Ben Nelson

Mr. NELSON of Nebraska

Mr. NELSON of Nebraska. Mr. President, I ask unanimous consent that the Committee on Government Affairs be authorized to meet on Thursday, April 11, 2002 at 9:00 a.m. to discuss legislation to establish a Department of National Homeland Security and a White House Office to combat terrorism.

Mr. NELSON of Nebraska. Mr. President, I ask unanimous consent that the Committee on Finance be authorized to meet during the session of the Senate on Thursday, April 11, 2002 at 10:00 a.m. to hear testimony on Schemes, Scams and Cons, Part II: The IRS Strikes Back.

Mr. NELSON of Nebraska. Mr. President, I ask unanimous consent that the Committee on the Judiciary be authorized to meet to conduct a nominations hearing on Thursday, April 11, 2002 at 2:30 p.m. in Dirksen Room 226. Panel I: The Honorable Arlen Specter, United States Senator [R-PA]; the Honorable Bob Smith, United States Senator [R-NH]; the Honorable Paul Wellstone, United States Senator [D-MN]; the Honorable Dianne Feinstein, United States Senator [D-CA]; the Honorable Barbara Boxer, United States Senator [D-CA]; the Honorable Judd Gregg, United States Senator [R-NH]; the Honorable Russell F. Feingold, United States Senator [D-WI]; the Honorable Mark Dayton, United States Senator [D- MN]; the Honorable Jim Ramstad, United States Representative [R-MN, 3rd Congressional District]; the Honorable Thomas M. Barrett, United States Representative [D-WI, 5th Congressional District]; and the Honorable Mark Green, United States Representative [R-WI, 8th Congressional District]. PANEL II: Jeffrey Howard for the United States Court of Appeals for the First Circuit; Percy Anderson for the United States District Court for the Central District of California; Michael M. Baylson for the United States District Court for the Eastern District of Pennsylvania; William C. Griesbach for the United States District Court for the Eastern District of Wisconsin; Joan E. Lancaster for the United States District Court for the District of Minnesota; Cynthia M. Rufe for the United States District Court for the Eastern District of Pennsylvania; and John F. Walter for the United States District Court for the Central District of California.

Mr. NELSON of Nebraska. Mr. President, I ask unanimous consent that the Committee on Banking, Housing, and Urban Affairs be authorized to meet during the session of the Senate on Thursday, April 11, 2002, at 2:30 p.m. to conduct an oversight hearing on ``Proposals To Improve the Housing Voucher Program.''

Mr. NELSON of Nebraska. Mr. President, I ask unanimous consent that the Subcommittee on Personnel of the Committee on Armed Services be authorized to meet during the session of the Senate on Thursday, April 11, 2002, at 9:30 a.m. in open session to receive testimony on military personnel benefits in review of the Defense Authorization Request for Fiscal Year 2003.

Mr. NELSON of Nebraska. Mr. President, I ask unanimous consent that the Subcommittee on Strategic of the Committee on Armed Services be authorized to meet during the session of the Senate on Thursday, April 11, 2002, at 2:30 p.m., in open and closed session to receive testimony on the intelligence, surveillance, and reconnaissance programs of the Department of the Defense in review of the Defense Authorization Request for Fiscal Year 2003.

Mr. NELSON of Nebraska

Mr. NELSON of Nebraska. Mr. President, earlier today, my colleagues from California and New York quoted extensively from an Energy Information Agency report which they said indicated the RFS would result in gasoline price increases from 4 cents to almost 10 cents per gallon. We have read this report, and it is difficult for us to understand how they arrived at those cost figures when our reading of the report sets the increase at prices up to 1 cent per gallon for reformulated gasoline and up to a half a cent per gallon compared to the referenced case. This is with the reformulated fuel standard without the MTBE ban. When there is an MTBE ban, there would then be a greater demand for gasoline that would drive prices up. The availability of ethanol to add volume as an additive and boost octane would put downward pressure on prices, which is what has been shown elsewhere in the country. So we are at a loss as to how that was arrived at. There also was a suggestion there might be the possibility that ethanol-blended gasoline could extend the benzene plume and contaminate the ground water in the event of leaking tanks or spills. Nebraska is the home of ethanol. It was first called gasohol. It has been used extensively for the past 20 years. I have used it for as long as I can recall. There is absolutely no evidence of benzene-contaminated water supplies resulting from the use of ethanol in Nebraska, and we are not aware of anywhere else where ethanol has been used extensively or even modestly where there has been an increase in benzene. It is going to boost the octane of gasoline, and I think most people looking at science will conclude it permits the reduction of aromatics, including benzene. We found that ethanol-blended gasoline in Nebraska has considerably less aromatics than unblended gasoline, and we do not understand nor do we follow the logic or the facts that have been presented. I think it is important to consider the fact we must, indeed, reduce our reliance on foreign sources of oil, and we must, in fact, expand the opportunity for renewable resources so we are not reliant on foreign sources of oil. When we can do this in an environmentally friendly way, and at the same time have the economics of the country advanced, it seems only too sound of logic to conclude we should go the other way. We must, in fact, move forward with the RFS. So I call on those who would have other information to return and let us debate the issue on the facts as they are. I suggest the absence of a quorum.

