Energy Policy Act of 2005 -- Continued
ENERGY POLICY ACT OF 2005--Continued
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Ms. CANTWELL. Mr. President, I thank the chairman of the Energy Committee for his participation and help in clarifying this next segment of debate on the Energy bill. While I think we have several issues left to discuss, I think it is very important to realize what a milestone we have achieved. After a couple of sessions of the Senate trying to get energy legislation, we are now on the precipice of having an energy bill that has great bipartisan support.
I compliment the chairman of the Energy Committee for his hard work and diligence in getting an energy bill that has such great bipartisan support. As a member of the Energy Committee and as a relatively new Member of the Senate, I can tell you how honored I was that Senator Domenici visited me in my office to talk about the issues impacting the Northwest--because we have been hard hit by an energy crisis in the last several years--and his willingness to work with my office on those Northwest issues, particularly related to the hydro system.
I can say with certainty that just about every member of the Senate Energy Committee participated in the markup of this legislation by getting ideas and concepts into the Energy bill. While each of us have different perspectives because we represent different regions of the country, people should realize that getting an energy bill is a very important step forward in our Nation.
I contrast that to the House version. The House version reminds me of where we were in the Senate version 2 years ago, except for the House version just kept going in the wrong direction. It basically has what I call ``gratuitous special interest deals'' relating to groundwater pollutants. This includes letting MTBE manufacturers off the hook from their liability, something I know the Presiding Officer has concerns about. The House bill also has rollbacks of the Clean Air Act, the Clean Water Act, the National Environmental Policy Act and the Safe Drinking Water Act. I think these are bad precedents to set.
I am trying to bring attention to the fact that the product we are starting with in the Senate is good legislation. The next week and a half will probably make this legislation even better, as Members who are not on the committee bring up issues, some of which, Members who are on the committee left to be discussed by all the Members on the Senate floor.
Something of particular importance to the Northwest is the electricity title in this legislation. Establishing the electricity title was a very meaningful step toward responding to the scandalous Enron crisis and the unethical practices of market manipulation. We are really getting tough on energy traders and executives who perpetrate the kinds of abuses that we saw in the western energy market. We are sending a message to those industries and businesses that the consumer will not provide the deep pocket for Enron kinds of bankruptcies.
I am grateful to the chairman and the ranking member from New Mexico for their hard work on this legislation. There was a great irony taking place the moment the Senate was about to make a decision on changing the filibuster rules. Members of both sides of the aisle and all their staffs were hard at work marking up a very comprehensive energy bill in a very bipartisan fashion. If people were there, they would have realized it was the Senate at its best doing its best work.
There are still outstanding issues that we decided we were going to bring to the Senate floor. Some of those issues were related to a variety of concerns that we thought were best addressed on the Senate floor. One of the issues that I think is important to bring up is my amendment on energy security. It is an amendment that will set a national goal for getting off our overdependence on foreign sources of oil. I am pleased to be able to offer that amendment with Senators DURBIN, SALAZAR, and KERRY because it is important that energy independence be part of our strategy for a national energy policy.
Many Americans are feeling this overdependence at the gas pump today. They know we are overdependent on foreign oil. They want to see more competition in gas prices. Americans may not realize that now the United States imports about 58 percent of our oil supply. That is about 11 million barrels a day. This number is expected to grow to about 62 percent by 2015. The underlying bill tried to address this by saying we should cut our dependence on oil by a million barrels a day, but what that underlying bill does is leave us worse off by 2015 than we are today. It would leave us more dependent on foreign oil than we currently are. The mathematics of the underlying bill need to be improved.
My amendment would direct the President to develop and implement a long-term strategy to reduce our dependence on foreign oil by reducing 7.6 million barrels of oil per day by 2025. So, instead of allowing our foreign oil imports to grow from the 58 percent that it is today to 68 percent in 2025, my amendment would reverse this alarming trend.
We can see where we are today and where we need to get to reduce this dependence.
Under my amendment, this would be a 40-percent reduction by the year 2025. It is very important that this goal be included as part of our energy legislation.
It should be no surprise because many of the Members have talked about energy independence as part of the energy legislation. If my colleagues believe in the underlying fundamentals of this legislation, then they must believe that we can be successful in getting off our overdependence on foreign oil.
What this legislation is missing is an adequate goal to actually reduce our dependence on foreign oil.
It is no surprise that consumers and experts alike agree on this. In fact, there was a recent poll which showed that 92 percent of Americans are very worried about our dependence on foreign oil, and 93 percent of Americans want our Government to develop an energy strategy that will get us off our overdependence on foreign oil. In fact, the President has joined in the call, saying that in order to make sure our economy grows, we need to encourage small business sector growth and vitality. We need to address a major problem facing our country, and that is our Nation's growing dependence on foreign sources of energy.
The President has joined in this debate in saying that getting off our foreign dependence is important.
We have had many others speak out, such as the leadership on both sides of the aisle. In the House, Speaker Hastert said: Our Nation is dependent on a fickle foreign oil market that is being stretched to the limit by foreign demands.
National security experts, such as CIA Director James Woolsey, former Secretary of State George Schultz, and others in the Energy Future Coalition, have said that the possibility exists for future oil embargoes and supply disruption that make us more dependent on the Middle East.
In fact, those gentlemen, in their report, said: For the foreseeable future, as long as vehicle transportation is dominated by oil, the greater Middle East and especially Saudi Arabia will remain in the driver's seat.
