[Congressional Record (Bound Edition), Volume 153 (2007), Part 22]
[House]
[Pages 31284-31290]
[From the U.S. Government Publishing Office, www.gpo.gov]




                        AMERICA'S ENERGY PROBLEM

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 18, 2007, the gentleman from Texas (Mr. Conaway) is recognized 
for 60 minutes as the designee of the minority leader.
  Mr. CONAWAY. Mr. Speaker, we have an hour's worth of comments today 
about an issue that there is little debate, and that is that we have 
got an energy problem in this country. How do we continue to power the 
factories and the plants and the office buildings, hospitals, our 
homes, our cars? How do we continue to use energy? Where do we get that 
energy from? And at what cost?
  There is not a lot of debate these days that we are in fact too 
dependent on imported foreign oil and natural gas, and that is a 
national security issue that I suspect the folks at the Pentagon chew 
on every single day. It is an issue for factory owners and businessmen 
and women all over this country as they look at ways to reduce their 
energy usage, as they look at ways to reduce their costs, their input 
costs on the product that they are trying to manufacture and sell to 
others. That is an issue to every family in this country as they decide 
how to pay for gasoline for their automobiles and home heating oil and 
natural gas to heat their homes or electricity to heat their homes. 
Energy should have a central front in our debate, in our actions, 
particularly in this body.
  Mr. Speaker, there is a story about a fellow who went to visit a 
neighbor. And when he got there, the neighbor was on the front porch. 
So they are sitting there visiting about things, and the neighbor's dog 
is in the front yard, and the dog is just howling to beat the band. He 
is making all kinds of racket. He is just howling. So finally the 
visitor says to the owner of the house, he says, ``What is the matter 
with your dog?'' And the owner looks out there and says, ``Well, he is 
sitting on a cactus.'' And the visitor says, ``Why doesn't he get up 
and get off the cactus?'' And the neighbor says, ``Well, I guess he 
would just rather howl.''
  Well, we are doing a lot of howling in this country today about 
energy. And rather than get up and get off the cactus and do some 
things about it, we continue to just howl and gripe about the price and 
the cost and solutions, and are unwilling to focus and study on this 
issue that is of terrific importance to every household, every 
business, every governmental entity, because they buy fuel as well, 
they buy electricity, they buy power.
  Let me give you a couple statistics. The crude oil December contract, 
the good news, it fell for the fourth time in 5 days to close at $91.17 
a barrel; but the bad news is, it closed above $80 a barrel for the 
40th time in 44 days, 22 consecutive days above 85, and the 14th time 
ever above $90 a barrel. This will ultimately translate into much 
higher gasoline prices.
  Let's talk about home heating oil, which is of grave concern to my 
colleagues in the northeast. The home heating oil for contract December 
did fall for the fifth time in 15 days, down 8 cents, to close at $2.50 
a gallon. However, home heating oil has closed above $2 a gallon for 
the 53rd consecutive day. Home heating oil prices are above a year ago 
prices for the 57th consecutive day, up almost 81 cents. This does not 
bode well for this year's coming winter. We can all hope and pray for a 
mild winter, but that doesn't make for very good public policy. We 
ought to be doing some things today. We should have been doing things 
yesterday, and tomorrow is open to us to do some things. I don't hold 
out a lot of hope for tomorrow, but maybe a few days from now the 
colleagues and I on both sides of the aisle can come to some rational 
conclusions about how do we power plants? How do we heat homes and 
hospitals? How do we drive our cars, and on what fuels? What costs are 
we going to live with as we transition from carbon-based fuels to some 
other based fuels? That has to be a part of the equation. We cannot 
simply just immediately wean ourselves off of crude oil and natural 
gas, because the replacement for that product is not in hand, nor is it 
in hand for the foreseeable future.
  Later on this evening we will talk about some reports that have 
recently been issued by some groups who should get some respect from us 
that the makeup of the energy usage in America 25 years from now, 
carbon-based products of crude oil, natural gas, and coal, will make up 
about the same percentage of that total demand that it does today.

                              {time}  2015

  These projections are done by reputable people and ones that we 
should look at in terms of relying on those as we begin to craft public 
policy.
  So with that, Mr. Speaker, I'd like to yield to my good colleague 
from Illinois, John Shimkus, a member of the Energy and Commerce 
Committee, for some comments that he may have.
  Mr. SHIMKUS. I thank my colleague, and it's great to be here tonight. 
We did a press conference last week addressing some of these concerns, 
and it's good to follow up with a Special Order tonight.
  At the press conference, we really highlighted the issue of when our 
friends on the Democratic side took over the majority, crude oil prices 
were at $58.31 per barrel of crude oil. And when we did the press 
conference of last week, the crude oil price was at $96.65, the price 
of a barrel of crude oil.
  Our issue was that when you have no energy plan, you have, when you 
can't plan, you have, this is the default energy policy of this 
country. The price escalations, as my friend from Texas, the difference 
about the price escalations now is that many times when we saw the run-
up of these, the costs for a barrel of crude oil in the past, it was 
based upon some national emergency, Katrina, pipeline disruptions, 
maybe a refinery fire. What's different about the price escalations 
today is that it's all demand related. So if you, as many of us have, 
have taken Economics 101 in college, maybe in an MBA program, the 
simple law of supply and demand. If you have high prices, and we'd say 
we have high crude oil prices and we're quoted today at $91 a barrel, 
you would think that that would then encourage people to go into the 
business to explore new means of recovery of crude oil so that they 
would bring more supply into the market so that you would lower the 
prices.
  But the policies here in Washington not only prohibit that, but they 
discourage any investment, because when people bring capital to the 
market, they assume risk. And when you assume risk, you assume the 
opportunity of losing it all. And most people in the investor community 
and the business community, all they want to do is if they're going to 
assume risk, they want to try to get a return on that investment.
  So last week we had close to $100 a barrel of crude oil, in 
California $5 a gallon of gas. Now, this is before we even talk about a 
global warming debate and a 50 cent per-gallon tax.
  And as I said last week, so what you now have is we have European 
prices for liquid fuel, but we don't have European distances. I always 
remind my friends, those that want to, well, why shouldn't we have as 
high gas prices as they have in Europe? Well, that's because you can 
put all of Europe on the eastern seaboard. We don't have the distances 
that our European friends do where they can drive across their country 
in 2\1/2\ hours. I can't drive across my district in 2\1/2\ hours from 
one point to another from the far west to the far east. So that's a 
problem that we have in this debate.
  So what we would like to see, we've already moved some energy bills 
on the floor. They're mostly efficiency oriented, the light bulb and 
the light car tires. But what we need to do is we need to focus on 
bringing on more supply, and that should be an energy policy.
  When you have no energy policy, the energy policy of this country is 
$96 a barrel crude oil. That's the default energy policy of this 
country if you do

