[Congressional Record Volume 144, Number 11 (Thursday, February 12, 1998)]
[Senate]
[Pages S728-S729]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




    EXTENDING PROGRAMS UNDER THE ENERGY POLICY AND CONSERVATION ACT

  Mr. COVERDELL. Mr. President, I ask the Chair lay before the Senate a 
message from the House of Representatives on the bill (H.R. 2472) to 
extend certain programs under the Energy Policy and Conservation Act.
  The PRESIDING OFFICER laid before the Senate the following message 
from the House of Representatives:

       Resolved, That the House agree to the amendment of the 
     Senate to the bill (H.R. 2472) entitled ``An Act to extend 
     certain programs under the Energy Policy and Conservation 
     Act.'', with the following amendment:
       In lieu of the matter proposed to be inserted by the 
     Senate, insert the following:

     SECTION 1. ENERGY POLICY AND CONSERVATION ACT AMENDMENTS.

       The Energy Policy and Conservation Act is amended--
       (1) in section 166 (42 U.S.C. 6246) by striking ``1997'' 
     and inserting in lieu thereof ``1998'';
       (2) in section 181 (42 U.S.C. 6251) by striking ``September 
     30, 1997'' both places it appears and inserting in lieu 
     thereof ``September 1, 1998''; and
       (3) in section 281 (42 U.S.C. 6285) by striking ``September 
     30, 1997'' both places it appears and inserting in lieu 
     thereof ``September 1, 1998''.


                           Amendment No. 1645

   (Purpose: To extend certain programs under the Energy Policy and 
               Conservation Act, and for other purposes)

  Mr. COVERDELL. Mr. President, I send an amendment to the desk on 
behalf of Senator Murkowski and ask for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The legislative clerk read as follows:

       The Senator from Georgia [Mr. Coverdell], for Mr. 
     Murkowski, proposes an amendment numbered 1645.

  Mr. COVERDELL. Mr. President, I ask unanimous consent that reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

       In lieu of the matter proposed to be inserted, insert the 
     following:

     ``SECTION 1. ENERGY POLICY AND CONSERVATION ACT AMENDMENTS.

       ``The Energy Policy and Conservation Act is amended--
       ``(1) in section 166 (42 U.S.C. 6246) by striking `1997' 
     and inserting in lieu thereof `1999';
       ``(2) in section 181 (42 U.S.C. 6251) by striking `1997' 
     both places it appears and inserting in lieu thereof `1999';
       ``(3) by striking `section 252(l)(1)' in section 251(e)(1) 
     (42 U.S.C. 627(e)(1)) and inserting `section 252(k)(1)';
       ``(4) in section 42 U.S.C. 6272)--
       ``(A) in subsection (a)(1) and (b), by striking `allocation 
     and information provisions of the international energy 
     program' and inserting `international emergency response 
     provisions';
       ``(B) in subsection (d)(3), by striking `known' and 
     inserting after `circumstances' `known at the time of 
     approval';
       ``(C) in subsection (e)(2) by striking `shall' and 
     inserting `may';
       ``(D) in subsection (f)(2) by inserting `voluntary 
     agreement or' after `approved';
       ``(E) by amending subsection (h) to read as follows--
       `` `(h) Section 708 of the Defense Production Act of 1950 
     shall not apply to any agreement or action undertaken for the 
     purpose of developing or carrying out--
       `` `(1) the international energy program, or
       `` `(2) any allocation, price control, or similar program 
     with respect to petroleum products under this Act.';
       `` `(F) in subsection (k) by amending paragraph (2) to read 
     as follows--
       `` `(2) The term `international emergency response 
     provisions' means--
       `` `(A) the provisions of the international energy program 
     which relate to international allocation of petroleum 
     products and to the information system provided in the 
     program, and
       `` `(B) the emergency response measures adopted by the 
     Governing Board of the International Energy Agency (including 
     the July 11, 1984, decision by the Governing Board on `Stocks 
     and Supply Disruptions') for--
       `` `(i) the coordination drawdown of stocks of petroleum 
     products held or controlled by governments; and
       `` `(ii) complementary actions taken by governments during 
     an existing or impending international oil supply 
     disruption.'; and
       `` `(G) by amending subsection (l) to read as follows--
       `` `(l) The antitrust defense under subsection (f) shall 
     not extend to the international allocation of petroleum 
     products allocation is required by chapters III and IV of the 
     international energy program during an international energy 
     supply emergency.'; and
       ``(5) in section 281 (42 U.S.C. 6285) by striking `1997' 
     both places it appears and inserting in lieu thereof `1999'.
       ``(6) at the end of section 154 by adding the following new 
     subsection:
       `` `(f)(1) The drawdown and distribution of petroleum 
     products from Strategic Petroleum Reserve is authorized only 
     under section 161 of this Act, and drawdown and distribution 
     of petroleum products for purposes other than those described 
     in section 161 of this Act shall be prohibited.
       `` `(2) In the Secretary's annual budget submission, the 
     Secretary shall request funds for acquisition, 
     transportation, and injection of petroleum products for 
     storage in the Reserve. If no request for funds is made, the 
     Secretary shall provide a written explanation of the reason 
     therefore.'.''

