[Congressional Record (Bound Edition), Volume 153 (2007), Part 17]
[House]
[Pages 23688-23694]
[From the U.S. Government Publishing Office, www.gpo.gov]




                      THE ENERGY FUTURE OF AMERICA

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 18, 2007, the gentleman from Pennsylvania (Mr. Peterson) is 
recognized for 60 minutes as the designee of the minority leader.
  Mr. PETERSON of Pennsylvania. Mr. Speaker, I rise today to talk about 
an issue that's not talked about enough in Washington, and on a warm 
sunny afternoon, where it's not real hot, it's not cold, not a lot of 
energy's being used. Not a lot of Americans are talking about energy, 
but it should be on the minds of Americans.
  I was disappointed last night as we listened collectively to the 
Presidential debate. Now, the candidates don't get to talk about what 
they want to talk about unless they squeeze it in on the side. They get 
to answer the

[[Page 23689]]

questions; and last night, not one question was asked about the energy 
future of America.
  We've been a very successful Nation. We've been the leader of the 
world because we have had cheap, affordable energy. That has all 
changed. We now have expensive energy, and we have short supplies on 
every hand.
  When I talk to the biggest employers in America, when I talk to the 
people that I know understand this country and the manufacture of goods 
and the process of goods and trade around the world, I say, should 
energy be a top issue? And they said, it is for us. To remain an 
employer in America, energy is our number one challenge.
  Just to give you an example, Dow Chemical, the largest chemical 
company in the world, located in America, thousands of good jobs in 
America, their costs of energy went from $8 billion on natural gas 
alone in 5 years to $22 billion. That's almost tripling the costs of 
their major use of energy, natural gas.
  Now, we have some energy bills moving, and we would hope that they 
would increase supply because when you increase supply, you decrease 
prices. A lot of us have struggled to understand the energy markets, 
but this is how I understand it in basic terms. They are not set by 
energy companies. They're set by Wall Street traders who look at 
availability of that form of energy, and they run the price up or down 
by the hour.
  In the last few days, oil prices have been rising a dollar-something 
per day, and I checked about 1 o'clock and oil was approaching $77 a 
barrel, almost the highest price ever, and had been increasing hourly 
all week. So the price of energy is not set by the sellers of energy. 
It's set by the Wall Street traders on their view of the availability 
and the affordability.
  Now, the bills before us, we'll look at them a little bit, I find 
somewhat disappointing. They cut off production from the Roan Plateau, 
a huge clean natural gas field in Colorado that was set aside as the 
Naval Oil Shale Reserve in 1976 because of its energy-rich resources. 
This means that nine trillion feet of natural gas, more than all the 
natural gas in the OCS bill that was passed last year, will be put off 
limits.
  The Roan Plateau had already gone through all the NEPA studies. Now, 
those are yearlong studies that say whether it's environmentally 
appropriate to produce it. They passed that test.
  This provision was not in the original Resources Committee bill and 
had been added at the request, we think, of leadership because it 
wasn't in the original bill. This bill will make it harder to produce 
energy from Alaska's natural petroleum reserve which was set aside in 
1923 to help America meet our energy needs in the long term. Additions 
of tens of trillions of cubic feet of natural gas and millions and 
millions of barrels of oil in Alaska's natural petroleum reserve which 
would have increased the likelihood of the construction of the gas 
pipeline that could bring 4 to 6 billion cubic feet of clean green 
natural gas from Alaska every day has not yet been built.
  The bill effectively repeals language that I put in the energy bill 
in 2005 that took out redundant NEPAs. NEPA is a comprehensive, 
complicated study that you have to go through to make your 
environmental assessments.
  Now, what was happening in the West, where a lot of our energy is, 
NEPA studies were being used redundantly. In other words, you have a 
study for your original plot. You have a study for the road. Each of 
these studies takes a year. You have a study for each well location. 
You have a study for everything you were going to do. And so I had 
people who said they had leased land 6 and 7 years prior and still 
hadn't been able to drill a hole in the ground and produce the energy 
for America.
  So we did a simple amendment that said you do a NEPA, you do it on 
all of those things collectively and you go ahead and proceed. Well, 
the bill we have moving now takes away those redundant NEPAs and allows 
them to go back to multiple NEPAs. The provision alone adds red tape 
that will stop 18 percent of the future on-shore natural gas production 
and oil and hurt those least able to pay their energy bill.
  The bill doubles the time it takes to get government approval for 
offshore energy projects at a time when China is drilling within 50 
miles of our shore, along with Cuba.
  Now, also, we have portfolio standards in the bill that says 15 
percent of renewable energy must be a part of all electric production. 
Now, that's a great goal. I don't have any quarrel with the goal. But 
we mandated it by 2020, and some States with their natural resources 
can meet that, some can't.
  We also, with the limit of what can be renewable energy, I know we 
already had the Pennsylvania law which used more items in their 
renewable portfolio package, and so the Federal one-size-fits-all 
mandate, we should have had a carrot approach, where we put a carrot 
out there, where we encourage, we assist, we help. But this mandate 
will make it very difficult for States who do not have the right 
sources of energy available to them because it will make it very 
difficult for them to produce electricity and meet that mandate.

