Energy Policy Act of 2003

Ms. MURKOWSKI. Mr. President, I come to the floor at this late hour to express my strong support for Senate passage of a comprehensive energy bill. This bill is an important first step in increasing the energy security of the United States. It has been a long time in coming, but we welcome this action by the Senate tonight.

From the jaws of defeat come some of the sweetest victories, and I want to commend our leadership for getting this done, really to the surprise of many pundits and experts around DC who said it could never get done this week, much less by the end of this year. We should also acknowledge the willingness of the other side to reach accommodation on this important bill.

Every where I go people talk to me about natural gas—back home in Alaska, in Seattle, or here in Washington, DC. Everyone, from the President of the United States to Federal Reserve Chairman Alan Greenspan to the farmers of Iowa, know that we face serious problems in our natural gas supply.

With passage of this bill the Senate is telling consumers, farmers and natural gas dependent industries that help is on the way. That is good for American jobs, good for our families and their pocket books and good for the economy. The provisions contained in this bill will truly help us get the all important Alaska natural gas pipeline moving forward.

Experts predict that the U.S. will face a 20 billion cubic foot per day shortage of gas by the year 2020. In Alaska we have 35 trillion cubic feet of gas in Prudhoe Bay that has already been found, and we expect more than 100 trillion additional cubic feet to be found on the North Slope with relatively little effort. Alaska's natural gas can help close more than 25 percent of the expected 2020 gap, but we need to assure the markets that some of the risk associated with this project can be mitigated. If we can get it built it will be one of the largest privately financed projects in the history of the planet. It will employ over 400,000 people nationwide, with thousands of new jobs being created in my State of Alaska. Nationally the creation of 400,000 new jobs could reduce our unemployment rate by a whopping ½ of a percentage point. That is a huge shift from just one project. And it will mean a stable supply of gas for America for years to come. No other project I know can have that kind of positive impact on America—from either a gas supply, energy security or job creation perspective. It is imperative that we get this project moving now.

I would note that the Senate bill reported by the Energy Committee this year, and the accompanying tax provisions reported out of the Finance Committee this year, called for a marginal well credit that would have capped tax credits for the production of Alaska gas at 52 cents per thousand cubic feet of gas, should the price fall below $1.35 at the wellhead.

It also contained a loan guarantee for up to $18 billion of the project's cost and an accelerated depreciation provision.

The bill we are passing tonight reverts to last year's proposal that provides a gas line tax incentive to producers if the price of natural gas falls below $3.25 per thousand cubic feet delivered to the AECO hub in Canada. Producers, however, will have to pay the credit back in full whenever the price of gas exceeds $4.85 per unit.

The provision accepted by the Senate also includes a loan guarantee where the government helps to underwrite some $8 billion of the first $10 billion of the cost of the line, in the event that unexpected energy price drops occur.

It includes all the other provisions that passed the Senate last year, including: a prohibition against a northern route, guaranteeing the gas line will follow the Alaska Highway south through the Railbelt and Yukon to reach the Lower 48 States; a streamlined permitting and expedited court review process to speed construction; Provisions that allow Alaska to control gas to facilitate use for heating or construction of petrochemical plants in State; a guarantee that the gas line will accommodate an LNG plant to be developed at tidewater in Alaska whenever exports markets for the gas appear; provisions to guarantee that new gas producers in Alaska will be able to get their gas to market; and a provision that authorizes $20 million for worker job training and promotes Alaska-hire provisions in State.

The bill also includes a proposal that will provide up to $120 million in grant aid yearly for rural electric improvements in high-cost areas. These grants can go for power plants or to reduce power demands by other utilities.

The bill also includes a $35 million grant ($5 million per year for seven years) to Alaska to help fund its Rural Power Cost Equalization (PCE) program that subsidizes the high cost of electricity in rural Alaska.

The bill authorizes the Department of Energy to make a loan of up to $125 million to retrofit the Healy clean coal plant with new technology so it can produce power economically without causing air pollution problems. The loan should make the plant economic, provide vitally needed power to the Fairbanks area at reasonable cost and aid the Usibelli coal mine and its workers.

The bill includes a tax incentive equal to $3 per barrel to produce heavy oil from northern Alaska or to produce low-pollutant synthetic fuels from coal. The same provision also provides a tax credit to fuels produced before 2007 from biomass, tar sands, or brine. For heavy oil, Alaska's West Sak field contains 15 billion barrels of known heavy oil. The incentive should help make an additional 200 million barrels of production economic over the next decade.

This legislation reauthorizes the Arctic Science Research Act of 1984 and expands its power to make grants for scientific research.

Thankfully the bill also makes it a federal crime to damage any intra-state energy pipeline. The amendment specifically provides extra legal protection to the trans-Alaska oil pipeline.

This package contains language originally proposed by Senator TED STEVENS with Senator BYRD for the Barrow Arctic Research Center to support climate change research and scientific activities. The amendment includes $35 million for planning, design, support and construction of the Barrow facility. The goal is to develop technologies needed to reduce greenhouse gas emissions.

I am pleased the bill also contains the following important provisions: Tax credits for hybrid and fuel-cell vehicles; tax credits for alternative and renewable fuels use and development; tax credits for marginal oil producers to protect oil production from stripper wells; extra funding for the Low Income Home Heating Program (LIHEAP) and for low-income weatherization grants; funding for an Advanced Clean Coal Technology program; funding for a hydrogen energy act; provisions to increase the use of ethanol in clean burning gasoline; reauthorization of hydroelectric dam licensing provisions; reauthorization of the Price Anderson Act to permit nuclear power to continue; provisions on electricity restructuring; and provisions to require a sensible increase in automobile fuel efficiency standards.

Using last year's bill was the quickest way to get the bill off the Senate floor so that details of a final package could be worked out in a conference committee with the House. Without this action today it was unlikely we would have seen positive movement until the late fall. Now we can move forward quickly for America and Alaska.

I want to assure Alaskans that I will work to include in the conference report on this bill the provisions I secured during this year's debate in the Energy Committee. With those changes this bill will help us to address our energy problems even more.

I thank the fine Chairman of the Energy Committee for his effort and leadership and I applaud the work of both Leaders to get this bill done before the August recess.