[[Page 31285]]

not bring on significant amounts of increased supply.
  So what kinds of supplies? All my friends here on the Republican 
side, one thing we have in common, although we will talk about 
different types of supply, is that we're all supply people. We all know 
that you if want to lower costs, you've got to bring more supply on 
board. And so that's kind of the commonality of the focus, because when 
you have more supply, you have lower cost. When you have lower cost, 
that's lower out-of-pocket cost to the individual consumer.
  And the consumers are going to start complaining when they're at $3 a 
gallon of gas, $3.50, especially around Christmastime because they're 
going to be spending that extra money at the pump versus going to the 
store. Then you have an oversupply of toys at the store. We all know 
about the focus on, you know, the Christmas shopping period. High 
energy costs will diminish and dampen the ability of our consumers to 
have a good Christmas shopping season. So that affects the 
manufacturers of all the things that we would like to buy for our loved 
ones at Christmas.
  So how do we address the supply concerns? And again, all of us are 
going to be involved with that. One thing that I've always pushed for 
and always encouraged us to take, look after, is an alternative fuel 
standard.
  When the President was here for the State of the Union address he 
said he would sign an alternative fuel standard. An alternative fuel 
standard would talk about things like corn-based ethanol. It also would 
address stuff like soy diesel, soybeans crushed and mixed with 
petroleum diesel, which is obviously the soybean portion, or the beef 
tallow or the reformulated cooking oil or all things that are 
renewable.
  And then, obviously, we have coal. And now in Illinois alone and in 
parts all over this country, we have a 250-year supply of coal in the 
Illinois coal basin.
  Now, coal can be used for a lot of things. Coal can be used to 
generate electricity. When we have this energy debate, we focus, 
sometimes we all lump it together, and sometimes I like to split it 
apart: part of it would be electricity generation; the other would be 
liquid fuel.
  It would surprise people if they knew that 50 percent of the 
electricity generated in this country comes from coal. In fact, the 
lights in this building and the lights at the Pentagon and all the 
electricity that we use here in the Capitol complex we can point to not 
only our own power plant, which uses coal, but one right across the 
river that also provides electricity.
  Now in this country, we're pretty much independent on electricity 
generation. Fifty percent coal, 20 percent hydro, 20 percent nuclear, 
10 percent the other one. The concern we have is the liquid fuel debate 
where we are highly dependent on imported crude oil. And hence, because 
demand goes up, we have $96.65 a barrel crude oil.
  A no energy plan is a plan to fail and a plan to increase crude oil 
prices. So while we're trying to work with our friends across the aisle 
and the leadership of this House, I mean, there's a lot of my friends 
who I call fossil fuel Democrats who understand the importance of 
fossil fuels in this country and understand the importance of making 
sure that we bring more supply in the fossil fuel arena to this debate. 
They have been tampered down by the leadership.
  But we hope in this Special Order, we hope from the press conference 
of last week, and we hope from the anger and angst that the driving 
public's going to see by escalating prices, that we'll start at least 
start making the point of you can't always say no if you want to have 
an energy policy. You can't always close up supply. You've got to make 
sure that where you know you have available resources, you then take 
the opportunity to go in those arenas. Like we want to exploit the 
Illinois coal basin for electricity generation and for liquid fuel. We 
do not want to shut off areas by which we can bring in more natural gas 
reserves or other type of fossil fuel research.
  So for my colleague from Texas, for planning to execute this Special 
Order, I appreciate the time that he has allotted me and want to let 
him know that I'm going to continue to be on the watch trying to drive 
home to the American public the importance and the need for a sound 
energy policy that, yes, talks about some efficiency issues, but as 
important, in fact, I think more important, talks about really bringing 
more supply to the debate so that we can at least maybe hold prices 
steady.
  I'd like to see us move to start lowering prices so that the 
consumers of this country have more spending power, the manufacturers 
in this country will have that as a net plus in their competitive 
advantage, which is low-cost power. And I feel that the inability of 
the Democrat leadership of this House to move effectively on the supply 
end will cause great distrust, dissatisfaction, and danger for the 
energy security position of this country.
  Mr. CONAWAY. I thank my colleague for his comments tonight. They are 
spot on. It really is about the supply of energy and where we're going 
to get it, what form it's going to take, how we should transition from 
where we are today to where we want to get to and what that will cost.
  Much of the debate to date has ignored the cost to the consumers, the 
cost to businesses. And should we do that, we do so at our own peril 
because if we artificially or arbitrarily raise costs to American 
manufacturers, American producers, and ultimately American families and 
homes, that makes us less competitive around the world as we try to 
compete. We've got 5 percent of the world's population, and so 95 
percent of the world is our market. And if we're going to make things 
in America that we can sell to somebody else, we need every single 
competitive advantage that we can have.
  Clearly, we've been coming out of a period where energy was 
relatively cheap. We've enjoyed very cheap gasoline prices almost as if 
a right of being an American. That right and those low prices has come 
as the result of some incredibly efficient and risk-taking people 
who've been willing to risk fortunes and make a lot of money and lose a 
lot of money trying to provide crude oil for our refineries that have 
allowed us to drive on cheap gasoline when the rest of the world isn't.
  Before I turn to my colleague from Pennsylvania, my colleague did 
make some rather benign comments about the legislation, energy 
legislation that's already come across the floor. And I'd like to call 
his attention to a study that's just been released by API, which was 
prepared by the Charles River Associates International. This study 
looks at the legislation that's pending or has passed so far. It looks 
at the oil savings provisions, the increased CAFE standards, the 
increased taxes on the industry, the renewable portfolio standards, 
expanded renewable fuel standards.
  All of the bills that are passed or talked about passed were reviewed 
by this group. And there's some pretty startling impacts that this 
legislation will have. Every vote has a consequence, and to the extent 
that we do things to reduce supply and to harm our own country, here's 
what some of the impacts could be.
  This study, and I hope my colleagues across the aisle will get the 
study and study it, try to poke some holes in it, try to show where 
it's wrong. But to the extent that this is a reasonable analysis of 
what those bills do, I hope that they also take that into consideration 
as they continue to formulate the energy bill that we may see this week 
which has no Republican input. I don't know that it's got a lot of 
Democrat input in it. It seems to be a leadership, Speaker/leader of 
Senate kind of a bill.
  But these bills so far will cost, 5 million jobs will be lost by the 
year 2030. The average American household's purchasing power could drop 
by $1,700 by 2030. Aggregate business investments in the United States 
could drop by as much as $220 billion by 2030. Our national GDP could 
decline by more than $1 trillion by 2030, relative to the baseline. And 
cost of petroleum products could more than double by 2030, just on the 
bills that have been threatened and

