Floor Statement: Introduction of the Domestic Fuels Security Amendment
March 8, 2007

Today, I rise to introduce an amendment that seeks to improve the U.S.’s national security through increasing our ability to fuel our country from domestic resources.
 
Americans are familiar with the violence, terrorism, and instability in the Middle East. But forms of that instability are spreading around the world, including to our own backyard.
 
This chart by the Energy Information Agency summarizes some of the energy security hot spots around the world. Since September 2005 when this chart was made, U.S. security interests have gotten even worst in some regions. On February 26th, Venezuelan President Hugo Chavez nationalized U.S. oil interests – the motivation for the Soviet-style move was to improve Venezuelan strategic interests.
 
Adding insult to injury, while signing an agreement allowing Chinese companies to explore in Venezuela, Mr. Chavez stated that, "We have been producing and exporting oil for more than 100 years but they have been years of dependence on the United States. Now we are free and we make our resources available to the great country of China."
 
China has recognized that energy is a true security interest and has inked deals with Russia and OPEC, along with Castro’s Cuba.
 
The fact is that our national security is linked with our energy security. Yet, even if we were to stop importing oil from the Middle East tomorrow our national security interests would still be at risk.
And we are not alone.
 
European Union countries as a whole import 50% of their energy needs, a figure expected to rise to 70% by 2030. A significant and increasing volume of those imports come from Russia.
 
In December 2005, Russia decided to turn off the gas to Ukraine, affecting imports into Italy, Austria, Germany, Poland, and Slovakia. A similar dispute between Russia and Belarus affected Germany’s oil imports.
 
According to the Congressional Research Service, global energy demand is expected to rise by nearly 60% over the next 20 years.
 
In order to meet motorists’ demands today and tomorrow and the global struggle for energy security, I am introducing the Domestic Fuels Security Act.
 
The Domestic Fuels Security Act lays out a coordinated plan to increase the production of critical clean transportation fuels for today and tomorrow in four significant ways.
 
First, the amendment provides a coordinated process whereby the federal government – at the option of a Governor and in consultation with local governments – would be required to assist the State in the permitting process for domestic fuels facilities. These would include coal-to-liquids plants, modern refineries, and bio-refineries. And this voluntary, coordinated, from-the-grassroots-up process would do so without waiving any environmental law.
 
Second, the amendment would look to the future and conduct a full environmental review of fuel derived from coal.
 
The U.S. has 27 percent of the world’s coal supply – the largest in the world – nearly 250 billion tons of recoverable reserves. It is critical that we learn to use what we have and do so in an environmentally responsible way.
 
Third, the amendment seeks to spur a viable coal-to-liquids industry in a comprehensive way. In order for a new fuels industry to develop three components are required - up front costs to design and build, a site to do it, and a market to sell the product.
 
The amendment provides loan guarantees and loans for the start up costs. It provides incentives to some of the most economically distressed communities – Indian tribes and those affected by BRAC – to consider locating a facility in their backyard through Economic Development Administration grants. Last, the amendment requires the Department of Defense to study the national security benefits of having a domestic coal-to-liquids (CTL) fuels industry – to comprehensively assess a new market.
 
I have to give credit to my colleagues Senators Bunning, Obama, Lugar, Pryor, Murkowski, Bond, Thomas, Craig, Martinez, Enzi, and Landrieu who together introduced a bill with similar language. I am hopeful that they will join me in moving this amendment.
 
We can all agree that increasing domestic energy security is a vital objective. Yet, it also provides good jobs.
 
According to the Illinois Department of Commerce and Economic Opportunity a CTL plant, with an output of 10,000 barrels per day, can support 200 direct jobs on site, at least 150 jobs at the supporting coal mine and 2,800 indirect jobs throughout the region. During construction, another 1,500 temporary jobs will be created.
 
Fourth, cellulosic biomass ethanol – renewable fuel from energy crops like switchgrass – is a popular concept but faces financial barriers. Recently, the federal government has released some initial money to help develop the industry, but more could be done.
 
In order to entice private sector investment, it is important for the collective fuels industry and motorists to know what our renewable resource base is, as well as traditional fuels. This amendment requires the Securities and Exchange Commission to convene a task force to assess how we should modernize our reserves – both traditional and renewable for cellulosic biomass ethanol feedstocks.
 
Energy security, job security, American security - please join me in passing the Domestic Fuels Security Act.
 
I ask unanimous consent that a full copy of my remarks be printed in the Record.

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