[Congressional Record Volume 146, Number 25 (Wednesday, March 8, 2000)]
[Senate]
[Pages S1316-S1318]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. MURKOWSKI (for himself, Mr. Akaka, Mr. Bennett, Mr. Bond, 
        Mr. Bunning, Mr. Breaux, Mr. Burns, Mr. Campbell, Mr. 
        Coverdell, Mr. Craig, Mr. Crapo, Mr. Domenici, Mr. Enzi, Mr. 
        Gramm, Mr. Grassley, Mr. Hatch, Mr. Helms, Mr. Hutchinson, Mrs. 
        Hutchison, Mr. Inouye, Mr. Inhofe, Mr. Kyl, Mr. Lott, Mr. 
        McConnell, Mr. Nickles, Mr. Sessions, Mr. Shelby, Mr. Stevens, 
        Mr. Thomas, Mr. Thurmond, Mr. Voinovich, Mr. Warner, Mr. 
        Abraham, Mr. Hagel):
  S. 2214. A bill to establish and implement a competitive oil and gas 
leasing program that will result in an environmentally sound and job 
creating program for the exploration, development, and production of 
the oil and gas resources of the Coastal Plain, and for other purposes; 
to the Committee on Energy and Natural Resources.


   legislation to establish and implement a competitive oil and gas 
                            leasing program

  Mr. MURKOWSKI. Mr. President, let me advise you, yesterday at the 
close of business, the posted price of oil was $34.13 a barrel. The Dow 
was down 374 points. The share price of one company, Procter & Gamble, 
plunged 30 percent as a consequence of their third quarter profits 
falling off because of the high cost of oil.
  We have a crisis in this country. Today, I rise to introduce 
legislation on behalf of myself and 33 other Members that I believe, 
and they believe with me, offers the United States its best chance to 
reduce our dependence on foreign oil; that is, by producing more oil 
domestically.
  We have seen the oil price rise in the last year from roughly $10 to 
over $30 a barrel. That is a pretty dramatic increase. There is an 
inflation factor associated with this. While we have not really 
addressed it, it is fair to say that for every $10 increase in the 
price of a barrel of oil, there is an inflation factor of about a half 
of 1 percent. Alan Greenspan has been quoted as saying, ``I have never 
seen a price spike on oil that I have ever ignored.''
  So we are now in a situation where we have seen heating oil prices in 
the Northeast reach historic highs this winter, nearly $2 a gallon. We 
are seeing a surcharge on our airline tickets of $20. You do not see it 
at the counter where you buy your ticket; of course not. You do not 
know what the price of a ticket generally is because they have so many 
prices between point A and point B. But it is there. It is $20. The 
American public ought to be questioning that. They at least ought to be 
aware of it, if they do not question it.
  Regarding diesel prices, we saw the truckers come to Washington, DC. 
Diesel prices are the highest since the Department of Energy began 
tracking.
  We are in a crisis. We have to do something about it. There are many 
factors that contribute to the price structure of each particular fuel, 
but underlying all of these, without a doubt, is our reliance on 
imported crude oil. We are 56-percent dependent on foreign crude oil. 
The current reserves indicate we are consuming twice as much crude in 
the U.S., as we are able to produce domestically.
  I had the professional staff of the Energy and Natural Resources 
Committee trying to do a forecast, with the Department of Energy--we 
have a net decline because we are using more crude reserves than we are 
bringing in--about what time the bear goes through the buckwheat; that 
is, when perhaps we are looking at $2 a gallon, $2.50 a gallon for 
gasoline. Relief is not in sight as yet.
  The worst part of it is this did not come without some warning. Those 
of us from oil-producing States, my State of Alaska, the overthrust 
belt--Louisiana Senators, Texas, Mississippi, other areas, Colorado, 
Oklahoma, Utah, Wyoming--have been predicting the dangers of increased 
dependence on imported oil. The administration, Department of Energy, 
has forecast by the years 2015 to 2020 we will be approaching 65-
percent dependence on imported oil. The problem with that is it looks 
now as if that is a goal rather than a forecast. They are not taking 
any steps to relieve us of that dependency.
  The facts, I think, are staggering. If you look at what is happening 
in this country, domestic production has decreased 17 percent since 
1990. That is a fact. Consumption, however, has increased 14 percent. I 
have a chart to show this. It shows, I think very clearly, what is 
happening in this country.
  We are seeing the demand, and that is the black line here, going, in 
1990, from 16 million to 19 million barrels per day. So what is 
happening is we see a constant demand going up. Then what happens on 
the offset? Where is the crude production? The crude production is 
declining, from 7.4 to a domestic production of 5.9.
  This reflects the reality of what has been happening. This should not 
come as a great surprise to the Department of Energy, the Clinton 
administration, or the Congress of the United States. This has been 
coming for some time.