[[Page 31286]]

some that have already passed so far in this House.
  So the energy bills that have passed this House and have been 
introduced on this floor have a consequence, and these consequences 
appear very dire.
  What I don't see is what the benefits are from the bills that have 
passed. It is clearly not a supply-based concept that's being worked on 
from the other side.
  So now it's my great pleasure to turn to John Peterson, a Member from 
Pennsylvania who's on the Interior Committee. And John has studied this 
issue quite at length, and is one of our go-to guys when it comes to 
particularly natural gas. So, John, let's hear what you have to say.

                              {time}  2030

  Mr. PETERSON of Pennsylvania. I thank the gentleman from Texas and my 
friend from Illinois. It's a pleasure to work with both of you. And I 
just wish the majority of Congress had a deeper interest in energy.
  I guess I find it confounding that this is a chart I have been using 
all year and it doesn't work anymore. This was the rise. This is 
annualized by year. It doesn't have the spikes that happened in those 
years, but this is the annualized figure. And I just find it 
confounding that last week we were bouncing all over 98, almost 100 one 
day, and not a word spoken in here about energy. It wasn't a priority. 
It was not even a discussion on this floor, except for a few of us, in 
5-minute speeches or hour speeches, like tonight, talking about it. But 
the committee is not meeting. The conference committee is not meeting. 
And I guess the question is how difficult does it have to get. Because 
here we are approaching the winter season. People have to heat their 
homes. And 58 percent of them use gas, I think 30 percent use 
electricity, and 9 percent use home heating oil, and then there are a 
few other mixtures in there. But nobody seems to be concerned.
  I was a retailer for many years, supermarket operator, and I remember 
back in the 1970s and 1980s when we had the energy spikes that were 
really severe back then. And as a person in the food industry, you 
would think people would always have money for food. 1979 and 1980 were 
very difficult years in my business because people didn't have money to 
spend.
  What we forget about is 50 percent or maybe 60 percent of Americans 
spend every dollar they make every week. They don't have any money in 
the drawer. They don't have any extra cash in the bank. They spend. And 
when energy prices spike like this, and especially in rural America 
where I come from, transportation costs are high in big rural areas. 
People have to travel to work, travel to church, travel to school, 
travel for everything. And then when you pay your transportation bill 
and then your home heating bill, in rural America, again, bigger old 
farmhouses, not a lot of new housing, not as energy efficient as the 
new modern housing, so they have high home heating bills. And when they 
spend an inordinate amount for home heating and for transportation, 
then they have less money. And my friend from Illinois was talking 
about it. I had tough springs. Usually in my business, I was lucky to 
break even through March. You had to make your profits the rest of the 
year. But in those years it was into May before I cracked into a profit 
because people didn't have money to buy basic fundamentals, food. I was 
in the food business. And that's what is going to happen in America 
this year. It could challenge the holiday season because it came this 
early.
  I didn't expect $95 oil, and I'm going to tell you why. Everybody has 
told me that if we had a major storm in the gulf, and we have been very 
fortunate in America, we haven't had a major storm in the gulf in 2 
years. The first time ever that we've gone that length of time. 
Everybody has told me this summer, when it was 75 or 80 and I asked 
what a major storm in the gulf would bring us, $100 oil. A couple weeks 
ago, I asked a gentleman what would a storm in the gulf bring us. He 
said $120 oil. Could we handle $120 oil? I'm not sure. I don't think we 
could handle $95 oil for a long period of time and keep the economy 
moving, because a great amount of our economy is you and I shopping, 
buying goods and services, and when we have so much money being 
consumed by energy, it has to come out of our budgets. And those who 
don't have any extra cash, credit cards will only give them so much, 
and then they are going to start cutting their spending.
  I think the thing that's interesting is the prediction for America. 
We have finally gotten this on a chart that anybody could figure out. 
Usually you see charts and you have lines going up and down. This is 
energy usage in America up to now. This line in the middle to my left 
is the projection by the Energy Department of what energy we are going 
to consume in this country. It doesn't change much.
  Now, I wish this nonhydro renewable line up here was just exploding, 
this red. That's what we are pinning our future on. Now, I'm for it. We 
are subsidizing. The people are saying we are holding it back. We're 
not holding it back. This is the projection of the Department of Energy 
of what renewables are going to grow. That's wind and solar. That's the 
mix.
  Look at hydro. Because we are not building dams and because dams are 
still being removed, hydro decreases. Now, there is a little bit of 
growth in nuclear here, very little, if we build the 35 plants that are 
under permit process tonight. We need to build those new 35 nuclear 
plants just to keep electric generation at this percentage that it is. 
I think it's 8 percent, if my memory is correct.
  Coal, now I happen to disagree with the Energy Department. They have 
coal growing. With the CO2 debate, coal is going to 
diminish. And I think their projections were made before CO2 
and carbon became the issue, because I see coal plants being refused by 
States all over the country. There are permits being denied. And they 
don't show gas growing, and I disagree with the Department of Energy on 
this estimate, and they may be a little bit wrong on renewables. But if 
you double this line, that's a lot wrong. It still isn't very much, is 
it? Now, I look for gas, because every country that started dealing 
with carbon as a pollutant and started charging carbon taxes or 
penalties, natural gas is the big winner because it has a third of the 
carbon of the other fossil fuels and has no NOX or no 
SOX, nitric oxides or sulfur oxides; so I predict that it 
will come up here and coal will decrease. That's my opinion because, as 
my friend from Illinois has talked about, we ought to be building. I'm 
going to give the White House credit. They are pushing six cellulosic 
ethanol plants. I think that's good. That's pretty new technology. 
That's using woody waste or biomass of any kind to make ethanol, and I 
think that's good. But I think we ought to be building 10 coal to 
liquid plants and some coal to gas plants.
  Then we look down here at oil. Oil is going to be a major part of 
America. Now, we have heard lots of speeches on this floor that we are 
going to replace oil. I wish that were true. I wish that was possible. 
But what we have decided in America is we are not going to produce oil. 
We're going to restrict it. The government owns a lot of the oil in 
America. They have control of all offshore, and 80 percent of that has 
been locked up by three Presidents, and all the Congresses in the last 
26 years have voted to literally not produce energy. In Brazil, who is 
energy independent and everybody says it's ethanol, well, ethanol is a 
piece of it. It's a nice piece of it. But they've opened up their Outer 
Continental Shelf, and I think they just found one of the biggest finds 
ever off South America just in the last week, and Brazil is producing 
offshore like we ought to be producing.
  But oil is what scares me. Number one, we are not producing it, so we 
are part of causing the shortage in the world. Number two, we are 
gaining dependency on foreign, unstable governments, 2 percent a year. 
And I think if we pass the energy bill that I hear rumored about, it 
will probably be 3 percent a year. And I hear people say we are going 
to be energy dependent. Well, there is no way in our lifetime, probably 
my lifetime anyway, and some of

[[Page 31287]]

