U.S. Senate Committee on Energy and Natural Resources Hearing

S. 2747, the Enhanced Energy Security Act

First of all, I want to thank you, Chairman Domenici, for holding this hearing, and I want to recognize Senator Bingaman’s efforts on this bipartisan legislation.  The Vehicle and Fuel Choices for American Security from which this legislative effort stems has 26 cosponsors and speaks to bipartisan interest in taking an aggressive approach to energy independence.

There are few topics Congress could address right now more important to the future well-being of the nation than our energy security.  Freeing our nation from dependence on foreign energy is truly a matter of national defense – defense of our national security, defense of our economy, defense of our way of life.  But, what some folks forget is that this challenge presents a powerful opportunity for economic stimulus and growth.

The Enhanced Energy Security Act sets an ambitious plan for saving 2.5 million barrels of oil per day in 10 years, roughly the amount of oil we currently import from the Middle East.  Many would dismiss such an ambitious goal, but the moon was also once out of reach – we all know the power of America’s innovative, relentless spirit when called to an objective, no matter how formative. 

Quickly, the threat to national and economic security is real and growing.  It does not take much imagination to consider the foreign policy implications of having oil imports rest on the whims of Hugo Chavez in Venezuela or the political stability of Nigeria.  Countries that aren’t free produce more than two-thirds of the world’s oil and have nearly 80 percent of the proven reserves.

Looking to our economy, just consider the recent comments of Alan Greenspan who has pointed out that world oil markets are now subject to a degree of strain not experienced in a generation and that the lack of excess capacity means there isn’t enough of a buffer between supply and demand to absorb shutdowns of even a small part of the world’s production.  If a terrorist attack on one of our major oil suppliers succeeds, our economy will pay a heavy price. 

The imperative is clear:  America must free itself from its oil dependence, and I believe the solution is also clear:  renewable energy and energy conservation.  The Enhanced Energy Security Act and its parent bill, the Vehicle Fuel Choices for American Security Act, include important initiatives that will promote E85 fueling infrastructure and speed the development of cellulosic ethanol, while investing in the development of efficient vehicle technologies and assisting auto manufacturers’ transition to fuel-efficient vehicle production.  These initiatives will help make America a leader in renewable fuel and energy conservation technology that U.S. businesses can then export to countries like China and India where there is a projected 125% increase in the demand for oil from 2003 to 2025.  

I believe much of the reduction in petroleum demand will rest with our ability to produce renewable fuels.  This year, Brazil will have the liberty of not having to import a drop of foreign oil.  I been to Brazil, witnessed their success firsthand, I’ve sat down with their leaders and talked renewables, and what I’ve learned is that Brazil’s success was the result of a determined, concerted effort over 30 years to reach oil independence. 

In the 70s, the Brazilian leadership realized its 85 percent dependence on foreign oil was unacceptable and they did something about it.  Investing billions of dollars, Brazil directed provided heavy government support for ethanol production, mandated an aggressive percentage of gasoline be blended with ethanol, and ultimately ensured flex fuel vehicles were widely available.  A similar commitment by the United States could also reap significant rewards.  In fact, a recent AllianceBernstein study found that ethanol could eventually replace a large fraction, around 40 percent, of gasoline demand. 

Of course, mandating that every gallon of gasoline contain ethanol in this country would be difficult, which is why it’s so important to have heavy federal in E85 pumps so that ethanol can be made widely available.  Notably, the alternative fueling infrastructure incentives in this bill would make an estimated $20 million a year available for these pumps. 

I think it’s obvious our current foreign oil dependence is untenable, that our economy and very national security is in peril if we don’t do something about it, but thankfully, that’s not the end of the story.  I truly believe we can gain a great deal of energy independence through existing and emerging energy saving and renewable energy technologies that will protect and grow American jobs.  The Enhanced Energy Security Act moves us towards independence and continued prosperity, and I commend the Committee for considering this proposal.