities. Cogeneration--the combined use of heat and industrial processes for generation of electricity--was also eligible. That program resulted in a huge growth in cogeneration. Over half of the new generation that came on line in this country during the 1980s and the 1990s was from that resource. It did not, however, do much for renewable generation. These technologies have remained at about 2 percent of total electricity supply for several decades now.
We have a chart here which makes that point. This chart depicts electricity generation by fuel during the period 1970 projected through 2025 in billions of kilowatt-hours.
You can see, from 1970 up to the current time, renewables is way down toward the bottom. It is the second to the bottom line on that chart. Then it stays flat going forward, unless we pass this legislation. This legislation is intended to change these lines on this chart. That is the entire purpose of the legislation.
Critics of the program claim that the cost of this would be too much, that States are already requiring development of renewables, and that some areas do not have readily available renewable resources. My response is, I would point to a number of studies of this proposal that have been done over the years.
In 2003, I asked the Energy Information Administration at the Department of Energy to look at the effect the proposed renewable standard at that time would have had. They found that the standard would result in 350 billion kilowatt-hours of renewable generation being constructed between 2008 and 2025; that is generation that would not be constructed absent the passage of that provision. They found that the cost would be minimal. The report indicated there would be an increase in the cost of electricity by about one-tenth of a cent in 2025 over projected costs. When combined with the reduction in natural gas prices which would
be caused by the renewable portfolio standard, the total aggregate cost to consumers on their energy bills was projected to be less than one- twentieth of 1 percent.
In 2005, again I asked the Energy Information Administration to update the analysis, taking contemporary conditions into account. That update found that the portfolio standard we were proposing then would cause the prices of both electricity and natural gas to actually go down, and the letter that outlines those results stated:
Cumulative residential expenses on electricity from 2005 to
2025 are $2.7 billion, that is 2/10th of a percent lower,
while cumulative residential expenditures on natural gas are
reduced by $2.9 billion, or one half of 1 percent. Cumulative
expenditures for natural gas and electricity by all end use
sectors taken together will decrease by $22.6, again, one-
half of 1 percent.
That report also indicates that generation of electricity from natural gas would be 5 percent lower with the RPS than it would be without the RPS. It also projected that total electricity-sector carbon-dioxide emissions would be reduced by 249 million metric tons relative to the reference case.
This year, once again, I asked the Energy Information Administration to analyze the proposal we now have before the Senate. This analysis indicates that the renewable electricity standard or renewable portfolio standard would result in a tripling of generation from biomass, a 50-percent increase in wind generation, and a 500-percent increase in solar generation. The net expenditures for energy by consumers are projected to increase by three-tenths of 1 percent, electricity prices are projected to increase by nine-tenths of 1 percent, while natural gas prices are slated to fall.
The renewable electricity standard would also be expected to reduce carbon dioxide emissions by 6.7 percent, or 222 million metric tons in 2030.
These projections are not as optimistic as those we got 2 years ago in the 2005 analysis. There are some different assumptions which they used which explain the different conclusions. The first assumption was that the reference case projects a much greater expansion of coal generation than earlier projections. That was partly a result of the higher natural gas price projected. Second, the study assumes tax credits for renewables will, in fact, end next year, in 2008.
They are scheduled to expire next year. I think all or at least most Members of the Senate believe we ought to extend those tax credits. I hope we do so as part of our amending of this bill on the Senate floor this week and next week. I know the Finance Committee, Senator Baucus and Senator Grassley on the Finance Committee are working to develop a package of tax extenders and provisions to expand the tax provisions that are related to renewables.
Third, and perhaps most importantly, the study--this is the study the Energy Information Administration did for us this year. The study does not assume any controls on carbon emissions anytime in the next 13 years. Frankly, I don't think that is a likely occurrence. I think this Congress and this Government is going to come to a responsible position with regard to greenhouse gas emissions and there are going to be limits on carbon emissions imposed in this country, as they have been imposed in many industrial countries around the world--the sooner the better, from my perspective. But certainly that is going to happen long before the end of the next 13 years.
The report acknowledges these assumptions but states that different assumptions would result in lower costs for the renewable electricity standard. There is, of course, considerable uncertainty regarding the projected baseline electricity mix. Actual implementation of future policies to limit greenhouse gas emissions could lead to a larger role for natural gas in the generation mix.
This is a quote from the report we received this year. It says:
In such a scenario----
That is where natural gas has a larger role in the generation mix----
the projected impact of the 15 percent renewable portfolio
standard proposal would move toward those identified in the
2005 analysis.
In the tax title that is being developed by the Finance Committee to accompany the bill, we are working to extend the production tax credit, to extend the investment tax credits that are available for renewables. We are also going to do something, I believe, to try to encourage sequestering of carbon emissions.
I don't think anyone in this body believes Congress will fail to act on this issue for the period of time that is built in for these assumptions. If we assume what we believe is going to happen, we are back with a projection of considerable consumer savings from the renewable electricity standard, as we found in the 2005 report that they did.
A recent report from Wood Mackenzie, which is a noted natural gas industry analytic consulting firm, concluded that a 15-percent renewable portfolio standard would result in a savings in variable costs for electricity of $240 billion by 2026.
That is far more than offsetting the $134 billion increase in capital expenditures. The study indicates that natural gas prices would be from 16 to 23 percent lower in their projection by 2026 as a result of enactment of this provision. The study also projects that carbon emissions from the power sector would be 10 percent lower in 2026 as a result of this.
A recent study by the Union of Concerned Scientists found that this proposal would result in $16.4 billion in savings to consumers on electricity and natural gas bills. It also reported a 7-percent reduction in carbon emissions.
A number of other studies found positive results, even to the point of reducing overall energy costs. In 2005, we had a hearing in the energy committee. Senator Domenici was chairing the committee at the time. It was on the issue of generation portfolios. Dr. Ryan Weiser, of Lawrence Berkeley National Laboratory, presented a report that summarized the results of 15 studies of renewable portfolio standards, much like the one I am offering.
All these studies found that a portfolio standard would reduce natural gas prices; 12 of the 15 studies projected a net reduction in overall energy bills for consumers as a result of the renewable portfolio standard. In other words, we can save natural gas, we can reduce carbon dioxide emissions significantly, and we can save money both on electricity bills and on natural gas bills from making this move that this proposal contemplates.
