[Congressional Record Volume 153, Number 114 (Tuesday, July 17, 2007)]
[House]
[Pages H7961-H7968]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                              {time}  2145
                            ENERGY SECURITY

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 18, 2007, the gentleman from Nebraska (Mr. Terry) is recognized 
for 60 minutes as the designee of the minority leader.
  Mr. TERRY. Mr. Speaker, I am here tonight to talk about energy 
security. We have talked about energy independence, and I think that is 
a subset of energy security.
  We have to look at the world in total, and we have to realize that we 
need to secure our own energy sources if we are going to secure the 
future of our country. Even as I look at probably the most immediate 
issue, the war with terrorists, their actions against us, but if we 
take that and look at the world in total, when I see the lowest common 
denominator, it's energy. It is a fight or a battle for energy.
  Those who are going to be able to power themselves without relying on 
others will not only have more options and purer choices in foreign 
policy

[[Page H7962]]

matters, but the reality is in this new emerging global economy, those 
that cannot be economically hijacked by foreign countries are going to 
be the winners. I want to make sure that we have a policy in place that 
recognizes the need for independence so that we can secure our future.
  Now this means that we have to do some things. I don't know how many 
of you out there remember high school economics. I remember Mr. Croft's 
lessons at Northwest High School, and basic supply and demand.
  When we look at resolving our energy issues, and, by the way, a 
barrel of oil hit over $75 today, we have to look at both sides of the 
equation. That's what we tried to do in 2005, the energy bill that was 
signed by the President. We tried to increase the amount of supply of 
energy and, at the same time, looking at how to conserve or reduce the 
demand for energy in our country.
  Now, overlaying this discussion about energy, supply and demand, is a 
new discussion amongst us about global warming. This is driving our 
discussions on energy today. I fear that we have become, how do I say 
this, but so spooked by global warming that we are willing to go to the 
extreme and hurt ourselves.
  And I really believe that part of my role and the role of the 
minority party here is maybe to swing back to a more practical level as 
we talk about energy and global warming.
  Now, what a lot of people don't know when we talk about global 
warming or the CO2 emissions, that is the gas that is 
depleting our ozone, the vast majority of that is created naturally, 
not by humans. Yes, human activity that I am going to talk about in a 
minute does contribute to that.
  Now, as I understand, the major contributor and the most significant 
contributor to CO2 emissions is livestock. So, of course, 
some have joined hands with PETA to make sure that we eliminate all the 
cattle, pigs, chickens, and we should just become vegetarians.
  The next is humans. Not by our activity of burning coal and the coal-
generated electrical plant, but just ourselves and our existence, our 
exhaling. And, therefore, we should have mandated policies to control 
population, i.e., abortion, and reduce the number of people on Earth. 
That is one of the policies out there.
  Now, the discussion that we are going to have here in the House in 
the next 2 weeks is going to be on what energy policies do we implement 
here to lower CO2 emissions and become energy independent. 
Well, the reality of it is, the policies that we are going to hear from 
the majority party will help to some small degree on the demand side 
and absolutely drive up or put more pressures, increased pressures, on 
supply, because they are going to eliminate some of our sources that we 
use for energy, make it more difficult and more costly to use and, 
therefore, create bigger demand. What happens when there is bigger 
demand? Prices go up.
  So any of you out there that want to turn on a light, use your 
computer, heat or cool your homes, drive to work, under the policies 
that we are looking at adopting in this House over the next couple 
weeks, expect to pay more.
  Now, this is why I think it is becoming so important here. I want to 
get back to our supply-and-demand lesson here. In this chart, the 
United States, because of our economic engine, our ingenuity, our 
intellectual properties that are being put into action, we are the 
largest consuming Nation. Now, look down here, we also rank number one 
in oil importation. We have to import to drive our economy, literally 
drive our economy, about 65 percent of our energy needs. Now, that is 
12 billion barrels that we have to import.
  When I think of energy, I have to separate it into two different 
issues. One is driving. About two-thirds of the oil that we import goes 
to refining into gasoline, to use in jet fuel and trucks to move goods 
from one place to another, as well as cars to get us to the grocery 
store, to get us back to work. If we are going to become independent, 
we have to look at a full array of fuels that we can generate here. 
That means biofuels to some extent. That means that we adopt policies 
on hybrid type of cars or other experimental cars that are out there. 
And, by the way, that does lower emissions. But remember, car emissions 
are pretty far down the list of what actually contributes to 
CO2 emissions and the ozone. We can then look at a lot of 
other technologies. I am a proponent of hydrogen, for example.
  Now, let's look at the other side of generating electricity that 
powers our economy and is part of the equation. Most of our electrical 
generation, about 52 percent nationally, is from coal. In the policies 
adopted by various committees of this House and that are going to be 
brought to the floor in some capacity either in the next 2 weeks or 
maybe even September, they make it much more difficult to use coal. I 
mentioned, 52 percent of the electricity in this Nation is generated 
from coal. In my district, it is over 70 percent. It is the cheapest 
way to generate electricity. It is plentiful. We have something like a 
500-year supply of coal to generate electricity in this country.
  So I feel that instead of doing what the majority party wants to do 
and shut down coal-fired plants, crippling our ability to generate 
electricity; and, by the way, nuclear is bad, too. Remember that, no 
nuclear power? Let's make it as difficult. Let's not find ways to deal 
with the waste. And so if we shut down coal, make it more costly at 
least to do it, no nuclear, that means you have one area to really rely 
on in generating electricity, and that is natural gas. Oh, and by the 
way, our policies don't allow for any more domestic supply of natural 
gas and oil, so we are going to shift everything to natural gas to 
generate. We barely allow it to be imported. We can't drill any more 
for it within our own 48 continental United States or offshore any more 
than we are doing today.
  I don't understand this energy policy that is going to be brought to 
us. It seems to me to be a negative energy policy. In fact, I think the 
only energy that is involved in this bill is perhaps if we burn the 
darn thing we could generate some power. But, as was just mentioned to 
me, that would result in CO2 emission, so we can't even do 
that.
  Mr. Speaker and the American public, we need to become more engaged 
in this. We are on a path to cripple our economy. China is adding at 
least one new power plant a week based on coal. They have no problems 
using coal. I saw a statistic that was 2 years old, so it is probably 
much more significant now, but the Chinese were adding 120,000 cars per 
day. That is not even talking about India, whose economy is expanding 
at near double digits as well, and they are adding power in their cars.
  The competition is extreme for oil. We need to recognize that. We 
need to expand it. That doesn't mean that we shut down our domestic 
fossil fuels. That means we add to it so that we become independent and 
secure our Nation's future.
  At this time, I yield to my friend from Texas.
  Mr. CONAWAY. I thank my friend from Nebraska hosting this hour 
tonight. We listened earlier tonight to one of our colleagues from Ohio 
who recited some of the same statistics that you and I work off of, and 
that is, most reputable projections of energy usage in this country by 
2025 and 2030 shows that, no matter what, even the rosiest predictions 
show that we still will be importing millions of barrels of crude oil 
and refined products every single day. And I don't know of any of us 
who thinks that America is better off by importing crude oil and 
refined products. Most of us would agree that that is a bad thing. Our 
balance of payments is out of whack.
  As you mentioned earlier, our foreign policy options are different. 
Our risks and threats to this country are exacerbated by that 
dependence. And then you begin to talk about the solutions. We agree on 
those facts. It is kind of looking at the glass half full or half 
empty. The amount of water in the glass is the same; it is just how do 
we look at it. And the proposals that she began to tout and promote 
seem to cost American taxpayers an awful lot of money. They also seem 
to involve some sort of price-control scheme that would not allow the 
natural market forces to work and operate as we begin to export these 
ideas.
  We will hear, as you said, over the next 2 weeks a lot of policies, 
and I think we ought to look at those polices through a lens that has 
four pieces. One lens would say does this policy help or hurt domestic 
production of crude oil and natural gas.

