[Congressional Record Volume 148, Number 10 (Friday, February 8, 2002)]
[Senate]
[Pages S525-S528]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                             ENERGY POLICY

  Mr. MURKOWSKI. Mr. President, I rise today to bring to the attention 
of my colleagues the coming debate on the energy bill which will be 
before this body sometime next week, at the pleasure of the majority 
leader, of course. I want to share with my colleagues the concern I 
have that somehow in this energy bill we may get into a debate--and it 
may be more than a debate. It may be pointing fingers at one another--
with regard to the Enron situation. I think it is fair to say there is 
a lot of blame around here.
  The objective and responsibility we have is to correct the damage 
that has been done to ensure it does not happen again, and if indeed we 
can find accountability, we should proceed with that process because 
that is part of our job.
  In my opinion, as the former chairman of the Energy Committee and 
ranking member currently, we have going on a little politics both in 
the House and Senate. We are trying to create a political issue out of 
the Enron failure. I think it is fair to say at least some are not 
particularly interested in the facts. They are more interested in the 
rhetoric, which occasionally occurs around here.
  What we have seen is the devastation with the employees, the 
stockholders, the billions that are lost, and retirement funds that 
have been wiped out. Indeed, I think we have to focus on the reality 
that this is a series of lies, a series of deceits, a series of shoddy 
accounting, a series of corporate misconduct, a series of coverup. That 
is the bottom line. It should not have happened, but it did happen. I 
think it is fair to say our obligation goes to trying to protect the 
consumers and protect the stockholders.
  One of the interesting things, though, as one who has followed the 
energy process very close, the failure of Enron really had nothing to 
do with the market price of electricity, the market price of national 
gas, or the market price to consumers in this country. It is very 
important to understand the system worked. In other words, Enron was 
buying and selling energy. They were not a great producer of energy. 
When they basically failed, those who were supplying Enron simply moved 
to other distributors. So the consumer was not hurt. Keep that in mind. 
This was a failure internally within this corporation that affected a 
lot of people, but it did not affect the ratepayers nor the supply in 
this country. The private system basically worked.
  What are some of the issues surrounding the political gain or 
political consequences? I think we have to agree we should try and look 
at a bipartisan effort to present real solutions to America's energy 
problems. Some are interested in demonizing the President and the Vice 
President with stories that are somewhat misleading and off the focus 
of the reality of why this corporation failed. We have seen our good

