WASHINGTON – U.S. Senator Mark Dayton (D-MN) Wednesday called on Congress to immediately draft a new energy bill that focuses on renewable and alternative energy initiatives to reduce America’s dependence on foreign oil. In remarks before the Senate Agriculture Committee and on the Senate floor, Dayton said Congress and the Bush Administration have failed to adequately invest in ethanol and other renewable energy sources as a way to control prices at the gas pump. Gas prices have climbed to nearly $3.00 per gallon nationwide and to $2.87 per gallon in Minnesota.

“Some progress toward increasing the supply and use of biofuels, like ethanol and biodiesel, was achieved in last year’s energy bill, but as a nation, we are tiptoeing when we should be running,” said Dayton. “A new energy bill should accelerate this transition away from our nation’s increasing dependence on foreign oil.”

Dayton, a longtime leader on renewable fuels, says America has seen little more than empty rhetoric from the President and the majority in Congress on the gas crisis and how to address it. Funding for key renewable energy programs has fallen far short of authorized levels in the 2005 Energy Bill and the 2002 Farm Bill. In fact, President Bush’s 2007 budget includes a 57 percent cut to the mandatory funds provided by Congress for Renewable Energy Systems Grants and Loans. This program provides key grants and loans that allow farmers and small businesses to make energy efficiency improvements and purchase renewable energy systems, such as wind turbines, methane digesters , and solar panels.

Dayton said Congress also needs to act to provide incentives and requirements for auto manufacturers to build more flex-fuel vehicles. The Minnesota Senator has introduced a bill that would require all vehicles to have flex-fuel engines beginning in model year 2008.

Dayton is also a cosponsor of sweeping energy reform legislation introduced this week by Senator Kent Conrad (D-ND). The bill, the Breaking Our Longterm Dependence (BOLD) Act, through a combination of tax credits, grants, and new renewable fuel standards set by the legislation, would increase production of renewable energy and alternative fuels, reward conservation, fund research of new energy technology, and upgrade our nation's electricity grid.

“Americans are being taken advantage of at the gas and the E-85 pumps, in Minnesota and other places around the country. And this Congress has a choice, whether to do something about it or to do nothing,” Dayton said. “If we’re really serious about reversing our growing energy dependency on oil and its products, and not being held captive to rising oil, gasoline and diesel prices here and around the world, we must act again to pass energy legislation. We must act now, this year, in doing so.”

Below is the full text of Senator Dayton’s statement.

Today, the Senate Agriculture Committee held a very important hearing on the biofuels industry. I hope that it will be the first, not the last, because biofuels – specifically ethanol and biodiesel—are real, viable, here-and-now alternatives to the ever-increasing costs of gasoline and diesel fuels.

We are in the midst of another price crisis for the gasoline, diesel, and oil upon which our citizens, our industries, our lifestyles, and our entire national economy depend. Most Americans want their fuel prices to be lower, but they don’t want to change their fuels in order to make them so. People say, understandably, solve our energy problems right now. But don’t make us do anything different.

That’s why I respectfully disagree with people who say we don’t have a national energy policy. We do – it is to maintain the status quo for as long as possible. That is actually a rational policy, because our existing energy sources – over 95 percent of which are oil and oil-derived products, coal, natural gas, and nuclear – have been, and in most cases continue to be, cheaper, more available, more convenient, and certainly more familiar than any of their alternatives.

The sources of supplies, their production, transportation and distribution systems, and retail networks are all well-established and well-protected by everyone who profits from them. Those industries and companies that control and profit from our country’s enormous and almost exclusive dependence upon their sources of energy, have enormous stakes in preserving their control and protecting their profits, by destroying any real competitive threats to their energy monopolies.

Nowhere are the stakes higher than in our nation’s transportation sector. Over 40 percent of total U.S. energy consumption is of oil and petroleum products, and over two thirds of that oil is used for transportation. Our country now consumes almost 30 percent of all the oil produced in the entire world each year, which means that 20 percent – or one out of every five barrels of oil produced in the entire world – goes into an American car, truck, train or airplane. And, up until recently, oil was the only fuel that those cars, trucks, trains and airplanes could run on.

What a gigantic energy monopoly that is. It’s the largest monopoly of any kind in the world. And like most monopolies, it’s hugely profitable for the monopolists, and hugely expensive for everyone else. And like every other source of enormous profits and financial power, it’s not going to be surrendered voluntarily by the profitable and the powerful.

The huge oil and oil products monopoly is not going to willingly surrender sales, or market share, or profits, not to a competitor like the bio-fuels industry. Like any other established energy monopolies, they may give lip service to those energy alternatives, but they don’t really mean it. That was very clear when the Senate considered its energy bill last year.

There were full page ads in The Hill and Roll Call newspapers by the American Petroleum Institute, which smeared bio-fuels with the same misrepresentations, distortions, and fear-mongering that they tried to use a decade ago to defeat a 10 percent ethanol mandate in the Minnesota legislature. Back then, the oil industry claimed that biofuels, particularly ethanol, would raise the price of every gallon of gasoline; that the supply would be impure and unreliable; and that people’s gas tanks would explode, or their carburetors would implode or their cars would be damaged or destroyed. None of those occurred.

