[Congressional Record (Bound Edition), Volume 153 (2007), Part 2]
[House]
[Pages 1639-1645]
[From the U.S. Government Publishing Office, www.gpo.gov]




                          ENERGY INDEPENDENCE

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
today, the gentleman from Texas (Mr. Conaway) is recognized for 60 
minutes as the designee of the minority leader.
  Mr. CONAWAY. Madam Speaker, it is great to be here tonight.
  Wow. I came here planning to talk about H.R. 6, which was passed this 
afternoon, but not knowing how much time our colleagues across the 
aisle were going to take, I was instructed to get here quite early in 
order that if they quit ahead of time that we might lose our hour. So I 
have sat here for the last, almost 45 minutes, and listened to my 
colleagues.
  It must be great, it must be wonderful to be so smugly self-confident 
to know the answers unequivocally. Things going on in Iraq are anything 
but clear-cut. We have some tough things going on ahead of us. I think 
there is a phrase that describes what really bothers me the most, and 
that is the classic, if I had known then what I know now, I might have 
taken a different course. Well, who wouldn't say that?
  It is just amazing to watch folks flee to the sidelines of this fight 
and say it is all yours, Mr. President, this is all your deal; and we 
are smugly confident to know that you are doing it the wrong way and 
our plan is to flee Iraq immediately. And all of the evidence to the 
contrary, that Iraq would become a disaster of biblical proportions, 
they simply ignore with a cavalier attitude that just amazes me.
  They continue to ignore the fact that since 9/11 we have not had a 
terrorist attack on this country, and I think that comes from several 
factors. One, we have some really wonderful men and women standing 
between us and the bad guys. Whether it is in uniform, whether in the 
intelligence services, or whether it is in the black operations all 
around this world, there are great men and women putting their lives on 
the line so that that has not happened. And they have done a great job.
  We are working real hard here at home at Homeland Security and 
elsewhere to make sure that doesn't happen, but I am afraid we have 
also been lucky that that has not happened.
  We heard some comments this morning from an expert in jihadists. She 
breaks down the Muslim religion and Muslim group into moderates, who 
make up about 80 percent of the Muslim population of the world, and 17 
or 18 percent would be referred to, in her vernacular, as Islamists, 
who are kind of in between; and then there is that 1 or 2 or 3 percent 
she referred to as jihadists. Those are the ones that perpetrated 9/11, 
and may not have had a hand in 9/11 but cheered and danced in the 
street. And those are the ones whose intention it is to kill Americans.
  They hate us for who we are and the freedoms that we have. And they 
are still coming to get us. And all of the rhetoric to the contrary 
that this would be a great wonderful world if we would just simply grab 
hands and sing Kumbaya is like the little guy walking by the cemetery 
in the dark, late at night, whistling to beat the band just to try to 
keep himself from getting his pants scared off.
  It is unfortunate we are at this point with respect to the debate, 
and I am quite frankly saddened by it. It is unworthy of us to be 
setting ourselves up to say I told you so; the Monday morning 
quarterbacking. The second-guessing is just legion among the squad who 
is, with hindsight, with the ability to know things didn't work, yet 
who at the time supported the program and supported the President, to 
now come back and cast these horrible aspersions against him and his 
intelligence squads and all the other things.
  Yes, mistakes were made. No doubt about it. Mistakes are made in 
every war. But, you know, I think I will move on to something that is 
maybe a little better to talk about.
  Another sad day. Today, on this floor we did something I didn't think 
was, A, possible or legal, but we did it, and I

[[Page 1640]]

will walk you through it. We passed H.R. 6 with about a 100-vote 
margin, which I suspect the folks who voted for it will crow that it is 
a giant bipartisan bill to make this country less dependent on foreign 
crude oil and natural gas.
  In fact, the preamble to the bill says that the intent of H.R. 6 is 
``to reduce our Nation's dependency on foreign oil by investing in 
clean, renewable, and alternative energy resources,'' et cetera, et 
cetera, et cetera. Quite frankly, it doesn't do any investing in that.
  This bill's preamble is false because it simply sets aside the money 
taken away from the folks who are trying to provide crude oil and 
natural gas to this country and puts it into a slush fund to be spent 
by who knows who in the future on things we don't have a clue about. 
But their intent is, I suspect, straightforward when they talk about 
that.
  Would that this bill even came close to doing even that modest a 
statement. It doesn't.
  The one thing that most of my colleagues and I on both sides of the 
aisle agree on, and most Americans, most folks in my District 11, who I 
represent, is that we are far too dependent on foreign sources of crude 
oil and natural gas.
  I grew up in west Texas, and still make west Texas my home. It is one 
of the oil and gas capitals of the United States, and so I am 
unabashedly in favor of crude oil production and natural gas 
production. It feeds my family, in some instances, and fed me growing 
up. So I don't make any apologies for being in support of crude oil and 
natural gas.
  I heard a new phrase today during the debate. One of my colleagues on 
the other side talked about foreign and polluting sources of crude oil 
and natural gas and fuels. What I would say to my colleague is that his 
righteous indignation would be a little more sincere if he would come 
to me and say, I have committed to either getting to and from my 
district by walking, I am going to ride a horse, a bicycle, a horse-
drawn carriage, or I have come up with some new conveyance that does 
not use any fossil fuels, non-electric cars, some sort of a new non-
fossil fuel way to get here as the first step on making that happen, 
because I feel so offended by the use of fossil fuels that I am going 
to begin to take those steps.
  If my colleagues would begin to say that, then their disdain for the 
oil business and all the wealth it has created in this country, all the 
solutions it has provided would be a little more understandable.
  Yes, there are problems with it, and we ought to be dealing with 
those in a straightforward manner. But that seems to be lost on the 
folks who on the one hand drive their cars, ride in their airplanes, 
and at the same time insult the domestic oil and gas industry of this 
country.
  And it is an insult, quite frankly. Just look at the title to section 
101, the short title, ``Ending Subsidies for Big Oil Act of 2007.'' 
What is Big Oil? It is not defined in the act. It is just one of those 
pejorative terms thrown out there by the folks who drafted this bill, 
which, by the way, had no Member input into this bill.
  And I am going to try to keep the whining about process to a minimum 
and just whine about the bill itself, but this is a staff deal. So at 
least the staff think the name Big Oil is pejorative, maybe the Members 
don't, but those who voted for it certainly agreed to that. So they are 
disdainful of the oil and gas business.
  Back to what we agree on. From the President down to anybody that you 
talk to, all of us want to be less dependent on foreign sources of 
crude oil and natural gas or, in fact, totally independent of those 
sources.