[[Page H7963]]

  I am a CPA by trade and I operate pretty often just by straight 
logic, and the logic is that if we increase domestic production of 
crude oil and natural gas, it means we are less dependent on foreign 
sources of crude oil and natural gas. I have yet to have anybody refute 
that argument in any way that makes sense. So, promoting production of 
crude oil and natural gas I think is a positive. So as you look at 
their policies, challenge them.
  If their policy continues to close off areas of domestic production 
and domestic exploration like ANWR, like the Inner Continental Shelf, 
then that policy does not make sense for America today. And many of the 
policies they have in place or want to continue in place have that 
result.
  If their policies retard or restrict the construction of new 
refineries in this country, the ability to process our domestic crude 
into refined products, gasoline, jet fuels and other kind of things, 
and force us to import refined products, it seems to me that that is a 
policy we ought to challenge.
  We in the minority spend a lot of time being against stuff, and I 
guess that is pretty much our role, but part of that is to be 
responsible devil's advocates. And if a policy curtails domestic 
production of crude oil and natural gas, that seems to be on its face 
something that you and I can challenge pretty easily.
  The second lens would be does it increase our reliance on foreign 
sources of crude oil. And in this category, it would be things like 
does it promote or inhibit personal responsibility for conservation.
  Republicans get beat up about not being wanting to conserve and 
wanting to use less fuel, but at the heart of that is the personal 
responsibility to use a little less gasoline than you used last week. 
The idea is that if all of us would use just 1 gallon of gasoline next 
week, if we did that, you would see an immediate increase of 
inventories. You would see a drop in the prices because the folks 
holding those inventories are wanting to sell them and sell them at a 
profit.
  So policies that either encourage personal responsibility for 
conservation or discourage personal responsibility for conservation, I 
think we have got to be for and against. If it encourages that and 
those policies come forward in the next couple of weeks, I think we 
ought to back those policies and help us do a better job making good 
choices ourselves, goofy little thing like keeping the tires in our car 
aired up properly, taking all the extra weight out of the trunk. Doing 
those kinds of things, you would probably pick up 3, 4, 5 percent 
efficiencies in the use of gasoline and see a dramatic impact. Just 
using less, that helps reduce our imported refined products. So 
policies that they bring forward that increase our reliance on foreign 
sources of crude oil and natural gas, I think we have to challenge 
those.
  The third would be does it encourage private investment in all 
sources of domestic energy, and that includes oil and natural gas. It 
includes coal, nuclear, wind and solar, and all those kinds of things 
that are out there.
  Mr. TERRY. Your vision would include wind energy, solar energy?
  Mr. CONAWAY. Yes. Let me say this: Even if the occasional turbine 
helped a bird commit suicide, yes, I would encourage wind turbines.
  Mr. TERRY. So in one of the bills in one of our committees, it 
specifically makes it a criminal act to have a turbine that would 
contribute to the death of a migrating bird. Does that help or hinder 
the rollout of that alternative energy?
  Mr. CONAWAY. Well, that folds into this exact policy, because things 
of uncertain public policies contribute to a decrease in private 
investment solutions.
  Mr. TERRY. You mean, if an investor might go to jail because a bird 
flies into a turbine under one of the bills that may come to this floor 
in the next couple of weeks, that would hinder investment?
  Mr. CONAWAY. You would think it would.
  Uncertainties about tax policies. How is a particular investment 
taxed and treated under our code over an extended period of time or 
changes in that policy contribute to a reduction in the private 
investment in these various sources. Other government initiatives, like 
things like the government picking winners and losers in a particular 
area as opposed to looking to the market to do that, to give incentives 
to the markets to create the most efficient kinds of policies that are 
in place. But, nevertheless, anything that comes in front of this body 
that retards or discourages or puts in question the private investment 
into all domestic sources of energy, I think we have to challenge 
those, and respectfully.
  And the fourth lens I would look at is what does this do to the 
consumers. At the end of the day, you and I and the people who pay the 
light bills when we turn the switch on, who buy the gasoline at the 
pump have to pay those costs.