                              {time}  1445

  We have an interesting issue in every appropriations bill this year 
that's a mandate that CFL light bulbs be used in every building. Now 
that sounds good. Those are highly energy-efficient light bulbs, the 
little ones my wife and I fight about because I bought them and put 
them in, and she takes them out because they buzz and make noise and 
don't give quite the quality of light we are used to with our 
incandescent bulbs. We have had that discussion ongoing, but we have 
mandated them in government buildings.
  The sad part of the story is they are all made in China. We do not 
produce one in America.
  The Senate had severe changes in CAFE standards in their bill, which 
I think would be part of the discussion when we have a conference 
committee, if we have a conference committee on energy. Many Members of 
the House, bipartisanly, are concerned that the mandates in the Senate 
bill will be harmful to the American auto industry.
  That's another issue, that we need to have more fuel-efficient cars. 
Nobody argues, we need to. I think we may have been a little too easy 
on the auto industry in America, because it seems like every time we 
have an energy spike, they are never ready for it, and they lose a 
piece of the market share. Because Americans have chosen to purchase 
cars that were not fuel efficient, energy prices would go up, and we 
would buy more fuel-efficient cars, and energy prices would come down, 
and we would go back to buying high gas users again.
  We need to have a more fuel-efficient auto available to us, and we 
need to use our energy as wisely and conservatively as possible. But 
hopefully, in the end, we will have a CAFE standard that will not 
disadvantage the American automakers.
  Now, one that bothered me the most, I guess, was the $15 billion to 
$16 billion tax increase on energy production. Now, I know what that's 
about; it's about the hatred of the big oil companies and their big 
profits.
  Well, someone said to me one day, well, how come they have made such 
profits? Big oil companies over the years purchase the ability and the 
rights to oil all over the world, including in our country. They 
purchase those rights, assuming that $25 or $30 would be the price they 
would receive for their oil.
  Well, we don't have $25 or $30 oil anymore, and when you sell $75 oil 
and you were going to be profitable at $30 oil, you are going to make a 
lot of money. Why do we have high oil prices and energy prices in 
America? Because this government and this administration have not 
opened up energy supply.
  When you don't open up energy supply and you help create a world 
shortage, you force prices up. It's the traders in Wall Street, again, 
who determine adequacy of natural gas or oil or other commodities to 
the marketplace.
  Now, in oil, it gets quite confusing because you will have an oil 
price set

[[Page 23690]]

