[Congressional Record (Bound Edition), Volume 146 (2000), Part 13]
[Senate]
[Pages 19016-19019]
[From the U.S. Government Publishing Office, www.gpo.gov]



                             ENERGY PRICES

  Mr. DORGAN. Mr. President, as we look ahead, aside from the wrench in 
the crankcase here in Congress that prevents any kind of movement to 
get things done, one of the significant challenges for us both now and 
in the months ahead is this issue of energy. What is happening to 
energy prices? What is happening to the supply of energy? I want to 
talk for a minute about where we are.
  Go back a year, or maybe a year and a half, and the price of oil was 
$10 a barrel. In fact, in North Dakota it was $6 to $7 a barrel. The 
price of gasoline at the gas pumps was about 90 cents a gallon. The 
price of natural gas was about $2 per million cubic feet.
  Now, fast forward: What has happened is the OPEC countries have cut 
their production of oil. We have seen a circumstance in this country 
where the price of oil has spiked up on the spot market to $36 and $37 
a barrel. Gasoline is anywhere from $1.50 to $2 a gallon. Natural gas 
prices have more than doubled from $2 per mcf, and in some cases $5 to 
$5.50.
  We have people frightened to death with the reports that home heating 
fuel costs are spiking way up. Those in my State and others--
particularly in the Northeast as they enter what could be a cold 
winter--are trying to figure out how they, on limited incomes, will pay 
for home heating fuel that is going to double, and in some cases triple 
in price. These are significant and serious issues. The question is, 
What do we do about it? What is causing all of this? And what can we do 
about it? We start out by understanding that it is complicated. It is 
not simple.
  One of the first and most important aspects of understanding this is 
our country is far too dependent on foreign sources of energy. We are 
far too dependent especially on the OPEC countries for our oil. When we 
have to send people from our country to the OPEC countries to beg them 
to open the faucets and produce more, it has a significant impact on 
our economy and our future and our economic growth. We ought to 
understand that this makes us far to vulnerable. We need in the long 
term to move away from that vulnerability.
  Second, with respect to consumers, they ask the question: Not only is 
OPEC cutting back, but why? The answer to that is, yes; OPEC is cutting 
back. Why? Because it is in their interest and they can do so. But they 
are also asking: Is somebody profiteering at the gas pumps? They see 
merger after merger in the energy industry. They see that British 
Petroleum and Amoco get married. They see Exxon and Mobil decide they 
are going to get hitched.
  All of these big companies gather together, and then at a time when 
we have an energy crisis, we have a circumstance where the largest 14 
oil companies show profits of over $10 billion in one quarter--up 112 
percent--and those who drive to the gas pumps, those who are buying 
home heating fuel, and those who are paying for natural gas prices are 
asking the question: Is somebody profiteering at my expense?
  As I say, this is a complex issue. But all of these questions need to 
be answered. The Federal Trade Commission has a current investigation 
going on. I hope they can wrap that up soon and tell the American 
people what is happening with respect to prices.
  The issue of supply and demand in energy is something I want to talk 
about just for a moment. There has been a lot of discussion in the last 
few weeks on this issue of energy. We have some people saying in the 
last 6 to 8 years we have seen a decrease in production. That is 
causing our problem. We have been talking about energy supplies. Let's 
talk about the production of oil. Let's take a look at this line of 
production and what you see going back to about the late 1960s or 
1970s. There has been a continual and diminished production.
  That has happened under Republican administrations and Democratic 
administrations. That has happened under a series of administrations 
over many years. You see the line on the chart. There is no change in 
it at all. There is a systematic reduction in the production of energy.
  With respect to the consumption of energy, we also see what has 
happened. In the 1970s, we had this energy scare for a number of 
reasons. We had a very brief reduction. We had a significant 
conservation movement in this country to conserve energy. We had some 
brief reductions. But the fact is, we have begun to trend upward once 
again in a significant way. You will see that imports are continuing 
now to increase once again, which makes us much more dependent on 
foreign source energy.
  This is important to everybody. I am a Senator who represents the 
State of North Dakota. It is important to us. When the price of gas at 
the pump spikes way up, or the price of diesel fuel begins to spike way 
up, this is what it means to a State such as North Dakota. We have 
farmers who are heavy users of fuel in order to put the crop in and to 
get the crop off the field. Higher prices for fuel means real trouble 
especially at a time when we have collapsed grain prices. It means 
people living in North Dakota, or other State such as ours, who drive a 
lot just to get places, that we pay a much heavier burden than others 
do. Do you know that North Dakotans drive almost twice as much per 
person as New Yorkers just to get to a grocery store? Why? Because we 
are a very large State with a sparse population and you have to drive 
long distances to get to places.
  I have a friend in New York. They have relatives in New Jersey 50 
miles away. I am told they pack an emergency kit in the trunk, put 
blankets in the car, and plan for 6 months to take a little trip to see 
their relatives 50 miles away. I don't know if that is true. But on the 
east coast, you don't travel as much. Populations are near. In North 
Dakota and Montana and States like those, we have to travel a lot. 
Therefore, we pay twice as much for our energy and for our 
transportation needs.
  There is a significant interest in what is happening. The consumption 
is going up. Our production has for 25 years been trending down, and 
imports are moving up.
  Here is the consumption by sector on the chart: Transportation, 
industrial, residential, and commercial. What we see is a significant 
trend up in transportation.
  It is interesting as we talk about all of these issues, one of the 
things happening in the Congress is a consistent resistance in Congress 
to ask anybody to work on vehicles that are more efficient. We have had 
these issues called CAFE standards, and I know it is very 
controversial. Does anybody think it is prudent for this country to 
resist trying to get more efficient automobiles?