                              {time}  2200

  And if we do things as a part of these policy initiatives that come 
forward over the next couple of weeks that arbitrarily and capriciously 
increase costs to consumers, then we need to challenge those. There has 
to be a pay the fiddler at some point in time. I mean, we have to pay 
for whatever sources of energy that we've had. We've enjoyed low 
gasoline prices for a long, long time, and we're coming to the end of 
those lower prices just because crude oil and natural gas are finite 
resources.
  You've already mentioned the increase in demand from around the world 
that we're in competition with those. And it's not likely that we'll 
see a significant decrease in the price of gasoline.
  On the one hand, high gasoline prices help us to look at doing things 
a different way. They help make other alternatives more viable for the 
consumer, because at the end of the day, the consumer across this 
country has to be willing to pay the cost for whatever it is you're 
talking about. You can't subsidize. You can't use government programs 
to overcome lack of a consumer participation.
  So any of these now policies that cause cost to consumers to go up 
arbitrarily and too quickly I think we have to challenge.
  Let me make one final point that you talked about, and that is 
converting either coal or nuclear plants to natural gas fired plants. 
Natural gas does not transport across oceans well. We've got to liquefy 
it. We've got to put it into tankers. We've got to have facilities for 
regasification and all those kinds things, and so importing natural gas 
is very difficult in comparison to how easy it is to import crude oil.
  So as we increase on natural gas, our local domestic cost for natural 
gas will go up. They're already the highest cost for natural gas in the 
world and because we are relying on it so much.
  The other point is that if all 38 nuclear permits that are currently 
in some form of approval are approved and those plants are built in the 
next 20 years, nuclear power will still represent only 20 percent of 
our demand. So if we're going to have nuclear that's going to actually 
help lessen the load on natural gas, then we've got to have a nuclear 
plant increase from where just the current system, the current new 
plants and new facilities and existing plants are in process.
  So as we look at these policies that come at us over the next couple 
of weeks, let's use common sense. Let's look at things that can be 
rolled out in a scope that makes sense. It's one thing to be able to do 
something on a very tiny, microscopic scale. But unless you can convert 
that into a significant portion of the demand or the supply of energy, 
whether it's electricity or gasoline or other sorts, other forms of 
energy that we use day in and day out, then you're barking up a tree 
and you're not helping the circumstance.
  So we've got some work to do, being in the minority, over the next 
couple of weeks to help point out the areas where we think these 
policies that are coming forward fail the American consumer.
  Mr. TERRY. I appreciate your comments and putting more meat onto the 
bones here. And I'll mention that in my district, again, it's about 70 
percent, almost 70 percent coal. We do have nuclear. We use natural gas 
only as a peaking, which is basically this time of year. It was 99 
degrees at home today, and I'll guarantee you Omaha Public Power is 
running their peaking plant during the day so that people can run their 
air conditioners. And there's a lot of things that we could do on the 
conservation side, as you said, and we need to push those.

[[Page H7964]]