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friend over in the House, Congressman Henry Waxman, issue a white paper 
entitled, ``How the White House Energy Plan Benefited Enron.'' That is 
a pretty broad accusation.
  Now I want to try and balance that a little bit because the 
Congressman asserts many policies in the White House energy plan are 
virtually identical to the positions Enron advocated. I want to look at 
the record for a few minutes.
  The intended inference of the report, no matter how inaccurate, is 
that the administration's national energy policy was written solely to 
benefit Enron.
  In my opinion, the logic of the Congressman leaves a little bit to be 
desired. To use that logic, we should be critical of any energy bill 
that helps meet our Nation's growing energy needs just because a 
company, for that matter any company, even one producing renewable 
energy, could benefit.
  It is true some elements of the administration's energy policy are 
consistent with the views of Enron, but it is also true that far more 
elements of the Clinton administration's energy policy were consistent 
with the views of Enron.
  I think we have to look at some of the facts. I am prepared to do 
that in the next few minutes. For example, one of the elements, 
according to a Washington Post story on January 12, in a meeting when 
Secretary of Energy Pena under the Clinton administration, and Ken Lay, 
who was the head of Enron, pressed the Clinton administration to 
propose legislation that would assert Federal authority over a national 
electricity market--now this is what the previous administration 
basically did. It was kind of interesting because some of the material 
that comes out of the research that is done by the media, that 
addresses some of the backroom meetings that went on, deserve the light 
of day, and I am prepared to share that briefly. I met with Ken Lay in 
my office on one occasion.
  The purpose of Mr. Lay's meeting with me was to encourage me to 
support deregulation at a time certain of America's electric energy 
market. Under the deregulation plan he supported, there would be a 
simultaneous definite date under which various States would come in 
under deregulation. I was opposed to that.
  That had happened, of course, in the California situation where we 
had a cap by the State of California on retail, and I felt we could not 
simply mandate everybody come in at the same time under deregulation. 
The fact that some have deregulated, like Pennsylvania, Texas, and 
other States, it has gone very well. Those States have seen a reduction 
in their electric rates. It still was not a perfect process. The States 
should have the opportunity for innovation and to deregulate over a 
period of time.
  According to a company version of the meeting, Lay and Pena, after my 
meeting with Lay, agreed that a go-slow approach to deregulation 
advocated by the Senate Energy Committee's chairman, Frank Murkowski, 
Republican of Alaska, was unacceptable. In other words, Pena had asked 
Enron officials to keep the Energy Department staffers posted on 
developments in Congress.
  The point I want to make, and make very clear, is it would not have 
been in the national interest to have followed the objective of Ken Lay 
and Enron to open up simultaneous deregulation of the electric market. 
As indicated in the memorandum, in the meeting with Pena and Ken Lay--
and Pena, again, was Secretary of Energy at that time--they agreed that 
my approach was too slow and unacceptable.
  I want to compare where we are today because this is the issue, or 
the accusation, that somehow the energy plan proposed by the 
administration was out of the Enron playbook. I want to compare where 
the current energy bill is relative to the specifics that would be 
applicable to Enron if Enron were still a functioning corporation. So 
let us look at many of the elements of Senator Daschle's energy bill 
because I believe many of them are straight out of the Enron playbook 
in asserting Federal authority over a national electric market. I think 
it should be pointed out that Enron has never wanted to deregulate 
electricity. Instead, they want to Federalize electricity. Now there is 
