[Congressional Record Volume 154, Number 90 (Tuesday, June 3, 2008)]
[Senate]
[Pages S4908-S4910]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                          HIGH COST OF ENERGY

  Mr. NELSON of Florida. Mr. President, I wanted Sara Sanders to come 
over here and be on the floor while I am speaking, because this 
photograph is of her hometown, Madison, FL, in Madison County, which is 
in north Florida. If you examine this photograph of downtown Madison, 
here is the old courthouse, and across U.S. 90 is this Shell gasoline 
station.
  This photograph is from a couple of days ago, and you can see that 
regular is $4.09.9 a gallon, and premium is $4.33.9 a gallon. This is 
certainly a record for Florida, and it is especially a record for the 
rural parts of Florida, which Madison County, part of north Florida, is 
a part of.
  Last week, when we were in recess, I did 18 townhall meetings all 
over the State of Florida, and I can tell you our people are hurting. 
They are hurting because they are having difficulty making financial 
ends meet. Our people are hurting and are having difficulty making 
their paycheck go far enough. Our people, particularly those who have 
to drive long distances and don't have any alternative of mass transit 
to get to work, are having difficulty being able to afford getting to 
work. That is symbolized by this photograph of a couple of days ago in 
Madison, FL--$4.10 for a gallon of regular gas.
  Where is it going to go? Well, I wish to have you look at this 
particular chart. Now, this indicates to us what has happened to the 
price of gas over the last 8 years. In January of 2001, the price of 
gas was at $1.47. Seven and one-half years later, the price at the end 
of May was $3.94 a gallon. This is a national average. As that 
photograph reflected, it has exceeded, even in rural parts of America, 
$4 a gallon.
  It rocked along here at less than $1.50 for a couple of years. Then, 
in 2003, it jumped above $1.50 and started to gradually climb. Then, in 
2005, it spiked up right after Katrina. As a matter of fact, overnight, 
when Katrina hit, it went from about $2.65 to up over $3. It gyrated 
back and forth, exceeding that $3 limit, and look what has happened in 
the last month or 2 months. It has gone from less than $3 a gallon all 
the way up to $4 a gallon.
  There is something that is going on, and people are sick and tired 
because they are frustrated they can't afford this. By the way, Florida 
is a microcosm of America. A lot of America has moved to Florida and, 
therefore, when you look at a representative sampling of this country, 
our State is a microcosm. And having been all over the State for all of 
these townhall meetings this past week, I can tell you that people's 
frustrations are turning to anger. They do not know what to do, but 
they want their Government to act.
  Now, what do we do? Well, I must say it is very interesting that we 
hear coming from parts of the energy sector the same old story: We have 
to drill more. If you could drill more and you could get it to market 
immediately, that would certainly bring some relief. But when that is 
said, the full story isn't told. Because when the oil companies say 
they want to drill more, and that supply and demand will take care of 
the problem, what they fail to say--and they fail purposely to say 
this--is that there are 33 million acres under lease that are submerged 
lands--33 million acres--of which they haven't drilled. It is there. 
They have not drilled.
  Of course, a side issue here is the constant pressure to come in and 
drill off of our coast, off of the east coast of the United States and 
off of the west coast. But there are 33 million acres under lease, 
submerged, that are already available. Plus, there are another 34 
million acres that are either owned or leased on lands that have not 
been drilled. Now, you don't hear that, but that is a fact. Of those 33 
million acres that are submerged, and that are under lease and ready to 
be drilled, or to go through the process of leasing, they ignore the 
fact that we worked out a compromise 2 or 3 years ago where we would 
add an additional 8.3 million acres of submerged lands in the Gulf of 
Mexico that could be leased. We kept that away from the military 
training area, which is most of the Gulf of Mexico off of the State of 
Florida.
  All that submerged land is there for drilling, but of course we hear 
the same old refrain from over the years: Well, let's drill. Let's 
drill our way out of the problem. The fact is that is a red herring to 
get us off of the ultimate solution to this problem. The answer is not 
just drill, the answer is alternative energy sources.
  Now, let me put it another way. The United States has only 3 percent 
of the world's oil reserves, but the United States consumes 25 percent 
of the world's oil production. If you only have 3 percent of the 
world's oil reserves but you are consuming every day 25 percent of the 
world's oil production, doesn't that suggest to you that you can't 
drill your way out of the problem; that you ought to be looking to 
different solutions?
  I am going to suggest a few. But first I want to go back in history. 
What has happened in America? First, we had a wake-up call. Remember, 
it was back in the early 1970s. The OPEC cartel was formed and they 
decided to have an oil embargo, and so the price of oil jumped per 
barrel something like from the $2 or $3 a barrel price to suddenly $10 
and

