[Congressional Record Volume 168, Number 102 (Wednesday, June 15, 2022)]
[Senate]
[Pages S2978-S2981]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
INFLATION
Mr. LANKFORD. Mr. President, I want to give today's reality check.
The Federal Reserve today raised interest rates 75 basis points--three-
quarters of a point--with a statement they may come back and do that
again in another month.
A point and a half in 2 months is a pretty dramatic effect. It is
going to be a situation where many people, 40 and younger, are about to
face interest rates they have never faced in their lifetime. The cost
of buying a car that is already high is about to get higher. The cost
of buying a home that is already really high is about to get much
higher.
Inflation is now at 8.6 percent. A lot of people are beginning to
feel what that really means. This is not some strange anomaly. This is
inflation over the last decade. It has bounced around about the same
level, basically, for a decade until right there--March of 2021--and
then it just skyrockets at that point.
This is the reality that we are facing at this point. What does
inflation really look like when you say it is 8.6 percent? Well, people
know what that feels like. The cost of eggs has gone up 32 percent in
the past year--32 percent for eggs. The cost of milk is up 16 percent;
the cost of butter, also 16 percent; the cost of coffee, 15 percent;
the cost of baby formula, if you can find it, is up 13 percent.
And gas prices? Oh, hello. Gas prices--that really has had an effect.
This is gas prices since January of 2017. Again, we look, and it stays
about the same until January of 2021. I wonder what happened then.
And then look at this.
Then, with the conversation about gas prices that, per the
administration lately, has been about, ``Well, it is all Putin's
fault,'' well, here are the rising gas prices since President Biden's
inauguration--right there--and right there is the war that began in
Russia. So this little increase right here is the part that is actually
there.
This is our consumer price inflation. This is on gas prices. It is
the same thing. To be able to see this flat line on gas prices, that
spike--that is the invasion of Ukraine happening right there--and to be
able to see what has been added onto it since then. So this is not just
about the invasion in Ukraine. This has been ongoing since late January
2021.
The challenge now is, Is this something intentional or is this
something accidental? Quite frankly, I think it is a bit of both.
We all remember very well this moment during the Presidential
campaign. It was when President Biden was
[[Page S2979]]
campaigning, and he walked over to a young lady on the campaign stop
and said:
[L]ook in my eyes. I guarantee you . . . we are going to
end fossil fuel.
I guarantee you.
That was this moment that happened here.
This was not something totally accidental. It was a drive to say, We
have got to shift to solar; we have got to shift to wind; we have got
to shift to hydro; we have got to shift to other things; we are going
to get rid of fossil fuels; and we are going to accelerate that as fast
as possible.
I have to tell you that I live in a State in which we use a lot of
wind power. We use a lot of solar power. We use hydropower. We have a
very diverse energy portfolio. But right now, the people in my State
are paying much higher prices for gasoline, much higher prices for
natural gas, and much higher prices for electricity because the
policies that have been put in place are driving up the costs, and
people feel it.
This is what it looks like at this point. This is the last 24 months
of retail average prices--right there, January 2021--and then to be
able to see what is happening with prices all over the country.
Now, the administration's response, just in the past couple of weeks,
has been this statement.
President Biden has said:
My administration will continue to do everything it can to
lower prices for the American people.
I love the words ``continue to do'' in there. They are going to
continue to do everything that they can. They are going to keep doing
these things that clearly have driven up prices overwhelmingly for the
American people.
It was, let's say, Putin's fault. It has been the oil companies'
fault. It has been the refineries' fault. That is the new one that he
actually just put out in the last 24 hours--that it is all the fault of
the refineries that are just taking in too much profit.
The challenge has been an ongoing attack on American energy from the
very beginning. Literally, on day 1, when President Biden canceled the
Keystone Pipeline, he started his process of fulfilling his promise
that he made during the campaign: ``I guarantee you I am going to end
fossil fuels.'' So day 1 was canceling the Keystone Pipeline and
getting crude oil from Canada--about 800,000 barrels a day. What he
didn't announce on this day is that we still have to have that same
800,000 barrels a day from somewhere because it is heavy crude. We
purchase some of our heavy crude from other places, so we still have to
get it. His announcement, though, on day 1 was, We are not going to get
it from Canada.
