[Congressional Record Volume 154, Number 68 (Monday, April 28, 2008)]
[Senate]
[Pages S3421-S3423]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
GAS PRICES
Mr. CORNYN. Mr. President, as the summer travel season rapidly
approaches, the cost of gasoline continues to skyrocket and the
American people are left to wonder whether Congress has any plans to do
anything about it. Unfortunately, every ``commonsense solution'' that
has been offered seems to be far from common sense or a solution
because most of those that have been offered within the last year would
only serve to raise, not lower, gasoline prices.
So far, Congress has offered the American people little more than
newsclips and sound bites from hours of endless hearings lambasting,
usually, the oil companies. The result, of course, has not been any
reduction in gasoline prices but proposal after proposal to raise taxes
on America's energy companies, which--guess what--would ultimately be
passed on to the consumer, thus raising prices and not lowering prices.
This policy posture reminds me of a quip from former President Ronald
Reagan, who said, ``Congress' approach is that if it moves, tax it; if
it keeps moving, regulate it; if it stops moving, subsidize it.''
History has shown that a tax increase ultimately has the effect of
not only passing along costs to the ultimate consumer but of
drastically reducing supply. From 1980 to 1988, this same tax idea, so-
called windfall profits tax, actually caused a decline in oil
production, reducing domestic oil by as much as 8 percent--that is
right, reducing America's supply of its own natural resources and
increasing our dependence on foreign sources of oil. The result, of
course, was not eliminating a perceived windfall but, rather, causing a
precipitous fall in production of American oil and, as I said, an
increased dependence on foreign oil.
The problem, then, is the same as the problem today--not a cabal of
oil executives conspiring to swindle the American people but a shortage
of oil around the world. With burgeoning economies such as those in
China and India, demand for oil has skyrocketed, while the supply has
lagged behind. Raising a tax on domestic energy companies only takes
away from the capital that could be used to reinvest in domestic energy
discovery and production. It does nothing to address the world's
stagnant supply of oil.
We can pass a lot of laws here in Congress, and we can actually
repeal a law
[[Page S3422]]
every now and then, but we can't repeal the law of supply and demand.
This is the law that for some reason Congress just refuses to learn. In
fact, one of the leading contributors to oil shortages in America is
actually Congress itself, which refuses to allow our domestic oil
companies to tap into American natural resources.
Revisiting failed policies of past decades and trying to beat the
same old dead horse will not address our current energy challenges.
Instead, some of my colleagues on the other side of the aisle have
suggested a new solution, one of their new ``commonsense'' solutions:
They will simply sue OPEC for more oil. Aside from the almost comical
image of suing OPEC and somehow finding some court somewhere in the
world that will accept jurisdiction of that lawsuit and somehow then
direct OPEC to produce more oil so that American consumers can enjoy
lower prices for that oil, I would be concerned, first of all, how OPEC
might respond to such a threat. Would they simply laugh it off or would
they turn off the spigot? But let's say the proponents of suing OPEC
were successful. Would that make us more dependent or less dependent on
imported oil from foreign sources? I think it is obvious that it would
continue to make us more dependent on foreign sources of oil.
We simply have to get out of this mindset that we can tax, regulate,
and litigate our way to greater energy independence.
At the same time, one of the things we can all agree on is the need
for America to be less dependent on foreign sources of oil. We need to
remember how much of an impact our energy policies have on the lives of
our constituents, of 300 million American citizens. High gas prices are
driving up the cost of living, they are raising the cost of driving to
work, driving your children to school, they are driving up the price of
fuel for the airline industry that is hitting American travelers even
harder.
While it is important that we increase our supply of energy from all
sources, we need to recognize too that the heavy hand of the Federal
Government can sometimes have unintended consequences. Our
subsidization of ethanol as a fuel source is driving up food prices, as
limited supplies of corn are being split between fuel, food, and
livestock feed.
At the same time, rising prices at the pump are hitting families at
the dinner table as well, as transportation costs continue to drive up
food prices. Now, there is no question that in the long term, renewable
fuels are an important answer to the energy crisis we face today. But
it is also irrefutable that oil, whether from American sources or
foreign sources, will continue to be a large part of our energy supply
in the near to midterm.
Our solution to increasing the supply of oil must begin here at home,
using America's vast natural resources. We can develop environmentally
responsible oil production here at home if Congress would simply get
out of the way and allow American companies to do so. In short, the
majority's response to high gasoline prices appears to be summed up in
three words: Posturing, suing, and raising taxes, none of which is
designed to provide effective solutions to the problems that confront
working families in America today.
The end result is an energy policy that shuts off the valve of
American energy, while desperately awaiting the last drops from the
trickling pipeline of foreign oil. This schizophrenic approach to gas
prices is best summed up in a cartoon I saw recently which I wish to
share with my colleagues. This is from Investor's Business Daily
earlier this month.
While Democrats demand energy companies solve their problem, they
simultaneously have rejected every responsible solution. As this
cartoon points out, the first segment says, ``We demand you energy
companies do something about these high energy prices,'' to which they
respond, ``We can drill in ANWR.'' That is in Alaska. The answer:
``Forget it.''
``How about offshore?'' The answer: ``Are you crazy?''
``How about clean coal?'' ``Out of the question.''
``Nuclear power?'' ``You are joking, right?''
``Well, don't just sit there, do something.''