We have a chart that shows who owns the oil supply and who are the top global oil companies in the world. If one thinks about these companies on the chart, looking at the names, Aramco and various companies, and they look at the countries that basically own these companies, people will see that they are 100-percent owned by those entities. We can see what countries they are. We can see where the supply is.
If Americans look at this chart, then they know that we cannot leave our economic future and our national security for future oil supply in the hands of these governments and these countries. What we need to do is to get off of our overdependence on foreign oil and diversify, and that is specifically what my amendment calls for.
I ask unanimous consent that a letter from the Energy Future Coalition that calls for major new initiatives to curtail U.S. oil consumption be printed in the RECORD.
There being no objection, the material was ordered to be printed in the RECORD, as follows:
ENERGY FUTURE COALITION
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Ms. CANTWELL. Specifically, this coalition believes that domestic biofuel, something that we just debated as part of this energy strategy, can be used to produce a very significant amount of our future energy, and they are calling it an extraordinary opportunity for American leadership for job creation and economic growth.
I think this group of individuals, who are part of a coalition that is interested in our country's national security, are pointing out that this very chart, showing the ownership by foreign entities, is of great concern to our future. I think this letter does adequately call on us to do our job in making sure we are getting off of our foreign dependence.
I believe this underlying legislation gives us the tools to do so. That is especially true if you think about the framework that is in the bill and the debate we just had on biofuels, the 8 billion gallon biofuels goal by 2012. What is great about the biofuels amendment that was adopted and revised from the committee markup is that it includes both ethanol and biodiesel, and specifically ethanol research and development of what are called cellulosic ethanols--biomass-based ethanol materials.
We know we have Midwestern States that are already producing ethanol and giving us a source of supply. But if you take those five Midwestern States and try to transport that product to the Northwest, as we do today--we are selling biofuels and ethanol in a variety of places in Washington State today, but you are adding a 30-cent to 50-cent transportation cost. What the amendment we just adopted does is make sure that various parts of the country can also be in the biofuels business; that we can start producing products in other parts of the country, closer to the source and consumers that are going to use them. So it is a very positive step forward.
The bill also includes clean coal technology, that I know my colleague who is on the floor, the Senator from Tennessee, has worked on so diligently. It includes hydrogen fuel cells, and it includes next generation nuclear power, things I know my colleagues on the other side of the aisle have worked hard to perfect. It includes new research and development, to play a vital role in the commercialization of new technology. It promotes in, a bipartisan way, conservation initiatives. It is exciting to catch a sense of the new technology that will be in this bill to give us more efficiency in our homes and businesses. We will get a lot of savings from these programs and tools.
There are many tools in the underlying bill to achieve the goals we set out for ourselves. We believe this underlying bill has the right technology answers; that is, it has all the various means by which we can get off our foreign oil dependence, but it is simply lacking a goal. That is what my amendment will provide. This legislation should reflect the resolve of the American people, who say that getting off our overdependence on foreign oil is a national priority, and we are going to stick to it.
I know various Members are going to come down here and offer amendments on other issues, issues related to global warming and greenhouse gas emissions. We are going to have proposals regarding a renewable portfolio standard, which would basically mean that our electricity grid would use more renewable energy to provide supply. I think Senator Feinstein is still going to come down and offer her amendment to close the SUV loophole, to try to make SUVs more fuel efficient.
We are going to have a lot of discussion to help improve the bill. But without setting a national goal, without saying our country has to get off our dependence on foreign oil, we will have missed an opportunity. This underlying legislation sets a goal that will actually make us, in 2015, more dependent on foreign oil than we are today. I think we need to set a goal as a legislative body, that we want to reverse that trend. In 2025 we want to actually be importing less foreign oil, and that is exactly what my amendment does.
Why is this so important? First, we all know it is in the economic interest of the United States to diversify off foreign oil. We know our dependence has cost us, since 1970, something like $3.6 trillion. In 2003, imports cost us $10 billion every single month, and our oil imports count for about 34 percent of our existing trade deficit. Think about that, 34 percent of our trade deficit, just because of the cost of oil. In fact, Alan Greenspan has said that the high cost of fuel has basically caused 8 out of the 10 postwar U.S. recessions; they were related to high energy prices and spikes in oil.
We know there is a strong relationship between energy costs to our overall economy. That is what we are trying to change. But a number of factors remain, and that is what is of great concern. Who actually controls those energy costs? We know the OPEC cartel, as well as international events and political events, have an impact. We know the growing demand in China and India for the same supply of oil has an impact. We know we need to do something about it.
If you talk to economists about what is going to happen to the price of oil in the future, the signs are pointing to oil prices could reach $100 a barrel in the next 20 years. If that is the case, that would have a devastating impact on our national economy. Yet that is exactly what we are hearing from them. That is exactly what people are saying. There is a world economic outlook report that was issued this spring by the International Monetary Fund, and that report basically said that oil could spike to $100 a barrel between now and 2030.
The Wall Street firm of Goldman Sachs also predicted that the price of oil could reach $105 in the next few years, and energy markets could easily be in the early stages of a superspike period. I know the United States has been through these periods before, where we have seen extreme spikes in energy costs. It has had a devastating impact on our economy. That is something we are trying to avoid by setting a national goal to diversify away from foreign oil.
We have many economic reasons for this amendment. But as I stated earlier, we also have security reasons. Let me expound on that just a little bit because I think it is important to understand the demand for oil and, basically, who holds the reserves. The oil reserves of every area in the world are in decline except for the Middle East. That means if we continue to be dependent on foreign oil, we are going to be more dependent on OPEC and its member countries. Given that those reserves, let's just say, are constantly under some scrutiny because of the challenges in that region of the world, some analysts, when looking at the oil futures market, basically describe what they call a fear premium. That is, the price of oil futures actually increases because people are concerned that international incidents may happen, terrorist threats and other things, that will damage that oil supply. So the cost of oil futures actually goes up, just on the fear of what might happen.