Mr. NELSON of Nebraska. Mr. President, I ask unanimous consent to speak for up to 15 minutes in conjunction with my opposition to the Feinstein amendment, which has been introduced on the energy bill.

Mr. NELSON of Nebraska. Mr. President, this amendment and other California amendments are outside the agreement and would negatively impact the renewable fuels standard contained in the bill. While I generally respect and certainly admire my colleagues from California, who are joined by my colleagues from New York in this particular situation, I must depart from their point of view and take this opportunity to explain that the facts do not support their amendment. The renewable fuels standard is the culmination of 20 years of sound public policy. We have all worked at the State, local, and Federal levels to make sure we have brought together the best kind of public policy for energy as it relates to renewable fuels. This standard will almost triple production of biofuels over the next 10 years. The RFS, as it is known, will accelerate the biorefinery concept so that a wide range of cellulosic biomass feedstocks will cost-effectively be converted into biofuels, bioelectricity, and biochemicals. Enactment of the RFS, along with other provisions in this bill, will emphasize new sources of energy production from biomass to wind power, as well as conservation, to further reduce our dependence upon foreign sources of energy. As the previous speaker, my colleague, Senator Allen, pointed out, this 100-year-old reliance on fossil fuels and on fuels from unstable parts of the world has put us in a position of instability. So this RFS is essential in helping us reverse this 100-year-old reliance on fossil fuels and on unstable governments. Enactment of this bill will strengthen national and energy security and improve our environment at the same time. If you will look at this poster, according to a recent study conducted by AUS Consultants, adoption of the RFS will: . . . displace 1.6 billion barrels of oil over the next decade; reduce our trade deficit by $34.1 billion; it will increase new investments in rural communities by more than $5.3 billion--and this is all domestic, all money that will inure to the benefit of Americans. It will also boost the demand for feedgrains and soybeans by more than 1.5 billion bushels over the next decade; it will create more than 214,000 new jobs throughout the U.S. economy, and it will expand household income by an additional $51.7 billion over the next decade. These days, we are witnessing substantial increases in gasoline prices at the pump because of disruption and turmoil in the Middle East. Gasoline prices are not going up because we are using ethanol; they are rising because we are not using enough ethanol. Over the next 10 years, the renewable fuels standard in S. 517 would increase United States gasoline supplies to 5 billion gallons per year in 2012, slightly less than the volume of crude oil we currently import from Iraq. That will come from the addition of these biofuels that will come from the renewable fuels standard. It will be bad public policy for us to eliminate the existing oxygenate standard without replacing it with the renewable fuels standard. That is exactly what S. 517 does. I congratulate California Governor Gray Davis for his support of the RFS section of S. 517. He recently declared: Let's let the Daschle bill pass, have a nice schedule that will affect the entire country, phase in ethanol and protect the environment. He also said: All we need to do is use about 250 or 275 million gallons of ethanol, which we already do and are prepared to do in the future. Governor Davis recently delayed his ban on MTBE in California for 1 year, coinciding with the initiation of the renewable fuels standard, RFS, and his acceptance of that RFS package is the best option to meet California's current and certainly its future gasoline needs. This, in large part, is due to the fact that a Federal RFG with an MTBE ban would require about 700 million gallons of ethanol annually in California. The next alternative would be a program to eliminate the current minimum oxygen standard, a ban on MTBE, and retain the existing wintertime carbon monoxide program using ethanol. This would require about 500 million gallons of ethanol annually. In contrast, the Daschle-Lugar-Nelson RFS requires California refiners to use only about 250 million gallons of ethanol annually. Finally, the RFS provision contained in the bill allows ``credit training,'' which provides the option of reducing California's ethanol use to zero, with a cost of less than 2 cents per gallon. Lest anyone thinks this is somehow a plan or decision by the States in the Midwest to support their own economies to the detriment of economies elsewhere, Governor Pataki from New York, and Governor Shaheen of New Hampshire, representing the Northeast States for Coordinated Air Use Management, and other Governors belonging to the Governors' Ethanol Coalition, have also signed a joint letter supporting the renewable fuels standards. These are Governors from all over the country. I also remind my colleagues that the RFS agreement was unprecedented in that it was accepted through the extensive and cooperative work of the ethanol and biodiesel industries, their associations, most farm and agricultural groups, the environmental and renewable energy communities, and the American Petroleum Institute. All of us, each and every one of us, is aware of how dangerously close we are to an overdependence on imported oil. As Senator Allen said, currently we are over 56 percent dependent on foreign sources, and it will rise to over 60 percent in the very near future. Too many of these supplies come from troubled nations in the Middle East, the Caspian Basin, and Indonesia where almost 80 percent of the world's reserves are located. As our colleague from North Dakota, Senator Dorgan, warned recently, we must recognize this vulnerability because it also extends to the potential of terrorist attacks on oil supply lines. An attack on our oil supply lines anywhere in the world would have us on our backs overnight. The RFS is critical to the process of reducing our dependence on oil imports through the advancement of domestically dispersed renewable and environmentally benign technologies that will generate new industries, high-quality jobs, economic activity, and rural development, while at the same time expanding national