Speeches & Floor Statements

Floor Remarks of U.S. Senator Lamar Alexander “On Climate Change Legislation”

Posted on June 3, 2008

In our region where the Tennessee Valley Authority produces about 3 percent of all electricity in the country, estimates are that we would need 700 new megawatts of power in the next year. That is a coal plant and a half. That means 30 or 40 new coal plants around the country just to meet that, if the rest of the country is like TVA. That is a real issue as well. Our Nation's overreliance on oil from other countries is a huge issue for us. We don't like being in the pocket of people who are selling us oil, including some who are trying to kill us by bankrolling terrorism. We want to be more independent than that in the world. It affects almost every aspect of our national security. It is costing $500 billion a year. Overdependence on foreign oil is driving down the value of the dollar. That lack of independence in our supply is a major issue. Clean air is an issue. Carbon is not the only pollutant in the air that I am concerned about, coming from Tennessee, nor would it be for a Senator from California either. We have a real concern about sulfur, nitrogen, and mercury. I have, since I have been in the Senate, supported legislation in a bipartisan way--first with Senator Carper--to stiffen requirements on mercury, nitrogen, and sulfur as well as begin to cap powerplant emissions for carbon. That is a little different perspective as well, rather than just saying carbon is the only problem. There is a range of problems we need to deal with. My preference, as I will say in my remarks, is that we should have a new Manhattan Project for clean energy independence. That is the real way to deal with high gas prices, high electric prices, climate change, clean air, and the national security implications of too much dependence on foreign oil. But let me go back to the beginning and start with some problems with this bill. What is wrong with Lieberman-Warner? The first thing wrong is that the Warner-Lieberman bill, according to an analysis by the Environmental Protection Agency, would increase the tax on gasoline by 53 cents per gallon by the year 2030, and an additional 90 cents or so after that. That's a 53-cent-per-gallon gas tax increase, according to the Environmental Protection Agency. That is not some Republican policy group speaking--that is the EPA. I intend, when the opportunity comes, to offer an amendment to strike from the bill the provisions that would put a 53-cent gas tax increase on the American people. That is the first thing wrong with the bill. The second thing wrong with the bill is that the Environmental Protection Agency says a 53-cent gas tax increase may hurt the pocketbook of the American consumer, but it will not reduce the carbon. It is not enough to cause people to drive much less and it is an ineffective way to do what the sponsors of the bill want to do, so we would have the worst of both worlds--we would be increasing the gas tax by 53 cents per gallon, and we would not be doing what we aim to do which is to reduce carbon with that effort. The third thing wrong with the bill is it creates, over the next 10 years--according to the Congressional Budget Office--what I would call a trillion dollar slush fund. It would collect money--in effect a carbon tax, through a cap-and-trade system on the entire economy of the United States--and bring it to Washington, DC, where Members of Congress would, over the next 40 years, create about 42 mandatory entitlement spending programs for that money. Nothing is more dangerous in Washington, DC than a $1 trillion slush fund with a group of Congressmen with ideas about how to spend it. My cure for that, and I think there will be amendments to this effect, is that to the extent there is any money brought into Washington as a result of a cap-and-trade auction--whether it is only on powerplants or the whole economy--that money ought to be returned directly to the taxpayers, especially the working people who will be having to pay for the higher electric rates or the higher gas prices caused by this legislation. Those are three problems I have with the bill. No. 1, the 53-cent-per-gallon gas tax increase--that is what the EPA says. I don't think anyone doubts that. No. 2, it doesn't work because the EPA also says--and so does other testimony before the committee of which Senator Boxer is chairman--that an economy-wide cap on fuel is not an effective way to reduce the amount of carbon produced, at least in the early years. And third is the trillion dollar slush fund for Members of Congress to use for their own great ideas they come up with. I can't think of a worse way to spend the money. It is well intentioned, but the bill as it has grown has become, in effect, with all respect, a well-intentioned contraption and it creates boards and czars and commissioners and money, and it is too complicated and too expensive. It has the potential for too many surprises. It overestimates what we in the United States have the wisdom to do in writing legislation about an economy that produces about 30 percent of all the wealth in the world every year and uses 25 percent of the energy. This is a very complex free market economy we have here and we have to be very careful about how we affect it. Having said that, would there be a better way to deal with climate change? The answer is, I believe so. I wish to say briefly what I think that is. I believe it would be to put a cap-and-trade system on powerplants alone--that is 40 percent of the carbon produced in the American economy--and a low-carbon fuel standard on fuel. A low-carbon fuel standard, which is already in this legislation, is very simply the idea that beginning in the year 2023 we would control the amount of carbon that fuel in cars and trucks could produce, and that is it. In other words, instead of putting cap and trade on the whole economy as the Lieberman-Warner bill would do, we should only put cap and trade on powerplants--nothing else--and use a different approach for fuel. Why would cap and trade work for powerplants? We have a lot of experience with cap and trade for powerplants. Cap and trade is simply a system of setting limits on the amount of carbon to come out of the smokestacks at a powerplant--if it is a coal plant or whatever kind of plant it might be. We have experience with measuring that. We actually have measurements for sulfur, nitrogen, and now mercury. We could do it for carbon. We could select effective enforcement dates that had some realistic relationship to the development of technology--for example, the technology to recapture the carbon that comes out of