[Congressional Record Volume 146, Number 137 (Friday, October 27, 2000)]
[Senate]
[Pages S11290-S11293]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                        NO DEFINED ENERGY POLICY

  Mr. MURKOWSKI. Mr. President, it is late. We have had pretty candid 
discussions on various issues before us. It is a political season. 
There is a lot of finger pointing, whether we talk about Social 
Security, Medicare, or the benefits of care associated with drug plans. 
I think we all share a common commitment to try to have meaningful 
legislation come out of the process. We simply have different points of 
view.
  You heard the Senator from Florida comment extensively on the 
Republican plan to strengthen Medicare. I am not here to comment on the 
Republican plan on Medicare, although I think it is quite defensible. 
But I am here to talk about the Democratic plan for an energy policy.

[[Page S11291]]

  You will notice, unlike the Senator from Florida, that I don't have a 
chart to show you what the Democratic energy plan is for the simple 
reason that there isn't any. This administration has absolutely no 
energy plan as evidenced by the dilemma that we face in this country as 
we watch our imports from the Mideast climb to approximately 58 
percent. Fifty-eight percent of the oil that we consume in this country 
is imported.
  We have seen a dramatic increase in the price of gasoline. Gasoline 
is in the area of $1.75 cents to $1.80, depending on the grade.
  We have seen heating oil in the country raised to approximately 
$1.56. Here in Washington alone, it has increased 56 cents a gallon in 
less than 10 months.
  We have seen natural gas on which 50 percent of the homes in this 
country are dependent increase from $2.16 for 1,000 cubic feet to 
deliveries in November at $5.40 per 1,000 cubic feet.
  We have a situation with our refining industry in which we haven't 
built a new refinery in this country in decades. We have shut down 30-
some refineries. We find ourselves at loggerheads because of our 
inability to refine, if you will, enough of the blends to address the 
Northeast heating oil shortage.
  It is fair to say that we don't have a defined energy policy. We have 
an energy policy that seems to be driven by environmental groups that 
do not accept the responsibility for realism.
  Realism dictates that we are not going to move out of here tomorrow 
or the next day on hot air. We are going to move out on kerosene. 
Kerosene comes from oil. Kerosene is what you put in the jet airplane. 
I don't attempt to be oversimplistic, but what we continue to need in 
this country is a balance of all the energy resources.

