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Senator Bingaman and my colleagues on the Energy Committee have worked

[Page: S1718]  GPO's PDF

   In the longer term, the question of whether we succeed for this country in developing an energy policy that moves this country ahead, reduces its dependence on foreign sources of energy, and increases this country's energy and national security will depend on whether we pass legislation that is balanced in all four areas I have mentioned.

   At the start of my presentation, I offered an amendment. It is now pending. I believe it will be accepted by both sides at some point when they have considered other legislation.

   I thank the Senator from Alaska for allowing me to proceed. He has something like 564 charts or close to that. I suspect he will be making a long presentation on a subject about which he is very passionate.

   Mr. President, I say to the Senator from Alaska, I have visited Alaska. It is a wonderful State. We might have disagreements about certain production in Alaska, but I think he certainly speaks aggressively on behalf of his view of those issues. I do think he is right on the point that we must produce more. The question is not whether; the question is how do we produce more and where do we produce more.

   I yield the floor and suggest the absence of a quorum.

   The ACTING PRESIDENT pro tempore. The clerk will call the roll.

   The legislative clerk proceeded to call the roll.

   Mr. MURKOWSKI. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

   The PRESIDING OFFICER (Mrs. FEINSTEIN). Without objection, it is so ordered.

   The Senator from Alaska.

   Mr. MURKOWSKI. In response to Senator Dorgan regarding his amendment which covers powerplant operator training, the amendment establishes, as he has noted, a national center to address the need for training and educational activities of operators of electric generator plants.

   I think we would all agree we can improve this even though operators have been trained in the past. But I want to emphasize the amendment would improve the training of the operators and their ability to do their job safely and efficiently. Therefore, I have no objection to the amendment. My only concern is we have some norm that is reasonable in the training, but I want to assure the Senator we will accept the amendment in the spirit of moving along on the energy bill.

   I want to comment on several aspects of amendments which we are going to be taking up very soon. There are a couple of points I want to address specifically. One is the Akaka Hawaii oil study which makes technical changes to the study language which is contained in section 1702 of the original Daschle bill. It requires the Department of Energy to assess the economic implications for Hawaii of its dependence on oil as a resource for most of its energy needs.

   I remind my colleagues the oil that Hawaii receives comes from Alaska. It comes in U.S. ships because the Jones Act mandates the carriage of commodities between two American ports has to be on a U.S. vessel. So this is a significant contributor to the American merchant marine inasmuch as it must use a U.S. vessel built in a U.S. yard with U.S. crews for the benefit of Hawaii.

   I want to assure the Senator from Hawaii that the amendment has been cleared by both sides. It is an amendment of a technical nature. It specifically requires the Department of Energy to assess the economic implications of the dependence on oil as its principal source of energy for the Hawaiian Islands. I have indicated I support the amendment.

   We should all be concerned about the economic dependence of our States on imported oil. Hawaii uses about 99.8 percent of its electricity needs generated from oil. Of the 50-plus million barrels of oil consumed in Hawaii, it comes primarily from Alaska. There is some that is imported as well, but the imported oil comes in foreign ships with foreign crews. As a consequence, the State Department indication on tourism indicated the transportation fuel prices caused substantially high impacts on the Hawaiian economy. Higher fuel means higher airplane tickets. Higher energy costs means higher hotel bills.

   So I agree with my friends from Hawaii, we should investigate our options to ensure energy security. I know the Senator from Hawaii has been working on the strategic petroleum reserve in case there are interruptions because of Hawaii's dependence on imported fuel, and I support that.

   There is also an amendment we can accept, and that is the Bingaman U.S.-Mexico energy technology cooperation. This amendment authorizes $23 million over the next 5 years for projects to improve energy efficiency and reduce environmental impacts of economic development along the U.S.-Mexican border. It is the same as a bill approved by the Senate in the 106th Congress. I am pleased to join with Senator Bingaman in

   supporting this.

   The program improves environmental quality and protection of public health along the southern border with Mexico, and it prompts energy-efficient, environmentally sound, and economic development. As we address transboundary problems like air pollution and climate change, we are going to need these kinds of partnerships with other nations obviously, sharing the recommendations of Members from those States that join our southern border. Clearly, they know what is in the best interest of their area and their State. As a consequence, I respect that and, hence, support the Bingaman U.S.-Mexico energy technology cooperation.

   We have another amendment we will be taking up tomorrow, and it is the Feinstein energy trading market oversight. I think we are going to probably be having some spirited discussions on this amendment. I am anxious to learn a little more from the Senator from California. As I understand, the amendment could potentially disrupt both the electrical and natural gas trading markets. I hope that would not be the case, and perhaps this could be brought out in the debate, but if it is the case it could lead to significant increases in the price of electricity and natural gas to consumers throughout the country. It could also lead to energy price and supply problems on the level--I would hope not--of the California disaster of last year. It seems to have a nationwide application.

