INTERVIEW TRANSCRIPT

C-SPAN’S “NEWSMAKERS”

Guest: U.S. Senator Jeff Bingaman (D-NM)

Reporters: Chris Baltimore, Reuters & Michael Coleman, Albuquerque Journal

Moderator: C-SPAN

TAPE DATE: Friday, June 15, 2007

AIR DATE/TIME: SUNDAY, June 17 at 10 a.m. and 6 p.m. ET

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SUSAN SWAIN, HOST: Our guest on Newsmakers this week is Senator Jeff Bingaman (D-NM) fresh from the Senate floor, we might say, where he's been holding forth all this week as the leader on the energy debate in the Senate. He is a Democrat of New Mexico and chairs the energy and natural resources committee.

Senator, thank you very much for being here on a busy week.

U.S. SEN. JEFF BINGAMAN (D-NM): Nice to be with you.

SWAIN: Our two reporters at the desk today, Michael Coleman, who is Washington correspondent for the Albuquerque Journal, and Chris Baltimore for Reuters, he is a correspondent for that news organization.

Michael Coleman, we're going to start with you.

MICHAEL COLEMAN, ALBUQUERQUE JOURNAL: OK. Thanks for coming, Senator Bingaman.

Majority Leader Reid has allotted two weeks for this debate. We're already one week into it and now there's talk that the immigration bill is going to be coming back. First of all, do you think two weeks is long enough to debate this complex energy issue? And do you think immigration is going to get in the way of concluding it?

BINGAMAN: Well, we don't know is the honest answer. I think two weeks is a reasonable amount of time to devote to it considering all of the other demands on the majority leader, now, and on the Senate at this time in our schedule. If we do conclude work on it this next week, which I hope we do, there will be amendments that people have not had a chance to offer and have debated, but truth is we have over 100 amendments that were filed and that's almost always the case that you have some amendments that people haven't really had a chance to have considered seriously by the time you finish a major bill like this. So I hope that we've done enough and I hope we've done the important provisions that in the eyes of most Senators and we can conclude debate on this, this next week, and go ahead and pass the bill through the Senate.

BALTIMORE: So many issues to break out here, hopefully we'll have time to run the gamut. One of the things that has gotten a lot of debate on your committee and also on the Senate floor is turning coal into liquid fuels and the sorts of incentives that Congress should be giving companies to do this. I know that your plan now offers these incentives for turning things like corn and soybeans into fuels, but you have been somewhat reluctant to offer the same treatment for coal. I just wanted to ask if you have any sense of movement there, whether you'd be open to giving coal fuels these treatment and what it would take to get you there.

BINGAMAN: Well, I certainly support trying to do what we can to find clean uses of coal and we've got various provisions in the bill that try to do that. I think you've got sort of two competing approaches on this coal to liquids issue. Senator Bunning has an amendment that he's intending to offer, I believe, that would try to do the same thing with coal to liquid fuel as we are trying to do with myo (ph) fuels and I don't support that. I mean setting up a renewable fuel standard or a requirement that a certain amount of coal to liquid fuel be blended into our mix of fuels. I don't think we are far enough along. I don't think we know enough about our ability to capture and eliminate and store the carbon that's produced when you turn coal into liquid. So I don't favor that. Senators Tester and Dorgan and Byrd and I have been working on an alternative which we think is the right approach and it essentially sets up a loan program where we would try to help support the development of capture and storage capability and it could apply to any kind of plant that has substantial emissions of carbon and that could be a coal to liquid plant, as well, but we have various standards in there that have to be met in order to be eligible for those loans and we think they're appropriate.

COLEMAN: Senator Bingaman, this week, both you and Senator Domenici, also of New Mexico, introduced legislation to try to curb greenhouse gas emissions from utilities. They were two very different approaches and they both ran aground it appears yesterday; neither one of them had the votes to actually pass and become a part of this bill. Could you briefly explain what the key differences are between your two approaches? And is there any hope for a compromise?

