[Congressional Record Volume 153, Number 175 (Tuesday, November 13, 2007)]
[House]
[Pages H13829-H13835]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
AMERICA'S ENERGY PROBLEM
The SPEAKER pro tempore. Under the Speaker's announced policy of
January 18, 2007, the gentleman from Texas (Mr. Conaway) is recognized
for 60 minutes as the designee of the minority leader.
Mr. CONAWAY. Mr. Speaker, we have an hour's worth of comments today
about an issue that there is little debate, and that is that we have
got an energy problem in this country. How do we continue to power the
factories and the plants and the office buildings, hospitals, our
homes, our cars? How do we continue to use energy? Where do we get that
energy from? And at what cost?
There is not a lot of debate these days that we are in fact too
dependent on imported foreign oil and natural gas, and that is a
national security issue that I suspect the folks at the Pentagon chew
on every single day. It is an issue for factory owners and businessmen
and women all over this country as they look at ways to reduce
[[Page H13830]]
their energy usage, as they look at ways to reduce their costs, their
input costs on the product that they are trying to manufacture and sell
to others. That is an issue to every family in this country as they
decide how to pay for gasoline for their automobiles and home heating
oil and natural gas to heat their homes or electricity to heat their
homes. Energy should have a central front in our debate, in our
actions, particularly in this body.
Mr. Speaker, there is a story about a fellow who went to visit a
neighbor. And when he got there, the neighbor was on the front porch.
So they are sitting there visiting about things, and the neighbor's dog
is in the front yard, and the dog is just howling to beat the band. He
is making all kinds of racket. He is just howling. So finally the
visitor says to the owner of the house, he says, ``What is the matter
with your dog?'' And the owner looks out there and says, ``Well, he is
sitting on a cactus.'' And the visitor says, ``Why doesn't he get up
and get off the cactus?'' And the neighbor says, ``Well, I guess he
would just rather howl.''
Well, we are doing a lot of howling in this country today about
energy. And rather than get up and get off the cactus and do some
things about it, we continue to just howl and gripe about the price and
the cost and solutions, and are unwilling to focus and study on this
issue that is of terrific importance to every household, every
business, every governmental entity, because they buy fuel as well,
they buy electricity, they buy power.
Let me give you a couple statistics. The crude oil December contract,
the good news, it fell for the fourth time in 5 days to close at $91.17
a barrel; but the bad news is, it closed above $80 a barrel for the
40th time in 44 days, 22 consecutive days above 85, and the 14th time
ever above $90 a barrel. This will ultimately translate into much
higher gasoline prices.
Let's talk about home heating oil, which is of grave concern to my
colleagues in the northeast. The home heating oil for contract December
did fall for the fifth time in 15 days, down 8 cents, to close at $2.50
a gallon. However, home heating oil has closed above $2 a gallon for
the 53rd consecutive day. Home heating oil prices are above a year ago
prices for the 57th consecutive day, up almost 81 cents. This does not
bode well for this year's coming winter. We can all hope and pray for a
mild winter, but that doesn't make for very good public policy. We
ought to be doing some things today. We should have been doing things
yesterday, and tomorrow is open to us to do some things. I don't hold
out a lot of hope for tomorrow, but maybe a few days from now the
colleagues and I on both sides of the aisle can come to some rational
conclusions about how do we power plants? How do we heat homes and
hospitals? How do we drive our cars, and on what fuels? What costs are
we going to live with as we transition from carbon-based fuels to some
other based fuels? That has to be a part of the equation. We cannot
simply just immediately wean ourselves off of crude oil and natural
gas, because the replacement for that product is not in hand, nor is it
in hand for the foreseeable future.
Later on this evening we will talk about some reports that have
recently been issued by some groups who should get some respect from us
that the makeup of the energy usage in America 25 years from now,
carbon-based products of crude oil, natural gas, and coal, will make up
about the same percentage of that total demand that it does today.
{time} 2015
These projections are done by reputable people and ones that we
should look at in terms of relying on those as we begin to craft public
policy.
So with that, Mr. Speaker, I'd like to yield to my good colleague
from Illinois, John Shimkus, a member of the Energy and Commerce
Committee, for some comments that he may have.
Mr. SHIMKUS. I thank my colleague, and it's great to be here tonight.
We did a press conference last week addressing some of these concerns,
and it's good to follow up with a Special Order tonight.
At the press conference, we really highlighted the issue of when our
friends on the Democratic side took over the majority, crude oil prices
were at $58.31 per barrel of crude oil. And when we did the press
conference of last week, the crude oil price was at $96.65, the price
of a barrel of crude oil.
Our issue was that when you have no energy plan, you have, when you
can't plan, you have, this is the default energy policy of this
country. The price escalations, as my friend from Texas, the difference
about the price escalations now is that many times when we saw the run-
up of these, the costs for a barrel of crude oil in the past, it was
based upon some national emergency, Katrina, pipeline disruptions,
maybe a refinery fire. What's different about the price escalations
today is that it's all demand related. So if you, as many of us have,
have taken Economics 101 in college, maybe in an MBA program, the
simple law of supply and demand. If you have high prices, and we'd say
we have high crude oil prices and we're quoted today at $91 a barrel,
you would think that that would then encourage people to go into the
business to explore new means of recovery of crude oil so that they
would bring more supply into the market so that you would lower the
prices.
