[Congressional Record (Bound Edition), Volume 146 (2000), Part 17]
[Senate]
[Pages 25401-25402]
[From the U.S. Government Publishing Office, www.gpo.gov]



                           OUR ENERGY CRISIS

  Mr. CRAIG. Mr. President, I thought this time was an opportunity of 
which I could take advantage to talk about something we all experienced 
this morning when we awakened here on the east coast. That was the 
chill of fall in the air.
  I think most of us had failed to recognize that we were late into 
October because the weather has been so mild and so generally warm. But 
we are really at the threshold of winter, and as winter comes, so does 
cold weather. And as cold weather comes, the average American reaches 
to the thermostat on the wall of his or her home and begins to turn it 
up.
  This fall, as that experience occurs, something else is going to 
happen in America that will be very dramatic, and that will be the 
turning up of the heating bill because, whether it is electricity or 
oil for space heating, the cost of those commodities in the average 
American's household budget has increased dramatically.
  In fact, in the Northeast, where home heating oil for space heat is a 
major commodity, those costs will have better than doubled since last 
year and could go even higher this year as the amount of supplies for 
those needs continues to not increase at the rate of demand.
  Why has this happened? Why are we at the threshold of an energy 
crisis in this country that we have not experienced in a long, long 
while?
  In nearly every part of the energy consumer basket--be it 
electricity, or home heating oil, or automobile gasoline, or diesel for 
our truck transportation, or fuel for the great turbines of the jet 
engines that fly Americans across America--there is no surplus today.
  That is a historic fact. This country was built on the abundance of 
energy. Our successes in our economy have always been the result of 
having the necessary energy to accomplish what we wanted. It was always 
one of the least-cost items in that accumulation of costs that made up 
the price to the consumer of a product on the market shelf. That is no 
longer the case.
  For the next few moments, I would like to once again address, as have 
I and other Senators for the last year and a half, the energy crisis we 
are now into and why we are there.
  Largely, it gained our attention about a year ago when we became 
aware that the members of the OPEC countries were going to move the 
price of oil from about $10 a barrel to $28-$30 a barrel. It had been 
selling for around $10 in the world spot market, and it was beginning 
to increase because they were beginning to decrease their production.
  Admittedly, no one was making money at $10 a barrel. Whether it is 
oil of the Middle East or oil in Texas or Oklahoma or on the overthrust 
belt of the west in Colorado and Wyoming, oil is not profitable at $10 
a barrel simply because of the cost of production and compliance, 
especially in this country, with environmental rules and regulations. 
Somewhere at $17 to $20 a barrel is where it begins to be profitable. 
So for a long time, for the last several years, we were operating on 
less-than-profitable oil for at least the producers.
  For the consumer, it was a bonus. I remember just a year ago, across 
the Potomac in Northern Virginia, I bought regular gasoline for 90 
cents a gallon. Today, one is going to pay at least $1.60 to $1.75, 
maybe even more than that, depending on your location and the location 
of the particular service station. That is a dramatic increase. That is 
a 110-120 percent increase. So that 90-cent gas, while there was a bit 
of a price war going on out in Northern Virginia at the time, was still 
based on $10-a-barrel oil.
  We know that has changed. We saw it change. Now we see the Arab 
nations receiving anywhere from $28 to $30, $31, $32, $33 a barrel for 
their crude oil. That all translates into a much greater cost at the 
pump to the consumer, but it also translates into a variety of other 
things.
  As we know, the petrochemical industry of this country is involved in 
almost all we do and sometimes a lot of what we wear because of the 
byproducts of the petrochemical industry, be it plastics or nylon or a 
combination of consumer goods. Slowly but surely, the increased cost of 
those byproducts is beginning to roll across the American economy.
  The other evening I did a conference call in Idaho with a group of 
farmers. They happened to be sugar beet farmers and potato farmers. The 
price of potatoes is well below break even this year. It has been for 3 
years. Many of those farmers will not make money again this year, and 
they are very frustrated. Some of them will lose their farms. It is 
also true in sugar beets, with the price of sugar at near an all-time 
low.
  What they were most concerned about was their energy costs. As we all 
know, agriculture is a large consumer of energy. It is an intensive 
industry. Those large tractors and trucks used in the process of 
farming all consume large quantities of energy. The pesticides, 
insecticides, herbicides are all hydrocarbon or petrochemical based. 
All of their costs have started going up. Fertilizer costs will nearly 
double this year as a direct result of energy costs because when you 
are dealing with phosphates and phosphate fertilizers, huge volumes of 
energy are used to transform those from the rock to the fertilizer 
product that ultimately goes to the ground that the farmer uses.
  All of those costs are going up, and all of them are based on one 
simple fact; that in this economy, the energy costs to the consumer 
have nearly doubled in just about a year. So the farmers, while their 
prices were at an all-time low, were talking to me about energy. What 
is this country going to do? What is this administration going to do. 
What is this Congress going to do about an energy policy that would 
ultimately begin to bring those prices down. They were dramatically 
concerned.
  When the Congress gets back in January and February, we are going to 
hear a hue and cry coming out of the Northeast in relation to the cost 
of space heat and home heating oil, even though we have tried to deal 
with that in short-term measures. But those are some of the 
circumstances in which we are involved.
  The consumer is still going to the pump, and they are still filling 
up their vehicles. In most instances, consumers are working. They all 
have good jobs at this time. We are at nearly full employment. Nobody 
has really stopped to factor in that over the course of a year, they 
are going to be paying more than $300, $400, sometimes $500 out of 
their household budget for their energy costs than they did a year ago. 
But it will be the single highest increase in relation to cost over a 
12-month period of any one item the American consumer will buy this 
year. It will be their energy. Never in the history of this country has 
energy gone up that fast for that sustained period of time and affected 
all segments of the economy.
  Those are some of the realities we are facing. Let me, for a few 
moments, explore why it has all happened. We now import about 56 
percent of our supply of crude oil. That has gone up very dramatically 
over the last few years. In 1975, when we established the Strategic 
Petroleum Reserve, we were 36-percent dependent on foreign oil. The 
political rhetoric at that time--I was not here; the Presiding Officer 
was not here--was loud and boisterous: Never again will America be 
dependent on foreign sources of oil; we will establish a Strategic 
Petroleum Reserve in

