[Congressional Record Volume 141, Number 34 (Thursday, February 23, 1995)]
[Senate]
[Pages S2985-S2989]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


 THE ADMINISTRATION'S RESPONSE TO THE THREAT TO U.S. NATIONAL SECURITY 
           POSED BY U.S. GROWING DEPENDENCE ON FOREIGN ENERGY

  Mr. MURKOWSKI. Mr. President, I rise to discuss President Clinton's 
``do nothing--and I repeat ``do nothing''--response to the threat to 
our national security from the rising tide of oil imports.
  Mr. President, the threat posed by our growing dependence on foreign 
energy is once again in the spotlight because of last Thursday's 
release of the Commerce Department's report to the President titled 
``The Effect of Imports of Crude Oil and Refined Petroleum Products on 
the National Security.'' The report found that:

       * * * the reduction in exploration, dwindling reserves, 
     falling production, relatively high cost of U.S. production, 
     and the resulting low rates of return on investments all 
     point toward a contraction of the U.S. petroleum industry and 
     increasing imports from OPEC sources. Growing import 
     dependence, in turn, increases U.S. vulnerability to a supply 
     disruption because non-OPEC sources lack surge production 
     capacity; and there are at present no substitutes for oil-
     based transportation fuels which account for two-thirds of 
     U.S. petroleum consumption.

  Based on these findings, the Secretary of Commerce formally advised 
the President that:

       The Department found that petroleum imports threaten to 
     impair the national security. I recommend that you confirm 
     this finding.

  Mr. President, it is reasonable to expect the President of the United 
States to take bold action--bold action--if the national security is at 
risk. President Clinton agreed that it is at risk, but he simply 
refuses to take action or propose anything. In his statement, President 
Clinton said:

       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.

  So far, so good. But President Clinton went on to say:

       [[Page S2986]] 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.

  So that is out.
  Further, Mr. President, translated into English, President Clinton 
will not do anything; the administration will simply continue its 
existing policies--the very policies that allowed the threat to our 
national security to occur in the first place. I would have hoped that 
he would come up with at least one new initiative. I know that I could 
have. But he did not.
  It is not that the report is trivial and can be ignored. It was put 
together by a high-level interagency task force led by the Department 
of Commerce, and included every major Federal agency; namely, the 
Department of Defense, the Department of State, the Department of the 
Treasury, the Department of the Interior, the Department of Labor, the 
Department of Energy, the Office of Management and Budget, the Council 
of Economic Advisers, and the U.S. Trade Representative. Public 
hearings were held throughout the country, and testimony was received 
from 69 witnesses. The report is well researched, thoughtful, and based 
on fact.
  It is not that the President does not have any authority to act. He 
certainly does. Under the Trade Expansion Act, once a determination is 
made that imports threaten the national security, the President obtains 
broad powers. These powers have been used in the past against other 
threats to the national security, just as they should have been put to 
use here. Moreover, even if the President did not want to make use of 
the Trade Expansion Act authority, there is a host of other regulatory 
and administrative changes the President could take under existing law. 
If the President found these powers too limited, he could have proposed 
legislative changes. But for reasons I cannot fathom, he has not done a 
single thing other than continue the administration's policy which 
makes us more dependent on imports.
  The President's don't worry, be happy attitude may be disturbing, but 
I guess it is not surprising. He is equally unwilling to promote 
hydroelectric power, nuclear power, or coal power. He strongly supports 
the use of natural gas, but not the domestic production of natural gas. 
Based on unfounded fears of the environmental community, he is 
unwilling to open up even the smallest amount of the Arctic National 
Wildlife Refuge for exploration and development, just as he does not 
want to see additional onshore and offshore Federal lands opened up.
  I find it ironic that at the very moment that the President of the 
United States is saying that the administration will do nothing new to 
promote energy production in the United States, the Secretary of Energy 
is in China promoting Chinese energy production. Perhaps we should 
invite the Chinese Secretary of Energy to the United States to help our 
industry.
  To this Senator, the President's decision to do absolutely nothing 
about a threat to our national security is nothing short of incredible. 
To agree with the Department of Commerce that the national security is 
at risk, but to take no action, is simply unconscionable. That is 
particularly mystifying because in 1992 candidate Bill Clinton made the 
following statement:

