[Congressional Record Volume 158, Number 52 (Thursday, March 29, 2012)]
[Senate]
[Pages S2188-S2199]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
IMPOSING A MINIMUM EFFECTIVE TAX RATE FOR HIGH-INCOME TAXPAYERS--MOTION
TO PROCEED
The ACTING PRESIDENT pro tempore. Under the previous order, the
Senate will resume consideration of the motion to proceed to S. 2230,
which the clerk will report.
The assistant legislative clerk read as follows:
Motion to proceed to Calendar No. 339 (S. 2230) a bill to
reduce the deficit by imposing a minimum effective tax rate
for high-income taxpayers.
The ACTING PRESIDENT pro tempore. Under the previous order, the time
until 11:30 a.m. will be equally divided and controlled between the two
leaders or their designees, with the majority controlling the first 30
minutes and the Republicans controlling the second 30 minutes.
Mr. LAUTENBERG. Madam President, I ask unanimous consent that the
order for the quorum call be rescinded.
The PRESIDING OFFICER (Mrs. Gillibrand). Without objection, it is so
ordered.
Big Oil Subsidies
Mr. LAUTENBERG. Madam President, I rise today in a moment when
America is in crisis, and I don't think we are paying appropriate
attention to the problems that befall our society. There are still too
many people out of work, too many people who can't afford health care
presently, and too many people who can't educate their children because
they don't have the means. They are struggling. Millions of homes are
still on the edge of foreclosure. And here we see a situation that is
unacceptable under any stretch of the imagination.
I rise today to talk to the American people who are struggling every
week to provide the necessities for family life. At the same time, I
ask my Republican colleagues why they would insist on continuing tax
subsidies--gifts, really--to multibillion-dollar oil companies at the
expense of ordinary, hard-working, middle-income families. Right now,
these families are forced to come up with $4 per gallon--$60 to $80
dollars, typically--to fill the tank every time they have to go to the
gas station. That is a huge burden. The big five oil companies have
made almost $1 trillion in profits in the last decade. Look at how much
money these companies made in the last year alone. It was a record $137
billion between the big five oil companies.
Look at them: ExxonMobil--these poor guys need a subsidy. They only
made $41 billion--$41 billion--in a single year. Look down the list.
The last of the five must believe that trying to catch up is pretty
tough. They only made $12 billion. That is Conoco, the last. In 1 year,
they made $12 billion.
Given how well these companies are doing, why are we giving them
billions of dollars in tax breaks? The legislation we are voting on
today presents a better idea. It says we should end these tax breaks
and instead invest in clean energy solutions that can break our
dangerous dependence on oil.
Investing in renewable energy has helped launch industries that
create jobs and clean up our air and provide homemade -- homemade --
American power. Clean energy is also our best chance to break through
spiraling gas
[[Page S2189]]
prices and our reliance on foreign oil. One would think our colleagues
on the other side of the aisle would want to put a stop to the
punishing effects of higher and higher gas prices on middle-income
working people. Why wouldn't they want to end America's dependence on
fossil fuels and eliminate needless tax breaks for oil companies? Two
words: Big Oil.
Big Oil is doing all it can to protect their tax breaks. Even a
retired chairman and CEO of Exxon said it is not necessary; they do not
need it. But they are taking it. Big Oil is doing all it can to protect
their tax breaks, and the Republicans are lining up to help Big Oil.
It is time to tell the truth. Making oil companies pay their fair
share in taxes is not going to raise the price of gas, contrary to what
they publish. It just means Big Oil executives might have to trim their
sail a little bit and share in the problems we have. A long time ago
when I was a soldier, we had an excess profits tax for companies that
made, in a way, unconscionable amounts of money based on the situation
our country was facing. So it is just a matter of sharing some of the
responsibility our country has in order to keep everybody feeling as
though they are participating in the American dream, not a nightmare.
While millions of Americans are struggling every week to pay their
bills, everybody should take a look at how much oil companies are
paying their executives. Here is a fellow who personally runs
ExxonMobil, the CEO, and he was paid $29 million last year. That is
what I said, $29 million. Conoco Phillips' CEO received $18 million,
and Chevron's exec made $16 million in income in 1 single year.
By the way, that is from money earned for an essential product. When
we look at gasoline, it almost compares to having medicines available
because when we look at the cost of gasoline, we might ask: What would
it take to educate all the children who can learn? Way less than we see
demonstrated on these charts and their balance sheets. Working men and
women in this country on average make just over $27,000 a year--$27,000
a year.
I don't begrudge high profits. I really don't. I ran a big company, a
company I helped start, which has 45,000 employees. It is a huge
company. It is a company that calculates the employment records every
month. The company is called ADT. So I don't mind big profits.
The question is, Who are you taking them from and how critical is the
product they are being forced to buy? Right now, people are paying an
average of $3.91 per gallon of gas.
What about the people who live in other places? We picked at random a
county in Mississippi. The county is called Issaquena County. Last
year, the entire income for all the people in that county who were
working was just over $16 million. All the people in a single county
made $16 million. This poor guy at Chevron made $16 million by himself,
and the others would leave all of those in that county way behind. A
single oil company CEO made more in 1 year than all the people in that
county put together. These hard-working people are already contributing
to the income of oil executives whenever they fill up their gas tanks.
Is it fair to ask them to chip in with their tax dollars to pay even
more toward these record-setting salaries?
Over the last 10 years, CEO pay at Exxon and Chevron has more than
tripled. Over the same period, gas prices have nearly tripled. The
picture is clear: Working people are struggling to fill up their tanks
while oil executives are struggling to carry their big fat paychecks to
the bank. It is almost beyond belief that Senators are lining up to
protect tax breaks for oil companies--some Senators, I say--beyond
belief.
I say to them: Mind your responsibilities. You were elected not just
by oil company executives or even oil company employees. Let's focus on
the hard-working Americans who are paying more and more at the gas
pump, the clean energy workers who might lose their jobs, and our men
and women in uniform who put their lives on the line to protect oil
supplies.
The American people know these subsidies are unnecessary, that they
are ineffective, and they are immoral considering the conditions that
exist in our society. Continuing to subsidize oil companies only
increases our dependence on dirty fuels. It keeps us on a dead-end road
to sky-high energy bills, more oilspills, and dangerous pollution
levels.
So I call on my colleagues to kick Big Oil off of the welfare rolls
and invest in clean energy jobs. Let's end the industry's tax breaks
and break our country's addiction to oil and other dirty fuels. Let's
invest in clean energy and smart transportation, not windfalls for oil
industry executives and lobbyists. Let's make certain our children and
our grandchildren inherit a country that is fiscally sound, morally
responsible, and free from its dependence on oil.
Let's not worry about the oil companies. They can take care of
themselves. Let's stop this drain on our society, this drain on
working-class citizens. Let's pay attention to the millions and
millions of people in America who say: Just give us a chance, give us a
chance to make a decent living; give us a chance to educate our
children; give us a chance to keep our jobs; give us a chance to
maintain our homes; get us off the possible foreclosure line. That is
what we are looking for.
That is the purpose of this legislation--to say to the American
people: Look in this Chamber, Mr. and Mrs. America. Look in this
Chamber and see the people who are supporting Big Oil profit fattening.
Look at those who are supporting these profits.
Again, I don't mind companies making profits, but when the profits
come in almost blood money, when you think of the effect gasoline has
on family life, it is unfair, it is indecent, and it is improper.
With that, I yield the floor.
Recognition of the Minority Leader
The PRESIDING OFFICER. The Republican leader is recognized.
Mr. McCONNELL. Our friends on the other side, the Senate Democrats,
have put on a clinic this week on how not to run a serious legislative
body. If they have achieved anything at all, it is to make Americans
even more frustrated with Congress, as if that were possible.
Faced with skyrocketing gas prices, Senate Democrats turned to a bill
that even they admit doesn't lower them. Then, to make matters worse,
they blocked Republicans from offering anything that might. That was
their brilliant plan on how to deal with gas prices: raise taxes on
energy companies, when gas is already hovering around $4 a gallon, then
block consideration of anything else just to make sure gas prices don't
go anywhere but up.
Somehow they thought doing this would set up some kind of political
win for them, which, frankly, I don't understand. I mean, I can't
imagine anybody giving them any high-fives for not lowering gas prices.
But, anyway, that was obviously the plan. It appears to have fallen
short because now they want to move off this issue and on to another
political vote to yet another debate where the goal isn't to make a
difference but, rather, to make a point--to increase taxes not lower
prices at the pump.
Well, I don't expect this next vote will have the political punch
they expect either. But that is the Democratic plan anyway. It is
getting quite tedious. Day after day after day, Senate Democrats all
choose to come out here not so we can make an actual difference in the
lives of working Americans and families struggling to fill the gas
tank, but so we can watch them stage votes for show. For some reason
they thought they would put some political points on the board this
week if the American people saw them voting for a tax hike we all knew
ahead of time didn't have the votes to pass.
That didn't work. If anyone has any doubt about that, just ask
yourself why they were moving to actually get off of it. Now they think
they will score political points by staging another vote on a tax hike
we know doesn't have the votes to pass.
