Dear fellow Oregonian,

So what did we buy today?

That was a question sarcastically heard often this week in the halls of Congress — and I would guess in coffee shops across the country — as the world’s financial markets suffered unprecedented challenges and the Fed and Department of Treasury stepped in to shore up America’s financial system and prevent collapse of some financial institutions.

Many of us were asking about the framework the Fed and Treasury use to determine whom to help and whom to let fail? How do un-elected bureaucrats get the authority to obligate taxpayers to the tune of $85 billion in one instance alone, without ever consulting Congress? And how much of the federal balance sheet is at risk? While I fully understand the speed with which these actions had to occur, it’s clear Congress has failed to do proper oversight and reform.

After the House adjourned Thursday night, Treasury Secretary Hank Paulson, Fed Chairman Ben Bernanke and others met with the bipartisan leadership of the House and Senate to discuss emergency legislation they need to address still further financial issues. It’s likely that this legislation will get hammered out by the leaders of both parties over the weekend and be ready for consideration early next week.

Meanwhile, Congress needs to take another look at how to restrain spending. I figure with the losses people are suffering — from jobs, to homes, to income — revenues to the federal government will decline at a time when we’re already up to our eyeballs in debt.

If there was ever a time for a balanced budget requirement and real spending reform, this is it. In fact, I think Congress should stay in session as long as it takes to get this work done in a serious and thoughtful way. Since Congress usually waits until there’s an emergency to act, I think we’re there.

Energy — where’s the energy?

It wasn’t that long ago that $7 wheat would have meant a very good year for growers, but in today’s environment input costs — especially energy and fertilizer — keep growers up at night wondering where the break even point is in today’s economy.

I heard that message loud and clear last week in Pendleton as the community gathered to celebrate the 98th Pendleton Round-Up and the 92nd Happy Canyon night show. A few weeks ago I met with leaders of both organizations in our continuing effort to help them secure funding for a major overhaul of the facilities at this eastern Oregon icon in preparation for the Round Up’s centennial year.

Wheat growers in Umatilla County weren’t the only ones speaking up about energy costs and the current state of our economy. I heard similar concerns expressed recently at the opening of the new Columbia Gorge Community College campus in Hood River and at meetings in other central, southern and eastern Oregon communities.

This week, Speaker Pelosi produced a 290-page energy bill for the House to consider. It was crafted in secret, and never received a committee hearing or mark up. In fact, it wasn’t made available to members of the House until 10:45 the night before the House took it up for a vote. It purports to allow drilling off our shores for the oil and gas we so desperately need, and yet, it really only allows access to areas that are 100 miles from shore and puts a permanent moratorium in place out to 50 miles. The area between 50 and 100 miles could be accessed, but only if states approve. However, there’s no sharing of royalties with those states and therefore no reason for them to open up those areas. All this explains why the most stalwart opponents of offshore energy development voted for it.

As the Wall Street Journal wrote on today, this hoax “…would put any bunko man to shame. This confidence trick won’t expand oil and gas supplies one bit.”

The Bulletin in Bend also chimed in today: “Fortunately, this bill is as likely to become law as its supporters are to support meaningful oil exploration in coastal waters.”

And at a time when troubled homeowners and buyers are struggling in the mortgage markets, it puts a new requirement Fannie Mae and Freddie Mac to favor “energy efficient mortgages.”

Rather than open up access to America’s energy reserves and create new energy and new jobs, initial data indicate it would permanently ban access to American energy reserves in 88 percent of the OCS.

My legislation, the Security and Energy for America Act (SEA Act), would not only give all states authority over their coast lines out to 75 miles, but also it would share revenues with states and coastal counties that allow oil and gas production. It would dedicate revenues from the royalties and fees to renewable energy production, shoreline and estuary restoration, fund five years of county timber payments and five years of Payments in Lieu of Taxes (PILT).

I only wish the Democratic leadership would give those of us with competing ideas an opportunity to have them heard and considered. Perhaps after the elections are over, Congress can get serious about a bipartisan solution to America’s energy and conservation needs.

Forest Fires Part II

Last week in Washington, D.C., I met with the new Region Six Forest Supervisor, Mary Wagoner. We talked about the demands facing that agency as it cuts programs to improve forest health in order to pay for this summer’s fire fighting. And she confirmed to me that the agency now spends more than 50 percent of its budget fighting fires.

