[Congressional Record Volume 153, Number 185 (Wednesday, December 5, 2007)]
[House]
[Pages H14233-H14239]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                    ENERGY INDEPENDENCE FOR AMERICA

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 18, 2007, the gentleman from New Mexico (Mr. Pearce) is 
recognized for 60 minutes as the designee of the minority leader.
  Mr. PEARCE. Mr. Speaker, I would like to address the body tonight 
about what we are facing in this country as we experience higher 
gasoline prices, higher energy prices. Today there is an article that I 
will submit for the Record today: Dow Chemical announced it is going to 
cut jobs and close plants in the United States.

               Dow Chemical To Cut Jobs and Close Plants

                    (By Bob Sechler and Ana Campoy)

       Dec. 5.--Dow Chemical Co. plans to cut 1,000 jobs and 
     shutter a number of underperforming plants, saying it will 
     put the savings into higher-growth opportunities.
       The job cuts constitute about 2.3% of Dow's estimated 
     42,500 employees. The chemical company expects to incur a 
     fourth-quarter charge of $500 million to $600 million, 
     including costs for severance and asset write-downs.
       The effort ``reflects our commitment to prune businesses 
     that are not delivering appropriate value and tackle tasks 
     more efficiently across the entire organization,'' Chief 
     Executive Andrew N. Liveris said in a statement.
       Dow Chemical, based in Midland, Mich., has been struggling 
     with higher prices for natural gas and oil, the main 
     feedstock for chemicals, and lower prices for commodity 
     chemicals, or the basic building blocks for more complex 
     chemicals. Basic chemicals account for about 50% of the 
     company's revenue.
       To reduce its costs, the company has been actively moving 
     its commodity-chemical production to places like Asia and the 
     Middle East, where raw materials are cheaper. It has also 
     worked with local companies in those regions to reduce the 
     amount of money it has to invest.
       The company also is trying to expand its specialty-chemical 
     business, which is more profitable and less exposed to the 
     ups and downs of energy markets. Dow has been widely expected 
     to unveil a major joint venture or acquisition that would 
     reduce its dependence on low-margin commodity chemicals.
       The company pegged the annual savings from the moves at 
     $180 million once complete.
       Among the moves announced yesterday, Dow said it will exit 
     the auto-sealers business in North America, Asia Pacific and 
     Latin America, and explore options for the business in 
     Europe. The company will close an agricultural-sciences 
     manufacturing plant in Lauterbourg, France.

  Now, it's not that it is cutting those jobs in the United States and 
simply lowering its production worldwide. What it is doing is cutting 
jobs in America in order to make more competitive changes to the 
company and have those jobs overseas.
  This is a significant thing that we on the Republican side have been 
talking about for the last several years. It is time for us as a Nation 
to fight the economic fight that we are faced with. We cannot continue 
to ignore what other nations are doing and what our energy costs are or 
we are going to continue to see headlines like this today with Dow 
Chemical cutting jobs and closing plants.
  Now, we had a precursor to this earlier this year. Dow Chemical 
announced that it was going to build a plant in Saudi Arabia that cost 
$22 billion, an investment that large in Saudi Arabia, and meanwhile 
they are going to also start in China another plant for approximately 
$8 billion, and they knew at that point that they would begin this 
transfer of jobs.
  Now, we have to ask ourselves is it because Dow Chemical is just a 
bad corporate partner? Maybe they are just after corporate greed. 
They're going to make profits at the expense of the United States, 
because that's what we have heard. We have heard on the House floor 
that corporations are evil, that they don't have the interests of the 
country at heart.
  As we look at it a little bit closer, we recognize that in the United 
States just today the prices for natural gas are quoted at above the $8 
range. We have at the same point, and natural gas is a very key 
component of Dow Chemical's products; in other words, about 50 percent 
of their costs, if I am not mistaken, come from their raw material 
costs, of which natural gas is the key component. So there is a direct 
correlation between the price of natural gas and jobs in this country. 
Now, when we are paying above $8 for natural gas, what are they paying 
in Saudi Arabia? In Saudi Arabia the price is today about 75 cents. So 
almost one tenth, one tenth the cost for 50 percent of their raw 
materials in Saudi Arabia versus here.
  Now, you don't have to be schooled in economics. You simply have to 
understand that you are not going to Wal-Mart and pay ten times the 
cost for something you buy when you could go down the street and get it 
somewhere else. You go to buy and get the best deal. Companies have to 
have the same incentive. If Dow Chemical stays here and pays ten times 
more, ultimately they become noncompetitive in the world. Someone else 
will set up the plant in Saudi Arabia with one tenth the cost of raw 
materials, and the jobs will come away from Dow Chemical and go to 
another plant. So all that Dow Chemical is doing is saying we have 
competitive forces that cause us to consider this move.
  We have done nothing in this Congress to dispel those costs, to drive

[[Page H14234]]

