Department of State, Foreign Operations, and Related Programs Appropriations Act, 2006

DEPARTMENT OF STATE, FOREIGN OPERATIONS, AND RELATED PROGRAMS APPROPRIATIONS ACT, 2006 -- (Senate - July 19, 2005)

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Mrs. FEINSTEIN. Mr. President, I always regret having to oppose an amendment proposed by my friend and colleague from California, but I am afraid I must. I have a very hard time understanding this amendment and understanding why we would even do it.

I believe, if this amendment is adopted, it is a free gift to the French, the Russians, and other European contractors who would have been provided a majoring advantage over their U.S. counterparts. Secondly, it will only lead to a further increase of greenhouse gases in China. Thirdly, it will result in the initial loss of American jobs and potentially many thousands in the future. Finally, it would mean a lost opportunity to address our rising trade deficit with China and to cooperate in finding efficient sources of energy.

I have been going to China for over 30 years now. I try to go every year. As mayor, I started a relationship with Shanghai. I traveled east, west, north, and south in China. China needs energy. All anybody has to do is be in China in the middle of the summer or the winter and see the effect of this coal-burning country.

Do you remember when they wanted to build hydroelectric power and build the Three Gorges Dam and people in this country objected to it? They said: It is too big. And the Three Gorges Dam, the largest hydroelectric dam in the world, will only handle 5 percent of the energy needs of China. So China has to go somewhere. China has to find a source of clean power.

This provision, I believe, would essentially shut out U.S. firms from being able to compete with their counterparts in Europe and, for all practical purposes, cede billions of dollars worth of contracts to non-American companies.

No matter what our personal views on nuclear power and the construction of nuclear powerplants in the United States--that is our business--it is clear that China intends to proceed with at least 30 nuclear powerplants, the most advanced and the cleanest yet known to man, over the next decade. This is China's decision, and it is their right to make this decision.

China, as its economy continues to expand by over 9 percent annually, is deeply concerned about an energy shortfall. As the world's No. 2 consumer of energy, China currently imports 40 percent of its oil supplies.

As its economy continues to grow--and it will--China will need to find additional and greater sources of energy. We do not want them to rival us as we look for those sources of energy.

Let me give you an example. The International Energy Agency, in its 2004 annual report, predicts that China's oil imports will increase by some 500 percent by 2030.

Despite the negative impacts on its citizens' health and its contribution to greenhouse gases, China remains the world's largest producer and consumer of coal. Coal continues to make up two-thirds of energy consumption in China, and it is predicted that coal consumption will only double over the next two decades.

Currently, the second largest emitter of greenhouse gases--behind us--China is expected to surpass the United States as the world's largest emitter of greenhouse gases by 2025. In an attempt to increase its reliance on cleaner, more efficient energy sources, China has been working to develop natural gas, hydroelectric power, and nuclear energy.

Now, while nuclear energy is not a panacea for all of China's energy needs, it offers one of the most efficient and cleaner sources of energy. And it is certainly superior to coal.

In the next 20 years, China is expected to top the world in nuclear power development. So I ask, what is the point of this amendment? Why would we want to pass legislation that would hurt American companies and try to tell China what sort of energy it can develop?

I could understand if this was sensitive nuclear technology and had national security implications. But it has been vetted, and that is simply not the case. The administration--and, in particular, the Department of Commerce and the Department of Energy--has reviewed this technology and has offered its unequivocal support for American firms bidding or subcontracting on these projects.

In the first project that would involve American technology, a multinational consortium, including the American Shaw group, is looking to design and construct four AP1000 pressurized water reactors on two sites in central and southern China. This AP1000 advanced nuclear powerplant will be the new standard for nuclear power throughout the globe and lead to thousands of high-tech jobs for Americans for many years to come.

In February 2005, the Ex-Im Bank gave a preliminary commitment to provide $5 billion of assistance to this consortium. Should this amendment pass today, it would mean the loss of at least 5,000 high-tech jobs throughout the Nation and could well set a precedent that precludes any American company from bidding on nuclear powerplant projects in China.

By passing this amendment, we essentially hand the contract to either the French or the Russians, who have the full support and backing of their respective governments.

With our trade deficit with China nearing $200 billion, I simply cannot understand why we would not want to provide American firms the best opportunity to successfully bid on these projects in China. For those, like myself, who have raised concerns with Chinese leaders about this unacceptable trade imbalance, it would seem counterproductive to support such an amendment.

Some have raised concerns about the decision by the Ex-Im Bank to provide financial assistance to a multinational consortium that includes non-American companies, suggesting that the bank is going beyond its mandate.

But the fact is, the Ex-Im Bank's primary responsibility is to assist in creating American jobs and export growth for the U.S. economy.

With this mission in mind, since 1987, the Ex-Im Bank has financially supported equipment and services for several overseas nuclear power projects, providing these loans at fee-for-service.

Despite what you may hear, American taxpayers do not subsidize these Ex-Im Bank loans to other countries and are not at credit risk.

Even in cases where the primary contractor may not be an American-owned company, these projects will spawn millions of dollars' worth of business for American subcontractors.

The fact is, China already has extensive nuclear power production. This is China's choice to pursue the construction of nuclear powerplants. We should not be telling China, which needs an increasing number of energy options, what to do.

Energy sufficiency has increasingly become a central component of China's long-term economic growth and development, and could have deep security implications as well.

I believe it is vital for the United States and China to cooperate in order to avoid future tensions and conflicts over securing energy resources. If this amendment passes, you can be sure there will be these conflicts. Therefore, in my view, working with China is important.

I oppose this amendment. I thank the Chair and yield the floor.

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