June 27, 1978
Page 19146
Mr. MUSKIE, Mr. President, the bill we are debating today concerns an energy resource whose development most people consider vital to the successful long term resolution of our energy problem. I am speaking of oil shale, which is a resource we have in abundance.
So far we have not realized the potential of our shale reserves. The Federal Government has ongoing a modest and useful development program, but the current activity does not reflect a sense of urgency and is proceeding as if we had all the time in the world to develop new supplies of liquid fuels.
What S. 419 does is to accelerate the pace. Given the obvious need to find out exactly what the economic and environmental consequences are of producing oil from shale in large quantities, passage of S. 419 is important.
I find it particularly important that the bill recognizes the need to determine and evaluate the impact of oil shale development upon the environment before proceeding to commercial production.
The impact advisory panel established in section 9 of the bill, the report on how first to proceed with the program required in section 14, and the required evaluation of the program upon its completion provide strong environmental safeguards.
Senator HASKELL is to be commended for his efforts in bringing this bill to the Senate and for seeking to insure that the environment is protected in the development of oil shale.
The cost of the bill is significant. To construct the three oil shale demonstration plants authorized by S. 419 would require approximately $275 to $400 million over a period of years, according to CBO. Additional costs would be incurred by operating and maintaining the facilities, although in later years total costs would be offset at least in part by the sale of the oil produced.
So what we are authorizing in this bill is a costly enterprise. S. 419 involves far more than the $1.4 million specifically authorized for fiscal year 1979 in section 18 of the bill, as both the CBO cost estimate and the report accompanying S. 419 point out.
Mr. President, late last year the Senate passed a measure that, like S. 419, dealt with the development of oil shale.
The Senate-passed version of the energy tax bill, now in conference, contains a provision, authored by the distinguished senior Senator from Georgia, allowing the producer a $3 credit against his tax liability for each barrel of shale oil produced.
The approach taken by that provision is very different from the one taken in the bill before us today. S. 419 emphasizes the Federal role and contemplates direct Federal spending. The Talmadge provision emphasizes the private sector and involves a tax expenditure, S. 419 calls for a demonstration program, limited in time, that will enable us to evaluate different oil shale technologies and their associated impacts before proceeding to commercial development.
The Talmadge provision is designed to yield commercial production right away. S. 419 envisions the construction of three oil shale plants. The Talmadge provision is likely to lead to five.
I happen to favor the approach taken in S. 419, but I am concerned that we are acting today as if the Talmadge provision is not pending in conference. To me, Senate passage of S. 419 implies a change in heart in how we believe the development of our oil shale resources should proceed. At the very least, passage of S. 419 would compel a reexamination of the tax credit proposal for oil produced from shale pending in conference. In my judgment, we cannot afford both programs.
Mr. President, let me now comment on a subject that I have addressed often as chairman of the. Senate's Budget Committee. The subject is the pressure upon government to spend. This pressure is enormous. Since I became chairman of the Budget Committee I have been forcefully reminded of how extensive and continuous this pressure is. Each area of public policy, be it health, or agriculture or transportation, needs more money to reach its goals, goals, which most of us accept as valid.
Certainly this is true with energy, where additional funds could be used on a wide variety of programs, from weatherization to laser fusion.
So it is noteworthy when this pressure to spend is resisted. It is hard to say no, particularly when the program is deserving and the amount requested is reasonable. But when we reach our spending limit, we must say no, or the budget will be out of control.
I know this to be so, and so do the people of Maine who, like most Americans, suffer greatly from inflation and expect their elected leaders to do something about it.
Recently, President Carter said no to a request for more spending, a decision for which he deserves commendation. The Energy Department had sought his approval for a budget amendment in fiscal year 1979 of nearly $400 million for new energy supply initiatives. Many of these initiatives were attractive and the amount, while large, was not unreasonable. But the President said no. He realized that the deficit could not be held down by his giving in to the pressure to spend.
I for one applaud his decision and his courage in making it.
We in the Congress must show a similar courage.
Last month, in adopting the budget resolution, we set for ourselves spending limits for fiscal year 1979. These limits include a target for energy spending, of $10.4 billion. This is an ample amount, clearly sufficient to fund the energy programs we must have. It is an amount $900 million above the President's request. The congressional budget can accommodate the oil shale proposal before us, and it is my expectation that it can accommodate funding the major Department of Energy authorization which will be before us soon.
For any funding above this target, we in Congress must be willing to say no. I venture a guess that new, seemingly worthwhile energy-related endeavors will appear as time goes on. When it comes to funding these endeavors, we must hold to the targets we have set for ourselves. We must be willing to say no. We simply cannot afford spending that will breach the targets.