[Congressional Record (Bound Edition), Volume 147 (2001), Part 6]
[House]
[Pages 8577-8583]
[From the U.S. Government Publishing Office, www.gpo.gov]



                      PRESIDENT BUSH'S ENERGY PLAN

  The SPEAKER pro tempore (Mr. Grucci). Under the Speaker's announced 
policy of January 3, 2001, the gentleman from New Jersey (Mr. Pallone) 
is recognized for 60 minutes as the designee of the minority leader.
  Mr. PALLONE. Mr. Speaker, last week President Bush announced his 
energy plan in front of a backdrop on which was printed the word 
``conservation,'' and I strongly suggest that my colleagues not be 
misled by this subliminal approach. I have always said that actions 
speak louder than words, and President Bush's actions during his first 
100 days clearly illustrate that he will undermine any environmental 
regulation that prevents implementation of the administration's energy 
plan. So, please, I caution my colleagues, do not be confused by the 
fact that he has the word ``conservation'' printed prominently behind 
him in a backdrop. There is nothing conservation-oriented about 
President Bush's energy policy.
  Clearly, neither President Bush nor Vice President Cheney nor the 
National Energy Policy Development Group believes that conservation 
should be the foundation of sound comprehensive energy policy. In fact, 
the Vice President recently stressed that the Bush administration views 
conservation as a sign of personal virtue but not a sufficient basis 
for a sound comprehensive energy policy.
  And when we talk about conservation, conservation is the planned 
management of a natural resource to prevent exploitation, destruction 
or neglect. It is the only basis on which to build a comprehensive 
energy policy that provides for the responsible long-term use and 
development of our Nation's energy resources. And by missing this 
simple principle, President Bush's energy plan is immediately flawed.
  Mr. Speaker, I would like to examine some parts of the Bush plan 
beyond its fundamental flaw, because I think many Americans do not 
understand the direct impact it will have on them. First, the 
administration's plan will do nothing to lower the prices that 
Americans are paying for energy today and will do little to mitigate 
price fluctuations in the future.
  When I talk to my constituents, they are concerned about the high 
cost of gasoline and the fact that gas prices keep going up. When I 
talk to my colleagues from California who are facing blackouts on a 
somewhat regular basis and more potential for blackouts as the summer 
progresses, they are concerned about the fact that they cannot get 
electricity. But if we look at the Bush policy, it will not lower 
gasoline prices, and it does nothing to prevent the rolling blackouts 
in California or prevent price gouging by the industry. It will not 
significantly affect America's dependence on foreign energy sources.
  On the other hand, what it does do, the President's energy plan does 
impact the quality of life for every American. The President's plan 
will damage public health through increased pollution of the air and 
water, it will speed up the impact of global warming and industrialize 
our Nation's pristine wilderness and open spaces.
  In my home State of New Jersey, we are already facing relatively 
dirty air and major problems that we have had with polluted water. And, 
frankly, I just do not see how we could possibly face a situation where 
the impact of the energy policy is to actually increase air pollution 
or increase water pollution, nor in New Jersey are people willing to 
tolerate the risk of contamination of our coastal environment by 
drilling off the coast.
  Now, I know that the President has not specifically mentioned 
drilling off the coast of New Jersey, but the Minerals Management 
Service within the Department of the Interior has a plan to drill off 
New Jersey, as it does for most of the coast. And the logical extension 
to President Bush's policy would be to seek out offshore oil 
essentially in every State.
  The reason that I believe that the President is moving in the 
direction he is, which basically is to drill more, try to increase 
production without addressing conservation, is primarily because of his 
alignment and his historic involvement with the oil industry. If we 
look at his references, they are all oil. And when we talk about the 
environment, conservation, and efficiency, I think we just see him 
giving more and more lip service.
  The National Energy Policy Development Group, which put together the 
President's plan, did not once have a substantive meeting with 
environmental-or conservation-minded organizations, so there really was 
no input from conservationists or environmentalists. The input was all 
from the oil industry.
  Let me talk a little about some of the problems I foresee with the 
President's new energy policy. First, I think it is going to accelerate 
the problem that we have with global warming. He calls for increasing 
coal and oil production. Specifically, the President requests a 10-
year, $2 billion subsidy for clean coal to make coal plants less 
polluting. However, in the energy budget, the administration did not 
specifically earmark funding for less polluting technologies, and 
instead, the budget requested this funding only to expand the use of 
coal in the United States.
  So the problem is that what we are going to see is essentially more 
coal-fired plants, and the emissions that come from those will only 
aggravate the situation that we already face with some of the air 
emissions that are coming from those plants right now. The largest 
contributors of greenhouse gases are coal-fired power plants and 
gasoline-powered automobiles.
  Power plants in the United States emit almost 2 billion tons of 
carbon dioxides pollution each year, and this is equivalent to the 
carbon dioxide emissions of the entire European Union and Russia 
combined. But as we know, or we learned a couple months ago, the 
President completely ignores this fact and he does not recommend any 
solution to reduce carbon dioxide emissions, even though he talked 
about that during the campaign. The President's plan regulates only 
three pollutants, and so carbon dioxide is completely left out.
  I have to point out that even in my home State there are utilities 
and utility executives who come to me and say that they are more than 
willing to regulate carbon dioxide. Around the time of Earth Day, the 
end of April, we actually did a bus trip where some of the Members of 
Congress joined me and we went around the State. One of the stops that 
we made was in Linden, New Jersey, where Public Service Electric & Gas, 
which is one of the two largest utilities in New Jersey, was about to 
construct a new generating plant

