Dependence on imported oil has put the United States in a position that no great power should tolerate.

Our economic health is subject to forces far beyond our control, including the decisions of hostile countries. We maintain a massive military presence overseas, partly to preserve our oil lifeline. We have lost leverage on the international stage and are daily exacerbating the problem by participating in an enormous wealth transfer to authoritarian nations that happen to possess the commodity that our economy can least do without. The hundreds of billions of dollars we spend on oil imports each year weakens our economy, enriches hostile regimes, and is used by some to support terrorism.

In the absence of revolutionary changes in energy policy, we are risking multiple disasters for our country that will constrain living standards, undermine our foreign policy goals, and leave us highly vulnerable to the machinations of rogue states.

The new geo-political reality emerging from the global energy situation and United States dependence on oil imports demands that we dramatically decrease the amount of oil we consume. I have said there is underway “a shifting balance of realism” from those who believe in the immutability of oil’s domination of our economy and a laissez faire approach to energy policy to those who recognize that our nation has no choice but to seek a major reorientation in the way we get our energy.

We must respond to our energy vulnerability as a crisis. This is the very essence of a problem requiring Congressional action, and I am pleased that President Bush, in his State of the Union address, called for a major increase in alternative fuel use.

The renewable fuels industry is in the position now to make a jump from a niche fuel to making biofuels as important to our fuel mix as petroleum. Corn-based ethanol will continue to be a major component. But the corn kernel will take us just part of the way. New cellulosic fuels are essential to our success and will complement today’s biofuels. Americans need to know exactly what the plan is and how we will achieve it. I have joined with Senators Harkin, Obama, Biden and Dorgan to introduce the Biofuels Security Act, which contains the three necessary provisions: all flex-fuel cars, more E85 pumps, and a market guarantee through an expansion of the Renewable Fuels Standard to 60 billion gallons by 2030.

An RFS is a powerful tool to pull investment into U.S. biofuels markets. The current RFS, which former Senator Daschle and I first introduced seven years ago and was finally passed in 2005, helped spur the market to the impressive growth we see today. Now we need to step up our efforts to ensure that our renewable fuels production makes a meaningful contribution to our national security, economic growth, and environment.

We also need to ensure that virtually all new cars sold in America are flex-fuel capable, starting as soon as possible. These vehicles give Americans the choice to use E85, the blend of 85 percent ethanol and 15 percent gasoline, or regular gasoline. Likewise, at least 25 percent of our nation’s fueling stations should offer E85 within the next 10 years. These two moves will give consumers choice and help promote investment in renewable fuel production.

Quick adoption of fueling infrastructure is critical for another reason - without it, the U.S. could approach the position where we are a net exporter of ethanol. Current and planned production of ethanol is 11 billion gallons a year, with some predicting higher numbers. That is already very close to the maximum 14 billion gallons that can be consumed by our current auto fleet, most of which is not flex-fuel and is limited by new-car warranties  to burning a 10 percent ethanol blend. Without a rapid increase in our capacity to consume ethanol, much of the new production resulting from the RFS would have to be exported or used in other ways in the U.S. that would not contribute to our energy security.

I have championed another crucial piece to the puzzle in the National Fuels Initiative introduced earlier this year. My legislation would establish a revolutionary variable alternative fuel tax credit to support the growth of alternative fuels. While this novel portion of the bill has caused some concern in the ethanol industry, and can be further debated and improved, its aim is to increase investment in cellulosic ethanol, coal-to-liquids, and other non-petroleum based fuels.

The variable incentive, if passed now, would be in place to provide assurances to investors when the current 51-cent-pergallon blenders’ credit expires in 2010. The present subsidy has been vital in nurturing the young ethanol industry, but as ethanol enters its adolescent growth spurt and production soars, this credit will become extremely costly for the federal treasury. This expense will both cause the current tax structure to become politically unsustainable, in my view, and also shorten the length of any potential extensions of the 51-cent credit.

Under my proposal, there would be no financial incentives - or cost to the taxpayer - when oil prices are high and ethanol is competitive, especially with a guaranteed market of the RFS. When crude oil drops below a trigger price, perhaps $45 a barrel, the credit would kick in and continue to rise as oil prices fall. This would save the government money in the long run and allow Congress to better leverage resources to protect alternative energy investments from the price manipulation of oil-rich foreign governments hostile to the United States. It would also help keep ethanol prices competitive with gasoline during any period of low oil prices. Otherwise, a wide price gap could prompt consumer backlash and allow oil companies to opt out under waivers contained in both the current RFS and the greatly expanded RFS I have proposed.

While many specifics must be worked out, I believe this is the best approach to keeping the ethanol industry strong and growing. It will assure investors the opportunity, but not the right, to make money under all market conditions.

The heart of America’s geostrategic problem is reliance on imported oil in a market that is dominated by volatile and hostile governments. We can start to break petroleum’s grip right now. The energy plan presented here is a package of proposals that would dramatically improve America’s security posture. It would also provide more jobs for Americans instead of sending billions of dollars to hostile countries, support our farmers instead of foreign terrorists, and promote green fuels over fossil fuels.

We must move now to address our energy vulnerability because sufficient investment cannot happen overnight, and it will take years to build supporting infrastructure and to change behavior. This year’s rewrite of the farm bill, a major legislative undertaking, would be a good place to start.