FARM, NUTRITION, AND BIOENERGY ACT OF 2007 -- (Senate - December 07, 2007)
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Mr. CRAIG. Mr. President, many of us in the Senate have been waiting now for well over a month for this document, S. 2302, to come to the floor and begin what is a right and responsible approach toward legislating: offering it up to amendments, allowing Senators to work their will under the rules of the Senate, and to complete it on time. The Democratic leader thought he could short-circuit that, that he could what we call ``load up the tree'' and not allow these kinds of amendments, only to find out in the end that wasn't about to happen; that both Democrats and Republicans alike would not allow the rules of the Senate to be thwarted and to deny the responsibility of each and every Senator, if they choose, to offer an amendment.
Later on in the course of this debate next week, I and Senator Domenici and Senator Thune will be offering an amendment that relates to RFS--renewable fuels standard. It is with that in mind that I come to the floor today to talk about a farm bill in a substantially different context.
We believe, and we have always felt, that agricultural policy was critical for America--for American farmers, yes, but for America's consumers of food and food products, most importantly.
There is no doubt the average consumer in America today spends less on high quality food than any other consumer in the world. America's food supermarkets are full of food. There are no shortages. There is great abundance. There is phenomenal variety. Without question, our food supply is the safest in the world. I believe, in large part, that is as a result of a combination of two things happening: the phenomenal capability of America's free and independent farmers, as well as a government that has been consistently willing, down through the decades, down through the Depression and the droughts and the hurricanes and the hail storms and all of that, to work with its farmers to ensure that they could stay on the land and produce. But rarely in the course of all of these decades of farm policy have we thought in the context that we are beginning to think today, which is that America's farmers can become, or are becoming, one of America's largest suppliers of energy. It is not a new phenomenon; it is a rapidly growing diversity in the American agricultural portfolio that is doing what we have wanted done for a long time, but simply because of a combination of program and price in the market didn't see happen.
So for a few moments this afternoon I would like to talk about the farm bill but in the context of energy and energy supply. Farmers, we have always believed, and know, if you have been one--and I have--are large consumers of energy. It takes a lot of diesel to plow a field, to run a combine, to run a corn dryer. It takes a lot of natural gas to produce nitrogen and phosphates and all of the necessary supplies and input costs that the Senator from Georgia was speaking to and about a few moments ago. America's agricultural producers are very large consumers of energy. But it has only been in the last decade that they have begun to become large consumer producers of energy. As that has happened and as we have changed and shifted policy in this country to incentivize and reward that production, we have watched that production grow very rapidly. We are now producing around 8 billion gallons of ethanol annually.
We encouraged it in the 2005 Energy Policy Act, and America's farmers went to the task of building the ethanol distilleries and beginning to supply the market as we allowed ethanol to enter the market at ever-higher volumes.
Now, an old farmer told me not long ago: You know, this is nothing new for American agriculture. Before we had tractors, farmers supplied all of their fuel for their farming. I hadn't put it in that context. I grew up on a farm and a ranch where one side of a barn once housed--I am talking a horse farm--once housed teams of horses that pulled the plow, that pulled the harvesters, and did all of that, and it was energy from our farm that fed the horse that produced the energy of the horse. We were not importers of energy to our farm. We were producers of energy. But that was 90 years ago. Then, American farming changed dramatically, and we became increasingly more productive. We began producing our own energy, and we started consuming it from outside sources, and it became gasoline and diesel. It isn't that we will see a reversal, but we are seeing a phenomenal new opportunity of production, and that is in combination a result of farm policy. This bill is a good farm bill, and the Senator from Georgia and the Senator from Iowa need to be congratulated for the cooperative effort in which they have worked to produce it. It will be, if you will, in part, one of the directives of American agriculture for the next 5 years, when it is passed.
What is important now is to try to look down the road and talk about a role for America that we must increasingly play if we are going to continue to be the strong power we are for ourselves and our citizens, but also for the world. What has happened from that time when horses once pulled the plow until now with that big tractor out there with hundreds of horses under the hood, if you will, pulling multiple plows, is that we began to become a nation of energy importers. Since I have been in Congress over the last 27 years, we went from 30 percent to 40 percent to 50 percent to 60 percent dependent on foreign countries producing our energy for us. I did say countries. I didn't say companies because the bulk of the oil in the world is owned by governments, not companies, and almost every one of those governments today is less than concerned and, in many instances, hostile to America.
