[Congressional Record (Bound Edition), Volume 150 (2004), Part 7]
[Senate]
[Pages 9445-9447]
[From the U.S. Government Publishing Office, www.gpo.gov]




                           U.S. ENERGY MARKET

  Mr. CRAIG. Mr. President, I come to the Senate floor once again 
today, as I have on three different occasions over the last 2 weeks, to 
visit with my colleagues about the State of the U.S. energy market and 
what is happening out there that I am afraid some of my colleagues are 
not yet understanding in a way that will cause them to act to help us 
shape a national energy policy for our country.
  When I was on the floor of the Senate 2 weeks ago, I mentioned that 
gas at the pump in California had hit $2.25 a gallon. A few days later, 
I announced that gas had hit $2.50 a gallon in the State of California. 
Yesterday, gas hit over $3 a gallon in the Los Angeles market--a 
historic high not only for this Nation but most assuredly for the State 
of California. In our State of Idaho--I say ``our'' State because my 
colleague, Mike Crapo, is presiding at this moment--in some instances, 
gas has gone over $2 per gallon. For those of us who travel the miles 
across Idaho to get from one small community to another, that begins to 
have a very real impact upon the ability of our citizens to simply move 
across the State of Idaho, let alone those businesses and industries 
that use large volumes of chemicals, gasoline, and diesel for the 
conduct of their businesses.
  So while I was accused by some of our folks on the other side of 
being a little bit too much of an alarmist a week ago in speaking about 
this, I will simply hold my tone down today. But I have to think that 
the average consumer who swiped his credit card with a $50 limit and 
found out that before he could get his SUV filled, he had ran out the 
limit of the credit card and had to swipe it one more time because the 
gas pump shut down got a very rude awakening this week in the Los 
Angeles basin.
  Who ever thought it would cost $45 or $50 to fuel your automobile? 
That is what it is costing today. I said a couple weeks ago that the 
average citizen this fiscal year would spend $300 to $500 just for 
gasoline than a year ago. I need to update that a little bit. Now we 
are up to about $560 instead of $400. That has happened just within the 
course of a week and a half. Yet, the Senate still cannot get its act 
together. It cannot produce a national energy policy that we have been 
debating and refining in this Chamber and in the appropriate committees 
for the last 5 years. Somehow it just isn't quite perfect.
  In the course of those years, we quit producing as a country. We kept 
demanding and growing, and our growth, in large part, is based on 
surplus energy that was built into our system over the last two 
decades. But as our economy comes back on line, that surplus is gone.
  Let's remember what happened at the last peak of an economic cycle in 
the State of California, when the State of California went dark, and 
businesses and industries had to curtail production because they didn't 
have electricity--or very little--or it wasn't reliable or stable. Have 
we done anything to correct that, to create sustainability and 
reliability in the system?
  The answer is that we have not done anything. We have debated it 
loudly and clearly, but we really could not get our political act 
together to solve the problem in California and the region. We have not 
drilled any more oil wells in the United States. We have not been 
allowed to drill where we think there are literally billions of barrels 
of oil in Alaska because somebody said it might damage the environment. 
Yet we have already proved by drilling in Alaska that proper procedure 
in the 1970s didn't damage the environment. Our abilities now, in 2004, 
are so much enhanced that we know we will not damage the environment. 
But it became the clarion call of the environmental movement in this 
country not to touch ANWR. So, politically, we did not; we could not. 
The votes simply were not here to do it.
  What would happen today if ANWR were developed and the production was 
on line, even though it wasn't pumping at the moment? We could say to 
OPEC, to other countries around the world, that we are going to turn 
the valve of ANWR on and flow the oil through the pipeline of Valdez 
and fill our tankers and bring them down to Anacortes, WA, and to the 
refineries of California, and begin to refine the oil of Alaska.
  I bet OPEC would scratch its head and say: Maybe we better change our 
ways a little bit. Maybe getting $30 to $35 a barrel is not realistic 
because we forced the United States to be less reliant on us and more 
reliable on themselves. It is called fungibility in the oil market.
  We cannot do that today because politically we have not been allowed 
to do the right kind of exploration and environmentally sound 
development in Alaska.
  We are hoping this economy keeps going, keeps growing, keeps 
rebounding the way it currently is, but what is putting a phenomenal 
amount of pressure on it at this moment in the form of greater input 
costs into almost every aspect of the economy is the cost of energy, 
whether it is the average home and consumer or whether it is our 
farmers in the State of Idaho who this past February, when they sat 
down with their banker to develop their line of credit for the year, 
penciled in an energy cost and a fertilizer cost, little knowing what 
they penciled in was 30 to 40 percent inadequate from what it was 
actually going to cost them. They have today found out their fertilizer 
costs doubled. Why? Because phosphate is made from natural gas, natural 
gas processes, and natural gas went from $2.50 a million cubic feet to 
$6.50 to $7 a million cubic feet, and the cost of fertilizer went 
through the roof.
  So fertilizer got applied less in some areas and where it did not get 
applied, the farmer rolled the dice and gambled, hoping somehow the 
value of the crop produced would increase 25, 30, or 40 percent, which, 
of course, won't happen. That is agriculture alone.
  What about the chemical industry? What about those kinds of 
industries up and down the east coast of America that produce the 
chemicals for this country? Many of them have already shut down, and 
they have taken their production to Europe. It has cost us thousands of 
jobs.
  I must tell those men and women who are out of work: Why don't you 
pick up the phone and call your Senators and ask your Senators how they 
voted on the Energy bill, and if they voted no, why did that vote cost 
you your job because the cost of energy went through the roof and your 
company had to shut down. That is, in part, the reality America is 
facing today.
  While all of us are excited about the growth of the economy and the 
thousands of new jobs that are being created at this moment, there is a 
cloud hanging over Wall Street and the investment community. They 
openly say that cloud is the unpredictable high cost of energy and the 
impact it will have on certain segments of the economy that are highly 
dependent upon it.
  What did we do when we crafted S. 2095? We built a broad-based, 
incentivized bill that said we ought to be producing in all segments of 
the energy market. It was not selective. It said America would grow and 
America would prosper with an abundance of energy at a reasonable price 
that was reliable and available. Therefore, our bill, S. 2095, 
encouraged domestic oil production, encouraged the development of more 
natural gas, encouraged the building of necessary infrastructure, such 
as the Alaska natural gas pipeline. Oh, I didn't tell you? We are 
pumping trillions of cubic feet of gas back into the ground in Alaska 
as we speak from the currently developed oilfields. Why? Because we 
cannot get it to the lower 48. We produce it, it comes up, we segregate 
it from the oil, we put the oil in the pipeline, and we pump the gas 
back into the ground.

