[Congressional Record Volume 154, Number 78 (Tuesday, May 13, 2008)]
[Senate]
[Pages S4112-S4114]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. SCHUMER (for himself, Mr. Dorgan, Mr. Casey, Ms. 
        Klobuchar, and Mr. Sanders):
  S.J. Res. 32. A joint resolution limiting the issuance of a letter of 
offer with respect to a certain proposed sale of defense articles and 
defense services to the Kingdom of Saudi Arabia; read the first time.
  Mr. SCHUMER. Mr. President, I rise to discuss rising energy prices. I 
remind President Bush, as he leaves for his trip to the Middle East, 
his ally, Saudi Arabia, holds the key to reducing gasoline prices at 
home in the short term.

[[Page S4113]]

  I, along with my colleagues, Senator Dorgan of North Dakota, Senator 
Casey of Pennsylvania, Senator Klobuchar of Minnesota, and Senator 
Sanders of Vermont plan to submit a Senate resolution that would block 
all four pending arms deals to Saudi Arabia, which together total $1.4 
billion, unless Saudi Arabia shows that our friendship is a two-way 
street and increases its oil production by 1 million barrels per day 
above the January 2008 output levels.
  Because these weapons have not yet been delivered to Saudi Arabia, 
Congress still has the power to block these four deals as leverage to 
get the world's larger oil producer to bring its production back to 
historical levels, an action that would have the single greatest impact 
of lowering gas prices in the short term.
  I am very proud that we today voted to prevent continued oil going 
into the SPR as Senator Dorgan, the sponsor and somebody who has pushed 
this issue a long time and done it well, has noted that will probably 
reduce prices about a nickel. There is more. It is a good first step, 
as he would be the first to say, but we can do more.
  If Saudi Arabia would increase production by 1 million barrels a day, 
the price of gasoline would go down 50 cents a gallon almost 
immediately. It is a short-term fix.
  As my colleagues across the aisle and the administration continue to 
side with big oil, we have no other choice because, right now, it is 
Big Oil and OPEC that are benefitting and American families are losing. 
It is unfortunate we are at this point. Eight years of poor stewardship 
over our Nation's energy policy has left us with alternatives. And my 
Republican colleagues have blocked every attempt at real energy reform 
that would help alleviate the rising energy prices in this country.
  In the 110th Congress alone, my colleagues on the other side of the 
aisle have blocked four different attempts by Democrats to extend the 
alternative tax provisions, and not only for a year or two but many.
  On June 21 of last year, the extension of energy credits received 57 
votes; on December 7, it received 53 votes; on December 13, it received 
59 votes; and on February 6, 58 votes.
  Each time, Republicans put up roadblocks requiring 60 votes in order 
to pass the bill. Each time the overwhelming majority of Democrats 
voted for the bill, the overwhelming majority of Republicans voted 
against.
  President Bush opposed the bills because each would have ended tax 
breaks for big oil, as if they needed more tax breaks given their 
record profitability.
  Meanwhile, Americans continue to spend more and more on gasoline, as 
prices at the pump have skyrocketed upward to record heights. Although 
our President was not aware that gasoline prices were predicted to top 
$4 a gallon this summer, American households already faced with rising 
fiscal burdens incurred as a result of the subprime foreclosure crisis 
and the financial credit crunch are being squeezed further by record-
high prices at the pump.
  In a sign that high prices will continue unabated, the Department of 
Energy recently forecasted that gasoline prices would average $3.66 per 
gallon across the U.S. this summer, 25 percent higher than last 
summer's average.
  So I, along with several of my colleagues, think it is time to get 
the President's attention and the attention of the leaders of Saudi 
Arabia. The resolution we have introduced today, which Senator Reid 
will rule to move on to the calendar this afternoon, requires Saudi 
Arabia to increase their oil production by 1 million barrels a day or 
jeopardize their $1.4 billion of pending arms deals with the United 
States.
  One of those deals includes the sale of JDAMs, Joint Direct Attack 
Munitions, which makes conventional bombs into smart bombs that can be 
aimed through the window of a house. The administration has warned us 
that Saudi Arabia needs to use these weapons in their fight against 
terrorism.
  But how are they going to use laser-guided bombs to fight terrorists 
in their midst? Saudi Arabia very much wants these smart bombs. So our 
resolution sends a strong signal to the administration and to Saudi 
Arabia that friendship with the United States is a two-way street. If 
the Saudis want to see their weapons, we need to see an increase in 
crude oil production within the next 30 days. As we all know, the 
principal cause underlying the rise in gasoline prices has been a spike 
in crude oil prices, now over $120 a barrel, a 100-percent increase 
over the crude price at this point last year. A significant portion of 
this price rise is due to supply decisions made by OPEC. The largest 
member of OPEC, Saudi Arabia, controls one-fifth of the world's crude 
reserves and constitutes more than 10 percent of daily production of 
crude oil.
  In the past, Saudi Arabia has kept crude oil prices high by limiting 
supply, producing anywhere from 1 to 5 million barrels per day below 
capacity. Currently, they are producing 2 million barrels a day below 
capacity. Why? Why right now, when crude prices are at an historic 
high, are the Saudis continuing to cut back on production? Does it make 
any sense? It does if you are a member of OPEC. It does if you are 
ExxonMobil. But it doesn't if you are almost everybody else. With crude 
oil at the highest price ever, Saudi Arabia and other members of OPEC 
are making record profits, and Saudi Arabia is not alone. Last month 
big oil companies announced some of the best profits in recorded 
history. Exxon made almost $11 billion in profit last quarter. So we 
know OPEC has no incentive to increase their production right now, 
since that would decrease their profits. In fact, if Saudi Arabia were 
to increase its production by 1 million barrels per day, that 
translates to a reduction of 20 percent to 25 percent in the price of 
crude oil. Crude oil prices would fall by more than $25 a barrel from 
the current level of $126. In turn, that would lower the price of 
gasoline between 13 and 17 percent or by more than 62 cents off the 
expected summer price, if the Saudis would simply produce the amount of 
oil they used to produce when they were far more responsible. Yet Saudi 
Arabia's oil minister said there was no need to increase supplies by 
even one barrel of oil.