But the policies here in Washington not only prohibit that, but they
discourage any investment, because when people bring capital to the
market, they assume risk. And when you assume risk, you assume the
opportunity of losing it all. And most people in the investor community
and the business community, all they want to do is if they're going to
assume risk, they want to try to get a return on that investment.
So last week we had close to $100 a barrel of crude oil, in
California $5 a gallon of gas. Now, this is before we even talk about a
global warming debate and a 50 cent per-gallon tax.
And as I said last week, so what you now have is we have European
prices for liquid fuel, but we don't have European distances. I always
remind my friends, those that want to, well, why shouldn't we have as
high gas prices as they have in Europe? Well, that's because you can
put all of Europe on the eastern seaboard. We don't have the distances
that our European friends do where they can drive across their country
in 2\1/2\ hours. I can't drive across my district in 2\1/2\ hours from
one point to another from the far west to the far east. So that's a
problem that we have in this debate.
So what we would like to see, we've already moved some energy bills
on the floor. They're mostly efficiency oriented, the light bulb and
the light car tires. But what we need to do is we need to focus on
bringing on more supply, and that should be an energy policy.
When you have no energy policy, the energy policy of this country is
$96 a barrel crude oil. That's the default energy policy of this
country if you do not bring on significant amounts of increased supply.
So what kinds of supplies? All my friends here on the Republican
side, one thing we have in common, although we will talk about
different types of supply, is that we're all supply people. We all know
that you if want to lower costs, you've got to bring more supply on
board. And so that's kind of the commonality of the focus, because when
you have more supply, you have lower cost. When you have lower cost,
that's lower out-of-pocket cost to the individual consumer.
And the consumers are going to start complaining when they're at $3 a
gallon of gas, $3.50, especially around Christmastime because they're
going to be spending that extra money at the pump versus going to the
store. Then you have an oversupply of toys at the store. We all know
about the focus on, you know, the Christmas shopping period. High
energy costs will diminish and dampen the ability of our consumers to
have a good Christmas shopping season. So that affects the
manufacturers of all the things that we would like to buy for our loved
ones at Christmas.
So how do we address the supply concerns? And again, all of us are
going to be involved with that. One thing that I've always pushed for
and always encouraged us to take, look after, is an alternative fuel
standard.
When the President was here for the State of the Union address he
said he would sign an alternative fuel standard. An alternative fuel
standard would talk about things like corn-based ethanol. It also would
address stuff like
[[Page H13831]]
soy diesel, soybeans crushed and mixed with petroleum diesel, which is
obviously the soybean portion, or the beef tallow or the reformulated
cooking oil or all things that are renewable.
And then, obviously, we have coal. And now in Illinois alone and in
parts all over this country, we have a 250-year supply of coal in the
Illinois coal basin.
Now, coal can be used for a lot of things. Coal can be used to
generate electricity. When we have this energy debate, we focus,
sometimes we all lump it together, and sometimes I like to split it
apart: part of it would be electricity generation; the other would be
liquid fuel.
It would surprise people if they knew that 50 percent of the
electricity generated in this country comes from coal. In fact, the
lights in this building and the lights at the Pentagon and all the
electricity that we use here in the Capitol complex we can point to not
only our own power plant, which uses coal, but one right across the
river that also provides electricity.
Now in this country, we're pretty much independent on electricity
generation. Fifty percent coal, 20 percent hydro, 20 percent nuclear,
10 percent the other one. The concern we have is the liquid fuel debate
where we are highly dependent on imported crude oil. And hence, because
demand goes up, we have $96.65 a barrel crude oil.
A no energy plan is a plan to fail and a plan to increase crude oil
prices. So while we're trying to work with our friends across the aisle
and the leadership of this House, I mean, there's a lot of my friends
who I call fossil fuel Democrats who understand the importance of
fossil fuels in this country and understand the importance of making
sure that we bring more supply in the fossil fuel arena to this debate.
They have been tampered down by the leadership.
But we hope in this Special Order, we hope from the press conference
of last week, and we hope from the anger and angst that the driving
public's going to see by escalating prices, that we'll start at least
start making the point of you can't always say no if you want to have
an energy policy. You can't always close up supply. You've got to make
sure that where you know you have available resources, you then take
the opportunity to go in those arenas. Like we want to exploit the
Illinois coal basin for electricity generation and for liquid fuel. We
do not want to shut off areas by which we can bring in more natural gas
reserves or other type of fossil fuel research.
So for my colleague from Texas, for planning to execute this Special
Order, I appreciate the time that he has allotted me and want to let
him know that I'm going to continue to be on the watch trying to drive
home to the American public the importance and the need for a sound
energy policy that, yes, talks about some efficiency issues, but as
important, in fact, I think more important, talks about really bringing
more supply to the debate so that we can at least maybe hold prices
steady.
I'd like to see us move to start lowering prices so that the
consumers of this country have more spending power, the manufacturers
in this country will have that as a net plus in their competitive
advantage, which is low-cost power. And I feel that the inability of
the Democrat leadership of this House to move effectively on the supply
end will cause great distrust, dissatisfaction, and danger for the
energy security position of this country.
