[Congressional Record Volume 157, Number 63 (Tuesday, May 10, 2011)]
[House]
[Pages H3150-H3155]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
{time} 2020
PRICE OF GASOLINE
The SPEAKER pro tempore (Mr. Amash). Under the Speaker's announced
policy of January 5, 2011, the gentleman from Texas (Mr. Carter) is
recognized for 60 minutes as the designee of the majority leader.
Mr. CARTER. Mr. Speaker, with all the issues that we deal with here
in Congress, the American people deal with other issues at home. Some
of those issues are connected, and some of those issues they don't see
the connection. But they do wonder about something.
They wonder about the fact that gas prices in some places in this
country January of 2009, when the President came into office, were
unleaded $1.32 a gallon; mid-range, $1.42; super range, $1.52. Gas
prices in April of 2011 over here somewhere in this country, looks like
it could be Texas because our numbers are about there, $3.99 for
regular, $4.09 for mid-range, $4.19 for the super, the ethyl, as they
used to say in the old days.
So since the President has taken office, something that affects every
life in this country: the price of gasoline. Because whether we like it
or not, whether we come up with alternative energy sources or not,
whether we have new ideas about high-speed trains, subways, elevated
railways, buses, the majority of the people in the United States move
around by automobile; and the majority of those automobiles are driven
using one of two fuels, either gasoline or diesel.
Now, neither one of these charts shows a diesel price; but amazingly
enough, back when I was a youngster, diesel was the cheapest fuel we
had available. But diesel prices are no longer cheap. Diesel prices are
competitive, usually around the mid-range price of gasoline. But there
are people who have good reasons to drive diesel vehicles. And so
whether we like it or not, whether it fits our congressional
legislative program or not to have gasoline and diesel being the fuel
that moves people around this country, it is a fact. And you may think
otherwise all you wish, but it is a fact.
There are no wind cars where you hook a sail up and hope that the
wind is blowing towards Washington, DC tomorrow morning at 8 o'clock so
everybody can get to work. It is not happening.
So everybody gets up and everybody goes out, and most everybody,
unless they have one of the brand-new electric cars, starts their
vehicle with gasoline or maybe diesel, and they go to work or they go
on vacation or they travel to see their relatives, or whatever the
purpose of their trip.
So let's be frank. Until we come up with alternative sources that
move people from point A to point B in the United States of America, we
are bound to gasoline and diesel. And in the 3-year track record of
this administration, we have seen, I understand it is reported, the
highest gasoline prices in the history of the country, even higher than
the famous Jimmy Carter days when Jimmy Carter had us waiting in long,
long ration lines and paying extremely high gasoline prices. At $4 a
gallon, I think we topped even the numbers that came under President
Carter almost two decades ago.
So here we are, we have gone full circle in a Democrat Presidency,
and here we are back with the issue of gas prices.
Now, why are gas prices so important to people? Because it is how we
get where we are going to go. If you are taking your kid to soccer game
or to baseball practice or football practice or lacrosse up here in the
East, or track and field, or whatever your young people are doing, you
have got to get them there; and in most instances they can't walk and
they can't ride a bike. They have to go in an automobile. And when you
move them from game to game, they go in automobiles. And when they go
to take their tests for entry into college, they have to go to an
independent location. Many times they travel there by automobile.
You have to pick up the laundry. You have to pick up the groceries.
You have to do a million things; get the kids to school on time, get
the kids home from school, take the wife out on a date. Unmarried
people are dating, and that's part of their date costs. And at a time
when we have some of the highest unemployment in modern times, we
bumped back above 9 percent, I understand now, so there is a lot of
people out of work.
Those people who are out of work, some of them are drawing
unemployment, and some of them are just trying to figure out a way to
make do until they can find another job. And to have a roughly $3
increase per gallon in the cost of their fuel to move them around the
country, people feel that immediately. It is literally sticker shock to
go in and start filling up your tank.
I have a fairly small tank in my car. My wife's got a little larger
tank, so more of a sticker shock. I drive a hybrid, so I'm getting some
pretty good gas mileage. But still, I watch that thing go up to $54 to
fill up my tank and watch my wife's go up to $65, $70 to drive.
I have a daughter who is working part time and going to college.
Sometimes she has to go for testing; in fact, today she went for
testing in a town about 40 miles from where we live to take a test, and
it is a full tank of gasoline up there and back for her in the little
car she drives, or almost. And she works hard. She will work all day
and maybe 2 days at her job to pay for a tank of gasoline. So it
immediately affects your budget.
[[Page H3151]]
But it is not just the cost of this fuel to the individual. It is the
fact that it is killing the recovery in this country, this new increase
in gasoline costs and fuel costs.
