[Congressional Record Volume 154, Number 32 (Wednesday, February 27, 2008)]
[House]
[Pages H1141-H1146]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
ENERGY ISSUES AND THE OIL AND GAS INDUSTRY
The SPEAKER pro tempore (Mr. Wilson of Ohio). 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, it's good to be with you this afternoon.
I want to spend most of the next hour talking about the oil and gas
business and energy issues in general but specifically about the oil
and gas business.
In the interest of full and fair disclosure, I grew up in West Texas,
home to much of the oil and gas production from the Permian Basin, and
I now have the high honor of representing much of that region in
Congress. My dad was in the oil business. He had a service company for
the last 25 years of his career. I had oil and gas clients in my
professional career. And so I hope the fact that I have some background
and experience in this area doesn't disqualify me from talking about
things that I know and that doesn't discount what I have to say.
In looking at our overall energy picture, almost every legitimate
projection of energy usage in this country, over the next 20-plus
years, shows that crude oil and natural gas will continue to be a vital
part, an important part of the energy complement for this country for
the next 20-plus years, as I mentioned.
There are no breakthrough technologies. There are no scientific
advances that anyone can anticipate today that would reduce our
dependency, particularly as it relates to driving cars and trucks and
airplanes, on crude oil and natural gas. We don't produce enough of it
domestically to meet the needs of our existing oil and gas needs, so
consequently we import 60-plus percent of the crude oil, natural gas
and gasoline products that we use every single day. And that percentage
is growing, unfortunately.
Most commentators, and I agree, would believe that this importation
of crude oil and natural gas from foreign sources coming from countries
whose leadership hate us, whose political schemes are directly opposed
to what we would want to do, is not in our best interest and represents
a strategic vulnerability that our country has to other parts of the
world that in many instances can be far less stable than you would want
to count on.
So given the fact that we will be using crude oil and natural gas for
the next 20, 30-plus years, and that we don't produce enough of it
ourselves, it would seem that it would be in our best interest to
promote policies that encourage and incentivize additional production
of domestic crude oil and natural gas, policies and incentives like
allowing the responsible and environmentally sound exploration of areas
in this country which we currently, either by law or by executive
order, prevent our crude oil and natural gas exploration companies from
having access
[[Page H1142]]
to, promoting policies that, to the extent that it is safe and sound,
reducing and eliminating unnecessary bureaucratic red tape.
You can look at the reasons we've not built a refinery in this
country for a number of years is because of the long lead times it
takes to get that done. The approval process, or the bureaucratic
nightmare that companies have to go through, all of the money they
invest on the front end, they don't get the return on that money until
the plant is built and done, and the longer you extend that timeframe
between when you start to when you actually begin to refine crude oil
adds to your cost, it adds to the carrying cost, it adds to the cost of
the money you've borrowed, and is a disincentive to actually entering
into that particular business.
So when we on this floor from time to time, today may have been one
of those times, when we on this floor from time to time put in place
new laws, new regulations, added taxes and other burdens on the
domestic and international oil and gas companies, we are, in effect, I
believe, cutting our nose off to spite our face, because increased
domestic production offsets the need for additional import of crude oil
and natural gas.
No one that I'm aware of with any rational thought thinks that we can
produce enough domestic crude oil and natural gas to completely wean
ourselves from international imports or foreign imports of crude oil
and natural gas. So it's not about totally doing away with those, but
at least putting ourselves in a position to make ourselves less
dependent on those foreign sources of crude oil and natural gas.
My colleagues earlier this afternoon were talking about the high cost
of gasoline. And gasoline is high here in the United States. It is
higher in other parts of the world than it is here in the United
States, but that's scant comfort to the consumers and the folks out
there who are, as they stand at the pump and they watch that price
ratchet up past $40 and $50 for a tank full of gasoline, the fact that
there are people around the world paying more for their gasoline than
we are is not much comfort as that happens.
I understand that the high cost of diesel, whether it's ag producers
or farmers or long distance truckers, whatever it is, adds to their
operating cost. The cost of gasoline, of course, has taken an
increasingly larger share of the family budget as that number goes up,
and that's something that should be of concern to all of us.
