[Congressional Record Volume 151, Number 79 (Wednesday, June 15, 2005)]
[Senate]
[Pages S6642-S6643]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
ENERGY POLICY ACT OF 2005--Continued
The PRESIDING OFFICER. The Senator from Illinois.
Mr. DURBIN. Mr. President, I see the Senator from Kansas waiting
patiently. I do not want him to sit here and miss the picnic. I will
just speak for a few minutes more.
The point I was trying to make when I yielded to the majority leader
is there is dramatic growth in the Chinese economy, and with that
growth, there will be an increase in their demand for oil. They will be
competing with the United States around the world.
We will find the old laws of supply and demand will not work.
Increased demand without increasing supply means higher prices. So we
will be in competition for this foreign oil, paying more for it,
watching our economy strangled by this dependence on foreign oil.
Obviously, there are some who say that is fine, that is the way life
is, get ready for it. We do not see it that way. On the Democratic side
of the aisle, the Cantwell amendment sets a goal of reducing this
dependence on foreign oil by 40 percent over the next 20 years. It is
an achievable goal. People who follow this closely will tell you there
are variety of ways to achieve it. The measures that can be used, short
of changing CAFE standards, which I support personally--but if you do
not want to change CAFE standards, there is market growth in hybrid
vehicles, industrial, residential, and aviation efficiency, heavy-duty
truck efficiency gains, replacement tires--that sounds like a small
thing but it turns out to be a large element in increasing fuel
efficiency--transportation choices, such as mass transit and growth in
biofuels.
All of these are here. The National Commission on Energy Policy has
come up with these recommendations and have given us things we can
point to, to reduce our dependence on foreign oil.
Some on the other side of the aisle just do not want to concede this
point. They are obviously prepared to accept this indefinitely, that
our dependence on foreign oil will grow. But how can that make us
stronger as a Nation, how can that make us more secure? It moves us in
the wrong direction.
There may be some who profit from our dependence on foreign oil, but
it is not the American economy, and it is certainly not the American
taxpayers, nor the sons and daughters who are serving overseas
defending America's interests.
Furthermore, unstable governments, in Iraq, in Saudi Arabia also
threaten U.S. supply.
Finally, I would like to note that the money that we spend annually
in the Middle East to feed our oil thirst, goes directly to the
production of hate literature throughout the region. So today, while
American men and women are fighting in Iraq, the U.S. continues to send
billions of dollars overseas that are funneled off to support
operations that completely undermine our service people's efforts
there.
In the past few years we have witnessed China's surging economic
growth. China's real gross domestic product is growing at a rate of 7
percent a year. In the U.S. News and World Report this week, the cover
story is, ``The China Challenge, What the awakening giant will mean for
America.''
China is the world's most populated country with 1.2 billion people.
In 2003, China overtook Japan as the second largest oil consuming
nation in the world and projections are that Chinese demand for oil
will double by 2025, nearly meeting current U.S. imports. The US News
reports notes that China's economy is expected to surpass Japan's by
2020, making it the second largest in the world.
Recent data indicates that the number of automobiles in China has
grown 19 percent annually, surpassing Germany with the number of cars
they have on their roads. By the year 2010 China is expected to have 90
times more cars than in 1990. Consequently, China could surpass the
total number of cars in the U.S. by 2030.
China's oil consumption has grown by 7.5 percent per year reaching a
current daily demand of about 6.4 million barrels a day, yet China's
oil production is flat at around 3.4 million barrels per day.
Currently, 58 percent of China's oil imports come from the Middle
East and it is projected that by 2015, the share of Middle East oil
will reach 70 percent.
With projected growth in automobiles, projected oil demand in China
could increase to 15 million barrels a day by 2020.
This growth in demand will increase global competition for oil
resources, likely to increase, not decrease the price of crude oil.
While China is attempting to diversity its oil interests, like the
United States, China recognizes that the world's most substantial oil
reserves are in the Middle East.
