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Public Statements

Ethanol

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Date:
Location: Washington, DC

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Mr. COBURN. Mr. President, I had a good time this afternoon listening to the debate on the amendment I have offered and visiting with Senators. I think there is an important distinction that needs to be made in the arguments that have been brought forward.

The first is we have a mandated level of ethanol that has to be produced and blended into gasoline, and it grows from now on. There will be zero job losses if this amendment is approved.

The second thing is, my colleague--and I love him to death--from South Dakota says we are going to save $1 billion. We can save $3 billion if we eliminate the VEETC blending subsidy.

Now, why should we do that? Here is a subsidy that goes to all the blenders of gasoline in the United States--all of them--and they all have called and written and said: We do not want the $3 billion for the rest of the year. We do not want it.

We actually have a letter from the National Petrochemical and Refiners Association, which they are all members of, saying: We do not want this money. So the best way to get money against the deficit is to not give money to people who do not want it on something that is already mandated anyway.

I spent a great deal of time listening to my colleague from Iowa, Senator Grassley, and his figures were very good. But they were only up through 2008.

According to the U.S. Department of Agriculture, 40 percent of last year's corn crop was utilized, converted to ethanol. Why would the American Bakers Association, the American Frozen Food Institute, the American Meat Institute, California Dairies, the Grocery Manufacturers Association, the International Dairy Foods Association, the Milk Producers Council, the National Chicken Council, the National Council of Chain Restaurants, the National Meat Association, the National Restaurant Association, the National Turkey Federation, the National Wildlife Federation--which is just about one-third of the people who are endorsing this--why would they be for this?

Because it is not just less than 3 percent of the cost of food, it has been, this last year, the significant driver. Corn prices are at $7.65 a bushel. They are 2 1/2 times what they were 3 1/2 years ago. And I am not against the farmers. I am for ethanol. I do not want to do away with ethanol blending. I do not want to do away with ethanol as a substitute. But we have a way to get the same amount of ethanol produced and put into our cars without spending $3 billion between now and the end of the year--$5.8 billion is what it has averaged over the last few years.

We spent $34 billion of money we didn't have subsidizing something that is mandated. I mean, it even goes beyond the Reagan quote, which was that the government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. If it stops moving, subsidize it.

We have the incentive to blend the ethanol, and that incentive is you by law have to blend it. They do not have a choice. So we are going to use ethanol in this country.

Another factor the American people ought to take into consideration when they go buy a gallon of fuel today--you already have $1.72 worth of subsidy in there. That does not have anything to do with oil and gas drilling; that has to do with the subsidies that go to this program for ethanol. And I am for using cellulosic. I am actually for using corn ethanol. I just do not think we ought to pay twice for it. I think we ought to pay once.

The number the Senator from Minnesota talked about in terms of subsidy, there are--I have worked on the President's commission on debt. I have worked with the Gang of 6. You cannot be for changing the Tax Code to get rid of tax expenditures and vote against this amendment. I mean, how do you explain? Here is one we do not need the incentive for and we are going to pay for, and yet you say you want to solve the problems of the country. But the first time we have a vote to really eliminate one that will make no difference in terms of the amount of ethanol that is produced in this country--it will just save us $3 billion--you can't be on both sides of that issue.

Let me address the oil and gas industries for a minute. They get accelerated depreciation and writeoff. That is true. And that amounts to taking legitimate business expenses and saying: You can write them off sooner. Why did we do that?

It started in 1903, by the way. That is when we started. We started it because it is a capital-intensive business in terms of the exploration. It is associated with a lot of dry holes.

Now, the very companies that we say we want to take some of their ``subsidies''--there is a big difference between a subsidy that is a tax credit and allowing someone to advance depreciation because they are going to get to write it off anyhow. The net effect to the Federal Government's revenue, if you take all of those away, is still zero. The Federal Government does not get any additional money because under accounting standards they get to write off those expenses anyway; they just do not get to write them off fast.

So the body has already chosen to not do that because they are legitimate business expenses. We are not saying: Take away legitimate business expenses from the ethanol distilleries or the blenders. We are just saying: Do not pay them money for something that they are going to have to do anyhow that they have already said to us they do not want.

Tomorrow during the debate, I will add to the Record the statement from the National Petrochemical and Refiners Association.