by Wall Street and you will have a gasoline price that sometimes 
doesn't make any sense. This spring we had gasoline prices higher than 
they should have been, as a result of 60-some dollar oil, but it was 
because there was a shortage of gasoline in the world. Fifteen percent 
of our gasoline now comes from Europe, and when Europe didn't have the 
gasoline for us, we had a shortage on gasoline. So our gasoline market 
went higher than it normally would have.
  So it's interesting that these Wall Street players run up the price 
because there is a shortage in the world.
  Mr. ABERCROMBIE. Will the gentleman yield?
  Mr. PETERSON of Pennsylvania. I would be glad to yield to my clean 
natural gas friend from Hawaii.
  Mr. ABERCROMBIE. Would the gentleman agree then that part of the 
issue that we have to face here then is supply?
  Mr. PETERSON of Pennsylvania. That's correct.
  Mr. ABERCROMBIE. Are we going to have an adequate supply of energy so 
that we can come to grips with the question of price, and, in turn, the 
question of how much production will cost us and whether we will be 
able to continue as a manufacturing nation?
  Mr. PETERSON of Pennsylvania. Yes. The issue should be, the number 
one issue in the Presidential debate, how do we secure adequate 
affordable energy for America to compete in the global economy?
  See, we have never had to compete before, but we have countries like 
China and India that are stocking up on energy, all kinds of energy, 
acquiring all kinds of access to energy, building all kinds of power 
plants and hydrodams and acquiring oil and gas rights around the world, 
and we are sort of here sitting on our hands saying we can do it with 
renewables.
  Now, I am for all the renewables, all we can get of them, but they 
are growing very slowly, and there has not been the willingness in this 
Congress and in this administration to say how do we acquire adequate 
energy supply.
  Mr. ABERCROMBIE. If the gentleman would further yield on that point, 
isn't it a fact that there is not a world price, as there ostensibly 
might be for gasoline, a world price, now, even though the price of a 
gallon of gasoline may fluctuate because of the factors that the 
gentleman has indicated, but, nonetheless, at least there is some 
benchmark against which you can measure that gasoline price.
  Mr. PETERSON of Pennsylvania. Yes.
  Mr. ABERCROMBIE. But when it comes to energy like natural gas, there 
is, in fact, not a world price. In the context that the gentleman has 
just outlined, isn't it true that the rest of the world is finding a 
natural gas foundation as part of the alternative to a petroleum fuel 
and able to meet the requirements that each of these nations may have, 
including China, at a price commensurate with production available to 
them and that the United States, because it does not have that same 
access, is actually paying a much higher price, and that, in fact, no 
world price exists for natural gas?
  Mr. PETERSON of Pennsylvania. That's absolutely correct. We produce 
about 83 percent of our own natural gas. We import a lot from Canada 
and about 2 percent of LNG, which is liquefied natural gas, from the 
same area as we get our oil from.
  Natural gas is not a world price, and a lot of Members of Congress 
and a lot of people in America don't understand that. Oil is a world 
price. The gasoline prices can vary. That's a portion of the oil. If 
you have an excess of gasoline in your country or in Europe, their 
price drops; if you have a shortage, their price goes up the same as 
ours. They operate off of the Wall Street market, and their markets.
  Mr. ABERCROMBIE. The gentleman has mentioned China. Is it not a fact, 
then, that as we confront this dilemma of a lack of energy supply at a 
reasonable price in America, the Chinese are presently going about the 
world securing oil rights, petroleum rights, natural gas rights, energy 
rights of one kind and another all over the world to supply the 
burgeoning manufacturing and development boom that they have going on 
there?
  Mr. PETERSON of Pennsylvania. They have a partnership with Cuba 50 
miles from our Florida coast, and we can't drill within 150 miles of 
the Florida coast. No, we can't drill off the Florida coast at all. 
It's all closed at the moment.
  No, you are absolutely right. We as a country do not have an energy 
supply plan. We just are kind of riding along, I guess, hoping things 
will get better, but we do not have a plan. The gentleman from Hawaii 
is absolutely correct.
  Mr. ABERCROMBIE. May I conclude then that I commend him for his 
leadership on this issue. I am pleased to join with him and want to 
indicate to you and to those who may be listening to us today, and, 
more particularly, to the presentation that you are making, that unless 
and until we have a comprehensive energy independence plan in this 
Nation, our security, economic, social, military, in fact, our 
leadership in the world is at stake.
  Mr. PETERSON of Pennsylvania. Absolutely. I have not talked to a CEO 
of a major corporation employer in America who either produces energy 
or uses a lot of energy like Dow Chemical, U.S. Steel, Pittsburgh, PPG, 
all the big users of energy, and I said to them, I believe that 
available, affordable energy equals terrorism and a challenge to 
America's future. They said, you are absolutely right. Every one of 
them.
  I have never had a person in that kind of a position or people that 
have understood this issue and have worked on it all their life and 
understand it who didn't agree with that. But for some reason, they 
don't say it publicly. I have been one of the few, and my friend from 
Hawaii has been one of the few who have been willing to say, hey, 
clean, green, natural gas can be our renewable, our bridge to the 
future. We need to realize that we must produce it, more of it.
  We will take a moment here and look at American energy production. We 
currently are 40 percent oil, 23 percent natural gas, 23 percent coal, 
8 percent nuclear, 2.7 percent hydroelectric, 2.4 percent biomass, and 
that's woody waste materials, geothermal, wind and solar. I guess the 
thing that's concerning is this is where all of our emphasis is, and 
ethanol.
  I haven't talked about ethanol, but one of the other things that's in 
the bills is a mandate of 35 billion barrels of ethanol, and we are 
currently producing 7 billion barrels, mostly from corn.
  Now, corn has been controversial because corn has gotten expensive, 
$1.80 corn per bushel is now $3.50 a bushel, has been as high as $4 a 
bushel. I am not opposed to it. The manufacturing of ethanol, 95 
percent of the plants that produce ethanol use a huge amount of natural 
gas.
  In fact, ethanol is sort of a swap. Some say it's a winner by a 
little bit. There are those who say it actually takes more energy to 
make ethanol, but it's American, it has given our farmers a market for 
grain. But using the food supply has its long-term problems. If we 
would become huge ethanol producers much more than today and would have 
a short corn crop for a bad season, food prices have already increased 
measurably because hog farmers and beef farmers and poultry farmers now 
are paying much more for their feed to feed their animals because of 
corn prices, and also organizations that feed the poor around the world 
have always used American corn because it was so cheap and are now 
having to pay twice as much for it as they did before.
  So using food for fuel is not, I am saying, bad, but it has its 
challenges. And the other problem with ethanol is that it's corrosive 
and cannot be put in our pipeline system. And the cheap way to move 
energy around the country is in pipelines. We can't use ethanol in the 
pipeline; we have to blend it on surface and either bring it in tankers 
blended or blend it at the station.
  Now, ethanol has its limitations. We will kind of move into the next 
portion here and talk a little bit about ethanol and cellulosic 
ethanol. The amount of importation of oil, every year our dependence on 
foreign, unstable countries

[[Page 23691]]

