I rise today to underscore the need to invest in homegrown energy and reduce our dependence on foreign energy. Our nation's ability to produce a reliable, low-cost, domestic source of energy is both an economic issue and a national security issue.
Two years ago, our nation got a wake-up call. Gas prices exceeded $4 per gallon - even $5 in some places. It was a chilling reminder that the United States spends more than $400,000 per minute on foreign oil. That money is shipped out of our economy, adding to our enormous trade deficit and economic woes, and leaving us reliant on unstable parts of the world to meet our basic energy needs.
Now some of our colleagues have called for the volumetric ethanol excise tax credit, known as VEETC, to expire at the end of December. This tax credit was created five years ago to help bring ethanol from our farms to our gas pumps.
It's helping us start investing in the farmers and workers in the Midwest – instead of the oil cartels in the Mid East.
Now, my colleagues talk about how we need to let the free market solve our dependence on foreign energy. Well, I wholly support free markets – but I say let's have a level playing field and let the best ideas succeed.
But I'd like to know if my colleagues really think there's a level playing field for those trying to compete with the oil companies.
We've had an oil industry that has received decades of government support, and we have an emerging biofuels industry, powered by American farmers, who are just starting to grow the crops to create fuel that is displacing our demand for oil. Over the last few decades, more than $360-billion worth of taxpayer subsidies and loopholes have lined the pockets of oil companies. This is nearly ten times greater than the investments we've made in homegrown biofuels.
Meanwhile, in just the last five years, the top five oil companies recorded $560 billion in profits.
Since the ethanol tax credit was first adopted, it's helped the existing renewable fuels industry grow but it's also helped create new fuels, such as cellulosic ethanol, and new industry practices to reduce the amount of water consumed in the production process.
In my state alone, employment and economic output from the ethanol industry has doubled. This year's ethanol production in Minnesota is expected to exceed 1 billion gallons, employing nearly 8,400 people and creating an economic impact of more than $3 billion.
Instead, we want to give all those jobs to the Mideast?
Nationally, homegrown ethanol displaces more than five percent of our oil consumption or about 350 million barrels. The ethanol industry employed nearly half a million Americans to produce the ethanol right here in our country.
Letting this tax credit expire would almost certainly put thousands of jobs in jeopardy, and it would also increase our dependence on foreign oil and thereby hurting our national security.
The oil spill in the gulf was a poignant reminder: Our addiction to oil comes with serious costs, and it's about time our nation got serious about investing in alternatives. You didn't see a windmill blow up in the Midwest! You didn't see an ethanol plant explode!
Senators Conrad and Grassley have called for a five-year extension of the ethanol tax credit, and I have supported their bipartisan legislation. Senator Johnson and I have also introduced the Securing America's Future with Energy and Sustainable Technologies (SAFEST Act), with similar provisions calling for an extension of the tax credit. But our legislation also includes a renewable energy standard – something Senator Snowe and I have worked on – and, I see Senator Kerry here, too. I know that reducing our dependence on foreign energy by investing in energy development here at home is something he's worked hard on, too.
But we know that this credit won't always be necessary. That's why I've also been working to develop a new [more cost-effective] tax credit that could replace the existing VEETC credit, and which would more directly benefit the farmers who are growing our transportation fuel.
No one is denying that we can improve this tax credit – to make even more effective investments in alternative fuels. But the ethanol industry and private investors with billions of dollars in capital need to know that our nation is serious about supporting alternative fuels. Allowing this tax credit to expire – before we can come up with a long-term agreement about how to continue to invest in homegrown energy – would send the wrong signal to investors. Letting this tax credit expire would say that America is not serious about finding alternatives to oil and that we're not serious about reducing our dependence on foreign energy. Are we just going to put our heads in the sand and pull the rug out from under ourselves?
Mr. President, our nation has an unemployment rate of 9.6 percent. We continue to send $730 million a day to foreign countries, many of which have been known to funnel money to terrorists, to meet our basic fuel needs. Now is not the time to pull the rug out from underneath the largest, most established domestic alternative to petroleum fuel. Now is not the time to put in jeopardy tens of thousands of jobs.
Now is the time to extend the biofuels tax credits and invest in the farmers of the Midwest instead of those oil cartels of the Middle East. Now is the time to increase our support for alternative energy. These investments will help us lower the unemployment rate, reduce the amount of money we send overseas to meet our energy needs, and these investments will help make our nation less reliant on unfriendly nations.