[Congressional Record Volume 154, Number 89 (Monday, June 2, 2008)]
[Senate]
[Pages S4858-S4861]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                            CLIMATE SECURITY

  Mr. McCONNELL. Mr. President, I very much appreciate that the 
majority leader has generously allowed me to go ahead and make my 
remarks because I have a meeting.
  Having spent most of the past week in Kentucky, I can say with a 
pretty high level of confidence that the single most important issue to 
the people of my State is the fact that they are paying about twice as 
much for a gallon of gasoline as they were at this time last year. I am 
also fairly confident that Kentuckians aren't alone in their 
frustration. Gas prices are, without a doubt, the single most pressing 
issue for Americans at this moment. That is why it is so hard to 
comprehend the majority's decision to move to a bill at the start of 
the summer driving season that would raise the price of gas by as much 
as $1.40 a gallon, home electricity bills by 44 percent, and natural 
gas prices by about 20 percent.
  Now, of all times, is not the time to be increasing the burden on 
American consumers. Now is the time to be considering overdue 
legislation that would send gas prices down, not up. Now is the time to 
be considering and approving legislation that would allow Americans to 
increase energy production within our own borders and to accelerate the 
process of moving to clean nuclear energy. Now is the time to do 
something about $4-a-gallon gasoline, not something that would give us 
$6-a-gallon gas down the road. So the timing of this bill could not be 
worse, and the substance is just as bad.
  Let's be clear on something at the outset of this debate: The Senate 
supports reducing carbon emissions. Just last year, we took a serious 
bipartisan step to increase fuel economy standards in cars and trucks, 
increase the use of renewable fuels, and expand research into advanced 
technologies to reduce pollution and stress on our environment. But in 
everything we have done, we have kept a couple of nonnegotiable 
principles in mind: First, any legislation that reduces carbon 
emissions can't kill U.S. jobs, and second, any legislation in this 
area must promote--promote--innovation here at home.
  This legislation fails both of those tests miserably. If passed, it 
would have a devastating impact on the U.S. economy. It is at its heart 
a stealth and giant tax on virtually every aspect of industrial and 
consumer life. It would result in massive job losses. It seeks to 
radically alter consumer behavior without any measurable benefit to the 
environment in return. Overall, it is expected to result in GDP losses 
totaling as much as $2.9 trillion by 2050. If our economy were running 
on all cylinders, this bill would be terrible economically. At a time 
when the economy is struggling, when the price of gas, food, and power 
bills is skyrocketing, this giant tax would be an unbearable new burden 
for Americans to bear.
  The Senate has already expressed its willingness to cut carbon 
emissions, and this Congress has acted in a bipartisan way to reduce 
greenhouse gases by tightening automobile fuel economy standards and by 
requiring increased use of alternative fuels in last year's Energy 
bill. But moving forward, we should agree, with gas prices as high as 
they are now, that any further action in this area must protect 
American consumers and American jobs. This means investing in new, 
clean energy technologies, including clean coal technologies, which can 
capture and store carbon emissions. This means encouraging the 
construction of new zero-emission nuclear powerplants and ensuring 
continued domestic sources of enriched uranium. It means developing 
countries must also participate, countries such as India and China, 
which already exceed the United States in greenhouse gas emissions.
  Legislation that fails to address clean coal technologies would have 
a disproportionately negative economic impact on States such as 
Kentucky that rely on coal-fired powerplants. According to one study, 
this bill would eliminate nearly 55,000 jobs in my State alone and cost 
the average Kentucky household more than $6,000 a year. This is an 
unthinkable economic burden to lay on the citizens of my State, 
especially when developing nations such as India and China wouldn't be 
held to the same standards. The impact of this climate tax is too great 
to bear for Kentuckians and for the rest of the country.
  At a time when Americans are struggling to pay their bills and when 
the price of gas seems to be rising higher and higher every day, the 
majority is showing itself to be laughably out of touch by moving to a 
bill that would raise the price of gas even higher.
  This proposed climate tax legislation would be a bad idea even if its 
impact were beyond dispute. The fact that experts tell us its actual 
impact on reducing global temperatures is hardly measurable--and will 
be negligible if China and India do not approve similar measures--makes 
the wisdom of moving to it at this time even more questionable. Why 
would we raise the price of gas, the cost of electricity, the cost of 
food, and put the brakes on our economy when it will be all for nothing 
if China and India aren't willing to do the same? And who exactly 
expects these developing nations to take similar action to slow their 
economic growth and raise prices for their consumers? No one expects 
that. No one seriously anticipates that they will approve anything 
similar to this legislation, which means that for American consumers, 
the Boxer bill is all cost and no benefit.
  There is a better way to move forward. Climate change is a serious 
issue, and we should continue taking action to address it, as we did in 
last year's Energy bill. But the way to proceed is to invest in clean 
energy technologies that allow us to reduce greenhouse gas emissions 
without harming our economy, sending jobs overseas, and raising energy 
prices across the board for U.S. workers, families, farmers, and 
truckers. Republicans are eager to begin this debate, and we will have 
amendments that protect consumers from the price increases and job 
losses in the Boxer substitute.
  Some of the problems with this bill have been explored in a number of 
excellent articles over the past few days. I note in particular an 
article by George Will entitled ``Carbon's Power Brokers''; an article 
by Charles Krauthammer entitled ``Carbon Chastity''; an editorial in 
today's Wall Street Journal entitled ``Cap and Spend''; a column by 
Robert Samuelson; and an article in today's New York Post by Jerry 
Taylor entitled ``Solving Pump Pain.''
  Mr. President, I ask unanimous consent to have all five articles 
printed in the Record at this point.

