Republican News

Republican News

Washington, D.C. – The Senate Energy & Natural Resources Committee today held an hearing on the Energy Information Administration’s Annual Energy Outlook 2007.
 
Below is the prepared text of Senator Domenici’s statement:
 
“This hearing on the EIA Annual Energy Outlook has become a tradition of sorts – and with good reason. The Outlook is usually a pretty sobering look at where our current policies will lead us. 
 
“But this year, it’s a little different.  In 2005, Congress passed the Energy Policy Act.  Working together, the Republicans and Democrats crafted an energy policy with a long-term vision of achieving greater energy security. 
 
“This Energy Outlook is the first that could fully consider the impacts of EPAct ’05.  There are some success stories – for example, projected increases in the use of biofuels, increases in appliance efficiency, and breakthroughs in enhanced oil recovery.
 
“However, the new Energy Outlook reminds us that passing a law isn’t enough – we have to follow up to make sure it is actually funded and implemented.
 
“The 2005 Energy Bill contains a number of requirements that will help us achieve energy security that aren’t taken into account in EIA’s analysis. 
 
“In some cases, EIA decided that the impacts of R&D efforts are too speculative – a good example is cellulosic ethanol. While EIA finds EPAct incentives will result in the first cellulosic production facilities being brought on line, they also conclude that its use will not be widespread unless there are significant technological breakthroughs. 
 
“For cellulosic ethanol – and other technologies too numerous to list here -- EPAct provides for R&D programs that can make those essential advances that we hope will bring new technologies to market.  
 
“While I understand EIA’s reluctance to try to predict the outcome of cutting-edge R & D programs, we must recognize the limitations of the forecast in this respect.
 
“Another, more troubling aspect is the EPAct programs that are not considered in the forecast because of a lack of implementation. 
 
“It will come as no surprise to those who attended our DOE Budget Hearing that I am deeply disturbed by the lack of progress on EPAct’s loan guarantee program.  In the 2007 Outlook, EIA finds that loan guarantees “could substantially affect the economies of new power plants”, lowering the cost of new, more efficient, nuclear and wind plants by around 25%. 
 
“That is huge.   But, because of a lack of implementation by DOE, the impact of the loan guarantee program is not taken into account in the forecast.  As a result, while EIA predicts that EPAct provisions will result in 12 gigawatts of new nuclear capacity by 2030, the market share of nuclear will decline, as 90% of new power plants will burn coal and natural gas. 
 
“I think that forecast on nuclear is off the mark, even without the loan guarantee program, but it is clear that the loan guarantees could make a huge difference in our nation’s energy security, as well as the air we breathe. 
 
“Furthermore, loan guarantees can bring a whole host of other new, clean technologies to the marketplace that otherwise might not get there. 
 
“For example, there is a company currently planning to build the world’s first commercial cellulosic ethanol plant in Idaho, but it needs a Title 17 loan guarantee to make the financing work.  These folks are businessmen…They can’t wait forever.  If the Department of Energy does not get on with implementing the Title 17 loan guarantees passed by the Congress almost 19 months ago, this potential capital investment in cellulosic ethanol will almost certainly be deployed elsewhere. 
 
“DOE’s failure to expeditiously implement Title 17 could mean the difference between creating a whole new cellulosic industry here in the U.S. and sending it all off to Europe.
 
“Having said all that, I believe that we don’t need to sit here and look at this Outlook and wring our hands.  We know what to do, and, in most cases, we’ve already set up the necessary legal authorities in EPAct.   Now all we need is the will to make it happen.” 
 
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