Now, we move goods from one place to the other. In Texas we are
blessed to have the Rio Grande Valley where we produce wonderful fruits
and vegetables, and we compete around the country with our fruit and
vegetable crops. But the prices of those things are going up, and they
are going up very quickly. All of a sudden, you are seeing tomatoes are
$2.50 a pound.
Now, you say how do you know this? One of the great questions they
always like to ask a Congressman is, what is the price of bread in your
town? What is the price of milk? Because they think that we don't know.
Well, I can assure you, my wife will back me up on this, I have shopped
for our family in the grocery store since the day I got married, and I
continue to do so.
We live away from town, and usually I would be leaving my work in
town and it was easier for me to grab the groceries than for my wife to
drive 8 or 10 miles from where we live out in the country into town. So
I can honestly say I watched avocados go from $1 apiece to $2 apiece in
2 days in Round Rock, Texas, at one of the better stores where the
prices are kept low where we regularly shop. I'm fortunate enough to
have a job, but there are people who don't. And avocados may be a
luxury to some people. That's just an example that I noticed because it
shocked me to see them double in price in a 48-hour period, and so I
thought about it.
{time} 2030
But that's not all. The price of everything is going up. Now, why is
that? Transportation costs. We move our products to market and we move
our products to wholesalers, retailers, and it all takes
transportation, and that transportation has now almost trebled in costs
in a very short period of time.
People say, why? We hear from our Democrat colleagues here in the
Congress, the ``why'' is the evil oil companies, the evil major oil
companies, and they name names; ExxonMobil, ConocoPhillips, Chevron. I
will not use all the names. There are a bunch of them, and they get
used every day in this Congress. They are making horrendous profits and
they are the cause of gasoline going up. But the price of oil is going
up, and that is part of why prices go up.
The thing is we don't know. We all speculate to some extent. But I
think it is a pretty easy, commonsense position to take that the more
supply we have with the demand, and we are the demand capital of the
world on burning gasoline and diesel. We outshine anybody else on the
face of this globe in the use of those products. And we have relatively
cheap prices as compared to the other countries, especially those
countries that have no production. They can get very expensive very
quickly.
Until very recently, there was no oil or gas at all to amount to
anything in what we now call Western Europe. Today, there is. They have
found it offshore. They have found it on the land in Holland, in Norway
and other places. Norway is, I think, something like the third biggest
producer of offshore oil in the world now. They are doing extremely
well and running their economy in a very frugal manner. They are very
smart people and they should be commended. We should do so well.
I happened to go to Norway with Chairman Obey with the Appropriations
Committee when the Democrats were in control, and we went to see the
offshore production in Norway. They are doing a good job. But the
prices for gasoline are probably three times as much in Europe as they
are here, and in other places even more.
But it makes sense that the law of supply and demand always works.
It's kind of like gravity, the law of gravity. If you drop something,
it's going down. Well, the law of supply and demand has been proven
over and over and over to be what drives the market for anything. So if
we have the opportunity to increase our supply in this country and we
have the demand, then why wouldn't that have an effect on our price? I
think that is a reasonable thing to talk about.
The Obama administration has, I would say, a dismal record in
assisting us in finding oil and gas. Of course, we are all familiar
with the fact that we had a bad oil leak in the gulf, and nobody in any
way is saying that was good. In fact, that was a terrible, terrible
thing to our environment, a terrible thing that panicked the country to
some extent, especially some of the southern States that border on the
Gulf of Mexico, and it messed up some beaches pretty nastily and
probably had some effect on the wildlife and sea life in the ocean. We
will probably be learning in the future how much.
As a result of that, we put a moratorium on drilling in the Gulf of
Mexico. But oil and gas is found in the Gulf of Mexico, especially oil,
but to some extent natural gas, in abundance in some places, and many
of those places are deepwater. Deepwater drilling is extremely
expensive. The rigs are $1 billion, with a ``b,'' piece of equipment,
and the cost of drilling those wells is very expensive. But they are
successful. We have had wells, even the BP well that blew out was
putting out a phenomenal amount of oil. If that had been sealed and
that production had been put into play, it would have had an effect on
the availability of oil in the United States. Just that one well would
have had an effect. But they put a moratorium on that, and the decrease
in oil production from this decreased the amount of production by
360,000 barrels of domestic oil per day.
The Obama administration has leased less offshore and onshore acres
for energy production than any other President since Ronald Reagan. In
2009, the administration indefinitely delayed leases for oil shale in
the West, which kept these resources off limits. Over 2 trillion
barrels of oil from oil shale are currently sitting idle due to these
delays. The Obama administration has kept all new offshore exploration
off limits until at least 2017. That is over 80 billion barrels of oil
in the Atlantic, Pacific, Alaska and Gulf of Mexico.
The Trans-Alaska Pipeline System, which could be transporting 2.2
million barrels of oil per day, is running at less than one-third
capacity because companies cannot get permits to produce oil in Alaska.