those costs lower. And, in fact, it is this Congress that is mandating 
the switch nationwide from coal production, coal-produced energy, to 
natural gas-produced energy. Now, that's fine except you must realize 
when we drive that demand up as a regulatory agency, as a government, 
that we drive the demand up and we say you are going to convert for 
clean air purposes from coal to natural gas, you have a great increase 
in demand. It is simply a supply and demand problem. So we have the 
outcome today. We are seeing Dow Chemical ship jobs overseas.
  Now, we have to then look at what the Congress is doing. Speaker 
Pelosi announced very early on that it was her desire to make this 
country independent of foreign companies. I will tell you that what we 
are finding now, we see this particular chart, and this is for the 
summer of 2007 and moving forward, we see the predictions that we have 
a 23 percent estimated increase in prices in the northwestern part of 
the country; in the middle regions about 30 percent increase; 19 
percent on the eastern seaboard; in Florida we are seeing 21 percent; 
Texas, 32 percent; California, 29 percent. Now, when you are seeing 
increasing prices, you would say that we as consumers are not seeing 
this energy independence. If we are, it's not a helpful thing to us, 
that, in fact, it is somewhat hurtful when we see energy prices and our 
home heating increase by that much. We are told these are the forecasts 
right now, so we are seeing the effects not only in jobs but also 
everyday costs.
  We have passed two bills, one back in January, H.R. 6, and then we 
also passed H.R. 3221, and those were to deal with the problem of 
higher prices, and yet they still have not come back from the Senate. 
We still don't have an agreement. And I will say that in the early 
stages, the things that we saw pass off this House floor were actually 
penalties to energy independence. They tax American companies but they 
don't tax Hugo Chavez.
  Now, we must at some point ask ourselves why we have a policy that 
would tax American companies and American jobs, would limit the supply 
so that the cost goes up and we lose jobs. Exactly why are we doing 
this as a country? Why are we suggesting passing policy off the floor 
that is causing this particular effect? Those are things that we as 
Americans should be asking, and we are asking, and yet we don't have a 
good, clear answer.
  It appears to me, because I am not involved in the conference, the 
discussions between the House and the Senate, it appears to me that 
special-interest groups have dominated those discussions and have said 
we are going to tax those high-profit oil companies because they are 
making $100 per barrel of oil, or maybe today it is only $85, but it 
seems like there are strong forces out there that say we need to 
penalize and punish these American companies because, according to 
some, they are obviously doing things that are harmful.
  I would say that the harmful effects are not to be found. The harmful 
effects are not there. They're not documented. The oil companies are 
simply price takers. Exxon cannot set the price of oil worldwide. They 
simply take the price that's offered to them. They have a large 
production. They are making quite a bit of money, but they have also 
got a large investment in the offshore rigs. They have got a large 
investment in onshore production, large transportation costs. Their 
costs are about the same as any company worldwide. But we are not 
taxing worldwide companies in each of the energy bills; we are only 
taxing American companies. And we have to ask ourselves why. Why are we 
driving the price of natural gas up, sending jobs overseas, and why are 
we taxing American companies and not taxing Hugo Chavez?
  These are the questions that we are here tonight to talk about as we 
move very close to a discussion of what might be in the energy bill 
when we close this week. We were told at the beginning of the week we 
will have an energy bill this week; yet we have not seen it on our 
side. We have said that we are going to discuss it. Tomorrow is the 
last day of business for the week, to my knowledge, and yet we still 
don't have a printed copy, we on the Republican side, and I don't think 
many Democrats have seen a written bill. But we do have in front of us 
what has been done earlier this year.
  I am joined tonight by a colleague from Pennsylvania, a classmate of 
mine, Congressman Tim Murphy. He has concerns also about the direction 
that we are taking the energy policy in this country. We are facing 
worldwide competition, increasing pressure from the large states of 
China, India, the other competitive nations in the world, and at a time 
when we should be all looking outward and working, Democrats and 
Republicans alike, to protect the economic base of this country and 
understanding that energy is a key piece of the economic base of this 
country, that jobs are created around the cost of energy. At a time 
when we should be focused outward together, we instead have a, 
suggested policies that punish American producers, American oil and gas 
companies, and they give competitive advantage to other nations and 
other countries.
  I would like to yield to the gentleman from Pennsylvania to talk 
about the nuclear, the coal, and the natural gas industries. He is from 
a coal-producing State and has good knowledge on these.
  Again, I yield to the gentleman from Pennsylvania.

                              {time}  1845

  Mr. TIM MURPHY of Pennsylvania. I thank the gentleman for yielding to 
me on this critically important issue about energy. As American 
families look into the next few months about how they are going to be 
paying their gas bills as the cold winter sets upon us, as natural gas 
prices go up, of how they will be paying their automobile costs as 
gasoline prices go up, as we look at such things as jobs such as 
chemical industry as was just outlined by my friend from New Mexico, it 
is extremely important that as Congress looks at facing an energy bill 
this week that we note not only what is in there but what we expect is 
not in the bill. And unless we take on a comprehensive energy policy in 
America, America will be facing more brownouts, more times when the 
power is not there. And in a world where other countries, such as 
China, are opening up a new coal-fired power plant every couple of 
weeks without the scrubbers and environmental controls we have on, they 
will be able to undercut us even further with our costs of 
manufacturing. Unless Congress takes sizable action to back up energy 
legislation that looks to the big picture of diversifying our energy 
production and help to lower costs for consumers, our problems will 
only multiply.
  Now, I represent a district in Pennsylvania coal country, directly 
above the Pittsburgh coal seam. It extends throughout western 
Pennsylvania, Ohio, and West Virginia. Some geologists tell me that the 
Pittsburgh coal seam has been the most valuable mineral deposit in the 
world. It was responsible for the growth of the American steel 
industry, glass, chemical industry, it has some 50,000 jobs in 
southwestern Pennsylvania dependent on the coal industry, railroads, 
barges, trucking, so many other industries involved. It allowed for the 
development of modern railroads, river navigation networks. It remains 
a valuable resource that will be able to serve us for many years to 
come, perhaps 250 more years, long after the Mideast is dry in its oil 
wells.
  Closing the mines in Pennsylvania would be like closing the beaches 
in Florida or closing the harbors in New Orleans. The country can't 
afford to stop using coal, either. It is a valuable economic resource 
for our region as other resources available in other parts of the 
country. So we have to take advantage of every possible resource to 
meet our energy demands. The messages today are quite simple. We cannot 
achieve energy independence without coal. We cannot achieve energy 
security without coal. And our coal must be clean coal, not the other 
option of no coal at all.
  Now, listen to these numbers. They are quite compelling. Over the 
next 40 years or so, the electricity demand in the United States will 
double. These are the demands of people in their homes. They are also 
the demands of increasing jobs in this country. We will conserve, and 
we will have make great strides in efficiency. But with the growth in 
the population and improving quality of life, it all dictates that 
electricity demands will still increase substantially.

