Veterans' Benefits Enhancement Act--Motion To Proceed--Continued

Floor Speech

VETERANS' BENEFITS ENHANCEMENT ACT--MOTION TO PROCEED--Continued -- (Senate - April 22, 2008)

BREAK IN TRANSCRIPT

HIGH ENERGY PRICES

Ms. COLLINS. Mr. President, our Nation faces record high energy prices, affecting almost every aspect of daily life. The price of gasoline, home heating oil, and diesel is creating tremendous hardships for American families, for truckdrivers, and for small businesses. High energy prices are a major cause of the current economic downturn.

It is clear we need a dramatic change in our energy policy to protect ourselves from rapid increases in oil prices, without sacrificing our environment for future generations. We must rally around a national effort to achieve energy independence for our economic, environmental, and national security.

I have recommended that we establish a national goal of energy independence by the year 2020. I don't know if we can get all the way to energy independence by that year, but I do know if we do not establish a goal, if we do not strive to achieve energy independence by a date certain, we will never get there. I believe that had our country embraced this goal in the 1970s, when we were reacting to the embargo, we would be nearly at energy independence right now.

I am proposing today a 10-point plan to get us started on this important effort. It is a plan that includes both actions that we can take in the short run to help mitigate the impact of high prices, as well as actions to achieve energy independence in the long term.

Many causes appear to be responsible for the skyrocketing increase in oil prices: the timing of Government purchases for the Strategic Petroleum Reserve; speculative trading on futures markets; increased global demand for crude oil; instability in the Middle East, Mexico, and Venezuela; supply decisions of the OPEC cartel; insufficient U.S. refining capacity; and the declining value of the dollar.

We will always use oil for part of our energy needs, but we need to decrease our reliance on foreign oil and be smarter about managing our supplies. It is appropriate that Senator Levin is in the chair as I discuss the first step that I believe we should take right now to help curb the increase in oil prices.

The administration's decision to fill the Strategic Petroleum Reserve when oil prices are at all-time highs defies common sense. As the Presiding Officer is well aware, the Strategic Petroleum Reserve is an emergency stockpile of oil that already contains some 700 million barrels. In 2005, the Presiding Officer, Senator Carl Levin of Michigan, and I joined forces on a bipartisan amendment that directed the Department of Energy to better manage the Strategic Petroleum Reserve by requiring the Department to avoid purchases when prices are high.

There are two reasons why that should be done. First, the Federal Government should not be removing oil from the marketplace at a time when there is a lot of pressure on supplies, as there is right now.

Second, it makes absolutely no sense for the Department of Energy to be buying oil at the height of the market. That is a bad deal for us as taxpayers. Unfortunately, I don't believe the Department of Energy is abiding by the Levin-Collins law. We questioned the Department at a recent hearing before the Permanent Subcommittee on Investigations, and there was no indication that the kind of analysis the law requires is being done. So I have called upon the President to stop filling the reserve until prices drop. It simply does not make sense for the administration to be making purchases right now.

The Energy Information Administration has estimated that the impact on gas prices of these purchases for the Strategic Petroleum Reserve is between 4 and 5 cents a gallon. Other experts believe it is considerably higher than that. At the hearing I mentioned, one energy expert said:

DOE's actions added between 5 and 20 percent to the price of oil.

The Department of Energy should stop purchasing oil for the Strategic Petroleum Reserve, and it should stop immediately. There is simply no compelling homeland security or national security reason for these purchases to be made now.

No. 2, we need to extend Federal regulation to the oil futures markets. Excessive speculation on futures markets is likely another factor pushing up oil prices. Unfortunately, there is a lack of publicly available data to track the effect of speculation on prices, and manipulation can go undetected on certain electronic markets that are unregulated. Experts testifying before our Investigations Subcommittee all agreed that greater transparency and better reporting of trades could help prevent abuses such as were documented in the natural gas markets in 2006. One of the experts testified that he believed the current high oil prices are inflated by as much as 100 percent--driven by excessive speculation. Other experts think it is not that high. But shouldn't we know and the Commodity Futures Trading Commission, which oversees the trading of agricultural commodities on the futures markets and also oversees the regulation of the energy futures markets as well? That would not prevent these markets from performing their important risk-hedging functions, but it would allow regulators to spot and act quickly upon evidence of deliberate attempts to distort prices and excessive speculation.

No. 3, we should curtail the tax breaks for major oil industry companies and, instead, redirect those funds to consumers and to alternative energy.

With net profits of a single oil company reaching almost $10 billion in a single quarter, we simply should not expect taxpayers who are struggling to pay their energy bills to continue to subsidize the oil industry. Congress should act to repeal the needless tax breaks for big oil companies and instead use those billions of dollars to fund the remaining proposals that will move us toward energy independence.

During consideration of this year's budget resolution, the Senator from Michigan and I joined forces again to provide for the rescission of needless tax breaks for major oil companies. Our proposal would redirect the revenue to support renewable energy and energy efficiency initiatives. Our amendment was accepted as part of the Senate budget resolution. We need to build on that momentum and quickly take up legislation to enact this proposal once and for all.