The administration has essentially shut down production in the State by
withholding the necessary permits. The Keystone XL pipeline, which
could eventually bring 1.5 million barrels of oil per day to America,
is being prevented by endless delays by the State Department.
America is the third largest oil producing Nation in the world. The
above actions are a clear sign to the world that we are closed for
business. If we are closed for business and we are number three, then
how much more valuable does that make the product that number two and
number one and those behind us are producing, therefore driving up the
cost of that product? The less you have in the market, the higher the
cost, if there is a demand, and there is clearly a demand worldwide.
In fact, one of the things you are seeing on the price of oil is the
fact that at one time we were the biggest market by far. In fact, the
Europeans really didn't even come close to being the market for oil and
gas that the United States is. But today these booming new upcoming
economies, China, the fastest growing economy in the world right now,
do you think they can have that fast growing economy without energy? Of
course not.
Energy is the driving force behind manufacturing. It is the driving
force behind development of a nation. Those folks need to get where
they need to go just like everybody else does, and they have many of
the innovative things that America is starting to talk about today.
The Secretary of Transportation has just let out a bunch of money to
build some high-speed rail. China already has high-speed rail, the
highest speed rail in the world. They have speeds of up to 250 miles
per hour. We are not even going to come close to that on our rail
projects. But they are still now the biggest competitor for trying to
make forward purchases. They are trying to buy future purchases so they
can ensure they have the fuel they need in the future to meet their
demands.
We have a product that we sell for that. They are called ``futures''
on the exchange, and you are buying oil to be delivered at a later time
at a set price. And when futures become in big demand and when the
price of oil in the future is looked at by countries and by industries
to make these purchases ahead of time to get cheaper fuel to
[[Page H3152]]
run your industry, then it drives up the costs in the market. The
market goes up. Something is in demand and the market needs it not only
today, but sees a projection to need it in 6 months, in a year, in 5
years and in 10 years, and they are willing to pay for the right to
purchase it at a certain price, the prices go up.
{time} 2040
That's the market. So I think that, first off, we're not ever going
to get anywhere if we don't have an energy plan that is about all
energy in the United States. And I would argue that with the use of the
regulations and the failure to lease and the failure to lift
moratoriums, and even after you lift moratoriums, failure to give
drilling permits, all the things that this administration has done, it
has been an anti-oil and gas industry--and I'm sure coal, also--and
anti-hydrocarbon administration. They don't deny that at all. They are
anti-hydrocarbons. They don't like coal. They don't like oil and gas.
They are opposed to them. And through regulations and through failure
to do the necessary leasing they are keeping closed natural resources
that are available to Americans. And, hey, let's get this straight.
Before the Middle East; before Russia, and the Soviet Union prior to
that; before offshore Norway, before onshore Holland; before the North
Sea; before the Gulf of Mexico; before Indonesia; before all these
places where we now produce oil and gas, we started out by producing
oil in Pennsylvania. We later made a huge gigantic oil find in Texas.
And Texas is now defined by oil and gas by many.
We are the pioneers of oil and gas in the world, the United States of
America. All the improvements in drilling procedures and in closing
down wells, in saving oil without blowouts, in fighting oil fires, in
any category you can come up with to do with oil and gas, the United
States of America has led, as it usually leads in all things, but it
has led in the oil and gas industry. We are the experts. In fact, when
we went to Norway and asked the Norwegians what they would do if they
had a blowout like the British Petroleum blowout, they said, We'd call
the experts; the people in the United States. The companies that are
drilling the wells, they're the experts, not us. Then why all of a
sudden in this administration have we decided that a major industry in
this country is of no consequences because you want to change the way
the American people get around, and you want to change the way we do
business in this country? So you hold votes on the floor of this House,
whether it's something called cap-and-trade, and it fails--passes the
House; can't get through the Senate. Dies. So you do it with
regulations. Just get the regulators to shut them down and that will do
just as good as passing cap-and-trade.
You want to know what this does to you folks that are looking for a
job. Well, Texas, at one time in the very near past, within the last
year, had the lowest unemployment in the Nation until we shut down
drilling offshore and along the gulf coast, and we lost tens of
thousands, possibly hundreds of thousands of people, that are connected
with this industry. And it's not just the greasy drillers that drill
the oil wells. It's the food service people that bring it out there.
It's the helicopter people that transport people. It's the shipping
industry that transports the fuel. It's the pipeline industry that puts
it in the pipeline and delivers it. It's the refining industry. All of
these people are affected when you shut down the local source, which is
what this administration has done. And then we say to ourselves, Why
has the price of gasoline gone up? Well, it seems to me part of the
problem has got to be an administration hostile to this very industry.
It's awfully hard when the regulators, EPA and others, have painted a
target on your back to prevent you from producing.