[[Page H14235]]

  Coal accounts for about 50 percent of our electricity, and nonhydro 
renewables like solar and wind account for about 2 percent. We have 
already built as much hydroelectric as possible, and it is doubtful 
that people will want to see more large super dams built around the 
country. But even if we triple the share of renewable electricity, we 
will still need coal for close to half of our electricity in 2050. This 
means we will still have approximately to double the available coal 
capacity by 2050 just to meet demand.
  Right now there are about 400 coal plants in the United States. Many 
of them are old and inefficient, outdated. Most or all of them will 
need to be replaced over the next 40 years. So just to maintain our 
current level, we are going to need to build about 400 plants to 
replace those. And then to meet the new electrical demands over the 
next 40 years, we are going to have to build an additional 400. That is 
800 new coal-fired power plants between now and 2050. This is twice as 
many plants as have been built since the start of the Industrial 
Revolution. This translates to about one coal plant every 2 to 3 weeks, 
even if we start in 2010, just to maintain the current capacity. It is 
a huge demand. And we can do that in a way that has clean coal 
technology, zero emissions, if we will choose to make the investments. 
MIT said about $8 billion or so will be needed to meet those 
investments in real dollars. That seems a lot cheaper than it took us 
back in the 1960s to put someone on the Moon. In the meantime, China is 
adding about one or two coal plants a week and they are going to 
continue. They put cheap power in the plants without scrubbers. In the 
U.S., renewable technologies such as solar and wind are expanding 
rapidly and will continue to do so. But they simply cannot match coal 
in terms of delivered power.
  Here are some examples. This past August, power from West Virginia's 
largest wind farm was available only about 10 percent of the time that 
it was actually needed. That is, the wind doesn't blow consistently 
every day. At 10 percent availability and 3 megawatts capacity, about 
3,000 windmills would be needed to equal the useful output of just one 
coal plant. To completely replace coal with wind, we would need to 
build 1.2 million windmills by 2050. This assumes the utilities will 
actually be allowed to build all the new miles of transmission lines 
they will need. And will people want all those wind towers up?

  Another area, the largest solar panel array in the United States is 
under construction at Nellis Air Force Base in Nevada. It is going to 
cover 140 acres of desert with 70,000 solar panels, but will produce 
only about 2 percent of the output of a modern coal-fired power plant. 
At that rate, we would have to destroy 11 square miles of beautiful 
southwestern Pennsylvania forest or consume this much valuable land 
from our farmers just to avoid building one coal plant.
  The truth is, we need to increase the supply of all energy, coal, 
natural gas, nuclear and renewables. We can't afford to ignore any of 
them unless we are willing to put up with a series of brownouts and 
blackouts during times when the sun doesn't shine and the wind doesn't 
blow. So the key to solving this problem includes developing clean coal 
technologies with zero emissions and zero greenhouse gases.
  Another option is to switch to natural gas, and what we are hearing 
in the energy bill is there will be more push for doing that, as was 
outlined by my friend from New Mexico. As natural gas prices continue 
to soar, that is more jobs out of America that use chemical plants and 
more families' gas bills going up. Natural gas provides about 19 
percent of our current electricity demand, and its use will also have 
to double by 2050 to maintain its current market share. About 90 
percent of the electric generating capacity installed since the year 
2000 has been natural gas-based, and natural gas is about three times 
more expensive than coal per kilowatt of electricity generated. This 
has increased the demand for natural gas and raised the price of both 
gas and electricity. The increased use of natural gas for electricity 
combined with our policies that place off-limits much of our domestic 
gas resources has caused us to be become a gas-importing nation when we 
could be a gas-exporting nation.
  Congress has repeatedly made vast areas of our coastlines off-limits, 
thus embargoing our own resources from ourselves, boycotting our own 
resources, and all the while countries like Cuba drill closer to our 
shore than we are allowed to.
  We used to be self-sufficient in natural gas, but not anymore. Most 
of our imported gas still comes from Canada, but this is declining. 
Imports of liquid natural gas, or LNG, are increasing rapidly. Not only 
does this move us farther away from independence, but it is 
unsustainable because demand for liquefied natural gas throughout the 
world, especially in Europe, is also increasing rapidly. Chemical 
companies which use natural gas as their primary feedstock to make such 
chemicals and fertilizers and other products and other industries that 
depend heavily on natural gas are going to move their operations 
overseas where gas is cheaper. When natural gas costs in Middle East or 
Russia are $1 per unit or less compared to $6 to $12 at a fluctuating 
cost line in the United States, it is easy to see why the decisions are 
being made.
  Already we have lost 3.2 million manufacturing jobs, almost 20 
percent of the total since the year 2000. Chemical companies 
consistently say that natural gas costs are far more important than 
labor costs when making their decision to move overseas. Worse yet, if 
greenhouse gas legislation becomes reality in its current form, natural 
gas will become by default the fuel of choice for electric utilities. 
The trends we have already seen will only become worse. Prices will 
soar.
  In the mix of which energy source is the cheapest, hydro is probably 
the cheapest, but as we said before, we doubt if people will want to 
build several more dams and dam up beautiful valleys across America. 
Next cheapest is nuclear power followed by coal, wind, natural gas and 
solar.
  But let me briefly talk about nuclear. We need to decide whether 
nuclear power can pick up the required electricity supply. Nuclear 
plants currently provide about 19 percent of our electricity, about 30 
percent in Pennsylvania. There are about 100 nuclear power plants in 
operation in the United States today, but we can't just keep 
relicensing them forever. They are also getting old and worn and will 
need to be replaced. By 2050, we will have to replace just about all of 
the existing nuclear fleet. They are long past their prime and will 
need to close. This means that by 2050, we will have to build about 200 
new nuclear power plants. That is 100 replacements and 100 new to meet 
the expected demands of 2050. The trouble is we haven't built a single 
nuclear power plant in the last 30 years, given all the delays and 
costs associated with nuclear construction. It is going to be 
difficult, if not impossible, to build plants in the U.S. at the rate 
needed. That is about five per year, about one every 2\1/2\ months 
starting in 2010. Although the operating costs for nuclear plants are 
about the same or slightly cheaper than coal, the capital costs are 
much higher and the lead times for construction and permitting are much 
longer. The nuclear operating costs also do not include the long-term 
costs of nuclear waste disposal or storage.

