[Congressional Record (Bound Edition), Volume 151 (2005), Part 11]
[House]
[Pages 14975-14982]
[From the U.S. Government Publishing Office, www.gpo.gov]




  EXPRESSING THE SENSE OF THE HOUSE THAT A CHINESE STATE-OWNED ENERGY 
    COMPANY COULD TAKE ACTION THAT WOULD THREATEN THE UNITED STATES

  Mr. NEY. Mr. Speaker, I move to suspend the rules and agree to the 
resolution (H. Res. 344) expressing the sense of the House of 
Representatives that a Chinese state-owned energy company exercising 
control of critical United States energy infrastructure and energy 
production capacity could take action that would threaten to impair the 
national security of the United States.
  The Clerk read as follows:

                              H. Res. 344

       Whereas oil and natural gas resources are strategic assets 
     critical to national security and the Nation's economic 
     prosperity;
       Whereas the global demand for oil and natural gas is at the 
     highest levels in history;
       Whereas the global excess capacity of oil production, at 
     between 1,500,000 and 2,000,000 barrels per day, is at its 
     lowest level in the past several decades, contributing to 
     world oil prices reaching historic highs of above $60 per 
     barrel;
       Whereas natural gas globally is the fastest growing 
     component of primary energy consumption, projected to 
     increase by nearly 70 percent by 2025;
       Whereas the National Security Strategy of the United States 
     approved by President George W. Bush on September 17, 2002, 
     concludes that the People's Republic of China remains 
     strongly committed to national one-party rule by the 
     Communist Party;
       Whereas China's daily consumption of crude oil grew by 
     nearly 850,000 barrels in 2004, accounting for more than one-
     third of the increase in world demand for oil in 2004;
       Whereas China's consumption of crude oil is expected to 
     grow by an additional 7.5 percent in 2005, and world oil 
     prices are projected to rise significantly as a result of 
     increasing demand from China for oil;
       Whereas notwithstanding the increasing demand from China 
     for oil, domestic Chinese output of oil has remained 
     relatively stagnant;
       Whereas on June 23, 2005, the China National Offshore Oil 
     Corporation (CNOOC) announced its intent to acquire Unocal 
     Corporation, in the face of a competing bid for Unocal 
     Corporation from Chevron Corporation;
       Whereas the People's Republic of China owns approximately 
     70 percent of CNOOC;
       Whereas a significant portion of the CNOOC acquisition is 
     to be financed and heavily subsidized by banks owned by the 
     People's Republic of China;
       Whereas Unocal Corporation is based in the United States, 
     and has approximately 1,750,000,000 barrels of oil 
     equivalent, with its core operating areas in Southeast Asia, 
     Alaska, Canada, and the lower 48 States;
       Whereas CNOOC has made various representations about its 
     intention to sell oil developed in the Gulf of Mexico to the 
     United States, but has not made any commitment to sell other 
     natural gas and oil it develops into global energy markets 
     instead of shipping it directly to China;
       Whereas a CNOOC acquisition of Unocal Corporation would 
     result in the strategic assets of Unocal Corporation being 
     preferentially allocated to China by the Chinese Government;
       Whereas a Chinese Government acquisition of Unocal 
     Corporation would weaken the ability of the United States to 
     influence the oil and gas supplies of the Nation through 
     companies that must adhere to United States laws;
       Whereas Unocal Corporation was responsible for the 
     production of energy equivalent to approximately 411,000 
     barrels of oil per day in 2004, which is approximately one-
     third of all global excess oil production capacity;
       Whereas CNOOC's control of Unocal Corporation's productive 
     capacity would mean control of approximately one-third of all 
     global excess oil production capacity;
       Whereas the petroleum sector uses a range of sensitive 
     technologies for exploration (such as seismic analysis and 
     processing, downhole logging sensors, and modeling software), 
     production, and refining (such as processing technologies and 
     equipment), including technologies that have ``dual-use'' 
     commercial and military applications;
       Whereas several of the technologies used in oil and energy 
     production require export licensing for export from the 
     United States to China;
       Whereas the CNOOC acquisition of Unocal Corporation could 
     provide access to Unocal Corporation's sensitive dual-use 
     technologies that the United States would otherwise restrict 
     for export to China;
       Whereas oil companies owned by the People's Republic of 
     China are active in parts of the world, such as Sudan and 
     Iran, that are subject to United States sanctions laws, and 
     the national security of the United States is threatened by 
     the export of sensitive, export controlled, and dual-use 
     technologies to such countries;
       Whereas barriers to the ability of the United States 
     Government to enforce export controls and sanctions could 
     pose a direct threat to the national security of the United 
     States; and
       Whereas section 721 of the Defense Production Act of 1950 
     (50 App. U.S.C. 2170) authorizes the President to suspend or 
     prohibit any foreign acquisition, merger, or takeover of a 
     United States corporation that threatens the national 
     security of the United States, if the President finds that 
     ``there is credible evidence that leads the President to 
     believe that the foreign interest exercising control might 
     take action that threatens to impair the national security'' 
     and other provisions of law ``do not in the President's 
     judgment provide adequate and appropriate authority for the 
     President to protect the national security'': Now, therefore, 
     be it
       Resolved, That it is the sense of the House of 
     Representatives that--
       (1) the Chinese state-owned China National Offshore Oil 
     Corporation, through control of Unocal Corporation obtained 
     by the proposed acquisition, merger, or takeover of Unocal 
     Corporation, could take action that would threaten to impair 
     the national security of the United States; and
       (2) if Unocal Corporation enters into an agreement of 
     acquisition, merger, or takeover of Unocal Corporation by the 
     China National Offshore Oil Corporation, the President should 
     initiate immediately a thorough review of the proposed 
     acquisition, merger, or takeover.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Ohio (Mr. Ney) and the gentlewoman from Michigan (Ms. Kilpatrick) each 
will control 20 minutes.
  The Chair recognizes the gentleman from Ohio (Mr. Ney).
  Mr. NEY. Mr. Speaker, I yield myself 3 minutes.
  Mr. Speaker, I rise today in support of House Resolution 344, 
introduced by the gentleman from California (Mr. Pombo), and urge its 
immediate adoption.
  Briefly, this resolution asks that the President initiate a thorough 
review of any potential takeover of Unocal Corporation by the Chinese 
National Offshore Oil Company as soon as any agreement of such a 
takeover is announced, on the grounds that such a purchase could 
threaten the national security of the United States.
  Mr. Speaker, at a time of rising prices on global oil supplies, ready 
access to energy resources is a vital element to our economic security. 
It is imperative that the United States protect its access to Unocal's 
energy resources in order to protect our economy and our national 
security.
  Just as importantly, Mr. Speaker, I and many Members are extremely 
skeptical of assurances that the Chinese oil company executives have 
sought to offer that they would dedicate any oil production from this 
region to consumption in the United States.
  Mr. Speaker, we know from a number of past experiences that the 
Chinese do not look at trade the same way we do, that agreements made 
or treaties signed are more of a starting point for negotiation than 
documents that must be adhered to. Especially in this purchase, the 
Chinese company and the Chinese government are not playing fair. This 
company is 70 percent owned by the Chinese government, is said to be 
receiving more than a quarter of the funding of its bid for Unocal at 
zero percent or at highly subsidized interest rates.
  Mr. Speaker, American companies who are interested in buying Unocal

