[Congressional Record Volume 141, Number 31 (Thursday, February 16, 1995)]
[Senate]
[Pages S2816-S2819]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                  INCREASED DEPENDENCE ON IMPORTED OIL

  Mr. MURKOWSKI. Madam President, I just have been advised of the 
release by the White House of the Department of Commerce's findings 
concerning the question of our increased dependence on imported oil. 
Today in that report, our President reported to the Congress that, 
indeed, our growing dependence on imported oil is a threat to our 
national security. However, it is rather disturbing to note that the 
President failed to propose any new action, direct or indirect, to 
alleviate this threat. It is the opinion of this Senator from Alaska 
that such action is unprecedented and wholly unacceptable.
  I ask unanimous consent that the press release be printed in the 
Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

  [From the White House, Office of the Press Secretary, Feb. 16, 1995]

                       Statement by the President

       I am today concurring with the Department of Commerce's 
     finding that the nation's growing reliance on imports of 
     crude oil and refined petroleum products threaten the 
     nation's security because they increase U.S. vulnerability to 
     oil supply interruptions. I also concur with the Department's 
     recommendation that the Administration continue its present 
     efforts to improve U.S. energy security, rather than to adopt 
     a specific import adjustment mechanism.
       This action responds to a petition under Section 232 of the 
     Trade Expansion Act of 1962, which was filed by the 
     Independent Petroleum Association of America and others on 
     March 11, 1994. The Act gives the President the authority to 
     adjust imports if they are determined to pose a threat to 
     national security. The petitioners sought such action, 
     claiming that U.S. dependence on oil imports had grown since 
     the Commerce Department last studied the issue in response to 
     a similar, 1988 petition.
       In conducting its study, the Department led an interagency 
     working group that included the Departments of Energy, 
     Interior, Defense, Labor, State, and Treasury, the Office of 
     Management and Budget, the Council of Economic Advisers, and 
     the U.S. Trade Representative. The Commerce Department also 
     held public hearings and invited public comment. Following 
     White House receipt of the Commerce Department's report, the 
     National Economic Council coordinated additional interagency 
     review.
       As in the case of its earlier study, the Commerce 
     Department found that the potential costs to the national 
     security of an oil import adjustment, such as an import 
     tariff, outweigh the potential benefits. Instead, the 
     Department recommended that the Administration continue its 
     current policies, which are aimed at increasing the nation's 
     energy security through a series of energy supply enhancement 
     and conservation and efficiency measures designed to limit 
     the nation's dependence on imports. Those measures include:
       Increased investment in energy efficiency.
       Increased investment in alternative fuels.
       Increased government investment in technology, to lower 
     costs and improve production of gas and oil and other energy 
     sources.
       Expanded utilization of natural gas.
       Increased government investment in renewable energy 
     sources.
       Increased government regulatory efficiency.
       Increased emphasis on free trade and U.S. exports.
       Maintenance of the Strategic Petroleum Reserve.
       Coordination of emergency cooperation measures.
       Finally, led by the Department of Energy and the National 
     Economic Council, the Administration will continue its 
     efforts to develop additional cost-effective policies to 
     enhance domestic energy production and to revitalize the U.S. 
     petroleum industry.

