Letter to Congressional Leaders on Proposed Energy Policy Legislation

Dear Mr. Speaker: (Dear Mr. Leader:)

With so much attention focused on the recent spike in gasoline prices and OPEC's decision to increase production quotas, it is critical that we not lose sight of our nation's long-term energy needs. For seven years, my Administration has pursued a sound, comprehensive policy to address those needs. Regrettably, several key elements of this Administration's strategy have languished in Congress. In recent days, in fact, budget initiatives to strengthen our energy supply have suffered significant cuts, while some Members have advanced proposals that would seriously harm our environment in the name of energy security. I urge you to work closely with me to enact these critical energy proposals without further delay.

I remain very concerned about high gasoline prices and find the situation in the Chicago/ Milwaukee region particularly troubling. Last week, the Department of Energy (DOE) and the Environmental Protection Agency sent analysts to the region to explore the reasons for this price differential. While a number of factors appear to have contributed to the unusually high prices in the region, it is possible that they may not account for the entire increase in gas prices. The Federal Trade Commission has initiated an investigation of pricing practices in the region to determine if there is any unfair or illegal activity there. We look forward to the results of these investigations.

Our concern about high gasoline prices in the short-term, however, cannot be allowed to distract us from addressing the long-term energy needs of our nation. My Administration has pursued an energy policy that provides a comprehensive and balanced approach to addressing the nation's energy needs. Unfortunately, Congress is considering proposals that are unnecessary and would do irrevocable harm to the environment, such as opening the Arctic refuge to drilling. Instead, Congress should act on the following key pieces of my energy policy.

First, I have proposed a $4 billion package of tax incentives to encourage consumers to purchase more efficient cars, homes, and consumer products. Congress has failed to enact this package for over two years, even though these tax credits would save consumers money, protect our environment, and reduce our dependence on foreign oil. I also have proposed tax incentives to support renewable energy and the domestic oil industry, including the expensing of geological and geophysical expenses and delay rental payments.

Second, over the past seven years I have repeatedly proposed significant increases in Federal investments in responsible domestic sources of energy, including most recently $1.4 billion in FY 2001 for high-priority items at DOE for energy efficiency, renewable energy, natural gas, and distributed power generation systems. Specific examples of these investments include more efficient technologies for our factories and homes, weatherization of low income households, technologies to produce biofuels and power from biomass, and the Partnership for a New Generation of Vehicles (PNGV)—a collaborative effort with automakers to deliver affordable cars that are three times more fuel efficient. Yet, Congress has failed to support these critical goals, approving only 12 percent of our proposed increases for energy efficiency and renewables over the past seven years. This year, the House has already cut DOE's FY 2001 budget for energy efficiency programs below last year's enacted level and has cut virtually all DOE funding for the PNGV program.

Third, two years ago I submitted the Comprehensive Electricity Restructuring Act to Congress, to improve the operation and efficiency of the electricity sector. Congress to date has not enacted a comprehensive restructuring bill. Such legislation would improve the reliability of our electric power system, provide American consumers an estimated annual savings of $20 billion as a result of competition in electricity markets, and significantly reduce greenhouse gas emissions.

Fourth, to address energy supply emergencies, I have called for reauthorization of the Strategic Petroleum Reserve (SPR), the establishment of a regional home heating oil reserve in the Northeast, and replenishment of the Low Income Home Energy Assistance Program emergency funds. Authorization for the SPR expired on March 31, 2000. It is critical that the SPR be reauthorized so that I have available all means to respond to any possible energy supply emergency. Further, the Department of Energy cannot establish a regional home heating oil reserve in the Northeast to respond to shortages of home heating oil until Congress either reauthorizes the SPR or separately passes legislation authorizing the creation of such a reserve with a responsible trigger. Because Congress has failed to act thus far, it will be virtually impossible to establish a home heating oil reserve in time for next winter.

America needs a balanced, forward-looking energy policy based on the proposals that my Administration has put before Congress. We are committed to a responsible approach that will infuse our energy sector with both efficiency and competition; that values clean air, clean water, and healthy lands; and that seeks to cushion America against emergencies in the energy market. Congress should act on my proposals without further hesitation.

Sincerely,

WILLIAM J. CLINTON