H.R. 6

H.R. 6 -- (Extensions of Remarks - December 18, 2007)

SPEECH OF
HON. WALLY HERGER
OF CALIFORNIA
IN THE HOUSE OF REPRESENTATIVES
MONDAY, DECEMBER 17, 2007

* Mr. HERGER. Madam Speaker, today the House considered H.R. 6, new tax and energy legislation. I strongly opposed the bill because I believe it will contribute to higher gasoline and diesel prices. Though there are a few worthwhile provisions in the legislation, its failure to effectively address the fact that families and small businesses are spending more and more of their hard-earned income on gasoline, diesel, and other energy costs warrants its defeat. Unfortunately this bill is a case of one step forward and many steps back.

* H.R. 6 would extend tax credits for renewable electricity production from wind, solar, biomass, and geothermal. Increasing the diversity of our energy supply is important to meeting our Nation's future energy needs and is something I've long supported. But any benefits America would gain from new renewable production would be seemingly lost because of the bill's steep tax increases on petroleum and natural gas production. Petroleum and natural gas currently supply roughly 63 percent of America's energy needs. Renewable sources account for only 7 percent. A truly balanced bill would provide incentives for environmentally responsible production of all energy sources, including fossil fuels, which energy forecasters predict will continue to provide for the vast majority of energy uses in our country. Not only does H.R. 6 not provide incentives for new American oil and gas production, the bill could actually make the cost of producing these important energy resources more expensive because of the new multibillion dollar tax increase that is the centerpiece of this legislation. These tax increases will likely be passed on to consumers in the form of higher gasoline and diesel and home heating and cooling costs.

* Singling out American energy companies for new taxes also runs directly counter to our goal of reducing the Nation's reliance on foreign sources of oil by encouraging more domestic production. At the time of America's first ``energy crisis'' in the 1970s, approximately 30 percent of our petroleum needs were met by oil imported from foreign countries. Today that number is over 62 percent. With petroleum use expected to increase over the next several decades, this number will only continue to grow unless steps are taken to reverse the trend. Continued reliance on hostile regions of the world for our energy needs threatens America's national and economic security. Such a serious problem is deserving of an equally serious response rather than the hollow gestures of energy independence within H.R. 6. While it's reasonable to expect that some percentage of our oil supply will continue to come from overseas, America can increase her energy independence through environmentally responsible oil and gas production here at home. We have resources in Alaska and deep ocean areas and, importantly, the state-of-the-art technology needed to develop these resources while preserving a healthy environment.

* This legislation's completely unbalanced approach to energy policy could not come at a worse time for northern California. Gasoline and diesel prices in our area are hovering around record levels despite the fact we are now in the driving ``off-season''--a time when fuel demand, and consequently fuel prices, are historically at their lowest levels of the year. One can only imagine how high prices will rise in the spring, when driving season begins and the state's fuel refiners take facilities offline to prepare them for production of California's special summertime boutique fuel blends.

* H.R. 6 would also increase the Nation's ``CAFE'' or fuel efficiency standards for cars, light trucks, and SUVs. Fuel efficiency is an important attribute in any car. The emergence of new ``hybrid'' vehicles is an example of consumer preference in the free marketplace forcing automakers to produce more fuel-efficient vehicles. But developing the know-how to build a car with better gas mileage takes time. I'm concerned that when faced with a federal mandate to meet such high efficiency standards in a relatively short amount of time, automakers may be forced to choose the path of least resistance by simply reducing vehicle size and weight, thereby making the cars people drive less safe in collisions. The National Academy of Sciences concluded in a 2002 study that smaller vehicle sizes have caused traffic fatalities to increase anywhere from 1,300 to 2,600 lives per year.

* An increase in the Nation's ethanol mandate is also in the bill. While striving to develop new sources of fuel should remain a significant goal, it is important to point out the unintended consequences that have come with mandating ethanol use throughout the Nation. For instance, the ethanol mandate has contributed to higher gasoline prices for California motorists. Ethanol cannot be shipped by pipeline. Instead, it must be transported from the Midwest by rail or truck. This process not only adds to the fuel's cost, it can, in some cases, contribute to California's notorious refining bottleneck if there are delays in its delivery to our State.

* The current ethanol mandate has also caused corn prices to roughly double over the last 2 years. While this has been good news for corn farmers, the result has had a slightly different outcome for everyone else. Prices for food products dependent upon corn and other grains, such as beef and dairy, have increased along with the price of corn. H.R. 6 seeks to raise the current ethanol requirement by a factor of five. Such a dramatic increase, combined with growing demand for corn-fed meat products the world over, will likely result in even higher food prices for U.S. consumers.

* Some have suggested that the shipping problems and price inflation associated with corn ethanol can be overcome if biofuels are made locally with material native to our area. Cellulosic forest residue left over from thinning or restorative forestry projects has been at the top of this list. Although the technology to make this fuel in a cost-effective manner is still being developed, California's 18 National Forests could serve as a ready supply of material to meet future biofuel needs. But this legislation expressly forbids any forest materials from our National Forests--not even a single pine needle--to be used as feedstock for biofuels manufacturing. The vast majority of the National Forest land in our congressional district has been rated as ``Condition Class III'' by forest researchers and scientists, meaning that the forests face an extraordinarily high risk of catastrophic fire. There is no scientific dispute of the fact that forest materials must be removed in order to protect communities and wildlife from severe fire and to generally restore forest health. Using forest residue for biofuels would arguably contribute both to forest recovery and to the Nation's fuel supply. But for reasons that can only be explained by environmental politics, the Democrat leadership has again labeled California's National Forests ``off-limits'' to commonsense forest management and a new and important source of a future renewable fuels supply.

* Finally, H.R. 6 seeks to mandate a new national ``Renewable Portfolio Standard'' or ``RPS.'' The RPS would require all private electricity supply companies to generate 15 percent of the electricity they produce with renewable sources, such as wind, solar power, or biomass. California already has such a mandate so the proposed federal standard is not new policy for our State's electricity providers. But other States, particularly those that lack the abundant natural resources we have, will likely struggle to meet the requirements of the RPS. Energy companies in these areas will have to purchase high cost power or renewable energy ``credits'' from other regions of the country. These costs will also be passed on to families and small businesses. Higher energy costs, no matter where they occur, harm U.S. economic competitiveness and will likely serve as a drag on an already uneasy economy.

* But even California, with its own renewable electricity requirement, would not come out ahead if the proposed federal RPS mandate in H.R. 6 becomes law. Just as the bill inexplicably limits the use of National Forest materials for cellulosic ethanol production, it also places unworkable limits on the use of forest resources for electricity production. Again, one step forward and several steps back.

* A truly balanced energy bill would begin with the serious problem of record gas prices and reducing America's dependence on foreign sources of energy and then proceed with creating incentives that would unleash the power of American inventiveness and creativity in order to develop the next generation of energy technology and supplies. H.R. 6 relies on an outdated and failed belief that Washington knows best. Over 1,000 pages of legislative text contains little in the way of broad-based incentives, but is chock-full of new regulations and a higher tax burden, which will do little, if anything, for consumers. A better approach would get Washington out of the way and allow market-oriented solutions to provide for an affordable, diverse, and secure energy supply for America.

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