September 05,2003

Baucus Urges Agreement on Balanced, Responsible Energy Legislation as Energy Bill Negotiations Begin

(WASHINGTON, D.C.) U.S. Senator Max Baucus, Ranking Member of the Senate FinanceCommittee, has been appointed as a conferee to the Senate and House joint negotiations on theenergy bill. At the opening meeting held today, Baucus prepared the following statement:

Opening Statement of Senator Max Baucus
Energy Bill Conference
September 5, 2003

Mr. Chairman, I am proud to join this conference today to begin the process of completing thisimportant piece of legislation. I would like to thank the Chairman, and also Senators Grassley andBingaman for their hard work in the Senate on this bill. Each of you has devoted a great deal oftime and effort to this important process.

At this moment in our history, our nation is facing significant energy challenges. We must addressthese challenges. I was disappointed that the conferees did not reach an agreement on a balanced,comprehensive energy package last year. This year, it is even more critical that we pass thoughtfuland balanced energy legislation that addresses both our current and future energy needs. I amconfident that we can reach a bipartisan agreement on this bill and have it signed into law in amatter of weeks.

The Senate bill incorporates energy tax incentives developed by the Finance Committee. These taxincentives are important to achieving some of the key energy policy objectives in the overall bill –increased domestic energy production from a variety of sources, greater energy efficiency, and morereliable, efficient and fair electricity markets. Achieving these policy objectives will lead to greaternational energy security and provide a boost to the nation’s economy.

Over the past two years, Senator Grassley and I have worked closely to put together a tax packagethat has widespread support.

I believe that we can reach an agreement on a package of tax incentives quickly if we emphatwo core principles: Balance and Budget.

First, balance. We need a conference agreement that balances both energy production and energyconservation. The Senate bill’s tax provisions consist of a balanced package of targeted incentivesdirected to alternative energy, traditional energy production, and energy efficiency. Maintainingthis balance should be a principal objective of this conference.

At the same time, we need to address the problems that resulted in last month’s electric powerblackouts in the Midwest and Northeast. Improving the reliability of energy delivery systems iscritical to the U.S. economy. This will also help protect U.S. consumers from market instability andrising energy prices.

Second, budget. We need a conference agreement that is mindful of the overall cost of thislegislation to the U.S. Treasury. We must not worsen our nation’s increasing budget deficit. Givenour current fiscal situation, tax relief must promise significant energy policy benefits–like new fuelsources, greater conservation, or better grid reliability.

Mr. Chairman, this nation has recently suffered through two major energy-related crises – the WestCoast energy crisis of 2000 and 2001, and the recent blackouts in the Northeast. Both of theseevents had devastating economic consequences. Both revealed different, yet significant, problemswith our electricity markets and our electricity delivery system. Although we are still learningabout the causes of the Northeast’s blackout, it was likely related to an aging transmission systemand a set of reliability standards that lack any real teeth. As I mentioned above, I think these areboth issues we must address in this conference.

My state of Montana was impacted significantly by the West Coast energy crisis, through increasedelectricity rates and economic uncertainty. We now know that market manipulation was a keyfactor in the West Coast crisis, destabilizing energy markets and driving high energy prices evenhigher, to unsustainable levels. The ripple effects of that crisis are still being felt in Montana andthe West. I think it would be unfortunate if this conference committee passed on the chance toaddress some of the abusive practices we saw in the West Coast markets. The reliability andstability of our electricity supplies must be assured, for businesses and consumers.

Mr. Chairman, I also wish to point out an issue of vital importance to me and to my state ofMontana. During the debate over the energy bill in the Senate, I introduced an amendment relatingto Montana’s Rocky Mountain Front. This amendment was very simple. It called for a study ofexisting oil and gas leases and any opportunities to exchange or otherwise cancel those leases.

Also, it extended for a period of three years existing lease suspensions in area of the Front borderingGlacier National Park. This suspension would allow the study to move forward quickly, and itwould give the Blackfeet Tribe a little breathing room in their negotiations with the InteriorDepartment over sacred sites in the Badger-Two Medicine area.

I was hopeful that my amendment would be accepted by the Senate and I was disappointed when Iwas denied the ability to offer it on the Senate floor. This issue is extremely important to myconstituents. The Rocky Mountain Front has been a battleground for decades, with the majority ofMontanans telling me loud and clear that they do not want to see the Front developed. The Front’sother values – world-class hunting, fishing and wildlife habitat – far outweigh the value of anypotential oil and gas reserves. These reserves, as indicated by the Administration’s own survey, justdon’t amount to much.

The cost and controversy surrounding oil and gas development in the Front make my amendmentparticularly important. I think it will set up a win-win situation: we protect the Front for futuregenerations, while at the same time we help producers move forward more rapidly in providing forour domestic energy needs.

I plan to explore seriously the possibility of offering my amendment for this conferencecommittee’s consideration. I believe it’s that important, and I hope my colleagues here will supportthe amendment.

Again, I look forward to working with my colleagues. I hope this will be a productive andsuccessful conference. I also hope that we will work together in an open manner, and in a spirit ofbipartisanship – that’s the only way we’ll get a bill that’s acceptable to both Chambers.We know difficulties lie ahead. But I am hopeful that we will quickly be able to reach suitablecompromises on these issues. I look forward to completing this important energy bill for theAmerican people.