[[Page 8578]]

which would cut back on the carbon dioxide that was generated by the 
old plant by about a third. So the reality is that many companies, not 
only in New Jersey, but around the country, are taking actions to 
reduce the carbon dioxide output from their plants and there is a 
significant segment of the power industry that supports the regulation 
of carbon dioxide emissions.
  Now, why are we not dealing with it? Why does the President not want 
to deal with it? I do not know, other than I think he is the captive of 
the special interests and the oil interests and those who do not want 
to see this kind of regulation.
  Utility executives who support reducing carbon dioxide emissions take 
the science of global warming seriously and they understand that carbon 
dioxide emission regulations are likely to develop within the life 
expectancy of coal-fired plants built today. One of the biggest 
problems that I see with the President's energy policy is that he is 
advocating taking these old coal-fired plants that are grandfathered, 
and most of them are in the Midwest, that are allowed to generate 
emissions that do not meet the air quality standards that we have 
adopted in the last, say, 10 or 15 years, and which continue to spew 
forth the air pollution that the newer plants that were built more 
recently are not allowed or not built to do, and in his energy policy, 
the President is saying he would allow those older coal-fired plants to 
expand their operation and basically generate more capacity and still 
be grandfathered for that additional capacity power that they generate.
  What we are saying, and those who would be concerned about 
conservation and the environment would say, is rather than allowing 
these older plants to expand, they should be retrofitted to reduce 
carbon dioxide. In the long run, it probably saves money. And there are 
industry executives now that are willing to do that, but they are not 
going to do it unless they are told by the Federal Government they have 
to. And so essentially what President Bush's plan does is ignore them 
and says, okay, let us expand, let us continue to pollute, that is 
okay.
  The administration's plan also calls for the creation of 1,300 to 
1,900 more power plants in the United States over the next 20 years. 
Now, 1,300 power plants equates to an additional 26 power plants per 
State, in every State, and that equals five new power plants on line 
every month for the next 20 years. The question is where are we going 
to place these plants; and is that really doable? I do not think it is. 
But the major problem with that, of course, is that if we somehow 
managed to do that, we would increase air emissions and air pollution 
tremendously, particularly if we did not require them to meet the 
existing strict standards.

                              {time}  1945

  Mr. Speaker, I can give an example in my State. In New Jersey, we had 
a government analysis of our air quality this year reported that every 
county in New Jersey has poor air quality. So one can understand why I 
would not want to see any backsliding on the issue of air emissions 
from power plants because if we are already in a bad situation, what 
the President proposes would only make it worse.
  Finally, on this point I wanted to mention if one looks at the 
President's plan, he claims the goal of his energy plan is to reduce 
America's dependence on foreign oil. However, the solutions espoused 
will sacrifice our environment and do little to alter the imported 
quantities of oil the U.S. will actually need. Let me talk about why I 
think what he is proposing will not reduce our dependence on foreign 
oil.
  First, the Bush administration supports drilling in the ANWR. They 
claim there are responsible ways to go about the drilling. However, if 
you think about it, drilling for oil in the Arctic refuge would require 
hundreds of miles of roads and pipelines, millions of cubic yards of 
gravel and water from nearby water bodies, housing, power plants, 
processing strips, air strips, landfills and services for thousands of 
workers. There is certainly nothing environmentally responsible about 
that.
  But even more important, there remains significant oil reserves in 
already-developed areas of Alaska's North Slope. Estimates from the 
State of Alaska project from 1999 to 2020 another 5.7 billion barrels 
of oil could be produced from the Prudhoe Bay region while 15 to 20 
billion barrels could be produced in nearby WSAK oil field. This land 
was made available under the Clinton administration, as were thousands 
of other acres around the country.
  I do not think President Bush wants to open the ANWR, the Arctic 
National Wildlife Refuge, because there is an energy crisis; I think 
his aim is to open this wilderness to drilling because he believes he 
has the political support to do so. I do not think he does. I think if 
you talk to Members on both sides of the aisle, both in the House and 
Senate, you will find that there is a majority against drilling in 
ANWR. But he persists that we should drill there.
  Let me go back to why opening up ANWR does little to reduce the 
U.S.'s dependence on foreign oil. The U.S. Geological Survey estimates 
there are between 3.2 and 16 billion barrels of oil, of which about 3 
billion barrels are economically recoverable. Furthermore, the DOE's 
EIA, which is environmental impact assessment, reports that the U.S. 
exported 339 million barrels of oil in 1999, far more than the 106 
million barrels that might be produced in the Arctic.
  I can go through the statistics all night, but the general point I 
want to make clear is that drilling in ANWR is not a reasonable 
solution to meeting energy needs. Even if one were able to do what the 
President wants, it is not going to have an impact.
  What we really should do if we want to be serious about trying to 
reduce America's dependence on foreign oil is increase the fuel 
efficiency of our own automobiles. If one thinks about what we could 
accomplish, one could increase the fuel economy of automobiles today to 
40 miles per gallon. That would save more than 50 million barrels of 
oil over the next 50 years. This would change the oil use charts in the 
President's energy brochure. But again, he does not want to do that. 
The President does not want to change efficiency standards until 
another government agency finishes another government study, 
determining the effectiveness of raising fuel standards. Basically that 
is the excuse he uses. That is another agency, that is another 
department.
  I think that the biggest thing that bothers me about the President's 
policies and the ideology around President Bush's policies, they do not 
take into consideration American ingenuity and creativity. We have the 
ability to find new ways of doing things: efficiency, renewable 
resources, conservation. We have the ability and the know-how to 
effectively implement those kinds of strategy, rather than reverting to 
the supply-side, energy-based approach which is drill, drill, drill. I 
think it is backward, and I think it is not in the tradition of 
Americans trying to find solutions to their problems.
  If I could, Mr. Speaker, I want to spend a little time talking about 
what the House Democrats have put forward in terms of an energy policy, 
and contrast that a little bit with the President's plan. I have been 
to the floor. I was here last week with some of my Democratic 
colleagues where we talked about the Democratic proposal.
  I think the most important thing I can say about the Democratic 
proposal which was unveiled just a couple of days before the 
President's proposal is that we try to address the immediate concern 
that the average American has. And when I talk to my constituents, I am 
home every weekend and I hear from them, they say look, the biggest 
problem are gas prices. Even though we do not think that that we are 
going to have blackouts in New Jersey, they remember last summer. And 
when we hear about what happened in California, we think maybe that is 
going to reoccur.
  What the Democrats have done in our energy plan, first of all, with 
regard to the California situation, we have basically put what I would 
call caps, if you will, on wholesale prices for gasoline. The Democrats 
believe that the FERC, the Federal Energy Regulatory Commission, 
basically has failed to enforce

