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INHOFE AMENDMENT TO ENERGY BILL SEEKS TO INCREASE DOMESTIC REFINING CAPACITY
June 12, 2007

Contact:
Marc Morano 202-224-5762
Matt Dempsey 202-224-9797
Link to Floor Statement

 

INHOFE AMENDMENT TO ENERGY BILL SEEKS TO
INCREASE DOMESTIC REFINING CAPACITY

WASHINGTON, DC – Senator James Inhofe (R-Okla.), Ranking Member of the Environment & Public Works Committee, today filed the Gas Petroleum Refiner Improvement and Community Empowerment Act of 2007, or the Gas Price Act, as an amendment to the energy bill currently before the Senate. The Gas Price Act, which is designed to ease America’s soaring gas prices, address true energy independence and increase refinery capacity, was first introduced on May 24, 2007 by Senator Inhofe. 

The Gas Price Act would improve the permitting process for the expansion of existing and construction of new domestic fuels facilities, as well as encourage and fund the development of future fuels including coal-to-liquids and cellulosic biomass ethanol. In addition, the Act would provide for a more stable and certain regulatory environment and it would have numerous economic benefits including locating refineries in distressed communities.

Senator Inhofe introduced the amendment on the Senate Floor today; a vote is expected on the amendment tomorrow. The following remarks are from Senator Inhofe’s Floor statement:

"I was pleased to hear that the majority leader recognized that the US has become too reliant on foreign sources of energy, Senator Inhofe said. "Unfortunately, the majority’s bill – at present - does not improve the situation, and indeed could worsen it. The fact is that Americans are paying more at the pump because we do not have the domestic capacity to refine the fuels consumers demand…"

"Americans are starving for affordable energy. The majority’s bill tells them to go on a diet. The good news is that it’s not too late to do something to improve the situation. And it is in that good faith to improve the energy security position of our country that we are offering the Gas PRICE Act…"

"The federal government should provide incentives rather than mandates on local communities. Increasing clean domestic fuel supplies is in the nation’s security interest, but those facilities can also provide high paying jobs to people and towns in need. Our amendment provides financial incentives to the two most economically distressed communities in the nation – towns affected by BRAC and Indian tribes – to consider building coal-to-liquids and commercial scale cellulosic ethanol facilities."

Full Inhofe Floor Statement

I was pleased to hear that the majority leader recognized that the US has become too reliant on foreign sources of energy.

Unfortunately, the majority’s bill – at present - does not improve the situation, and indeed could worsen it.

The fact is that Americans are paying more at the pump because we do not have the domestic capacity to refine the fuels consumers demand. Some members’ answer are more hybrids than SUVs, but that ignores the profound impact high fuel prices have on our economy.

According to the Department of Labor’s recent numbers, about three percent of the nation’s inflation is directly attributed to high fuel prices. That means, whether your constituent drives a gas guzzler, a hybrid, or rides a bicycle, they are paying for high fuel prices.

In order to lower those prices, we have two options – increase capacity at home or import more from abroad. The LA Times wrote (May 25, 2007), "Gas supplies are tight because the U.S. lacks refining capacity, and every time a refinery shuts down for maintenance or because of an accident, prices rise."

Americans are starving for affordable energy. The majority’s bill tells them to go on a diet.

The good news is that it’s not too late to do something to improve the situation. And it is in that good faith to improve the energy security position of our country that we are offering the Gas PRICE Act.

The lack of domestic refining capacity is not new to many members, the public, or even the Federal Reserve.

In May 2005, then Chairman Alan Greenspan stated, "The status of world refining capacity has become worrisome" and that the industry is straining to meet markets, "which are increasingly dominated by transportation fuels that must meet ever-more stringent environmental requirements."

While chairman of the committee on environment and public works, I held a series of hearings to look into the issue.

The very same month I held one of those hearings, the senior Senator from California, wrote to her Governor:

"I can see where a cumbersome permitting process, with uncertain outcomes, would make it difficult to plan and implement projects…I encourage you to improve the speed and predictability of the permitting process, and believe that this will allow business and government to focus their limited resources on actions that most benefit the environment."