None of this makes sense to me. But that is how the Democrats have
chosen to run this place. If they want to keep trying to distract the
American people from the fact they do not have any solutions to the
problems we face, that is their prerogative. But that is not going to
keep Republicans from talking about ours. That is not going to keep us
from trying to actually make a difference around here.
[[Page S2190]]
Surveys show two-thirds of Americans disapprove of the way the
President is handling high gas prices.
We know high gas prices are having a negative impact on Americans'
daily lives. So we think the American people are entitled to this
debate. They sent us to do something other than put on a show, and that
is why we will continue to insist on a serious debate.
The majority leader frequently complains there isn't any time to
focus on priorities such as cybersecurity, postal reform, and the
Export-Import Bank, not to mention maybe passing a budget for the first
time in 3 years. Yet he seems to find the time to hold not one but two
political show votes on tax hikes.
The way I see it, the American people didn't send us to score
political points. As I said, they sent us to make a difference. So I
will be voting against this tax hike on American energy manufacturers,
and I would urge my colleagues to do the same.
I hope that when the Senate returns in April, Democrats will have
heard from their constituents and will focus on jobs and prices at the
pump--rather than the latest political vote.
Mr. REID. Madam President, if my friend would yield. I have a
unanimous consent request.
Mr. McCONNELL. I will be happy to yield.
The PRESIDING OFFICER. The majority leader.
Mr. REID. Madam President, I ask unanimous consent that the cloture
vote on S. 2204, which is currently set for 11:30, be moved to start at
11:15.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. REID. Members should not be worried about this because we will
keep the vote open until at least noon. So everybody who was scheduling
to vote at 11:30 can still do that.
Madam President, 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. McCONNELL. Madam President, I ask unanimous consent that the
order for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Health Care
Mr. McCONNELL. Madam President, we have all been following what has
been going on across the street this week with great interest. While we
all have our preferences, none of us knows at this point how the
Supreme Court will rule. But one thing we should all be able to agree
on is that the President's health care bill is a mess, an absolute
mess.
The American people clearly don't like it. Polls show the majority
want the law repealed. More than two-thirds of the public, including
most Democrats, believe the core of this bill is unconstitutional. It
is loaded, literally loaded with broken promises.
The President said it would lower costs. It is, in fact, raising
costs. Proponents said it would create jobs. Now we know it means fewer
jobs. The President said families would save on their premiums. They
are, in fact, going up. He said people would be able to keep the
insurance they have and like. They will not. CBO's most likely
prediction finds 3 to 5 million Americans will lose their current plan
every single year. The President said he would protect Medicare, but,
instead, the law raids Medicare for over $500 billion, cutting billions
from hospitals, nursing homes, hospices, and Medicare Advantage.
The President promised the American people their taxes wouldn't go up
one penny. Two years later, the American people found out their taxes
will be going up by more than $550 billion. The Joint Committee on
Taxation found no fewer than 11 separate taxes and penalties that fall
squarely on the middle class.
Remember the CLASS Act? The administration said it would be fiscally
stable and would reduce the deficit. A couple months ago, it was
determined to be unsustainable and was shut down before it even began.
The President told the American people, ``Federal conscience laws
will remain in place.'' Two years later, he turned around and gave his
approval to HHS to mandate that religious-affiliated schools,
universities, hospitals, and charities would have to violate their
religious tenets or pay a hefty fine.
Finally, the health care law will increase Medicaid rolls by nearly
25 million people, costing already cash-strapped States another $118
billion--money many Governors, including Kentucky's, don't know where
to get.
This law is bad for Kentucky, it is bad for the country, and it is
bad for health care. Americans don't want it. Regardless of what the
court decides this summer, it should be repealed and it should be
replaced. It should be replaced with commonsense reforms that lower
costs and that Americans actually want--reforms that protect jobs and
State budgets, reduce the deficit, reform entitlements, and strengthen
Medicare.
One broken promise is one too many. This law is full of broken
promises from top to bottom.
Two years ago, then-Speaker Pelosi said we would have to pass this
bill to find out what was in it. Now we know. The American people have
had a chance to decide for themselves. They don't like it. They want it
repealed, and that is what we plan to do.
Tornado Relief
Madam President, I once again share with my colleagues stories of the
heartbreaking events in my home State of Kentucky in the aftermath of
the horrific wave of storms and tornadoes that ravaged my State, along
with several others in the Midwest, earlier this month.
As I have already stated on the floor, these were very severe
tornadoes, with at least 11 funnel clouds confirmed by the National
Weather Service to have touched down in my State, blowing at wind
speeds up to 125 miles an hour.
We know 24 Kentuckians lost their lives and more than 300 were
injured. Many homes, churches, schools, and places of business were
destroyed. Scenes of destruction still exist across the State in places
such as Magoffin County, Menifee County, Kenton, Morgan, Laurel,
Lawrence, Martin, Pulaski, Johnson, and Trimble, all those counties in
my State which were among the hardest hit.
Kentuckians are working hard to rebuild. I am pleased to say that
despite the tragedy of lives lost, families grieving, and memories
destroyed forever, there is some good news to report; that is, how
inspiring it is to see so many good-hearted Kentuckians come together
to provide for their neighbors in the wake of these tornadoes.
Take, for example, the congregation of Arthur Ridge Baptist Church in
the town of East Bernstadt, located in Laurel County. Thanks to the
leadership of Pastor Steve Smith, Arthur Ridge Baptist Church opened
its doors within hours of the storm's end to provide food and shelter
for those who needed it.
Pastor Smith kept the church doors open for 24 hours a day and served
up to 700 meals a day to local residents who had no food, no kitchen,
and no home to call their own. According to Pastor Smith, people from
all over the area pitched in. Folks from different churches worked to
prepare meals, and many residents donated items such as dishes,
silverware, toiletries, pillows, and blankets for care packages to
distribute to the victims of the storm. Local businesses did their part
too. The nearby Little Caesar's pizza in London gave away 120 pizzas in
1 day, soon after the tornadoes. Many other local restaurants donated
food as well.
Thanks in part to the efforts of Pastor Smith and the congregation of
Arthur Ridge Baptist Church, life is just a little bit better for many
in East Bernstadt. At first, the church had to tend to people's most
immediate and ``simple needs--water, a hot meal, an air mattress to
sleep on,'' says Pastor Smith, who is a Laurel County native and has
been the pastor at Arthur Ridge now for 6 years. He says, however,
``People are over the shock and awe.''
Weeks after the tornadoes passed, the church was still open 14 hours
a day, distributing 125 to 150 meals a day and running a clothing
distribution center. Pastor Smith's latest focus was on finding a place
to set up donated washing and drying machines so local storm victims
without homes can actually clean their clothes.
Over 3,500 people have registered to volunteer in the region, and as
of last week over 25,000 meals had been served to displaced families.
[[Page S2191]]
This is just one story of how many Kentuckians have joined together
to help the least fortunate in my State. Hawk Creek Baptist Church in
Laurel County, First Baptist Church of East Bernstadt, and Trinity
Freewill Baptist Church of Martin County also opened their doors to
provide shelter and relief to displaced Kentuckians and the volunteers
working to help them in the days after the disaster struck.
Jim Paul, director of the organization called Ken-Tenn Relief Team,
was in East Bernstadt the morning after the storms with food supplies.
He trucked in a tractor-trailer load of donated food and other items
and personally volunteered dozens of hours in at least three counties
to aid storm victims.
In Morgan County, the local Appalachian Regional Healthcare hospital
suffered serious damage. Every second-floor window of the hospital was
literally blown out, doors were torn off their hinges, and part of the
roof was ripped off. Dozens of people were injured and the patients had
to be evacuated to nearby hospitals.
Luckily, Martie and Teresa Johnson, owners of a nearby Wendy's
restaurant, stepped in to help. They served 450 hot meals to the
cleanup crew who came in to repair the Morgan County ARH hospital and
also traveled to Salyersville and gave away food there.
One television station in Hazard, WYMT, held a telethon to raise
money for victims across the State. I was pleased to play a small part
in that effort myself, as the television station asked me to record a
greeting describing the devastating effects of the tornados. The people
of the region raised over $180,000 in the telethon for disaster relief.
The local J.C. Penney of Corbin donated clothing and shoes to area
elementary school students, and the employees of the store took up a
collection to donate winter, spring, and summer clothing for the
children.
``Some of [the employees] don't have a lot to give, but when this
came up, they all wanted to know what else we needed,'' says Tiffany
Flint, the Corbin J.C. Penney store manager.
We hope it will help the children to look good and feel
good. We just wanted to do this to help them get back on
their feet.
The men's soccer team from Kentucky's University of the Cumberlands
donated some of their time to help the less fortunate. Head soccer
coach Brenton Benware, his staff, and nearly 30 student athletes drove
to East Bernstadt to help clean up debris in the area.
``Going . . . was just another reminder of how blessed we really
are,'' said Coach Benware. ``I think we were all deeply affected by
what we saw and reminded how important it is to serve and help our
neighbors in times of need.''