  The Middle East last week gave us another reminder as to our crisis. 
That is the fear that we are going to be held hostage to foreign oil 
imports. I have been coming to this floor for many days now warning of 
how our dependence on foreign oil threatens the national security of 
this Nation. I certainly don't take any pride at this late hour in 
coming here and saying I told you so. We know the Middle East is a 
tinderbox. Some of our most impassioned enemies are already lighting 
fires there.
  What little energy policy this administration has in the sense of 
increasing reliance on foreign oil has come in conflict, in my opinion, 
with our foreign policy. How can we pretend to play the role of an ally 
to Israel or even an honest broker when we are now beholden to Israel's 
sworn enemy, Saddam Hussein, of Iraq?
  Now we are looking to Saddam Hussein to keep our citizens from 
freezing this winter. We are importing about 750,000 barrels of oil a 
day from Saddam Hussein. Many people forget we fought a war over there 
in 1991 and 1992. We lost 147 American lives.
  Today, the real wild card is in Iraq and the Middle East. I mentioned 
my previous concern over Saddam Hussein and the leverage he brings, but 
some analysts estimate that oil will increase to $40 to $45 a barrel if 
Iraq halts oil sales or reduces oil sales. The significance of that is 
the position that Saddam Hussein and Iraq currently hold.
  Iraq, we know, has threatened to stop oil exports if the U.N. doesn't 
convert Iraqi dollars held by the U.N. to Euro dollars for trading. We 
know Iraqi exports have dropped a little bit, by about 500,000 barrels 
a day just last week. It is not clear whether this is the start of an 
ominous trend. Even if supply disruptions do not occur, world oil 
markets are stretched so thin that even the possibility of a disruption 
could raise prices even more. And it did so last week.
  Currently, I think oil closed today around $34 a barrel. We have seen 
a high on two occasions of $37 within the last month or so. But the 
reality is that Saddam Hussein controls about almost 2.8 million 
barrels a day of daily exports, and that is more than the available 
excess capacity worldwide.
  What I am saying is that the difference between the world's ability 
to produce oil and the world's consumption is a little over a million 
barrels--there is a little over a million-barrel capacity--but Saddam 
Hussein controls 2.8 million. My point is if Saddam Hussein reduces his 
sales, then we are in an even tighter position and as a consequence we 
can expect the price to go up. And Saddam Hussein is aware of this.
  There is no question about his actions of late. He has become more 
aggressive in recent months. It is rather interesting to note, after 
every speech, he concludes it with ``Death to Israel.'' If there is 
ever a threat to Israel's security, it comes from Iraq. He has a 
$14,000 bounty on each American plane shot down. Thank God there 
haven't been any. But we have flown over 200,000 individual flights 
over Iraq, enforcing the no-fly zone, an area of blockade since the 
1990s.
  Last month, Saddam Hussein accused Kuwait of stealing Iraqi oil. Here 
we go again. He did this shortly before invading Kuwait in 1990.
  Last week, nearly 15,000 Iraqi Republican Guard troops moved westward 
in a show of force, obviously toward Israel. Just yesterday, Saddam 
Hussein said: Jihad, holy war, is the only way to liberate Palestine.
  How quickly we forget. Let me remind everyone, before President 
Clinton and Vice President Gore took office, we carried out Desert 
Storm and 147 Americans were killed, 467 were wounded, and 23 were 
taken prisoner. We continue to enforce the no-fly zone. The cost to the 
taxpayers is about $50 million per month. It is still going on. Yet the 
administration seems to want to rely more on Iraqi oil.
  We have had in this country a 17-percent decline in domestic 
production, yet the demand has increased 14 percent. In August of last 
year, we consumed more oil in this country than ever before. What is 
the rationale?
  We are traveling more. The economy is growing. We are an electronic 
society. We need more energy. Where does it come from? It doesn't come 
from thin air. Now 58 percent of our oil comes from overseas. Some 
people perhaps remember 1973 when we had the Arab oil embargo. We had 
lines around the block. People were indignant. They were mad. They were 
outraged. We couldn't get gasoline at the gas station. At that time, we 
were 36-percent dependent on imported oil and we created the Strategic 
Petroleum Reserve.
  Here we are today with Iraq, the fastest growing source of U.S. 
foreign oil, 750,000 barrels a day, nearly 50 percent of all Iraqi 
exports. I don't want to be oversimplistic, but we buy Saddam Hussein's 
oil, put it in our airplanes, and go over and bomb him. Is that a 
sensible, responsible foreign policy?
  In a few words, that is what is happening. You can interpret it 
however you desire. This administration's inattention to maintaining 
the U.N. conditions against Iraq has left the sanctions in a shambles. 
We aren't doing any weapons inspections in Iraq; increased Iraqi 
flights across Saudi airspace in the no-fly zone continue; his 
development of missile, missile delivery systems, and biological 
warfare capabilities continues. Russia and France have openly 
challenged our sanctions. Turkey sends flights to Baghdad despite the 
U.N. ban.
  It is simply not working. Our friends in Jordan are demanding the end 
to inspections of Iraqi imports through Jordanian ports. Saddam Hussein 
is about to get a free pass to import anything he wishes despite the 
U.N. sanctions. Does anyone doubt he will be able to import what he 
needs to continue his weapons of mass destruction? We are going to have 
to deal with this one of these days.
  Let me say again what little energy policy we seem to have is a 
reliance on imported oil, and it has certainly come into conflict with 
our foreign policy, with potentially disastrous consequences for 
American consumers and our national security.
  I am pleased to say that George W. Bush, and our Vice President 
nominee, Mr. Cheney, have spoken about how to decrease our dependence 
on imported oil by developing some of the reserves that we have here at 
home, open up the overthrust belt--Wyoming, Colorado, Utah--areas where 
we have great potential, areas where the administration has closed up 
to 64 percent of the public land, exempting that area from development, 
and my State of Alaska, where the administration refuses to allow an 
opening of the area which might have the largest reserves known to 
exist in North America, that small sliver of ANWR.
  There are a lot of misunderstandings about the area of Alaska known 
as