Many have argued that States are already implementing renewable portfolio standards so there is no need for a Federal program. It is true States have taken the lead in pushing for more renewable generation.
Twenty-three States currently have in development renewable requirements. Almost all these standards are more aggressive than the Federal standard I am proposing in the amendment I have sent to the desk. New Mexico requires 16.2 percent by 2020. California requires 20 percent by 2017. Maine requires 30 percent by 2000. Minnesota requires 27.4 percent by 2025.
This will spur the growth of renewables in these regions. There is one thing, however, that a State standard cannot do--it cannot drive a national market for the technologies involved here. If some States have renewable standards and others do not, it is impossible for a national market to develop for renewable credits.
This credit trading system is the piece of our proposal that gives the greatest flexibility for compliance. The credit trading system also helps to reduce the cost of compliance by allowing credits for lower cost renewables from one region to be bought by utilities in another region.
Some argue this is a cost shift from the regions without renewable resources to those that have renewable resources. I would argue it is a way to spread the cost to all who are, in fact, benefitting. If States do not have or choose not to develop renewable resources, they still realize very real benefits in lower natural gas prices, lower SO2 allowance costs, and low-cost carbon reductions. It is only fair they share the slight increase in costs for generation of electricity that, in fact, created the savings. The argument that many States do not have, or many regions do not have renewable generation resources has been made. It is true the best wind, geothermal, and solar resources are concentrated in the West.
The entire country has extensive biomass potential. As Maine and other Eastern States have shown, paper production and agricultural processes are
available everywhere. We have a chart that makes that point. It shows, up in the left-hand corner, biomass and biofuel resources; on the right side, solar insolation resources; geothermal resources on the left-hand side; and wind resources on the bottom right.
If Rhode Island and Pennsylvania and New Jersey and Maryland can implement aggressive standards, then the standard we are calling for can be implemented in all States. The chart from the Department of Energy's National Renewable Energy Lab shows that virtually every State has the biomass production potential to meet this target. Environmental benefits are clear.
RPS would result, according to the Energy Information Administration, in a 6.7-percent reduction in carbon emissions in the year 2030. That is a reduction of 222 million tons in that area alone. RPS standards also benefit the economy. It drives job growth. The Union of Concerned Scientists says that wind turbine construction alone would result in 43,000 new jobs per year, on average.
An additional 11,200 cumulative long-term jobs will result from subsequent operations and maintenance. There is another study by the Regional Economics Application Laboratory for the Environment, Environmental Law and Policy Center, that found that over 68,000 jobs at 6.7 billion in economic output would result from the development of the renewable energy capacity contemplated in this amendment.
According to the AFL-CIO, an estimated 8,092 jobs would be created over a 10-year period for installation and O&M on wind power in Nevada alone, and another 19,137 manufacturing jobs would be created. Agricultural interests have begun to be aware of the potential and have indicated their support.
Last month, the 21st Century Agricultural Policy Project, under the guidance of former Senators Bob Dole and Tom Daschle, issued a report. That report made recommendations to sustain the Nation's farm sector. One of the key recommendations was that Congress pass a Federal renewable portfolio standard. I do have executive summaries of those reports. I ask unanimous consent that they be printed in the Record following my remarks.
So support for RPS is strong throughout the Nation. A poll recently by Melvin & Associates found that 70 percent of those surveyed nationwide supported a 20-percent portfolio standard. That is not what I am recommending. I am recommending 15 percent.
But these results were about the same in States as diverse as North Dakota and Georgia and Missouri and Arizona. Environmental groups, from the Sierra Club to the Natural Resources Defense Council, to the industrial associations, to the renewable trade groups, to utilities have all supported RPS. We recently received letters from a great many organizations.
Let me indicate what these letters are. First, we have a letter to Senators Reid, McConnell, Bingaman, and Domenici, signed by several hundred organizations indicating their strong support for this proposal that I have put before the Senate today.
I ask unanimous consent that letter be printed in the Record.
Next I have a letter from Michael Wilson of FPL Group-- he is vice president for government affairs with FPL--saying: Please consider this letter an endorsement in the renewable portfolio standard amendment that you intend to offer.
I ask unanimous consent that be included in the Record following my remarks.
Next, a letter from the National Farmers Union directed to Senators Reid, McConnell, Domenici, and myself, saying: On behalf of the farm, ranch and rural members of National Farmers Union, we are writing to urge you to support inclusion of a strong national renewable portfolio standard in energy security legislation and oppose attempts to weaken that when the Senate considers this issue in the coming days.
I ask unanimous consent to have that letter printed in the Record.
Finally, I have a letter from the American Wind Energy Association indicating strong support for my amendment and concern and opposition to the proposed substitute amendment that Senator Domenici has offered under the title: Clean Portfolio Standard.
Mr. President, I ask unanimous consent that this letter be printed in the Record following my remarks.
Mr. President, we are moving ahead on this bill. This is an important part of the legislation. I think all Senators have known this was intended to be offered as an amendment on the floor. I have certainly indicated that repeatedly over recent weeks and even months. So as I say, it has been offered and passed in a somewhat different forum, three previous Congresses in the Senate. I hope very much that we can proceed to a good debate on this proposal and on the proposal by my colleague from New Mexico, Senator Domenici, and then have votes on those two proposals.
I know Senator Kerry also has a proposed second-degree amendment to raise the percentage requirement from 15 percent to 20 percent. He would like to have a chance to have the Senate consider that proposal as well.
At this point, I think that gives a general overview of the amendment and the reasons why I think the Senate should support it. I urge all my colleagues to vote for the amendment. I will also want to address Senator Domenici's amendment once he has had a chance to explain that.
I yield the floor.
Exhibit 1
21ST CENTURY AGRICULTURE POLICY PROJECT
executive summary
America's farmers and ranchers face unprecedented
challenges and opportunities in the decades ahead.
Globalization, technological change, trade issues, federal
budget constraints, global warming, high energy costs, land-
development pressures, and increasing environmental and food
safety concerns are all likely to have a profound impact on
rural communities and on future prospects for sustaining a
prosperous and vibrant farm economy. At the same time, new
markets are opening to farmers that already are paying
enormous dividends. Investments in biofuels projects and wind
farms, as well as the generation of carbon credits, are
providing farmers and ranchers with new sources of income
that are transforming the rural American economy.
