[Congressional Record (Bound Edition), Volume 146 (2000), Part 13]
[Extensions of Remarks]
[Pages 19306-19307]
[From the U.S. Government Publishing Office, www.gpo.gov]



                 TIME TO HOLD OPEC NATIONS ACCOUNTABLE

                                 ______
                                 

                        HON. BENJAMIN A. GILMAN

                              of new york

                    in the house of representatives

                       Monday, September 25, 2000

  Mr. GILMAN. Mr. Speaker, while our nation is suffering from a severe 
energy crisis, the American people are losing the battle on two 
fronts--they are being held hostage by OPEC and its policies, and they 
are the victims of the current Administration's inability to formulate 
a coherent, strategic, prospective, short and long term energy policy. 
With oil prices at record levels and rising towards 40 dollars per 
barrel, the time for ``quiet diplomacy,'' as Energy Secretary 
Richardson refers to the Administration's dealings with OPEC, is over! 
This crisis comes at a time when total U.S. reserves are at a 24-year 
low of 1.53 million barrels from 1.63 million barrels a year ago, 
according to the Energy Information Agency.
  With the recent decision by the Administration to release 30 million 
barrels in the Nation's Strategic Petroleum Reserve it is hopeful that 
we are at long last beginning to take the first steps needed to achieve 
this much-needed policy overhaul.
  It is imperative that the Administration more effectively address 
these issues. Our hard working people are being strangled, not only by 
oil prices, but by overall energy prices. There is not a person or a 
business in our country that is not affected, or is going to be 
affected, by the outrageous, prohibitive costs of energy in the coming 
months.
  In its ``Short Term Energy Outlook for September'', The Energy 
Information Agency reports, ``Unless the winter in the Northeast is 
unusually mild and/or world crude oil prices collapse, substantial 
price gains for heating oil and diesel fuel are highly likely.'' What 
the Agency is saying to the American people is we should hope that oil 
prices, that are at 10 year record levels will collapse, which is 
highly unlikely, and wish for a mild winter--and that is absurd!
  Once again, it appears that mother nature dictates the 
Administration's energy policy, rather than the Administration being 
pro-active, creating and implementing both a short and long term energy 
policy that takes and plans for winter weather rather than hoping for 
mild weather. Our nation deserves better!
  The United States imports 55 percent of its crude oil. OPEC produces 
40 percent of the world's oil supply. In 1999, more than 50 percent of 
the crude oil imports into the United States came from OPEC members. 
This places the United States in the precarious position of relying on 
foreign powers to fulfill our crude oil requirements. Many of the oil 
producing nations are ``states of concern,'' whose national interests 
run counter to our own. In a recent publication of the Clean Fuels 
Development Coalition, former director of the Central Intelligence 
Agency R. James Woolsey believes that our dependence on foreign oil is 
one of the three major threats to the national security of the United 
States. The American people must find this as troubling as my 
colleagues in the Congress do.
  Ten years ago, our nation, sacrificing American blood and resources, 
intervened in the Persian Gulf to quell the invasion of Kuwait by 
Saddam Hussein's Iraqi forces. At that time the price of oil rose to 
the record levels we see today!
  Today, our nation is under attack from OPEC. While the cartel 
promised to increase oil production by 800,000 barrels per day 
commencing on October 1st, there is no way we can verify what they are 
actually producing. There must be more transparency and accountability 
in OPEC's dealings with the United States.
  Furthermore, with all the saber rattling over the latest dispute over 
oil between Iraq and Kuwait, the next time we are asked to intervene in 
the Persian Gulf, perhaps we may not act with the same timing or speed 
as we did ten years ago to prevent that aggression!