[[Page S11292]]

ANWR. It is 19 million acres, the size of the State of South Carolina. 
Congress, wisely, has taken out of that 19 million acres, 8.5 million 
acres and put it in permanent wilderness. They have taken another 9 
million acres and put it into a refuge, leaving 1.5 million acres for a 
decision to be made whether to open it. The geologists tell us there 
might be as much as 16 billion barrels of oil there. That would equal 
what we import from Saudi Arabia for a 30-year period. It is a very 
significant amount.
  Some people say that is a 200-day supply. That is totally unrealistic 
because that assumes there would be no other oil produced anywhere in 
the world. Obviously the Russians, the Venezuelans, and the others 
would produce.
  So as we look at potential energy sources here at home, I think we 
have to look to the advanced technology that we have been able to 
develop in this country and the record of opening up areas in the 
Arctic such as Prudhoe Bay, where we find a contribution of nearly 20 
percent of the total crude oil produced in this country. That has come 
about over a period of 23 years. The significance of that speaks for 
itself.
  You might not like oil fields, but Prudhoe Bay is the best in the 
world. We could have the same potential by opening up that small sliver 
of the Arctic known as the 1002 area.
  The interesting thing is that industry tells us, out of 1.5 million 
acres, we would probably utilize as little as 2,000 acres--not much 
bigger than a medium-sized farm--to open up the area.
  I was rather interested in looking at the Christian Science Monitor 
the other day. They did a poll across America on what the attitude 
would be of opening ANWR. The poll was 58 to 34 in favor. That is a 
rather startling result, and I think it surprised some of the folks at 
the newspaper as well.
  The point is, charity does begin at home. There are those on the 
other side who simply blame big oil. I remind them, where was big oil 
when they were handing out oil a year ago at $10 a barrel? Big oil in 
this country--Exxon, British Petroleum, Chevron, Texaco--does not set 
the price of oil. Do you know why? Because we are so dependent on 
imports. Saudi Arabia, OPEC, Mexico, Venezuela--they are the suppliers. 
They are supplying us with 58 percent. They set the price. We are 
addicted; we pay it; and that is the consequence of becoming so 
dependent when, indeed, we have the technology in this country to open 
up some of these frontiers safely.
  We have, in the Trans-Alaska Pipeline, an unused capacity of a 
million barrels a day. As a consequence, the development of that 
portion of ANWR could be done very easily, and it could be done very 
quickly. If we had the conviction of our commitments to simply make a 
statement that that is our intention, there is no question in the mind 
of this Senator we would see oil drop $10 a barrel. We saw the 
President's action the other day when he pulled 30 million barrels out 
of the Strategic Petroleum Reserve. The price dropped from $37 a barrel 
to somewhere in the area of $32 a barrel.

  Let me conclude with a little evaluation of the Strategic Petroleum 
Reserve and the actions, or should I say the ``mis-actions'' of the 
administration handling them.
  As we know, when the Vice President made a recommendation to the 
President that we sell 30 million barrels from the Strategic Petroleum 
Reserve, the price was nearly $37 a barrel, prices which last month 
prompted the administration, of course, to release this oil from SPR. 
Now word comes from the Department of Energy that initially only 7 
million barrels of that original 30 million barrels would have to go up 
for rebid. It is kind of interesting because they waived the normal bid 
requirements. They didn't require normal financial responsibility. They 
said they would do that later. Three of the bidders could not meet the 
demands, and as a consequence they had to bid it again. But they 
recognized their mistake the next time because they did require the 
bidders meet financial capability for performance.
  In any event, according to the Department of Energy's own analysis, 
20 million of the 30 million barrels will simply displace foreign oil 
imports. The reason for that is our refineries are running at 96-
percent capacity. They cannot, basically, take any more oil. They can 
only get so much out through this process because we have not built new 
refineries in 10 years. We have simply increased some of our larger 
refineries. We have also lost about 37 refineries in the last decade. 
It is not a very attractive business to be in.
  In any event, the Department of Energy has decided that out of the 30 
million barrels, there are probably going to be only 10 million barrels 
that are going to be refined into finished product. Currently, U.S. 
refinery yields are about 8 percent heating oil and 92 percent other 
products, whether it be gasoline, diesel, kerosene, and so forth. So if 
we do the math, while the Department of Energy suggests 3 million to 5 
million barrels of heating oil will result from the SPR release, we 
find that the testimony from those representing the Department of 
Energy uses the terminology ``distillates.''
  What are distillates? They would lead you to believe this was heating 
oil and would benefit the Northeast, but it is not. We found out that 
current refinery yields of 10 million barrels of SPR oil will yield 
only 800,000 barrels of heating oil. That is less than a 1-day supply.
  When you look at the intent of the administration's effort to open up 
the SPR, it was to increase the heating oil supply availability in the 
Northeast, a portion of the country that does not have the availability 
of natural gas. Their objective was not achieved. They have less than a 
1-day supply out of this sale. How ironic.
  What they did is they did manipulate the price because the price did 
drop, but the supply did not increase. If the administration's intent 
was to get more heating oil to the market, that certainly was not the 
way to do it. They could have explored thoroughly the offer by the 
Venezuelan state oil company to produce heating oil for direct delivery 
to the United States or they could have made a greater effort to 
convince companies to voluntarily reduce exports, refine product until 
stocks were at a more comfortable level.

