[Congressional Record Volume 152, Number 47 (Wednesday, April 26, 2006)]
[Senate]
[Pages S3530-S3532]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
ENERGY
Mr. DOMENICI. Mr. President, I rise today to talk candidly about
rising gasoline prices and what we can do about them. I have been
deeply concerned about our reliance on foreign oil and the rising cost
of energy for many years. That was one of the reasons I gave up my post
as chairman of the Budget Committee in the Senate to become chairman of
the Energy Committee. I saw energy dependence and rising energy prices
as a big problem for this great Nation, and I wanted to help solve it.
Last year, we passed a bipartisan policy act called the Energy Policy
Act of 2005. It was the first comprehensive Energy bill in 12 years. It
took Republicans and Democrats 5 years and a lot of hard work to get
this bill passed. It is an excellent bill and one I am proud of. This
bill fixed a lot of our energy problems, and in a year or two from now,
it will fix a lot more. Let me highlight a couple of the remarkable
accomplishments which our Energy bill has put before the American
people.
We create a pilot program in seven Western States that will
streamline the permitting process so oil and oil developers won't have
to wait years to develop their leases. Some people wonder: Are we doing
anything to help America solve our problems? One thing we must do is
develop our resources where we have them and where we can. We cannot
sit by and be naysayers about developing what we have that we can use,
so we don't have to buy it from others.
In this bill, we require 8 billion gallons of ethanol be included in
the gasoline by 2012. This provision will help ethanol displace 2
billion barrels of foreign oil over the next 6 years.
There are those on the other side who say the President proposed
nothing to help the farmers of the United States and the ranching
community. I just discussed with you what the Energy bill will do with
reference to ethanol, and all of that creates a new market for the
products of our farmers, makes them wealthy, gives them alternatives to
sell their product so they can be used to ultimately go into the tanks
of our automobiles in lieu of crude-oil derivatives called gasoline. We
provide several incentives in this bill for new nuclear power that have
prompted nine utility consortia to plan at least 19 new nuclear
powerplants in the immediate future. We had zero, we are already moving
toward 19, and some think it is 22.
The bill encourages wind, solar, and geothermal sources. Our
incentives will bring more than 14,000 megawatts of wind energy that
could be on line by the end of next year, which is enough energy to
power roughly 5 million homes for 1 year. Those are the things we did.
Those are the things that would have all been front and center had
Katrina not hit us and taken away all of the positives we were thinking
of and put us in that tank that came as a result of that enormous
hurricane which we are still recovering from. But all of the things I
am discussing are there, actually taking place, as the United States
changes because of that new energy bill.
The oil and gas prices continued to climb after the Energy bill was
passed, and a lot of that was due to the hurricane I have described. We
still have two refineries that are down because of the storm. That
accounts for 5 percent of our refining capacity. We have lost about 1.5
million barrels of oil per day because of damaged oil rigs. That is a
whopping 22 percent of our domestic production.
So for all of those who wonder: Did anything happen that could have
caused the problems we are having that might have been otherwise?
Obviously we can look at Katrina and say something very bad happened.
We didn't have to have that. Things could have been better.
Let me talk about the global unrest and the rising global demand that
has driven up the prices of oil across the globe. Oil is a global
commodity. Nobody knows what a barrel of oil is worth as it comes out
of the ground. Nobody knows what it is inherently worth. Let me say to
my fellow Americans, I regret to tell you, it is worth what somebody
will pay for it. That sounds strange, but that is what it is. It comes
out of the ground, it is gathered up, and when it finally gets on a
ship, somebody buys it. And what do they buy it for? They buy it for
what they think it is worth, and they bid it, and that is what it is
worth. So oil is worth what people pay for it. Regrettably, they are
paying more and more because they are worried about the world situation
and whether oil supply is credible, whether it is going to remain
reliable. So they bid it up higher and higher.
Problems in producing nations such as Venezuela, Nigeria, and Iran
have sharply driven up this price, along with this great, new,
voracious appetite on the part of China and India. They are entitled--
they are entitled, just as we are--to use this oil, and they are buying
it up, bidding it up, causing the supply and demand to have the impact
I am describing with all of you here this morning.
There are some things we can do to try to ameliorate this problem,
and, yes, some of them are very difficult. Most of it we can't do much
about, unless we either wean ourselves off foreign oil, which will take
several years to do, or dramatically increase our own production of
oil. I regret to say there are too many on the other side of the aisle,
not everyone but most on the other side of the aisle here in the Senate
and in the House who refuse to acknowledge that we must produce more of
our own wherever we can.
Let's talk about what we can do.
President Bush proposed four things yesterday, and I endorse every
one of them. Every one of those is now out there for the market to look
at, for everyone to look at, and they have already had a positive
effect. He wants an aggressive investigation of fraud and manipulation.