Mr. CONAWAY. I thank my colleague for his comments tonight. They are
spot on. It really is about the supply of energy and where we're going
to get it, what form it's going to take, how we should transition from
where we are today to where we want to get to and what that will cost.
Much of the debate to date has ignored the cost to the consumers, the
cost to businesses. And should we do that, we do so at our own peril
because if we artificially or arbitrarily raise costs to American
manufacturers, American producers, and ultimately American families and
homes, that makes us less competitive around the world as we try to
compete. We've got 5 percent of the world's population, and so 95
percent of the world is our market. And if we're going to make things
in America that we can sell to somebody else, we need every single
competitive advantage that we can have.
Clearly, we've been coming out of a period where energy was
relatively cheap. We've enjoyed very cheap gasoline prices almost as if
a right of being an American. That right and those low prices has come
as the result of some incredibly efficient and risk-taking people
who've been willing to risk fortunes and make a lot of money and lose a
lot of money trying to provide crude oil for our refineries that have
allowed us to drive on cheap gasoline when the rest of the world isn't.
Before I turn to my colleague from Pennsylvania, my colleague did
make some rather benign comments about the legislation, energy
legislation that's already come across the floor. And I'd like to call
his attention to a study that's just been released by API, which was
prepared by the Charles River Associates International. This study
looks at the legislation that's pending or has passed so far. It looks
at the oil savings provisions, the increased CAFE standards, the
increased taxes on the industry, the renewable portfolio standards,
expanded renewable fuel standards.
All of the bills that are passed or talked about passed were reviewed
by this group. And there's some pretty startling impacts that this
legislation will have. Every vote has a consequence, and to the extent
that we do things to reduce supply and to harm our own country, here's
what some of the impacts could be.
This study, and I hope my colleagues across the aisle will get the
study and study it, try to poke some holes in it, try to show where
it's wrong. But to the extent that this is a reasonable analysis of
what those bills do, I hope that they also take that into consideration
as they continue to formulate the energy bill that we may see this week
which has no Republican input. I don't know that it's got a lot of
Democrat input in it. It seems to be a leadership, Speaker/ leader of
Senate kind of a bill.
But these bills so far will cost, 5 million jobs will be lost by the
year 2030. The average American household's purchasing power could drop
by $1,700 by 2030. Aggregate business investments in the United States
could drop by as much as $220 billion by 2030. Our national GDP could
decline by more than $1 trillion by 2030, relative to the baseline. And
cost of petroleum products could more than double by 2030, just on the
bills that have been threatened and some that have already passed so
far in this House.
So the energy bills that have passed this House and have been
introduced on this floor have a consequence, and these consequences
appear very dire.
What I don't see is what the benefits are from the bills that have
passed. It is clearly not a supply-based concept that's being worked on
from the other side.
So now it's my great pleasure to turn to John Peterson, a Member from
Pennsylvania who's on the Interior Committee. And John has studied this
issue quite at length, and is one of our go-to guys when it comes to
particularly natural gas. So, John, let's hear what you have to say.
{time} 2030
Mr. PETERSON of Pennsylvania. I thank the gentleman from Texas and my
friend from Illinois. It's a pleasure to work with both of you. And I
just wish the majority of Congress had a deeper interest in energy.
I guess I find it confounding that this is a chart I have been using
all year and it doesn't work anymore. This was the rise. This is
annualized by year. It doesn't have the spikes that happened in those
years, but this is the annualized figure. And I just find it
confounding that last week we were bouncing all over 98, almost 100 one
day, and not a word spoken in here about energy. It wasn't a priority.
It was not even a discussion on this floor, except for a few of us, in
5-minute speeches or hour speeches, like tonight, talking about it. But
the committee is not meeting. The conference committee is not meeting.
And I guess the question is how difficult does it have to get. Because
here we are approaching the winter season. People have to heat their
homes. And 58 percent of them use gas, I think 30 percent use
electricity, and 9 percent use home heating oil, and then there are a
few other mixtures in there. But nobody seems to be concerned.
[[Page H13832]]
I was a retailer for many years, supermarket operator, and I remember
back in the 1970s and 1980s when we had the energy spikes that were
really severe back then. And as a person in the food industry, you
would think people would always have money for food. 1979 and 1980 were
very difficult years in my business because people didn't have money to
spend.
What we forget about is 50 percent or maybe 60 percent of Americans
spend every dollar they make every week. They don't have any money in
the drawer. They don't have any extra cash in the bank. They spend. And
when energy prices spike like this, and especially in rural America
where I come from, transportation costs are high in big rural areas.
People have to travel to work, travel to church, travel to school,
travel for everything. And then when you pay your transportation bill
and then your home heating bill, in rural America, again, bigger old
farmhouses, not a lot of new housing, not as energy efficient as the
new modern housing, so they have high home heating bills. And when they
spend an inordinate amount for home heating and for transportation,
then they have less money. And my friend from Illinois was talking
about it. I had tough springs. Usually in my business, I was lucky to
break even through March. You had to make your profits the rest of the
year. But in those years it was into May before I cracked into a profit
because people didn't have money to buy basic fundamentals, food. I was
in the food business. And that's what is going to happen in America
this year. It could challenge the holiday season because it came this
early.