While there, the University of the Cumberlands soccer team may have
run into the soccer team from Union College, which also traveled to
Laurel County to help. The team stacked wood from downed trees, cleared
debris from backyards, and helped a man move a displaced steel roof
that the tornado had deposited in his yard.
Union College dean of students Debbie D'Anna was responsible for
sponsoring the trip, while the school's campus food services donated
snacks and bottled water, and James Jimerson of the school's physical
plant loaned out tools. Local businesses, such as Knox Hardware and
Pope's Lumber, donated work and cleaning supplies. Many faculty, staff
and students of Union College donated items such as food, clothing, and
other essentials.
In Salyersville, a town in Magoffin County, the block known as
``Restaurant Row'' was hit by a tornado and nearly every restaurant on
it destroyed. One of the few left was a Dairy Queen owned by Doug and
Sue Mortimer.
On the night of the storms, they opened their restaurant, running on
generator power, and served free meals to the volunteers working to
clean up the wreckage.
Several Home Depot stores in Kentucky and Indiana contributed to the
relief efforts as well. In the West Liberty area, district manager
Becky Young and store manager Jim Householder coordinated donations of
approximately $2,600, and Jim's store employees were out immediately
after the storm handing out paper towels, trash bags, and gloves to
relief volunteers.
Other Home Depot stores in Kentucky and Indiana, led by district
manager Tim Choate and district human resource manager Lee Ann Bruce,
donated thousands of dollars' worth of products such as chainsaws,
gloves, respirators, tarps, water, and trash bags to organizations such
as the Henryville Fire Department and local United Way chapters. And
store employees volunteered to assist those organizations in the
recovery.
Lowe's stores in Kentucky have also pitched in, providing gloves,
tarps, shovels, bleach, and other supplies to communities all across
the State. In addition to over $300,000 donated by the company to
relief efforts after the storms, the Lowe's district manager for
Kentucky, Stephen West, dispatched ``Lowe's Heroes,'' store employees
who are volunteering their time and construction know-how.
Local Walmart stores in Kentucky as well as the company's foundation
have provided tens of thousands of dollars' worth of water, cleaning
supplies, baby food, diapers, and more to help the community. Bob
Gound, the market human resources manager for Walmart locations in
eastern Kentucky, has taken the lead in coordinating these efforts. And
local store employees are making bag lunches and handing them out in
the hardest-hit Kentucky communities.
I have seen firsthand in my recent visits to the Bluegrass State both
how severe the destruction is, and how hard the people of Kentucky are
working to rebuild and lift their neighbors out of the dire
circumstances that the cruel forces of nature have put so many of them
in.
It is thanks to altruistic and generous Kentuckians like Pastor Steve
Smith, among many others, that I am confident that the Kentuckians hurt
by these storms will recover. I and my staff throughout the State have
heard so many heart-warming stories like the few I have just shared
that it would not be possible for me to recite them all on this Senate
floor.
But I hope that the few stories I have shared are more than enough to
reassure my colleagues, the people of Kentucky, and the world that we
Kentuckians are stout of heart and firm in our resolve. We will prevail
over this tragedy. We will rebuild towns like East Bernstadt to be
better than they were before. And the families of Kentucky will
hopefully one day heal the wounds in their hearts and continue on.
Tribute to Laura Dove
Madam President, I know I have inconvenienced the Senator from
Georgia, but I have one more rather brief comment. I would like to say
a few words about Laura Dove, who is leaving us this week, sitting
right here at the table on the Republican side of the Chamber in the
well.
For C SPAN2 watchers out there, Laura is the assistant secretary for
the minority. We wish she were the assistant secretary for the
majority, but she is assistant secretary for the minority, which means
she is one of the people who make this place run every day but whose
names you don't hear on the rollcall.
She has put in her time, starting out as a page in high school and
later moving to the Republican cloakroom. She did a stint at the Senate
Republican Conference and the National Republican Senatorial Committee.
And then Dave Schiappa, the Secretary for the Minority, hired her back
into his shop about 10 years ago.
And she's done a fabulous job. Senate work is in Laura's DNA. Her
dad's a past Senate parliamentarian. And she's been an invaluable
member of the floor team for as long as I can remember--counseling
members on the floor, working with committees to clear legislation, and
doing countless other essential tasks, big and small, that nobody
watching from home would even notice.
She always has a smile, always handles the pressure down in the well
with a cool-head, and I know she's been an anchor for Dave over the
years. So we will miss having her around.
And we wish her all the best as she moves onto other things.
I know she wants to travel with her husband Dan, and her two children
Jakey and Abby. I don't think any of us would be surprised if Laura
came back. But for now, I thank her for her service to the Senate.
[[Page S2192]]
I yield the floor.
The PRESIDING OFFICER. The Senator from Georgia.
Mr. ISAKSON. I would note that it is never an inconvenience to be
deferred by a beautiful lady, and again I take all the remarks made by
the leader about Ms. Dove, and I would add one thing about the best and
greatest institution in America, the U.S. Senate, and that is that a
young mother of two has become an institution to herself. Laura, we
appreciate all you have done.
Missile Defense
Mr. ISAKSON. Madam President, I rise to talk about two specific
subjects, one of them a very troubling comment picked up by a
microphone that was not believed to be live, made by President Obama to
President Medvedev of Russia. It is a troubling comment to me because I
spent most of the previous year in the Senate as a member of the
Foreign Relations Committee working on the New START treaty, which the
Senate adopted with 71 favorable votes a year ago, a treaty that is a
treaty on offensive missiles, not defensive missiles nor strategic
missiles.
It is a treaty that began under Ronald Reagan, was ratified by George
H.W. Bush shortly after the fall of the Berlin Wall, was extended under
George W. Bush and terminated a couple of years ago and needed to be
renewed. It is a treaty that did three things. First of all, it reduced
offensive weapons held by the Russians and the Americans; second, gave
us unilateral access to Russia and the Russians unilateral access to us
to trust but verify the warheads that existed; and third, new
identification systems and holographs that made it almost impossible to
hide or mimic nuclear warheads. It is a comprehensive treaty that is
important to America, important to the free world, and, quite frankly,
important to Russia.
I would like to quote from the Washington Post exactly what the
President was picked up as having said when he was talking to Mr.
Medvedev after their official conversation.
I quote from the Washington Post:
On all these issues, but particularly missile defense,
this, this can be solved--
I underline, nobody knows what ``this'' means--
but it's important for him to give me space.
President Medvedev said back:
Yeah, I understand.
Then the President said the following:
This is my last election. After my election, I [will] have
more flexibility.
That flexibility obviously refers back to ``this,'' which was in the
first comment.
So as a continuing member of the Foreign Relations Committee, one who
is proud of the work we did on the START treaty but one who understands
particularly the commitments of the country, I think it important that
the President clarify what ``this'' meant and how flexibility would be
applied if he were reelected as President of the United States for this
reason: In the President's letter to the Senate to endorse the New
START treaty and ask for its ratification, he said the following: that
he pledged in his message to the Senate on the New START treaty ``to
continue development and deployment of all stages of the Phased
Adaptive Approach to missile defense in Europe, including qualitative
and quantitative improvements to such system.'' That is a unilateral
statement.
I met with Vice President Joe Biden in his office outside this
Chamber during the debate. Vice President Biden committed the
administration in terms of continuing on missile defense. I met with
Secretary of State Clinton. I met with Ellen Tauscher, who was one of
the chief negotiators and chief operatives, a former Member of the
House working for the State Department. There was never any wiggle room
nor need for flexibility. The United States was committed to missile
defense in Europe, we remain committed to this day, and it is important
that the President reaffirm that and it not be in any way confused or
blurred by the comments picked up by that microphone. It is too
important to the country, it is too important to this body, and it is
too important to me for us to be able to trust the words of each other,
not to find out sometime later that they want flexibility to possibly
move from those words. Nuclear defense clearly is very sensitive with
the Russians, and I understand that. If there are negotiations on that,
that ought to be in the open, not after we have time for flexibility.
It ought to be forthright.
I also would like to add that there is another missile defense issue
that looms out there that we have to pay attention to. Israel is
surrounded by missiles with warheads to injure the people of that
country and take the country down. A missile defense system for Israel
would be equally as important as missile defense deployment would be
for the Eastern European countries.
So missile defense was a vision of Ronald Reagan's, continued under
every President of the United States since Ronald Reagan, and it is
important that we remain committed to it. I believe it is particularly
important to understand what the President said, particularly on
missile defense, what ``this'' meant when he asked for flexibility,
because there should be no wiggle room in our desire to protect and
defend democracy not only in the United States but around the world.