  OPEC is aware of the gravity of the situation as evidenced by OPEC 
President, Venezuela's Oil Minister, Ali Rodriguez' statement, [that] 
``we are approaching a crisis of great proportion because oil 
production capacity is reaching its limit.'' The cartel is fully aware 
that an increase by 800,000 barrels is not enough--by half--to bring 
down the price of crude oil to a reasonable level for both consumers 
and producers alike. It is regrettable that by the time additional 
measures are taken by OPEC, it will be too late to bring down the price 
of oil for this winter when the cost of heating oil, a distillate of 
crude oil, is already 51 percent higher than the average cost for last 
fall and winter, (The New York Times (9/12/00).
  While we are under attack from OPEC, and with the Administration 
standing by, I introduced two bills that hold the OPEC nations liable 
and accountable. My foreign Trust Busting Act (H.R. 4731), will allow 
lawsuits to be brought against foreign energy cartels, where 
previously, courts threw out these lawsuits because such suits would 
impede the carrying out of the President's foreign policy program, and 
would embarrass the administration. My International Energy Fair 
Pricing Act (H.R. 4732), directs the President to make a systematic 
review of its policies and those of all international organizations and 
international financial institutions, such as the IMF and the World 
Bank, to ensure that they are not directly or indirectly promoting the 
oil price fixing activities, policies and programs of OPEC. If they 
are, the U.S. representative would not support any loan, support of a 
project or program, or to any financial support. Furthermore, along 
with my colleagues I co-sponsored the following legislation: H. Con. 
Res. 273, urging President Clinton to release the Strategic Petroleum 
Reserve (SPR) to mitigate the high heating oil and gas prices; H.R. 
3608, the Home Heating Oil Price Stability Act; H.R. 2884, Energy 
Policy and Conservation Act, which authorizes the Department of Energy 
to establish, maintain, and operate a Northeast home heating oil 
reserve; and to the Sanders-Shays-Markey-LoBiondo-Strickland Amendment 
to the Interior Appropriations to establish a home heating oil reserve.
  As a direct result of the work and hearings on the oil/gas crisis 
that the Congress undertook this past winter, the Secretary of Energy 
at the direction of the President, announced on July 10, 2000, that a 
heating oil component of the Strategic Petroleum Reserve (SPR) is to be 
established in the Northeast to protect the American people from the 
possibility of fuel shortages in the upcoming winter.
  In addition, I have called upon the President, the Secretary of 
Energy and the Secretary of State, urging them to intervene and put an 
end to this crisis, now! I have been pursuing this point in meetings 
with representatives of the OPEC nations in the United States. I intend 
to continue to pursue a strategic, coherent energy policy by this 
Administration that makes sense for the American people.
  We need a pro-active Administration rather than a reactive one. Since 
the beginning of the Clinton-Gore Administration domestic oil 
production is down 17%, while the U.S. dependency on foreign oil is at 
an all time high. We need to be exploring alternative energy sources, 
the use of coal, the use of hydroelectric power, of biomass, 
geothermal, photovoltaic, solar thermal and wind, utilizing ethanol, 
creating a system of electric reliability, increasing the exploration 
and supply of natural gas, and retrofitting or building cost efficient 
oil refineries. In addition, we need to utilize government land for 
responsible oil and natural gas exploration. The API advocates that an 
effective national energy policy, must at a minimum allow for all of 
the above.
  For their part, the American people must harness their creative 
spirit by car pooling, using mass transportation where available, 
contacting their local utilities to find out how to become more energy 
efficient, and by demanding that the Administration develop and 
implement a coherent, strategic, and prospective, short and long term 
energy policy. Such

