Mr. COONS. Madam President, Senator Murkowski of Alaska is a strong leader on energy issues, and I am proud to work with her on the Energy and National Resources Committee. It is fitting that we are here despite representing different States from different regions of the country to talk about an issue we believe can bring us together.
Republicans and Democrats alike can agree that when it comes to American energy, we need a comprehensive, all-of-the-above strategy, and that is the only way we are going to succeed in securing homegrown and affordable sources of energy for the next generation.
In my view, oil and gas are not going away anytime soon. If renewable sources of energy are going to grow and become central players in the American energy marketplace, we have to make sure they are operating on a level playing field. Right now the playing field is anything but equal.
For nearly 30 years, traditional sources of energy have had access to a very beneficial tax structure called Master Limited Partnerships. This is a financing arrangement that taxes projects like a partnership, a passthrough, but trades their interests like a corporate stock. This prevents double taxation and leaves more cash available for distribution back to investors.
This allows limited partners and general partners to come together and invest capital in a Master Limited Partnership and form an operating company. For the last 30 years, that has been used in natural gas, oil, and coal mining, predominately in pipelines but also in fossil fuels.
Not surprisingly, this structure means MLPs have had access to private capital at a lower cost, and that is something capital-intensive projects, such as oil pipelines, badly need. Frankly, it is something alternative energy projects in the United States need more than ever.
Let's work together and level this playing field. Let's remove the restriction that allows only traditional energy projects, such as, oil, gas, coal, and pipelines, to form MLPs. It is literally in the original statute that only nonrenewable forms of energy are eligible. In my view, we should open it up to include clean and renewable energy and then let the free market take it from there.
So this week, Senator Murkowski and I joined Republicans and Democrats from the House and the Senate to introduce the Master Limited Partnerships Parity Act of 2013--a bill that will do just that. We are grateful for the support of Senators Jerry Moran of Kansas and Debbie Stabenow of Michigan, as well as Congressman Ted Poe of Texas, Mike Thompson of California, Peter Welch of Vermont, and Chris Gibson of New York, who are original cosponsors.
Our bill does not change these benefits for traditional energy sources at all. It doesn't touch existing MLPs and their well-established benefits for coal and oil and natural gas; it just allows renewable energy projects to compete fairly by also accessing this tax advantage capital formation field. It gives an equal chance for success for projects using energy from wind and the Sun, the heat of the Earth, and biomass; breakthrough technologies to consumers with affordable homegrown energy for generations to come.
This bill is this year a new and improved version of the Master Limited Partnership Parity Act from last year. We introduced a version last year that earned strong support from Republicans and Democrats, as well as outside experts and the business community. This year we are expanding the scope of the bill to also include additional energy projects that qualify as MLPs: waste heat to power, carbon capture and storage, biochemicals, and energy efficiency in buildings. We wanted to include a broader array of clean energy resources because that is how we can get the best competition and deliver the most affordable and efficient energy to consumers from Delaware to Alaska and across our whole country.
MLPs are complicated financial structures, but our bill is very simple. It is just a few pages long. It makes one simple tweak to the Tax Code to bring these renewable energy and clean energy projects into the existing structures of MLPs. It is the embodiment of what I have heard from many colleagues in the last 3 years, that we should not be picking winners and losers in energy technology, and we should have an ``all of the above'' strategy.
This change, in my view, will bring a significant new wave of private capital off the sidelines and into the renewable energy marketplace. It allows the private sector to look at clean energy in a whole new way. Today, master limited partnerships have reached a market capitalization of close to $450 billion with about 80 percent of it devoted to traditional energy projects--oil and gas--and the majority of that to pipelines. Access to this kind of scale of private capital could drive the investment that is essential to creating new jobs in a fast growing new field.
It would also, in my view, bring some fairness, some modernization to this well-established section of our Tax Code. As the Presiding Officer knows, our Tax Code hasn't been broadly modernized in decades. In the mid-1980s, Congress enacted provisions to establish MLPs for oil and gas, timber and coal, and midstream energy industries. This tax benefit hasn't been significantly changed, expanded, or modernized in nearly 30 years.
Just to be clear, we are not talking about taking away any of these benefits for any existing beneficiary industry, just updating them to recognize the modern market reality of new energy technologies and to reflect the changing investment opportunities in the emerging markets of renewable energy. In fact, one of the lead cosponsors of this legislation in the House, Congressman Ted Poe--Judge Poe--a Texas Republican, said at a recent press event we did that over the course of his career, he has represented as many oil refineries as any other Member of Congress. Yet he sees this as an efficient and effective opportunity to expand from its traditional use of pipelines of oil and gas to the broader energy marketplace of the United States, and he is confident expanding this structure to include clean sources of energy would create jobs.
