[Congressional Record (Bound Edition), Volume 146 (2000), Part 6]
[Senate]
[Pages 8028-8030]
[From the U.S. Government Publishing Office, www.gpo.gov]



                      ENERGY SECURITY ACT OF 2000

  Mr. LOTT. Mr. President, it is my pleasure this morning to introduce 
and cosponsor, with the distinguished chairman of the Energy and 
Natural Resources Committee, S. 2557, the Energy Security Act of 2000.
  There is a dark cloud on the horizon for America's future and for our 
economy and for job creation. This cloud could cause serious problems 
in the future. That cloud is the fact that we don't have a national 
energy policy. Despite a lot of rhetoric that we do--there is nothing 
to worry about--there is plenty to worry about.
  The American people remember the long lines we faced at the gasoline 
stations in the 1970s. At that time, we were dependent on foreign oil 
for much less than 50 percent, probably around 45 percent at the time. 
We passed legislation in an attempt to deal with that problem and, for 
a variety of reasons, the prices came back down. The problem was not 
resolved, and the problem is much worse today.
  In today's Wall Street Journal, for instance, there is an article 
entitled ``Tight U.S. Gas Market Boosts Oil Prices.'' I ask unanimous 
consent to have the article printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

[[Page 8029]]



              [From the Wall Street Journal, May 16, 2000]

                Tight U.S. Gas Market Boosts Oil Prices

                        (By Alexei Barrionuevo)

       A tight U.S. gasoline market drove world crude-oil prices 
     back to nearly $30 a barrel yesterday, and analysts say 
     little in the short term will help arrest the run-up.
       This time, the worry isn't about a shortage of oil, but a 
     confluence of gasoline-related issues and a hot economy.
       In the past five weeks, wholesale gasoline prices have shot 
     up 30% out of concerns about refinery production, new 
     environmental regulations and a patent dispute. That has left 
     the false impression that crude is in short supply, pulling 
     crude-oil prices up more than $4 a barrel.
       The drop in retail gasoline prices, which normally trail 
     wholesale prices by a month or more, has stopped dead in its 
     tracks, with the average U.S. price at $1.46 a gallon of 
     regular unleaded, according to the Energy Information 
     Administration. With U.S. refineries expected to get little 
     help from foreign sources this summer because of new 
     environmental gasoline requirements, price spikes are 
     possible.
       The new surge in oil prices is also bound to intensify 
     inflation concerns. Analysts have dismissed the significance 
     of a creep up in consumer prices earlier in the spring, 
     saying that it was a temporary trend driven by the jump in 
     oil prices and would likely recede once oil prices fell.
       Since the Organization of Petroleum Exporting Countries 
     loosened up production in late March, the attention has 
     turned to refiners, who must crank up production to meet 
     summertime demand. Refiners, who had cut production and 
     scheduled more maintenance work over the winter amid 
     depressed margins, now are trying to catch up in a hurry. 
     U.S. refiners are currently running at about 92% of capacity 
     and will need to kick production up to 97% to meet expected 
     demand.
       Gasoline inventories continue to be low, in part because of 
     demand for a federally mandated cleaner-burning gasoline to 
     be required in about one-third of the U.S. beginning June 1. 
     European and Venezuelan refiners, which usually provide a 
     total of 400,000 to 500,000 barrels a day of gasoline and gas 
     components, have had difficulty making the fuel. And some 
     ``blenders,'' which are critical to upgrading foreign 
     gasoline, particularly in the Northeast, are holding off on 
     reformulated gasoline because of concerns about gas patents 
     held by Unocal Corp., which has been pursuing violators.
       Add to all that strong gasoline demand despite the steepest 
     pump prices in years. ``High prices pull down demand but 
     income pulls it up, and right now income is winning out over 
     price,'' said Larry Goldstein, president of Petroleum 
     Industry Research Foundation in New York.
       U.S. officials, who two months ago put heavy pressure on 
     OPEC to increase production when oil hit $34 a barrel, are 
     scrambling once again. Energy Secretary Bill Richardson met 
     with OPEC President and Venezuelan Minister Ali Rodriguez 
     over the weekend to urge OPEC ministers to open up the taps a 
     bit more next month.
       Mr. Richardson, who thinks $30-a-barrel oil is too high, is 
     expected to discuss new visits to producing countries at a 
     White House meeting today focusing on oil and electricity 
     issues, government officials said. ``I will continue to do 
     what we said we would do, monitor the oil market and stay in 
     touch with producing countries and others,'' Mr. Richardson 
     said yesterday in La Jolla, Calif.
       With the current run-up in crude prices, OPEC is entering 
     territory where its price-band mechanism could be tested. The 
     band, agreed to in March, gives Mr. Rodriguez power to direct 
     changes in production based on a 20-day average of prices 
     that translate to roughly $24 to $30 a barrel for West Texas 
     Intermediate.
       Even if prices are within the band, most analysts expect 
     OPEC to vote to put more oil on the market at its meeting 
     next month. ``We are now talking about prices that make a 
     number of producers uncomfortable,'' Mr. Goldstein said. Only 
     three countries--Saudi Arabia, Kuwait and United Arab 
     Emirates--have spare capacity, and most of it is in Saudi 
     Arabia.
       Speaking yesterday, Mr. Rodriguez said there is ``no 
     inclination to increase production,'' but that oil prices 
     would ``return to an acceptable level.''