       Our reliance on foreign oil is a genuine threat to our 
     national and economic security. When George Bush took office, 
     foreign oil made up a third of our trade deficit, and since 
     then the U.S. has not had an energy policy. Now we import 
     nearly half our oil, which accounts for two-thirds of our 
     trade deficit. Even James Watkins, the President's Secretary 
     of Energy, has written that the U.S. imports much of its oil 
     ``from potentially unreliable suppliers half a world away.'' 
     That kind of dependence makes us vulnerable, and we must 
     change that situation.

  That was President Clinton the candidate.
  Mr. President, there is an old saying that those who do not learn 
from the past are condemned to repeat it.
  Does President Clinton remember the shortages, price increases, and 
long gasoline lines caused by the 1973 Arab oil embargo?
  Does he remember the energy shortages during the 1976-77 winter, 
which shut down schools and businesses throughout the Midwest?
  Does he remember the Khomeni revolution and the Iraq-Iran war which 
threatened international oil supplies?
  Does he remember our reflagging Kuwaiti oil tankers to allow the 
United States Navy to protect them from Iran?
  And, finally, does he remember Iraq's invasion of Kuwait, which 
threatened two-thirds of the world's oil reserves and resulted in one-
half million United States troops laying their lives on the line?
  Mr. President, that was a war over oil, make no mistake about it.
  In refusing to take any action, however modest, President Clinton is 
putting hope over experience. He is also placing our energy and 
economic destiny into the hands of foreign producers--producing nations 
who have demonstrated time and time again, that they have their 
political and economic interests in mind, not ours.
  Mark my words: If we do not pay attention to the present, we will 
relive the past.
  We will look at the energy situation very briefly this morning.
  Mr. President, there is no question that each day our energy 
situation is increasingly perilous. That is obvious from the data which 
I would now like to provide for the benefit of the Senate. I will first 
describe the rapid decline in U.S. crude oil production, and the state 
of natural gas production.
  In 1970, U.S. crude oil production hit its all-time peak of 9.6 
million barrels per day. In 1973, the year of the Arab oil embargo, 
U.S. production had fallen to 9.2 million barrels per day. Today, we 
produce only 6.6 million barrels per day, a 28-percent decline since 
1973 and a 32-percent decline since 1970.
  Today, the United States produces less crude oil than we did back in 
1955. Had environmentalists succeeded in preventing the development of 
the Prudhoe Bay in Alaska, the United States would now be producing 
less oil than before 1949, the first year for which we have data.
  I might add, that Prudhoe Bay has been contributing about 25 percent 
of the Nation's total crude oil for the last 17 years. That production 
is now in decline. We would like to open up new areas in Alaska to 
replace the decline of Prudhoe Bay, but clearly it is not the present 
policy at this time. I would hope the President would see fit to change 
his mind. He has been known to do that on occasion.
  As bad as that sounds, it is only going to get worse. According to 
the Department of Energy, in 5 years the United States will be 
producing only 5.4 million barrels per day of crude oil. In the year 
2005--only 10 years from now--U.S. oil production will fall to 5.2 
million barrels per day. Thus, unless we take action, and take it now, 
in the year 2005 we will be producing about the same amount of crude 
oil as we did back in 1949.
  To put this all in perspective, in 1949 there were only 36 million 
cars on the road; today there are 143 million on the road, four times 
as many. The good news, of course, is that energy efficiency has 
increased dramatically.
  Although natural gas production has increased over the past 2 years, 
it is still 13 percent below the 1973 production rate. Moreover, the 
Department of Energy forecasts that natural gas production will not 
keep pace with increased demand over the next decade.
  Let me now very briefly talk about our dwindling reserves of crude 
oil and natural gas.
  As worrisome as the decline in U.S. production may be, the decline in 
U.S. proven reserves of crude oil and natural gas is even more 
worrisome.
  From 1949 until 1968, the combined U.S. reserves of crude oil and 
natural gas increased every year. Beginning in 1968, however, 
production exceeded net additions to proved reserves, and net reserves 
began their current decline. Since 1968, except for the addition of 
Alaska's North Slope reserves in 1970, our combined proven reserves of 
oil and gas have consistently declined.
  Today, U.S. proven reserves of crude oil are 40 percent below their 
peak in 1979. They are even lower than they were back in 1949.
  Today, U.S. proven reserves of natural gas are 43 percent below their 
peak in 1967. They are also lower than they were back in 1949.
  In this connection, it is interesting to note that the Commerce 
Department's report cites the decisions 
[[Page S2987]] ``against developing other geological prospects such as 
the Arctic National Wildlife Refuge and the Outer Continental Shelf'' 
as key factors contributing to the decline of U.S. oil reserves.
