[Congressional Record Volume 154, Number 71 (Thursday, May 1, 2008)]
[Senate]
[Pages S3701-S3704]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. CRAIG (for himself, Mr. Warner, and Mr. Inhofe):
  S. 2953. A bill to provide for the development and inventory of 
certain outer Continental Shelf resources, to suspend petroleum 
acquisition for the Strategic Petroleum Reserve, and for other 
purposes; to the Committee on Energy and Natural Resources.
  Mr. CRAIG. Mr. President, during consideration of the reauthorization 
of the FAA, a great deal of conversation has gone on on this floor 
about energy and the cost of energy. It is appropriate that we talk 
about it at a time when our airlines are struggling and we are 
attempting to reauthorize FAA. Part of the reason our airlines are 
struggling is the unprecedented aviation fuel prices. It is only one of 
the many reasons they are having difficulty today, but clearly the 
doubling of their costs are putting at risk their corporate structure 
and their ability to serve an American public.
  But it is not just the airlines that are at risk. Every American 
consumer and every business is finding the tremendous increase in the 
cost of energy a significant problem. For example, just a few minutes 
ago, my BlackBerry buzzed. My wife Suzanne is out in Boise, ID. I got 
an e-mail about the temperature, which is 31 degrees in Boise this 
morning. At the bottom of the e-mail, she said regular gas just hit 
$3.53 a gallon. That is a lot of money. Now, that is not as much as 
others are paying across our Nation, but when an Idahoan fills their 
tank and they go from community to community, oftentimes they drive 
hundreds of miles--not just a few miles but literally hundreds of 
miles. Idaho is a great big Western State. Our distance is oftentimes a 
significant part of our commerce and our ability to conduct economic 
activity, and fuel prices have always been significant and important.
  Idaho is also a large agricultural State. The cost of the production 
of foods today has gone up dramatically because of the cost of diesel, 
if you will, the cost of fertilizer, and all of those components that 
go into the production of food and the transporting of the food.
  Part of the reason food is going up on the retail shelf of the 
supermarket today is the cost of getting it there, let alone the cost 
of producing and refining it. Many truckers are saying that just to 
fill up their truck now can be as much as $1,000. They are not able to 
change their freight rates to adjust as quickly to the high cost of 
energy, and they simply have to--this is the term--``eat it.'' Well, 
they cannot afford to eat it. Oftentimes, those trucks are simply 
turning off their motors and sitting idle.
  So the impact of energy costs on our economy can be dramatic. I came 
to the floor yesterday to talk about it and to say that, in large part, 
the American consumer, in their frustration, is saying: Whom do we 
blame? I don't think they have to look any further than the U.S. 
Congress and the failure of this Congress--the House and Senate--over 
the last 20 years to do the things that were necessary to continue 
production, to ensure refinery capacity, to ensure exploration and the 
development of reserves, while we were doing all of the other things in 
conservation, in CAFE standards, assuring that we had a new form of 
transportation energy. But, no, we have failed to do the right things, 
and as a result of that, the American consumer is, in fact, paying a 
great deal for our failure.
  What do we do to change that? Instead of just wringing our hands, 
there are all kinds of ideas out there about changing it.
  Some would suggest that you just tax the big oil companies; if you 
just tax those big oil companies and put that money somewhere else, 
that will solve the problem. There is an old adage in economics that is 
quite simple: You usually get less of that which you tax. In other 
words, the higher you tax something, the less you are going to get from 
it. Do you want to, by taxation, nationalize America's independent oil 
companies? Is that a way to get production and more oil and gas at the 
pump? Remember, there are not any gas lines out there today. There 
aren't the kinds of lines we saw in the 1970s during the last energy 
crisis. There is supply. It is the cost of supply that we are 
frustrated about and the impact that cost is having on our economy.
  Here is one of the problems we have. I talked about a Congress that 
failed, a public policy that failed, a policy that failed to continue 
to produce as demand went dramatically up--not just in this country but 
around the world.
  The blue line on this chart is the supply line. As you can see, in 
the 1990s it peaked and it began to drop. That is, of course, U.S. 
production versus U.S. consumption. In other words, as a nation we 
began to produce less and less crude oil into our refineries.
