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Congressman
Paul Ryan
Recent Congressional Action on Energy Legislation.
Earlier this year, Congress passed several pieces of legislation in response to our current energy crisis. However, this piecemeal approach did little to address the systemic problem that is directly affecting families and I am extremely frustrated about the lack of progress Congress has made on this important issue. The economic well-being of the United States and the livelihood and safety of our citizens is largely dependent on maintaining a strong energy supply. We depend on electricity to light our homes and businesses, natural gas to heat them, and gasoline to operate the cars and trucks that carry us to work and transport our goods.
Unfortunately, the U.S. House of Representatives has continued to take the wrong approach in achieving our shared objectives of meaningful reform to our nation’s energy policies. In the 110th Congress, the House has passed legislation, including H.R. 6, H.R. 2776, and H.R. 3221, which mandate energy standards create a plethora of new government programs ripe for waste and abuse, fail to consider the feasibility and costs of such mandates, and increase our reliance on foreign energy sources instead of addressing oil and gas production here at home.
As gas prices soared and consumers found themselves paying more than $4 a gallon at the pump, I, along with many of my colleagues called on Congressional leaders to move quickly and bring energy legislation to the floor. This legislation should allow America to invest in its own natural resources instead of sending more than $1.5 billion a day overseas to hostile countries. This legislation should reduce bureaucratic red tape and open up areas such as the Outer Continental Shelf (OCS) for oil and gas exploration. This legislation should promote the development of alternative sources of energy such as oil shale, hydrogen, coal-to-liquid, and nuclear power. At just as importantly, this legislation should aim to build a framework for reducing our reliance on fossil fuels and encourage the adoption of clean and renewable energies.
At the same time, this legislation raises $5.8 billion by imposing new fees on certain leases that currently pay no royalties. It also imposes $1.8 billion of new fees on non-producing Gulf of Mexico leases, and requires retroactive lease payments back to 1 October 2007 on certain leases. H.R. 6800 also raises taxes on large oil and gas companies engaged in domestic energy production by nearly $13.9 billion over 10 years, all to provide tax breaks to favored energy projects and products. By raising costs on domestic production, this bill would limit efforts to expand U.S. energy supplies, ensuring continued dependence on foreign oil and keeping energy prices high for American families. The bill also limits the use of foreign tax credits on the international operations of oil and gas companies, which pushes the overall tax hike in the bill up to $17.7 billion.
H.R. 6899 does not come close to helping resolve the energy crisis that is faces our nation. Yet on Tuesday, September 9, 2008, less than 24 hours after the bill was introduced, the House was expected to vote on scheduled to vote on this proposal. Unfortunately, despite a veto threat from the President and indications that the Senate will not consider this proposal, H.R. 6899 passed the House by a vote of 236-189. I am hopeful that the House will soon get another opportunity to consider more effective reforms before the 110th Congress adjourns for the year.
A Long Term Solution for Energy Independence.
I believe a national energy proposal must take a three-pronged approach focused on increasing American-made energy, reforming outdated fuel regulations, and investing in alternative energy sources:
More Production. To address this problem, I have continued to support efforts that would open up the resources available to America in the Outer Continental Shelf. On December 15, 2006, Congress passed a comprehensive legislative package that included a measure to allow oil and natural gas exploration in two specific areas of the Gulf of Mexico. I voted in favor of this measure and was glad to see this provision pass into law on December 20, 2006.
Next, I support ANWR oil exploration because it will significantly increase the domestic supply of oil in the United States. Our society continues to demand more gasoline, but we have not increased our domestic supply of crude oil and are forced to import more and more to meet our needs. Currently, we import approximately two-thirds of the crude oil that we use and are expected to import 80% by 2020. This dynamic poses a threat to our national security and our economy. It leaves the price of gasoline in the U.S. subject to the actions of the Organization of Petroleum Exporting Countries (OPEC) and the political conditions in countries like Iraq, Saudi Arabia, and Venezuela. It also forces individuals to pay more for the gasoline that they rely on to go about their daily lives and makes our businesses less competitive by making it more expensive for them to transport their goods to consumers.
Further, only 2,000 of the 19.6 million acres in ANWR would be affected. This represents only 0.01% of the total ANWR acreage. To further illustrate, ANWR is approximately the size of South Carolina, whereas the total footprint for oil production at ANWR is equal to the size of Milwaukee’s Mitchell International Airport. As a strong supporter of wildlife and land conservation, I would not support exploration in ANWR if I thought it would carelessly or permanently damage excessive areas of the arctic tundra. Thanks to new technology that minimizes the environmental impact of this drilling, we can take steps to ensure that the ANWR region remains environmentally sound while providing relief to consumers.
