Energy Policy Act of 2003

ENERGY POLICY ACT OF 2003

AMENDMENT NO. 856 TO AMENDMENT NO. 850

    Mr. WYDEN. Mr. President, if I could just respond, Senator Sununu and I will be in the Chamber talking in a bit more detail. I always appreciate the graciousness of the chairman of the committee in working with me. I think we are going to get an agreement. There are probably a lot more Senators who will want to speak on this than first estimated.

    So the Senate knows, originally Senator Sununu and I were prepared to offer an amendment to strike the $16 billion for nuclear subsidies. The amendment is supported strongly by the Taxpayers Union, but at the request of the chairman of the committee, that vote will be put over until next week.

    I am very hopeful that we will be able to get a consent agreement before long to have this debate. This is a significant exposure for taxpayers. It is not a question of whether someone is pro-nuclear or anti-nuclear. The Congressional Budget Office has said that there is at least a 50-percent risk of failure with respect to these facilities. The Congressional Research Service has indicated the taxpayers will be on the hook for in the vicinity of $16 billion.

    What I worry about is what happened in our part of the country. Four out of five facilities were never built. In this case, if the Congressional Budget Office is right and you have over a 50-percent risk of failure at these facilities, this will be a huge exposure for taxpayers.

    I tell Senators there is no other source of energy in this legislation which gets a direct subsidy for building a facility.

    I am going to try to find a way to reach a procedural accommodation with the chairman of the committee. I am a personal friend, and I want to accommodate him. I hope we will be able do that.

    This is a very significant taxpayer issue for the Senate. It is not a question of whether someone is pro-nuclear or anti-nuclear. In my own inimitable way, I have managed to make both sides mad over my career in public service. But it is a taxpayer issue of enormous importance.

    I hope Senators will read what the Congressional Budget Office and the Congressional Research Service have had to say about this. The Congressional Budget Office reports that there is more than a 50-percent risk of failure with respect to these facilities, if subsidized. The Congressional Research Service has talked about a $16 billion subsidy.

    I would point out that this is even too rich for the blood of the other body. The other body has not talked about anything like this.

    We will work with the chairman of the committee. Senator Sununu and I will be coming to the floor before long as well so that we can begin to lay out the bipartisan support we have with Senator Bingaman, the ranking minority member, Senator Ensign, and others.

    I would just tell the chairman of the committee that I think there are probably more Senators who want to discuss this than we thought. We already have some indication that 90 minutes equally divided with an up-or-down vote may not be enough. It is my intention to work with the chairman of the committee, the ranking minority member, and others to try to work out this unanimous consent so we can have that done expeditiously.

    I point out that this Senator and the Senator from New Hampshire were asked to come today to have our amendment brought up. We felt pretty good about it. We know there is going to be an awful lot of back and forth with Senators between now and the time we vote Tuesday.

    I ask that Senators look at the Congressional Budget Office report and the Congressional Research Service report over the next few days as the discussions go on and off the floor.

    I look forward to working this out in terms of procedure with the chairman of the committee probably over the next hour or so.

    I yield the floor.

    Mr. DOMENICI. Mr. President, we will have a great deal of time to discuss what I believe is the most important issue for America's future; that is, are we going to have an alternate source of energy for electricity, aside and apart from coal and natural gas?

    I believe the time has come. We ought to set in motion the authorization—not the approval, not the appropriations, but the authorization—to start down the path that says the United States may be ready to build a nuclear powerplant. The arguments that have just been made in anticipation of the agreement are not exactly as such. This bill says America should have an opportunity to have a variety of energy sources. We have provided subsidies for coal so that coal can be made clean and delivered to our people as clean as possible. That is subsidized. We have an enormous tax subsidy for wind and energy. In fact, it is so big and so current that there will be windmills built all over this country, and the amount is a direct tax credit. It is not something that may happen. Every time one of those windmills is built, the tax credit will apply and money will be used in large quantities.

    In addition, we are talking about whether nuclear powerplants are being built today. For instance, General Electric nuclear powerplants are being designed and built in Taiwan right now at a cost—believe it or not, and which we will show here to the Senate—that belies all of the information that is submitted by the Congressional Budget Office, which we believe is speculative. It will be shown that they are constructing these nuclear powerplants at $1,250 a kilowatt. That means they are perilously close today to producing nuclear powerplants that will be competitive with natural gas in the United States.