We've made a phenomenal natural gas find in this country. We have
found, which if I had told you this 4 years ago that we would bust up
rocks and find natural gas, you would say that I needed to have some
serious psychiatric examination, because it makes no sense to anybody
that you can bust up rocks and produce natural gas. But we've
discovered shale gas. And now, although we've got shale gas in Texas--
and we're mighty proud of it--this shale gas now touches multiple
States in this country. It goes right up through the South, right up
through the Midwest, right up into Pennsylvania, where they have
already done some serious shale oil work. And I know there's some up in
New York State, although they don't seem to be interested in producing
it.
So a belt of product stretches all the way across our country.
Natural gas. And yet immediately there's some people who are telling
you, I can smell that gas in my water well. Well, I've got news for
you. Natural gas doesn't smell. So if you smell that gas in your water
well, you've got a city gas line leaking someplace in your house,
because you put the smell in the gas when you sell it to the retail
customer so you can smell the gas if it's leaking in your house. But
there's no smell of natural gas. But people have come up here to
Congress and said, They drilled a well right around the corner from me,
and now my water smells like natural gas. It doesn't make sense because
natural gas doesn't smell. I can tell you that from personal experience
it does not smell because I have dug up the machine on a job I had that
smells. That was one of the nastiest jobs I ever had, because you got
that smell all over you, but that's a different story. We need an
energy policy that works, not an anti-energy policy.
Let's look at an anti-energy policy. Year One, 2009. February 4, 77
Utah oil and gas lease areas withdrawn from development. One of the
things we talk about is Alaska, we talk about Texas, we talk now about
Pennsylvania, we talk about many other places where there is now
production. But what we don't talk about because we haven't been able
to get in there to do it is the basin which Utah sits in the middle of,
but it goes up into Idaho, it goes over into Wyoming, it goes up into
Montana. There's a large potential field and discovered field in North
Dakota of oil and gas. But the Utah oil leases were withdrawn from
development. February 10. These were all actions of the administration.
Offshore leasing plan delayed for 6 months.
February 25, shale oil research and development leases delayed in
Colorado, Wyoming, and Utah. March 30, 3 million acres of Federal land
removed from energy production by Omnibus Public Lands Management Act
passed by a Democratic Congress. June 29, 29 million acres of Federal
land removed from solar energy development plans, leaving just 670,000
solar acres. So even the so-called clean energy is having roadblocks by
this administration.
Uranium mining blocked for 2 years on 1 million acres of land in
Arizona. That was in July. August, 24,000 acres in Wyoming oil and gas
leases withdrawn. September, new Outer Continental Shelf lease plan
postponed until 2012. October, 60 of the 77 Utah oil and gas leases
permanently canceled. November, Obama administration found to have
approved the least oil and gas leases annually ever recorded in the
United States history. So in the first year of this administration they
started out with a clear policy of getting rid of our energy, not going
after our energy. Even solar.
Year Two. January 6, new regs issued to restrict oil and gas
development on Federal lands. January 26, Virginia offshore leases
delayed.
{time} 2050
January 28, restricted shale oil lease terms, cutting industry offers
85 percent. February 1, $40 billion in oil and gas industry tax and fee
increases introduced in FY 2011 budget proposal. February 17, the
administration unilaterally shuts down Yucca Mountain, the Nation's
only repository for spent nuclear fuel, jeopardizing the future of
nuclear energy.
That's not oil and gas, but that's energy.
March 12, 61 Montana oil leases withdrawn. March 31, majority of
Outer Continental Shelf closed to future production. May 6, ban on all
gulf drilling over BP spill. July 12, President defies Federal court
order overturning the gulf drilling ban. October 12, the President
finally says gulf drilling ban lifted, but refuses to issue new
permits, keeping a de facto ban in place in contempt of Federal court.
November 18, Interior Department plans no new gulf leases until 2012.
December 1, the administration reinstates the illegal gulf
[[Page H3153]]
drilling ban to introduce the entire Pacific/Atlantic Coasts, Eastern
Gulf, and parts of Alaska.
So they reinstated the ban to cover the whole coasts of the country.
Oh, yes, we've got one more here--year three, 2011.
January 14, revoked West Virginia coal mine permit, costing 250
American jobs. February 2, a Federal judge finds Interior Department in
contempt of court over de facto drilling ban. February 15, announced
further delays to U.S. oil shale production by deciding to re-review
the current rules for commercial oil shale leasing. February 28,
continued the de facto drilling ban while issuing a token deepwater
permit. March 4, the President appealed the Federal court ruling to
issue stalled deepwater permits.
When I saw that shale oil, I saw my friend from Pennsylvania stand
up. I yield to my good friend whatever time he may need to talk about
the great things that are happening in Pennsylvania.
