WASHINGTON, D.C. – U.S. Senator Bob Corker (R-TN) and the other nine members of the bipartisan coalition of senators known informally as the “Gang of 10” today unveiled a sweeping energy proposal to reduce gas prices, lessen our nation’s dependence on foreign oil, and strengthen America’s economy.
 
“Working with this bipartisan group on a solution to America’s energy needs has been a labor of love; it’s exactly what I came to the Senate to do,” Corker said. “We have put forth a bill today that focuses on supply, conservation, and alternatives, and I hope this becomes a centerpiece of discussion when we come back in September.
 
“By opening up additional areas in the Gulf of Mexico and parts of the Outer Continental Shelf for drilling, this bill provides additional access to oil and gas reserves and sends an important signal that will change market expectations and have an immediate impact on prices. Our proposal also contains incentives to spur the growth of nuclear power, a source of electricity that must be a vital component of this country's clean energy future. In addition, our proposal decreases demand for energy, particularly oil, by transitioning our cars and trucks to new technologies such as electric vehicles, hybrids, and alternative fuels,” Corker said.  “I hope the American people understand that securing our energy future will require a strong commitment and cannot occur overnight. I believe this bill starts us down the right path, and I sincerely hope it will receive serious attention and support.
 
“Compromise has been a big part of this, and that’s what it takes in this body to make something happen,” Corker said. “This exercise has been a ‘pendulum of pain’ as five Democrats and five Republicans sat down to agree on something, and I want to thank Senator Chambliss and Senator Conrad for providing the leadership.”
 
The bipartisan coalition is led by Senators Kent Conrad (D-ND) and Saxby Chambliss (R-Ga.) and, in addition to Corker, includes John Thune (R-S.D.), Lindsey Graham (R-S.C.), Blanche Lincoln (D-Ark.), Mary Landrieu (D-La.), Johnny Isakson (R-Ga), Mark Pryor (D-Ark.), and Ben Nelson (D-Neb.).
 
“Our country faces a critical challenge because of skyrocketing energy costs.  This growing crisis undermines the budgets of families across the nation.  Congress needs to take immediate action. This is not a Democratic issue, or a Republican issue, it is an issue that affects all of us.  As a group, we are committed to working together in a bipartisan manner to develop comprehensive energy legislation. Americans are looking for solutions. We need to act now,” the senators said in a joint statement.
 
The comprehensive New Energy Reform Act of 2008 calls for a focused effort to transition the nation’s motor vehicle fleets to fuels other than gasoline and diesel. To ease gas prices in the interim, the proposal includes significant conservation provisions, consumer tax credits, and responsible measures to increase domestic production.
 
The senators believe their compromise energy plan will generate a groundswell of support among the American people as well as their colleagues in Congress and lead to the development of comprehensive legislation to tackle the nation’s energy crisis.
 
The senators also welcomed the news that Senate Leadership would adopt the group’s proposal to convene a summit of energy experts in an effort to develop a plan for securing America’s energy independence. The 10 senators first proposed the idea of a bipartisan energy summit in a letter to Senate Leadership on June 26.
 
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New Energy Reform Act of 2008
Roadmap to a Secure Energy Future
 
Overview
Knowing that the rising cost of energy is the number one issue facing Americans today, ten Senators from both sides of the aisle have come together to present a proposal to reduce gas prices, lessen our dependence on foreign oil, and strengthen our economy.  The New Era legislation represents a true compromise, incorporating common sense ideas.
 
The purpose of the legislation is to transition our economy – particularly the surface transportation sector – to run off alternative fuels other than gasoline and diesel. The legislation dedicates at least $20 billion in the next ten years to this important endeavor.
 
To ease gas prices in the interim, the New Era bill includes significant conservation provisions and targeted, responsible measures to increase our domestic production of traditional fuel sources. Any new domestically produced resources must stay in the United States. The bill will also establish a National Commission on Comprehensive Energy Policy to identify critical “inhibitors and prohibiters” to the goals established in the bill and to make recommendations to Congress on policies to overcome these obstacles as well as to address related matters such as carbon capture and storage, nuclear and renewable energy, and the need for upgrading and transitioning the national grid and other energy infrastructure.
 
