Energy Policy Act of 2005

ENERGY POLICY ACT OF 2005 -- (Senate - June 23, 2005)

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Mr. ALEXANDER. Mr. President, I urge our colleagues to reject the Sununu-Wyden bill and support the Domenici-Bingaman bill. The provision the Senator seeks to strike is one of the most innovative and one of the crucially important parts of the legislation. As I will explain in a minute, it is not a free ride, and it costs the Government nothing. It scores at 0. It is constructed in conformance with the Federal Credit Reform Act.

Let me explain the amendment and, in doing so, I am doing it on behalf of the chairman of the committee, Senator Domenici. This is his idea. It is an idea to help us jump-start legislation which we have probably come to think of as a clean energy bill, as a bill which transforms the way we produce electricity in the United States, puts us on a path toward low-carbon and no-carbon electricity, and involves, in doing so, using a number of new technologies, technologies that are not yet commercially proven.

For example, in our legislation, the Domenici-Bingham clean energy legislation, we talk about more efficient coal plants. We talk about carbon sequestration, a technology which has not yet been fully demonstrated. We talk about advanced nuclear plants, plants that are of the next generation of nuclear plants. We talk about new forms of solar. Solar has a very limited use in the United States, but there is some exciting new technology there. We talk about new biomass and hybrid cars, a technology which is just beginning to emerge.

One of the largest and most important of these new technologies is what we call IGCC, or clean coal gasification, the idea of using coal, of which we have hundreds of years supply, to turn it into gas. I will say more about that in a minute. We have higher efficiency natural gas turbines, a hydrogen economy. We are quite a bit away from there, and research and development is important for that.

We are excited about these incredible potential new technologies, and our goal here is to jump-start these technologies, get them into the marketplace--only new technologies, only technologies that are not commercially viable--and then we step back and get out of the way.

That is not just the idea of our Energy Committee, which voted 21 to 1 for a bill that contains this provision and heard a great amount of testimony, it is the idea, for example, of the bipartisan National Commission on Energy Policy, which pointed out that the energy challenges faced by the United States mean many new technologies and, unfortunately, ``both public and private investments in research and development, demonstration and early deployment of advanced energy technologies have been falling short of what is likely to be needed to make these technologies available in the time frames and on the scales required.''

We have since World War II invested in research and development. Half our new jobs since World War II, according to the National Academy of Sciences, have come from research and development. Our R&D, our scientific capacity, is our cutting edge advantage. If we do not, for example, help launch a handful of new clean coal gasification plants, if we do not, for example, invest in the next generation of nuclear plants, they either will not happen or they will happen so slowly that we do not get on the path we intend to be on.

In conclusion, let me point out exactly what we are talking about. This title is limited to technologies that are not commercial, that are not in general use. These technologies have to avoid reduced or sequestered air pollutants or manmade greenhouse gases, and the technology has to be new or significantly improved over what is available today in the marketplace.

In addition, this is not a free ride. The guarantees can only be for 80 percent of the cost of the project. The developers will share the risk.

More important, the program is constructed in accordance with the Federal Credit Reform Act and it costs the Government nothing. In every case, the cost of the guarantee has to be paid in advance. It could be done through appropriations, but that would have to be decided each time. But in most cases it will be done because the project sponsors will simply write a check to the Federal Treasury before the guarantee is issued. These payments are calculated based upon the risk that any one of the guaranteed loans might go into default--that always could happen--so that the amount collected will be sufficient to pay off that portion of the loans that do default.

In other words, it is in the form of an insurance premium that takes into account, actuarially, what the defaults might be should there be any.

This is not new. The Federal Credit Reform Act has been on the books since 1990. It applies across the Government, and I want to emphasize this key point: The provision scores at zero. Only if Congress later decides to appropriate money for the program will it cost anything.

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AMENDMENT NO. 873

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Mr. ALEXANDER. Mr. President, if Chairman Domenici were here tonight, he would urge our colleagues to oppose the Sununu amendment because it is critical to this clean energy bill. If we want lower natural gas prices, we need new technologies for carbon sequestration, for advanced nuclear, for solar, for biomass, and for hybrid vehicles. We need to invest in these options and jump start them. We have done that throughout our history in America. That is our secret weapon, our science and technology, research and development. Chairman Domenici likes the existing provision because this is for new technology. It is not a free ride.

Chairman Domenici would urge Members, as I do, to vote no on Sununu-Wyden because his existing provision jumpstarts new technologies for a clean energy bill from coal plants to sequestration to advanced nuclear to solar, new technologies not in general use. It costs the Government nothing, according to the scoring of the Congressional Budget Office. It is like an insurance policy. The user of the guarantee pays the premium.

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