  Again, I refer you to the objective. The objective was not met. 
Manipulation of the price was. But I do not think this was the real 
reason for the SPR release. As I have indicated, the real reason was to 
manipulate the price. They had some success. Prices did dip down to $31 
a barrel. But we have seen that erased, with prices back up to $34 a 
barrel.
  Heating oil stocks in the Northeast have actually declined. They have 
declined 600,000 barrels since the administration came up with the idea 
of releasing the SPR crude oil, which has to be refined and, 
incidentally, is not going to be made available until November.
  One of the more interesting things they left out of the sale was no 
prohibition against exporting the SPR oil, so many of the profiteers in 
oil simply bid the oil in with the idea of exporting it. There was no 
ban on exports and there was no ban on heating oil. The market in 
Europe is higher than the U.S. Some traders will simply refine that 
crude oil, turn it into heating oil, and export it to Europe because 
they had no prohibition in their bid.
  The administration's logic was flawed when it announced this, and it 
seems to have only gotten worse. The bottom line is, rather than 
increase domestic production of oil and gas to ensure our energy 
security, again the administration falls back to its reliance on 
foreign oil imports, posing significant threat to our national 
security, undermining our foreign policy in the Mideast, and the 
administration's strategy is also to try to manipulate prices when 
necessary by releasing oil from SPR.
  We need a real energy policy, such as that proposed by one of the 
candidates for President, Governor Bush; one that ensures a clean, 
affordable, secure energy supply for American consumers, one that 
increases domestic production of oil and gas. Why should we be 
exploring in the rain forests of Colombia where there are no 
environmental considerations? Instead, we should be using our 
technology to develop the frontier areas in the overthrust belt in my 
State of Alaska. We need to expand the use of alternative fuels and 
renewable energy, which is part of the Bush-Cheney plan, and we need 
improved energy efficiency for all kinds of energy uses. I am pleased 
to say that is a position Governor Bush supports as well.

[[Page S11293]]

  The emphasis of this administration has been on natural gas. The only 
problem is there has been a tremendous increase in the price of natural 
gas. Natural gas was $2.16, as I said, 10 months ago. It is $5.40 per 
delivery per thousand cubic feet. The emphasis, particularly from our 
utility industry, is that they have nowhere to turn for a source of 
energy other than natural gas. There has not been a new coal-fired 
plant built in this country since the mid-1990s. We have no new 
hydrodams. In fact, the administration is supporting taking out 
hydrodams in the West. There has been a collapse of our nuclear 
program. We cannot address the nuclear waste issue. We have not built a 
new reactor in 15 to 20 years and none are on the horizon.
  As a consequence, we need to go back to our energy policy and bring a 
balance. Bring in nuclear. Obviously, it contributes to the quality of 
our air. Look at hydro, which we can safely develop. Look at clean 
coal. We have the technology to do it. We can recognize that 50 percent 
of the homes dependent on natural gas are going to be subject to some 
substantial price increases if we do not develop more energy at home. 
As a consequence, what we need here is a balanced energy policy. The 
administration's energy policy is that there simply is not any.

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