I didn't expect $95 oil, and I'm going to tell you why. Everybody has
told me that if we had a major storm in the gulf, and we have been very
fortunate in America, we haven't had a major storm in the gulf in 2
years. The first time ever that we've gone that length of time.
Everybody has told me this summer, when it was 75 or 80 and I asked
what a major storm in the gulf would bring us, $100 oil. A couple weeks
ago, I asked a gentleman what would a storm in the gulf bring us. He
said $120 oil. Could we handle $120 oil? I'm not sure. I don't think we
could handle $95 oil for a long period of time and keep the economy
moving, because a great amount of our economy is you and I shopping,
buying goods and services, and when we have so much money being
consumed by energy, it has to come out of our budgets. And those who
don't have any extra cash, credit cards will only give them so much,
and then they are going to start cutting their spending.
I think the thing that's interesting is the prediction for America.
We have finally gotten this on a chart that anybody could figure out.
Usually you see charts and you have lines going up and down. This is
energy usage in America up to now. This line in the middle to my left
is the projection by the Energy Department of what energy we are going
to consume in this country. It doesn't change much.
Now, I wish this nonhydro renewable line up here was just exploding,
this red. That's what we are pinning our future on. Now, I'm for it. We
are subsidizing. The people are saying we are holding it back. We're
not holding it back. This is the projection of the Department of Energy
of what renewables are going to grow. That's wind and solar. That's the
mix.
Look at hydro. Because we are not building dams and because dams are
still being removed, hydro decreases. Now, there is a little bit of
growth in nuclear here, very little, if we build the 35 plants that are
under permit process tonight. We need to build those new 35 nuclear
plants just to keep electric generation at this percentage that it is.
I think it's 8 percent, if my memory is correct.
Coal, now I happen to disagree with the Energy Department. They have
coal growing. With the CO2 debate, coal is going to
diminish. And I think their projections were made before CO2
and carbon became the issue, because I see coal plants being refused by
States all over the country. There are permits being denied. And they
don't show gas growing, and I disagree with the Department of Energy on
this estimate, and they may be a little bit wrong on renewables. But if
you double this line, that's a lot wrong. It still isn't very much, is
it? Now, I look for gas, because every country that started dealing
with carbon as a pollutant and started charging carbon taxes or
penalties, natural gas is the big winner because it has a third of the
carbon of the other fossil fuels and has no NOX or no
SOX, nitric oxides or sulfur oxides; so I predict that it
will come up here and coal will decrease. That's my opinion because, as
my friend from Illinois has talked about, we ought to be building. I'm
going to give the White House credit. They are pushing six cellulosic
ethanol plants. I think that's good. That's pretty new technology.
That's using woody waste or biomass of any kind to make ethanol, and I
think that's good. But I think we ought to be building 10 coal to
liquid plants and some coal to gas plants.
Then we look down here at oil. Oil is going to be a major part of
America. Now, we have heard lots of speeches on this floor that we are
going to replace oil. I wish that were true. I wish that was possible.
But what we have decided in America is we are not going to produce oil.
We're going to restrict it. The government owns a lot of the oil in
America. They have control of all offshore, and 80 percent of that has
been locked up by three Presidents, and all the Congresses in the last
26 years have voted to literally not produce energy. In Brazil, who is
energy independent and everybody says it's ethanol, well, ethanol is a
piece of it. It's a nice piece of it. But they've opened up their Outer
Continental Shelf, and I think they just found one of the biggest finds
ever off South America just in the last week, and Brazil is producing
offshore like we ought to be producing.
But oil is what scares me. Number one, we are not producing it, so we
are part of causing the shortage in the world. Number two, we are
gaining dependency on foreign, unstable governments, 2 percent a year.
And I think if we pass the energy bill that I hear rumored about, it
will probably be 3 percent a year. And I hear people say we are going
to be energy dependent. Well, there is no way in our lifetime, probably
my lifetime anyway, and some of you may be younger, that we can be
energy independent. We can be less dependent. I would like us to be
energy independent, but we can only be less dependent. But this one
just keeps marching on.
And why is it $95? Well, we have countries like China who are
producing energy all over the world. They are locking up oil and gas
reserves in every part of the world. Every part of the world. They're
going to be producing less than 50 miles off of Florida with Cuba, as
are five or six other countries. In our waters, actually, they are
going to be producing oil that we should be producing. But we have
locked up those 200 miles offshore and cannot produce there.
So my biggest fear, and I will just ask the question, what if one
unstable administering country topples? What does that do to the price
of oil? What if we have a storm like Katrina? What does that do to the
price of oil? What if terrorists struck a couple of refineries, some
pipelines, some loading stations in foreign countries where we get a
lot of our energy? What happens to the price of oil? Will China stop
anytime soon purchasing and outbidding us? I predict in the near future
you are going to see China announcing a major oil coup with a major
supplier that has been part of our supply system. That's what they are
doing. They are out there locking it up.