                              {time}  2045

  Well, that road to independence is decades away. And between here and 
there, that road is paved with fossil fuels. That road is driven by 
crude oil and natural gas, and it is going to be a combination of 
domestically produced crude oil and natural gas and foreign sources of 
crude oil and natural gas because we consume 21 million barrels a day 
of gasoline, and whatever our imports are, about 65 percent of that is 
foreign sources. So I think most folks recognize that an immediate 
cessation of importing foreign crude oil and natural gas is not in the 
cards, not only in the short term, near term or really long term as we 
go about trying to become less dependent on fossil fuels, less 
dependent on foreign sources of that crude that we are headed to that 
path.
  I would also argue that every single barrel of domestically produced 
crude oil and every MCF of natural gas makes us less dependent on 
foreign sources. That is just one more barrel that we didn't have to 
import. That is another 50-plus dollars that we didn't send to some 
country that may hate us. It is another $6 an MCF of natural gas that 
didn't go somewhere else.
  And so, why, for goodness sakes, would we want to intentionally 
inflict financial harm on the folks that are producing the crude oil 
and natural gas from domestic sources? It is counterproductive in the 
extreme.
  And so when you talk about reducing our Nation's dependency over some 
period of time, since we recognize we are going to have to have crude 
oil and natural gas, then by reducing the domestic production of crude 
oil and natural gas, you have, in fact, increased the foreign source 
requirements of that crude oil and natural gas. And so that is what 
this bill does.
  Now, does to do it in a way that is going to destroy the economy or 
destroy life as we know it? Not likely. This economy, these producers, 
are incredibly resilient and in spite of all of our predictions of doom 
and gloom on the one hand, in all likelihood this will have an impact 
on it. But there will be great men and women working hard every day in 
the oil business to overcome the challenges that we have put in front 
of them tonight with the passage of this bill in the House. We will 
see, of course, whether or not our colleagues in the Senate take this 
up.
  The one disappointing thing about this bill is that as it talks 
about, they call it clean, renewable and alternative energy sources, it 
clearly ignores clean-burning coal technology, as well as nuclear 
power. Most folks who understand the need for energy in this country 
and understand the scope of energy and the scope of how that energy is 
produced would acknowledge that clean-burning coal and nuclear are two 
major and significant sources of energy for this path that we are on to 
try to get to where we have weaned ourselves off of crude oil and 
foreign crude and foreign natural gas. It is ignored in this bill.
  Now, I know I heard earlier this afternoon, the chairman of the 
Natural Resources Committee, in his mind, alternative energy sources is 
coal, but it is a fossil fuel; and I am hard pressed to understand that 
clean-burning coal fits into the generally accepted definition. So I am 
disappointed that he was not able to, well that is right, this didn't 
go through his committee. So he had no opportunity to make that 
clarifying statement in the committee where the chairman has great 
sway, whether you are the Republican or Democrat. If you are the 
chairman of a committee, you have got great control over the bill. And 
had it been through his committee in the regular order, my guess is, 
given West Virginia's coal production, that my good friend would have 
clarified that the money that is confiscated from producers out of this 
bill would have been used in the clean-burning coal arena to help us 
wean ourselves from crude oil and natural gas.
  Let me talk a little bit about the specifics of what this bill does. 
Back under the Big Oil category, let me talk about what that did. That 
is simply a tax increase. Most businessmen and -women understand that 
taxes on businesses go up and they go down, they go up, they go down, 
so a 3 percent increase in the tax rate on businesses is not something 
that is going to destroy any single business, I wouldn't expect. But it 
is cash flow that would have otherwise gone into their business. And in 
this instance, their business is producing crude oil and natural gas.
  Statistics show that the small producers who are impacted by this 
provision reinvest about, in 2005, reinvested

[[Page 1641]]