  But at the same time, we seem to be adopting policies that restrict 
the supply. And I think even though the policies that are going to be 
proposed here don't necessarily further restrict than already have been 
natural gas, what they do is move more energy, or force more energy to 
electrical generation by natural gas without doing anything to increase 
the supply of that natural gas.
  And the gentleman from Pennsylvania has come to the floor many times. 
He is one of the leaders in the House in discussion of what we need to 
do to increase supplies of natural gas, and how ridiculous it is that 
our prices in the United States are probably five times more than 
anywhere else in the rest of the world.
  So I yield to my friend from Pennsylvania (Mr. Peterson).
  Mr. PETERSON of Pennsylvania. I want to thank my friend from Nebraska 
for his leadership here tonight and for his sharing time with us.
  I personally believe that energy is the Number 1 issue facing 
America's economic future. I don't think, I think that available, 
affordable energy is a greater threat to the American economy than 
terrorism is. That's my personal view.
  Before we talk about natural gas, I want to look at what we're using. 
Now, these are 2004 figures, but they've changed very little. It takes 
the Energy Department several years to compile them. These are the 
figures that we made the last chart out of a few months ago.
  Currently 40 percent of our energy is petroleum. Just about 22.9 or 
23 percent is natural gas, and a similar figure is coal. Now that's 86 
percent.
  Then you get down here to nuclear, 8.2, and now you're up to 94 
percent. So renewables are those figures on the left. And the largest, 
which surprises a lot of people, is biomass, which was 2.8, 
hydroelectric, 2.7, geothermal, 0.3, solar, 0.06, and wind, 0.01. Now, 
I think we need to look at that.
  And then we look at the next chart, which is the Energy Department's 
estimates. Now, these are the people that deal with us every day. In 13 
years, in 2020, these figures don't change much, according to their 
statistics. Now, I hope they're wrong because the energy bills that are 
coming at us do not deal with petroleum, do not deal with natural gas, 
certainly do not deal with coal and do not deal with nuclear, which 
provides 94 percent. And I don't believe they deal with hydroelectric. 
That's another 3 percent. And so we have about 4 percent that's in 
play.
  And I think what we have to be concerned about, if we focus on that 4 
percent, woody biomass, solar, wind, geothermal and hydrogen, can we 
take care of the needs of this country, because when you don't have 
emphasis on these, and you don't continue to drill new wells, and you 
don't continue to promote coal to liquids or coal to gas to furnish our 
mass amounts of energy needs, then these volumes go down, and that's 
where we've been at as a country.
  We've had a policy not to produce American energy, oil, gas or coal. 
We are gaining 2 percent foreign dependence every year, so we're at 64 
percent. We've been gaining. Since I have been in Congress it's been 2 
percent a year, every year. And that's a trend that nobody thinks is 
appropriate or positive for America because it's foreign, unstable, 
often unfriendly countries with unstable governments.
  Some new statistics that I'll just add to this that are a little 
concerning; 80-some percent of the oil and gas in the world is owned by 
countries that do not have democracies, unstable countries. They own 
the energy of the world. In fact, Exxon, our largest oil company, is 
14th in the world in ownership of energy. There are 13 countries that 
own, starting with Saudi Arabia and Russia and Iran and Iraq, and you 
can tell that's not exactly our friends, on down the road, all of those 
types of countries that own the energy of the world, and we are totally 
dependent.
  Now, I'm pleased that the House and the Senate are both going to be 
dealing with an energy bill, but I think it's important that we have 
some energy production in those bills.
  Now, the natural gas issue is one that has, I think, is really 
driving us economically in the wrong direction. We use 20 some percent 
of our natural gas now to make electricity. The gentleman from Nebraska 
just mentioned that his State doesn't do that, but the country does 
that. The States of California and Florida, the big users of energy in 
this country, consume huge amounts of electricity produced by natural 
gas, and that's an increasing figure daily.
  About 12 or 13 years ago we took away the moratorium. It used to be 
just used for peaking plants in the morning and the evening because 
people felt natural gas was to precious to use to make electricity.
  Natural gas is the feedstock for hydrogen, which the Representative 
from Nebraska talked about is one of our future fuels. We currently 
make it out of natural gas. Ethanol, the big push on ethanol consumes 
huge amounts of natural gas in the production of ethanol, so we don't 
make ethanol without consuming huge amounts of natural gas. The same 
with biodiesel. It's the feedstock.
  Now, here's where the rubber meets the road in America. Natural gas 
is an ingredient in almost everything that's manufactured, or it's used 
in large amounts to heat, treat and bend products.
  Petrochemicals, all the petrochemical companies, 55 percent of their 
cost of producing their chemicals because they use natural gas as an 
ingredient, they use it as a fuel is natural gas.
  Polymers and plastics, 45 to 50 percent of their cost is natural gas 
because they use it as an ingredient and they use it as a fuel.
  Fertilizer, from 50 to 70 percent of the cost of making fertilizer to 
grow the corn to make the ethanol is made by natural gas. In the last 2 
years, 50 percent of our fertilizer production has gone offshore.
  Petrochemicals, polymers and plastics are moving offshore. Why? 
Because America has the highest natural gas prices in the world, and 
have had for 6 years. That was not true 6 years ago. South America, a 
buck and a quarter. Our average retail price last year was between 12 
and $13. Like I said, we have consistently, for 6 years, had the very 
highest natural gas prices in the world.
  To show you, Dow Chemical uses huge amounts of natural gas. In 2002, 
they spent $8 billion to buy natural gas. In 2006, they spent $22 
billion, and of course those numbers just keep rising.
  If we don't deal with the natural gas issue, America will not compete 
as a nation, because we use natural gas in producing almost all of our 
products, whether it's melting steel, melting aluminum.
  Mr. TERRY. Will the gentleman yield on that?
  Mr. PETERSON of Pennsylvania. Certainly.
  Mr. TERRY. Dow Chemical has thousands of employees. They're just one 
of many petrochemicals that rely on natural gas. If the price of 
natural gas remains high or goes higher, where do they go? I yield back 
to you.
  Mr. PETERSON of Pennsylvania. They just committed $32 billion to 
build new plants in Saudi Arabia, Kuwait and Libya.
  Mr. TERRY. And all of those jobs go to those countries now.
  Mr. PETERSON of Pennsylvania. That's right.
  Mr. TERRY. Because of our natural gas policy.
  Mr. PETERSON of Pennsylvania. There's about 100 chemical plants in 
the world under construction, none in the United States. And that's a 
tragedy because those are some of the best working man jobs. When you 
bend steel, when you bend aluminum, when you heat treat products, when 
you dry grain, you use natural gas. I mean, natural gas heats 60 
percent of our homes, heats about 70 percent of our businesses.
  Now, if natural gas was affordable, it would be the natural next fuel 
for vehicles, because we could fuel, if it was affordable, we could 
fuel a third of our auto fleet and that would be much quicker than 
CAFE. And I'm not opposed to CAFE. But it would be much quicker than 
all the things they're talking about because it could displace 2.5 
million barrels a day, just for short haul vehicles who don't go long 
distances. One of the problems with natural gas as a vehicle fuel is 
distance because you can't store, you can't have a big enough gas tank 
to run long distances on a tank of natural gas.