The bad news is that over time those costs will simply continue to
get higher. Short of a worldwide recession, in which demand for crude
oil and natural gas was dramatically lessened or reduced, we are going
to continue to have increases in the price of crude oil, an increase in
the price of natural gas, and that, of course, will be reflected at the
pump.
Our job should be to try to minimize those increases or delay those
increases as long as we can, to smooth them out as best we can to allow
consumers and businesses to make the accommodations they need to to
begin to live with these higher gasoline and diesel prices that we're
currently experiencing.
{time} 1800
A big jump that we have seen from $30 a barrel to today, I guess,
$100-plus per barrel has had an impact, a surprisingly limited impact
to the extent that the economy that we've enjoyed over the last several
years has not gone down as much as most folks had predicted with a
rapid increase in crude oil and natural gas prices. But nevertheless,
families are paying more out of their family budget each month for
gasoline, and that's not going to get any better.
We can make it worse with the policies that we pass on this floor to
the extent that as we make it more expensive to find and produce crude
oil and natural gas, we will add to the costs and the burdens of
families that are unnecessary additions to costs by taking a different
tack of promoting and incenting crude oil and natural gas producers to
produce more, then we would help go a long way of providing additional
supply as the demand goes up.
So I was in Midland, Texas, in 1998 and 1999 when the price of crude
oil was $10, $11 a barrel, a scant 9 years ago. It's hard to believe
that today it's 10 times that number. But there's the yo-yo effect with
respect to crude oil and natural gas prices. We have seen those prices
go up and down dramatically over the last 40 years.
I think the difference this time in this run-up is that China and
India are much greater consumers of crude oil than they were in the
late 1990s, so we were able to see a price drop to $10 a barrel. I
don't think anyone realistically expects that to happen because you
have got additional consumers in the market, and those consumers are
China and Japan, as I mentioned. I was in China last April and was told
that a thousand new cars a day are being added to the traffic pattern
in Beijing alone. A similar statistic for Shanghai. These aren't cars
or people that are switching from one car to another. These are folks
who are getting off their bicycles and beginning to drive automobiles.
So this is a net-plus increase in the demand for crude oil and natural
gas that has not been there before.
So while the prices are high, they will fluctuate some, but I don't
think we will ever go back to the levels that we have seen 5 and 6 and
7 years ago.
The people who produce crude oil and natural gas, those companies are
vilified in the press and, sad to say, with our Presidential candidates
from time to time, as well as Members of this House come to this floor
and will say some pretty outrageous things about the companies that
supply us with the level of crude oil and natural gas that we have
today at these prices as if they are some sort of a bad person.
When we make critical statements, critical statements about
corporations, and let's take ExxonMobil, for instance, because they're
the easiest target having just released earnings this past week or so,
earlier this month, showing that they had set a record for a 2007
profit of some $40.7 billion. That is a huge number in any comparison,
except, perhaps, maybe the total Federal budget. But it's out of
context as it is taken most the time. It can be criticized, and some
very unflattering adjectives are used such as ``outlandish,''
``unjustifiable,'' or ``appalling'' or ``ruthless.'' These words have
been used by some of my colleagues to describe ExxonMobil, and that's
unfortunate.
Now, I'm not an apologist for ExxonMobil. They're a corporation, and
if they've done something wrong, they should be held to high standards
of conduct. But to the extent they have played the rules and played the
game within the rules that are set for them, the fact that they have
been successful, the fact that they have done well should not be held
against them simply because the fact that they've done this well. They
are not price gouging. Their prices are set by the international market
like everybody else's. And the fact that they are big helps them do
things that smaller companies simply cannot do.
The investments, the billion-dollar investments that are necessary to
explore for and to produce crude oil in some of the more remote areas
of this world require huge investments, and it takes big companies to
be able to do that. And the fact that ExxonMobil is in that arena and
is successful at it should not be denigrated the way it is.
Here is some of the bad things that ExxonMobil does, if you think
that making money in the oil business is, in and of itself, bad.
They produce some 4.2 million barrels of crude oil a day, an oil
equivalence of some 637,000 barrels a day. So that's a sizable
production of things. I don't have the exact percentage of total
worldwide percentage that that is off the top of my head, but I think
the production is about 80 million barrels a day. ExxonMobil is 4.2. So
that is a sizable piece.