  Mr. MURKOWSKI. Madam President, if we look at the specifics of the 
recommendation, as indicated in the press release, the specific 
highlights include increased investment in energy efficiency, certainly 
a worthy and laudable goal; increased investment in alternative fuels, 
likewise; increased Government investment in technology to lower costs 
and improve production 
[[Page S2817]] of gas and oil and other energy resources; expanded 
utilization of natural gas; increased Government investment in 
renewable energy sources; increased Government regulatory efficiency; 
increased emphasis on free trade and U.S. exports; maintenance of the 
Strategic Petroleum Reserve which, obviously, is there for emergencies; 
and coordination for emergency cooperation measures.
  Notable by its absence is any mention of efforts to stimulate 
domestic drilling and production in the United States. I find that 
extraordinary. I wonder just who is advising the President. I cannot 
believe that the President himself does not support domestic 
exploration, development, the creation of jobs. One of the bases of 
America's industrial might has been our ability to produce energy 
sources, specifically oil and gas. But there is no mention of 
exploration for oil. There is no mention of stimulating exploration in 
the Gulf of Mexico where a good portion of our current resources are 
coming from.
  As we go deeper out in the gulf and invest in new technology, it 
requires greater engineering, greater risk, but, obviously, the 
industry is willing to make those commitments and that investment. This 
is what we call deep-water drilling. It requires substantial capital 
and substantial incentives.
  Furthermore, we have frontier areas where onshore there are no 
pipelines, no infrastructure, and to encourage the industry to go in 
those areas and explore, again, may require some concessions, some type 
of moratorium relative to the application of taxation.
  None of these are mentioned, and I find that rather curious. We have 
the overthrust belt; no mention of opening up areas for oil and gas 
exploration.
  It is rather curious, and I guess it is appropriate, that I be a 
little sensitive on this because my State of Alaska has been supplying 
this country with about 24 percent of the total crude oil that is 
produced in the United States for the last 16 to 17 years. That area 
where most of that oil comes from is called Prudhoe Bay. It is a huge 
investment by three major international companies--Exxon, BP and ARCO. 
They operate the fields. They produce about 1.6 million barrels of oil 
per day. That is down from approximately 2 million barrels a few years 
ago. The field is declining. But the significance is, as it declines we 
are increasing our imports.
  Where do our oil imports come from? Why, it comes from the Mideast. 
It comes to our shores in foreign flag ships, manned by foreign crews. 
Many of the corporations that operate those ships are relatively alike 
in their corporate structure. Some suggest they are even shell 
corporations.
  It is interesting to look at our trade deficit, Madam President, of 
about $167 billion. A good portion of that is Japan, a portion of it is 
China, but almost half is the price of imported oil. So we are 
exporting our dollars, exporting our jobs and becoming more and more 
dependent on other parts of the world.
  I find this trend relatively unnerving; that we should have to depend 
to such an extent on imported petroleum products and then recognize 
that it is called to our attention by this special study done by the 
Department of Commerce that we have been waiting for an extended period 
of time to identify that, indeed, our national security interests are 
at stake.
  I look at my State of Alaska with the potential to supply more oil as 
Prudhoe Bay declines, and it is rather ironic, Madam President, that on 
this floor today was a bill to take the most promising area in North 
America, namely ANWR, and put it in a permanent wilderness.
  We have always had a difficult time trying to keep Alaska in 
perspective relative to its size and the type of development and the 
control that our State as well as the Federal agencies have in 
developing the resources from the North Slope and the Arctic. And as we 
reflect on that, the technology that developed Prudhoe Bay is now 20 to 
25 years old, but some new technology came along about 10 years ago and 
resulted in the development of a field called Endicott. Endicott was an 
expansion of Prudhoe Bay in one sense, but the technology was entirely 
new. It came on as a production facility, the tenth largest producing 
field in the United States at about 107,000 barrels a day. Today it is 
the seventh largest at about 120,000 barrels a day. But that 
technology, Madam President, resulted in a footprint of 56 acres. That 
is a pretty small area. That is the size of the footprint. But the 
contribution to our energy security, our jobs, was significant.
  The last area that has been identified by geologists as potentially 
carrying the capability of a major discovery is ANWR, but what are the 
parameters of ANWR?
  First of all, there are about 19 million acres in the area. Over 17 
million acres are basically set aside in wilderness in perpetuity. That 
is a pretty good-sized chunk of real estate. We are looking at an area 
the size of Oregon and Washington put together. Industry tells us that 
if they can find the oil necessary to develop the field--and they have 
to find a lot of oil because you do not develop small fields in the 
Arctic--the footprint would be about 12,500 acres. To put that in 
perspective, that is about the size of the Dulles International Airport 
complex in Virginia, assuming the rest of Virginia were a wilderness.
  The arguments against opening ANWR are the same arguments that 
prevailed nearly 20 years ago when we talked about opening Prudhoe Bay: 
What is going to happen to the caribou? What is going to happen to the 
moose? What is going to happen to the wildlife?
  Well, we have had some 17 or 18 years to observe the process. The 
caribou herds in Prudhoe Bay were 4,000 to 5,000; now they are 17,000 
to 18,000. The growth of those herds is as a consequence of the 
realization that those areas are absolutely off limits to subsistence 
hunting of any kind. The Eskimo people in the region do not hunt in 
those areas, and caribou is a very adaptable animal. If chased down by 
a snow machine or hunter, obviously it runs away. The common sight of 
modest activity associated with exploration and development has 
absolutely no effect. A person can go up there today and observe this 
process.
  So as we reflect on what some of the alternatives are, I wonder if we 
are really not selling America short. As I said before, they are the 
same arguments of 17 years ago we are hearing today, that somehow this 
is the Serengeti of the Arctic--12,500 acres out of 19 million acres is 
what we are talking about--somehow the native people of the area will 
be affected. But I can tell you, Madam President, the native people of 
the area have been given an opportunity that they never had before, and 
many of them have chosen the opportunity to have gainful employment, 
have a tax base, have first-class schools. Schools in Barrow, AK, are 
the finest schools in the United States bar none. In areas where we 
have intense climates, we have indoor play areas. As a consequence of 
the contribution of oil and the fact that the native people have been 
able to tax the oil, have been able to tax the pipeline, they have been 
able to have an alternative to a subsistence lifestyle which jobs offer 
but never would have been prevalent in the area.
  I think we are shortchanging America's ingenuity to suggest we cannot 
open it safely. There is absolutely no scientific evidence to suggest 
that we cannot open it safely. The technology is advanced. The 
footprint is smaller. The environmental concerns, the restoration, are 
