[Congressional Record Volume 154, Number 76 (Thursday, May 8, 2008)]
[Senate]
[Pages S3936-S3939]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                 DOMESTIC ENERGY PRODUCTION ACT OF 2008

  Mr. INHOFE. Mr. President, let me respond, firstly, if I can, to the 
assistant majority leader. First, it is easy to point the finger at oil 
companies. That is the easiest ``out,'' because everyone has this 
perception that all oil companies are doing great.

[[Page S3937]]

  Here is the problem you have. If you were to take all profits from 
oil companies--let's forget about windfall profits; take it all, do not 
leave any at all for anything else, other than what they are putting 
into exploration--it would amount to 28 cents a gallon.
  If you slashed their profits in half, as they are proposing to do, 
that would be 14 cents. Fourteen cents does not help a lot, at least my 
wife says it does not. And I think you know we are kidding ourselves. 
There are solutions to this problem, but that is not one of them.
  Then as far as the Strategic Petroleum Reserve, we are putting about 
50,000 barrels per day in there right now. If we were to halt that, 
over the course of a year it would equal less than one day of U.S. 
consumption. That is not what I call a fix. Fourteen cents a gallon is 
not a fix, one day of time is not a fix.
  But there are some things we can do. We do have an amendment, 
amendment No. 4720. It is by our leader, Senator McConnell, and by 
Senator Domenici. This actually was a bill. It was going to be the 
Domestic Energy Production Act of 2008, but we are offering it now as 
an amendment. This would handle a lot of the problems. First, if we had 
all of the production out there that we needed to take care of 
America's needs, we still could not do anything, because we do not have 
the refining capacity. Two years ago I introduced the Gas Price Act. I 
could not believe it went down right on party lines. The Democrats flat 
do not want to increase our refining capacity. This happened in the 
Environment and Public Works Committee. It was actually a pretty smart 
approach to it. We were taking a lot of the closed bases and using them 
and allowing EDA grants to take place so that adjoining communities 
could turn those into refineries, and also streamlining the process and 
all of that.
  Well, it went right down on party lines. So this amendment we are 
going to be talking about is one that will do something about the 
refinery capacity. The one we introduced, the amendment, streamlines 
the permitting process so there would be a maximum on any new refinery 
of 360 days on a new refinery or an expansion of 180 days.
  We have not increased our refining capacity. We have not had a new 
refinery in 30 years. Other countries are doing it. China is doing it. 
Mexico is doing it. But we are not. So that is the first thing we need 
to do, increase refining capacity.
  Secondly, everybody hold on, because this is something I know is very 
foreign to our thinking nowadays, it is an old concept called supply 
and demand. We have a lot of demand for gas out there. We know that. We 
know when we go to the pump. The problem is the supply. I hate to say 
it. Is there a chance? I am kind of excited that the public now has the 
attention of the high prices and realizes we are going to have to do 
something besides the gimmicks the assistant majority leader talked 
about. That would be to increase our drilling capacity. We could do it 
on ANWR. People talk about the fact that this is pristine wilderness. 
First of all, I challenge anyone to look at this area. It is not a 
pristine wilderness. The main thing is, if you take that little area 
that we have, with huge reserves, we have been trying to do something 
with it. It compares as a postage stamp does to a football field. It is 
such a small amount. All the Natives there want it. All the Alaskans 
want it. It is their land. That would be the first thing we should do 
to increase our capacity.
  We tried this. We passed this 10 years ago. Then President Bill 
Clinton vetoed it. If he had not, that would be flowing today. All the 
people who are complaining about that are the same ones who complained 
about the Alaska pipeline. They said it was going to kill all the 
caribou. Go up there now during the summer months, and they have 
increased the number of caribou up there primarily because in some 
parts of Alaska, the only shade they can find is the Alaskan pipeline. 
They are all lined up there. So it is not a problem.
  The other major area of production potential would be to go offshore. 