When you consider the governmentally owned entities in that 80
million, ExxonMobil is a small player, given the fact that Saudi Arabia
and others, as a group owned by the governments, are much bigger
producers than that.
ExxonMobil, out of that $40.7 billion that they earned in 2007, they
paid out $7.6 billion in dividends to their shareholders.
Now, when we denigrate corporations, it's easy to do because we don't
[[Page H1143]]
put a face on the corporation. We just think of it as an entity. But
the truth of the matter is corporations can't do anything without
people, employees, and directors and others at ExxonMobil. So when we
make negative and ugly comments about this corporation or any
corporation, we are, in effect, talking about the people who work
there.
ExxonMobil has some 82,000 employees worldwide. That's 82,000
families who feed their families, feed their kids from hard work and
the successful work at ExxonMobil; 82,000 families who own homes,
82,000 families that try to find a way to send their kids to college
and pay for health care and take care of the things that they need to
do to put braces on their children and all of those kind of things that
families do. Those people are no different than anyone else working in
America or around this world. They've got the exact same cares and
responsibilities that every parent has. And so to denigrate the
corporation and, by extension, these 82,000 people is really unfair.
Hidden in the conversation about the profits that ExxonMobil made of
some $40.7 billion was the fact that they paid some $32 billion in
taxes; $32 billion in taxes. Now, if you added up the bottom 50 percent
of all individual taxpayers in the United States, I think that number
is some $27 billion. And so ExxonMobil single handedly paid as much in
taxes as half of the individual taxpayers in the United States,
actually paid more than that half.
And so as you talk about all of the bad things that ExxonMobil has
done, saying they're guilty of some pretty rotten stuff: creating
82,000 jobs, paying out $7.6 billion in dividends to their
shareholders, creating the wealth that relates to what those
shareholders do. Those shareholders have bought stock in this company.
They bought it expecting to be able to sell it at some point in time in
the future for a profit, which is not bad, because when they sell that,
they will pay capital gains taxes on that. The 7.6 billion, to the
extent it went to taxable entities and not to retirement plans or IRAs,
those taxpayers pay taxes on that 7.6 billion.
So there's an additional 7.6. The 82,000 employees that are U.S.
citizens pay individual income taxes on their salaries as well. And
they're paying the payroll taxes, and ExxonMobil is matching those
payroll taxes in a responsible way.
So, as you see, the comments made about the amount of money that
ExxonMobil has made, please put it into context with the amount of
money that they would have to invest in order to do that. The return on
shareholders' investments is in line with other U.S. corporations and
other industries within the United States. It should be a good
investment. It should create wealth for the shareholders that are able
to take advantage of owning that stock having bought it when hopefully
the price is lower than what they could sell it for.
So, as you hear comments, negative comments, if it is about the
breaking of a law or something like that, fine. We will deal with that.
But if it is just the fact that they're big and the fact that they
found a lot of crude oil, natural gas, and produced a lot of it, then
those are misplaced. And when you make those comments about what Exxon
does within the rules, you are criticizing people. You are criticizing
82,000 folks around this world who are getting up, going to work every
single day trying to do the best job they can at providing a resource
and a commodity that all of us enjoy each and every single day.
I did not mention the fact that ExxonMobil refines 5.6 million
barrels a day worldwide and almost 4.7 million barrels a day here in
the United States. So, again, jobs are created up and down the stream
with respect to the oil and gas business.
As you look at energy policy, I think that we spend a lot of time in
this Hall talking about what we should be doing, and yet we don't
listen to each other very well in terms of what the impact is of what
we are trying to do. And consequently, we don't have in place rational
policy for what we should be doing in this country.
There are two broad areas of energy that we should talk about
separately: One is electricity generation and the other is crude oil
and natural gas. That is what we use to drive our cars.
With respect to electricity, we have had a dramatic event in Florida
yesterday where we had a blackout, an infrastructure failure, overload
of some sort that quickly got corrected, but it was a microcosm of a
wreck that would happen if we didn't have adequate supplies of
electricity.