The 21st Century Agriculture Policy Project was motivated
by a recognition that rapidly changing landscape calls for a
more expansive and creative approach to national farm policy.
Sponsored by the Bipartisan Policy Center and chaired by the
two of us, who together have eight decades of experience at
the forefront of federal engagement with agriculture issues,
the Project was launched in March 2006. Its aim has been to
work directly with farmers, ranchers, and other stakeholders
to forge bipartisan consensus around a new agenda for U.S.
farm policy in the 21st century. It is our intent to put
forward a series of recommendations that, taken together, can
be implemented at a net savings to the federal government
compared with the current Farm Bill. Specifically, our
recommendations assume that increased demand for biofuels
under an expanded renewable fuel standard will produce
substantial savings in existing agriculture support programs,
including elimination of the direct payment program, less
reliance on countercyclical and loan deficiency payments, and
more reliance on the marketplace.
Programs to sustain the nation's agricultural sector must
necessarily evolve to reflect emerging budget pressures and
new economic realities, while also being responsive to the
larger concerns and interests of American taxpayers,
consumers, and utility ratepayers. Indeed, as taxpayers,
consumers, and ratepayers themselves, farmers and ranchers
are best served by well-designed policies that achieve
equitable outcomes, do so in a fiscally responsible
manner, and are carefully targeted to achieve maximum
societal benefits at the lowest possible cost.
Fortunately, the input gathered through this project from
farmers and researchers points to promising opportunities
for reforming current policies in ways that are responsive
to broader public-interest objectives without in any sense
diminishing the federal government's longstanding
commitment to an economically secure agricultural base.
The recommendations advanced here reflect the view that
strategic investments in developing new
market opportunities and in helping agricultural producers
gain a larger stake in high-value-added enterprises can
reduce farmers' need for current safety net programs in
ways that are less susceptible to political uncertainty
and international trade rules and that are revenue-
neutral, in terms of overall federal spending. Four
overarching themes connect these recommendations:
Securing a robust, economically vibrant future for American
agriculture in the 21st century requires a more expansive and
creative approach to farm policy. A continued federal
commitment to the financial security and stability of the
nation's farm community is essential at a time when
globalization, technological change, environmental concerns,
high energy costs, international pressure to cut traditional
subsidies, and continued urbanization all pose new challenges
for agriculture. To help farmers respond effectively while
continuing to undergird U.S. competitiveness, federal policy
must evolve to encompass a broader set of issues and
successfully leverage multiple synergies.
An emphasis on new markets and on increasing farmers'
equity share in value-added enterprises provides the best
foundation for expanding opportunity in rural communities.
Biofuels, renewable energy like wind power, carbon
sequestration, and habitat preservation for recreation and
hunting are just some examples of agriculture-related
activities that can significantly augment and diversify
future sources of income for America's farm families.
Targeted policies are needed to increase farmers' stakes in
the new wealth generated by these emerging markets.
Increasing the role of America's farms in energy production
can be achieved at a net savings to the federal budget
because increased demand for corn and other crops to serve
the rapidly growing alternative-fuels market will naturally
reduce outlays for traditional ``safety net'' programs. New
economic research suggests that explosive growth in ethanol
production will lead to higher prices not only for corn, but
also for soybeans and wheat, as acreage now in these crops is
shifted to corn. These market shifts are expected to
dramatically reduce countercyclical and loan deficiency
payments for certain crops, potentially freeing billions of
dollars each year for farm programs that have broad political
support and that generate promising, and ultimately more
self-sustaining, economic opportunities in the long run.
Federal action to establish a mandatory program to limit
greenhouse gas emissions is sensible and will provide
agricultural producers with significant new market
opportunities. The agriculture sector is in a unique position
to lead in--and benefit from--efforts to address climate
change. Expanded demand for biofuels is an obvious example,
but ranch and farm lands are also well-suited for future
development of renewable electricity sources (e.g., wind and
solar power) and carbon sequestration.
summary of recommendations
Continue to provide economic stability through existing
countercyclical programs, while investing in market-based
opportunities for agriculture and addressing new sources of
financial insecurity through a permanent disaster program:
First, the core of the federal farm program must be a
strong countercyclical program based on the two
countercyclical elements of the current farm bill: (1) a
robust marketing loan program that treats all producers
equally and (2) a partially decoupled countercyclical
program. Individual farm benefits should be capped at
$250,000 per year and eligibility to obtain benefits through
more than one entity should be eliminated.
Second, Congress should eliminate the direct payment
program and redirect funds for this program--along with
savings generated by reduced countercyclical and LDP payments
for corn, wheat, and soybeans--to permanent disaster
assistance and promoting new income-generating opportunities
for farmers in markets such as biofuels, renewable
electricity, carbon sequestration, and conservation.
Third, Congress should establish a Value-Added Equity
Creation Program to provide farmers and ranchers with no-
interest revolving loans so that they can participate in
high-value agriculture-related business opportunities, such
as biofuels plants and wind projects. Producers should be
eligible to participate if their primary occupation is
farming and should be able to receive up to $100,000 in
interest-free loans for equity investments in qualifying
value-added enterprises (as certified by the U.S. Department
of Agriculture (USDA)).
Finally, in recent years, Congress has frequently passed
annual emergency spending bills to provide agricultural
producers with disaster assistance. While these measures have
provided important relief to farmers and ranchers, they have
been ad hoc in nature and off budget. As a result, Congress
may decide to establish a permanent disaster assistance
program, administered by USDA, to provide ranchers and
farmers with assistance for clearly defined disaster
conditions. If so, we recommend that Congress replace the
current system of ad hoc off-budget emergency supplemental
spending bills, make the permanent disaster assistance
program on-budget as part of the Farm Bill, and include a
reasonable benefit cap of $250,000 per farm or ranch in any
single year. If a reasonable benefits cap is imposed, net
federal outlays for disaster assistance should be reduced
compared with the current off-budget approach.
To promote biomass-based alternative liquid fuels, Congress
should:
Expand and extend the recently-adopted renewable fuels
standard (RFS) to reach at least 10 billion gallons per year
by 2010, 30 billion gallons per year by 2020, and 60 billion
gallons per year by 2030, as proposed in bipartisan
legislation introduced in the U.S. Senate. This step would
lead to expansion of biofuels markets beyond the E-10 market
and spur new investment in the next generation of advanced
biofuels technologies, such as cellulosic ethanol.