Mr. THOMPSON of Pennsylvania. I thank my good friend from Texas for
hosting this hour.
I actually do think this administration has an energy policy, and
it's all about shutting down all of the domestic use of the resources
we've been blessed with in this country. It's about cutting our supply,
eliminating our domestic supply.
When I looked at your chart you had in terms of gas prices reflecting
2009 and 2011, I know at the White House the President is asking the
Attorney General to put together a task force and is trying to find the
bad guys of who's causing gas prices to be so high right now, which are
pushing over $4 a gallon. There's only really one thing that impacts
gas prices, and that's supply and demand, and demand around the world
is going up. As you really captured nicely in the documentation,
Congressman, the problem is that this administration has shut down
access to domestic supply, and we're making us more and more foreign-
dependent. Right now, with what's happening in Libya, we only get 2
percent of our oil resources from them. Just that 2 percent with what's
happening in that country, we're seeing gas prices now push over $4 a
gallon.
I'd like to contrast that with the shale gas that you talked about
because, in Pennsylvania, we are blessed with it. Also, let me claim my
heritage. I have the privilege of representing Titusville,
Pennsylvania, where Edwin Drake drilled that first well 151 years ago,
and we're very proud of that. Also, the 17 counties I represent in
Pennsylvania are right in the heart of the Marcellus natural gas shale,
and in the middle of one of the worst recessions we've had since the
Great Depression, gas prices--and you captured them--are spiking at
just record heights. If we had a chart there that showed natural gas
prices, it actually is a record low. It's a little over $4 a cubic
foot. Normally, in importing our domestic gas from other countries,
natural gas would probably be somewhere around $11 or $12 a cubic foot,
but today, it's $4-something a cubic foot in the middle of the worst
recession. This winter was a tough winter in Pennsylvania, and the
folks all over the State, including those in center city Philadelphia,
are paying some of the lowest gas rates, which is only because natural
gas is domestically produced.
It just speaks to the importance of a strong domestic supply program,
but the policies of this administration make that almost impossible for
our oil. They're going after natural gas, trying to stop that as well,
and that is driving up costs. I find that it's not only so terribly
damaging on our economy and jobs but that it's just immoral when we've
been blessed with these resources. They were provided to us for a
purpose, which was to be able to use them and go after them and do it
as good stewards, and we know how to do that today.
Mr. CARTER. If my friend would yield just for a minute, what is the
unemployment rate in Pennsylvania right now?
Mr. THOMPSON of Pennsylvania. The unemployment rate is lower than the
national average is. I have a couple counties in particular. Tioga
County is one of them, which is in the heart of the Marcellus natural
gas. It is probably the first time in history that that county's
unemployment is below both State and national averages, and it's
because of the natural gas industry.
Mr. CARTER. It's because of those new jobs that were created by this
marvelous find in Pennsylvania.
Mr. THOMPSON of Pennsylvania. It is, and all the related jobs.
Absolutely. You're right.
It's not the drilling jobs, but it's the hotel jobs and it's the
restaurant jobs. I've got manufacturers right now that are sitting with
jobs that they can't fill. We hear a lot about unemployment, but these
are good jobs. They pay a significant amount of money per hour with
good benefits. It's a great employer, and they're sitting there with
these job openings, looking for folks to fill them. Now, some of the
people they've had working for them have moved on into the gas field,
and they've created new opportunities. So producing domestic energy
produces domestic jobs, and it's so important.
Mr. CARTER. Reclaiming my time for just a moment, a lot of people
don't realize that, when you're talking about the production of oil and
gas, there is much more to putting up a rig on a piece of land than
just driving out there and putting it up. You build roads. You build
fences. Road builders don't drill a single drop of oil or gas, but they
build the roads. That's a job. That's multiple jobs. In Louisiana, in
the marshy parts of the country, they used to build wooden roads to get
out to these rigs. All this creates jobs for all the side industries of
the oil and gas industry. Just like any other industry, there are side
industries that feed the big industry, and they all create jobs in a
country that dropped below 9 percent but has now jumped back this month
above 9 percent again, after one of the longest stretches of high
unemployment in the country. I'll just use my family as an example.
My daddy was born in Kentucky, and my mother was born in Tennessee.
In fact, where my mother lived may be pretty close to being underwater
right now. In fact, she lived right close to the river in Tennessee. In
the Great Depression, there were no jobs in their part of the country,
but there were jobs in Texas because of the oil industry, so they both
came down to Texas to get jobs in the oil industry. Now, they both
ended up in the oil industry, but they started out where my mother was
in the secretarial pool for business and my daddy was a teacher, an
accounting professor; but they got jobs in the oil business, and it was
always good to our family.