  It should not come as any surprise that the combination of increasing 
demand and declining production results in growing foreign dependence 
on imported oil.
  In 1973, the year of the Arab oil embargo, we imported 6.3 million 
barrels per day of crude oil and refined petroleum products. We were 36 
percent dependent on foreign oil.
  Today, we import 8.9 million barrels per day of oil, making us more 
than 50 percent foreign dependent.
  By the year 2005, the Department of Energy projects that we will 
import 12.5 million barrels per day of oil, making us 68 percent 
foreign dependent.
  Although we are less dependent on imports of natural gas than we are 
on imports of oil, our natural gas imports are also rising. In 1973, we 
imported 5 percent of the natural gas we consumed. Today, we are 
importing 12 percent, and the Department of Energy projects that by the 
year 2005 our foreign dependence will increase to 14 percent.
  As the Commerce Department's report notes, our growing dependence on 
foreign energy is very worrisome because:
  ``The United States and the OECD countries have limited prospects to 
offset a major oil supply disruption ***.'' and that ``(d)uring a major 
oil supply disruption, there could be substantial economic austerity as 
a result of the decreased availability of oil *** (which would) pose 
hardships for the U.S. economy.''
  Our foreign oil dependency also has significant financial 
implications for the United States, particularly with respect to the 
trade deficit.
  Each and every day we spend $140 million on foreign energy--$55 
billion last year alone. Altogether, over the past decade we have spent 
one-half trillion dollars on imported energy.
  Clearly, our economy would have been healthier and more of our 
workers employed if we had spent that money on domestically produced 
energy instead of on imports.
  Imports of foreign energy have cost oil workers thousands of jobs, 
according to IPAA and Department of Commerce statistics. In 1981, there 
were 15,000 independent oil and gas producers; today there are less 
than 8,000. Total employment in oil and gas production has fallen from 
700,000 in 1982, to 350,000 today--a 50-percent decline. We can only 
expect this to get worse over the next decade as domestic production 
declines and imports increase.
  You do not have to be a rocket scientist to figure out what it all 
means. The Department of Commerce is right on target. Our economic and 
national security is threatened. Our growing dependence on foreign 
energy leaves the United States vulnerable to the whims of foreign 
producers. No matter how stable our energy supply now appears, the 
price and availability of energy from foreign nations has been, and 
will continue to be, a function of their political and economic 
priorities, not ours.
  The problem is largely self-made. For example, the entire east coast 
of the United States is under a leasing moratorium, just as is the west 
coast and the eastern Gulf of Mexico off Florida's coast. There is 
great oil and gas potential there which can be developed with due 
regard to the environment. Drill in ANWR? Not a chance, says the 
environmental community.
  We must not forget that the picture is no better for our other energy 
resources. For example, no new nuclear powerplant has been announced 
for two decades. It is difficult and costly for U.S. refineries to 
comply with environmental restrictions. Federal environmental laws and 
regulations likewise make it difficult and very costly to build a 
natural gas pipeline, a coal-fired powerplant, an electric transmission 
line, or a hydroelectric dam.
  There is much that can be done to promote the production of domestic 
energy from our abundance resources. It ranges from the mundane to the 
controversial. But if we do not take action, our children are going to 
be very critical of us as they sit in long gasoline lines or are cold 
at night or are unemployed.
  Mr. President, the Commerce Department's report is a clarion call to 
action, not a lullaby to put us to sleep. We have a choice: Produce 
more energy domestically, or suffer the consequences of our dependency. 
I choose the former; President Clinton chooses the latter.
  Finally, Mr. President, I ask unanimous consent that the press 
release from the Independent Petroleum Association of America, the 
American Petroleum Institute, and the National Stripper Well 
Association be printed in the Record following my statement.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  (See exhibit 1.)
  Mr. MURKOWSKI. I thank the Chair.
  Mr. President, these press releases really express the petroleum 
industry's deep disappointment with the President's response to the 
Commerce Department's finding that oil imports threaten the national 
security.
  Mr. President, I also want to bring to the attention of the Senate a 
letter to the President dated February 10, 1995, sent by 70 Members of 
Congress, myself included. This bipartisan letter identifies a host of 
administrative, regulatory, and legislative actions that the President 
could have taken in response to the Department of Commerce report. But 
as I have stated before, the President instead decided to do nothing, 
and this is disappointing to me and to my colleagues who signed the 
letter.
  I ask unanimous consent that this letter be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                 Congress of the United States