[[Page S4859]]

  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                [From Real Clear Politics, June 1, 2008]

                         Carbon's Power Brokers

                            (By George Will)

       Washington.--An unprecedentedly radical government grab for 
     control of the American economy will be debated this week 
     when the Senate considers saving the planet by means of a 
     cap-and-trade system to ration carbon emissions. The plan is 
     co-authored (with John Warner) by Joe Lieberman, an ardent 
     supporter of John McCain, who supports Lieberman's 
     legislation and recently spoke about ``the central facts of 
     rising temperatures, rising waters and all the endless 
     troubles that global warming will bring.''
       Speaking of endless troubles, ``cap-and-trade'' comes 
     cloaked in reassuring rhetoric about the government merely 
     creating a market, but government actually would create a 
     scarcity so government could sell what it has made scarce. 
     The Wall Street Journal underestimates cap-and-trade's 
     perniciousness when it says the scheme would create a new 
     right (``allowances'') to produce carbon dioxide and would 
     put a price on the right. Actually, because freedom is the 
     silence of the law, that right has always existed in the 
     absence of prohibitions. With cap-and-trade, government would 
     create a right for itself--an extraordinarily lucrative right 
     to ration Americans' exercise of their traditional rights.
       Businesses with unused emission allowances could sell their 
     surpluses to businesses that exceed their allowances. The 
     more expensive and constraining the allowances, the more 
     money government would gain.
       If carbon emissions are the planetary menace that the 
     political class suddenly says they are, why not a 
     straightforward tax on fossil fuels based on each fuel's 
     carbon content? This would have none of the enormous 
     administrative costs of the baroque cap-and-trade regime. And 
     a carbon tax would avoid the uncertainties inseparable from 
     cap-and-trade's government allocation of emission permits 
     sector by sector, industry by industry. So a carbon tax would 
     be a clear and candid incentive to adopt energy-saving and 
     carbon-minimizing technologies. That is the problem,
       A carbon tax would be too clear and candid for political 
     comfort. It would clearly be what cap-and-trade deviously is, 
     a tax, but one with a known cost. Therefore, taxpayers would 
     demand a commensurate reduction of other taxes. Cap-and-
     trade--government auctioning permits for businesses to 
     continue to do business--is a huge tax hidden in a 
     bureaucratic labyrinth of opaque permit transactions.
       The proper price of permits for carbon emissions should 
     reflect the future warming costs of current emissions. That 
     is bound to be a guess based on computer models built on 
     guesses. Lieberman guesses that the market value of all 
     permits would be ``about $7 trillion by 2050.'' Will that 
     staggering sum pay for a $7 trillion reduction of other 
     taxes? Not exactly.
       It would go to a Climate Change Credit Corp., which 
     Lieberman calls ``a private-public entity'' that, operating 
     outside the budget process, would invest ``in many things.'' 
     This would be industrial policy, aka socialism, on a grand 
     scale--government picking winners and losers, all of whom 
     will have powerful incentives to invest in lobbyists to 
     influence government's thousands of new wealth-allocating 
     decisions.
       Lieberman's legislation also would create a Carbon Market 
     Efficiency Board empowered to ``provide allowances and alter 
     demands'' in response to ``an impact that is much more 
     onerous'' than expected. And Lieberman says that if a foreign 
     company selling a product in America ``enjoys a price 
     advantage over an American competitor'' because the American 
     firm has had to comply with the cap-and-trade regime, ``we 
     will impose a fee'' on the foreign company ``to equalize the 
     price.'' Protectionism-masquerading-as-environmentalism will 
     thicken the unsavory entanglement of commercial life and 
     political life.
       McCain, who supports Lieberman's unprecedented expansion of 
     government's regulatory reach, is the scourge of all 
     lobbyists (other than those employed by his campaign). But 
     cap-and-trade would be a bonanza for K Street, the lobbyists' 
     habitat, because it would vastly deepen and broaden the 
     upside benefits and downside risks that the government's 
     choices mean for businesses.
       McCain, the political hygienist, is eager to reduce the 
     amount of money in politics. But cap-and-trade, by hugely 
     increasing the amount of politics in the allocation of money, 
     would guarantee a surge of money into politics.
       Regarding McCain's ``central facts,'' the U.N.'s World 
     Meteorological Organization, which helped establish the 
     Intergovernmental Panel on Climate Change--co-winner, with Al 
     Gore, of the Nobel Prize--says global temperatures have not 
     risen in a decade. So Congress might be arriving late at the 
     save-the-planet party. Better late than never? No. When 
     government, ever eager to expand its grip on the governed and 
     their wealth, manufactures hysteria as an excuse for doing 
     so, then: better never.
                                  ____


