[Congressional Record Volume 142, Number 10 (Thursday, January 25, 1996)]
[Senate]
[Pages S359-S361]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                          POLICY AND POLITICS

  Mr. MURKOWSKI. Mr. President, another matter I bring before this body 
concerns the policy and politics related to mining law reform. As 
chairman of the Energy and Natural Resources Committee, I have been 
working with Senator Craig and other members of the committee to craft 
a mining bill that is realistic, that is responsive to change.
  Many know that the 1872 mining law has been a topic of debate in this 
body for many years. My good friend from Arkansas has spent many hours 
suggesting reform. The environmentalists continue to cry for reform. 
This year in an effort to enact a responsible reform we included 
several mining law provisions in the budget reconciliation package.
  What did we send to the President? Specifically, for the first time 
in history, I repeat, for the first time in history, we required miners 
to pay a 5-percent royalty. For the first time in history, miners were 
required to pay a fair market value for patented land, and for the 
first time in history patented lands used for nonmining purposes would 
revert back to the Federal Government. Patented land would have to be 
used for mining. If the land was used for non-mining purposes it would 
revert back to the Federal Government.
  For the first time in history we established an abandoned mines land 
fund to start the process of cleaning up the old abandoned mines and 
try and address abuses that had taken place in the past.
  We maintained the existing $100 per claim fee for 3 years and doubled 
the fees to $200 per fee starting in 1999. The Congressional Budget 
Office score over 7 years was approximately $157 million. This is 
significant reform.
  What happened to the proposal, Mr. President? The President vetoed 
the reconciliation package. What is the administration's proposal? 
Pretty hard to get a feel for what they have in mind. Secretary 
Babbitt, continues to demand mining law reform, yet he does not offer a 
specific solution. In fact, the administration has failed to submit a 
comprehensive mining law reform proposal this year.
  Now, let me read some comments made by the administration on mining 
law reform. ``This process has gone from distasteful to obscene. We 
support common sense reform that gets the taxpayers a fair return. 
Congress could and should act quickly to end this travesty.'' Secretary 
Babbitt, December 1, 1995.
  Second: ``The idea that we are backing off of mining reform, grazing 
law reform, is just nonsense. We are totally committed to changing the 
current policy.'' This was Vice President Gore, May 10, 1993.
  Further: ``Just recently, a law on the books since 1872 that I am 
trying hard to change, forced the government to sell minerals worth $1 
billion.'' President Clinton, November 4, 1995.
  By reading these quotes one would think the White House wants action 
on mining law reform. There is an old saying around here, ``actions 
speak louder than words.'' In this case I can assure my colleagues we 
have had no action on mining law reform from the administration this 
year. What we have had, Mr. President, is a lot of words. There is 
another old saying around here, ``What is good for the goose is good 
for the gander.'' I guess it depends on who is the goose and who is the 
gander.
  In today's Washington Times there is a very interesting and revealing 
editorial about Vice President Gore and Secretary Babbitt. Apparently 
the Vice President's family has an interest in mining property in 
Tennessee, a family interest I am sure--nothing wrong with a family 
having an investment in mining property. According to the Washington 
Times the Vice President or his family receives a 4-percent net royalty 
from minerals mined on their land.
  I find this interesting because Secretary Babbitt has been pushing 
for a gross royalty as high as 12.5 percent. As everybody knows, I 
support mining in the United States. I am pleased that the Vice 
President and his family are in the mining business. What troubles me 
is this administration continues to demand a gross royalty for miners 
while the Vice President receives a royalty based on net. I agree with 
the Washington Times, if a net royalty is good enough for the Vice 
President, why is it not good enough for the Secretary of Interior 
Babbitt?
  We can take this process one step further. The Vice President 
apparently supports exploration and development when it benefits his 
personal interest, yet he opposes it almost everywhere else, 
particularly on public land, and certainly in my State of Alaska. He 
opposes logging in the Tongass, he opposes exploration and development 
of the Arctic, including ANWR, for oil and gas.
  Mr. President, what is the difference between mining and oil and gas 
production? Both are producing something from Mother Earth, providing a 
return, reducing our dependence on imported resources. It appears to be 
a rather inconsistent policy, Mr. President.
  I think it is appropriate that the Washington Times has highlighted 
this because the Vice President is known as a champion of the 
environment. We appreciate his contribution to the environment, 
however, we are troubled by his strong opposition to oil and gas 
exploration, mining exploration, logging, grazing, and any other 
development of our natural resources. Yet here we have a personal 
interest reflected on the families' ownership of the lead and zinc mine 
that the Vice President and his family have in the State of Tennessee 
which has been highlighted in the Washington Times article.
  That is why I question, Mr. President, what is good for the goose is 
good for the gander.
  Mr. President, a good deal of this is about politics. The 
administration sees the environment as a political issue, and they will 
go to any means to exploit it. We have seen the President's remarks--
protect the environment. Many of the issues are not environmental. They 
are jobs issues. Are we going to have blue collar jobs in this country 
in our timber industry, in our mining industry, in our grazing 
industry, in our oil and gas industry? Or are 

