Creating Long-Term Energy Alternatives for the Nation Act of 2007--Continued
Floor Speech
CREATING LONG-TERM ENERGY ALTERNATIVES FOR THE NATION ACT OF 2007--Continued -- (Senate - June 19, 2007)
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Mr. BINGAMAN. Mr. President, I will take 5 minutes. I know Senator Tester is here and wishes to speak. I understand Senator Kerry and many others wish to speak also.
The issue between the two amendments is what our focus should be, when we think about the future of coal, are we sure the best use of coal and the best future for coal is in the developing of transportation fuels? In my view, that is what the Bunning amendment concludes.
The Tester amendment, to the contrary, takes a broader view of the future of coal. I believe we want to enable the development of many potential uses of coal that are both environmentally and economically sound. We should not be focused on commercializing in large-scale uses of coal that do not make good sense in the marketplace.
First, let me say a couple of things about the Bunning amendment.
There are currently no large-scale coal-to-liquid plants in the United States. The price tag of a typical plant is in the billions of dollars.
The Bunning amendment purports to require that coal-derived fuels be 20 percent better than gasoline. But we have an apples-to-oranges comparison here because coal-to-liquids plants will produce primarily diesel fuel, not gasoline. The total greenhouse gas emissions from coal-derived diesels are likely to be greater by about 150 percent than the emissions from diesels that are powered from petroleum.
The Bunning amendment is technologically limiting, and such uses of coal as conversion to chemicals, to plastics, and to fertilizer are not permitted to benefit from the Bunning amendment.
Coal-to-liquids products mandated by the Bunning amendment have very large water requirements. Water requirements are estimated to be about 2 gallons for every gallon of coal-derived fuel produced. The Tester amendment, by contrast, is much more broad in the beneficial uses coal can be put to, whether to make fuels or fertilizers or plastics or chemicals.
There are industrial plants in the United States that do use coal commercially as a feedstock for chemical products.
I have a letter from the president of Dow Chemical which I ask unanimous consent to be printed in the Record at the end of my statement.
The PRESIDING OFFICER. Without objection, it is so ordered.
(See Exhibit 1.)
Mr. BINGAMAN. He states as follows in that letter:
On behalf of Dow Chemical Company, I write to offer my strongest support for Senator Tester's ``Coal Innovation'' amendment.
Simply put, it will allow companies to build gasification plants in the United States that run on coal, biomass and other feedstocks, while helping to increase fuel and feedstock diversity and demonstrate options for carbon capture and storage. This will result in gasification plants that are more efficient and help address climate change and contribute to energy security.
Mr. President, I also have a letter that I want to have printed in the Record at the end of my remarks from various unions--the AFL-CIO Building and Construction Trades Department, the Industrial Union, the United Mine Workers, various others.
The PRESIDING OFFICER. Without objection, it is so ordered.
(See Exhibit 2.)
Mr. BINGAMAN. They strongly endorse the Tester amendment. They previously were part of a coal-to-liquids coalition which issued an earlier letter which has now been rescinded which spoke in favor of the Bunning amendment and against the Tester amendment, and they say in their letter that they strongly support the Tester amendment.
Clearly, I think the Tester amendment gives us the best chance of promoting the use of coal to meet our energy needs in the future, and I strongly support it and oppose the Bunning amendment. I hope my colleagues will do the same. I believe this is the right course for us to follow.
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Mr. BINGAMAN. Madam President, there is an old legal adage that says, hard cases make bad law. That seems to be the case here. No one likes OPEC. None of us like being put in a position of appearing to defend OPEC. But this amendment, in my opinion, would make bad law. The Framers of the Constitution wisely assigned responsibility for formulating foreign policy and conducting foreign relations to the President and to the Congress, not to the law courts.
Chief Justice Marshall said nearly two centuries ago:
The judiciary is not the department of the Government to which the assertion of its interest against foreign powers is confided. A question like this is more a political one than a legal one.
There has been much talk in this Chamber over the years about the proper role of the judiciary. Nearly every time we are asked to confirm a judicial nomination, we hear speeches given on the Senate floor about the need for judges to confine themselves to the business of interpreting the law, not making the law. And this is exactly what the courts have done in this circumstance.
Here is a case where the courts have wisely recognized that OPEC's pricing policies are not something that should be litigated in U.S. courts but should instead be addressed by the political branches of the Government--the President, the executive branch, and the Congress. Senator Kohl's amendment would throw the issue of OPEC's oil prices back into our courts and force the courts to address those issues.
The amendment before us has its roots in a lawsuit filed by the labor union nearly 30 years ago. The union at that time charged OPEC with price fixing in violation of our antitrust laws.
The trial court dismissed the case on the ground that OPEC members are sovereign nations and are immune from suit. On appeal, the appeals court affirmed the dismissal, though for different reasons. It dismissed the suit under the act of State doctrine. In the court's words:
The act of State doctrine declares a United States court will not adjudicate a politically sensitive dispute which would require the court to judge the legality of the sovereign act of a foreign State.