[[Page H7965]]

  But we have, on the Outer Continental Shelf, that's from 3 miles to 
200 miles offshore, every country in the world produces both gas and 
oil there. Now, they may have 20-mile distance out or 30-mile distance 
out. But they produce, after you pass 11 to 12-mile it's out of sight. 
And countries around the world, when I tell them we don't produce 
there, just look at us and they say, why? Norway, Sweden, Great 
Britain, Canada, New Zealand, Australia, all environmentally sensitive 
countries, they all produce there. We're the only known modern society 
that does not produce oil and gas.
  Now, I have a proposal that opens it up for gas because we have not 
been able to pass it. I would support oil, but natural gas is more 
important to us because how it fuels our industry, how it heats our 
schools, how it heats our homes, how it heats our hospitals, how it 
plays such a role in our economy, how it's an ingredient in so many of 
our products, in fertilizers and petrochemicals and plastics. So we 
need natural gas.
  So I put the priority, and we have a bill that says the first 20 
miles remains locked up. The second 25 miles State option, State 
control, and the next 50 miles is open unless the States pass a bill to 
lock it up. They can do that. The second hundred miles is just open. 
That's the bill that I have proposed. And I think it's vital to the 
future of this country, because if we opened up the Outer Continental 
Shelf on the East and West Coast and the rest of the gulf we would have 
ample supply of natural gas for many, many years.

                              {time}  2215

  Now, we need to produce other kinds of fuel. I mean, what I think a 
lot of people are not aware of is there is an energy shortage in the 
world. In fact, right now OPEC controls the price. I believe the price 
ends the day at somewhere between $75, $76 for oil. Gas is about 7 
bucks, which is the cheapest it has been, but this is the slowest time 
of year in the use of gas. This is gas that is going into storage that 
you add a couple, 3 bucks to, and then there are distribution costs, 
and it comes back out on a next year's average price. And this year the 
price of gas is higher than last year so far in storage.
  So we are going to have a 25 to 30 percent increase in gas prices, 
and it appears we are going to have, because here we are with not one 
storm in the gulf, which always disrupts supply. Right at the moment, 
we don't have a large sending country in trouble with their government. 
So things are kind of calm, and we have $75 oil, and we are at the high 
usage time, right in the mid-summer. So now all we have to do is have a 
storm or two in the gulf, like we did 2 years ago, and have a country 
have some sort of disturbance or a government overthrown, and we have 
$85 or $90 oil, and we know what that is going to do to the American 
economy. In fact, I am not sure we are really sure what $3 gasoline, 
which is prevalent today, is going to do to the economy long term 
because we have had spikes for short periods of time. But now, in my 
view, $3 is the base price, and it is going up from there. It is just a 
matter of how much it goes up.
  I think what is important for Americans and Members of Congress to 
understand is that we have to really get serious about energy policy 
for this country. I am for wind and I am for solar and I am for 
geothermal and I was part of the Hydrogen Caucus when I first came. I 
am for all of those.
  But they are tiny fractions when you look at the amounts they 
produce. And we also know that wind has its opponents and solar has 
just had trouble getting off the ground. I mean, it just has trouble 
growing. I read an article today that said ethanol, the new fuel, we 
spent $5.1 billion last year, subsidizing that by paying the tax on it. 
So it doesn't come free. And it seems foolish to me that we as a 
country now want to buy our natural gas from foreign countries and 
bring it in ships and be once again dependent.
  I have had that argument with a lot of leaders in the last few years 
that LNG could be part of the solution, but it is not the solution. And 
that has turned out true because countries like Spain and Japan outbid 
us because they will pay more for a tanker load of natural gas than we 
can afford to. So we don't often get it because it becomes a commodity 
once a ship is loaded. But I want to get across to Members of Congress 
and to the American people is that we want to be for the clean and 
green fuels, but I think natural gas is one of those.
  Natural gas is one of the cleanest fuels we have. And if we had ample 
supply of it, we could be expanding the use of it, not just detracting 
the use of it. It could be our bridge until we figure out how to make 
cellulosic ethanol, until we figure out how to get hydrogen vehicles, 
until we figure out how to charge our cars up at night with electric 
and have batteries that will last and all these things we are working 
on, we need a bridge to get to them because what is going to happen if 
we allow ourselves to have $100 oil from foreign countries, unstable 
governments, who are totally going to own this country?
  The major balance of payment, and I will just show you that in 
conclusion, is the last chart here. This is one on manufacturing 
decline as natural gas prices have risen. But here is the one on the 
balance of payment. The major portion of the balance of payment, a huge 
portion, is energy prices. And as energy prices go up and we continue 
to import, that figure is going to grow. We could almost cut our 
balance of payment in half if we stopped importing energy.
  Now, we are not going to be able to do that but we could move a long 
ways. But we need cola liquids. We need to develop the hydrogens and 
the winds and solars and all of those. We need to do more nuclear. We 
need all of those because China is increasing their energy usage 15 to 
20 percent a year, and they are just drying up the marketplace. They 
are just sucking it dry because they are, and many other countries, are 
developing a strong energy portfolio; so they have energy. The United 
States has done little to secure its economic future with clean, green, 
affordable energy.
  And I hope when we finally pass bills here that we have some energy 
in them that will secure our economic future with clean, green, 
affordable energy and specifically natural gas.
  Mr. TERRY. I really appreciate your tutorial there. What is our 
supply in the United States of natural gas? We had the gentlewoman from 
Ohio that was down here that was talking about petroleum and how 
limited we may be at our peak here within the next 30 years. How about 
natural gas?
  Mr. PETERSON of Pennsylvania. We have anywhere from a 50- to 100-year 
supply. There are huge amounts in the Midwest, but the Outer 
Continental Shelf has actually not been measured. But we had old 
seismographic 40 years ago. Actually this Congress has prevented, and I 
see the Senate right now is preventing, seismographic from being done 
in the portion of the gulf that has not been produced.
  Mr. TERRY. You mean we won't even be able to measure how much?
  Mr. PETERSON of Pennsylvania. Not only do we prohibit usage but we 
prohibit the measurement.
  Now, there was a lot of drilling off the coast of Florida a few years 
ago. We bought those leases back. That was very fertile gas. There is 
very fertile gas up in Georgia, the Carolinas, Virginia, New Jersey. 
The east coast is loaded with gas, and it is very rich, and it is where 
the population is. And when you produce in the ocean, it is out of 
sight. It is beyond the site line. The habitat for fisheries improve. 
They love to be around the rigs. They love to be around the platforms. 
And, of course, the underground piping comes in the ground under the 
water. It is not even seen. It is clean, green fuel. And they talk 
about it harming a beach. I don't know how gas harms a beach. I have 
never seen dirty natural gas. It's clean. It doesn't stain anything. It 
isn't colorful. It's just a gas. So it has been somewhat amazing. We 
have lots of natural gas.