for petroleum increases about 2 percent. Every year, that's just 
constant. It just keeps going up.
  The energy bill we have before us will put another spike out here 
because it's going to tax energy production. It's going to make major 
energy fields off limits, and so we will have to do more imports. So 
with the energy bills that are before us, we are going in the wrong 
direction as far as energy production.
  Now, let me get the other chart there on foreign dependence, or the 
deficit, the trade deficit, huge percentage, $293 billion is the 
importation of oil.
  Now, anything we can do to lessen dependence on foreign and the 
purchase of foreign oil helps the trade balance for America. It's a 
major portion. In fact, it's about a third of our trade imbalance. When 
the price goes up, this number expands very quickly.
  We are at $76, almost $77 oil today. We have not had a major storm in 
the gulf. A major storm in the gulf can raise prices $10 to $20 a 
barrel in a day or two. Here is what happened when Katrina hit. That 
was Katrina. We have not had a storm in the gulf since Katrina.
  When a major storm hits the gulf, why does it increase prices? It 
shuts down refineries, it shuts down pipelines, it shuts down the rigs. 
We stop producing for months because we have to go back in and repair 
the system that produces it, the pipeline systems, the cleaning 
systems, the refineries. All that has to be rebuilt because those 
storms are immense.
  Last year was the first year in a long time we had a major storm in 
the gulf. This year we seem to be in a major series of storms right 
now. We have been lucky. The last two have been south of our gulf. 
There is one coming now that may hit the East Coast.
  But when they hit the gulf with $75 oil, we could easily have $90 
oil. That means gasoline pump prices of $3.50, $3.75. Also at the 
current time, here is where America is in trouble. We are dependent on 
no storms in the gulf for a stable price, or a high price, stable price 
without further spikes, and we are dependent on no country in the world 
that ships our oil, most of them are unstable governments, not having a 
governmental collapse or a takeover or a military coup where we lose 
millions of barrels of oil per day.
  We have to pray, I guess, that we have good weather, that it doesn't 
interrupt the gulf and that we don't have a major country producing oil 
topple its local government.
  Here is the problem. This is a picture of America. We produce a fair 
amount of energy in the middle. We could produce more, and we talked 
about some of that earlier, but we are the only country in the world 
that doesn't produce immense amounts of oil and gas offshore.

                              {time}  1500

  Every country in the world: Canada, Great Britain, Norway, Sweden, 
Denmark, New Zealand, Australia. I mean, these are all green countries. 
These are countries with records of being environmentally sensitive.
  Offshore is from 3 miles to 200 miles. That's controlled. The States 
control the first 3 miles. The next 197 miles is controlled by the 
Federal Government. We've had it locked up for 26 years. We've said, we 
don't need that. I disagree with that.
  Now, we will have argument that, oh, we can't have clean beaches. All 
those countries have clean beaches. Oil and gas production today is not 
the threat to the environment it was many years ago. In fact, the last 
major oil spill offshore was in Santa Barbara in 1966, I believe. 
That's a long time ago.
  And everybody talks about the ship, I can't think of the name of it 
now, the Valdez up in Alaska. That was a ship. In fact, everybody who 
knows offshore says that we're more in danger with ships hauling oil, 
which they do every day, than we are from producing it.
  Now, what's been interesting here is I have promoted and many of my 
colleagues have promoted the production of clean green natural gas. 
They say, well, that will pollute our beaches. Well, there has never 
been a gas well that's ever polluted a beach.
  In fact, 11 miles is the sight line, and if you go 25 miles offshore, 
nobody will ever see it, even from a tall building. It's out of sight. 
And clean green natural gas, it's a gas, and it bubbles into the air 
naturally from fissures in the ocean floor every day. And even on land, 
natural gas finds its way out of the reserves, through pressure and 
works its way.
  In fact, I come from the original oil patch, Titusville, 
Pennsylvania, first oil well drilled by Colonel Drake. It was 68 feet 
deep. They drilled there, actually it was a dug well because they 
didn't have the drilling; I guess they couldn't get a driller to come 
in so they actually dug the well and lined the side with stone like you 
do a water well, and caught oil at 68 feet. Because oil had been oozing 
up out of the ground and that stream called Oil Creek had oil on it 
before we ever drilled an oil well because it naturally oozed out of 
the ground because that gas sand was very close to the surface, and so 
they produced it there. And so I've been around it all my life.
  And it's interesting that we've also had the argument on this floor 
and across the country that you just can't drill for natural gas. So 
we've been promoting just natural gas, hoping, because natural gas is 
our biggest need. Natural gas is what we heat 60 percent of our homes 
with, 70 percent of our businesses, and is a major ingredient in the 
production of fertilizer. Nitrogen fertilizer, 70 percent of the cost 
of making it is natural gas, and we have tripled the price in a very 
short period of time.
  Petrochemicals, every chemical you buy at the hardware store, every 
chemical you buy at the grocery store is made with natural gas as an 
ingredient, 55 percent of the cost of petrochemicals, on average. So 
petrochemical companies in America are in trouble because we're paying 
more to make them than other countries.
  Polymers and plastics, 45 percent of the cost of producing polymers 
and plastics is natural gas because it's used to heat and it's also 
used as an ingredient.
  We all know that making steel and bending steel is a huge cost, and 
most of it's done with heating by natural gas. The furnaces are run by 
natural gas. So our steel industry has paid a tremendous price with 
natural gas, and will continue to pay a tremendous price.
  In fact, the president of U.S. Steel told me a year or so ago, John, 
if you don't get a handle on natural gas prices, we won't have a steel 
industry in America. PPG Industries said the same: if you don't get a 
handle and stop this escalation of natural gas prices, we won't be in 
America.
  And I'm sorry to say that if we don't get a handle on natural gas 
prices and stop the next peaks, where gas gets just unaffordable, we 
will be buying bricks and glass from South America, which has natural 
gas prices a fraction of ours, like $1.25 a thousand, when we are 
currently at about seven and many times on a winter's average it's 
about 12 to 13 when you pay retail price.
  So Russia, China, India, all of our competitors have natural gas 
prices that are a fraction of ours. And so we believe that we need to 
produce clean green natural gas offshore.
  And I'm pleased that a friend of mine from Virginia Beach, from 
Virginia, Thelma Drake, has come to join us on the floor; and we'd 
welcome her comments.
  Mrs. DRAKE. Well, thank you to the gentleman from Pennsylvania 
inviting me to be here with you today. This is such a critical issue, 
and one that I truly appreciate your leadership in the time that I've 
served in the House of Representatives, that this has been your 
passion. It shows to America today, but it's something that is a 
critical need, for our country, for our economic and for our national 
security. And I really want to thank you for the explanation that you 
give to America.
  And I heard you talk just a few minutes ago about Cuba and China, and 
I think that's when America is going to demand of elected leaders, why 
are we blocking the deep sea drilling of natural gas off America when 
Cuba is going to be doing it and selling it to China, right off the 
coast of our Nation? And I really want America to