                                Washington, DC, February 10, 1995.
     Hon. William J. Clinton,
     President of the United States, The White House, Washington, 
         DC.
       Dear Mr. President: The Secretary of Commerce recently 
     reported to you the results of an investigation, conducted 
     under the Trade Expansion Act, into the impact of crude oil 
     imports on the national security of the United States. The 
     investigation determined that oil imports threaten to impair 
     the national security of the United States. While this 
     finding may be startling to some, that is exactly the point 
     that so many of us made when we met with you, Secretary 
     Bentsen, and Deputy Secretary White last June.
       As required by the Administration's Domestic Natural Gas 
     and Oil Initiative, the Department of Energy recently 
     completed a cost benefit analysis to quantify the costs of 
     imported oil that are not reflected in the price. DOE's 
     analysis determined that the United States pays a hidden and 
     exorbitant economic and environmental price for imported oil.
       Clearly, it is imperative that we take immediate action to 
     alleviate this threat to our national security. By removing 
     unnecessary impediments to domestic exploration and 
     development we can strengthen our domestic oil and gas 
     industry and begin to correct this dangerous oil trade 
     deficit.
       During the 103rd Congress, a bipartisan group of Senators 
     and Representatives submitted to you the attached 
     comprehensive domestic oil and gas policy initiative. This is 
     a balanced package of legislative proposals and regulatory 
     actions that could immediately boost domestic energy 
     production.
       As you will recall, the Departments of Energy, Treasury, 
     and Interior favorably expressed a willingness to work within 
     the framework of this bipartisan policy proposal in an effort 
     to respond to the crisis in the domestic oil and gas 
     industry.
       In addition to the widespread support on Capitol Hill, all 
     of the segments of the domestic energy industry 
     enthusiastically support our proposed solutions.
       Mr. President, the Trade Expansion Act requires you to take 
     action within ninety days of the Secretary of Commerce's 
     report. We strongly believe that our recommendations to 
     preserve marginal well production, encourage new oil and 
     natural gas drilling, reduce regulatory compliance costs, 
     abolish existing prohibitions against the export of domestic 
     crude oil production provided that full and adequate 
     protections for the domestic merchant marine industry are 
     assured, and ensure reasonable access to oil and gas 
     resources on public lands, provides a blueprint for fast, 
     effective action to protect our Nation's vital economic and 
     security interests.
       We are confident that working together with the 
     Administration, we can quickly implement these proposals and 
     reduce our dangerous dependence on imported oil.
       We look forward to working with you to protect our 
     Country's future.
           Sincerely,
         Bill K. Brewster, Glenn Poshard, Frank H. Murkowski, J. 
           Bennett Johnston, Craig Thomas, Jim Inhofe, Jim 
           McCrery, Pete V. Domenici, Jeff Bingaman, Conrad Burns, 
           Howell Heflin, Kay Bailey Hutchison.
         Nancy Landon Kassebaum, Don Nickles, Paul Simon, Richard 
           Shelby, Larry E. 
         [[Page S2988]]   Craig, John Breaux, Alan Simpson, Trent 
           Lott, Ted Stevens, Thad Cochran.
         Frank D. Lucas, Tom A. Coburn, Henry Bonilla, Jerry F. 
           Costello, Pete Geren, Ralph M. Hall, Barbara Cubin, 
           Blanche Lambert Lincoln, Sonny Callahan, Greg Laughlin, 
           Wm. J. Jefferson, Bob Livingston, ------ ------.
         Jim Chapman, Ernest Istook, Tim Hutchinson, James Hayes, 
           W.J. Billy Tauzin, Ken Bentsen, Gene Green, Charles 
           Wilson, Pat Danner, Alan B. Mollohan, Chet Edwards, Bob 
           Wise, Don Young.
         Larry Combest, Steve Largent, Ray Thornton, Lamar Smith, 
           Jack Fields, Wally Herger, Joe Skeen, Sam Johnson.
         Charlie Stenholm, Jay Dickey, Frank Tejeda, Jerry F. 
           Costello, Solomon P. Ortiz, Calvin Dooley, Mac 
           Thornberry, Bill Thomas, Dave Camp.
                                                                    ____