Promote the use of higher blends of ethanol in the existing
fleet of automobiles by instructing the Environmental
Protection Agency to conduct analysis of the viability of
using higher blends of ethanol (including E-15, E-20, E-30,
and E-40) in the existing fleet of automobiles by January 1,
2009.
Extend the existing volumetric ethanol excise tax credit
(VEETC) to 2020 while simultaneously restructuring this
program in ways that account for expected growth in corn
ethanol production under an expanded national RFS. After the
current tax incentive authorization expires in 2010, Congress
should look for ways to ensure that the cost of the tax
credit--in the context of other policies and expected ethanol
production volumes--remains acceptable, while ensuring that
new and innovative biofuels project are provided the support
they need to be successful. Among the criteria that
Congress should use to design the post-2010 biofuels tax
credits are:
1. Limiting the overall cost of the tax incentives to the
government;
2. Encouraging expansion of the industry by ensuring that
investments in new plants and recently-built plants can be
fully amortized;
3. Rewarding energy-efficient and low-carbon emitting
technologies;
4. Ensuring that pioneering processes, such as those that
convert cellulosic feedstocks like corn stover and
switchgrass to ethanol, are economically competitive with
fossil fuels;
5. Encouraging farmer ownership of ethanol plants;
6. Balancing domestic tax credits with an import duty of
similar size, so that U.S. taxpayers do not subsidize ethanol
imports to the detriment of American producers.
Extend the small producer renewable fuels tax credit beyond
2008 for plants that are at least 40 percent locally-owned
and for cellulosic ethanol plants. Consolidate all cellulosic
biofuels loan guarantee programs into a single program at
USDA and establish an energy security trust fund to provide
consistent funding for that program. Successfully
commercializing the production of ethanol and other fuels
from cellulosic (i.e., woody or fibrous) plant materials
would dramatically expand the potential contribution of
biofuels in terms of displacing current petroleum use and
associated carbon emissions. Implementing many existing loan
guarantee programs through three separate federal agencies
makes little sense. USDA has considerable experience in
implementing loan guarantee programs and expertise in
evaluating biofuels projects through its Office of Energy.
Therefore, Congress should consolidate all federal biofuels
grant and loan guarantee programs at USDA and establish a
national energy security trust fund to provide at least $1
billion per year in loan guarantees and grants to promote
necessary advances in production technology and bio-science.
Establish a demonstration cellulosic biofuels feedstock
program. Congress should establish a new set-aside program to
demonstrate how the cultivation and harvesting of cellulosic
feedstocks could be accomplished in an economically
attractive manner. Following the model of several existing
programs, the 2007 Farm Bill should provide a modest payment
to landowners who convert existing cropland to grow
cellulosic biofuel feedstocks for nearby cellulosic biofuels
plants in ways that improve wildlife habitat, reduce soil
erosion, and protect water quality. New lands to be set aside
under such a program should be capped at 500,000 acres for
the duration of the 2007 Farm Bill.
Establish policies to encourage a rapid increase in the
number of flexible fuel vehicles sold in the United States
and the installation of E-85 pumps and blender pumps at
gasoline stations. For example, we recommend extending the
existing tax credit for installing E-85 refueling stations
and redesigning it to provide relatively greater benefits in
the near-term to encourage more rapid deployment of E-85
infrastructure. We also recommend clarifying that blender
pumps be eligible for the tax credit, since in the long run
it will make more sense to install blender pumps that are
capable of dispensing a range of ethanol blended fuels.
Congress also should consider more attractive expensing and
accelerated depreciation options to encourage installation of
E-85 and blender pumps in lieu of tax credits.
To promote renewable electricity production and other
renewable energy projects on farms and ranches, Congress
should:
Establish a national renewable portfolio standard (RPS)
along with complementary policies to promote maximum
development of cost-effective renewable energy potential on
agricultural lands. Such policies to promote renewable energy
have been adopted by 21 states and the District of Columbia
and Congress should now take action to adopt a
portfolio requirement at the federal level. Moreover, federal
policies to promote renewable energy should encourage the
siting of new projects on farm or ranch lands wherever
possible. Given that the use of these lands would be far
preferable to new development in wilderness areas and would
simultaneously provide important economic benefits for rural
communities, an appropriate policy goal would be to satisfy
at least two-thirds of a national RPS with renewable energy
production on agricultural lands. In addition, a federal RPS
should be designated to complement and not pre-empt any state
requirements (which may be more ambitious) and should apply
equally to all large retail electricity providers. (To
simplify implementation requirements and to address supply
and price concerns, it may be appropriate to exclude rural
electric coops and small municipal utilities.)
Expand and strengthen existing programs outside the Farm
Bill that promote renewable energy development and related
technology advances. To provide investment certainty,
existing renewable-energy production tax credits (PTCs)
should be extended for ten years and funding for related
research, development, demonstration, and early deployment
efforts should be increased. In addition, such programs
should be modified so that incentives can be taken against
non-passive income. The Community Renewable Energy Bonds
(CREBs) program should be extended and expanded, with a
substantial sum set aside for rural electric cooperatives and
municipal utilities.
Establish a Rural Community Renewable Energy Bonds program
to provide a federal incentive for local private investment
in renewable energy to complement the PTC and CREBs programs.
This new initiative would be limited to projects of not more
than 40 MW; where at least 49 percent of the project is
owned by entities resident within 200 miles of the project
site.
Expand the capacity of the existing federal power
administration transmission system. The federal power
marketing administrations (PMAs) own and manage a vast
network of existing power lines, which should be
substantially expanded to provide the additional capacity
needed to tap cost-effective renewable energy resources.
Congress should direct the federal power administrations to
pursue this objective under a structure in which non-
benefiting PMA customers do not shoulder the cost and
preference is given for system investments that maximize
promising opportunities for renewable energy development on
agricultural lands. Priority should be placed on the
expansion of the Western Area Power Administration (WAPA) and
Bonneville Power Administration (BPA) transmission systems.
The PMAs also should be authorized and encouraged to enter
into partnerships with non-federal parties for the siting,
planning, and construction of transmission lines; the
participation of PMAs can streamline siting by avoiding
multiple state siting authorities.