Yet, almost 10 years after Minnesota required every gallon of gasoline sold in our state to contain at least 10 percent ethanol, we are still the only state to do so. And nationwide, the use of ethanol is only about 2½ percent that of gasoline. It turns out that regular automobile, SUV, and small truck engines not only run very well – with no modifications at all– on 90 percent gasoline and 10 percent ethanol, but they can also –with factory modified engines – run as well or better on a blend of 85 percent ethanol and 15 percent gasoline, called E85 fuel. And in Brazil, where I visited just 2 weeks ago, automobiles run very effectively on 100 percent ethanol.

This week’s U.S. News and World Report magazine contains a two-page ad by General Motors touting its flex-fuel engines, which can run on either 100 percent regular, unleaded gasoline, 85 percent ethanol, or a combination of the two. Yesterday, Daimler-Chrysler announced that in model year 2008, 500,000 or ¼ of its vehicles will be provided with flex-fuel engines. A flex-fuel engine is the key to unlocking the gasoline monopoly. With a flex-fuel engine – as I have in both my Minnesota and Washington cars – the consumer has a choice at every service station offering both regular unleaded gasoline and E-85 fuel.

It is that price competition that will do more than anything else to stop the price gouging and profiteering by the oil and gasoline companies. For the past 3 years, I have introduced legislation requiring every car, truck, and SUV sold in the country to have a flex-fuel engine, beginning with model year, 2005, 2007, 2009 – take your pick. Some people say that’s impossible. But last year, over 70 percent of all the automobiles sold in Brazil had flex-fuel engines.

I met last year in Detroit with General Motors and Ford engineers. They told me that they can design and install flex-fuel engines at a production cost of $100 - $300 per vehicle. They are better engines; however, until now most consumers haven’t known about them or even wanted them. So we in the federal government can take one of two positions. We can do nothing, and let the markets eventually change manufacturers and consumers behaviors, as they are starting to do now. Or we can act to accelerate that transition.

It seems clear that our constituents are clamoring for us to make available alternatives to the rising costs of gasoline and other fuels. We have right before us now the opportunity to do so. Right now. Not 10 years from now with hybrid engines. Not 20 years from now with hydrogen engines. They may ultimately be the more energy-efficient and environmentally-friendly, but ultimately is years away from now.

Now – right now- we can give Americans a real energy alternative. The first large-scale, readily available alternative to a traditional energy sources in many, many years in this country. Because ethanol, and behind it, biodiesel, is not just a substitute for the gasoline additive MTBE. It is a substitute for gasoline. It’s not perfect – no energy source is yet. There are transition costs; production and distribution challenges; and similar susceptibilities to supply manipulation, price gouging, and profiteering as with oil, gasoline, and other fossil fuels.

The key is competition and the consumers’ ability to choose the lower-priced option. Last week traveling around Minnesota, I could choose between E-85 at about $2.39 per gallon and regular unleaded gasoline at $2.79 per gallon. Both of those prices were significantly higher than they were in Minnesota six months or a year ago. Both prices are too high. Americans are being taken advantage of at the gas pump and the E85 pump, in Minnesota and other places around the country. And this Congress has a choice, whether to do something about it or to do nothing.

President Bush said last weekend that his administration would investigate and prosecute price gouging and profiteering at the gasoline pump. I’m glad to hear him say it. I just question whether he really means it. He said the same thing when gasoline prices skyrocketed after Hurricane Katrina.

Yet, as far as I know, not a single charge has been brought against anyone. In fact, the Chair of the Federal Trade Commission subsequently testified before a Senate committee that no “federal statute makes it illegal to charge prices that are considered to be too high, as long as companies set those prices independently.” She went on to state that an oil company’s “independent decision to increase price is - and should be - outside the purview of the law.” As my mother used to say to me, “Actions speak louder than words.”

Price-gouging investigations and prosecutions, for now, are just words. I urge the President to turn them into actions. The President yesterday touted his support for biofuels; however in the last two years he has signed into law cuts of almost 50 percent to bioenergy grants. His FY2007 budget calls for a 57 percent reduction for Renewable Energy Systems Grants and Loans. So I urge the President and the Congress to turn their words into actions by increasing federal funding for biofuels and other renewable energy research and development.

Another important action that Congress should take this year is to pass a new energy bill. Some progress toward increasing the supply and use of biofuels, like ethanol and biodiesel, was achieved in last year’s energy bill, but as a nation we are tiptoeing when we should be running. A new energy bill should accelerate this transition away from our nation’s increasing dependence on foreign oil, which, even after last year’s legislation, is projected to increase from 62 percent now to 67 percent in 2012. So, if we’re really serious about reversing our growing energy dependency on oil and its products, and not being held captive to rising oil, gasoline, and diesel prices here and around the world, we must act again to pass energy legislation. We must act now, this year in doing so. Thank you Mr. President.

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