[[Page 14976]]

cannot get funding deals like that. They borrow on the open, 
nonsubsidized credit market, or they would be able to offer a few 
billion dollars more in an instance like this. I call that an unfair 
trade practice, and a good enough reason for the deal to be waved off 
all by itself.
  But, Mr. Speaker, there is a much more serious reason to be skeptical 
of this proposed purchase, and it is for that reason I support this 
resolution.
  In my view, a purchase of Unocal by a company that the Communist 
government of China controls, a government that is one of our major 
trading partners but also one of our major trade competitors, threatens 
the national security of this country by holding out the prospect that 
every drop of oil, every unit of natural gas produced by that company 
could end up being shipped to China.
  We are all reminded every time we go to the gas pump what has 
happened to the price of oil recently, and if the Chinese shut off the 
Unocal tap, the United States supply of oil would be that more scarce 
and a gallon of gas or heating oil that much more expensive.
  You only need 2 numbers to understand how serious this problem 
potentially could become: the global excess capacity of oil production 
right now is estimated to be just 1.5 to 2 million barrels of oil a 
day, the lowest in the past several decades. Compare that to this: last 
year, China's increase in demand for crude oil is said to have been 
850,000 barrels a day, with the demand expected to grow another 7.5 
percent this year alone.
  Mr. Speaker, the Chinese economy is inhaling oil, and a lot of other 
commodities, at a staggering rate. How can we imagine that a 
government-owned oil company will not send its fuel to feed that 
government's economy, and not our own?
  Mr. Speaker, I urge support of this resolution that is so needed.
  Mr. Speaker, I reserve the balance of my time.
  Ms. KILPATRICK of Michigan. Mr. Speaker, I yield myself such time as 
I may consume.
  I rise in support of the resolution. The House went on record earlier 
today in a strong, bipartisan way, to support that we would, first of 
all, make sure that CFIUS, which is the Committee on Investments in the 
United States chaired by the Secretary of the Treasury Snow, that we go 
on record making sure that we not spend money at this time for a 
Chinese company that is Communist-owned by the Communist government to 
take over our ninth largest oil company. The Congress has spoken, and 
we are happy that we did so in a loud, strong voice.
  The sense of the Congress resolution before us is one that we also 
support. General Motors is losing technology to China, and it is 
costing the company $12 billion a year. Intellectual property rights 
are not being protected, and China has been abusing those rights.
  We must protect American business, and we must do what is necessary. 
So, I am proud of the Congress and the gentleman from California (Mr. 
Pombo) for introducing this resolution that we also further state our 
strong support for not allowing the sale to go through.
  Mr. Speaker, I reserve the balance of my time.
  Mr. NEY. Mr. Speaker, I yield 2 minutes to the Chairman of the 
Committee on Energy and Commerce, the gentleman from Texas (Mr. 
Barton).
  Mr. BARTON of Texas. Mr. Speaker, I thank the gentleman for yielding 
me this time.
  Mr. Speaker, I rise in strong support of this resolution, and I am 
proud to be one of the original cosponsors. I would like to point out a 
couple of problems with the proposed transaction.
  Number one, if Unocal was trying to buy the Chinese National Offshore 
Oil Company, they could not do it, because Chinese law does not allow a 
foreign company to have a controlling interest in a company in China. 
That is one problem.
  Number two, CNOOC is a front company for the Communist Chinese 
government. Seventy percent of the equity in the company is owned by 
the Communist Chinese government. The money that is going to be used to 
buy Unocal comes from the Communist government in the form of a loan. 
This loan almost doubles the total amount of debt; in fact, it over-
doubles the total amount of debt that the company currently has.
  Number three, if we wanted to sell our products in China, under 
current law, that probably would not be allowed. So I am in strong 
support of this resolution.
  I chair the committee that has jurisdiction over the Committee on 
Foreign Investment of the United States, CFIUS, and I plan to hold a 
hearing on this when we get back sometime in the very near future, 
after the July Fourth recess. There is no reason that we cannot find a 
buyer for Unocal that meets all of the tests that a company in the 
United States would have to meet.
  So I am in strong support of this resolution, and I hope all Members 
of the House of Representatives will support it.
  Ms. KILPATRICK of Michigan. Mr. Speaker, at this time, I yield 3 
minutes to the gentleman from Virginia (Mr. Moran).
  Mr. MORAN of Virginia. Mr. Speaker, I thank the gentlewoman for 
yielding me this time.
  I do not have any objection to a review of this contract, and I 
certainly understand the domestic politics, but I think we need to be 
fully aware of two things about this: how China is able to purchase 
UNOCAL, and why they need to.
  The how is all about what we have done to ourselves. With $9 trillion 
of public debt outstanding, somebody has to buy it, and 44 percent of 
our Treasury debt, I say to my colleagues, is foreign-owned. The 
fastest-growing component of that foreign ownership is in China, and it 
is a darn good thing for us that they are buying it, because if they 
were not, our interest rates would be much higher than they are today. 
They are keeping our interest rates low, but it does not come for free.
  The fact is, if we say that they cannot use that money legally to 
purchase assets, to give 16+ billion to American shareholders in return 
for a corporate asset, what are they likely to do? They are going to 
say this currency is not as valuable to us as it is to other people in 
other countries, so we are going to have to dump this, and imagine what 
that would mean. They are holding a financial guillotine over the neck 
of our economy, and they will let it drop if we do things like this 
that are not well-considered.
  Now, the why. They desperately need energy to keep their economy 
sustained, but if we do not let them invest in western firms, what are 
they going to do? They are going to invest more capital in Iran, in 
Sudan; they are going to make those governments even stronger than they 
are today and a much greater threat to us. So think seriously about 
this.
  Now, the reality is that UNOCAL only produces about 1 percent of our 
oil and gas production, and they intend to market that and continue 
providing that to the United States. Also bear in mind, though, that 
American oil companies have a whole lot of drilling rights and oil 
reserves off the coast of China. We have an investment all over the 
world, and when we start with these kinds of resolutions, start 
deciding, well, we are not going to let the market work, we are not 
going to let free enterprise control this, this is not truly a globally 
free economy if it is not completely to out liking. We are going to 
treat China differently.
  I cannot stand State-controlled economies. But when we start doing 
things like this, there are ramifications that we have not thoroughly 
thought out, and I think we need to be very careful about passing 
resolutions like this.
  Again, I understand the domestic politics, I understand why we do not 
want State-owned companies controlling American oil companies, but I 
also understand why China is doing this. Their CEO was educated in the 
United States. They will keep all of UNOCAL's employees. Chevron plans 
to save millions by firing most of them. This is one of the better-run 
Chinese companies. Ultimately what they are proposing is much more in 
our interests than the alternatives also available to