The amendment that Sen. Thune and I are offering today will improve the energy security of the United States and it will do so in complete compliance with environmental laws and in concert with state interests.

In her letter to Governor Schwarzenegger, the senior Senator from California was correct in recognizing that much of the permitting decisions are by states and not the federal government. That is why we worked very hard to recognize the importance of state and local groups in making these decisions.

The Environmental Council of States – who represents state Departments of Environmental Quality said as much – as well as noting that, "the Gas PRICE Act does not weaken environmental laws."

Similarly, the National Association of Counties stated, "It goes a long way in addressing the concerns of local governments during a refinery siting, ranging from the importance of considering local needs, concerns, and honoring a county’s land use authority."

I think it’s important to point this out because it seems that time and time again some members of this body hide behind vague concerns over the environment in defending their failure to improve US energy security.

After working with a variety of stakeholders – this bill achieves both goals – increases energy while preserving local governments and environmental quality.

The fact of the matter is that, like it or not, the US needs to increase its domestic refining capacity if we are to solve the economic struggles facing every family.

The amendment we are introducing today redefines and broadens our understanding of a "refinery" to be a "domestic fuels facility."

Oil has and will continue to have a role in the US economy, but the future of our domestic transportation fuels system must also include new sources such as ultra-clean syn-fuels derived from coal and cellulosic ethanol derived from home grown grasses and biomass.

Expanding existing domestic fuels facilities or constructing new ones face a maze of environmental permitting challenges. This amendment provides a Governor with the option of requiring the federal EPA to provide the state with financial and technical resources to accomplish the job and establishes a certain permitting process for all parties.

The public demands increasing supplies of transportation fuel, but they also expect that fuel to be good for their health and the environment.

To that end, the amendment requires the EPA to establish a demonstration to assess the use of Fischer-Tropsch (FT) diesel and jet fuel as an emission control strategy. Initial tests have found that FT diesel significantly reduces criteria pollutants over conventional fuels and it can easily be transported with existing infrastructure.

I should note that ongoing tests at Tinker airbase in my home state found that blends of FT aircraft fuel reduced particulates 47-90%, and completely eliminated SOX emissions over fuels in use today.

Good concepts in Washington are bad ideas if no one wants them at home. As a former Mayor of Tulsa, I am a strong believer in local and state control.

The federal government should provide incentives rather than mandates on local communities. Increasing clean domestic fuel supplies is in the nation’s security interest, but those facilities can also provide high paying jobs to people and towns in need.

Our amendment provides financial incentives to the two most economically distressed communities in the nation – towns affected by BRAC and Indian tribes – to consider building coal-to-liquids and commercial scale cellulosic ethanol facilities.

I am very proud that my home state of Oklahoma is a leader in the development of energy crops for cellulosic biofuels. The key now is to promote investment, and nothing would speed the rapid expansion of the cellulosic biofuels industry more than investment by the nation’s traditional providers of liquid transportation fuels.

Many integrated oil companies have formed or substantially expanded their biofuels divisions within the past year to prepare for the eventuality of cost-competitive cellulosic biofuels.

Oil companies invest in exploration because their stock prices are affected by their declared proved reserves. Creating a definition of renewable reserves would create a similar incentive for them to invest in cellulosic biofuels.

The Energy Policy Act of 2005 directed the Department of Energy to accelerate the commercial development of oil shale and tar sands. Given the country’s interest in developing renewable alternatives to fossil fuels, it is logical that the SEC would develop criteria for the incorporation of biomass feedstock sources into its hierarchy at the same time.

This is Congress’ least expensive way to jumpstart the cellulosic biofuels industry.

Increasing capacity to produce clean fuels at home is critical in making America more secure. Passing the Gas PRICE Act would be a material and substantive action toward the majority’s stated goal of "energy independence." To vote against it underscores something altogether – they like high prices at the pump

I yield the floor.

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June 2007 Press Releases

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