[[Page S360]]
we going to continue to be dependent to an ever increasing degree on 
imports? We seem to be importing resources and exporting jobs.
  Currently, over 51 percent of our crude oil consumption comes from 
imported oil. The Secretary of Energy has just come out with a forecast 
that is truly alarming because it suggests that this is going to 
increase dramatically in the coming years.
  I note for the Record in the ``Inside Energy/with Federal Lands,'' of 
January 22, 1996, a statement from the Secretary of Energy Secretary 
O'Leary decrying the deficiency budget. She says an oil crisis is 
``imminent.'' That is a pretty strong statement.

       Energy Secretary Hazel O'Leary last week predicted that an 
     oil crisis is ``imminent,'' and called on Congress [this 
     body] to help prepare for it by shifting resources from 
     fossil energy r&d to energy efficiency and renewable energy 
     r&d.
       O'Leary, speaking to reporters Tuesday, reiterated concerns 
     about a possible oil crisis stated earlier in the day by 
     Joseph Romm, DOE's Acting Deputy Assistant Secretary for 
     Energy Efficiency and Renewable Energy. . . . 
       ``It's pretty clear there's going to be another oil crisis. 
     I would say, in the next 10 years,'' Romm said. . . . 
       O'Leary agreed with Romm, adding, ``with the trajectory 
     Congress has us on, we're not allowed to intervene with new 
     technology.''

  I find that very revealing. It further reads:

       ``Any interruption in the Persian Gulf or pipeline failures 
     could lead to supply disruptions.''
       Comparing the situation to the blizzard that afflicted East 
     Coast cities earlier this month, O'Leary said, ``I see crisis 
     imminent and something we better take care of.''
       Asked what DOE could do to avert it, O'Leary responded that 
     the department is ``beginning to pull away from the 
     traditional energy supply, shave some resources from 
     unnecessary national security programs and high-tech nuclear 
     programs, and put that effort to deploying energy efficiency 
     and renewable energy technologies. . . . 

  That sounds great. Some of it is attainable, but not all of it. There 
are not enough renewable energy resources out there. Yes, we can 
increase energy efficiency. But to suggest we are moving our focus over 
there from increasing energy supplies to alternatives is simply 
unrealistic, and anybody who is in the energy business, having to 
supply this country with energy, will tell you, ``It just ain't so.''
  ``Romm predicted that soon''--and this is the bottom line, and I will 
urge all my colleagues to reflect on it because one of these days it is 
going to come around and bite you, it will bite each one of us, because 
the public is going to say, Where was Congress? Why did Congress not do 
something to avert this crisis of curtailing a supply of crude oil into 
the United States?

       Romm predicted that soon the Persian Gulf region's 
     percentage of the oil market will surpass its highest level 
     ever, which was 67 percent in 1974. That percentage, he said, 
     ``likely will go over 70 percent.''

