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Sources of Energy in America

Location: Washington, DC

SOURCES OF ENERGY IN AMERICA -- (Senate - February 06, 2007)

Mr. GRASSLEY. Mr. President, every time a President gives a State of the Union message, there are a lot of people who praise it, there are a lot of people who disagree with it. One of the areas where there was some agreement--but also a lot of disagreement--was on the energy package the President suggested in his State of the Union message. Since I come from a State that is No. 1 in almost all of the alternative energies such as biodiesel, such as wind--we are third in wind energy, we are first in biodiesel, we are first in ethanol production--I would like to set the record straight and encourage people to see that a lot of good has been accomplished over the last several years and that we ought to forget a lot of disagreeing rhetoric and move on and even enhance what we have already done. So I am here to address an issue President Bush mentioned in his State of the Union message and an issue that those particularly on the other side of the aisle have been quick to criticize.

In the President's speech to the Nation, he once again highlighted the need for the United States to reduce our dependence upon foreign oil. This has been something that Presidents have been stating on a very regular basis, both Republican and Democratic, going back to 1973, when President Nixon gave a speech, during the first energy crisis, speaking about energy independence. Of course, President Nixon was saying we can do it by 1980. I don't know why he picked that date, but actually we are much more dependent upon foreign sources now than we were even in 1980 because of the consumption of the United States and the standard of living we have. People want to be free to drive their car wherever they want to drive it as long as they want to. Whether it is a big car or little car, it is freedom in America to do it, so we become more dependent. But also along the lines of alternative energy, we have made tremendous progress.

So President Bush did not do anything that Presidents probably haven't been doing for the last 34 years, in saying we need to move toward energy independence, but what they mean is less dependence upon foreign sources and less dependence upon petroleum. Because I would be misleading my colleagues, I would be misleading my constituents if I said we have the capability--at least I don't know that we have the capability--of being totally independent of foreign sources of energy, but we surely have the capability of being less dependent upon foreign sources of energy, and we have the capability of being less dependent upon petroleum as a basis of our energy.

So the critics, though, it seems, have been quick to point out that the President has mentioned our dangerous dependence on foreign oil in seven straight addresses to the Congress. That is why I pointed out that every President since President Nixon has been talking about this issue. So it is not just President Bush who has been mentioning it and, presumably and impliedly, not doing anything about it. I wish to remind my colleagues he has also talked about the value of domestic, homegrown, renewable sources. But at the same time, there has been criticism that he has done little to actually support the growth of alternative energy. I say my colleagues are wrong.

I am going to quote Senators, but I am not going to mention their names because I am not here to embarrass anybody; I am here to try to get people to be responsible. I do wish to refer to these as all Members of the Democratic Party, but I am not going to mention their names. One Democratic Senator stated after the President's speech last week:

The President acknowledged the need to develop alternative energy, but he did not offer a real plan to put us on the path to energy independence.

Now, I am going to show my colleagues how the President has been very much involved in this.

Another Democratic Senator stated:

So many of us believe that though the President continues to refer to the problem--meaning the problem of not being energy independent enough--he has never quite moved us--never quite moved us-- as we would like in the direction of a solution. We did little or nothing in Washington to address the addiction.

Maybe he hasn't addressed the addiction, but because there is an addiction, he has tried to make us less dependent upon a petroleum addiction, as opposed to an energy addiction.

Finally--and I could go on and quote many more, but I will stop at the third one--one more Democratic Senator commented:

We have waited 6 long years for the aggressive new incentives needed to really get our biofuels industries off the ground and break America's oil addiction.

Of all the statements I have quoted, it seems to me that is the one that is flatout intellectually dishonest, as I am going to give some facts here. The facts would suggest otherwise. The fact is the ethanol industry is growing at the fastest pace in its history. There are over 110 ethanol facilities operated across the country. These plants have the capacity to produce 5.3 billion gallons of ethanol annually. I said 110--110 ethanol facilities. We only have 170 petroleum refineries to make gasoline and fuel oil in this country. So I think we are developing an industry.

Here my colleagues can see the States that are darker, where the ethanol industry is being located. Iowa is No. 1, my State is No. 1 in the production of ethanol, but it is rapidly expanding. I still remember 3 or 4 years ago, or maybe it has only been 2 years ago now, when we had Members from this State and Members from this State who would stand up here and offer amendments against ethanol, and it wasn't long that once we got into the point where everybody realized they had to use ethanol, we had Members from this State and we had Members from this State saying to Senator Harkin and me: Why don't you get us more ethanol, as an example. So people are becoming more ethanol friendly, but it seems you have to take them dragging and screaming into the new world of alternative energy.