[[Page S4909]]

a little more, and the long gas lines occurred. There was world oil 
panic and we vowed we were going to do something about it. As a matter 
of fact, the President of the United States at the time said, We are 
going to make ourselves energy independent.
  Well, here we are, 3\1/2\ decades later, and it is not the United 
States that is energy independent, it is Brazil that is energy 
independent. In those early 1970s, after that scare, when we vowed we 
were going to do something about it, we went back to sleep. Then in the 
late 1970s, we had another wake-up call. This wake-up call was the 
Iranian hostage crisis. Remember how the oil markets got jittery and we 
started having the long lines at the gas stations again, and we said, 
We are going to do something about this energy independence on foreign 
oil? Then what happened? We collectively, as a nation, went back to 
sleep.
  Cheap oil was part of the problem. It seduced us, even though that 
cheap oil was continuing to get a little more expensive. So, then, we 
get up to the end of the decade of the 1980s and Saddam Hussein 
suddenly moves on Kuwait and takes over another country and their oil 
fields. We had another crisis and oil spikes again. The Nation was in 
an energy crisis. Our foreign oil supplies were being threatened, and 
we make another vow that we are going to do something about it. And 
what happens? We allow ourselves to be lulled by the sweet dulcet tones 
of being reliant on a cheap energy source, even though it was getting 
higher and higher, and we go back to sleep.
  Then we turn the century. Suddenly, we have September 11. Then we 
have Afghanistan. Then we have the Iraq war. All of those oil supplies 
in that region of the world are threatened and, suddenly, everyone is 
getting jittery. At the same time, China is emerging as an industrial 
power, and so is India. They are demanding more and more of the world's 
oil supplies and the supplies are getting tighter and tighter and the 
price starts going up and up. Still, on the Senate floor with my 
colleague, the senior Senator from California, as I have assisted her 
for the last 8 years, each year trying to increase miles per gallon in 
the fleet average of our automobiles, we are not able to get the votes 
to pass it. We allow ourselves to be lulled and lulled back to sleep.
  Finally, because of the way this gas price spiked after Katrina to 
over $3, finally we were able to marshal the political will so that we 
could change the miles per gallon, a modest change, to 35 miles per 
gallon from 25 miles per gallon--although that 25-miles-per-gallon 
standard set in the 1980s was illusory because light trucks and SUVs 
were exempt. We were able to get to a new standard to include all and a 
fleet average of 35 miles per gallon--but it would not be fully phased 
in, over the period of the next 12 years, until the date of 2020.
  Before I offer some additional solutions, why has oil, as measured in 
gas prices, gone, in just a few months, from $3 a gallon to over $4 a 
gallon?
  Is the President indicating that I do not have any further time, Mr. 
President? Is the Presiding Officer indicating I do not have any 
further time?
  The ACTING PRESIDENT pro tempore. No. The Senator has spoken for 15 
minutes. I was consulting with the Parliamentarian to see if there were 
limits. There were none.
  Mr. NELSON of Florida. That was my understanding. Mr. President, does 
the Senator from California want to speak?
  Mrs. FEINSTEIN. Through the Chair to the Senator from Florida, I am 
the first speaker on the global warming bill. Do what you need to do. I 
thank the Senator.
  Mr. NELSON of Florida. I am having a good time doing it, too. I will 
wrap up within the next 5 or so minutes.
  Why, then, other than what we have already talked about--the 
tightness of the world's oil market--why, in just the last couple of 
months, has it spiked from $3 a gallon to over $4 a gallon? Why, in 
Madison, FL, a rural part of Florida, 2 days ago, was regular gas at 
$4.10?
  Part of that reason, of course, is what we have talked about, the 
world tightness. Part of it is that the United States relies on oil 
from foreign shores for 60 percent of its daily consumption of oil from 
places such as the Persian Gulf and Nigeria and Venezuela--the Persian 
Gulf, roughly 20 percent of our oil supply; Nigeria, 12 percent of our 
daily supply; Venezuela, 14 percent of our daily supply. I have just 
mentioned three very unstable parts of the world. That is part of the 
skittishness of this world oil market. But there have to be additional 
reasons.
  How about the weakness of the dollar? You know what we could do about 
that? Here is a solution. We could start bringing our budget back into 
balance instead of going out where spending is here but revenues are 
