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Conference Report on H.R. 6, Energy Policy Act of 2005

Location: Washington DC

CONFERENCE REPORT ON H.R. 6, ENERGY POLICY ACT OF 2005 -- (Extensions of Remarks - July 29, 2005)


Mr. UDALL of Colorado. Mr. Speaker, I regret that I cannot support this legislation.

There is nothing I would rather vote for than a balanced energy bill that sets us on a forward-looking course--one that acknowledges that this country is overly dependent on a single energy source--fossil fuels--to the detriment of our environment, our national security, and our economy.

But at a time of sky-rocketing oil prices, this report doesn't do what it needs to do--help us balance our energy portfolio and increase the contributions of alternative energy sources to our energy mix.

The process of developing the conference report is much improved from last year's contentious debate. Senate and House conferees worked together cooperatively and were able to compromise on a number of provisions and bridge difficult differences of opinion. I believe Chairman BARTON and Ranking Member DINGELL and on the Senate side, Chairman DOMENICI and Ranking Member BINGAMAN, have done a good job in this respect.

The conference report itself is also an improvement over the bill passed by the House earlier this year.

It includes an extension of the Renewable Energy Production Tax Credit for another 2 years, which will take us through the end of 2007. This is very good news. The report also includes clean energy bonds provisions from the Senate bill which will enable electric cooperatives to invest in renewable generation.

It also removes the methyl bromide tertiary-butyl ether, MTBE, liability waiver that would have let industry off the hook. It's true that the conference report does provide a ``backdoor immunity'' that could derail many legal claims by denying communities and states the right to be heard in state forums. But I believe that the conferees took a big step forward by dropping the liability waiver.

On energy efficiency, the conference report goes beyond the House bill in establishing new energy efficiency standards for 15 products. It also includes numerous energy efficiency tax provisions for alternative fuel vehicles, energy efficient appliances and new and existing homes, among others, provisions contained in the Energy Efficiency Cornerstone Act that I introduced with my colleague Rep. ZACH WAMP and others.

Electricity provisions are strengthened--not only does the conference report include new standards for grid reliability, but it also includes consumer protections in electric markets, such as new merger review, a prohibition on market manipulation, improved market transparency, among others. These protections are especially important given that the bill repeals the Public Utility Holding Company Act, PUHCA, which restricts the ownership and operations of power companies and their ability to control energy prices.

Another way in which the conference report has improved on the House bill is its treatment of oil shale.

This is a subject of particular concern to Coloradans, because Colorado has the most significant amounts of oil shale--and also the most experience with oil shale fever. In Colorado, we have had several bouts of that syndrome. The last one started during the 1970s energy crisis and ended abruptly on ``Black Sunday'' in 1982. That was when Exxon announced it was pulling out of the Colony shale project, an event that left an impact crater from the Western Slope to downtown Denver. There followed an exodus of other companies that had been working on oil shale--which led to an echoing exodus of jobs and of Coloradans who had nowhere else to turn.

The House bill would have required the Interior Department to set up a new leasing program for commercial development of oil shale, with final regulations to be in place by the end of next year. In other words, it called for a crash program to meet a short, arbitrary deadline.

In the Resources Committee, I tried to change that. An amendment I offered would not have barred oil shale development. Instead, it would have said that before we leap again, we should take a look and have a clear idea of where we are apt to land. Under my amendment, the Department of the Interior would be told to prepare regulations for a new oil shale leasing program--and to get them finished ``promptly'' after finishing the analysis required by NEPA and the regular process for developing new federal regulations.

Unfortunately, the Republican leadership of the Resources Committee opposed my amendment, and so it was not adopted. The result is that that part of the House bill was much uglier than it should have been.

The oil shale part of the conference report, while not necessarily a thing of real beauty, is definitely better. It calls for a programmatic environmental impact statement as the first step, and requires issuance of final regulations for a new commercial leasing program only after that statement has been completed. Further, it requires the Interior Department to consult with the Governor of Colorado (and the governors of other relevant states) and other interested parties in order to determine the level of support for development of oil shale (or tar sands) resources, and provides that leasing will then occur only if there is sufficient interest and support. This is a much better way to proceed than through the kind of crash program called for in the House-passed bill.

And, while I think the need for a new oil shale task force or a new office within DOE is doubtful at best, the conference report's provisions related to experimental leases are sensible and worthwhile.

There were a few good things in the House bill that I am glad are retained in the conference report--after all, in a 1,725-page bill, there are bound to be some good provisions, but in this case they are far outweighed by the bad.

For example, I support most of the provisions developed by the Science Committee, and I commend Chairman BOEHLERT and Ranking Member GORDON for their bipartisan approach.

In particular, I'm pleased that the Science Committee bill included generous authorization levels for renewable energy and energy efficiency R&D. As Co-chair of the Renewable Energy and Energy Efficiency Caucus, this funding is very important to me.

I am also pleased that the conference report includes the Clean Green School Bus Act, a bill that Chairman BOEHLERT and I drafted that authorizes grants to help school districts replace aging diesel vehicles with clean, alternative fuel buses. H.R. 6 also includes provisions from legislation I introduced on distributed power, which would direct the Secretary of Energy to develop and implement a strategy for research, development, and demonstration of distributed power energy systems.