It is interesting. One of the things in this amendment is to allow 
States to determine what they want to happen offshore. It is 
interesting, some of the States, such as Virginia, south of where we 
are standing right now, very much wants to. I have talked to Senator 
Warner. They are talking about allowing production offshore. Several 
other States have wanted to do that. It is a wake-up call we have right 
now that we are going to have to do some of these things. It is 
interesting that Canada allows offshore drilling in the Pacific, the 
Atlantic, and the Great Lakes. Cuba is also looking to expand drilling, 
which could occur 45 miles off parts of Florida. If this happened, they 
would be doing it with technology that is much less environmentally 
friendly than we have right now. So we have the possibility the Cubans 
are going to be doing something without any emission controls, without 
any environmental precautions, and we would be allowing it.
  Another part of this amendment is to repeal section 526. This is 
something that should not have been in before. This was actually put in 
in the Energy bill that was passed in December of 2007. Section 526 
prohibits Federal agencies from contracting to produce nonconventional 
alternative fuels that emit higher levels of greenhouse gas emissions 
than conventional petroleum sources. The scope of the fuels that could 
be prohibited is left wide open to interpretation, including fuels such 
as Canadian oil sands, E85 ethanol, the coal and natural gas-to-liquids 
fuels. This was an experiment I had something to do with, as did the 
occupant of the chair, in the Senate Armed Services Committee. We now 
have a B-52H bomber that is actually running on gas-to-liquid fuel. So 
we know this is something that works. We know it can help our 
situation.
  What I don't have time to get into because I only had 5 minutes, but 
I wish to do it later, is the ethanol mandate that came with the 
December of 2007 bill. Right now we know that ethanol--and quite a few 
of the far-left environmental extremists were behind this thing to 
start with; in fact, former Senator Al Gore, Vice President Al Gore has 
stated he cast the deciding vote to allow ethanol in the first place--
is not environmentally sound. It is expensive. It is not good on 
engines, and it is competing. In my State of Oklahoma, our livestock 
people say we can't continue to have the biomass fuels competing with 
our feedstocks. Almost everything you see that is high priced now in 
the grocery stores you can trace back to the ethanol mandate. One of 
the things we will be wanting to do--and I will elaborate on it later--
is to exercise the part of that bill that gives the EPA the opportunity 
to be involved in a waiver of the ethanol mandate.
  I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Wyoming.
  Mr. BARRASSO. Mr. President, the American Energy Production Act of 
2008 is being offered as an amendment to the flood insurance 
legislation before us today. I am an original cosponsor of the American 
Energy Production Act.
  The thrust of this legislation is expanding American energy supply 
through many different avenues. I view this amendment as an essential 
step forward in both addressing the short-term as well as the long-term 
American energy supplies. I also view this amendment as the right 
policy to deal with today's high price of energy. America needs to 
advance its energy policy, and this amendment deserves immediate 
consideration.
  There are many excellent provisions of the amendment that is before 
us. I am particularly interested in a provision to ramp up production 
of 6 billion gallons of fuel derived from coal. The provision would 
start with a mandate of 750 million gallons of alternative coal-to-
liquid fuels and then ramp up by a similar amount over the following 7 
years, beginning in year 2015. Analysts estimate this provision will 
result in a reduction in the amount of oil America is projected to 
import.
  Simply put, coal is an abundant, affordable, reliable, and secure 
source of energy. Coal can also be a clean energy source. These coal-
to-liquid fuels would likely be used first by our military. The 
Department of Defense would be allowed to sign longer contracts for 
synthetic fuels. The duration of the contracts would be expanded from 
the current 5 years to 25 years. By doing that, this simple provision 
provides great potential because it adds certainty to the market and 
provides another incentive to develop coal-to-liquid facilities. In a 
time of soaring