The Department of Energy (DOE) should designate the
Heartland Transmission Corridors ``National Interest Electric
Transmission Corridors'' pursuant to the Energy Policy Act of
2005. Federal assistance in the form of an expanded role for
WAPA as a facilitator for planning and investment, and a 20
percent matching investment from the federal government would
go a long way toward addressing cost and siting hurdles,
encouraging state cooperation, and ensuring that needed
transmission system enhancements are implemented.
Congress should authorize $1 billion per year for five
years to provide tax-exempt bonds for the construction of
transmission facilities (or the expansion of existing
facilities) where such construction or expansion is cost-
effective and offers substantial public policy benefits in
terms of facilitating the development of clean, domestic
renewable resources. Under such a program, loans would be
provided by eligible government entities to qualified private
entities seeking to finance eligible transmission
infrastructure. Such bonds would assure the availability of
financing for transmission at significantly lower cost than
presently available in the market. They could be used both
for new transmission and for upgrades to existing facilities
(for example, to address transmission constraints in west
Texas and Minnesota, where substantial wind development
opportunities exist, or to access renewable energy projects
anticipated as a result of the Rocky Mountain Area
Transmission Study (RMATS) in the Western Interconnect. In
addition, current private use restrictions applicable to
projects that receive tax-exempt bonds should be reviewed to
assess whether they create unnecessary additional hurdles to
investment.
Explore further opportunities for an expanded federal role
in directly facilitating the implementation of, and providing
resources for, investments to enhance grid capacity and to
promote a more efficient, seamless, and reliable transmission
system nationwide.
Reauthorize and expand USDA's Energy Audit and Renewable
Energy Development Program under Section 9005 of the 2002
Farm Bill. This program to assist farmers, ranchers, and
rural small businesses in becoming more energy efficient and
in using renewable energy technology and resources has never
been funded. It should be reauthorized with a goal of
performing audits of 25 percent of all farms and ranches over
the time horizon covered by the next Farm Bill and funds
sufficient to achieve that goal should be appropriated in the
future.
Reauthorize and expand USDA's Rural Development Business
Renewable Energy and Energy Efficiency Program (Section 9006
of the 2002 Farm Bill). This program currently provides a
modest number of grants--$23 million per year--to support
renewable energy and energy-efficiency projects. Future
funding should be scaled up over the next 5 years to at least
$500 million per year and the program should be expanded to
enable participating agencies to provide grants for
feasibility studies and loan guarantees for project
development. As long as feasibility studies are accurately
performed, the cost to the federal government of providing
loan guarantees for up to 75 percent of project costs should
be fairly small. In addition, Congress should consider
modifying the program to (1) increase loan guarantees for
cellulosic ethanol facilities to at least $100 million per
project, and $25 million for other projects, (2) create a
rebate program to streamline the application process for
smaller, standardized projects by reducing the paperwork
burden, and (3) expand eligible applicants to include
agricultural operations in non-rural areas (such as
greenhouses) and schools.
To promote markets for carbon sequestration and other cost-
effective greenhouse-gas mitigation measures on farm and
ranch lands, Congress should:
Establish a national, mandatory, market-based program to
reduce economy-wide greenhouse gas emissions that provides
substantial market opportunities for cost-effective carbon
sequestration on farm and ranch lands. Specifically,
agricultural producers should have the opportunity to
participate fully in the carbon markets that will be created
under a greenhouse gas trading program. To facilitate this
participation, priority must be given to establishing robust,
well-defined protocols for measuring and verifying carbon
reductions achieved through terrestrial sequestration.
Establish tax incentives, such as federal tax refunds for
local and state property taxes, for farmers and ranchers who
enroll land in a carbon trading program that works in tandem
with entities that buy, sell and trade carbon credits.
Direct USDA to work with other state and federal agencies
on continued economic and technical research on different
options for sequestering carbon and on better methods of
documenting sequestration for market participation.
To advance widely supported environmental habitat-
preservation, and open-space objectives while creating
additional income-generating opportunities for farmers and
maximizing potential business opportunities related to
hunting, fishing, and other forms of outdoor recreation,
Congress should:
Expand existing conservation programs:
1. Expand the Conservation Reserve Program at 40 million
acres;
2. Expand the Wetlands Reserve Program at 5 million acres,
with annual enrollment capped at 250,000 acres per year;
3. Expand the Grasslands Reserve Program at 5 million
acres, with annual enrollment capped at 500,000 acres per
year;
4. Increase funding for the Farm and Ranch Lands Protection
Program to at least $300 million per year.
5. Implement the Conservation Security Program on a
nationwide basis on all working lands.
Enact ``Open Fields Bill'' to provide $20 million per year
in federal funds to supplement state ``walk in'' programs
that give farmers and ranchers financial incentives to expand
public access to their lands.
Exhibit 2
Hon. Harry Reid,
Majority Leader,
U.S. Senate.
Hon. Jeff Bingaman,
Chairman, Energy & Natural Resources Committee, U.S. Senate.
Hon. Mitch McConnell,
Minority Leader, U.S. Senate.
Hon. Pete V. Domenici,
Ranking Member, Energy & Natural Resources Committee.
Dear Senators Reid, McConnell, Bingaman and Domenici: As a
diverse group of corporations, manufacturers, electric
utilities, renewable energy developers, labor organizations,
farm groups, faith-based organizations and environmental
advocates, we are writing to urge the Senate to include a
national renewable portfolio standard (RPS) in energy
security legislation that may soon be considered by Congress.
An RPS is an essential component of a broader national energy
strategy, because it will held the nation to take full
advantage of the abundant domestic renewable resources
available for the generation of electricity.
An RPS is a market-based mechanism that requires electric
utilities to include a specific percentage of clean,
renewable energy in their generation portfolios, or to
purchase renewable energy credits from others. By
substantially increasing renewable electricity generation,
the RPS would enhance national energy security by
diversifying our sources of electric generation. At a time
when the United States is increasing energy imports, an RPS
would make America more energy self-reliant. The reduction in
the use of fossil fuels to generate electricity would also
limit fuel price volatility, which is important to both
industry and consumers. In fact, the U.S. Department of
Energy's own Energy Information Administration has found in
several studies that an RPS would actually cause natural gas
prices to decline.
Increasing the market share for renewable energy resources
would also have substantial environmental benefits. An RPS is
one of the most important and readily available approaches to
reducing greenhouse gases from the electricity generation
sector. In addition, an RPS also would help reduce
conventional pollutants including nitrogen oxide, sulfur
dioxide and mercury emissions.