  Today, we are near 60 percent dependent upon other sources of energy, 
from outside our country, to come into our refineries and to go out of 
the gas pump to the consumer. In fact, you can see that the red line--
demand--has gone up dramatically as our economy continued to grow over 
the years, as more people were driving cars, and as more cars consumed 
more gas.
  The only way you are going to keep price down is when the supply line 
and the demand line are somewhat in concert, somewhat tracking each 
other. That simply stopped in the 1950s, as we began to grow 
increasingly dependent upon foreign nations.
  We passed the Energy Policy Act of 2005, but it wasn't really 
directed at transportation fuels. Last year, we added to that and we 
began to address transportation fuels. We brought ethanol into the 
market by subsidizing that and allowing our farmers, and those who take 
corn from them, to produce ethanol to become increasingly effective in 
the market. That is working to some degree. In fact, it is estimated 
today that 20 cents would be put on the price of gas at the pump if

[[Page S3702]]

it wasn't for national and rural ethanol production. Now, it has caused 
other problems. Some would argue that it has caused problems in the 
food chain, and it probably has. I think the marketplace will work that 
out. So there are things we have been doing.
  But I think, most importantly, it is the things we have not done. It 
is the failure of our country to recognize the increased dependency we 
were developing from other countries around the world. I think that has 
become one of our greater frustrations. While you have some on the 
campaign trail today talking about taxing the big oil companies, the 
big oil companies don't own the oil. It is the cartels. It is the 
nations. It is not oil companies, it is oil countries that we have to 
worry about today.
  I didn't coin the phrase, but I use the phrase quite often, ``petro-
nationalism.'' If I am a country and I am small but I am sitting on a 
pool of oil, I become rich overnight. The reason I become rich 
overnight is because Americans will come and buy my oil. If I want to 
form a cartel and I want to control the supply of that oil, then they 
will pay even more for it because Americans quit producing for 
themselves.
  Here is a statistic that I find fascinating, and some have said that 
if we don't stop this in the near future, we will spend our Nation into 
poverty as we spend all of this money on oil. We are now spending well 
over $1 billion a day outside our country to buy oil. That is a 
phenomenal figure. Our neighbors to the north, we send them $280 
million a day; to Saudi Arabia, we send $190 million a day; to 
Venezuela and Dictator Chavez, we send $160 million; to Nigeria, we 
send $140 million; to Algeria, we send $70 million. Do Venezuela and 
Nigeria and Algeria have our best interests in mind? I don't believe 
so. They have their own interests in mind. We are literally making them 
wealthy because we are buying their oil.
  Many of us talk about energy independence, and last year when we 
passed that legislation I was talking about, the Energy Independence 
and Security Act of 2007, we did some very good things in it. As I 
said, we looked at increasing production by conservation, by CAFE 
standards, and by renewable fuels standards. We said to the automobile 
industry: You have to design cars that burn less, and in doing that, we 
will improve our overall position on dependency by dropping it 
significantly by 2030. But it takes a long time to redesign a car, make 
it efficient, produce it, and then sell it into the market.
  Those are the realities of a problem where you cannot just fix this 
tomorrow. We cannot just change the price of gas at the pump tomorrow 
because we cannot fix the underlying problems instantly. But as I said 
earlier, if Congress is at fault, the problem in this, then Congress 
ought to be doing more about it. And it is not just wringing your hands 
and wanting to tax. It is doing things that get us back into production 
while we learn to conserve, while we have cleaner automobiles, while we 
look at alternative fuel sources, while we get more hybrid cars and 
electric plug-in cars in the market. That is all coming, but that is 10 
years, 15 years, and 20 years out.
  What do we do in the interim? I believe there is something we can do, 
and we ought to do. In America today and in our territorial waters we 
are sitting still on a lot of oil, a dramatic amount of oil. Some would 
argue under old U.S. Geological Survey analysis that we are sitting on 
at least 100 billion barrels of oil. If we are sitting on it, why 
aren't we using it? Once again, the politics of Congress and the 
politics of States enter into the debate.