and local tax bases. This is, in fact, a win-win for everyone in America. Ethanol opponents claim that it takes more energy to make ethanol than is contained in the fuel. This is simply not the case. The most recent USDA report shows an increase in the net energy balance of corn ethanol from 1.24 in 1995 to 1.34 in 2002, and that new technologies continue that improvement. Furthermore, only 17 percent of the energy that goes into farming and ethanol plant operations is from liquid fuels, and with the advent of biodiesel and advanced farming practices, this number continues to drop and will continue to do so into the future. Some opponents also claim that the price of gasoline could double. The issue of consumer cost is clearly important to all sectors of our Nation, certainly to the Midwest as well as to the West and the East. But historically, ethanol serves as a buffer to higher prices. It does so by actually extending supplies. It provides an alternative to costly imported oil and leverage for independent gasoline marketers to compete against the larger, more powerful integrated oil companies. According to the Society of Independent Gasoline Marketers of America: The Federal benefits afforded ethanol-blended fuels have been an important pro-competitive influence on the Nation's gasoline markets. By enhancing the ability of independent marketers to price compete with their integrated oil company competitors, this program has increased independent marketers' economic viability and reduced consumers' costs of gasoline. On April 8 in Los Angeles, San Francisco, and the New York metropolitan areas, the price of ethanol-blended premium midgrade and regular ranged from .0133 to .0327 cents per gallon. So availability is not going to be a problem and neither is price. Today and into the near future, ethanol will be in abundant supply because of market conditions and all the new plants that will be coming online. This chart shows the past, present, and predicted growth of the ethanol capacity, and one can see that as it goes into this new century, the incline is rather steep. Some worry about ADM's control over the market and their ability to control prices, but their influence is dissipating, being replaced by farmer, rancher, and community-owned plants. It is not concentrated within only one industry or within one producer. It is widely spread out over all kinds of operations, from the small to the medium size to the large. To attack some other myths, there are some claims that ethanol does not contribute to cleaner air, and that is not true. There is no question that ethanol blends reduce carbon monoxide and carbon dioxide, but most areas with polluted air are worried about ozone. The good news is that 3 years of clean air quality data in the Chicago/Milwaukee area show that it is possible to effectively reduce ozone emissions while using ethanol blends. These blends also reduce air toxins, such as the carcinogen benzene. The defeat of the renewable fuels standard in S. 517 would be a great loss to the national energy and economic security of the United States. The real tragedy would be a further loss to the Europeans as they advance their biorefinery technology to produce biofuels, bioelectricity, and biochemicals from a wide range of biomass, including much of which is wasted or ends up in landfills. If there is a myth that somehow this is going to simply affect our food supply by providing alternative use, it is very clear to understand that ethanol can be made from any kind of biomass, including that which is waste, that which is garbage, that which is discarded and ends up in landfills. As technology continues to increase, we will have more and more sources for a renewable resource that will come from those production sources that currently have other means of disposal. Unfortunately, some of them are disposed only in landfills. The RFS provides a credit of 1.5 for biofuels made from cellulosic biomass, oilseeds, tallow, animal fat, and yellow grease compared to 1 credit for ethanol made from starch and sugar crops; that is, every gallon of these fuels is equal to 1.5 gallons in meeting the renewable fuels standards. In fact, it does go to other kinds of biomass. Consequently, the RFS will provide the stimulus and the market for biofuels needed to produce the next generation of biorefineries. In the past, it has always been the question of how you can create the demand or whether you create the supply and hope, in fact, it will create the demand. This bill with the RFS in it creates both the demand and the opportunity and the incentive for more supplies in a cost- effective and a very environmentally friendly and very economic friendly manner. During my two terms as Governor, I watched firsthand as the private sector invested hundreds of millions of dollars in new community-based ethanol plants. We went from one operating plant to more than seven when I left, and there continues to be more plants built around the State and a great deal of interest in further expanding the plants, depending on the passage of S. 517. These investments occurred primarily in response to the demand created by the Clean Air Act's oxygenate requirements. Not one of those plants is owned by AD in Nebraska. Farmers and ranchers own most of them. The ethanol industry in Nebraska has been one of the few bright spots in an otherwise underperforming agricultural economy, thereby creating quality jobs, increasing farm income, and, in some instances, maybe providing the only farm income by adding value to farmers' products and expanding local tax bases. This is, in fact, sound public policy, and we should be doing more, not less, of it. If we are going to eliminate the oxygen requirement that has been proposed, then we must be sure to put in its place the renewable fuels standard in S. 517. The RFS is sound public policy. The provision will increase gasoline supplies and consequently serve to lower gasoline prices. It will have a positive impact on the Farm Belt economy and also reduce energy costs for other areas of the country. This is truly a national plan to control costs, spur economic activity, and reduce our dependence on foreign oil. I ask my colleagues to vote to preserve the historic agreement manifested in the RFS. To do otherwise will certainly face us in the wrong direction, a step backwards, into deeper dependence on imported oil. I thank the Chair, and I suggest the absence of a quorum.