[[Page S3938]]

prices at the pump, this provision deserves serious debate, serious 
consideration.
  The fundamental energy issue before us is one, as we have heard from 
all speakers, of supply and demand. It is a time for Congress to take 
action, action that can have a real important impact on America's 
energy supply.
  America's coal is vital to our Nation's economic prosperity and our 
Nation's security. Coal is a crucial part of America's energy 
portfolio. Coal provides a foundation for a competitive economy, a 
secure future, and a prosperous information technology sector. Wise use 
of natural resources drives America's innovation and our economic 
success. From the steam engines of yesterday to the superconductors of 
the world, coal has powered this Nation. Now is the time to support the 
technology and development of coal to liquids. This will allow coal to 
be an important contributor to America's transportation fuel. After 
all, coal is strategically found in States throughout the Nation, both 
in the East as well as the West.
  The countries competing with us economically--India, China--rely 
heavily on coal. They are poised to exploit coal's many benefits. In 
order for us to sustain America's current economic leadership, we must 
continue to harness the vast potential of coal. Energy sources often 
face challenges. You know what they are: reliability, security, 
economic competitiveness, ease of conversion, impacts on food supply, 
and environmental considerations. Coal provides an essential on-demand 
energy supply in the United States, and coal is a low-cost energy 
source. Coal has enormous potential to be converted into transportation 
fuels. At a time when America faces record prices at the pump, coal 
should be used to produce gasoline, diesel fuel, and jet fuel. Several 
provisions in the American Energy Production Act of 2008 move America's 
use of coal and domestic energy in the right direction. America's 
energy and economic security will depend on promoting technologies that 
are related to coal. The time to act to expand America's energy 
portfolio is now.
  I urge adoption of the amendment when it comes up for a vote.
  I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Texas.
  Mr. CORNYN. May I ask how much time remains in morning business on 
our side.
  The ACTING PRESIDENT pro tempore. There are 15\1/2\ minutes.
  Mr. CORNYN. Mr. President, I thank the Senator from Oklahoma and the 
Senator from Wyoming for their excellent remarks on the energy crisis. 
I want to focus attention on a couple of numbers this morning.
  The first number is $3.65. This is the average price of a gallon of 
gasoline now for sale across America. Contrast that with the figure of 
$2.33. That shows how much the price of gasoline has gone up across the 
country since January 4, 2007. If we extrapolate what that means for 
the average American family, they have seen a decrease in their 
standard of living or an increase in their cost of living by roughly 
$1,400 a year as a result of this increase in gasoline prices.
  Another figure I wish to mention is the figure 745. That was 745 days 
ago, when Speaker  Nancy Pelosi, before she was Speaker, said that if 
she and her fellow Democrats were given the majority, they would come 
up with a commonsense plan to reduce gas prices. That was 745 days ago. 
Notwithstanding the fact that they announced a plan yesterday--I will 
talk about that in a minute--we are still waiting for a commonsense 
plan to bring down gas prices at the pump.
  Here is the quote:

       Democrats have a commonsense plan to help bring down 
     skyrocketing gas prices.