[[Page 14977]]

them. So let us fully consider this before we pass this resolution. I'm 
voting no.
  Mr. NEY. Mr. Speaker, I yield 1 minute to the gentleman from 
California (Mr. Hunter), the chairman of the Committee on Armed 
Services.
  Mr. HUNTER. Mr. Speaker, I thank the gentleman for yielding me this 
time.
  I support the attempt to block this sale. This sale involves a 
strategic asset and, more importantly, a strategic lever for Communist 
China. Our policy for the last many years has been to deter the Chinese 
government in Beijing from ever coming into the position where they 
thought they had enough leverage over the U.S. to cross the Straits of 
Taiwan. This would be a major lever that would accumulate to the 
Chinese Communist government on top of the Sovereign class missile 
cruisers that they have acquired, on top of the MiG fighter production 
that they have acquired, on top of the other acquisitions of major U.S. 
economic interests.

                              {time}  2045

  I hope everyone votes against this, votes to block this important 
transfer of a strategic asset to, and make no mistake about it, the 
communist government, not a private entity, but the communist 
government of China.
  Ms. KILPATRICK of Michigan. Mr. Speaker, I yield 1\1/2\ minutes to 
the gentleman from Massachusetts (Mr. Capuano), a member of the 
committee.
  Mr. CAPUANO. Mr. Speaker, this is a good resolution, and I support 
it, and the issue is important. However, I just wanted to stand tonight 
to point out the fact that we are really just talking about the tail. 
This is not the dog; it is simply the tail. It is important. I do not 
want to minimize it. But the truth is we are talking a $16 billion sale 
most of which will go to American shareholders.
  However, what we are not talking about is the elephant in the room 
where right now as of today, after 4\1/2\ years of this administration, 
we currently owe China $277 billion. That is what we owe them right 
now. That is a 257 percent increase over 4\1/2\ years ago. We are going 
to have a 40-minute debate tonight on this particular issue. In that 40 
minutes, on average, over the last 4\1/2\ years, America will have 
borrowed $3 million from China. By the time we are finished talking, we 
will owe them another $3 million. I do not want to pick on China. China 
is only one of the issues. It is not the only country.
  In the last 4\1/2\ years, 84 percent of all debt sold, all private 
debt sold by the United States Government has been sold to foreign 
governments and foreign corporations of which China is only the second 
largest.
  To me this is an important issue. I support it. I am glad we are 
taking action. But more importantly, we had better wake up. We are 
sending too many jobs, too much money, too much economic power 
overseas. China is only one of them. But they are a large one. I just 
wanted to use this opportunity to make sure that we know this is only 
the beginning. It is not the end.
  Mr. NEY. Mr. Speaker, I yield 1 minute to the gentleman from North 
Carolina (Mr. Hayes).
  Mr. HAYES. Mr. Speaker, I rise in strong support of the resolution. 
This legislation is going to send a much needed strong signal to China. 
We do not support government-sponsored acquisitions of American 
corporations that clearly threaten our national security. I am 
extremely concerned at CNOOC's proposal to buy Unocal, one of our 
Nation's leading independent natural gas and crude oil exploration 
companies. The Chinese Government owns over 70 percent of the China 
National Offshore Oil Corporation.
  This is frightening. China is the second largest consumer of energy 
in the world behind the U.S. China's only desire to purchase this 
energy company is to meet the demands of their ever-growing population 
and economy. We cannot let this purchase move forward. What type of 
precedent would it set? What would the Chinese take next? They have 
already taken the textile industry jobs, thousands of jobs from other 
business, whether it is currency manipulation, the intellectual 
property rights or even government subsidies. China does not play by 
the rules. Why in the world would we expect them to do so now?
  Folks, this is a no-brainer. It is time for America to take a stand 
and say no. We have suffered too much. We cannot allow the Chinese to 
lock into one of our most precious resources and leave our Nation 
vulnerable.
  Support the resolution. I commend the gentleman from California (Mr. 
Pombo). Stop this move now.
  Ms. KILPATRICK of Michigan. Mr. Speaker, I yield 3 minutes to the 
gentleman from Oregon (Mr. Blumen-
auer).
  Mr. BLUMENAUER. Mr. Speaker, I appreciate the gentlewoman's courtesy 
in permitting me to speak on this bill. There are a number of things in 
here that I have no objection to, that I think we should do in terms of 
preserving our national security.
  But what is striking about H. Res. 344 is that it basically misses 
the point. It is inadequate. It talks about only a little bit of the 
equation.
  The problem that we have now is first, we have a reckless fiscal 
policy in this country aided and abetted by this Congress. We are as 
addicted to the Chinese loans, to their credit to us, as we are to 
Saudi oil. Nothing in this resolution talks about getting our fiscal 
house in order. What would happen if instead of using their money that 
we have given them to purchase this oil company, what if they purchased 
something in another area or if they start dumping our bonds. What 
would happen to interest rates and the problems in this country?
  It is also interesting that the resolution talks about the Chinese 
oil supply being stagnant in terms of their domestic production. Our 
supply in the U.S. is not just stagnant; it is going down. Even if you 
suck the entire oil supply out of the Arctic wildlife refuge and 
threaten our offshore areas with drilling, we are still in decline.
  This resolution does not talk about energy independence for the 
United States. In fact, the Republican majority's energy bill, 
according to the Department of Energy, is going to increase our 
dependence on foreign imported oil by 75 percent. Interesting. We have 
gone from a one-third in the 70s, 56 percent imported today, it will be 
68 percent in 2025; yet the best that my friends in the majority can do 
is bash China a little bit and not do anything about our oil addiction, 
not do anything about diversifying our sources of energy, not do 
anything about the reckless fiscal policy that puts us at their mercy.
  As my colleague from Virginia pointed out, 44 percent of our debt is 
foreign owned, an increasing percentage from China. Our addiction to 
things from Wal-Mart means that it is going to be more the case in the 
future.
  What are the Chinese doing? They are diversifying their supply. They 
are taking some of the money we have given them to invest. They are 
increasing the energy efficiency of their cars, something that, sadly, 
the Republican energy bill does not allow in any meaningful way.
  I would suggest, ladies and gentlemen, that you can examine the 
national security implications of dual-use technology. That is fine. 
But what really has us at risk is that we are addicted to imported oil, 
wasting energy and a reckless fiscal policy. This resolution is 
completely beside the point on these critcial factors.
  Mr. NEY. Mr. Speaker, I yield 3 minutes to the gentleman from Arizona 
(Mr. Hayworth).
  Mr. HAYWORTH. Mr. Speaker, I had hoped to come to the well to speak 
on a bipartisan resolution. Given the preceding remarks from the well, 
it may be difficult for international observers to detect the 
bipartisanship. Rather than succumb to the temptation of snappy 
rejoinders in the field of domestic political debate, rather than use 
this time as a pretext for a campaign screed that would criticize the 
opposing party instead of deal with the resolution at hand, rather than 
rephrase history about troubling campaign donations that emanated from 
the People's Republic of China, perhaps it is best, Mr. Speaker, to 
deal with the resolution at hand, and find some common