Now, the growth in this country in terms of population, with it comes
an automatic growth in the use of electricity. That's just the nature
of the beast. Now, we should be doing all that we can to conserve. We
should be using smart appliances and smart light bulbs and doing all of
those kinds of things. But the truth of the matter is, as the
population of the United States increases, we need more energy, more
electricity to be able to meet the needs of this increased population,
whether that is lighting their homes, air-conditioning their homes,
providing electricity to power the businesses in which they work. That
is going to be a demand that is there and is growing.
If we don't continue to invest in generating capacity, then we are
going to get caught in a circumstance where our demand has outrun or
outstripped our ability to supply that energy, and we will have very
sizable increases in the cost of electricity.
You can see what happened a number of years ago in California where
they got caught in that exact same wrinkle. They discouraged generating
capacity to be built in California, but yet the demand for electricity
continued to increase and they got caught in circumstances where the
demand was higher than the supply and they had a dramatic increase in
prices. They had some regulatory issues involved that created that
problem, but when you have demand that outstrips supply, you have large
price increases in that arena. And those kinds of circumstances have
the dramatic effect on individuals as well as businesses, because when
you are putting your monthly budget together or your business plan for
your company, you try to estimate what your costs are going to be over
a near-term and mid-term circumstance; and you ought to be able to
predict reasonably close what your energy costs should be over the next
4 or 5 or 6 months. And when you get sharp spike increases, as was seen
in California, then that wreaks havoc not only in the family budget but
also with businesses that are subject to passing on those electrical
costs through their products and services ultimately to consumers.
So as we look at the electrical side of this thing, we should be
promoting wind, as we see in west Texas, and solar and hydropower. All
of these alternative and green sources of electricity should be
promoted as well. But the growth in that side of the business cannot
even keep up with the growth in the demand. We've got two
circumstances: natural gas-generated electricity, we've got coal used
to generate electricity, and we've got nuclear that is used to generate
electricity. Those are the three main backbones of the current grid.
And so as you look at those plants, they are all getting older every
single day. Recently, the Nuclear Regulatory Commission has been able
to go through a second round of licensing for existing plants and has
been able, because of the good maintenance and upkeep and the proper
operating procedures and plans that have been in place at the nuclear
plants, have been able to extend the useful life of the current
complement of plants we have for another 10 to 15 to 20 years, which is
important, because the time frame of which a lot of that production
capacity was built, they're all going to fall off the grid in a
relatively short period of time, which means the supply is going to dry
up if we don't create additional sources of electrical generation that
can be counted upon.
{time} 1815
So we've got a problem, going forward, with how to generate
electricity. The green sources can't keep up with the growth in demand.
Natural gas is an expensive commodity. We're not drilling for sources
of domestic gas. And because natural gas is hard to import, those
prices and costs of generating electricity using natural gas will
continue to go up faster than the cost of using coal or nuclear.
The backbone of the grid, for certainly my lifetime and perhaps even
[[Page H1144]]
my children's lifetime and beyond, will have to be nuclear and clean
coal burning technologies. I don't think realistically there is any
other way to generate electricity on the scope that we're going to have
to generate it on and get it done.
If you don't acknowledge that, if you put your head in the sand, then
you develop policies that will not promote a rational, orderly,
thoughtful process of how to provide electricity for this country over
the next 50 or 60 years, and that is an unfortunate circumstance that
we see ourselves in.
None of the alternative sources can fully replace everything that's
going on, and yet we seem to be placing great reliance, or hope, that
we can develop these alternative sources, green sources of electrical
generation in time to offset the loss of the nuclear power plants that
ultimately wear out, the coal-powered plants that ultimately wear out,
and the natural gas that is a commodity of seemingly infinite supply.
But that's wrong, too, because crude oil and natural gas are finite
resources. There will be a day, a long time from now, when the last
barrel will be produced and the last MCF of natural gas will be
produced because it is such a finite resource and takes so long,
millions of years, to create it underground.
The argument about nuclear is that it's unsafe and unsound. It's
dangerous. I had the opportunity to visit the Comanche Peak Nuclear
Power Plant that's just on the eastern edge of my district. It's not in
my district, it's just outside on the eastern edge. Quite frankly, I
had never been to a nuclear power plant, and so it was an eye-opening
experience for me. Everybody had the little meters on, DOSA meters on
that will show whether or not you've had an exposure to radiation that
is inappropriate.