[[Page 8579]]

the law and should step in and essentially put in place ways of 
controlling prices and looking at the wholesale prices.
  We have asked specifically for the Department of Justice to 
investigate energy pricing to assure that illegal price fixing does not 
occur.
  The other thing that we do that directly impacts what needs to be 
done in terms of foreign sources, is that we say that the President 
should go to the next OPEC meeting, which I believe is going to take 
place within the next couple of weeks in June, and he should request 
that there be an increase in production at this time.
  During the campaign, then-candidate Bush said if it were up to him, 
President Clinton should demand that OPEC increase production. Now as 
President, he says that is not necessary, I am not going to ask them to 
increase production.
  Similarly, we have a source of oil called the strategic petroleum 
reserve which basically is a storage of petroleum that the U.S. 
Government has made over the years. During the Clinton administration, 
the Republicans and then-candidate Bush said the SPR should be used to 
control prices in the fashion that has been done many times over the 
last 10 years or so. Even under former President Bush, we used the SPR 
in that fashion. Now President Bush says no, we do not want to touch 
the SPR, that is not its purpose.
  The Democrats are saying look at wholesale prices, control wholesale 
prices of energy so we can hopefully help out California and the other 
western States. With regard to gasoline, demand more production from 
OPEC. Use the SPR as a hammer, and try to deal with the immediate 
crises that we face.
  I see some of my colleagues have come in, and particularly I see two 
colleagues from western States who I think are very knowledgeable about 
what has been going on.
  Mr. Speaker, I yield to Mr. Sherman who has been up here for the last 
couple of weeks on a regular basis talking about this problem very 
effectively.
  Mr. SHERMAN. Mr. Speaker, I thank the gentleman from New Jersey. He 
may have noticed that 60 minutes ago on this very floor, the gentleman 
from Pennsylvania attacked me personally, and attacked my State. This 
gentleman refused to yield for even 30 seconds because his arguments 
were subject to such total rebuttal.
  Mr. Speaker, I thank the gentleman from New Jersey for yielding more 
than 30 seconds because to outline all of the mistakes of the gentleman 
from Pennsylvania, a man who would not yield 30 seconds, yet ended his 
speech a full 20 minutes before his time had expired, this gentleman 
needs rebuttal on this floor, not to the attacks against me personally, 
but to the attacks against my State.
  The gentleman tried to create the image that California's suffering 
is somehow the just-desserts for environmental extremism in California, 
and that our energy shortage is as a result of opposing offshore oil 
drilling. Keep in mind that all offshore oil drilling would be an 
attempt to develop petroleum, and we do not use petroleum in the West, 
and certainly not in my State, to generate electricity.
  This attack that we somehow prevented the building of a sufficient 
number of plants. First of all, California has had sufficient plants to 
generate all of the electricity we need. Now at times the supply might 
be a little tight, but enough electricity to keep every light bulb on 
in the State was available except for one thing: They deliberately 
withheld supply.
  Nothing the environmentalists do or have been accused of doing rises 
to the level of deliberately withholding supply in order to jack up 
prices; and nothing the environmentalists did or were accused of doing 
would solve that problem.
  But let us go through this argument that somehow environmentalists 
prevented the creation of plants in California. First, it is simply not 
true. The incredible lack of knowledge about what is going on in 
California is matched only by the loud vituperation of those who are 
not from anywhere near my State when they come to this floor. There was 
no effort to build plants in California. I know, as every elected 
official in California knows what happens when powerful interests want 
to build something and environmentalists are trying to hold them back. 
It becomes a political question. It is brought to a variety of 
political levels.
  Nobody made any attempt to build a major power plant in California 
until quite recently. The utter proof of that was that there was no 
big, political brouhaha anywhere in the State, except for one plant in 
San Jose, and that related to just a few miles one way or the other, 
and was very recent. Over the last 10 years, no plants were built 
because the private sector did not want to build them.
  And a further proof of that is when the private sector had the chance 
to buy all of the existing plants, they did not pay a premium price for 
them. So to say that private industry was desperate to build plants, 
they did not even pay a premium for the plants that were already there.
  But also, contrary to the physics that may be taught on the other 
side of the aisle, the physicists that I consulted tell me that 
electrons are unaware when they pass a State border. You can supply Los 
Angeles with power just as easily building a power plant in Nevada or 
Arizona as you can building one in Northern California or far Eastern 
California. Yet no private company was trying to build plants in Nevada 
or Arizona unless we are to believe that these are States where 
environmental extremists are in total control.
  So they did not try to build plants in our State, they did not try to 
build plants near our State, and they were not anxious to buy plants 
already built in our State because there was not a lot of money to be 
made until they saw that opportunity to withhold supply; and then the 
absence of rate regulation on the wholesale utilities became obvious. 
Then, by withholding supply, by redefining ``closed for maintenance'' 
as meaning ``closed to maintain an outrageous price for every 
kilowatt,'' these gouging utilities, chiefly based in Texas, have been 
able to charge sometimes 10 times, sometimes 100 times the fair price 
for energy they generate from those same old plants that served 
California so well under the previous regulated regime.
  So we are told that the Federal Government must do everything 
possible to ensure that Californians suffer, and this administration is 
doing that, but it is not out of a sense of justice or retribution; but 
rather, for the beneficiaries. You see, as long as gouging occurs, 
there will be a huge transfer of wealth from California to a few very 
rich corporations, mostly based in Houston, mostly very close friends 
of the current administration.