[[Page 9446]]

  So we said: Why don't we build a pipeline? And industry said: Because 
it is so expensive, we cannot afford to build it unless you give us 
certain consideration. This week we gave them that consideration. We 
gave them the tax incentives to build the pipeline to bring the gas to 
the lower 48 to supply our business and industry, to bring down the 
cost of fertilizer, and S. 2095 did just that. It encouraged and 
incentivized the building of a natural gas pipeline out of Alaska.
  Our Senate bill encouraged use of renewable fuels, such as ethanol. 
It encouraged more renewable energy. Wind--you bet we are all for wind 
and more of it as a generating source for electricity and 
photovoltaics, energy cells, taking the energy of the Sun. This bill 
promotes that where it can fit and does work. We have strengthened the 
future of nuclear energy as an option by, again, trying to incentivize 
getting into what we call generation 4 reactor development.
  Our State of Idaho might well be the place where a prototype is 
built. This week in the State of Idaho, five representatives from five 
different nations around the world visited our national laboratory as 
the site where a new reactor prototype will be built, called generation 
4. It is a high-pressure reactor, safe to operate, that can produce a 
phenomenal abundance of nonemitting electricity and even hydrogen for a 
hydrogen economy and a hydrogen fuel cell transportation market. That 
is in S. 2095. That is part of what we have been working on.
  Clean coal technology, that phenomenal energy resource of the Senator 
from Kentucky, who is sitting here beside me at the moment, could be 
used without the risk of pollution.
  There is hydrogen promotion, hydrogen fuel cell development, and I 
spoke of the generation 4 reactor and the production of hydrogen. Of 
course, there is conversation, using energy more wisely so we use less, 
research and development in new technologies, mandatory reliability 
rules for the electrical grid that moves our electricity across the 
country, the promotion of advancement and the expansion of that grid. 
That is the full package.
  It is also very interesting that when George Bush was President-elect 
George Bush, before he had taken the oath of office, I will not forget 
meeting with him for the first time just down the hall from the Senate 
Chamber in the office of the majority leader of the Senate. He said: My 
most important priority beyond education, the economy, and tax cuts to 
get the economy going again will be a national energy policy.
  At that time, he said: I will task the Vice President to put the best 
minds in the country together and make recommendations to you, the 
Congress, to develop a national energy policy based on what we see is 
necessary in the market. Our President did that.
  It is interesting that a lot of people criticized him for it: Gee, 
who was that who was meeting with you? Did they meet behind closed 
doors? What did they recommend? And all of that.
  They recommended a first-class list of things to do and what I have 
mentioned. What is embodied in S. 2095 is, in large part, what the 
President of the United States recommended to us as a national energy 
policy.
  Why isn't it law? Why hasn't this country turned toward producing 
energy instead of simply consuming and being more reliant on a foreign 
producer than a U.S. producer? Because this Senate could not get its 
act together. It is not big oil you ought to be blaming anymore, it is 
big Government and big politics. It is the politics of energy, it is 
the politics of the environment, and it is the denial of the 
responsibility that every Senator in this body has to the home folks, 
to the consumer, to the producer, to the farmer, to working men and 
women who are now paying more for energy than at any other time in this 
Nation's history.
  If you don't think $3 a gallon for gas at the pump in the L.A. basin 
does not have an impact on the economy of this country, then think 
again. If you think $2 a gallon for gas at the pump in Idaho today does 
not have an impact on the consumer, does not have an impact on the 
farmer, the producer, the working men and women, then think again.
  Our economy is a whole. It is just as I said, and if that average 
working family has to spend $400, $500, $600 or more or $1,000 or more 
a year on energy, that is $1,000 less they have to put food on their 
table, buy clothes for their kids, or even go out in the evening and 
have a dinner.
  It is that extra income that rolls across America that makes this 
country and this economy as strong as it is. When it is going to an 
OPEC nation to pay for the oil for the gas or the oil we burn here 
instead of going to our own producers, somehow that just is not right. 
But that is exactly what we are doing today, and we are doing it for 
one simple reason alone: Because politically we could not function. 
Politically we did not get our act together.
  Many of us tried. We produced a bipartisan bill, but it was not quite 
perfect for some. Now the tragedy of that story is that the American 
