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Thune Unveils Plan to Reform American Energy Strategy

-Legislation Would Use New Oil and Gas Revenue to Create "Energy Independence Fund," Increase Domestic Oil Production, Expand Renewable Fuels Use, and Encourage Research and Development of Fuel Saving Technologies-

July 1, 2008

Washington, D.C. —  Senator John Thune today commented on the provisions of his Energy Transition Act of 2008 (S. 3222). Senator Thune's landmark legislation calls for lifting federal restrictions on domestic petroleum reserves, expands the potential for cellulosic ethanol production, and creates new funding sources for advanced research for plug-in hybrids, hydrogen fuel cell technology, and other conservation initiatives. The bill would also increase funding for the U.S. Geological Survey to further explore domestic oil formations.

"American consumers are paying a heavy price for years of inaction," said Thune. "We need to rethink our approach to energy in this country, and that means better utilizing our domestic petroleum supply while at the same time expanding the use of renewable energy and exploring technologies that would allow us to finally kick our addiction to oil."
    Senator Thune's bill includes the following provisions to expand America's capability to produce energy from domestic sources of traditional fuels:
  • Repeals the federal moratorium on exploring the Outer Continental Shelf (OCS), with an estimated 14 billion barrels of proven reserves and 86 billion barrels of undiscovered oil;

  • Allows for exploration in the Alaska National Wildlife Refuge (ANWR), estimated at 10 billion barrels of oil;

  • Lifts the moratorium on oil shale leasing in western states, estimated at 2.1 trillion barrels of recoverable oil;

  • Requires the use of 6 billion gallons of coal-to-liquid fuel by 2022.

Senator Thune's bill would also allow refineries to bundle permit applications to streamline the permit process without reducing environmental protection laws.
    Senator Thune's legislation would also increase the use of second-generation biofuels by:
  • Changing the definition of renewable biomass to allow for cellulosic ethanol production from biomass collected from federal lands and private forestland;

  • Reducing the regulatory roadblocks for higher ethanol blends.

"The biofuels industry has made tremendous strides in recent years, and cellulosic ethanol can be a big part of our long-term energy strategy," said Thune. "Estimates show that the use of ethanol saves consumers as much as 40 cents per gallon, and if approved, higher blends will save even more."

Senator Thune's legislation would create an Energy Independence fund, which would collect 50 percent of all new federal leases from OCS, ANWR, and oil shale development to fund research and development for next generation biofuels, renewable energy, plug-in hybrid technology, and hydrogen fuel cell vehicles.

"Plug-in hybrids, hydrogen fuel cells, and biofuels have the potential to dramatically reduce our consumption of oil," said Thune. "Congress can facilitate the development of technology that reduces our dependence on oil in the future, but we must increase our domestic supply today."

Finally, the legislation directs the U.S. Department of Energy to develop a plan that would eliminate the need for non-North American oil imports by 2028. The Department of Energy would have to submit the plan to Congress within 12 months of enactment of the bill.