a difference. It is the regulatory process. Enron wanted different 
regulations, not deregulation in the sense of my last remarks where I 
indicated the only thing they would support was simultaneous 
deregulation.
  So they wanted different regulations. They wanted to preempt States 
and put FERC, the Federal Energy Regulatory Commission, in charge. 
Enron wanted to create a one-size-fits-all system that benefits 
national marketers such as Enron--Enron is a national marketer. They 
did not produce power --and, on the other hand, ignore local concerns 
and interests, which is one of the reasons I objected. Enron wanted 
special provisions of particular benefit to that company.
  I think Enron had every intention of getting a movement in their 
direction, and they had access to take their plans directly to the 
upper echelons of the leadership, and they did. What is the result? Let 
me share the result because this is where we are today. This is what 
this body is going to be looking at next week when we take up the 
Daschle energy bill.

  First, this bill did not come before the committee of jurisdiction. 
That is the Committee on Energy and Natural Resources. I am the ranking 
member. It was crafted in secret. It was crafted in violation of 
traditional Senate rules. And, in my opinion, to a large degree, it 
would have benefited Enron because the Daschle bill grants further 
authority to restructure the electric power industry. It allows FERC to 
take any action it may deem appropriate to create competition as FERC 
sees fit. The Daschle bill grants FERC open access to all transmission 
lines. It gives FERC authority over transmission not now within the 
purview of federally owned and State owned. The Daschle bill creates 
uniform reliability standards under FERC control. That is something 
Enron opposed. The industry consensus relied on this because it would 
allow for regional differences. They did not want regional differences.
  The Daschle bill includes transmission information disclosure. That 
benefited Enron's trading activities, provisions that require 
disclosure for potential commercial sensitive transactions that would 
have given Enron a complete and competitive advantage and helped them 
game the electric power mark.
  Further, the Daschle bill offers a special transmission access and 
benefit for wind generators and a renewable portfolio standard of 
benefits. As we know, Enron owns wind generation companies.
  The Daschle bill includes Federal preemption of States on consumer 
protection. Enron wanted a uniform regulatory system, equally 
acceptable across State lines, regardless of different needs in 
different States.
  Finally, the Daschle energy bill includes nationwide uniform 
interconnection standards. Again, Enron wanted a unified national 
system without talking and taking into consideration regional concern.
  That is a partial wish list. As we look at the allegations back and 
forth of whose bill favors Enron, we should look at it fairly and 
objectively. This is a virtual wish list, in my opinion, for a company 
that made millions and millions of dollars trading electricity 
nationwide.
  Enron's main goal was to create the federalized system found to a 
large degree in the Daschle bill before the Senate. By knocking down 
State rights in exchange for Federal command and control, Enron would 
have gained the substantial advantage in energy markets at the hands of 
State protections of consumers. In other words, the State has the 
obligation to protect its consumers.
  One Senator referred to the Bush energy plan the other day as ``a 
cash and carry'' for Enron. If that is the case, perhaps the approach 
we have in the majority leader's bill ought to be ``a quick check'' as 
Enron got far more money and would have gotten far more money in the 
proposed bill before the Senate, the Daschle bill, than it did under 
the Bush energy plan. As I say, those who live in glasshouses should 
not throw stones and perhaps should not take baths.
  I conclude with the situation surrounding the committee of 
jurisdiction, the Committee on Energy and Natural Resources. We talk 
about ensuring that we have an energy supply to meet our Nation's 
needs. There is one place in this country where energy

