[Congressional Record (Bound Edition), Volume 152 (2006), Part 2]
[Senate]
[Pages 1820-1823]
[From the U.S. Government Publishing Office, www.gpo.gov]




                                 ENERGY

  Mr. DORGAN. Mr. President, I will spend a few minutes talking about 
energy.
  There was a letter to the editor in the Wall Street Journal, I 
believe, this morning or yesterday morning, responding to an editorial 
where I had given a response to an editorial. The writer to the Wall 
Street Journal was taking me to task for saying there is not a ``free 
market'' in energy or in oil. My point was there is no free market in 
oil. He said he doesn't know what I have been drinking or where I got 
these thoughts. He said there is a free market in oil.
  Let me describe all of this in the context of President Bush's State 
of the Union Address in which he suggested that we are ``addicted'' to 
oil and we need to move toward greater independence with respect to 
oil, especially coming from off our shores.
  First, on the subject of a free market, there is no free market in 
oil. A substantial portion of oil comes from halfway around the world, 
under the sand in the Middle East, in Saudi Arabia, Kuwait, Iraq, and 
Iran. A substantial part of the world supply of oil comes from that 
region. And those OPEC ministers, having formed a cartel, sit around a 
room and decide how much they are going to pump and at what price. That 
is a cartel. Cartels are the antithesis of the free market system. Yet 
the OPEC countries have this cartel, produce a great amount of oil, and 
they decide how they are going to manipulate price and supply. That is 
No. 1.
  No. 2, you have the large oil companies, bigger and much stronger 
because of the blockbuster mergers in recent decades, especially in the 
last one. These oil companies used to be one company, and now they are 
a company with several names, such as ExxonMobil. That used to be 
Exxon, and that used to be Mobil. They decided to fall in love and get 
married, and now it is ExxonMobil. Last year, ExxonMobil made $36.1 
billion--the highest profit ever recorded in corporate America. 
ExxonMobil.

[[Page 1821]]