BINGAMAN: Well, the proposal I made, which is still pending as an amendment to the bill, was to require that 15 percent of the electricity that's sold by a utility be produced from renewable sources and that would include solar or wind or geothermal or biomass or tidal energy or landfill gases, a variety of things. That's essentially what we passed through the Senate three times before. Now, we passed it through the Senate at a 10 percent level before. I proposed to the 15 percent level this time. Senator Domenici's proposal is very different; it says we'll have a 20 percent requirement, but it will be 20 percent of something different than what I'm asking for.

He subtracts out all production, all electricity currently produced from nuclear power. He also says let's allow people to meet this requirement by improving efficiency by demand side management, by building additional nuclear plants, by doing a whole variety of other things. So it essentially takes the effect out of the bill, as I would see it. He also has a provision in his which says that states can opt out if they have a program that they think is working toward the same goal, they have the right to opt out, which I think would be a big mistake.

COLEMAN: Do you think there's a possibility for a compromise?

BINGAMAN: I don't know that there is. I don't really think, on the Republican side, they support either what I proposed or what Senator Domenici proposed. They don't really think we should be requiring anything of utilities with regard to renewable energy. Most members on the Republican side and accordingly I think it's going to be hard for us to get a compromise agreed to.

BALTIMORE: More about the RPS. There's a lot of facts and figures flying around about how much this actually going to cost. There had been a study released, I guess, earlier this week or last week that the costs could be as much as $150 billion by 2030, mostly on states that don't have the kind of prevailing wind currents to build these big wind mills and I've spoken with individual utilities, The Southern Company in Atlanta who says that it could cost them around $4 billion within the decade or so to comply. What do you make of these sorts of arguments? And are you worried that an RPS could be sort of a de facto tax on regions of the country that don't have plentiful renewable sources?

SWAIN: … I'm sorry, I'm going to ask you to decode the acronym for our audience at home.

BINGAMAN: Oh, the acronym ...

SWAIN: RPS.

BINGAMAN: The RPS. Well, that stands for renewable portfolio standard, which is just an unfortunate name that has been attached to this requirement, this 15 percent requirement on all utilities that they produce 15 percent of the electricity they sell from renewable sources. The study that you're referring to that says it's going to be very expensive, it was one that was, of course, paid for by the Edison Electric Institute which is the organization of utilities which is opposed to us requiring this of them. And I can understand that the people who did that study would conclude that this is going to be very expensive.

I think the much more objective study is the one that was done by the Energy Information Administration, which is the government body of the Department of Energy and in our federal government and they said that it will cost far less and dependent upon what assumptions you use, it could actually save money because it's going to reduce the price of natural gas to consumers, you won't have the utilities having to use so much natural gas if they, in fact, can produce electricity from renewable sources instead. And so, I think that the concern about prices is overblown.

I do think that the technology has developed and is continuing to develop at a very rapid pace with regard to how you can produce power from biomass and nobody can argue that the southeast part of this country is short on biomass. I think they have said in the past that the only thing that would be available for them would be wind energy and they don't have a lot of wind in the southeast. But I think the Energy Information Administration, again, says that if we adopt this 15 percent requirement it would result in a 50 percent increase in the use of wind energy, it would result in a 300 percent increase in the use of biomass, a 500 percent increase in the use of solar power or solar panels to produce power and we already – biomass already accounts for production of more than twice as much energy as wind does. So, I think that their concerns of the sky is falling and everything is going to be terrible if we adopt this kind of requirement are overblown.

SWAIN: CAFE standards and I'll decode that for people, the fuel efficiencies for cars, is something that most everybody watching this can understand. It's also another aspect of the bill that's been pretty controversial. How persuasive were the auto industry chiefs in their testimony about the effect on Detroit's economy for increased CAFE standards?