More Refineries.
I also support reforms to our regulatory regime to allow for new refineries to be built in the U.S. We have not built any new refineries since 1976. At that time, our country was only using a handful of blends of gasoline. Now, we are attempting to refine 4 dozen blends of gasoline in a system designed to only produce a few. This has imposed substantial constraints on our ability to refine the gasoline that we use on a daily basis and has forced us to import more and more of the gasoline that we use. Furthermore, adding new refineries to the market will lead to greater competition and help place downward pressure on prices.
In support of this position, I voted in favor of H.R. 5254, the Refinery Permit Process Schedule Act, which was considered on the House floor on May 3, 2006. This legislation would take multiple steps to cut down on the bureaucratic requirements that have prevented the establishment of new refineries. Additionally, this bill would have instructed the President to designate at least three closed military installations as potentially suitable for the construction of a refinery. This innovative attempt to employ untapped resources to provide real energy relief to consumers is an example of sound energy policy that is necessary to lower gasoline prices. Unfortunately, this legislation failed to pass the House. I am hopeful that Congress will make another attempt to address this issue during the 110th Congress, because our limited refinery capacity is a large factor in the high cost of gasoline.
Boutique Fuels.
In addition to problems with supply, we pay more for gasoline because of an outdated reformulated gasoline policy that requires different areas of the country to use different blends of fuel to meet environmental requirements. This fragmented system results in the under-production of certain blends and allows refineries to charge more for the unique boutique fuels that they produce due to a lack of competition in the marketplace. The use of boutique fuels also causes price spikes any time that there is a supply disruption, such as a refinery fire or pipeline break, because there are few refineries that can make the special blend to cover the loss in capacity. Furthermore, areas like Southeastern Wisconsin that are required to use different fuels during the winter and summer months experience price spikes when the transition between fuel types is made.
I have been working hard to help address the boutique fuels problem since 2001. During 2005, I was able to make significant progress on this issue when legislation that I authored that capped the total number of fuels that are used in the U.S. and allowing for fuel waivers to be provided in the case of supply emergencies such as Hurricane Katrina was signed into law by the President.
During the 110th Congress I have again acted on addressing this problem by introducing H.R. 2493. This bill takes aim at the proliferation of specialized “boutique” fuels to prevent further fragmentation of America’s gasoline supply. This bill aims to reduce our fuel blends to a small, manageable number of blends so that gasoline supplies are much more stable. Unfortunately, my legislation has experienced opposition from the oil industry and oil state legislators. I will continue fighting this opposition so we can bring common sense to our fuel distribution system, which will help lower prices and prevent future price spikes.
Alternative Energy.
From a long-term perspective, I also support the development of alternative fuel vehicles. American automakers have already taken strides in this area with the production of cars and trucks that run on ethanol, electricity, hydrogen and natural gas. We must encourage this type of behavior to continue so that Americans can continue to enjoy the freedom of owning automobiles without contributing to our increasing demand for crude oil. Equally important, this course of action will also have many positive benefits for our environment.
Because of the necessity of encouraging alternative energy sources, I supported H.R. 547, the Advanced Fuels Infrastructure Research and Development Act. This bill instructs the Environmental Protection Agency (EPA) to implement a program of research and development of materials to be added to biofuels to make them more compatible with existing infrastructure used to store and deliver petroleum-based fuels to the point of final sale. I agree that biofuels have the potential to help reduce our dependence on foreign source of oil, but we currently lack the infrastructure to properly distribute this produce to the market at low cost. This legislation addresses this need, and I was happy to vote for this and see it pass the House on February 8, 2007, by a bi-partisan vote of 400-3. It is currently pending before the Senate, and I am hopeful that the Senate will act quickly in passing this important legislation.
Conservation.
We must also affect the demand side of increasing gasoline prices. I believe that energy conservation and responsible fuel efficiency improvements can go hand in hand with our efforts to expand our economy. I believe that initiatives such as requiring efficiency improvements on a vehicle class by class basis, rather a company by company basis, are proposals that can help reduce the demand for gasoline while not undermining U.S. auto manufacturers. It is my hope that Congress will pass legislation that will reduce energy consumption in an efficient manner, protecting both industry and ensuring lower energy prices for consumers.
Additional Information.
For more information on energy issues and priorities, please refer to the following
web site:
Energy
Information Administration: www.eia.doe.gov
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