So we have a developing industry. Twenty-three States currently have ethanol plants in operation or under construction. Today, there is some level of ethanol blended in more than 46 percent of our Nation's fuel. In my State, that would be about 80 percent. In Minnesota, I will bet it is more because Minnesota has a State mandate. I have been embarrassed because when the Republicans controlled the State legislature and I went to them and said we ought to be doing what Minnesota is smart enough to do, I had Republican legislators tell me: Grassley, go back to Washington and stick to your own business. But I told them how I fought for the ethanol industry and alternative fuel and for the agricultural industry because that is where the source of the energy comes from, from the family farmers of America, and I told them it was embarrassing to me to fight big oil here while they were kowtowing to big oil back in Des Moines.

Well, anyway, I think things are going to be moving along. We have a Democratic Governor who wants to do more with the biofuel industry in my State, and I think we are going to make some progress. We may not have a mandate, but we may not need a mandate now.

I wish to talk about where we are located. Now, according to the Renewable Fuels Association, the ethanol produced in 2006 resulted in the reduction of oil imports by 170 million barrels of oil, with a value of $11.2 billion. Remember, $11.2 billion being spent on ethanol that is not going to the Middle East to produce a profit for the oil barons over there who shoot bullets at our soldiers as we are trying to take on the war on terrorism.

Now, I say to the critics on the other side--the other side chooses, as evidenced by the earlier statements I quoted of Democratic Senators--to ignore this data when they discuss the energy track record of President Bush and the Republican-controlled Congress in past years.

I was cynical when there was a Governor Bush running for President and coming to Iowa to campaign saying he would be for anything but big oil. So I had the opportunity in January of 2000, when we have our caucuses in the coldest time of the year, to be in a minivan with President Bush, as a candidate for the Republican caucuses at that time, to ride with him for 2 or 3 days. I thought, what a wonderful opportunity to be in a small car with a Governor who might be President of the United States, to teach him about the facts of ethanol. It didn't take me very long because he came back--and you never remember the exact quotes because I didn't write this stuff down. But I remember him saying something along the effect of: Well, it is just common sense. We only have so much petroleum. We have to start relying on ethanol to a greater extent. I guess I believed him then, but maybe I had some question marks. So we went on for 2 or 3 days, and there wasn't anything in those 2 or 3 days to change my mind. But you wonder: you say one thing as a candidate; you might perform another thing as an officeholder. But I found back in 2000 that the President was a friend of ethanol when he told me about it, and he has performed that way in office. So I am satisfied that this President is coming from where he started and albeit from a State where oil is big business and where you wouldn't expect him to be for it, but he has been a friend, as he indicated to me privately he was going to be. I think this President has done well for alternative fuel. So I don't think the criticism of him is legitimate.

The fact is that when President Clinton left office in 2000, our farmers were only producing 1.6 billions of gallons of ethanol. Now, I am not saying President Clinton was not friendly to ethanol. He was friendly to ethanol. But I think there are degrees of friendliness. But for the people on the other side of the aisle who tend to be criticizing this President, I want them to see where we have come since this President took office. During the 8 years of the Clinton presidency, domestic ethanol production grew 33 percent, as my colleagues can see here. Now, when we compare that to what it is since President Bush came to office in January 2001, the domestic ethanol industry is producing 1.7 billion gallons annually.

That grew to 4.9 gallons last year. When President Bush leaves office--this chart is somewhat of an estimate, but we think it is on target because the plants are coming online and ethanol is catching on and the need for ethanol is very real--we think this will grow to 10 billion gallons. That is a 488-percent increase during this period of time compared to a 33-percent increase.

I am not belittling President Clinton's efforts, but I think people on the other side of the aisle ought to take into consideration when they are raising a question about whether we have done enough in recent years about alternative energy these facts and this growth and not belittle this growth that seems to me is going on. This growth is no accident.

In fact, a key turning point took place in March of 2001 when President Bush took a courageous step that President Clinton should have taken but did not take during the last year of his Presidency. In 1999, the big State of California, with a tremendous consumption of fuel for automobiles and energy--generally, the State of California, at that time, was deciding to ban the competitor to ethanol as an octane enhancer that is known by the acronym MTBE. It stands for methyl tertiary-butyl ether. It was found to contaminate ground water.

Obviously, California had to quit using it, but they did not want to substitute ethanol. According to the 1990 Clean Air Act, they had to substitute ethanol without a waiver by the President or Congress. They were asking for that waiver. It did not happen, so we did not know where the ethanol industry sat versus the MTBE, so ethanol did not benefit the way it could have if President Clinton had made a decision.