  Then there is Chevron-Texaco. It used to be Chevron, and there was 
Texaco. They discovered they liked each other and they got hitched, 
making it Chevron-Texaco.
  And then we have ConocoPhillips, which used to be separate companies. 
Once they decide to marry up and merge, they save all these names.
  So there is ExxonMobil, Chevron-Texaco, and ConocoPhillips. Maybe 
some day they will all merge, and when you put them all together, they 
will be ExxonMobil ChevronTexaco ConocoPhillips--just one company. The 
blockbuster mergers mean these companies are bigger, stronger, and have 
greater capacity to influence the marketplace.
  So you have the OPEC ministers in a closed room talking about supply 
and price and how they affect supply and price and the manner in which 
they want to affect it. You have the oil companies, larger and 
stronger, having more muscle to influence the marketplace. And third, 
you have the futures market. The futures market, rather than simply 
providing liquidity for training, has become an orgy of speculation. So 
those three things are what determine the price of oil and the price of 
gasoline. It has very little to do with the so-called free market. Yet 
we hear all these people talk about the free market.
  Do you think it is the free market that gives us a company such as 
ExxonMobil, with profits of $36.1 billion last year? That is not a free 
market. That is the price of oil which is somewhere between $60 and $70 
a barrel. That is up from $40 a barrel average price of the year 
before, at which point this company had the highest profits in their 
history. So it went from an original price of $40 a barrel to over $60 
a barrel, and the company had no additional expenses at all. That price 
went to that level and it stayed relatively at that level, and it has 
dramatically boosted the profits of all of these oil companies--Shell, 
$25.3 billion; B.P., $22.3 billion; $36.1 billion for ExxonMobil.
  Listen, all the gain is here with the big oil companies and the OPEC 
countries. All the gain is here, and all the pain is on the side of the 
consumers, people trying to heat their home in the winter, people 
driving to the gas pump trying to figure out how much it is going to 
take to fill up their tank. They are paying the higher prices, and all 
that goes into these coffers, higher profits. And that is sent also to 
the OPEC countries.
  The President talks about an addiction to oil. I would use that term. 
We are hopelessly addicted to oil. I don't suggest that we have an oil 
anonymous organization where we show up on Wednesday nights and confess 
that we drove our Humvee 10 blocks to pick up a bagel. What do we 
confess to? Well, we have a 6,000-pound vehicle and we decided we 
needed to run an errand to buy a piece of ribbon. That is not what I 
suggest, nor is it what I expect the President suggest.
  Addiction to oil. Let's think about that. We suck 84 million barrels 
of oil out of this Earth every day. Every single day, 84 million 
barrels are sucked out of the Earth. One-fourth of it, 21 million 
barrels of oil, goes to this country, the United States of America. We 
use fully one-fourth of all the oil that is extracted from this planet 
every single day. Sixty percent of all that oil we use in this country 
comes from off our shore, and much of it from troubled parts of the 
world. If, God forbid, something should happen to the supply of oil 
from Saudi Arabia tomorrow, we would have a huge problem.
  Our economy is, in fact, attached to the ability to get oil from 
other parts of the world that are very troubled parts of our planet. If 
terrorists, for some reason, interdicted the supply of oil, shut off 
the supply of oil tomorrow morning, our economy would be in deep 
trouble. Obviously, there are national security interests here. Does it 
make sense from a national security standpoint to have the American 
economy running on 60-percent foreign oil, much of it coming from 
troubled parts of the world? The answer to that is no. Of course not. 
So in addition to national security issues, you have the issue of the 
unfairness, of huge profits for the major oil companies, huge profits 
for the OPEC countries, Saudi Arabia, Kuwait and others, and then 
substantial pain for people, many of whom can't afford it, pain in the 
form of higher prices.
  Energy independence: That is the watchword. Energy independence, they 
say. What does all this mean? Let me go back for a moment to January 
13, 2002. January 13, 2002 is the day the Ambassador for Saudi Arabia 
showed up at the White House in the Oval Office. Prince Bandar, the 
Saudi Ambassador, was then told at a meeting in the White House on 
January 13 that this country was going to attack Iraq, invade the 
country of Iraq. It is interesting that not until the next day did the 
President notify the U.S. Secretary of State.
  On January 13, at a meeting in the Oval Office--and again, this comes 
from Bob Woodruff's book ``Bush at War''--the President called in and 
notified the Saudi Ambassador to the United States that we were going 
to war with Iraq. The following day, the President notified his own 
Secretary of State that he had made a decision to go to war with Iraq. 
Interesting. It describes something about the relationship this country 
has with Saudi Arabia and the importance it places on that 
relationship.
  This occurred, by the way, as my colleagues know, following 9/11/
2001. Fifteen of the 19 hijackers were Saudi citizens. Of the 19 
hijackers who flew the planes that hit this country, 15 of them were 
Saudi citizens. We had Saudi citizens rounded up on private airplanes 
leaving this country. Then in January of 2002, the President calls the 
Saudi Ambassador to the Oval Office and tells him we are going to war 
with Iraq. The following day, he tells our own U.S. Secretary of State 
Colin Powell that he has decided to go to war with Iraq. I recite that 
because it describes a very special relationship this country has had 
with Saudi Arabia, and perhaps a very unhealthy relationship. Under the 
Saudis' noses and eyes, I believe, there has existed a network of 
madrassas, schools and other activities in which terrorist 
organizations developed and flourished, and we bore the brunt of that 
on 9/11/2001. As long as they left Saudi Arabia alone, it was going to 
be all right; They could develop their terrorist cells.
  The fact is when we go to the gas pumps in this country and fill our 
tank and pay the kind of money we are paying for that petroleum, there 
is a fair amount of evidence, and it is written evidence coming from 
numerous studies, that we are actually helping to finance terrorism. 
There are many steps we have to take to deal with that.
  The first and most important step, however, is for us to understand 
this addiction to oil from the Middle East. The addiction to oil from 
Saudi Arabia and Kuwait and Iraq and elsewhere is a very unhealthy 
circumstance for our country. It is relatively easy to talk about 
addiction and fairly simple to talk about the need for energy 
independence. It is quite another thing to get there. I mentioned a 
moment ago driving a 6,000-pound car to go get a bagel. By that I meant 
a Humvee. Understand, I have never driven a Humvee, but I understand 
they weigh about 6,000 pounds, and I don't mean to demean anybody who 
would drive a 6,000-pound Humvee. But I do have, as I have indicated 
before, only broken knowledge of Latin, and when I drive up to a 
stoplight beside a Humvee and look over and see a Humvee on the street 
next to me, I think of a Latin phrase I learned in high school, not in 
formal class, but the phrase was ``totus porcus.'' I look at Humvees, 
6,000-pound vehicles, and I understand that no one has been serious in 
this country about suggesting that we change the way we do things.
  Are we suggesting that we get better gas mileage in our automobiles 
in any significant way? I looked at a vehicle the other day that is an 
identical vehicle to the same model that was produced 10 years ago. 
Guess what. It has exactly the same rated gas mileage. In 10 years, we 
can't add 1 mile per gallon. Whether it is conservation, efficiency, 
better gas mileage, or any dozens of other issues on the side of using 
petroleum products, or if it is on the side of