  As with natural gas, the enactment of greenhouse gas legislation in 
what we are understanding is the current form, without working to help 
the nuclear is going to increase the demand for nuclear power and place 
further strain on resources and increase costs. So there we are, two of 
our biggest resources for producing electricity, coal and nuclear, are 
areas that Congress has got to deal with seriously.
  We have 250, perhaps 300 years' worth of coal in the ground. 
Scientists are working on ways of making sure we have zero emissions 
coal, zero greenhouse gases, massively reduce that. Right now I know in 
Pennsylvania about 40 percent of our coal-fired power plants have no 
scrubbers, or inadequate scrubbers. Unfortunately, the way new source 
review works is if a company says let's work to improve efficiency, 
let's put in new turbines or other things that improve efficiency by a 
few percent, at that point, the government comes in and says, no, we 
now have to review everything you do, and if you don't take care of 
everything with all the scrubbers, you can't do it at all. The 
companies say, well, we were

[[Page H14236]]

thinking of spending 20, or 50 or $150 million on some upgrades but we 
don't have four or $500 million to take care of this one plant. So they 
hold off. That is not cleaning the air. That is not taking care of our 
needs.
  What we have to do is look at ways of promoting the new technology, 
helping private business make those investments in new technology, but 
above all, meet our current and our future needs by addressing the 
issues of America's abundant supplies of coal and expanding the use of 
nuclear power which is clean. It is one of those areas we have to deal 
with seriously.
  I thank the gentleman from New Mexico for yielding me this time and 
his leadership on working in these areas which is so important for 
America's energy security.
  Mr. PEARCE. I thank the gentleman for his comments and recognize that 
we have a 15-year lead time before we build the first nuclear power 
plant. China is right now currently hiring our nuclear technology 
capability. They are hiring our people so that we first of all don't 
have young people going into the nuclear industry, those who are 
retiring are going to China because they have a commitment to build 
nuclear power plants. And as the gentleman said, we face a severe 
shortage of energy in the future. We are already giving up jobs. And we 
are doing nothing about it.
  Now, I would like to show a difference in viewpoints. Up above the 
Speaker's dais is a quote by Daniel Webster. If I were to read that 
quote, it says, ``Let us develop the resources of our land, call forth 
its powers, build up its institutions, promote all its great interests 
and see whether we also in our day and generation may not perform 
something worthy to be remembered.'' It begins, ``Let us develop the 
resources of our land.'' Daniel Webster.
  Can we do something great that our generation might be remembered 
for? Now, I would go also to a quote from earlier this year from the 
chairman of our Resources Committee. Now, keep in mind Daniel Webster 
said, ``Let's develop our resources,'' but the chairman of our 
Resources Committee this year says, ``I see no reason, no reason 
whatsoever why good public land law should be linked to the gross 
national product.'' I'm sorry, the gross national product is our 
capability to generate jobs. And contrasting with Daniel Webster who 
says, Let's do everything we can to build a great country. Let's build 
this dream of American exceptionalism and let's fight to have the hope 
and opportunity that we as a country have and let's use our resources 
to do it.
  Contrast that to this year, this year's energy bill, ``No reason, no 
reason whatsoever, why good public land law should be linked to the 
gross national product.'' Just earlier this week, I authored an article 
in Human Events magazine. If you want to go online, pearce.house.gov. 
Be sure and spell it p-e-a-r-c-e. If you spell it p-i-e-r-c-e, there 
are things on the Web site that come up on that that your mother would 
not want you to see. We simply need to go and look at energy policy. If 
you go to pearce.house.gov and look at the Human Events article earlier 
this week, we talk about the energy bill that was passed out of the 
House by the chairman who says, ``No reason why public law should be 
linked to gross national product'' and what they did in that particular 
bill, H.R. 3221, was they cut off 9 trillion cubic feet of natural gas 
from Colorado's Roan Plateau.

                              {time}  1900

  They cut off 2 trillion barrels of oil from shale oil. That is in 
Colorado. This, by the way, is twice the reserves of all known reserves 
in the world. We could be the Saudi Arabia of oil if we would simply 
harness those resources down there Webster talks about, that shale oil 
in Colorado.
  The bill, H.R. 3221, dramatically expands the environmental study 
requirements on existing oil and gas pads. This provision alone is 
expected to reduce or delay onshore natural gas supply by approximately 
18 percent. So at a time when Dow Chemical is investing $22 billion in 
Saudi Arabia because their natural gas prices are one tenth of ours, we 
are limiting supply by another 18 percent by our bureaucratic and 
regulatory requirements. It just does not make sense.
  There are breaches in the legitimate legal offshore energy contracts 
between companies and the U.S. Government, in much the same way as Hugo 
Chavez and Vladimir Putin might install. That is a quote from some of 
our friends at the Washington Post earlier this year writing about H.R. 
6.
  It cuts off 10 billion barrels of oil from the National Petroleum 
Reserve in Alaska, and it cuts off the government agency's 
communication for oil and gas permitting activities, as they currently 
do under law.
  Now, these are things in the bill that supposedly are going to bring 
us energy independence. It is a bill that we oppose. We as Republicans 
and we as conservatives say that we must first take care of the 
opportunity for our young people to have jobs and careers. We first 
want to defend our economy against those foreign countries that would 
take our living standard, that would take our jobs. And yet we are 
passing a bill where the chairman says there is no reason, no reason 
whatsoever, why good public land law should be linked to the gross 
national product. I find that quote to be stunning.
  One of the provisions in the bill that is suggested that might come 
up, again, the Democrats are saying, Nancy Pelosi is saying we are 
going to have an energy bill this week, and one of the provisions in 
that is a provision to require renewable fuel standards.
  Now, that is well and good, until one looks more closely. That part 
of the renewable fuel standard is ethanol from cellulose fibers. Those 
are wood fibers.
  I would like to yield to the gentleman from Utah, a good friend of 
mine, Representative Bishop, who heads the National Parks Public Lands 
Subcommittee in the Resources Committee, is knowledgeable about 
national forests and about the opportunity that we have to help lower 
energy costs by using renewable fuels as the technology exists or does 
not exist today.
  I yield to the gentleman from Utah.
  Mr. BISHOP of Utah. I thank the gentleman from New Mexico for 
offering, for allowing me an opportunity of saying a few words on what 
will be a significant piece of legislation that we will maybe be asked 
to vote upon this week.
  You know, it is only intuitive that this Nation should be energy 
independent. If we were energy independent, not relying on foreign 
sources of energy from obviously other places, not only would it allow 
our military to have the flexibility it needs to function in whatever 
situation upon which it is called to be used, but it allows our 
diplomacy to be used in flexibility in any situation.
  So, how do we actually replace this foreign oil that is presently 
being brought in here? Everyone who understands the situation will tell 
you there is no simple, single silver bullet. Multiple means have to be 
used.
  Energy conservation, efficiency in transportation, things we have 
talked about, those are good. That is part of the mix. But only about 
16 percent of our foreign oil imports could be eliminated simply by 
using efficiency in transportation or energy conservation means. Other 
methods have to be added to the mix as well, and one of those is 
biomass.
  Biomass by itself could produce 24 percent of all the foreign oil we 
are importing into this country, far more than even our best efforts of 
conservation or efficiency. If we combined those two together, we are 
well on our way to trying to become energy independent.
  For those of you like me that like technical talk, biomass is dead 
trees, dead shrubs, the stuff that burns in forests if you don't remove 
it first. And as much as our friends on the other side of the aisle 
will continuously say they want to require biomass to be part of the 
fuel standards, the renewable alternative fuel standards, the bill that 
will be brought before us this week will not allow biofuels, dead 
trees, to come from the one and the largest source of those dead 
materials, and that is Federal lands where we have unhealthy and 
overgrown forests. That is specifically prohibited as part of the 
alternative energy formula.
  Now, when we limit the collection of hazardous fuels from those 
forests, that biomass material, what we are really doing in essence is 
gutting the Healthy Forest Restoration Act, a bipartisan bill that was 
passed last year, in an effort to prevent catastrophic fires, 
wildfires, those fires that we have