California Governor Gray Davis did not want his citizens to have to use ethanol--which the 1990 law required--and he petitioned Clinton for that waiver. While many of my colleagues and I lobbied President Clinton to deny the waiver, he took no action. When President Clinton had the opportunity to demonstrate his confidence in our Nation's farmers and ranchers to produce this clean renewable alternative energy, President Clinton was nowhere to be found.

That changed when Governor George Bush was elected President. Less than 90 days into his term as President, George Bush denied the waiver which put the ethanol industry firmly on a path to growth because California uses so much energy.

Along the way, Congress considered and enacted a number of incentives and supportive policies to foster the development of this important industry. In August 2005, President Bush signed into law the Energy Policy Act which included the renewable fuels standard, or RFS, for short. This provision was a culmination of the work of dozens of Senators during a period that spanned three Congresses. It has also been key to the growth of the domestic ethanol industry.

The effort to enact a strong renewable fuels standard was bipartisan, but it was approved by the majority Republican Congress with the help of President Bush.

During the consideration of the Energy Policy Act, President Bush asked Congress for a bill that would help diversify the U.S. away from crude oil. He put his public support behind the renewable fuels standard to require the use of ethanol and/or biodiesel. The President supported our efforts toward a renewable fuels standard because he recognized that increasing our use of ethanol and biodiesel would create new markets for farm products and increase our energy security.

During the consideration by the Senate during this period of time--and I referred to this a little bit before--no fewer than 11 amendments were offered by Members of the other side of the aisle to delay, reduce, or render useless the renewable fuels standard which had broad bipartisan support, particularly from those from the Midwest. It was not the Republicans offering these amendments to kill the growth of the domestic renewable fuels market. It was members of the other side, some of whom are the same ones who may be criticizing the President today for not doing enough to decrease dependence upon foreign oil.

Perhaps more ironic is that a strong renewable fuels standard could have been enacted earlier than 2005. In November 2003, an Energy bill conference report came to the Senate with a renewable fuels standard but ran into a filibuster in the Senate. Had there not been a Democratic-led filibuster, what the President signed in August of 2005 would have been signed in November 2003. We would have been 2 years ahead of the game.

In addition to the renewable fuels standard, other provisions enacted in the past 6 years have perhaps done even more to spur the growth of the renewable fuels, particularly ethanol and particularly biodiesel. In 2004, Congress enacted the American Jobs Creation Act. This legislation included modification and extension of the ethanol tax incentive. While improving the incentive, it also extended it through 2010.

In the Energy Policy Act, which the President signed in August of 2005, Congress expanded the incentive for small ethanol producers and created a new credit for small producers of biodiesel. Most recently, Congress extended the tariff on imported ethanol through the year 2008. The tariff ensures that U.S. taxpayers are not subsidizing foreign ethanol and that we continue to grow our domestic production of ethanol.

As a result of the tax incentives, the ethanol import tariff and the renewable fuels standard, the domestic renewable fuels industry, is growing faster than anyone could have ever imagined. The policies put in place by the Congress when Republicans controlled it, with the support and assistance of President Bush, have put this industry on a path of extraordinary growth. We have recognized that renewable fuels, such as ethanol and biodiesel, improve air quality, strengthen national security, reduce the trade deficit, decrease dependence upon the volatile Middle East for oil, expand markets for agricultural products, increase income for farmers, and create good-paying jobs in rural America.

In other words, it is as the Campbell's soup advertisement of 25 years ago: everything about ethanol is good, good, good.

The fact is, President Bush has been the most prorenewable fuels President our country has ever had. I stated earlier when he was a candidate for President coming from big oil Texas and being Governor of that State,

would I expect him to be a renewable fuels person in the future? No, because I have been dealing with big oil and fighting them versus ethanol for a long period of time. It is only within the last 3 or 4 years that we had the freedom of not having to fight big oil. Who knows, maybe today we will have to fight big oil again when it comes to some ethanol products for the future, but there has been a lull. I thank President Bush for keeping his word to the people when he promised to be prorenewable fuels.

Getting back to those who claim the renewable fuels industry has lacked attention from President Bush and previous Republican Congresses, I leave with one final point. In the year 2000, the final year of the Clinton administration, we produced 1.6 billion gallons of ethanol. That is nothing negative about President Clinton. He seemed to be, for the most part, very ethanol friendly. But you cannot criticize this President when we have this figure: By the time he leaves office in 2008, we will be producing 10 billion gallons. The policy supported by the Republican Congress led to this growth.

I have proven that I don't want to sit by quietly while the other side tries to say otherwise.

I yield the floor.

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