The video for this story is not available, but you can still read the transcript below.
No image

Energy Politics

Kwame Holman looks at the long journey of the energy bill recently debated in Congress.

Read the Full Transcript


    Last night, when the Senate finally passed a Democratic-backed energy bill after two months of on-again, off-again debate, it did so overwhelmingly, 88-11.

    But the final measure reflected losses on major issues by both Democrats and Republicans, leaving members of both parties less than happy. Alaska's Frank Murkowski spent much of the last two months pushing his colleagues to allow oil drilling in Alaska's Arctic National Wildlife Refuge, or ANWR.


    We had an opportunity a few days ago to debate this issue about reducing our dependence on foreign oil. It was called ANWR. It was substantial. It was defeated.


    Senate Republicans and President Bush say allowing energy exploration in the arctic refuge could produce a million barrels of oil a day, and be accomplished in an environmentally safe manner. But last week, Senate Democrats and some Republicans refused make the idea part of their bill. And last month, Senators voted down a hotly debated plan to raise fuel efficiency standards for cars by 50%.


    When you look at why we are continuing to import more and more oil, it's very clear why we're continuing to import more and more oil. The main reason is that we have stalled out on improving efficiency in the motor vehicle sector.


    The remaining items in the energy debate left the Senate embroiled this week in battles over other ways to cut down on the use of fossil fuels and the pollution they cause. One was whether to mandate that ethanol derived from corn be added to gasoline to reduce auto emissions. Senators from large, urbanized states argued blending ethanol with gasoline is complicated and expensive, and their states should be allowed to develop other additives to reduce tailpipe emissions. California's Dianne Feinstein:


    Moisture causes ethanol to separate from gasoline, so the fuel additive cannot be shipped through traditional gasoline pipelines. Ethanol needs to be transported separately by truck, boat, barge, rail, and then blended into the gasoline at the refinery site after it has arrived. Yet it will not be so easy to transport ethanol by truck, boat, or rail from the Midwest and blend it once it is transported unless adequate facilities can be built.


    Feinstein said mandating ethanol use was the work of Senators from corn-producing states, including Majority Leader Tom Daschle of South Dakota — whose aim is to force corn-based ethanol on the big states. She characterized their attitude.


    "Tough, if it spikes your cost of gasoline; tough, if you don't have enough refinery capability. That is your fault. I am for the farmers in the Midwest, and all the rest of you be damned." I resent that as public policy. And I have every right to. I represent 34.5 million people, the fifth-largest economic engine on earth, and we are being told it is good for corn farmers, so you guys lay down and take it. And I have got every right to stand on this Senate floor and say I have a problem with it, and say I think this is unfair, and say I think it is done in the dark of night, and say I do not think anybody who is really affected by it has been let into that secret, dark room. Yes, you have all cut your deal, and both coasts are going to suffer because of it.


    More excess corn raised in Ben Nelson's Nebraska would be converted into ethanol under the mandate.


    Will this raise the price of gasoline because of the cost of ethanol? Quite frankly, by reducing the amount of gasoline used, because of the additive, it will drive down the supply of gasoline, which I think will also, if you will– and the use of ethanol as a part of that– not increase the cost of gasoline but will in fact decrease the cost of gasoline. And evidence really exists that this is what the marketplace has been doing over the last ten to twenty years in many states across the country.


    Most Senators agreed with Nelson and voted to require refiners to add five billion gallons of ethanol to gasoline by the year 2012. The U.S. consumes 180 billion gallons of fuel per year. In addition to the ethanol mandate, the Senate energy bill would require the federal Transportation Department to mandate higher fuel efficiency standards for cars within two years. The House passed a similar standard.

    The Senate bill provides about $14 billion in tax credits to encourage conservation, renewable fuels, cleaner coal, and safer nuclear technology. The House bill gives about twice as much in tax credits, mostly to increase oil and natural gas production. Finally, the Senate bill would require utility companies to generate 10% of their electricity using renewable fuels by 2020. Democrat John Breaux is from major oil and gas producer Louisiana.


    I support the so-called renewable portfolio standard. Now in English — if I were in Louisiana, I would try to explain it by saying it is a requirement of the federal government that power companies have to look for renewable sources of energy in producing energy in this country. What do we mean by that? Windmill power, for instance, biomass power are renewable alternative forms of energy that should be encouraged in this country, and I'm for that.


    But another oil state Senator, Republican Don Nickles of Oklahoma, said electric utility customers would pay higher bills unless the Senate adopted his plan for a less stringent mandate on the use of renewable fuels.


    If we don't pass this amendment, there is going to be a significant hit on ratepayers. It is going to happen, and people should know it. They should know we are voting on whether we are going to have electric rates go up significantly more.


    In fact, the Senate did vote for the stricter renewable fuels requirement. Work on melding the energy bills passed by the House and Senate will occur over the coming weeks.