  Mr. TERRY. So just what we know, 50 to 100 years, and, by the way, I 
understand one of our largest pockets of natural gas that is in Wyoming 
was made into a Federal monument or a park, making it federally illegal 
to even drill there. So that is what happens when we find new pockets. 
We rule them off limits. That just astounds me that we have got that 
much. And when we are talking about securing our future, wanting to 
become independent, the other side and us are worried about global 
warming. And

[[Page H7966]]

this is a clean fuel. You have stressed it. It is a clean fuel, which 
is why the policies that we are seeing are moving electrical 
generations towards natural gas. It makes no sense to me that we won't 
increase supply at the same time.
  Mr. PETERSON of Pennsylvania. When we started down that road, natural 
gas was less than $2 a thousand. And it has hit as high as $14 and $15 
in peak periods. But Daniel Yergen, who wrote the book ``The Prize,'' 
spoke in the Senate shortly after that process started, and I happened 
to be there with Steve Largent. And he said if we don't open up supply, 
we are going to make natural gases so high that Americans will struggle 
to heat their homes, struggle to run their businesses, struggle to heat 
their hospitals. We are not going to make products in this country much 
longer that consume a lot of natural gas.
  I predict if we don't deal with the natural gas issue, simple things 
like glass and bricks will be made in Trinidad, where gas is about a 
buck a thousand. That is not very far from here. Trinidad is in 
northern South America, probably a boat, a ship, a day away. It 
wouldn't take long to get to the east coast with a ship of bricks and 
glass. And that is a tragedy if we start importing those kinds of 
things that the American working man has made.
  This is about jobs for working people. It is about the economy for 
the working people of this country. Energy punishes the poor and the 
middle class. The rich will go right along. The rich environmentalists 
who are against will live right on. They won't change their life-style. 
They will live in their huge homes and fancy cars and they will do 
their thing because money is not a problem. But the middle-class 
working people will not have a middle-class job anymore. They will have 
a poor man's job. And the poverty rate in this country will skyrocket.
  Mr. TERRY. We talked about jobs, that we are losing our 
manufacturing, our middle class. And what a lot of people don't 
understand is it is our energy policy that is driving those jobs 
offshore. Yes, there are some that are offshoring, taking maybe 
telephone answering jobs over to India. But our policies are driving a 
lot of our good manufacturing jobs away.
  Mr. PETERSON of Pennsylvania. Some of the best jobs in America are 
producing energy. When you buy Luke Oil gasoline down here, that is 
produced in Russia, and only the person selling it makes money in 
America.
  Mr. Pearce can tell you how many people make money because he knows 
that business in the production of energy. He will give you some great 
information.
  Mr. TERRY. Then let's bring him up.
  At this time, Mr. Speaker, I would like to yield to my friend from 
New Mexico.
  Mr. PEARCE. Mr. Speaker, I thank the gentleman for his discussion on 
energy security.
  And for my discussion tonight, I would like to begin at the same 
point that my friend from Ohio from the other side of the aisle began. 
She was quoting accurately an oil industry study which says that supply 
cannot keep up with demand, that prices are going to be high, that 
supply is going to be tight, and that is for the foreseeable future 
through the next decades.
  Now, the response that we had in the Energy Policy Act of 2005 was 
literally to, number one, recognize that it is not possible to convert 
overnight; so we had incentives there for the very hard-to-get oil and 
gas. That is the deep, the very deep, ultra-deep, and then offshore.
  Now, the offshore platforms are extraordinarily expensive. They maybe 
look something like this. Our friends from Louisiana would recognize 
many of these, and California. These units cost over $1 billion to $1.5 
billion. We don't invest in them easily, but they produce a tremendous 
amount of energy. It is the belief of those who are concerned about the 
energy business, concerned about the fact that prices are high, that 
supply is low, they really only have two choices if prices are high and 
supply is tight. You can lower demand, which Americans have not seen to 
want to do, or you can increase supply.
  So these units here, we had great incentives for those, and we felt 
like that would bridge us during the years to where consumers would 
begin to consume differently.
  But I would ask our average listener, how many people do you know who 
actually put biodiesel in their car or their truck? How many are using 
any fuel other than straight gasoline? We have got some of it augmented 
by ethanol. But how many cars really do significantly reduce the 
consumption?
  If the answer is not many, then you would be concerned about the time 
to convert. And we have had testimony in our Resources Committee where 
both sides of the aisle say we are probably on a 20- to 40-year 
conversion that you and your family probably will not drive a different 
car for 20 to 40 years that has a different power source than what it 
has got right now. So we either recognize the truth in the matter and 
we encourage supply while we are converting to those renewables, and 
the Energy Policy Act of 2005 had great stimulation. I think the 
difference, though, is that when we are confronted, as business-
supporting conservatives, with the idea that the oil industry study 
says the supply is limited, it cannot keep up with demand, that we 
probably should increase supply.
  Our friends on the other side of the aisle, and I would quote, said 
that we are going to reinvent our economy in the first decade of this 
century.
  Now, it is not possible to reinvent an economy in 2\1/2\ years 
because we are already at year 6\1/2\. It is just not possible to 
reinvent an economy in 2\1/2\ years, and that becomes the great 
disconnect on the discussion.
  I would like to spend the rest of my time talking about the energy 
suggestions that our current majority has. We have recently marked up 
H.R. 2337. We have recently passed that out of the Resources Committee. 
And I will tell you that we need to make one point perfectly clear, 
that H.R. 2337, the Rahall energy bill, which is intended to be a piece 
of the package that is brought to this floor, will cost Americans jobs. 
It will increase the cost of natural gas and gasoline. And it is going 
to stunt the growth of the alternative and renewable energy industry.

