U.S. Senate Committee on Environment & Public Works
U.S. Senate Committee on Environment & Public Works
Hearing Statements
Date:   09/06/2006
Statement of Senator Joseph I. Lieberman
Oversight on Federal Renewable Fuels Programs

Thank you, Mr. Chairman, for holding this hearing on the federal government’s renewable fuels programs.

The Energy Policy Act’s promotion of renewable fuels is one of the attributes that led me to vote in favor of that law’s passage last year. The Act directs the Energy Department to institute a ten-cents-per-gallon financial incentive for the production of cellulosic biofuel. It authorizes the Department to provide loan guarantees amounting to as much as 80% of the cost of at least one commercial-scale cellulosic biomass project. It also authorizes the Department to provide up to $250 million in loans to merchant producers of cellulosic biomass and other approved renewable fuels. It authorizes the Agriculture Department to issue $1 million per year in grants to small businesses for the marketing and certification of bioproducts. And, perhaps most significantly, the Act directs the Environmental Protection Agency to mandate the use of at least 4 billion gallons of renewable fuel in this country this year, and at least 7.5 billion gallons in 2012. In my view, these incentives and mandates in the Energy Policy Act represent a positive and necessary step toward ending this country’s destructive oil addiction and curbing global warming. I am glad to hear, then, that tomorrow EPA Administrator Johnson will sign a proposed rule to implement the Act’s renewable fuels mandate.

As warranted and impressive as the Energy Policy Act’s renewable fuels provisions are, however, I believe they amount to only a first step toward ending our oil addiction and dramatically reducing our transportation sector’s contribution to global warming. To carry this country much farther down the road that we need to travel, I joined with Senators Bayh, Brownback, Coleman, and others last November to introduce S. 2025, the Vehicle and Fuel Choices for American Security Act. That bill, which now has the bipartisan support of 28 Senators, would require the executive branch to use means readily at its disposal to save, by 2016, 2.5 million barrels per day from projected oil consumption in that year. That is roughly the amount of oil that we currently import from the Middle East. The bill, which I like to call the Set America Free Act, would go on to require 7 million barrels per day in savings by 2026 and 10 million barrels per day in savings by 2031 (our current oil consumption is just over 20 million barrels per day).

To implement these savings, the Set America Free Act would set rising targets for manufacturers to produce flexible-fuel, alternative-fuel, hybrid, plug-in hybrid, and fuel cell vehicles; institute loan guarantees, grants, and tax credits to promote sales of those vehicles; mandate the development of fuel-efficiency standards for heavy-duty vehicles; eliminate the current tax break for purchases of heavy SUVs; require the federal government to improve the fuel efficiency of its vehicle fleets; institute a program for increasing the use of fuel-saving tires; and institute a series of steps for increasing domestic production of ethanol.

Of particular relevance to today’s hearing, the Set America Free Act would increase the ethanol infrastructure tax credit to 50%. This is important, because limited ethanol infrastructure is one of the greatest impediments to use of the fuel today. Millions of flexible fuel vehicles designed to use ethanol never see a drop of it simply because it is unavailable at the pump. The Set America Free Act’s tax credits would help change that. The Act would also increase the authorization for cellulosic ethanol incentives to $200 million for five years, and add a near-term target of 75 million gallons of cellulosic biomass fuel by 2010.

My cosponsors and I were disappointed that Majority Leader Frist blocked our effort to add the Set America Free Act to the Gulf of Mexico Energy Security Act in July. We were somewhat encouraged, however, to hear Senator Frist and Energy Committee Chairman Domenici nevertheless praise our bill on the Senate floor. We will continue to advance the Set America Free Act in the next Congress, because the Energy Policy Act’s significant step toward energy security will have been in vain unless we now continue the march toward that goal.

Thank you, Mr. Chairman.