[[Page 23692]]

watch that and to remember that you've been talking about that for all 
this time.
  One of the things that was painful for me that I learned in working 
with you on your bill this year is the story of Dow Chemical and how a 
company founded in Michigan in 1897 has lost 7,000 jobs since 2002. But 
they're now doing a $30 billion expansion, and 10,000 jobs that should 
be right here in America are going to countries like Saudi Arabia and 
Libya because of the price of natural gas. You can't pay that $14 you 
just showed us if you can pay 85 cents in Saudi Arabia. And that was a 
real driver in the Commonwealth of Virginia.
  Virginia has really made a name for herself nationally on the issue 
of energy because of a study that was introduced by Senator Frank 
Wagner to look at manufacturing in Virginia. And what that study showed 
right away was that an absolute problem was the cost of natural gas in 
Virginia, and that was causing us to lose our manufacturing base. And I 
don't think that we've put that together into our discussions about 
energy.
  But I certainly agree with you, there has to be a comprehensive 
approach to energy. I brought something today to show you that I'm very 
proud of, and I hope you can see it. This is the work of Old Dominion 
University in the Second District of Virginia in Norfolk, Virginia. And 
this is a sample of a biodiesel that's created from algae. They are 
working with our sewage treatment plants; they're using that algae. But 
think about it even in the terms of agriculture and the run-off that we 
don't want in our rivers and in our streams and in our bays, that those 
nutrients, those fertilizers could be used to spur the growth of algae 
to be used in a product like this. So there are so many exciting things 
there, and that's part of what we need to focus on in your bill, in the 
NEED Act, which does make designated revenue streams for alternative 
energies for those future technologies that we need as we move into the 
future. But we also have to think about the needs of today and the 
economy of today.
  And sometimes I wonder, people who fight your initiatives, if they 
understand the impact that it has on our economy. And I just have to 
question that they don't understand the problem that they're creating 
for us in America.
  But the other things, that you have fixed royalties that will go into 
environmental restoration projects, in addition to renewable energy, 
weatherization and energy assistance, gives us funding for that, and 
royalties back to our local governments and to our States.
  In Virginia we all know our number one issue right now is 
transportation and how we fund that. This would give us a designated 
stream that wouldn't put an additional burden on our taxpayers.
  And critically important to us in the Second District is that the 
legislation will target 5 percent, roughly $20 billion, of funds that 
would go towards the restoration of the great natural resource of our 
Chesapeake Bay. That fully funds the estimate we've had from our 
Chesapeake Bay Commission for what it would take to restore the bay.
  And what's interesting is that this is gas only. We need to make sure 
that we have that discussion. You mentioned Exxon Valdez. My numbers 
are that you're 13 times more likely to have a spill moving product in 
by tanker.
  But we're talking about natural gas. We're talking about nothing that 
would have an impact on our environment, but would have a huge impact 
on our economy and our national security.
  It also puts our States in control. So thank you for that, that 
States would make the decision of, during that first 100 miles, of 
whether to be in or out of this program.
  So I want to thank you for letting me join you. I want to thank you 
for your leadership. I want to thank you for continuing to be the voice 
that says this is a crisis in America. We can no longer continue to be 
dependent on foreign sources of energy. With the technologies that 
exist today, we need your legislation; and thank you for telling 
America about it.
  Mr. PETERSON of Pennsylvania. Let me just ask you a question: Weren't 
you surprised in the debate last night that the media didn't ask one 
energy question, as if energy is not an issue?
  Mrs. DRAKE. I am surprised. I think it is one of the top five issues 
in America, and that's energy, and I was very surprised by that.
  Mr. PETERSON of Pennsylvania. As we look at the chart that we have in 
front of us, it's called the NEED Act: $150 billion will go to 
producing States, with an incentive for them; $100 billion will go in 
the U.S. Treasury, $32 billion for renewable energy research. Now, 
that's real money for renewable energy research: $32 billion for carbon 
capture and sequestration research, which is the big issue of the day, 
unfortunately, getting more play than energy availability and 
affordability. And I'm going to say this: if carbon sequestration is a 
bigger issue in this Congress than energy availability and 
affordability, this country will not compete. We have to have 
available, affordable energy. And the advantage of clean natural gas is 
it has a fraction of the carbon of the other fossil fuels. It's the 
clean green fuel. It's about a third of the carbon of all the other 
fuels. So clean green natural gas. But it has to become affordable and 
stably priced.
  For the Chesapeake Bay, $20 billion, $20 billion for the Great Lakes 
restoration, $12 billion for the Everglades, $12 billion for the 
Colorado River, $12 billion for the San Francisco Bay, and $10 billion 
with LIHEAP and weatherization. Weatherization of course is an 
important component there because it helps poor people make their homes 
energy efficient.
  We're joined by the lady from Tennessee. We're delighted to have you 
with us today.
  Mrs. BLACKBURN. I thank the gentleman for yielding, and I thank you 
for the work on the House Energy Action Team and the leadership that 
you have provided there on this issue, and for your consistent message 
that I think most Americans share with us. They understand that fuel 
sources are abundant in this Nation. The problem is they're restricted. 
And there is so much regulation and so much red tape that you have to 
go through in order to arrive at a utilization point for those fuel 
sources.
  Now, we've just come past the second remembrance of Katrina. And as 
we have done that, and as I spent some time down in the gulf coast 
region during August, so many people would say, you know, it's amazing 
to me that the Federal Government has not made significant changes in 
putting refineries, in opening other resources. We're still centered 
around here, and the hurricane season is coming. And that causes people 
to say, I question you for what you have not done. And we hear that 
from our constituents. And I question you about the price at the pump, 
because they now understand that a lack of refinery capacity in this 
country, overregulation of refineries, restricted access to fuel 
sources, yields a higher price at the pump for transportation fuels. It 
yields a higher mark on the bill when they get it for their home 
heating oil, for gas for their home, for electricity for their home. 
They understand this. And I fully believe that the liberal leadership 
in this House will have to answer to the American people for the high 
cost to consumers.