I don't lay any bones about it. I was raised in an oil and gas
family, and my dad was a gas man. I've seen it make our State prosper,
and of all the producing States that I've ever visited, they've
prospered. Look at what it has done for Alaska. Look at Louisiana. Look
at New Mexico and Oklahoma and what it has done for those States and
those economies. To take and target an industry and go after that
industry the way this administration has done--but not only that, I
don't even understand the Yucca Mountain deal. I don't understand the
no uranium leases. Now the President, in a couple of speeches, said
we'll switch to nuclear. I think that may have changed now since the
Japan disaster.
{time} 2100
But we can't do it without uranium. There's a new process, you maybe
could, but that's a different story. Historically, you can't do without
uranium. You've got to have the location to store spent fuel. Americans
need to wake up and say, wait a minute, we need energy.
I just was talking to people today that said the EPA was going to try
their best to shut down wood-burning fireplaces. My gosh, I mean, how
are we going to get warm? You guys up north, how are you going to get
warm in the winter time if you're going to take away your coal and your
natural gas and the price of oil is going to be through the roof and
you can't afford that? You can't even burn wood in your own fireplace?
What's wrong with this picture?
Mr. THOMPSON of Pennsylvania. Well, you're right. The demand side
impacts gas prices as well, and it has been very well documented that
two countries in particular are increasing their thirst for oil, and
it's going to drive up the demand for oil worldwide, and that is China
and India. It's expected just
[[Page H3154]]
within the next few years the demand for oil is going to go up 10 to 12
million barrels a day. That's in addition to what the world is using
today; and if that occurs and we don't increase our domestic supply, we
don't have a board big enough to show where that red line is going to
climb to in terms of gas prices.
It is absolutely critical. That's why I'm so proud. I'm on the
Natural Resources Committee. We passed out of there a matter of a
number of weeks ago not one but three pieces of legislation. Last week,
the House passed out of the House of Representatives H.R. 1229, Putting
the Gulf Back to Work Act. This week we're going to be working on H.R.
1230, Restoring American Offshore Leasing Act, and that will make a
difference.
Now, critics will say, oh, well, it would be a year or more until you
produce one barrel of oil once we pass that act, and that is true
because it takes awhile to get that rig set up and get it produced, but
we only have to look back to 2008 when President Bush and this Congress
finally lifted the Outer Continental Shelf ban moratorium, and on the
day that that was lifted and Congress lifted that and we gave the
approval to go ahead with issuing permits again, on the day they voted
on it, the price of gas in 2008 was four-something a gallon. The very
next day it was two-something a gallon.
It makes a difference. It communicates that America is willing to use
its own resources, that America is not going to be dependent on the
Middle East, on Libya, and on Saudi Arabia, on places that are so
volatile today that we don't know if there's a revolution or
demonstrations or riots or terrorism that we're not going to have
access to that 30 percent of our energy resources that we use today.
The best predictor of future performance is past performance. So we
know if the Senate does the right thing and passes these acts that
we're going to have and will pass out of the House of Representatives
and the President signs it, gas prices will come down; but,
unfortunately, the best predictor of future performance is past
performance, and under this administration, they're going to continue
to limit and eliminate our Americans' access to the domestic resources
that we have right here in this country.
Mr. CARTER. The great surge in the cost of gasoline that we were just
talking about, that surge was the result of basically two things. You
named one of them. The other one was they had a small fire in an
Illinois refinery, but the speculators look and they say, we're
fighting capacity shutdown and we have a limited refining capacity
because we haven't built a major refinery in this country in 25 years.
Mr. THOMPSON of Pennsylvania. Right.
Mr. CARTER. Because of the burdensome rules we've come up with and
the fact that we can't permit them. So they look at refining capacity
and they look at the other issue, and they say, wait a minute, if
there's not a shortage now, there's going to be, and they run the price
up. Then when that opens up, hey, the market gets back to normal again,
and every time that happens the driving public of America suffers.
They're suffering today, and they're suffering on top of the highest
unemployment, longest period of high unemployment in modern times just
about.
This is one of those what we call kitchen-table issues, when the
family gathers around the kitchen table to figure out how they're going
to make the budget work especially if Mom or Dad are laid off. One of
the things they're looking at is the cost of that fuel, fuel to heat
their homes or cool their homes. Down where we come from, we want it
cool. They look to see how much it's going to cost them to get to and
from school, to and from work, how they're going to conserve energy,
maybe they're going to car pool. They're making these kinds of
decisions, and yet the government seems to be making these gigantic
decisions to shut off supply and then wonder why we have an energy
crisis in this country.
This is not rocket science. This is the law of supply and demand. We
have the biggest demand. If we can't meet our demand, we've got to go
to foreign oil. If there's a fight in Libya, we may not use much of
that foreign oil right now, but somebody else does; and if it's at
risk, then they are going into another market to get their oil and that
makes our market go up. It's all worldwide market in our oil and gas.