BINGAMAN: Well, we're going to find out. I think probably Tuesday or Wednesday we'll have a vote. I know Senator Levin and Senator Pryor and Senator Stabenow and some others have proposed an amendment as a substitute essentially for the provisions that are in the bill. We've got in the bill the new requirements, the stiffer requirements that the commerce committee in the Senate reported out and that essentially says that the corporate average fuel economy standard for cars and light trucks would go up to 35 miles per gallon by 2020 and the auto industry says, ‘No, this is terrible. We can't possibly do anything that aggressive.' And they have worked with the Senators I mentioned to develop a more modest improvement and we'll see what the Senate says when we have the vote.

SWAIN: And what's your own view?

BINGAMAN: Well, my own view is that I don't think 35 miles per gallon is that excessive. I think the technology is there, it's been there for a long time to produce much more efficient vehicles than we are producing today, but it's never been a priority of Detroit. It's never been a priority of our country generally and I think it's high time that we made it a priority to get better vehicle fuel efficiency and that way reduce the amount of oil we have to import.

SWAIN: Mr. Coleman?

COLEMAN: Senator Bingaman, as a long time player on energy issues in the Congress, you've always said that you're not anti-nuclear. I think you've supported some measures in the past to spur the production of more nuclear power. Senator Domenici wanted to include nuclear as part of this mix in his greenhouse gas emissions plan. What do you think the role of nuclear power should be in America's energy mix? And do you anticipate nuclear power plants coming online at some point?

BINGAMAN: Well, I think nuclear power accounts for 20 percent of the electricity we produce today. I think what do we have? 103 nuclear power plants operating. I think something in that range. I favor maintaining nuclear power as an important part of our energy mix. I would like to see us build some new nuclear power plants. I supported the various provisions that we passed in the energy bill in 2005 that would encourage that. And we've got some very significant incentives in there for companies to go look at this. We've said essentially that for the first six of these plants, I believe this is what our provision says in the 2005 bill, for the first six of these plants we will essentially subsidize you to the extent of two cents per kilowatt hour for the first eight years that you're in operation. So whatever power you can produce from a new nuclear power plant, we'll add two cents per kilowatt hour to whatever you sell it for. Now, that's a pretty substantial subsidy by the federal government. We also have a variety of provisions to streamline the regulation, to take away the risk, to do a lot of other things.

So I hope that the various companies that are looking at this and there have been about 30 or 32 companies that have filed letters with the Nuclear Regulatory Commission saying that they are considering actually constructing a new nuclear plant. I hope that they go ahead and do it.

BALTIMORE: I wanted to talk a little bit about ethanol, making fuel from corn and other renewable sources. I know that ethanol is a big part of this energy bill. It's got a lot of political support behind it. The White House has offered it's own plan for renewable fuels which has a faster and I guess larger target for ethanol use than the plan that came out of your committee. Just wanted to ask why you think your plan is better than the White House's plan?

BINGAMAN: Well, the White House plan is faster, it's not bigger. Their plan is that we would go from where we are to use or the mixing of 35 billion gallons of ethanol into our vehicle stream by 2017 is what they've asked for. The bill we've got on the Senate floor and that came out of our committee says we'll go to 36 billion instead of 35 billion, but we'll do it by 2022. So five years later. And our approach was to say, ‘Look, between now and 2015 the – realistically the bulk of any ethanol or bio-diesel that we produce is going to have to come from corn and other sort of traditional feedstocks like that.' After that, we think the technology will be there to produce it from the cellulosic feedstocks and that's where the real opportunity is and so, we're – we require that the blending after 2015, the additional blending be in these other feedstocks and we think that that's the right way to go. We think that's where the incentive ought to be.

There are some things in the White House plan that we're still looking at. They have a safety valve provision, they have some ability to use plug in hybrid cars to get credit against the requirement for ethanol that's a little complicated quite frankly and we've been trying to sort through it and figure which parts of it we might be able to agree to.

