Economic Development Revitalization Act of 2011

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Ms. KLOBUCHAR. I see I am joined by the Senator from Iowa, who I know will speak shortly and has been a leader in biofuels and energy for many years.

I rise to speak about the votes we will have later today on the amendments that would immediately cut off support for our homegrown energy industry with I guess a few days' notice. I did not think there was precedent for this decision. If this were to ultimately pass--I am not certain this is the vehicle that would allow it to go into law, but if it were to pass, we would have made a decision that is different from the decision in January affecting an industry that employs nearly 500,000 people.

I wish to talk about the amendment offered by my friend, the Senator from California. And I would hope, I would say first, that if we were voting twice on an amendment in just a few days, it would be something that creates jobs or decreases our dependence on foreign oil, but that is not the case here. We are talking about pulling the rug out from an industry that provides 10 percent of the Nation's fuel supply and supports nearly 500,000 jobs. I don't think people quite understand that about biofuels. I think they think it is some boutique industry. Madam President, 10 percent of our Nation's fuel supply at a time when gas is up near $4 a gallon.

We know there is support for phasing out the current ethanol tax credits. I have a bill to do that. Senator Grassley has another bill to do that. We understand that at a time when our country is facing severe budget constraints. But the question is not if we should do it--we will--it is when and how.

We all know homegrown energy has played an important part in reducing our dependence on foreign oil and supported thousands of jobs. We also know that as we continue to move our Nation toward energy independence--by the way, we actually are moving up in terms of our own energy independence, which is a goal that I believe every Member strongly supports, and that is that homegrown energy will be a significant part of our solution. We need a glidepath and not a cliff for the only alternative to oil.

Immediately ending all support for the biofuels industry, as the amendments we are considering propose to do, would stifle investment in not only the existing ethanol industry but also the newly developed cellulosic--yes, that is part of this--cellulosic, algae, and the next generation of biofuels, which I think holds the most hope for this country. In fact, many of the first advanced biofuel plants are co-located with corn ethanol plants. You cannot promote next-generation fuels by ending a tax policy for existing biofuels 6 months into a 1-year extension with only a few days' notice.

Again, the real debate is not about whether we end this tax credit--we know we should do it, and I believe we should do it with oil, too, but right now we are on biofuels--it is about how we do it. That is why the Senator from South Dakota, Mr. Thune, and I continue to work toward the bipartisan compromise to reduce our deficit and offer a reasonable way to reform the biofuels industry and achieve significant deficit savings immediately. And I appreciate our colleagues talking to us. We have had many meetings, and we are working very hard to get this done. We need to work toward a pragmatic solution that reforms the ethanol industry without harming jobs or driving up gas prices at a time when gas is over $3.70 a gallon.

An article in the Chicago Tribune underscored the fact that if we cease to produce the 13 billion gallons of ethanol we make every year, it will drive up prices at the pump by as much as $1.40 per gallon in the short term. Does the Senate actually think we can afford to raise gas prices by $1.40? Do my colleagues think we can afford $5-per-gallon gas?

I look forward to working with my colleagues on a more responsible option that will reduce the deficit and not suddenly disrupt an industry that supports $3 billion in economic activity in my State alone.

I also wish to say a few words in opposition to the amendment offered by my friend from Arizona, Senator McCain. Our current policies provide incentives for many different kinds of fuel-dispensing technologies--from hydrogen to natural gas, to electric hookups, to ethanol--but the McCain amendment singles out only biofuel blender pumps and proposes to cut all incentives for investment in these pumps at a time when we need to be expanding our fuel supply options, not limiting them to oil from Saudi Arabia. We should be investing in the farmers and workers of the Midwest and not the oil cartels of the Mideast.

What the McCain amendment does is focus on limiting those blender fuel pumps. Blender pumps do not require customers to use ethanol. That is why they are blender pumps. They give consumers a choice at the pump and help lower gas prices for all consumers, even those who do not

use the higher blends of ethanol.

From 2000 to 2010, competition from ethanol reduced wholesale gasoline prices by an average of 25 cents per gallon, saving American consumers an average of $34.5 billion annually. During the gasoline price runup in 2010, the impact of ethanol and gasoline prices was substantially larger, reducing gasoline prices by a national average of 89 cents per gallon.

Giving consumers a choice of using higher blends of renewable fuel has allowed the country of Brazil to become energy independent, and we can do the same here.

The McCain amendment would also do more than limit consumers' options at the pump. I know North Carolina is a good military State. This would prohibit the U.S. military from constructing blender pumps or storage tanks that can use more fuels that would be more resilient in case of a fuel supply cutoff from OPEC or other disruptions in the global fuel supply.

Our dependence on foreign oil has been widely recognized by our military and diplomatic leaders as a major strategic vulnerability. To respond to this, we have taken important steps in recent years to encourage U.S. Government and military fleet vehicles to be fuel flexible as part of our efforts to reduce both our spending on fuel and our dependence on foreign oil. Shouldn't we allow our homegrown ethanol to compete with foreign oil to fuel these vehicles?

I urge my colleagues to oppose the McCain amendment. At a time when families and businesses across the Nation are battling high fuel costs, we should be giving them more options at the pump, not less.

Today's votes on the Feinstein amendment and the McCain amendment are part of a process. We all know it is not the final result. While I strongly oppose both amendments, I also know that regardless of the outcome today or even the outcome of that vote 2 days ago, we still have work to do.

I appreciate the willingness of the Senator from California and the Senator from Oklahoma to continue to negotiate with Senator Thune and myself. These are serious ongoing negotiations. I am hopeful that in the coming days we can reach a bipartisan compromise. It is not just about one amendment on a bill that is not the vehicle where we can get this done, but, in fact, we actually have a bipartisan compromise that balances our need to continue to support homegrown biofuels with our need to reduce our deficit and to do this in a way that actually puts money right now back to our government to pay off this debt.

I see Senator Grassley, who knows a little bit about finances with his major role on the Finance Committee, and also, as a farmer, a little bit about the biofuels industry.

I yield the floor.

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