[[Page 1822]]

producing petroleum products, we don't have a national plan. We don't 
have a plan that represents this country's crucial interests in 
actually getting to some kind of independence or some percentage of 
independence of foreign oil. We need one, and if the President's call 
in his State of the Union is an honest attempt to get there, I am with 
him. But it is not so much what we say, it is what we do that will 
determine our energy future.
  I was proud in the last week or two to join my colleagues Senator 
Domenici, Senator Bingaman, and Senator Talent in offering legislation 
to open the Gulf of Mexico for additional production. We believe there 
is somewhere around 6 trillion cubic feet of natural gas available for 
production in lease 181. It was ready for production in 2001 and the 
President took it off the books because his brother was Governor of 
Florida and didn't want it produced, so it has not been produced. But 
the fact is on a bipartisan basis here in the Senate we have a fair 
number of people on the bill that has been introduced. So let's 
produce, let's get that natural gas and get it into the pipeline.
  The issue of additional production, especially coming from renewable 
fuels, makes a great deal of sense to me. I talked about lease 181, 
that is drilling, and that is production from drilling, oil and natural 
gas. We have a pipeline that needs to get done that we have already 
supported, from Alaska to the United States, transporting substantial 
portions of natural gas to the United States, but those who are 
supposed to be doing that have been dragging their feet on that. We do 
need fossil fuels to be producing more. But we also in the area of 
renewable fuels need to understand, we can decide to substitute for 
traditional fuels a substantial amount of renewable energy if we 
decided our country could do that.
  Wind energy. Wind energy has great potential. Taking energy from the 
wind and producing electricity from it, perhaps even using electricity 
in the process of electrolysis to separate hydrogen from water and 
creating hydrogen fuel to run a hydrogen fuel-celled vehicle. All of 
that makes great sense. But you only do that as a country if you set 
goals and decide that is the direction you want to head.
  Biofuels, ethanol. I was part of a group that set a new renewable 
fuel standard, saying we are going to get to 7.5 billion gallons of 
ethanol by the year 2012, doubling the use of ethanol in our country. 
That means you go in the farm fields on a renewable basis every year, 
produce corn, as an example, and produce ethanol fuel from corn that 
extends America's energy supply and also produces a new market for 
family farmers. All of these things are doable. Other countries have 
done them. Brazil is an example of a country that has done remarkable 
things with the extension of renewable fuels. Our country has not 
because we have not had a plan. Now we are getting there.
  Last year's energy bill was a start. The bill we have introduced on 
lease 181 is another piece. There is much more to do, but we will not 
do anything close to move toward something you could call energy 
independence unless we as a country have a rational plan, a thoughtful 
plan.
  There has been a lot of discussion about who created this energy plan 
of ours. It goes all the way back to the year 2001 when there were 
secret meetings and we had people coming to town to participate in 
these meetings, and virtually all of these countries, I understand, 
played a role in meetings such as that, although we can't find the 
names because they claim that the meetings were not public. The Vice 
President and others convened meetings, developed an energy policy, but 
it has not been a policy that has done anything other than lead us 
toward greater dependence on foreign sources of oil.
  Slightly over 60 percent of our oil is coming from off our shores. 
That is scheduled in a very short order to go to nearly 70 percent. It 
has been an inevitable climb, from 60 to now 70. We are going to have 
to decide as a country, are we going to change that or aren't we? There 
is not much more we can do for this country's economic security and 
national security that is more important than to take this kind of 
energy plan and to decide to embark on something that will strengthen 
this country and make us less dependent on unstable parts of the world 
for the production of our energy and for the transport of our oil.
  It is interesting to me that we never see that which goes in our gas 
tanks. My father ran a gasoline station, among other things. So when I 
was a kid, on nights and Saturdays and weekends, I was pumping gas. 
Some people say my occupation hasn't changed very much. But I pumped 
gas, and people would drive up and I filled their car with gas. I did 
that when I was a kid for years and years. When you think about this, 
we never see that product. So it comes from under the sands of Saudi 
Arabia. The Lord has seen fit to give us this wonderful bounty called 
the United States of America. There is no other country quite like it. 
Yet we have this prodigious appetite for energy. We use one-fourth of 
all the oil that is sucked out of this earth every day, and a 
substantial part of the oil, for some reason, exists halfway around the 
world under the sands of a very troubled part of our globe.
  So in Saudi Arabia, where there are dramatic deposits of oil--we are 
not quite sure how large those deposits are because the Saudis won't 
let anyone verify all that--it is pulled out of that sand. It is 
cheaper to pull it out of that sand than anywhere else on the face of 
the Earth, and then it is put in a pipe, it goes to a refinery, put in 
another pipe, goes to a dock, put on a ship, comes to this country on a 
tanker, is offloaded into a refinery, goes on a pipeline, perhaps goes 
to a truck, gets sent to a gasoline station, pumped through an 
underground tank and pumped through a hose into your car, and no one 
has ever seen it. Nobody has ever seen that gallon of gasoline. That is 
the way it works. But literally in this country our economy and our 
future are held prisoner by this unbelievable dependence on foreign 
oil.
  It affects everything we do. It affects our foreign policy. We have 
gone to war over oil. It affects everything. So the question for this 
President and this Congress, not tomorrow but today, is how do you 
reach some sort of independence? How do we make our country less 
dependent on something we desperately need for our future economic 
opportunity and growth, less dependent on oil from overseas? I know 
there are as many suggestions on how to write a new energy policy as 
there are Members of the Senate. But I do not believe, with all due 
respect, that there is a Republican or Democratic way to write an 
energy policy or a conservative or liberal way to write an energy 
policy. I think there is a right way and a wrong way and a smart way 
and a pretty stupid way. But it seems to me that we need to begin to 
find the best of what each of our political parties has to offer in 
terms of an energy policy and find a way to construct, from the best of 
what both have to offer, something to assure us that our economy will 
have the energy that it needs for the future.
  This is not some academic discussion, as is often the case on the 
floor of the Senate. There are people who, this winter, do not have 
enough money to heat their homes because prices are too high. That does 
not, by the way, have anything to do with supply and demand. You see 
these profits, the highest profits in history for the oil companies. 
You don't see gasoline lines. Has anybody seen any gas lines around 
here, people lining up for hours to get gas? No. There is no shortage. 
In fact, something came across my desk yesterday--an oil company is 
shutting down a portion of its refinery because it wants to restrict 
supply. Why? It wants to keep prices where they are. They like these 
high prices.
  There are a lot of ramifications. There are enormous riches for the 
big oil companies and enormous pain for the American consumer, and that 
is the short term. The question in the short term is always: Who is 
going to stand up for the American consumer? I introduced a bill, along 
with my colleague, Senator Dodd, from Connecticut, a couple of months 
ago, that would have imposed a windfall profit