That is troubling because as we all know, we cannot predict what is going to happen on an international basis. We do our best to protect that oil supply, but Saudi Arabia alone has about a quarter of the world's oil reserves and more than 60 percent of that country's total oil inputs are processed at a single facility. So if you think about it, it is the home to almost all of the world's spare production capacity. Again, we are putting all our eggs in one basket. I am simply saying lets set a national goal to get off that dependence on foreign oil because of this security reason, as well as the economic reason and who owns this supply and how important it is.
I would like to talk for a second about the picture as it relates to other people interested in that oil supply. I mentioned China and India and the projections of the price of oil reaching $100 a barrel. Analysts agree that China, because of its growth and huge demand, is likely to shift the whole center of gravity for energy markets. That is, China has already moved past Japan in its global energy consumption. It is the second largest oil consumer and the third largest oil importer. In the next decade, China is going to continue to grow to about half of today's U.S. combined car and truck total, so they are going to be looking for lots of energy supply. It is expected that their imports are going to double by 2010 and quadruple, to 8 billion barrels of oil a day, by 2025. Imports will be 60 percent of China's total oil consumption.
While we are looking at the picture, already knowing we are overdependent on foreign oil and that the challenges to security are there and that the American economy is already suffering, we also need to recognize there are other nations who are going to be bidding for that same resource.
We need to get off our overdependence on foreign oil. How are we going to do that? First, we have to have the resolve. There are many times in American history this country has shown American resolve. We have put a man on the Moon. We have ushered in the nuclear age. We stood up in the OPEC crisis and got fuel efficiency standards for cars. We ought to have the resolve now. We need to bet on the ingenuity of American brain power to get us off our overdependence on foreign oil. If we are smart enough to put a man on the Moon, we ought to be smart enough to get off our overdependence on foreign oil. When John F. Kennedy made the declaration of wanting to put a man on the Moon in a 10-year period of time, I don't think he had the answer to every single element of how to do that. He left the details up to both the public and private sector in getting new technology developed so we could move forward.
In this case we have an underlying bill that actually can achieve this goal of reversing the trend by 2025 and reducing 40 percent the consumption of the United States of foreign oil. How do we do that? Many people have talked about how we get there. I will show one chart with examples of the oil savings technology in this legislation.
The biofuels amendment we talked about: Many organizations, including some of those security initiative organizations such as Energy Future Coalition and some environmental organizations such as Natural Resources Defense Council, have said biofuels can play a significant role. They could help produce 3.9 billion barrels of alternative fuel a day.
I hope my Midwest colleagues and my colleagues from other parts of the country who are interested in biodiesel and ethanol are excited by that opportunity. It means an economic opportunity for all the regions of our country that can produce those fuels. It also has a higher national purpose, to help us get off our over-dependence on foreign oil.
We can also improve efficiencies in various sectors such as aviation, residential applications, and various modes of transportation. I am very proud the Northwest has figured this out.
At the Paris Air Show we are seeing a lot of news about future planes. One plane you will not see there today but is on the drawing boards and is getting rave reviews from people making purchase orders is the next generation 787. What is great about that is its whole design is based on a more fuel-efficient plane. Boeing estimates it can save between 20 and 30 percent on fuel costs. They figured out the marketplace is going to be very sensitive to the high expense of transportation fuel and have developed a plane to answer the call from the marketplace. What has the marketplace said? The marketplace is responding with over 200 orders for a plane that is not even finished yet. That is a great example of how we can get efficiencies in aviation and other sectors.
This chart explains how we can make a big step forward in energy savings, which are aspects of this legislation. They are very important aspects to look at.
A few of my colleagues who are anxious about this legislation want to know if it is a back door to higher fuel efficiency standards; that somehow this bill mandates CAFE. It does not mandate a higher fuel efficiency standard, although this Member would certainly support a piece of legislation in the Senate that suggested that. This amendment realizes there are hybrid cars in the marketplace that are likely to come onboard. There are estimates that you can increase the efficiency of our economy using hybrids and save up to 2 million barrels a day by 2015. That's just from the growth in the hybrid auto market. That is just American consumers buying hybrid cars and making that investment. It does not have to be CAFE, although I personally think we are losing a huge opportunity in the American marketplace by not being more aggressive about cars that can run on alternative fuels. I say that, mentioning the Boeing experience in aviation.
The aerospace industry in the Northwest is responding to the demand of more fuel-efficient transportation. I wish the auto manufacturers would be more aggressive. Actually, as oil has hit $50 a barrel they have gotten more aggressive. They have gone over to Japan and said, okay, we want a technology deal with the Japanese auto manufacturers; we want to get more of these cars in the United States market. Maybe that will work.
However, this amendment does not assume we are going to have a new CAFE standard. It simply says to the United States, if you are serious about this problem, you will set a national goal to get off our overdependence on foreign oil by 2025 and start reducing the trend. Instead of continually importing more, we should be importing less.
This chart shows the trend we are trying to reverse. Today we are basically importing 13 million barrels a day; if we do nothing, by 2025, we will be importing 19 million barrels. This is the trend we are trying to reverse. This is the direction we did not want to go in. We want to make a change.