  Mr. MURKOWSKI. Mr. President, this bill should have been the easiest 
thing we did this Congress. The Senate passed legislation on this issue 
by unanimous consent twice last year. This bill contains nothing less 
than our Nation's energy security insurance policy. This bill 
authorizes two vital energy security measures: the Strategic Petroleum 
Reserve and U.S. participation in the International Energy Agency.
  Both of these authorities have expired. At this moment, sabers are 
rattling in the Gulf. Very soon, there may be more than sabers 
rattling. As I speak, more American troops are headed to the Middle 
East. We owe it to our soldiers, and the Nation's civilian consumers, 
to do everything we can to ensure that our energy insurance policy is 
in effect.
  The House bill before us, H.R. 2472, would provide a simple extension 
of these authorities through September of this year. However, this is 
not enough to ensure our Nation's energy security. We must change the 
antitrust exemption in EPCA to comply with current IEA policy. The IEA 
changed its emergency response policy at our request, switching from 
command-and-control measures to more market-oriented coordinated 
stockdraw procedures. However, our laws haven't kept up.
  Right now, our U.S. oil companies don't have any assurance that their 
attempts to cooperate with the IEA and our government in a crises won't 
be a violation of antitrust laws. The IEA's efforts to respond to a 
crisis will be critically impaired if it can't coordinate with U.S. oil 
companies. Our oil companies want to cooperate with our government and 
the IEA and strongly support this amendment.
  We also need to amend H.R. 2472 to extend the authorization beyond 
September. For every year in recent memory, we have authorized this Act 
on a year-to-year basis. Every year, we face a potential crises when 
these authorities go unrenewed until the very end of the Congress. The 
provisions of this bill are not controversial. However, there are those 
who see any important bill as leverage.
  This year, we are on the edge of a real crises. We have ongoing 
military action in the Gulf, and no clear authority to respond to oil 
supply shortages. Playing political games with this bill has always 
been irresponsible; now it is downright dangerous. In the future, the 
only way to avoid the annual crisis is to renew EPCA for more than one 
year. I am disappointed that we can't do that now. But for now, we must 
avert the immediate crisis.
  I have tried to address concerns about the future of the SPR. Like 
many of you, I am dismayed by the recent use of the SPR as a ``piggy 
bank''. In 1995, DOE proposed the sale of oil to pay for repairs and 
upkeep, opening the floodgates to continued sales of oil for budget-
balancing purposes. So far, we've lost the American taxpayer over half 
a billion dollars. Buying high and selling low never makes sense. We're 
like the man in the old joke who was buying high and selling low who 
claimed that ``he would make it up on volume.'' I am pleased that 
President's budget does not propose oil sales. I hope we have broken 
the habit of selling SPR oil forever.
  We have already invested a great deal of taxpayer dollars in the SPR. 
We proved during the Persian Gulf War that the stabilizing effect of an 
SPR drawdown far outstrips the volume of oil sold. The simple fact that 
the SPR is available can have a calming influence on oil markets. The 
oil is there, waiting to dampen the effects of an energy emergency on 
our economy. However, if we don't ensure that there is

[[Page S729]]

authority to use the oil when we need it, we will have thrown those tax 
dollars away. So, the first step is to ensure that our emergency oil 
reserves are fully authorized and available.
  We are talking about people's lives and jobs. The least we can do is 
stop holding this measure hostage to political ambition. I urge my 
colleagues to support the adoption of this amendment and immediate 
passage of H.R. 2472. I also urge our colleagues in the other body to 
adopt this measure before we go home for recess during this dangerous 
and uncertain time.
  Mr. COVERDELL. Mr. President, I ask unanimous consent that the 
amendment be agreed to.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment (No. 1645) was agreed to.
  Mr. BINGAMAN. Mr. President, before we engage in a significant 
military confrontation in the Persian Gulf, the Senate should 
thoroughly examine the reasons for, and the likely outcomes of, such 
action. Many of our colleagues have begun to do so in speeches on this 
floor over the past several days. I look forward to a continuation of 
this vigorous debate when the Majority Leader brings forward his 
resolution on this topic.
  I believe that we must also take concrete action today, by amending 
and passing the bill that is now before us, to ensure that our nation 
and our economy are fully prepared to deal with any adverse effect that 
military action in the Gulf might have on the world's supply of oil 
from that region.
  About 65 percent of the world's known oil reserves lie in the Persian 
Gulf region. That region supplies one-quarter of the oil that the world 
now consumes. Although Persian Gulf oil is responsible for a smaller 
fraction of U.S. oil consumption, world oil markets are highly 
interconnected. Any threat to the continued supply of Persian Gulf oil 
at current rates of production will quickly translate into volatile, 
higher prices here in the United States.
  One can see this in the historical record. After the Iraqi invasion 
of Kuwait, world oil prices rose sharply, and American consumers paid 
accordingly. Between August 1, 1990 and December 1, 1990, U.S. 
consumers spent $21 billion more for crude oil and petroleum products 
than would have been spent absent that Middle East crisis. Events in 
Iraq continue to drive world oil markets. On November 13, 1997, the day 
that Saddam Hussein intensified the current crisis by ejecting U.S. 
inspectors from Iraq, the world price of oil rose by 20 cents per 
barrel. The last time we waged war on Saddam Hussein, our strategy 
included not only amassing multilateral military might in the Persian 
Gulf, but also minimizing the conflict's economic impact at home. We 
appear headed for another major military confrontation in the Gulf, but 
thanks to inaction by the other body, the second part of our 1991 
strategy is currently not even an option.