We actually, as a part of that tour, went into the storage facility
for the spent fuel rods, the spent rods that they've used over the
years to create the nuclear reactions. And I'll admit to being a little
apprehensive. You simply walk through this door and you're standing in
front of what appears to be a giant swimming pool. At the bottom of
this pool of water are these spent rods. And I kept kind of glancing at
my DOSA meter to make sure that I wasn't getting a dose of radiation.
Sure enough, I was not. It's perfectly safe. But I didn't know that.
Ahead of time, if you would have said that this spent fuel is stored
underwater like that in an open arena pool, I would have been a little
bit skeptical about how safe that was. But our nuclear industry is a
safe industry and deserves to be exploited as we look at ways to
generate electricity.
The argument is that spent fuel creates a hazard and a problem for
disposal and storage, and that's the case. But you have to weigh that
against the way electricity is produced everywhere else. If we continue
to use coal, until we learn how to capture the CO2 and
sequester that CO2, the equivalent amount of electricity
between producing with coal versus nuclear, the coal will have produced
X tons of carbon dioxide that would have gone into the atmosphere,
versus on the nuclear side, a small, relatively containable and
handleable spent fuel that we have to deal with.
So you look at the two. And clearly, given the emphasis on global
warming and climate change, the folks who are proponents of that argue
that CO2 and climate change are the single biggest things
threatening our lives. Well, if CO2 is the biggest threat to
our way of life, why not deal with that by using nuclear? I mean,
nuclear waste has to be way down the list of things that are dangerous
for us to deal with.
I'm not a Pollyanna. I understand that when you build a nuclear
plant, that it is subject to being somebody's target to do something
stupid. But we have done a good job the last 7 years, since 9/11,
protecting the nuclear plants, we'll get better at it, and assessing
the risks to those power plants and understanding the opportunities
that some bad guys might want to do at a nuclear power plant. But
getting exposed to it, which is probably not a good word, but at least
understanding and becoming more informed about how the nuclear power
plants work and how the controls are in place, the systems they have in
place for fail-safe circumstances, in addition to developing new
generation or next-generation power plants which use a different model
that in and of itself is a safer model of a way to generate
electricity, and approaching that in a rational, thoughtful manner is
going to be in all of our best interests.
And yet there are still an awful lot of people out there who are
apprehensive to the point of not wanting to use nuclear because they
believe that the risks are too great. We need to have these
conversations between the folks who believe it's too risky and the
experts who understand exactly what it is and how it works and where
those risks are and where those risks aren't, to get those to come
together and help us understand how we mitigate the risks and how we
adjust them and go forward with a source for the grid that is clean,
zero emissions, and is going to be one of those sources of electricity
generation for the U.S. that is important to our grid. It's important
already in France, and other countries of the world are using it safely
without incident. And certainly we're as good as the French are at
doing things, I would expect, and should be able to handle nuclear
power in ways that are responsible, both to the areas where the plant
would be, as well as to how we handle the spent fuel and the waste that
is an issue, and where we store that. All those kinds of things can be
solved and should be solved if we can begin to deal with the issue, and
first dealing with our irrational paranoia about it, getting past that
and dealing with the realities that the experts and the scientists
could certainly help us understand that.
So, Mr. Speaker, the national energy policy, we've had several
attempts at it over the years. We currently don't have one that's
rational, I don't think. We continue to penalize the oil and natural
gas industry with added taxes, as we did this afternoon, with red tape,
with regulation that prevents them from being efficient. We lock away
vast areas of the United States to prevent domestic production of crude
oil and natural gas. We don't have a thoughtful, rational approach to
electrical generation and how we're going to get that. Clearly, clean
burning coal and nuclear have to be exploited and explored. Yes,
continue to work on the wind and solar and other ways of generating
electricity, but the truth of the matter is that those are going to be
at the margin of the electrical grid.
Every American alive today, when they walk into a room and flick the
switch on, expects the lights to come on. They don't know how that
happens, but they expect it to happen. And except for yesterday
afternoon in Florida, most all the time it does. When it doesn't
happen, like what happened yesterday in Florida, it shows how
vulnerable we are to not having electricity, what impact that has. You
saw the traffic grids, the traffic parking lots across Florida because
the traffic lights went out. You couldn't move traffic the way it
normally moves. And all the people trapped in elevators and all that
kind of anecdotal excitement that happens when that goes on helps give
us a little bit of a sense of what a world without all the electricity
that we need to produce and to use is not readily available at our
fingertips at the flick of a switch.