Some of my colleagues ask, how can you set this goal? If you are not specific about how you get there, how are we going to achieve it? There is a lot I am sure that President Kennedy thought about when he wanted to put a man on the Moon, and maybe his original projections were not accurate. There is a lot of research and development we are going to do on a variety of these technologies.
One country that has taken this challenge and embraced it is Brazil. It is a country which looked at this same dilemma the United States has, from the economic perspective. They said, we cannot afford to be dependent on the high cost of imported oil. In fact, in the 1970s, Brazil had about 80 percent of its supply from imports. That was a big challenge.
As it exists today, Brazil has, because of its biofuels initiative, changed that trend. In fact, Brazil has gone from 1975 being 80 percent dependent on foreign oil to 1990 being only 45 percent dependent on foreign oil, and in 2006, Brazil actually plans on being an energy self-sufficient country and maybe even being a net exporter of fuel. That is very interesting. As it stands today, they are only importing about 11 percent of their supply.
How do you go from 1975 at 80 percent to 11 percent in 2003? The country took the initiative and said they were going to produce a competitive product to fossil fuel. That competitive product happened to be sugar-based ethanol. They got good at producing sugar-based ethanol. They got so good at producing sugar-based ethanol they actually can produce it and ship it here cheaper than we can produce it today.
I don't like losing the competitive edge to somebody else on the production of an alternative fuel source. I want the United States to be a leader in the production of alternative fuel sources. It holds a lot of promise for the United States.
One might say, well, Brazil is only one-eighth the size of the United States economy and we have much more demand than Brazil. That is true, but Brazil has learned about the efficient production of ethanol. Are we saying somehow the United States does not have the raw material supply for ethanol, whether it is sugar-based ethanol or biomass-based ethanol?
We actually are trying to put the American farmer in the fuel business. If there is anything we ought to be sure we have its agriculture. We know we only sit on 3 percent of the oil reserves in the world, so we know we are not going to get it from there. We are talking about importing liquified natural gas, so we know we are challenged there. But we sure know that the American farmer can produce a lot of product as it relates to ethanol, whether it is sugar based or biomass based, and we can produce a lot as it relates to biodiesel products as well.
That is exactly what this legislation does. It is very specific about the research and development that needs to take place to get us into the alternative fuels business. I am so certain of the well-crafted nature of that section of the bill that I am willing to say that I think we really can achieve our goal of decreasing our energy dependence by 2025. So it is a very positive step for us to look at what we have seen around the globe as far as other countries trying to get toward energy independence or becoming less dependent on foreign oil.
Now, I have another chart that shows examples of what we are trying to reach. This chart basically demonstrates how we can reduce, by 7 million barrels a day, U.S. consumption. It does not have to be the exact mix as shown on the chart of how we achieve that. This is just one of the proposals. You have market growth in hybrid cars; industrial improvements, efficiency improvements in aviation; efficiency gains in trucks and heavy-duty equipment. One of our National Laboratories in the State of Washington, the Pacific Northwest Labs, is doing great research on lightweight trucks, lightweight materials, transportation efficiency, for the trucking industry in our country. Other areas to reduce consumption: how to make the movement of goods and services more efficient, saving transportation costs; the replacement of tires, you can get more fuel efficiency just by having better balance of your tires to get better gas mileage; and there are transportation choices; and biofuels. Again, biofuels is a big opportunity for us.
So I hope all my colleagues are listening who are very supportive of the biofuels section of this legislation--which I hope there are many because I think it is a great opportunity. If you are supportive of that biofuels section of the bill, you ought to be very supportive of setting a goal because you really ought to believe the national goal is achievable. You ought to believe that the economic interest of our country in getting that new production of biofuels is not only an economic and security matter, it is also just plain good job creation for our country. You are putting the American farmer back in business with a product that now will see huge demand.
Now, I do not know if we have it here on the floor, but I took great note that the Economist magazine wrote a piece on biofuels a few weeks ago. In fact, it was a front-page cover story article that week about biofuels. What was interesting about it is that it discussed the fact that we are at this point where biofuels make so much sense because of the price of oil.
Now, several years ago, when we were talking about oil at $20 a barrel and people were talking about biofuels, maybe it did not make much sense, the economics did not make much sense. But we have hit, as Andy Grove would say, an inflection point, and that inflection point is that now we are seeing prices over $50 a barrel for imported oil.
So the article basically says that it is no longer the ``blue sky'' stuff that people talk about, but it is an idea whose time has come. It is a very substantive opportunity for anybody who can produce biofuels because at anywhere around $50 a barrel, instead of $25 a barrel, biofuels can be competitive.
Now, in Washington State, we are selling biodiesel and alternative fuels. A few weeks ago, we had the opening of one of our first biofuels stations. It was actually at the same location as a previous traditional petroleum-based station. So they changed over from serving customers gasoline to now serving biodiesel.
Right now, the product is something that is shipped from the Midwest, refined at a production facility in Seattle, and then sent over to what was this particular station, Laurelhurst Oil. They are producing a biofuel in Seattle, even though the oil is still imported from another state. That biofuel, I think at the time, was about 30 cents more than what you could go around the corner and get to fill your car up with gasoline--30 cents more. And you ask: Well, how are you expecting to be competitive if it is 30 cents more? It was 30 cents more because we had the transportation cost of bringing that agricultural product to the Northwest, having it processed, and then sold. The production facility that is actually producing this biodiesel in Seattle believes it can reduce the cost by 30 cents--they could be selling the biodiesel at the same cost we are buying gasoline per gallon in Seattle--by simply producing the product in the State of Washington.
