Energy Policy Act of 2005--Conference Report

ENERGY POLICY ACT OF 2005--CONFERENCE REPORT

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Mr. McCAIN. Mr. President, I am afraid that the heralded passage of this energy bill against years of failure by the Congress to legislate a comprehensive energy policy has created a false sense of accomplishment in Washington today. As my colleagues are well aware, oil prices are hovering near the infamous $60 per barrel mark; the greenhouse effect is beginning to have a substantial measurable impact on the global climate; and American families are being gouged at the pump while their tax dollars are carelessly spent on Federal subsides for big oil and gas companies. As leaders, we cannot claim that we have successfully addressed these real-life challenges by enacting this latest incarnation of special interest influence in policymaking.

I do want to acknowledge the work of the Senate conferees for keeping out a few of the most objectionable provisions that prevented passage of the bill during the last Congress, particularly the MTBE liability waiver and the proposed drilling in ANWR. They took the right action in preventing the inclusion of those provisions. Unfortunately, after all the time and effort spent on this issue during the past several years, when it comes to solving America's pressing energy problems, this bill simply does not go far enough. It will not reduce our dependence on foreign oil, it won't assure the growing threat of global warming is addressed in a meaningful way, and it wont effectively reduce the price of gasoline at the pump.

The estimated cost of this energy bill has ballooned far beyond the original $6.7 billion in the President's proposal. The conference agreement provides an estimated $14.5 billion in corporate subsidies and tax credits. And the tax package provides more than twice as many incentives to the oil, gas, coal and nuclear industries as it does to energy efficiency and renewable energy--a significant change from the Senate-passed bill.

Indeed, big oil, coal and gas companies seem to be disproportionally favored under this bill as most of the tax breaks going to traditional industries. Only about 36 percent of the estimated tax package would go to renewable energy and cleaner burning vehicles. Even then, some of the programs to promote renewable energy and alternative fuels are questionable. A loan guarantee program that would cover up to 80 percent of the cost of developing new energy technologies was scored at $3.75 billion for the first 5 years. These loans carry a 20- to 60-percent risk of default according to the CBO, and after the 5 years there are no limits on the amount of loans that can be guaranteed, thus leaving the taxpayer to cover the losses when such endeavors fail. Perhaps more alarming, the estimated costs of the bill are estimates at best, and don't take into account some of the hidden costs associated with program authorizations and future tax credit extensions.

And then there is the ambiguous realm of alternative fuels for vehicles. Rather than addressing the gas mileage interests of consumers, this energy conference report would boost ethanol production by requiring 7.5 billion gallons of the corn-derived fuel be added to the domestic gasoline supply by 2012. This is double the current ethanol mandate and while it will be a boon for the ethanol producers, it will have a negligible effect on oil imports. While I fully recognize

and support efforts to promote clean energy sources, the costs also need to be weighed against any presumed benefits. And at this juncture, the beneficiaries are still the producers, not the consumers and not the environment.

Let me mention some of the more ``interesting'' provisions in the conference report:

Section 134. Energy Efficiency Public Information Initiative. Authorizes a total of $400 million, $90 million for Fiscal Years 2006 through 2010, for the Secretary of Energy to carry out a national consumer information program to encourage energy efficiency through disseminating information to the American public addressing, among other things, the importance of proper tire maintenance. I am fully aware that it is important to rotate your tires, and to take other actions to preserve energy, but do we really need to spend almost half a billion on such a campaign?

Section 138. Intermittent Escalator Study. Requires the GSA to study the advantages and disadvantages of employing intermittent escalators in the United States. I can't imagine many of my colleagues would support removing ``Senators Only'' features in the Capitol Complex and be content to wait for an elevator to intermittently show up, but maybe the rest of the American public is more patient.

Section 207. Installation of Photovoltaic System. Authorizes $20 million for the GSA to install a photovoltaic system, as set forth in the Sun Wall Design Project, for the Department of Energy headquarters building. Of all the sunny places in this country where solar power is viable, the Energy Department Building in DC would not be the first place that comes to mind.

Section 208. Sugar Cane Ethanol Program. Establishes a new $36 million program under EPA that is limited to sugar producers in the States of Florida, Louisiana, Texans and Hawaii for 3 years.