you may be younger, that we can be energy independent. We can be less 
dependent. I would like us to be energy independent, but we can only be 
less dependent. But this one just keeps marching on.
  And why is it $95? Well, we have countries like China who are 
producing energy all over the world. They are locking up oil and gas 
reserves in every part of the world. Every part of the world. They're 
going to be producing less than 50 miles off of Florida with Cuba, as 
are five or six other countries. In our waters, actually, they are 
going to be producing oil that we should be producing. But we have 
locked up those 200 miles offshore and cannot produce there.
  So my biggest fear, and I will just ask the question, what if one 
unstable administering country topples? What does that do to the price 
of oil? What if we have a storm like Katrina? What does that do to the 
price of oil? What if terrorists struck a couple of refineries, some 
pipelines, some loading stations in foreign countries where we get a 
lot of our energy? What happens to the price of oil? Will China stop 
anytime soon purchasing and outbidding us? I predict in the near future 
you are going to see China announcing a major oil coup with a major 
supplier that has been part of our supply system. That's what they are 
doing. They are out there locking it up.
  It's interesting in the summertime we get 20 percent of our gasoline 
from Europe. This spring we had $3.09 gasoline in my market, which we 
have $3.09 now, at $63 oil. We now have 90-some-dollar oil, and we 
still only have $3.09 gasoline because gasoline has not yet caught up 
with the oil price, plus at the end of the summer there was a surplus 
of gasoline. This spring when the driving season started, Europe was 
short of gas themselves, so they couldn't supply us with the gasoline 
they normally did. So there was a shortage in the market, and, of 
course, that runs the marketplace up. So $3.09 gasoline was abnormal, 
just as abnormal as $3.09 gasoline is in America today with $95 oil. We 
are probably looking at $3.49, $3.50 gasoline would sort of be the 
price if it was being used out of today's oil and with not a surplus of 
supply.
  Here is a chart that tells what we use: 40 percent petroleum, 23 
percent natural gas. Now, this figure has grown a lot because 13 years 
ago we took away the prohibition of using natural gas to make 
electricity, and we went from 8 or 9 percent of our electricity made 
with natural gas. We only allowed it to be used for peak power in the 
morning and evening when we have to turn them on and off. And a gas 
generator is cheaper to build, doesn't take very long in comparison to 
other generators. But now we produce 23 percent, and that number is 
growing every day, and it will really grow. Coal, 23 percent; nuclear, 
8 percent; hydroelectric, 2.7; biomass, 2.4; geothermal, .36; wind, 
.12; solar, .06.
  Now, here is where our future lies, and the only one that is really 
growing is biomass. How is that growing? Well, we are using it to heat 
factories. Wood waste has now become a commodity. I'm from 
Pennsylvania, the hardwood capital of the world. We are now drying most 
of our wood with wood waste instead of using fuel oil or natural gas 
because it's cheaper. A million Americans will heat their homes this 
year with wood pellets. A lot of people don't know about a pellet 
stove, but a pellet stove is a new, modern, beautiful stove that you 
can heat your home and it's wood waste. That is a new consumer in the 
market. And also power plants that are burning coal will top them with 
wood waste so they can just slide under the air standards where the 
coal they are burning might just have a little too much emission in it. 
So they'll use 20, 30 percent wood waste, and they will be able to meet 
the EPA air quality standards. So woody biomass is the growing one. And 
now when we go into cellulosic ethanol, we are going to use wood waste 
again to make ethanol, cellulosic ethanol.
  But let's say we really put our effort behind, and we are, solar. So 
let's say we double solar. Now, it is hard to double something in 10 