So it seems only fitting to me that as we shape public policy in this country, we do so in a way that begins to move America toward energy independence. The American farmer, more than ever before, can become that producer of energy and help in that equation of energy independence in a way that even a decade ago we didn't think possible at all. With the passage of the Energy Policy Act of 2005 and the expansion of entry of ethanol into the market, we saw that market begin to take off and we saw production of ethanol begin to take off. We saw the distortion that always occurs in a market when a new demand begins to occur for a commodity that isn't overly abundant. In that case, it was corn, and we saw our dairy farmers and our feeders of beef cattle and hog farmers begin to be concerned about the high price and the high cost of that import because corn had been shifted from the feedlot to the distillery to produce ethanol. We are continuing to encourage that.
One of the things we will do with a renewable fuels standard in the farm bill is begin to shift that equation to stabilize the use of the inputs to produce ethanol. Right now, ethanol is produced by corn almost exclusively in this country, and many of us believe with the new science that is coming, with the new loans and guarantees that are coming out of the Energy Department because of the Energy Policy Act we passed in 2005, we will begin to see a shift toward a combination of ethanol fuels, both corn-based and cellulosic-based. Cellulose, fiber, not only could it be the grain of the corn itself producing, but it could become the ear of the corn and the stock of the corn and grasses and other kinds of fibers where cellulose is dominant but could become a major producer.
In the Energy Act the Senate passed this year that went to the House--and the House largely destroyed it by trying to use it as a taxing mechanism more than a production mechanism--we had placed in it a renewable fuels standard that did the combination of things I am talking about. We said we could take corn up to about 15 billion gallons a year, and we could take cellulose-produced ethanol up to about 15 billion gallons a year by the year 2020, and by the year 2022 we would add another 6 billion gallons of cellulose-based ethanol as that science, as that technology began to be increasingly more efficient and refined.
Here is a reason why we would want to do that. Right now, corn-based ethanol only reduces the output of CO2 into the environment by about 19 percent, compared with conventional fossil fuel. It is a help, but it is not where we want to be if we want a clean world out into the future. I know a lot of farmers and I have always said in my life that farmers are probably the finest environmentalists in the world because they are phenomenal stewards of the land, and they want to make sure the land is viable and the water around it is sustained. They want to produce a better quality product.
What we are suggesting is that we increasingly shift the equation in America agriculture, in its participation, in the production of energy, to make us more energy independent and help us find new and cleaner sources. In the end, when we shift this production portfolio of ethanol from corn-based to cellulosic, in the outyears--25 or 30 years out--cellulosic-based ethanol fuel will be 86 percent cleaner. That is what we want. That is what we ought to ask for.
That is why, for the first time, at least in my time in the Congress, America's farm bill, America's agricultural policy, is, in part, an energy policy because agriculture is looking at not only its input costs of energy but its opportunity to produce energy. There are a lot of other things I could talk about as it relates to taking biomass and animal waste and converting them into energy. All of that is starting to happen. But the big production--the production that makes the difference, the production that makes America and America's energy consumers more independent from a Venezuela or from the Mideast--is this right here: ethanol, both corn-based and cellulosic. That is what we are about. That is what we have to be about as a country.
There is every reason for the American consumer to say: Why can't we be energy independent? We should be. But our policies have not taken us there. In part, it is because I think we didn't think we could get there but largely because there was all kinds of bias out there in the whole energy arena. The bias is quite obvious. We all like big cars, we like our SUVs, and we all like what we like--until we cannot afford liking them anymore because the cost of feeding them has gone up dramatically. That has helped us a little bit to develop changes.
For the first time this year, I introduced a bill, with Senator Dorgan, to have mandatory CAFE standards. The auto industry was quite upset with me. I have always defended them not changing that standard. I have been here 27 years and we have not changed the standard in 27 years and they have not changed. I wish to change that standard and force the American marketplace and the American producer to look at what can happen if they become more realistic in auto consumption efficiency. Oh, what a difference a day makes when a car gets another mile or two to the gallon nationwide in the consumption of oil. So it is a balancing part, a total picture, the big portfolio of production.
I will be back to the floor all during 2008 talking about energy independence, talking about drilling offshore, talking about ethanol, cellulosic and corn-based ethanol, talking about all the kinds of things America must do to get independent of foreign sources of energy and to get clean. My children, who are all adults now and are pretty conservative folks, say: Dad, why can't we produce clean energy? Why can't we be energy independent? Why are we allowing a dictator in Venezuela to jerk us around?
