[Congressional Record Volume 154, Number 68 (Monday, April 28, 2008)]
[Senate]
[Pages S3454-S3456]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                                 ENERGY

  Mr. SESSIONS. Mr. President, I thank the Chair and Senator Klobuchar 
for her comments. These things just take time. I fully understand that.
  I would share with her a question as to why we would continue to pour 
large amounts of petroleum into our Reserve when we are clearly at 
high, even peak prices that seems to me not a good idea. It would help 
relieve some pressure on price and on supply if we were to suspend 
that. I also share her concern that on the world market, we are not in 
a free marketplace. Those experts who said they thought the price ought 
to be $50, $55 a barrel, I don't know what the prices ought to be, but 
I know OPEC meets and decides what the production level will be. As a 
prosecutor myself, that is a cartel. That is price fixing, as I 
understand it. Somehow, we need to make it a part of our sustained 
national policy to stand up to this.
  In one sense, what OPEC does when they drive up the price by limiting 
production, what they are doing is taxing the United States of America. 
They just decide how much they are going to tax us for the oil we use. 
One expert has said that the cost of producing a barrel of oil in those 
fabulous oil sands in Saudi Arabia is less than $10 a barrel. So we see 
what the profit margin is when it hits $120 a barrel on the world 
market. Many factors are in it. I know the decline in the dollar and 
other factors are involved.
  But I just want to say that I do think we are moving into a new era 
of government-controlled oil more than we ever have. Most people think 
oil companies control it. But recent studies show about 85 percent of 
oil is owned by nation states. For example, Mexico owns all of its oil 
and will not allow private industry to participate in its extraction. 
Because the Government is inefficient and unproductive, their 
production has fallen, whereas Mexico has huge reserves. Venezuela's 
production has fallen. Aramco, the Saudi Arabian company, owns theirs, 
and their production has fallen. As a result, we continue to see 
shortages on the world market, driving prices up, allowing certain 
people who are clever and smart and who have invested wisely or 
aggressively to make billions of dollars.
  We have a serious energy problem in the United States. The high costs 
are impacting the lives of American citizens and farmers and others. 
There was an article in a local paper--I believe the Mobile Press 
Register--that I saw today where an individual who has a shrimp boat 
parked his boat at the dock and said: If the price of shrimp doesn't go 
up or the price of fuel drop, I cannot make a profit. There is no way I 
can go out and do this. He docked his boat. There was a similar article 
in the Florence Times talking about farmers and the increasing cost 
farmers see from the fuel they use.
  Increased demand from India, Southeast Asia, South America, with 
decreased production around the globe, has created the opportunity for 
prices and profits to grow for certain people who are wisely 
positioned.
  During my last trip to Alabama for a week, I had townhall meetings 
and visited with people throughout the State. Energy prices were the 
No. 1 thing people talked to me about. It is having a real impact on 
their family budget. The price of regular unleaded gasoline climbed to 
$3.50 a gallon. A year ago, it was $2.84, and 2 years ago, it was 
$2.74. That is a 28-percent increase in 2 years. This helps explain the 
economic doldrums and slowdown we are in. The typical American family 
with two cars is paying about $750 to $1,000 more per year for the same 
amount of fuel they were buying the previous year. That represents $70, 
$80 a month of disposable income that previously they could use for 
other things for their family. It is now going to buy the same amount 
of fuel they were using the year before or 2 years before. This 
represents a huge economic hit to the American family.
  There is another adverse, serious problem for America as a nation: 
More than 60 percent of the fuel we utilize in our vehicles comes from 
places such as Saudi Arabia and Venezuela and Russia and Mexico, some 
of which countries are not friendly to us. That represents a $400 
billion transfer of wealth on an annual basis from this country. 
Businessman T. Boone Pickens, in a recent interview in the American 
Spectator, referred to this as ``the greatest transfer of wealth in the 
history of mankind.'' That is a pretty smart guy. He is an oil man 
himself. He said we have to do something about this. It is not 
something we can just ignore.
  Of course, there is no silver bullet to solving the problems, but 
there are some basic principles we should respect. We must increase 
supplies in our own country, increase production in our country, which 
we certainly can do and which I regret to say we have attempted in this 
Senate and in the House more than once, to be blocked by various groups 
that seem to complain about high energy prices but don't want to do 
anything to allow us to produce more in the United States. We must 
conserve more energy. I supported the increased gas mileage standards 
which represent a substantial improvement. Maybe we can even do more. 
We certainly must try to use more biofuels, if we can, although under 
current technologies, we are reaching the limits. But I think other 
technology will help us in the future to expand the amount of biofuels 
we can use. We must use the fuel we have more efficiently.

