[Congressional Record Volume 146, Number 115 (Monday, September 25, 2000)]
[House]
[Pages H8037-H8038]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                             ENERGY POLICY

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Illinois (Mr. Hyde) is recognized for 5 minutes.
  Mr. HYDE. Mr. Speaker, I come to the floor to talk about energy 
policy, a subject that has been much in the news in recent days. Crude 
oil supplies are tight, and we expect prices of all the various 
petroleum products to rise in the coming weeks.

                              {time}  1900

  Some may ask why should the chairman of the Committee on the 
Judiciary speak on this subject? In short, OPEC presents a classic 
antitrust problem that does not lend itself to antitrust solutions. 
What then should we do?
  First, I want to suggest that the policy measures that have been 
advanced in recent days will not help for long. We must realize that 
our problem is not a temporary one, it is deep, it is structural and it 
is getting worse. Currently, we import more than 50 percent of the 
crude oil we use, and that number has been steadily increasing. So long 
as we allow that situation to persist, it will gravely threaten our 
national security and our way of life. So far we have been relatively 
lucky, but there is no reason to believe we will always have the same 
luck.
  Last Friday, the Clinton-Gore administration decided to release 30 
million barrels of crude oil from the Strategic Petroleum Reserve in an 
effort to lower prices. The idea is that the government will set oil 
prices. This from an administration that admitted it had been caught 
napping on oil prices last February. We established the Strategic 
Petroleum Reserve for national security reasons, to tide us over when 
there was a serious disruption in supply. At this point, there is no 
disruption at all. Prices are simply high because supply is tight. I do 
not like that, I wish they were lower, but tight supply is one thing 
and a disrupted supply is another. So the reserve was not meant to be a 
government price management tool.
  Apart from that consideration, will this move succeed in lowering 
prices? I am not an economist, and I do not know what effect releasing 
a day and a half's supply of oil into the market over a month will 
have, but common sense would suggest that, holding all other things 
equal, it probably will reduce prices for a short time. But in a 
dynamic world, who knows whether all other things will remain equal. 
For example, why would OPEC simply not cut its production by a 
corresponding amount? Meanwhile, our buffer against a true disruption 
is lessened by a day and a half's supply during that time. How will we 
feel about that if Iraq decides to invade Kuwait again?
  However, as the administration has stressed, this is a swap deal. Oil 
companies that take the oil will have to replace it with more at some 
future date. If that comes to pass, I will certainly be glad that we 
have more oil in the reserve. But what effect will removing that 
replacement oil have on market prices? If releasing 30 million barrels 
into the market will drop prices now, does it not stand to reason that 
removing more than 30 million barrels in the future will raise prices 
then? To put it in medical terms, this release is, at best, a temporary 
pain reliever that does nothing to cure the underlying disease. Indeed, 
it may well worsen our pain in a very short time.
  What then do I propose? We must have a national energy policy that 
includes increased domestic energy production consistent with 
reasonable environmental guidelines, increased domestic refining and 
transportation capacity consistent with reasonable environmental 
guidelines, increased diplomatic pressure on foreign nations that 
produce oil, increased energy efficiency of engines and generation 
facilities, increased use of renewal energy sources throughout our 
economy, and a reformed excise tax structure. We can do all of this, 
and we can overcome this problem.
  But these things that I have mentioned cut across the jurisdictions 
of lots of congressional committees and government agencies. They 
affect a lot of people and a lot of businesses. Because of that, we 
need sustained committed Presidential leadership. Only a comprehensive 
national energy policy can solve our problem, and only the President 
can lead us to that national energy policy. So I am introducing 
legislation, and have done so today, to call on the President to do 
that immediately.
  So what can we do to ease the short-term pain? I think we must repeal 
the 4.3 cents a gallon deficit reduction tax that the Democrat Congress 
and administration passed in 1993. Fortunately, we have since ended the 
deficit. Unfortunately, in 1997, instead of ending this tax, we 
converted it to the Highway Trust Fund. I understand everyone wants 
their road projects, but consumers deserve some relief too. It is not a 
lot, but it will help until we get our long-awaited Presidential 
leadership.
  Mr. Speaker, I call on all of my colleagues to support my Energy 
Independence Through Presidential Leadership Act. It calls on the 
President to provide immediate action to lead us to a national energy 
policy, and it gives short-term relief by repealing the deficit 
reduction tax. Let us forget the bandages and let us cure the disease.
  Mr. Speaker, I come to the floor tonight to talk about energy 
policy--a subject that has been much in the news in recent days. The 
subject has been in the news because crude oil supplies are tight, and 
we expect prices of all the various petroleum products to rise in the 
coming weeks.
  Some may ask why should the chairman of the Judiciary Committee speak 
on this subject? My answer to that is to ask why are world oil supplies 
tight. World oil supplies are tight because the members of the 
Organization of Petroleum Exporting Countries, or OPEC, have agreed 
among themselves to restrict the supply. They form a classic price 
fixing conspiracy that violates our antitrust laws. If they were 
American companies, they would go to jail. Unfortunately, they are 
sovereign nations, and we cannot reach them under our current law. In 
short, we have a classic antitrust problem that does not lend itself to 
antitrust solutions.
  What then should we do? I know that we are in the middle of a 
campaign season, and I do not want to make this political. But I do 
want to suggest why some of the policy measures that have been advanced 
in recent days will not help. I also want to tell you what I think must 
be done. The Judiciary Committee has held three days of hearings on 
this subject this year, and we have learned quite a bit.
  We must realize that our problem is not a temporary one. It is deep--
it is structural--and it is getting worse. Currently, we import more 
than 50 percent of the crude oil we use and that number has been 
steadily increasing. So long as we allow that situation to persist, it 
will gravely threaten our national security and our way of life. So 
far, we have been relatively lucky, but there is no reason to believe 
that we will always have that same luck.
  So, let's talk about some of the policy initiatives that are under 
discussion. Last Friday, the Clinton-Gore Administration decided to 
release 30 million barrels of crude oil from the Strategic Petroleum 
Reserve in an effort to lower prices. The idea is that the government 
will set oil prices--this from an administration that admitted that it 
had been ``caught napping'' on oil prices last February. I was not 
there when any of these comments were made, but according to press 
reports, Vice President Gore opposed this strategy last February, 
Treasury Secretary Summers thought it was a ``dangerous precedent,'' 
and Federal Reserve Chairman Greenspan also opposed it.
  That is such a distinguished group that I hesitate to add my own 
thoughts, but let me do so briefly. We established the Strategic 
Petroleum Reserve for national security reasons--to tide us over when 
there was a serious disruption in supply. At this point, there is no 
disruption at all--prices are simply high because supply is tight. I do 
not like that, I wish