Last month I talked with people in Baker City and John Day who had forest health contracts lined up and workers ready to work when the money was suddenly pulled back and the contracts cancelled or delayed. All across the country, the Forest Service is robbing from every financial account to find hundreds of millions of dollars that can pay for fire fighting. With the end of the fiscal year less than a month away, they’re left with very few options to find that much money. So every program is taking a hit.

Meanwhile, down in the Winema-Freemont National Forest, nearly 340,000 acres are ready to go up in flames. This dead forest has needed help for a very long time. While some may say this bug kill is just nature at work, what’s unnatural, Lake County Commissioners tell me, is that the fir and ponderosa pine are dying along with the lodge pole pine. And once again, treatment dollars are going to pay for fire fighting costs elsewhere.

It’s time for the Senate to pass the FLAME Act, which would set up a separate account within the Forest Service directly for fire suppression costs, leaving the other accounts available for their intended purposes.

In the “old days” the Forest Service simply borrowed from the Knutsen-Vandenberg (KV) Fund during fire season and repaid the money later in the year. Of course, the money that went into the KV fund came from timber harvest receipts. With the dramatic decline of timber harvest off of federal lands came a concurrent drop in money to the KV fund, contributing to both the financial crisis facing the agency and the forest health crisis facing the federal lands and the economic crisis endured by our timber dependent communities and the people who live there. We need to get this all back in balance.

Electricity Grid Under Attack?

On the day that the nation remembered those who perished on September 11, 2001, the Energy and Air Quality Subcommittee held a hearing regarding the threat the country faces from cyber attacks on our nation’s electric energy system and the urgent need to change the law.

In the spring of 2007, the Department of Homeland Security conducted a test that demonstrated a possible vulnerability in the software controls of electric generators. This test revealed what they called the “Aurora vulnerability.” The Aurora vulnerability in generator control systems could allow someone to remotely destroy a generator (presuming they can hack through a variety of firewalls) by setting it out of phase. Hackers could also cause extensive physical damage that could take months to repair. For example, an intruder could switch off of the lubrication pumps, causing a generator to seize up in a matter of seconds. The Federal Energy Regulatory Commission (FERC) identified 60 different means to affect equipment through remote internet access.

A June 2005 FERC staff report found 20 documented cases where hackers penetrated networks and affected controls on dams and a reactor, disabled backup generation, and shut down a power plant. These attacks were launched by insiders, ex-employees, nation states, and political groups, but in many cases the attackers could not be traced.

The Central Intelligence Agency reports criminal enterprises have taken control of grid systems in several foreign countries and sought to extort payments.

While the National Electric Reliability Corporation (NERC) can issue advisories to address these issues, the concern is that NERC’s processes are slow, public and may lack the enforcement necessary to prevent major destruction of America’s energy grid and generators.

After last year’s test revealed the Aurora vulnerability, NERC issued an advisory to 1,800 owners and operators of the national power grid and provided a 60 day schedule for “immediate” mitigation measures and a 180 day schedule for longer term measures. Compliance is voluntary.

FERC conducted a recent audit of 30 utilities and found that 23 were in noncompliance of the NERC advisory. The legislation the Subcommittee is considering would give Federal authorities the power to compel implementation of remedial measures on an emergency basis throughout the bulk power system when vulnerability poses a threat to the system.

I, and other subcommittee members, received a classified briefing on the extent of this threat to our nation Tuesday. I anticipate our Energy and Air Quality Subcommittee will approve bipartisan legislation to address this threat in the near future. The last thing our nation needs is a successful attack on our electric energy system.

Speaking of energy, I got an update on our regional power issues this week during a meeting with Steve Wright, the administrator of the Bonneville Power Administration (BPA). One of the issues we discussed involves wind energy. I’m curious about how much of the wind energy we’re generating in eastern Oregon is under contract to utilities in other states, the limits on wind energy and the effect all this may have on meeting Oregon’s renewable energy requirements. These are issues that are very important to Bonneville and to ratepayers in our region. In just a couple of years, the Northwest will have more wind energy to mange on its power grid—some 30 percent—than any other power grid in the country. Because wind power can fluctuate rapidly and dramatically, BPA must constantly smooth out the load. In the future, this might actually require BPA to acquire new gas peaking power plants to accommodate growth in wind power load.