I don't understand why people think they're gouging you. They're
making excessive profits, and I understand the payment on CEOs and I am
not defending any payment on CEOs in any industry. It's not just the
oil industry that pays big bucks for CEOs; but if you look at the
history of the oil and gas industry, their percentage on investment is
lower than most average manufacturing facilities, somewhere between 6
and 8 percent return on their investment. And you say what investments?
Well, I think I said earlier, those offshore drilling rigs that drill
in the Gulf of Mexico and now have all been moved off the coast of
Africa, Indonesia and off the coast of Brazil, those rigs cost $1
billion, and they can cost you operational-wise in a 24-day period
almost $1 million to operate. They are expensive. And if you hit
nothing but dust when you get down to the bottom of that well, you have
blown a whole lot of money out the door, and that's just lost. Then you
drill the next well to try to get it back. We've gotten better at
looking for it and finding it, but it's still a gambler's business when
you get down to it.
But this is caused by the government to a great extent. You can't
create an environment of uncertainty in any market, I don't care what
the market is. If you create the idea of uncertainty, it affects the
market. It also affects the psyche of the people, and that's kind of
what I don't think they're getting.
So their solution is to tax it. If it moves, tax it. The problem with
that is do you really think the CEO of Exxon is going to pay the taxes
if we increase taxes on the oil and gas industry? No. You and I are
going to pay those taxes when we fill up our tank. If you go and ask
the question, they will tell you at your local filling station. They
used to publish it in Texas on the pump how much of a gallon of
gasoline was taxed. It's a whole bunch. Direct and indirect tax make up
a large amount of the cost of gasoline, always have, and I come from a
time where we used to have 19 cents a gallon gasoline in Texas. Try
that on for size. I could go buy a dollar's worth of gas and drive all
week.
I yield to the gentleman.
Mr. THOMPSON of Pennsylvania. I thank the gentleman from Texas.
I think a point in terms of the profits that oil companies make, it
really is what most industries, whether it's a manufacturer or service
industry, make right around 6 to 8 percent; but yet you have to answer
who is benefiting from that. I would find it hard to believe that
there's not a lot of Americans that benefit from that because their
pension programs are investing in the portfolios they may have. Their
pensions are investing in those types of companies and benefiting from
that 6 to 8 percent margin that these companies are delivering.
Those who will speak against using oil, they say, well, we don't have
enough. We use so much, but we only have 2 percent of the proven
reserves. Here's the facts. Frankly, when they define proven reserves,
they just look at conventional. They don't look at unconventional. They
don't consider shale gas. They don't consider shale oil. They just look
at conventional reserves. Then they really don't look at probable.
{time} 2110
For probable, there is 10 to 20 times that much available in terms of
probable. And then when you get the estimate, there is enough oil out
there to really, I think, meet the needs of this country for as long as
we need to. Now, I'm not saying forever because I think at some point,
there will be a new energy source that comes along. It may be
generations until we get that. It may be hydrogen-fueled cars. I don't
know what it is, but we are going to have that kind of new science in
the future. But we have plenty of oil to meet our needs right now.
In terms of natural gas, what we know now from all the reserves in
Texas and Pennsylvania and the Outer Continental Shelf and, frankly,
throughout the West, we have at least 200 years of natural gas, and
that's just what we know about. And the unknown is--but it's pretty
consistent--is that the technology gets better and better
[[Page H3155]]
and better. It's only with the advent about 60 years ago of the
development of horizontal drilling that we have been able to really
access the full potential that we are getting now on natural gas. I
know that the engineers and the scientists out there are looking at new
and better ways to get out more of this resource that God has really
blessed us with as a country.
I think we really do need an energy policy in this country, and it
ought to be one that is centered around the full use of and access to
domestic energy resources. We ought to be doing the research too,
obviously, for new development. And energy efficiency is important as
well, whether it's transportation or heating or electricity or
appliances being more energy efficient with it. But those three things
alone, all centered on domestic use of energy resources, that's the
kind of energy policy this country needs.
Mr. CARTER. Reclaiming my time, I agree with you 100 percent. It's
the same thing when we took over this House floor 3 years ago in the
dark because they turned out the lights on us, turned off the mics, and
we talked for about 2 or 3 weeks on, what we want is all of the above.
We are for every energy resource that is available, but we want that
energy resource to be as available as possible to be competitive in the
market. I mean, everybody's got their own little bailiwick. And corn
farmers love ethanol, but it's got to compete. Sun has to compete. Wind
has to compete.
They invariably call us oil and gas guys ``anti-wind people.'' Wrong.
Texas has the largest wind farm in the United States. There's no State
with more of those wind turbines than the State of Texas because out in
the West, the wind blows all the time. It's like a gold mine for wind.