[[Page 14978]]

agreement, apart from the grand-
standing and campaigning that is so easily enjoined.
  Fact number one: just as Dwight Eisenhower warned America about the 
growing influence of a military industrial complex, the fact is, there 
is a political business military complex in the martial markets of 
communist China. What do I mean by that? The communist Chinese do not 
enjoy free markets. They, instead, have a program of martial markets. 
American investment is kept in minority status; and every application, 
from the most innocuous widget to the fried chicken drumstick, 
eventually brings proceeds to the Chinese Red Army. And now we have the 
most graphic example, where the Chinese-owned energy company, with 
government, Communist government investment, seeks to buy an American 
oil company.
  It has been said that information is power. Energy literally is 
power. Early in the 21st century, though we may look to new 
technological advantages, the fact is this: a nation that surrenders 
its energy concerns, its energy technology is a nation inviting 
vulnerability. And so I would enjoin Members of this House, Mr. 
Speaker, as tempting as political debate and one-upsmanship might be, 
not to succumb to the temptation, not to stand as Republicans or 
Democrats or Independent or Libertarians or vegetarians, but to stand 
as Americans. Support this resolution because we dare not yield our 
energy future to the Communist Chinese.
  Ms. KILPATRICK of Michigan. Mr. Speaker, I yield 3 minutes to the 
gentlewoman from Ohio (Ms. Kaptur).
  Ms. KAPTUR. Mr. Speaker, I thank the gentlewoman from Michigan (Ms. 
Kilpatrick) for yielding 3 minutes to me and wish to rise in support of 
the resolution, but also to compliment the gentlewoman from Michigan 
for successfully passing an amendment this afternoon that stopped this 
merger by claim with Unocal from going through. That is in the base 
bill that we were debating for the entire day.
  This resolution is helpful. It gives us a sense of the Congress that 
the U.S. does not want to lose her strategic energy edge. But this July 
4th weekend, it is important for America to think about our 
independence, indeed, our diminishing independence due to imported 
petroleum. It is the largest share of our trade deficit with the world; 
63 percent of what fuels this economy has to be imported.
  Yes, America has lost her independence, and under this President, it 
is 7 percent worse than it was before he took office now, with the cost 
of a barrel of oil over $60 and gas at the pump $2.50 and rising all 
over this Nation.
  So what are the Chinese trying to do? They are trying to trump our 
strategic edge over in Afghanistan now, because the Unocal pipeline 
running through Afghanistan has all that natural gas just ready to 
flow, but it is right on the border of China. So China has been very 
smart with the money she has earned off this market. She is buying 
pieces of us or what some claim to be ``U.S. companies,'' but in 
actuality they have their assets spread all over the world. It's no 
secret we have pumped ourselves dry except for what is left up in 
Alaska.
  And so we ask ourselves what is going on here? What is going on here 
is America is losing her independence, starting with petroleum. The 
Chinese need petroleum too. What America needs is energy independence 
here at home and the sooner we realize that, the fewer resolutions we 
would need to try to interfere with the free market. But you know what? 
We do not have any more choice, because we expect we will be 75 percent 
dependent on petroleum if this Congress does not trump this President 
of the United States and produce a real energy bill that will put us on 
the road to true energy independence. We need new biofuels, new energy 
from fuel cells, from hydrogen, from solar, from renewables, from all 
kinds of new energy sources that should be tapped and built in this 
country.
  Meanwhile, we sort of have to limp our way across the finish line on 
this July 4th celebration and admit America is losing her energy edge 
around the world. We should not be dependent. We should not have to 
kneel down in front of the Chinese, the Communist Chinese, vegetarians 
as Mr. Watt referenced, or anyone else. We should become energy 
independent here at home. This resolution points us in the only 
direction open to us now. The gentlewoman from Michigan's amendment 
earlier in the day hit a real home run in blocking the merger. We 
compliment her for her excellent work.
  Mr. NEY. Mr. Speaker, I yield 1 minute to the gentleman from Illinois 
(Mr. Kirk).
  Mr. KIRK. Mr. Speaker, both The Wall Street Journal and the New York 
Times agree, a rare event, that we should not interfere with free 
markets in this way. America stands for freedom, and that means not 
just voting for who we want, speaking the way we want, but also the 
right to buy and sell from whoever we wish.
  I remember when Japanese investors moved to buy Rockefeller Center, 
at inflated prices, and many in this body wanted to stop that deal. We 
did not. And only a few years later the Japanese sold it back to the 
United States for pennies on the dollar. Bottom line, we made a 
killing. And Americans are better off for letting the market work.
  If we take this action, China could rightfully cancel American 
investments in China now totaling $25 billion. Wal-Mart, Conoco, 
Motorola, United Air Lines all bought companies in China and should be 
allowed to do so.