  A couple of years ago, I began to talk about an issue I called the no 
zone. What was I talking about at the time? I was talking about that 
area of the United States and Outer Continental Shelf of waters that we 
knew had large volumes of oil. But California said no. We said no in 
Alaska. We have said no off the east coast. We have said no around 
Florida. Because we have said no, the American consumer today is paying 
the highest price for gasoline ever. That is a fact. It is a simple 
reality. Our dependency on foreign nations grew. As I just expressed, 
over 60 percent of our oil is coming from outside the continental 
United States when we know there is a significant amount of oil outside 
the continent.
  When I introduced this chart a couple of years ago and I began to 
talk about the no zone and there were a few folks wringing their hands, 
we went to work. We went to work and we looked at oil sales in the gulf 
and the development in the Outer Continental Shelf in the deep waters 
of the Gulf of Mexico.
  Thanks to our effort, we did something. The American consumer needs 
to know we went into lease sale 181 off the coast of Florida. We looked 
at and found a tremendous amount of capability there and we began to 
develop it and we are developing it today. We have allowed other lease 
sales to occur. That is tremendously important. We are beginning to tap 
some of that oil supply that we know is out there and about which we 
ought to be doing more. That is what I think is important, and that is 
on what I think we ought to be focused.
  To sit and wring our hands and tell the American people there is 
nothing we can do, and all we are going to do is go out and tax and 
tax, which will not produce--we ought to be talking about production. 
The legislation I have introduced today talks about production. It 
talks about production in a positive way.
  I mentioned a few moments ago the action we took last year in lease 
sale 181. We were successful in bringing Florida along in their 
cooperation and understanding, which was phenomenally important.
  We know there are millions of barrels of oil and trillions of cubic 
feet of gas out there. What is most significant about oil development 
in this region is that the infrastructure is in place. What do I mean? 
Refineries, pipelines, capacity. We don't have to wait 5, 6, and 7 
years just to build the infrastructure. It is there, and the oil is 
under it. That is why we did lease sale 181. But there is a lot more we 
can and should do. That is why the legislation I have introduced today 
does just that. It doesn't start drilling, but it says a couple of 
things that are quite simple.
  As we have heard others talk about the fact we are putting money into 
the Strategic Petroleum Reserve at this time, we are buying oil off the 
market and putting it underground in the salt domes in the South for a 
time of necessity, I suggest we stop doing that for the time being, and 
I suggest we take that money we are using for those purposes and we 
modernize our inventory of our known reserves, our unknown reserves, 
and our capacity because the true SPR--SPR means Strategic Petroleum 
Reserve--the greatest reserve in the world is to know what we have, 
where it is, and how we can access it. That is one of the most 
important things we can do for the consumers of America today.
  I know it frustrated some of my Floridian friends when I talked about 
our inability because of policy to allow our companies to go in to the 
northern area off Cuba and drill because Cuba was allowing other 
countries to come in and develop. Just 90 miles--45 miles until you hit 
the zone--90 miles off our coast on the extreme of the Florida Keys 
there are foreign nations drilling oil today. India is there, and India 
has now discovered oil. China is there, and China has now discovered 
oil. We are not there today because our policy is 45 years old and 
still says: No, no, Americans cannot get involved with Cuba, even 
though we believe Cuba has phenomenal potential oil reserves. Shame on 
us.
  America, listen up: It is Government policy today in large part that 
has caused you the pain at the pump, and it is very important that 
Government act today to reduce that pain.
  The legislation I am offering would create an inventory that would do 
just that. It would allow us to know what our reserves are.
  We have moratoriums off the coast of Florida, and yet we know there 
are huge oil reserves out there. Why are we not doing something about 
it? Well, it is local politics. It is national politics. It is green 
politics. It is politics. That is why we have the price of oil we have 
today, nothing more and nothing less but politics, and our economy is 
growing more fragile by the moment because of it.
