[Congressional Record Volume 158, Number 49 (Monday, March 26, 2012)]
[Senate]
[Pages S2025-S2028]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
REPEAL BIG OIL TAX SUBSIDIES ACT--MOTION TO PROCEED
The PRESIDING OFFICER. Under the previous order, the Senate will
resume consideration of the motion to proceed to S. 2204, which the
clerk will report.
The legislative clerk read as follows:
Motion to proceed to Calendar No. 337, S. 2204, a bill to
eliminate unnecessary tax subsidies and promote renewable
energy and energy conservation.
The PRESIDING OFFICER. Under the previous order, the time until 5:30
p.m. will be equally divided between the two leaders or their
designees.
Mr. INHOFE. Mr. President, I ask unanimous consent that the time on
each side be equally divided during the quorum calls.
[[Page S2026]]
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. INHOFE. I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. CORNYN. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. CORNYN. Mr. President, I come to the floor today to express
concerns about the rising cost of gasoline and the Obama
administration's efforts to further increase the American consumers'
pain at the pump.
As we all know, the average price of gasoline has now more than
doubled since the first week of the President's inauguration in January
2009, from $1.84 a gallon to $3.86. Furthermore, the Associated Press
has reported the typical American household spends about $4,155 a year
filling up at the pump--an all-time high--and 8.4 percent of the median
household income, the highest percentage spent for gasoline since 1981
when oil prices soared due to the crisis in the Middle East.
The Energy Information Administration estimates that 72 percent of
the price of a gallon of gasoline is made up from the cost of crude
oil, which is a globally traded commodity. Although some would like to
distract from the fundamentals, Congress cannot repeal the law of
supply and demand.
Indeed, President Obama used to agree with us. Last March, for
example, he said ``producing more oil in America will help lower oil
prices.'' However, his administration has adopted policies that
directly conflict with our goal of lowering gasoline prices. To add
insult to injury, with the public outcry, the President is out to
further confuse the facts and actually take credit for increasing
production when those increases have been on private lands outside of
his control, and while opposing greater exploration on Federal lands
under his purview. At the same time he is even seeking now to push
prices even higher by raising taxes in his fiscal year 2013 budget.
This week the Senate will be debating a bill by Senator Menendez of
New Jersey to increase taxes on oil producers. I don't know of anyone
who could reach any other conclusion than that by raising taxes on the
people who produce oil and gas, it will raise, not lower, the cost of
oil, thus the refined petroleum product known as gasoline. So,
actually, by punitively and in a discriminatory sort of way raising
prices on an unpopular sector of the economy, we will actually make
matters worse, not better.
The Tax Code supports the energy sector by providing a number of
targeted tax incentives--or tax incentives only available to the energy
industry. In addition to targeted tax incentives, there are a number of
broader tax provisions that are available for energy- and nonenergy-
related industries. For example, the section 199 domestic production
deduction incentive is available to most domestic manufacturers with
income derived from production property that was manufactured,
produced, grown, or extracted within the United States.
So this section 199 provision applies to a whole host of American
businesses, not just the oil and gas business. Yet the Menendez bill
and the Obama administration continue to single out oil producers for
tax increases, even though oil-related activities are already limited
from claiming the deduction compared to other industries.
Analysis by the Congressional Research Service for the energy
targeted tax incentives shows that while the majority of U.S. primary
energy production comes from fossil fuels, the majority of energy tax-
related revenue losses are associated with provisions designed to
support renewables.
During 2009, 77.9 percent of U.S. primary energy production could be
attributed to fossil fuels--77.9 percent in 2009. Of the Federal tax
support targeted to energy in 2009, an estimated 12.6 percent went
toward fossil fuels. In contrast, in that same year, more than 10
percent of U.S. primary energy sources came from renewable fuels.
In other words, just to repeat: 10.6 percent from renewable, 77.9 in
that same year from oil and gas, but notwithstanding the fact only 10
percent of energy produced came from renewable fuels, 77.4 percent of
energy targeted Federal tax support went toward supporting renewable
fuels.
If we want to put all these tax provisions on the table, I think we
should do that. As a matter of fact, the Simpson-Bowles study
identified more than $1 trillion of tax expenditures. But let's not
just pick out one sector of the economy and, in the process, raise
taxes and increase the price of gasoline at the pump as an unintended
but clearly likely outcome.