all set in place by the State and the Federal Government. So the risk 
is diminished dramatically. So why the hesitation?
  Well, to some degree, Madam President, it is associated with a cause, 
and that cause is that Alaska is far away. ANWR has been identified by 
many of the national environmental groups as an issue where they can 
challenge; people cannot go up there and see for themselves. It 
generates revenue. It generates a cause. And as a consequence, they 
would suggest to you that this area cannot be opened up safely. They do 
not address the opportunities for employment, the opportunities for new 
engineering technology and expertise but, rather, that Americans cannot 
meet a challenge. I find this very, very distressing, but it is 
something that perhaps Alaskans and others who come from energy States 
have become uncomfortably accustomed to.
  Now, where do we go from here, Madam President? Well, I happen to be 
chairman of the Energy and Natural 
[[Page S2818]] Resources Committee, and we are going to hold a number 
of hearings on this matter as we look at our growing dependence on 
imported oil and the effect that it has on our national security and 
look to alternatives.
  But, Madam President, we are not going to look to the alternatives 
suggested by the White House, which are nothing but words.
  I can remember coming into this body in 1981 when we were running in 
the high 30's, low 40's percentile dependence on imported oil. There 
was concern then. There was an expression if it ever got to the area 
where it would be approaching 50 percent we would have to do something 
drastic, we would have to stimulate our industry somehow with 
incentives. But we went on and on and became more dependent and now 51 
percent of our total consumption is imported oil. And now we are told 
that our national security is at stake.
  Out of these hearings I hope we get the experts--not the wordsmiths 
from the White House who are simply selling America short, relative to 
its capability to produce additional discoveries of oil and gas within 
the United States. It is truly distressing to read this report. We knew 
it was coming. We suspected what it said. And each time we made an 
inquiry we were advised that the report was still under review because 
the administration chose, for obvious reasons, to put it off as long as 
they could. I find it rather coincidental that it comes in at a time 
when we are almost out for the Presidents' Day extended weekend.
  But I think it is time for this body and the other House to reflect 
on the reality associated with a segment of America's traditional 
industrial might that the administration proposes to remove from the 
passing scene and become more dependent on imports and export more 
dollars and more jobs offshore.
  This is not unique to the oil industry. To some extent it follows 
with the administration's attitude towards domestic mining. But I will 
save that analysis for another day.
  I am pleased the Independent Petroleum Association of America has 
pursued this matter. I think their President, Mr. Dennis Bode, has made 
a very commendable and meaningful contribution to bring this report 
before us. I hope the Energy Coalition, that is made up of both Members 
of the House and Senate, will reflect upon this report in the very near 
future. I know they will.
  It is interesting to look at the attitude of other nations as they 
observe our increasing dependence on imports. My many friends in Japan 
cannot understand. They simply say how unfortunate it is that Japan has 
no natural resources and must import its entire resources, whether 
energy or mineral. They only have the human work ethic and the 
efficiencies associated with Japanese industry that have been perfected 
over an extended period of time, since the Second World War. We helped 
them basically during the reconstruction period. They simply cannot 
understand our mentality and lack of our commitment to use our 
resources wisely, for the benefit of our people and our economy.
  In summary, Madam President, I am disappointed. It is ironic that we 
should be confronted on the same day with a bill to close the most 
promising area in North America from exploration and put it into an 
additional permanent wilderness--and I might add, Madam President, we 
have 56 million acres of wilderness in our State. There are some who 
would like to put the whole State in a wilderness. There are others who 
would like to buy the State back from the United States and go it 
alone. But that is probably another story, for another day as well. To 
suggest this is the time to put it in wilderness when we get a report 
that says our national security interest is at stake is, indeed, 
ironic.
  I know Senator Stevens will be joining me in commenting on the 
significance of this report and the lack of responsible--and I stress 
responsible--analysis of the alternatives that we have available to us, 
alternatives that are practical, and certainly in the national security 
interest.
  I think that is enough for tonight, Madam President. I wish you a 
good holiday and I yield the floor.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. DOLE. Madam President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DOLE. Madam President, in a move that defies principle and logic, 
the Clinton administration has proposed lifting the sanctions on Serbia 
and Montenegro, while it maintains an illegal and unjust arms embargo 
on Bosnia and Herzegovina. As the Washington Post editorial page put it 
today, ``the United States and its partners in dealing with the old 
Yugoslavia have got it upside down.''
  For 7 months, the Bosnian Serbs have said ``no'' to the contact group 
peace plan. Despite their promises last summer of tough measures, the 
contact group countries have pursued a concessions only approach. And 
so, instead of putting on more pressure on Serbia and its allies in 
Bosnia and Croatia, the contact group is now ready to offer an enormous 
concession to Serbia by agreeing to remove the only real leverage we 
still have, that is, sanctions. Sanctions provide leverage not only on 
the situation in Bosnia, and in Croatia, but in Kosova--where Albanians 
are the latest victims of ethnic cleansing.
  Sure, the administration says that Serbian President Milosevic will 
have to make promises in return. We have seen what his promises are 
worth. Last August Milosevic promised to cut off the Bosnian Serbs, but 
what really happened is that support was reduced, not ended. Yes, the 
administration has managed to see that conditions are attached to this 
lifting of sanctions, noting that the Europeans and Russians would make 
such a deal even sweeter for Milosevic. But the bottom line is that 
this is an ill-conceived policy and any tinkering by the administration 
on the margins does not change that fact.
  The message this action sends is that the contact group countries are 
incapable of pressuring anyone but the victims of this brutal 
aggression. That message is a green light to the Bosnian Serbs and to 
the Krajina Serbs. There are warnings of a wider war, but now we see 
how the contact group hopes to avoid such a scenario, namely by 
withholding the Bosnians' right to self-defense. Anyone outside the 
contact group can see clearly that this is a formula for wider war, not 
a formula for preventing wider war. As the Washington Post concluded, 
``seeking a phony peace, the United States and its partners may be 
stoking a greater war.''
  Madam President, this is a policy of desperation. This is a policy 
that highlights the lack of American leadership. This is a policy that 
puts the United States on the side of rewarding aggression and against 
the forces of freedom and democracy.
  Madam President, I ask unanimous consent that the text of the 
Washington Post editorial be printed in the Record.
  There being no objection, the editorial was ordered to be printed in 
the Record, as follows:

