Consumer First Energy Act of 2008--Motion to Proceed

Floor Speech

CONSUMER-FIRST ENERGY ACT OF 2008--MOTION TO PROCEED -- (Senate - June 05, 2008)

BREAK IN TRANSCRIPT

Mr. ALLARD. Madam President, thank you. I am prepared to discuss the Lieberman-Warner climate change bill that was amended by the Boxer amendment. In general terms, I wish to take a moment to discuss climate change because that is obviously the main topic on the floor today. I have concerns about the science that some people are claiming here on the floor of the Senate.

I think that obviously if we are going to have good policy, we have to have good science. But let me say that from the reports I have seen, I think it is unclear as to what the long-range trend is as far as the temperature of the Earth is concerned. I admit that right now we are going through a warming period, but in the last few years we may have cooled a fraction of a degree.

I am recalling when I was in high school in the late 1950s, that we had magazine articles, National Geographic and everyone were writing about how we were into a cold trend, and we were heading toward an ice age.

Now we are heading toward the trend in the headlines where we have global warming. I have listened to some of the comments here on the floor. One comment was that: We are at the highest temperature on record--the problem is, the record we have of the Earth's warming and cooling is a relatively short period of time when you look at the total history of the Earth. If you go back to the year around 1,000, for example, measuring based on some scientific evidence that has been obtained from our polar caps, by going down through the depths of the ice and analyzing it, some scientists have come up with the conclusion that actually it was warmer in the year 1,000 than it is now. You cannot blame that on human action. So the question comes up whether this is a trend, a natural cycle, that happens, that is related to sunspots or volcanic activity or whatever natural phenomena might be happening.

I happen to agree that we probably contribute some to global warming. The question is, how much?

That has not been adequately identified either.

I am here to raise some questions. Obviously, if we absolutely know we are headed for catastrophe, the sooner we act, the better. But on the other hand, we don't want to overreact. We could cause problems for the economy and for Mother Earth if we react in the wrong way without having good scientific evidence.

I am rather disappointed we will not have an opportunity to debate and amend this legislation, as we should. No piece of legislation is perfect. Obviously, there needs to be an opportunity for bills to be amended when they come to the floor. I am disappointed the majority leader has filled the amendment tree and filed for cloture, rather than allowing for the full and healthy debate that is such a rich part of the Senate's history.

Since this bill has been introduced, we have record-high gas prices. There is pain at the pump. The common solution we have heard time and time again, whenever we have high petroleum prices, is: You need to raise taxes. You need to limit supply. You need to blame corporations. You need to somehow control international cartels. You can't control what isn't part of America. We can't pass laws and tell them when they can form a cartel and what they can do. It is beyond our reach. But we can take care of corporate misbehavior. We have had hearings time and again trying to blame oil companies for overcharging. Over the years, the conclusion is, there has not been any misbehavior as far as corporations setting prices. They are responding to supply and demand. They are responding to the cost of the product, taking a reasonable profit and putting that product on the market. I happen to believe supply and demand has the greatest impact on our prices at the pump to date.

Obviously, this is not a perfect process. It is not a perfect bill. We need to bring the bill to the floor, provide an opportunity for substitutes to be brought forward, and then an opportunity to amend those. I am disappointed we will not have an opportunity to do that. That seems to be the trend this year. Republicans are not having the opportunity to bring up issues they believe are important on legislation that comes to the floor. That has happened time and again. Then the other side blames Republicans for somehow blocking the process. If you don't have an opportunity to offer amendments to the legislation, that is a serious concern to those of us who have to work in the minority in an institution such as the Senate, where there are specific minority rights.

I would like to address some of the concerns of the Boxer amendment to the Warner-Lieberman climate change bill. My foremost concern is the science on which the entire bill is based. But because the ranking member of the Environment and Public Works Committee has asked us to leave science aside and focus on the legislation itself, I will start there.

Based on many reports I have seen, it is unclear what, if any, effect climate change legislation would have on global temperatures. However, its potential economic impacts are absolutely staggering. The primary tool this bill uses to reduce greenhouse gases is a cap-and-trade program. It should more accurately be called a cap-and-tax program because it is essentially a camouflaged energy tax increase.