  Mr. LOTT. It says in this article that crude oil prices were back up 
to nearly $30 a barrel yesterday, and for the last month our dependency 
on foreign oil was in the range of 60 percent. This is going to have an 
effect on the price of fuel oil. It will have an effect on the price of 
gasoline. It will have an effect on the economy. While we saw some 
leveling off or some general slide back, we have done nothing to secure 
our country's energy future.
  Earlier, I tried to put in place some reduction in the Federal 
gasoline tax, to stop until the end of the year the 4.3-cent Federal 
gasoline tax that was added back in the early 1990s and say if 
nationwide gas reached an average of $2 a gallon, we would suspend the 
entire Federal gasoline tax for the balance of the year. The Senate was 
not inclined to go along with that.
  My purpose was a wakeup call--first, that gasoline prices are 
probably not going to go down; more than likely, they will go up. But 
the wakeup call was bigger than that, to try to make people realize 
that we don't have a national energy policy.
  What are we going to do? I ask the American people: Do we feel safe 
with the idea we are dependent on foreign oil, OPEC oil, oil from Iraq, 
oil from Libya? I don't. What if they decide not only to turn down the 
spigots but to turn the spigots off? What would America do? Within 30 
days we would be in serious trouble.
  Now, we have a strategic oil reserve, and that was a very wise 
decision; it could be helpful in dealing with a national security 
emergency. It would help deal with a crisis created if the spigot 
should be cut off. However, I think to not have a plan to be less 
dependent on foreign oil is irresponsible. We can't tolerate it.
  So what are we going to do? We know now we are dependent on the 
foreign oil imports to the tune of 56 percent of oil consumed, compared 
to 36 percent imported in 1973 when we had the Arab oil embargo. Even 
the Department of Energy predicts America will import at least 65 
percent of foreign oil for our energy needs by the year 2020. Secretary 
Richardson even admitted that the administration had been caught 
napping when energy prices began to rise a few weeks ago.
  We appointed a task force to deal with this problem, to look at it, 
to see what we could do to address our energy needs for the future. It 
is a multifaceted proposal, not only aimed at gasoline or oil but 
across the spectrum. This task force has been working to find these 
reasonable solutions to give us more of our own energy supplies. 
Chairman Murkowski has headed that task force. This task force has been 
a diverse group, including Senators from all over the country--Senator 
Craig from Idaho, who is on the floor; Senator Nickles from Oklahoma; 
Senator Hutchison from Texas; also Senators from the Midwest and 
Northeast, including Senator Collins of Maine; Senator Snowe; Senator 
Roth of Delaware; Senator Santorum of Pennsylvania, Senator Smith of 
New Hampshire. They have worked together and have come up with a 
proposal that I think will make a real difference. It will encourage 
alternative sources. It will try to enhance the use of renewable energy 
resources, including hydro, nuclear, coal, solar, and wind.
  We need to increase our domestic supplies of nonrenewable resources, 
including oil and natural gas. In my own State of Mississippi, and in 
the gulf off the coast, we have a tremendous supply of natural gas. 
Natural gas is relatively cheap and is a very clean source of energy. 
Yet there is no incentive to make greater use of natural gas. We have 
more oil deposits. We know it. Some of them are in marginal wells, some 
are in large areas such as off the coast of Alaska. We have to do 
something to take advantage of these resources, give incentives to take 
advantage of them.
  I absolutely support the effort by the Alaskan Senators who advocate 
getting the oil off the coast of Alaska in what is commonly referred to 
as ANWR.
  We should also look at unique needs within the country, in the 
Northeast where they have extraordinarily cold weather, compared to my 
part of the country, where people are dependent on home heating fuel. 
We need to strengthen the Department of Energy weatherization program. 
We need to establish a State-led education program to encourage 
consumers to take actions to minimize seasonal price increases and fuel 
shortages. We should authorize the expensing of costs associated with 
building new home heating oil storage. We should authorize the 
Secretary to build a home heating oil reserve. If we don't do that, 
more than likely there will be a problem in the Northeast next year. We 
have a number of tax incentives that would encourage more production. 
We would provide relief for marginal wells.
  By the way, these so-called marginal wells are responsible for 50 
percent of

[[Page 8030]]

U.S. production, so they may be marginal but they are significant. It 
allows for expensing of oil and gas exploration costs. It would delay 
rental payments. The 1999 Taxpayer Relief Act had a 5-year carryback 
provision, and that is included.
  Finally, there is an expansion of tax credits for renewable energy to 
include wind and biomass facilities. Some people say we shouldn't be 
giving any kind of consideration or breaks to people who are out there 
trying to produce more oil and gas; they may not need it; it may not be 
good for the environment.
  What do you mean? That is the most fallacious argument of all. It can 
be done safely and cleanly and we need that resource. The alternative 
is to go ahead and continue to be dependent on OPEC and other countries 
for our energy needs. It is irresponsible.
  This is a broad package. It is a good package. I thank Senator 
Murkowski and the task force for their work. We will talk more about it 
later. I encourage my colleagues on both sides of the aisle to take a 
look at this. This is something that should not be partisan. It is not 
partisan. It should be bipartisan. It will help our country all across 
the Nation both in terms of energy needs and in terms of energy 
production. This is not something that is aimed only at this 
administration. I emphase this administration has no plan to deal with 
this problem, but this administration is going to be leaving shortly. 
What are we going to do about the future? We need to come together. We 
cannot continue down the path we are headed. If we do, I predict 
disaster looms on the horizon. I want to make sure that we make our 
best effort to do something about it so we can avert this disaster.
  I yield the floor.
  Mr. MURKOWSKI. Mr. President, I ask how much time remains on our 
side.
  The PRESIDING OFFICER. The Senator has 32 minutes.
  Mr. MURKOWSKI. I thank the Chair.

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