coal plants. And, in doing so, I believe that could be an effective way to begin to control the source of 40 percent of the carbon produced in the United States--the powerplants. Would it add to the cost of electricity? Yes, it would. What would we do with the revenues from credits that were auctioned if there were a cap-and-trade system? We would give the money back. Not through a lot of federal spending programs, not to the State governments, not to pet projects; we would give it straight back to the working people to help pay their electric bills because they are the ones who would have those higher rates. That would leave manufacturers alone. It wouldn't drive them overseas. It would avoid setting up all these boards and commissions and czars and government bureaucracies. Then what would we do about fuel? Already we have done the single most important thing we could do as a Congress for climate change when we passed higher fuel efficiency standards at the end of last year. We did that in a bipartisan way, too. In 2007, we increased by 40 percent the fuel efficiency standards for cars and trucks in the United States for the first time in over 30 years. Testimony from David Greene of the Oak Ridge National Laboratory said that is the single most important thing the Congress can do to deal with climate change, overdependence on foreign oil, or clean air. And we did it. That is the first thing. But there is another step we could do and that is already in this bill. It is the low-carbon fuel standard that I talked about a few moments ago. As it is now presented in the bill, it would require fuel suppliers to lower the carbon content of transportation fuels by 5 percent less per unit of energy in 2023, and 10 percent less in 2028. The advantage of a low-carbon fuel standard, unlike the cap-and-trade system which is ineffective in terms of reducing carbon in fuel, is that it would be 100 percent effective because it would require a certain amount of reduction. Second, it is the way we normally deal with fuel and pollution. For example, the low-sulfur diesel standards for big trucks that the Clinton EPA started and the Bush EPA finished is making a big difference in the Smoky Mountains of Tennessee by reducing the amount of sulfur in the air starting this year. That is a form of fuel standard. This would be a low-carbon fuel standard, just like the low-sulfur diesel standard is for big trucks. It is simple. There would be a timeline that we could prepare for, and it might actually lower gasoline prices rather than adding 53 cents per gallon to the price of gasoline as the Lieberman-Warner bill would, because if you know that there needs to be a low-carbon fuel standard, then you might, for example, choose electricity as a fuel and have a plug-in hybrid vehicle and that would reduce the amount of carbon for fuel. Or you might advance research for biofuels made from crops we don't eat, such as cellulosic ethanol, and use more of that kind of fuel. But we wouldn't have Senators and Congressmen and people who are elected to office making judgments about picking and choosing winners and losers. If you are asking me how I would do it, I would imagine that if we looked ahead a couple years and had to guess today what kind of climate change legislation might actually pass the Senate, the House of Representatives, and be signed by the President, I think it will be a very simple piece of legislation, probably cap and trade for powerplants, with effective dates regulated or adjusted to the development of technology that would permit powerplants to meet the standards. Then, for fuel, it would be the higher fuel efficiency standards we already passed into law last year, plus a low-carbon fuel standard. That would cover two-thirds of the carbon we produce in the United States. The current bill only presumes to cover 85 percent. The approach I am suggesting would fairly distribute the burden because most people buy electricity and most people buy gasoline. It should be lower cost, fewer surprises, and much less complicated than the bill we are debating in the Senate today. I might add to that framework I suggested, we would take whatever money was auctioned off in the cap-and-trade system on powerplants and--rather than building what I call a slush fund--refund it to the taxpayers. That money would come right in and go right back home, right back to the taxpayers. It wouldn't stop. Finally, the best way to deal with the climate change issue would be a different agenda--one that focuses on clean energy. I would much prefer to see the Senate today talking about clean energy independence rather than the President asking the Saudis to drill for more oil or the Democratic majority saying: Don't explore for oil but raise taxes on gasoline by 53 cents per gallon. I would rather see a Republican or a Democratic President work with the Congress and say: Let's say to the world we are going to launch a new Manhattan Project for clean energy independence. So within 5 years we will be well on our way to saying to the Saudis: We want to be your friends, but we can take or leave your oil. The way to do that would be, first, to begin to do the things we know how to do to increase supply. For the next 30 years, we are going to use oil; it might as well be ours rather than importing it. Explore for oil offshore, and use it from the 2,000 acres in Alaska that is next to 13 million acres of wilderness. Then agree on six or seven grand challenges, such as those I suggested at the Oak Ridge National Laboratory a couple of weeks ago, to give us a chance to make breakthroughs that would give us that kind of clean energy independence. Those would include making plug-in cars and trucks commonplace, a crash program for carbon recapture, for making solar costs equal or as low as fossil fuel costs, advanced research for biofuels from crops that we don't eat, more new green buildings, even fusion for the longer term. I believe from the day the American President and the Congress announced to the world that we were engaged in a new Manhattan Project for clean energy independence that included both supply, demand, and research, what would happen is that the rest of the world would change its way of thinking, that the speculators would get nervous, that the oil-producing countries would get real, and that the price of gas would stabilize and eventually go down. Within 5 years, we would be well on our way to clean energy independence. That is the way to deal with high gas prices, high electric prices. That is also the way to deal with clean air, climate change, and the national security implications of our overdependence on foreign oil. I yield the floor.