[[Page 19017]]

It makes sense to begin to continue to apply pressure to say we need 
more efficiency in our vehicles. We can see what is happening in 
transportation consumption of energy. Yet this Congress continues to 
demand we not try to establish some new goals with respect to fuel 
efficiency.
  I have not been the biggest cheerleader on these issues because we 
drive a lot of pickup trucks. We have to make accommodations for that 
in sparsely populated areas, but we ought to expect the auto industry 
and others to join in trying to move in a relentless way toward more 
efficient vehicles and toward trying to provide some balance in this 
top line. More efficiency will result in less consumption on the 
transportation side. That is one way to deal with this.
  We need to respond to this issue, to respond on two sides of this 
coin; one is production, and one is consumption. I will describe both 
quickly, especially in the context of the discussion of the last couple 
of days.
  Vice President Gore says we ought to consider taking some oil out of 
the Strategic Petroleum Reserve. They call that the SPR. We have over 
500 million barrels of oil in the Strategic Petroleum Reserve, and Vice 
President Gore says we should take some out to provide stability in oil 
prices. Frankly, I have not been the biggest fan of moving to SPR 
anytime quickly. We have had this discussion before--8 or 9 months ago.
  There is a circumstance today with the intransigence of the OPEC 
countries in being unwilling to increase production sufficient to 
provide some short-term balance in energy supply. We could, it seems to 
me, take half a million barrels a day out of SPR for 6 months, 9 
months, 120 days, without dramatically diminishing the Strategic 
Petroleum Reserve, and at the same time contribute stability to 
international supply in a way that brings prices down and provides 
people the ability to see over this hump.
  When we get over the heaviest use of supply in this fourth quarter 
and get into the next year, we will see more production because $35 and 
$36 a barrel has moved all kinds of rigs into areas where we have not 
had production before. A year and a half ago, we had zero production 
rigs drilling for oil in North Dakota; today, we have 20. I am told if 
there were enough workers, we would probably have 30 rigs in North 
Dakota. That is just a small amount compared to what is happening all 
over the world relative to today's oil prices.
  My point is, what will provide some stability in the next 2, 3, 4 
months? We have an economy that is a blessing. This has been the 
longest sustained economic growth in this country's history. It doesn't 
take much to tip an economy. We saw that in the early 1990s with some 
energy price spikes. Now it seems to me we ought to engineer a serious 
public discussion about the value of using, in a very cautious and 
conservative way, a portion of the Strategic Petroleum Reserve--only a 
very small portion--to come in and provide a cushion for the daily 
needs, as of yet unmet, that will provide some stability in energy 
prices. This will then provide, in my judgment, the opportunity to not 
have to worry quite so much about having these price spikes in energy, 
tipping this economy out of balance and moving toward a slowdown and a 
recession.
  Vice President Gore talks about SPR. I say again, I have not been a 
big cheerleader for saying let's run into tapping the Strategic 
Petroleum Reserve. Normally, the use of the SPR is for national 
security interest reasons. We have barrels of oil put away for 
emergencies. Given the production that exists in OPEC, the amount we 
are short on a daily basis, and the production we expect to come in 
around the corner sometime beginning January of next year because of 
the new rigs, it seems to me we can provide some filler with a small 
amount of inventory from the SPR in a way that provides stability to 
this market. In providing stability to the market, we will provide some 
insurance for this economy. I think that would be very important.
  We must, however, understand this is a wake-up call for our country. 
We cannot allow this moment to pass without understanding we are far 