617 percent of their profits back in the ground. Let me make sure you 
understand that. If they made a dollar out of their businesses, they 
borrowed $5 and put $6 back in the ground.
  Now I would give you the statistics from 1999 to 2005, but it is 
embarrassing. It is 898 percent. And so these are folks that take that 
money that they earn, taking the risks of drilling for oil and gas. And 
I am going to be joined here in a few minutes by a colleague who fed 
his family for a while owning a service company in the oil and gas 
business, taking the risks that are inherent with all the oil and gas 
exploration, all of the regulatory burden with trying to produce crude 
oil and natural gas and making money with it and turning that money 
back into additional activity.
  That 617 percent provides additional jobs, because you spend that 
with drilling contractors; you spend it with service companies, some 
large and some small, some mom and pop organizations. In fact, my dad 
and mom owned an oil field service company for the last 25-plus years 
of my dad's career. They spent it with folks like him, who he also 
hired folks, and so that is how that system worked.
  What section 102 does is to change a section of the code, section 
199, which, back in 2003 when America was losing jobs, particularly 
manufacturing jobs, the Republican Congress in place at the time said, 
we need some way to incent manufacturing jobs because most 
manufacturing jobs have better benefits and better pay than service 
jobs, particularly entry-level service jobs.
  Now, you know, lawyers and accountants and doctors and others are in 
service business and they make really good money. But the bulk of 
service jobs are such that they don't make as much money. But 
manufacturing jobs, by and large, really are important to this economy 
on a go-forward basis.
  In fact, back in 2003, Speaker Pelosi said manufacturing jobs are the 
engines that run the economy. These are good jobs. They give working 
families high standards of living. So even our current Speaker agreed 
that to incent manufacturing jobs to stay in this country was an 
important thing to do. So that is what section 199 of the code was 
intended to do.
  The net effect was to take the corporate tax rate which, on C 
corporations is 35 percent, and over its implementation time frame 
would lower that rate about 3 percent to somewhere between 32 and 33 
percent, meaning that those manufacturing jobs would have that 3 
percent taxes that instead of coming to the Federal Government and 
having the 435 of us spend it, the companies would spend that money 
themselves. And with respect to the oil and gas business, they would 
take that money and multiply it by, from 200 percent to 600 percent for 
the small companies with additional activity, additional jobs.
  Now, by definition, oil and gas production was considered to be 
manufacturing under the definition that was put in place. Now, under 
the ending subsidies for Big Oil, every single oil company, the 
companies that produce the largest average daily production down to the 
smallest daily production, if they are a C corp, are impacted by this. 
So I guess by impact, we will have to assume, my colleagues on the 
other side's definition of Big Oil includes every oil company, just 
because that is how this impact will be. This impacts every single oil 
company that is in that business.
  And again, I said taxes go up, taxes go down. But the net effect on 
this is that there is less money for these companies to spend in the 
oil business drilling, producing, completing all the things that go on 
to produce additional crude oil and natural gas which, again, as I said 
earlier, limits our need for imported crude oil and natural gas. Every 
single barrel is a barrel that we have not had to buy from somebody who 
really hates us.
  There are a couple of other tax provisions that, whether the 
amortization period should be 5 years or 7 years or 3 years, reasonable 
people are going to differ on that and it is unfortunate that we have 
made that change, but that was not one that I think anybody is 
necessarily going to fall on their sword over.
  Let me talk a little while about the most insulting piece of this 
entire piece of legislation, and that is referred to under section 201 
as the Royalty Relief for American Consumers Act of 2007. Now, just the 
title would mean that apparently American consumers are paying 
royalties. That is not the case, and so the title is flawed.
  I had introduced an amendment that was not made in order for reasons 
you will see here in a minute when I quote it. My better title, my 
amendment would have given this thing a little more descriptive title 
to the bill than the Royalty Relief for American Consumers Act, which 
is meaningless, except the individual terms have meaning, but in 
context of this bill they don't have much meaning.
  The title is far more descriptive of what the impact of title II does 
on our oil producers, is the Congressional Abrogation of Contracts 
Using Blackmail Act of 2007. That is much more descriptive of what 
section or title II in these following sections do as a result of this.
  Let me set a little bit of the history for you. There are always 
going to be ups and downs in the oil business, not to be confused with 
drilling for oil and gas, but nevertheless there are swings in the 
economy. There are swings in oil and gas, and sometimes it is great to 
be in the oil business and other times it is not really good to be in 
the oil business.
  One of those times that was particularly bad to be in the oil 
business was 1998, 1999 when the price of crude oil, sweet crude was 
about 10 bucks a barrel. Sour crude was $7.50 or less per barrel. And 
so at that point in time, companies were coming to the Federal 
Government to lease offshore leases in the Gulf of Mexico.
  Now, again, the price was 10 bucks a barrel, 12 bucks a barrel. 
Contrast that and today. This is 1998 and 1999. I lived through that 
time in west Texas. We had a march on the Capital led by some folks who 
demanded that the Texas legislature do something to try to help the oil 
business. There were thousands and thousands of jobs lost in the 
economies of west Texas and throughout the oil business as a result of 
those low prices. It was almost impossible to make money at that price, 
and folks were being laid off. Rigs were being stacked and not 
utilized, and it was one of those bottom down times in the oil business 
that happens from time to time.
  So against that backdrop, the Clinton administration, led by 
Secretary Bruce Babbitt, who I assume is a competent Secretary of the 
Interior, offered up leases for the oil and gas companies to drill on.
  Now, when you are trying to decide how much bonus money to pay the 
leaseholder, in this instance the Federal Government, obviously the 
price of crude, the price of natural gas is a significant piece of what 
you are trying to do. Another piece of it is what your share of the 
crude oil will be if you find crude oil or natural gas in the ground. 
Most leases provide for a royalty to the mineral owner. In this 
instance the Federal Government is the mineral owner. But given the 
circumstances of the day, there is some fuzziness as to why this 
happened. But the leases issued in 1998, 1999, which would have 
normally had a royalty associated with them, did not.
  Now, I have to assume that there are competent lawyers, maybe some of 
them still there at the Interior Department who worked on behalf of the 
Interior Department to negotiate, in good faith, with the companies who 
were actually wanting to buy these leases or actually wanted to pay the 
Federal Government for the right to drill in the Gulf of Mexico in an 
environment which is very difficult to drill.
  I have to assume, since we have not seen any malpractice suits, we 
have not seen anybody lose their law license, that these guys were 
doing the job they were told to do. The companies were represented by 
reputable lawyers, and a deal was struck. In effect, the Federal 
Government shook hands with these companies and said, here are the 
leases. Here are the terms. Here is what you need to do. And go forth

