[Congressional Record Volume 151, Number 70 (Tuesday, May 24, 2005)]
[Senate]
[Pages S5853-S5854]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. HATCH (for himself, Mr. Bennett, and Mr. Allard):
  S. 1111. A bill to promote oil shale and tar sand development, and 
for other purposes; to the Committee on Finance.
  Mr. HATCH. Mr. President, I rise today to introduce the Oil Shale and 
Tar Sands Development Act of 2005. In doing so, I would like to thank 
Senator Robert Bennett and Senator Wayne Allard for cosponsoring this 
legislation.
  It could not be any more apparent to Americans when we pay to fill up 
our cars that this country is in need of a strong, comprehensive energy 
strategy. Our citizens recognize that there is a shortage of petroleum, 
and that that shortage is driving up prices.
  American consumers have increased their demand for oil by 12 percent 
in the last decade, but oil production has grown by less than one half 
of one percent. Is it any wonder we rely on foreign countries for more 
than half our oil needs? We import 56 percent of our oil today, and 
it's projected to be 68 percent within 20 years.
  On a larger scale, global demand for oil is growing at an 
unprecedented pace--about two and half million barrels per day in 2004 
alone. However, while global oil production is increasing, the 
discovery of new oil reserves is falling dramatically. Moreover, trends 
indicate that the global thirst for petroleum will continue to grow, 
especially in Asia.
  Last month, Federal Reserve Chairman Alan Greenspan stated, ``Markets 
for oil and natural gas have been subject to a degree of strain over 
the past year not experienced for a generation. Increased demand and 
lagging additions to productive capacity have combined to absorb a 
significant amount of the slack in energy markets that was essential in 
containing energy prices between 1985 and 2000.''
  We are quickly heading into a global energy crunch, and our lack of 
sufficient oil supply at home will give us little or no buffer against 
it. Increasing our domestic oil reserve is imperative both from an 
economic and a national security perspective.
  I am pleased to report to my colleagues today that a solution is 
available.
  It is a little known fact that the largest hydrocarbon resource in 
the world rests within the borders of Utah, Colorado, and Wyoming. I 
know it may be hard to believe, but energy experts agree that there is 
more recoverable oil in these three States than there is in all the 
Middle East. In fact, the U.S. Department of Energy estimates that 
recoverable oil shale in the western United States exceeds one trillion 
barrels and is the richest and most geographically concentrated oil 
shale and tar sands resource in the world.
  This gigantic resource of oil shale and tar sands is well known by 
geologists and energy experts, but it has not been counted among our 
Nation's oil reserve because it is not yet being developed 
commercially. Companies have been waiting for the Federal Government to 
recognize publicly the existence of this resource as a potential 
reserve and to allow industry access to it.
  This bill would give them that chance.
  Some might ask why we have not yet developed these resources if doing 
so could have such a profound economic potential?
  I understand why we have been so hesitant to develop this resource in 
the past. During the 1970s, we saw a very large and expensive effort 
begin in western Colorado to develop oil shale there. When the price of 
oil dropped dramatically, though, the market for oil shale went bust 
and the region suffered an economic disaster.
  We should never forget that experience.
  Much has changed since the 1970s, and it would be senseless to 
continue to ignore the huge potential of this resource. I think there 
has been a mind set within the government and the local communities 
resulting from the Colorado boom and bust experience that developing 
this resource would be risky. The fact is, developing this energy 
resource is no more risky than producing oil offshore or in the Arctic. 
It is certainly less risky than continuing to rely on oil from the 
Middle East or from other foreign competitors.
  We need to remember that our past failure in this area was not 
necessarily a failure of technology, but rather an inability to sustain 
this technology economically because of a very large slump in gas 
prices. Today's economics and advances in technology combine to provide 
the right scenario to begin the development of the world's largest 
untapped oil resource.
  Skeptics might ask how we know that the price of oil won't plummet, 
causing the problems of the 1970s all over again? The world is now 
reaching peak oil production of conventional oil. With the tremendous 
growth in India and Asia, and the accompanying need for oil, experts 
predict there will be little economic incentive for prices to drop. 
This is a new scenario for the world, and it forces us to shift our 
focus to unconventional resources.
  We have already seen this shift in focus by the government of 
Alberta, Canada. Alberta recognized the potential of its own tar sands 
deposits and set forth a policy to promote their development. As a 
result, Canada has increased its oil reserves by more than a factor of 
10, going from a reserve of about 14 billion barrels to its current 
reserve of 176 billion barrels in only a few years. And just think we 
are sitting on one trillion barrels, more than five times what Canada 
has.
  I think it's outrageous that Utah imports about one-fourth of its oil 
from Canadian tar sands, even though we have a very large resource of 
those very same tar sands in our own State sitting undeveloped. The 
government of Alberta, which owns the resource, has moved forward in 
leaps and bounds, while the United States has yet to take even a baby 
step toward developing our untapped resource.
  Our proposed legislation looks to the Alberta model to help the 
United States move toward greater energy independence. The Oil Shale 
and Tar Sands Development Act represents a necessary shift by our 
government from an almost complete reliance on conventional sources of 
oil to our vast unconventional resources, such as tar sands and oil 
shale.
  In drafting this legislation, we have been mindful of the environment 
and of States' water rights. We live in a different world than when 
these resources were first developed. Unlike 30 years ago, we now have 
the Clean Water Act, the Clean Air Act, the Resource Conservation and 
Recovery Act, the Comprehensive Environmental Response, Compensation, 
and Liability Act, the

[[Page S5854]]

National Environmental Policy Act, and the Mining Reclamation Act. 
Also, new technologies make the effort much cleaner and require less 
water than in the past. Industry understands that any water it needs 
will have to be acquired according to State law and according to 
existing water rights.
  Let me talk, for a moment, about the specific provisions in our bill. 
S. 1111 would establish an Office of Strategic Fuels tasked with, among 
other things, the development of a five-year plan to determine the 
safest and steadiest route to developing oil shale and tar sands. The 
bill would also establish a mineral leasing program in the Department 
of the Interior to provide access to this resource.
  Recognizing the tremendous national interest in this resource, our 
legislation provides a number of programs to encourage oil shale and 
tar sands development, including Federal royalty relief, Federal cost 
shares for demonstration projects, advanced procurement agreements by 
the military, and tax relief through the expensing of new equipment and 
technologies related to oil shale and tar sands development.
  The size of our nation's energy challenge is enormous, but in Utah, 
Colorado, and Wyoming we have an answer that more than meets the 
challenge. This bill moves us down that path. I urge my colleagues to 
join us in our effort to help the United States open the door new 
frontier for domestic energy.
                                 ______