BALTIMORE: Just as a follow up, this idea of producing ethanol from cellulosic sources like woody biomass or switchgrass. I've spoken with some analysts who have said that this is akin to the Holy Grail of energy sources that we really don't have the kinds of technology to do this now, the government is putting obviously billions of dollars into making these sorts of advances. Are you worried that perhaps we're putting a little bit too much of our hopes on an unproven scientific process right now?

BINGAMAN: Well, we don't know exactly what the end result of this will be. We've had testimony before our committee that says you can produce a tremendously larger amount than what we call for in our bill from cellulosic sources by 2022. And then there are others who are more skeptical. But there are a lot of entrepreneurs in this country and venture capitalists who are investing very heavily in developing the technology and the processes that will allow the use of these cellulosic feedstocks and they're putting a lot of their own money in to try and demonstrate that this is the right way to go and I hope they're right. We'll see.

BALTIMORE: Wouldn't want to bet against Wall Street, huh?

BINGAMAN: Well, I don't know. I mean I think, realistically, there are sort of two ways forward and I can't tell you which one is going to win. One way is more meeting of our energy needs through development of biofuels and that's what we've been talking about. The other is plug in hybrid vehicles which, of course, would be another way that we can meet our transportation needs and which of those turns out to be the most promising, I think we're going to know in 10 years a lot more than we know today.

SWAIN: Well, before you leave that topic, would you respond to the concerns of people in the commodity area who are concerned about the effects on the economy of the price of corn if, in fact, ethanol becomes a larger part of the energy equation?

BINGAMAN: Well, that's, frankly, I think those concerns are valid. That's why we have put a provision in our bill that says the mandate to blend ethanol – to blend ethanol that's produced from corn is limited to 15 billion gallons. And we're told by both the corn growers and the ethanol producers that that is achievable without unduly straining anybody. And we have that, as I've said before, in by 2015. So we think that if you don't sort of limit what can be achieved, what part of the requirement can be achieved from production of corn, then you could build in a perverse incentive that would drive the price of corn up too much.

SWAIN: Seven minutes left.

COLEMAN: Sir, I want to ask you about the concept of peak oil. This is the idea that the global oil production curve is reaching it's zenith and that it soon begins to decline and the cost of extraction becomes much, much more expensive. Some people say that looking down the road, this could ultimately really effect our economy and even our way of life. How much credence do you give the concept of peak oil? And is it going to be a big problem for us going down?

BINGAMAN: Well, if I knew the answer to that, I'd obviously be a wealthy individual. I don't know. I think there have been people around predicting that we were going to peak out in our production of oil now for several decades. There are still people around who say we're now actually going to do that and maybe they're right. Dan Jurgen (ph) of course, with Cambridge Energy Associates is a person whose opinion I respect. He tends to think that there are other sources of energy that are sources of oil that we're still developing and exploring and that there's going to be a substantial supply of oil for a long time. So I just don't know the answer. I think what we're trying to do is even there is a substantial supply, we're trying to diversify the sources that we depend upon for our energy needs in this country. We're way too dependent upon oil and way too dependent upon foreign sources of oil today, so we need to try to reduce that dependence regardless of whether the oil is there.

BALTIMORE: Back to this energy bill, I know we are just getting started with the debate and many miles to go before we sleep. I wanted to ask about the end game for this legislation, the House of Representatives has it's own plan that they are debating. It's in several different pieces and several different committees. I have also heard some talk that the Speaker of the House, Nancy Pelosi, could just go ahead to decide and take the Senate version and bring that right to the floor and basically forego the pieces that are coming through her committees. Do you have any sense of whether a – what we call a conference debating between the House and the Senate is inevitable here? Or how this is all going to shake out?