[[Page H14237]]

seen that destroy property, that actually push more pollutants into the 
air than any highway full of cars can ever do, and, more importantly, 
they destroy the lives of people who are caught in the path. This act 
was there to bring a new energy to people in the West and to help rural 
economies recover from a collapsed timber industry forced on them by 
outside sources.
  This bill tries in some way to help with payment in lieu of taxes to 
western counties and secure rural schools; yet at the same time, secure 
rural schools are rural districts that relied upon the timber industry 
and can no longer do it because of outside decisions, and therefore 
they are getting subsidizations for their school systems. At the same 
time this bill tries to help those schools, it prohibits them from ever 
having any kind of natural recovery within those areas by prohibiting 
their last source of job creation in those areas, which is recovering 
the dead fuel in the forests.
  Now, that is the hope, and that is eliminated in the bill that we 
will have coming before us. It isn't enough that this energy bill 
prevents the use of this material that is grown in those areas; it 
prohibits the use that is used in private forests to maintain their 
health as well.
  The Democrat intents of this bill seems to be clear: If you can 
prohibit the collection of biomass, the dead stuff of the forests, and 
make the provisions so unworkable, then obviously no responsible 
company would ever attempt to comply and go in and therefore do it. So 
the essence is, like Marie Antoinette of old who said ``Let them eat 
cake,'' the essence of this bill is simply let it burn. That is what 
will happen to our forests, when it could be being used to help us 
become energy independent and energy self-sufficient.
  And it is a key and crucial element. Not only can we help our 
societies by reducing wildfires, we can help have jobs in those rural 
areas that need them so desperately. We can help all of society become 
energy independent by using a renewable source, but it is specifically 
prohibited by the language that you will find in this particular bill.
  Now, once again, I am very simple, and I need to know who is going to 
be hurt by this situation. I am an old schoolteacher.

  We have two States in the West bordering one another, one of which 
puts its emphasis on proactive energy development and the other does 
not. A starting teacher in the school district that puts its emphasis 
in proactive energy development makes $4,000 a year more than a fourth-
year teacher in the neighboring State will do. So who is hurt when we 
prohibit and eliminate the opportunity of expanding our energy 
production in the West? Well, the kids are, the school system is, the 
teachers are, the road funds that you need to construct roads in those 
larger western areas. Those people who actually pay taxes will be hit 
higher when we don't need to do it if we simply look to the resources 
we have.
  As the gentleman from New Mexico clearly said, quoting Daniel 
Webster, this quote that is in this Chamber, we sit and look at it 
every day, very few of us actually look up the words, but, once again, 
Daniel Webster said, ``Let us develop the resources of our land, call 
forth its powers, build up its institutions, promote all its great 
interests.'' And why? ``And see whether we also, in our day and 
generation, may not perform something worthy to be remembered.''
  This bill that will be before us is a bill that is not going to be 
worthy to be remembered. It does not move us towards energy self-
sufficiency. It does not make us independent in our efforts. It does 
not grow our energy needs and provide jobs and provide a cleaner kind 
of energy for the future.
  It simply doesn't make the cut on a whole bunch of areas, one of 
which happens to be biomass. What could have been a great source for 
energy in the future is literally shut out by provisions in this bill 
that should not be there, ever. It is the wrong approach to take.
  Now, I appreciate the chance of rambling on here for a minute, and I 
appreciate what my good friend from New Mexico is doing to present the 
concepts that are in this bill that we are glossing over in an effort 
to try and rush an energy bill just before Christmas. No one is going 
to have the time to look at it. No one is going to have the time to 
study it. No one is going to have the time to simply sit down and say, 
you know, there is a better way. We could tweak it here and there and 
actually come up with a decent policy. But because we have waited and 
piddled around until the very end of the session when our backs are to 
the wall, we are going to be faced with an up or down vote on something 
that just isn't worth it. It has too many flaws.
  With that, I would yield back to the gentleman from New Mexico.
  Mr. PEARCE. I thank the gentleman from Utah for his compelling 
arguments.
  The situation is, again, there appears that there will be a 
requirement to produce ethanol from cellulose, which is a nice thing to 
think about. We have had testimony, though, that no technology exists 
to do that, and it could be 20 years before that technology exists.
  Now, you would ask what are the circumstances in the bill that deal 
with this. What if there is no technology, but there is a requirement? 
That is fairly simple. There is up to $2 a gallon penalty, tax, fee, on 
the companies, the refiners, if they can't produce the minimum amount 
of ethanol from cellulose fibers. So, first of all, we are restricted 
from going into our national forests and stopping them from burning 
down. We have all seen the wildfires in San Diego and New Mexico. We 
had the Los Alamos fire back in 2000. We had the Kokopelli fire up near 
Ruidoso that burned 30-something houses. We have seen the devastating 
effects of wildfires in the West, and yet we are prohibited now by this 
law from going in and taking those fibers. One has to ask, where is the 
sense in that? Why are we doing that? I would say again, it is special 
interests, the extremists of the environmental movement who say we are 
not going to allow the Forest Service to cut one single tree. We are 
not going to allow any harvest.
  We passed the healthy forest initiative back about 2004, and yet this 
is the way that we gut the bills. We can say on the one hand we passed 
the healthy forest initiative, and then we don't quite tell the people 
of the country that the healthy forest initiative will not be 
implemented. We won't keep our forests healthy because we are going to 
prevent anybody from using those materials out of them. So it is going 
to be a sheer cost, a cost to the government, where we could get 
someone to pay the government.
  Mr. Speaker, I would submit the article from the Human Events paper, 
``America Does Not Need a San Francisco Energy Policy,'' for the 
Record.