With respect to crude oil and natural gas production, again, as I
mentioned earlier, we are going to be using it for a long, long, long
time. If it's imported from countries that are not operating in the
same thought patterns that we are with respect to human rights and
women's issues and other kinds of things, if it creates a strategic
vulnerability to this country to import crude oil and natural gas, then
it seems logical to me that we would put in place policies and
regulations that would promote the domestic production of crude oil and
natural gas as opposed to hindering them.
To reduce domestic supplies is wrongheaded. And when we increase
taxes on the oil and gas business, that is money that is taken away
from the exploration for new sources and new supplies of crude oil and
natural gas.
The mechanics of an oil and gas company typically says that when you
find, through the exploration process, through drilling and finding it,
you understand that there's a reservoir of crude oil or natural gas
underground. Through scientific estimates and from petroleum engineers,
you can determine what the value of those reserves
[[Page H1145]]
are once you've drilled a well and begun to produce those.
Typically what happens, the independent producers in particular then
go to the bank with the reserve report that shows what they think the
estimated value of that crude oil and natural gas is in the ground.
They go to the bank and use those reserves as collateral to borrow
additional dollars to drill with and to explore that field further or
to increase production. And so each dollar that goes somewhere else
other than back into production is a multiple of that dollar that is
not used to explore for and to produce crude oil and natural gas.
Most of the independents that I represent in West Texas are trying to
drill in the United States. Statistics show that independents, as that
term is defined, typically reinvest 600 percent of their profits back
in the ground. In other words, they borrow six times as much money as
they earn in a year in order to continue to grow their reserve base to
replace the production that they've already produced and to continue to
do the things that they do best. Major oil companies, such as
ExxonMobil, are generally well above 100 percent, I think it's 170
percent of their profits go back into the ground to explore for and to
produce additional crude oil and natural gas, much of that is
worldwide, which in a commodity such as crude oil and natural gas,
there is really no distinction between the oil produced around the
world versus domestic production as far as creating supply against the
demand that is out there and is a growing demand as well.
So a broad-based national energy policy that encompasses electricity
production, how we drive cars and fly planes and drive trucks and those
kinds of things, I think it is awfully important that this Congress
come to grips with.
I have not mentioned conservation, but that is a huge piece of the
pie as well. We can use less per person than we currently are, and
that's less electricity and certainly less gasoline in our cars.
I have introduced a bill that would create a public-private
partnership in order to help remind consumers that they have a direct
role in energy usage in this country. The partnership would point out
things that we can do individually, by choice, to reduce our own
demand. Our own use of gasoline is an example. And it doesn't have to
be draconian. I'm not talking about giving up your automobile and
riding a bicycle to work. That's not rational. We're not going to do
those kinds of things. But there are some small things that each one of
us can do and choose to do on our own that would have a dramatic impact
across the system. As an example, if we would arrange our affairs next
week to use one gallon of gasoline less than we used this week, that
would have a dramatic effect if everybody decided to do it. If the
millions and millions of consumers and drivers out there would just
simply use one gallon less, you would see a dramatic increase in
inventories. When inventories go up, the folks who are in the business
of retailing gasoline are very price sensitive, and their prices move
around, up, and they also come down. But if their inventories begin to
grow unexpectedly because we just simply used a little bit less
individually, but if collectively across all the United States, you
would see a big rise in inventory.
Now that does two things. One, you would save the cost of that one
gallon of gasoline. And at $3.50 a gallon, you may think, well, that's
not all that much. But if you look at the impact that that savings
would have across the system, you would save $3.50 per person, but you
would also see a drop in the price of that gasoline because the
supplies and inventories would go up. That means that collectively all
of us would be better off.