[[Page S527]]

is in great demand. In my opinion, that is this body of the Senate. 
Energy, energy, everywhere, in all sorts of committees--except one 
committee. That is the committee where it belongs, the Energy and 
Natural Resources Committee.

  Through a press release issued late last October, Senator Daschle 
basically pulled the plug on the Energy Committee: The Senate's 
leadership wants to avoid quarrelsome, divisive votes in committee. 
That was how the release read.
  What happened was, clearly, the majority leader did not like the 
writing on the wall, so he basically took and created his own bill and 
introduced it as the bill that will be considered by this body. I think 
the development of that bill was in the worst traditions of the Senate 
and was done without the open process associated with the committee 
requirements. There was no opportunity for Republican or Democrat 
amendments, and it was done far out of the reach of the public or input 
of the reach of the public, out of the glare of the media. That fact, 
in itself, should have the media howling. But I don't hear many of them 
howling. But their silence on that fact has been somewhat deafening.
  In doing so, the committee of jurisdiction has simply not been 
allowed to meet. That is in clear violation of committee rules and 
Senate rules. But we have not met on any markup since October. That is 
a mandate from the majority leader to the committee chairman, Senator 
Bingaman.
  What frustrates a lot of Members on the committee is that this is 
applicable only to the Energy Committee. Other committees have been 
allowed to meet, and they have not been pushed aside. For example, the 
Commerce Committee has been allowed to meet because they are having a 
vigorous debate about the controversial issues, CAFE standards for 
automobiles. It is a legitimate debate, and it belongs in the Commerce 
Committee. It is an energy debate that should be aired in public, in 
the press, and under scrutiny of public opinion. That is current. But 
the committee of jurisdiction is not allowed to meet on the underlying 
bill.
  The Environment and Public Works Committee has been allowed to meet. 
They are having a vigorous debate about a controversial issue, and that 
is Price-Anderson, to help the nuclear plants that are online in this 
country. Again, it is an energy debate that should be aired in public, 
in the press, and under scrutiny. It is being done. Yet the underlying 
committee of jurisdiction is forbidden from meeting on the energy bill.
  The Finance Committee has been allowed to meet. They are debating a 
wide variety of tax provisions to help spark the next generation energy 
sources for the country. Again, it is the energy debate that should be 
aired in public, in the press, and under scrutiny. And it is in the 
Finance Committee. But where is the Energy Committee, the committee of 
jurisdiction? Silenced--totally silenced in this debate.
  As the ranking member, I will not be silenced. I don't think this is 
a fair process. We are using every avenue available to help make 
certain the Americans hear the voice on the other side in this debate. 
We will continue our effort to carry out the challenge that President 
Bush laid out in his State of the Union to make this Nation more secure 
in the face of the volatile and dangerous world in which we live. 
Energy security must be part of that debate, even if the Energy and 
Natural Resources Committee is not allowed to meet.
  Finally, let me generalize on what the Daschle-Bingaman energy bill, 
S. 1766, provides. In general, the bill contains very little in the way 
of increasing domestic production of conventional forms of energy--oil, 
natural gas, coal, and nuclear. As a consequence of our energy 
dependence on imported oil, we are about 57 percent dependent. On 
September 11, we were importing just over a million barrels a day from 
Iraq. Currently, that is 750,000 barrels a day. One has to question 
whether indeed an energy bill should address our increased dependence 
on foreign sources of oil.
  I am often reminded of a statement made by Mark Hatfield, who served 
in this body for a long, long--long time. He headed up the 
Appropriations Committee. He was a pacifist, if I can characterize him 
to some degree. But on this issue of increasing our imports of oil from 
the Mideast, he often said: I will support opening up ANWR, opening up 
oil discoveries domestically, on any occasion, rather than send one 
more American, man or woman, overseas to fight a war on foreign soil 
over oil.
  That is what part of this debate is going to be about, because we 
have opportunities to increase domestic oil production. Some are going 
to say that we have other forms of energy, let's use them. We do, but 
the world moves on oil. Until we find another alternative, we are going 
to be increasing our dependence on very unstable sources: Iraq, Iran, 
Saudi Arabia. The consequences of that to the American people are, I 
think, severe.
  We are going to have a debate in this body. There is going to be an 
effort to filibuster. The National Environmental Policy Act groups have 
been against us. This has been a cash cow for them. Opening up ANWR 
specifically is the lightning rod. Those organizations have gotten 
together and put fear in the American people that it cannot be opened 
up safely.
  They suggest it is a 6-month supply. That is absolutely ridiculous. 
That would be like assuming there was no other energy produced in this 
country or imported for a period of 6 months.
  They say it is somewhere between 5.6 and 16 billion barrels. If it 
were in the middle, 10 billion barrels, it would equate to about 25 
percent of the total crude oil produced in the United States. It would 
be the largest discovery, if you will, other than Prudhoe Bay. That is 
more oil than the proven oil reserves in Texas. Some say it will take 
10 years. We built the Empire State Building in less than 2 years. We 
built a pipeline in a couple of years--800 miles. By permitting, we 
could get this oil on line in a couple of years.
  When Members are going to vote on this issue, they are going to be 
torn by the pressures from America's environmental community that has 
milked this issue like a cash cow, for money and membership. When we 
eventually pass it, they are going to move on to another cause, make no 
mistake about it. I think we are all practical politicians who 
recognize that.
  So these Members who stand here are going to have to make a vote on 
whether to be responsive to the environmental groups or do what is 
right for America--that is, to reduce our dependence on imported oil.
  This bill favors reduction in energy demand through the creation of 
new Federal agency efficiency standards--I am talking about CAFE--and 
it also focuses on fuel and renewable energy technologies, all of which 
I support. But we have to be careful and recognize that it is very easy 
to set a goal for 2015 of 37 miles per gallon. We are around 24 miles 
per gallon now. Because in the year 2015 a lot of us are not going to 
be here, we are not going to be held accountable. So it is very 
convenient to put that off and say let's achieve a standard of 37 miles 
by the year 2015.
  We have to concern ourselves with the safety of the automobiles. We 
have to concern ourselves with the mandate that Government is going to 
dictate what kind of car you drive, jobs protection in the industry--
OK? These are considerations that I believe are paramount in the 
discussion on CAFE standards.
  Some suggest the alternative is to let a scientific process set an 
achievable increase in CAFE standards, or mileage. That is the position 
I favor. Let's do what is attainable so we can be held accountable, not 
being held accountable by the year 2015, or thereabouts, for an amount 
that may not be practical, achievable, or maybe at a cost that is 
prohibitive--or at a cost of safety or maybe at a cost of jobs.

