[Congressional Record Volume 146, Number 19 (Monday, February 28, 2000)]
[Senate]
[Pages S846-S847]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                             ENERGY PRICES

  Mr. GRASSLEY. Mr. President, presently we are experiencing the 
country's highest petroleum prices this decade. And there is every 
indication the price is going to go higher and higher. I think we need 
to start looking at why and not look at where to place blame. I think 
we have to find a common sense solution to the situation because it's 
not going to get any better in the short term even if OPEC decides to 
pump more oil and ship more oil to the United States. The fact of the 
matter is that regardless whether OPEC complies with our wishes there 
are still two reasons we are bound to face a similar dilemma again in 
the future.
  The No. 1 reason is that the United States and other energy-consuming 
nations are going to continue to consume a greater amount of gasoline 
and petroleum products over the next several decades. The demand is 
going to increase.
  The second reason is that as long as OPEC remains a powerful cartel 
willing to violate the principles of a free marketplace and continue 
its stranglehold on the production of oil, it will be able to radically 
effect our economy and financial stability.
  As I look at how this administration is responding to the high price 
of oil, all I can see is that Secretary of Energy Richardson has been 
dispatched to the various oil-producing nations. The administration in 
a sense is having the Secretary get down on his knees and beg for OPEC 
nations to produce more oil. Even if he is successful--some indications 
are that he might be to the tune of 1 million or 1\1/2\ million 
barrels--it is going to be another 60 days before that oil makes any 
impact on the price of gasoline at the pump in my State of Iowa or 
anyplace in the United States. Regardless of whether he is successful 
or not, this is a pretty poor energy policy.
  Every time the price of oil gets so high that administration sends 
the Secretary of Energy around to beg for more oil to be produced, we 
ought to be looking at what we can do to be energy independent. This 
sort of extreme energy policy that President Clinton has seemingly 
implemented is gouging the consumers of America.
  One example of something the President could do right now would be to 
develop greater reliance upon alternative energy and renewable sources. 
The President should be relying upon the ethanol and other renewable 
fuels instead of the ability of his Energy Secretary to be persuasive.
  I am not only speaking for the economy of my State when I make this 
point about ethanol. I am talking about all renewable fuels. Ethanol is 
one of those renewable fuels. The reason I continue to hound the 
administration about ethanol is that right now the Environmental 
Protection Agency has an opportunity, if the President would bring it 
to their attention--and I called upon him in a letter last year to do 
this--to eliminate MTBE from gasoline nationwide and replace it with 
ethanol.
  MTBE, a nonrenewable source of oxygenated fuel which is a competitor 
to ethanol, is already documented as poisoning water and has been 
outlawed in the State of California. The EPA should make the decision 
that MTBE ought to be outlawed in all 50 States, as the Governor of 
California has decided to do in the State of California. This action 
would encourage the production of ethanol and fill the void which MTBE 
has left in California.
  The amount of ethanol that could be marketed in California is equal 
to the use of ethanol in all 50 States right now. The President, in 
making that decision, would be able to not only continue to use 
oxygenated fuel to clean up the air, he could also help agriculture, 
create new jobs, and make us less dependent upon foreign sources of 
oil, which strengthens our economy and national security. Obviously, 
since one-third of our trade deficit comes from the importation of oil, 
he would also reduce our trade deficit by relying on renewable fuels. 
But the most important aspect is that to the extent which we rely on 
domestically produced renewable sources of energy, we would not be 
forced to plead with OPEC every time they meet and decide they are 
going to gouge the American consumer.

  Just the fact that the members of OPEC, many being Arab nations, 
agreed to reduce production and dramatically increase our cost bothers 
me tremendously. Is this how they show their respect for the Americans 
who shed their blood in the Persian Gulf war so that the region would 
not be dominated by Saddam Hussein? This surely is true of Kuwait, the 
third leading exporter of oil in the world. Kuwait ought to show a 
little sense of gratitude to the American military and American 
taxpayers for saving them from that sort of dominance. But this only 
goes to show me we are actually dealing with a domestic problem. We 
seemingly cannot force OPEC to act reasonable, because if these nations 
want to continue their monopolistic practice, unless we are willing to 
take retaliatory action, we are going to be beholding to them. 
Consequently, this extreme policy of having no domestic policy on 
energy is devastating the consumers of America. We need to have that 
reliance upon alternative fuels.
  Another glaring problem with the Administration's energy policy is 
their policy has reduced the domestic production of energy, oil, 
natural gas, et cetera, by limiting the areas in the United States 
where exploration can take place.
  If they had anticipated $30 oil, I don't think they would have 
followed that policy. They had other thoughts in mind when they adopted 
that policy and restricted the exploration of oil. Consequently, they 
have put the United States in a position where we have not had much 
drilling going on in the continental U.S. or offshore. Now we are 
paying the price.
  In addition, there is a lot of regulatory red tape involved with the 
Federal Energy Regulatory Commission. One of the pipeline companies put 
in an application to build a pipeline to the Northeast. The Federal 
Energy Regulatory Commission put so many conditions upon the building 
of that pipeline, it became too costly and the pipeline company decided 
not to build.
  If one wonders why the price is $2 a gallon for heating oil in New 
England--when a year ago it was only about 60 cents--it is because of a 
regulatory policy that makes it almost impossible for people who are 
willing to invest to derive economic benefit from their investment.
  We ought to look at some of the regulations of this administration 
that tend to discourage exploration, that prohibit exploration, or that 
have made it very difficult to deliver the product from the refineries 
to the consumers.
  OPEC's attempt to drive up the price of oil, at great cost to the US 
consumer, is causing economic instability which also serves to injure 
our national security. The United States has long been the locomotive 
preserving

[[Page S847]]

peace around the world and when we are in jeopardy, peace is in 
jeopardy.
  The concept of world peace promoted by the US has led to an era of 
trying to free up trade internationally through the World Trade 
Organization. There are countries in OPEC who want to belong to the 
World Trade Organization. By simultaneously being a member of the 
petroleum exporting countries, and being a part of that organization, 
their whole approach to determining price is antithetical to the free 
trade principles of the World Trade Organization. I don't think we 
ought to be supportive of OPEC nations joining the World Trade 
Organization if they don't want to follow the principles of free trade 
established within the WTO, which are contrary to OPEC's recent 
monopolistic action.
  There is also $415 million of the taxpayers' money that the 
administration hopes to provide to some of the OPEC nations in the form 
of foreign aid. While we have traditionally done this for three or four 
decades, should we continue to give taxpayers' money, paid for by 
working men and women in this country, to the very same countries that 
have imposed egregious oil prices upon those same men and women? And at 
the same time encourage those consumers and working people of America, 
every day when they go to work, to pay more taxes into the Federal 
Treasury even though the price of gasoline continues to increase?
  There is a third lever we can use against some of these countries. 
Mr. President, 20 percent of all the money for International Monetary 
Fund loans comes from the American taxpayer. We should encourage the 
International Monetary Fund to review the anticompetitive energy policy 
exhibited by foreign states as a factor when considering approval for 
loans. At the very least our 20% contribution should be conditioned on 
this criteria. We should not stand by while the same countries who 
gouge American taxpayers benefit from our 20 percent contribution.
  I hope we use all the leverage we can against OPEC, but the only real 
solution is ultimately less reliance upon imported sources of oil and 
more on domestic production and/or renewable fuels.
  I yield the floor and 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. LOTT. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Coverdell). Without objection, it is so 
ordered.

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