Madam President real quickly, we talked all week about gas prices,
and there has been a lot of demonization from both sides. I am a pretty
simple guy. I was a businessman for 33 years, went and got a degree in
college in business, studied economics in high school, and learned one
principle of free enterprise and competition: prices are determined by
supply and demand. If your supply goes down and your demand goes up,
your prices go up. On the contrary, if the supply is plentiful and
demand goes down, your prices go down. You can blame gas companies,
presidents' salaries, anything you want to blame; the fact is, we are
talking out of the side of our mouth--and particularly in the
administration--when it comes to exploration for natural resources in
the United States of America, and only can we become energy independent
when we develop all of our resources. I support that. I drive a hybrid
car. I am not just somebody who talks about it, I believe it is
important. It reduces my consumption, it extends my miles per gallon,
and it is better for the environment.
But we have proven through the Solyndra and other cases that some of
the alternative energy sources were either not perfected or frankly
just don't work. So while we are developing ones that do, we should be
robustly exploring in the gulf, in Alaska, in the Midwest, in the
Northwest, and offshore, such as my State of Georgia, the resources we
know exist to raise the supply of petroleum in the United States and
lower the price to the American taxpayer.
All four sources of energy that are safe and reliable should be
promoted. That includes nuclear energy. I am very proud and I am
thankful to the President that he issued the loan guarantee on the
first reactors licensed in this country since 1978. They are in Plant
Vogtle in Augusta or Burke County, GA. But his Chairman of the
Nuclear Regulatory Commission voted no on that final approval. He was
outvoted 4 to 1, but he voted no. That sends a signal that we may talk
on one hand about having robust development of all resources, but when
it comes to playing our hand on the actual vote, we really don't do it.
The same thing is true with the Keystone Pipeline. You can't just
approve the pipeline to the south without connecting it to the north
because if you do, you don't get the petroleum.
We can blame whomever we want to blame, but the fact is facts are
stubborn, and supply and demand is what dictates price. We should
robustly be exploring the natural resources of the United States for
America to have less dependence on foreign oil and more dependence on
our own oil where we know we have resources. We should pay attention to
our environment and recognize that no country in the world has done a
better job in the modern era since the industrial revolution of
cleaning up its environment than the United States of America. No one
looks after their environment harder than the United States of America.
We owe it to our people to look equally hard at the cost of gasoline,
the price of petroleum, and the robust exploration of our own natural
resources here at home for less dependency overseas.
[[Page S2193]]
I yield the floor and defer to the Senator from Louisiana, who has a
lot of offshore resources of his own.
The PRESIDING OFFICER. The Senator from Louisiana.
Mr. VITTER. Madam President, I rise to talk about one of the most
pressing challenges Louisiana families--indeed, most American
families--face, and that is the price at the pump and the enormous hit
that is to their family budgets, their pocketbooks, their wallets. It
is really making life very difficult in the midst of a very weak
economy.
A few years ago the price was $1.84. That was on the day Barack Obama
was sworn in as President of the United States. Now it has more than
doubled; it is $3.80-plus. It seems to be rising every day, and that is
a real crisis to a lot of American families. We should be committed
here in the Senate, here in Washington, to connecting with the real
world and focusing on real problems and real crises. For millions of
Louisiana and American families, that is absolutely it. Unfortunately,
I don't see real solutions and a real policy to address that coming out
of the President or some of my colleagues on the Senate floor. Right
now, to the minute, as we speak on the Senate floor, the President is
speaking at the White House, and he is laying out his proposal to raise
taxes on domestic energy companies and domestic oil and gas production.
That is not a policy that is going to help Louisiana and American
families with the price at the pump. In fact, it is a policy that is
going to make it worse and not better.
Folks get it in the real world. They certainly do in Louisiana. When
we increase taxes on something, those are costs that almost every
business, if they possibly can, is going to pass on to consumers. That
is pushing prices up, not down.
It is also the first rule of economics, as my colleague from Georgia
said, supply and demand. If we tax something more, we get less of it.
If we increase taxes on domestic energy producers, on domestic oil and
gas, we will get less of it. Less supply means the price goes up. So
those are two compelling reasons this proposal is not going to help
Louisiana families and American families with their struggles with the
price at the pump. It is going to make it even worse, when it has been
getting worse on its own for a lot of related reasons, very
dramatically. So that is not a policy. That is not a commonsense or a
real-world solution.
Likewise, one of the few other things I have heard from the President
in terms of this matter is essentially begging other countries to
increase their production. I don't think that is a policy worthy of
America either. I think the perfect symbol for that approach is the
President bowing to the princes of Saudi Arabia. It is a symbol of his
approach of trying to deal with the price at the pump, and it is not
good enough and it is not worthy of the American people.
Other folks have also adopted this approach. Senator Schumer, our
colleague in this Chamber, recently wrote Secretary of State Clinton on
February 28, 2012, just a few weeks ago:
To address this situation--
Meaning the price at the pump--
I urge the State Department to work with the government of
Saudi Arabia to increase its oil production, as they are
currently producing well under their capacity.
Begging Saudi Arabia is not an adequate solution, and it is not a
policy worthy of America.
President Obama's own Energy Secretary Secretary Chu said even more
recently, on March 20 of this year:
We're very grateful that Saudi Arabia has extra capacity
and it feels confident that it can fulfill any potential
deficits, at least the way the current markets are now, the
current demand I should say, are now.
Again, begging Saudi Arabia, begging the Middle East, begging other
countries, that is not an adequate policy and it is not a policy worthy
of America.
President Obama has done a world tour doing some of this in other
countries. Notably, on March 20, 2011, when my part of the country was
still struggling with the de facto moratorium in the Gulf of Mexico, a
permit logjam blocking us from producing good, reliable American
energy, putting Americans, Louisianans to work, the President went to
Brazil to beg them to produce their resources and to promise them that
the United States would be a great customer. Quote:
We want to help you with the technology and support to
develop these oil reserves safely. And when you're ready to
start selling, we want to be one of your best customers. At a
time when we've been reminded how easily instability in other
parts of the world can affect the price of oil, the United
States could not be happier with the potential for a new,
stable source of energy.
He means drilling in Brazil. I have to say this was like rubbing salt
in the wound to most Louisianans. As I said, this was March 2011, a
year ago, and we were still suffering from a continuing de facto
moratorium that the President had imposed following the BP incident. So
he was going to Brazil and urging them to drill, urging them to
explore, committing America to that, and refusing to do it in America
in the Gulf of Mexico. That is not a commonsense solution. That is not
a real-world policy. That is not a policy worthy of America. None of
this begging is.
Other countries do have an energy policy, and it is not begging; it
is developing. It is controlling their own future. Very recently in the
press there have been reports that PetroChina has now become the
leading company publicly traded in terms of production of oil, far
surpassing Big Oil and all the other companies that have been demonized
by my colleagues on the left on the Senate floor.
Madam President, I ask unanimous consent to have the press report
printed for the Record.
The PRESIDING OFFICER. Without objection, it is so ordered.
There being no objection, the material was ordered to be printed in
the Record, as follows:
[From the Washington Post, Mar. 29, 2012]
PetroChina Produced More Oil Than Industry Giant Exxon Mobil in 2011
(By Associated Press)
New York.--A big shift is happening in Big Oil: an American
giant now ranks behind a Chinese upstart.
Exxon Mobil is no longer the world's biggest publicly
traded producer of oil. For the first time, that distinction
belongs to a 13-year-old Chinese company called PetroChina.
The Beijing company was created by the Chinese government to
secure more oil for that nation's booming economy.
PetroChina announced Thursday that it pumped 2.4 million
barrels a day last year, surpassing Exxon by 100,000. The
company has grown rapidly over the last decade by squeezing
more from China's aging oil fields and outspending Western
companies to acquire more petroleum reserves in places like
Canada, Iraq and Qatar. It's motivated by a need to lock up
as much oil as possible.
The company's output increased 3.3 percent in 2011 while
Exxon's fell 5 percent. Exxon's oil production also fell
behind Rosneft, the Russian energy company.
PetroChina's rise highlights a fundamental difference in
how the largest petroleum companies plan to supply the world
as new deposits become tougher to find and more expensive to
produce.
Every major oil company has aggressively pursued new finds
to replace their current wells. But analysts say Western oil
firms like Exxon Mobil have been more conservative than the
Chinese, mindful of their bottom line and investor returns.
With oil prices up 19 percent in 2011, they still made money
without increasing production.
PetroChina Co. Ltd. has a different mission. The Chinese
government owns 86 percent of its stock and the nation uses
nearly every drop of oil PetroChina pumps. Its appetite for
gasoline and other petroleum products is projected to double
between 2010 and 2035.
``There's a lot of anxiety in China about the energy
question,'' says energy historian Dan Yergin. ``It's just
growing so fast.''
While PetroChina sits atop other publicly traded companies
in oil production, it falls well short of national oil
companies like Saudi Aramco, which produces nearly 8 million
barrels a day. And Exxon is still the biggest publicly traded
energy company when counting combined output of oil and
natural gas. PetroChina ranks third behind Exxon and BP in
total output of oil and natural gas.
PetroChina is looking to build on its momentum in 2012.
``We must push ahead,'' PetroChina chairman Jiang Jiemin
said in January.