We know the Menendez bill is not about tax reform. This is about
mixing the message and trying to drive a wedge between the American
people and the people who actually create jobs. Unfortunately for the
administration, raising taxes will, in fact, translate into higher
prices.
It is a fair question to ask whether this administration can defend
its policies, such as their budget proposal to raise taxes where they
argued these tax provisions should be repealed because they ``encourage
overproduction of oil'' and are thereby ``detrimental to long-term
energy security.''
I am not sure most Americans understand that the official policy of
this administration is that tax deductions should be removed because
they encourage overproduction of oil in America. I thought the goal--
one of our goals--was to produce more at home so we would depend less
on imported energy from abroad.
Then there is the Keystone Pipeline, which is well-known. The
President is the primary obstacle to the completion of that pipeline
which will create more than 20,000 new jobs and produce 700,000 barrels
of oil at refineries in the United States from a safe and friendly
source--the nation of Canada. Because the President is blocking
completion of the Keystone XL Pipeline, they are looking for
alternative customers. Indeed, the Prime Minister of Canada has visited
China to prospect that potential purchase.
What is worse, it is not just that the President hasn't acted, it is
that the President has actually lobbied in the Senate to defeat efforts
to bypass his obstruction to the completion of the Keystone XL
Pipeline.
Well, the President must be feeling the heat because he showed up in
Cushing, OK, to celebrate and to say he would expedite about one-third
of the pipeline, which, ironically, doesn't require him to do anything.
It certainly doesn't turn on the spigot in Canada to get the oil in
that pipeline to come from Canada down to the United States.
So we can see our Nation has no coherent energy policy. We see that
not only is this an area that has been neglected to the detriment of
the American consumer, but actually the sorts of policies being pursued
by the administration--particularly with regard to the Keystone XL
Pipeline and raising taxes on domestic oil producers--are designed to
make matters worse for American consumers at a time when they are
struggling to recover from this recession, with historically high rates
of unemployment and too few jobs.
Looking at all the evidence on energy prices, it is hard to come to
any conclusion other than that high energy prices are part of President
Obama's plan. The policies he has put in place have intentionally
elevated the price of gasoline, much to the detriment of the American
people.
Mr. President, I yield the floor.
The PRESIDING OFFICER. The Senator from the State of New Jersey.
Mr. PRESIDING OFFICER. The Senator from New Jersey.
Mr. MENENDEZ. Mr. President, I rise in support of S. 2204, which is
my legislation to repeal Big Oil subsidies.
This bill is pretty simple. We end wasteful subsidies to the big five
oil companies, and we use those proceeds to invest in clean energy, in
creating jobs, and reducing the deficit. I think the American people
are sick and tired of paying ridiculously high gasoline prices at the
pump and then paying Big Oil again with our collective taxpayer
subsidies. I think that money is better spent keeping our economy going
and developing alternatives to oil that will create competition in the
marketplace and help to reduce gas prices.
We are poised to waste $24 billion over the next 10 years subsidizing
only five companies that are poised to make
[[Page S2027]]
over $1 trillion in profits--not proceeds, in profits--over the same
time frame. And as we all pay more at the pump, Big Oil rakes in more
money.
Exxon boasts in its Securities and Exchange Commission filings that
for every $1 increase in the price of oil, their profits rise by $375
million. For every $1 the price of oil goes up, they boast in their
filings that their profits--not proceeds, profits--rise by $375
million. The American driver's pain is Big Oil's profit.
What is Big Oil doing with its profits? Well, the answer is not
useful. As you can see in this chart, the profits from the big five oil
companies were $137 billion in 2011. That is an impressive 75-percent
increase from 2010. Did they use that extra money to produce more oil,
as some of my colleagues here would suggest? No, they didn't. They took
your money and actually in that time frame didn't produce a drop more
of oil. As you can see, despite the fact that overall U.S. production
is higher now than it has been in the last 8 years, last year these
five companies actually produced 4 percent less oil.