                [From the Washington Post, May 30, 2008]

Carbon Chastity--The First Commandment of the Church of the Environment

                        (By Charles Krauthammer)

       I'm not a global warming believer. I'm not a global warming 
     denier. I'm a global warming agnostic who believes 
     instinctively that it can't be very good to pump lots of 
     CO2 into the atmosphere but is equally convinced 
     that those who presume to know exactly where that leads are 
     talking through their hats.
       Predictions of catastrophe depend on models. Models depend 
     on assumptions about complex planetary systems--from ocean 
     currents to cloud formation--that no one fully understands. 
     Which is why the models are inherently flawed and forever 
     changing. The doomsday scenarios posit a cascade of events, 
     each with a certain probability. The multiple improbability 
     of their simultaneous occurrence renders all such predictions 
     entirely speculative.
       Yet on the basis of this speculation, environmental 
     activists, attended by compliant scientists and opportunistic 
     politicians, are advocating radical economic and social 
     regulation. ``The largest threat to freedom, democracy, the 
     market economy and prosperity,'' warns Czech President Vaclav 
     Klaus, ``is no longer socialism. It is, instead, the 
     ambitious, arrogant, unscrupulous ideology of 
     environmentalism.''
       If you doubt the arrogance, you haven't seen that Newsweek 
     cover story that declared the global warming debate over. 
     Consider: If Newton's laws of motion could, after 200 years 
     of unfailing experimental and experiential confirmation, be 
     overthrown, it requires religious fervor to believe that 
     global warming--infinitely more untested, complex and 
     speculative--is a closed issue.
       But declaring it closed has its rewards. It not only 
     dismisses skeptics as the running dogs of reaction, i.e., of 
     Exxon, Cheney and now Klaus. By fiat, it also hugely re-
     empowers the intellectual left.
       For a century, an ambitious, arrogant, unscrupulous 
     knowledge class--social planners, scientists, intellectuals, 
     experts and their left-wing political allies--arrogated to 
     themselves the right to rule either in the name of the 
     oppressed working class (communism) or, in its more benign 
     form, by virtue of their superior expertise in achieving the 
     highest social progress by means of state planning 
     (socialism).
       Two decades ago, however, socialism and communism died 
     rudely, then were buried forever by the empirical 
     demonstration of the superiority of market capitalism 
     everywhere from Thatcher's England to Deng's China, where 
     just the partial abolition of socialism lifted more people 
     out of poverty more rapidly than ever in human history.
       Just as the ash heap of history beckoned, the intellectual 
     left was handed the ultimate salvation: environmentalism. Now 
     the experts will regulate your life not in the name of the 
     proletariat or Fabian socialism but--even better--in the name 
     of Earth itself.
       Environmentalists are Gaia's priests, instructing us in her 
     proper service and casting out those who refuse to genuflect. 
     (See Newsweek above.) And having proclaimed the ultimate 
     commandment--carbon chastity--they are preparing the 
     supporting canonical legislation that will tell you how much 
     you can travel, what kind of light you will read by, and at 
     what temperature you may set your bedroom thermostat.
       Only Monday, a British parliamentary committee proposed 
     that every citizen be required to carry a carbon card that 
     must be presented, under penalty of law, when buying 
     gasoline, taking an airplane or using electricity. The card 
     contains your yearly carbon ration to be drawn down with 
     every purchase, every trip, every swipe.
       There's no greater social power than the power to ration. 
     And, other than rationing food, there is no greater 
     instrument of social control than rationing energy, the 
     currency of just about everything one does and uses in an 
     advanced society.
       So what does the global warming agnostic propose as an 
     alternative? First, more research--untainted and reliable--to 
     determine (a) whether the carbon footprint of man is or is 
     not lost among the massive natural forces (from sunspot 
     activity to ocean currents) that affect climate, and (b) if 
     the human effect is indeed significant, whether the planetary 
     climate system has the homeostatic mechanisms (like the 
     feedback loops in the human body, for example) with which to 
     compensate.
       Second, reduce our carbon footprint in the interim by doing 
     the doable, rather than the economically ruinous and socially 
     destructive. The most obvious step is a major move to nuclear 
     power, which to the atmosphere is the cleanest of the clean.
       But your would-be masters have foreseen this contingency. 
     The Church of the Environment promulgates secondary dogmas as 
     well. One of these is a strict nuclear taboo.
       Rather convenient, is it not? Take this major coal-
     substituting fix off the table, and we will be rationing all 
     the more. Guess who does the rationing.
                                  ____