What people don't realize is that this announcement on day 1 was, We
are not going to get it from Canada. We are going to get it from
Russia.
How did that foreign policy work out? Terribly.
On day 1: We are not going to get oil from Canada. We are going to
get it from Russia. We are going to get it from other places instead.
He put a moratorium on new Federal oil and gas leasing. That
moratorium, by the way, still stays in place in multiple areas, and 24
percent of our oil and gas in the United States comes from Federal
lands and waters--24 percent. So what this did was say, for the future
of how we are going to develop, we are not going to develop in those
areas anymore. I am going to cut off 24 percent of the supply coming
in. Again, this goes back to his campaign promise of ``I guarantee you
I am going to end fossil fuel.''
He declined to defend the gulf lease sale 257. That is offshore.
Basically, an environmental group went in and sued and said: We don't
think they followed the process.
The administration was, like, We are not going to challenge that. We
are going to let the environmental group just take this whole thing
down, and we are not going to increase our supply of oil coming from
the gulf.
He limited the seismic studies necessary for new production in the
gulf.
What does that matter?
Well, he has opened up some areas and said: You can drill for more
oil in these areas. Oh, but, by the way, you are allowed to do that,
but if you want to do seismic testing before you do it--which is a
standard that you have to do seismic testing--oh, we are not doing any
more seismic testing this whole year. We are not going to allow you to
actually prepare a site. We are just going to tell you that you can do
it.
That is this mode that the administration is in: Produce more oil,
but I am not going to actually allow you to do that with the
permitting.
He has failed to implement a 5-year offshore leasing program.
What difference does that make?
By law--by law, now--the administration is required to be able to put
a 5-year offshore leasing proposal in place. The current one expires on
June 30 of this year. That is days away. There is no present plan in
place to be able to replace it.
In fact, I personally asked Secretary Haaland, the Secretary of the
Interior, and she said: ``We plan by June 30--the deadline to have a
new one in place--to be able to put out a comment of what we could do
if we do a new plan.''
I said: ``When will that be complete?''
Her response to me was, ``We don't have a deadline as to when that
will be complete.''
So, what is required by law to have a plan for how we are going to do
offshore leasing, they are going to, instead, by the day it should be
in place, begin discussing when they might do it in the days ahead.
Again, it goes back to: We are going to talk about it, but we are
actually not going to put this lease sale plan in place.
He canceled a lease sale in Alaska's Cook Inlet, which is where oil
comes from. He closed off half of the National Petroleum Reserve in
Alaska to any future energy development.
He pushed regulations that would slow or halt a buildout of natural
gas pipelines and liquefied natural gas export infrastructure. This is
a FERC piece. They actually put a new leader in place in that spot, and
then the first action they took was to make putting pipelines that were
heading to the gulf to be able to sell natural gas to Europe harder to
do and more expensive to do. If we wanted to put natural gas pipelines
across our country, he would also make it more expensive and more
complicated. So, literally, as the price is going up for natural gas,
he has made it even more expensive to be able to transport natural gas
and harder to be able to sell it to our allies.
He proposed new financial regulations designed to drive investment
for traditional energy projects. This body will remember nominees who
were put up by the Biden administration to go to the Federal Reserve
who stated out loud that their goal of going to the Federal Reserve was
to cut off access to capital for any kind of energy development that
was a fossil fuel. They are literally saying: You can't get loans and
money to get access to that.
So they will make it harder to actually move it when you get it, if
you can get it at all on Federal lands; and they will make it harder to
be able to get access to capital.
He has also proposed raising taxes on oil and gas development. Do you
remember my comment--or his comment, actually--saying he is going to
continue to do everything he can to lower the prices of energy for the
American people? Well, what he has actually done is he has proposed a
whole new set of taxes on all energy companies. In fact, even recently,
there was a conversation about a windfall profits tax on energy
companies.