So it is fair to ask: If they did not invest to produce more oil,
then what are they doing with this $137 billion in profits, this 75-
percent increase in profits in 1 year? Well, they spent about $38
billion repurchasing their own stock to enrich themselves, and they
spent nearly $70 million on campaign contributions and lobbying to
protect their billions of dollars in subsidies. As you can see here, it
was a pretty smart investment. For every $1 they spent in lobbying,
they got about $30 in subsidies. One might say that is not a bad return
on their investment.
So instead of giving these subsidies to Big Oil so they can enrich
themselves and seek to affect and control our political system, I think
we could use some of those funds to reduce the deficit. I think we can
all agree we need to reduce the deficit, but there seems to be some
considerable disagreement on how to do it. Last week, those on the
other side of the aisle came out with what I call the Romney-Ryan
budget, their proposed budget, and it would drastically cut funding for
wounded soldiers, for seniors, for students, but it leaves in place
these wasteful subsidies even though we have this enormous profit.
Through some political sleight of hand they defy reality when they
tell us with a straight face that we have to make tough choices, and
then they cut funding for wounded soldiers, for seniors, and students
but won't touch the subsidies for Big Oil.
Somehow, in this Republican parallel universe, logic is turned on its
head and we are asked to believe that fairness doesn't mean treating
everyone equally. It means more for the very rich and more for Big Oil.
But we don't live in a parallel universe. We live in the real world.
Fairness means that working families should not be the only people
sacrificing. And we can't lower the deficit while we give taxpayer
dollars away to Big Oil companies that are making record profits and
not producing more energy. It is amazing to me that anybody can come
and make that argument.
What makes these subsidies even more ridiculous is that when we
pressed those who have supported the industry or those who have come
from the industry, everyone seems to admit that oil companies do not
need these subsidies. Former President Bush, who was very good with the
oil industry, said that oil companies do not need incentives to drill
when oil hits $55 per barrel. Those were his remarks. Now it is over
$100 a barrel. So if they didn't need incentives to drill when it was
at $55 a barrel, how does anybody come to the floor and suggest they
need incentives now when it is over $100 a barrel?
Then the former CEO of Shell said that subsidies are not necessary
for drilling and production. That is pretty much probably clear when
they are making $137 billion in that 1 year, and where they will make
$1 trillion over the next decade.
Of the $24 billion we save by cutting these subsidies to the big
five, we can use over $11 billion to extend a series of critically
important expiring energy tax incentives. These clean energy
technologies will cut demand for oil, they will drive economic growth,
will create jobs, and will allow America to lead the global clean
energy market.
Despite Big Oil's rhetoric--let me tell you, it is amazing. I see
they are spending a lot of that money, all this money here not making
oil, but they are spending it on television to scare everybody and to
say that, Oh, if you take any of those subsidies away, somehow prices
will rise. Well, we know that, despite Big Oil's rhetoric, cutting
subsidies will not raise gas prices. We know that. Why? Because experts
from the U.S. States Treasury Department, from the nonpartisan
Congressional Research Service, and from oil executive testimony that
came before the Finance Committee that I sit on, made it very clear
that is not the case.
But more than that, some of the most important tax policies that will
be extended in this bill will help drive down gas prices by creating
competition for oil as a transportation fuel. These incentives include
the one for biofuels such as cellulosic ethanol, biodiesel, also
incentives for natural gas and propane used as a transportation fuel.
There are also incentives for alternative fuel refueling infrastructure
and for electric vehicles. Taken together, these incentives are laying
the groundwork for a truly competitive market where we are not beholden
to one type of fuel to power our vehicles. But the good news doesn't
even end there. There are also tax incentives that will help the United
States compete for the renewable industries of the 21st century.
For example, the section 1603 Treasury grant program has helped
finance renewable energy projects around the country. It has leveraged
over $35 billion in investments to create tens of thousands of energy
projects. In my home State of New Jersey alone, 750 grants were given
for solar, geothermal, landfill gas, hydropower, wind projects. These
projects are worth over $350 million, creating many jobs, and will help
New Jersey on energy bills for decades to come.
Another important renewable energy incentive is the production tax
credit for wind. Since the last reauthorization of PTC in 2005, wind
power capacity has more than tripled. But if that production tax credit
is not extended, it is estimated that annual installations of wind will
drop by more than 75 percent and wind-supported jobs will decline from
78,000 in 2012 to 41,000 in 2013, and total wind energy investment will
drop by nearly two-thirds. So it is time to get back to reality. It is
time to tell middle-class families struggling to make ends meet that
fairness means everyone--everyone--pays their fair share when it comes
to reduce the deficit. It means ending ridiculous taxpayer giveaways to
the five most profitable companies in the world.