Quoting the Supreme Court, the Court said:
Every sovereign State is bound to respect the independence of every other sovereign State, and the courts of one country will not sit in judgment on the acts of the government of another done within its own territory.
Senator Kohl's amendment overturns the act of state doctrine, at least so far as OPEC is concerned. It also creates a new offense under the Sherman Act to get at OPEC, it waives sovereign immunity for this new offense, and it amends the Foreign Sovereign Immunities Act to cover the new offense. In short, it sweeps away all of the legal defenses OPEC members have against antitrust suits in our courts.
Adopting the amendment will undoubtedly be very popular, but it is also very unwise. The Ninth Circuit Court of Appeals explained nearly 30 years ago:
To participate adeptly in the global community, the United States must speak with one voice and pursue a careful and deliberate policy.
The President can do this, the court said; the judiciary cannot.
Here is another quote from that same decision:
When the courts engage in piecemeal adjudication of the legality of the sovereign acts of states, they risk disruption of our country's international diplomacy. The executive may utilize protocol, economic sanction, compromise, delay, and persuasion to achieve international objectives. Ill-timed judicial decisions challenging the acts of foreign states could nullify these tools and embarrass the United States in the eyes of the world.
In this case-- the granting of any relief would in effect amount to an order from a domestic court instructing a foreign sovereign to alter its chosen means of allocating and profiting from its own valuable natural resources. On the other hand, should the court hold that OPEC's actions are legal, this would greatly strengthen the bargaining hand of the OPEC nations in the event that Congress or the executive chooses to condemn OPEC's actions.
In addition, we here in the Senate ought to consider how enactment of this amendment might affect our relations with OPEC members. What will be the international repercussions when the United States starts awarding judgments against foreign nations and attaching their assets in this country? What sort of precedent will the amendment set in the international community? Will other nations start to view our trade policies--such as our nuclear trade restrictions--as violations of their antitrust laws?
The Bush administration has offered us answers to some of these questions. Its statement of administration policy on this bill, which we are considering here in the Senate, says that:
The consequent targeting of foreign direct investment in the United States as a source of damage awards would likely spur retaliatory action against American interests in those countries and lead to a reduction in oil available to U.S. refiners. Not only would such a result substantially harm U.S. interests abroad, it would discourage foreign investment in the United States economy.
For these reasons, the administration concluded:
If a bill including such a provision is presented to the President--
That is the bill we are considering right here on the Senate floor.
--his senior advisers will recommend that he veto the bill.
For all these reasons, I urge my colleagues to vote against the Kohl amendment.
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Mr. BINGAMAN. Madam President, Senator Thune's amendment makes a major change in a provision of the Federal Power Act that governs the siting of electric transmission lines. Until 2 years ago, the siting of electric transmission lines was under the exclusive control of the States. The Federal Power Act gave neither the Secretary of Energy nor the Federal Energy Regulatory Commission the authority to site transmission lines.
The States tended to make their siting decisions in the best interests of their citizens, not necessarily in the best interests of the citizens of neighboring or even distant States that might benefit by the long distance transmission of electricity.
Two years ago, in the Energy Policy Act of 2005, which I worked on with Senator Domenici, which amended the Federal Power Act to provide what is called the Federal backstop siting authority. Specifically, we directed the Secretary of Energy to conduct a comprehensive national study of electric transmission congestion once every 3 years.
We then authorized the Secretary to designate, based on the study, any geographic areas experiencing electric transmission congestion as ``national interest electric transmission corridors.'' The Secretary completed the first congestion study last August, and he has begun proceedings to designate the first national interest corridors.
Designation of an area as a national interest corridor is likely to have serious consequences. Under the law we passed 2 years ago, a utility that wants to build an electric transmission line within the corridor can apply to the Federal Energy Regulatory Commission for a permit, and the Commission can approve construction of the transmission line without the permission of or even over the objections of the State. Once the Federal Energy Regulatory Commission issues the utility a permit, the utility can then go into Federal court and exercise the Federal Government's power of eminent domain and take private property to erect the transmission line.
I have heard speeches in the time I have served in the Senate from many of my colleagues about their concern over the exercise of the power of eminent domain. The passage of the Thune amendment substantially increases the likelihood that authority, that power of eminent domain, will be exercised against private property rights. Giving Federal officials and private utilities these powers was a major change in Federal law and a major departure from past practice. Nonetheless, we believed the step was warranted to ensure that the national interest in a national electric grid was protected. We believed that entrusting the Secretary of Energy with the task of studying congestion on a national basis and allowing the Secretary to designate only those areas which affected the national interest would prevent abuse of this Federal eminent domain authority.
Even though this authority is less than 2 years old, no corridors have yet been designated, no construction permits have been issued, and no private property has been taken. The authority is already, however, proving very controversial. There is major opposition to the use of this authority just west of here in northern Virginia and in other areas of the country. There has been talk of repealing the authority.