              [From the Wall Street Journal, June 2, 2008]

                             Cap and Spend

       As the Senate opens debate on its mammoth carbon regulation 
     program this week, the phrase of the hour is ``cap and 
     trade.'' This sounds innocuous enough. But anyone who looks 
     at the legislative details will quickly see that a better 
     description is cap and spend. This is easily the largest 
     income redistribution scheme since the income tax.
       Sponsored by Joe Lieberman and John Warner, the bill would 
     put a cap on carbon

[[Page S4860]]

     emissions that gets lowered every year. But to ease the pain 
     and allow for economic adjustment, the bill would dole out 
     ``allowances'' under the cap that would stand for the right 
     to emit greenhouse gases. Senator Barbara Boxer has 
     introduced a package of manager's amendments that mandates 
     total carbon reductions of 66% by 2050, while earmarking the 
     allowances.
       When cap and trade has been used in the past, such as to 
     reduce acid rain, the allowances were usually distributed for 
     free. A major difference this time is that the allowances 
     will be auctioned off to covered businesses, which means 
     imposing an upfront tax before the trade half of cap and 
     trade even begins. It also means a gigantic revenue windfall 
     for Congress.
       Ms. Boxer expects to scoop up auction revenues of some 
     $3.32 trillion by 2050. Yes, that's trillion. Her friends in 
     Congress are already salivating over this new pot of gold. 
     The way Congress works, the most vicious floor fights won't 
     be over whether this is a useful tax to create, but over who 
     gets what portion of the spoils. In a conference call with 
     reporters last Thursday, Massachusetts Senator John Kerry 
     explained that he was disturbed by the effects of global 
     warming on ``crustaceans'' and so would be pursuing changes 
     to ensure that New England lobsters benefit from some of the 
     loot.
       Of course most of the money will go to human 
     constituencies, especially those with the most political 
     clout. In the Boxer plan, revenues are allocated down to the 
     last dime over the next half-century. Thus $802 billion would 
     go for ``relief' for low-income taxpayers, to offset the 
     higher cost of lighting homes or driving cars. Ms. Boxer will 
     judge if you earn too much to qualify.
       There's also $190 billion to fund training for ``green-
     collar jobs,'' which are supposed to replace the jobs that 
     will be lost in carbon-emitting industries. Another $288 
     billion would go to ``wildlife adaptation,'' whatever that 
     means, and another $237 billion to the states for the same 
     goal. Some $342 billion would be spent on international aid, 
     $171 billion for mass transit, and untold billions for 
     alternative energy and research--and we're just starting.
       Ms. Boxer would only auction about half of the carbon 
     allowances; she reserves the rest for politically favored 
     supplicants. These groups might be Indian tribes (big 
     campaign donors!), or states rewarded for ``taking the lead'' 
     on emissions reductions like Ms. Boxer's California. Those 
     lucky winners would be able to sell those allowances for 
     cash. The Senator estimates that the value of the handouts 
     totals $3.42 trillion. For those keeping track, that's more 
     than $6.7 trillion in revenue handouts so far.
       The bill also tries to buy off businesses that might 
     otherwise try to defeat the legislation. Thus carbon-heavy 
     manufacturers like steel and cement will get $213 billion 
     ``to help them adjust,'' while fossil-fuel utilities will get 
     $307 billion in ``transition assistance.'' No less than $34 
     billion is headed to oil refiners. Given that all of these 
     folks have powerful Senate friends, they will probably 
     extract a larger ransom if cap and trade ever does become 
     law.
       If Congress is really going to impose this carbon tax in 
     the name of saving mankind, the least it should do is forego 
     all of this political largesse. In return for this new tax, 
     Congress should cut taxes elsewhere to make the bill revenue 
     neutral. A ``tax swap'' would offset the deadweight taxes 
     that impede growth and reduce employment. All the more so 
     because even the cap-and-trade friendly Environmental 
     Protection Agency estimates that the bill would reduce GDP 
     between $1 trillion and $2.8 trillion by 2050.
       Most liberal economists favor using the money to reduce the 
     payroll tax. That has the disadvantage politically of adding 
     Social Security into the debate. A cleaner tax swap would 
     compensate for the new tax on business by cutting taxes on 
     investment--such as slashing the 35% U.S. corporate rate that 
     is the second highest in the developed world. Then there's 
     the 2001 and 2003 tax cuts, which are set to expire in 2010 
     and would raise the overall tax burden by $2.8 trillion over 
     the next decade. Democrats who want to raise taxes on capital 
     gains and dividends are proposing a double tax wallop by 
     embracing Warner-Lieberman-Boxer.
       All of this helps explain why so many in Congress are so 
     enamored of ``doing something'' about global warming. They 
     would lay claim to a vast new chunk of the private economy 
     and enhance their own political power.
                                  ____


                [From the Washington Post, June 2, 2008]

                      Just Call It ``Cap-and-Tax''

                        (By Robert J. Samuelson)