It's interesting in the summertime we get 20 percent of our gasoline
from Europe. This spring we had $3.09 gasoline in my market, which we
have $3.09 now, at $63 oil. We now have 90-some-dollar oil, and we
still only have $3.09 gasoline because gasoline has not yet caught up
with the oil price, plus at the end of the summer there was a surplus
of gasoline. This spring when the driving season started, Europe was
short of gas themselves, so they couldn't supply us with the gasoline
they normally did. So there was a shortage in the market, and, of
course, that runs the marketplace up. So $3.09 gasoline was abnormal,
just as abnormal as $3.09 gasoline is in America today with $95 oil. We
are probably looking at $3.49, $3.50 gasoline would sort of be the
price if it was being used out of today's oil and with not a surplus of
supply.
Here is a chart that tells what we use: 40 percent petroleum, 23
percent
[[Page H13833]]
natural gas. Now, this figure has grown a lot because 13 years ago we
took away the prohibition of using natural gas to make electricity, and
we went from 8 or 9 percent of our electricity made with natural gas.
We only allowed it to be used for peak power in the morning and evening
when we have to turn them on and off. And a gas generator is cheaper to
build, doesn't take very long in comparison to other generators. But
now we produce 23 percent, and that number is growing every day, and it
will really grow. Coal, 23 percent; nuclear, 8 percent; hydroelectric,
2.7; biomass, 2.4; geothermal, .36; wind, .12; solar, .06.
Now, here is where our future lies, and the only one that is really
growing is biomass. How is that growing? Well, we are using it to heat
factories. Wood waste has now become a commodity. I'm from
Pennsylvania, the hardwood capital of the world. We are now drying most
of our wood with wood waste instead of using fuel oil or natural gas
because it's cheaper. A million Americans will heat their homes this
year with wood pellets. A lot of people don't know about a pellet
stove, but a pellet stove is a new, modern, beautiful stove that you
can heat your home and it's wood waste. That is a new consumer in the
market. And also power plants that are burning coal will top them with
wood waste so they can just slide under the air standards where the
coal they are burning might just have a little too much emission in it.
So they'll use 20, 30 percent wood waste, and they will be able to meet
the EPA air quality standards. So woody biomass is the growing one. And
now when we go into cellulosic ethanol, we are going to use wood waste
again to make ethanol, cellulosic ethanol.
But let's say we really put our effort behind, and we are, solar. So
let's say we double solar. Now, it is hard to double something in 10
years. But let's say we double it in 5 years. So we would be at .12.
And if we double it again in another 5 years, we would be at .24, if my
math is still good. And we take wind and we do the same. We could do
that for a number of years, a couple decades. We'd still be struggling
to get a percent of our energy from wind and solar.
{time} 2045
And yet people seem to think, and I don't know why, but they seem to
think it's ready to take over, it's ready to be helpful. But it's not
ready to replace that big wide band I had on oil, it's not ready to
replace that big wide band on coal. Nothing is. And hydroelectric is
decreasing because we're taking dams out and it's becoming a smaller
percentage. And nuclear will decrease to 7 percent if we don't open the
new plants because, as electric use goes up, if nuclear doesn't go up
with it, it will become a smaller figure.
So when you look at this chart, now I'm going to switch gears on you
for just a minute, what do we hear? Here's what we hear is coming now:
this is, I believe, the ``no energy bill.'' It locks up 9 trillion
cubic feet in the Roan Plateau. The Roan Plateau is a huge, clean
natural gas field in Colorado that was set aside as a naval oil shale
reserve in 1912 because of its rich energy resources. This means that 9
trillion cubic feet of natural gas, more than all the natural gas in
the OCS bill that was passed in Congress last year, that little piece
in the gulf, will be put off limits. It has already been through NEPA,
it's all ready to lease, it's ready to produce. Legislation that's
coming before us is going to take it away. What makes sense about clean
green natural gas?
Next, it locks up 18 percent of the Federal onshore production,
America's natural gas. And that's because of policy changes and further
NEPA studies, and making it more difficult to permit is going to slow
down the production of both oil and gas production in America.
I was responsible for a small amendment, but a good amendment, in the
energy bill in 2005. It took away redundant NEPA studies because NEPA
studies take a year. I talked to people who had leased land and in 7
years have not drilled yet because they were still doing NEPA studies
because they had to do one for every piece of the process, not a NEPA
study, and then produce it with a NEPA study to delay. Locks up 2
trillion barrels of oil shale from the West oil shale.
Now, everybody talked about the tar sands as oil that we couldn't
get. Canada has been persistent. They're now producing 1.5 million
barrels a day. Much of that is coming into our States to be refined. In
fact, they're trying to enlarge refineries in the northern tier, having
a lot of problems. Lots of resistance about enlarging those refineries,
but that's necessary to produce. But the tar sands are one of the
fields that's growing in Canada that's available, and they tell me that
shale oil has even greater reserves.
It's going to lock up 10 billion barrels in Alaska, the national
petroleum reserve, breaches legitimate legal contracts that are out
there that companies have signed to produce oil by trying to make them
null and void with legislation.
And then the one that really is bad, $15 billion tax increase. I have
two oil refineries in my district, one in Warren, Pennsylvania,
American Refineries, and in Bradford, Pennsylvania the original Kendall
refinery. They're going to pay, if this bill passes, a higher tax than
any other business in Pennsylvania or in America. Does that make sense,
that we're going to tax people who produce energy with a greater tax
than those who produce steel or food or other products for a profit? I
don't think it does. I know what it's about; it's about the hatred of
oil companies. Well, Big Oil does not produce.