years. But let's say we double it in 5 years. So we would be at .12. 
And if we double it again in another 5 years, we would be at .24, if my 
math is still good. And we take wind and we do the same. We could do 
that for a number of years, a couple decades. We'd still be struggling 
to get a percent of our energy from wind and solar.

                              {time}  2045

  And yet people seem to think, and I don't know why, but they seem to 
think it's ready to take over, it's ready to be helpful. But it's not 
ready to replace that big wide band I had on oil, it's not ready to 
replace that big wide band on coal. Nothing is. And hydroelectric is 
decreasing because we're taking dams out and it's becoming a smaller 
percentage. And nuclear will decrease to 7 percent if we don't open the 
new plants because, as electric use goes up, if nuclear doesn't go up 
with it, it will become a smaller figure.
  So when you look at this chart, now I'm going to switch gears on you 
for just a minute, what do we hear? Here's what we hear is coming now: 
this is, I believe, the ``no energy bill.'' It locks up 9 trillion 
cubic feet in the Roan Plateau. The Roan Plateau is a huge, clean 
natural gas field in Colorado that was set aside as a naval oil shale 
reserve in 1912 because of its rich energy resources. This means that 9 
trillion cubic feet of natural gas, more than all the natural gas in 
the OCS bill that was passed in Congress last year, that little piece 
in the gulf, will be put off limits. It has already been through NEPA, 
it's all ready to lease, it's ready to produce. Legislation that's 
coming before us is going to take it away. What makes sense about clean 
green natural gas?
  Next, it locks up 18 percent of the Federal onshore production, 
America's natural gas. And that's because of policy changes and further 
NEPA studies, and making it more difficult to permit is going to slow 
down the production of both oil and gas production in America.
  I was responsible for a small amendment, but a good amendment, in the 
energy bill in 2005. It took away redundant NEPA studies because NEPA 
studies take a year. I talked to people who had leased land and in 7 
years have not drilled yet because they were still doing NEPA studies 
because they had to do one for every piece of the process, not a NEPA 
study, and then produce it with a NEPA study to delay. Locks up 2 
trillion barrels of oil shale from the West oil shale.
  Now, everybody talked about the tar sands as oil that we couldn't 
get. Canada has been persistent. They're now producing 1.5 million 
barrels a day. Much of that is coming into our States to be refined. In 
fact, they're trying to enlarge refineries in the northern tier, having 
a lot of problems. Lots of resistance about enlarging those refineries, 
but that's necessary to produce. But the tar sands are one of the 
fields that's growing in Canada that's available, and they tell me that 
shale oil has even greater reserves.
  It's going to lock up 10 billion barrels in Alaska, the national 
petroleum reserve, breaches legitimate legal contracts that are out 
there that companies have signed to produce oil by trying to make them 
null and void with legislation.
  And then the one that really is bad, $15 billion tax increase. I have 
two oil refineries in my district, one in Warren, Pennsylvania, 
American Refineries, and in Bradford, Pennsylvania the original Kendall 
refinery. They're going to pay, if this bill passes, a higher tax than 
any other business in Pennsylvania or in America. Does that make sense, 
that we're going to tax people who produce energy with a greater tax 
than those who produce steel or food or other products for a profit? I 
don't think it does. I know what it's about; it's about the hatred of 
oil companies. Well, Big Oil does not produce.
  The other fact I want to share with you, 90 percent of the oil in the 
world today is not owned by an oil company. The 14th largest oil 
company in America today is Exxon. The other 13 are countries like 
Mexico, Iran, Iraq, Saudi Arabia, Venezuela, Nigeria, Russia, all