       We'll have to discard the old adage ``Everyone talks about 
     the weather, but no one does anything about it.'' It is 
     inoperative in this era of global warming, because the whole 
     point of controlling greenhouse gas emissions is to do 
     something about the weather. This promises to be hard and 
     perhaps futile, but there are good and bad ways of attempting 
     it. One of the bad ways is cap-and-trade. Unfortunately, it's 
     the darling of environmental groups and their political 
     allies.
       The chief political virtue of cap-and-trade--a complex 
     scheme to reduce greenhouse gases--is its complexity. This 
     allows its environmental supporters to shape public 
     perceptions in essentially deceptive ways. Cap-and-trade 
     would act as a tax, but it's not described as a tax. It would 
     regulate economic activity, but it's promoted as a ``free 
     market'' mechanism. Finally, it would trigger a tidal wave of 
     influence-peddling, as lobbyists scrambled to exploit the 
     system for different industries and localities. This would 
     undermine whatever abstract advantages the system has.
       The Senate is scheduled to begin debating a cap-and-trade 
     proposal today, and although it's unlikely to pass, the 
     concept will return because all the major presidential 
     candidates support it. Cap-and-trade extends the long 
     government tradition of proclaiming lofty goals that are 
     impossible to achieve. We've had ``wars'' against poverty, 
     cancer and drugs, but poverty, cancer and drugs remain. 
     President Bush called his landmark education law No Child 
     Left Behind rather than the more plausible Few Children Left 
     Behind.
       Carbon-based fuels (oil, coal, natural gas) provide about 
     85 percent of U.S. energy and generate most greenhouse gases. 
     So, the simplest way to stop these emissions is to regulate 
     them out of existence. Naturally, that's what cap-and-trade 
     does. Companies could emit greenhouse gases only if they had 
     annual ``allowances''--quotas--issued by the government. The 
     allowances would gradually decline. That's the ``cap.'' 
     Companies (utilities, oil refineries) that needed extra 
     allowances could buy them from companies willing to sell. 
     That's the ``trade.''
       In one bill, the 2030 cap on greenhouse gases would be 35 
     percent below the 2005 level and 44 percent below the level 
     projected without any restrictions. By 2050, U.S. greenhouse 
     gases would be rapidly vanishing. Even better, their 
     disappearance would allegedly be painless. Reviewing five 
     economic models, the Environmental Defense Fund asserts that 
     the cuts can be achieved ``without significant adverse 
     consequences to the economy.'' Fuel prices would rise, but 
     because people would use less energy, the impact on household 
     budgets would be modest.
       This is mostly make-believe. If we suppress emissions, we 
     also suppress today's energy sources, and because the economy 
     needs energy, we suppress the economy. The models magically 
     assume smooth transitions. If coal is reduced, then 
     conservation or non-fossil-fuel sources will take its place. 
     But in the real world, if coal-fired power plants are 
     canceled (as many were last year), wind or nuclear won't 
     automatically substitute. If the supply of electricity 