That is what Congress keeps telling the energy producers in this
country time and time again. But every proposed solution, whether it is
drilling in Alaska, whether it is developing offshore resources from
the Outer Continental Shelf, whether it is investing America's
ingenuity and know-how in using clean coal technology or nuclear energy
or nuclear power, Congress seems to answer: No, no, a thousand times,
no. And the price of oil and the price of energy for American consumers
keeps going up, up, and up. With this kind of response from Congress,
no wonder energy prices are so high.
At every turn, we handcuff American producers while at the same time
demand they fix the problems that Congress is creating. The only real
commonsense solution is to finally take advantage of the resources we
have in this country with which we have been richly blessed. It is
estimated that if the Congress stopped penalizing and handcuffing our
domestic energy supply, we could produce as much as 2.7 to 3 million
barrels of oil a day in addition to what is being produced now.
Does that not make more sense than continuing to rely on countries
such as Venezuela and Hugo Chavez, and enriching our enemies and those
who use that oil wealth to invest in military weapons and the like?
Allowing American companies to begin producing this oil would send a
strong message to the American people and to the market, which has run
up the price of oil to about $120 a barrel because of speculation that
Congress intends to do nothing about it, and this static supply and
increasing demand continues to drive up the price of oil and refined
petroleum products.
But the message, if we were to pass some of this commonsense
legislation, would be to tell the marketplace and the speculators we
are serious about addressing this by producing as much as 3 million
additional barrels of oil here in America each day. It would bring down
the price, I believe precipitously, and I believe nearly immediately.
Demonstrating our commitment in this way would have an immediate
impact, but, unfortunately, we find ourselves locked into the same old
``he said, she said'' sort of arguments and nothing seems to happen, to
the detriment of the American consumer.
We find that sound energy policies continue to be blocked that would
provide access to our vast natural resources here at home. If we are
tired of relying upon other nations for our energy needs, along with
the national security and economic risks that that entails, if we are
tired of paying high prices for their low production, is it not time we
did something about it here at home?
It would be nice to see a ``Made in America'' sticker on the side of
a gas pump for once. Aside from demonstrating our independence and
lowering gas prices, it would provide a boom to our economy. What
better stimulus to our economy could there be than creating new jobs
here in America as a result of increased activity, exploring and
developing our natural resources right here at home?
We have a potentially enormous domestic energy industry waiting to be
permitted by Congress to start going to work. Once we give them that
opportunity, it will mean the creation of thousands of new jobs as well
as more affordable gasoline and less dependence on foreign oil and gas
from dangerous parts of the world.
While opening American resources would be beneficial, it will not
have the full intended effect unless we also encourage companies to
build new refinery capacity here in America. Of course, 70 percent of
the cost of gasoline is due to the cost of oil. But a lack of adequate
refinery capacity to take that oil and to make it into gasoline is
another reason why the supply has been limited and prices continue to
go up.
We have not built any new refineries in America since the 1970s,
primarily because of burdensome regulation by the Federal Government.
Since we have that limited capacity, we once again run in that pesky
old law of supply and demand; the only law that, try as some of my
colleagues might, we cannot repeal and we cannot ignore.
If we do not increase refinery capacity, prices will only continue to
go
[[Page S3423]]
higher. While we increase American oil production and lower our gas
prices, we should also pursue technological developments and good old
American know-how that will allow us to take advantage of the energy
resources we do have here and are available.
We should not forget conservation efforts, and this has been one area
where Congress has gotten it right by passing commonsense fuel
efficiency requirements for automobiles and conserving this scarce
resource.
We need to also be good stewards of the environment and ensure that
we are doing all we can to use our resources wisely and not wastefully.
Finally, we need to pursue alternative energy solutions that will
ensure our future energy production is secure. We need to start now to
utilize and develop energy production methods that will work alongside
of oil and gasoline to power America's economy into the future, sources
such as, as I mentioned a moment ago, clean coal, nuclear energy; even
biofuel and wind can be part of the answer to the overall fuel and
energy mix our country needs.
But we need to give all of these potential power sources a free and
open chance to develop and to reach their potential in the marketplace.
We must encourage American innovation and technology to help us develop
the ability to use these in a way that is compatible with a good
environment.
We must be careful not to play favorites, as unfortunately we have,
and are now seeing the consequences come home to roost and turn these
industries into political tools. Different energies will work better in
different areas, and all of them can work together to provide America
with cost-efficient energy and the strong energy industry we need in
order to fuel our growing economy.
But our future energy production starts today with removing the
roadblocks that this cartoon indicates that Congress has thrown in
front of every opportunity to increase energy supply and bring down the
cost ultimately to the consumer.
We cannot make up for lost time, but we can start today by
recognizing the mistakes of the past and what that has actually done to
run up the cost of gasoline at the pump and made us even more
dependent. We need to act now to build a strong American energy policy,
bring down the price of gasoline, and free ourselves from foreign oil-
producing nations, many of which want to do us harm.
Every day we delay brings a heavier burden on American families with
the cost of gasoline. We cannot ask the American people to foot the
bill for our inaction any longer. It is time for Congress to take
responsibility for gas prices in America, by allowing our industries to
utilize the American resources that are available to us that will
eventually help bring that price down.
I yield the floor.
The ACTING PRESIDENT pro tempore. The Republican whip.
____________________