Expand Domestic Energy Supplies

ISSUE

Before the Energy Policy Act of 2005 became law, no major revision had been made to America’s energy policy in nearly 15 years. Outdated U.S. energy policies have led to an ever-increasing dependence on foreign sources to meet our country’s energy needs, subjecting consumers to energy price volatility. While the comprehensive energy bill enacted in 2005 is a good first step, more must be done by Congress to encourage new technologies and policies for renewable energy sources as well as further exploration of domestic energy supplies.

BACKGROUND

H.R. 6, the Energy Policy Act of 2005, included the following provisions:

• A Renewable Fuels Standard (RFS) of 7.5 billion gallons by 2012.
• Extension of the biodiesel tax credits for two additional years to the end of 2008.
• Modification of the small producer tax credit to include both ethanol and biodiesel plants of up to 60 million gallons per year.
• Extension of the renewable production tax credit for wind, biomass, etc., to the end of 2007.
• Shortening the length of a valid tradable credit under the RFS to one year.
• Inclusion of a provision calling for a seismic inventory of the Outer Continental Shelf (OCS) region.
• Inclusion of provisions promoting clean coal technology and nuclear technology and decreasing current demand pressure on natural gas, the primary feedstock for fertilizer.
• Language to clarify the jurisdiction of the Federal Energy Regulatory Commission with respect to siting and permitting of liquefied natural gas terminal facilities.

What H.R. 6 did not include are provisions that would specifically address increasing domestic oil and gas production in energy-rich areas such as the 1002 Area of the Arctic National Wildlife Refuge (ANWR) and OCS regions. In the aftermath of record high energy prices, we must seek ways to further diversify our energy supply.  Therefore, these areas must be opened to environmentally-safe oil and gas exploration and production.

Congress is currently working on energy legislation which may include raising the RFS, providing energy tax incentives, revising corporate average fuel economy (CAFE) standards and enacting a Renewable Portfolio Standard (RPS).

LEGISLATIVE HISTORY

Last Congress, legislation was signed into law to open up the OCS to exploration of oil and natural gas. Although efforts to open up ANWR were not successful, those efforts will continue in the 110th Congress.

In the 110th Congress, a Concurrent Resolution was introduced in both the House and Senate to establish 25x’25 as a national vision. The 25x‘25 vision is to get 25 percent of our energy from renewable resources like wind, the sun and biofuels by the year 2025.

The Senate Energy and Natural Resources Committee marked up energy legislation, including increasing the RFS to 36 billion gallons a year by 2022 with a focus on cellulosic ethanol.

In addition, the House Energy and Commerce Committee and the Resource Committees are holding hearings on energy legislation.

AFBF POLICY

AFBF supports the production and use of agricultural-based energy products and promotion of ethanol-blended fuels and biodiesel through tax credits of at least 10 years in duration and through other appropriate measures such as an increase of the RFS to 36 billion gallons by the year 2022. AFBF also supports increasing America’s energy independence by expanding domestic exploration and production of oil and natural gas from the nation’s energy reserves. AFBF also supports the “25x’25” vision, which calls for 25 percent of America’s energy needs to be produced from working lands by the year 2025.

ACTION

Encourage Congress to promote incentives for renewable energy sources and promote the exploration of domestic energy supplies.

September 2007