[[Page 31288]]

our good friends. Dictatorships, unstable governments, unfriendly 
governments, and they own about 90 percent of the oil.
  And now what's worrisome, from what I'm told, is they're using this 
huge cash revenue for social purposes, and they're not putting the 
money back. So it could happen in the very near future that those 
countries could not produce enough oil to supply America. And that's 
why we have $95 oil, because we're not doing coal-to-liquid; we're not 
doing all the other things we ought to be doing. We're hoping that 
renewables can replace oil. I wish they could.
  I think America, I think this Congress, I think this administration 
needs to take a very serious look at the economic viability of this 
country if we continue, if all we have coming at us is a bill that has, 
it shouldn't be no energy, it's less energy and more taxes.
  I thank the gentleman for allowing me to share.
  Mr. CONAWAY. I thank my colleague from Pennsylvania for sharing those 
facts with us. And pesky though they may be and inconvenient though 
they may be, they're nevertheless facts; and I appreciate you sharing 
those with us.
  I again would like to turn to my colleague from Illinois for other 
comments that he might have.
  Mr. SHIMKUS. I want to ask my friend from Pennsylvania a couple of 
aspects on the chart. The first one, when we talked about the tax, 
under this current Congress, how many times have the Democrats gone to 
that same pot of money for PAYGO issues of other bills that have come 
to this floor?
  Mr. PETERSON of Pennsylvania. I can think of 5 or 6.
  Mr. SHIMKUS. I know there is at least 3 times, and I'm being told 4, 
using this same pot of money to justify the PAYGO, the new spending 
that they brought on.
  The other thing that we really need to have here and talk to the 
American public about is that the Energy Information Service, what we 
don't have depicted is, what is going to be the future demand? And the 
future demand is going to double. So with your great chart of all the 
portfolio there, it's kind of confusing because the public might think, 
well, as we look at that, that everything is going to stay pretty much 
the same. But the reality is demand is going to go up exponentially. 
And if you have the same amount of supply and the demand goes up, then 
you see $100 a barrel crude oil, $120 barrel crude oil. And that's why, 
as we have come here to talk about supply, we want to bring more supply 
to the table. And we know we have friends on the other side of the 
aisle that believe the same thing.
  I'm working with Rick Boucher. And you mentioned coal-to-liquid. Just 
imagine this, we have 250 years' worth of coal in the only coal basin. 
So you have the coal underneath the ground, you build a coal mine, 
right on top of it you build a coal-to-liquid refinery somewhere in the 
Midwest or somewhere in Pennsylvania where there is a coal field, and 
then you connect it to pipelines that we have today. Then you limit the 
risk. The risk we have now is, if we're not going to build new 
refineries, we're going to build refineries and expand existing 
refineries, and we have so many down on the gulf coast, we have them in 
Louisiana, we have them in Corpus Christi, we have them in Houston, we 
have them in all these areas where they are really at risk, and we 
dodged a bullet this year, of major storms that take these refineries 
offline, depending upon the severity of the storm. So for national 
security sake, to have a diversified energy portfolio, John, you said 
it numerous times, diversification. When you have an investment 
portfolio, you want diversity for security.
  We've got to have a diversified energy portfolio. And for our friends 
on the other side to say no to coal, no to oil, no to nuclear, yes to 
solar, yes to wind, and it's such a small portion of what can really 
affect the cost, it's really sending a terrible signal to our 
constituents that the salvation is in renewables when we all agree we 
want a diversified portfolio. We want to bring them on. But if you do 
it at the risk of the other major sources of supply, you do great harm 
to this country.
  Mr. PETERSON of Pennsylvania. Would the gentleman yield?
  Mr. CONAWAY. Yes.
  Mr. PETERSON of Pennsylvania. I disagreed with the IAs. I look for 
gas to get bigger and coal to get smaller because of the CO2 
issues.
  Now, let's say they're wrong here, because I'm sure lots of people 
will disagree with them. Let's say they're 100 percent wrong. Right 
now, when you see hydro and nonhydro, you see hydro decreasing as much 
or more than nonhydro increases, so there is really no growth in 
renewables. Let's say they're 100 percent wrong. So instead of having 5 
percent, we're 10 percent. It wouldn't even take up the growth need of 
America. So let's say they're wrong, and we're going to be twice that 
effective at renewables. I hope they're wrong, but it won't take care 
of the growth. We will still need this oil, we will still need this 
gas, we will still need this coal.
  Mr. CONAWAY. Will the gentleman help us understand, as we talk about 
these supplies, a variety of energy resources, we assume, for the lack 
of this conversation, that it's all equal and that it all costs the 
same amount of money to produce, and that's the fallacy. One of the 
problems with a renewable portfolio standard of 15 percent, now, that 
our chart does not depict just electricity, but if we had a chart that 
did just electricity, the big players are going to be the same.
  Mr. PETERSON of Pennsylvania. I don't have a big chart, but I have a 
little chart.
  Mr. CONAWAY. And it's very close to the same. And if we demand or 
mandate 15 percent total electricity produced from renewables, what 
does that do to the cost of that electricity to the consumer?
  Mr. PETERSON of Pennsylvania. It's going to be much higher.
  Mr. CONAWAY. And, in effect, that is a tax on families in this 
country. Now, we all want to get to a, I would refer to it as an energy 
security, not only American energy security, but we ought to be talking 
about global energy security in this context. Right now we're focused 
just on the U.S. And so as we look at this energy security, not 
understanding that a global portfolio standard increased to an 
unworkable 15 percent is a heavy tax on consumers, it's a tax on 
businesses, it's a tax on anybody who turns on a light, anybody who 
gets in a car, anybody who uses electricity, that's a tax that they're 
not currently paying; and those increased taxes go to a narrow margin 
of the energy supply. And our real goal should be energy security at a 
cost that we can afford.
  And I yield back.
  Mr. PETERSON of Pennsylvania. That's the electric map, and it shows, 
it's the same as this. But it does prove my point, that coal goes down 
and gas goes up; it gets bigger. But up here at the top, you have the 
same thing. There is almost no change because the growth in volume 
needed more than absorbs all these new renewables.
  Mr. CONAWAY. Texas Utilities announced that they were going to build, 
I think the number was 12, 300-megawatt coal fire plants in Texas. And 
the reason for that was that over in that time frame of construction, 
the demand in Texas was expected to increase, electricity demand was 
expected to increase to the point that our grid, ERCOT, which is 
separate from the rest of the United States, the differential between 
demand and supply would narrow to a margin that is unacceptable from a 
safety standpoint. And these 12 plants were going to help keep that 
margin at the 9 or 10 or 12 percent excess capacity to allow for spurts 
in daily demand or to allow for continued growth in demand without 
getting to a point where you turned the light on and it didn't work, 
the experience in California where they had brown-outs because supply 
outstripped demand.
  You mentioned earlier about the opponents to coal fire plants. They 
went to work, Texas Utilities, to demand that they not build those 
plants. And as a result of that, and a takeover by a private entity, 
eight or nine of those plants have now been scrapped and