So that is what this bill allows us to do. I think the Economist was right, that the private sector is starting to respond to this and starting to come up with solutions. So then you say: Well, if the private markets are responding, why do we have to set a national goal? Well, let me address that because as a former businessperson, I understand that businesses are responsive to their customers and they are responsive to their shareholders. I do not blame a national oil company for setting its own agenda on when it wants to get into new energy technologies. That is their prerogative.
You see lots of commercials on TV all the time about how existing fossil fuel companies are going to generate biofuels, how they are going to diversify. They would make you think they are doing that in a rapid fashion. I am not so sure it is rapid enough for the consumers of Washington State, who are paying a very high price for gasoline, have paid a very high price for electricity recently, and are reeling from a hard-hit economy because of high energy costs.
We would like to see a much more aggressive effort. But those companies are not going to set a national goal and they are not going to diversify until it is in their financial interest. So the question is whether this body is going to set a national goal, which I think this underlying bill can achieve, and whether we, as a country, are going to diversify off of that overdependence on foreign oil. It is not their job; it is our job. And we should get about showing the American people that we have the will to do it and that we are betting on American ingenuity to achieve it. I have to believe that putting a man on the Moon is a lot harder than discovering how to be as efficient as the Brazilians are in the development of ethanol. I have to believe that was a tougher challenge.
So I think about the things we have achieved in our country's history. I think about the fact that, in response to the threat of what other countries might be doing with the nuclear bomb in World War II, FDR ushered in the nuclear age in 2 years. He shifted our spending in the development of energy in 2 years from about $8,000 to 86 million dollars and ushered in the nuclear age. Why? Because he saw a threat, and he wanted to set a national goal. We have had these instances where our country has decided it was in our economic interest and our security interest to move ahead. That is what we need to do today.
So I am glad to offer this amendment that simply says that we should take the underlying legislation and change its goal. The underlying bill already has a goal. It says that our goal should be to get off of foreign oil by 2015 by reducing it a million barrels a day.
What we need to do is reduce our oil supply in a much more aggressive fashion. We need to reduce that 40 percent by 2025. That is what my amendment calls for. I am happy to hear from my other colleagues on this issue. I hope that my colleagues will take this issue as an amendment to improve the underlying bill.
The underlying bill has the tools and the framework we need. What we need to do is have the resolve as a country to set a national goal. The private sector is not going to do that. We are not going to have consumers make market choices that don't exist. They want more market choices. What we have to do is set the wheels in motion. The good news is, once the Government sets a goal, it is amazing how many people respond to that.
Our country has set lots of goals. We set goals for more homeland security. I have seen more security technology companies come through my office in the last 2 years than imaginable. Why? Because we said we want more homeland security. So we have every imaginable aspect of homeland security being addressed by thousands of companies across America.
If we want to be serious about getting off our overdependence on foreign oil, we will pass this amendment, and we will be on the track for setting a goal that both the private sector and public sector will respond to. I think with that we will be able to say to Americans that we are on the right track, that we are not going to let consumers continue to pay high transportation costs, and that we have a plan for the future. We are not going to continue to be so singularly dependent on the fossil fuel industry. We are not going to continue to have transportation-sensitive industries caught in a stranglehold by high energy costs. We are going to say to them instead that our national security interests, our economic interests, our environmental interests are being met by a new national goal that all of us will participate in making a reality.
Mr. DURBIN. Will the Senator yield for a question?
Ms. CANTWELL. I yield to the Senator from Illinois.
Mr. DURBIN. I thank the Senator for her leadership. The amendment she is proposing--and we hope will be embraced by both sides of the aisle--will set a goal to reduce our dependence on foreign oil. I can't think of a single person in America who wouldn't agree with that goal. We can all understand that as we wait every day for a press release from the OPEC nations to try to determine whether or not the price of gasoline is going to go up or down. This proud, strong, leading nation in the world goes hat in hand to the Saudi peninsula looking for oil. We wait for them to determine what the price will be. It affects every individual and family and business and airline, right down the line.
Is it not true that the bill before us, S. 10, has a goal of reducing dependence on foreign oil over the next 10 years by 1 million barrels a day, which is not as ambitious or as far reaching as the goal of reducing dependence on foreign oil by 40 percent over 20 years? Is it not also true that the President sent a letter to Congress yesterday and said if we include this provision--the weaker provision that is already in the bill--reducing the barrels of oil by 1 million a day over 10 years, the President will veto the bill? Is that the message that we have received from the Bush White House about our goal in reducing dependence on foreign oil?
Ms. CANTWELL. The Senator is correct. In the underlying bill, we have language that says we should reduce our dependence on foreign oil by 1 million barrels a day by 2015. The problem with that goal is, when you are currently importing 58 percent of your oil supply from foreign sources and you calculate in the growth of demand--obviously, our economy continues to grow--there is demand for more oil. Even with that amendment, in 10 years, in 2015, we will be importing 60 to 62 percent of what our Nation consumes in oil supply from foreign sources. So the underlying amendment does nothing to stop this trend. In fact, we will continue to be more dependent on foreign oil.
I know the White House has sent some communication to Senators saying they oppose even that milestone in the bill which does attempt to try to reduce oil consumption. But the provision in the bill doesn't take into effect the fact that the economy grows. I guess it is saying: We don't want to have any goal to actually try to decrease the amount of foreign oil coming into this country.