The fourth step we can take in the short-term: One program with an immediate impact is the Low-Income Home Energy Assistance Program, better known as the LIHEAP program. It is the Federal grant program that provides vital funding to help our low-income and elderly citizens meet their home energy needs. Nationwide, over the last 4 years, the number of households receiving assistance under this program increased by 26 percent, but during that period, Federal funding increased by only 10 percent. So the obvious result is that, at a time of record high prices, the average benefit under the LIHEAP program actually dropped.

We need to fully fund this program. I tell my colleagues that while it is a glorious spring here in Washington, Maine and many other States are still struggling with temperatures that drop into the thirties at night. We need to fully fund the LIHEAP program at the authorized level of $5.1 billion. And for the long term, we should also restructure this program to make it more flexible so that States can take a reasonable approach to low-income energy issues and better balance energy bill assistance so we can provide some grants to winterize the homes of those who qualify for low-income heating assistance.

No. 5--and now I am getting into the long-term aspects of this plan--we need to improve energy efficiency.

Let me discuss the six steps toward the goal of energy independence. First is to make more efficient use of the energy to heat and power our homes, our offices, and our buildings.

I have introduced a comprehensive energy bill that would double funding for the Department of Energy's weatherization program. On average, weatherizing a home reduces heating bills by 31 percent, and overall energy bills by $358 per year.

The legislation would also provide predictable funding for the valuable Energy Star Program, which helps consumers buy energy-efficient appliances. It would extend the renewable energy tax credit through 2011 and the residential investment tax credit for solar and energy-efficient buildings through 2012.

It also includes an energy efficiency performance standard for utilities that would help them improve their efficiency. According to the Alliance to Save Energy, an energy efficient performance standard for utilities could save consumers $64 billion and avoid the need to build 400 powerplants, preventing 320 million metric tons of carbon dioxide emissions. Making buildings, appliances, and utilities more energy efficient would dramatically reduce our use of oil and save money for consumers at the same time.

No. 6, we need to implement a renewable electricity standard. Another component in my 10-point energy plan would revamp the way we produce electricity in this country. We need a national renewable electricity standard that would require the utilities to generate at least 15 percent of their electricity from environmentally sound, renewable energy sources by the year 2020. This would move us away from a reliance on coal and natural gas for electricity and diversify our energy supply to provide more price stability.

(Mr. Sanders assumed the Chair.)

Ms. COLLINS. There are 28 States, including Maine, that already have a renewable electricity standard. We should follow their lead and establish a national renewable electricity standard.

I do wish to say, in enacting a standard, we need to make sure the benefits of renewable electricity reach rural areas, and that means building adequate transmission capabilities.

I know the new Presiding Officer, the Senator from Vermont, is also very committed to this goal.

No. 7, we should invest in cellulosic ethanol and renewable fuels. I want to distinguish between cellulosic ethanol versus corn-based ethanol. We have oversubsidized corn-based ethanol. It is causing tremendous distortions. It is causing shortages in food supplies. It is driving up the cost.

I have talked with a baker in Lewiston, ME, who cannot buy rye flour anymore because it has been displaced by farmers switching to grow corn. That is not what I am talking about. I am talking about the very promising development of cellulosic ethanol which could be made, for example, from switchgrass and from wood chips, waste wood, for example. That is why I am proposing to expand tax credits for cellulosic biomass. At the same time, those fuels have a much smaller life cycle environmental footprint than does corn-based ethanol and traditional fuels.

We can do so much in this area. I am proud researchers at the University of Maine have been at the forefront of developing commercially viable technologies to produce ethanol from cellulosic sources.

In addition to cellulosic ethanol, my 10-point energy plan calls for the expansion of other sources of clean renewable energy. During the height of the oil crisis in the 1970s, many Maine families turned to wood as an affordable way to heat their homes. With oil prices soaring, wood is once again the fuel of choice for an increasing number of consumers.

Unfortunately, many of the wood stoves that were purchased three decades ago are outdated, they are inefficient, they waste fuel, and they contribute to air pollution. The good news is the new style wood stoves emit 70 percent fewer emissions, and they produce as much energy with 30 percent less wood. This is a real breakthrough that allows consumers to get more energy out of their wood stoves and also to reduce the air pollution from wood stoves. In fact, I saw a demonstration where you could not see any emissions at all coming from these new clean-burning wood stoves because there is a second burn of the emissions so they are far more efficient.

Unfortunately, making that change from an old dirty, inefficient wood stove to a modern, clean, and safer wood stove or a wood pellet stove is expensive. That is especially difficult for many families today. That is why I have introduced legislation to provide a tax credit so consumers can afford to trade in to these better wood stoves, and I am delighted the authors of the housing bill we recently passed agreed to include, at my behest and at the urging of others, a $300 tax credit for consumers who purchase these new clean-burning wood or pellet stoves.

