Date:11/13/97
 
Statement of U.S. Sen. Dick Lugar
Hearing on Energy Security and Global Warming

 WASHINGTON -- U.S. Sen. Dick Lugar, Chairman of the Senate Agriculture, Nutrition and Forestry Committee, today issued the following statement at a hearing on global-warming and energy security:

 In less than a month, leaders from more than 150 countries around the world will gather in Kyoto, Japan to address the question of climate change.

 President Clinton recently announced a U.S. strategy to address this problem. The administration plan includes a joint implementation program under which developed nations help developing nations protect forests and conserve energy.  The plan also includes a tradeable emissions permit system and binding targets to stabilize greenhouse gas emissions at 1990 levels.

 To implement his climate change plan, President Clinton has called for an additional 5 billion dollars over 5 years in funding for energy research and development. Many, including myself, would argue that this amount is insufficient if we hope to make the bold strides necessary to prevent further environmental damage.

 The future energy strategy of the United States must also go well beyond the concerns of  global warming.  Protecting public health, reducing our dependence on oil from the Persian Gulf, and strengthening our economy must also be priorities.

 As we approach the Kyoto summit, representatives of agriculture and industry have expressed concerns regarding the cost and fairness of compliance with a global environmental treaty.  It is important that agriculture be treated as a part of the answer, not as part of the problem.
 
 We meet today to think through the many ways that agriculture can help supply our nation’s energy demand while also reducing potential harm to the environment.  The Committee’s interest in this subject is natural because most renewable fuels are derived from agricultural products.  As the demand for ag-based fuels increases, so will the demand for agricultural commodities and the incomes of farmers.

 As we have discussed in past Senate Agriculture Committee hearings, an important impetus in the creation of renewable fuel sources is the national energy security of the United States.  Current events in Iraq remind us that a dependence on Middle Eastern oil places the
United States and the world at a strategic and economic disadvantage.  As long as national
leaders such as Saddam Hussein remain in power, disruptions in the world flow of oil will remain a possibility.

 The effects of world dependence on Middle Eastern oil means that while the quoted market price per barrel is about $20, the costs associated with keeping shipping lanes open, rogue states in check and terrorists at bay, may more than quadruple the price per barrel. Given these costs, the United States may pay more than $100 billion this year for oil from the unstable Middle East.  By contrast, the United States will spend less than $1 billion this year on energy research.

 I am not pessimistic about our capabilities to address this problem.  We can mitigate disruptions in our energy supply by developing reliable, home-grown  alternatives to oil. Department of Energy officials testified before this Committee last Fall that renewable agricultural sources could provide up to 10 percent of our nation’s motor fuels by the year 2010 at prices competitive with gasoline.

 The ethanol industry, for example, has the capacity to produce roughly 1.5 billion gallons per year, already reducing our need for imported oil by more than 32 million barrels.  According to USDA studies, if we increase production capacity of ethanol to 10 billion gallons per year, we could create an additional 100,000 jobs nationwide.

 Ethanol also offers tremendous potential in reducing greenhouse gas emissions as compared to regular gasoline.  Ethanol produced from corn can reduce emissions up to 35 percent.  Ethanol produced from biomass has the potential to reduce emissions by more than 100 percent, through a combination of low emissions and carbon absorption.

 Other exciting technologies are also finding applications in energy production.  Fuel cells, developed for NASA’s Apollo moon program, are being used to convert hydrogen and oxygen from biomass into electricity for cars, buildings and utilities.  New genetically altered organisms have been developed to produce fuels from plants and grains.  And automobile manufacturers are selling cars and minivans capable of running on 85 percent ethanol.

 As we work to ensure the future security and economic growth of the United States, we must do everything possible to develop reliable, domestic sources of energy.  As the world’s leading user of energy resources, it would be irresponsible to put off action on this problem.  Research and technology can mean the difference between a world of opportunity and one limited by diminishing resources.

 It is also important that as we take steps to address environmental issues in this country, the upcoming Kyoto summit must require participation from all nations of the world who are significant emitters of greenhouse gases.

 To assist us in mobilizing timely and appropriate responses to these issues,  we welcome before the Committee former Director of Central Intelligence, R. James Woolsey.  Mr. Woolsey is the author of an essay recently published in the Wall Street Journal on the subject of alternative energy development.  We also welcome B. Reid Detchon, the Executive Director of Biomass Energy Advocates.