          America Does Not Need a San Francisco Energy Policy

                    (By Representative Steve Pearce)

       When Democrats took control of Congress last year, they 
     promised to do something about energy prices. They have 
     delivered on that promise by driving the price of oil to an 
     all-time high of $99 per barrel and forcing families to 
     tighten their budgets. Apparently unfazed by this dramatic 
     increase, the Democratic leadership is poised to deliver 
     legislation that will drive prices even higher and make us 
     more reliant on foreign sources of energy.


                     Leaving Americans in the Dark

       Behind closed doors, House Speaker Nancy Pelosi (D.-Calif.) 
     and Senate Majority Leader Harry Reid (D.-Nev.) are piecing 
     together an energy bill that they plan to unfold sometime in 
     December. In addition to violating procedural rules they 
     promised to uphold, this secretive process prevents both 
     Republicans and Democrats from heading off offensive 
     provisions that would otherwise receive public scrutiny. It 
     appears it is not just the majority's energy plan, but also 
     the process that leaves Americans in the dark.
       The mad scientists behind those locked doors are using the 
     remains of two considerably flawed energy bills that came one 
     each from the House and from the Senate. Every objective 
     analysis of both bills concludes they will hurt the U.S. 
     economy. A recent study conducted by a highly respected 
     nonpartisan business consulting firm estimated that by 2030, 
     the House and Senate energy bills will cause the loss of five 
     million American jobs, a 4% reduction in gross domestic 
     product annually (more than $1 trillion) and an estimated 
     loss of $1,788 in spending power for the average household 
     each year.


                          Bureaucratic Hurdles

       The House bill, in particular, is designed to increase 
     bureaucratic hurdles to domestic energy production from oil, 
     natural gas, wind, solar and biomass and punish American 
     energy companies for being in the business of making energy.
       Here are just a few of the worst examples of how Democrats 
     would make energy more

[[Page H14238]]

     expensive and less available to Americans. Their plan:

       Cuts off nine trillion cubic feet in natural gas from the 
     Colorado Roan Plateau. This is enough clean-burning natural 
     gas to heat four million homes for 20 years.
       Cuts off two trillion barrels of oil from oil shale 
     resources. This is twice the total proven oil reserves 
     available in the world.
       Dramatically expands the environmental study requirements 
     on existing oil- and gas-drilling pads. This provision alone 
     is expected to reduce or delay our onshore natural-gas supply 
     by approximately 18%.
       Breaches legitimate legal offshore energy contracts between 
     companies and the U.S. government in much the same way as 
     Hugo Chavez and Vladimir Putin.
       Cuts off 10 billion barrels of oil from the National 
     Petroleum Reserve in Alaska, as though derailing production 
     of 10 billion barrels from the Artic National Wildlife Refuge 
     weren't enough.
       Cuts off government agencies' communication for oil- and 
     gas-permitting activities as they do under current energy 
     law.
       Raises the tax on American-made oil and refined products by 
     as much as 9%. This tax will simply be passed on to 
     consumers.


                 Dangerous Reliance on Foreign Sources

       Since their plan will make domestic energy harder and more 
     expensive to produce, the majority's energy future creates a 
     dangerous reliance on foreign energy sources. They have 
     repeatedly prevented the use of energy resources in ANWR and 
     the Outer Continental Shelf and locked up a large portion of 
     our public lands that are rich in energy. Without access to 
     domestic sources, we will become increasingly reliant on 
     energy from ruthless dictators such as Hugo Chavez or from 
     highly volatile regions of the world like the Middle East.
       This is not a good time to be experimenting with San 
     Francisco-style energy policies. Our fastest-growing 
     competitors for energy around the world are China and India, 
     who are expected to surpass the United States in economic 
     output within two decades. Both countries vaulted past 
     America at the beginning of this year as an exporter and have 
     since moved at lightning speed to eclipse Germany's once 
     insurmountable export machine. While China and India are 
     using every type of energy they can get their hands on, our 
     leadership in Congress is trying to severely limit our energy 
     options.
       America needs energy to survive. If we have the means to 
     ensure that survival, we shouldn't lock it up and throw away 
     the key.

  Mr. PEARCE. Mr. Speaker, now we should talk about the components of 
the bill that is suggested. Again, keep in mind that we are here 
talking about the future of the Nation. We are talking about the 
philosophical underpinning of where we are going in this country with 
our jobs, with our economy, with our future. This bill is at the basis, 
because the American economy is driven by affordable, cheap energy.