consumer pays an unprecedented price. That is the bad news.
  There is a glimmer of good news. In a bill that we passed this week, 
we passed a piece of this energy bill. We passed the tax incentives. A 
couple of Senators came to the floor and said: Oh, all that money is 
just being given to big oil, which is a big rich industry and shame on 
you for doing that.
  Do my colleagues know what the rate of return on investment in the 
oil industry was last year? Mr. President, 6.3 percent. Banking was 
19.5 percent. Starbucks was 8 percent. In other words, it was more 
profitable last year to invest in a Starbucks coffee shop than to 
invest in a major oil company. Why? Cost of production, Federal 
regulations, Clean Air Act, all of those Government hurdles that the 
oil industry has to jump over that cost hundreds of millions of dollars 
to bring a new refinery online or to bring a new oilfield into 
production.
  So good money just does not go there when money can go elsewhere with 
less risk to make greater return. That is what we passed this week. 
With the tenacity of the leadership, we got it through. That is a piece 
of a total picture of getting this country back into the business of 
producing.
  Somebody said, well, we could tap SPR, the Strategic Petroleum 
Reserve, the salt domes down in the south where we store crude oil in 
the case of an emergency. So if we tap those, then we would have more 
oil and therefore more gas and the gas at the pump would cost less.
  What they did not say is that was the strategy that Bill Clinton used 
during a period of high gas prices and it changed the price at the pump 
by one cent. The reason it changed the price at the pump by only one 
cent is because our refinery capacity in this country is so limited 
today.
  Twenty years ago, we had 324 gas and oil refineries in this country. 
Today, we have 135 or 140. It was not cost effective to retrofit them 
and rebuild them to meet the standards of the Clean Air Act. They 
simply tore them down and they went away. So with our gas and oil 
refineries operating at 95- to 98-percent capacity, as we speak at this 
moment, adding more total supply does not change the equation.
  Well, would you leverage down the Saudis and OPEC? Probably not that 
much, because they know that ultimately we will have to come back to 
buy oil from them because we are not producing it for ourselves.
  So before we adjourn this final session of the 108th Congress, 
whether it occurs in late September or early October, there is one 
thing we ought to do, and that is we ought to pass a national energy 
policy for this country. It is written. It is refined. It has been 
through conference. It is laying at the desk of the Senate, ready for 
an up-or-down vote. It is that simple.
  It will not change gas at the pump overnight, but it will set us on a 
path of conserving, of producing, and of creating new technologies, 
alternatives, and fuel sources that are clean and nonemitting. Most 
importantly, it will say to the American consumer that the Senate of 
the United States on energy,

[[Page 9447]]

for the first time, acted responsibly; instead of kowtowing to an 
environmental community or to another community of interests, it put it 
all together, it did the right things, and S. 2095 does, in my opinion, 
all of the right things and it puts us on a path of getting back to the 
business of producing, being more self-reliant on our own ability, less 
reliant and less dependent on nations elsewhere in the world that have 
become the primary producers of crude oil for the whole of the world.
  That is the mission we ought to be about, but somehow politically we 
just cannot get there. So pick up your phone, call your Senator. I have 
called mine. I am talking to my Senator, who is the Presiding Officer. 
He and I agree that it is time this country get back into the business 
of producing energy, and it is important that the Senate respond.
  I have one request of my colleagues this weekend when they are home. 
Take your car out, drive up to a gas pump at the local service station 
and fill it up and watch the face of the gas pump. Then watch your 
wallet because, if the tank is empty and you are filling it, it will 
drain your wallet, as it is draining the wallets of the working men and 
women of America.
  Shame on us for having allowed that to happen, but it is this Senate 
and its inability to get a policy together that has in large part 
caused the problem our consumers now face.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Florida is recognized.
  Mr. GRAHAM of Florida. I thank the Chair.
  (The remarks of Mr. Graham of Florida pertaining to the introduction 
of S. 2420 are located in today's Record under ``Statements on 
Introduced Bills and Joint Resolutions.'')
  Mr. GRAHAM of Florida. Madam President, I suggest the absence of a 
quorum.
  The PRESIDING OFFICER (Ms. Collins). The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. LAUTENBERG. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Chambliss). Without objection, it is so 
ordered.

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