                              {time}  2100

  We should recover the conviction of our own convictions, especially 
in our Republican party, to make sure we let the market work and let 
efficiency and fair play rule the day.
  Ms. KILPATRICK of Michigan. Mr. Speaker, I yield 3 minutes to the 
gentleman from Louisiana (Mr. Jefferson).
  Mr. JEFFERSON. Mr. Speaker, I will enter into the Record a letter 
that a number of us in this House wrote to the Secretary of the 
Treasury with respect to this transaction.
  I am one who has supported free trade since I have been in the 
Congress and I support it today. If it were true that this were a 
market-based transaction, as the preceding speaker has said, I would 
not be standing here talking about this issue whatsoever. The fact of 
this is this is not a free market transaction. This is a transaction by 
a government-owned company, financed by the government of China, 
financed with subsidies with the government of China and it puts every 
other competitor for the assets that they are seeking to acquire at a 
disadvantage.
  There are substantial questions here about the motives of the Chinese 
as well. I have been dealing with oil and gas issues for a very long 
time as a representative from Louisiana, and ordinarily one thinks of 
the oil and gas market as one where free commodities move and oil is a 
very fungible commodity. But what we have here is a Chinese government 
with an accelerating demand for oil and gas trying to find a way to 
corner a market here and to put it to their exclusive use. This is 
unheard of in the oil and gas commodities market.
  No one ever thinks that one explores for oil and then uses the oil 
only in the place where they have their own demand and not make it 
available to the rest of the world. That is the scary part of what is 
happening here.
  As China seeks more and more assets that they themselves control and 
they themselves corner, it makes it much more difficult for us to argue 
that this is a free economy, a market-based economy. That is the real 
reason I have come to this microphone tonight.
  I think it is important to support this resolution, and I think the 
actions we are taking today by the Congress were appropriate to be 
taken. I think the warning signs that are going up from this House 
about the Chinese government's interest in cornering the market on a 
strategic asset such as petroleum today, is a dire warning indeed and 
one we should take heed of.
  So I urge the Members of the House and all who are within the sound 
of our voice to take heed of this warning and to support this important 
resolution.


[[Page 14979]]




                                Congress of the United States,

                                    Washington, DC, June 24, 2005.
     Hon. John W. Snow,
      Secretary of the Treasury, Department of the Treasury, 
         Washington, DC.
       Dear Mr. Secretary: Energy security is a matter of 
     significant and ever increasing importance for the United 
     States. In particular, we are very concerned about China's 
     ongoing and proposed acquisition of energy assets around the 
     world, including assets of U.S.-based energy and oil 
     companies.
       China is now the second largest consumer of energy in the 
     world, right behind the United States. In order to fulfill 
     the energy consumption requirements of its growing 
     population, China has developed an aggressive strategy to 
     acquire offshore assets to supplement its limited domestice 
     supply of resources. It will become increasingly difficult 
     for U.S.-based companies to compete for scarce energy 
     resoures on the world market against China's state-owned and/
     or controlled energy companies.
       To that end, we are very concerned to read reports that the 
     China National Offshore Oil Corporation (CNOOC)--whose 
     majority owner is the Chinese government--is planning to make 
     an offer to acquire one of America's leading independent 
     natural gas and crude oil exploration and production 
     companies. Moreover, it is our understanding that two 
     influential Chinise government agencies have reportedly given 
     tentative approval to this acquisition by CNOOC.
       As you are aware, the Committee on Foreign Investment in 
     the United States (CFIUS) was established to monitor the 
     impact of foreign investment in the United States and to 
     coordinate the implementation of U.S. policy on foreign 
     investment. In 1988, CFIUS was given additional authority 
     under Section 721 of the Defense Production Act of 1950 (the 
     Exon-Florio Amendment) to authorize the President to conduct 
     investigations to determine the impact of foreign 
     acquisitions of U.S. companies on national security.
       Given what we know about CNOOC to date, we think this 
     potential transaction should be reviewed immediately by CFIUS 
     to investigate the implications of the acquisition of U.S. 
     energy companies and assets by CNOOC and other government 
     controlled Chinese energy companies. As the official chair of 
     CIFUS, we would request that the Treasury Department look 
     into this proposed acquisition to determine whether an 
     official CFISUS investigation should be undertaken should an 
     official offer come from CNOOC. Specifically, the CFIUS 
     should review the following issues, among others:
       Whether and to what extent the Chinese government is 
     involved in financing any potential acquisitions by CNOOC;
       Whether such investments by CNOOC are market-based and free 
     of subsidies;
       Whether there are technology transfer implications of these 
     investments that present national security concerns; and
       How CNOOC investments in the U.S. energy sector and 
     acquisitions of U.S.-based energy and oil companies advance 
     China's energy agenda to the detriment of U.S. national 
     security objectives.
       Mr. Secretary, we know that you understand well the 
     critical importance of ensuring U.S. energy security and the 
     critical need to secure the future availability of energy 
     resources for American consumers. We ask that you treat this 
     matter with the utmost urgency and report back to us with 
     yout findings.
           Sincerely,
         William J. Jefferson, Al Green, Dana Rohrabacher, 
           Edolphus Towns, Sheila Jackson-Lee, Roger Wicker, Bobby 
           Jindal, Kevin Brady, Michael Rogers of Michigan, Joseph 
           Crowley, Devin Nunes, Ginny Brown-Waite, Richard Baker, 
           George Radanovich, Ellen Tauscher, Gary Miller.
         Gregory Meeks, Gene Green, Darrell Issa, Frank Wolf, 
           Barbara Cubin, Charlie Melancon, Ted Strickland, Geoff 
           Davis, Gene Taylor, Ralph Hall, Bill Jenkins, Wally 
           Herger, Charles Boustany, Walter Jones, John Tanner, 
           Bart Gordon.
         John Shimkus, Michael Burgess, Paul Gillmor, Lincoln 
           Davis, Ted Poe, J.D. Hayworth, Jim Walsh, Bob 
           Goodlatte, Donald Manzullo, Roy Blunt, John Sullivan, 
           Bernard Sanders, Collin C. Peterson, Roscoe G. 
           Bartlett, John Doolittle, Peter T. King.
         John J. Duncan, Jr., Bart Stupak, Dennis Cardoza, Thomas 
           Reynolds, Eric Cantor, Carolyn Kilpatrick, Darlene 
           Hooley, Mary Bono, Mark Foley, Robin Hayes, Tom 
           Tancredo, Ken Calvert, Melissa Hart, Mark Souder, Jo 
           Ann Davis, Michael Rogers of Alabama.