only here and the difference each year we have to borrow. Guess whom we 
are borrowing from--China and Japan. They are buying our debt in order 
for us to meet our expenditures. If we bring that budget back into 
balance, we can start strengthening our dollar, which will help us in 
this overall global market of oil since oil is sold in U.S. dollars.
  But I think the biggest part of this spike is that we have world oil 
markets that are buying futures contracts, and the speculators are 
speculating up the price as they bid up the price, and they are not 
having to put down a substantial amount of money. They are only putting 
down about 6 percent of the total oil contract, so 94 percent they are 
basically getting on future credit, and that means they can bid up that 
price.
  The question is, Are we going to get in and start checking out these 
commodities exchanges? Are we going to get a Commodity Futures Trading 
Commission that will crack the whip, that will examine this speculation 
driving up the price?
  We passed a part 2 weeks ago in the farm bill that is now law that 
will close that Enron loophole that occurred in the year 2000, that 
exempted Enron and others from oversight in the trading markets for 
energy. That certainly has allowed that speculation to go on. We got a 
little victory there, on the Commodity Futures Trading Commission.
  The bottom line is, if we are going to solve this problem we have to 
have the political will. This Senator will be speaking about the 
Lieberman-Warner bill later on, but there is all kinds of inflammatory 
rhetoric about how this is going to jack up the price of gasoline and 
of oil.
  But the fundamental problem is we have to have the political will to 
start going to alternative sources in order to break the stranglehold 
of dependence on oil and particularly foreign oil. That means we are 
going to have to go to alternative sources such as biofuels. We are 
going to have to pour the money into research and development on 
cellulosic ethanol. Ethanol, of course, we can mix in our existing cars 
with gasoline, and that yields much less consumption of oil.
  In the new vehicles, the new cars, you can take 85 percent of ethanol 
and mix it with 15 percent of gasoline. Just think how much less is the 
use of oil. Or you put all of that mixture--85 ethanol, 15 gasoline--
into a hybrid, and what about a plug-in hybrid? Suddenly you have 
expanded your equivalent miles per gallon of oil consumed to upwards of 
several hundreds of miles. We have the technology to do this. The 
question is, Do we have the political will? That is what I bring us 
back around to.
  There is a lot of inflammatory rhetoric about how, if you try this 
new thing or you try that new thing--don't do it. Go back on the old, 
reliable oil. I have seen frustration grow into anger out there as I 
faced my constituents and tried to give them hope this past week in 
those 18 townhall meetings. They need hope. We need to help provide 
that hope.
  The next President of the United States needs to help provide that 
hope. I want to be a part of that solution, to provide that hope. This 
Senator is going to continue to speak out against those voices that 
would say: No, no, just do it the same old way.
  It is time for change. It is time for bold ideas. It is time for 
research and development. It is time to take the competitive genius of 
America, this Yankee ingenuity, our ability to create, our ability in 
our technological prowess--it is time to utilize all of those assets 
and to break through to a new beginning.
  I yield the floor.
  The ACTING PRESIDENT pro tempore. There is 7 minutes remaining in

[[Page S4910]]

morning business. The Senator from California.
  Mrs. FEINSTEIN. If I may, it is my understanding there is an 
agreement that I would be the first speaker on global warming. I have 
about 21 minutes. I could use 7 of them now. If the Senator from 
Oklahoma--I see him on the Senate floor--if he would prefer some time 
in morning business, I am prepared to yield to him, and then if I could 
be recognized as soon as we go to the bill?
  The ACTING PRESIDENT pro tempore. The Senator from Oklahoma.
  Mr. INHOFE. I think we are working on a unanimous consent request 
right now. Why don't you go ahead and use the remaining time in morning 
business, and then you will be the first speaker to use the remaining 
of that 21 minutes or whatever you want, and that 14 minutes will come 
out of the bill.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered. The Senator from California is recognized.
  Mrs. FEINSTEIN. Mr. President, I am going to yield back the morning 
business time so we can go to the bill and I will be able to speak 
without interruption.

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