If we look at this chart, we can clearly see that in 2020, 83 percent
of projected global reserves based on current production rates will be
in the Middle East. The United States and China will be in very similar
positions with regard to domestic oil reserves.
A story last week's Washington Post reported that nationally, daily
production of oil and natural gas liquids dropped last year to an
average of 7.2 million barrels a day, a 36 percent decrease since
peaking in 1970. And at Prudhoe Bay, average daily production last year
was about 450,000 barrels a day, a 72 percent drop from its peak, and
production is expected to continue to drop.
What does this mean for the U.S.? Our increasing decline in domestic
production and growing global demand on Middle East oil supply could
have serious implications on foreign policy. A report by the U.S.-China
Security Review Commission, a group created by Congress, warned:
A key driver in China's relations with terrorist-sponsoring
governments is its dependence on foreign oil to fuel its
economic development. This dependency is expected to increase
over the coming decade.
China is already competing with us for world supply, and this
competition is--not may--is going to increase.
It is very clear from China's economic growth, with India emerging as
well, that the United States, if it continues on the current course,
feeding its thirst for energy using foreign oil, will face increasing
pressures caused by increasing demand and tightening supply.
Inevitably the production decisions of foreign nations and
organizations like OPEC, will determine the price of our energy, and in
turn control of our economy and America's national security.
Earlier this year, in April, the price of a barrel of oil rose above
$55, today it is hovering around $53. With the increase in crude prices
in the spring, gas prices jumped too, increasing 40 or more cents per
gallon in many parts of the country since that time last year. While we
have witnessed a slow drop in gas prices, they still remain over $2 per
gallon in much of the country.
An AP report noted yesterday that oil prices rose yesterday on news
that OPEC may increase production quotas, and that oil prices will
remain high well into 2006, even if the production ceiling is raised.
In this same report, a group of finance ministers from the Group of
Eight industrialized nations, over the weekend, called for greater
investment in increased energy efficiency and alternative sources of
energy. They noted that sustained high energy prices ``are of
significant concern since they hamper global economic growth.''
Not only do high oil prices hamper global economic growth, they
hamper America's economic growth.
Back when oil was $43 per barrel, the International Air Transport
Association estimated that the airlines would lose $5.5 billion.
Yesterday's oil price, however was $10 higher than this, $53.47
[[Page S6643]]
per barrel, pushing this overall figure even higher. Fuel costs are the
second biggest cost for our nation's airlines.
The chief of the IATA said that each dollar rise in the cost of oil
boosts the industry's total fuel costs by about a billion dollars
annually.
Airlines, many on the verge of bankruptcy like United Airlines in my
State, cannot afford this. Workers and retirees are impacted with wage
and benefits cuts. United Airlines reported that their fuel costs
soared $200 million in just the first quarter of 2005.
And in this industry, where fuel makes up such a large portion on the
companies operating budget, fuel efficiency is leading purchase
decisions.
For instance, the next Boeing jetliner, the 787, is projected to be
20 percent more fuel efficient than its predecessors, key factor being
cited by airlines like Air Canada and others who have placed orders for
the new model.
The economic toll that rising energy costs has on the industrial
sector is also large. For instance a $1 increase in the price of oil
costs U.S. companies and consumers about $828 million in trucking costs
each year.
And families are impacted too, making hard decisions as the money
gasoline they pump into their gas tanks eats at a bigger portion of
their paycheck.
I raise these issues because I think we can help move America in a
direction whereby reducing demand will help to insulate our economy,
our jobs and our national security from oil prices spikes brought on by
either production quotas, infrastructure delivery implications or
instability in foreign countries.
There is potential job growth if America embraces a new vision. For
instance, a report completed by the Renewable Fuels Association
estimated that doubling the production of ethanol could create 234,840
new jobs in all sectors of the U.S. economy--help communities grow and
rejuvenate cities.