                              {time}  2000

  We paid $7 billion for electricity in 1999. In the year 2000, we paid 
over $30 billion for the same electricity. This year we will pay over 
$60 billion. We are not using any more; we are paying more, and we are 
paying more to those who withhold supply to drive up price.
  Let us not blame environmentalists in California. Let us not come to 
this floor and assert that somehow environmental extremists control 
Carson City and Phoenix. Let us realize that the private sector bought 
these plants thinking they would earn modest profits. They fell into an 
opportunity. They fell into the opportunity to withhold supply and 
charge outrageous profits. That is what they are doing for the benefit 
of a few companies based in Texas.
  This is not a morality play. This is an economic crisis. California 
needs price regulation based on cost of our wholesale electric 
generators.
  Mr. PALLONE. Mr. Speaker, I want to thank the gentleman from 
California (Mr. Sherman) for his comments, and I want to continue 
talking about the issue of what is happening in California.
  I know that our other colleague, the gentleman from Washington (Mr. 
Inslee), has actually introduced a bill that is designed to return the 
West to just and reasonable cost of services, and I know that his bill 
was actually part of the Democratic proposal that

[[Page 8580]]

we have been talking about. So I was going to ask if the gentleman, 
which is probably what the gentleman was going to do anyway, but I 
wondered if the gentleman would specifically continue with what our 
colleague from California said and what we can do in that regard.
  Mr. INSLEE. Mr. Speaker, I appreciate the gentleman from New Jersey 
(Mr. Pallone) being here and asking that question. I am reporting from 
the State of Washington up in the Pacific Northwest about what is not 
just a California problem, but indeed a western United States problem 
of price gouging on the electrical markets.
  I now can report back to the House the reaction the President's 
energy inaction plan is getting from my constituents in the State of 
Washington. In the immortal words of Siskel and Ebert, it is two thumbs 
down, big time as they would say. The reason is that while California-
bashing is one of the favorite sports of the State of Washington, the 
President's callous indifference to the whole West Coast is not just 
hurting California. It is hurting small businesses and people in 
Washington and Oregon who are paying wholesale electrical prices that 
have gone up a thousand percent, a thousand percent wholesale 
electrical prices, from last year.
  Where communities that paid $25 for a megawatt of energy in 
Washington, not California but in Washington State, $25 a megawatt hour 
last year, we are now paying $600-plus for a megawatt. No one on this 
floor, I have heard, had the courage, I guess it would be, to come and 
try to defend that kind of a pricing change over a year.
  It just bears repeating that it is not just California that is 
suffering here. The State of Washington may lose 43,000 jobs as a 
result of the President's willful neglect of this crisis on the West 
Coast.
  Now, if the President has some indifference to the State of 
California, for whatever reason, we do not appreciate allowing him to 
have the energy-gouging locusts that sort of visited that plague on the 
whole West Coast, and we are getting hurt, too.
  Last weekend when I went home, I had people coming up to me in the 
ferry boat lines and in the supermarkets absolutely shaking their 
heads, livid about this failure of the elected official.
  The President, he has had ties to the oil and gas industry. That is 
not exactly a secret. But he does not work for the oil and gas industry 
anymore. He works for us on the West Coast, and he has simply sent a 
message to the West Coast in this moment of trial, to guys like Cliff 
Syndon, who has cut his energy bill by like 40 percent and has seen his 
bill go up; who has been dedicated to conservation, a guy who wrote me 
an e-mail and said, I have cut my energy almost in half and my bill 
went up.
  What are we supposed to tell people like that who are trying to be 
good Americans in this moment of crisis, as we are when everybody wants 
to pull together, and then have the President say, well, Cliff, go 
fish; you can just go fish, for all I care. Yet, that is the signal the 
President is sending to the West Coast of the United States.
  Now it is not like he does not have a tool. As the gentleman has 
indicated, I have introduced a bill supported by a goodly number of 
folks that essentially would have a short-term cost-based pricing 
system in the western United States. This is a very reasonable, common-