I cannot understand how the oil industry is spending money on radio
and other forms of media to say, Oh, my God, If you take any of our
subsidies away--and these aren't even all of the subsidies they have.
These are just a couple, the $24 billion over 10 years. They are going
to make $1 trillion over 10 years. So you are telling the American
people that when you are going to make $1 trillion over 10 years, we
collectively as taxpayers must still give you $24 billion or else
somehow $1 trillion minus $24 billion wouldn't be enough for you in
profits that you would gouge the consumer at the pump? I don't think
the American people are going to accept that.
It is time for us to stop wasting taxpayer money on oil subsidies and
use this money to invest in clean energy, in jobs, in lowering the
deficit. All of that can be done on this opportunity when we vote in
favor of moving forward on S. 2204, the Repeal Big Oil Subsidies Act.
It is time to put the interests of the American people ahead of the
money interests in this Congress with this vote, and then moving
forward.
I hear my colleagues may very well vote for us today to have a
debate--which I more than welcome. I am looking forward to it. I have
got a lot more to talk about in this regard--but then won't vote at the
end to repeal the subsidies. So I guess what we will hear is a chorus
of voices that will speak about defending Big Oil and defending its $24
billion in subsidies, and justifying that even with $1 trillion in
profits they still need to get their hands into the pockets of
taxpayers and take another $24 billion in addition to what they get at
the pump so they can make even more profits. And, somehow, there will
be a justification to that. I hope
[[Page S2028]]
the American people will be watching, because that type of
justification is beyond comprehension. I know it as I hear it from
families in New Jersey.
I hope we will have this debate. I hope we will be able to move
forward. I want to be able to talk about how I hear my colleagues talk
about drill, baby, drill. Well, I was incredulously amazed that
actually we are now exporting from the United States millions of
gallons of gasoline and refined petroleum products every day to other
places in the world. It seems to me that if we drill it here,
particularly on Federal lands and water, we should keep it here because
obviously the bigger the supply we have, the more we are going to
create downward pressure on prices. But I think most Americans would be
pretty shocked to know that we are actually exporting. They think
everything that is created here is kept here, which is why I found it
interesting--I keep hearing my colleagues talk about the Keystone
Pipeline. Well, there are those of us who said, You know what. If you
will make it with materials made in America so that we can ensure
American jobs are created with it, and if you keep the energy here and
not export it someplace around the world, then there are a lot of
people who would say: Yes, along with the right environmental
safeguards, let's consider it. But overwhelmingly that was voted
against. So so much for American jobs. So much for securing American
energy. Because what is the use of a pipeline to bring an energy source
and then have it sent to other places in the world? That doesn't help
us.
I am a big believer if we are going to drill it on Federal lands and
water, we are going to keep it here, we are going to help us lower
prices. I am a big believer if we are going to do something such as
Keystone, let's make sure it is made with American materials and made
with American hands and, at the end of the day, the energy is kept in
the United States. I am a big believer in saying at a time of shared
sacrifice, it is wrong to ask working families to do more and yet give
the oil companies $24 billion, when they will make $1 trillion in
profits. It is wrong to say to a wounded soldier we are going to cut
programs in his long-term health care that will ultimately help him get
back on his feet, but we are going to give Big Oil $24 billion. It is
wrong to tell students who are trying to determine their future and get
access to that college education and who will encumber themselves with
significant costs along the way, no, they pay more, but we are going to
give Big Oil $24 billion. It is wrong to tell seniors we are going to
end Medicare as we know it, but we are going to give Big Oil $24
billion. That is beyond my comprehension.
I look forward to the debate because it is going to be very
interesting to see some of the remarkable ways in which people are
going to have to explain that. I don't think it is explainable to the
American people. Tonight's vote starts a process: Which side are we on?
Are we on the side of the American taxpayer or are we on the side of
Big Oil? I hope an overwhelming number of our colleagues will, starting
tonight and moving toward final passage, say we are on the side of the
American taxpayer and the American consumer. If we do that, we can
create some justice in this process. We can help create competition in
the energy market to drive down prices, we can reduce the deficit by
another $12 billion, and we can be a lot more fair to working families
in this country. That is the choice before us. That is a choice the
Senate will make in a positive way.