    We are not asking the Senate for any of this to happen. We are saying that, as a matter of policy, we should put in the Energy bill the opportunity for this to happen. We will go into great detail as to the conditions, how it will happen, how it won't happen, and who has to approve and who has to disapprove.

    We think before we are finished, we will have convinced a majority of Senators that the time has come to give a rebirth to this alternative source so that if, as a matter of fact, in the next decade or so the need arises, we will be ready, willing, and able to move ahead.

    Having said that, I have just indicated nothing else is going to happen in the Senate until sometime around 3 o'clock or 3:30. We will try to get our unanimous consent agreement sometime this afternoon.

    I yield the floor.

    Mr. WYDEN. Mr. President, I want to be very brief. In fact, we are going to get an agreement with the Senator from New Mexico to work out the process for considering nuclear subsidies.

    I just want to make sure Senators are clear with respect to what the subsidy is all about. The Senator from New Mexico, the distinguished chairman of the committee, said wind is going to get vast amounts of subsidies. I wanted to point out to the chairman that if wind farms produce power, they get a tax credit for the energy they produce. But wind farms do not get any subsidy to build a facility.

    What is unique about the $16 billion exposure for taxpayers is only one energy source, under this legislation, gets a subsidy to build a facility. That has troubled the National Taxpayers Union. That is why they have been a strong supporter of the Wyden-Sununu amendment. This is not going to be about whether you are pro-nuclear or anti-nuclear. This is about whether Senators want to put at risk the taxpayers of the country for the prospect that the Congressional Budget Office has said has a 50-percent or higher failure with respect to constructing these facilities.

    We will have more to say about the bipartisan Wyden-Sununu amendment before long, but I wrap up this part of the discussion by simply saying, again, I hope Senators will look at what the Congressional Budget Office and the Congressional Research Service have had to say about that. Those are reports that lay out, in a frank and objective way, what the risk is for taxpayers. I hope Senators will review it carefully.

    Mr. President, I yield the floor.

....

    Mr. WYDEN. I thank the Chair. Mr. President, the Senator from New Hampshire has said it very well. I will offer just a couple of additional remarks. It is clear there is going to be an effort, as this is discussed in the Senate, to simply make this an "Are you for nuclear power or are you against nuclear power?" issue. I think that would be very unfortunate.

    I said earlier when we began to discuss this, I have inimitable abilities that over the years have managed to make both sides of the nuclear power debate unhappy with me. In a sense, I hope we can do as Senator Sununu has done, which is to keep the focus on the taxpayer question. I urge Senators, in particular, as they make up their minds on this issue to look at two important reports. The Congressional Budget Office report and the report done by the Congressional Research Service are particularly illuminating in that the Congressional Budget Office report talks about how, in their judgment, there is a more than 50-percent probability that these plants will not be successful, that they will fail. And the Congressional Research Service, in their analysis, indicates if that is the case, taxpayers would be on the hook for in the vicinity of $16 billion.

    In my part of the world, this is not exactly an abstract issue. In fact, with the WPPSS debacle, which was the largest municipal bond failure in the country's history, four out of the five facilities were not, in fact, even built, and the people in my region and many investors, of course, were on the hook.

    If the scenario of the Congressional Budget Office were to come to pass, all of our constituents—all of them—would, in effect, be exposed to these very significant costs.

    That is why Senator Sununu and I are going to try our best, between now and the Tuesday vote, to make sure that for us this is first and foremost a taxpayers' issue.

    To try to drive that point home, we had a discussion about how this affects other aspects of energy development. If this provision stays in the bill, in other words the amendment that the Senator from New Hampshire and I are offering is unsuccessful, nuclear energy would be the only part of this field that would get a direct subsidy for constructing a facility.

    For example, the distinguished chairman of the committee, who has been very gracious to the two of us in terms of working on process and all of the issues towards getting this offered, talked at some length about wind and talked about subsidies for wind. Well, in fact, when wind is produced, there are various credits and incentives, which I guess are very appropriate, but there is no subsidy for constructing any other facility under this legislation other than in the nuclear area.

