[Congressional Record Volume 154, Number 117 (Wednesday, July 16, 2008)]
[Senate]
[Pages S6800-S6802]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                                 ENERGY

  Mr. BINGAMAN. Mr. President, I wished to address this issue which 
both the majority leader, Senator Reid, and the Republican leader, 
Senator McConnell, have talked about; that is, high gas prices.
  This is a very real problem for Americans throughout the country. 
High gas prices today, the high price of home heating fuels as we 
approach the fall and winter, particularly natural gas prices which are 
expected to be much higher this winter; propane prices; and home 
heating oil prices.
  Unfortunately, as I am sure we are all aware, there has been a lot of 
politics mixed in with the debate about what we ought to be doing to 
try to deal with and help solve this problem. I hope we can put that 
behind us and get onto a substantive discussion of the concrete steps 
that would make sense.
  Most agree there are three areas we might constructively address in 
the very near term in the Congress. I hope we are able to address all 
three. The first is the one Senator Reid was talking about earlier, and 
that is, the proper functioning of energy markets or the so-called 
problem of speculation in our markets.
  The second, of course, is how do we reduce our demand for oil. 
Everyone recognizes that part of the high price of gas is the 
increasing demand for oil, and the United States is a significant 
participant in increasing demand.
  The third item is the increasing of supply which needs to be part of 
the solution as well, in my view.
  On the issue of proper functioning of the markets, Senator Reid 
pointed out that as majority leader he has now put forward a piece of 
legislation which we hope can gain bipartisan support and we hope can 
be addressed in the Senate in the very near future. It takes some of 
the ideas that have come from the Republican side of the aisle, and 
some of the ideas that have come from the Democratic side of the aisle, 
and tries to meld these two into a piece of legislation that will do 
some real good in taking speculation out of the market.
  Now, there is a lot of dispute as to what extent there is speculation 
affecting the price of oil. But most experts say the increased 
speculation in commodity markets is one factor.
  On the issue of demand reduction, there are a lot of ideas also 
around the Congress as to things we might do. The President has not 
spoken about demand reduction, at least I have not heard him say 
anything about that. He has not spoken about the issue of speculation 
in the markets either or urged action there.
  But I think the Congress ought to try to address both to speculation 
issue and demand reduction. Third, we ought to try to do something on 
the issue of increasing supply. Now, the President has made this his 
sole issue that requires attention, as I understand his recent 
statements.
  He specifically has said the current ban on drilling in the Outer 
Continental Shelf is what needs to be changed, that is the one thing 
standing between the American people and a lower price for gas at the 
pump. Now, 2 days ago, he took action to revoke the Presidential 
withdrawal of this Outer Continental Shelf land and challenged Congress 
to act similarly in the immediate future before the August recess.
  Let me try to put some facts out for people to understand on this 
general issue. Before doing so, I ask unanimous consent that my total 
time allowed be 20 minutes as part of morning business.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  Mr. BINGAMAN. This first map tries to make the point as to what we 
are talking about. We are all talking about the OCS, the Outer 
Continental Shelf. There are four areas that constitute the OCS. It is 
an area 200 miles going out from the U.S. coast all around the

[[Page S6801]]

