Empowering Americans to Transform American Energy

Senator Wyden submitted the following statement into The Congressional Record on Wednesday, May 20, 2009:

"Americans consume too much oil, and they pay too high a price for it. National security pays a price. The environment pays a price and the economy clearly pays a price. It's clear that Americans can no longer afford the energy policy of the status quo.

Last summer, when crude oil prices approached $150 dollars a barrel, Americans were sending roughly $1.7 billion dollars a day to foreign countries to pay to cover their addiction to oil. That's $1.7 billion a day that was not invested here at home. Rather it went into the pockets of oil producers in foreign countries -- and often to countries that oppose America's interests and undermine American security. A third of the oil Americans use comes from the OPEC oil cartel - a cartel that includes governments who are either openly hostile to the United States or who provide a haven and support to those who are. American dependence on their oil is a recipe for disaster.

Oil prices have retreated, but America's addiction to oil has not let up. The nation's transportation system is almost entirely fueled by it. When the price of oil goes up, transportation costs go up, which means shipping costs and the cost of everything that has to be shipped goes up right along with it.

On top of all the other faults oil brings with it, burning fossil fuels is bad for our health and the health of our planet. Burning fossil fuels produces 86% of the man-made greenhouse gases released into the environment every year in the United States. Motor fuels have become cleaner over the years, but they still heat up the environment with greenhouse gases, just like burning coal at electric generation plants. Continuing to rely on energy sources that do harm to the air, land and water is a failed policy and bad for America's future.

Spelling out the problem, however, is the easy part. There is no silver bullet when it comes to remaking the way the entire nation consumes energy and encouraging the development of viable alternatives. No one person, organization or piece of legislation can do it alone.

If America is going to get on the path to real energy independence, Americans not only have to build that path, every American is going to have to commit to changing course in the way they use energy. And while I believe that government cannot simply legislate such transformative change, it is my view that government can provide the incentives and framework needed to empower Americans to rise to the challenge.

While I cannot tell you where the next advancement in green energy will come from, I know that given the right tools and incentives there is no limit to what American ingenuity can achieve. This is why today I am offering a series of proposals to speed up our progress toward a cleaner energy future. My proposals address the spectrum of solutions needed to get there. They start with harnessing the intellectual power of our colleges and universities to invent new energy technologies. They create new incentives for businesses to turn those technologies into new energy products. And they give consumers incentives to buy and install those new energy technologies in their homes and businesses.

If America is going to cut back in its use of oil, then it needs to take a hard look at the single largest user of oil, the transportation sector. Today, I am proposing a three-pronged program to dramatically reduce the amount of oil Americans use every day to get to work, do their errands, and transport American products to market.

First, I propose to dramatically revise the Renewable Fuel Standard that now requires gasoline and diesel fuel providers to blend larger and larger amounts of ethanol and other biofuels into motor fuel. I strongly support the continued development of biofuels, especially those that do not require the use of food grains like corn and oils used to make them. But as we have seen in recent years, you can't divert large amounts of food grains and oils without impacting the supply and price of those commodities. Last year, nearly a third of the U.S. corn crop was used for ethanol production, leading to more expensive food for families at a time when they can least afford it. That doesn't make sense to me.

The current standard also doesn't do enough to genuinely reduce the amount of oil being consumed. In part this is because fuels like ethanol simply do not contain as much energy per gallon as the gasoline it is intended to replace. The existing standard is aimed at replacing less than 15 percent of U.S. gasoline and diesel fuel with renewable fuels. I think we can do better, which is why my proposal aims to replace a third of those fuels with new low-carbon fuels. Right now a third of the United States gasoline is imported from OPEC countries. Let's aim to get this country off OPEC oil once and for all!

I want to make it clear that I am not proposing these changes because I am opposed to using renewable fuels. I have already introduced legislation - S. 536 - to allow biomass from Federal lands to be used in the production of biofuels. Under the existing Renewable Fuel Standard, biomass from Federal lands is prohibited from being used as a renewable fuel. This makes no sense from either an energy perspective or an environmental perspective. Allowing for the use of fuel derived from biomass from Federal lands will reduce the threat of catastrophic wild fires, help make those forests healthier, and open up a variety of economic opportunities for hard hit rural communities. It is also a step towards a sound national energy policy.

However, if the U.S. is going to have a Renewable Fuel Standard for motor fuels, then it really ought to be a standard open to all renewable fuels, not just a chosen few. This is why my legislation would allow a range of energy sources to qualify as motor "fuels" including electricity for plug-in cars, methane to fuel compressed natural gas vehicles, and hydrogen for fuel cells. Initially, these low-carbon fuels could come from conventional sources, such as electricity from the electric grid, but eventually they would need to come from renewable energy sources.

Singling out ethanol as the only additive approved for motor fuel only creates a market for ethanol, which in turn discourages research and investment in other promising fuels. Creating a technology neutral "low-carbon" standard to replace traditional fossil fuels with alternative lower-carbon domestic fuels opens the door for a whole host of advancements and innovations yet unknown.

In addition to supplying new, cleaner, renewable transportation fuels, I will also be introducing legislation to authorize the U.S. Department of Transportation to designate "Energy Smart Transportation Corridors" so that these fuels will be readily available for consumers. By working with trucking companies, fuel providers, and State and local officials, the Transportation Department would establish which alternative fuels would be available and where they could be purchased. They would standardize other features such as weight limit standards geared towards reducing fossil fuel use and the release of greenhouse gases. The corridors would also include designation of other methods of freight and passenger transportation, such as rail or mass transit - to help reduce transportation fuel use.