[[Page 31289]]

they're only going to build three. Now, what got lost in that 
conversation was, where is the extra electricity production going to 
come from in order to keep ERCOT at a margin of safety for the 
differential between supply and demand that it has had over these years 
and should have in the going-forward future.
  So as we look at how we produce electricity, and all of us who have 
always turned lights on with the assumption that they would come on, 
left unchecked and left to our own devices, the growth in demand will 
get us to a point in the not-too-distant future where we will turn 
light switches on and nothing happens because the electricity is just 
not there to be used.
  Mr. SHIMKUS. I mean, you bring up a good point. And I would like to 
focus on that for a minute. Because now you're going from 12 coal fire 
plants or electricity generation plants to three. And one of the 
reasons why the building trade and many in organized labor are in 
support of a new supply provision, because look at what you've done, 
look at all the jobs to build these plants, and then look at all the 
good-paying jobs to operate these plants.
  I don't know what Texas plans are, but I can see them very well, 
governments south of the great State of Texas citing a power plant and 
selling power across the border into Texas. And then who gets the jobs? 
It's like the same, my friend from Pennsylvania, we talk about natural 
gas all the time; if we're not willing to have a liquefied natural gas 
port built inside this country, where are they going to go?

                              {time}  2100

  Where are they going to go? To the Bahamas. Or they are going to go 
to other places where when they build the port facility, they build the 
liquefied natural gas, and then they pipe it in to this country. Who 
loses the jobs? We lose the jobs. So that is one of the frustrating 
things of this debate.
  There are two main issues. We always talk about energy security 
because we address it in the national security component of how do we 
keep our Nation safe, how do we stop from being extorted by foreign 
rogue countries, and how do we keep our economy from falling in 
disruption should there be a strike in the sea lanes.
  But there is also another security debate that we have talked about, 
and that is financial security, financial security for this country, 
and what really strikes individual families is financial security for 
the families. When you have these types of price escalations, when you 
don't bring new major supply to the economy and you put all your 
promises on a small portion of renewables that won't even meet the 
future demand increase, then what you are doing is, you are going back 
to $96 a barrel of crude oil. And that is the no energy plan that we 
are talking about. And all we are saying to our friends, and again, I 
have many of them. I work with them on the committee all the time. My 
fossil fuel Democrats, now is the time to make sure that fossil fuel is 
a huge, is a part of this debate. And my friend from Pennsylvania is 
right. We are not saying it has to be the whole thing. We are all 
comers here. I have got my corn here. I have got my soybeans. I have my 
coal. I have got marginal oil wells in southern Illinois, marginal oil 
that we can use and recover, and we are still recovering oil from 
southern Illinois. Bring on the wind, bring on the solar, but we want 
to bring everything in. The more supply we have, the lower the cost, 
the Nation will be better off
  Mr. CONAWAY. Before we get away from the coal comments, I want to 
make sure that, I know my colleagues agree with this, as we look at 
coal usage, it ought to be clean-burning coal. None of us argue in 
support of continued CO2 emissions from coal-fired 
electricity plants. There is in the works right now a future gen 
project which is going to be about a billion eight research project. 
There are four sites that are in the hopper still competing for that 
one final selection: two in Illinois, two in Texas, one in my district.
  Mr. PETERSON of Pennsylvania. None in Pennsylvania.
  Mr. CONAWAY. That will do the research to be able to learn how to 
burn all forms of coal from the lignite that we have in Texas to the 
hard coals in Pennsylvania and Illinois, learn how to burn that coal to 
generate electricity but yet capture the CO2, and then take 
that CO2 and either sell it back to the oil and gas business 
to sweep oil reservoirs to enhance the oil recovery, or in many places 
we will have to learn how to put it underground, deeply buried, 
permanently buried in the ground so it is not in our atmosphere. That 
is essential that we get that done, and the sooner the better, because 
all of us believe coal is a long-time solution to electricity 
production, but it ought to be clean-burning coal, zero-emission coal-
fired plant. That is important not only for the coal plants that we 
ought to be building in the United States, but India and China are also 
part of this consortium that is going to develop this technology. China 
is bringing on a 500-megawatt power plant every 2 weeks or so. India is 
in a similar mode. They are going to burn coal however they need to in 
order to generate electricity because electricity and an increased 
electricity supply drives growth and economies. The availability of the 
electricity helps drive the growth in these economies. China and India 
are going to continue to burn coal and spew CO2 into the 
atmosphere no matter what we do. So it is in all of our best interests 
to learn how to burn coal cleanly and take advantage of that 250-year 