[[Page 19307]]

a policy in the short term must include taking heed to bi-partisan 
calls for a release of the Strategic Petroleum Reserve to mitigate the 
outrageous and prohibitive cost of oil. Additionally, the 
Administration must meet bi-laterally with representatives of OPEC 
member nations, and tell them to end this crisis--and to do it now!
  Mr. Speaker, I submit into the Record the two recent letters that I 
sent to President Clinton regarding OPEC and the oil crisis:

                                    Congress of the United States,


                                     House of Representatives,

                                Washington, DC, September 8, 2000.
     President William J. Clinton,
     The White House, Washington, DC.
       Dear Mr. President: Our country is suffering from a severe 
     energy crisis, and the American people are being held hostage 
     by OPEC. The price of crude oil contracts at $34.90 per 
     barrel are now the highest they have been in a decade. As 
     reported on the front page of the Washington Post (9/7/00), 
     the Department of Energy's Energy Information Administration 
     (EIA) reports that total U.S. crude oil reserves are at a 24-
     year low, while there is a 30 percent projected rise in home 
     heating oil prices this winter over last year's high prices. 
     This will further strangle our hard-working American families 
     already suffering from exorbitant fuel and oil prices.
       The United States imports 55 percent of its crude oil. OPEC 
     produces 40 percent of the world's oil supply, placing the 
     United States in a precarious position of relying on foreign 
     powers to fulfill our crude oil requirements. Many of these 
     oil producing nations are ``states of concern'' and have 
     national interests that run counter to our own. In a recent 
     publication of the Clean Fuels Development Coalition, former 
     director of the Central Intelligence Agency, R. James Woolsey 
     believes that our dependence of foreign oil is one of the 
     three major threats to the national security of the United 
     States.
       By September 8, 2000, it will be 20 days that oil prices 
     are above $28 per barrel and will trigger OPEC's price band 
     mechanism. This mechanism mandates that OPEC produce an 
     additional 500,000 barrels per day. Regrettably, this 
     additional production will do little to reduce, and 
     contribute to stabilizing crude oil prices. In fact, in its 
     Short-Term Energy Outlook, the EIA projects that imported 
     crude oil will remain above $28 per barrel for the remainder 
     of the year. Even if OPEC agrees to increase its production 
     at its meeting on September 10th, the EIA reports that ``only 
     Saudi Arabia, Kuwait, and, to a lesser degree, the United 
     Arab Emirates will have significant capacity to expand 
     production.'' Analysts report that if OPEC increases total 
     production by one-million barrels per day, the oil would not 
     be available to consumers until mid-November, 2000, and will 
     do little to prevent further spikes in imported oil prices 
     this year.
       Mr. President, while you have expressed concern and 
     encouraged OPEC to raise output at the United Nations 
     Millennium Summit, I urge you to use the full powers and 
     resources of your office to mitigate this crisis with the 
     OPEC 10 before its meeting on September 10, 2000. Thank you 
     for your urgent attention to this matter of grave concern to 
     the people of our country and to the national security of the 
     United States.
           Sincerely,
                                               Benjamin A. Gilman,
                                               Member of Congress.

                                  ____
                                  

                                    Congress of the United States,


                                     House of Representatives,

                               Washington, DC, September 13, 2000.
     President William J. Clinton, 
     The White House, Washington, DC.
       Dear Mr. President: Following OPEC's meeting on September 
     10th, the cartel announced that it would increase production 
     of crude oil by an additional 800,000 barrels per day. This 
     increase in production was to reduce the price of crude oil 
     which has been at near record prices of $34 dollars per 
     barrel, which OPEC members freely admits is too high. This 
     raise constitutes an increase of 3 percent. Regrettably, this 
     increase is simply not enough to bring down the price of 
     crude oil. OPEC needs to undertake aggressive measures to 
     bring down the price of oil, and an increase in production of 
     3 percent is not enough--not enough by half!
       OPEC is aware of the gravity of the situation, as evidenced 
     by OPEC President and Venezuela's oil minister Ali Rodriguez' 
     statement, ``[that] we are approaching a crisis of great 
     proportions because oil production capacity is reaching its 
     limit.'' In the midst of this crisis, OPEC's increase will 
     not even go into effect until October 1st. OPEC agreed to 
     meet again on November 12th to reassess ``market 
     conditions,'' with full knowledge that its increase was a 
     trivial gesture towards reducing prices of imported crude 
     oil. As reported in The New York Times (9/12/00), heating oil 
     is at record levels, its highest price in a decade--now 51 
     percent higher than the average for last fall and winter. 
     Some analysts believe that imported crude oil may further 
     spike at $40 dollars per barrel. Conservatively, it will take 
     a minimum of 6 weeks to ship the increased oil to the United 
     States and another week to 10 days to refine it. Mr. 
     President, we are looking at early December before the oil 
     (and its by-products) will be available to consumers. In real 
     terms, OPEC's increase is too little, too late to alleviate 
     the astronomical and nearly prohibitive cost of home heating 
     oil that confronts the hard working people of our country.
       Parts of Europe are in a state of paralysis over this 
     crisis, and in England, Prime Minister Blair authorized the 
     use of the military to quell protesters. In our own country 
     Mr. President, this crisis is grave enough that there are 
     calls to release oil from the Strategic Petroleum Reserve 
     (SPR) which is maintained for use during wartime and national 
     emergencies. This crisis comes at a time when total U.S. 
     reserves are at a 24-year low of 1.53 million barrels from 
     1.63 a year ago according to the Department of Energy's 
     Energy Information Agency (EIA).
       Mr. President, this grave crisis calls for strong measures 
     in dealing with OPEC, and therefore it is imperative that you 
     use the full powers and resources of your office in showing 
     OPEC that its good faith gesture, is not good enough for the 
     people of our country. Mr. President, I will welcome any 
     plans that the Administration is developing to resolve this 
     oil crisis, and I thank you for your urgent attention to this 
     matter.
           Sincerely,
                                               Benjamin A. Gilman,
                                               Member of Congress.

     

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