Many of the proponents of this bill have said it is just like the program the Government instituted to control acid rain. But unlike sulfur dioxide in the acid rain program, there is no widely deployable control system for CO2 removal, nor do we expect this equipment to exist in the reasonably foreseeable future. This will result in significant increased cost to electric utilities, their consumers, as well as affected industries and their customers. That is the taxpayers. Thus, the cost of compliance will have a significant negative economic impact on electric consumers statewide and Colorado's manufacturing industries.

A recent study produced by the Heritage Foundation Center for Data Analysis found that enacting this bill would cost Colorado almost 7,000 agriculture-based jobs and over 21,000 manufacturing jobs. That is over 27,000 lost jobs in Colorado alone. The same study found that statewide, Colorado would have a personal income loss of around $2.162 billion.

This bill also contains a provision in section 201 which was originally formulated for the acid rain program. This provision specifically denies that emissions allowances, which will be given out by the Government, are to be considered a property right. The provision also allows the administrator to limit or revoke the allowances at any time. Specifying that allowances are not property is, therefore, the Government's way to avoid a ``taking'' in the inevitable instance that the administrator does revoke allowances.

How do we justify this? Government enables itself to give a product, sets up a scheme for buying and trading that product but can, at any time and for any reason, revoke that product without compensation. While there is certainly legal precedent, that does not make it right. In my view, this challenges assertions the bill's sponsors are making that their cap-and-trade approach is a market-based one.

I will propose an amendment, if given the opportunity--I filed it by the 1 o'clock deadline--to fix this by specifying that emissions allowances are property rights, and while the Government could still limit or revoke allowances, it would have to compensate the owners of allowances in order to do so. It is only fair that the Government would have to follow the same rules it sets out for industry to follow when buying and selling allowances.

If we allow this legislation to go forward in its current form, we will see energy prices go up. The national cost of gas today averages around $4 a gallon. This will only go up if we pass the climate change bill. Coloradans are currently feeling pain at the pump, but if we pass this bill, they will feel it in their homes also. One of Colorado's municipally owned utility providers has informed me that when this bill takes full effect in 2012, their customers will immediately see their utility bill jump above 25 percent.

Another utility, Tri-State, which provides electric power for 1.2 million rural electric customers in a 4-State area, has projected that their costs to comply with the requirements laid out in this bill will be $12.6 billion in 2012 to 2030. This is based on the assumption that carbon credits would cost $50 per ton.

It is entirely possible that cost projection is very conservative, and these are just rural electric cooperative impacts.

I also have very real concerns related to the fact that anyone--not just covered emitters--can buy, sell, hold, or retire emissions allowances. Anyone with a large enough pocketbook could purchase a significant share of allowances and hold them to push the allowance price up or retire them. That would put our Nation at risk of economic manipulation, should another nation decide to step in and buy those allowances. Additionally, if an investor wants to make a lot of money off of the carbon trading market, they could just purchase and hold those allowances until the price gets high enough to make them want to sell.

In any of these scenarios, the end result will leave the consumers as the ones paying the price.

In closing, I reiterate that this bill is, in my opinion, not the right way to approach the issue of climate change. A far more effective approach would be for the Federal Government to continue to provide incentives for the development of greenhouse gas neutral technologies and technologies that do not produce greenhouse gases. Incentivizing technology development would get us to the same place without the economic hardship that this bill would impose. A good example of doing this has been the significant increases in renewable energy production that have resulted from the production tax credit, clean renewable energy bonds--called CREBs--and with incentives for clean coal technology.

There will, of course, be a need for a larger Federal incentive program in all these areas to move the ball forward, but this will still be at much less cost to consumers than the $325 increase in average annual household energy cost that the Energy Information Administration has projected this bill could bring about.

This is a poorly thought-out piece of legislation. We need to have an opportunity to legislate, to offer amendments, and move forward with this important debate. This is a comprehensive piece of legislation. It is important. It involves lots of Americans. I am disappointed we will not have an opportunity, under the current process, to amend this legislation.

I yield the floor.

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