4/7/2018 Letter Opposing the "Energy Independence and Security Act of 2007" | U.S.

Chamber of Commerce

https://www.uschamber.com/letter/letter-opposing-energy-independence-and-security-act-2007

Letter Opposing the "Energy

Independence and Security Act of
2007"
Tuesday, December 4, 2007 - 7:00pm

December 5, 2007

TO THE MEMBERS OF THE U.S. HOUSE OF REPRESENTATIVES:

The U.S. Chamber of Commerce, the world's largest business federation representing more than three
million businesses and organizations of every size, sector, and region, strongly urges you to oppose the
"Energy Independence and Security Act of 2007," a bill expected to be considered by the full House
this week.

Like its predecessors in the House and Senate, H.R. 3221 and earlier versions of H.R. 6, the Energy
Independence and Security Act effectively "turns off the lights" on the country's energy supply. The bill
fails to produce one Btu of new energy while scaling back energy production from both fossil fuels and
renewables. Chief among the bill's flaws are an unworkable renewable fuels standard, an impossible-
to-meet renewable portfolio standard, and a punitive, overly burdensome tax title.

The bill supposedly calls for a renewable fuels mandate of 36 billion gallons by 2022, with 21 billion of
these gallons to be met with "advanced biofuels," or non-cornbased biofuels. The bill does not,
however, adequately address such critical issues as: (1) where the U.S. intends to secure enough
water (from an already-scarce supply) so that it may grow enough corn and other biomass to meet the
mandate; (2) how the nation will protect against formation of "dead zones" of oxygen-depleted water
caused by increased farming and irrigation to meet the mandate; (3) how the U.S. intends to transport
36 billion gallons of ethanol, given that current pipeline systems are not compatible; and (4) the effect
the increased burning of ethanol will have on background levels of ozone, a pollutant currently
regulated by EPA under the Clean Air Act.

The bill is also expected to contain a 15 percent renewable portfolio standard (RPS) for electricity
generation to be satisfied only by so-called "renewables," wind, solar, biomass, geothermal, ocean,
tidal, and incremental hydropower. A federallymandated RPS could raise electricity prices for all
consumers, result in a wealth transfer among states, and impose new burdens on the reliability of our
nation's electric grid. The Energy Information Administration (EIA) estimates that a 15 percent RPS
would require consumers to pay $1 billion to $2 billion more for electricity. Utilities will be forced to
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4/7/2018 Letter Opposing the "Energy Independence and Security Act of 2007" | U.S. Chamber of Commerce

purchase renewable energy credits from the federal government, which amounts to a tax on electricity
used by businesses and other consumers, driving up energy costs and hurting economic growth. And a
mandatory RPS based exclusively on "renewables" chooses energy winners and losers, excluding
good, clean energy sources like nuclear, hydroelectric and clean coal for no good reason.

Renewable generation sufficient to meet an unrealistic 15 percent federal requirement is neither cost-
effective nor achievable nationwide; in fact, many states have chosen not to adopt an RPS because
they lack sufficient renewable resources. There should be no illusion as to how daunting a task such a
mandate would be: using wind energy alone, the Chamber estimates it will require 172,500 additional
1-megawatt wind turbines at a cost of $207 billion to meet a 15- percent RPS; using solar, it will take an
additional 11 million 25-kilowatt photovoltaic units, at a cost of almost $390 million, to meet the RPS.
This does not even take into account impossibility of siting the facilities: if the 172,500 wind turbines
were placed in a straight line about 2,000 feet apart in the water, they would have a total length of
about 64,500 miles—nearly six times the length of the U.S. shoreline, and well more than twice the
circumference of the earth.

Finally, the Chamber opposes the $21 billion tax package expected in this bill, which would single out
the oil and gas industries for punitive treatment. The Chamber opposes any denial or limitation of the
section 199 deduction for oil and gas companies. This change would discourage domestic energy
investment, result in the loss of U.S. jobs, place domestic oil and gas companies at a competitive
disadvantage to foreign oil and gas companies, and ultimately decrease supply and increase energy
costs for businesses that rely on oil and gas. The Chamber also opposes the proposed modification of
the foreign tax credit rules for oil and gas companies, as it would place domestic firms at a competitive
disadvantage to foreign oil and gas manufacturers. Further, the Chamber opposes the proposed
extension of the FUTA surtax which was added to the tax code in 1976 as a temporary measure and
should have been allowed to expire long ago, having outlived the purposes and term that served as a
rationale for its enactment.

The Chamber urges you to oppose the "Energy Independence and Security Act of 2007." The
Chamber may consider votes on, or in relation to, this legislation in our annual How They Voted
scorecard.

Sincerely,
R. Bruce Josten

© The U.S. Chamber of Commerce

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