We mandated a similar investigation in the Energy bill, and I
absolutely support what the President called for--an ongoing
investigation into the manipulation or cheating that might be taking
place. Let's get on with it. Let's put the resources in. Let's make
sure the American people feel comfortable that it is taking place. We
are doing it. Whether it proves anything, we will have to wait and see.
[[Page S3531]]
The President wants to do another thing. He wants to repeal certain
tax breaks that are in the Energy bill. He says they are unnecessary
for oil companies. I agree. Actually, I thought they would do some
good, but the President has convinced me and many of us, under his
leadership, to repeal those tax items that are in the bill. I am happy
to take the lead, along with those who write the tax laws, and see if
we can repeal and eliminate the deepwater drilling tax relief that is
in the bill.
The President also recommended and announced that he will temporarily
halt the filling of SPR, a move I hope will free up about 12 million
barrels of oil this summer, meaning we won't use it for the Strategic
Petroleum Reserve. So it will be available to those who are purchasing
oil to be used as we have been describing it here: for the marketplace
to put in refineries and be used by the great demand that is worldwide.
If we had developed ANWR--and I note the presence of the junior
Senator from Alaska on the floor--if we had done that 10 years ago, if
we had passed ANWR legislation--we did pass it. Had the President of
the United States not vetoed it--and that was President Bill Clinton
who vetoed it--then what we would have had available is at least 1
million barrels of oil--American owned--that we could use every day,
and it would be added to the inventory that is out there for the world
to use, and for the United States it would be a dramatic reduction in
the amount of oil we would have to buy from others.
We have to wake up. There is nothing to be damaged. You can go look
at ANWR and see what we would be doing with new drilling, new
approaches to drilling, if we would get that done. It is regrettable
that we won't produce our own and we will sit and talk and blame, and
in particular, the other side will blame the President and blame
Republicans. These Senators understand that today's gasoline prices are
driven ever increasingly by long-term speculation on global production.
They understand that a strong signal on supply can drive prices up
today and down tomorrow. They know a vote to develop ANWR will have an
immediate impact on oil prices, which in turn will have an immediate
impact on gasoline prices.
Look at what happened to the energy markets yesterday after the
President announced his four-prong plan. Energy prices fell. Yet these
same Senators fought against ANWR, fought against OCS production, and
have consistently fought against new energy production almost anywhere,
production they know will ease our price and supply problems.
We have worked in the committee and marked up, gotten ready for a
vote, Lease Sale 181 on natural gas, a bill that will develop oil and
gas 100 miles off the coast of Florida. Democrats have threatened to
filibuster the bill when it comes to the floor. It shows there is no
desire to produce even what is our own.
The Massachusetts delegation continues to block the Weaver Cove
liquefied natural gas facility, a facility proposed for Fall River that
would provide 400,000 mcf of natural gas per day. That is enough to
ease the price and supply pressure for most of New England.
Another example is if you don't want to produce energy that is our
own, then you ought not be complaining about the fact that the price
continues to rise because of shortages in global markets. Instead,
today some on the other side propose a tax holiday. I find it
interesting that it is Democrats who want to temporarily repeal the
gasoline taxes since it was they who voted over the years to increase
that same tax.
I can support the idea of a holiday. I like the idea of helping
American families keep some of their money they are spending at the gas
pump. But we use that money to build roads and mass transit. The
Federal Government is going to have to make up those revenues
somewhere. So let me propose this idea: Let's let the oil companies
make up the difference. That is what we ought to do.
Anyway, I suggest we are on the right track. The President's
suggestions are good suggestions, and we can come up with some more.
But in the meantime, we ought to tell the American people the truth:
There is no quick fix, and it is easier to blame than it is to have
solutions. Let's look for the solutions and then we will all get a
chance to judge who is doing the most to help America move toward
energy independence.
I believe I have some additional time, and I yield it to the
distinguished Senator from Alaska.
The PRESIDING OFFICER (Mr. Vitter). At this time all time has expired
on the majority side.
Ms. MURKOWSKI. Mr. President, I ask unanimous consent for 5
additional minutes to be added on this side and on the other side as
well.
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.
Ms. MURKOWSKI. Mr. President, I commend the distinguished chairman of
the Energy Committee who has taken such a leadership role on the issue
of achieving energy independence for this country.
We all had an opportunity to go home over the past couple of weeks,
and I think it is fair to say that without question, in every State
across this country, the No. 1 issue our constituents are talking about
is energy prices. With the crude oil prices passing an all-time high of
$75 a barrel last week, I think it is fair to say we can anticipate
that the prices will go higher and higher.
It seems we all want to blame someone. Americans want to blame
someone--anyone--for the high prices. They want to blame the oil
industry companies that have been showing record profits. They want to
blame the filling station operators and accuse them of price gouging.
