Statement of Senator James M. Jeffords
H.R. 6, the Energy Policy Act of 2005 Mr. President, I intend to vote in favor of H.R. 6, as amended by the Senate, the energy bill. I want to explain in detail my reasons for supporting this legislation and highlight my serious concerns regarding the House-passed version of H.R. 6. I strongly oppose many of the provisions in the House-passed bill, and the Senate conferees should hold strongly to the Senate-version of this bill and reject the House legislation. Energy policy is an important issue for America and one my Vermont constituents take very seriously. The bill before us seeks to address important issues, such as the role of domestic production of energy resources versus foreign imports, the tradeoffs between the need for energy and the need to protect the quality of our environment, and the need for additional domestic efforts to support improvements in our energy efficiency, and the wisest use of our energy resources. Given the importance of energy policy, this bill is a very serious matter. I do not take a decision to support such a bill lightly. Though this bill is not exactly as I would have written it, it begins to move this nation towards a more balanced approach our energy needs. During floor debate, the Senate modified the renewable fuels standard contained in the Energy Committee reported bill to more closely resemble legislation reported by the Environment and Public Works Committee, S. 606. Specifically, the bill would repeal the Clean Air Act requirement for oxygenated gasoline, and phase out the use of the additive methyl tertiary butyl ether, or MTBE, in four years. It would require refiners to use biofuels, presumably mostly ethanol, in volumes of 8 billion gallons by 2012. This is a much more aggressive goal than the 108th Congress Senate-passed bill that I supported, which included a 5 billion gallon by 2012 mandate. It is my hope that such a significant commitment will begin to reduce our dependence upon foreign oil. Mr. President, I would like to share the history of the renewable fuels provisions included in this bill we are adopting today. I’ve long supported a more aggressive approach to replacing petroleum-based motor fuels with fuels made from domestic resources, including ethanol produced by farmers growing grains and fibers. I commend Senators Domenici and Bingaman on their leadership on this important matter. Back in 1991, I introduced S. 716, the Replacement Fuels Act, to require gasoline refiners to replace increasing percentages of their product with domestically produced, non-petroleum liquids. Many of us knew then that it was technologically possible, and now it seems that a majority has crossed that threshold of understanding. When I first introduced my Replacement Fuels Act, many did not take it seriously. The oil industry certainly did not. But I made the rounds with several of my colleagues to convince them of the benefits of such a program, including the national security benefits of weaning ourselves from our dependency on foreign oil. At the time, I argued that the costs to our military, in terms of personnel and dollars, of protecting the shipping lanes of the Persian Gulf, and of attempting to quell the political unrest of the Middle East, were staggering then and only apt to grow larger. I recall meeting with the distinguished Senator from New Mexico, now the Chairman of the Energy Committee, in his office to discuss my bill. We agreed on the domestic benefits of moving in this direction – for our farmers; for our environment; for our national and domestic security. After considerable discussion, Senator Domenici agreed to cosponsor my bill. I made the rounds to other Members of the Energy Committee for their advice and support. Many of those Committee Members who cosponsored my bill are still here today – Senators Bingaman, Burns, Craig and Conrad, Shelby and Akaka. Four other committee members, since retired, also were cosponsors, making a majority of the committee and ensuring committee approval. Other Members who cosponsored my bill and who are here today include Senators Grassley, Reid, and Warner. In the end, the bulk of the language of my Replacement Fuels Act was included as Title V of Public Law 102-486 the Energy Policy Act of 1992. Before final passage of that Act, however, in every instance that “shall” appeared in my bill, it was changed to “may” in the final law. In other words, it changed from a mandate to an option, and we’ve only made modest gains in the past dozen years, when we could have made bold progress. So, again, I commend Senators Domenici and Bingaman for their leadership to move us more aggressively toward domestic production of transportation fuels and away from our growing foreign dependence. Mr. President, I urge Senators and the public to take note of the Sense of the Senate on climate change successfully included in the bill due to the efforts of Senators Bingaman, Domenici, Specter and many others. It says that Congress should enact a comprehensive and effective national program of mandatory, market-based limits and incentives on emissions of greenhouse gases that slow, stop, and reverse the growth of such emissions at a rate and in a manner that (1) will not significantly harm the United States economy; and, (2) will encourage comparable action by other nations that are major trading partners and key contributors to global emissions. Such a program regarding air pollution and environmental policy is clearly in the