Section 224. Royalties and Near-Term Production Incentives. Under this section, all monies received by the U.S. on all lands except for the State of Alaska, from sales, bonuses, rentals and royalties on leased Federal lands or geothermal resources shall be paid into the Treasury of the U.S. and a percentage of such funding is then partially redistributed to the State within the boundaries of which the revenues were generated. But in the case of Alaska, seems that they will get to keep all of the monies generated.

Section 237. Intermountain West Geothermal Consortium. Establishes an Intermountain West Geothermal Consortium that focuses on building collaborative efforts among universities in the State of Idaho, other regional universities, State agencies and the Idaho National Laboratory, must be hosted and managed by Boise State University, and have a directed appointed by the Boise State University. Why do we need a federal law to promote collaboration at Boise State?

Section 244. Alaska State Jurisdiction Over Small Hydroelectric Projects. Amends the Federal Power Act with respect to certain authorities for the State of Alaska, allowing the State to completely ignore any recommendations received from the National Marine Fisheries Service, the U.S. Fish and Wildlife Service, and State fish and wildlife agencies concerning conditions for the protection, mitigation, and enhancement of fish and wildlife in constructing small hydroelectric projects.

Section 245. Flint Creek Hydroelectric Project, located in Granite and Deer Lodge Counties, Montana. The bill basically extends the project's permit for an additional 3 years. And, notwithstanding other laws and regulations regarding payment to the U.S. for the use of Federal lands, such payments surrounding this project would be specified in the bill. I can only assume this payment is less than what would otherwise be required.

Section 354. Enhanced Oil and Natural Gas Production Through Carbon Dioxide Injection. Establishes a $3 million demonstration program solely for 10 projects in the Willistin Basin in North Dakota and Montana and 1 project in the Cook Inlet Basin in Alaska.

Section 356. Denali Commission. Authorizes $55 million annually for fiscal years 2006-2015 for a seven-member commission created in 1998 comprised entirely of Alaska interests to support Alaska interests. This funding would be used to carry out energy programs.

Section 365. Pilot Project to Improve Federal Permit Coordination. Establishes a pilot that only the States of Wyoming, Montana, Colorado, Utah, and New Mexico can participate in.

Section 412. Loan to Place Alaska Clean Coal Technology Facility in Service. This section authorizes a direct Federal loan for up to $80 million for a plant near Healy, Alaska. One of the few protections under this section for the American taxpayer is extremely lax. It states that prior to providing the loan, the Secretary determine that ``there is a reasonable prospect that the borrower will repay the principal and interest on the loan.'' That sure doesn't sound like the type of stringent criteria and risk assessment that would be weighed by many lending institutions that I am aware of. And why does this particular facility merit a Federal loan over other clean energy technologies?

Section 416. Electron Scrubbing Demonstration. Directs the Secretary to use $5 million to initiate, through the Chicago operations office, a project to demonstrate the viability of high-energy electron scrubbing technology on commercial-scale electrical generation using high-sulfur coal.

Section 628. Decommissioning Pilot Program. This section authorizes $16 million for a pilot program to commission and decontaminate the sodium cooled fast breeder experimental test site reactor located in northwest Arkansas.

Section 755. Conserve by Bicycling Program. Provides $6.2 million to establish a pilot program to be known as the ``Conserve by Bicycling Program'' and study the feasibility of converting motor vehicle trips to bicycle trips, including whether such factors make bicycle riding feasible: weather, land use and traffic patterns, the carrying capacity of bicycles and bicycle infrastructure. I find it difficult to support spending $6.2 million to encourage Americans to ride bicycles when we are running a deficit of $368 billion this year and a 10-year projected deficit of $1.35 trillion, according to the Congressional Budget Office.

Section 756. Reduction of Engine Idling. Authorizes $139.5 million to study the environmental impact of engine idling from heavy-duty vehicles and locomotives at truck stops, ports of entry, rest areas and private terminals. Is there any doubt that engine idling may be contributing to air quality problems? Do we need to expend almost $140 million on such a study? It might be cheaper to pay the truckers and engineers to shut off their engines.

Section 955. Department of Energy Civilian Nuclear Infrastructure and Facilities. Requires the Secretary to develop a comprehensive plan for facilities at the Idaho National Laboratory to avoid duplicative efforts at other national laboratories and establish or consider plans to establish or convert various areas into user facilities.