country, on the east coast, the west coast, the Gulf of Mexico, and all 
around Alaska. Those are the four areas that contain Outer Continental 
Shelf lands. These are submerged lands owned by the Federal Government. 
They have always been owned by the Federal Government. There is no 
dispute about that. States have rights going 3 miles out into the Outer 
Continental Shelf but after that, the Federal Government controls those 
lands. That is the OCS.
  So if we should be drilling more in the Outer Continental Shelf, 
where does that resource lie? The Minerals Management Service, which is 
part of our Department of the Interior in this administration, says 
their best calculation at this point is that 44.9 billion barrels of 
oil are in the Gulf of Mexico; that is 52 percent. Another 31 percent 
is not in the Gulf of Mexico, it is around the area of Alaska. On the 
east coast, there is 4 percent of what we believe exists in the way of 
oil in the OCS; and on the west coast, 12 percent. That is their best 
estimate at the current time. On natural gas, it is even a larger 
amount in the Gulf; there is about the same amount in Alaska as there 
is oil percentage-wise, 31 percent; and you can see natural gas is 4 
percent on the Pacific coast and 9 percent off the Atlantic coast. That 
is where the resource is. To put it simply, according to this MMS 2006 
survey, 83 percent of the oil and 86 percent of the natural gas on the 
Outer Continental Shelf is located in one of two places, either the 
Gulf of Mexico or the area around Alaska.
  The Atlantic coast is estimated to contain only 4 percent of the oil 
and 9 percent of the natural gas, and the Pacific coast is estimated to 
contain 12 percent of the oil and 4 percent of the natural gas. That is 
the basic information.
  What is the proposal that Senator McConnell and President Bush have 
put forward to try to deal with this problem? First, let's talk about 
what they have not proposed. They have not proposed any change in the 
Gulf of Mexico. They have said, leave the law as it is in the Gulf of 
Mexico. There is no proposed lifting of any ban there. Second, they 
have not proposed anything with regard to the area of second most 
promise, and that is around Alaska, because there is no moratorium to 
be lifted up there. Third, they have said as to the two areas that have 
the least resource as far as we know, the east and west coasts, that we 
should give the Governors and the State legislatures of the coastal 
States the authority to decide whether there is to be any drilling off 
their individual coasts. Not only should we give them that authority, 
we should bribe them, in a sense, to make the right decision by 
promising to give them a chunk of the revenue, if, in fact, there is 
development permitted off their coast and if, in fact, they allow it.
  This has been characterized, both by the President and the media, as 
giving the States a say. That is not what the legislation calls for. 
This legislation calls for giving the legislatures and the Governors a 
veto over development off their coasts. That is an unprecedented action 
by this Congress to say, OK, this is Federal land. This is a Federal 
resource. We are trying to craft a national energy policy. The way we 
want to go about it is to give each State legislature and each Governor 
the ability to veto development off their particular coast. I think 
that is a terrible idea. I have spoken many times about this. I hope 
the Congress will not agree to go along with the idea that we shift 
this responsibility and authority to the State level. That is a point 
people need to keep clearly in mind.
  I believe strongly that there are several categories of land that are 
not subject to the drilling ban, not subject to any moratoria, where we 
could be producing more oil and gas. I wish to go through that list and 
explain it a little bit. The first area is drilling leases that are not 
producing oil. We know for a fact that most of the area that has been 
leased is not producing oil. Here is a chart that says 83 percent of 
the leased area in the OCS is not producing energy. There may be good 
and sufficient reasons why the companies that lease that land are not 
producing oil from it, but I believe we need to ensure that there is 
diligent development of existing leases. I don't know that that is the 
case. We wrote a letter to Secretary Kempthorne--30 Senators signed the 
letter--urging him to look into this and see if more can be done. I 
hope we can do more, and I am persuaded that we can. There are 2,200 
producing leases on the Outer Continental Shelf. There are 6,300 
nonproducing leases. There are many reasons for this, but clearly this 
is something we should look into, and I believe we can do better to 
produce oil from areas that have already been leased.
  The second area on this chart is leases offered but not taken by oil 
companies. Here again, the current 5-year plan includes a sale every 
year in the central and western Gulf of Mexico. We had a recent sale in 
this lease sale 181 area that Congress legislated on in 2006, near the 
eastern Gulf of Mexico. The fact is, for much of the land offered for 
leasing--two companies at the time--MMS received no bids. We need to 
get to the bottom of that and figure out why, when we offer this land 
for lease, companies are not coming forward and actually bidding.