                              {time}  1915

  And what are we to say about the bill? We are having to speculate. We 
are told that it's coming up this week, either today or tomorrow. It's 
obvious that it's not coming up today. So one would say that it must 
come up tomorrow because we had that promise from the Speaker of the 
House. And yet we don't have the text of the bill that is dealing with 
our future as a Nation, our ability to make and create jobs, and we 
know nothing tonight so that we can not really talk in anything but 
speculative terms. But we feel fairly certain on those speculative 
terms because we have had leaks from behind those closed doors where 
this process is going on.
  What are we to believe might be in that bill? First of all, there is 
going to be the renewable fuel standard, the RFS, renewable fuel 
standard, which says that we need to produce a certain amount of our 
energy, our gasoline, from ethanol. That is a worthy and acceptable 
thing if it's possible and if it doesn't stop us from implementing the 
Healthy Forests Act.
  The second thing that is in the bill that we feel pretty certain 
about is that there will be some renewable portfolio. That is, we are 
suggesting that companies should produce electricity using renewable 
fuels. The only problem is that the suggestion up to now has been that 
they should produce 15 percent. Now, there's a delicate problem there 
because we have not yet seen the capability to produce from renewable 
fuels 15 percent. Again, one has to wonder about the penalty. Every 
major utility is against this provision because they know they cannot 
comply.
  Every single one of us wishes that we were independent of Saudi 
Arabian oil and Hugo Chavez oil. But the truth is we are not. We made 
the wrong decisions 30 years ago, and the wrong decisions are causing 
us the problems that we have today. We did not make incentives in 
renewables 30 years ago. We made it harder to invest in nuclear power 
30 years ago. Today, we are making it harder to invest in coal. We are 
requiring the conversion to natural gas, and that conversion to natural 
gas is pushing the price of natural gas up, which is causing Dow 
Chemical to say we are taking our jobs to where the price of gas is 75 
cents, not over $8. It is a very simple process that we are engaged in.
  So the bill, we think, is going to have a renewable fuel standard. 
It's going to have a renewable fuel standard that says we cannot take 
woody fibers out of our national forests, even when they are burning 
down, even when the trees are dead, even when they are at threat of 
burning down. There's going to be a renewable portfolio standard which 
says that you have to produce more energy than what is technically 
feasible right now in this country from renewable sources.
  The next thing actually appears to be a good consensus from the auto 
industry on the CAFE standards. If the automakers say that we can hold 
American jobs and we can produce to those standards, again, we have not 
seen the exact standards, but if the automakers say we can keep 
American jobs, then that's one of the key pieces of the debate.
  There is another thing in this energy bill that we are supposed to 
bring up tomorrow but yet haven't seen. But there is a component that 
we are assured is going to be there. That is $21 billion in taxes on 
American companies, $21 billion, and the truth is taxes are not paid by 
companies, taxes are passed along by companies. So that is $21 billion 
that is going to come out of the taxpayers' pocket. Every time you fill 
up with gas, $21 billion is going to come from the producer or from the 
taxpayer. It's going to the government and it's going to lower the 
capability for us to balance our personal budgets. So $21 billion in 
taxes in this bill that will be borne by consumers.
  Now, the sad thing, and this is where you really must understand that 
there are elements of this tax provision that include a rollback of the 
section 199 manufacturers' deduction. That was a deduction that was 
passed in Congress back in 2004. It included oil and gas, but it was 
specifically there to encourage increased domestic production 
activities. We wanted to assure American jobs and we wanted to assure 
that American jobs were competitive with overseas countries, so we had 
a rollback in the 199 taxes. I'm sorry; we established the section 199 
manufacturers' deduction but the bill that is coming before us, it has 
leaked out that it has a rollback in those incentives for producers.
  Now, the difficult thing is that the rollback hits only the top five 
producers. It hits BP, Chevron, ConocoPhillips, ExxonMobil, and Shell. 
Now if you are listening like I am reading, you're wondering who got 
left out of the list. Who's not going to see a tax increase? Citgo.
  Now Citgo is owned by Hugo Chavez. I do not know if it is by design, 
but I can say that according to the information that is out right now, 
there is going to be a rollback in deduction for the top five companies 
so that they pay more taxes, and we are not charging Hugo Chavez any 
more tax. One has to wonder about the value system that says don't 
charge Hugo Chavez tax but do charge Exxon, do charge ConocoPhillips, 
do charge Chevron/Texaco, do charge Shell and BP.
  Now, what you have been led to believe, if you listen to the people 
on the left, they want you to believe that ExxonMobil is an evil 
entity; that they by themselves are driving the price of oil up that 
they might profit. When we look at a world assessment of size of 
companies, we realize the falseness of that argument.
  Let's look at this chart which begins to look at countries and 
companies. Many countries own their oil companies. Saudi Arabia by far 
has the largest oil company, you can see. It has about 10.3 million 
barrels per day. You go to Iran. It has a very large oil company. The 
Iraqi National Oil Company is actually quite large. Qatar, Kuwait, 
Venezuela, ADNOC, Nigeria. You notice we are not even yet to 
ExxonMobil.
  And yet Hillary Clinton says, I am going to take ExxonMobil's profits 
and spend them. Nancy Pelosi has said the same thing, We are going to 
take

[[Page H14239]]

ExxonMobil profits and spend them. We haven't taken yet any profits 
from any of these companies, and they dwarf, they dwarf ExxonMobil. We 
go all the way down to this far on the chart before we find the first 
privately owned company, ExxonMobil.
  ExxonMobil is owned privately by you, the shareholders, the 
stockholders. You can buy it every day. ExxonMobil is going to be 
charged taxes. It's going to make them less competitive worldwide. We 
are going to do away with more jobs so that these companies, these 
state-owned companies might have an easier time to take our jobs. I 
wonder at the thought process that went into that. I wonder what 
compelled policymakers here, the Speaker of the House to say we are 
going to tax American consumers, we are going to tax American 
companies, and we are going to let Hugo Chavez, we are going to let 
Nigeria, we are going to let Kuwait, Saudi Arabia go.
  We also have other considerations. In the bills that we have passed, 
the bills that we have passed out of this Congress so far about energy, 
we have done kind of sort of a tricky thing. There is much discussion 
about Enron. That was the large power company that became synonymous 
with tricky dealings, double dealings.
  What did they do? One of the things they did in defrauding the 
consumer, one of the things they did in defrauding the shareholders is 
that they did things called round-trip sales. If they needed their 
balance sheet to look better on a certain day, they would maybe buy or 
sell a lot of energy, maybe a specified amount of energy, and then they 
would simply buy it back, sell it to their own selves in a different 
company, and buy it and sell it, buy it and sell it, round trip, so 
that nobody was actually giving them money, but it looked like money 
coming in, and no one could ever see their balance sheet to see that 
they were actually paying out the money to themselves. It was coming 
in. The sales looked really good until some day you simply have to have 
the cash in hand. Those round-trip sales became synonymous with Enron 
and their double dealing.

