ENERGY POLICY ACT OF 2005--CONFERENCE REPORT
BREAK IN TRANSCRIPT
Mr. GRASSLEY. Mr. President, today we have the opportunity to finish a very long journey in the quest to build a dynamic, comprehensive energy policy for the United States of America. I can say with pride that this Congress, through many trials and tribulations, has now performed admirably in its duty to the American people. This is a balanced energy bill that focuses as much on the future as it does the present. We have the opportunity with the passage of this legislation to safely produce more energy from more sources and with more infrastructure security then ever before.
On June 21st, the Senate passed H.R. 6 which included the Energy Policy Tax Incentives Act of 2005. The tax provisions were a bipartisan product formulated with Senator Baucus, after consultation with many Members of the Senate.
In my estimation, the energy policy tax incentives reflected in this conference agreement are a fair balance of the interests of the Members and effectively supports the development of energy production from renewable and environmentally beneficial sources.
I would like to briefly describe these tax incentives that are included in the final energy Conference agreement.
For years, I have worked to decrease our reliance on foreign sources of energy and accelerate and diversify domestic energy production. I believe public policy ought to promote renewable domestic production that uses renewable energy and fosters economic development.
Specifically, the development of alternative energy sources should alleviate domestic energy shortages and insulate the United States from the Middle East-dominated oil supply. In addition, the development of renewable energy resources conserves existing natural resources and protects the environment.
Finally, alternative energy development provides economic benefits to farmers, ranchers and forest landowners, such as those in Iowa who have launched efforts to diversify the State's economy and to find creative ways to extract a greater return from abundant natural resources.
Section 45 of the Internal Revenue Code currently provides a production tax credit for electricity produced from renewable sources including wind, biomass, and other renewables. The final Energy Tax Incentives Act extends the section 45 credit through the end of 2007.
I have been a constant advocate of alternative energy sources. Since the inception 13 years ago of the wind energy tax credit, wind energy production has grown considerably. In addition, wind represents an affordable and inexhaustible source of domestically produced energy.
Extending the wind energy tax credit until 2008 will support the tremendous continued development of this clean, renewable energy source.
The conference agreement supports a maturing green energy source. Experts have established wind energy's valuable contributions to maintaining cleaner air and a cleaner environment. Every 10,000 megawatts of wind energy produced in the United States can reduce carbon monoxide emissions by 33 million metric tons by replacing the combustion of fossil fuels.
In addition, this agreement helps to empower our rural communities to reap continued economic benefits. The installation of wind turbines has a stimulative economic effect because it requires significant capital investment which results in the creation of jobs and the injection of capital into often rural economic areas.
In addition, for each wind turbine, a farmer or rancher can receive more than $2,000 per year for 20 years in direct lease payments. Iowa's major wind farms currently pay more than $640,000 per year to landowners, and the development of 1,000 megawatts of capacity in California, for example, would result in annual payments of approximately $2 million to farm and forest landowners in that State.
Environmentally friendly biomass energy production is a proven, effective technology that generates numerous waste management public benefits across the country.
The biomass definition covers open loop biomass. Open loop biomass includes organic, nonhazardous materials such as sawdust, tree trimmings, agricultural byproducts and untreated construction debris.
The development of a local industry to convert biomass to electricity has the potential to produce enormous economic benefits and electricity security for rural America.
In addition, studies show that biomass crops could produce between $2 and $5 billion in additional farm income for American farmers. As an example, over 450 tons of turkey and chicken litter are under contract to be sold for an electricity plant using poultry litter being built in Minnesota. This is a win-win. Not only do the farmers not have to pay to dispose of this stuff, they get paid to sell the litter. You could find similar examples throughout the Midwest and other farm regions across America.
Finally, marginal farmland incapable of sustaining traditional yearly production is often capable of generating native grasses and organic materials that are ideal for biomass energy production. Turning tree trimmings and native grasses into energy provides an economic gain and serves an important public interest.
I am very proud of a long history of supporting new alternative energy concepts in the production of electricity. The energy conference agreement continues that commitment.
By using animal waste as an energy source, an American livestock producer can reduce or eliminate monthly energy purchases from electric and gas suppliers and provide excess energy for distribution to other members of the community.
Swine and bovine energy is truly green electricity, as it also furthers environmental objectives.
Specifically, anaerobic digestion of manure improves air quality because it eliminates as much as 90 percent of the odor from feedlots and improves soil and water quality by dramatically reducing problems with waste runoff. Maximizing farm resources in such a manner may prove essential to remain competitive in today's livestock market. In addition, the technology used to
The Energy Tax Incentives Act is important to agriculture, rural economy and small business. It is also important for domestic supply and energy independence.
Rural America can play an important part in energy independence and domestic supply. In addition to the production of electricity, this agreement includes additional tax incentives for the production of alternative fuels from renewable resources.
We continue the small producers credit for the production of ethanol. We continue the incentive for the production of biodiesel. Biodiesel is a natural substitute for diesel fuel and can be made from almost all vegetable oils and animal fats. Modern science is allowing us to slowly substitute natural renewable agricultural sources for traditional petroleum. It gives us choices for the future and it can relieve the strain on the domestic oil production to fulfill those important needs that agricultural products cannot serve.
Renewable fuels like ethanol and biodiesel will improve air quality, strengthen national security, reduce the trade deficit, decrease dependence on the Middle East for oil, and expand markets for agricultural products.
This package is fiscally responsible. The conference report provides a net $11.5 billion in tax relief over 10 years. That figure aligns with the budget resolution. Over 5 years, the package loses only about $6.9 billion.
The Energy conference agreement is a balanced package. I would like to note, with some satisfaction, that today we have performed the people's business in the way they want us to do business. This Energy Tax Incentives Act was crafted in a bipartisan, bicameral way on an important initiative, in a way that reflects the diversity of our views and the diversity of our Nation.