[[Page 1642]]

and drill. 1998, 1999. $10 a barrel crude oil.
  Well, today, crude oil has been much higher than it is right now. But 
it is still over 50 bucks a barrel last time I checked, although it may 
have dropped some yesterday, and circumstances are radically different. 
Well, the opportunists on the other side see this as a chance to, in 
their view, in their mind, correct something that was done wrong in 
1998 and 1999.

                              {time}  2100

  The truth of the matter is, a deal was struck in good faith by the 
Federal Government, by other companies. These companies should have 
been able to rely on those written contracts to conduct their business.
  This Congress, though, has seen fit to step into the breach to do 
something I didn't think was legal for us to do but nevertheless are 
doing. Most times, when you have a contract conflict or a conflict over 
the terms of a contract, our judicial system is where that is ferreted 
out, where facts are drawn, where rational arguments on both sides are 
presented, where you have a trier of the fact, you have a judge, and 
everybody comes to whatever conclusions.
  That is not how this works on this floor. On this floor somebody came 
up with a good idea that we ought to go get this money, and 260 of our 
colleagues agreed to that idea. I am not sure that everybody fully 
understands that these were contracts that companies should have been 
able to agree to, should have been able to rely on. Most companies can 
deal with taxes going up and down. What companies hate to deal with is 
dealing with a customer, dealing with a partner that you cannot trust.
  We have now placed the United States in that category. We are now in 
league with the conduct of Hugo Chavez, the conduct of Evo Morales in 
Bolivia in terms of how we treat contracts with this Federal 
Government.
  From this day forward, as far as the House is concerned, and, again, 
this may not happen in the Senate, but as far as the House is 
concerned, we are told, at least people in the oil and gas business, if 
you sign a contract with the Federal Government, too bad. Now, we are 
going to hold you to every single term in there, but we on the Federal 
Government side, if we don't like the deal, if the deal changes, if the 
deal looks like it is too good for you, then in addition to taking tax 
money away from you, we are going to impose either a fee or we are 
going to force you to renegotiate these contracts.
  Here is some language that is just unpalatable in the extreme. 
Section 202, the Secretary of the Interior shall agree to a request by 
any lessee to amend leases. A request by a lessee to come in and change 
a contract? That is not going to happen. Since when do you have to 
demand that the Secretary of Interior accept that?
  This is only happening because this law is, in effect, a gun held at 
the head of these lease owners to come in and renegotiate. There are 
some mechanical flaws in this thing that I am not sure was an intended 
consequence. One is that if you are a holder in due course of one of 
these leases, and you sell it to somebody else, you sell all of your 
right, title and interest in it. Then unless that new leaseholder 
agrees to these terms and agrees to this, nonsense, then you are 
forever tainted. You cannot get another lease. That is where the 
blackmail comes in. Unless you renegotiate the lease, you cannot get 
another lease from the Federal Government to drill on Federal lands.
  I know there are a lot of folks who hate the oil and gas business, 
and never drilling on another Federal land is an acceptable public 
policy, but it is wrong-headed if you think that we can continue to 
import foreign crude oil and get to where we want to with respect to 
the energy independence.
  Another problem that is, in all likelihood, is a Republican problem 
as well, back in June we passed a similar concept, a conservation fee 
that is triggered at $34.73 a barrel. Here are the mechanics. If the 
price is above $34.73 a barrel on average for a year, then you owe a $9 
fee on that production. If it is less than that, then you don't owe 
that fee. So you are the business guy, you are the guy that is 
producing crude oil and natural gas, you have been rocking along all 
year along at $34.70 on average, and so you are not paying that fee. 
You built your business model based on that number.
  Then you get a $.10 increase in the average price over that 
timeframe, and you are now making $34.80. You now owe a $9 fee, which 
drops you back to a $25 gross revenue on each barrel of oil that is 
sold.
  There are many places in the world where business people have to deal 
with that kind of a 25 percent haircut just because something went up 
over a particular threshold.
  A couple of amendments that I offered, then I am going to turn to my 
colleagues for whatever time they would like to take that I offered up 
that seem to be a little more straightforward than my first one. The 
first one would have said there is plenty of uncertainty as to what the 
impact this is going to have on domestic crude oil and natural gas 
production. We all agree that for every barrel that is produced 
domestically is a barrel we don't have to buy from somebody else.
  Given the uncertainty, given the rush to judgment that this was, 
let's have the Secretary of Energy and the Secretary of Interior 
document what the impact is going to be and tell this body for sure and 
for certain that this will not reduce the investment in crude oil and 
natural gas and will not reduce the domestic production that we rely on 
to help wean ourselves off of foreign production. I got turned down on 
that.
  Then the second one was if our goal is to increase domestic 
production while we bring on these other technologies that are decades 
into the future, then let's not penalize the people who are taking the 
money and putting it back in the ground. Let's only have these 
penalties apply to people who are taking the money and giving it to 
shareholders or, you know, some nasty thing like that.
  So folks who reinvest over 75 percent of their net profits would not 
be affected by this. For those folks who are taking the money, putting 
it back in the ground, they wouldn't be impacted by this law; those 
folks who are taking less than 75 percent of their profits and putting 
it in the ground, then they would have to pay these penalties, and they 
would be associated with that.
  I meant to say early on that the chairman of the Rules Committee had 
told us in advance that none of these amendments would be made in order 
and that we were wasting our time and breath, but it seemed like 
something I ought to do.
  I am joined tonight by Steve Pearce from New Mexico. He and I share 
the New Mexico border along a good long stretch. He is also the 
Congressman for my three grandsons, and I am particularly interested in 
him doing a good job on behalf of my three grandsons and my son and 
daughter-in-law.
  Mr. Pearce, would you share with us some of your thoughts?
  Mr. PEARCE. I would thank the gentleman from Texas for bringing this 
important item up tonight and will enjoy the opportunity to address it.
  First of all, as we went through the discussions today, we were told, 
I heard that it was not the intent to lower production. It was not the 
intent to harm the American consumer. It was not the intent to defraud 
the contracting process. But I would share with my colleagues that the 
same kind of language had to be used in the first item that came to the 
floor.
  That item, the majority placed an element into the new rules package 
which said that a Member, Delegate Or Resident Commissioner may not use 
personal funds, official funds or campaign funds for a flight on a 
nongovernmental airplane that is not licensed by the FAA to operate for 
compensation or hire.
  Now, when it came up for their own colleagues, they came to the floor 
and just declared in their comments that this was not the intent of the 
provision. But it is the effect of the provision, because they 
absolutely outlawed, they made it illegal to use even your own funds or 
campaign funds or MRA, that is the Congressional delegation funds, for 
private aircraft. So you had

