Lugar Introduces Energy Legislation

The legislation would create long-term assurances that alternative fuels could remain economically competitive if oil prices were to drop below $45 per barrel. It would also reduce taxpayer-funded subsidies when high oil prices make alternative fuels more profitable. It would also set a goal for the United States to expand production of alternative fuels to at least 100 billion gallons a year by 2025.

Source: Inside INdiana Business

Press Release

U.S. Sen. Dick Lugar today introduced the National Fuels Initiative of 2006, based on proposals from his keynote address at the Richard G. Lugar-Purdue University Summit on Energy Security on August 29, 2006.

Most notably, the comprehensive energy legislation proposes to create long-term assurances that alternative fuels could remain economically competitive if oil prices were to drop below $45 per barrel. In return the bill would reduce taxpayer-funded subsidies when high oil prices result in highly competitive and profitable alternative fuels.

"The heart of America's geostrategic problem is reliance on imported oil in a market that is dominated by volatile and hostile governments. We can start to break petroleum's grip right now. The key is to replace oil used in transportation with alternative fuels and to improve the fuel efficiency of our cars and trucks," Lugar said.

The legislation would:

· Establish a revolutionary variable alternative fuel tax credit to support growth of alternative fuel production. Its aim is to increase investment in cellulosic ethanol, coals to liquid, and other non-petroleum based fuels by reducing risks posed by oil price manipulation of foreign regimes.

· Set a goal for the United States to expand production of alternative fuels to at least 100 billion gallons a year by 2025. Some of this added production will come from current corn-based ethanol and biodiesel, but a great majority will be from emerging cellulosic technology allowing ethanol from diverse sources of renewable biomass.

· Require that virtually all new cars sold in America should be flex-fuel capable. These vehicles give Americans the choice to use E-85, a blend of 85% ethanol and 15% gasoline, or regular gasoline. This bill would require that virtually all vehicles would be manufactured as flexible fuel vehicles within ten year. This provision was also part of the Biomass Security Act of 2006, which Lugar joined Sen. Tom Harkin (D-IA) in introducing earlier this year.

· Require that roughly 25% of our nation's fueling stations offer E-85 throughout the country within the next ten years. This provision was also part of the Biomass Security Act of 2006. This will give consumers choice and help spur investment in renewable fuel production.

· Enact increased mileage standards that set a target of steadily improving fuel economy every year, as well as encourage research into new advanced technology vehicles such as hybrids and coal-based transportation fuels. Lugar joined Sen. Barack Obama (D-IL) in introducing this provision earlier this year as the Fuel Economy Reform Act of 2006.

"We must move now to address our energy vulnerability because sufficient investment cannot happen overnight, and it will take years to build supporting infrastructure and to change behavior. Americans need to know exactly what the plan is and how we will achieve it. We not only must understand how to bring alternatives to the market, we must establish what degree of change would improve our national security situation, then tailor national policy to achieve that goal. The energy plan presented in this bill is a package of proposals that would dramatically improve America's security posture. The plan would achieve the replacement of 6.5 million barrels of oil per day by volume - the rough equivalent of one third of the oil used in America and one half of our oil imports. It would provide more jobs for Americans instead of sending a deluge of money to hostile countries, support our farmers instead of foreign terrorists, and promote green fuels over fossil fuels," Lugar added.

In addition, Lugar and Harkin (D-IA) today introduced the Ethanol Infrastructure Expansion Act, which would require the Secretary of Energy to study the feasibility of constructing one or more dedicated ethanol pipelines to increase the energy, economic and environmental security of the United States.

A decade ago, Senator Lugar began pushing for a national biomass ethanol research program. Witnesses at Agriculture Committee hearings he chaired from 1996 to 1999 said this would be the most efficient method to produce ethanol. In 1999, Lugar and former CIA Director James Woolsey co-authored a seminal article that linked foreign policy and the high cost of securing foreign oil flowing to the United States with the development of homegrown ethanol derived from any form of cellulose ("The New Petroleum," Foreign Affairs). Lugar then authored and passed the Biomass Research and Development Act of 2000, which remains the nation's premier legislation guiding renewable fuels research.

In 2005, Lugar led 21 bipartisan Senators in introducing the Fuels Security Act to more than double the production and use of domestic renewable fuels including ethanol, biodiesel and fuels produced from cellulosic biomass. This legislation laid the groundwork for the renewable fuels section of the energy bill that passed Congress in July 2005.

Throughout the 109th Congress, Lugar has cosponsored a host of bipartisan legislation to address U.S. dependence on foreign oil and to promote biofuels. Lugar joined with Sens. Tom Harkin (D-IA) and Barack Obama (D-IL) in introducing the Fuel Security and Consumer Choice Act, S. 1994, that would require all U.S. marketed vehicles to be manufactured as FFVs within ten years. In addition, Lugar is an original cosponsor of Sen. Evan Bayh's bill, the Vehicle and Fuel Choices for American Security Act, S. 2025. This bill would provide for changes in oil conservation, new measures to improve fuel economy, tax credits for hybrid cars and advanced fuels, encourage use of renewable fuels, and set new regulations for federal fleets.

Lugar also introduced the Energy Diplomacy and Security Act, S. 2435, which would recognize energy security to be a foremost concern for United States national security and would realign U.S. diplomatic priorities to meet energy security challenges.

Lugar and Obama introduced the American Fuels Act, S. 2446, which would take a four-step approach to reducing America's dependence on foreign oil. First, the legislation would spur investment in alternative fuels by increasing the production of cellulosic biomass ethanol and create an Alternative Diesel Standard. Second, it would help increase consumer demand for alternative fuels by providing a short-term, 35 cents per gallon tax credit for E85 fuel and by providing automakers with a $100 tax credit for every FFV produced. Third, it would require the U.S. government to increase access to alternative fuels by requiring the government to allow public access to alternative fueling stations located on federal government property. Finally, it would create a Director of Energy Security to oversee and keep America focused on its goal of energy independence.

On the web:

The Lugar Energy Initiative

http://lugar.senate.gov/energy

The Richard G. Lugar-Purdue University Summit on Energy Security

http://lugar.senate.gov/energy/purdue

Source: Indiana Senator Richard Lugar's Office