Mr. NELSON of Nebraska. I thank the Chair. (The remarks of Mr. Nelson of Nebraska are printed in today's Record under ``Statements on Introduced Bills and Joint Resolutions.'')

Mr. NELSON of Nebraska. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. NELSON of Nebraska. If I still have time left, I am happy to use it.

Mr. NELSON of Nebraska

Mr. NELSON of Nebraska. I thank the Senator.

Mr. NELSON of Nebraska. Madam President, I come to the floor to talk about a bill I plan on introducing later on today with my good friend Senator Susan Collins. I am pleased to say that our legislation could be considered the next step in economic stimulus. A little more than a month ago, this body passed and the President signed a bill to stimulate the economy and help workers. It was not a perfect bill, but few are. But the economy was hurting and it was time to act. One of the unintended consequences of the stimulus bill was a revenue loss for many states. The final package included a provision that will stimulate business development through tax incentives. Unfortunately, because the majority of states ``couple'' their tax rates to the federal tax rates, this benefit for businesses will mean an estimated $14 billion loss in state revenues. States can avoid the revenue loss by decoupling from the federal law, but this approach is not without its own traps and pitfalls. Decoupling makes the tax codes of states just that much more confusing. Many states have explored ways to decouple, or in simpler terms, they have searched for ways to hold their state harmless from the experienced revenue loss. In fact, the state Legislature in Nebraska is considering such a measure today, as it attempts to find a way out of it's expected $119 million budget shortfall. We must now take steps to alleviate the unintended impact of the tax reductions on state budgets. In previously debated stimulus packages, a provision was included that would have helped state governments by increasing the federal contribution of the Federal Medicaid Assistance Percentage, FMAP, by 1.5 percent. This provision enjoyed wide support. Unfortunately, and over the objections of the crafters of the Centrist stimulus plan, it was not included in the final package signed by President Bush. Even before the passage of the stimulus bill, Medicaid costs were rising at the same time state tax revenues were decreasing. States are now faced with the choice of either cutting Medicaid services or diverting funding from other essential programs to fund Medicaid. This ``choice'' is no choice at all either cut health care service to Medicaid recipients or cut funding for schools, roads, police and firefighters. In a time of economic turmoil this ``choice'' can stall the economic recovery the stimulus bill was meant to jump-start. Our bill would revive the FMAP provision this body earlier considered. It would provide a direct response to the false ``choice'' faced by states. This bill will alleviate state's Medicaid liabilities by increasing the federal government's contribution to the Medicaid program by 1.5 percent for this year and next. This would mean an additional $7 billion for states. In Nebraska, the savings would amount to an estimated $42.7 million. This more than offsets the $34 million that Nebraska is expected to lose if they comply with the business tax incentives in the stimulus bill and would in fact provide $8.7 million on top of what was lost. A month ago, we took steps to help the economy recover and to help workers. Today, we need to take an additional step to help states struggling with fiscal calamity. With this increase in federal Medicaid assistance throughout this year and next, states will be given some breathing room to deal with the difficult choices they face in balancing their budgets. I urge my colleagues to join Senator Collins and I in this effort and show the states that Congress is not indifferent to their budget problems and that we will step in and provide meaningful assistance at a time when governors need it most.

Mr. NELSON of Nebraska

Mr. NELSON of Nebraska. I thank the Senator.

Mr. NELSON of Nebraska

Mr. NELSON of Nebraska. Madam President, while I was home in Nebraska, a great Nebraska citizen passed away. Loral Johnson was a newspaper publisher in southwestern Nebraska and a pillar of his community. He began working in the newspaper business at age 9 as a ``printer's devil.'' He started at the Imperial Republican newspaper as a linotype operator following graduation from high school in 1952. He purchased the paper with his wife, Elna, in 1968. Loral Johnson was well respected and known by his colleagues as an innovative newspaperman. Johnson's editorial pages were often positive and progressive, calling on community members to move forward and always striving to make Imperial a better place for current and future generations. He was inducted into the Nebraska Journalism Hall of Fame and was named a master-editor publisher, the highest award of the Nebraska Press Association. Johnson's Imperial Republican was also among the first weekly papers to print on an offset press and to use computers. However, Loral Johnson will be remembered as far more than just a newspaper publisher. He was also a key leader in his community and his church. He was a member of the school board for 28 years, a co-founder and board member of the local nursing home for 33 years, and secretary for the Imperial Planning Commission for 21 years. His important contributions to education and health care will be remembered for many years to come. While we will miss Loral Johnson greatly, it is comforting to know that his two daughters and a son-in-law are continuing the tradition of excellent journalism in Imperial. His family and the devotion to community that he has passed on to them and so many others are his greatest legacy.