  There are solutions to the problem, and the three that are proposed 
by the Department of Energy suggest the following: Raise the price of 
oil, make it scarcer; add to the burden of the family budget, the 
Northeast corridor that depends on oil for heating. What is that going 
to do for inflation, Mr. President? They suggest one of the answers is 
raise the price of oil. Is that not a bureaucratic answer to a 
shortage? You raise the price. Put in place regulations to increase 
fuel economy--there is nothing wrong with that, but you can only go so 
far--and try to improve fuel efficiency technology. We have done that 
dramatically in our automobiles.

  The indication here is that the administration is taking all three of 
these approaches, but they blame Congress for opposing all three. We do 
not oppose all three but we are being realistic.
  It is interesting, spokesman Romm ``downplayed the effect that 
opening the Arctic National Wildlife Refuge to oil and gas drilling 
would have on reducing oil imports. More oil would be saved by 
implementing DOE's efficiency and renewable energy programs than would 
be generated by ANWR, he said,'' if it was opened.
  The inconsistency there, and what he does not tell you, is that 
Prudhoe Bay has been supplying this Nation with nearly 25 percent of 
its total crude oil production for the last 25 years. That field is in 
decline. As I have said, currently we are importing 51 percent of our 
total crude oil. As Prudhoe Bay declines, if we do not find more 
domestic reserves, we are simply going to import more. It is going to 
come into this country in foreign vessels, so we are not going to have 
our U.S. maritime fleet as we have currently in the movement of Alaskan 
oil which requires that all that oil be moved in U.S. tankers with U.S. 
crews.
  So here we have a situation where, as Prudhoe Bay declines, if we do 
not find more domestic oil, if we do not look for it in the most likely 
place where it is likely to be, and that is, the geologists tell us, in 
the Arctic, we are simply going to be exporting more of our dollars and 
more of our jobs overseas.
  We hear a lot about the deficit balance of payments. That means we 
spend more than other nations spend buying from us. Half of it is made 
up in the cost of imported oil. So I find it extraordinary at this time 
that we have a dire prediction that we are facing an oil crisis and the 
only alternative that we pursue is greater efficiency and renewable 
energy and do not prioritize increased domestic production.
  This administration is selling America short. America has the 
technology. America has the engineering know-how to develop oil 
reserves in those delicate areas and do it safely. We have proven that 
time and time again.
  The difficulty we have in my State of Alaska is we happen to be a new 
kid on the block. We have only been a State for 38 years. We are trying 
to develop our land patterns. The rest of the States did it 100 years 
ago, Virginia 200 years ago. Prudhoe Bay is the best oil field in the 
world. Endicott was the 10th largest producing field when it came on 
line. Now it is the seventh. The footprint is 56 acres. That is the 
technology we have in industry. If we are allowed to go into ANWR, it 
will generate $1.3 billion for the Federal Treasury resulting from 
those lease sales. Developing the 1002 area could provide nearly 
700,000 jobs during the life of the field throughout the country. We do 
not make pipe in Alaska. We do not make valves. We do not make all the 
seals, all the things that go into the development. We get these 
supplies throughout the United States and this means jobs. And the 
industry says they can do it in 2,000 acres.
  What does ANWR consist of? It consists of 19 million acres. Out of 
that 19 million, 8 million acres have been set aside as wilderness. The 
rest of it is in refuge, leaving 1.5 million that Congress set aside 
for determination to be made of whether to allow exploration. Out of 
that 1.5 million acres only 2,000 acres would see a footprint.
  Think of the jobs in this country. Think of the dollars generated. If 
we lose this opportunity, Mr. President, indeed our only alternative 
will be to increase oil imports of oil coming in foreign vessels and 
the export of U.S. jobs and the export of dollars.
  So, as we look at the situation in general, and this administrations 
attitude towards development of public lands, I think we have, indeed, 
a political situation. This administration sees these issues, and 
certainly the environmental community does, as causes--causes for 
membership, causes for more dollars coming in. Because the American 
people cannot go up and see Prudhoe Bay, see the advances that have 
been made in the Arctic, see what we have done to increase the caribou 
herds in the central Arctic that were 3,000 or 4,000, and are now over 
20,000.
  So, unfortunately, in their efforts to win political points, this 
Administration is destroying our natural resource industries. These 
industries have been significantly reduced--driving jobs overseas and 
increasing our balance of payments deficit.
  So, indeed, it is about politics--not policy. I hope my colleagues 
will see through the smokescreen.
  The editorial, which I ask unanimous consent be printed in the 
Record, is about the Vice President's mine, and his interest in that 
mine. I encourage my colleagues to read the editorial. If it is good 
enough for the Vice President, it ought to be good enough for the rest 
of the Nation's miners.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