I yield the floor and suggest the absence of a quorum.
The PRESIDING OFFICER (Ms. Klobuchar). The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. BINGAMAN. Madam President, I ask unanimous consent the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. BINGAMAN. I thank the Chair.
Cloture Motion
The PRESIDING OFFICER. The cloture motion having been presented under
rule XXII, the Chair directs the clerk to read the motion.
The assistant legislative clerk read as follows:
Cloture Motion
We, the undersigned Senators, in accordance with the
provisions of rule XXII of the Standing Rules of the Senate,
hereby move to bring to a close debate on the Reid motion to
proceed to Calendar No. 337, S. 2204, a bill to eliminate
unnecessary tax subsidies and promote renewable energy and
energy conservation.
Harry Reid, Robert Menendez, Richard J. Durbin, Patrick
J. Leahy, Patty Murray, Carl Levin, Charles E. Schumer,
Bernard Sanders, Amy Klobuchar, Al Franken, Benjamin L.
Cardin, Sheldon Whitehouse, Sherrod Brown, Mark Udall,
Daniel K. Akaka, Debbie Stabenow, John F. Kerry.
The PRESIDING OFFICER. By unanimous consent, the mandatory quorum
call has been waived.
The question is, Is it the sense of the Senate that debate on the
motion to proceed to S. 2204, a bill to eliminate unnecessary tax
subsidies and promote renewable energy and energy conservation shall be
brought to a close?
The yeas and nays are mandatory under the rule.
The clerk will call the roll.
The assistant legislative clerk called the roll.
Mr. DURBIN. I announce that the Senator from California (Mrs. Boxer)
is necessarily absent.
Mr. KYL. The following Senators are necessarily absent: the Senator
from Utah (Mr. Hatch), the Senator from Utah (Mr. Lee), and the Senator
from Illinois (Mr. Kirk).
The PRESIDING OFFICER. Are there any other Senators in the Chamber
desiring to vote?
The yeas and nays resulted--yeas 92, nays 4, as follows:
[Rollcall Vote No. 59 Leg.]
YEAS--92
Akaka
Alexander
Ayotte
Barrasso
Baucus
Bennet
Bingaman
Blumenthal
Blunt
Boozman
Brown (MA)
Brown (OH)
Burr
Cantwell
Cardin
Carper
Casey
Chambliss
Coats
Coburn
Cochran
Collins
Conrad
Coons
Corker
Cornyn
Crapo
DeMint
Durbin
Enzi
Feinstein
Franken
Gillibrand
Graham
Grassley
Hagan
Harkin
Heller
Hoeven
Hutchison
Inouye
Isakson
Johanns
Johnson (SD)
Johnson (WI)
Kerry
Klobuchar
Kohl
Kyl
Lautenberg
Leahy
Levin
Lieberman
Lugar
Manchin
McCain
McCaskill
McConnell
Menendez
Merkley
Mikulski
Moran
Murkowski
Murray
Nelson (FL)
Paul
Portman
Pryor
Reed
Reid
Risch
Roberts
Rockefeller
Rubio
Sanders
Schumer
Sessions
Shaheen
Shelby
Snowe
Stabenow
Tester
Thune
Toomey
Udall (CO)
Udall (NM)
Vitter
Warner
Webb
Whitehouse
Wicker
Wyden
NAYS--4
Begich
Inhofe
Landrieu
Nelson (NE)
NOT VOTING--4
Boxer
Hatch
Kirk
Lee
The PRESIDING OFFICER. On this vote, the yeas are 92 and the nays are
4. Three-fifths of the Senators duly chosen and sworn having voted in
the affirmative, the motion is agreed to.
vote Explanation
Mrs. BOXER. Madam President, I was absent from the vote to
invoke cloture on the motion to proceed to S. 2204, the ``Repeal Big
Oil Subsidies Act.'' Had I been present, I would have enthusiastically
vote ``aye.''
Mr. SCHUMER. Madam President, I suggest the absence of a quorum.
The PRESIDING OFFICER (Mrs. Hagan). The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. DURBIN. Madam President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
____________________