   I want to emphasize these could be cases because, frankly, we do not really know. The amendment has materialized without any hearings, without any witnesses, without any testimony from the Federal Energy Regulatory Commission and the SEC or the Justice Department. So we do not have any real analysis.

   We do not know what problem this amendment is trying to fix. On the other hand, I look forward to the debate. Perhaps we will be enlightened by the Senator from California. We do not know if this amendment actually fixes the problem, let alone recognizes the problem. We do not know if this amendment has the right problem. So we look forward to some clarification.

   One thing is clear, if this amendment is intended to prevent another Enron from occurring, in my opinion it will not work. Enron's collapse had nothing to do with the energy trading business. It was triggered when Enron's other business activities raised questions of accounting irregularities and conflict of interest among the company's executives. In other words, Enron's bankruptcy was not the result of unregulated energy trading. It was the result of Enron's bad judgment, bad accounting practices, a fundamental lack of honesty, and a loss of investors' confidence.

   Even if this amendment had been adopted 10 years ago, I do not see how it would have done anything but recognize the free market would dictate an environment where Enron still would have collapsed.

   Many other honest and legitimate energy trading businesses have done, and are continuing to do, the very same kind of energy trading in which Enron was engaged. They have not gone bankrupt.

   We all want information disclosure, and good corporate management. We all want to fix the problem and prevent

[Page: S1719]  GPO's PDF

   Let us not throw the baby out with the bathwater. Let us make sure we know what is being done. Let us fix the problem that needs to be fixed. Let us not make the problem worse.

   This amendment preferably should be introduced as legislation. Hearings should be held, with testimony from the FEC, the Commodities Future Trading Commission, the Department of Justice, and others. The committee of jurisdiction should consider testimony, weigh the evidence, and report a well thought out bill that really fixes the problem. I would encourage that we become enlightened because it is rather inconsistent to recognize that some of these bills that have not had a full evaluation could be dropped in conference, and that is not fair to anybody, particularly those who have worked so hard and presented responsible legislation.

   So let us not just satisfy a pile-on, so to speak, to do something regardless of whether it works or not. Our $200 billion a year electric power system is too important to toy with. Confidence in our future trading businesses is too important not to fix it properly, assuming there is something that needs to be fixed.

   As a consequence I remain open and yet somewhat guarded in my evaluation of whether this amendment is going to do anything other than pile on more criticism for the manner in which the Enron failure occurred.

   I would like to remind my colleagues, and staff particularly, that when Enron collapsed two things did not happen. First, we didn't see an increase in electric rates. Second, we didn't see a decrease in supply.

   The conclusion we can draw is, clearly the system worked. There was a transition where the open market simply picked up the volume that Enron was trading and transferred that over to other organizations to continue that function. I would hate to have seen a situation occur where you would have to get approval from FERC on who would pick up that additional responsibility after Enron's failure, as opposed to the clear and workable process that filled the vacuum left by Enron. When Enron failed, we didn't see price increases, and we didn't see a shortage of supply.

   I have a couple of other points I want to bring up relative to where we are going with this legislation. I doubt very much we are going to get anything introduced today on CAFE, although I had hoped that might occur. I gather the principals are still in the process of some discussion.

   I would like to comment briefly on the electric provisions pending in the Daschle legislation. I think we need to recognize that the process is going to require a good deal of input from Members and staff because it has not had the evaluation associated with a committee function. There was not an opportunity where a committee could meet and come out with a bipartisan opinion on various aspects of this complex piece of legislation. We are reconciling our different views on electricity, but one of the things to keep in mind is this industry is not broken. The Enron collapse is something else. Again, I add that the industry is not broken. It functions. We have not seen a shortage. We are not seeing price increases. There are those who suggest if it is not broken, why fix it? Sometimes Congress is the one fixing things, even when they are not broken.

   Let me first observe that there are ongoing discussions and reconciliation of various views on electricity. I am hopeful and optimistic that these discussions will bear some fruit.

   I would like to discuss the existing provisions in the pending Daschle bill as written. The current provisions exemplify the fundamental philosophical differences between authors of this provision and what I believe is a bipartisan majority of the Senate.

   First of all, the authors of the electric provision want more Federal Government participation and control by Federal regulators, which, in my opinion, micromanages the marketplace and preempts State regulation with Federal regulation--you have different regulations, not deregulation. Again, think about it--you have different regulations, not deregulation, and, further, to have the Government pick winners and losers rather than trusting the consumers to the obligation of the free market.