  The Government does have a responsibility to ensure that we have 
fairness in the world marketplace and in the American marketplace and 
to make sure these cartels openly fixing the price of oil do not 
succeed. As I will discuss in a minute, I think we should take a 
serious look at establishing a policy with regard to diesel fuel. I 
will mention that in a moment.

[[Page S3455]]

  I know the problem for gasoline is hitting American families 
directly. But at this moment, I would like to share some specific 
thoughts about diesel fuel and those high costs.
  Recent spikes in diesel fuel prices don't get a lot of attention in 
the media, but it has a huge impact on consumers and businessmen and 
truckers and shrimpers and farmers.
  Today, I had the pleasure to meet with six independent truckers who 
are here in Washington to bring attention to the skyrocketing cost of 
diesel fuel. They had press conferences, and they talked to a number of 
people. I invited a group to come to my office.
  Over-the-road trucks, 18-wheelers, heavy equipment, and agricultural 
trucks almost exclusively use diesel fuel. This month, diesel fuel 
prices climbed to $4.14 a gallon. Two years ago, it was $2.72. That is 
a 52-percent increase in diesel fuel, substantially greater than the 
increase in gasoline. That is putting a huge stress on trucking 
companies--independent truckers, particularly--small businesses, and 
farming and fishing operations.
  Among automobiles and pickup trucks, 98 percent of the people drive 
vehicles that use unleaded gas. So you might say: I am not a trucker or 
a farmer. Those prices don't really affect me. But that is just not so, 
really. There are two ways the market for diesel fuel affects the 
average person's pocketbook. When diesel prices go up, the cost of 
transporting goods, consumer products, and food goes up. That increase 
is passed to consumers. Secondly, we have an opportunity, through 
improved diesel technology, of making diesel engines cleaner and more 
efficient than ever before. Mercedes, for example, Daimler-Chrysler, is 
offering consumers a range of vehicles with its blue tech diesel engine 
that is built in my home State. So we should spend a few minutes 
looking at our policies and how they affect diesel prices.
  I hope the Energy Committee, of which I am a member, will have some 
hearings on this issue. It would be worth our having some time set 
aside exclusively to this problem. Nearly all trucks and delivery 
vehicles utilize diesel fuel. The price of diesel fuel affects our 
country in so many ways. Trucking currently uses 75 percent of the 
total diesel fuel used in the United States. Only 3.5 percent of the 
automobiles in America use diesel. But in Europe, approximately 50 
percent of the automobiles are diesel. And in the United States, one 
action we took that may have had some impact on not using so much 
diesel fuel but had a good impact, perhaps, for the environment was to 
demand very clean, low-sulfur diesel fuel. Our diesel fuel is lower 
sulfur than the Europeans, and that is because of environmental 
reasons.
  But did you know this? Diesel automobiles run approximately 30 
percent farther on diesel fuel than similar gasoline-powered 
automobiles. Diesel engines get 30 percent better mileage than gasoline 
engines. Diesel-powered automobiles also get more miles per gallon even 
than hybrid automobiles, or about the same. Some insist it is better, 
but they are pretty much equal. In addition to being fuel efficient, 
diesel-powered automobiles emit fewer CO2 emissions than 
similar hybrid and gasoline engines. A lot of people don't know that. 
Of course, that is why 50 percent of the automobiles in Europe, which 
has analyzed this more carefully than we, it appears, are now diesel. 
The European Union has emphasized diesel engines because it takes 30 
percent less fuel to run a diesel engine.
  The average price of diesel fuel used in motor vehicles has 
historically been lower than the price of regular gasoline. According 
to the Department of Energy, the average price of diesel has been 
higher than gasoline since 2004--as a matter of fact, substantially 
higher.
  So for some reason, even though diesel fuel traditionally has been 
less expensive and requires less refining effort than gasoline, it has 
been averaging 64 cents a gallon more than gasoline.
  Now, like I said, I believe in a free market. I am loathe for the 
Government to intervene. But let me ask this question: Why is that? 
Why? Why would a product that should be cheaper be consistently, since 
2004, more expensive than the other product? I, frankly, do not know. 