                              {time}  1515

  And that's the first point that I want to touch on today. As you look 
at what was passed in the energy bill they brought forward that really 
has no energy production in it, it just deals with all these global 
warming measures or conservation measures at some point but not really 
with energy. Just looking at the cost of government-mandated 
efficiency, now, if I have ever heard an oxymoron, that is probably is 
it. Government-mandated efficiency. It's not driven by consumers, it's 
not driven by innovators, but by the government saying reach this mark.
  What we are seeing is that the new appliance efficiency standards 
have raised the cost of a good top-loading washing machine, which is 
the kind I still have in my house. The kind I

[[Page 23693]]

choose to use is a top loader. They have raised that to over $900. And 
that is not according to you or me or the Congressional Budget Office. 
That is according to Consumer Reports. And we know that if the Senate 
had their way, then it would cost even more. So on our appliances, the 
mandated efficiency standards are going to end up costing our consumers 
more when they go to make that purchase.
  So the gas to get in the car is going to cost them more. The 
electricity to power the computer is going to cost them more in order 
to get to the purchase point for that appliance that is going to cost 
them more.
  Mr. PETERSON of Pennsylvania. Reclaiming my time, it's interesting. 
Here I have a chart in front of me that I have not seen before but I 
found very interesting today. Twenty percent of our electricity now is 
produced by natural gas, and that has been the big user of natural gas 
that has really forced natural gas prices up because we changed that 
about 12 years ago. Prior to that you were not allowed to use natural 
gas to make electricity, only for peak power in the morning and evening 
when you have this surge. A gas generator you can turn off and on, but 
a coal plant you can't. A nuclear plant you can't.
  But here is the current cost of electricity: Nuclear electricity 
costs $13.54 a megawatt hour. Coal costs $20.80 a megawatt hour. 
Natural gas, $49.51 a megawatt hour. Nonhydro, which would be wind and 
solar, costs $68 a megawatt hour. And the reason for that is that we 
all wish that wind and solar would produce a lot more energy than they 
do, but the wind doesn't always blow and the sun doesn't always shine, 
and when it doesn't shine and it doesn't blow, you have to have another 
system that you've paid for like a gas generator that you can turn on 
or turn off as the wind blows or doesn't blow and the sun shines or 
doesn't shine, because we have not yet been able in batteries to store 
this energy, or in some sort of a heat tank, to where we use it later. 
We have researched with billions of dollars and we will continue to 
research, but those are very expensive forms of electricity.
  Mrs. BLACKBURN. The gentleman is exactly right on that. They are 
expensive forms of energy and electricity. And one of the other 
components to that, in our Select Committee on Environment and Global 
Warming today, we had a hearing dealing with carbon emissions and 
carbon offsets and the cap and trade system that Europe is currently 
involved in to meet their Kyoto protocols. Well, the interesting point 
of this is if you were to enact some of the sequestration encaptured 
for CO2 emissions, what we are seeing and what we are 
hearing from some research is that this could end up raising a 
household electric bill $40 a month.
  Now, what we do know is we have a lot of Americans that would not 
take kindly to seeing government mandates increase their electric bill 
every month while we are still not sure if our CO2 emissions 
are causing the Earth to warm or if it's cyclical. Is it just part of a 
natural scientific cycle that our wonderful world goes through? We have 
times of cooling and times of warming.
  So there are lots of questions that are around this issue, and before 
we make hasty decisions, one thing we need to do is be certain that we 
tend to what we know is on our plate; that we tend to, first of all, 
address lowering the restrictions on our domestic sources of energy, 
making certain that we can avail ourselves of the oil, of the gas, of 
the coal that we have domestically, making certain that we are doing 
the right type of research and looking for alternative sources, making 
certain that nuclear is available for our power generation. As you 
said, the least expensive, the cleanest form of electric power 