[[Page 1643]]

then Mr. Hastings of Florida say, I want to assure my colleagues that 
this is not the intent of this provision.
  Now, either we are bumping into people who were not quite prepared to 
present legislation to the floor, who are maybe getting bad advice, 
maybe thinking a little bit too quickly, maybe being driven by an 
agenda to bring stuff to the floor, to bring legislation to the floor 
that is a little bit narrowly constructed without the opportunity to go 
to committee.
  But let's take a look at what happened today in this energy bill. The 
first thing they declared was that energy companies are making so much 
profit that they must be declared immoral, that we must take back some 
of that money. We heard that over and over and over again today.
  But I would like to take a look at a chart here that begins to break 
down the cost of petroleum versus the cost of some of the other items 
take we have.
  The cost of oil, today, is $52 per barrel. The cost of bottled water 
is $409.50 per barrel. The cost of American beer is $448 per barrel. 
The cost of ice cream is $934 per barrel. Nail polish rings up an 
amazing $75,264 per barrel.
  So we have to ask how it is that we are declaring too much profit is 
being made? I heard today that oil companies, the top oil companies 
made $96 billion in profit. Yet when I look at Microsoft in just this 
past year, it was $36 billion just by itself.
  If we are going to make it wrong, if we are going to simply set up 
the class struggle between companies that make extraordinary profits, 
we should look at those that have no investment in large capital.
  When I look at the elements of producing oil that we are describing 
today, I see an investment in a rig that is almost like $1 billion to 
$1.5 billion. Now each one of these components that is made on this rig 
creates jobs, they create cash flow, they create profits for a whole 
range of companies.
  So when my colleagues were saying we need to go up on the taxes for 
these pieces of property, I think that the American consumer is smart 
enough to realize that investors just might choose not to put their 
money into this project.
  If that is the case, then we are going to find that our colleagues, 
in trying to assure energy independence, will, in fact, ensure energy 
dependence.
  Because in America, in the United States, we are driven further and 
further offshore, further and further down into the ground in order to 
produce oil.
  Saudi Arabia produces from a very shallow depth. Some of the wells in 
our district may be 20,000 feet deep. Saudi Arabia could be producing 
from as shallow as 1,000 feet deep. Saudi Arabia already has 
significant cost advantages over the United States production. We have 
tried to encourage this kind of drilling, this kind of production, to 
see that we have as much oil and gas as possible from internal sources.
  Now, our friends have said that they wanted to create incentives for 
the renewable fuels. Then they declared that the previous Congress for 
12 years did nothing. I don't think they absolutely intended to mislead 
the American public on that, but they certainly did.
  Just because of the effects of the Energy 2005 Act that we passed 
from the Republican House, let me read a list of renewable projects 
that have already started or are already showing results.
  First of all, because of that legislation in 2005, 27 new ethanol 
plants have broken ground, 500 million gallons of new annual ethanol 
production is online already, 1.4 billion gallons of ethanol production 
are online by the end of 2006; 401 E-85 pumps, those are the pumps that 
can give you 85 percent ethanol if you pull up and have an engine that 
will burn ethanol; 25 new nuclear reactors are planned, 25,000 
megawatts of electricity will be generated by 2020 if all 25 plants are 
built, 15 million households can be powered from the electricity by the 
25 plants; 116,871 new hybrid vehicles have been purchased since 
January 1 of 2006, so the last calendar year, over 116,000 vehicles 
that are hybrids; there were 2,000 megawatts of new wind power.
  Many of those wind generators went into the second district of New 
Mexico that I represent. Many others lie just outside the district. 
Wind generators are not suitable for all parts of the country, but New 
Mexico is one of the few States that could be self-sufficient on wind 
energy. Very few States are capable of doing that; 493,000 homes will 
now be powered by new wind power.
  Three billion in economic activity is spurred by the wind power 
production. There is 7 billion pounds of CO2 offset by new wind power 
production, 1 million homes that can be powered by new wind power by 
the end of 2006, 100 percent increase in California and New Jersey and 
the applications for photovoltaic systems, 30 percent increase 
nationwide are solar, thermal collector installations. We had 15 new 
efficiency standards implemented for large appliances and 50,000 
megawatts of energy saved by 2020 because of the 15 new efficiency 
standards.
  Now, our friends today said frequently that they were giving comments 
like clean energy policy starts today. Well, they are making the 
implication that nothing was done previously, and such is just not the 
case.
  Mrs. BLACKBURN. If the gentleman would yield, I would like to refer 
back to something that he was saying on the alternative fuels 
development, draw attention to that. I know that the gentleman from 
Texas will agree with me, just as the gentleman from New Mexico has.