  Further, this legislation does not appear to solve the pressing 
energy problems the United States will face in the next decade, acting, 
instead, as the energy policy for 50 years from now. That is not what 
we want to do. That is just putting it off. By our account, this bill 
creates 40 Federal programs, 12 new Federal offices, and authorizes 41 
new studies related to energy policy.
  I am going to have a lot more to say about this later. I conclude my 
remarks again with the reference that each Member here is going to be 
held

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accountable for his or her vote and that accountability should be on 
what is right for America, not what the environmental lobby dictates.
  I yield the floor.
  I ask unanimous consent an article appearing in the AP entitled 
``U.S.-British Planes Bomb Iraq'' dated Monday, February 4, be printed 
in the Record. We are importing 750 million barrels a day from Iraq at 
the same time we are bombing them.
  There being no objection, the article was ordered to be printed in 
the Record, as follows:

               [From the Associated Press, Feb. 4, 2002]

                     U.S.-British Planes Bomb Iraq

                            (By Ben Holland)

       Instanbul, Turkey.--U.S. and British planes patrolling a 
     no-fly zone over northern Iraq bombed Iraqi air defense 
     systems Monday in response to anti-aircraft fire, U.S. 
     officials said.
       It was the first time U.S. and British planes had bombed 
     Iraq's north since the Sept. 11 terrorist attacks, said Capt. 
     Brian Cullin, a spokesman for U.S. European Command in 
     Stuttgart, Germany. The bombing came amid rising debate on 
     whether Iraq will be the next target of the U.S. anti-terror 
     campaign.
       The bombs were dropped after Iraqi forces northeast of 
     Mosul in northern Iraq fired on a routine air patrol, the 
     U.S. European Command said in a written statement.
       ``All coalition aircraft departed the area safely,'' the 
     statement said. Cullin said it would not be clear for some 
     time how much damage was done to the Iraqi targets.
       U.S. and British planes based in southeast Turkey have been 
     flying patrols over northern Iraq since September, 1996. The 
     two countries say the operation is designed to protect the 
     Kurdish population of northern Iraq from Iraqi leader Saddam 
     Hussein.
       ``There's a day-to-day commitment made by three very strong 
     coalition partners . . . toward a population we still feel we 
     have an obligation to protect,'' Cullin said.
       Expectations that Iraq could be the next target of the 
     U.S.-led anti-terror campaign were strengthened by President 
     Bush's State of the Union address last week.
       Bush said Iraq was part of an ``axis of evil,'' along with 
     Iran and North Korea, and accused it of seeking weapons of 
     mass destruction.
       Turkey, host to the air patrols and a launching pad for 
     strikes against Iraq in the 1992 Gulf War, has expressed 
     anxiety over the prospect of war in Iraq, fearing that the 
     fall of the Baghdad regime could lead Kurds in northern Iraq 
     to create a Kurdish state. That could in turn boost 
     aspirations of autonomy-seeking Kurds in Turkey.
       Turkey's Prime Minister, Bulent Ecevit, warned the Iraqi 
     leader on Monday to admit U.N. weapons inspectors in order to 
     head off possible U.S. military action.
       Iraq has refused since 1998 to allow U.N. inspectors into 
     the country to check if the Baghdad regime has dismantled its 
     weapons of mass destruction. Baghdad has rejected a U.S. 
     warning to admit the inspectors or face the consequences.
       In a letter to Hussein, Ecevit warned of the ``sever 
     consequences to be encountered'' if Iraq does not allow the 
     inspection.

  The PRESIDING OFFICER. The majority whip is recognized.
  Mr. REID. Mr. President, I say to the distinguished Senator from 
Alaska, I always enjoy his presentations. He is always prepared. He 
believes fervently in what he was addressing. I look forward to the 
debate we are going to have on ANWR and a number of other issues on 
this energy bill, which is going to come up next week. The majority 
leader indicated last year that it would be brought up before the 
Presidents Day break. That break is a week from today.
  We are on the agriculture bill. I think we can see the end of that, 
as I mentioned to my friend from Alaska today. I hope we can be on the 
energy bill by next Wednesday and work on that for a few days next week 
and maybe a few days after that when we come back. But I look forward 
to the debate. It is something we need to do. Energy policy is so 
important to this country.
  While there are divergent views on what that energy policy should be, 
that is the American system. We are going to come here, work through 
all this, and come up this year with what I hope is a finalized version 
after we finish our conference. It will be something to give us a long-
term energy policy for this country.

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