   There is one reason why these provisions do not have any committee blessing. The real reason, of course, is we haven't had any committee hearings. We haven't had any markups. We haven't reported anything out.

   That is the way the majority leader directed it, and he, kept the committee from proceeding with its responsibility of holding hearings and voting out action.

   I believe the bipartisan majority of the Senate wants electricity reform, wants legislation which specifically protects consumers, that tries to streamline regulation rather than making it more complex, and wants to enhance the competition while preserving State authority.

   Further, it ensures the reliability of the grid, allows regional flexibility, and promotes renewable energy and other types of generation.

   I am going to talk a little bit about renewable energy. There is a great deal of concern and interest in the aspects of renewable energy. I am going to take one example, which is something that is exciting to many of us; that is, the potential solar panels being utilized. Of course, you have to have some sunlight. In the winter in my State of Alaska, it is dark a good deal of the time. So a solar panel would not necessarily get you very far.

   As we look at the contribution of solar energy in relationship to oil, you have to look at an equivalent of what kind of footprint it would make. Here is a chart that shows 2,000 acres of solar panels that produces the energy equivalent of 4,464 barrels of oil a day. You have 2,000 acres that would be covered solid with solar panels. That would be two-thirds of the State of Rhode Island.

   Two thousand acres in the Arctic National Wildlife Refuge would produce roughly 1 million barrels of oil per day. I think that gives you a little comparison, if you will, of the footprint associated with renewables in the sense of a meaningful and significant contribution. It is important. We want to continue to look toward the renewables in the future. But we should recognize that there is a legitimate tradeoff.

   We are going to debate ethanol, and it is certainly a significant renewable source of energy. It comes from corn, primarily. If we were to take 2,000 acres of ethanol farmland and plant corn, we would produce the equivalent of 25 barrels of oil a day from 2,000 acres. Take 2,000 acres of ANWR and it will produce 1 million barrels of oil a day.

   To produce a million barrels of oil, it would take corn fields covering the entire States of New Mexico and Connecticut. You would have to plant all the acres in the State of my friend, Senator Bingaman, in corn, plus all the acreage in Connecticut to get 1 million barrels of oil. In Alaska, you could get 1 million barrels of oil from ANWR's 2,000 acres.

   I have one more renewable energy source that might get the attention of some of my colleagues. In the State of the current occupant of the chair, the senior Senator from California, there is a wind farm located between Banning and Palm Springs in San Gorgonio. She is quite familiar with it. I have been through there many, many times. I don't know how many windmills there are on this wind farm, but it is significant. Some suggest it is a Cuisinart for the birds because while flying low they occasionally have a problem getting through there. On the other hand, higher flying birds don't have that problem.

   The point is, you can look at it and say it is a pretty picture, or you can say that there is a rather dramatic footprint that has its own attraction, but I think it is important to look at the equivalent energy.

   I understand this particular area is a little over 1,500 acres of wind generators, but 2,000 acres of wind generators produce the energy equivalent of 1,815 barrels of oil. Yet 2,000 acres of ANWR produces 1 million barrels of oil a day. It would take about 3.7 million acres of wind generators--or all of the landmass of Connecticut and Rhode Island--to produce as much energy as the 2,000 acres of ANWR.

   My point in going through this demonstration is to identify that while renewables are important, they are simply not the answer for the volume of

[Page: S1720]  GPO's PDF

   So as we look at various aspects associated with the electric portion that covers renewables, I think we have to keep in mind, indeed, there is a tradeoff.

   The philosophical difference is apparent when you compare the electric legislation I had introduced earlier this year with the pending Daschle bill.

   My legislation was bipartisan. It was S. 388. We had three electric provisions: We had PUHCA, we had PURPA , and we had reliability. The PUHCA and PURPA repeal provisions promote competition by reducing Federal interference with the marketplace.

   The electric reliability provision protects consumers by creating an industry-run, Government-overseen electric reliability organization that has clear enforcement authority. Consumers will continue to be fully protected because, first, the States will continue to regulate retail rates, and, second, FERC will continue to regulate wholesale rates, which I feel quite comfortable with and which has worked quite well, in my opinion.

   Let me identify some of the provisions in the majority leader's electricity title which creates new Federal authority or preempts State authority.

   Section 202 expands FERC's jurisdiction over utility mergers and acquisitions.

   Section 203 gives FERC new authority to restructure the electric power industry with no guidance--absolutely none--from Congress.

   Section 205 gives FERC authority to order the construction of new transmission lines and to order the sale of electricity on its own motion.

   Section 206 gives FERC new authority over publicly owned utilities to order open access transmission. Although this section exempts all but the largest publicly owned utilities, we all know what happens in conference to those exemptions once the principle has been established.

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