                        Proposal, March 25, 1994


   a tax credit to preserve marginal production and to encourage new 
                                drilling

       The provision will first establish a tax credit for 
     existing marginal wells. The provision will allow a $3 per 
     barrel tax credit for the first 3 barrels of daily production 
     from an existing marginal oil well and a $0.50 per Mcf tax 
     credit for the first 18 Mcf of daily natural gas production 
     from a marginal well.
       The current definition of marginal wells will be expanded 
     to include a new category for ``high water cut property''--
     producing 25 barrels per day or less per well, with produced 
     waters accounting for 95 percent of total production. In 
     addition, techniques such as waterflooding and disposal, 
     cyclic gas injection, horizontal drilling, and gravity 
     drainage should be encouraged to enable domestic producers to 
     capture more of the oil in a given marginally economic 
     property.
       The provision will also include a tax credit for production 
     from new wells that have been drilled after June 1, 1994. The 
     provision will allow a $3 per barrel tax credit for the first 
     15 barrels of daily production for such oil wells and a $0.50 
     per Mcf for the first 300 Mcf per day for such gas wells.
       The tax credit will be phased out in equal increments as 
     prices for oil and natural gas rise. The phaseout prices, 
     which are based on BTU equivalence, are as follows: Oil--
     phase out between $14 and $20; Gas--phase out between $2.49 
     and $3.55.
       The tax credit is creditable against regular tax and AMT.


                   additional legislative initiatives

       Geological and Geophysical Costs. We continue to urge the 
     administration to support the current expensing of G&G costs. 
     We understand that the administration is studying the tax 
     treatment of G&G costs, and we recognize that legislative 
     action may be required.
       Eliminate the Net Income Limitations on Percentage 
     Depletion. Currently, the depletion deduction cannot exceed 
     100% of income from the property, and the deductions from all 
     properties cannot exceed 65% of taxable income. Many of 
     producers have so little income from the property that the 
     net income limitations further restrict the value of their 
     deductions. We support the repeal of both these limitations.
       Limitation on Exports. We favor abolishing the existing 
     prohibitions against the export of domestic crude oil 
     production provided that full and adequate protections for 
     the domestic merchant marine industry are assured.
       OCS Deepwater and Frontier Area Production. With domestic 
     reserves dwindling, areas with potential for new production 
     are the deepwater of the Outer Continental Shelf (water 
     depths greater than 400 meters) and frontier areas. The costs 
     of finding and producing most oil and gas in these areas 
     exceed the current price for that oil and gas. We support the 
     consideration of a per barrel tax credit to encourage 
     deepwater and frontier production.