too dependent on foreign sources of energy. We need more production at 
home, we need more conservation at home, and less dependence on foreign 
energy.
  In production in this country, I have favored some ability to use 
royalties as well as the Tax Code to provide some stabilization of 
prices with respect to production. Ten dollars a barrel for oil was too 
low; we all understood that. When oil went to $10 a barrel, nobody was 
drilling anymore; $10 a barrel was too low. We need some price 
stability for that industry; I understand that.
  Even as we work on price stability and to encourage greater 
production in this country, we also need to understand the issue of 
conservation is a critically important issue, because in this 
consumption line we have to understand part of our balance is a 
production line that we need to get up, and the other part of our 
balance is a consumption line that we need to trend down, if we can.
  We face serious challenges. This is the moment for our country to 
stop and think a bit about how we get over this short-term problem. I 
think we ought to have a good discussion about the short-term use of 
SPR in a very cautious and conservative way to stabilize these markets. 
This ought to spark a good discussion about conservation and greater 
fuel efficiencies in our vehicles. It ought to spark a significant 
discussion about conservation.
  Even as we do that in the short run, we need to understand in the 
long run, we can't sustain an industrialized economy--the strongest, 
biggest economy in the world--the economy with the longest sustained 
economic growth in the world, we cannot sustain that with the vagaries 
of production decisions made by oil sheiks in other countries. We are 
too vulnerable to allow that to happen.
  I make an additional point on a related issue. A part of the problem 
of these increasing oil imports--but only a part and really not even 
the largest part--is what it is doing to our trade deficits. When I 
talk about challenges we face, aside from the fact that this process 
around here is broken, and we are not passing appropriations bills when 
we should, and we are in a state of confusion on how to get this 106th 
Congress adjourned, there are two larger challenges about which we need 
to be very concerned.
  One I just mentioned, and that is the oil issue, the energy issue, 
and what has happened to energy prices, what might happen to our 
economy as a result of what is happening in energy prices. The second 
is our trade deficit. It relates to the energy issue, as well. This is 
the second challenge to our economic opportunities in the future. Our 
trade deficit is spiking up, up, up, way up. Importing more oil, 
obviously, is causing part of this, but it is just part. Our trade 
deficit is a very serious, abiding, long-term problem.
  We are now headed toward a yearly merchandise trade deficit that is 
going to be around $430 billion in the year 2000. In July, the overall 
trade deficit in goods and services was $31.9 billion. The merchandise 
deficit was $38.7 billion. That is unsustainable. A $7.5 billion 
monthly trade deficit with Japan, a $7.6 billion trade deficit with 
China, a $6.3 billion trade deficit with the European Union, $4.7 
billion with Canada, $2.2 billion with Mexico--we can't sustain that. 
That cannot continue. The merchandise deficit with Japan for the first 
half of 2000 was nearly $40 billion; with China, $36 billion; Europe, 
$26 billion; Canada, $23 billion.
  Not many people seem to care much about this. Nobody talks much about 
it. But this is a deficit that must be repaid. It regrettably will be 
repaid in the future with a lower standard of living in this country, 
and the higher the deficit, the more difficulty we will have to respond 
to this obligation.
  This results from a wide range of things. It results from China, 
Japan, Europe, Canada, Mexico--which have the largest bilateral trade 
deficits--deciding they should sell more to us than they are willing to 
buy from us. This cannot continue.
  Even Alan Greenspan, with whom I have had substantial disagreements 
for a long period of time, says something has to give; this trade 
deficit is unsustainable.

[[Page 19018]]