The Thune amendment will only add to the controversy. It makes a fundamental change in the current authority. The Thune amendment says that ``the Secretary may designate additional corridors ..... upon the application by an interested person.'' So even though the Secretary of Energy did not find that a particular area presented congestion concerns of national interest in conducting his congestion study last year and even though the Secretary of Energy did not see fit to propose an area as a national interest corridor, a utility that would like to make use of the Federal eminent domain authority to take private property can apply to the Secretary and the Secretary could then designate the area as a corridor under this new authority. This, as one of the authors of the provision we put in law in 2005, is a major expansion of that authority, and it is an unwarranted expansion.
In addition, the Thune amendment contains additional provisions on rates and recovery of costs which direct the Federal Energy Regulatory Commission to issue new rules setting transmission rates for the recovery of the cost of transmission lines in national interest corridors. Frankly, I am not entirely sure what the purpose of these provisions are. I am not sure how these provisions affect the ratemaking authority the Commission already exercises under the Federal Power Act. They are either redundant or unnecessary or else they authorize the Commission to set up a new rulemaking standard that will apply in national interest corridors different from the standard the Commission applies elsewhere.
I urge my colleagues to oppose the amendment. We should give the program we created in the Energy Policy Act just 2 years ago a chance to work before we dramatically expand it in ways that are not entirely clear.
I yield the floor.
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Mr. BINGAMAN. Mr. President, I am sympathetic to the concerns of my colleagues from Maryland, but I also rise to oppose their amendment.
Just 2 years ago, the Senate approved the Energy Policy Act of 2005 which contains this comprehensive approach to the siting of liquefied natural gas receiving terminals. In that bill, Congress gave FERC, the Federal Energy Regulatory Commission, the jurisdiction to approve the siting of LNG terminals that are located on shore.
FERC acts as the lead agency for NEPA compliance and also as a safety regulator. The combined NEPA and permitting process set forth in that legislation, EPAct 2005, fully recognizes the role of other Federal agencies and the role of State agencies acting under delegated Federal authority.
A project developer is not able to move forward unless all relevant permits are granted. FERC has addressed State concerns related to other LNG facilities through conditions placed on its approval certificate and it has denied a certificate due to safety concerns. So it is clear FERC is taking this authority and responsibility very seriously.
Moreover, this EPAct 2005 legislation also mandated the consideration of State concerns in the NEPA prefiling process which occurs very early in the siting process. The Governor of the affected State has a direct role in that process.
The Senators from Maryland describe their amendment as ``not affecting FERC authority,'' but the amendment would essentially trump FERC's authority to site the entire facility.
As my colleagues know, LNG is imported. It is delivered to this country by ship. Therefore, an absolutely essential piece of the LNG receiving facility is a place for the ship to moor and to unload its cargo; that is, a dock that is constructed in the navigable waters of the United States. The Senators' amendment would allow a Governor of an affected State--and there is a very broad definition of which States are affected; in fact, any State within 15 miles of the terminal would be an affected State under their definition--it would allow the Governor of an affected State to block the Corps' permit, Army Corps of Engineers' permit. Obviously, there is no point in building a terminal if the ship is not permitted to get near it.
Finally, all of us are aware of the high price of natural gas and the pressure that puts on electricity prices, home heating prices, and on the viability of domestic industries that rely on natural gas. The Energy Information Administration estimates that by 2030 the United States will need almost 21 billion cubic feet per day of regasified LNG to meet a total estimated demand of about 81 billion cubic feet per day. This means LNG will account for over 25 percent of our natural gas supply. We need a workable process to assure we have adequate capacity to meet this need.
So, Mr. President, for those reasons, I urge my colleagues to vote ``no'' on this amendment.
I know the Senator from Maryland wishes, I assume, to use the remainder of his time or to conclude his argument. Following that, I will yield back the remaining time in opposition.
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Mr. BINGAMAN. Mr. President, since I don't see anyone else here, let me speak in opposition to the amendment.
This is one of these feel-good amendments where you can tell your constituents you struck a blow for freedom by outlawing OPEC.
The truth is, this is terrible precedent for us to say we are going to drag foreign governments into our court system and allow them to be sued for antitrust violations. We have always stopped short of doing this. The precedent would be terrible because obviously they would do the same thing with us. If we can bring foreign governments into our courts and subject them to penalties here, they can bring our Government into their courts and do the same thing. The courts have stayed away from these issues. These are diplomatic issues and political issues the courts should stay out of.
I urge my colleagues to oppose the amendment.
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Mr. BINGAMAN. Mr. President, this amendment does not just allow the States to participate in the decision; this amendment would give the States the ability to veto the issuance of any permit to the Army Corps of Engineers to build a terminal and would, in that way, cut us off from needed access to international supplies of liquefied natural gas, LNG. We are going to be more and more dependent upon these liquefied natural gas supplies from overseas. We need to have these terminals constructed. We have a provision in existing law that gives us good processes for including the States, but it is important that we not change existing law.
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