[[Page 25402]]

case of a national or an international crisis. Never will we have to be 
held hostage to the attitudes or the political concerns of a small 
group of Arab nations known as OPEC.
  That was 1975 when we were 36-percent dependent. So we established 
SPR and we put hundreds of millions of barrels of oil in a salt dome 
down in Louisiana as a special reserve to be used in an international 
or national emergency where supply would be disrupted.
  Today, we are 58-percent dependent on foreign oil, not 36-percent 
dependent.
  I have run my 10 minutes and there are others here to speak. I ask 
unanimous consent to continue for 5 more minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. CRAIG. We have not heard this administration in any way talk 
about the need to change things very much. Why is that the case? Why 
are we now at the threshold I have described?
  The large reason is that for the last 8 years, during a time when 
this dependency on foreign oil has skyrocketed, we have had no energy 
policy coming from the Clinton-Gore administration. In fact, in almost 
every instance, they have, by rule and regulation or by process slowed 
down production in our fundamental sources of energy, be it domestic 
crude production, down 14 percent over the last decade; be it any 
exploration because of new environmental regulations; the inability to 
get out on the land and explore, even though our oil companies have the 
highest environmental standards to protect the land and to protect the 
environment around any new discoveries and developments.
  Out in my State of Idaho and in the Pacific Northwest, this 
administration is talking about taking down four very large hydrodams. 
They believe that by doing so and turning the Snake and the Columbia 
Rivers back to a more natural flow, they could actually improve 
fisheries. Somebody says: It is only 5 percent of the supply.
  Well, 5 percent of the supply of that region from those four dams 
generates enough electricity for the entire city of Seattle, WA--again, 
another attitude as to why we are not producing this and solving this 
problem but simply getting more deeply into this problem.
  Well, there are a lot of other reasons, and my time is short. But as 
a result of all of those problems and no solution coming from the 
administration--well, they did have one solution. They sent Bill 
Richardson, the Secretary of Energy, to the Middle East, and he had in 
his briefcase a tin cup. He got it out and he held out his tin cup and 
he said to the Arab Emirate oil nations: Please fill up my cup; please 
turn your valves on. You see, we have no energy policy. You are our 
supplier. We are victim to your political and economic whims.
  That has been the energy policy of the Clinton administration. That 
is the only real thing they have attempted to do, other than the 
politically charged action to open the SPR and bring about 30 million 
barrels of oil out of there to somehow change the price and the supply. 
Of course, we have held several hearings on that and, no, that hasn't 
happened. But this year, I, Senators and Frank Murkowski, Trent Lott, 
and many others introduced the National Energy Security Act of 2000, S. 
2575. We brought it to the floor. It is a major, new effort to bring 
our dependency on foreign oil at or below 50 percent, to encourage and 
maximize utilization of alternative fuels and renewable energy and 
increased domestic supply of not only oil but gas production, because 
natural gas has better than doubled in price in less than a year.
  Yet this administration sits happily by, as if nothing were 
occurring, knowing very clearly, but not wanting to talk very loudly in 
this political season, that their energy policy will drive costs to the 
consuming public to a higher rate than ever in the history of our 
country. Their only real good argument is that they did it all in the 
name of the environment.
  In closing, let me talk about the environment we are about to 
experience. It is going to be a cold environment this winter. That is a 
normal environment then. When elderly people and poor people have to 
make choices this winter between food and medicine and heat, that is 
not a very good environment. We will do all we can here to supply them 
with alternative resources to hold down their heating bills, but there 
is one remaining fundamental fact about why they must make those 
choices in this environment. We have lived for 8 years without an 
energy policy coming from this administration, except one--the tin cup 
in the hand of Bill Richardson--and a policy that somehow the 
production of hydrocarbons in our country was environmentally damaging. 
I think most of us know that is no longer true today.
  So I thought as I awoke this morning and felt the cool in the air and 
turned up the thermostat on the wall, while I may be able to afford my 
heating bill this winter, I know a good many people won't be able to 
afford theirs. That is a tragedy in this country that should not have 
to happen--a country that has always been so wise to allow the 
marketplace to provide one of the great abundances that we have always 
had that has set our Nation apart from all others, in our ability to 
produce and succeed, and that was an abundant supply of energy.
  In 8 short years, that abundant supply has dwindled to a point where 
we really have no surpluses at all today. The average demand for growth 
in energy goes up 1.4 percent in our country on an annualized basis, 
and we have only increased production by 0.4 percent in the last 8 
years--in all segments of energy. That tells you one thing very 
clearly. Somebody has failed along the way, and I must tell you, 
serving on the Energy Committee and studying and examining this issue 
very thoroughly over the last several years, I know who has failed. It 
is the Clinton-Gore administration. They failed to recognize the 
reality of the marketplace, the reality of the world production supply, 
and disallowing us from producing our way out of it.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Nevada is recognized.

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