  I was intending to speak at greater length about our trade deficit, 
but I will save that for a later time. Suffice it to say that if this 
trade deficit continues to spike up, we could very well see it 
undermine confidence in the U.S. dollar and we could see the dollar 
begin falling on international currency markets. That could cause all 
kinds of problems for our country's economy.
  There are two challenges we must meet--dealing with an energy policy 
both short term and long term that makes sense, and the challenge of 
dealing with a trade policy that begins to straighten out this trade 
mess.
  I know other colleagues have things they want to talk about. I will 
come back later to talk about the specific trade issues we have with 
China and Japan and Canada and Europe. But it is my hope to end where I 
began today. It is my hope, in the next 2 weeks or so when the 106th 
Congress is expected to adjourn, that we can decide to bring the issues 
I have discussed to the floor for a vote. If someone believes we should 
keep using food as a weapon, good for them. They are dead wrong, but 
they have a right to think that. Everybody has a right to be wrong.
  The point is, if 75 percent of the Senate and 75 percent of the House 
believes we ought to stop using food as a weapon and stop holding our 
farmers hostage by preventing them from shipping food to other 
countries, and stop hurting poor and sick and hungry people in Cuba and 
Iran and Libya and other places, if you believe that, then let us have 
a conference and cast a vote to stop it, as the Senate has done with 
over 70 percent of its Members. But those who bottle this up and try to 
hijack it by saying, ``We are not going to allow you to vote on this,'' 
that is not the way the system is supposed to work. If they try to do 
that in a dozen or so areas--where we have already passed legislation 
but they are trying not to have a conference and are trying to hijack 
the process--this place is going to slow way down in a big hurry.
  Let me ask for cooperation on the part of the majority leader, the 
majority party, and my colleagues on my side and let's get this done. 
Let's do it right.
  Another thing, we can't end this session without dealing with the 
issue of the minimum wage for the people at the lowest rung of the 
ladder in this country. We have an obligation to do that. That has been 
kicking around like a Ping-Pong ball for months.
  We can't end this session without passing a Patients' Bill of Rights. 
Of course we ought to do that. That just makes sense. There are the 
votes to do that, in my judgment. It passed the House. We have the 
votes in the Senate. If we get it back up, we will win it by one vote.
  There are a series of important things we should do, we ought to do--
things the American people should expect us to do--and we only have a 
couple of weeks. I say to the people who run this place: Let's go back 
to regular order. If you don't like a provision, fine, try to kill it. 
But at least give us a vote on it. We will see, how the American public 
feels about it, how our colleagues feel about it. The way they are 
killing things these days is by putting them in a closet someplace and 
hoping nobody will see. It is happening to the issue of reimportation 
of prescription drugs, to the issue of food as a weapon in 
international sanctions. Frankly, that is the wrong way to legislate. 
If you have the votes, beat us. If you do not have the votes, give us 
the chance to win on the floor of the Senate and House as well on these 
important issues.
  Mr. REID. Will the Senator yield?
  Mr. DORGAN. I am happy to yield.
  Mr. REID. I say to my friend from North Dakota, it is too bad there 
are not more discussions about trade. I say my colleague has tried, 
more than any other Member of the Senate. If we take a look at what is 
happening with these tremendous trade deficits--we are all kind of fat 
and sassy around here these days. Because the economy is so good, it 
buries these trade deficits. But if the economy begins to lag a little 
bit--and it will someday--we are going to feel these trade deficits 
more than you can imagine--not more that you can imagine but more than 
most people can imagine.
  So I compliment you for trying so hard to keep the fact that we need 
to be concerned about our trade deficit in the forefront of what we are 
doing. We cannot have this imbalance of trade going on forever and 
remain the strong, powerful country that we are. If the trade deficit 
continues and it keeps getting larger and larger, as the Senator's 
pictures have shown--I am trying to figure out a way to say ``a picture 
is worth a thousand words,'' and it really is. What you have shown here 
tugs at my heartstrings because it really is an issue we need to be 
addressing, and we are not.
  Basically, I want to say to the Senator from North Dakota how much I 
appreciate his doing everything within his power, not only today but 
over the past 5 years, to bring this to the forefront so we start 
talking about these issues.
  I have to say we failed. We have not followed your lead. We have not 
discussed, in any depth at all, the trade deficit.
  Mr. DORGAN. Mr. President, the Senator from Nevada is very generous. 
I must say the two things I came to talk about today are the energy 
problems that we have that are abiding and serious and that have a huge 
impact, not only on the State of North Dakota and the citizens I 
represent, but an impact on all Americans. And also the trade deficit, 
which has a similar impact on an agricultural State such as the State I 
represent. These are big issues, big challenges. Unfortunately, they 
are going unresolved.
  There is the old story about a Cherokee Indian chief who is reputed 
to have said at one point:

       The success of a rain dance depends a lot on the timing.