               [From the Washington Post, Feb. 16, 1995]

                              Phony Peace

       The United States and its partners in dealing with the old 
     Yugoslavia have got it upside down. What they should be doing 
     is putting more pressure on Serbia and the Serb rebels it 
     supports in Bosnia and Croatia. What they actually are doing 
     is putting on less pressure by prematurely opening up the 
     possibility of ending the already partly suspended, porous 
     sanctions on Serbia that are in place.
       This new sweetener concocted by the five-nation Contact 
     Group takes as its stated purpose to draw the Serbian regime 
     of Slobodan Milosevic into formal acceptance of international 
     peace plans for Bosnia and Croatia. But it was always 
     implicit anyway that if Mr. Milosevic decided to rein in his 
     wild ambitions for a Greater Serbia, the sanctions on him 
     would fade away. Now to make it explicit--while he still 
     cheats on his pledges, before he has shown a commitment to 
     restraint--is to invite him to bargain the Contact Group 
     down; to extract a large concession for a minimal policy 
     change.
       It is easy enough to grasp why the Contact Group finds 
     itself in the weird position of proposing to suspend not the 
     military embargo on the chief victim, Bosnia, but the 
     economic sanctions on the chief offender, Serbia. It's 
     because none of the group's five members (United States, 
     Russia, France, Britain, Germany) has a taste for employing 
     [[Page S2819]] the force it would take to stiffen their 
     lowest-common-denominator collective diplomacy. To prevent 
     their diplomacy from becoming altogether laughable, they 
     should at the least be stiffening it with tougher sanctions 
     on Serbia. But this they decline to do.
       A tragic irony is building. The danger now perceived by the 
     Contact Group is that the war will spread. But the burden of 
     constraining it is being put largely on the Muslims and, to a 
     lesser extent, the Croats. They can fairly wonder whether 
     they are not being asked to swallow huge Serb incursions on 
     their territory, viability and sovereignty for the 
     geopolitical convenience of states far from the battlefield 
     and substantially unaffected by its flows. Feeling abandoned 
     even as their fundamental interests are threatened, Muslims 
     and Croats may yet be confirmed in a judgment that they can 
     satisfy their legitimate political goals only by military 
     means. Seeking a phony peace, the United States and its 
     partners may be stoking a greater war.

  (Mr. DeWINE assumed the chair.)

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