               [From the Washington Times, Jan. 25, 1996]

                      Bruce Babbitt as Gold Digger

       Vice President Al Gore can afford to worry about whether 
     Earth's in the balance. He has a zinc mine at home in 
     Carthage, Tenn., that keeps his checkbook in balance. He gets 
     a 

[[Page S361]]
     $20,000 check every year based on a 4 percent net royalty on the value 
     of the minerals mined on the Gores' property.
       Now it may seen a little hypocritical for an 
     environmentalist like Mr. Gore to profit so handsomely from a 
     nasty old industry like mining. But the question for the 
     moment is, if the deal is good enough for Mr. Gore, why isn't 
     it good enough for Interior Secretary Bruce Babbitt.
       For months now, Mr. Babbitt and congressional Republicans 
     have been arguing over plans to reform the infamous 1872 
     Mining Law as part of the overall budget reconciliation 
     package. The law provides, among other things, that mining 
     companies can get title to government lands for as little as 
     $2.50 an acre and then mine the minerals without paying 
     royalties.
       That doesn't mean the government collects nothing from the 
     operation. Mining companies pay income taxes, company 
     shareholders pay taxes on dividends, and company employees 
     pay taxes on their wages. Such taxes make the government a 
     partner in almost any business enterprise, including mining.
       Mr. Babbitt, however, seems to want a gross royalty of 4 
     percent or higher, a demand to which even the formerly 
     Democrat-controlled Congress would not agree. One says 
     ``seems'' because it's not clear exactly what percentage he 
     wants. An Interior Department spokesman this week could not 
     provide a figure.
       Republicans propose to make companies pay a 5 percent net 
     royalty as well the fair-market value of the land. The 5 
     percent figure happens to be a percentage point higher than 
     what Mr. Gore gets, but it's not good enough for Mr. Babbitt. 
     A net royalty is ``riddled with loopholes,'' he says. Mr. 
     Babbitt means the kind of loopholes that allow business to 
     deduct the cost of their expenses before paying taxes.
       Again, the business dealings of the Gore family are 
     instructive here. So eager were the Gores to capitalize on 
     the assets of Mother Earth that they actually sued the 
     company mining the family farm for cheating it out of royalty 
     payments. It seems that although the company had paid 
     royalties on zinc mined there, it had failed to pay 
     appropriate royalties on the germanium ore it dug up. 
     Arbitrators sided with the Gores.
       ``My attorney proposed an accounting methodology,'' the 
     vice president's father said in 1992, ``which the arbitrators 
     accepted, to determine the value of germanium produced: Take 
     value of germanium produced from the ore and deduct refining 
     costs, insurance, freight and other charges. That's not 
     difficult accounting.'' No it's not.
       It can cost millions, perhaps hundreds of millions of 
     dollars, to discover, explore and ultimately develop a mine. 
     Refusal to permit companies the same kind of deductions on 
     government lands that the Gores agreed to on their land is 
     simply another way to shut down mining there. That may be 
     what Mr. Babbitt wants, but employees and towns and schools 
     who directly or indirectly depend on mining jobs don't have 
     the luxury of handouts from Washington.
       There's plenty of ``gold'' to be had from the Republican 
     mining reform proposal. It would raise an estimated $157 
     million in federal revenues. But Mr. Babbitt needn't take 
     Republicans' word when it comes to mining income. All he has 
     to do is ask the Gores.

  Mr. MURKOWSKI. Mr. President, I thank the Chair. I wish the President 
a good day.
  I see another of my colleagues on the floor. I yield the floor.
  The PRESIDING OFFICER (Mr. Brown). Who seeks recognition?
  The Senator from Utah is recognized.

                          ____________________