{time} 1830
Now, how do you save a gallon of gasoline? You do some simple things
like you keep your tires aired up to the proper limit. You take the
extra weight out of the trunk of the car so you're not hauling it
around. You think each day about what are the trips I'm going to make
today. How can I drive a few miles less today than I drove yesterday,
and just be smart about it. You can be a safer, more polite driver to
the extent that as you accelerate your car, if you're not aggressive in
accelerating it, if you don't slam the accelerator down and race away
from red lights and stop signs, if you drive a little friendlier than
some of us are used to, that uses less gasoline as well.
So there are a lot of things that you and I can choose to do. It
doesn't require a government mandate. It doesn't require a bureaucracy
to administer. It's just simply all of us working in our own best
interests to save a little bit of gasoline. And, again, 1 gallon this
week less than I used less last week would have a dramatic impact on
those prices, and we would all collectively benefit because we would be
doing what we ought to be doing, and that is conserving the resources
that we've got responsibility for.
The same thing applies to electricity. Using less electricity, you
could do a lot of things, and we all can do that, to reduce the growth
in the demand for electricity. Again, you're not going to read at night
by candlelight or campfire or lanterns. We're not going to do those
kinds of things, but we can have a dramatic impact on electrical uses.
I had a client when I was with Price Waterhouse back in the early
1970s, Recognition Equipment. Recognition Equipment made some pretty,
at that time, sophisticated optical readers, and they had a very
complicated cost accounting system in which they would allocate their
indirect costs, heating and air-conditioning and lighting and all those
kinds of stuff, would allocate those to their products that were being
produced. As you remember, in 1973 we had the Arab oil embargo and
prices shot up from $3 a barrel to 30 bucks a barrel. There was a big
push to use less electricity, to use less energy. REI went all through
their plant and did everything they thought they could do rationally to
reduce their electrical usage; things like they went to every other
light in the hallways and all kinds of things. They were able to so
dramatically reduce their electrical usage that it screwed up or messed
up their indirect cost allocation to their products, and they had to go
back through and readjust the amount of money that they were applying
to come up with the cost of their products through their process. So we
can do those kinds of things when we have to. Typically when we have to
is when the prices get so exorbitant that we are forced to do it. We
can choose to do those things ahead of time without being forced to.
I currently represent a chain of convenient stores in west Texas
where I know the folks who run it, and we were talking about gasoline
uses. They make a lot of money selling gasoline at these convenience
stores. And 2 years ago when the price first started going over 3 bucks
a gallon, they could see a dramatic difference and a change in their
consumer patterns when the price of gasoline was above $3 versus when
it was below. Consumers would immediately react to that. Now we have
become desensitized or less sensitive to the $3 number, and that new
number is somewhere north of that where we would feel the pain enough
where we would be willing to make some changes in our own personal life
to do that. We don't have to wait for that price to go up in order to
motivate us to do those kinds of things. There should be plenty of
motivation for us to be able to take the kinds of conservation steps
that each one of us individually could do as a free-will choice that
would help this issue tremendously as we move forward.
In conclusion, Mr. Speaker, there are no magic bullets. There's no
magic wand that we could wave across this problem and instantly fix it.
It requires thoughtful compromise across a lot of folks who are in this
arena, folks who have legitimate concerns, legitimate worries,
legitimate issues. Working through those, working off of sound science,
looking at rational approaches to things and not taking the extremes is
going to be important as we as a society continue to move forward with
an energy policy that makes sense.
Calling each other names, talking about the producers of crude oil
and natural gas like ExxonMobil in some very unflattering terms is
counterproductive to the system. Beating up ExxonMobil makes absolutely
no sense if you think that the product that they are producing is
something that we need. Now, you may not like the prices that they're
producing it at, but those
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82,000 people who work for ExxonMobil are human beings. And when they
hear their company denigrated by folks in this Chamber and Presidential
candidates and others because they have been successful working within
the rules and within the laws, that sends a really bad message to folks
who are providing a service, providing a commodity to us that we simply
can't get along without.
So thank you, Mr. Speaker, for allowing me this time tonight. I would
encourage my colleagues to thoughtfully think about the words they use,
the adjectives they use as they describe this problem. This is not a
Republican issue. It's not a Democrat issue. This is an issue that's
important to every single American out there. It's one that deserves
our best, thoughtful consideration. It deserves our listening to each
other and hearing the concerns each of us have and working toward a
solution and actually putting it into place.
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