I want to have a goal for decreasing the amount of foreign oil coming into this country. I want to reverse the trend. I want to go from what we are expected to have, 68 percent in 2025, and say, let's switch that down towards 50. Let's get to 56 percent. Let's start doing as the Brazilians did, which is an amazing story, if you think about it. Here is a nation that basically went from 80 percent, now, today to 11 percent, and is on the verge of becoming an exporter. When you think about the economic opportunities our country has in actually being an exporter of new energy efficiency technology, it is a great opportunity.
The Senator is right that the administration opposes any goal setting in this bill. Why would somebody oppose goal setting? All the tools are here in this legislation. I am not saying which technology is going to win. Basically, our amendment is technology agnostic. It doesn't say: You are going to have CAFE; you are going to have nuclear power.
A lot of my colleagues are betting on nuclear power. There is new language in here for new nuclear technology. A lot of people think it will provide us hydrogen sources, and we will have hydrogen fuel cells. We will move to having a more fuel-efficient economy that way.
I am not being prescriptive because 2025 is a long time from now. But I know if we look at specifics, we can get there through these various means, but we won't get there without a goal.
Mr. DURBIN. If the Senator will yield for a further question, we can't pick up a news magazine or a newspaper in America without reading about the growth of the Chinese economy. They are expanding at the expense of many other countries, including the United States.
We have lost hundreds of thousands of manufacturing jobs over the last 4 years to China as their economy is exploding in size. Many of the companies in China that are growing are American companies. The fact is, China is expanding its economy dramatically. It is no longer a backward Communist nation. It is a full-fledged world competitor, and many believe that China and India will be our competitors in the next 50 years for jobs and economic growth.
Is it not also true that China has one problem it has to face, and that is the fact that within the borders, as huge as China is, they don't have a lot of energy resources. So to keep this economy moving forward, they need to import energy into China, which means in the years to come, we will see more and more competition for foreign oil, not just the United States versus the rest of the world, but the United States versus China and the rest of the world, which means oil for $50 per barrel, which has now raised our price at the pump, may go to $100 per barrel.
I ask the Senator from Washington, setting this goal of reducing our dependence on foreign oil through conservation techniques, through alternative fuels, through finding environmentally sensitive resources that we can use, is that not looking forward to the kind of global competition we are going to face and accepting the reality that if we don't do this as a nation, we will find ourselves losing out from a security viewpoint as well as global competition with nations such as China?
Ms. CANTWELL. The Senator from Illinois brings up an important question, which is with China's interest in global oil supply and the demand, is it going to drive up the price. I don't think an oil company really cares whether the price of oil is driven up or not. What do they care?
Somebody is going to pay them, whether it is $50, $55, $60, $80, or $100. With an increase in demand, that is good news for them. Oil supply costs just go up. They reap the benefits; they reap the profit. But what it is not good for is the American economy.
So the Senator is absolutely right, China's entrance into the demand for foreign oil should be seen by this country as an economic and security risk. China's consumption and growth rate is staggering. China is going to be consuming I think I said 8 million barrels of imports. They have already overtaken Japan, and they are fast on our heels to catch up to our consumption, and they will get to a point where they are the 800-pound gorilla in the dynamics of world oil supply.
Even our underlying bill says you can try to ramp up different sources of U.S. production. But we all know with the United States being situated on 3 percent of the world's oil reserves, it is not a likely scenario for us in the United States to be able to drill our way to energy security. So the Senator is right, China is a unique concern in this. We ought to take that, along with the other national security factors, and the fact that the oil supply is located primarily in these Middle Eastern countries--if we can put the chart back up there. If you look at where the supply is already, the countries and state ownership, that is already worrisome enough. Now, when you throw into the equation that China is going to be demanding more supply from these entities, it is going to lead to a higher price. I am not sure any of these countries are worried about the U.S. consumer and what they have to pay for transportation costs. I don't think they are responsive to the needs of U.S. consumers. The United States might be responsive to our own consumers if we were the owner of these companies, but we are not.
So this is about setting a national goal that recognizes the hardship the American economy is going to encounter, and that we are going to be under in the future if we continue to pay these prices. We might, in 10 years, be happy we were talking about $50 a barrel prices, if some of the expectations of Wall Street come to pass--the predictions that we could see superspikes and get to $100 a barrel. We are already feeling the pain now. Americans are losing jobs, pensions, like the pensions of transportation workers, where there are issues because of high fuel costs; and people are curtailing economic activity because of high transportation costs. We ought to take the Chinese part of the equation and realize this goal needs to be set and we need to make it a reality, just as we did to reach the goal of putting a man on the Moon.
My colleague from Tennessee is also on the floor. I want to give him an opportunity to add whatever comments he wants to add about this.
AMENDMENT NO. 784
Ms. CANTWELL. Mr. President, I call up my amendment at the desk and ask for its immediate consideration.
The PRESIDING OFFICER. The clerk will report.
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Ms. CANTWELL. Mr. President, I thank the Senator from Tennessee for his comments and for his diligence in following energy policy both on the committee and on the floor. I know he cares greatly about this issue and has spent many hours on the details in various sections of this legislation. I appreciate his interest and unique focus on clean coal technology. He has great interest and knowledge about clean coal technology, and has articulated his views about that numerous times.
I know my colleague from North Dakota is here so I want to give him an opportunity to talk, but I want to respond. The 7 million barrels reduction is an achievable goal. If you believe in the underlying technology the Senator from Tennessee just discussed, which is the various ways we can get to that goal, he and I are in agreement. Where we seem to be in a disagreement is whether we want to set this goal. I believe the American people deserve to have a goal set that is achievable.