PetroChina has grown by pumping everything it can from
reserves in China, estimated to contain more than 6.5 billion
barrels. It drilled thousands of oil wells across vast
stretches of the nation's northern grasslands. Some of those
fields are ancient by industry standards, dating close to the
beginning of China's communist government in the 1950s.
The commitment to aging fields distinguishes PetroChina
from its biggest Western rivals. Exxon and other major oil
companies typically sell their aging, low-performing fields,
or they put them out of commission.
PetroChina also has been on a buying spree, acquiring new
reserves in Iraq, Australia, Africa, Qatar and Canada. Since
2010, its acquisitions have totaled $7 billion, about
[[Page S2194]]
twice as much as Exxon, according to data provider Dealogic.
Several other Chinese companies have become deal makers
around the globe as well. Total acquisitions by Chinese
energy firms jumped from less than $2 billion between 2002
and 2003 to nearly $48 billion in 2009 and 2010, according to
the International Energy Agency. More times than not, the
companies are paying above the industry average to get those
deals done.
It's making some in the West nervous.
In 2005, for example, CNOOC Ltd., a company mostly owned by
the Chinese government tried to buy American oil producer
Unocal. U.S. lawmakers worked to block the deal, asking
President Bush to investigate the role the Chinese central
government played in the process. Chevron Corp. eventually
bought Unocal for $17.3 billion.
``There's a resistance to Chinese investment in (U.S.) oil
and gas,'' Morningstar analyst Robert Bellinski says. ``It's
like how Japan was to us in the 1980s. People think they're
going to take us over. They're going to buy all of our
resources.''
That's unlikely to happen. It doesn't make economic sense
to export oil away from the world's largest oil consumer.
But the Chinese could make it tougher for Big Oil to
generate returns for their shareholders. China's oil
companies have been willing to outspend everyone and that
drives up the price of fields and makes it more expensive for
everyone to expand.
``You now have to outbid them,'' says Argus Research
analyst Phil Weiss. ``If you can't, you're going to have
access to fewer assets.''
Longer term, Chinese expansion globally will bring benefits
to the U.S. and other economies. By developing as many oil
wells as possible--especially in Africa, Iraq and other
politically unstable regions--China will help expand supply.
``Frankly, the more risk-hungry producers there are, the
more oil will be on the market, and the cheaper prices are,''
says Michael Levi, an energy policy expert at the Council on
Foreign Relations.
Despite its swift expansion, PetroChina and other Chinese
companies still have much to prove to investors, analysts
say.
PetroChina's parent, China National Petroleum Corp., for
example, has spent millions of dollars in Sudan to provide
highways, medical facilities and shuttle buses for the
elderly. Oil companies typically don't do that. All of that
increases the cost of business and minimizes the returns for
shareholders.
In 2009 and 2010, PetroChina's profit margins for its
exploration and production business were only about two-
thirds that of Exxon Mobil's. Its stock price has climbed
less than 1 percent, in the past year, compared with a 3.7
percent rise in the stock of Exxon Mobil Corp.
``You have to ask yourself: What is the purpose of
PetroChina?'' Bellinski says. ``It is to fuel China. That's
it. Although they're a public company, I'm very skeptical
that they have any interest in shareholder value creation.''
Mr. VITTER. The Chinese are not going around the world begging. The
Chinese are developing. The Chinese are trying to control their own
destiny, and PetroChina is now the leading company in terms of
producing oil.
Petrobras in Brazil is another example. Brazil is developing its
resources very aggressively. That is what I referred to when the
President went there a year ago and applauded them and encouraged them
with giving them U.S. resources to do it in terms of loan guarantees,
and the President absolutely promised we would be a great customer.
The Brazilians are not traveling the world begging. The Brazilians
are controlling their own destiny. The Brazilians are responsibly
developing their own resources, and our President even applauds that
while refusing to do the same in this country.
Madam President, I ask unanimous consent to have the press report
printed in the Record.
The PRESIDING OFFICER. Without objection, it is so ordered.
There being no objection, the material was ordered to be printed in
the Record, as follows:
[From the Washington Times, Jan. 19, 2012]
China Gets Jump on U.S. for Brazil's Oil--Two Export Pacts a Coup for
Beijing
(By Kelly Hearn)
Buenos Aires.--Off the coast of Rio de Janeiro--below a
mile of water and two miles of shifting rock, sand and salt--
is an ultradeep sea of oil that could turn Brazil into the
world's fourth-largest oil producer, behind Russia, Saudi
Arabia and the United States.
The country's state-controlled oil company, Petrobras,
expects to pump 4.9 million barrels a day from the country's
oil fields by 2020, with 40 percent of that coming from the
seabed. One and a half million barrels will be bound for
export markets.
The United States wants it, but China is getting it.
Less than a month after President Obama visited Brazil in
March to make a pitch for oil, Brazilian President Dilma
Rousseff was off to Beijing to sign oil contracts with two
huge state-owned Chinese companies.
The deals are part of a growing oil relationship between
the two countries that, thanks to a series of billion-dollar
agreements, is giving China greater influence over Brazil's
oil frontier.
Chinese oil companies are pushing to meet mandatory
expansion targets by inking deals across Africa and Latin
America, but they are especially interested in Brazil.
``With the Lula and Carioca discoveries alone, Brazil added
a possible 38 billion barrels of estimated recoverable oil,''
said Luis Giusti, a former president of Venezuela's state oil
company, PDVSA, referring to the new Brazilian oil fields.
``That immediately changed the picture,'' he said, adding
that Brazil is on track to become ``an oil giant.''
During Mrs. Rousseff's visit to China, Brazil's Petrobras
signed a technology cooperation deal with the China Petroleum
& Chemical Corp., or Sinopec.
Petrobras also signed a memorandum of understanding with
Sinochem, a massive state-owned company with interests in
energy, real estate and agrichemicals.
The Sinochem deal aims to identify and build ``business
opportunities in the fields of exploration and production,
oil commercialization and mature oil-field recovery,''
according to Petrobras.
The relationship with China goes back to at least two years
before Mr. Obama came to Brazil to applaud the oil discovery
and tell Mrs. Rousseff:
``We want to work with you. We want to help with technology
and support to develop these oil reserves safely, and, when
you're ready to start selling, we want to be one of your best
customers.''
China rescued Petrobras in 2009, when the oil company was
looking at tight credit markets to finance a record-setting
$224 billion investment plan. China's national development
bank offered a $10 billion loan on the condition that
Petrobras ship oil to China for 10 years.
A chunk of Brazil's oil real estate appeared on China's
portfolio in 2010, when Sinopec agreed to pay $7.1 billion
for 40 percent of Repsol-YPF of Brazil, which has stakes in
the now internationally famous Santos Basin, and the Sapinhoa
field, which has an estimated recoverable volume of 2.1
billion barrels. Statoil of Norway also agreed that year to
sell 40 percent of the offshore Peregrino field to Sinochem.
Last year, Sinopec announced it would buy 30 percent of
GALP of Brazil, a Portuguese company, for $3.5 billion. GALP
has interests in the Santos Basin and a 10 percent stake in
the massive Lula field.
``The $5.2 billion cash-in we will get from Sinopec is
paramount for our strategy in Brazil,'' GALP CEO Manuel
Ferreira de Oliveira told Bloomberg News.
``It will give us a rock-solid capital base as we enter a
decisive investment period at the Santos Basin. This
operation values our existing Brazilian assets at $12.5
billion and is really a landmark for the company and for our
shareholders.''
News reports in December said Sinopec is the current
favorite to buy stakes in Brazilian oil owned by Britain's BG
Group, which also has interests in the massive fields of
Carioca, Guara, Lula and Lara.
On Jan 8., the French company Perenco announced it was
selling Sinochem a 10 percent stake in five offshore blocks
located in the Espirito Santos Basin. Some of the
transactions still await approval by Brazil's government.
In December, Venezuelan Oil Minister Rafael Ramirez
publicly reiterated his government's commitment to an oil
refinery joint venture with Petrobras.
That project reportedly is set to be funded by China's
national development bank. Some news reports have quoted the
head of China's development bank saying that new deals with
Brazil are under consideration.
James Williams, an energy economist with the U.S.
consulting group WTRG Economics, said the Chinese are taking
on big risks with ultra-deep-water investments.
``But for them, the benefits are greater, as they become
partners with companies that have better technology and
expertise,'' he said.
Mr. VITTER. According to recent press reports, there is a budding and
building relationship between Brazil and China, and China is taking
advantage and forming contracts to take advantage of that resource. We
should learn a thing or two from other folks around the world, and we
should not just beg; we should build and develop. We should take our
own future into our own hands, and we have an enormous opportunity to
do that.
The United States is actually the single most energy-rich country in
the world, bar none. When we look at total energy resources, we lead
the world. Russia is second, and other countries follow way behind.
Saudi Arabia is third but cannot compare in terms of total resources.
No Middle Eastern country can compare, and China is below that. We have
the resources. We are the single most energy-rich country in the world,
and this map shows it.
We have enormous reserves, particularly shale in the West, natural
gas in
[[Page S2195]]
finds on land, and offshore enormous potential of reserves of oil.