Moreover, a national RPS will produce substantial economic
benefits. The additional investment in renewable electric
generation would create hundreds of thousands of well-paying
jobs. In addition, because many renewable resources are
located in remote areas, rural America will experience a
substantial economic boost.
We believe the time has come for Congress to move quickly
to enact national RPS legislation. The costs of inaction for
our environment, national security and economy are too high.
Although more than 20 states have adopted individual RPS
programs, the country will not realize the full potential for
renewable electricity without the adoption of a Federal
program to enhance the states' efforts.
Thank you for your consideration of this important matter.
Sincerely,
GE, BP America, Inc., National Venture Capital Association,
Miasole, Wisconsin Power and Light, National Council of
Churches of Christ in the USA, Technet, APX, Inc., Alliant
Energy, Sempra Energy, Shell Wind Energy, Inc., Solar
Turbines, Inc., Business Council for Sustainable Energy,
Alliant Energy, Invenergy LLC, Owens Corning Composites
System Business, Leeco Steel, Clipper Wind Power, Inc.,
Google, United Steelworkers, Edison International, Pacific
Gas & Electric, Union for Reform Judaism, GT Solar, PPM
Energy, Inc., Avista Utilities, Horizon Wind Energy, Enel NA,
D.H. Blattner and Sons, Applied Materials, Inc., Greene
Engineers, Oregon Steel Mills, LM Glasfiber ND, Inc., Noble
Environmental Power, enXco, Interstate Power and Light,
National Audobon Society, American Wind Energy Association,
Blue Green Alliance, Big Crane & Rigging Company, Iberdrola
U.S.A., Natural Resources Defense Council.
DMI Industries, Union of Concerned Scientists, Lake
Superior Warehousing, Rocky Mountain Farmers Union,
Pennsylvania Interfaith Climate Campaign, Interfaith Power &
Light, Environmental Law and Policy Center, Western
Organization of Resource Council, ATS Wind Energy Services,
BioResource Consultants, Bosch Rexroth Corporation, Castle &
Cooke Resorts, Chermac Energy Corporation, Dominion Energy,
EFormative Options, Energy Unlimited, Enertech, Environmental
Stewardship & Planning, Eurus Energy America, FPC Services,
Generation Energy, Green Energy Technologies, Gro Wind I,
Highland New Wind Development, Knight & Carver, LAPP
Resources, Louis J. Manfredi Consulting, Mackinaw Power,
Mizuho Corporate Bank, Nordex USA, Old Mill Power Company,
Otech Engineering, Phoenix Contact, Renewable Energy
Consulting Services, San Gorgonio Farms, SIPCO (MLS
Electrosystem), TCI Renewables Limited, Tideland Signal,
Trinity Structural Towers, Varelube Systems, Wind Capital
Group, Wind Utility Consulting, WindLogics, Windsmith.
PowerWorks, Physicians for Social Responsibility, McNiff
Light Industry, Citizen's Utility Board, Great Southwestern
Construction, RES America, JPW Riggers, AES Wind Generation,
Suzlon Wind Energy, U.S. PIRG, University of Alaska,
Fairbanks, Atlantic Testing Laboratories, National
Environmental Trust, AWS Truewind, Big Stone Wind, CAB, Inc.,
Bluewater Wind, BQ Energy, Competitive Power Ventures,
Chinook Wind, EcoEnergy LLC, Electric Power Engineers,
Enerpro, FAW Foundry, Foresight Wind Energy, Excellent Energy
Solutions, General Compression, Hopwood, Greenwing Energy,
Hailo, HMH Energy Resources, Pandion Systems, ReEnergy,
Tamarack Energy, Mariah Power, Molded Fiber Glass Companies,
Oak Creek Energy Systems, Sierra Club, Padoma Wind Power,
Project Resources, RSMR Global Resources, Signal Wind Energy,
Sustainable Energy Strategies, The Conti Group, TMA, Inc.,
Oregon Rural Action, Venti Energy, Wind Turbine Tools,
Windland.
WindRose Power, Winergy Drive Systems, Winergy Power,
Appropriate Energy, Castaic Clay Products, Cannon Power,
TOWER Logistics, Energy Development and Construction Corp.,
Institute for Environmental Research and Education, RENEW
Wisconsin, Fallon County Disaster & Emergency Services,
Stevens County (KS) Economic Development, Dakota Resource
Council, Montana Department of Environmental Quality, West
Wind Wires, Interwest Energy Alliance, Concord Energy Policy
Group, Renewable Northwest Project, Friends Committee on
National Legislation, American Lung Association of the
Central States, Tompkins Renewable Energy Education Alliance,
Alaska Wilderness League, 1000 Friends of Wisconsin, Citizens
Campaign for the Environment, Grassroots Citizens of
Wisconsin, NH Sustainable Energy Association, Southwest
Wisconsin Progressives.
Cabazon Wind Energy, Zephyr Lake Energies, Hodge Foundry,
Commonwealth Capital Group, Mankato Area Environmentalists,
Clean Wisconsin, Missourians for Safe Energy, Oklahoma Wind
Power Initiative, OverSight Resources, Kansas Rural Center,
Chesapeake Climate Action Network, Greenpeace, Southern
Alliance for Clean Energy, Clean Power Now, RMT/WindConnect,
The Land Institute, Western Colorado Congress, Idaho Rural
Council, Clean Water Action, Coulee Progressives, League of
Conservation Voters, Penn Future, REACH for Tomorrow, The
Minster Machine Company.
Exhibit 3
FPL Group, Inc.,
Washington, DC, June 11, 2007.
Hon. Jeff Bingaman,
Chairman, Committee on Energy and Natural Resources,
Washington, DC.
Dear Chairman Bingaman: Please consider this letter an
endorsement of the Renewable Portfolio Standard (RPS)
amendment you intend to offer during upcoming Senate
consideration of energy legislation.
As you may know, FPL Group, comprised of two major
subsidiaries, Florida Power & Light (FPL) and FPL Energy
(FPLE), is one of America's cleanest, most progressive energy
companies. Our commitment to the environment is manifested by
FPL's diverse generation mix and by FPLE's largely renewable
energy portfolio. FPLE operates two of the largest solar
projects in the world, over 1,000 megawatts of hydroelectric
power, a number of geothermal projects and several biomass
plants. Additionally, FPLE is the world's largest generator
of wind power.