BINGAMAN: Well, I don't know. Obviously, the Speaker would be the only one who could answer that question. We are, as I said, hoping that we can produce or complete action on this bill in the Senate and have a good strong bill. It may not be able to do all that I would like it to do, but it still could be a good strong bill and if we're able to do that, then I would, obviously, like to see the House do the same. If they've got complications in producing a bill that we could go to conference with them on, then they can take up our bill and make what changes they think are appropriate and then, we could go to conference. But one way or another, I think there's a good prospect that we can get an energy bill passed through both Houses and sent to the President for signature. This is really – most of the provisions in this are not partisan. I mean most of the provisions in this are things that have pretty good bipartisan support and so I think there's a good prospect for us doing it.

SWAIN: But the flipside of that question, are there any amendments lying in wait that you would consider untenable? Such that it would be better to have no energy bill this year than to have it included?

BINGAMAN: Oh, I'm sure that someone could come up with amendments that would be in that category from my perspective. I don't see any that I think are likely to get adopted in the Senate in the next week that I think would be poison pills in the sense that I would then want to turn around and vote against the bill. Now, if we're not able to do the tax provisions, that would dramatically weaken our bill. A good share of the strength of our energy bill is that while our energy committee and the commerce committee and the environment and public works committee have put together the provisions that are now being debated on the floor, the finance committee has also been working on a tax incentives to encourage more use of renewables, to encourage more efficiency in the use of energy, and we hope that that can be added as an amendment next week. And if that's not able to be added as an amendment, then that would be a major blow to the bill, but other than that, I would expect us to be able to pass a strong bill.

SWAIN: Two minutes left. Final questions?

COLEMAN: I'll ask a hometown question as the Washington correspondent for Albuquerque Journal. Our governor in New Mexico is obviously running for President. How do you assess his performance so far in this quest? And have you endorsed him? Or do you plan to endorse him?

BINGAMAN: No. No. I've endorsed him and obviously, I think I have great admiration for anybody who will jump into this kind of a maelstrom that these candidates for President are putting themselves into. But I think he's done pretty well. That's my sense. I mean he's got a difficult road in trying to compete for national attention in the media and all the rest with the so-called front runners at this point. But I think he's running a good campaign and hope he does well.

SWAIN: Final question, Chris.

BALTIMORE: You talked about poison pills. The White House has put out it's statement on what it thinks of the Senate bill and it's that the two veto possibilities are OPEC provision and also one on price gouging. Do you think there's any way of finding an agreeable solution there with the White House on those issues?

BINGAMAN: Well, I don't know. On the price gouging, I think their concerns are overblown and a lot of states have adopted anti-price gouging statutes. It's not been the end of the world. I think the definitions we have in the Senate bill are sufficiently narrow and that there are protections that you're not going to have people filing suit or attorneys general going out and prosecuting innocent people at a whim which is sort of a White House argument. On the OPEC (ph) business, this is a proposal which is very popular and I oppose it, but because I think that it gets us into all kinds of trouble internationally. But it's a proposal to say that we can pull other countries into our federal court system and prosecute them for violating anti-trust laws, our anti-trust laws if they participate in something like the Organization of Petroleum Exporting Countries, OPEC. I don't think it's practical for us to implement that kind of a provision because they'll do the same thing to us. But I mean if we can pull these countries into our federal court system, they can pull United States into their federal court system.

So, I assume we're going to wind up passing it on the floor. I hope that cooler minds prevail before we finish the bill.

SWAIN: Senator, we're out of time. Thank you very much for being our guest this week.

BINGAMAN: My pleasure. Thanks.

SWAIN: Senator Jeff Bingaman of New Mexico and the chair of the Energy Committee in the Senate.

BINGAMAN: Thanks.

COLEMAN: Thanks so much.

(BREAK)

SWAIN: Chris Baltimore of Reuters and Michael Coleman of the Albuquerque Journal have been following the energy debate in the Senate. We just finished talking to Senator Jeff Bingaman, the chair of the Energy Committee. He’s been leading the legislative debate on the floor of the Senate.