Literally, there are hundreds of years' worth. So what is the problem?
The problem is we are the only country in the world that puts well over
90 percent of those resources off-limits and doesn't develop them, but
we can do better.
We can reasonably, responsibly, and safely open that access. We can
do what Brazil is doing; we can do what China is doing. We do not have
to beg. We can have a policy worthy of America and Americans. We can
take control of our own destiny.
What will that mean? It will mean great U.S. jobs, which by
definition cannot be outsourced. We cannot have a domestic energy job
producing good, reliable energy in the United States and outsource it
to China or India. We will build more energy independence, not having
to beg Saudi Arabia or go to Brazil as a customer or anything else. We
will even increase revenue to lower deficit and debt. After the Federal
income tax, the biggest source of revenue to the Federal Government is
royalty or revenue on domestic oil production. It is second only to
Federal income tax. It would be enormous new revenue to reduce deficit
and debt. And, of course, we can help lower the price at the pump. We
can increase supply, which lowers the price.
So I urge us to do what the American people want us to do: to adopt
common sense, to adopt a real policy, and to take control of our own
destiny. Begging is not a policy, at least not one worthy of Americans.
This tax proposal to increase taxes on U.S. oil companies and domestic
oil production is not a policy that will do anything but increase the
price at the pump, decrease supply, and that is the opposite of what we
need. Let's do what will make a difference: increase supply, control
our own destiny, and do more right here at home.
I yield back the floor.
The PRESIDING OFFICER. The Senator from Arkansas.
Rising to the Occasion
Mr. BOOZMAN. Madam President, in a moment I am going to speak about
energy. But, first of all--as I was waiting to have the opportunity to
do this--I want to thank Senator McConnell for giving us an update on
what is going on in Kentucky. We do a lot of very important things
here. One of the things I am going to talk about, energy, is one of the
most important, and yet it is good to hear the stories of ordinary
Americans doing extraordinary things. This truly is what our country is
all about, and my thoughts and prayers are with the people of Kentucky.
But it is so refreshing--we talk a lot about our problems, but the
strength of America is people like the folks in Kentucky and all
throughout America who rise to the occasion as they need to.
The increasing price of gas is a costly reminder of how dependent our
country is on foreign oil. This is one of the most pressing issues we
face today because the price at the pump directly impacts our everyday
lives, and Arkansans are telling me they are worried about what it is
doing to their bottom line.
Americans are frustrated with the increase in the cost of gas, and
rightfully so. In my home State of Arkansas, the cost for a regular
gallon of gas is up 22 cents from a month ago according to AAA. The
letters, calls, e-mails and Facebook posts I receive from Arkansas are
saying the same thing. It is harder to fill their tanks while making
ends meet.
Arkansas families are faced with tough choices because the rising
prices are dipping into their family's disposable income. The increase
in the price of gas puts a strain on family budgets.
Earlier this week I hosted a townhall with Arkansans throughout the
State. While I expected the major discussion to be about this issue, I
was surprised at how much it dominated the conversation. During the
event we took an informal poll asking participants if the increase of
gas has forced significant changes in their daily habits. Seventy-eight
percent of those who answered said the price had a significant impact.
Sarah, from Mountain Home, AK, said on her Facebook page that the
increase in gas prices has forced her family to allocate more money for
fuel expenses, which leaves less money for food, making it frustrating.
Sarah and other Arkansans should not have to choose between getting gas
to get to work and the necessities they need in the household.
Chris from Mena, AK, wrote that he notices an increase in the price
of groceries. He said:
People should be aware of how fuel costs affect everything
we buy and do.
I agree with Chris because the increased price for gas adds to the
transportation costs that are passed along to consumers.
Donnie Smith, the CEO of the Springdale-based Tysons Food, told the
Arkansas Business Journal that with Springdale as a price point, there
has been an increase of more than 55 percent in the cost of diesel in
the past 5 years. This is significant because the company uses fuel to
transport feed to family farmers, chickens to and from the farms, and
the finished products to customers around the world.
American families and businesses deserve a plan that will help bring
down the prices at the pump. The legislation before this Chamber
proposed to raise taxes on American energy producers. This will not
change supply and demand, as Senator Isakson talked about a few minutes
ago. These are basic truths. Supply and demand does control costs. This
will do nothing to that.
Again, hard-working Americans will be left with the bill as a result
if this bill were passed. I believe the better way begins with adopting
an energy strategy that increases production of American energy in a
clean, efficient way through developing wind, solar, and hydrogen
technologies as well as tapping into the vast majority of natural
resources our country is blessed with.
The reality of our country's nonexistent energy policy is it forces
us to rely on the Middle East for oil. We import about 9 million
barrels of oil every day, half of our supply. This is costly to our
economy, our citizens, and it threatens our national security. This is
the only developed country in the world that refuses to use its natural
resources. Opening Alaska's Wildlife Refuge and increasing offshore
exploration on the Outer Continental Shelf is a step in the right
direction that puts us on a path of energy independence. We can boost
our domestic energy supply through the development of the Keystone XL
Pipeline. The proposed 1,700-mile pipeline would transport 700,000
barrels of oil per day from Canada to U.S. refineries in the gulf coast
and allow us to get reliable and secure oil from our largest trading
partner and trusted ally. Unfortunately, while I support this project
and voted in favor of it several times in this Chamber, the project was
rejected by the majority after President Obama took the time to lobby
his Members to vote against it after vetoing the project earlier this
year.
There is no time like today to pass legislation to fully utilize the
resources we have been blessed with in our country, but this should not
come at the cost of our energy producers.
Mr. President, I yield the floor.
The PRESIDING OFFICER (Mr. Brown of Ohio). The Senator from Michigan.
Ms. STABENOW. Thank you very much, Mr. President. If the Chair would
please let me know when I have used 5 minutes, I would appreciate that.
We have a very important vote in front of us that goes to the
question of whether consumers are going to continue to be held hostage
by basically having one energy source at the pump or whether we are
going to give competition to the oil companies and if we are going to
give consumers choice.
I believe we need to do everything; there is no question about that
in my mind, but that doesn't mean having a Tax Code that has embedded
in it for almost 100 years special tax breaks and subsidies for the oil
companies, and the other new clean energy alternatives that are growing
and creating jobs in our country do not have the same treatment. In
fact, they limp along with a tax cut that expires every year, not sure
if it is going to continue, which is what is happening right now.
People are losing their jobs right now in the areas of wind
production and other areas because they are not sure what is going to
happen. Yet we give preferential treatment to an industry right now
whose top five companies are making about $260,000 a minute--a minute.
For people in Michigan, the
[[Page S2196]]
average wage does not equal $260,000 a year, yet $260,000 a minute in
profits for the oil companies, and we as customers, as consumers, have
the great privilege of on the one hand paying whatever they want to
charge at the pump because there are no alternatives and not enough
choices, and at the same time out of the other pocket we get to
subsidize them.
One hundred years ago those subsidies probably made a lot of sense. I
am sure I would have voted for them as we were starting the new
industrial economy and incentivizing the production of oil certainly
made sense. I still support the efforts for small businesses and local
efforts, but the top five companies do not need taxpayer subsidies
right now when they have the highest profits of any business in the
world.
So what are we talking about? We are talking about--in tough times
and budget deficits and when we need to be focused on jobs and getting
us off of foreign oil--making choices that make sense for the future
and not the past. That means closing down these special subsidies for
the top five companies that, again, are earning profits of about
$260,000 every single minute, and turning those dollars over to new
clean energy alternatives such as biofuels, wind, solar, electric
batteries, and all of the things that need to happen--including natural
gas, which my colleague from New Jersey has been a champion of--so that
we actually have real competition and we can actually go look at the
price at the pump and say, you know what, it is too much; I am going to
do something else.
We are beginning that process with new electric vehicles and I am
proud that those are being made in Michigan. We have advanced biofuels
right now. If we didn't have advanced biofuels at the pump in the few
places we do, we would actually see prices a dollar higher on average
than they are right now. So there is a little bit of competition, but
we have a long way to go.
This bill takes dollars from subsidies that are no longer needed,
that don't make sense from the American taxpayers' standpoint or an
energy standpoint, and turns them over to continue 19 different tax
cuts for entrepreneurs, small businesses, and those who are creating
the new clean energy alternatives in the future.
Some of my colleagues on the other side have said that taking away
government subsidies will increase prices. It is amazing to me that
somehow Friday seems to increase prices; Memorial Day seems to increase
prices. I think whatever the market will bear increases prices. But
when the CEOs of the big five companies came to the Finance Committee I
actually asked them--because folks are saying taking away government
subsidies for them will increase prices. I said: How much do we have to
pay you to bring down the price? Give me a number. How much do we have
to pay you to bring down the price?
Finally, one of the CEOs actually said: Well, I did not say we would
be raising gas prices at the pump. I did not hear anyone else say that,
either.
So that is what they said. They were not willing to go on record as
saying they would raise the prices at the pump.
Instead of throwing huge government handouts at some of the most
profitable companies ever, we should be paying down the debt and we
should be providing tax cuts for the jobs and the new alternatives for
the future, and I urge my colleagues to support this very important
bill.