Unfortunately, though, as a whole this conference report--like the bills we've debated twice before--basically retains the status quo and does little to provide solutions to the real energy problems facing this country.

This conference report provides oil and gas companies massive forgiveness of royalty payments. It exempts industry from requirements of the Safe Drinking Water Act when they inject harmful chemicals into the ground during drilling. It exempts oil and gas construction sites from storm water runoff regulations underthe Clean Water Act. It authorizes up to $1.5 billion in new subsidies to the oil industry for ultra-deep oil drilling and exploration. It establishes an exclusion under the National Environmental Policy Act for oil and gas development activities.

Of the bill's total $14.6 billion in tax incentives, $9.3 billion (or 64 percent) is for traditional energy sources such as oil, natural gas, and nuclear power. The oil and gas industries are getting these massive subsidies from the taxpayer at the same time that their profits have never been higher. Meanwhile, renewables and energy efficiency technologies are allocated $5.3 billion, or just 26 percent of the total incentives in the bill.

And then there are all the things the bill would not do. It would not increase vehicle fuel economy standards, which have been frozen since 1996. Raising CAFE standards is the single biggest step we can take to reduce oil consumption, since about half of the oil used in the U.S. goes into the gas tanks of our passenger vehicles.

This conference report avoids the whole question of mandatory action on climate change, excluding even the toothless Senate-passed resolution that recognized the need for immediate action by Congress to implement mandatory caps on greenhouse gas emissions.

It also does not include the Renewable Portfolio Standard, RPS, part of the Senate-passed bill, which would require utilities to generate 10 percent of their power from renewable sources by 2020. Colorado is uniquely positioned to take advantage of alternative energy opportunities, such as wind and sun. Colorado's voters approved Amendment 37 last year, a state RPS, which is making a difference in our energy supply.

But a Federal RPS would yield numerous rewards in the long-term for the whole country, including increased energy independence and security, economic development opportunities in depressed communities, maintaining a competitive advantage internationally, protecting our environment, and helping our farmers develop long-term income sources. The absence of an RPS in this conference report is a serious setback for forward-thinking energy policy.

Most importantly, according to analyses conducted by the Department of Energy's Energy Information Administration, this energy bill will neither lower gas prices nor reduce U.S. dependence on foreign oil, with foreign imports predicted to increase from 58 percent to 68 percent in the next 20 years. Coloradans on average are already on average $2.25 for a gallon of regular gas. This bill will do nothing to bring those prices down.

I don't always agree with President Bush. But I think he is absolutely right about one thing--at $55 a barrel, we don't need incentives to oil and gas companies to explore. Instead, we need a strategy to wean our Nation from its dependence on fossil fuels, especially foreign oil.

In conclusion, Mr. Speaker, we need a plan in place to increase our energy security. Thirteen percent of the twenty million barrels of oil we consume each day comes from the Persian Gulf. In fact, fully 30 percent of the world's oil supply comes from this same volatile and politically unstable region of the world. Yet with only 3 percent of the world's known oil reserves, we are not in a position to solve our energy vulnerability by drilling at home.

This bill does nothing to tackle this fundamental problem. For every step it takes to move us away from our oil/carbon-based economy, it takes two in the opposite direction. I only wish my colleagues in the House could understand that a vision of a clean energy future is not radical science fiction but is instead based on science and technology that exists today. Given the magnitude of the crisis ahead, we can surely put more public investment behind new energy sources that will free us from our dependence on oil.

Earlier this year, President Bush spoke at the opening of the Abraham Lincoln Museum in Springfield, Illinois and attempted to draw parallels between his goal of expanding freedom in the world and Lincoln's effort to expand freedom in the U.S. I have some questions about that comparison, but I do think it is good to consider Lincoln's example when we debate public policy.

In fact, I wish President Bush and the Republicans would draw a few more parallels to Lincoln in their approach to energy policy--because, as that greatest of Republican Presidents said, ``The dogmas of the quiet past are inadequate for the stormy present. Our present is piled high with difficulties. We must think anew and act anew--then we will save our country.''

And while we are not engaged in a civil war, our excessive dependence on fossil energy is a pressing matter of national security. We have an energy security crisis. We need to think anew to devise an energy security strategy that will give future generations of Americans an economy less dependent on oil and fossil fuels.

Unfortunately, too much of this bill reflects not just a failure but an absolute refusal to think anew. Provision after provision reflects a stubborn insistence on old ideas--more tax subsidies, more royalty giveaways, more restrictions on public participation, more limits on environmental reviews--and a hostility to the search for new approaches.

Maybe we could have afforded such a mistake in the past. But now the stakes are too high--because, as I said, energy policy isn't just an economic issue, it's a national security issue. America's dependence on imported oil poses a risk to our homeland security and economic well-being.

Unfortunately, this conference report does not think anew and is not adequate to the challenges of this stormy present. For that reason, I cannot vote for it.

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