The other fact I want to share with you, 90 percent of the oil in the
world today is not owned by an oil company. The 14th largest oil
company in America today is Exxon. The other 13 are countries like
Mexico, Iran, Iraq, Saudi Arabia, Venezuela, Nigeria, Russia, all our
good friends. Dictatorships, unstable governments, unfriendly
governments, and they own about 90 percent of the oil.
And now what's worrisome, from what I'm told, is they're using this
huge cash revenue for social purposes, and they're not putting the
money back. So it could happen in the very near future that those
countries could not produce enough oil to supply America. And that's
why we have $95 oil, because we're not doing coal-to-liquid; we're not
doing all the other things we ought to be doing. We're hoping that
renewables can replace oil. I wish they could.
I think America, I think this Congress, I think this administration
needs to take a very serious look at the economic viability of this
country if we continue, if all we have coming at us is a bill that has,
it shouldn't be no energy, it's less energy and more taxes.
I thank the gentleman for allowing me to share.
Mr. CONAWAY. I thank my colleague from Pennsylvania for sharing those
facts with us. And pesky though they may be and inconvenient though
they may be, they're nevertheless facts; and I appreciate you sharing
those with us.
I again would like to turn to my colleague from Illinois for other
comments that he might have.
Mr. SHIMKUS. I want to ask my friend from Pennsylvania a couple of
aspects on the chart. The first one, when we talked about the tax,
under this current Congress, how many times have the Democrats gone to
that same pot of money for PAYGO issues of other bills that have come
to this floor?
Mr. PETERSON of Pennsylvania. I can think of five or six.
Mr. SHIMKUS. I know there is at least three times, and I'm being told
four, using this same pot of money to justify the PAYGO, the new
spending that they brought on.
The other thing that we really need to have here and talk to the
American public about is that the Energy Information Service, what we
don't have depicted is, what is going to be the future demand? And the
future demand is going to double. So with your great chart of all the
portfolio there, it's kind of confusing because the public might think,
well, as we look at that, that everything is going to stay pretty much
the same. But the reality is demand is going to go up exponentially.
And if you have the same amount of supply and the demand goes up, then
you see $100 a barrel crude oil, $120 barrel crude oil. And that's why,
as we have come here to talk about supply, we want to bring more supply
to the table. And we know we have friends on the other side of the
aisle that believe the same thing.
[[Page H13834]]
I'm working with Rick Boucher. And you mentioned coal-to-liquid. Just
imagine this, we have 250 years' worth of coal in the only coal basin.
So you have the coal underneath the ground, you build a coal mine,
right on top of it you build a coal-to-liquid refinery somewhere in the
Midwest or somewhere in Pennsylvania where there is a coal field, and
then you connect it to pipelines that we have today. Then you limit the
risk. The risk we have now is, if we're not going to build new
refineries, we're going to build refineries and expand existing
refineries, and we have so many down on the gulf coast, we have them in
Louisiana, we have them in Corpus Christi, we have them in Houston, we
have them in all these areas where they are really at risk, and we
dodged a bullet this year, of major storms that take these refineries
offline, depending upon the severity of the storm. So for national
security sake, to have a diversified energy portfolio, John, you said
it numerous times, diversification. When you have an investment
portfolio, you want diversity for security.
We've got to have a diversified energy portfolio. And for our friends
on the other side to say no to coal, no to oil, no to nuclear, yes to
solar, yes to wind, and it's such a small portion of what can really
affect the cost, it's really sending a terrible signal to our
constituents that the salvation is in renewables when we all agree we
want a diversified portfolio. We want to bring them on. But if you do
it at the risk of the other major sources of supply, you do great harm
to this country.
Mr. PETERSON of Pennsylvania. Would the gentleman yield?
Mr. CONAWAY. Yes.
Mr. PETERSON of Pennsylvania. I disagreed with the IAs. I look for
gas to get bigger and coal to get smaller because of the CO2
issues.
Now, let's say they're wrong here, because I'm sure lots of people
will disagree with them. Let's say they're 100 percent wrong. Right
now, when you see hydro and nonhydro, you see hydro decreasing as much
or more than nonhydro increases, so there is really no growth in
renewables. Let's say they're 100 percent wrong. So instead of having 5
percent, we're 10 percent. It wouldn't even take up the growth need of
America. So let's say they're wrong, and we're going to be twice that
effective at renewables. I hope they're wrong, but it won't take care
of the growth. We will still need this oil, we will still need this
gas, we will still need this coal.
Mr. CONAWAY. Will the gentleman help us understand, as we talk about
these supplies, a variety of energy resources, we assume, for the lack
of this conversation, that it's all equal and that it all costs the
same amount of money to produce, and that's the fallacy. One of the
problems with a renewable portfolio standard of 15 percent, now, that
our chart does not depict just electricity, but if we had a chart that
did just electricity, the big players are going to be the same.
Mr. PETERSON of Pennsylvania. I don't have a big chart, but I have a
little chart.
Mr. CONAWAY. And it's very close to the same. And if we demand or
mandate 15 percent total electricity produced from renewables, what
does that do to the cost of that electricity to the consumer?
Mr. PETERSON of Pennsylvania. It's going to be much higher.