Thank you, Mr. President.
Mr. ENZI. Today I wish to discuss high gasoline prices and to express
my concern that the legislator we are debating will only cause the
price at the pump to increase. We need to have a serious debate about
energy policy in the Senate. We have not passed substantial energy
legislation since 2007, and without a sound energy policy, we will
continue to see price instability.
Unfortunately, the legislation we are debating is not that sound
energy policy. Instead, it is an effort at political theater, designed
to force a vote on a proposal that the majority finds politically
popular.
Republicans understand that the problem we face today will not be
solved by taxing the five largest oil companies. Unlike the majority,
we understand that you cannot expect to lower energy prices when you
increase taxes. Increasing taxes will lead to higher prices.
I want to see lower prices, and so I oppose S. 2204. Instead of
passing this legislation, the Senate should take up any one of the
ideas my colleagues and I have proposed.
The Senate should pass legislation to approve the Keystone XL
Pipeline so we can obtain more of our energy from Canada as opposed to
countries like Saudi Arabia. The Senate should pass legislation to
prohibit the EPA from implementing its greenhouse gas policy--which
will make it more difficult to use our most abundant, domestic energy
source--coal--to power our homes, businesses, and daily lives.
The Senate should pass legislation to open up more areas of the Outer
Continental Shelf to exploration and production, and should require the
administration to grant permits for responsible energy development. We
should also pass legislation to open up a small area of the Arctic
National Wildlife Refuge, ANWR, to energy development.
Any one of those actions would have a much more positive impact on
our Nation's energy situation than the legislation we are debating
today. S. 2204 is an effort to punish the Nation's five largest energy
companies because oil prices are high.
Republicans stand ready to have a serious debate on energy because we
know our policies are the best solution for achieving energy security.
We recognize that the problems we are facing are an undersupply of oil
as well as an instability in some countries where a substantial amount
of oil is produced.
To address these issues, I want to produce more American oil on
American soil. I want to see more oil produced in regions like the
ANWR. I want to determine what technology is needed to recover the
nearly 800 billion barrels of oil shale that the Rand Corporation has
suggested are recoverable. I want to see permits granted in areas of
Wyoming so we can develop our State's coal bed methane. We also want to
see more wind turbines and solar energy panels in places where they
make sense.
Republicans truly support an ``all of the above'' approach. We
support traditional sources like coal, oil, and natural gas. We support
alternative sources like wind and solar. And our record shows that to
be the case.
President Obama claims to support an ``all of the above'' approach.
However, his record shows something different. Earlier this week, his
administration released a rule that will make it exceedingly difficult
to build a coal-fired power plant in the future. That action follows
his administration's decision in 2010 to put a moratorium on leasing in
the Gulf of Mexico and their decision to put in place policies that
make it more difficult to develop natural resources on our Federal
lands. President Obama claims to support natural gas--at the same time
his administration seeks to stop hydraulic fracturing, the tool that
has allowed us to access our abundant natural gas reserves.
President Obama also claims that there isn't a silver bullet to bring
prices down. That may be true, but if you add up all of his
administration's efforts to hold up American energy production, there
are a number of measures we could undertake to make our situation
better. Unfortunately, the legislation we are debating today is not one
of those measures.
What's further unfortunate about S. 2204 is that it is an attempt to
punish a sector of our economy that is doing well. The oil and gas
sector has created jobs during the recession and employs more than 9
million American workers. It is a sector that employs a lot of people
in my State. In 2010, more than 21,000 workers were employed in the oil
and gas industry in Wyoming. Instead of punishing these companies for
their success, we should be finding ways to work with them so they can
put more Americans back to work.
It is valuable to have a discussion about energy like we have had
this week. It allows us to point out the differences between the vision
we offer of more production and more jobs versus the vision of our
colleagues on the other side, which is essentially higher taxes and
higher energy prices. When we have finished voting on S. 2204, which
everyone acknowledges will fail, we should sit down and have a full
debate about our energy future. I am confident that our vision is the
right one if
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we want an America that has a secure energy future.
I urge my colleagues to oppose S. 2204.
Mrs. FEINSTEIN. Mr. President, I rise to speak in support of the
Repeal Big Oil Tax Subsidies Act, which I have cosponsored.
This legislation would repeal five specific tax subsidies and a
royalty relief provision to the largest oil companies, which simply do
not need them and which our Federal Government definitely cannot
afford. And this bill would invest the savings from repealing these
subsidies to extend vital clean energy incentives that have recently
expired. It would also save billions of dollars in order to reduce the
deficit.
This is a simple vote, really. If you are for subsidizing profitable
and polluting industries and raising taxes on clean, innovative, and
renewable energy companies, you should not support this bill. But if
you are for fiscal responsibility, balancing the Federal budget, and
investing in a cleaner energy industry that is less dependent on
international oil markets and suppliers, you should vote yes.
If you are against increasing taxes on clean energy sources such as
wind, solar, and energy efficiency, you should vote yes. And if you
believe that we cannot afford to spend Federal dollars subsidizing an
industry that needs no help, you should vote yes.
Oil prices have risen to well above $100 per barrel, and according to
AAA, California currently has the highest gasoline prices of any State
in the continental United States, currently at $4.30 per gallon of
regular unleaded.
But these higher prices are not the result of a change in the cost of
producing and refining oil.
According to a Finance Committee analysis of the SEC filings of the
three largest oil companies in the United States that filed, it costs
them an average of $11 to produce one barrel of oil. At today's prices
that is nearly $100 in pure profit for each barrel.
The result is massive oil company profits on the backs of American
consumers. Last year, the top five oil companies made more than $135
billion in profit. That is an increase of 80% over what they made in
2010.
Yet the largest oil companies are not using these profits to produce
more oil. Oil production for the biggest five oil companies was down 4
percent last year.
Instead of using their enormous revenues to invest in drilling, the
big five oil companies are buying back stock, issuing dividends, and
lobbying governments.
For example, Shell Oil's profits increased by 54 percent between 2010
and 2011. But its production decreased by 3 percent.
And the American taxpayer is providing oil subsidies that increase
profits, stock prices, and dividends--and don't produce more oil or
lower gasoline prices.
U.S. taxpayers subsidize these hugely profitable oil companies to the
tune of over $2 billion dollars per year, year after year.
Some Members of Congress still believe these subsidies lead to lower
gas prices, despite all evidence to the contrary.
As Severin Borenstein, the codirector of University of California
Center for the Study of Energy Markets, recently said:
The incremental change in production that might result from
changing oil subsidies will have no impact on world oil
prices, and therefore no impact on gasoline prices.
According to an analysis by the Congressional Research Service,
repealing tax subsidies for Big Oil would not result in higher gasoline
prices.
CRS concludes that because the current $100-per-barrel price of oil
far exceeds the cost of production, it is unlikely that a small
increase in taxes would reduce output in a manner that decreases supply
resulting in higher gasoline prices.
Yet these subsidies continue.
This bill eliminates five tax subsidies that lower the tax burden for
oil companies without producing a public benefit.
These changes will prevent oil companies from deducting things like
payments to foreign governments and also prohibit oil companies from
claiming that oil production is ``domestic manufacturing'' deserving of
incentives designed to help manufacturers compete with Chinese
factories.
This legislation also includes the key provisions of the Deepwater
Drilling Royalty Relief Prohibition Act, a bill Senator Bill Nelson and
I introduced to eliminate royalty relief that rewards dangerous oil
drilling methods.
By eliminating sections 344 and 345 of the Energy Policy Act of 2005
that provided mandatory royalty relief for deepwater gas and oil
production on the Outer Continental Shelf, this bill will ensure that
Americans receive fair value for federally owned mineral resources.
In 2005, Congress created this royalty-relief program to encourage
exploration and production in the ocean's very deepest waters.
But the BP Deepwater Horizon catastrophe showed that safety and
response technologies are not sufficient in deep waters to justify this
incentive.
When the Deepwater Horizon well blew out, 11 people died and 17
others were injured. Oil and gas rushed into the Gulf of Mexico for 87
days.
Oil slicks spread across the Gulf of Mexico, tar balls spoiled the
pristine white sand beaches of Florida, wetlands were coated with toxic
sludge, and more than one-third of Federal waters in the gulf were
closed to fishing.
This week, the National Academy of Sciences found that plumes of
subsurface oil substantially damaged a community of deep-sea gulf
corals.
Drilling in deep water presents substantially more challenges and
technical difficulties than drilling in shallow water or on shore.
The ocean currents on the surface and in the water column exert
torque pressure on the pipes and cables, which are longer and heavier.
The ocean pressure increases dramatically at depth, and the pressure
in a well can exceed 10,000 pounds per square inch.
The volume of drilling mud and fluids is greater, and many technical
procedures can only be accomplished with the use of remotely controlled
robots thousands of feet below the surface.
Methane hydrate crystals form when methane gas mixes with pressurized
cold ocean waters, and the likelihood of these crystals forming
increases dramatically at a depth of about 400 meters.