[[Page H8038]]

they were lower, but a tight supply is one thing and a disrupted supply 
is another. So the Reserve was not meant to be a government price 
management tool.
  Apart from that consideration, will this move succeed in lowering 
prices? I am not an economist, and I do not know what effect of 
releasing a day and half's supply of oil into the market over a month 
will have. Common sense would suggest that, holding all other things 
equal, it probably will reduce prices for a short time. But, in a 
dynamic world, who knows whether all other things will remain equal? 
For example, why wouldn't OPEC simply cut its production by a 
corresponding amount? Meanwhile, our buffer against a true disruption 
is lessened by a day and a half's supply during that time. How will we 
feel about that if Iraq decides to invade Kuwait again?
  However, as the Administration has stressed, this is a swap deal. Oil 
companies that take the oil will have to replace it with more at some 
future date. If that comes to pass, I will certainly be glad that we 
have more oil in the Reserve. But what effect will removing that 
replacement oil have on market prices? If releasing 30 million barrels 
into the market will drop prices now, doesn't it stand to reason that 
removing more than 30 million barrels in the future will raise prices 
then? To put it in medical terms, this release is at best a temporary 
pain reliever that does nothing to cure our underlying disease. Indeed, 
it may well worsen our pain in a very short time.
  Now, some have suggested that ``Big Oil'' is price gouging. If that 
is so, then the oil companies must be punished. Last June, 
Representative Jim Sensenbrenner and I were the first to ask the 
Federal Trade Commission to investigate this matter. So far, they have 
not brought any price gouging cases. I do not know what their 
investigation will ultimately show, but I think we have to be careful 
about throwing that charge around until we know what the evidence is.
  Some have suggested that we change the law so that we can sue the 
foreign nations that make up OPEC. I would not oppose that--it is so 
emotionally satisfying to say let's sue them. But we have to realize 
that any such measure is largely symbolic and may lead to worse 
consequences for us. This is one of the first questions that we asked 
in our Judiciary Committee hearings and let me just quote what the 
Federal Trade Commission said in response:

       A possible enforcement action . . . raises practical 
     questions as to whether jurisdiction can be obtained over 
     OPEC and its member nations, how a factual investigation 
     could be conducted with respect to documents and witnesses 
     located outside the United States, and the nature and 
     enforceability of any remedy.
       . . . [P]erhaps most importantly, any enforcement action 
     would raise significant diplomatic considerations. A decision 
     to bring an antitrust case against OPEC would involve not 
     only, and perhaps not even primarily, competition policy, but 
     also defense policy, energy policy, foreign policy, and 
     natural resource issues. In particular, any action taken to 
     weaken a sovereign nation's defenses against judicial 
     oversight of competition lawsuits, for example, would have 
     profound implications for the United States, which places 
     buying and selling restrictions on myriad products. 
     Consequently, any decision to undertake such a challenge 
     ought to be made at the highest levels of the executive 
     branch, based on careful consideration by the Department of 
     Justice and other relevant agencies.

  I think that the last point is particularly timely when you consider 
that just last week the Yugoslavian government began a ``war crimes'' 
trial against President Clinton and other Western leaders growing out 
of our bombing of Kosovo. So we have to think about what the 
consequences of our action will be.
  When we face the prospect of rising energy prices six weeks before an 
election, it is tempting to scramble around proposing band-aid 
solutions like those I have discussed. But they really do not do 
anything to address the problem. What then do I propose?
  First, we must acknowledge that this problem is not easy to solve, 
and it will take commitment and discipline over a significant period of 
time. We must have a national energy policy that includes: increased 
domestic energy production consistent with reasonable environmental 
guidelines, increased domestic refining and transportation capacity 
consistent with reasonable environmental guidelines, increased 
diplomatic pressure on foreign nations that produce oil, increased 
energy efficiency of engines and generation facilities, increased use 
of renewable energy sources throughout our economy, and a reformed 
excise tax structure.
  We have oil in Alaska and other places that we can use. Much of the 
home heating oil problem arise not from a lack of oil, but a lack of 
refining capacity. Refining capacity lags because environmental and 
other regulations make it almost impossible to build new refineries. I 
an confident that we can reconcile these things with reasonable 
environmental guidelines.
  Let me quote from a recent statement on advanced oil drilling 
technology: ``advanced technology has led to fewer dry holes, smaller 
drilling `footprints,' more productive wells, and less waste. All of 
these advances have contributed to a cleaner environment, and even 
greater benefits are possible. . . . We have only scratched the surface 
of what is possible--and of what technological improvements can do to 
benefit the energy security and environmental quality for future 
generations.''
  You might think that this statement comes from ``Big Oil.'' In fact, 
it comes from the Clinton-Gore Administration's own Assistant Secretary 
for Fossil Energy just a year ago.
  In that same vein, we heard testimony in the Judiciary Committee 
about the great advances that are being made in making more efficient 
engines and generation facilities. We are well along in this field, and 
we just need to make the changeover. We also need to look around us: 
the sun, the wind, and the waters are free and renewable. OPEC cannot 
take them from us. We must develop these energy sources.
  We can do all of this, and we can overcome this problem. But these 
things that I have mentioned cut across the jurisdictions of lots of 
congressional committees and government agencies. They affect a lot of 
people and businesses. Because of that, we need sustained, committed 
presidential leadership. Only a comprehensive national energy policy 
can solve our problem, and only the President of the United States can 
lead us to that national energy policy. So I am introducing legislation 
to call on the President to do that immediately.
  But candidly I do not expect that we are going to get much leadership 
in the waning days of the Clinton-Gore Administration. So what can we 
do to ease the short term pain? I think we must repeal the 4.3 cents a 
gallon deficit reduction tax that the Democrat Congress and 
Administration passed in 1993. Fortunately, we have since ended the 
deficit. Unfortunately, in 1997, instead of ending this tax, we 
converted it to the Highway Trust Fund. I understand that everyone 
wants their road projects, but consumers deserve some relief. It's not 
a lot, but it will help until we get our long awaited presidential 
leadership.
  So, Mr. Speaker, I call on all of my colleagues to support my 
``Energy Independence through Presidential Leadership Act.'' It calls 
on the President of the United States to provide immediate action to 
lead us to a national energy policy and it gives short term relief by 
repealing the deficit reduction tax. Let's forget the bandages and cure 
the disease.

                          ____________________