What is wrong with this great country that we cannot do for ourselves what we have always done for ourselves--stood up and be counted and be independent and strong, and we can. America's farmers now, for the first time, have a phenomenal role to play beyond putting food on the consumers' shelves, which they have done so beautifully for 200 years. Now they have a role to play of putting fuel in the fuel tank. We ought to encourage that in every way but balancing the policy, as I think this final bill will do, to make sure we don't distort the markets, that we allow them to grow responsibly, that we allow them to work their way into a 15-billion-gallon-a-year production of corn-based ethanol and, by 2026, a 15- to 20-billion-gallon-a-year production of cellulosic-based ethanol. It is doable. We know how to do it. We are putting programs into place to promote it and advance it.
America's auto fleet will adjust to it, and America will be a stronger Nation. But more importantly, it will be an independent Nation from the small countries who have, underneath their geologic strictures, large bodies of oil they now see as tools for diplomacy, tools to shape a world, and tools to control this great country called America.
I will be back next week, along with my colleagues, to make new changes in the farm bill. S. 2302 is a good work product. I am pleased that finally the majority leader of the Senate has said: OK, put it on the floor and let it work its will. By the end of next week, we will have a farm bill. It is about a month late. That could have happened a month ago. It will happen now. I guess patience counts. Many of us have been patient. America's farmers need a new farm bill, and I believe the Senate Agriculture Committee has done a worthy job in producing it.
The RFS that was included in the Senate passed Energy bill this summer, and that was similarly filed as an amendment to the farm bill, reduces our dependence on foreign oil and reduces our carbon footprint, by emphasizing the importance of developing cellulosic biofuels. The RFS is, by definition a clean fuel standard, and the House has offered some additional language which endorses this low carbon fuel approach. This week in the Environment Committee we marked up a climate bill that seeks to regulate fuels with a cap on all emissions, including transportation. At the mark-up, Senator Alexander offered an amendment that is now layed on top of having fuels already covered under a ``cap and trade'' program by subjecting them also to a low carbon fuels standard. I and other members of the minority strongly opposed this amendment because it was offered in addition to the cap-and-trade, rather than as a substitute, which would have made much more sense, so as not to double-regulate the industry. In addition, however, and most importantly it also conflicts and overlaps with what we are now doing as part of the Energy bill and the farm bill as it relates the Senate RFS language, and certainly raises serious questions of jurisdiction. Senator Alexander indicates that he supports a sector approach, as do I, and I hope we will be able to move in this direction together.
Trading carbon credits between transportation sector fuels and other industry sectors is unprecedented and could lead to high fuel price volatility, supply issues including possible disruptions, and a level of market uncertainty that could discourage critically needed investment in new and innovative technologies. The EU-ETS has not included transportation fuels in its cap-and-trade program for stationary sources for this very reason. The U.S. transportation and electric power sectors are subject to very different national and international market forces and forms of regulation. Mixing these two dissimilar markets under a common cap can lead to unpredictable and potentially intractable conflicts in how each market will respond to this untested economic combination.
Studies conducted by the Energy Information Agency and the University of California on economy-wide cap-and-trade programs show that carbon reductions are less cost-effective in the transportation sector as compared to other industry sectors. Mixing transportation fuels with other fossil fuels under a common cap simply raises the cost of transportation fuels without a guarantee of significantly decreasing their carbon emissions, at least until much more cost-effective options have been exhausted for reducing emissions in other sectors. Studies by EIA indicate that this will generally not occur until after 2030.
There is a better approach for technology development for advanced transportation fuels. Technology development is driving a separate lower carbon transportation fuel standard rule that is being developed by the administration and expected to be proposed later this year. The bill should have a separate approach for transportation fuels that recognizes the confluence of these policies to ensure this sector is not subject to overlapping or conflicting requirements.
I am concerned that the fuels amendment offered by Senator Alexander during committee markup conflicts with provisions regarding low carbon fuels and the renewable fuels standard that are already included in the Energy bill now being considered by the House and Senate. Cellulosic ethanol is key and will substantially reduce the carbon content of fuels and this is included in the Renewable Fuels provisions. The Alexander amendment overlaps, and is conflicting and also raises questions regarding fuels jurisdiction with the Senate Energy Committee. In addition, the amendment develops a low carbon fuel standard that is fundamentally flawed and well beyond the bounds of current technology and science. Developing and advancing technology, not mandating a ``wish list,'' is a superior approach to meeting the challenges of providing affordable and clean fuels that American consumers need.
I yield the floor.
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