                 Administrative/Regulatory Initiatives

       Oil Pollution Act of 1990. We believe that the financial 
     responsibility requirements of OPA '90 are excessive, and we 
     support a reduction in the dollar levels. In addition, the 
     agencies implementing the financial responsibility 
     requirements should revise their regulations to make the 
     requirements more realistic in several ways. First, the 
     regulations must recognize that Protection and Indemnity 
     Clubs function as indemnitors, rather than guarantors. 
     Second, we support a thorough examination of existing 
     resources to identify those that are available for immediate 
     response and those that are available to pay damage claims 
     and restoration costs. Third, we believe that the MMS should 
     propose regulations regarding de minimis quantities. Finally, 
     the MMS should apply the requirement for offshore facilities 
     to maintain financial responsibility only to the area seaward 
     of the coastline, consistent with prior agency actions 
     implementing the OPA '90 and with the February 28, 1994, 
     Memorandum of Understanding establishing Federal 
     jurisdictional boundaries for offshore facilities.
       Royalty Reduction. To remain competitive in attracting 
     capital, U.S. royalty laws should be reassessed. The existing 
     royalty reduction for marginal oil wells on public lands 
     (onshore) should be expanded to include marginal natural gas 
     wells. The royalty reduction for offshore production should 
     be extended for new activity, especially deep water and other 
     frontier areas, and marginal properties. Finally, we support 
     legislation that would temporarily suspend the collection of 
     royalties from wells in deep water, such as the bill that was 
     approved by the Senate Energy and Natural Resources 
     Committee.
       Royalty Collection. `Reinventing Government'' legislative 
     proposals establish an unworkable, unfair penalty regime that 
     will have particularly adverse affects on natural gas 
     production. The Administration should withdraw this proposals 
     and work with industry to eliminate royalty collection 
     problems.
       Underground Injection Control. The EPA is developing 
     revised regulations, reportedly deviating from 
     recommendations made by the Advisory Committee on UIC. 
     Indications that the EPA is considering tightening 
     regulations are disappointing, especially in light of its 
     report to Congress which found that any problems could be 
     solved by enforcing existing regulations, rather than 
     adopting new rules. This proposal could be extremely costly 
     to the industry without improving environmental protection. 
     We oppose the EPA proposed revision of existing UIC 
     regulations.
       Natural Resources Damage Assessment. The Departments of 
     Interior and Commerce are developing regulations to impose 
     liability on natural resource producers for injuries caused 
     by hazardous discharges. Although relevant statutes do not 
     require it, damages could include emotional loss of persons 
     who do not suffer from direct contact or use of the natural 
     resources. The ``non-use'' damage proposal relies on an 
     economic methodology known as contingent valuation (CV).\1\ 
     However, a panel of economists created by NOAA was unable to 
     confirm that CV was a reliable methodology. We believe that 
     CV for damage assessments is seriously flawed and oppose the 
     inclusion of liability for non-use value loss in the final 
     regulations.
     \1\A simplified example of the use of CV is as follows: 
     Trustees representing the public's interest in natural 
     resources injured by an oil spill conduct a survey in which 
     individuals are asked to state an amount they or their 
     household would pay to prevent this injury. The reported 
     amounts are averaged and then multiplied by the number of 
     affected individuals or households. Since no actual use of 
     the injured natural resource is required, the multiplier is 
     frequently quite large and the resulting ``damage'' figure 
     can run into the billions.
---------------------------------------------------------------------------
       Oil and Gas Leasing on Public Lands. The Interior 
     Department is conducting an internal review of leasing to 
     promote a new approach called ``ecosystem management.'' 
     Current law, the Federal Land Policy Management Act (FLMPA), 
     is based on multiple use, including oil and gas leasing 
     activity. We urge the Interior Department to abide by the 
     principle of multiple use.
                               Exhibit 1