Senator Bingaman was fairly confident, it seemed, in the prospects for the passage of this, but what’s your take in watching the larger dynamics in Washington about how successful the Democrats are going to be in bringing an energy bill forward?

BALTIMORE: Well, I think that there is tremendous pressure from constituents back home to act on energy issues, $3 gasoline at the pump, that is first and foremost on every consumers mind and I'm sure that's the first question that all of these law makers get asked when they go home. We've heard about energy independence day in the House of Representatives. I think that there will be some kind of package that we'll see, I'm not sure if Senator Bingaman is going to win on his renewable portfolio standard to require more renewable use by utilities. That seems to be a pretty controversial aspect of this. But I imagine that we will see some sort of package coming along.

SWAIN: You were digging pretty deeply into some of the provisions of the legislation, but how much, Mister Coleman, do they actually affect the $3.50 a gallon prices that people are paying at the pump?

COLEMAN: Probably not really much. I mean there's a price gouging provision in there that would try to help prevent retailers and oil distributors from price gouging, but there's some question as to whether that's really even happening. Some people say that's just sort of a cosmetic approach to the issue or a political approach to make it seem like they're doing something. I think it seems to me that $3 a gallon gasoline is going to be with us for some time regardless of whether they pass this bill. I also sense Senator Bingaman is very level and he doesn't really show his cards much, but I think he's really frustrated with what's going on with this renewable portfolio standard that he's been really pushing for for years now and I think now that the Democrats are in the majority, he was hoping that he could get that together. It's not over yet, but it's on life support and I think it's going to be real tough to – for him to get that done.

SWAIN: Explain why it's so important to him.

COLEMAN: Well, I just think that he's one of those who thinks that global warming, climate change is a serious issue. I think he thinks this is the most effective way of addressing it, that with the mix of conservation and the CAFÉ standards and things, but I – he told me yesterday that this is really the key element of this bill as far as global warming goes and he really just has been working a long time to get it done.

SWAIN: Some critics of the legislation have pointed out that it doesn't put enough pressure on oil companies for the refining capacity. Can you talk a little bit more about where there might be an effort for that to come forward in the bill?

BALTIMORE: We haven't seen a lot of refining incentives so far. The last big refinery package I can remember was about a year ago in the House, then head of the House energy and commerce committee, Joe Barton, had a package that would have given refiners incentives to build on abandoned military bases, things of this nature. Those sort of refinery incentives don't seem to have the same wide ranging support as something like burning more ethanol, just because of the concentrated nature of the oil industry right now, most of them have addresses that end in Houston, which means they only have two Senators whereas corn states, coal states have so much more political muscle right now. But in terms of whether we're going to see more refineries built in the next few years, it seems that refiners are reluctant to put these billions of dollars into these projects when they see people talking about ethanol and coal to liquids and other non-traditional uses of energy that are a whole lot different than turning crude oil into gasoline.

SWAIN: In 30 seconds, in past energy debates, so this is a funny question for New Mexican, the offshore drilling provisions have been highly controversial. Is that issue likely to be controversial this go-round?

COLEMAN: I suppose it will be. It always is. Senator Domenici when he was chairman the last time was able to get some offshore drilling provisions put into the bill. I'm not exactly sure where they're going to go with that, but there's – the people in Florida always have issues. Other coastal states are going to – and then there's the whole issue of how you distribute the revenues from offshore drilling. So it's going to continue to be a controversial problem I'm sure.

SWAIN: You want to handicap passage and then sign the bill at this point?

COLEMAN: Gosh, I think that we're probably going to get some sort of bill through. I don't know if it's going to be next week, but something I think they'll pass.

SWAIN: Chris Baltimore?

BALTIMORE: Not a betting man. I wouldn't want to bet against smart people like Chairman Bingaman. So I'll leave it at that.

SWAIN: Well, thanks to both of you for being here this week. Appreciate it.

COLEMAN: Thanks.

END