Now, here is the basic economics that this group knows well: If you
tax it more, you get less of it. If you get less of it, the price goes
up. This is not hard. This is basic economics. Yet this administration
has proposed multiple new taxes in their budget that they just put out
in the previous month. At the same time, he said: I am going to
continue to do what I can to lower prices, at the same time he put out
proposals to dramatically increase oil and gas costs.
Nominate anti-traditional energy activists for key posts. We have
seen that. He has turned to hostile nations like Iran and Venezuela to
meet the U.S. energy demand instead of turning to U.S. producers.
It has been interesting. I have heard several people say: Well, we
have got high numbers of production of oil and gas here in the United
States. But the fact is, we are still a half a million barrels less now
of production than what we were prepandemic. We have not caught up on
actual production here; and the Biden administration has made it even
harder to go get it.
[[Page S2980]]
While the Biden administration is planning a trip to Saudi Arabia to
talk to them about getting more oil, our friends in Canada are saying:
Why don't you come to Canada and talk to us about production? We can
increase supply to the United States.
American producers are saying: We can increase supply to the United
States if you will lift regulations, allow us to get permits, stop
making it harder to move it, stop making it more expensive to get it,
and stop adding more taxes onto us. We can produce more in the United
States.
Listen, the price of oil right now is about $117 a barrel. There is
plenty of incentive to go get it, but the administration continues to
make it harder and harder and harder and more and more unpredictable to
actually go get it, so folks are not going to get more. While the Biden
administration blames speculators on Wall Street and rich oil companies
and everyone else, the basic facts are that the administration's
policies are what are driving this problem.
Are there solutions to this? Of course, there are. There are ways to
be able to resolve this. We can restart Federal leasing onshore and
offshore. I am not talking about having massive rigs everywhere. We do
oil drilling and gas drilling better than anyone else in the world.
While the administration is going over to Saudi Arabia to go get oil
to be able to use in the United States, don't we think that we produce
it cleaner than Saudi Arabia does? What in the world?
If we are going to need to use it, then why aren't we producing it
here in the United States? If this is all about a global climate
challenge, then why aren't we focused on production here rather than
running overseas and trying to be able to get it there?
Restart the permitting process. Restart the leasing onshore and
offshore. Stop all of the regulations that are designed to limit and to
punish oil and gas production--the administration just did a moratorium
on this; it would make a significant difference--actually put in
timelines for permitting and litigation.
Again, I have mentioned Canada several times, but if there is a mine
that is going in in Canada for things like lithium and other things
that we need and the whole world needs--they have deadlines and
timelines to be able to do that--it takes about 5 years to be able to
do a mine in those areas. It takes 15 years to be able to do that in
the United States, if you can get it done at all, because there are no
timelines and deadlines.
It is the same thing with the production of oil and gas. When there
is this constant litigation challenge all of the time, it makes it more
difficult to go get it.
People need to be engaged in the process. The community needs to be
heard--Tribes, local governments. People need to be heard and consulted
in the process. But with no deadlines out there, there is no incentive
to be able to actually go after it.
Promote projects that enhance mutual security like the Keystone
Pipeline and like other pipelines. We learned, when there was a
security problem on the Colonial Pipeline--coming out last year to
North Carolina--and North Carolina suddenly didn't have refined
products, gasoline, the whole east coast discovered: We are dependent
on one pipeline--one.
If that one pipeline actually has a structural failure, what happens
to the east coast? Listen, you can multiply that all over the country.
While this administration fights every pipeline company that is
trying to put in a pipeline, they increase our risk of having a major
problem and large sections of the country losing access to energy. They
are gambling with our future at this point, while we are watching
prices exceed $5 a gallon. Focus on the solutions that don't raise
taxes on energy or limit U.S. energy production.
I did have to laugh last week when the President made a speech and
said he was working on bringing down the cost of energy. So the
announcement was, I am going to bring down the cost of energy by
dropping tariffs on solar panels coming from the Far East.