They want to blame the oil commodities traders for bidding up the price
of crude. They want to blame the Congress for allowing and perhaps
encouraging these prices. Quite frankly, it is hard for us not to
accept some of the blame. But what Americans don't want to accept is
that these prices we are seeing are the result of nearly 20 years of
incoherent energy policy.
The reasons for the price increases are many, and we have heard the
chairman discuss many of them. But the biggest goes back to the lessons
we learned in high school economics about the law of supply and demand.
Today the world consumes 80 million barrels of oil a day. The U.S. is
responsible for a quarter of that. Right now, our oil producers
collectively around the world have the ability to produce at most 81
million barrels daily. So the demand is bumping dangerously close to
maximum current supply, and that demand for the oil is booming.
We talked about China. China last week announced that its economy
grew more than 10 percent last year, and its demand for fuel is rising
an equivalent amount. Developing nations are outbidding industrial
nations for oil, and the trend continues. Demand for fuel in the Asian
pacific region is likely to grow at over 3 percent annually for the
next 25 years, nearly 5 times the growth rate of fuel use in North
America and 4 times the rate in Europe.
In addition to the demand side of the picture, the supply side is
down. Six percent of the Nation's oil production remains offline as a
result of the damage from Hurricanes Katrina and Rita. We have often
talked about the world's supply. The world's supply is uncertain, given
the unrest we are seeing in Nigeria, the political events in Venezuela,
rhetoric from Iran, supply disruptions that plague Iraq.
We here in Congress also have a place in this equation when we look
to the supply side. It was 6 years ago that Congress passed the
requirement that said by June 1 of this year the Nation's refineries
must reduce the sulfur in diesel fuel from 500 parts per million to 15
parts per million, and refiners have spent the money, more than $8
billion, to comply. The changes are this: They are going to cut the
diesel exhaust pollution by 90 percent. But it does take more fuel to
make a similar amount of diesel, and it is costing the refineries more
money to comply with the ultralow sulfur diesel rules.
Last year we were talking about MTBE and what to do about it. We
didn't provide for an organized phaseout of MTBE, which means the
refineries are rushing to acquire ethanol to replace MTBE in gasoline.
What this does is causes a host of different price pressures, from the
added costs of building new tanks to store the ethanol to the crush of
finding railroad tank
[[Page S3532]]
cars to move the ethanol from the Midwest to the Northeast and down
into Texas, where it can be blended into the gasoline.
Since it requires a special base form of gasoline, the ethanol-to-
MTBE switch makes it difficult for us to import gasoline from overseas
to relieve these price pressures, because outside of Europe there are
few foreign refineries that can actually make this base form. So that
means tighter fuel supplies that cannot readily be remedied by imported
product.
We talk about the cost to us as Americans. According to the Energy
Information Administration, we are already paying about twice as much
for fuel today as we did in the summer of 2002. On the whole, our
country is spending $212 million more per day for gasoline than we did
last year, a half billion dollars more per day than 4 years ago. It is
incredible.
What do we do about it? The chairman of the Energy Committee noted
some of the steps, and noted some of the steps the President has
advanced. But our first effort today is to conserve, to increase our
conservation and efficiency efforts.
The PRESIDING OFFICER. The time of the Senator has expired.
Ms. MURKOWSKI. Mr. President, I ask unanimous consent for 1
additional minute.
The PRESIDING OFFICER. Without objection, it is so ordered.
Ms. MURKOWSKI. We must do the simple things first. Conservation,
efficiency, make sure the tires are inflated, our cars are in tune,
drive less, reduce the air conditioning--those small things that will
make a difference. We have to move quickly to increase our fuel
efficiency, continue to expand the use of renewables such as wind,
geothermal, biomass, oceans, solar--all of those that are available.
But we must increase our domestic supplies of oil and natural gas, and
the first place we start is up in ANWR. We have the ability to do it.
We have demonstrated that we can. Opening ANWR would produce up to 1
million barrels a day of additional oil for 30 years to meet the world
demand and drive the prices down.
People are saying it is not going to make a difference today, and
they are correct. But we didn't get to this place in 1 day. What we are
anticipating is the need down the road. Anyone who thinks in 5 or 10
years there are not going to be anymore hurricanes or supply
disruptions or production impediments is fooling himself. So let's plan
for the future. Let's plan for our own domestic energy security by
doing what we can in this country. The first place to start is by
opening ANWR to limited oil exploration and development, and doing it
in an environmentally sensitive and balanced manner.
I yield the floor.
The PRESIDING OFFICER. Who yields time?
Mrs. MURRAY. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. ALEXANDER. Mr. President, I ask unanimous consent the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. ALEXANDER. Mr. President, I understand the remaining time on the
Democratic side is not needed and may be yielded back.
Mrs. MURRAY. Mr. President, I yield back the remaining time on the
Democratic side.
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