But it does appear our country has made a determination to shift to a 
gasoline economy and a hybrid economy.
  I think it is fabulous we are utilizing large numbers now of hybrid 
vehicles--large numbers. We certainly have enough on the roads today to 
be able to find out how well they work, to make their capabilities more 
sophisticated, to improve their lifespan, to improve their efficiency, 
to work out the bugs.
  A lot of people are finding that the savings in gas alone will help 
pay for the somewhat more expensive hybrid engine. So I am not against 
the hybrid engine, and I am delighted we are leading the world in the 
effort to utilize hybrid engines.
  What I am asking is, how have we gotten ourselves in a situation in 
which the less expensive diesel fuel, that gets 30 percent better gas 
mileage, is not readily available and is costing 64 cents more a 
gallon? Something is awry as far as I can see.
  I say, let's get busy. Let's do something about it. Let's stand up to 
OPEC. Let's use every political influence and pressure we have to 
encourage them to increase productivity to reduce these shortages. 
Let's stop, at least temporarily, depositing to the petroleum reserve. 
Let's expand biofuels, and particularly biodiesel, which is a fabulous 
fuel that, unlike ethanol, is just as productive as diesel fuel and 
actually is even cleaner than diesel fuel.
  We need to figure out how to get more production domestically from 
our own reserves. I will not go into the arguments we have had about 
ANWR, all the oil shale in the West, and offshore drilling. We simply 
have not done enough of it, and we still have large reserves available 
to us in this country. So when those reserves are produced, that wealth 
does not go to foreign nations but is kept within the United States, 
creating jobs in our country.
  So we need more production, and we need to look at this question of 
refineries. I do not know what the problem is, but we need to ask some 
questions. I have already asked the Congressional Research Service and 
the Department of Energy some questions. But I intend to look at this 
more as to why we do not have sufficient diesel fuel being produced in 
the country and we continue to have shortages of it.
  So that is what I think we need to do. I am not unaware and I 
understand completely that the surging cost of energy impacts working 
Americans directly. It hits their pocketbook. Those are the people who 
have the least disposable income, and it is like a hidden tax.
  Yes, oil is more valuable today than it was. Mr. T. Boone Pickens, in 
his article, said he thought we were at a peak oil situation in the 
world while demands are going up worldwide. I do not know that we are 
yet at a total peak. I doubt we are, frankly. But we are getting close 
to that. So the oil is just a more valuable product. I understand that. 
But we need to execute the policies we know will work to help contain 
the price increases that are hurting Americans.
  I will add this one thought: We need to be careful about cap and 
trade and other pieces of legislation that focus solely on 
CO2 emissions because we know those actions and those pieces 
of legislation will only drive the cost of fuel higher. According to 
the Environmental Protection Agency, which has just completed a study 
of the cap and trade bill that the Environment and Public Works 
Committee just reported to the floor a month or two ago, that bill 
would raise the price of gasoline 50 cents a gallon. It could raise the 
price of electricity maybe as much as $100 a month for a family. Who is 
going to pay that?
  So we have to be very careful when we pass cap-and-trade, global-
warming-type legislation, that when we do, we do not dump huge costs on 
working Americans, on low-income Americans which they do not deserve 
and they are not justified. So I think that is a matter we will need to 
consider in the weeks to come.
  I thank the Chair. I appreciate the opportunity to share these 
remarks. I appreciate very much the truckers who were in my office 
today. I enjoyed talking with them. They told me stories of people who 
are having to park their trucks and not being able to continue to work. 
They told me stories of people who were going to go into bankruptcy; 
they could not continue to make their payments.

[[Page S3456]]

  So it is not an academic matter. It is a very real thing. We need to 
take action consistent with our great heritage of freedom in our 
country to see what we can do to confront this rising cost of energy.
  I thank the Chair and yield the floor.

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