  In one year, total petroleum net imports rose 7.6 percent. So, as we 
look for relief, we look towards imports. Now we are 56-percent 
dependent. What does it mean? It means we do not learn from history. We 
do not learn much. In 1973, when we had the Arab oil embargo--some 
people remember the gasoline lines around the block--at that time, we 
were 37-percent dependent on imported oil. We said it would never 
happen again. We said we would create a Strategic Petroleum Reserve to 
ensure we were not held hostage.
  What did other countries do? Different things. The French, for 
example, said they would never be held hostage by the Mideast again, 
and they departed on a nuclear program so that today the French are 
over 90-percent dependent on nuclear energy. We do not have that 
situation in the United States. I simply point that out to direct 
attention to what some countries have done with their energy policy 
vis-a-vis others. What we have done is very little.
  We fought a war over in the Mideast, didn't we? We fought that war, 
Desert Storm, to keep Saddam Hussein from invading Kuwait and taking 
over those oil fields. During Desert Storm, we were 46-percent 
dependent. Today we are held hostage to aggressive OPEC pricing 
policies. What has our response been?
  Secretary of Energy Richardson went to the Mideast. Some suggest it 
was the greatest hostage recovery effort since the Carter 
administration sent the military to Tehran. He went there and said: We 
have an emergency in the United States. We have a crisis. We need you 
to produce more oil.
  Do you know what they told him? They looked him in the eye and they 
said: We are going to have a meeting March 27 and we will address our 
policies then.
  That is hardly responding to an emergency, particularly at a time 
when he reminded them of how quickly

[[Page S1317]]

we responded to the emergency when Saddam Hussein was about to invade 
Kuwait. Nevertheless, that is reality, that is business, that is the 
attitude of OPEC. This time the hostage is our country, our energy 
security--and the rescue mission is flawed.
  We can look to the non-OPEC countries for relief. We can look to 
Venezuela. We can look to Mexico.
  I happened to have a little feedback from Mexico. We went down to 
Mexico. The Secretary met with them and said we need you to produce 
more oil. There was a message, and that message that came back from 
Mexico is: Where was the United States when the Mexican economy was in 
the tank? When oil was selling at $11 a barrel, were you, the United 
States, doing anything to help out Mexico and its economy? Clearly, we 
were not. We were very happy to get $11, $12 oil.
  So somebody said: If the shoe fits, wear it.
  We have been stiffed. We have been poked in the eye because OPEC is 
saying: Ho, ho, the United States--do you know what the United States 
could do, if they wanted to do a favor for the consumer? They can waive 
all their taxes, waive all the highway taxes, waive all the State 
taxes. That will bring the price down.
  It is an interesting suggestion. Obviously, it is unacceptable to us 
and an indignity, but I think it is sobering to recognize that is their 
proposed answer.
  The irony that Iraq has emerged as the fastest growing source of U.S. 
oil imports is something beyond comprehension. We need to question 
where we are placing the Nation's energy security. Are we placing it 
with Saddam Hussein? That is where our imported oil is coming.
  Our own Government agencies question this policy. Isn't that 
interesting? They question the policy they make.
  Here is the statement on a chart. This is at a time when the 
administration is suppressing domestic production. This is from the 
Minerals Management Service:

       Much of the imported oil that the United States depends on 
     comes from areas of the world that may be hostile to the 
     interest of the United States and where political instability 
     is a concern.