supply that my colleague from Illinois was talking about.
  Mr. SHIMKUS. I know that the public, sometimes they don't understand 
that carbon dioxide is a commodity that is bought and sold, that people 
want, and we want it in the soda business to give the fizz in your Coke 
or your Pepsi, or as my friend from Texas knows, advanced oil recovery. 
You shove that CO2 back in the ground, it helps recover that 
margin of oil that has been harder to recover in the past.
  Mr. PETERSON of Pennsylvania. One thing I want to mention, what has 
happened to these high energy prices? Dow Chemical paid $8 billion for 
natural gas in 2002, $22 billion in 2006, and they are now building 
plants all over the world because we can't afford America's energy. 
That is the message we need to realize. Many companies are doing that, 
and we need to prevent that.
  Mr. CONAWAY. I want to thank both my colleagues tonight for coming in 
and sharing this hour and hopefully shedding a little bit of light on 
an issue that is of interest to every single American. We all use 
electricity in some form or fashion. It is all important to us.
  In the couple of minutes we have left, I want to bring both my 
colleagues' attention to a study that came out this summer called 
``Facing the Hard Truths About Energy.'' This is a study that was done 
by the National Petroleum Council. It involves some 350 contributors. 
It was not a new study in the sense that it went out and did the 
research, but it gathered the research from these 350 participants that 
cover a very broad spectrum. It included of course energy producers. It 
included environmentalists. It included everybody who might have 
something intelligent to say about the issues and problems that we 
face. It was transparent. Everybody got to see what was going on. There 
weren't any hidden agendas. There weren't any preconceived ideas.
  I want to quickly run through the things that this study shows that 
we must do in the United States. Some I agree with wholeheartedly, and 
others I am still questioning and understanding the impact. But this 
study, which I hope over the next several months we are able to show to 
the American people and have them look at it and understand the issue 
as you and I do, but this study would say that we need to moderate the 
growing demand for energy by increasing efficiency of transportation, 
residential, commercial and other industrial uses. That is one we can 
all agree with. Expand and diversify production from clean coal, 
nuclear, biomass, other renewables and unconventional oil and gas; 
moderate the decline of conventional domestic oil and gas production, 
which means lifting those restrictions

[[Page 31290]]

and going after domestic crude oil and increased access for development 
of new resources; integrated energy policy into trade, economic, 
environmental, security, foreign policies; strengthen global energy 
trade and investment; and broaden dialogue with both producing and 
consuming nations to improve global energy security. Not just energy 
security of the United States, but global energy security, because a 
world that has global energy security will be much more peaceful than a 
world that is fighting for the energy.
  Enhanced science and engineering capabilities and create long-term 
opportunities for research and development in all phases of the energy 
supply and demand system. And finally develop the legal and regulatory 
framework to enable carbon capture and sequestration. In addition, as 
policymakers consider options to reduce carbon dioxide emissions, 
provide an effective global framework for carbon management, including 
establishment of a transparent, predictable economywide cost for carbon 
dioxide emissions.
  A couple of their findings unrelated directly to their 
recommendations were that the majority of the U.S. energy sector 
workforce, including skilled scientists and engineers, is eligible to 
retire within the next decade. The workforce must be replenished and 
trained. These are millions of jobs across a broad spectrum, from 
roughnecks all the way to the smartest scientists, that we have got in 
this country.
  So I want to thank both my colleagues for coming to us tonight. We 
have 1 minute to close. John, anything? John, anything?
  Mr. PETERSON of Pennsylvania. Well, I guess I think the thing we need 
is we need an energy policy. We need to get serious about energy. 
Energy, in my view, is the number one challenge of America. I've said 
this in many speeches; I think it equals terrorism and the security of 
America. But if energy prices continue to skyrocket and we cannot 
compete in the global economy and the average American can't get a 
workingman's job, we are going to be a country in trouble. We are going 
to be a country that is not first rate. We are not going to be the 
leader of the world.
  Energy availability and affordability should be the number one issue 
in the Congress. It is unlocking the OCS. It is unlocking the Midwest. 
It is wiser use of energy. It is using less for transportation, more 
efficiency. In fact, conserving in the next 5 years is probably all we 
can do, because everything we have talked about takes 5 to 10 years to 
produce fruit to bring it to market. So I think America's, I think that 
the real terror threat of this country is available, affordable energy.
  Mr. CONAWAY. I want to thank both my colleagues for joining me 
tonight. As we opened the conversation tonight, I think it is time we 
quit howling and begin to do something that is important to all 
Americans.
  With that I yield back.

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