  Mr. NEY. Mr. Speaker, I yield 6 minutes to the gentleman from 
California (Mr. Pombo), the chairman of the Committee on Resources.
  Mr. POMBO. Mr. Chairman, I thank the gentleman for yielding me time.
  First of all, I want to thank the gentleman from Louisiana (Mr. 
Jefferson) for the work he has put in to this issue and for the tone 
that he used in this debate. This is an important issue and it never 
ceases to amaze me to see that Members come to the floor and try to 
make it a partisan issue and try to complicate what is already a very 
complicated issue.
  This is not about free trade or free markets. If it was it would be a 
very different debate. If we were talking about Exxon and Chevron or BP 
competing to buy Unocal, that would be a completely different debate.
  What we are talking about is a company that is 70 percent owned by 
the Communist government of China, competing against a U.S. company to 
purchase a U.S.-based energy company. That is not free market. And no 
matter how you twist or turn or try to make this sound good, that is 
not free market. That is free market competing against the Communist-
financed company. That raises concerns just because of that.
  But let us look at it a little bit more and look at the assets of the 
company they are trying to buy. They are trying to buy a major U.S. 
energy provider. That is a major concern. In the world today, in the 
world market today we are near an energy crisis. We are almost equal in 
terms of supply and demand, and that is why the price of oil has gone 
up dramatically. The U.S. economy is growing. The Chinese economy is 
growing. The Indian economy is growing. The Brazilian economy is 
growing. All of these different economies are growing and they are 
competing for the same source of energy. And that has caused energy 
prices to go up worldwide.
  Now, I tell my colleagues, you have got to wake up here. This is a 
wake-up call to all of us, to America and to us here, the Chinese have 
figured out that in order for their economy to grow, they need a safe, 
dependable supply of energy, primarily oil, coming into their market, 
in order for their economy to continue to grow. That is how you grow 
your economy. It is based on energy.
  What are we doing to increase our domestic energy supplies? What are 
we doing to provide a greater amounts of a safe, dependable supply of 
energy into this country? We have been trying to pass an energy bill 
for 5 years. Wake up. It is time for us to get together and figure out 
what our energy future is. We cannot, in my opinion, we cannot afford 
to have a major U.S. energy supplier controlled by the Communist 
Chinese. But what we are asking for in this resolution is for the 
President, for the administration to convene the Commission on Foreign 
Investment into the United States and investigate this possible sale, 
to look at it and determine whether or not this is in the best economic 
and national security interests of the United States. That is the 
purpose of the Commission on Foreign Investment. That is what we are 
asking them to do.
  We are asking them to step forward and look at this and report 
whether or not this is in our best interest. It is my opinion it is 
not. It is my opinion that it is a huge risk that we run to allow a 
foreign government to own one of our major U.S. energy producers. That 
is a huge risk that we are running. At a time like this when we are 
looking at international shortages on energy, skyrocketing prices, we 
need to do what we can to increase domestic supplies and to hold on to 
what we have got. And at the same time I would encourage my colleagues 
to begin to put enough pressure so that we finally get an energy bill 
passed.
  I heard one of the previous speakers talk about alternatives and 
solar and wind and fuel cells. I would just suggest read the energy 
bill. That is in it. But it also has the realistic view that in the 
short term, we are dependent on fossil fuels which are oil, gas and 
coal. That is the reality. That is what fuels the U.S. economy today.
  We need to do both. Part of it is increasing domestic production of 
our fossil fuels and making that competitive in this market. The other 
part of it is looking at the future and how are we going to replace our 
dependence on current technology. That is the direction we are going. 
If we allow this sale to go forward, we are taking a huge risk. And I 
would encourage my colleagues to support this resolution. It is the 
right policy, the right thing for this country, and the right thing for 
Congress to do.

[[Page 14980]]


  Ms. KILPATRICK of Michigan. Mr. Speaker, how much time remains on 
each side?
  The SPEAKER pro tempore (Mr. Simpson). The gentlewoman from Michigan 
(Ms. Kilpatrick) has 6 minutes remaining. The gentleman from Ohio (Mr. 
Ney) has 3\1/2\ minutes remaining.
  Ms. KILPATRICK of Michigan. Mr. Speaker, I yield 3 minutes to the 
gentlewoman from Texas (Ms. Jackson-Lee).
  Ms. JACKSON-LEE of Texas. Mr. Speaker, I thank the gentlewoman from 
Michigan (Ms. Kilpatrick) for yielding me time. I want to thank her, 
first of all, for focusing the House on this very important issue, and 
as has been said before, giving us an opportunity to affirmatively 
stand against an idea whose time has not come.
  If there is ever a time to speak about investing in America I think 
the time is now. On the shadow of celebrating the freedom day, July 4, 
our day of independence, it is a time now to stand up for investing in 
America. And I guess in discussing this purchase of Unocal by China, I 
think we should make the point that China has been and hopefully will 
continue to be our friend. We engage in cultural exchange and 
educational exchange. It is a great opportunity to learn from each 
other to do research with each other.
  But in this instance, I think any purchase of Unocal by China at this 
time would be a disservice and a detriment to our homeland security. 
For example, one of the reasons why Unocal is such an attractive 
purchase is because it has deep reserves. And one of the reasons it has 
deep reserves is because it is one of the few companies that has 
developed the kind of technology that has allowed it to project into 
the future and be able to keep and find the amount of reserves that 
keep it with a sizable amount of reserves in place.
  Then, of course, China is dropping cool cash, $18 billion, which puts 
at a disadvantage a number of American companies in particular who are 
interested in purchasing Unocal.
  Now, of course, this is a private purchase and shareholders rights 
have to be taken into consideration, but I think this Congress, 
although we are a capitalist society, should look at the government 
money that Communist China is going up to buy not only in America but 
in South and Central America, in the Caribbean, in Africa, more and 
more in the Middle East and elsewhere. We need to begin to put together 
a package that suggests that we will be able to help some of our 
companies who are trying to invest in America companies and purchasing 
them.
  Well, an unusual idea but one whose time may have come. We cannot 
compete. We need to be able to support our companies such as General 
Motors. Why does General Motors owe China $2 billion. Why do we owe 
China almost $300 billion? Because we have not kept our eye on the 
prize and we have not reminded not only our individuals, but our large 
corporate sector of investing in America.
  I rise to support this amendment. There should be bipartisan support. 
I thank the distinguished gentlewoman from Michigan (Ms. Kilpatrick) 
for her very affirmative amendment that keeps the money away from this 
deal. But I believe the sense of Congress should acknowledge that this 
is a protracted deal. We need oversight, and it should not go forward 
unless we pass the litmus test of national security, homeland security, 
investing in America and allowing American companies to purchase 
Unocal. Because I remind my friends, the technology that you lose today 
is the technology that you will regret tomorrow.
  This purchase should not go forward. I ask for the support of the 
amendment.
  Mr. NEY. Mr. Chairman, I reserve the balance of my time.
  Ms. KILPATRICK of Michigan. Mr. Speaker, I yield myself such time as 
I may consume.
  Mr. Speaker, thank you for allowing us to have this debate. I believe 
it has been a good debate and we do support the amendment, many of us 
on this side of the aisle, although a couple who spoke do not support 
it.
  It is important as we talked about it earlier today that we 
remembered that 53 percent of America's private debt is held by foreign 
countries, 53 percent. That means many of our debt and the two owners 
of those debts are Japan first, and China second. 53 percent of our 
private debt is owned by foreign countries. I think that is not good 
for our country, for our grandchildren. We have got to strengthen 
America, calling those debts when we are able to pay them off, and give 
America back to Americans.
  Should we have work with China? And I said this earlier, yes, we 
should, and other foreign markets. This is an international, global 
community that we live in. But we should always put America first, and 
I think the debate that we have had today, and I thank the gentleman 
from California (Mr. Pombo) for some of his remarks and for the 
resolution, the sense of the Congress, again, will reinforce what we 
have done earlier today.
  We have got to make sure that American companies stay strong so that 
Americans can continue to work, so they can take care of their 
families, pay taxes, help cities, towns and villages maintain 
themselves with the revenue that it gets from them.
  So trade, yes, and this is free trade. Somebody said free trade. This 
is not that deal. This is something less than that. As the gentleman 
from Louisiana (Mr. Jefferson) spoke, it is getting the corner of the 
market because you can pay $18.5 billion in cash at a time when our 
country has $160 billion trade deficit and then you turn some of that 
money back and want to buy our company. It is not a good deal.
  We call on CFIUS, the Committee on Foreign Investment in the United 
States, Secretary Snowe and his 12-member committee to look closely at 
what is before them, to do the proper investigation and then not to 
recommend to the President that we go forward with this sale.
  It is not the right time for America. It will weaken our economy. And 
our national security interests as well as our economic interests, as 
well as our energy interests are at stake.