  Let me also talk about this third area which is areas scheduled to be 
leased but not yet leased. The administration has done what previous 
administrations have done, and that is to have a 5-year schedule of 
leases. We have a 5-year schedule in place now. The lease sale I 
referred to in March was part of that 5-year schedule. I believe there 
are 16 additional lease sales scheduled in 2008, 2009, 2010, 2011, and 
2012. All of those are on this chart on the right, scheduled lease 
sales. We need to look at that and ask: Is this an ambitious enough 
schedule of lease sales? Do we believe there is a greater appetite by 
the oil industry than this reflects? Do we believe that if we put up 
more land for leasing, we would get more production more quickly? If 
so, we should consider doing this. I don't see any reason why the Bush 
administration couldn't offer a more ambitious plan in this regard.
  The final category is areas that are not in the moratorium. They are 
subject to no moratorium for drilling, and also they are not in the 5-
year plan. So they are not scheduled to be leased in the future either. 
We have a chart here on Alaska. Most of the area I am talking about is 
the Outer Continental Shelf that surrounds Alaska. You can see it is a 
very large area. Of course, we claim our right to drill and to 
ownership of the submerged lands way out around the Aleutian Islands. 
All of this is part of the Outer Continental Shelf. What this chart 
shows is that there are 918 million acres in the Outer Continental 
Shelf around Alaska that are open for drilling but have not been 
included in the administration's 5-year plan. So of the area in the 
Outer Continental Shelf in Alaska that is not covered by moratoria, 
about 15 percent is included in the administration's 5-year plan. The 
other 85 percent is areas not covered. I would think the first thing to 
do, if you want to get more production in the OCS in the near term, is 
to ask: How do we get more of that 85 percent leased? If there is a 
demand for that, if the oil companies wish to develop that, how do we 
get that leased or how do we take the schedule of lease sales that take 
us through 2012 and accelerate some of that? I haven't seen anything 
from the administration indicating a desire to do that. We need to look 
at that as well.
  All of these things I have on this list are ways to increase oil 
production that do not require any change with regard to who is going 
to control access to the Outer Continental Shelf. As I indicated, that 
would be a big mistake to grant that authority to State legislatures 
and Governors.
  Let me summarize by going back and asking, what should we do, what 
should we as the Congress do in the coming weeks? And I hope what we 
are able to do. First, we should deal with speculation. Senator Reid 
has a proposal in that regard. I hope it can get bipartisan support, 
and we can move ahead.
  Second, we should do all we can to encourage more reduction in 
demand. There are a lot of good ideas around, from Republicans, from 
Democrats, from experts on all sides on that subject. We are having a 
workshop tomorrow in our Energy and Natural Resources Committee where 
some of these ideas will undoubtedly be discussed, as well as ideas 
related to supply. We are also going to have a hearing next week on the 
subject of demand reduction and possible changes in policy that could 
help. Then we should

[[Page S6802]]

also look at supply. That is what the President is focused on. We 
should develop the leases we have already let that are currently in 
existence. We should be sure they are being diligently developed and 
take every step possible to ensure that.
  Third, if companies have the ability and the desire to develop more 
leases on the Outer Continental Shelf, we should accelerate leasing in 
areas that are not covered by the moratoria, and there are a lot of 
them, as I think these charts have made clear. There are a lot of areas 
outside the moratoria that could be leased under current law.
  Finally, if the administration knows of particular areas they believe 
have great promise and would like us to go ahead and open to leasing 
and that currently are not covered, I would be anxious to have them 
present the evidence and tell us what those are. We put a provision in 
the 2005 Energy bill, which many of us worked on, calling for a 
comprehensive inventory of OCS oil and natural gas resources. It called 
on the Secretary to do that. The Secretary did do a report, an 
inventory. He gave it to us in 2006. Unfortunately, what we said in the 
legislation was that the Secretary should use all available technology, 
any technology except drilling, including 3-D seismic technology, to 
obtain accurate resource estimates. The administration chose not to do 
that. They did not ask us for the funds to do that. So the report they 
gave us in 2006 does not have the benefit of any 3-D seismic survey. I 
think if the President believes, and if the Minerals Management Service 
within the Department of the Interior believes, there are areas that 
are currently covered by a drilling ban that have great promise, then 
they should come forward and at least ask for the resources to go ahead 
and complete the survey they were directed to do in section 357 of the 
2005 Energy bill.
  There is a lot of progress we can make on a bipartisan basis. We need 
to quit suggesting that the solution to high gas prices is taking what 
has always been a Federal decision--that is, who is going to have 
access to the Outer Continental Shelf and under what circumstances--and 
give it to the State legislatures and Governors. That would be a major 
mistake. I hope we do not go that route. There are things we can do on 
speculation. There are things we can do on demand reduction. There are 
things we can do on increased supply which I hope will help alleviate 
this very real problem Americans are faced with.
  I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from North Dakota.

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