    In fact, right now there is nothing preventing any utility from going forward with a nuclear project simply by going to the Nuclear Regulatory Commission and getting a license to build the plant.

    Let me repeat that. Anybody who wants to build a nuclear powerplant in this country simply has to go to the Nuclear Regulatory Commission and get the license. They can do that if they satisfy the safety standards.

    The issue, as propounded by Senator Sununu and myself, is whether or not there should be these very large subsidies; whether or not the taxpayer should be exposed, in the vicinity of $16 billion, with respect to building these plants.

    I do not think this is an issue about whether one is for or against nuclear power, and that is why the National Taxpayers Union and a host of other organizations that have been watchdogs for taxpayers have made this a priority item. In their letter to me, they took the position that they are neither for nor against nuclear power. They say that explicitly in the letter. What they and a number of other taxpayer watchdogs are concerned about is the $16 billion exposure for taxpayers that is contained in this provision.

    So I am very pleased that before long we will be able to enter into a consent agreement for an up-or-down vote on Tuesday on the Wyden-Sununu legislation. I think the chairman of the Energy Committee will be leading us in that discussion with respect to a UC before too long.

    The Senator from New Hampshire is still in the Chamber, and I thank him for all of his involvement in this. He has a long record of being a taxpayer watchdog, and that was, in fact, the special reason why I thought it was so important for the two of us to try to do this together.

    I am sure between now and Tuesday, as this is discussed, to some extent some will try to make this into a referendum on whether one is for or against nuclear power. I will be doing my best to try to make sure that it is a taxpayers' issue. That is central and critical to me, and I look forward to the discussion that we will have on Tuesday. We should have a UC ready to go before long. I thank Chairman Domenici for his willingness to work out the procedure on it, and I am particularly grateful to my cosponsor, Senator Sununu.

    I yield the floor.

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    Mr. WYDEN. Mr. President, will the Senator yield for a question?

    Mr. CRAIG. I would be happy to yield in just a moment.

    I think the Senator from Oregon is wrong on this issue. I think it is a form of selectivity as it relates to our willingness as a country to use public resources in the advancement of all forms of energy resources as the kind that is offered by the committee to, once a new reactor design is developed, allow for loan guarantees to guarantee up to about 8,400 megawatts of electrical development through nuclear reactor construction.

    I would be happy to yield to my colleague from Oregon.

    Mr. WYDEN. I thank my good friend for yielding. I listened patiently to him and to the chairman of the committee raising the concern that in some way the opponents of the subsidies are engaging in scare tactics, red herrings, and the like. This is not a red herring. This is a dollar and cents issue.

    I was curious whether the distinguished senior Senator from Idaho was aware that the Congressional Budget Office "considers the risk of default on such a loan guarantee to be very high, well over 50 percent."

    Is the distinguished senior Senator from Idaho aware of that? I would be curious about his reaction because to me—and as the Senator from New Mexico said—this is about risk. The Congressional Budget Office has given us an objective, nonpartisan assessment of risk here. They consider "the risk of default on such a loan guarantee to be very high, well over 50 percent"—coupled with the Congressional Research Service memo indicating the exposure is $16 billion. Is the distinguished Senator from Idaho aware of that? I would be curious what the distinguished Senator's reaction to that is.

    Mr. CRAIG. Mr. President, I thank my colleague for bringing up that issue. There are red herrings. Maybe some of them are blue and some of them are green, as we debate these issues. I don't know what a red herring really is here.

    I do know that when you sit a group of economists or accountants down and say, project backwards over the last 20 years or 30 years as it relates to the cost of developing nuclear reactors, and/or their failure—and out in the Pacific Northwest we had some that were funded and then brought down because the economy and the politics would not accept them—if you do that, you might get to a 50-percent risk factor.

    If you project forward to a new concept design that is under a new Nuclear Regulatory Commission licensing process that meets the demand of the electrical systems, that is a cleaner process, that drives down the cost—and my colleague, the senior Senator from New Mexico talked about the new concepts in Taiwan; one of them may well be built here—my guess is they did not factor that in. Because those are all things you and I, as Senators, will insist upon and do over the next decade, and that when we do that, the risk factors come down dramatically.