  But even as they are saying no, no, no to the United States, they are 
saying yes, yes, yes to China. They are doubling oil production for 
China. This is galling. When the President goes to Saudi Arabia and 
acts as if the Saudi King and the Saudi leadership are our good 
friends, he ought to look the American family in the eye and say that 
and say Saudi Arabia is a loyal ally. To most Americans, a well-armed 
Saudi Arabia is far less important than a reasonable price for 
gasoline, heating oil, and all other products upon which oil is based.
  The Saudis have to understand this is a two-way street. The President 
has to understand that the one-way street relationship with Saudi 
Arabia has to end. We provide them weapons. Our troops provide them 
protection. Then they rake us over the coals when it comes to the price 
of oil. Just as Saudi Arabia feels a need to protect itself with high-
tech, laser-guided missiles, American consumers and our economy need 
protection from record high oil prices, exacerbated by OPEC's 
stranglehold on supply. The administration needs to use all of the 
leverage it has to influence the OPEC cartel to stop manipulating the 
world's oil supply to its member nations' own wealth advantage. It is 
time we stop treating a cartel that would be illegal in the United 
States with kid gloves. That is what our resolution does. It reminds 
the Saudis there are consequences for keeping oil prices high at a time 
when American families are hurting. It reminds Saudi Arabia that it 
can't take American support for granted. They can choose record oil 
profits or American weapons, but they can't have both.
  I would like any Member of this Chamber and President Bush to look 
the average American family in the eye and say: There is nothing we can 
do to get Saudi Arabia to be responsible.
  There are things we can do; we just refuse to do them. This 
resolution has us step to the plate. The resolution is not the final 
answer, of course, to the problem of rising gas prices. That is why I 
am a proud cosponsor of S. 2991, the Consumer First Energy Act of 2008 
that we Democrats will offer on the floor before Memorial Day. That 
bill addresses underlying causes that are

[[Page S4114]]

driving up energy prices and forces big oil to reinvest some of their 
record-breaking profits into alternative and renewable sources of 
energy that are both good for the environment, the consumer, and break 
our dependence on foreign oil.
  Our bill will also attack the broader bill's speculation, punish 
price gouging, and put additional pressure on the OPEC cartel. I urge 
my colleagues on both sides of the aisle to support it. I am hopeful we 
can move on this resolution as soon as possible so American consumers 
no longer have to carry the heavy burden of high energy prices all by 
themselves.

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