                              {time}  2230

  H.R. 2337 is called the Energy Policy Reform and Revitalization Act. 
It could be called the ``American Job Outsourcing Act,'' it could be 
the ``Chinese Full Employment Act,'' or it could be the ``Funding 
Mechanism for Hugo Chavez,'' but to declare that it is the ``Energy 
Industry of America Revitalization'' is intended to be a stretch of the 
facts.
  During congressional hearings in Congress, we've heard a lot of 
testimony from witnesses talking about the impact of our actions on the 
cost of energy. So I would refer to another chart which simply talks 
about the cost of our energy is going to be increasing dramatically. We 
have received this testimony that the cost of energy probably will go 
up to a 23 percent increase in some areas, 29 percent on the California 
coast, 32 percent in the Texas region, 21 percent in the South, and in 
the Southeast, 19 percent; 20 percent in New York. So you see 
significant energy increases because of the increasing consumption of 
natural gas.
  One witness, Paul Cicio, testified that America has lost 3 million 
manufacturing jobs to overseas competition due to this kind of energy 
increases. It is an important point because we need good jobs in 
America. High-tech industries and high-tech manufacturing are the 
future of our economy, yet they're tremendously energy dependent. You 
can't put a server farm in Washington or San Jose unless you have the 
energy to power it. You can, however, put it in Beijing because the 
Chinese are committed, like one of my friends said, building 544 coal-
powered plants over the next 10 years to ensure they have enough cheap 
power. Cheap power is the key to keep their economy moving forward.
  At the hearing we talked about, a couple of months ago, how Dow 
Chemical was going to build a $22 billion facility in Saudi Arabia 
because of the price of energy here in the U.S. And yet, what we're 
doing is restricting our access to energy here in the U.S. while we're 
not restricting the overseas, ensuring that we're going to import more 
energy, ensuring that jobs are going to continue moving to those cheap 
sources of energy.
  American prices are simply too high, and we're doing nothing about 
it. And

[[Page H7967]]