I wish to ask the Senator from Alaska, Ms. Murkowski, if she has seen the same thing in Alaska. Does the Senator from Alaska see this as an opportunity that will help us grow an ``all of the above'' energy strategy for the United States?
BREAK IN TRANSCRIPT
Mr. COONS. Madam President, I thank the Senator from Alaska. I am grateful for her joining me as an original cosponsor and for her being a strong and engaged advocate for this approach at the conference in New York and in conversations with colleagues and in the image she has laid out. She has been a real champion for a commonsense, ``all of the above'' visionary path forward that will move us on the committee and in the Congress.
As the ranking member of Energy and Natural Resources, the support of the Senator from Alaska is central and significant. I am also glad the chairman is working with me. Senator Wyden, in a recent public setting, referred to this as ``exactly the right approach.'' I believe, as does the Senator from
Alaska, the bill will unleash private capital; that it will help create jobs, modernize our Tax Code, and make it more fair; and I think that is why it has earned support from Republicans and Democrats in the House and in the Senate, but also at some senior levels in the administration.
Former Secretary of Energy Steven Chu said the MLP Parity Act would make ``a world of difference and have a profound effect on private capital and investment.'' Our, hopefully, incoming Energy Secretary, Ernest Moniz, also pointed toward the MLPs as a great opportunity to increase clean energy financing and put it on a level platform.
This legislation has earned backing from business leaders, from investors, from outside experts, from academics. Two experts in energy finance, Felix Mormann and Dan Reicher, from Stanford's Steyer-Taylor Center for Energy Policy and Finance, shared their thoughts in an editorial in the New York Times.
If renewable energy is going to become fully competitive and a significant source of energy in the United States, then further technological innovation must be accompanied by financial innovation so that clean energy sources gain access to the same low-cost capital that traditional energy sources like coal and oil and gas enjoy.
Our financial innovation has to keep up with our energy innovation. It is just that simple. That is why more than 250 companies and organizations have recently signed a letter supporting our Master Limited Partnerships Parity Act. They range from Fortune 500 NRG to the American Wind Energy Association, the Solar Energy Industries Association, the American Council on Renewable Energy, and many more.
Just one more quote, if I might. David Crane, who is the CEO of NRG Energy, said:
The MLP Parity Act is a phenomenal idea. It's a fairly arcane part of the tax law, but it's worked well and has been extremely beneficial to private investment in the oil and gas space. The fact that it doesn't currently apply to renewables is just a silly inequity in our current law.
Well, one of the things the folks we work for expect us to do is to find ways to move forward together, to find ways to nail down and address inequities in the law, and this is one we can fix with a simple, straightforward bill.
I am so grateful for the cosponsorship of the Senator from Alaska and her leadership, and I agree with her that we are seeing growing momentum behind this free market approach. Does the Senator from Alaska wish to add anything else as we advocate for this bill?
BREAK IN TRANSCRIPT
Mr. COONS. I thank Senator Murkowski.
If we are going to lead on energy or in anything, we have to listen to each other and we have to work together. I have been so grateful for the way Senator Murkowski and Senator Wyden have worked closely together and moved the Energy and Natural Resources Committee forward.
As the Senator referenced, we had a great hearing earlier this week on the Shaheen-Portman bill--the energy efficiency bill on which Senator Shaheen of New Hampshire has worked so well with Senator Portman of Ohio--and also some bipartisan bills on hydropower.
It is my real hope that this strong bipartisan bill--opening up master limited partnerships to energy efficiency, to hydropower, and to a dozen other clean and renewable sources of energy--this sort of simple, straightforward, commonsense, bipartisan bill that creates opportunity, will allow the private sector to then marry up with the innovations of researchers and help with the deployment of new energy sources.
At the end of the day, we in Congress--the Federal Government--have to set a realistic policy pathway forward to sustain innovations in the energy market and then let the financial markets work to their fullest potential. The Master Limited Partnerships Parity Act moves us closer to that goal and that day.
I thank Senator Murkowski for her leadership and for being here with me today, and I thank Senator Moran and Senator Stabenow, our original Senate cosponsors, and our House counterparts. By leveling the playing field for fair competition, this market-driven solution can provide vital support to the kind of comprehensive, ``all of the above'' energy strategy we all need to power our country for generations to come.
BREAK IN TRANSCRIPT