Mr. NELSON of Nebraska

Mr. NELSON of Nebraska. Madam President, I rise today to talk about campaign finance reform. As a veteran of four statewide campaigns, I believe, as many of my colleagues do, that the current campaign finance laws are--in a word-- defective. Our country was founded on the principles of freedom and justice. As I see it, the present system for financing federal campaigns undermines those very principles. I believe that in its current form, the campaign finance system tends to benefit politicians who are already in office---some folks call it incumbent insurance. I prefer to call it a problem. Thus, I whole-heartedly believe that the time has come for meaningful campaign finance reform. Before us today, we have a bill that purports to fix the system. Unfortunately, I do not believe the Shays-Meehan bill does the job. In fact, in some respects, I think this bill will make the current system worse. In the effort to find a culprit for the faults in the present campaign finance system, soft money has become a scapegoat. While I agree that unlimited soft money contributions raise important questions, banning soft money to the parties would be unproductive and, ultimately, ineffective. Chances are, if we succeed at blocking the flow of soft money from one direction, it will eventually be funneled into campaigns from another. Furthermore, some soft money contributions are used for get-out-the- vote efforts--for the promotion of voter registration and party building--valuable efforts that encourage voter participation. Though some changes were made to ease the inevitable burden on GOTV and voter registration efforts, as a practical matter, the effects will still be devastating to the political parties and their activities. A more realistic approach in lieu of banning soft money would be to cap the contributions at $60,000, as prescribed by the Hagel-Nelson bill that we debated and voted upon last year. I would have offered that proposal as an amendment again this year, but I can count the votes as easily as everyone else. It failed last year, 60-40. The votes simply aren't there. I dislike this bill, but I don't want to hold up the inevitable. For that reason, I do support cloture on this bill. Although I believe it is fundamentally flawed, the bill before us should be allowed to stand or fall on its own merits--on a final vote that decides the direction this issue will take once and for all. We've been at a stalemate on this issue for too long and it is time to move on. As an individual who has spent a lot of time on the campaign trail, I have put a great deal of thought into what I believe is the right direction for campaign finance reform. My campaign experience with one group in particular has bolstered my support for efforts to limit so- called ``issue ads.'' This organization, funded by secret, undisclosed contributors, ran issue ads throughout my campaign distorting my position on one issue, which was unrelated and irrelevant to their purported purpose. This group was accountable to no one and did not have to disclose its true agenda. Because it operated in virtual secrecy, it was impossible to hold them accountable for distorting the truth. It only follows that I am pleased with the Snowe-Jeffords provision in the bill before us, which addresses some of the problems created by so-called issue ads funded by special interest groups and corporations. This provision will hold these groups more accountable for their ads by imposing strict broadcasting regulations and increasing disclosure requirements, effectively putting light where the sun doesn't shine in issue advocacy. Unfortunately, as many of my colleagues have pointed out, this provision is arguably the most susceptible to being struck down as unconstitutional by the Supreme Court. If the Shays-Meehan bill had a non-severable clause that would protect it from selective dissection by the Supreme Court--which we unsuccessfully tried to include in the McCain-Feingold bill last year--I would be much more inclined to support this bill. It now seems likely that parts of this bill will be struck down in court, creating, in effect an off-balance piece of legislation that will penalize some groups--the political parties--while giving ``issue advocacy'' groups more influence. This will alter the very basis of our political system and give disproportionate power to the least accountable groups around. I cannot support any legislation that will not only not fix our current problems but will create new ones by putting candidates of all parties at the mercy of these shadow groups, while at the same time taking away much of their ability to respond. Accordingly, I simply cannot vote for this bill.

Mr. NELSON of Nebraska

Mr. NELSON of Nebraska. Mr. President, I rise today during the celebration of the 90th anniversary of the Girl Scouts of the U.S.A., to express my support for this respected organization. The mission of the Girl Scouts is to help all girls grow strong. Girl Scouting empowers girls to develop to their full potential and to develop values that provide the foundation for sound decision-making. Scouting teaches girls to relate positively to others and to contribute in constructive ways to society. Through Girl Scouting, girls acquire self-confidence, learn to take on responsibility, and are encouraged to think creatively and act with integrity. Girl Scouts take part in activities that teach them about science and technology, finance, sports, health and fitness, the arts, global awareness, and community service. These experiences allow Girl Scouts to develop the qualities that are essential in developing strong leaders. Perhaps the best proof that Girl Scouting has had an important impact on women leaders in our country is the fact that over two-thirds of our doctors, lawyers, educators, and community leaders were once Girl Scouts. I also would like to thank the many volunteers who make the Girl Scouts such a successful organization. These mentors and role models are essential in providing support to girls and empowering them to realize their potential and to achieve. I think it is important to take this time today to celebrate and recognize the contribution Girl Scouting has made to our society by providing positive role models for girls and by encouraging them to become good citizens and effective future leaders.

Mr. NELSON of Nebraska

Mr. NELSON of Nebraska. Madam President, I ask unanimous consent that a member of my staff, Bill Holmberg, be given floor privileges by the Chair.

