[Congressional Record Volume 157, Number 39 (Tuesday, March 15, 2011)]
[Senate]
[Pages S1619-S1620]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
ENERGY PRODUCTION
Mr. HOEVEN. Madam President, I would like to speak this morning on an
issue that I believe is of great importance to our economy and to our
national security. In recent weeks, we have seen political turmoil in
Libya and Egypt and Tunisia and throughout the Middle East and other
North African nations.
Only time will tell what the outcome of these historic events will
be. What is clear, however, is that there is, once again, disruption in
the worlds's petroleum supplies as a result of the turmoil in this
region of the world, and American consumers and businesses are feeling
the brunt of it.
In the United States, we have seen the price of gasoline and other
petroleum products increase dramatically. The pain is particularly
sharp at the pump.
Over the last few weeks, retail gasoline prices have risen to more
than $3.50 a gallon. They are expected to rise to more than $3.70 a
gallon during the peak summer driving season and, of course, they could
go substantially higher. This is a reflection of what is happening in
the crude oil commodity markets around the world. In fact, the Energy
Information Administration's latest forecast of the average West Texas
spot price for the remainder of this year increased from $93 a barrel
to more than $100 a barrel. The EIA expects continued tightening of
world oil markets in the next 2 years in light of the events in North
Africa and in the Middle East.
For example, in Libya it is widely reported that much of the
country's 1.6 million barrels a day of total production in 2010 has
been largely shut down. It is unclear how long this will last. However,
the reality is that the problem is not a matter of current supply.
Prices are going up not because of lack of supply but because of
concerns in the market about future supplies. Therefore, to address
this problem, we must increase domestic production. We must produce
more American energy, and we can do it.
Furthermore, taking steps now to create a legal, tax, and regulatory
environment that will stimulate more domestic production will help take
pressure off prices even before that supply comes on line, as markets
anticipate more production.
Of course, the opposite scenario exists today as markets anticipate
less supply from the Middle East and they do not see the commitment
domestically to offset that reduction in supply. We must change that
perception by taking real action to encourage production here at home.
Stalled energy projects and impediments to domestic oil production in
our own country are costing our Nation's economy billions of dollars
and millions of jobs.
A study released last week by the U.S. Chamber of Commerce says 351
energy projects, both renewable and traditional, are stalled, at a cost
of $1.1 trillion to the American economy and nearly 2 million jobs for
the American people. When we combine disruptions in foreign sources of
production and a domestic market hobbled by bureaucracy and delays, the
result is higher energy prices, a sluggish economy, and fewer jobs.
That is exactly what we see happening. That should be a cause of huge
concern, but it should also be a huge call to action. There is a path
out of this for America, a path we in my home State of North Dakota
successfully followed starting a decade ago by building a comprehensive
energy plan called Empower North Dakota.
Through Empower North Dakota, we worked to create a business climate
that incentivized energy companies across all industry sectors,
including the oil industry, to invest in our State. We created the kind
of legal, tax, and regulatory certainty that attracted capital,
expertise, and jobs to North Dakota. In fact, when we started 10 years
ago, oil companies had either left or they were leaving the oil-
producing region in our State, the Williston Basin. Why was that?
First, they were getting better returns elsewhere. Technology was
lacking to produce oil economically from new formations. Companies were
going to other places in the world where they could extract oil less
expensively. Second, data on confirmed reserves was lacking, and the
technology to produce oil from shale wasn't sufficiently developed.
Third, the workforce was aging, and we lacked the training and
education for new workers. And fourth, transport constraints limited
production. In other words, there were better places for the industry
to invest shareholder dollars and earn a return.
To turn that around, we built a climate for investment. We
established an oil and gas research fund paid for by the industry. We
put tax incentives in place. We initiated studies of the Bakken
formation at the heart of the Williston Basin through the North Dakota
Geological Survey. That was followed by a U.S. Geological Survey study.
I have requested another USGS study I believe will demonstrate that we
have billions more in recoverable oil reserves in our State.
We also improved infrastructure. We created a pipeline authority to
expand transportation capacity, and we established a center of
excellence for petroleum safety and technology at Williston State
College to train workers in oilfield drilling and recovery methods.
Before that we had to send workers to Wyoming or Oklahoma and other
places for training and education. Now we do it in our State.