[[Page 1823]]

tax on these oil company profits, only on the profits above $40 a 
barrel. Incidentally, last year, 2004, represented the highest profits 
in history at $40 a barrel. We proposed a windfall profits tax at 50 
percent on profits over $40 a barrel, with all the proceeds to be sent 
back to the American consumers as a rebate.
  Interestingly enough, I guess it was 65 Senators voted against that 
because they do not want to take money from the oil industry and 
provide it as a rebate to consumers. I think you ought to even the 
score a bit. There is no justification for these profits. These 
companies have not exhibited additional expenses. These are 
extraordinary profits, the highest in the history of corporate America, 
and all the American consumers are feeling the pain. That is the short 
term. We have tried, in the short term, to address it with the windfall 
profits tax rebate bill and we have not been successful. But that is 
not over.
  Then in the intermediate to longer term, we have to do more. We need 
a real plan for energy independence, a real plan, one that addresses 
alternative fuels and renewable fuels, enhances the recovery of fossil 
fuels in a way that is protective of our environment. We need to be 
doing all of that together, reaching a set of goals that our country 
establishes. You can't do this without leadership.
  So my hope is that, both from the White House and also from here, we 
will begin to see some leadership toward energy independence--I mean 
some real leadership. Talking about it is one thing. It doesn't mean 
anything. People have been talking about this forever. It is a waste of 
breath unless it results in real planning.
  I have mentioned before the book McCullough wrote about John Adams. 
It was a fascinating book and had lingering questions from John Adams 
as he was traveling around the world representing this new country they 
were trying to form. He spent time in France and England. He would 
write back to his wife Abigail. At least as I read the book, it would 
seem that he would write to Abigail and lament to her in his letters: 
Where will the leadership come from to form this new country of ours? 
Where will the leadership emerge to put this new country we want to 
form together? Then in the next letter he would write: Well, then, 
there is really only us--there's me, there's George Washington, there's 
Ben Franklin, there's Thomas Jefferson, there's Madison, there's 
Mason--and of course in the rearview mirror of history we know the 
``only us'' now represents some of the greatest human talent ever 
assembled. But every generation of Americans asks the identical 
question: Where will the leadership come from? Where will the 
leadership emerge, real leadership, to steer this country in the right 
direction?
  With respect to energy policy which relates to both our economic 
security and our national security, time is wasting, and there is not a 
more important subject for us to address, beginning now. The question 
remains: Where will the leadership come from? That question is 
addressed to both the White House and the Congress, asking for, 
finally, what the best of both political parties ought to have to offer 
this country.

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