Section 980. Spallation Neutron Source. Requires the Secretary develop an operational plan for the Oak Ridge National Laboratory in Oak Ridge, TN, to ensure the facility is employed to its full capability. It further authorizes the Spallation Neutron Source Project at Oak Ridge at $1,411,700,000 for total project costs.

Section 997. Arctic Engineering Research Center. It directs the Secretary of Transportation to provide annual grants, worth $18 million total, to ``a university research center to be headquartered in Fairbanks''--that must be the University of Alaska-Fairbanks according to its Web site--to establish and operate a university research center to research improved performance of roads, bridges, residential, commercial, and industrial structures in the Arctic region.

Section 1511. Renewable Fuel. The section authorizes a total of $12 milliom--$4 million for 3 years--for a resource center to further develop bioconversion technology at the Center for Biomass-Based Energy at the Mississippi State University and the Oklahoma State University.

Section 1811. Coal Bed Methane Study. Directs the DOE and EPA to collaborate with the NAS on a study on the effect of coalbed natural gas production on surface and ground water aquifers in Montana, Wyoming, Colorado, New Mexico, North Dakota, and Utah.

Now that we know a little about some of the provisions contained in the conference agreement, let's talk about one very important issue that is not addressed--an issue of worldwide significance: global warming.

Earlier this month, the leaders of the G8 nations met and issued an agreement with respect to climate change. The agreement among the G8 nation states that: ``We will act with resolve and urgency now to meet our shared and multiple objectives of reducing greenhouse gas emissions [.]''

This agreement followed the joint statement that was issued in June in which the U.S. National Academy of Sciences and national academies from other G8 countries, along with those of Brazil, China, and India, which concluded that: ``The scientific understanding of climate change is now sufficiently clear to justify nations taking prompt action. It is vital that all nations identify cost-effective steps that they can take now, to contribute to substantial and long-term reduction in net global greenhouse gas emissions.''

It is very disappointing that the climate change provisions in the conference report fail to address the necessary commitment for taking urgent actions and making substantial reductions in greenhouse gas emissions.

The conference report requires the Department of Energy to develop greenhouse gas intensity technologies and strategies. Such requirements are a waste of time and effort as we already know that using the greenhouse gas intensity does not work. How do we know it doesn't work? We know because the Department of Energy has shown us and because climate change science tells us that the climate system does not respond to greenhouse gas intensity, but rather to greenhouse gas concentration levels in the atmosphere.

Recently, the Energy Information Administration at the Department of Energy released a statement indicating that preliminary data for the year 2004 revealed that energy-related carbon emission intensity fell by 2.6 percent, while energy-related carbon dioxide emissions grew by 1.7 percent. This is an early reality check for those who argue that we can control greenhouse gas emissions by only controlling carbon emission intensity.

Again this clearly shows how our efforts to address climate change are misfocused and without substance. If we continue down this path, the $5 billion per year that we are currently investing in the climate change science and technology programs will not provide the return on investments that the American people deserve.

Furthermore, if you look at any credible scientific report on climate change, it speaks of the impact of greenhouse gases on the climate system, not the impact of greenhouse gas intensity. In all the hearings that we have held in the Commerce, Science, and Transportation Committee over the past few years, I don't recall a single scientist indicating that if we control our greenhouse gas intensity, then we can mitigate the impacts of climate change.

If we are to address climate change consistent with the sense-of-the-Senate resolution passed by this body just over a month ago, then we must pursue solutions that will truly have an impact on the climate system, not those that are no more than ``smoke and mirrors.'' Of course, the conferees failed to agree to even include the modest resolution in the final conference agreement.

If it weren't for the pressing need to show the American public that we are acting in at least some way to address our Nation's energy problems--action that every person is reminded of every time they pay yet a higher price at the pump--I doubt many of my colleagues would be so rushed to pass this bill. Quite frankly, it seems as though the Congress is grasping at straws to address our energy quandary, unwilling or unable to use the foresight necessary to plan for a future America that is less reliant on foreign oil, cleaner under renewable energy generation, or leading in cutting-edge energy efficiency technology. And in our failure, the American people will be disappointed.

http://thomas.loc.gov/