  That speaks for itself. The Mideast is unstable. We see our friends 
in Libya, Iran, Iraq, and now the relationship between Iran and Iraq 
seems to be closer than it ever was. We are caught in the middle.
  In the meantime, What has happened to our domestic industry? It is 
interesting. We have seen in the oil industry a 28-percent decline in 
jobs, a 77-percent decline in oil rigs that are used in exploration, 
and we have seen a 7-percent decline in reserves. That is the largest 
decline in 53 years.
  This is what we are doing, particularly under this administration, 
relative to encouraging domestic exploration and drilling: Rigs 
drilling for oil are down from 657 in 1990 to roughly 153 in 2000.
  What has our energy policy been under the Clinton-Gore 
administration? Coal: Highly dependent on coal. But EPA filed a lawsuit 
against eight electric utilities with coal-fired powerplants. The 
lawsuit says these plants have been allowed to extend beyond their 
lifespan, and the management says they are trying to maintain these 
plants according to the permitting process and not necessarily 
extending their life.
  One gets a different point of view, but clearly there is going to be 
employment for a lot of attorneys.
  Hydro: Secretary Babbitt wants to be the first Secretary to tear down 
dams. It is estimated by my colleagues from the Pacific Northwest that 
if the dams go down, we are going to see roughly 2,000 trucks per day 
on the highways to replace the barge service, particularly in Oregon, 
and the environmental air quality and congestion issues will be 
significant.
  Nuclear power: The administration opposes this. They do not want to 
address what they are going to do with nuclear waste on their watch.
  Natural gas: It is the fuel of the future, but they have closed so 
much of the public lands; 60 percent of the overthrust belt is off 
limits in the Rocky Mountain area, which is Colorado, Wyoming, Montana, 
Utah, New Mexico, North Dakota, and South Dakota. They estimate there 
is 137 trillion cubic feet of gas out there. And as a consequence, but 
they have put 60 percent of the area off limits.
  Let's look at one more thing. If we look at our reliance on natural 
gas and oil, we recognize that we are not going to change over the next 
20 or 25 years, as much as we would like to have greater dependence on 
alternative energy sources. The realization is the technology is not 
there. We have to continue to encourage them. The real answer is long-
term and short-term relief. There is some short-term potential relief 
in repealing the Clinton-Gore gas tax hike. With prices at the pump 
steadily rising, one thing we can do is suspend the 4.3 cent-per-gallon 
Clinton-Gore gas tax. That came in 1993. The Democratic Congress, 
without a single Republican vote, adopted the Clinton-Gore gas tax as 
part of one of the largest tax increases in history.