sense tool the President already has. We should not have to pass a bill 
here to make him do this. He should do this because it is already the 
law, because the law of the Federal Energy Regulatory Commission is 
that they will require reasonable rates to be charged in this country 
for wholesale electricity.
  What our bill does is simply call a time-out for this plague, and the 
time is that for 2 years we simply have cost-based plus a reasonable 
degree of profit for the wholesale electrical market, something similar 
we have done for decades in this country since the Edison Round; we are 
simply saying we ought to do this at least for 2 years while these 
markets become better established.
  We also would respond to the President. I talked to the President. He 
told me he did not want to do that because, well, nobody will build any 
more plants to generate electricity if we did that. Well, the President 
missed one aspect of our bill. We would exclude new generating capacity 
from the impact of this cost-based pricing.
  It cannot be a disincentive for someone when they are excluded from 
the application of this system, which we would do to make sure that 
these energy sources can continue to come online. That is something he 
has simply missed in his analysis.
  So I can say that on the Main Streets of the first district in the 
State of Washington people are very, very angry about this President's 
callous indifference to their plight. It is small businesses that are 
curtailing hours. We have heard about the big industries, the aluminum 
industry that is going to heck in a handbasket; the pulp and paper 
industry that has shut off hundreds of jobs, but the small businesses 
are getting hit, too; the Highland Ice Rink in Shoreline that has to 
curtail its hours because they cannot pay the energy costs. Restaurants 
are having trouble. School districts, they are now not being able to 
hire the teachers they need to. Edmonds School District, the prices are 
going up $600,000 in one year for energy.
  These are real people that are really suffering. For the life of me, 
I cannot understand why the President will not seriously consider this 
issue, except perhaps the history of their economic lives. And that is 
extremely disappointing.
  We are going to continue on this floor to advance this issue because 
it is too important to let go.
  Let me also say that I think there are short-term and long-term 
strategies we have to have on energy. The problem with the President's 
proposal is he has exactly zero short-term proposals. Zero. It is sort 
of like the people in the West are drowning and he says, well, I have a 
strategy for them as soon as they can swim to shore. Well, 43,000 
people are not going to make it to shore. They are going to lose their 
jobs in the State of Washington alone; and he has offered them exactly 
zero short-term relief, no caps on electrical prices; no jawboning 
OPEC; no nothing. We are going to suffer as a result of that.
  We are going to continue this effort. We hope FERC will reexamine 
this issue.
  Let me point out one other thing, too. I will give you some good 
news. We should have some good news in the House just for a moment. I 
talked to Steve Wright, who is the acting administrator of the 
Bonneville Power Administration, last week who told me that there are 
currently 28,000 megawatts of energy plants which in the Pacific 
Northwest or at least in some fashion are considering opening up plants 
in the Pacific Northwest, 28,000 megawatts. That is a big chunk of 
electricity. That is the good news. The market is responding to what is 
going on.
  When we have an economic major dislocation with the economy going to 
be in the tank by the time that new energy gets here, we are going to 
look back at this period and the White House's indifference is going to 
have to cost this economy a good amount. That is why we are going to 
continue to insist that the President reconsider this, and we are going 
to pass legislation here if we have to do that.
  I hope I explained this proposal.
  Mr. PALLONE. I am glad the gentleman did. The gentleman explained it 
in detail. Of course, I characterize it sort of briefly and probably 
too generally as wholesale price caps, but it is not exactly that. It 
is, as the gentleman said, more detailed than that. Nonetheless, the 
point is that neither the President nor the FERC are willing to do 
anything about prices at the wholesale level.
  I thought the gentleman said something very interesting. If we think 
about it, when one tries to say to their constituents why is it that 
the President and the Vice President do not want to deal with this, it 
obviously

[[Page 8581]]