In response, our enhanced business environment drew investment
capital, technology, and ingenuity to Williston Basin which unlocked
the potential of North Dakota's oil patch. We took full advantage of
the Bakken and Three Forks, which are deep shale formations with
billions of barrels of oil locked away in porous rock, by using
innovative, unconventional technologies and with good environmental
stewardship.
To release the oil, companies in North Dakota use hydraulic
fracturing which involves pumping water under pressure deep into the
Earth to crack the shale and release the crude oil. The water is then
recycled or deposited safely back into the ground 2 miles down, well
below, far below the water table. Companies also use directional
drilling which enables drilling rigs to drill one vertical bore and
multiple horizontal bores deep in the ground, producing more oil with a
smaller footprint and, again, better environmental stewardship.
As a result, this year North Dakota will produce more than 120
million barrels of oil. That number is growing dramatically. This is
sweet crude oil.
Since 2006, we have grown to become the fourth largest oil-producing
State among all 50 States in the Union, passing States such as Oklahoma
and most recently Louisiana. Bear in mind that in North Dakota the
measures we took were not about government spending. They were about
creating an environment for private investment that generated revenues
for the State, broadened the economic base, and actually enabled us to
reduce taxes. This isn't a Republican or a Democratic issue. It is an
American issue, and it will take both parties to fix it. That is why I
am cosponsoring a bill with Senator Roberts that actually works with a
directive from President Obama.
The Regulatory Responsibility for Our Economy Act will give the force
of law to a Presidential Executive order issued in January. The order
proposes to review rules that may be outmoded, ineffective, or
excessively burdensome, and to modify, streamline, or repeal them. We
are all committed to good environmental stewardship and effective
consumer protections. But the President's order acknowledges that
Federal regulations are hindering the Nation's economic growth and our
ability to create jobs. The law we are proposing, if passed, will make
sure we take a clear-eyed look at our rules and help to bring
regulatory and legal certainty to the markets.
While we are working to produce more oil in America, with the right
approach, with the approach I am describing, we can also enlist the
help of our friend and close ally to the north, Canada. To do that, for
example, we need to complete some very ambitious projects that need
permitting and approval. One example is the Keystone XL pipeline. This
$12 billion, high-tech transcontinental petroleum pipeline is designed
to carry crude from the Canadian oil sands in Alberta to the Gulf of
Mexico. As it passes through the Midwest, an onramp will receive
midwestern sweet crude from States such as North Dakota and Montana to
mix with the heavier Canadian crude and send it to refineries that will
turn it into gasoline and diesel fuel in America. With no overseas
involvement, this
[[Page S1620]]
one promising project would help double current flows of oil from
Canada, which is already our No. 1 trading partner.
One estimate projects that the project will create--and these are
numbers the company has put forward in advancing this project--at least
20,000 high-paying jobs during the construction phase and more than
250,000 permanent jobs. It will spur more than $100 billion in annual
total expenditures in the U.S. economy. It will generate $6.5 billion
in new personal income for U.S. workers and their families, and it will
stimulate nearly $600 million in revenue for State and local
governments along its route.
Federal approval is something that will cost our Nation not one
penny. What it will do, however, is create assurances in markets that
the energy we need to power our Nation will be there in the future, and
it will be there when we need it. That in turn will help to reduce our
dependence on unstable overseas regimes, hold down the cost of gasoline
at the pump, and create thousands of good American jobs at a time when
unemployment is still hovering at about 9 percent.
Keystone XL is just one example. Across America there are hundreds of
projects like it that could be advanced with good environmental
stewardship and responsible oversight, if we resolve to do it and we
create the climate to do it.
Today the United States, Canada, and Mexico combined produce 75
percent of the total oil we need. We can do much more. Our Nation needs
to send a signal to energy markets that the United States is committed
to a policy of aggressive domestic energy development by creating a
strong business environment and a pro-energy agenda, including the
legal, tax, and regulatory certainty companies need in order to make
the kinds of investments that will truly lessen our dependence on
foreign oil.
We are at a moment in history when we can truly turn adversity into
opportunity and potential into reality. I urge Members to seize this
opportunity to make America stronger, safer, and more financially
secure with a comprehensive approach to truly develop American energy
right here at home, to meet our needs both now and for future
generations. We can do it. We must do it, for the well-being of our
country today and for future generations.
I thank the Chair for this opportunity, yield the floor, and suggest
the absence of a quorum.
The ACTING PRESIDENT pro tempore. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Ms. LANDRIEU. Madam President, I ask unanimous consent that the order
for the quorum call be rescinded.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
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