Mr. NELSON of Nebraska

Mr. NELSON of Nebraska. Madam President, as we are waiting for Senator Lincoln, perhaps it is important to point out some of the truths about the renewable fuel standard and debunk some of the myths that sometimes have continued for a period of time as a method of trying to avoid dealing with the need for more domestic production and as a means of deterring our efforts for this renewable fuel standard. There is a myth that somehow there are inadequate supplies of ethanol to meet the demand that will be created by this renewable fuel standard. The fact is, the ethanol industry has been growing substantially in recent years. If I could get the chart that shows the growth within the industry, it has been growing in recent years in anticipation of the phaseout of MTBE, particularly in the State of California. We can see the historic fuel ethanol production over the course of the last 20 years. It continues to increase. According to the Renewable Fuels Association, 15 new plants have opened and several expansions have been completed, increasing U.S. ethanol production capacity to 2.3 billion gallons. Thirteen plants are currently under construction and will bring the total capacity to 2.7 billion gallons by the end of 2002. A survey conducted by the California Energy Commission concludes that the ethanol industry will have the capacity to produce 3.5 billion gallons a year by the end of 2004. So achieving the 5 billion gallon requirement over a 10-year period is clearly within reach, and we are clearly on our way to achieving that. There is also a myth that MTBE will result in a shortage of gasoline- blending components; that if we remove MTBE it will result in a shortage of gasoline-blending components that will therefore reduce U.S. fuel supplies. The fact is, while acknowledging there will be enough ethanol, some have suggested there will be a shortage of gasoline-blending components needed to replace MTBE. MTBE is currently blended at 11-percent volume, largely in Federal reformulated gasoline in the Nation's nine severe ozone nonattainment areas so we can satisfy the oxygenate requirements. Ethanol is used exclusively today in RFG in Chicago and Milwaukee, where it is blended at 10-percent volume. Ethanol used in RFG to replace MTBE will similarly be blended at the 10-percent level, mitigating any loss in supply from MTBE's removal. A large share of the ethanol-blended formula will satisfy the renewable fuel standard. It will be blended in conventional gasoline where it simply is blended with finished gasoline, adding an additional 10-percent volume to the U.S. fuel market. In other words, it will, in fact, expand the availability of fuel rather than reduce it. There is another myth: that the RFS will result in significant price increases for consumers at the pump. The fact is, S. 517 does not require a single gallon of renewable fuels be used in any particular State or region. The additional flexibility provided by the RFS credit-trading provisions of S. 517 will result in much lower costs to refiners and therefore to consumers. The credit- trading system will ensure that ethanol is used where it is most cost effective. According to ChevronTexaco, the free market will not allow a California price differential of 20 to 30 cents per gallon to be sustained. The market will always find ways to take advantage of a much smaller differential. Furthermore, a nationwide Federal MTBE ban provides certainty for investments and eliminates the greater use of boutique fuels, thereby lowering gasoline prices. One of the constant challenges we have today is the use of boutique fuels, the blending of certain grades and certain kinds of fuels, which actually has the impact that while reducing efficiency it raises the cost of gasoline prices. This will have the effect of moderating that, and it will, in fact, reduce the number of boutique-blended fuels and therefore reduce the cost of production of these fuels. Increasing the use of renewable fuels such as ethanol and biodiesel will diversify our energy infrastructure, making it less vulnerable to acts of terrorism and increases the number of available fuel options, increasing competition, and reducing consumer costs of gasoline. There is a myth that more time is needed for the MTBE phaseout to ensure adequate fuel supplies. The fact is, the negotiated agreement set forth in S. 517 announced last week provides for a 4-year phaseout of MTBE, giving the petroleum and the transportation industries adequate lead time to make necessary changes to accommodate the increased use of renewable fuels. In fact, the American Petroleum Institute, the lead trade association for the refining industry, agrees that 4 years is an adequate phaseout period, and cost estimates for removing MTBE must also consider the cost incurred in additional MTBE water contamination if MTBE is not removed from the fuel supply. A recent poll conducted by the California Renewable Fuels Partnership concluded that 76 percent of likely voters supported banning MTBE because we cannot afford the pollution caused by MTBE, while only 13 percent think it is a bad idea because of potential higher gasoline prices. The myth is it will raise gasoline prices when it is not expected to raise those prices. But 13 percent is a bad idea because of potential higher gasoline prices. If they are aware of the fact that it will not raise gasoline prices, perhaps the 76 percent favoring the phaseout, banning it, will increase substantially. There is another myth important to debunk; that is, ethanol cannot be transported from production centers in the Midwest, where it is currently produced, to coastal markets without incurring substantial investments and therefore large costs to the consumer. Furthermore, ethanol must be blended at the terminal and cannot be shipped by pipeline, constraining the distribution network. The fact is, today ethanol is transported cost effectively from coast to coast by barge, railcar, and oceangoing vessel. An analysis completed in January for the U.S. Department of Energy assessed the infrastructure requirements including transportation, distribution, and marketing issues for an expanding ethanol industry. The report concludes that no major infrastructure barriers exist to expanding the U.S. ethanol industry to 5.1 billion gallons per year, comparable to the renewable fuel standard established in S. 517. Therefore, the study concludes the logistics modification necessary under the scenario can be achieved cost effectively. Myths are important to debunk because they will, if not countered, very often stand in the way of the progress of this important part of our energy efforts. One final myth: Air quality will actually suffer as ethanol use increases nationwide. The fact is, the use of ethanol significantly reduces tailpipe emissions of carbon monoxide, an ozone precursor, VOCs and fine particulates that pose a health threat to children, seniors, and those with respiratory ailments. Importantly, renewable fuels help to reduce greenhouse gases emitted from vehicles, including carbon dioxide, methane, and other gases that contribute to global warming. S. 517 protects against any backsliding on air quality. First, the agreement tightens the toxic requirements of reformulated gasoline by moving the baseline refiners must meet by 1999 to 2000. The Northeast States for Coordinated Air Use Management concluded that they are satisfied to have reached an agreement that substantially broadens the ability of the U.S. EPA and our Nation's Governors to protect, and in some cases actually improve to a greater extent, air quality and public health as we undertake major changes in the Nation's fuel supplies. Those who typically have proposed the myths and have supported those myths and made them a part of current mythology relating to biofuels and ethanol in particular have very often done so out of a lack of information but very often as a result of trying to derail the effort toward expanding this important part of our energy source. That is why it is important we take the opportunity to point out the truthfulness of the facts underlying ethanol and point out the falsehoods in the myths being used to deter our actions toward this amendment. I note my colleague from the other side. I yield the floor.