  This was the Speaker of the House, April 24, 2006. As I said, we are 
still waiting for that plan.
  You heard both the Senator from Oklahoma and the Senator from Wyoming 
talk about some aspects of the legislation, the so-called Domenici 
amendment, which we will vote on, on Monday, and of which I am a proud 
cosponsor. But let me focus on the plan announced by Majority Leader 
Reid and the Democratic leadership yesterday. First, we will find some 
very familiar elements to this plan rolled out by the Democratic 
leadership. It bears some remarkable resemblance to previous plans they 
have rolled out. The No. 1 element is it produces not one single drop 
of additional oil or gas or energy, not one drop. The other 
characteristic it bears a remarkable resemblance to in terms of past 
proposals is that they basically suggest we tax, we litigate, and we 
investigate our way to greater energy independence. This is a formula 
which, although familiar, is one that has not shown itself effective, 
obviously, in bringing down the pain at the pump, the price of 
gasoline.
  First, they said: We are going to investigate price gouging by the 
oil and gas industry. We have seen investigations by the Federal Trade 
Commission. We have had numerous hearings that have found basically no 
substantiation for so-called price gouging. In fact, the cost of oil 
and gasoline has been related to unrest around the world in dangerous 
parts of the world where the supply may be in question, whether it is 
the Middle East or elsewhere.
  They found that the failure of Congress to remove the regulatory 
burden to construction of new refinery capacity has led to a bottleneck 
when it comes to refinery capacity where that oil is then transformed 
into gasoline that we burn in our gas tanks.
  Then, of course, there is the fact that we cannot repeal the law of 
supply and demand, and that unless we are going to do something about 
increasing the supply of oil, that if we fix the amount of oil 
available worldwide because we refuse to open America's own natural 
resources in order to expand that supply, that rising demand for oil by 
countries such as China and India--which have more than a billion 
people each who want the kind of prosperity and enjoy the sort of 
economic vitality the United States has--they are going to place 
greater demands on that fixed supply of oil so they can benefit, as 
America has, from having access to low-cost--relatively low-cost--
energy for a long, long time.
  So price gouging is something for which we have had investigations in 
the past. We have had hearings in the Senate Judiciary Committee, on 
which I am proud to serve. The Federal Trade Commission has 
investigated it until they were blue in the face and found no real 
evidence of price gouging but, rather, a deficit of supply when it 
comes to increasing demand as the most likely cause.
  Now, the second element of the Democratic leadership's so-called 
energy policy is litigation. In other words, we are going to sue the 
Organization of Petroleum Exporting Countries.
  Now, I have heard some of our colleagues talk about another context: 
We need to engage countries such as Iran and Venezuela and talk to them 
directly about geopolitical matters and about security matters.
  This is the first time, really, I have heard them talk about suing 
countries such as Iran and Venezuela and the Organization of Petroleum 
Exporting Countries. The irony of it is, what are we going to sue them 
for? We are going to sue them for, presumably, more oil or make them 
turn the spigot open even wider, ironically forcing us to become more 
dependent on imported oil from dangerous regions across the globe and 
from people who are not our friend--President Ahmadinejad in Iran, head 
of an Islamic extremist government on the terror watch list of the 
State Department as a state sponsor of international terrorism in the 
Middle East; and then there is Hugo Chavez in Venezuela, somebody who 
is not our friend, somebody who harbors narcoterrorists in the FARC and 
other organizations in his country. These are the kinds of people we 
are going to continue to depend more and more on by somehow filing a 
lawsuit against them and forcing them to sell us more of their oil? How 
is that going to make us more energy independent? How is that going to 
enhance our national security and our economy?
  Well, then there is the other answer we have heard in the Democratic 
leadership plan they proposed--this one, again, is a familiar solution, 
or I should say a nonsolution--and this has to do with the so-called 
windfall profits tax.
  Well, I think we ought to learn from history or else we will be 
condemned to relive it. Over the entire 1980 to 1986 period, in which 
the U.S. Government