We appreciate your leadership on this important issue and
support your efforts to enact a fair and balanced RPS in
order to increase the amount of non-emitting electricity
generation in the United States.
Sincerely,
Michael M. Wilson,
Vice President, Governmental Affairs.
Exhibit 4
National Farmers Union,
June 11, 2007.
Hon. Harry Reid,
Majority Leader, U.S. Senate, Washington, DC.
Hon. Jeff Bingaman,
Chairman, Energy & Natural Resources Committee, Washington,
Mr. President, let me make a few comments in response to my colleague's statement and in opposition to his amendment, which he has designated the clean energy portfolio standard. I think people need to understand what his amendment provides, and let me try to explain that.
This amendment purports to be significantly stronger than the 15- percent requirement I have proposed as part of the renewable portfolio standard I have sent to the desk. It actually, though, accomplishes very little in driving the development of new technologies for electricity supply.
The amendment talks about a target of 20 percent clean energy resources by 2020, but when you look at it carefully, it is a recipe for business as usual, given all the other things that are going on and in the planning stages.
There are various reasons why I say that. First of all, it is very clear from his amendment that existing nuclear power is subtracted from the base against which the requirement is measured. Now, what does that mean? What that means is that instead of taking 100 percent, you say: OK. How much of our current electricity supply comes from nuclear power? About 20 percent. You subtract that, and you are then left with the remaining 80 percent; and that remaining 80 percent is what he calculates his 20 percent against. So, in fact, 20 percent of 80 percent gets you down to 16 percent--rather than a 20-percent requirement.
He also has a provision in here that says incremental nuclear power is counted for full credit. Now, that means any new powerplant that is built is new energy and helps to meet the requirement that would be imposed by his amendment. Let me say, first of all, I worked very closely with Senator Domenici in supporting additional incentives and additional supports--subsidies, in fact--for the nuclear energy industry in the 2005 Energy bill we passed. We put a variety of things into law to encourage the construction of new nuclear powerplants in this country. We put in regulatory risk insurance. We put in a production tax credit, which I think was 1.8 cents per kilowatt-hour for the first 10 years you had one of these new nuclear powerplants in production. We extended the Price Anderson Act. We had loan guarantees for the construction of new nuclear plants--the first six, I believe. We had a substantial increase in funding for nuclear research and development, and we had a transfer to the Federal taxpayer of much of the expenditure for safety and security that would otherwise have been borne by the industry.
So there are a lot of things in there to support the nuclear power industry. I still believe those are very good provisions, and I am in no way backing away from those. But now my colleague has come to the floor and said: OK, now let's give them another subsidy, another incentive to build nuclear power by including them as one of the ways you would meet the requirement of this clean energy portfolio standard.
As I am sure anybody who was paying attention to our discussion yesterday would know, I believe Senator Domenici made this point very strongly: Since we passed the 2005 bill, there has been a resurgence in interest on the part of various companies that want to build new nuclear powerplants. I think there are some 30 letters of intent currently pending at the Nuclear Regulatory Commission stating that companies are looking seriously at filing applications for the construction of new powerplants. So the expectation is that we are going to have a lot of new nuclear powerplants constructed in this country over the next decade, and I, frankly, hope we do because I think that is an essential part of meeting our energy needs. But we do not need to further incentivize that by including them as part of a renewable or a clean energy portfolio standard as the Domenici amendment would have us do.
He talks about how the amendment I have offered is strictly a wind type of incentive; it is a program to encourage construction of more wind energy.
That is directly contrary to what has been stated by the Energy Information Administration. In their analysis, they concluded very clearly that wind energy would be expected, under this amendment I have offered, to increase 50 percent; that biomass energy production, electricity production from biomass, which is already twice as large as energy production from wind, would be expected to increase 300 percent rather than 50 percent, as is the case with wind; and that energy production from solar would be expected to increase 500 percent. So it is clear to me that this is not just a wind energy amendment I have proposed. Our amendment talks about meeting the requirements from solar power, from wind power, from geothermal power, from biomass power, from ocean.
The Senator from Utah was just on the Senate floor talking about his support for the idea of energy from tidal waves. We have that included. That is one of the new renewable energy
sources which we contemplate. Incremental hydro--so that if we have a hydroelectric facility and one wants to increase the amount of power from that facility, we count that against the requirement; landfill gases as well. So I think all of that is included, and all of it would be increased significantly.
Let me also talk about the issue of subsidies. I went through a list of the various subsidies we provide in the 2005 bill for the nuclear power industry, and I support every one of those. I think that was the right thing to do. But let me just be clear that we have subsidies for a great many types of energy sources, including tax deductions, loan guarantees, liability insurance, and provisions for leasing of public lands at below-market prices. Some, like the depletion allowance for oil and gas, are permanent subsidies that are built into the Tax Code, and I am not suggesting they need to be repealed. I am just pointing out the largest subsidy--and I think any economist would make this point and would agree with this point--the largest subsidy is an invisible subsidy, the fact that the environmental impacts from use of fossil fuels are nowhere reflected in the cost of those energy sources. That is what has caused our problem with greenhouse gas emissions. That is why--it does not cost anything to pump 100 tons of CO2 or other greenhouse gases into the atmosphere. There is no cost to the person who is producing their energy for those fossil fuels. There is a cost to society, and we are beginning to understand what that cost is. But the idea of a major impetus for the renewable portfolio standard I have offered is that we would reduce dramatically these greenhouse gas emissions and provide incentives for the development of these other technologies. There are already incentives for the improvement in the development or improved use of nuclear power for energy production, and, as I say, I support those.
Let me also talk a little about this proposal that States can opt out. First, let me mention that the Secretary can add others. I think that is a very major loophole, for us to essentially say to the Secretary of Energy: It is up to you; if you find something else that you believe ought to be included in the way we meet essentially this 16 percent requirement, then add that in. I think the idea that States can opt out is unfortunate, indeed. Obviously, many States have chosen to put in place their own renewable portfolio standards. Nothing in my amendment in any way overrides those States' proposals.
What we try to do with the proposal I put forward is to set a national minimum. We say you should at least do this 15 percent. If you want to do something else, have a go at it. If your laws provide for something else, then so much the better. But we do not say to States: You can opt out of any Federal requirement. I think to do so essentially eliminates any coherence we might have in the system.