This crystallization repeatedly impeded efforts to stop the gushing
oil and was a primary reason it took so long to stop BP's Deepwater
Horizon spill.
Bottom line: the risks of drilling for oil in thousands of feet of
water are far higher than other oil exploration methods, and spills are
both ecologically devastating and hard to stop.
American taxpayers should not forego revenue in order to incentivize
this most dangerous form of offshore drilling. It is not good
environmental policy, and it is not good energy policy either.
I believe that global warming is the biggest environmental crisis we
face, and the biggest culprit of global warming is manmade emissions
produced by the combustion of fossil fuels like oil and coal.
That is why I believe it is unconscionable that Congress allowed the
taxes on renewable sources of energy to go up on December 31, while
taxpayer-funded subsidies continue to finance production of fossil
fuels.
I have worked with my colleagues on a number of legislative
initiatives designed to reduce greenhouse gas emissions, increase
energy efficiency, and incentivize the use of renewable energy.
One of our biggest victories has been an aggressive fuel economy law,
called the Ten in Ten Fuel Economy Act, which was enacted in 2007.
In order to implement this law, the Obama administration has raised
fleetwide fuel economy standards to 35.5 mpg in 2016--a 40-percent
increase above today's standard. The fleetwide average will rise to
54.5 mpg by 2025.
This is important because these standards will dramatically reduce
the economic burden of massive swings in the price of oil and gasoline
on American families.
By 2025, the average new car will reduce what an American family
spends on gasoline by $5,200 to $6,600 during the life of vehicle, and
that is assuming relatively affordable gas prices in the $3 per gallon
range.
If prices were to stay at today's levels, this law will save American
families even more money.
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The other positive development is that the domestic renewable energy
industry has grown dramatically over the last few years due to the
Federal incentives that are expiring and which this legislation would
extend.
The Treasury Grants Program, which expired in December, has helped
fund the installation of more than 22,000 renewable energy projects
with a generating capacity of more than 14,000 megawatts.
The production tax credit has allowed wind power capacity to more
than triple since 2005. If the production tax credit is not extended by
the end of this year, Navigant Consulting estimates that annual
installations of wind will drop by more than 75 percent, wind-supported
jobs will decline from 78,000 in 2012 to 41,000 in 2013, and total wind
investment will drop by nearly two-thirds, from $15.6 billion in 2012
to $5.5 billion in 2013.
We simply cannot afford as a nation to abandon the renewable energy
industry just as it is emerging as a major force in our economy.
These are private sector jobs in a growing industry that is competing
globally.
Just 2 years ago, the United States added more new capacity to
produce renewable electricity than it did to produce electricity from
natural gas, oil, and coal combined, for the first time. A great deal
of this growth can be attributed to government renewable energy
incentives. That is where public investment in energy development
should go.
The Obama administration has offered up millions of acres of Federal
land for oil extraction by oil companies. As a result, production on
these Federal lands has increased.
In fact, of the over 12,000 permits that the Obama administration has
issued since 2009, 7,000 sit idle.
But the fact is that whether or not the Federal government has opened
enough land to oil drilling has almost nothing to do with gas prices,
even though many politicians argue it does.
According to a statistical analysis of 36 years of monthly,
inflation-adjusted gasoline prices and U.S. domestic oil production by
the Associated Press released this month, ``there is no statistical
correlation between how much oil comes out of U.S. wells and the price
at the pump.''
The AP writes:
If more domestic oil drilling worked as politicians say,
you'd now be paying about $2 a gallon for gasoline. . . .
More oil production in the United States does not mean
consistently lower prices at the pump.
Since February 2009, U.S. oil production has increased 15 percent
when seasonally adjusted. Prices in those 3 years went from $2.07 per
gallon to $3.58. It was a case of drilling more and paying much more.
U.S. oil production is back to the same level it was in March 2003,
when gas cost $2.10 per gallon when adjusted for inflation. But that is
not what prices are now.
I don't believe oil companies need taxpayer dollars to help them out.
They are already reaping record profits.
Over the last decade, the five largest oil companies have enjoyed
nearly $1 trillion in profits and tens of billions of dollars in
taxpayer subsidies. Yet we continue to use taxpayer dollars to add to
their bottom line. This is unacceptable.
Oil reserves are a public resource. When a private company profits
from those public resources, American taxpayers should receive a
royalty as compensation. And when oil companies profit by charging $4
per gallon of gas, they should pay income taxes like the rest of us do
instead of relying on billions of dollars of tax subsidies to avoid
their obligations.
In these critical economic times, every cent of the people's money
should be spent wisely.
I urge my colleagues to support this legislation.
The PRESIDING OFFICER. The Senator from New Jersey.
Mr. MENENDEZ. Mr. President, I have been monitoring the debate on my
Repeal Big Oil Tax Subsidies Act and I keep hearing over and over from
our friends on the other side of the aisle that if we keep giving the
oil companies taxpayer money, they will do the right thing. The problem
is we already know that is not true.
First of all, the United States has only 2 percent of the world's oil
reserves, so we cannot drill our way out of this problem even if we
wanted to. But, more importantly, we cannot trust the big five oil
companies to simply do the right thing.
Let's look at the record. Last year, the big five oil companies took
$2 billion of your money and saw their profits shoot up to $137
billion--an impressive 75-percent increase in profits. Did they use
that extra money we gave them in our subsidies to produce more oil? No,
they didn't. They took your money and they didn't produce a drop more
of oil. Despite the fact that overall U.S. oil 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 here is another way to look at it. As each of these companies
pocketed our subsidies to pad those profits, they did not use this
windfall to produce more oil. If we take the word of our friends on the
other side of the aisle, we have a contract, in essence, with these
five companies. We pay them $2 billion and they give us more oil. Last
year, they broke that contract and produced less. So it appears that
these poor oil companies took the taxpayers' $2 billion and instead of
having to suffer with only $135 billion in profits, they made $137
billion in profits last year.
Mr. INHOFE. Will the Senator yield for a question?
Mr. MENENDEZ. I would be happy to at the end of my remarks.
What a heartwarming story of Robin Hood in reverse--taking from the
American taxpayer to give to the rich. So congratulations, Big Oil, you
got $2 billion extra in profits and we got 4 percent less oil.
But, of course, we are not just seeing less oil, we are also seeing
the American driver gouged with higher gasoline prices. What happens
when taxpayers are forking over $2 billion in subsidies a year to
highly profitable oil companies that, in turn, produce less? We get a
double whammy with $4-a-gallon gas at the pump and a bigger burden on
taxpayers. How is that a fair return on our taxpayer dollars? It is
pretty generous to Big Oil, which stands to profit $1 trillion over the
next decade while getting $24 billion in subsidies, but it is a bad
deal for consumers struggling to make ends meet.
First, the Repeal Big Oil Tax Subsidies Act takes back $24 billion in
taxpayer subsidies to Big Oil and stops that insanity. The next step
the bill takes is investing in alternatives to oil--biofuels, natural
gas, propane, and a refueling infrastructure for these fuels as well.
By investing in these alternatives we finally give Big Oil some
competition in the marketplace that will give consumers the choice to
use cheaper fuels as well as drive down gas prices.
For those reasons, I urge my colleagues to join me in getting back to
reality and stop subsidizing industries that need it the least and
start investing in the 21st century industries that will help us
compete with China, that will create jobs, that will improve our
environment and make us more energy secure. It is time we stopped
trusting Big Oil to do the right thing with our money and use it on
things that actually make sense.
With that, I yield the floor.
The PRESIDING OFFICER. The Republican leader.
Mr. McCONNELL. Mr. President, I have one question before this
morning's vote--one simple question: Is this the best we can do? Is
this the best we have to offer folks who are staring at $4-a-gallon
gasoline, a bill that even Democrats admit won't do anything at all to
lower the price of gas, and a process that blocks any other idea from
even coming to the floor for a vote? Is this the best we can do? No
other idea has been allowed other than a proposal that will inevitably
raise the price of gasoline at the pump. Does anybody think the Senate
has done its job on this issue?
Well, if you don't, if you think we should do more for the American
people at a time when they are paying $4 a gallon for gas than raise
taxes on energy manufacturers and block a pipeline from Canada, then
you ought to vote against cloture. You should stand with Republicans
and insist we do more to lower gas prices in this country.
I see the President made a statement a little while ago in support of
this proposed tax hike. My question is: Where
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was the White House when the Democrats voted to actually get off of
this proposal? Maybe they were too busy lining up votes against the
Keystone Pipeline. Maybe the President was too busy telling the
Russians about how he is hoping for more flexibility.
My point is Democrats don't have to take orders from the White House.
They don't need to serve the President's political strategy. They can
do what their constituents want them to do on this issue. They can vote
to stay on this bill and fight for real solutions to the problems of
high gas prices and any other number of issues the Democrats refuse to
face, for that matter. We can use this institution to actually make a
difference. I hope at some point that is what my colleagues on the
other side decide to do.
Mr. President, I yield the floor.
The PRESIDING OFFICER. All time has expired.
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