     doesn't keep pace with demand, brownouts or blackouts will 
     result. The models don't predict real-world consequences. Of 
     course, they didn't forecast $135-a-barrel oil.
       As emission cuts deepened, the danger of disruptions would 
     mount. Population increases alone raise energy demand. From 
     2006 to 2030, the U.S. population will grow 22 percent (to 
     366 million) and the number of housing units 25 percent (to 
     141 million), the Energy Information Administration projects. 
     The idea that higher fuel prices will be offset mostly by 
     lower consumption is, at best, optimistic. The Congressional 
     Budget Office has estimated that a 15 percent cut of 
     emissions would raise average household energy costs by 
     almost $1,300 a year.
       That's how cap-and-trade would tax most Americans. As 
     ``allowances'' became scarcer, their price would rise, and 
     the extra cost would be passed along to customers. Meanwhile, 
     government would expand enormously. It could sell the 
     allowances and spend the proceeds; or it could give them 
     away, providing a windfall to recipients. The Senate proposal 
     does both to the tune of about $1 trillion from 2012 to 2018. 
     Beneficiaries would include farmers, Indian tribes, new 
     technology companies, utilities and states. Call this 
     ``environmental pork,'' and it would just be a start. The 
     program's potential to confer subsidies and preferential 
     treatment would stimulate a lobbying frenzy. Think of today's 
     farm programs--and multiply by 10.
       Unless we find cost-effective ways of reducing the role of 
     fossil fuels, a cap-and-trade system will ultimately break 
     down. It wouldn't permit satisfactory economic growth. But if 
     we're going to try to stimulate new technologies through 
     price, let's do it honestly. A straightforward tax on carbon 
     would favor alternative fuels and conservation just as much 
     as cap-and-trade but without the rigid emission limits. A tax 
     is more visible and understandable. If environmentalists 
     still prefer an allowance system, let's call it by its proper 
     name: cap-and-tax.
                                  ____


                 [From the New York Post, June 2, 2008]

                           Solving Pump Pain

                           (By Jerry Taylor)

       Skyrocketing energy prices are hammering Americans.
       Five years ago this week, gasoline cost an average of $1.43 
     a gallon at the pump; this week, it's $3.94. And home 
     electricity averaged 5.43 cents per kilowatt-hour in 2003; it 
     was up to 10.31 cents in December.
       The underlying cause, of course, is that oil, coal and 
     natural-gas prices have all gone berserk--with no relief in 
     sight.
       What to do?
       Individually, of course, most of us will start conserving--
     people are already driving less, buying more fuel-efficient 
     cars, etc. We'll keep on finding ways to save as prices stay 
     high.
       Should the government mandate even more conservation? No, 
     ``too much'' conservation is as economically harmful as ``too 
     little.'' Just consider the economic harm that would be 
     delivered by, say, capping speed limits at 30 miles per hour, 
     or banning recreational long-distance travel. Both would save 
     gobs of energy--but at the cost of doing more harm than good.