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had a windfall profits tax, it, in fact, reduced domestic production 
from between 320 million barrels and 1,268 million barrels. That is 
almost 5 percent of overall production. If you think about it, there is 
an easy way to understand that. If you put an increased tax on American 
producers--because, of course, we cannot put an increased tax on OPEC, 
on Venezuela, on Iran, and these state-owned oil companies--the fact 
is, we put an increased tax burden on our own domestic producers.
  Of course, we find that the Congressional Research Service has found 
that last time we tried a windfall profits tax, it decreased our 
domestic oil production. Why in the world would we want to do that? How 
does that help increase the supply of America's natural resources, 
which can help ameliorate some of this pain at the pump by increasing 
supply and thus bringing down, hopefully, the cost of a barrel of oil 
and then the refined product of gasoline?
  Well, the last suggestion has to do with the strategic oil reserves. 
That is a final answer, by eliminating the 70,000 barrels a day that we 
put into the strategic oil reserves. Now, I think there may be a case 
for reducing or eliminating the 70,000 barrels of oil a day that go 
into the Strategic Petroleum Reserve. But I have to tell you, the world 
consumes roughly 85 million barrels of oil a day--85 million barrels of 
oil a day. What effect is 70,000 barrels a day that would not go into 
the Strategic Petroleum Reserve, what impact would that have on 
reducing the price of oil globally or bringing down the price at the 
pump? Well, my calculation is that by reducing the amount of oil going 
into the Strategic Petroleum Reserve, we could bring down gas prices 
maybe 2 cents or 5 cents per gallon. Maybe that would be welcomed but 
hardly adequate to deal with the high gas prices we have sustained and 
are experiencing today.
  But I want to take that one step further. If our Democratic friends 
believe reducing the amount of oil that goes into the Strategic 
Petroleum Reserve by 70,000 barrels a day is a good idea because that 
might reduce, although infinitesimally, the cost of gasoline, how much 
more sense would it make to explore and develop the million-barrel-a-
day capacity that is located in Alaska in the Arctic National Wildlife 
Refuge? If you take the million barrels of oil a day that could be 
produced from ANWR, then you are talking about--according to the same 
calculation I just used on the Strategic Petroleum Reserve--reducing 
the pricing of gasoline, by an additional million-barrel supply of 
American oil a day, by 85 cents to $2.14 a gallon. Now, that would be a 
real impact, to be able to bring down the price of gasoline by 85 cents 
to $2.14 a gallon.
  I just mentioned the ANWR reserves. But it is estimated if we were 
actually to open not only Alaska to environmentally responsible 
development of those oil and gas reserves located there and produce an 
additional million barrels a day of oil, that if we were also to leave 
up to the States--States such as Virginia and other States, Alaska--the 
option to open their Outer Continental Shelf to oil reserves, to 
further production, if we were to open some of the oil shale and oil 
sands out in the West to production, we could develop another 3 million 
barrels of oil capacity right here in America without having to depend 
more and more on foreign sources of oil.
  If you take the same argument our friends have offered on the impact 
of reducing deposits of oil in the Strategic Petroleum Reserve and that 
that would actually have an impact on price, how much more would it 
have a beneficial impact on lowering the price if, in fact, we were to 
open up America's natural resources here at home?
  We will have an important vote on Monday where the so-called Domenici 
amendment--which I am proud to join--will be offered for a vote, where 
the Senate can go on record in showing where they stand when it comes 
to this effort to help bring down the price at the pump, which Speaker 
Pelosi announced 745 days ago. The highlights, as I have already 
mentioned, of that bill are opening portions of the Outer Continental 
Shelf, as we have the Gulf of Mexico 300 miles offshore from the State 
of Texas. I tell you, you cannot even see the drilling activity out 
there 300 miles offshore. Indeed, the drilling activity could occur in 
the Outer Continental Shelf beyond the horizon in a way that is not 
even visible to people on shore.
  I mentioned the Arctic National Wildlife Refuge. Tapping into that 
oil and gas, which we know is there, would immediately produce--once it 
is done--huge volumes of oil that could help relieve our dependence on 
imported oil.
  We know that building additional refineries would help relieve some 
of that bottleneck when it comes to refining the oil into gasoline. Of 
course, 70 percent of the price of gasoline is the price of oil, but 
another part of it is the burden we put on the permitting process for 
the construction of new refineries or expanding refinery capacity.
  My colleague from Wyoming talked about coal, and I agree with him 
that we ought to use good, old-fashioned American ingenuity in our 
research and scientific ability to figure out, how do we use this 
coal--we are the ``Saudi Arabia'' of coal--how do we use it in a way 
that is compatible with a good environment? The technology has already 
been demonstrated, things such as coal-to-liquids technology, coal 
gasification, which can capture the carbon, deal with the environmental 
concerns, and yet provide us access to energy which can help drive our 
economy and help make us less dependent on imported oil and gas from 
other parts of the world.
  So, Mr. President, I hope our colleagues on the other side of the 
aisle will come forward with additional ideas. I have explained how the 
proposals they have made would have no impact, would provide no supply 
but would really just rehash old, tired themes which have been shown 
not to work in the past. But I think the debate is an important one, 
and I look forward to continuing it.
  Mr. President, I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from New Jersey.

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