                              {time}  2115

  So, Mr. Speaker, let us not do this sale. Let us continue to build 
America and keep America strong.
  Mr. Speaker, I yield back the balance of my time.
  Mr. NEY. Mr. Speaker, I yield myself the time remaining.
  Mr. Speaker, I want to thank the gentlewoman from Michigan for 
standing up tonight for this resolution, standing up for the American 
people.
  I want to thank the gentleman from California (Chairman Pombo) for 
this resolution and also the gentleman from Ohio (Chairman Oxley) for 
expediting this, also being a cosponsor, but expediting this to the 
floor.
  Mr. Speaker, national security has to include economic security. This 
is an important resolution. Never in a million years would China let us 
do this type of deal over there, and do not fool yourselves about that.
  This deal is not good for America. It is not good for American 
workers. As we near our birthday of this country, let us not give a 
gift to the Chinese Government. Let us give a gift to the American 
people and support this important resolution.
  Mr. PAUL. Mr. Speaker I rise with great reservations over this 
legislation. Why is the federal government involving itself in the sale 
of a private American company? Do we really believe we have this kind 
of authority?
  I would remind my colleagues that Unocal is a private company with 
shareholders and a board of directors. That is the governance of the 
company--not the U.S. Congress. Do we really believe that we should be 
the real board of governors of Unocal?
  If in the United States a private company does not have the right to 
be sold on the free market, should we really be criticizing the lack of 
freedom in China? Many conservatives who have decried the recent 
Supreme Court decision that severely undermines the principle of 
private property in the United States are now on the other side, 
cheering this blatant Congressional attempt to do something that may be 
even worse than Kelo vs. New London.
  I voted recently against allowing the EximBank to use U.S. taxpayer 
money to underwrite Chinese construction of nuclear

[[Page 14981]]