makes sense to deal with the immediate problem and have in place 
something to address wholesale costs the way the gentleman describes. I 
am convinced and the only way to explain it is because of the 
administration's ties to big oil and their history.
  I am not going to go on forever about it, but I just wanted to 
mention that big oil give $3.2 million to the Bush campaign in the last 
election and $25.6 million to Republicans overall, and other sectors of 
the energy industry have been similarly generous.
  If one thinks about it, we have the President himself who was 
involved in oil ventures in Texas and abroad in the 1980s. He run 
Arbusto Energy Firm, which after a few years become the Bush 
Exploration Oil Company. It merged with two other companies.
  Vice President Cheney, who was the former CEO of Halliburton, the 
world's largest oil fuel services company, in August of last year he 
received $20.6 million for a sale of Halliburton stock. But it is not 
just them. The National Security Adviser Condoleeza Rice served on the 
board of directors for Chevron, a major U.S. oil company, for 10 years. 
Chevron gave GOP candidates and committees in the last cycles $758,000; 
$224,000 to Republican Congressional candidates. The list goes on. The 
Secretary of Commerce Evans who spent 25 years at Tom Brown, Inc., a 
$1.2 billion Denver-based oil and gas company. We can mention the 
Energy Secretary and the Interior Secretary. They were also big oil 
money recipients when they ran for public office.
  There is no other way to explain it other than the special-interest 
money they are getting. Otherwise they would not be doing these things 
because they do not make sense.
  Mr. INSLEE. Mr. Speaker, will the gentleman yield?
  Mr. PALLONE. I yield to the gentleman from Washington.
  Mr. INSLEE. I need to leave the floor. There is just one point I 
would like to add. I want to make sure people understand that our 
proposal is not going to leave these energy-generating companies 
penurious. What we are suggesting is that they receive, for a 2-year 
period, their costs plus a reasonable degree of profit. They are going 
to be assured making money.
  What we have suggested is pick the highest level of profit ever 
historically enjoyed by anyone possibly in the oil industry and these 
prices probably are still going to be cut in half.
  We are very generous, profit-oriented in saying pick the highest 
number that we cannot have people laugh at us on Main Street and we 
will go along with it; but when they are charging, as the gentleman 
knows, the equivalent of $190 a gallon for milk, that is wrong.
  We ought to restore some sanity, just for a couple of years, while 
this industry gets back into a market-based approach and we get some of 
that 28,000 megawatts back on line.
  Mr. PALLONE. I could get into the oil companies' profits, and maybe I 
will do that later; but obviously the profits have just soared in the 
last year. Maybe we will give some examples of that later.
  I would like to yield to the gentleman from California (Mr. Sherman) 
at this time.
  Mr. SHERMAN. I would like to comment on the misperception of some of 
our colleagues that California is asking for a handout. California 
wants nothing more than to have our hands untied. For 100 years we were 
successful with cost-plus profit regulation of our private utilities. A 
few years ago, we made a mistake. We went with this new-fangled system. 
Had there not been conspiracies and probably illegal actions that we 
will never be able to prove, it would have worked. We were not 
completely stupid. We went with a system that worked on paper, but it 
did not work in reality. So we went with a system that did not work. We 
now want to go back to the system that we know works. We do not want to 
affect anybody else. We do not want any tax revenue. We just want to 
have cost-plus profit price regulation of electric generators.
  Federal law prohibits us from doing it. Federal law preempts. Federal 
law has us bound and gagged while the muffled laughter from the White 
House can almost be heard here on Capitol Hill. All we ask is that we 
who benefit or are harmed by the electrical policies affecting our 
State be able to return to the policies that served us and almost every 
other State very well for nearly 100 years. Instead, we are told it is 
California's problem, California has to deal with it and, oh, by the 
way, they will remain tied, bound and gagged.
  Now, the White House tells us that we will be tied; we will be bound 
and gagged for our own benefit because the kind of sane regulation 
described in detail by our colleague from the State of Washington is 
somehow bad for us and the White House should protect us from it.

                              {time}  2015

  We are told that reasonable prices for electricity will prevent 
conservation. The President himself has admitted that California is 
already doing a spectacular job of conservation, that we are about to 
be first, we are now second, we are about to be the first on the list 
of States who minimize their use of kilowatts per person. We are doing 
a spectacular job of conservation, and I can assure the House that 
everyone in our State will continue to do so.
  Now, I might say the President does not praise us for this 
conservation effort in order to praise California. He praises 
California's conservation effort in order to degrade the concept of 
conservation, saying conservation must be terrible, they are good at it 
in California. But nevertheless, even the President admits, we are 
doing a spectacular job of conservation. We do not need to be hog-tied 
by Federal preemption laws in order to diminish our usage.
  But second, we are told that price regulation will diminish supply. 
As the gentleman from Washington points out, both his bill and the bill 
put forward by the gentleman from San Diego, California (Mr. Hunter) 
and the gentlewoman from northern California (Ms. Eshoo) exempts new 
production. So it cannot prevent the production of electricity through 
the construction of new plants.
  But then we are told that only if there was unlimited prices are we 
going to get maximum production. Now, think about it for a minute. If 
it costs $40 to create a megawatt and you are allowed to sell it for 
$60, you only make $20 for every one you make and you maximize your 
effort by making as many as possible. But what if, instead, it still 
costs $40 to create a megawatt and one of your options was to make as 
many as you could and sell them at a nice profit, but your other option 
was to produce less, produce fewer megawatts, force the price up not to 
$60 a megawatt, not to $600, but to $700, $800 a megawatt. By producing 
less, the price goes crazy, the profits go crazy, the transfer of 
wealth from California to Texas exceeds anything that anybody ever 
thought was possible. So that is what is happening. The California 
Public Energy Commission has determined that we are getting less 
because we are paying more than a fair price. About withholding supply, 
we get blackout and enormous electric bills.
  The solution is obvious. Let California have the system that 
Californians are begging for. Allow California to regulate its own 
wholesale generators, or better yet, have the Federal Energy Regulatory 
Commission do its job and impose these regulations. That is why the 
bill of the gentleman from Washington (Mr. Inslee), the bill of the 
gentleman from California (Mr. Hunter), these are the bills that this 
House ought to pass. But the only reason we have to pass them is 
because the President of the United States has instructed his Federal 
Energy Regulatory Commission to stand on the neck of California, and 
the laughter is almost audible here over 2 miles from the White House 
from which it emanates.
  Mr. Speaker, I yield back to the gentleman from New Jersey.
  Mr. PALLONE. Mr. Speaker, I want to thank the gentleman. I was 
talking before about the oil company profits, and it is amazing. We 
just have a little table here that talks about six of the largest 
companies, and to just give my