jurisdiction of the Environment and Public Works Committee and I am strongly committed to holding hearings and reporting implementing and bipartisan legislation from that Committee, on which I serve as the Ranking Member, as soon as possible. During debate on the renewable fuels provisions, I agreed to modify the absolute deadline for EPA's long-awaited and long-delayed mobile source air toxics (MSAT) rule from July 2005 in Domenici Amendment No. 779 to July 2007. EPA is widely expected to promulgate a final rule well before that later date, but this provision provides additional certainty and protection. In addition, the provision as amended and included by Senator Inhofe in the last manager’s package will allow EPA to regulate more stringently than the 2001-2002 toxics emissions reductions baseline in the final MSAT rule. That more stringent rule will take the place of the baseline so long as it will achieve and maintain greater overall reductions in emissions of air toxics. Such reductions must occur in the same timeframe and result in overall reductions of each and every one of the air toxics emitted in the combustion of gasoline, when compared to the 2001-2002 baseline. This provision should not be construed to permit EPA to count reductions of less toxic pollutants like aldehydes equal in effect or equivalent to reductions of more toxic pollutants like benzene. The intent of this provision is not to allow EPA to avoid toxics potency weighting or sensible risk analysis and exposure assessment in determining the meaning of "overall reductions." This provision should also not be viewed as a vehicle for changes to the liability system for fuel additives. The Senate has spoken very strongly on this point, and the conferees should be aware than any new MTBE language addressing the issue of retroactive liability is likely to jeopardize passage of the Conference Report in the Senate. I am also pleased that the Senate included a 10% renewable portfolio standard in this bill. I have worked for more than twenty years to boost the percentage of renewable sources used to generate our nation’s electricity. While I believe we could be taking a much more aggressive step, we need to take a serious first step, and the provisions in this bill do just that. Though I understand that the House has concerns with adding an RPS, it is my hope that the conferees will acknowledge that, for many states, renewable energy can and should be a bigger energy source. I am pleased that the Senate has also chosen to promote renewable energy by accepting three amendments I offered to the bill during floor debate. It is my hope these modest provisions will be retained in conference. My first amendment will make significant reductions in energy use in the Capitol complex by requiring the Architect of the Capitol to review the possibility for energy savings in the Dirksen building. The second two amendments expand the sources of grant financing available to utilities for projects involving renewables and efficiency. The Senate has agreed to add livestock methane, a promising source of energy in Vermont, as an energy source that is eligible to compete for grants under the Department of Energy’s Renewable Energy Incentives Program. The Senate has also agreed to create a new $20 million per year grant program for upgrade of electric transmission. As I mentioned, though, the bill is not perfect, and the conferees should carefully review several provisions. In Title XIII there are a number of sections authorizing investigations that will recommend changes to environmental laws, such as the Clean Water Act, the Safe Drinking Water Act, the Clean Air Act and the National Environmental Protection Act. Unfortunately, in a number of these areas the Environmental Protection Agency, whose responsibility it is to ensure the air we breath we the water we drink is safe, is not involved in developing or approving these recommendations. While I proposed amendments to include the Environmental Protection Agency in these sections, not all of changes were adopted. The sections needing amending include: Section 1306 Backup Fuel Capability Study; Section 1309 Study of Feasibility and Effects of Reducing Use of Fuel for Automobiles; and Section 1320, Natural Gas Supply Shortage Report. It is my belief that any studies that involve environmental compliance should include the involvement of the agency whose mission it is to oversee the implementation of these environmental laws. I am pleased that my Recycling Investment Saves Energy (RISE) provisions were included as section 1545 of the final bill. The provisions will provide almost $100 million in tax incentives for recyclers over the next decade to preserve and expand our nation's recycling infrastructure. The targeted 15 percent tax credit for equipment used in the processing and sorting of recyclable materials will increase quantity and quality of recyclable materials collected. This national investment is necessary to reverse the declining recycling rate of many consumer commodities, including aluminum, glass and plastic, which are near historic lows. It will also generate significant energy savings as increasing the US recycling rate to 35% will result in annual energy savings of 903 trillion BTUs, enough to meet the energy needs of an additional 2.4 million homes. The Finance title includes an amendment that I authored to improve future Federal energy investment and policy decisions. It requires the Secretary of Treasury to contract with the National