Energy

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Mr. HOEVEN. Madam President, I rise this morning to talk about America's energy future. The reality is we need a diversified energy future. What I mean by that is we need to develop all of our energy resources. In my home State of North Dakota, we are doing just that. We have coal, and we are developing clean coal technologies. We have oil and gas. We have hydro. We have biofuels--ethanol and biodiesel. We have solar. We have wind. We have biomass. We are working aggressively to develop all of them, both traditional sources of energy and our renewable sources of energy.

Ten years ago, in 2000 when I started as Governor of North Dakota, we set a course to develop a comprehensive energy plan to develop all of our energy resources, both traditional and renewable, and to do it in tandem, by encouraging private investment that would spur the development of new technologies--new technologies to develop traditional sources of energy and renewable sources of energy, and create new and exciting synergistic partnerships that would both diversify our energy mix, help us produce more energy most cost effectively, create good-quality jobs and improve environmental stewardship.

That is exactly what is happening. That is exactly what is happening in our State. That is exactly what we need to do as a nation. Let me give you some examples from our State. Oil and gas. Oil and gas development has taken off in North Dakota. We are now the fourth largest oil-producing State in the Union. We recently passed States such as Oklahoma and Louisiana, producing more oil, and we are producing it from new formations such as the Bakken Shale and the Three Forks, and we are doing it with new technologies: directional and horizontal drilling. We figured out how to use those technologies such as directional drilling and hydraulic fracturing in new ways that produce more energy but do it with good environmental stewardship. For example, in the case of hydraulic fracturing, we recycle the water. We go down 2 miles underground, we drill directionally underground for miles. So it is a small footprint. One well now produces what maybe 10 or 12 wells used to produce. The water we use to force the oil to the surface we send back down; we recycle it--we use it again--and ultimately we put it back down the hole where we drew it from in the first place when it came up with much of the oil that is produced.

In the case of coal, we take lignite coal and we produce synthetic natural gas. We put it in pipelines and we send it to other parts of the country, just like the gas you pull out of the ground. At the same time, in one of our plants, we are capturing CO

2, the carbon dioxide. We are capturing it, we are compressing it, we are putting it in pipelines, and we are sending it off to the oilfields for second or tertiary oil recovery.

Those are some of the new developments we are undertaking in traditional sources of energy. But as we do that with things such as oil and gas and coal, we are also developing the renewables. For example, wind. Our State is now the ninth largest wind energy State of all 50. We are continuing to move up the ranks, and that includes investing billions of dollars to make it happen. Again, that is more energy for our country, from more diversified sources, creating good jobs in the process.

Think how important that is. Think how important it is to create good jobs at a time when we have more than 9 percent unemployment, 15-plus million people out of work, an economy that we need to get going and growing. Energy development represents an incredible opportunity to make that happen. But when we talk about energy development, we need all of the different sources of energy. Each has strengths and each has weaknesses. That is why we need the mix.

In our State we also produce biofuels: ethanol and biodiesel. Clearly the discussion today is how do we best create that environment to continue the development, the production, and the growth of ethanol in a way that is cost effective, that serves the taxpayers of the country, but continues to develop that vital industry for our country at a time when we need to reduce our dependence on foreign oil, when we need more domestically produced energy, when we need quality jobs, when we need a growing economy.

We can do it. We can do it with the right kind of energy policy--with the right kind of energy policy--and that is what we are talking about today. Think about ethanol. It helps reduce our dependence on foreign oil. For every gallon of ethanol we use as part of the fuel mix, that is 1 less gallon of gasoline we are bringing in from the Middle East, and by increasing supply we help reduce the cost of gasoline at the pump for our consumers.

In addition to that, we are creating good-paying American jobs. In 2010, the ethanol industry employed 400,000 workers in good jobs throughout the United States--400,000 jobs. It provided an important market for American farmers throughout our country. It displaced the need for 445 million barrels of foreign oil. Let me repeat that. It displaced the need for 445 million barrels of foreign oil. It reduced the price of gasoline at the pump by 80 cents a gallon for the American consumer.

In addition to all of that, the ethanol industry paid $11 billion in Federal taxes in 2010. I want to emphasize that point. In 2010, the ethanol industry paid $11 billion in Federal tax. So it is an important industry to our country and we need it to continue.

The point of the discussion today, though, is how best to do that. So for this discussion today, how do we create the right environment to stimulate private investment so we have that growing economy, we have more jobs, we have more energy, but we also generate more tax revenues with less government spending so we both grow our way out of this debt and deficit, we get this economy going, we create a better energy future for these young people and young people all over our great country.

That is why I have sponsored legislation, along with Senator Thune and Senator Klobuchar, that will reform the ethanol tax credit. It will provide deficit reduction and set us on the right path for alternative fuel development in our country for the long run. The legislation is called the Ethanol Tax Reform and Deficit Reduction Plan.

It is the right way to transition from the current VEETC, the volumetric ethanol excise tax credit, rather than the amendment today to simply do away with VEETC. This is the right transition for us to make from the VEETC to creating the right environment to stimulate investment and energy growth in biofuels for the future. The ethanol tax reform and deficit reduction plan provides $1 billion in deficit reduction right away--provides $1 billion in deficit reduction. But it also provides the right transition for ethanol by providing the right kind of energy policy. Specifically, we provide incentives for things such as blender pumps that offer consumers choice. We provide the right kind of incentives for research, development, and deployment of second-generation ethanol, specifically cellulosic ethanol, so that instead of making ethanol from food products, we make it from stover and wheat straw and other sources.

By combining blender pumps, flex fuel vehicles, and commonsense regulation on the part of the EPA that encourages higher fuel blends, we create the business environment that will foster growth in the ethanol industry.

What does that mean? That means, No. 1, we avoid the ongoing cost of subsidies such as the VEETC. Second, we set the ethanol industry up for long-term growth. Third, we gain jobs. We gain jobs at a time when we badly need them. We produce more energy, which reduces our dependence on foreign oil, and we gain tax revenues. We gain tax revenues to help reduce our deficit.

So we not only spend less directly, helping to reduce the deficit, we grow our economy, and that growing economy builds on the $11 billion that the industry is already paying in Federal taxes, and we grow that base while we are growing our jobs. That is the right way to move forward, to move out of our deficit situation in this economy, to get our economy going and also to produce more energy.

This is a market-based approach that will give customers more choice and also reduce their fuel costs. For example, you go into the station, there is a blender pump there. You have a flex fuel vehicle. You can dial up whatever blend you choose, anywhere from 0 percent biofuels all the way up to 85 percent, whatever works best for you, whatever works best for your pocketbook, whatever works best for your vehicle.

We have blender pumps in my State. We have an incentive for blender pumps in my State. As a result, we have more blender pumps than any other State in the country. The reality is today, if you buy fuel in North Dakota, almost all of the fuel you buy will have ethanol in it and you do not even realize it. Why? Because at a 90-10 percent blend, every vehicle can use it, and it is the lowest price gasoline at the pump, so dealers want to sell it. Consumers buy it. They simply buy it because they pick the lowest priced fuel at the pump. It is a 90-10 blend.

That is where we are going with this, a market-based approach. That is how it can work for the benefit of our economy, for the benefit of our energy future, for the benefit of reducing spending, and for the benefit of growing our tax revenues. That is the choice we have today. That is the right way to approach job creation and energy development in our country. We are reducing spending. We are improving and creating an environment for private sector investment that will help us build a probusiness climate for energy and economic growth in our country.

I urge my fellow Senators to make that progrowth choice.

I yield the floor.

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