                              {time}  2115

  What we are doing is recapping much of what took place in the Energy 
Act of 2005, and in that act, the $8 billion that was set aside and 
designated for alternative fuels development, the reason that was done 
was because the Republican House leadership knew and the Senate agreed 
and the President agreed that beginning some alternative fuels 
development was very, very important. It was something that needed to 
be done. Great ideas needed to be brought to the table.
  I think what the gentleman is saying is so very significant, and I 
want to highlight it because I appreciate so much the fact that you are 
bringing it forward, that whether you are looking at the blended fuels 
and ethanol and biodiesel, all of that is coming on line.
  If I understood the gentleman correctly, what we have seen over the 
past 18 months is generation capacity of these alternative fuels, 
fossil-based fuels and blends. What we are seeing is hundreds of 
millions of gallons available at the retail level every year. This will 
increase every year.
  We will hear more this evening from our dear colleague from Maryland 
about developments in other alternative energies and getting outside of 
the box and thinking outside of that paradigm. But I appreciate so much 
the gentleman highlighting the provisions that were there and shedding 
a little bit of sunlight on the statement that was made today over and 
over and over on the floor of this House, an untruth, whether they are 
misinformed or misdirected or misguided or whatever, that clean energy 
policy would start today. Then what did they do when they voted for the 
energy act that we passed in 2005, because we got that out of Energy 
and Commerce Committee on a bipartisan vote.
  We took significant steps at that point in time, and, as the 
gentleman is seeing, results are being yielded and brought forth.
  Mr. PEARCE. Madam Speaker, I thank the gentlewoman for her comments. 
One of the distressing things about the vote we took today was that not 
only were we setting up kind of an undisclosed fund, a slush fund for 
things that had already been done, the $8 billion referred to by my 
colleague from Tennessee was in the Energy Act of 2005 and was very 
specific. It had incentives for wind, solar, biomass, geothermal, 
hydrogen and nuclear. It had incentives for many of the renewable 
fuels. Those incentives are taking place and those incentives are 
causing developments to take place that are very significant.
  But the very damaging thing about this bill today was it violated a 
constitutional provision that prohibits the Federal Government from 
taking private property. That occurs on page 10 of the bill. Again, I 
would read the excerpts from the bill, line 4 on transfers.

[[Page 1644]]