  President Bush had two tools at his disposal to reduce the economic 
effects of a military conflict in the Persian Gulf. The first was an 
economic alliance among the world's major oil-consuming countries, the 
independent International Energy Agency (or IEA). The United States 
formed the IEA after the Arab oil embargo of 1973, so that we would 
never again experience the market chaos, including gas station lines, 
that occurred back then. The initial IEA approach for dealing with oil 
supply disruptions was through mandatory allocations--having an 
international committee decide which nation would get how much oil.
  The world has changed since then. 1970s-style command-and-control 
supply allocations won't work today. Instead, the United States has 
taken the lead in designing a flexible, market-friendly response to oil 
supply disruptions. The new approach relies on a coordinated drawdown 
of worldwide oil supplies. President Bush pioneered such a system 
during the 1991 Gulf War, although the oil companies that cooperated at 
that time placed themselves in legal jeopardy for having done so. The 
United States, with the full backing of our domestic oil industry, has 
refined this concept and convinced all of the other countries in the 
IEA to adopt it. But without passage of a law to facilitate the sharing 
of information about oil supplies in an emergency, the mechanism cannot 
be used.
  If the world encounters oil market instability, the IEA will need to 
know about the location and movement of oil supplies in order to 
coordinate a response. Most of these oil supplies are privately held, 
so only oil companies have the needed information. Sharing such 
information is normally forbidden under U.S. antitrust laws, which 
apply to the world's major oil companies by virtue of their operation 
in this country. But in a genuine emergency, the national interest in 
the free flow of oil is far greater than the interest in keeping oil 
companies from sharing inventory information. Accordingly, there is 
already an emergency antitrust exemption in law that allows oil 
companies to share information with the IEA, but only to implement the 
outdated command-and-control response to an oil crisis, and only if the 
oil supply disruption is of mammoth proportions. Both the Bush and 
Clinton Administrations have sought to make this antitrust exemption 
apply to the types of oil crises we are actually likely to see, and to 
coordinated emergency responses other than mandatory worldwide oil 
supply allocations. This revised antitrust exemption would apply only 
when information sharing was expressly requested by the U.S. 
government. This is what we need to enact into law, now. Without these 
changes, the United States could find itself in the absurd position of 
being unable to use the international oil emergency response system 
that we ourselves designed.
  The second tool that President Bush had at his disposal in 1991 was 
the nation's Strategic Petroleum Reserve (SPR)--586 million barrels of 
crude oil, stored in underground salt caverns at five sites along the 
coast of Texas and Louisiana. At the beginning of Operation Desert 
Storm, President Bush ordered the drawdown and sale of oil from the 
SPR. This had a powerful calming influence on world oil markets. 
Incredible as it may seem, such a use of the SPR by President Clinton 
would be illegal today. The United States still owns 563 million 
barrels of crude oil in underground salt caverns, but the President's 
authority to sell it in response to an emergency has lapsed.
  How could we be so vulnerable to such clear and present dangers? I 
regret that once again, in the immortal words of Pogo, we have met the 
enemy, and he is us. The Administration has beseeched the Congress, for 
years now, to update the legal framework governing the IEA and to renew 
its authority to operate the SPR. The Senate has repeatedly and 
unanimously passed such legislation. The other body has refused to act, 
for reasons that are very difficult to understand.
  With a major military confrontation in the Persian Gulf imminent, 
further delay is inexcuseable. We cannot allow our economy to be 
needlessly vulnerable to, say, a terrorist attack on Middle East oil 
infrastructure. I applaud the Chairman of the Senate Committee on 
Energy and Natural Resources for his persistence in trying to resolve 
this problem. I fully support his amendment to H.R. 2472, which 
provides the President with all the tools he needs to respond to an oil 
supply disruption. In the current situation, to do any less would be 
irresponsible. I hope that the other body now acts quickly on this 
matter. If the House has concerns, let us quickly convene a joint 
House-Senate conference to resolve them. If not, then let this bill 
become law.
  The PRESIDING OFFICER, Mr. President, I move that the Senate insist 
on its amendment to the House, the Senate request a conference with the 
House, and finally, that any statements relating to the measure appear 
at this point in the Record.
  The motion was agreed to.

                          ____________________