[[Page 8582]]

colleague some examples, for Exxon-Mobil in the first quarter of this 
year, profits were up 43 percent; for Texaco in the first quarter, 
profits were up 45 percent compared to last year; Chevron, 53 percent 
compared to last year; Conoco, 64 percent compared to last year; and 
the first quarter of this year for Phillips Petroleum, profits are up 
96 percent by comparison of last year.
  Mr. SHERMAN. Mr. Speaker, if the gentleman would yield, I would point 
out that these price gougers in California, the ones that are 
generating electricity, withholding some of that possible generation, 
driving up prices, their profits are not up 40 percent, their profits 
are up 400 percent. And, the four big companies, the four big companies 
that have pipelines that bring natural gas into California from Texas 
and Colorado, they have increased their prices by a factor of 12, they 
have increased their profit by a factor of 2,000 to 3,000 percent.
  The gouging from a few huge Texas-based companies is not limited to 
those that deal with petroleum companies that are having the rather 
startling profit increases that the gentleman from New Jersey 
indicates, but those that are crucial to the generation of power in 
California. The natural gas pipeline companies and the wholesale 
electric companies are beyond comprehension in their profit increases. 
I yield back.
  Mr. PALLONE. Mr. Speaker, I am going back to the oil companies again 
now, but if we think about these examples for oil, electric utilities, 
nuclear waste and coal, just to compare what they gave to the Bush and 
Republican campaigns as opposed to what they are going to get if the 
Bush energy policy went through, to talk about the oil and gas 
industry, which gave $3.2 million to the President's campaign, $25.6 
million to the Republicans in the Congress. But if we look at what they 
stand to gain based on the President's energy policy that just came 
out, he would permit oil drilling in the Arctic National Wildlife 
Refuge, permit oil drilling on Federal lands, that is, national parks, 
national forests, national monuments, permit oil drilling off the cost 
of Florida, undercut environmental protections to permit new oil 
refineries and pipelines, review and potentially lift economic 
sanctions against Iraq, Libya, and Iran so that U.S. oil companies can 
do business there, and lock in place record prices at the pump at the 
same time that they see record profits. Now, that is the oil and gas 
industry. Let us go to the electric utilities.
  They gave $1.3 million to Bush, $12.9 to Republicans. The Bush energy 
plan says no price caps in the western United States, which is what the 
gentleman from California (Mr. Sherman) and the gentleman from 
Washington (Mr. Inslee) have been talking about. The Bush policy would 
waive environmental standards for the Endangered Species Act, for 
hydroelectric plants, and it would enable FERC to seize private lands 
for constructing electric transmission lines.
  Then we go to the nuclear industry. They gave $105,000 to Bush, $1.2 
million to Republicans in Congress. They get to gut current licensing 
procedures for nuclear plants to ensure public input on safety and 
nuclear waste disposal and tax credit for more nuclear plant 
construction.
  Then lastly, coal. The coal industry gave only $110,000 to Bush, $3.3 
million to GOP Republican congressional candidates. If we look at what 
they get out of the energy policy, the Bush energy policy, basically it 
is what I mentioned before, the permission for coal-fired power plants 
to exceed clean air limits.
  I have to stress that last one again, because as the gentleman knows, 
in my home State of New Jersey, much of the air pollution comes from 
these old coal-fired plants in the Midwest that do not meet current 
clean air standards, but were grandfathered. What they would do in 
order to expand is that they would expand their existing plants and 
they would use the same old standards, the grandfather standards, 
rather than the new ones under the Clean Air Act. It went so far and 
got to be so outrageous that the EPA, under the Clinton administration, 
actually brought suit in Federal court and managed to win, to succeed 
in the Federal courts with their suits, and the courts required these 
companies to put in place new standards when they expanded their 
generating capacities.
  So we actually are in a situation now where those court actions are 
in the process, if they are allowed to continue over the next few 
years, they will have settlements in place that basically require these 
old coal-fired plants to meet the up-to-date standards, not for the old 
generation, but for new generation, expanding the capacity.
  The way I understand the Bush policy, he basically would throw that 
all out and say, okay, maybe they have been sued, maybe they have been 
successful, but we are just going to let them expand their capacity and 
not have to meet the new standards.
  First of all, what does that do to the air quality? Obviously, it 
deteriorates, but what does it also say to those utilities who have 
been the good actors and who have built the new plants and have 
expended resources to do so and who are now told, well, you probably 
are stupid that you did that and did the right thing, because you could 
have just waited around and you would have gotten an exemption, and you 
will not even be able to compete with them because the dirty guys are 
going to be able to produce and generate capacity at a much lower rate.
  So it is really outrageous. Every day when I look over the 
President's proposal, I get more and more upset, because he started 
out, if anyone watched him last week, he had all of these charts and 
big bulletin boards behind conservation, everything was green and blue, 
and we are supposed to either think of trees or maybe the ocean. 
Everything was beautiful. I said it was subliminal. I do not know much 
about these subliminal things, but if you looked at it on TV, I think 
it was trying to give the impression that he was green or he was blue 
or he was a good guy, conservationist. Then we look at the details and 
it is just the opposite. It really upsets me, because I do not like to 
see that kind of chicanery, if you will, pulled by government 
officials. Everybody thinks we all do that, but I do not think we all 
do. That was particularly egregious, in my opinion.
  Mr. SHERMAN. Mr. Speaker, to chime in on this, I am so focused on the 
short-term disaster in California that so far I have not mentioned the 
long term.
  Some of the less progressive elements in the energy industry have 
sought to crush the alternatives. They have sought to eliminate 
conservation as a way to go, to eliminate research and to slash 
renewables. The President's budget reflects these worst elements in the 
energy industry. He cut by an average of one-third, here in the middle 
of an energy crisis, cut the precrisis efforts for renewables, 
research, and conservation. That is the budget he brought here to us. 
Then, that budget is rammed through both Houses, and this week they are 
going to ram through the tax cut that locks that budget in. Then, the 
President, having arranged for the passage of a budget that cuts by 
one-third the amount for conservation renewables and research, dares to 
have a press conference in which he says he wants to spend more money, 
tax credits he wants, expenditures he wants.
  What hot air it is to propose things only after one has maneuvered a 
budget through the House and the Senate that guarantees that there will 
not be a penny to do any of the things the President was talking about. 
In fact, the President's budget does not provide adequately for the 
other tax cuts that he is working so hard to achieve, some of them as 
necessary as extending the R&D tax credit, does not provide for the 
military increases that we know this House will adopt; provides 
nothing, not one penny of an increase in Federal spending on education, 
and does not reflect the proposal of our Secretary of the Treasury that 
every corporation in America should be exempted from income tax.
  So how, how are we going to provide for conservation research and 
renewables? Obviously not at all. The only source of money would be 
dipping deep into the Social Security trust fund, and I do not think 
even those of us who