Basically the language says: ``A lessee,'' and some language in 
between, ``shall not be eligible to obtain the economic benefit of any 
covered lease or any other lease for production of oil or natural gas 
in the Gulf of Mexico'' unless they voluntarily back away from, agree 
to undo these contracts written in full faith.
  If you can imagine an investor, or even a stockholder, having to walk 
away from an investment like this because the government changed its 
standards, the government changed the contracting basis, you would 
understand then why The Washington Post said: ``This House bill would 
break the deadlock,'' meaning the deadlock in this contracting process 
that has been so messed up. ``The House would break this deadlock by 
imposing heavy penalties,'' that is the heavy penalty of walking away 
from that investment without economic return, ``on firms that do not 
renegotiate on terms imposed by the government.
  ``This heavy-handed attack on the stability of contracts would be 
welcomed in Russia, Bolivia and other countries that have been 
criticized for tearing up revenue sharing agreements with private 
energy companies.''
  I would like to share with my colleagues, before I yield back, the 
things that this Washington Post is referring to. For instance, in 
Venezuela in 2006, Hugo Chavez caused royalty rates to be increased 
from 1 percent to 16 percent without renegotiation. In 2005, Venezuelan 
President Hugo Chavez mandated that private oil firms cooperate with 
new contractual changes. Those firms that did not agree had their 
assets nationalized.
  Now, we are not nationalizing these assets, but we are saying you 
have to sacrifice any potential to make economic benefit from that. 
That does not seem American. It does not seem like the way that we want 
to run business in this country, and yet it is what the majority 
presented to us today. They said, well that is an unintended 
consequence, which brings me back to my initial point, that maybe they 
just should have sent these things to committee before they came to the 
floor with such outlandish provisions.
  Bolivia in 2006 threatened to expel oil companies that refused to 
agree to new government terms on already existing contracts. That is 
very similar to what this language in this bill did. If you don't agree 
to the terms in the language here, then you do not get to make economic 
impact from an investment such as this.
  In May of 2006, President Evo Morales in Bolivia suspended 
negotiations and nationalized his country's energy industry. These 
actions were done for short-term increases in revenue from taxes and 
royalties, but foreign investors have canceled almost new projects, 
which will likely lead to massive economic problems in the future.
  Now, if they are going to cancel economic projects in Bolivia because 
of the overturn of existing contracts, I will guarantee you that they 
will do the same in the United States, and they will cancel future 
contracts.
  Russia found the same thing. President Putin made firms agree to 
change existing leases that had been in existence for several years. He 
threatened to pull these leases for suspect reasons. Now he is willing 
to hold all of Europe hostage as he takes these nationalized assets. I 
will tell you that companies will not invest in Russia in the energy 
business in the future.
  These are all problems that this bill today that was passed off the 
floor of the House of Representatives are going to cause. So if my 
colleague would give me one more second, we would run through a chart 
showing what American consumers can expect from this bill.
  First, it sends American manufacturing jobs overseas. The second 
thing that it does is lower domestic energy production, so we are going 
to use more foreign oil, not less. It is going to provide higher prices 
at the pump, $3, $4, $5. Hugo Chavez, the Iranian Government and the 
Russian Government get the handouts at the expense of the American 
consumer.
  American voters need to understand what has occurred in the House of 
Representatives today. I think that they are going to rise up when they 
begin to see the effects on jobs, when they see the effects at the 
pump, and when they see that the contractual basis, the full faith and 
credit of the United States, has been undermined by this piece of 
legislation.
  I thank the gentleman for yielding. If he has additional time, I have 
other comments. But I thank the gentleman from Texas for bringing this 
important issue up.
  Mr. CONAWAY. Madam Speaker, I thank the gentleman for joining us 
tonight. It just occurred to me that the Federal Government has 
contracts with investors all over the world, where we have borrowed 
money from them at interest rates that may or may not be advantageous. 
I wonder if those holders of those bonds and T-notes out there all 
around the world are noticing tonight that if interest rates go the 
wrong way, that this Federal Government set a precedent of simply 
changing them at will. That ought to put a chilling effect on the 
purchase of this money.
  Mr. PEARCE. That is a great point. Let me make one additional 
comment. The very amusing thing is the people that are so critical of 
the contracting process, the negotiation process, are exactly the same 
people that said we should trust the Federal Government, who negotiated 
so badly here, to negotiate in good faith on our prescription drugs. I 
will tell you, it is not congruent. It does not fit any sense of logic 
that I understand.
  Mr. CONAWAY. Madam Speaker, we are also joined tonight by a good 
colleague from Tennessee, Marsha Blackburn. I yield to the gentlewoman.
  Mrs. BLACKBURN. Madam Speaker, I thank the gentleman so very much. 
The gentleman from Texas, being an accountant and understanding what is 
at stake when you talk about changing contracts and changing rates of 
taxation, it is so wise to point these things out for our colleagues 
tonight, and we appreciate that, and also the expertise in the energy 
industry that our colleague from New Mexico holds.
  I have dubbed this the ``hold-on-to-your-wallet Congress,'' and 
indeed I believe it is. To the Americans who are watching us, you just 
better be hanging on to that wallet, because if you are not, they are 
coming to a pocket near you to get every single penny out of it that 
they can wring out of it. They are off in their 100 hours to quite a 
start.
  As we talk about the energy bill tonight, the gentleman from New 
Mexico was recapping what this means and the impact this is going to 
have on the American people, and he is exactly right. The bill that the 
Democrats in the House passed today does not put one more penny toward 
alternative energy development or exploration or alternative fuels. It 
doesn't do it.
  It will not make gas cheaper. Contrary to what you heard on the floor 
of the House today, this is not going to make gas at the pump cheaper.
  It will not increase U.S. production. As a matter of fact, it is 
going to make it more difficult to produce fuels and gas and heating 
oil in the United States.
  Now, the foreign gas production companies and foreign refineries 
probably love the action that was taken here today, because they saw 
House Democrats saying we don't have enough faith, we don't trust the 
U.S. oil industry enough; but we are going to put our attention on 
foreign investment and foreign oil, because indeed what they did was 
make us less dependent on U.S. oil and more dependent on foreign 
sources of oil.
  The Washington Post, the Wall Street Journal and the Washington 
Times, three publications that very seldom agree, all agreed today that 
the bill, H.R. 6, the Democrat bill, was not a wise move for the people 
of this great country.
  So to the gentleman from Texas, and Madam Speaker, I will commend to 
you that indeed this is the hold-on-to-your-wallet Congress. As we have 
heard in this first 100 hours that our friends across the aisle have 
been in charge of this majority, we have had no regular order. We have 
no rules. They did go in and make a change to make it easier to raise 
taxes.