There are serious grid and ratepayer issues that need attention from policy makers and regulators as Oregon becomes the nation’s leading producer of wind energy.

Meanwhile I also met with Tim Raphael of Pacific Ethanol to learn more about the status of their Boardman refinery and their research efforts to develop fuel from cellulosic material. As recipients of a $24.3 million Department of Energy grant—which they must match—they’re preparing to use new technology to create ethanol from biomass. Personally, I think cellulosic holds great promise for future fuel development and gets us away from using food for fuel.

Duck Valley Water and the Owyhee

The House took up and passed legislation today that resolves a long-simmering water issue in northern Nevada. I write about it here, because the original draft of the bill caused great concern for ranchers in the Owyhee Canyon area of southeastern Oregon.

I worked closely with State Rep. Cliff Bentz of Ontario and ranchers in the area to craft language that resolved our concerns without upending the thrust of the legislation, sponsored by my colleague U.S. Rep. Dean Heller of Nevada. It’s always rewarding to work with people who want to solve problems in a thoughtful way — not just jam a bill through.

Just Compensation

Having voted against the Fannie Mae and Freddie Mac taxpayer bailout, I was especially incensed to read later that the departing chief executives of both organizations were going to walk with golden parachutes of some $24 million combined. I wasn’t alone, not only did I hear about it at home in the district, but also among my colleagues, one of whom even introduced legislation to prevent the bonuses from being paid. Because Fannie and Freddie are creatures of the government and had the implied (now real) backing of the taxpayers, the authority to deny such bonuses already existed. I went ahead, however, and cosponsored the legislation to make the point. And today, it was announced that the bonus payments will not be made — a small and rare victory for the taxpayers and those of us who want to reform the government.

Fighting the grasshoppers

If you’re in eastern Oregon you probably know about the grasshopper infestation that’s currently threatening the agriculture in the region. For over a decade, the federal government has partnered with the state of Oregon to fund an eastern Oregon entomologist position to diagnose and prescribe treatments for these very kinds of infestations. This year, however, it is uncertain whether the state is going to continue funding its share of the position, which threatens the future of the entomologist position. Supporting a program that has proven to be very successful at diagnosing and controlling these problems before they threaten the region’s economy is a no-brainer, and I just cannot understand why the state may not continue its support. That’s why I sent a letter to state leaders yesterday asking them to continue its commitment to the entomologist position and support the agricultural economy of eastern Oregon. You can read more about it here.

Where did my TV picture go?

As you probably know by now, if you receive your television from an antenna (not from satellite or cable) that analog signal goes away in 155 days. Those of us in rural areas are most affected by the transition. If your television is older and cannot process digital signals you will either need to acquire a DTV converter box, or a new digital TV and antenna before the February 17, 2009 cutoff of the analog signal. For more information on the transition and $40 off coupons, go to http://www.dtv.gov/.

Oregon Ag leaders come east

Leaders from some of Oregon’s most important agricultural sectors met with me this week in Washington, D.C. We discussed farm, trade, research, energy and workforce issues. I got to spend time with leaders from the Oregon Wheat Growers Association, the Oregon Association of Nurseries and the Oregon Farm Bureau. In addition to the uncertain agriculture, energy and financial markets, Congress has failed to pass either the Agriculture or Interior appropriations bills that fund these important government agencies. With the fiscal year running out in two weeks, there’s no plan to move forward on individual spending bills, but instead the government will operate on a continuing resolution. That can cause real problems for ag research, among other priorities, and slow the implementation of the new farm bill and the reforms and initiatives it contains.

That’s it for now. I’m writing this as I return to Oregon on Friday. I will spend Saturday at meetings and events in Wallowa County before returning to Washington, D.C. Monday.

As I said at the start, Congress will likely confront legislation to give Treasury and the Fed more authority to prevent collapse of our financial markets. At a time like this, Congress needs to go further and stay in session and finish a budget for the government on time, rather than punt this issue until after a month of campaigning. We have serious work to do, and we should stay and do it.

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Best regards, Greg Walden Member of Congress