generation is the new nuclear. And I will ask the gentleman to 
reiterate those statistics.
  Mr. PETERSON of Pennsylvania. Yes. The cost for nuclear is $13.54, 
and there is a new nuclear. Coal, $20.80; natural gas, $49.51; and 
nonhydro, $68. Now, we need them all for the portfolio, but we have to 
have affordable, available energy or Americans won't have jobs. In my 
view, energy costs are the biggest job killer in America and have been 
this decade. We blame it on other things, but the cost of energy since 
it has spiked has stayed there, and we now are at a high plateau where 
future spikes are coming. We just need a storm, we just need a country 
to topple, and we'll have $100 oil. And we know $100 oil would be $4 or 
more for gasoline. We understand that.
  I yield to the gentlewoman.
  Mrs. BLACKBURN. I thank the gentleman for yielding. And he is exactly 
right about the cost and comments about the portfolio. And I think that 
many of our colleagues would be interested in seeing what the balance 
is in our portfolio as to where we are pooling our energy sources. And 
you are right. A well-balanced and appropriate portfolio is going to 
have many different components to it. Just as with trade, we are going 
to see many different components in that. We are going to have an 
opportunity to look at how trade affects this.
  And you have just put a poster up about our trade deficit, and we 
certainly can see where we are fitting in here with some of our natural 
gas and our petroleum and petroleum products and what that means to our 
trade balance. And at the same time as we look at trade, we look at the 
portfolio that we have stateside and look at what is contained in that 
portfolio, and you are exactly right to bring those issues forward.
  I will just say I thank the gentleman again for yielding. I do think 
that as we look at this issue, the cost to consumers and the effect on 
our GDP has to be considered as well as moving forward. The gentlewoman 
from Virginia mentioned a biodiesel alternative, algae, and we know 
that for carbon capture, sometimes that is used to help spur the growth 
of that algae that is then turned into biodiesel. So you are using an 
unwanted byproduct to create an item that can be the genesis for an 
alternative fuel, making certain that we open up American energy 
resources for American energy solutions. Our domestic energy supply is 
abundant. And then in order to capitalize, to be resourceful and 
utilize that, making certain that we are spurring American innovation 
to find those solutions.
  And, again, I thank the gentleman for yielding.
  Mr. PETERSON of Pennsylvania. I thank the gentlewoman from Tennessee 
for her comments and for coming down and sharing today.
  I think the number one issue we need in America is to have a strategy 
to open up the Outer Continental Shelf for natural gas first, and, 
further on out, hopefully down the road, oil, because we need both.
  Natural gas, though, is a clean, green fuel that is low in carbon 
emissions. It's not a nitrous oxide problem. It's not a sulfuric acid 
problem. It's a clean, green fuel. And why we have not utilized it as 
the bridge I find hard to understand. We have had a presidential 
moratorium and a congressional moratorium for 26 years. The only 
country in the world to do that.
  We talk a lot about Brazil's ethanol. Ethanol is part of their 
portfolio, but Brazil also opened up their Outer Continental Shelf and 
are now producing lots of natural gas and lots of oil offshore, so they 
are energy self-sufficient, with ethanol being a piece of it.
  Now, they make their ethanol out of sugarcane, which is far less 
costly because we have a two-step process. We have to change the starch 
in corn to a sugar and then we change it to alcohol, which is the fuel. 
So we have a dual process, and it takes twice as much energy to do 
that. The production of ethanol is a high-energy consumer, probably as 
much energy as we produce, but it is trading foreign imports for 
American made, so I support it.
  Now, the push at the White House has been for cellulosic ethanol, 
which I am in support of too, but it is still, unfortunately, in the 
test tube. The President was here on the floor talking about it last 
February, and a few days later I was told that he asked to go see a 
plant and, unfortunately, there wasn't one. He had to go to two 
laboratories to where it is being studied. And cellulosic ethanol will 
be made out of any plant life that is decaying. It could be garbage 
from our garbage stream. It

[[Page 23694]]

