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Democrat energy package will fatigue country

Enzi successful with Thomas amendment, but votes against final bill

June 22, 2007

           Washington, D.C. – The U.S. Senate passed an energy bill last night, but U.S. Senator Mike Enzi, R-Wyo., said the measure will mean higher prices at the pump for motorists and higher food prices at the grocery store for consumers.

           Enzi was one of the senators who voted against the bill, which the Senate passed on a vote of 65-27.

           "This bill relies too much on regulation and non-existent infrastructure to ease our energy woes," Enzi said. "One of the most glaring omissions in this bill was the absence of a coal-to-liquids provision. If we are ever going to kick our addiction to foreign oil we’ve got to increase fuel production here at home and coal-to-liquids technology is a big part of the answer."

          Unlike ethanol, which can’t be transported in existing pipelines, liquid fuel derived from coal works with our existing transportation and delivery infrastructure. Demand for corn to produce the mandated quantity of ethanol also drives up the price for cattle feed and other products made with corn, Enzi said.

          The bill mandates that the U.S. use 36 billion gallons of ethanol by 2022. Acknowledging that the mandate could cause economic hardship to some states or regions, the legislation would allow these areas to petition the President for a waiver from some of the requirements. The President would have 90 days to respond to the waiver request. Enzi said that was too long. He sponsored an amendment the late Senator Craig Thomas, R-Wyo., had authored that would give the President 30 days to respond. The Senate included this provision in the final package.

          "When an area of the country is really hurting economically it doesn’t have time to wait three months for bureaucrats in Washington to decide what to do," Enzi said.

           Senators will now try to reconcile their version of the energy bill with a version passed earlier by the House. Enzi said the House version also contains strict mandates, increased taxes and more regulation.

           Enzi spoke on the Senate floor several times during the energy debate and sponsored amendments. He also submitted information for the Senate record.  

Statement of Senator Michael B. Enzi

On the Baucus Amendment #1704

June 21, 2007

         Mr. President. I would like to take this opportunity to discuss my opposition to a few of the provisions in the Finance Committee-passed energy tax package. Before I begin, I would like to take a moment to thank Chairman Baucus and Ranking Member Grassley for their work on this amendment. I know they have exerted an incredible amount of energy to get this legislation to the floor so that we can debate it as part of this energy bill.

         The package that we are debating includes a number of important provisions. It includes additional funding for clean renewable energy bonds, which are important to rural electric cooperatives who seek to build clean generation. It includes accelerated depreciation for carbon dioxide pipelines, which will encourage more carbon sequestration. It also includes a carbon capture credit that will make it more economical for some carbon dioxide to be used in enhanced oil recovery and for some carbon dioxide to be sequestered. These are important provisions, and I am pleased to see them included in this package.

        Although that is the case, I have grave concerns about the impact of this tax package. I am specifically concerned about its impact on consumers. When taken as a whole, I believe that the package will lead to increased gas prices and will have a detrimental impact on our country’s quest to become energy independent by discouraging domestic energy production.

        The amendment contains approximately $28.6 billion in "revenue raisers" over the next ten years. The phrase "revenue raisers" is Washington speak for tax increases, and I find it hard to believe that we can increase taxes by $28.6 billion and have no impact on the price of gasoline at the pump for the average American. Businesses are in business to make money, and when we increase their taxes, they pass that increase along to the consumer.

        It is not Exxon Mobile or Shell or BP who will pay for these tax increases. It is the senior citizen on a fixed income who fills up her station wagon. It is the soccer mom who drives her children to school. This tax title is not punishing the companies. It is punishing the American people who rely on energy to fuel their daily lives.

       Specifically, I am concerned that three provisions of this bill will increase gas prices and will discourage energy production at a time when our nation’s supply does not meet our nation’s demand. Last week, I joined a number of my colleagues in a letter to the Senate Finance Committee that urged the Committee not to repeal the Section 199 manufacturing deduction, and I am disappointed to note that this was included. The Joint Tax Committee estimates that the repeal of the Section 199 deduction will raise $9.43 billion over a ten-year period. That is $9.43 billion that will be passed along to the American people.

      I am also disappointed that the legislation includes a new 13 percent severance tax for oil produced in the outer continental shelf (OCS). The OCS represents one of America’s greatest energy sources and raising taxes on those who hope to produce in the OCS will most certainly not encourage the domestic energy production that we all believe is so important.

      Finally, I am concerned that this legislation changes what is known as the foreign tax credit. This change, which amounts to double taxation, will increase taxes by $3.2 billion over the next 10 years. Someone has to pay for that tax increase, and I am concerned that it will be the American people.

      While I appreciate the work of my colleagues, at the end of the day, I am extremely concerned that this legislation will slow domestic energy production and increase the prices paid by consumers. There are a number of good provisions in this bill that I do support. However, at the end of the day, raising taxes is not the way to increase energy production and decrease energy prices. I would urge my colleagues to oppose cloture on this amendment.

I yield the floor.