Opening Statement
Senate Agriculture, Nutrition and Forestry Committee

Chairman Dick Lugar, U.S. Senator for Indiana

Date: 7/16/97

Opening Statement for Senator Richard Lugar Hearing on Energy Security and Agriculture

The Committee meets today to continue a study of our nation’s energy security situation and its implications for agriculture. Last October the Committee heard from several distinguished witnesses that the dependence of the United States on foreign oil is growing, with more than half of our supply coming from offshore. Two-thirds of the world’s oil reserves lie in the Persian Gulf region, where political, ethnic and religious turbulence is the rule, rather than the exception.

As I said at the earlier hearing, the cost of our military responses to Saddam Hussein begs two questions: Must the United States continue dependence on foreign oil at a tremendous cost in military operations and foreign policy initiatives? Or can a substantial portion of our energy needs be derived from ethanol, biofuels and other home-grown alternatives? It seems obvious to me that these questions are still relevant today.

In fact, it is particularly timely for the Committee to focus the spotlight on our energy situation this morning. Conferees from the Senate and House continue to meet this week to work out differences between the revenue reconciliation bills passed by the two chambers. While the House bill precludes any tax incentives for ethanol use beyond the end of this decade, the Senate version extends the incentives -- at a lower rate -- until 2007.

Neither the instability of the Middle East nor our nation’s demand for energy will end in the year 2000. For that reason, I supported extending the incentives into the new century. So did 68 other senators, in a massive show of support during floor consideration of the tax bill.

Given the delicate nature of the world’s oil supply, it would be short-sighted and dangerous to cut off the flow of alternative energy sources. In the long run, the investment we make through tax incentives and investments in research to promote alternative fuels will pay off.

I have asked the Central Intelligence Agency to give the Committee a briefing this morning on the global energy situation. This will include information on relatively unexploited oil supplies in the Caspian Sea. This region is indicative of the fact that while there are substantial international sources of oil other than those of the Persian Gulf, many of those sources have their own geopolitical strife.

We will also hear from representatives of the Departments of Agriculture and Energy, as well as the White House biofuels initiative. These witnesses will discuss agriculture as an energy user and an energy source, and will update the committee on the research and market development initiatives that the federal government is undertaking. Finally, John Campbell of Ag Processing in Omaha will give a private sector view of the alternative fuels industry. Mr. Campbell will concentrate on biodiesel fuel.

The United States may never be 100 percent energy-independent. But it is reasonable to increase our use of fuels that are made from readily-available agricultural sources that are also less harmful to our environment. I hope this hearing will play at least a small part in pointing our nation toward this reasonable goal.

Before we hear from our witnesses, I am pleased to yield to Senator Harkin, our distinguished ranking member, who has also been a stalwart supporter of domestic renewable energy supplies.