Mr. CONAWAY. And, in effect, that is a tax on families in this
country. Now, we all want to get to a, I would refer to it as an energy
security, not only American energy security, but we ought to be talking
about global energy security in this context. Right now we're focused
just on the U.S. And so as we look at this energy security, not
understanding that a global portfolio standard increased to an
unworkable 15 percent is a heavy tax on consumers, it's a tax on
businesses, it's a tax on anybody who turns on a light, anybody who
gets in a car, anybody who uses electricity, that's a tax that they're
not currently paying; and those increased taxes go to a narrow margin
of the energy supply. And our real goal should be energy security at a
cost that we can afford.
And I yield back.
Mr. PETERSON of Pennsylvania. That's the electric map, and it shows,
it's the same as this. But it does prove my point, that coal goes down
and gas goes up; it gets bigger. But up here at the top, you have the
same thing. There is almost no change because the growth in volume
needed more than absorbs all these new renewables.
Mr. CONAWAY. Texas Utilities announced that they were going to build,
I think the number was 12, 300-megawatt coal fire plants in Texas. And
the reason for that was that over in that time frame of construction,
the demand in Texas was expected to increase, electricity demand was
expected to increase to the point that our grid, ERCOT, which is
separate from the rest of the United States, the differential between
demand and supply would narrow to a margin that is unacceptable from a
safety standpoint. And these 12 plants were going to help keep that
margin at the 9 or 10 or 12 percent excess capacity to allow for spurts
in daily demand or to allow for continued growth in demand without
getting to a point where you turned the light on and it didn't work,
the experience in California where they had brown-outs because supply
outstripped demand.
You mentioned earlier about the opponents to coal fire plants. They
went to work, Texas Utilities, to demand that they not build those
plants. And as a result of that, and a takeover by a private entity,
eight or nine of those plants have now been scrapped and they're only
going to build three. Now, what got lost in that conversation was,
where is the extra electricity production going to come from in order
to keep ERCOT at a margin of safety for the differential between supply
and demand that it has had over these years and should have in the
going-forward future.
So as we look at how we produce electricity, and all of us who have
always turned lights on with the assumption that they would come on,
left unchecked and left to our own devices, the growth in demand will
get us to a point in the not-too-distant future where we will turn
light switches on and nothing happens because the electricity is just
not there to be used.
Mr. SHIMKUS. I mean, you bring up a good point. And I would like to
focus on that for a minute. Because now you're going from 12 coal fire
plants or electricity generation plants to three. And one of the
reasons why the building trade and many in organized labor are in
support of a new supply provision, because look at what you've done,
look at all the jobs to build these plants, and then look at all the
good-paying jobs to operate these plants.
I don't know what Texas plans are, but I can see them very well,
governments south of the great State of Texas citing a power plant and
selling power across the border into Texas. And then who gets the jobs?
It's like the same, my friend from Pennsylvania, we talk about natural
gas all the time; if we're not willing to have a liquefied natural gas
port built inside this country, where are they going to go?
{time} 2100
Where are they going to go? To the Bahamas. Or they are going to go
to other places where when they build the port facility, they build the
liquefied natural gas, and then they pipe it in to this country. Who
loses the jobs? We lose the jobs. So that is one of the frustrating
things of this debate.
There are two main issues. We always talk about energy security
because we address it in the national security component of how do we
keep our Nation safe, how do we stop from being extorted by foreign
rogue countries, and how do we keep our economy from falling in
disruption should there be a strike in the sea lanes.
But there is also another security debate that we have talked about,
and that is financial security, financial security for this country,
and what really strikes individual families is financial security for
the families. When you have these types of price escalations, when you
don't bring new major supply to the economy and you put all your
promises on a small portion of renewables that won't even meet the
future demand increase, then what you are doing is, you are going back
to $96 a barrel of crude oil. And that is the no energy plan that we
are talking about. And all we are saying to our friends, and again, I
have many of them. I work with them on the committee all the time. My
fossil fuel Democrats, now is the time to make sure that fossil fuel
[[Page H13835]]
is a huge, is a part of this debate. And my friend from Pennsylvania is
right. We are not saying it has to be the whole thing. We are all
comers here. I have got my corn here. I have got my soybeans. I have my
coal. I have got marginal oil wells in southern Illinois, marginal oil
that we can use and recover, and we are still recovering oil from
southern Illinois. Bring on the wind, bring on the solar, but we want
to bring everything in. The more supply we have, the lower the cost,
the Nation will be better off
Mr. CONAWAY. Before we get away from the coal comments, I want to
make sure that, I know my colleagues agree with this, as we look at
coal usage, it ought to be clean-burning coal. None of us argue in
support of continued CO2 emissions from coal-fired
electricity plants. There is in the works right now a future gen
project which is going to be about a billion eight research project.
There are four sites that are in the hopper still competing for that
one final selection: two in Illinois, two in Texas, one in my district.
Mr. PETERSON of Pennsylvania. None in Pennsylvania.