Academy of Sciences to complete a study and report to Congress on the health, environmental, security and infrastructure externalities associated with energy activities and how they may or may not be affecting revenues, the economy and trade. Such information will dramatically improve our ability to review the costs and benefits of energy legislation and tax policy changes I am pleased that my amendment to Section 1305, the coal bed methane study, was adopted. My amendment requires that as it studies the issue the Department of Energy consult with states and the Environmental Protection Agency on the impacts of coal bed natural gas production on surface water and ground water resources. This consultation should occur, especially before making recommendations to Congress on changes to the Clean Water Act and the Safe Drinking Water Act. This bill does a reasonable job in balancing support for traditional fossil fuels and nuclear power and renewable energy, but I am perplexed by provisions in the energy bill that provide $1.82 billion in grants for oil, gas and coal industries. With oil hovering around $60 a barrel and gasoline prices at record highs, I question the wisdom of providing additional subsidies for oil and gas exploration and production. While Americans pay more at the pump, multinational oil companies continue to report record profits. The bill also waives royalty payments for oil companies drilling in federal waters and rewards these already profitable companies while depleting the U.S. economy of $100 million over 10 years. The bill gives $1.8 billion to the dirtiest power plants to build new coal power plants, thereby giving them an economic advantage over power plants that installed pollution control technologies. I am also concerned about provisions in the coal title that unfairly benefits mining companies with current leases on federal lands by doubling the acreage (162 to 320 acres) of coal-leased lands; removing the 40-year limitation for leases; and doubling the time (from 10 to 20 years) current leaseholders can pay advanced royalties. These provisions will have the most significant impact on the Powder River Basin where three mining companies dominate current production. I question the wisdom in subsidizing these fossil fuel industries that will only continue to encourage our nation’s dependence upon these polluting and expensive energy sources. I also urge the conferees not to include the Leaking Underground Storage Tank (LUST) reform provisions in the final bill. The Senate Environment and Public Works Committee is actively considering these issues and has planned a hearing for July 2005. Our Committee’s actions led the Senate to enact bipartisan comprehensive LUST reform legislation last Congress by unanimous consent. Adding LUST reform onto the energy bill would needlessly bypass our legislative consideration and prevent this issue from getting the careful attention that it requires. The LUST provisions of the Senate’s energy bill, Section 210, are problematic. Most significantly, the section raids the LUST Trust Fund and diverts dollars from their intended purpose -- cleaning up contamination from leaking USTs. Without increasing the amount of money to be appropriated to the States, the provision expands the eligible uses of the LUST Trust Fund to pay for cleanup of spills from non-UST sources, such as pipelines, cars, and above ground storage tanks. In a letter to Rep. W.J. “Billy” Tauzin on May 7, 2003, former EPA Administrator Christine Todd Whitman opposed these provisions because they "would change the historical scope of the program, and could stress the Agency’s ability to adequately address releases from USTs." I am concerned, Mr. President, because this section will go to conference with the House-passed LUST provisions that also contain significant flaws. The House provisions add a new periodic inspection requirement for USTs that is weaker than the 2-year minimum inspection frequency recommended by EPA and the 3-year minimum requirement recommended by the Government Accountability Office. For example, a tank last inspected in 1999 wouldn't need to be inspected again for over a decade. In addition, the House delivery prohibition provisions may preempt existing authority in 24 states. Finally, the provisions requiring secondary containment within 1,000 feet of existing community water systems includes an exemption that ignores prevention in favor of expensive cleanup. So, Mr. President, we have our work cut out for us. Today, the Senate is passing a good bill that needs some work in conference, but not a substantial overhaul or weakening. To retain my support the conferees need to prevent substantial modifications to this bill, resist the addition of controversial items added in the House-version of H.R.6, avoid substantive modification to core titles of the bill, limit adjustments to the bill's fiscal scope and cost, and consider additions of provisions to provide energy security. This is a good effort to develop energy legislation for America, which is a goal widely shared in both houses of Congress. It is my hope that conferees seek this year to reach consensus on issues such as: national electricity reliability standards, the use of renewables, the phase out of methyl tertiary butyl ether (MTBE) and production of suitable oxygenate replacements, and the fiscally responsible extension of needed energy tax provisions. With this bill I am supporting today we send them a good template to achieve that goal.