Talk about out of touch. That is out of touch. That is out of
touch. Because, if we are going to produce solar panels, then why
aren't we incentivizing the production of solar panels here in America
rather than encouraging the production of solar panels overseas in the
Far East? How in the world is dropping tariffs on solar panels from the
Far East going to help folks filling up their tank with gas next week?
The President said he was going to solve energy issues and the price
at the pump by increasing the amount of ethanol that we would use.
Remember that one? That was about 5 months ago. He said that we would
just have more ethanol. He went to Iowa and made a big announcement: We
will just do more ethanol. And the prices continue to be able to
skyrocket and rise.
The President then came on and said: All right, we still have a
higher and higher and higher price. So the ethanol whole thing didn't
work when he put that out here, and so he came back and said: We are
going to do this Strategic Petroleum Reserve. We are going to release a
million barrels a day from this Strategic Petroleum Reserve. Remember
that announcement? That announcement was made right about there on this
chart. That is when that announcement was made.
How is it going for gas prices since his announcement that we are
going to release a million barrels a day from this Strategic Petroleum
Reserve? It still continues to be able to rise.
These prices aren't based on short-term input from the Strategic
Petroleum Reserve. They are based on long-term supply. That is basic
economics.
Now the talk has been a temporary gas tax holiday: We will do a
temporary gas tax holiday, and that is going to give people relief.
Can I remind everyone that we are over $5 a gallon? The temporary gas
tax holiday would drop the price 18 cents. Eighteen cents is what it
would drop the price. We are not trying to get an 18-cent drop. We are
trying to get it back to where it was over here, or how about over
here, where we were at $2 a gallon, not 18 cents. Besides the fact, if
you drop the price by 18 cents just for this year, it puts a $20
billion hole in our infrastructure--in our building for bridges and
highways and roads--to get an 18-cent bump.
There has also been the proposal out there that he is going to take
over refineries. That was today. Again, it seems like every week there
is a new thing that they throw out. Now it is a letter that he sent to
the major refineries. In the letter that the President sent to the
major refineries, he wrote:
[M]y administration is prepared to use all reasonable and
appropriate Federal Government tools and emergency
authorities to increase refinery capacity and output in the
near term . . . to ensure that every region of this country
is appropriately supplied.
Great. So the President is going to go into the refineries, and he is
going to take them over. The same administration that is managing our
baby formula is now going to manage our refineries. That is going to
work out terrific.
Our refineries right now are running at 95-percent capacity--95
percent. The interesting thing about our refineries is that America has
not built a new refinery since 1977. And just in the past 3 years, we
have lost almost a million barrels a day of refining capacity in the
United States from refineries shutting down.
Maybe the better question the President could ask is ``How do we
start increasing our ability to refine,'' not how is he going to take
over refineries and run it himself.
We have a major structural problem right now. This is just evidence
of what is going on across the whole economy.
There are answers. There are solutions. But they are not raising
taxes, and taking over refineries, and putting oil out from the
Strategic Petroleum Reserve, or running to Saudi Arabia. That is not
going to solve our energy problems.
And I can assure us, we are not going to solve our 8.6-inflation rate
until we solve the price of energy, because the price of energy is
baked into every single product that we buy--everything. And if this
doesn't get solved, this doesn't get better.
Mr. President, do what needs to be done to increase supply in America
so that the price will go down. We all believe--we all believe--that,
in the decades ahead, we are going to have more electric vehicles; we
will have more renewable energy. We all believe that. But 98 percent of
the vehicles on the
[[Page S2981]]
road right now run on oil and gas, and fulfilling your promise--your
promise--that you are going to get rid of fossil fuels right now by
making it harder to do pipelines, harder to get capital, harder to do
permitting, and more complicated regulations is causing this mess.
Thirty years from now, we may all be driving electric vehicles--great.
We don't today. Today, we need solutions for how we are going to move
in the country. That involves increasing supply. That will get down
inflation. That will help us as a nation.
With that, I yield the floor.
____________________