[[Page S4861]]

       The only thing government should do on this front is ensure 
     that prices are ``right''--that is, that they reflect total 
     costs. That's mainly an issue for electricity, where retail 
     power prices typically bear little relation to wholesale 
     prices. State governments need to encourage real-time pricing 
     of electricity--so that consumers will get the signal to, for 
     example, run the clothes dryer at night, when power is 
     cheaper.
       (Incidentally, those who argue that gas and diesel prices 
     don't reflect important ``external'' environmental and 
     national-security costs are simply wrong--at best, those 
     added costs are trivial on a per-gallon basis.)
       But there's a fair bit to do on the supply side. Congress 
     could take four positive steps--if it really wants to bring 
     prices down.
       Open up key areas for oil and gas exploration and 
     development. Washington has declared the Arctic National 
     Wildlife Refuge and 85 percent of the outer continental shelf 
     off-limits. It's absurd for our politicians to fulminate 
     about the need for more oil production from OPEC when they 
     won't lift a finger to increase oil production here at home.
       That said, it will take years to get these fields on-line 
     (all the more reason to start now!)--and they'll do more for 
     natural-gas prices than for oil.
       By the time those new fields would be producing, global oil 
     production will probably be about 100 million barrels per 
     day. Optimistically, the fields would yield about 3 million 
     more barrels a day--for a long-run cut in the price of crude 
     of about 3 percent.
       But U.S. natural-gas reserves are almost certainly far 
     greater--and gas prices are highly sensitive to regional 
     (rather than global) supply and demand issues, so we'd likely 
     see far greater reductions in electricity prices.
       Open up the West to oil-shale development. The United 
     States has three times more petroleum locked up in shale rock 
     than Saudi Arabia has in all its proved reserves. But this 
     U.S. oil is costly to extract. Oil prices need to be at about 
     $95 a barrel to allow a reasonable profit from extracting oil 
     from Rocky Mountain shale.
       Well, it's probably profitable now, there's undoubtedly 
     great investor interest in harnessing shale. Only problem: 
     It's mostly on federal land; Washington has so far said, 
     ``Hands off!''
       Environmentalists object to both these first two ideas--
     insisting that the wilderness that would be despoiled by 
     energy extraction is worth more than the energy itself. 
     That's nonsense--faith masquerading as fact.
       How much something is worth is determined by how much 
     people are willing to pay for it. If these lands were 
     auctioned off, energy companies (the market representatives 
     of energy consumers) would outbid environmentalists for 
     virtually all of them.
       Empty out the Strategic Petroleum Reserve. This now holds 
     700 million barrels of oil; draining it could add add up to 
     4.3 billion barrels of crude a day to the market for about 
     five months. That's nothing to sneeze at--it's about half of 
     what the Saudis now pump and almost twice what Kuwait puts on 
     the market.
       At the very least, this would bring gasoline prices down. 
     And if the theories of a speculator-created ``oil bubble'' 
     are true (I doubt they are), it would pop the bubble and send 
     prices tumbling.
       What of the national-security risk? Another myth. As long 
     as we're willing to pay market prices for crude oil, we can 
     have all the oil we want--embargo or no embargo.
       A real U.S. physical shortage is impossible unless a) all 
     international oil actors refused to do business with us--
     which won't happen, or b) a foreign navy stopped oil 
     shipments to U.S. ports--which is the U.S. Navy is more than 
     competent to prevent.
       Opening this spigot now also means a $70 billion windfall 
     for the U.S. Treasury.
       Suspend (or end) federal rules that force refiners to use 
     only low-sulfur oil to make gasoline and diesel. This is 
     easily the best short-term fix for high gas prices.
       Refiners were once relatively free to use heavy crude to 
     make transportation fuel. Today, environmental regulations 
     make it difficult and costly. And there's actually a 
     (relative) glut of heavy crude right now.
       Light-crude oil markets are incredibly tight, with no real 
     excess production capacity. Heavy-crude markets are robust, 
     with plenty of crude going unsold for lack of buyers.
       Suspending low-sulfur rules would bring those heavy crudes 
     into the transportation fuels. Oil economist Phil Verleger 
     says it could well send gasoline and diesel prices 
     plummeting.

  Mr. McCONNELL. It is my expectation that once we get on the bill, the 
majority will allow for amendments, and I expect there will be a rather 
robust debate on the merits of this climate tax legislation. I know 
many of my Members are anxious to begin the debate.
  Again, I thank the majority leader for the opportunity to go first 
today. I appreciate it very much.
  The ACTING PRESIDENT pro tempore. The majority leader is recognized.

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