    But this is what the Senator from Oregon and I need to look at. You came to the Congress how many years ago?

    Mr. WYDEN. We were both young; in 1980.

    Mr. CRAIG. In 1980. In 1980, the United States was about 35-percent dependent on foreign hydrocarbons, foreign oil. Now, there were some folks out there saying: Boy, if we don't get busy here, we could someday be 40-percent dependent.

    Well, they were right. We did not get busy. In fact, we increasingly restricted the ability to refine and the ability to discover and the ability to produce, and by 1984 or 1985, we were at 45 percent. And that kept going on.

    What is the risk factor there? We know what the risk factor is. The risk factor is, we did not do anything and we are now over 50-percent dependent, and in some instances as high as 65 percent, give or take, dependent on foreign oil sources.

    You see what has happened at the pump. I don't know what you or I were paying for gas in 1980 but it was well under $1 a gallon. Now we are paying $1.55, $1.60 a gallon for regular fuel. The average household is spending a great deal more on energy today than it did in 1980. We did not develop a policy. We did quite the opposite. We began to restrict the ability to produce, whether or not it was hydrocarbons.

    We have not brought on line a nuclear reactor, fire-generating system for the purpose of electrical production in the last 10 or 12 years. One got started under construction, and, of course, as we know in the Pacific Northwest, we actually stopped construction on some.

    Are there risks? You bet. There is no zero-sum game here. There isn't anything you or I could possibly legislate. But there is a reality; the reality is that energy prices in Oregon shot through the roof in the last 3 years and the energy prices in Idaho went up dramatically. The cost of living in the State of Oregon and the economy of the State of Oregon reeled under the hit, as is true of the State of Idaho. I am not, anymore, going to stand here and be selective on the production of and the future opportunity to produce energy for this country because I want to get your State's economy moving and my State's economy moving.

    (Mr. CRAPO assumed the Chair.)

    Mr. WYDEN. Will the Senator yield for yet another question?

    Mr. CRAIG. I am happy to yield.

    Mr. WYDEN. I thank my colleague.

    Again, the Senator from Idaho has been critical of the Congressional Budget Office report, saying that perhaps they did not look forward; they just looked backward. I would urge my colleagues to look at the report because the report does, in fact, look to 2011 and the future, and that is what the Congressional Budget Office did make their judgment on, where they said there was a risk of default that was well over 50 percent.

    But my question to my colleague is whether my colleague thinks it is relevant about who assumes risk with respect to energy production. Because he is absolutely right, there are no foolproof guarantees in life. There is no question there is risk. Here, however, I see the taxpayer being at risk. The taxpayer is on the hook for $16 billion.

    I thought it was interesting that the distinguished chairman of the committee talked about the credits for production.

    Well, the fact is, when you get a credit for production, the producer is largely at risk because in order to get the break, you have to produce something. There is no tax credit, I say to my colleagues, for failing to produce a successful wind venture. You get the credit if your wind venture is successful.

    My understanding is that here, with the subsidy, the person who assumes the risk is the taxpayer, not the producer. I was wondering if the distinguished Senator from Idaho thinks it is relevant with respect to who takes the risk. This Senator does because the taxpayer is on the hook rather than those who produce. I am curious of the reaction of the distinguished Senator from Idaho.

    Mr. CRAIG. I am pleased the Senator brought this issue forward because you and I live in an environment in the Pacific Northwest that was substantially subsidized by American taxpayers to produce a massive electrical system known as the Bonneville Power Administration—direct appropriations of hundreds of millions of dollars to build a hydro system in the Snake and Columbia watersheds and in other places. These were not loan guarantees. They were just outright expenditures to be paid back. They have been paid back over a long period of time, and we are continuing to pay them back.

    So the American taxpayer, to our benefit, has always been on the hook in the Pacific Northwest for the production of energy. In fact, you and I worked to just get some borrowing capability for Bonneville to expand its transmission system—a big chunk of money. We fought for that, and we should have. Why? Because it will generally benefit the Pacific Northwest. It is not a loan guarantee. It is an outright appropriation to be paid back.