Mr. NELSON of Nebraska. Mr. President, for the next several minutes, I will speak about the renewable fuel standard as part of the energy bill. For more than an hour, perhaps closer to 2 hours, my colleagues and I will be talking about the importance of the renewable fuel standard as a part of the energy bill and as a part of our national defense, as well as our economy, and for the environment. In the early days of the automobile, Henry Ford believed at first that the best source of power for the automobile was with ethanol made from farm crops and other renewable materials. It is interesting to note, after a century of domination by oil, that we have now come perhaps full circle to recognizing there is a place for ethanol and renewable fuels as part of the fuel standard in order to power the automobiles that we continue to drive some 100 years later. Ultimately, the power of oil interests led to policies that made oil king, with depletion allowances, foreign tax credits, and naval convoys and armies dispatched to protect oilfields around the world. Of course, the direct or indirect control of oil remains an American economic, diplomatic, political, and military priority. While we have had, in fact, a petroleum age, it has ushered in many technological advances. The industrialized world's love affair with oil has not been without costs. Dependence on imported oil threatens our national and our energy security, our economy, our jobs, our farmers and ranchers, our industry and our environment. Public policy decisions and discussions have continued that began nearly a century ago, launching upon a path which led us to our current reliance on imported oil. Today we have a historic opportunity to begin the process of swinging back full circle, at least to some degree, in our national energy policy. The energy policy today embodied in this bill offers us a chance to realize the potential that Henry Ford saw even then, and that his successors managing Ford, GM, and Chrysler are making possible every time they produce an E-85 automobile capable of running on 85- percent ethanol. More than 2 million of these so-called flexible fuel vehicles are on the road at this time. Additionally, essentially all automakers in the world produce cars that run well on blends of ethanol, up to 10 percent, as well as those that will run up to 85 percent. We have the cars. Now we need the fuel. This bill provides the means in order to get it. The Energy Policy Act of 2002 will boost biofuels and biorefinery concepts to realistically address oil import levels that have now surpassed the 56-percent mark, with ever higher levels ahead of us if we do not do something significant now to change the direction in which we have been heading. From the perspective of a Senator from a farm State, and a former two-time chair of the Governors' Ethanol Coalition, one of the most important aspects of this landmark energy bill is the establishment of a 2-billion-gallon renewable fuel standard in 2004 that gradually grows to 5 billion gallons by 2012. Even if this approximate tripling of the ethanol industry from today's levels represents less than 4 percent of the total projected U.S. motor fuels demand over the next decade, it is a critical beginning of national importance. Enactment of this RFS, along with other provisions in this bill that emphasize new sources of energy production from renewables such as wind power, as well as conservation to further reduce our dependence upon foreign sources of energy, will help us reverse this 100-year-old reliance on fossil fuels. It will not replace them, but it will help us reduce the amount of reliance. There is now a revolution driving American agriculture as surplus, low-value starch and oils are converted into high-value liquid fuels, with the proteins being fed locally so that American taxpayers save money. Rural communities are reinvigorated. High-value, high-quality finished products enter the export market and the Nation's energy security and environment are dramatically improved. The Senate energy bill represents a historic step away from business as usual in U.S. energy policy. Just as we cannot export ourselves out of an agricultural crisis, we also cannot drill ourselves out of our energy crisis. With the renewable fuel standards, it will no longer be a matter of whether or not there will be a biofuels industry to augment our oil and auto industries. Rather, it will be how fast can we advance these domestic renewable fuels? How do we enhance their environmental performance, reduce their costs, and advance the technology to include the conversion of all forms of clean biomass into biofuels, biochemicals, and biopower? I am unabashedly proud of what my home State of Nebraska has accomplished. The formation of the National Governors' Ethanol Coalition was one of the most important steps. Nebraska and several other Midwestern States created this coalition that now represents 26 States and one U.S. territory, as well as Brazil, Canada, Mexico, and Sweden. Since its formation in 1991, the Governors' Ethanol Coalition has worked to expand national and international markets for biofuels. I might add that this Governors' Ethanol Coalition included the current and the previous Presidents of the United States when they were Governors of the State of Arkansas and the