  That tax has cost the American motorist $43 billion over the last 6 
years. We can suspend this tax until the end of the year when prices 
may be stabilized, and we can make sure the highway trust fund is 
reimbursed for any lost revenue so we can ensure all highway 
construction authorized will be constructed.
  It is interesting to note that when Clinton-Gore passed this tax, it 
was not used for highway construction; it was used for Government 
spending, until Republicans took over Congress and authorized the tax 
to be restored for highway construction.
  Long-term fixes: We need to stimulate the domestic oil and gas 
industry. We need to get in the overthrust belt. We need the Department 
of Interior to open up these areas, and we need a long-term fix. It 
involves legislation that I am introducing to authorize the opening of 
the Coastal Plain.
  I will show my colleagues what I am talking about. This is an area 
that lies in the northeast corner of Alaska, north of the Arctic 
Circle, 1,300 miles south of the North Pole. The pipeline of Prudhoe 
Bay over the last 30 years has produced 25 percent of the total crude 
oil produced in this country.
  I will show another chart because we have to put this area in 
perspective, otherwise you lose it.
  The Arctic National Wildlife Refuge consists of 19 million acres in 
its entirety. We have set aside in wilderness permanently 8 million 
acres. We set another 9.5 million acres in refuge, permanently--no 
drilling, nothing in those two areas. But Congress set aside what they 
call the 1002 area, the Coastal Plain, for a determination of whether 
or not to open it for competitive oil and gas bids. The Eskimo people 
of Kaktovik, a little village there, support exploration in this area. 
The geologists say it is the most likely area for a significant find.
  We propose a competitive lease sale. We propose only exploration in 
the wintertime, that way we will make no footprint on the ground. There 
is roughly 1.5 million acres on the Coastal Plain. The industry says if 
they are allowed to develop it with the technology they have, they will 
use less than 2,000 acres in the entirety of the 1.5 million acres. 
That is the kind of footprint the technology gives us.
  As we look at national energy security, we have to look at some long-
term solutions because Prudhoe Bay, as can be seen on this chart, shows 
a good degree of compatibility with abundant wildlife. This shows 
Prudhoe Bay field and the caribou wandering around. This is the 
pipeline that goes 800 miles to Valdez. If the oil is where we think it 
is, we simply extend the pipeline over to Prudhoe Bay and produce it.
  This chart shows what frequently happens on the pipeline. Here are 
some bears going for a little walk on the pipeline enjoying the 
afternoon. They get away from bugs and flies, and it is easier walking 
on the pipeline than it is in the heavy snow. They know what they are 
doing.
  I conclude by recognizing in October our Vice President made a 
statement that he is going to do everything in his power to make sure 
there is no new drilling off our coastal areas relative to OCS lease 
sales. I think that statement is going to come back and haunt the 
administration and certainly haunt the Vice President because if we do 
not go for OCS activities, we are not going to go anywhere.

[[Page S1318]]

  I ask unanimous consent that a letter from the Sierra Club soliciting 
visitations to Washington to lobby Members of Congress be printed in 
the Record. The Sierra Club pays for all the meals, all the 
transportation, and all the lodging for these recruits it is simply 
reflective of the other point of view and that they are attempting to 
influence us on this issue. It is a good issue for revenue, for their 
membership.
  I also ask unanimous consent to have printed in the Record a copy of 
the proposed lease sale by the Gwich'in people of Venetie for their 
lands on the North Slope that they hold, which is about 1.8 million 
acres. It is necessary that you understand the opposition. This will 
give you a point of view that, indeed, the opposition was prepared to 
lease their land. The only unfortunate problem was, there was no oil on 
it.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

               [From SC--Action Vol. II, January 6, 2000]

                   The Arctic Refuge Needs Your Help:

       This February 5-9, the Sierra Club, together with the 
     Alaska Wilderness League, the Wilderness Society and the 
     National Audubon Society, is hosting another National Arctic 
     Wilderness Week in Washington, DC. Support from the 
     grassroots is the key to protecting the Arctic National 
     Wildlife Refuge and its fragile coastal plain--and this 
     gathering will help arm you with the skills and knowledge you 
     need be build support in your own community.


                           Hands-on Training

       Arctic Wilderness Week is your introduction to the campaign 
     to protect the Arctic Refuge and its vast array of wildlife--
     polar bears, grizzlies, caribou, and thousands of migratory 
     birds--from the ravages of oil and gas development. If you 
     can make it on Friday night, the training begins with a 
     potluck dinner and a chance to meet other like-minded 
     wilderness and environmental activists. Saturday and Sunday 
     offer two full days of intensive skills training, including 
     message development, media communications and legislative 
     advocacy. All of it will be tied together with hands-on role 
     playing and campaign planning exercises.
       If you can stay longer, on Monday and Wednesday we'll brush 
     up your lobbying skills. You'll be pounding the marble halls 
     of Congress, meeting with your own Congressional 
     Representatives and Senators or their staffs. It's your 
     chance to make your voice heard!