  Is it demagogic to say that? I don't think so. I don't think so at 
all. I pulled out the sign, the no zone. The no is a result of 
politics, whether it is the politics of the State of Florida or the

[[Page S3703]]

politics of the State of California or whether it is the national 
politics of this Senate that will not allow for us to drill for the 
reserves in what is known as ANWR, the Alaskan national wildlife area, 
where we know there is phenomenal abundance.
  It was all done, all of this no, this political no was all done in 
the name of the environment. There was some reason at the time these 
old ideas were put in place. We had the oil spills off the coast of 
Santa Barbara, and as a result of that, Americans were concerned. So 
California said no more drilling there, and then we followed up.

  A few years ago, we had a great national tragedy in the gulf area of 
our country. That tragedy was called Katrina. She came rolling up and 
through the gulf. We know what she did in New Orleans. She did 
something else nobody wants to talk about today. She knocked offline 
hundreds of oil wells that were producing out in the gulf--knocked them 
off. She even set some of the drilling rigs adrift. But not a drop of 
oil was spilled. Why? Because modern technology today and American 
know-how and a concern for protecting our environment has produced one 
of the cleanest deepwater oil drilling industries in the world. We are 
producing in this area of the gulf off the coast of Texas, off the 
coast of Louisiana, off the coast of Mississippi, and with 181, we just 
brought into or soon will be bringing into production off the coast of 
Alabama. Why not off the coast of Florida? Why not off the coast of 
California? Why not off the coast of the Carolinas, Virginia, and on up 
where we believe there is significant gas and oil reserves?
  It is old politics of the past that is caught in the ghosts of Santa 
Barbara of decades ago. Yet our technology today will take us there, 
but our politics will not take us there. That is why I have introduced 
the legislation I have. The least we can do is inventory with modern 
technology to know where our oil is.
  I notice the president of Shell said in a press release the other 
day: If Americans sent a message to the world that we were going to 
start drilling our own reserves and bringing them into production, the 
price of gas at the pump would drop dramatically, 25 or 30 cents a 
gallon or more. That is significant stuff, both short term and long 
term, to the economy of this country.
  I say to my colleagues, I say to our country, and I say to our 
consumers: Is it a time to act? You bet it is a time to act. While some 
suggest we tax the big boys out of existence, we do not produce 
anything by doing that, while we can create all kinds of other 
structures. Do we produce more, do we build refinery capacity, and do 
we assure the American public while we are transitioning into hybrid 
cars and electric cars and hydrogen cars and all of those kinds of 
activities that we support and are doing research and development on 
today that they will still have an abundant supply of energy? That is 
our job. That is the job we failed in doing over the last good number 
of years, and that is the job we ought to stop and start over and do it 
right and reward the States that are the boundary States to the 
production of the Outer Continental Shelf.
  We have huge oil reserves in this country, and yet we are letting the 
rest of the world have our wealth. Why not keep our wealth in this 
country by the development of these reserves?
  The first step is the legislation I have introduced today. Let's at 
least in the next few years do the inventory, the modern, sophisticated 
seismographic inventory that USGS can do to let us know how much is out 
there because what we know today is simply old stuff. Those efforts 
were done years ago. Already out at the edge of this green line in the 
deepest waters in the gulf under the newest drilling technologies, we 
are finding phenomenal oil that just a few years ago we did not even 
know we could get to. We are getting to it. We are producing it. It is 
clean, and it is environmentally sound. We ought to be doing that 
everywhere else.
  I have joined my colleague from Louisiana who just came to the floor, 
who introduced legislation that says when oil gets to $125 a barrel, we 
ought to give the States the option to allow the development of the 
Outer Continental Shelf off their State. You darn bet we ought to, and 
those States ought to be rewarded for it.
  There is so much this country can continue to do instead of standing 
still and wringing our hands and trying to blame somebody else for our 
failure over the last 20 years to continue to allow this great country 
to produce for its consumers.
  Mr. WARNER. Mr. President, will the Senator yield for 10 seconds?
  Mr. CRAIG. I will be happy to yield to the senior Senator from 
Virginia.