The underlying bill that says in 2015 we will be more dependent on foreign oil than we are today doesn't seem the goal we should be putting forth. While the committee passed that out of committee, we knew we were going to come out here and discuss a variety of issues. Now that we have the perspective of the entire bill with a lot of different technology solutions, I would say it is time for the Senate to be more bold about this.
I commend to my colleagues this report, ``Securing America; Solving Our Oil Dependence Through Innovation.'' There are two different organizations, the NRDC and the IAGCS, that basically outline in their report how we can save close to 7 billion barrels of oil per day.
We have a submittal to the RECORD from the Committee on the Present Danger, on our oil security. It, too, talks about how we can achieve this goal and what some of the sources are.
I ask unanimous consent to have that printed in the RECORD.
There being no objection, the material was ordered to be printed in the RECORD, as follows:
A Committee on the Present Danger Policy Paper: Oil and Security
(By George P. Shultz and R. James Woolsey)
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Ms. CANTWELL. There are lots of third parties saying we can achieve this goal. I want to bet on the American ingenuity that is outlined in this bill, and other American ingenuity, that we can achieve what it takes to get there. So I am not afraid of setting this goal. I am glad third parties are validating that we can achieve it.
My colleague wants to say this is about putting a man on Mars or something of that nature. I can tell you, the American people are right here on planet Earth and paying $2.36 or close to it for gasoline in Seattle, and that is too high. What Americans want is relief. What they know they will not get is relief from language that says we are going to be more dependent in 2015 than we are today. They want us to set a goal to get off that overdependence because, frankly, there is not true competition on oil prices. That is to say when Americans have no alternative fuel at the pump and they have to pay that price, there is no true competition. So Americans want to get off that overdependence. That is what the amendment says and that is what we want to achieve by 2025, 20 years from now.
With all the myriad technology in the legislation and all the technology we can create between now and then, let's reverse the trend and be less dependent on foreign oil in 2025 than we are today. That seems to be a national goal on which everyone in this body ought to be able to agree. We should not be afraid of the underlying bill and the great work that has been done by my colleagues. I cannot say who the ultimate winners and losers will be. My colleague has spoken about new nuclear technology, he has talked about natural gas--there will be many ways. But I know if we set this goal and tell the American people they are not going to be strangled by high energy costs moving forward maybe up to $100 a barrel, then we will actually achieve that goal. But our underlying language right now does not get us there. So I hope we will embrace the bipartisan effort that the Senate committee had and work together on this to set a goal we will be proud of, in the sense of reversing the trend so we are not in 2015 being more dependent on foreign oil, but in 2025 being less dependent on foreign oil.
I yield the floor to the Senator from North Dakota.
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Ms. CANTWELL. Mr. President, I thank the Senator from North Dakota for his comments. I wish I could take credit for the bold idea in the sense that I am happy to be the sponsor of this amendment, but there are many people in America who have been talking about this as an idea.
I submit for the record another organization that has supported a blueprint for U.S. energy security, the Set America Free Organization, which is a collective organization of individuals, and they actually submit information that would be much bolder than a proposal to set a goal in number of barrels that could be saved by 2025.
There are a lot of people out there who have their sights set even more dramatically than what we are talking about.
Clearly, my colleague outlined that we are talking about something that is technologically agnostic. We are not declaring what technology is going to win. There are lots of great solutions that are provided in this bill. But I would like to remind my colleagues that today at 2 p.m., the price of oil per barrel was up to $56.50. So that is what we are dealing with, $56.50.
I know my colleagues in the Chamber were involved in getting the original language of 1 million reduction by 2025. I think that language first emerged when the Senate was considering previous Energy bills 2 years ago. At the time we originally started thinking about this goal of how to get off our foreign oil dependence or to reduce it, we were talking about oil prices that were much lower, maybe as low as $23 a barrel. Now we are looking at $56 a barrel. It is imperative that we be more aggressive by setting this goal and by working together to achieve it.
The underlying bill is a testament to bipartisan work in saying that there are a variety of ways to reach the goal. Some may ask: Senator CANTWELL, why do you want to set this goal? You might actually find the United States pursuing more domestic oil supply as a result of this goal.
I can't say what is going to happen. I just know I want to get off the foreign dependence that we are at today because our economy cannot continue to take that risk. With the concentration of oil supply in the Middle East, we are one mishap away from having our economy face a $100-a-barrel oil cost in the future. We cannot afford $56 a barrel. Some people say: Well, economies adjust to the high cost. I guarantee, in the meantime, a lot of people are going to suffer. There is not a week that goes by that I am not on a plane flying back to the west coast, to my home State of Washington, and a transportation worker doesn't come up to talk to me about their pension, the fact that they are laid off, the fact that they are losing their job because transportation fuel costs in aviation have not been passed on to the consumer. Consequently, it is being taken out on pensions. So there isn't a week that goes by where I don't see somebody who hasn't suffered from the high cost already, at $56 a barrel.
We cannot continue this dependency or the race we are going to be in with China on competing for a limited supply.
I am confident enough in American ingenuity that I am not even going to be prescriptive about how we get there as it relates to whether it is nuclear, another supply of oil, biofuels, what is going to win the day. I showed a chart because I am a big advocate of biofuels. If you can buy biofuels in Seattle now in the $2.60 range, $2.70 range, I know that we can create more incentive, as we are in this bill, more research and development to get that cost down. So I know I can get it competitive to what I think gasoline prices are going to be. I want to do that. I am gung-ho about that.
I am gung-ho about what the Brazilians have done because they have turned their economy around by becoming almost net exporters of energy instead of net importers. That is an incredible story the United States should learn from.
