Sen. Coleman introduces bill to diversify U.S. energy portfolio

By Timothy Charles Holmseth | June 02, 2008
Web exclusive posted June 23, 2008 at 12:26 p.m. CST

U.S. Sen. Norm Coleman, R-Minn., has introduced legislation intended to diversify the U.S. energy portfolio. It would create an Energy Independence Trust Fund to finance renewable energy programs set forth in the 2005 and 2007 energy bills.

The bill would also authorize deep water exploration of oil and gas, increase oil and gas production, expand nuclear energy capacity, fund renewable fuels and accelerate the production of coal-to-liquid technology.

Coleman said the pain being suffered by Minnesota taxpayers at the pump and in the grocery line can be traced back to an unhealthy national dependence on foreign oil - and that dependence must be broken. "To achieve this, we must take advantage of the domestic energy resources we have at home, while diversifying our energy portfolio to include renewable energy resources such as wind and biofuels," Coleman said. "We must also invest in state-of-the-art technology such as clean coal, nuclear and hydrogen fuel cells, and at the same time promote greater conservation and energy efficiency. The American people expect us to come up with real solutions, and the time has come to put political grandstanding aside and pass a bill that actually has a chance of passing the Senate."

Coleman's legislation includes the following provisions:

Outer Continental Shelf
According to a press release from the Sen. Coleman's office, the bill would open up the Outer Continental Shelf to oil and gas development outside of Florida in a way that protects the environment and economy of states in new development areas. There are an estimated 2.8 billion barrels of crude oil and 12 trillion cubic feet of natural gas that could be produced between now and 2025 in areas currently under moratoria. Coleman states that if developed, this could reduce America's trade deficit by $145 billion by offsetting oil imports.

"We must open up development in a way that recognizes that many states are opposed to opening up development in the federal waters off their coasts, which is why my bill does not allow the federal government to allow development, unless the state's governor approves the plan," Coleman said. "And, to get the discussion going between the Secretary of the Interior, the Secretary of Defense, and coastal governors, this proposal would give governors the opportunity to make a counterproposal and to propose long-term protection of federal waters off their shores. The federal government can then accept this proposal or begin a negotiation with the governor." Coleman added that the idea is to move past the take-it-or-leave-it approach to OCS development and provide states the authority and processes they need to make a deal that protects their economic and environmental interests. Coleman's bill will require that an oil company holding an OCS lease develop the oil and gas on that tract in a reasonable timeframe or lose the right to develop that area. Existing leases that come up for renewal will face the same limitation.

Renewable Fuels and New Energy Technology
The legislation would also create an Energy Independence Trust Fund to be funded with the federal share of additional royalties that would be collected when more of the OCS is opened for development. Coleman said this trust fund, which could receive tens of billions of dollars from new royalties, would go to fully fund all renewable energy, energy efficiency, research and development, and technology deployment programs from the Energy Policy Act of 2005 and the Energy Independence Security Act of 2007. "This would make sure programs we already have on the books to develop technologies like fuel cells, hybrid vehicles, solar, wind, advanced batteries, building efficiency, the list goes on and on, are fully funded," Coleman said. Additionally, the fund will provide resources for a new ethanol pipeline loan guarantee program and fund new nuclear energy production incentives.

Clean Coal-Derived Fuels
Coleman said the bill will also utilize the United States' 250 year supply of coal by creating a new standard for the production of fuel from clean coal, often called coal-to-liquid technology. He said his amendment would take a new approach by tightening the environmental standards required of this fuel.

Nuclear Energy
Coleman said the legislation would recognize the fact that nuclear energy is one of America's energy solutions as it provides an affordable, zero-emissions source of energy. This proposal will improve the loan guarantee for nuclear production, create a nuclear production tax credit, and increase training for the nuclear workforce.