              Independent Petroleum Association of America

       Independent Oil and Gas Producers Reject Clinton 
     Administration's Do-Nothing Strategy, Call for Congressional 
     Hearings on Risks Posed by Oil Imports.--Independent 
     producers are stunned and disappointed by President Clinton's 
     response to a Commerce Department finding that oil imports 
     threaten to impair national security. ``The good news is the 
     president agreed that oil imports pose a national security 
     threat. The bad news is he's not going to do anything about 
     it,'' said IPAA Chairman George Alcorn. ``That's a do-nothing 
     approach from an administration that talks about taking 
     action but fails to follow-through.''
       ``It is unprecedented for a president not to take any new 
     action, direct or indirect, to address the national security 
     threat,'' said Alcorn. ``All other presidents who have 
     concurred with the national security finding have proposed 
     specific new initiatives.''
       IPAA and a nationwide coalition of producers petitioned 
     Commerce to launch the investigation under section 232 of the 
     Trade Expansion Act last March following a drop in world oil 
     prices that forced producers to shut-in wells and lay off 
     thousands of employees. Last year the amount of oil the 
     United States imported reached an all-time high--over 50 
     percent of demand--while domestic production fell to a 40-
     year low. During the first two years of the Clinton 
     administration, over 22,000 more American workers in the U.S. 
     oil and gas industry lost their jobs. ``It has all happened 
     on the Clinton administration's watch,'' said Alcorn.
       ``This industry has been made noncompetitive by over-
     regulation and a confiscatory tax policy. Congress has 
     recognized the threat and asked for presidential leadership 
     in a letter written only a week ago,'' said Alcorn. ``Faced 
     with congressional support and evidence provided by the 
     administration's own investigation that the loss of this 
     strategic American industry poses a national security risk, 
     the president still proposes no specific action.''
       ``The lack of leadership and action by this administration 
     again demonstrates a flawed view of national security and 
     economic stability that cannot be allowed to prevail,'' said 
     Alcorn. ``Therefore we are calling upon Congress to 
     investigate the threatened impairment of national security 
     and to act where the president has failed to do so.''
       IPAA Hails Energy Bill.--Today the Oklahoma Congressional 
     delegation led by Sen. Don Nickles (R-Okla.), a key member of 
     the Senate leadership and a member of the Finance Committee 
     and Energy and Natural 
     [[Page S2989]] Resources Committee, introduced a 
     comprehensive energy bill designed to help put the domestic 
     oil and natural gas industry back to work and strengthen the 
     U.S. economy by increasing domestic production and creating 
     jobs throughout the 33 oil and gas producing states.
       ``This bill goes a long way toward developing a national 
     energy strategy that will make the domestic oil and gas 
     producer more competitive,'' said IPAA President Denise Bode. 
     ``These energy initiatives are far-reaching because they will 
     impact virtually every producer who explores for and produces 
     oil and natural gas in the United States. The legislation is 
     the foundation for much-needed energy reforms and it has the 
     support of independent producers.''
       The bill was introduced in the House and Senate by 
     Congressmen Bill Brewster, Tom Coburn, Ernest Istook, Steve 
     Largent, Frank Lucas, J.C. Watts and Senators Nickles and 
     James Inhofe. It includes tax and regulatory measures that 
     will help maintain production from marginally economic wells, 
     encourage new drilling, provide relief from an unpredictable 
     royalty collection system, promote the cost-benefit analysis 
     of new regulations and support the export of Alaska North 
     Slope crude oil.
       ``This energy bill is clearly a way we can alleviate the 
     oil import crisis and jump-start the domestic industry,'' 
     said Bode. ``It will put domestic producers back to work, 
     benefiting the nation with more jobs, economic wealth and tax 
     revenue.''
       If you need additional information or would like to talk to 
     an independent producer for a local angle on this story 
     contact Kate Hutcheons or Jeff Eshelman.
                                                                    ____