[[Page 8583]]

are dedicated to new forms of energy want to see that.
  So the President stands before the green and the blue posters and 
promises while, at the same time, his people are here on Capitol Hill 
making sure that not one penny will be provided to meet the President's 
promises.
  Mr. Speaker, there is something else subliminal about those blue 
posters, and that is, and I hesitate to say this, Californians will be 
very blue when they review, will be singing the blues when they see 
their electric bill.

                              {time}  2030

  But what Californians have to understand is if their electric bill is 
double, that does not mean that these wholesale gougers are only 
getting double a fair price. Sixty percent of the energy we use in 
California is regulated, so 60 percent of our bill is made up of 
electrons sold to us at a fair price. Forty percent is what we are 
getting from these gougers. Yet, our bill is double. That is because 60 
percent of the energy we are buying at a fair price and 40 percent we 
are buying not at double but at triple or quadruple the fair price.
  Now, we might think that means triple or quadruple profits. No, 
profits is what is left over when we pay our expenses. If we are able 
to jack up the price by a factor of three or four while the expenses 
are not affected by the gouging activity, then the profits might be 
going up by 800 percent, 1,200 percent.
  That is indeed what is happening for a few huge corporations based in 
Texas who are, with such a powerful friend in the White House, able to 
avoid commonsense rate regulation on the electricity they are selling 
in California.
  Mr. PALLONE. Mr. Speaker, I know we only have a couple more minutes, 
so I am going to try to wrap up. If the gentleman from California would 
like to add to this, please do not hesitate.
  I just wanted to point out, I started out this evening by saying that 
actions speak louder than words. Really, I think that describes what we 
are seeing from this administration and from the President. We are 
seeing a lot of rhetoric about conservation and no action.
  The gentleman talked about the budget. Two things I wanted to 
mention. We know that renewable energy programs were slashed by 50 
percent in the President's budget proposal. But what he did in his 
energy plan that he came out with last week, and I think it is really 
hypocritical and really outrageous, he recommended the creation of a 
royalties conservation fund. This fund would provide money in royalties 
from new oil and gas production in the Arctic National Wildlife Refuge 
to fund land conservation efforts, and it would also pay for the 
maintenance backlog at national parks.
  So what we are basically being told is that we have to destroy the 
wilderness, the Arctic wilderness, in order to protect the national 
parks, or to provide money for other land conservation efforts. I just 
think it is a slap in the face to any conservation or environmental 
efforts to suggest that that is the way we are going to fund these 
things, and then just go ahead and cut all things in the Federal 
budget.
  I think the only thing we can do is to continue to speak out, as the 
gentleman has so well done. I know the gentleman is probably going to 
be back again tomorrow night or another night this week, and I plan on 
doing the same thing, because we have to get across to the public that 
as much as the President has a lot of rhetoric about conservation, his 
energy policy really is a disaster for the environment, and is not 
going to do anything, either long-term or short-term, to deal with the 
problems that we face now with gas prices or blackouts. Does the 
gentleman wish to add anything else?
  Mr. SHERMAN. I thank the gentleman for his leadership on this issue, 
especially because his State is not facing quite the disaster we are 
facing in California.
  I think it is simply outrageous that we in California are prevented 
from having the kind of rate regulation at the wholesale level that we 
all want, that we so desperately need, and that we are precluded from 
having by Federal preemption.
  Mr. PALLONE. Mr. Speaker, we will continue until we get that 
opportunity. I want to thank the gentleman again.

                          ____________________