As my colleague from North Dakota said, there are many different technologies in the bill, but other countries are starting to gain the advantage. If we think about it, we are not the experts on fuel efficiency that the Japanese are. We are not the experts on wind energy that some of the Scandinavian countries are. We are not the experts on the production of sugar-based ethanol that the Brazilians are. It bothers me that we are losing the technology edge to other countries.
I certainly am willing to take the risk of setting a goal of 2025 in reducing our foreign oil consumption by 40 percent and saying all the options are on the table. I believe that Senator DOMENICI and Senator BINGAMAN did a good job of putting all those options on the table. I believe in the underlying bill. What I think we should reflect on is that the underlying bill includes language from a couple of years ago that may not be bold enough in the sense that if it doesn't reduce our dependence on foreign oil in 2015, we will be more dependent.
We should reflect on that and see if we can get to a point where we are endorsing the underlying solutions in this bill and setting a higher goal so that we can say to the American people, we are reversing this trend.
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Ms. CANTWELL. Mr. President, I ask unanimous consent that a letter from Set America Free be printed in the RECORD.
There being no objection, the material was ordered to be printed in the RECORD, as follows:
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Ms. CANTWELL. Thank you, Mr. President.
Mr. President, I thank the Senator from Louisiana for her comments and for her focus on the fact that the amendment is basically agnostic about where we get future supply. You can get it from more domestic production of oil or natural gas. I have been a big supporter of more natural gas production, particularly from Alaska, because I think it is so important to our country moving ahead.
I appreciate her chart showing what States are involved in energy production because we in Washington State are getting 70 percent of our electricity from a hydro system. She mentioned, yes, you can get energy from damming rivers. Well, that is exactly what we have done in the State of Washington and many parts of the Northwest. It has cost our environment, but yet we get 70 percent of our power from that.
We have one nuclear powerplant in our State. We have one coal plant in our State. We have a few natural gas-fired plants in our State. We have four major refineries that take crude oil and convert it to petroleum products, such as gasoline, jet fuel, diesel, and asphalt. So we in Washington State are involved in all those activities.
The fact is, we do not have significant oil and natural gas off the coast of Washington. I know that is something that is being discussed. But the Minerals Management Service Report that was conducted basically says there is not a lot of natural gas off the coast of Washington. So I am not in the same position as the Senator from Louisiana.
I think you have to take into consideration in this debate what some of my staff call the ``accidents of geology;'' that is, that Saudi Arabia happens to sit on 25 percent of the world's oil reserves, and we in the United States only sit on 3 percent. That is a fact of geology.
So the fact that Louisiana has oil and gas and Washington does not is another fact of geology. But I tell you that we do play our role in Washington State. We help keep the lights on in California. We were forced to do so by emergency order by the U.S. Government during a drought, at a cost to ratepayers in Washington State. So we do play our part in providing energy supplies around the region.
But this is an issue about regional diversity and about getting off our overdependence on foreign oil. I think the Senator correctly articulated what this amendment does; and that is, it basically sets a goal and says it is most important to get off the foreign dependence, to start reducing it. I appreciate that because she came up with the original language and I think is concerned that we do set goals. So I appreciate her comments.
I would like to add to the record, if I could--I know my colleagues from Colorado and Illinois are on the floor and want to speak. But we have had questions about whether we can get a supply of biofuels. I know a lot of my Midwestern colleagues believe in the biofuel section of this bill.
Mr. President, I ask unanimous consent to have printed in the RECORD the Executive Summary of the USDA and Department of Energy report entitled ``Biomass as Feedstock for a Bioenergy and Bioproducts Industry: The Technical Feasibility of a Billion-Ton Annual Supply.''
There being no objection, the material was ordered to be printed in the Record, as follows:
Biomass as Feedstock for a Bioenergy and Bioproducts Industry: The Technical Feasibility of a Billion-Ton Annual Supply
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Ms. CANTWELL. The reason I am asking to do that is because this report, which was done by the Oak Ridge National Laboratory, the Tennessee research facility that is part of our national lab system, has said we currently have enough forestland and agriculture land in our country to produce biofuels to meet more than one-third of our current transportation demand. We are already doing research at these labs. They are already calculating the numbers. They are already saying we have enough forestland and timberland in our country to produce one-third of our current demand for transportation fuels. So I think this report is very telling that we can and are on our way. It is a matter of us setting the goal.
I know my colleagues talked earlier a lot about CAFE standards. One of the charts that was presented was supposedly information from the Energy Information Administration about CAFE standards. The Energy Information Administration does not have any idea where those numbers came from, and they understand this amendment does not say anything about CAFE standards. It says basically we ought to set a national goal.
It is important to set the national goal to get off our overdependence of foreign oil because this is who owns the foreign oil. These are the state-owned facilities. These are the countries: Saudi Arabia, Iran, Iraq, Kuwait, Venezuela, Libya. These are the places that have the majority of the world's oil reserves. So our policies for the future are going to be subject to factors involving these countries, so long as we are so dependent on foreign oil.
Now, it is in our economic and security interests to diversify. I think the underlying bill gives us lots of tools to do that, but it does not set a goal to reduce the amount we are dependent on foreign oil.
My amendment would say, let's reduce the amount so that in future years we actually have a reduction--not the 58 percent we are importing today, and not the 68 percent of foreign fuel we are going to import in 25 years, but actually reduce that down to 56 percent so that the trend line is going in the other direction. Let's become less dependent on foreign oil than we are today. That is the goal of my amendment.
I appreciate that my colleagues from Colorado and Illinois are also here to speak on that, so I yield to the Senator from Colorado.
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