                      American Petroleum Institute

       Washington, February 22.--The surest and most important way 
     to stem rising oil imports is to produce more oil and natural 
     gas at home, the American Petroleum Institute emphasized 
     today.
       The API made that observation after expressing 
     disappointment in President Clinton's reaction to the 
     Commerce Department's study and finding that rising oil 
     imports are a threat to the nation.
       ``The President had the opportunity to express his 
     commitment to open federal lands to new oil and gas leasing, 
     exploration and development,'' the API said in a statement, 
     ``but he chose to emphasize federal programs that have had no 
     impact on rising oil imports, such as promoting alternative 
     fuels and renewable energy resources.''
       The coastal plain of the Arctic National Wildlife Refuge in 
     Alaska holds the promise of billions of barrels of oil, as do 
     the offshore areas of California and Florida, now closed to 
     leasing by the federal government, API noted. The new 
     Congress indicates a willingness to grant greater access to 
     federal lands, but the President's support is vital, API 
     added.
       In 1994, for the first time in history, more than half of 
     the oil used in the United States was imported. The 8,894,000 
     barrels a day of crude oil and petroleum products amounted to 
     50.4 percent of domestic demand and set an all-time record. 
     At the same time, domestic crude oil production averaged 
     6,629,000 barrels a day--the lowest level in 40 years.
       The President often speaks of jobs and the need for federal 
     revenues. Both could be attained by opening new areas to oil 
     and gas development, API said. Tens of thousands of jobs, not 
     only in the oil fields, but in the host of service industries 
     and factories throughout the country would be created. At the 
     same time billions of dollars in revenues would accrue to the 
     federal treasury in the payment of bonuses, rentals, 
     royalties and income taxes.
       The Bureau of Labor Statistics reported that in 1982, 
     employment in the exploration and development sector of the 
     petroleum industry reached a high of 754,500. At the end of 
     December 1994, that number stood at 332,800--a loss of 
     421,300 jobs! The principal cause, the API said, were unwise 
     federal government policies closing lands onshore and 
     offshore to oil and gas development.
       ``The opportunity exists now to reverse these unwise and 
     unsound policies,'' API said, ``and initiate policies to 
     increase oil and gas production that would impact on oil 
     imports.''
                                                                    ____

  National Stripper Well Association Blasts Clinton Administration's 
  Response to Oil Imports Security Risk--Joins Call for Congressional 
                                Hearings

       Virginia Lazenby, president of the National Stripper Well 
     Association, made the following statement regarding President 
     Clinton's Feb. 16 response to the Commerce Department's 
     finding that oil imports threaten to impair national 
     security:
       ``I am enraged, not for myself, but for the thousands of 
     U.S. oil and natural gas producers the National Stripper Well 
     Association represents.
       President Clinton agrees that the rising level of oil 
     imports--now over 50 percent--pose a threat to U.S. security. 
     That's a step in the right direction. What the Clinton 
     administration failed to do is address the threat by 
     proposing new initiatives such as tax and regulatory measures 
     that would help boost domestic production. The Clinton 
     administration's inaction is unacceptable.
       In addition to the nine-month national security 
     investigation, other studies were completed last year, 
     including one by the National Petroleum Council, which 
     supports the call for the passage of initiatives to maintain 
     production from the nation's marginally economic wells. NSWA 
     played a key role in developing the report. At the time of 
     its release Department of Energy Secretary Hazel O'Leary said 
     ``There are actions we can and must take that will benefit 
     the gas and oil industry.''
       Why the administration has decided against taking action is 
     shocking. Nearly half-a-million people in the domestic oil 
     and gas industry have been forced out of their jobs over the 
     last decade as low-priced oil has been imported into the 
     United States. Domestic production is at a 40-year-low. The 
     nation can not afford to lose an increasing amount of 
     production from marginal wells which represents $10 billion 
     of avoided imports each year.
       NSWA joins the Independent Petroleum Association of America 
     in its call for Congressional hearings on this matter and 
     hopes that the members of Congress will take action.''
       The National Stripper Well Association represents domestic 
     producers who produce oil and gas from so-called stripper or 
     marginal wells which are wells that produce less than 15 
     barrels per day. NSWA was among the groups that petitioned 
     the Commerce Department to conduct the national security 
     investigation last March.
     

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