Let me conclude my comments at this point by saying that my own reading of the proposal Senator Domenici has made here as a second- degree amendment to mine is that it really gets us to the worst of all locations in the debate or in our deliberations on this issue. It is a Federal program that does not result in the generation of electricity from clean energy sources beyond what otherwise would be expected to happen at any rate. But it does require utilities to go through very extensive efforts to track and buy and sell credits and comply with a regulatory regime. The Government would have to establish a credit- trading scheme, a tracking system, a monitoring system, regulations for implementation--a whole panoply of Government machinery--but they would do so in order to achieve a result that could have been achieved without the implementation of the proposed amendments.
So I think it would be an unfortunate provision for us to adopt. I hope my colleagues will agree with that and will vote against the Domenici proposal and, of course, as I said earlier in the debate, a vote in favor of the one I propose.
Let me conclude with that. I know my colleague may wish to speak some more, and I know there are others coming to the floor intending to speak as well, and there may be additional opportunities for me to add to these comments as the afternoon progresses.
Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.
Mr. President, I ask unanimous consent that Senator Snowe from Maine be added as a cosponsor to the underlying amendment I have sent to the desk.
Mr. President, I suggest the absence of a quorum.
Mr. President, I appreciate the comments of my friend and colleague from Idaho. I would just direct a question to him and see if I am confused or he is confused, or just where the confusion lies. He says there is not authority in the Domenici proposal, the clean energy proposal; that there is not authority for a State to opt out. Here is the sentence on page 9 of that legislation. It says:
On submission by the Governor of a State to the Secretary--
That is the Secretary of Energy--
of a notification that the State has in effect, and is
enforcing, a State portfolio standard that substantially
contributes to the overall goals of the Federal clean
portfolio standard under this section, the State may elect
not to participate in the program under this section.
Now, that clearly states, as I understand it, that it is entirely up to the State whether it chooses to participate in the program or chooses not to participate in the program, and there is no discretion on the part of the Secretary of Energy about it at all. There is no certification required by the Secretary of Energy. There is no requirement that the State program meet any particular standard other than it contribute to the overall goals of the Federal standard.
To me, that means a State can opt out of the Federal program, unless I am misreading it.
Well, Mr. President, let me just reiterate that the clear language of the statute states if the State determines that it has a ``portfolio standard that substantially contributes to the overall goals of the Federal clean portfolio standard, then the State may elect not to participate in the program.''
To me, that is a clear opt-out for the State. There is no requirement that anybody certify or anything else. If I were Governor of New Mexico, I could type up a letter, send it off to the Secretary and say we are opting out--include us out--and that clearly would let me out of the program.
So I don't think the bill says what the Senator has indicated.
Mr. President, I appreciate the comments from my friend. I would just say he is describing a provision in an amendment that is not before us. I want to point that out to my colleagues.
Mr. President, I do object. I believe we need to complete action on the two pending amendments before we take up any other amendments or have other amendments pending. Obviously he can send anything he wants to the desk, but as far as calling up any amendment for consideration, I would object.
I yield to the Senator from Iowa for whatever time he wishes.
Mr. President, let me speak briefly. I know my colleague, Senator Sanders, is in the Chamber and wishes to speak. I will not delay him long.
Let me make three brief points with regard to Senator Domenici's second-degree amendment. What that amendment does is it does three things to the renewable portfolio standard I have sent to the desk.
First of all, it starts out by saying: Since it is a requirement that you produce a certain percent of the power you are selling from renewable sources, let's take the base amount of power you are selling and redefine it so it is smaller. It does that by saying: OK, if you are selling any power you produce from nuclear sources, that does not count in the base. So that automatically eliminates 20 percent of the electricity being sold in this country today.
It says: OK, that way, you can suggest to people we have a 20-percent goal here--whereas the one I have sent to the desk is only 15 percent. But you do not need to be a mathematician to realize that after you take the 20 percent out, and you take 20 percent of 80 percent, then you are getting down to 16 percent. So, essentially, there is some smoke and mirrors going on there.
Second, they say: OK, let's redefine how you can meet that requirement, that 16 percent requirement, which is what it, in fact, is. They say: You can meet it by using any of the renewable sources the Bingaman amendment allows for; and that is, biomass, solar,
wind, geothermal, tidal energy. Those are all options. In addition, if you want to build another nuclear plant, that counts. If you want to improve energy efficiency, that counts. If you want to adopt some demand response programs to reduce demand, that counts against your requirement. If you want to use the capture and storage technology, that counts. The Secretary is given authority to identify other things that could count, too, which are unspecified in the bill.
So, essentially, what you wind up--and then the final thing it does with our amendment is it says: If you are a State that has some kind of program, and you think it is pursuing the same--I will read the exact language. It says:
If the governor of a State submits to the Secretary a
notification that the State has in effect and is enforcing a
State portfolio standard that substantially contributes to
the overall goals of the Federal clean portfolio standard
under this section, then the State may elect not to
participate in the Federal program.
So, essentially, it is an invitation to States to adopt something and then opt out, which I think undermines what we are trying to accomplish.
Essentially, the way I read the amendment by my colleague, his second-degree amendment would basically say: Let's put together this complicated trading system to keep track of what utilities are doing, but, in fact, it is designed essentially to mirror what they are already planning to do at any rate. It doesn't require them to do anything different.
The amendment I have sent to the desk does require them to do some things differently. They are going to have to actually start either producing energy from renewable sources, buying energy that has been produced from renewable sources by someone else, buying credits from someone else who has produced more renewable energy than they, in fact, needed, or pay a compliance fee to the Secretary of Energy. So we have some real teeth in our provision.
Now, it is not as strong as some Senators would like. I know my colleague, who is about to speak, will speak to that issue, and I know Senator Kerry from Massachusetts feels very strongly that this is not a strong enough requirement that I have suggested. But I would suggest to anyone who is studying these issues, the proposal I have made is a vastly stronger proposal than the one that my colleague, Senator Domenici, has proposed as an alternative.
I urge my colleagues to study both amendments tonight and perhaps tomorrow we can get a vote on both amendments. Also, I know Senator Kerry would like an opportunity to propose that we have even a stronger standard. I think he should be given that opportunity.
Mr. President, I ask unanimous consent that three letters--one from Constellation Energy, one from a large group of environmental organizations, and then another one from a separate group of environmental organizations--be printed in the Record.