Mr. CONAWAY. That will do the research to be able to learn how to
burn all forms of coal from the lignite that we have in Texas to the
hard coals in Pennsylvania and Illinois, learn how to burn that coal to
generate electricity but yet capture the CO2, and then take
that CO2 and either sell it back to the oil and gas business
to sweep oil reservoirs to enhance the oil recovery, or in many places
we will have to learn how to put it underground, deeply buried,
permanently buried in the ground so it is not in our atmosphere. That
is essential that we get that done, and the sooner the better, because
all of us believe coal is a long-time solution to electricity
production, but it ought to be clean-burning coal, zero-emission coal-
fired plant. That is important not only for the coal plants that we
ought to be building in the United States, but India and China are also
part of this consortium that is going to develop this technology. China
is bringing on a 500-megawatt power plant every 2 weeks or so. India is
in a similar mode. They are going to burn coal however they need to in
order to generate electricity because electricity and an increased
electricity supply drives growth and economies. The availability of the
electricity helps drive the growth in these economies. China and India
are going to continue to burn coal and spew CO2 into the
atmosphere no matter what we do. So it is in all of our best interests
to learn how to burn coal cleanly and take advantage of that 250-year
supply that my colleague from Illinois was talking about.
Mr. SHIMKUS. I know that the public, sometimes they don't understand
that carbon dioxide is a commodity that is bought and sold, that people
want, and we want it in the soda business to give the fizz in your Coke
or your Pepsi, or as my friend from Texas knows, advanced oil recovery.
You shove that CO2 back in the ground, it helps recover that
margin of oil that has been harder to recover in the past.
Mr. PETERSON of Pennsylvania. One thing I want to mention, what has
happened to these high energy prices? Dow Chemical paid $8 billion for
natural gas in 2002, $22 billion in 2006, and they are now building
plants all over the world because we can't afford America's energy.
That is the message we need to realize. Many companies are doing that,
and we need to prevent that.
Mr. CONAWAY. I want to thank both my colleagues tonight for coming in
and sharing this hour and hopefully shedding a little bit of light on
an issue that is of interest to every single American. We all use
electricity in some form or fashion. It is all important to us.
In the couple of minutes we have left, I want to bring both my
colleagues' attention to a study that came out this summer called
``Facing the Hard Truths About Energy.'' This is a study that was done
by the National Petroleum Council. It involves some 350 contributors.
It was not a new study in the sense that it went out and did the
research, but it gathered the research from these 350 participants that
cover a very broad spectrum. It included of course energy producers. It
included environmentalists. It included everybody who might have
something intelligent to say about the issues and problems that we
face. It was transparent. Everybody got to see what was going on. There
weren't any hidden agendas. There weren't any preconceived ideas.
I want to quickly run through the things that this study shows that
we must do in the United States. Some I agree with wholeheartedly, and
others I am still questioning and understanding the impact. But this
study, which I hope over the next several months we are able to show to
the American people and have them look at it and understand the issue
as you and I do, but this study would say that we need to moderate the
growing demand for energy by increasing efficiency of transportation,
residential, commercial and other industrial uses. That is one we can
all agree with. Expand and diversify production from clean coal,
nuclear, biomass, other renewables and unconventional oil and gas;
moderate the decline of conventional domestic oil and gas production,
which means lifting those restrictions and going after domestic crude
oil and increased access for development of new resources; integrated
energy policy into trade, economic, environmental, security, foreign
policies; strengthen global energy trade and investment; and broaden
dialogue with both producing and consuming nations to improve global
energy security. Not just energy security of the United States, but
global energy security, because a world that has global energy security
will be much more peaceful than a world that is fighting for the
energy.
Enhanced science and engineering capabilities and create long-term
opportunities for research and development in all phases of the energy
supply and demand system. And finally develop the legal and regulatory
framework to enable carbon capture and sequestration. In addition, as
policymakers consider options to reduce carbon dioxide emissions,
provide an effective global framework for carbon management, including
establishment of a transparent, predictable economywide cost for carbon
dioxide emissions.
A couple of their findings unrelated directly to their
recommendations were that the majority of the U.S. energy sector
workforce, including skilled scientists and engineers, is eligible to
retire within the next decade. The workforce must be replenished and
trained. These are millions of jobs across a broad spectrum, from
roughnecks all the way to the smartest scientists, that we have got in
this country.
So I want to thank both my colleagues for coming to us tonight. We
have 1 minute to close. John, anything? John, anything?
Mr. PETERSON of Pennsylvania. Well, I guess I think the thing we need
is we need an energy policy. We need to get serious about energy.
Energy, in my view, is the number one challenge of America. I've said
this in many speeches; I think it equals terrorism and the security of
America. But if energy prices continue to skyrocket and we cannot
compete in the global economy and the average American can't get a
workingman's job, we are going to be a country in trouble. We are going
to be a country that is not first rate. We are not going to be the
leader of the world.
Energy availability and affordability should be the number one issue
in the Congress. It is unlocking the OCS. It is unlocking the Midwest.
It is wiser use of energy. It is using less for transportation, more
efficiency. In fact, conserving in the next 5 years is probably all we
can do, because everything we have talked about takes 5 to 10 years to
produce fruit to bring it to market. So I think America's, I think that
the real terror threat of this country is available, affordable energy.
Mr. CONAWAY. I want to thank both my colleagues for joining me
tonight. As we opened the conversation tonight, I think it is time we
quit howling and begin to do something that is important to all
Americans.
With that I yield back.
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