Beyond empowering Americans to make more energy efficient choices, my legislation would make sure that energy efficient choices are within the reach of more Americans. Because I believe that energy efficient vehicles should not just be a luxury item for affluent Americans, I will be reintroducing legislation to provide tax credits to Americans who purchase fuel efficient vehicles. Vehicles getting at least 10% more than national average fuel efficiency would get a $900 tax credit. The credit would increase up to $2,500 as vehicle fuel efficiency increased. The bill also provides a tax credit for heavy truck owners to install fuel saving equipment. And it would increase both the gas guzzler tax and the civil penalty for vehicle manufacturers who miss their legally-required Corporate Average Fuel Economy (CAFE) requirements. The technology-neutral tax credit is designed to get more fuel-efficient vehicles on the road by making fuel-efficient vehicles an affordable choice for more Americans.

But reducing oil use by the transportation sector alone is not enough. Some forty percent of energy use in the U.S. is consumed in buildings. So I am introducing legislation to empower American families -- as well as small and mid-sized businesses -- to save energy and install clean energy equipment. The "Re-Energize America Loan Program" will create a $10 billion revolving loan program to allow home and property owners and small and mid-sized businesses, schools, hospitals and others to make clean energy investments. This zero-interest loan program would be administered at the state level, not by bureaucrats in Washington, D.C. so it will be tailored to regional needs. It would be financed through the transfer of federal energy royalties paid on the production of coal, gas and oil, and renewable energy from federal land. It would empower Americans and businesses to help themselves and help their country start laying the groundwork for an entirely different energy future.

States like Oregon have enormous potential for development of renewable energy - solar, wind, geothermal, biomass, wave and tidal. The challenge is to find new ways to harness these energies. Renewable energy is also not just about fuel that goes into cars or electricity for homes or buildings. Renewable energy can also be used to heat homes and buildings, and power factories and businesses. So I am introducing legislation to provide tax credits for the production of energy from renewable sources, such as steam from geothermal wells, or biogas from feedlots or dairy farms that is sold directly to commercial and industrial customers. A separate credit would be available if this renewable energy is used right on site to heat a building or provide energy for the dairy.

The goal of this bill is to foster the development of new renewable energy technologies while expanding the market for renewable energy beyond the wind farms and electric generation plants already in place. The amount of the tax credit will no longer be tied to the way energy is produced but rather the amount of energy produced. This will help new energy technologies get in the game, and reward solutions that create the most energy. I am also introducing legislation to end the current tax penalty on biomass, hydroelectric, wave and tidal energies and other forms of renewable energy that are only eligible for half of the available Federal production tax credit. America needs all of these resources if it is going to move into a new energy future. My goal is to create a level playing field and give all of these technologies the full tax benefit in order to stimulate investment and get more renewable energy projects built.

One big advantage of renewable energy is that some form of it can be found on every corner, and in every corner of the country. Whether it's a solar panel on a home or store -- or geothermal power plant -- there is renewable energy potential virtually everywhere. One set of technologies that can make renewable energy even more available are energy storage technologies. These are solutions that can store solar energy during the day for use at night, or store wind energy when the wind blows, to be used when it doesn't.

Simply put, not enough attention has been paid to the use of energy storage technologies, which can also address daily and seasonal peaks in energy demand such as all of those air conditioners that Americans will soon be putting to good use during the summer's hottest days. Federal funding for energy storage technologies has been virtually nonexistent. So I am introducing legislation to create an investment tax credit that will help pay for the installation of energy storage equipment both by energy companies who connect it to the electric transmission and distribution system and for on-site use in buildings, homes, and factories. Any number of different types of storage technology can qualify - batteries, flywheels, pumped water storage, to name a few. The credit would be based on the energy stored, not on the technology used.

The goal throughout the bills I'm introducing today is not to pick winners and losers. The goal is to encourage innovation and installation.

Last but not least, America not only needs new solutions to our energy problems. It needs a skilled workforce to make them a reality. So, I am also proposing an "Energy Grant" Higher Education program to provide $300 million a year to America's colleges and universities to work on regional energy problems. This program is modeled on the highly successful SeaGrant research and education program that has been run by the U.S. Department of Commerce for more than 30 years and the SunGrant program established to research biofuels. The EnergyGrant program would fund groups of colleges and universities to do research and develop education programs aimed at unique opportunities and challenges in each region of the country. Why rely solely on the Federal Government research programs to come up with solutions for regional energy issues when labs and research departments at colleges and universities around the country can contribute to the effort?

The Senate Energy Committee has already adopted legislation I have proposed to create a $100 million a year, community college-based training program for skilled technicians to build, install and maintain the new American energy infrastructure of wind turbines, geothermal energy plants, fuel cells, and other 21st Century technologies. Without these skilled workers, this future will not happen and without effective training programs there won't be skilled workers to fill the jobs. I am also introducing this proposal as a stand-alone bill to help ensure that job training gets the attention that it needs. What good will "green jobs" do for Americans if Americans don't have the skills that these jobs will demand?

My goal in formulating this agenda has been to mobilize Americans and American resources to achieve authentic energy independence and a new energy future. To really accomplish this goal, I believe we must employ every tool at our disposal. But in the end the success or failure of any effort to transform the way Americans use energy will ultimately rest with the American people. There is no question that this won't be easy, but I have faith that the energy challenges facing the nation today are no match for the collective ingenuity, talent and energy of the American people. Let's put those resources to work."