power plants. I do not support subsidizing the Chinese government's 
economic activities. But I also do not support the U.S. Congress 
involving itself in the private economic transactions of U.S. 
companies.
  Some have raised concerns that the purchase of Unocal by a company 
tied to the Chinese government will create security problems for the 
United States. I would argue the opposite. International trade and 
economic activity tends to diminish, not increase tensions between 
countries. Increased economic relationships between the United States 
and China make military conflict much less likely, as it becomes in 
neither country's interest to allow tensions to get out of hand.
  Mr. Speaker, we should not criticize a lack of economic freedom in 
China when Congress, as evidenced in this legislation, attempts to 
restrict the economic freedom of American citizens.
  Mr. STARK. Mr. Speaker, I rise in opposition to H. Res. 344, which 
blames China for our dependence on foreign oil.
  The Republican Majority has already sold the entire farm to foreign 
central banks and multinational corporations, and now they're trying to 
tell the American people that they're standing up for them by stopping 
China from buying a leftover chicken.
  Mr. Speaker, where were these patriotic Republicans when the House 
passed an energy bill and couldn't even muster the votes to raise fuel 
economy standards on automobiles? Where were they when we passed trade 
deals and tax laws to make it easier for their corporate friends to 
ship jobs to China? Why has President Bush refused to stand up for 
American workers who wither against illegal dumping practices and an 
undervalued Chinese currency?
  The American people need to know: as long as the Republican Majority 
and their corporate friends get their tax breaks and boondoggle defense 
contracts, they don't care who pays the bill. China, in turn, is happy 
to prop up the dollar and finance the debt because it gives them great 
leverage over the U.S. for years to come. No empty resolution like this 
or indignant politician can change that.
  So why are we talking about China now when they have been stocking 
oil supplies and U.S. currency for years with no change in course from 
this administration? It's very simple: cheap Chinese imports and labor 
enrich the pockets of the people who really matter in the Republican 
party, but a Chinese company owning Unocal does nothing for the base. 
This non-binding resolution is a talking point for July 4th barbecues, 
just the way the Republicans will tell their constituents that they're 
making them safer by throwing billions more into the quagmire in Iraq.
  Mr. Speaker, I have proudly voted for renewable energy, against trade 
deals that sell out American workers, and against tax breaks for 
millionaires financed by foreign governments. I support real economic 
security, and I will not support this sham resolution to give cover to 
my greedy colleagues and their corporate contributors.
  Mr. GARY G. MILLER of California. Mr. Speaker, I rise today in 
support of H. Res. 344, which expresses the sense of the House of 
Representatives that a Chinese government acquisition of a critical 
United States energy company could impair our national security and 
therefore justifies a comprehensive review.
  As a member of the Congressional China Caucus, I would like to 
commend Chairman Pombo for his hard work to ensure our country and its 
resources are protected.
  The bid by the China National Offshore Oil Corporation (CNOOC), whose 
majority owner is the Chinese government, to acquire Unocal Corporation 
is China's first attempt to secure energy resources in the United 
States and must be thoroughly evaluated.
  Unocal is one of America's leading independent natural gas and crude 
oil exploration and production companies. It is the country's ninth 
largest oil company, producing 159,000 barrels of oil and more than 1.5 
billion cubic feet of natural gas per day.
  The Chinese oil company's plan to buy California-based Unocal poses 
serious questions about national security. In addition, this 
acquisition could mean less energy for the United States.
  In a free market economy, mergers and acquisitions are a common way 
to enter foreign markets. However, China does not yet comprehend 
laissez faire economic principles. While our economy promotes 
competition for the sake of consumers, China's economy is easily 
influenced by political forces. As a state-owned corporation with ties 
to Chinese government leaders, I am worried that CNOOC's motivation is 
aligned to political and nationalistic goals. Specifically, I am 
troubled that CNOOC may use Unocal's technology to advance China's 
military.
  As is evidenced by passage of the Energy Policy Act in the House and 
the Senate, I know that all Members of Congress understand the critical 
need to secure the future availability of energy resources for American 
consumers. I fear China is attempting to buy Unocal not as an 
investment, but to use the company's vast reserves, especially its 
natural gas fields, for its own benefit at the cost of the U.S. 
economy. For these reasons, Congress must ensure the Chinese company's 
bid is carefully reviewed by all of the relevant agencies.
  I urge my colleagues to support this resolution to demonstrate that 
we will not let China damage our economy or compromise our national 
security through hostile acquisitions of oil and natural gas resources.
  Mr. OXLEY. Mr. Speaker, I rise in strong support of the resolution 
authored by the gentleman from California concerning the bid by CNOOC 
Ltd. to purchase Unocal Corp.
  Mr. Speaker, I remain fully committed to free and fair trade. 
However, I don't believe that this offer constitutes free and fair 
trade. The offer also could threaten our national security. This 
resolution would encourage immediate review of a merger agreement, 
which is authorized by the statute already, rather than waiting for 
bureaucratic processes to kick in. Acting quickly is important because 
national security reviews of proposed merger transactions often take 
months and can last over a year.
  Mr. Speaker, a review of any Unocal merger agreement with CNOOC would 
be done by the Committee on Foreign Investment in the United States, 
known as CFIUS, which was created pursuant to language inserted into 
the Defense Production Act (DPA) nearly two decades ago. It is chaired 
by the Department of the Treasury and includes Commerce, Homeland 
Security, Defense, State, the U.S. Trade Representative and other parts 
of the government.
  The DPA is solely in the jurisdiction of the Committee on Financial 
Services because it seeks to identify, stop or mitigate negative 
effects on the economy from our efforts to protect the Nation's 
security. As Chairman of the Committee of jurisdiction, I believe it is 
critically important that the Administration act quickly to review any 
merger agreement so that shareholders who would need to review 
potentially competing bids would have all relevant information at their 
disposal.
  Mr. Speaker, the national security implications of a proposed merger 
between CNOOC and Unocal are unmistakable. China's appetite for energy 
is enormous. I agree with the gentleman from Ohio, Mr. Ney, that 
national security includes economic security here. It is important for 
CFIUS to review the possibility that the Chinese might divert from the 
United States all of Unocal's energy production to China to feed its 
energy appetites if a merger with Unocal were to be completed. I think 
we can all agree that this would be a blow to the U.S. economy.
  Please consider the following facts:
  China's consumption of crude oil is expected to double within the 
next two decades.
  World production of oil exceeds capacity by the smallest margin in 
decades.
  China's need for energy is so great that electricity has been 
rationed to some factories, and the Chinese are reported to be 
investing in technology to ``cook'' low-quality coal into gasoline. 
This is costly, inefficient and has environmental problems.
  China is the world's largest economy without a meaningful strategic 
petroleum reserve.
  The U.S.-China Commission's 2004 Report to Congress indicated that 
China's strategy for securing oil supplies ``is still focused on owning 
the import oil at the production point . . . The Chinese policy is to 
own the barrel that they import `. . . to gain control of the oil at 
the source. Geopolitically, this could soon bring the United States and 
Chinese energy interests into conflict.''' The United States, in 
contrast, has a free market strategy ``based on global market supply 
and pricing.''
  The same report indicates that China ``plans to expand its strategic 
reserve to fifty to fifty-five days worth of oil imports by 2005 and 
sixty-eight to seventy days by 2010.''
  So, as today's Washington Post points out, it makes perfect sense 
that a majority-owned Chinese oil company seeks to acquire control of 
oil and gas production and reserves.
  Make no mistake about it, Mr. Speaker, this offer comes from the 
Chinese government. CNOOC is 70 percent owned by the Chinese 
government. One quarter of the funding for its cash offer comes at no 
or minimal interest rates. If that is not a subsidy, Mr. Chairman, I do 
not know what a subsidy is. News reports indicate that more than $5 
billion of the Unocal offer is available at no interest--more than $2 
billion of the bid--or at 3.5 percent interest. These are not market 
rates.

[[Page 14982]]

  I absolutely agree with a spokesman for China's Foreign Ministry, who 
is quoted in the Post article as saying: ``We think that these 
commercial activities should not be interfered in or disturbed by 
political elements.'' By that I mean: without a Chinese government 
subsidy.
  Mr. Speaker, I would like to add that I doubt whether the CNOOC 
proposal will result in a deal which would trigger CFIUS review. The 
Chevron offer will go to Unocal shareholders August 10. The Chevron 
offer now has all of the appropriate regulatory approval. The CNOOC 
offer comes late in the process and has not received any regulatory 
approvals to date. It is far from clear, even with the Chinese 
government subsidies, that the CNOOC bid would be competitive with the 
Chevron bid . . . but that is a decision for Unocal shareholders to 
make, not us.
  Mr. Speaker, I urge immediate approval of this resolution and 
immediate review of any accepted CNOOC offer for Unocal.
  As well, Mr. Speaker, I urge swift convening of a conference 
committee on a comprehensive energy bill for the United States, an 
adoption of the President's comprehensive energy program for the U.S. 
and swift adoption of the conference report.
  Mr. NEY. Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore (Mr. Simpson). The question is on the motion 
offered by the gentleman from Ohio (Mr. Ney) that the House suspend the 
rules and agree to the resolution, H. Res. 344.
  The question was taken.
  The SPEAKER pro tempore. In the opinion of the Chair, two-thirds of 
those present have voted in the affirmative.
  Mr. NEY. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX and the 
Chair's prior announcement, further proceedings on this motion will be 
postponed.

                          ____________________