The New Era bill contains three main components:
An intensive effort to transition vehicles to non-petroleum based fuels;
a robust federal commitment to conservation and energy efficiency; and
targeted, responsible domestic production of energy resources.
 
Converting Cars and Trucks to Non-Oil Fuel Sources to Regain Energy Independence
The New Era legislation funds a $20 billion “Apollo Project” like effort to support the goal of transitioning 85% of America’s new motor vehicles to non- petroleum-based fuels within 20 years. To accelerate this transition, the legislation includes:
$7.5 billion for R&D focused on the major technological barriers to alternative fuel vehicles, such as advanced batteries;
$7.5 billion to help U.S. automakers and parts makers re-tool and re-equip to become the world leader in making alternative fuel vehicles;
Consumer tax credits of up to $7,500 per vehicle to incentivize Americans to purchase advanced alternative fuel vehicles (those that run primarily on non-petroleum fuels) and up to $2,500 to retrofit existing vehicles with advanced alternative fuel engines.
 
Enhancing Conservation
To ease gas prices and protect our environment during the transition, the proposal includes a significant federal commitment to promoting conservation and efficiency.  These include:
·         Extending renewable energy, carbon mitigation and energy conservation and efficiency tax incentives, including the production tax credit, through 2012 to create greater certainty and spur greater investment;
·         New consumer tax credits of up to $2,500 to purchase highly fuel efficient vehicles, to help Americans reduce their annual gas costs and reduce oil imports;
·         Extending and expanding the $2,500 tax credit for hybrid electric vehicles;
·         $500 million for R&D into new materials and other innovations to improve vehicle fuel efficiency;
·         $2.5 billion in R,D&D on next generation biofuels and infrastructure;
·         Tax incentives for the installation of alternative fueling stations, pipelines and other infrastructure;
·         Expanding transmission capacity for power from renewable sources;
·         New dedicated funding for the weatherization assistance program.
 
Responsible, Targeted Domestic Energy Production
To help meet our energy needs until our economy transitions to advanced alternative fuel vehicles, the New Era bill increases domestic energy production in environmentally responsible ways. The legislation:
·         Provides a CO2 sequestration credit for use in enhanced oil recovery to increase production from existing oil wells while reducing greenhouse gas emissions;
·         Opens additional acreage in the Gulf of Mexico for leasing (in consultation with the Defense Department to ensure that drilling is done in a manner consistent with national security) and allows Virginia, North and South Carolina and Georgia to opt in to leasing off their shores.  Retains an environmental buffer zone extending 50 miles offshore where new oil production will not be allowed.  Requires all new production to be used domestically.  Creates a commission to make recommendations to Congress on future areas that should be considered for leasing. Provides for appropriate revenue sharing for states that allow leasing off their shores;
·         Provides grants and loan guarantees for the development of coal-to-liquid fuel plants with carbon capture capability.  Plants must have lifecycle greenhouse gas emissions below those of the petroleum fuels they are replacing;
·         Supports nuclear energy by increasing staff at the NRC, providing workforce training, accelerating depreciation for nuclear plants, and supporting R&D on spent fuel recycling to reduce nuclear waste.
 
Speculation
The Group decided to focus on increasing supply and reducing demand and will await the mid-September report of the CFTC to consider this subject.
 
Offsets
The $84 billion in investments in conservation and efficiency in the New Era bill will be fully offset with loophole closers and other revenues.  Approximately $30 billion will come from new revenues from the oil and gas industry through such measures as modifying the Section 199 manufacturing deduction for oil and natural gas production and other appropriate measures to ensure that the federal government receives its fair share of revenue from Gulf of Mexico leases.  Remaining offsets will be finalized in consultation with the Finance Committee after accounting for interaction effects with other pending legislation.