State of Texas. Within the State of Nebraska during the period of 1991 to 2001, seven ethanol plants were constructed and several of these facilities were expanded more than once during the decade. I do not want to take full credit for that timeframe, but I want the record to reflect it happened during my watch. Specific benefits of this national ethanol program in Nebraska include more than $1.2 billion in new capital investment in ethanol processing plants, 1,005 permanent jobs at the ethanol facilities, and over 5,000 induced jobs directly related to plant construction, operation, and maintenance. The permanent jobs alone generate an annual payroll of $44 million. More than 210 million bushels of corn and grain sorghum are processed at the plants annually. Economists at Purdue University and the USDA estimate that the price of corn increases from 9.9 cents to 10 cents per bushel for every 100 million bushels of new demand. Local price basis increases in Nebraska range from 5 cents to 15 cents, quite a stimulus for agriculture in ethanol-producing areas. These economic benefits and others have increased each year during the past decade due to plant expansion, employment increases, and additional capital investment. If each State produces 10 percent of its own domestic renewable fuels, as Nebraska does, America will have turned the corner and that noose of oil import dependency and climate change will begin to fade away. In the world of renewable biomass, there are no wastes, just feed stocks for other production systems, without the fossil-based toxins blocking the next biological step. I ask my colleagues to take a new look at the opportunities offered by RFS and grasp the full potential of the biorefinery portions of this energy legislation. These provisions are urgently needed to increase our energy and our national security, create new basic industries and quality jobs, reduce the vulnerability of our energy supplies, enhance the environment, contribute to the stabilization of greenhouse gases, while improving America's economic performance. Everyone gains from this effort. This balanced and comprehensive piece of legislation is the end result of the dedication of so many of my colleagues. It was not always easy to foresee the day when biofuels and other renewable resources would be poised to be a major component of our national energy policy. The farsightedness of a few has directly led to the creation and wide acceptance of the bill before the Senate today. The oil production versus imports chart shows the domestic oil production peaked in 1970 and again in 1985 and has continued to drop. The oil imports on the graph are shown to have expanded from 1950 to the point where they are more than 10 million barrels per day, and the trend continues. We must, in fact, support the growth of our own industry in the domestic production of fuels to power our energy needs. Last summer, Senator Tim Johnson and my colleague from Nebraska, Senator Hagel, introduced legislation that dealt with this very issue. Their hand is felt throughout the bill. I congratulate them and thank them for their efforts. Senator Daschle's and Senator Lugar's tireless efforts created a bill with broad consensus, taking shape in the form we see today, the legislation before the Senate. They have taken an issue that could have been controversial and instead introduced a bill that provides a wide-reaching blueprint for future renewable energy goals. These provisions are a direct result of their leadership. I am honored to be a cosponsor of this bill. I personally take a moment to recognize and thank staff who have worked on this issue as well. They worked long hours to put the bill together. Their efforts are much appreciated. Eric Washburn from Senator Daschle's staff and the rest of the team are a real asset to Senator Daschle and have been a tremendous help to me personally throughout this process. I ask my colleagues to join me in promoting new opportunities for the technologies that will put our fuels and our world transportation fuels on solid, sustainable, and environmentally enhancing ground. We owe it to our country now and to future generations to pass this legislation.

Mr. NELSON of Nebraska. I yield time to the distinguished Senator from Illinois.

Mr. NELSON of Nebraska. That will be fine.

Mr. NELSON of Nebraska. Madam President, it is my pleasure at this point to yield the floor to the distinguished senior Senator from the State of Nebraska, my colleague, Mr. Hagel. I welcome his support for ethanol. As a colleague, as a Nebraskan, and as Member of this body, I congratulate him and Senator Johnson on their support of this very important bill.

Mr. NELSON of Nebraska. Madam President, I thank the Senator from Nebraska for his very articulate comments supporting the efforts for the renewable fuels standard and for his support for ethanol. It is a pleasure to work with him on this issue. Madam President, I thank members of my staff, as a matter of privilege, for their support and their work on this important issue. I have identified Eric Washburn of Senator Daschle's staff. It is my pleasure to also thank my staff, Tom Litjen as well as Scott McCullers. At this time, I yield the floor to the distinguished Senator from North Dakota, to be followed by the distinguished Senator from Missouri.