Statement of The Honorable Devin Nunes, a Representative in Congress from the State of California

Testimony Before the Subcommittee on Select Revenue Measures
of the House Committee on Ways and Means

April 24, 2007

Chairman Neal and Ranking Member English;

I appreciate the opportunity to testify today on legislation that I and a number of my colleagues, including Senator Burr, introduced last Congress to address our nation’s energy future.  While gas prices fell over the winter, they are back on the rise just in time for the summer driving season.  All we need is a hiccup in the supply chain of crude oil, and the prices at the pump can quickly return to the historic levels we saw last year – or even higher. 

Indeed, in the past, we have attempted to address our nation’s energy security by looking at renewables and alternatives – only to see crude oil poured into the international market driving down the price per barrel of oil.  In this case, basic economics take over and the cheaper energy source prevails.  Because of this, crude oil has been the fuel of choice for more than a century.  This economic addiction to cheap energy has led to the crisis we are now experiencing.

As everyone on this committee knows, we import 65% of our petroleum needs, and the Energy Information Administration (EIA) projects that by 2025 we will import 71% of our petroleum.  While this is a tenuous situation, it is exacerbated by the fact that two-thirds of the world’s proven oil reserves are located in the volatile Middle East.  The nexus of instability with the Middle East, as well as the threat of lost production from Nigeria and Venezuela, and a virtual halt to new energy exploration in the United States resulted in the price of oil reaching all-time highs last year.  With this in mind, it does not surprise me that year after year we pay higher and higher prices for energy – whether at the pumps or in our home energy bills.  This situation has stifled economic development, put our nation’s security at risk, and placed an unnecessary burden on the family budget.  We need to come to grips with the onerous policies of the past that are strangling us now; this is an American-Made problem that requires an American-Made solution. 

Unfortunately, we, as legislators, have tried time and again to enact solutions to expand our energy resources only to be thwarted by a vocal minority of interest groups.  Their only solution is social engineering by mandating that the American people change their lifestyle.  This has not worked in the past and will not work today.  What we need is a comprehensive market-based strategy that will reduce our dependence on foreign sources of oil while bridging the gap to the next generation of energy.  Congress has a responsibility to deal with our nation’s energy demands in a bi-partisan manner that benefits all Americans.  

My bipartisan, bicameral, bill would provide short-term relief while funding a long-term solution for energy freedom.  We would accomplish this by opening the Arctic National Wildlife Refuge (ANWR) to exploration and investing the federal share of the lease and royalty revenue into an energy trust fund.  This trust fund would be used to pay for numerous renewable, alternative, and advanced energy programs.  At an estimated $40 billion over 30 years, this trust fund would be the largest investment in renewable, alternative, and advanced energy in our nation’s history – all at no cost to the taxpayer.

Within the first two years of enactment of this legislation, numerous renewable and alternative energy programs would receive billions of dollars in much needed investment.  This would include an infusion of investment into the next generation of ethanol (cellulosic), a deployment of Coal-to-Liquid (CTL) technology, an expansion of the use of solar and fuel cell technology, and significant growth in the biofuel energy production industry.  A number of these investments would come in the form of market-based tax credits.    

Moreover, the bill funds numerous renewable energy provisions that were originally authorized in the Energy Policy Act of 2005 and have yet to receive significant funding.  These federal investments are needed to ensure breakthroughs in biotechnology, new feedstocks, harvesting, storage, transportation, and processing to produce a sustainable transportation fuel at a price competitive with fuel from the mature petroleum industry.  Furthermore, enhancing federal consumer tax credits is necessary to ensure that every home owner or small business has the opportunity to participate in our energy freedom by installing alternative energy systems that are economically viable and environmentally sensitive.

Indeed, the proposals put forth in this legislation will have numerous benefits.  First, it will bridge the gap in our efforts to transition to homegrown energy and reduce our dependence on foreign oil.  Second, it will assist us in meeting Renewable Portfolio Standards which have been set by many states.  Third, it will significantly reduce greenhouse gas emissions.  Finally, all of this is accomplished by incubating technology rather than subsidize an industry.

With that said, I am currently working on a new and improved version of my legislation.  The general concept in the bill will remain the same, but I am expanding it into other areas of renewable energy production and conservation that have shown promising results.  I expect that I will reintroduce it some time in the coming month.

Certainly, there are no quick fixes to our energy challenges.  However, one thing is clear.  Americans cannot continue to rely on cheap imports for our energy future.  It is important for us to recognize the possibility of global shortages or disruptions as demand for fossil fuel continues to grow.  We must also contemplate the real possibility that oil will be used as an economic weapon against us.  We are in the midst of a Global War on Terrorism, fighting radicals whose stated objective is to destroy western civilization and install religious theocracies.  At the same time, we rely on certified state-sponsors of terrorism for our petroleum needs.  In my view, it is irresponsible for the United States to buy oil from fanatical regimes that are determined to destroy our way of life.  It is time for energy freedom, it is time for energy security, and it is time for action on an American-Made solution. 

I appreciate the opportunity to testify today and I look forward to working with my colleagues on the committee to address the tax provisions in my proposed legislation.