As many of us who have worked toward a secure energy future for our country have recently found out, the term “energy bill” can mean almost anything. This year, both the Senate and the House have passed “energy bills.” Yet a closer examination reveals that while the Senate bill takes important steps to diversify our fuel sources, and increase our fuel economy standards and our energy efficiency, the House bill does little more than increase energy costs among multiple industrial sectors.
This spring, Sen. Jeff Bingaman (D-N.M.), who chairs the Senate Energy and Natural Resources Committee, and I began working on legislation to strengthen the renewable fuel standard that would help use less gasoline by replacing it with other sources. The centerpiece of our efforts is a mandate that would require an increasing portion of our fuel supply to come from advanced biofuels, like cellulosic ethanol and sorghum.
These new, advanced biofuels lack many of the disadvantages of traditional ethanol. Unlike kernel-based ethanol, they can be produced in every part of the country, and they use fewer resources to develop. Industry has already made advances in this area, and I am confident that with the help provided in our legislation, we can meet this new standard.
The House “energy bill” contains no such provisions. When it comes to America’s fuel supply, in fact, it takes a much different approach. When the federal government steps in and imposes new taxes and fees on the oil and natural gas industry, consumers pay the price. Companies do not swallow these costs; rather, they pass them on to consumers. Evidence of this concept can be found in each bill you open this month and every purchase you make at the store.
The House bill repeals numerous provisions in the Energy Policy Act of 2005 that were designed to increase domestic energy production. The net result of the House bill is a $16 billion tax increase on American oil and gas production. In fact, the House bill even imposes punitive costs on companies that produce domestic oil and natural gas in the Gulf of Mexico. Economics 101 says that the average consumer will bear the brunt of these new costs.
What makes the House approach even harder to understand is the way it targets domestic production. Producing more energy in the United States should be encouraged, not discouraged. It is not just an energy issue, but also a national security issue. Every barrel of oil produced herein America is one that we will not have to rely on from unstable regions. While the House targets American oil companies, state-owned oil companies in Russia, China and Saudi Arabia are out competing with U.S. companies and are thriving.
The House effort to increase prices for consumers does not end at the pump. It also targets electricity bills. I have a long record of supporting renewable energy. In fact, during passage of the Energy Policy Act of 2005, I led Congress to pass the largest tax incentives for renewable energy in U.S. history. The following year I led the fight, along with Sen. Bingaman, to protect Cape Wind, an offshore clean energy wind project that will deliver two-thirds of the electricity to Cape Cod and the islands of Martha’s Vineyard and Nantucket. On this year’s energy bill, I cosponsored an amendment that will establish clean energy corridors to develop transmission infrastructure for renewable energy such as wind.
I commend the House for seeking more renewable energy, but to make a renewable portfolio standard (RPS) workable, they must account for the fact that individual states lack the natural resources to meet a strict 15 percent requirement. If states can’t meet the RPS, they will be forced to pay large fines to the federal government, and consumers will once again have additional costs passed on to them. Instead of raising prices for those ratepayers, we should find a way to include every part of the country in an effort that truly will expand renewable energy. Otherwise, we will be left with billions in increased costs without an increase in renewable energy.
Finally, the Senate took a strong, bold step to pass a robust CAFE standard. While I understand that there is opposition in some quarters to CAFE, there is little doubt that Congress should act to increase our fuel efficiency. Yet inexplicably, the House passed no companion measure, leaving the status quo in place for fuel economy standards.
As Congress turns its attention back to energy this fall, I hope that the approach that we took in the Senate, of diversifying our fuel supplies and increasing our energy conservation and efficiency, prevails. If we instead defer to an approach that locks up our domestic resources and increases energy costs on consumers, we will weaken our nation’s energy security.
Domenici is the ranking member of the Senate Energy and Natural Resources Committee.
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