Opening Statement by Sen. Jeff Bingaman

Energy Policy Act of 2005

June 14, 2005

“Mr. President, let me first congratulate our Chairman, Senator Domenici, on successfully bringing this bill through the Committee on Energy and Natural Resources and to the Senate floor.  As he indicated, the vote on the bill in Committee was 21-1, nearly unanimous.  That vote is a testament not only to what is contained in the bill, but also to the process the he followed when moving the bill to the Senate floor.

“It’s been over 4 years since President Bush released his energy policy plan.  I believe that President Bush was right to want to fashion a comprehensive energy policy for the nation.  President Clinton had such a policy document, put together by a task force under Secretary of Energy Federico Peña.  The first President Bush also had a National Energy Strategy document that was put together by then-Secretary of Energy James Watkins, after numerous public hearings around the country.

“The fact that three successive Presidents have seen the need for comprehensive energy policies illustrates an important fact.  That is, good energy policy does not happen automatically.  Energy markets are not inherently free markets, and the short-term thinking that drives much corporate behavior in America is often mismatched to the long-term energy needs of the country.  As one example, if you look at the utility sector, you can see that our generation mix in recent years has strongly skewed toward new plants based on natural gas.  But we now find our long-term supply picture for natural gas cannot accommodate this additional demand without significant increases in price for all gas consumers.

“Energy policy is something that requires intentional forethought and planning.  I remember former Chairman Bob Galvin of Motorola saying at one point that there are certain things that a country needs to set out to do on purpose.  And I believe, along with my colleagues on the Democratic side, that a good comprehensive energy policy is one of those things.  I believe that what we should try to do “on purpose” can be summarized under four basic principles.

“The first principle is that we need increase our supplies of energy from all available sources.  Every potential source of energy will be required in order to meet our energy future.  We need to make sure that resources that have not yet been as extensively developed as they might otherwise be, such as renewable energy, get the policy assist they that need to make their maximum contribution.

“The second principle is that we need to ensure that the energy we do produce is transported as effectively as possible and consumed as efficiently as possible.  Our national energy system depends on a critical infrastructure of ports and pipelines and transmission wires and the other modes of moving energy from one place to another.  Building and maintaining that infrastructure are difficult and expensive.  And we need to make sure that we have policies so consumers are not hurt by price spikes and other problems caused by bottlenecks in the energy system.  Once energy reaches its point of end-use, it’s important that it not be wasted.  Improving the efficiency of energy use in appliances, in commercial equipment, in industrial processes and in transportation will lead to two important goals: lower prices for all energy users and less strain on our energy infrastructure.

“The third principle of a good comprehensive energy policy is that we need to make sure it meshes well with other important national policies.  It’s especially important that energy policy have good synergy with environmental policy.  Nowhere is this clearer, in my view, than in the case of global warming.  Ninety-eight percent of the carbon dioxide produced in the United States is associated somehow with energy production and use.  We can’t afford an energy policy that does not take into account environmental and climate impact, just as we can’t afford to have a climate policy that ignores energy impacts.

“Finally, because we rely heavily on market forces and signals to shape our energy choices, we need to be sure that we have energy markets that are transparent and that are fair to consumers.  I believe that when we have competitive energy markets, that work fairly, everyone in the energy chain, from producer to consumer, benefits.  As the California electricity crisis a few years ago showed – and not just the California crisis, but the crisis that afflicted most of the West Coast -- when energy markets are not structured properly, when those markets allow for hidden and manipulative practices, great economic damage can be done.

“So these four principles are the foundation that I hope we have before us in this energy bill that’s coming to the Senate for consideration.  I believe that the Senate will ultimately be judged in the area of energy policy:

--  First, by whether our bill makes a concrete difference in bringing new energy resources and technologies into the mix,

--  Second, by whether we make sure that we use advanced technology to save as much energy as possible,

--  Third, by our ability to protect the environment and respond to challenges such as global warming, and

--  And finally, by our ability to shape energy markets for the future that protect and empower consumers.

“At the beginning of the mark-up of the bill in the Energy Committee, I expressed my appreciation to my colleague, Senator Domenici, for the way in which he and his staff worked with Democratic Members and staff in preparing for the mark up.  I told him that he deserved great credit for a good start, and I looked forward to working with him to see if we could have a similarly good finish in Committee.

“We had a very good finish in Committee.  We are now having our start here on the Senate floor.  This bill is a good starting point, but there are several important issues that we need to deal with in the full Senate that we were not able to address in Committee.

“Three of these issues deal with providing more certainty to everyone associated with our energy system, so that they can make rational investments in the energy technologies of the future.

“First, we need to provide renewable energy with a more certain place in our future.  Renewable energy provides nowhere near the contribution to our energy mix today that it could, or that it should.  In the last Congress, we expanded the scope of production tax credits for renewable energy, but these tax credits expire after only a very short time.  Thus, they do not provide the needed long-term market signals.  I believe that we need to supplement these tax credits with a long-term national Renewable Electricity Standard.  By having a clear, certain requirement that 10 percent of all electricity generation come from renewables in the year 2020, we would give industry the certainty it needs to successfully undertake new projects to improve the diversity of our electricity generation mix and to relieve some of the pressure that is leading to high natural gas prices.

“Second, we need to deal responsibly with global warming.  The electric industry and many other sectors of our economy are gripped with uncertainty about the future of carbon-based energy and products in a world that is increasingly concerned about global warming.  There is a need for certainty about the regulatory framework that would be in effect regarding future investments to ameliorate the threat of global warming.  Under our current voluntary approach to the problem, we will likely never see these new investments, not because they aren’t needed, but because the economic picture is so clouded.

“Third, we need more clarity in how we plan to deal with our dependence on foreign oil.  We need to see if we can spur additional petroleum production in a way that’s environmentally responsible, and we need to see if we can find ways to use less oil in the U.S. economy.  If we can trim the growth in our national demand for oil, we will relieve both our dependence on imports and the pressure on our national infrastructure of oil terminals and pipelines and refineries, all of which are operating near their capacity today.

“An energy bill is a place for clear purposes.  I hope that when the full Senate has completed its consideration of this measure, it will have expressed a willingness to take clear and forceful new action to ensure that our energy future is clean and abundant and affordable.”

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Bill Wicker

Democratic Communications Director

Senate Energy & Natural Resources

202.224.5243