the renewables, though they have promised, the renewables are far, far 
into the future, decades into the future, where they begin to affect 
us.
  We can see that energy prices are already high and headed higher. The 
projections show that they're going to be 20 to 30 percent increases, 
which drive these billion dollar projects overseas.
  I would comment that the Dow Chemical plants in both China and Saudi 
Arabia are going to take 10,000 jobs, those are 10,000 jobs which would 
be in the hundred thousand dollars range if they're here in America, 
and yet because of the low energy prices overseas compared to here, 
we're going to export those jobs. And it simply does not make sense.
  Since 2000, our offshore gas production has dropped 40 percent. Our 
next chart will show that production decrease. It's very difficult to 
see, the yellow line is on the top, moves along here. And we see the 
energy decreasing as it moves across the chart.
  We would recognize that onshore gas is actually a flat stable line, 
but the offshore is decreasing rapidly. And yet the Outer Continental 
Shelf, where we have great potential large, large resources, we're 
restricting access to those areas. Meanwhile, in the Rocky Mountains, 
where we restrict access there, those are fields which already have 
been drilled, so it's not as if they're pristine. We just are limiting 
our access to our own resources, which then compounds the problem that 
Ms. Kaptur started out with initially. Prices are high, supply is 
tight. And we're seeing that supply gets tighter, and we're going to 
then increase the price.
  Another thing that H.R. 2337, the Rahall energy bill, is doing is 
limiting shale completely. We're restricting the regulatory framework 
that was supposed to be out already and saying that it won't come 
forward. And without regulation, the industry is simply going to die. 
Now, that's important because in the long term, the 20 to 50 year term, 
shale causes America to be the Saudi Arabia of energy. If we consider 
just oil, Saudi Arabia has the dominant amount of energy in the world. 
But when we consider shale, the U.S. then becomes the dominant energy 
producer, and yet we're killing that industry completely.
  We're in the shape that we're in today because of our decisions over 
the past 30 years. We chose not to build new refineries. We have chosen 
not to have nuclear energy. We have chosen not to drill more in this 
country, but instead, to restrict access on Federal lands, and so we 
simply have a problem of tight supplies and high prices. And those are 
going to continue for the foreseeable future.
  Now, what does 2337 do regarding renewable energy? We hear our 
friends on the other side of the aisle talk about the need for 
renewables, but this bill begins to hurt the renewables. It begins to 
restrict the renewable energy development, also. It just doesn't make 
sense.
  But we heard from four Democratic witnesses at one hearing that coal 
cannot be a part of America's energy future if we're to combat global 
warming, but according to the bill H.R. 2337, it's about the only 
energy source left because of restricting oil and gas in 2337. We also 
give deep restrictions onto the wind industry so that the Wind Energy 
Association came out opposed to the bill saying it cripples our 
industry.
  The bill places new costs and restrictions on the solar industry, 
requiring new labor provisions, per acre fees, and purchasing 
restrictions. So this bill harms domestic oil and gas production, 
reducing domestic production, increasing our reliance on foreign oil, 
but it also begins to limit our development of the alternative energy 
sources, but even worse, the most restrictive thing for alternatives is 
that there were corridors that were implemented in the Energy Policy 
Act of 2005. Those corridors recognize that places where renewables are 
created are not where the population is generally. New Mexico is one of 
the few States that would be self-sufficient on wind, yet we can't 
consume all of the wind energy that we would produce there. And so 
there were corridors that were lined up to take the renewables from 
where they're produced maybe in New Mexico to Los Angeles or New York, 
wherever, and yet those energy corridors receive a death blow in this 
bill, H.R. 2337, which again is passed out on pretty well party lines 
and is coming to the floor of the House as a part of Ms. Pelosi's 
energy package. And yet you have to ask, where is the energy in the 
bill? Because I see where the limitations on oil and gas are; I see 
where the limitations on shale are; I see where the limitations on wind 
and solar are. Exactly where is the energy production going to come 
from?
  I guess with the carbon sequestration that is in the bill, to the 
dismay of our friends on the other side of the aisle, it's going to 
ensure that coal is our only source of fuel for the future. But they're 
also trying to limit its use.
  Finally, regarding royalties. This bill attempts to capture royalties 
owed to the American Federal Government. Like the chairman, I strongly 
believe that American taxpayers should receive the royalties that are 
due. Nevertheless, we differ when it comes to the method of collection.
  I support a Royalty in Kind program where we simply declare the 
number of barrels produced. We can meter that, it's very easy. We don't 
have to calculate the price because the price changes every day. And so 
the take to the Federal Government changes every day if we're 
contemplating dollars, but Royalty in Kind is very simple, but it also 
puts a lot of accountants out of business, puts a lot of tax lawyers 
out of business. And so we could call the provisions here where we kill 
the Royalty in Kind program in 2337, the ``Tax Lawyer Full Employment 
Act.'' Because that's what it's going to do, it's going to put people 
in the courts saying, now exactly what was the price on November 7 of 
2001 when you sold that gas? It would be so much easier just to take 
the meter reading, take the government's percent, and put it into the 
government's coffers.
  In our legislative hearing on this bill, leading Members on the other 
side of the aisle chastised our royalty regime saying it parallels 
countries whose corrupt governments are blowing up the rigs. That was a 
quote. Then they're moving to this country to exploit our low rates. 
But how ironic is that? You wish for the U.S. to set an example for the 
world on climate change, but want to follow the lead of Venezuela and 
Nigeria on royalties.
  I support increasing production that will bring good, safe jobs and 
energy to America. I support efforts to keep the ``American take'' as a 
portion of energy development to a reasonable level that ensures 
companies have the money to provide safe working conditions, keep their 
facilities up to date, and reinvest in development and exploration.
  Finally, we had comments all through the time that the royalties 
received by the U.S. Government are so much lower than Russia, so much 
lower than Venezuela. Yet I would like to share a final chart with you 
that shows some of the problems.
  This picture is in Russia. And I will guarantee you that you will see 
no oil field in America like this. The opponents on the other side of 
the aisle of the level of royalties that we take currently simply want 
to make a moral equivalency between the kind of government and 
regulations that allow this, and the government and regulations in this 
country which have produced one of the strongest energy economies in 
the world, which have produced the most dramatic economy of American 
exceptionalism in the world, and yet they're trying to unravel that and 
undo that.
  I would hope that we all would look at the energy suggestions from 
our friends on the other side of the aisle, that we would carefully 
evaluate the fact that the supply cannot keep up with the demand, that 
prices are going to be high, and the supply is going to continue to be 
tight unless we do something about it.
  I thank the gentleman for yielding tonight and appreciate the 
discussion on both what we've done in the past, and what we're looking 
for in the future according to 2337.
  Mr. TERRY. Well, I thank you for your input.
  I just fear that the policies that we're looking at to adopt in this 
Nation are going to jeopardize our security, jeopardize our future. We 
need to look at a balance.
  I appreciate you being here, and all of the others that came to 
speak.

[[Page H7968]]



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