Advancing technological innovation can encourage our traditionally
robust manufacturing sectors provide new parts and products that we
will need to meet our goals. Cynics point to what we know, increasing
fuel economy standards, visionaries embrace new ideas, advancing
engineering design, alternative fuels, hybrids, hydrogen--and who knows
what next.
Building new infrastructure or retooling factories are jobs that will
be in America--not oversees. These jobs will provide stronger markets
for goods and labor--reinvigorating some cities across the U.S.
Yesterday, Mr. Woolsey noted in our press conference that the U.S.
borrows $4 billion annually to buy foreign oil. If each billion spent
abroad were spent in the United States, we could create 10,000-20,000
American jobs, many in rural communities.
Technological change and advancement has always been a recipe for
success for America. From the Wright brother's flier to the creation of
the personal computer, we have created ways to advance and provide jobs
for Americans while doing so.
But America needs to agree that we have to move in this direction.
The Cantwell ``40 in 20'' Amendment establishes the goal that moves the
U.S. forward.
Earlier on the floor today, I heard one of my colleagues say that it
is not possible to reach the goal established by this amendment. First,
how do we know if we do not try. Second, I challenge American's to do
so--because it is our Nation's best interest.
The AP story yesterday noted that an energy analyst cautioned that,
what is the so-called ``global depletion midpoint''--the point at which
roughly half of oil reserves have been tapped and production can no
longer be increased--could come by the end of the decade.
For me, I believe that we have no choice but to turn around before
it's too late.
In May 1961, President John F. Kennedy set the goal of landing an
American on the moon. He did not prescribe to scientists how to get an
American to the Moon; he set the goal, and provided the resources to
meet that goal. Only nine years later, Neil Armstrong and Edwin Aldrin
made the first human steps on the Moon. I know there were skeptics at
the time--I wasn't one of them, but there were--thinking a man couldn't
walk on the Moon. But we did, and we've done so much more since.
When American's are challenged they have proven that they can and
will rise to the occasion.
I encourage each one of my colleagues to think long and hard about
this amendment and what vision they have for America.
If you want an America whose economy is strapped to the whims of
foreign governments and supply shocks of foreign oil, then vote no on
this amendment.
If you believe that America's great thinkers, innovators, scientists
and businesses cannot create the solutions that we need to reach this
goal then you should vote no on this amendment.
If you believe that we cannot create more jobs by increasing
domestically produced fuels, then you should vote no on this amendment.
But if you want a different America, one where your children or
grandchildren can don a lab-coat instead of a flack-jacket; where
energy solutions can create jobs, protect the environment and safeguard
public health and believe that America's economic prosperity and
national security are our highest priority, I encourage you to vote yes
on the Cantwell energy security amendment.
In keeping with the bipartisan nature of this bill to date, I
encourage all my colleagues to pass this amendment and move America
toward an energy independent future.
The Cantwell amendment moves us in the right direction, reducing our
dependence on foreign oil and reducing our dependence on the nations
that supply that oil.
Critics have come to the Senate floor and said: Well, she does not
spell out how to do it. This bill spells out many ways that we could
move toward less dependence on foreign oil, and because it is a good
bipartisan bill, I am looking forward to supporting it.
These things which I have noted are already existing technology that
can be used to move us toward this goal. For those of us who have a
positive, optimistic view of the creativity and freedom in America, the
Cantwell amendment sets us on a goal that America should achieve on a
bipartisan basis.
I urge my colleagues on both sides of the aisle to join me in
supporting the amendment.
I yield the floor.
Mr. CRAPO. Mr. President, during Senate vote No. 139, pertaining to
amendment No. 779, I was necessarily absent. Had I been present, I
intended to vote ``yes.'' I ask that the Record reflect this.
The PRESIDING OFFICER. The Senator from Kansas.
Mr. ROBERTS. Mr. President, I ask unanimous consent that I may
proceed as if in morning business.
The PRESIDING OFFICER. Without objection, it is so ordered.
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