could be grass like switch grass and other kinds of grass. It could be 
cornstocks or peapod waste or any kind of waste stream from our food 
supply, or it could be cellulose from wood, any kind of woody waste. 
And you then make alcohol as you ferment that. Now, hopefully, that is 
going to be more cost-effective and will not be competing with our food 
supply. And I commend the President for producing that, but I think we 
need to do a number of things.
  First, we need to expand the conservation wise use of energy. If 
Americans were told up front where we are with energy availability and 
affordability, I think each and every American will do something to 
conserve and more wisely use energy. But I don't think Americans have 
been adequately informed. I think the press have been very negligent. 
But, of course, Congress and the White House have been negligent about 
talking about this issue. The press certainly have not had it on their 
agenda and have not often asked it in the presidential debates, and we 
hope that will change. We mustn't waste energy.
  Recently here in the House we had an initiative that the Capitol 
complex would be less heated by coal and more by gas, and that was a 
carbon statement. That bothered me a little because if everybody in the 
country, if every government does that, all Federal agencies do that, 
State governments do that, universities, and some universities have 
already done that, if they all switch from coal to gas, we are going to 
put more pressure on natural gas and increase the shortage of natural 
gas and increase the price. What disappointed me was that was the first 
initiative to have a wiser energy use for Congress and the complex we 
house, all the buildings we work in. But every window in all of these 
buildings is still a single-pane, leaky window. Not one energy-
efficient window has been put in. It seems like we ought to keep the 
heat in and the cold out before we change fuels.
  We need to assist companies and individuals who use a lot of energy 
with using energy more wisely. That is a government educational 
process. We need to open up the OCS. We need to open up the Outer 
Continental Shelf for the production of energy, specifically natural 
gas. We need to open up more of Alaska and more of the West for oil 
production.
  The President has funded six pilot plants for cellulosic ethanol. I 
have been urging them to fund six pilot plants that take coal and make 
liquid fuels. That is a German process. When we blockaded Germany 
during World War II, they made their fuel out of coal. The fissure 
tropes process, several other processes that have been developed in 
this country, there are ways to do that. You can make natural gas out 
of coal. But for some reason, there has been a reluctance in this 
Congress and a reluctance in this administration to use coal, our most 
abundant fuel, for liquids and for natural gas, thus lessening our 
dependence on foreign, unstable countries.
  We need to figure how we speed up nuclear energy. Nuclear energy is 
safe. France is, I think, approaching 80 percent nuclear energy for 
their country, the production of electricity. We had a process here 
that took, I think, 10 years for a permit. We downsized that in the 
energy bill to 4 years to permit and 4 years to build, so we now have 
an 8-year process to build a nuclear plant.

                              {time}  1530

  One of the problems we're having is that many of the components that 
are needed in the energy plant have to be bought from foreign countries 
because in America we don't make the castings to make a nuclear power 
plant any longer. We're buying those from Japan. I'm told a lot of the 
other portions are coming from Germany. We no longer have the 
technology in-house. I find that scary.
  We must expand the use of clean coal technology. We have the 
fluidized bed process that we use in Pennsylvania to burn waste coal, 
the dirtiest, nastiest coal, and burns it cleanly. And if you burn good 
coal with the fluidized bed process, and if you incentivize the 
building of new plants to replace the old plants, but it's almost 
impossible in America to permit a new coal plant. We have put coal off 
limits. So we're not going to use it for liquids, we're not going to 
use it to make gas and we're not going to use it to make electricity. 
And we're not going to open up the Outer Continental Shelf for oil.
  Folks, we cannot conserve our way out of the energy crisis in 
America. We need to conserve. We need to use energy very wisely. But if 
we don't have an energy plan for available, affordable energy for 
America, I will guarantee you that within a decade, we will not be the 
superpower of the world; we will not be a front-runner nation. We will 
be a second-rate nation.
  We have huge competitors today. America has never had Chinas and 
Indias nipping at their heels taking away business every day. Those 
companies have energy plants. They're building nuclear plants. They're 
building hydro plants, dams. They're building coal-to-liquid plants. 
They're doing it all. They're acquiring rights to oil fields that have 
historically been ours. They have a plan for energy availability and 
affordability.
  Yes, Americans must conserve and use energy wisely. But Congress and 
this White House must have an energy policy that says we're going to 
have available, affordable energy. And in my view, at the front of the 
pack should be clean green natural gas. And our bill, the NEED Act, 
opens up the Outer Continental Shelf after 50 miles. We give the States 
control of the first 50. The second 50 will be open to natural gas 
only. And the States will have the right, with their legislature 
passing a bill to say they don't want it open. The second 100 miles 
will be open for natural gas only. That gives the States control of the 
first 100 miles for clean green natural gas. We think we ought to be 
producing more than that, but we're struggling to get clean green 
natural gas.
  So we say offshore should be our first initiative. We should have 
coal-to-liquid plants being built online so we can refine that process. 
We need to be promoting more nuclear. We need to have all the 
renewables that we can produce; but, unfortunately, there are only a 
little bit over a percentage today. And many people are holding that 
out as the answer. I wish that was the answer; I would be all for it. 
But those that are telling us that we can conserve and renewables will 
be our energy portfolio are not being honest with the American public.
  Just to show you, just a few months ago a bill was introduced in this 
body that said, if a bird or a bat is found at the foot of a windmill, 
it would be a criminal act. And that same day I think the Wind 
Association, and God bless them, I'm for them, but they stated that we 
would be at 20 percent of the energy portfolio in a very short time, I 
think in 10 years. I wish that was true, but it's not true. We can't 
get there that quick. The wind only blows a portion of the time, and we 
have not been able to store the energy and keep it and use it later. It 
only blows part of the time. We have to have a redundant source, clean 
green natural gas, and a complete portfolio for America so we can have 
jobs in America, so Americans can heat their homes, run their 
businesses, and compete in the world economy. We can compete with 
anybody if we're given a fair shake; but we must have available, 
affordable energy if America is going to continue to be a leader of the 
world.

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