What do you think Boone Pickens is talking about when he's talking
about all that wind energy out there? And his idea of putting natural
gas-burning cars on the road is a good idea. I support it. Because when
we hear that now with the discovery of shale gas and the ability--we
just started to tap it. It is just a small part of the future.
By the way, it would be real interesting to find out if some of our
colleagues that are so opposed to natural gas, if they knocked on his
door and said, Sir, we would like to talk to you about making a lease
for a share of the profits on drilling for natural gas on your
property. And I wonder if they would say, Oh, no. I wouldn't take that,
those hundreds of thousands of dollars that I might make from you
developing that resource. No, I don't believe in that stuff. I don't
think so. Whenever you produce wealth, wealth enhances a nation. And
your natural resources are a part of the wealth of the Nation, always
have been and, my friend, they always will be.
Mr. THOMPSON of Pennsylvania. I just want to come back to the point
you talked about in terms of ethanol, wind, solar. It could be
anything. Anytime that you take a new energy to commercial level,
commercialize it, but you do it artificially, you do it with subsidies,
you use taxpayer dollars to sustain it in the market, that's just
wrong. And it's not real. If something is ready for prime time, if it
is ready to be commercialized, it will stand on its own. It will create
a market that people want to come and buy it and use it. So as we look
forward to an energy policy, I think we need to be very careful about
what we artificially commercialize, what we subsidize.
Natural gas is real. Oil is real. Both of them will stand on their
own. It doesn't need subsidies in order to provide energy for folks. It
will do it in a way that is market proven. But there are other markets
out there--and you've named a couple of them--that if we take away
those subsidies today, they would collapse. They wouldn't exist. So,
frankly, I think that's a disservice to the American taxpayers.
Why are we commercializing energy resources? You know, I do believe
in research; and that's where our focus should be, as opposed to
prematurely commercializing something that doesn't stand on its own. I
have a lot of appreciation for the national energy labs in this
country. They are scientists. They don't have an agenda. They are just
looking for that new energy source, and they are very credible in what
they do. And that's where our emphasis should be, not prematurely
commercializing energies that are unsustainable. We really should make
sure we invest in research and development.
Mr. CARTER. Within the last 3 years, I have met two different
individuals--one of them very recently--who have a scientific plan to
refine garbage at your garbage dump, solid waste, normal throw-it-in-
your-garbage-can stuff, go out there and, through a multiple process,
produce gasoline and capture all the CO2 to be used--in
Texas we take CO2, put it back down in the ground in old
wells, and reenergize those wells to bring more oil to the surface. And
the leftovers, after this burning process to create the gasoline,
refine the gasoline out of garbage, leaves an ash that is good to plow
into fields in certain parts of the country to refurbish the fields.
That's the kind of thinking we want. That's great. That's a good
idea. And because we're talking energy and we're having energy policy,
those good ideas come to the fore. That's what we want. That's how
we're going to solve this problem. But we're not going to solve it by
shutting down what we have now in hopes that there is going to be this
miraculous overnight discovery that's just going to make everything
great, like we find some kryptonite or something, and it runs the whole
country. Wrong. It ain't going to happen.
This is a frustrating time for those of us that are in energy-
producing States because we have people that literally don't like the
production of energy, but they complain about the production of energy.
They want to tax it.
By the way, the majors, the big boys, they don't get subsidies on
their stuff. That's for wildcatters. They drilled, but most of their
production is overseas. And we, to some extent, by having bad energy
policy in the United States, we have driven people to the benefit of
other people in the world. Nobody thought about drilling off the coast
of Australia or drilling off the coast of Indonesia, which is a very
unstable volcanic area over there, until they were kind of pushed out
of American waters. And then they started looking in places like the
North Sea, off the coast of Africa, Nigeria, Indonesia; and these are
now major production fields. They've benefited from our lack of
foresight under some administrations to continue to enhance our native
industry. More power to them. That's good for them. But we have it here
too.
I still think there is plenty of oil in Alaska and lots of it. And
they haven't even started looking for natural gas up there. They
probably have got as much natural gas as anybody. There's an
international thing going on; most people don't even know about it. I
learned it from the Coast Guard. Because of the receding ice from the
North Pole--and I won't get off into global warming here today, if
that's it--whatever it is, because it's receding, there is now a
waterway. There is now a northwest passage across the top of North
America. You can sail from the Atlantic to the Pacific.
Also, if that water stays open, you can drill for natural resources
there. The unclaimed international water gets claimed by who puts the
most activity in that water. And one of the questions is, the Russians
are pouring in ships and trawlers and other things into that whole area
up there, the part we claim is so much. The Canadians claim so much.
But there is a lot more that seems to be developing. And why are they
after it? It's not for fish, my friend. It's oil and gas.
I thank my friend from Pennsylvania for joining me.
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