  That was tongue in cheek, I expect, but that is true also with 
Congress and what it is willing to address and not willing to address, 
what it is willing to bring out here and sink its teeth into and what 
it wants to put in a closet and pretend doesn't exist.
  These are big issues. We deal with a lot of small issues every day as 
well, but these are big issues and we have to deal with these issues. 
These issues will affect the economic lives of millions of small 
businessmen and women. It will affect the economic future of kids 
coming out of school, and they want a job and they need a good, growing 
economy to get a job.
  These issues are the kinds of things that can tip a growing economy 
over into a recession, or something worse. That is why it is important. 
When you see storm clouds gather on the horizon, you pay attention to 
them. These are storm clouds on the horizon. Things are good now. This 
is a blessing. We have a great economy. You wouldn't rather be anywhere 
than here because we have a wonderful economy and things are very good 
in a lot of areas of this country, but these are storm clouds and our 
job is to anticipate and respond to things that we know are going to 
have a significant impact on the future of this country--energy and 
trade. We better get busy. We better respond to these issues.
  I yield the floor.
  Mr. REID. I say, before my friend does leave the floor--I ask I be 
recognized.
  The PRESIDING OFFICER. The Senator from Nevada.
  Mr. REID. Mr. President, we in the United States, because of the 
power of our economy, are not feeling the increase in fuel prices. We 
are feeling it a little bit. But other places in the world are feeling 
it very dramatically.
  What I say to my friend, talking about the trade deficit and problems 
with energy, is that we may not be feeling them now, but if we do not 
address these problems we are going to feel these fuel problems 
dramatically because it was not long ago a barrel of oil was costing 
$10. We did nothing. At the time, of course, because of the low prices, 
we could have done something to put this fuel into our reserves. We did 
not do anything about that. We, of course, during the good times, have 
done nothing to develop alternative fuel sources. We could do that. We 
have not done that. Now that there is the spike in oil prices, we are 
looking back

[[Page 19019]]

and saying: Gee, I wish we would have done something. Tax policy does 
not do anything to favor alternative fuels.
  There are a lot of things that are facing this country that we need 
to get ahold of while we have the opportunity. This economy is looked 
upon as the greatest of all time. But as good as our economy is, it can 
falter just as it has gone up. It does not take a lot of things to 
start going wrong before we have a problem with our economy.
  So, again, before my friend leaves the floor, he could not talk about 
two issues that are any more important to this thriving economy than 
the trade deficit--that is pronounced and we are not doing anything 
about it--and, of course, energy, about which we are doing very little.
  Mr. DORGAN. If I might respond, Mr. President, the folks in this 
country who are now worried sick about what is happening to energy 
prices are people such as senior citizens who know they are going to 
pay a home heating fuel bill that is multiples of what they paid last 
year. They are living on fixed incomes and do not have the money. They 
are saying: How do I do this? These are people who are living on fixed 
incomes, who drive up to the gas pump and now discover it costs a 
significant amount of money to fill their gas tank. Or small truckers--
I just make this final point.
  Mike and Jenny Mellick from Fargo, ND, called me. They operate seven 
trucks. It is a small company, a man and wife trying to run an 
operation with seven tractor-trailer rigs that haul loads across the 
country. They said the increase in fuel costs is devastating to them 
and they are worried about losing their business.
  This is having repercussions all across this country. This could tip 
the economy. We have to get ahead of this and say we need more 
production and more conservation and we need to care about these folks 
who are being dislocated by the significant energy crisis we face.
  I yield the floor.
  Mr. REID. Mr. President, the one thing I am appreciative of is the 
Vice President has a plan; that is, he has recommended that if these 
prices stay where they are, we should start drawing down our reserves. 
This is one alternative. I am glad he is doing this rather than just 
complaining.
  We have to have an energy policy. This is not a problem of Democrats 
or Republicans; it has been a problem of administrations for the last 
30 years. They simply will not get involved and work with Congress to 
come up with a long-term energy policy, and we need one.
  Mr. DORGAN. Mr. President, I mentioned earlier about the Vice 
President's proposal. I have not been a big cheerleader to move to SPR. 
By the same token, SPR is 570 million barrels of stored reserves. If we 
take half a million barrels a day, we could for 90 or 120 days, which 
is what we need at this point to get back into a supply equilibrium, 
provide some significant stability in energy prices just by taking a 
very small portion. So we take a very small fraction of the SPR and 
with it provide stability to oil prices.
  We need to work on the longer issues as well. There is merit in 
having this debate and discussion. The Vice President has raised a very 
important issue. Good for him. We have a short-term issue, intermediate 
issues, and long-term issues. In the short term, we ought to take a 
look at this issue. Maybe half a million barrels a day will be the 
catalyst to provide the stability we want in oil prices at this moment 
in order to get to the next intersection, which I think after the first 
of the year is an intersection of much more production.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER (Mr. Warner). The Chair recognizes the Senator 
from Nebraska.

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