U.S. Senator Chuck Grassley addressed concerns about the future of renewable fuel in the nation and high energy prices to a crowd of about 50 people gathered at the American Bank for the senator's Le Mars visit Monday night. [Click to enlarge]

Speaking to a crowd of about 50 people at the American Bank Monday, Grassley responded to questions about fuel prices by presenting his idea for an energy program.

The first thing, he said, is to add more fossil fuel to the mix.

"The reason that gas is so high is because we aren't drilling in every place in the U.S. we ought to be drilling," Grassley said. "We're about the only country in the world that doesn't drill where we know we have oil."

His proposal for an energy program also includes supporting all the forms of alternative energy available, promoting them with tax credits.

"We've developed an ethanol industry that we wouldn't have had 30 years ago," he said.

The third piece of an energy program, he said, should be tax credits for conservation practices like fuel cell cars and energy efficient home appliances.

A county pork producer asked about the influence of speculation on oil prices, and Grassley answered that he thought speculation was part of the puzzle, but not the biggest piece.

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"I think maybe the greatest impact is the price of the dollar," Grassley said, pointing out that it is weak compared to other currency like the euro.

"For the first time it looks like government officials like the secretary of the treasury and the Federal Reserve chairman are serious about knowing it's a problem and wanting to do something about it," Grassley said.

Increasing the interest rates, he added, would send a strong message and could help the struggling dollar.

"There's a feeling in Washington that they're going to start raising interest rates sometime after Labor Day because of the fear of inflation," Grassley said.

Countries like China and India, he added, are also part of what's driving fuel prices up.

China, he said, sizably increased its fuel demand from last year.

"When you only pump 85, maybe 86 or 87 million barrels out of the ground a day for the whole world and 85 of it's used, and you've got another country increasing at 13 percent where normally we increase by one percent, it makes a big difference here."

Earlier Grassley had pointed out that while the global daily demand for oil was around 87 million, about 1.2 billion barrels are traded on paper in stock exchanges.

He told people gathered Monday about a bipartisan group that began investigating different stock exchanges six months ago to find out whether or not there ought to be some regulation on speculation, Grassley said.

"I think that since … one party isn't going to have control, I think you're going to have a fair way of making sure that it ought to be regulated or not," he said.

No decision has yet been made.

Grassley, who also openly supported the proposed oil refinery near Elk Point, S.D., stood up for the ethanol industry.

"There's an effort now to scapegoat ethanol by the Grocery Manufacturer's Association that that's the sole cause of food prices going up," he said. "But food prices go up 1/3 because of energy, so if you take ethanol out of the equation, Iowa State (University) says if you didn't have ethanol, gasoline would be 30 cents higher yet. So if you take ethanol out of the equation you've got higher energy prices, you've got higher food prices, the way I see it."

A member of the public asked if the federal government was making any efforts to keep the cost of food down.

Grassley urged caution there.

"We learned a lesson from Nixon…when Iowa was number one in beef production and he froze the price of beef, it ruined the cattle industry not only in Iowa but in the United States," he said. "We've never been number one since."

He said the same applies to putting embargos on exports -- doing so would be harmful for the economy.

Grassley also spoke about the future of the education law "No Child Left Behind."

Second grade teacher Bill Jordt asked if an overhaul was ahead for the law.

Grassley said that could happen this year. The 12-year program actually has a sunset, or expiration, written into it for this year, the mid-way point, giving legislators a chance to re-evaluate the law for the last 5-6 years.

Grassley is co-sponsoring a bill that would give greater flexibility to the states to administer the law.

He also supports a system where each subset of students, whether it is students in special education or students speaking English as a second language, is graded separately according to the law's standards.

"If one subset was down, it wouldn't affect the whole school," he said.

While the sunset is supposed to be this year, Grassley predicted a one-year extension of No Child Left Behind as it is now. Senator Edward Kennedy's recent brain cancer -- the senator is the chairman of the Education Committee -- and the presidential election will likely push back work on the law, he said.

"There's one advantage of that: the new president has input," he said.

Grassley's stop in Le Mars was one of several Iowa town hall meetings during the Fourth of July week.