  But let's look at what this Congress, the new majority, who said they 
are going to do things in such an ethical fashion, let's look at what 
they have done. They have used the same taxes on offshore oil and gas 
in the gulf coast, the gulf region. They used those as on offset 
because we in Congress say we can't spend money without providing for 
it; the PAYGO provision. So they use those same taxes in H.R. 6, and, 
by the way, I am calling these the Enron tax provisions because they 
are kind of like those Enron round-trip sales, those ways of stating 
things so you have to check both sides of the ledger before you 
understand, but there's really not anything there.
  So our friends on the other side of the aisle used those offshore 
taxes, those 1998/1999 leases to offset, to be the PAYGO in H.R. 6. 
They used it in H.R. 2419. H.R. 6 we passed back on January 18. H.R. 
2419, we passed July 27. They used them again on August 4 in H.R. 3221. 
And they used them again in H.R. 3058, which still has only passed 
committee but yet has not passed the floor.
  When we as policymakers begin to do round-trip sales, it's no wonder 
that we have the reputation that only 9 or 10 percent of the American 
public really trusts what we are doing. We are doing things that do not 
make sense for our economy. We are doing things that are creating a 
false illusion about our potential to pay for things that we are saying 
we are going to do. We are watching our jobs leave and go away, all 
because we in this country need affordable energy, and yet we are doing 
things that hurt the chances of providing affordable energy.
  Again, the point that we object to in this coming bill, the energy 
bill we are talking about this week, are the renewable fuel standards 
that are not achievable and keep us from implementing the healthy 
forest initiative so that we don't burn down our forests. It's 
objectionable that a renewable portfolio standard is being set that we 
cannot reach. It's objectionable that we are raising taxes by $21 
billion to American consumers. It's objectionable that we are using a 
tax that is going to be punitive to American companies but will not tax 
foreign oil companies, will not tax Hugo Chavez. At the end of the day 
we have to ask ourselves exactly why. Why is it that this majority is 
taking these stances that harm Americans so much? I don't know an 
answer to that.
  I would like to submit for the Record a summary of the report, the 
Charles River report. In that, Charles River is suggesting that we are 
going to lose jobs, almost $5 million from the energy policies that are 
being suggested right now by this Congress. We are going to lose 5 
million jobs. The average American household's purchasing power could 
drop by $1,700 by 2030. Aggregate business investment in the U.S. could 
drop by as much as $220 billion by 2030. Our gross domestic product 
could decline by more than $1 trillion by 2030. The costs of petroleum 
products could more than double by 2030. If you take a look at that 
report, you will see the damaging effects to your future, your 
children's future, and your grandchildren's future. The Charles River 
report is nationally respected and says: Please, please reconsider what 
you're doing in Congress, what the majority is doing in Congress right 
now to affect energy prices in the wrong way. We need lower costs of 
gasoline at the pump, lower costs of heating oil. We need policies 
which will implement those, not drive them up. We need them to be 
driven lower.
  Mr. Speaker, I thank you for the time that you have yielded me 
tonight. I thank my friends from Utah (Mr. Bishop) and from 
Pennsylvania (Mr. Murphy). This is a very important consideration that 
we are talking about tonight.

  The Economic Impacts of Proposed Energy Legislation, Charles River 
                Associates International, November 2007

       A report by a respected economic analysis firm examines the 
     economic impacts of seven major energy legislative provisions 
     being considered by Congress. If adopted, these provisions 
     would mandate that American families and businesses replace 
     proven energy sources such as oil and natural gas with 
     unproven high cost sources, likely leading to higher energy 
     costs. The study reveals the following:
       Almost 5 million jobs could be lost by the year 2030. The 
     impact would likely be felt even sooner, with an estimate of 
     more than 2 million jobs lost by the year 2020, and about 3.4 
     million jobs lost by the year 2025. These estimates take into 
     account jobs that would be created by the nearly five-fold 
     expansion of the biofuels mandate.
       The average American household's purchasing power could 
     drop by about $1,700 by 2030. Higher energy and non-energy 
     costs estimated in the study would likely mean that consumers 
     must spend a larger percentage of their income to maintain 
     their current level of consumption. This could force 
     Americans to make lifestyle changes, as significant 
     quantities of energy would be needed to produce and transport 
     many goods and services.
       Aggregate business investment in the U.S. could drop by as 
     much as $220 billion by 2030. Higher energy costs place 
     upward pressure on manufacturing costs, and businesses have 
     less capital to absorb the impact. As household and business 
     consumption fall, demand for goods and services weakens.
       Our national GDP could decline by more than $1 trillion by 
     2030, relative to the baseline. This estimated 4 percent 
     decline in GDP would be the result of energy supplies 
     declining and energy sources becoming more expensive. The 
     economy as a whole likely would suffer, but the impact would 
     resonate strongest in the following sectors: commercial 
     transportation, electric generation, motor vehicles, and 
     manufactured goods.
       Costs of petroleum products could more than double by 2030. 
     The impact would likely be felt sooner, with a roughly 44 
     percent cost increase by 2020. In addition to refined fuels 
     and home heating oil, this would likely impact the many 
     products that have oil or natural gas components, including 
     toothpaste, cell phones, infant seats, and pacemakers.

                          ____________________