[[Page 1645]]

  As I said, hold on to that wallet because they are coming for it. 
They actually made it easier to raise taxes on the American people.
  They even want to get into committees and not record votes so that 
you will not know what they are doing in the Rules Committee and in 
some of the committees so that you can play both sides of the aisle on 
these issues.
  In addition to the energy bill that was passed today, they also 
passed a bill dealing with student loans. It is not going to do one 
single thing to help get one student into college. They were dealing 
with interest rates after, after, you leave college.
  They decided they wanted to rework a Medicare prescription drug plan. 
Well, do you know what? Over 75 percent of the seniors are satisfied 
with the prescription drug plan; and here they go, they are wanting to 
make that one more expensive.
  With the 9/11 Commission, we heard from our transportation industry, 
from companies large and small that transport goods and merchandise 
that it would be a cost of billions and billions of dollars to the 
American public.
  The minimum wage bill that brought about Tunagate, my goodness, $5 
billion to $7 billion worth of added cost to the small businesses, plus 
our fiasco with Tunagate that was carried forth by the gentlelady from 
California.
  So it has been an interesting 100 hours. They did pass their energy 
bill today; and as has been said, it is not a bill, Madam Speaker, that 
is going to make gas cheaper at the pump, more affordable, or make the 
U.S. less dependent on foreign oil. It will make it more dependent on 
foreign oil.
  I yield back to the gentleman from Texas.

                              {time}  2130

  Mr. CONAWAY. I thank the gentlewoman for coming back from her 
previous engagement this evening to join my colleague from New Mexico. 
We are just winding down. Does my colleague from New Mexico have 
another point or two he wanted to make?
  Mr. PEARCE. Yes. I would comment to my colleagues that a government 
depends on the confidence of the people. We make promises all the time, 
and we are expected to honor those promises if we are going to be a 
good government. We make promises to our seniors. We make promises to 
our veterans. We make promises to our young men and women who serve in 
the military that we will watch out for them, that we will take care of 
them.
  But like the gentleman says, we also make written contracts and 
written agreements. In this bill today, we have undermined the 
contracting process. We have declared that previous agreements simply 
must be renegotiated or you give up all future rights, and when we as a 
country choose to do that, not only do we offend and compromise our 
constitutional protection of private property rights, we undermine the 
confidence in our Nation and in our government.
  This is such a very serious step. It is a step that other Nations 
take very easily and yet is so significant, and yet this major step, 
this change in American policy was done without one single committee 
hearing.
  This bill that was in front of us today, H.R. 6, should have gone to 
four different committees. Instead, it went to none, not one committee 
hearing, and there were new provisions in this bill. There were new 
people on the floor who were elected just this year who have not heard 
the old provisions. I do not disagree with my colleagues who wanted to 
make us energy independent, but they failed in that task, and in the 
process, they have begun to undermine the confidence of this great 
Nation and the great reputation it has for treating fairly those people 
who invest and those people who trust the government.
  Who else will be undercut by actions from the floor of this House and 
the Democrat majority that is willing to take any step to try to 
enforce a new standard while declaring it to be a new way? Instead, it 
is an old, tried way that many other Nations have tried in the past. It 
is unfortunate to see now this Congress and this majority taking steps 
that Russia or Bolivia might have taken.
  I thank the gentleman for yielding time to me.
  Mr. CONAWAY. I appreciate the gentleman from New Mexico being with us 
tonight.
  On the campaign trail and in the town hall meetings throughout my 
brief career, I have talked about Social Security being basically a 
contract with ourselves, a promise with ourselves, that we would not 
break that. From now, every time I talk about that, I will have to 
think about this legislation, have to think about the fact that, wow, 
here is a written contract, much like the written provisions of Social 
Security, much like the written provisions in our veterans' benefits, 
that we tend to keep but here is one that we did not.
  I appreciate both my colleagues coming tonight. Here is one final 
thing. I go through the long list of co-sponsors on this bill. At the 
end of it, it says they have introduced this bill and it has been 
referred to the Committee on Ways and Means, Natural Resources, Budget 
and Rules for a period to be consequently determined by the Speaker. I 
do not think there is a stopwatch fast enough that could measure the 
amount of time that this bill laid before those committees because they 
did not work. So how those committees did meet, how they were able to 
get it through all four of those committees without anything happening, 
without any meeting is one of those well-kept secrets about how this 
process works when you do not have a transparency that a full committee 
process will have.
  As I told them earlier this afternoon, I hope that my colleagues on 
the other side are not so intoxicated with this power that they now 
wield that they continue this process of not having committee hearings, 
not taking regular order, not moving things through in ways where at 
least we can point out the flaws in a format and in an arena in which 
it can be perhaps have an impact on the ultimate legislation.
  So I want to thank the Chair for having us in here tonight.

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