As alternative fuels become more competitive oil and gas producers have strong

As alternative fuels become more competitive oil and

This preview shows page 31 - 33 out of 93 pages.

As alternative fuels become more competitive, oil and gas producers have strong incentive to drop prices to kill competition. Investors need to know that alternative energy initiatives will continue to be competitive. A revenue-neutral $35 per barrel price floor on oil would provide the security investors need. At this price, alternative fuels like cellulosic ethanol, shale and tar sands oil, and Fischer-Tropsch diesel, could still compete with regular gasoline. Many analysts say that expensive oil is here to stay, but most energy investors are hesitant still to take on that risk. A modest price floor for oil that we may never reach would provide a major stimulation for energy alternatives. Long-term energy security also requires the use of clean energy, a third component of energy security. As long as we continue to consume fuels that do not burn cleanly, or cannot have their damaging gases sequestered, we will continue to pay environmental costs and will remain vulnerable to a climate change-induced disaster. To combat this result, Congress must pass legislation establishing a cap and trade mechanism. A cap and trade system would provide regulatory certainty, reward innovation to improve energy efficiency, and provide strong market incentives for clean renewable fuels. Any such system should give credit for carbon sequestration in coal-fired plants and allow farmers and foresters to sell credits for the carbon they sequester. And with new technology, we can control many greenhouse gases with proactive, pro-growth solutions, not simply draconian limitations on economic activity. Industry and government alike recognize that progress on climate change can go hand in hand with progress on energy security, air pollution, and technology development. Even as we strive to reduce the prevalence of fossil fuel in our energy portfolio, pragmatism requires that we diversify to the greatest extent possible our sources of oil and natural gas. While we continue to debate production there and on the outer continental shelf, we have to carefully consider both the security and economic benefits of more exploration, as well as the environmental costs. We must also ensure that we are not wasting fossil fuel resources in end-use that could be fueled by other means. I am encouraged by DuPont’s commitment to replacing petrochemicals with bio-alternatives. This wise business choice leaves
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31 DuPont less vulnerable to price spikes than competitors who still rely exclusively on oil and gas. With natural gas prices high, there is now a shift to coal-fired electrical generation. New plants should favor coal, which we have in abundance, over natural gas. I continue to vigorously support the deployment of clean coal technology with carbon sequestration. We can also use coal to reduce our oil dependence. The energy bill I coauthored with Senator Obama included legislation authorizing $85 million for federal research into the production of coal-based transportation fuels. One of the
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