The other point I would make: There is no question we are not energy independent, and there is no question that biofuels and cellulosic ethanol can contribute to what our results can be in terms of maintaining that independence. But we are the only Nation in the world where we as citizens own more oil and gas than Canada, China, and Saudi Arabia combined, and our Government will not let us have it. Think about that for a minute. According to the Congressional Research Service, there is more oil, gas, and gas liquids untapped in the United States than is known in all of Canada, all of China, and all of Saudi Arabia combined. So the reason we are in trouble and importing oil is because our own government will not let us have our own resources. Why would we continue that? That is a debate for another time.

No matter what we believe in terms of green energy, what we do know is that we are 30 years away from getting away from carbon-based fuels--at the earliest. So we can either pay a price or we can buy from the Saudis or buy from other Middle Eastern countries or we can develop our own. Talk about jobs. The estimate is that if we would truly go after our own energy, we would generate over 100,000 jobs a year the next 10 years in the oil and gas industry in this country--cleanly.

The other comment I have heard is that this amendment was not brought up properly. Well, let me talk about something for a minute. When the Senator from South Dakota and I came to the Senate, the first 2 years you could offer an amendment on anything, on any bill at any time because that is the way the Senate was intended to operate. As a Senator, a Member of this body, you had the right to offer an amendment. Now, you may lose it or it may get tabled, but you had to right to do it. That is not a majority leader's prerogative; it is a prerogative of every individual Senator that you ought to cherish and protect because if the majority leader is the only one who will decide what amendments get offered and when they get offered, this is no longer the Senate. There is no longer an ability to offer what is in the best interests of our country or our constituency.

The very fact that we do not want to have controversial amendments that we have much disagreement on coming to the floor because we do not want to have to go home and defend them or we do not want to vote on them because we might lose--the Senate ought to be a free place to offer ideas and get them voted down.

In my first 2 years in the Senate, I had tons--in fact, I had every amendment voted down. There was not an amendment I won. But I had the freedom to offer the amendments. And do you know what. We passed 10 times as much legislation in that Congress than we have the last two. So limiting amendments is not the prerogative of the majority leader. Deciding what bills come to the floor is the prerogative of the majority leader.

If we want to go home and tell our constituents that we have voted against saving $3 billion, that we are going to borrow 40 percent of it from outside of this country because we do not like the way an amendment was brought up--how else do you bring up an amendment if you cannot in the Senate?

Every true and proper procedure was followed in bringing up this amendment, and had this amendment been allowed to come up, if other Members had not objected to it, we would have never used cloture to bring up an amendment. You should not have to use cloture to bring up an amendment. You should be able to bring up any amendment you want and let Senators have the courage to vote the way they want on it rather than to say: I am going to hide behind not having to vote, so I am going to object to having a vote on an amendment.

Well, if we start down that process, we are never going to have any amendments and every amendment is going to end up having 60 votes just to be brought up. If we are going to move to that procedure--and I know procedure in this body pretty well--then I will insist that we do it all the time. That will dead stop the Senate.

So the idea that you can hide behind the excuse that even though you want to save the $3 billion but you do not like the way the amendment was brought up is a pretty flimsy excuse to go home and explain to your public that you think we should not ever have cloture motions on amendments. We ought to be able to bring any amendment up at any time.

I see the majority leader coming to the floor. He is a dear friend of mine. He has the hardest job in Washington, there is no question. But the privilege to bring an amendment to the floor ought to be protected for both sides of this aisle, and you vote it down, you table it, but you do something with it.

Let me just finish by saying that I agree this is supposed to expire at the end of this year. I hope it does because we do not need it. Our corn farmers do not need it. The worldwide demand for corn is high. We are going to continue to produce ethanol. We have a federally mandated requirement that we produce ethanol. This amendment does not touch that, never intended to touch that.

But ethanol as a fuel should be processed to the next stage, which is methanol, because methanol is not water soluble and it has the same octane rating as gasoline. Ethanol is not a great fuel. It is not an economical fuel. But we can take that same carbon atom and add to it and create methanol from corn and get a much better fuel that can be transported much easier and have much greater effect on our economy and have much better gas mileage and less effect on the engines and drivetrains and all of the other--the smog prevention we have on automobiles today.

So let me say it again. I am not against using biocrops. I am for biocrops. I am not against cellulosic-based. I am not against ethanol. I am not against algae. But ExxonMobil has spent a couple of billion of their own money on algae-based biofuels without the government's help, which is one of the points with this amendment. We no longer need to help. We no longer need to spend the money.

So I look forward to the debate tomorrow. I will be on the floor all day to answer questions and to debate the pros and cons of this amendment.

I yield the floor.

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