Wood is a renewable resource and its increased use for home heating is inevitable in these times of high oil prices. We now have the technology that makes their use better for the environment and for human health, as well as safer and more affordable.

No. 8, we need to promote tidal, geothermal, solar, and wind energy. Other clean renewable energy sources include the tide in our oceans and the moderate temperatures that can be tapped under our land.

The U.S. wave and tidal energy resource potential that could reasonably be harnessed is about 10 percent of national energy demands. We have to put all these sources together and look at the broader comprehensive picture.

Once again, I am very proud that a consortium of the University of Maine, the Maine Maritime Academy, and industry is poised to become a key test bed for improved tidal energy devices.

It still is more costly than traditional electricity production, and that is why we need to provide some tax incentives to spur this kind of alternative development in tidal, geothermal, solar, and wood energy.

No. 9, we need to improve vehicle efficiency and alternatives to gasoline. We must provide more efficient transportation options. Last year, we took a giant step forward because Congress enacted, and the President signed into law, a long overdue increase in fuel economy standards for automobiles, SUVs, and light trucks that will save a million barrels of oil a day. That is a great start, but we can do even more.

The amount of gasoline used in transportation amounts to 9.2 million barrels of oil a day. That is almost half our national consumption of 20 million barrels of oil each day. Currently, we import about 12 million barrels of oil a day. So if we reduce the consumption of oil products for transportation purposes, it goes a long way toward reducing our reliance on foreign oil and decreasing overall energy prices, or at least stabilizing them for consumers.

Flex-fuel vehicles and plug-in hybrid vehicles can help us meet the challenge of energy independence and lower prices. We should extend the existing tax credits for alternative fuel vehicles and consider providing a tax credit for consumers who modify their existing vehicles to be flex-fuel capable.

We need to put more money into research, into plug-in hybrid vehicles, and expand the tax credits in that area as well.

Plug-in hybrids hold great promise. If all the new vehicles that are added to the American fleet for the next 10 years were plug-in hybrids, an additional 80 billion gallons of gasoline could be saved each year. That translates into almost 2 billion barrels of oil. It is significant. It cannot happen overnight, but let's put in place the policy that will help us get there.

We also must do more to help existing vehicles be more energy efficient. The Energy bill I have introduced would direct the Department of Transportation to create a national tire fuel efficiency program that would include tire testing and labeling, energy-efficient tire promotions through incentives and information, and the creation of minimum fuel economy standards for tires. That makes a difference as well.

Heavy-duty vehicles also deserve our attention. They move our economy. The Energy bill I have introduced would help keep them on the move while helping to reduce both fuel consumption and emissions. It would require the Department of Transportation to develop a testing and assessment program to determine what is feasible to improve the efficiency of heavy-duty vehicles and then develop appropriate fuel economy standards.

Additionally, we should provide a Federal tax credit for the purchase of idling-reduction technology for heavy vehicles, such as big trucks. That could save a trucker almost $1,600 in fuel costs and $2,000 in maintenance costs each year. It seems almost every week I read or hear or talk with another trucker in Maine who has gone out of business because of the cost of diesel. Think if through these policies we could help those truckers save that kind of money in fuel costs and maintenance each year. It would make the difference for many truckers between staying in business or being forced out of business.

Finally, the 10th point of my plan involves public transportation. Public transportation is difficult in a State such as the Presiding Officer's and mine. There are only three cities in Maine that have regular public transportation. But it is important for the overall goal nationally of energy independence that we focus on public transportation for those areas where it is feasible.

It is one of the most efficient ways we can get more passenger miles per gallon of gasoline. The energy legislation I have introduced would promote the development of the use of public transportation by subsidizing fares, encouraging employers to assist their employees with fares, as we do in the Senate, where we subsidize the employees who use the subway, and by authorizing funding to build energy-efficient and environmentally friendly modes of transportation, such as clean buses and light rail.

The bill would direct the Department of Transportation to designate 20 transit-oriented developmental corridors in urban areas by the year 2015 and 50 by the year 2025. These corridors could be developed with the aid of grants to State and local governments to construct or improve facilities for motorized transit, bicycles, and pedestrians. We have to look at everything.

In these times of high energy prices, when American families are struggling with the costs of filling their gas tanks and heating their homes, we must act in the short term to provide them some relief, and we must embrace fervently a national effort to achieve energy independence.

This Nation has demonstrated time and time again throughout our history our ability to rise to the challenge. I remember when President Kennedy, in the 1960s, challenged our Nation to be the first to land a man on the Moon and how everyone rallied toward that challenge and we achieved the goal that the President set forth for us. Let's now establish another goal and embrace it as fervently. Let's establish the goal of energy independence by the year 2020. It is vital to our economic, our environmental, and our national security. If we embrace this goal, Mr. President, I am confident we can achieve it.

Mr. President, I thank the Chair, and I suggest the absence of a quorum.

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