                         We've Got You Covered

       We know your time is valuabel--so we don't ask you to cover 
     all of your expenses for the trip. You pay a $40 registration 
     fee (some scholarships available), and we'll pay for your 
     travel to D.C., your hotel (two per room), a continental 
     breakfast each morning, and several dinners. Unfortunately, 
     space is limited. And we are making it a priority to bring in 
     activists from a number of targeted states and media 
     markets--where our public education efforts are most 
     critical. To find out if you're eligible, contact Dana Wolfe 
     of the Sierra Club at (202) 675-6690. We'll send you a packet 
     of information about the battle to save the Arctic Refuge and 
     a tentation agenda for the wilderness training.
       Please join us in Washington and be a hero for America's 
     great Arctic wilderness!
                                  ____



                                    Native Village of Venetie,

                                                   March 21, 1984.
     To Whom It May Concern:
       This letter is authorization for Donald R. Wright, as our 
     consultant, to negotiate with any interested persons or 
     company for the purpose of oil or gas exploration and 
     production on the Venetie Indian Reservation, Alaska; subject 
     to final approval by the Native village of Venetie Tribal 
     Government Council.
                                  ____


                       Native Village of Venetie


               request for proposals for oil & gas leases

       The Native Village of Venetie Tribal Government hereby 
     gives formal notice of intention to offer lands for 
     competitive oil and gas lease. This request for proposals 
     involves any or all of the lands and waters of the Venetie 
     Indian Reservation, U.S. Survey No. 5220, Alaska, which 
     aggregates 1,799,927.65 acres, more or less, and is located 
     in the Barrow and Fairbanks Recording Districts, State of 
     Alaska. These lands are bordered by the Yukon River to the 
     South, the Christian River to the East, the Chandalar River 
     to the West and are approximately 100 miles west of the 
     Canadian border on the southern slope of the Brooks Range and 
     about 140 miles East of the Trans-Alaska Pipeline. 
     Communities in the vicinity of the proposed sale include 
     Arctic Village, Christian and Venetie. Bidders awarded leases 
     at this sale will acquire the right to explore for, develop 
     and produce the oil and gas that may be discovered within the 
     leased area upon specific terms and provisions established by 
     negotiation, which terms and provisions will conform to the 
     current Federal oil and gas lease where applicable.
     Bidding method
       The bidding method will be cash bonus bidding for a minimum 
     parcel size of one-quarter of a township, or nine (9) 
     sections, which is 5,760 acres, more or less, and a minimum 
     annual rent of $2.00 per acre. There shall be a minimum fixed 
     royalty of twenty percentum (20%).
     Length of lease
       All leases will have an initial primary term of five (5) 
     years.
     Other terms of sale
       Any bidder who obtains a lease from the Native Village of 
     Venetie Tribal Government as a result of this sale will be 
     responsible for the construction of access roads and capital 
     improvements as may be required. All operations on leased 
     lands will be subject to prior approval by the Native Village 
     of Venetie Tribal Government as required by the lease. 
     Surface entry will be restricted only as necessary to protect 
     the holders of surface interests or as necessary to protect 
     identified surface-resource values.
       Prior to the commencement of lease operations, an oil and 
     gas lease bond for a minimum amount of $10,000.00 per 
     operation is required. This bonding provision does not affect 
     the Tribal Government's authority to require such additional 
     unusual risk bonds as may be necessary.
     Bidding procedure
       Proposals must be received by 12:00 p.m. sixty (60) days 
     from the date of this Request for Proposals, at the office of 
     the Native Village of Venetie Tribal Government, Attention, 
     Mr. Don Wright, S. R. Box 10402, 1314 Heldiver Way, 
     Fairbanks, Alaska 99701, telephone (907) 479-4271.
     Additional information
       A more detailed map of reservation lands and additional 
     information on the proposed leases are available to the 
     bidders and the public by contacting Mr. Don Wright at the 
     office identified above.
       DATED this 2nd day of April, 1984.
       Native Village of Venetie Tribal Government, Allen Tritt, 
     Second Chief.
                                                 Donald R. Wright,
                                            Authorized Consultant.

  Mr. MURKOWSKI. I encourage my colleagues to look at this legislation 
and recognize that we have to decrease our dependence on imported oil. 
The best way to do that is to stimulate domestic production here at 
home. The Coastal Plain of ANWR is one way to do it.
  I thank the Chair and wish everybody a good day.
                                 ______