  Mr. WARNER. Mr. President, I commend him for this initiative, but I 
hope he says ``oil and gas'' because off the east coast there is an 
abundance of gas, as shown by the previous studies. As he says, they 
have to be brought up to date. Do let us invoke gas because along the 
beaches--and I, as the Senator knows, twice tried to get legislation 
through, and a collection of Senators--and I say this in a lighthearted 
way; I call them the beach boys--will not permit this for fear that 
pollution could emanate from the drilling process onto their beaches.
  I suggest let's start with gas. There would not be any potential for 
the erosion of beaches as a consequence of an accidental spill. I do 
hope the Senator puts in the word ``gas.''
  Mr. CRAIG. Mr. President, I thank the senior Senator from Virginia. 
He is absolutely right. When I think oil, I think gas because, 
obviously, in lease sale 181 and in other areas where there is gas, 
there is oftentimes oil, and oftentimes where there is gas, there is no 
oil. We believe that to be the case off the coast of Virginia.
  The Senator from Virginia has been a leader, without doubt, in that 
very kind of effort to allow at least the seismographic effort, the 
exploration that would determine for us the kinds of reserves we have 
and may have for the future.
  I thank the Senator from Virginia for his leadership in this area.
  Mr. WARNER. Mr. President, I thank my good friend from Idaho. I also 
emphasize that the technology to do it safely and not be the victim of 
a disruption by Mother Nature is there.
  Mr. CRAIG. Without question it is there today, and we know that. We 
are the leaders of clean drilling in deep water for the world, no 
question.
  Mr. WARNER. I thank the Senator. I wish him well. He has my support.
  Mr. NELSON of Florida. Mr. President, will the Senator further yield?
  Mr. CRAIG. I will be happy to yield to the Senator from Florida.
  Mr. NELSON of Florida. Would the Senator mind putting up his map with 
the State of Florida on it?
  Mr. CRAIG. I am more than happy to.
  Mr. NELSON of Florida. Would the Senator recognize that the area in 
yellow there on the west coast of Florida that he indicates for future 
drilling--would he recognize almost that entire area is the largest 
testing and training area for the U.S. military in the world? The 
military is on record at all levels, of all generals and admirals, that 
drilling should not be done in that area to compromise our training and 
testing mission for the U.S. military.
  Mr. CRAIG. I do recognize that. I do appreciate what our military has 
said.
  I also understand a few years ago we took offline a naval training 
area in Vieques. Why? It was no longer a popular thing to do.
  If there is oil under this area--and we believe there is--and it is a 
training area, why couldn't we train here? Or why couldn't we train 
over here? The reality is, what is at this time more valuable?
  It is very easy to say don't do it. Or is it possible to say can we 
do both? There are a good many experts and professionals in the field 
who said that. We can have a military training area, and guess what we 
also can do. We can pull the oil out from under. How do you do it? 
Quite simply. You put a location, a location and you slant drill 
thousands of feet and you do not have to pepper the area with all kinds 
of drilling rigs.
  Today's technology is amazing. It is politically comfortable, I 
appreciate that, and I understand the State's politics and I do not 
deny that--but this is not the oil of the State of Florida. This is the 
oil of the citizens of our country. It is the politics of Florida today 
that deny us the oil, not the politics of America. So it is a simple 
question: Should we inventory it? Should we know what it is? And should 
we, under modern technology, reward the State of Florida for the 
potential benefit?

[[Page S3704]]

  It is ironic we did not move at all to stop drilling 45 miles off the 
Florida coast. We could even take a 45-mile zone here, or more, 
consistent with what is going on in Florida today and still protect 
this.
  But the Senator is right. It is a military area. Guess what. I am 
kind of a modern guy. I believe in technology taking us where we can go 
and having the best of both worlds. But right now the American consumer 
has the worst of the world we have created for them--a scarcity of a 
supply that is driving costs and impacting our economy in a significant 
way.
  I suggest the legislation I have introduced, while it will not impact 
the State of Florida, will give us a base and an understanding and 
knowledge of what we have as a reserve. We are spending millions of 
dollars a day to buy oil and put it in the ground when, in fact, we 
ought to spend a few million dollars and find out about all the oil we 
already have.
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