[Congressional Record (Bound Edition), Volume 154 (2008), Part 11]
[Senate]
[Pages 15200-15203]
[From the U.S. Government Publishing Office, www.gpo.gov]




                             ENERGY CRISIS

  Mr. CRAPO. Mr. President, I want to speak on an issue which is as 
important to Americans as health care. In fact, it may be, today, more 
on their minds and may be a more critical issue. That is our national 
energy policy, particularly the increasingly high price of gasoline and 
petroleum.
  About 2 weeks ago I asked my constituents in Idaho to contact me by 
e-mail and to tell me what the high price of gas meant in their lives. 
What was it doing? Was it another inconvenience or what was happening 
in their individual lives because of these high prices; secondly, to 
tell me what they thought Congress ought to do about it, what the

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solutions should be. Overnight I had almost 600 responses. The total 
now has risen to over 1,200 responses.The people in Idaho tell a story 
I am sure could be told by millions of people across this country about 
what the high price of gas means. It is not just an inconvenience; it 
is not just fewer trips to the restaurant or to the movies; it is 
impacting people's lives across the board in monumental ways that 
could, if we don't fix it, change the quality of life and the American 
dream. I am reading every one of these e-mails. I read stories from my 
constituents about those who end up at the end of the week with just 
about $40 or $50 left in their budget, and they haven't yet bought 
their food. They need to buy another tankful of gas so they can get to 
work and keep their job. That is the decision they have to make. They 
buy the gas because they have to keep their job. They try to figure out 
how to do with less food.
  I have stories coming in from individuals who cannot any longer 
purchase their medicine. Their choice is food, medicine, or fuel. Now 
they are going without the medicines they need.
  I read one this morning from a lady who needs to travel to a certain 
medical facility for medical treatment. She no longer has the ability 
to make these trips because she does not have enough money to pay for 
the gas. So she has had to try to make arrangements with her doctor to 
make some educated guesses about her health care, because she cannot 
get to the medical facility for the treatments she needs and the 
analysis she needs to receive clear answers for her health care.
  I get information from those who run businesses who talk about the 
fact that they are going to have to lay off employees. The list goes on 
and on and on. As they talk to me about what they think we should do, 
they have all the same commonsense ideas people across America are also 
coming forth with. We here in the Senate, I hope, are going to be 
debating a robust, full agenda of ideas about how to deal with this 
crisis. We will have a tremendous amount of ideas coming forward from 
Idaho. I told my constituents that I would get their ideas and their 
positions put into this debate. I am putting every one of those e-mails 
into the Congressional Record. I am going to talk about those e-mails 
and the responses and the ideas of my Idaho constituents in the debate 
as we move forward.
  Another thing that is coming through loudly and clearly in the 
messages from my constituency is, they believe that the problem we face 
is largely a result of Congress's failure to enact a rational, 
meaningful energy policy for this country. Our failure to act is 
recognized. I believe they are right. I jokingly said in an interview 
today, when someone said, Congress is responsible for this, I said: It 
is kind of a national pastime to blame Congress for just about 
everything. But this time they have it right. This time Congress could 
have acted years ago, and we would be in a better position.
  There is much we can do and need to do. We have an opportunity to do 
it. The American people, I hope, are watching. I hope they are weighing 
in heavily with their Senators and Congressmen to make sure that we act 
and that we don't sidestep the issue.
  I think we will have an opportunity to act in the near future. The 
majority leader has put a bill on the floor that we hope will be coming 
forward soon that I believe should be a vehicle for a robust debate on 
energy policy. Unfortunately, this bill deals with only one issue, that 
of speculation in the futures markets. I want to talk about that for a 
minute. But my hope is we will have an open amendment process and that 
ideas about other pieces of the solution can be dealt with. Frankly, 
there is much more than simply the futures market to look at, as we 
seek to resolve our problems with the rising price of oil. In fact, it 
may be that futures market issues are in the lower category of 
potential results.
  Our Federal Reserve Board chairman talked to us yesterday at the 
Banking Committee about this and said:

       Another concern that has been raised is that financial 
     speculation has added markedly to upward pressures on oil 
     prices. Certainly, investor interest in oil and other 
     commodities has increased substantially of late. However, if 
     financial speculation were pushing oil prices above the 
     levels consistent with the fundamentals of supply and demand, 
     we would expect inventories of crude and petroleum products 
     to increase as supply rose and demand fell. But in fact, 
     available data on oil inventories show notable declines over 
     the past year.

  He continues:

       This is not to say that useful steps could not have been 
     taken to improve the transparency and functioning of our 
     futures markets, only that such steps are unlikely to 
     substantially affect the prices of oil or other commodities 
     in the longer term.

  One of the concerns I have is that if Congress, once again, looks for 
a quick fix, says, hey, there is one problem here, there is too much 
speculation, we will stop that speculation in the futures market, and 
then we will have solved the oil crisis, then Congress will have once 
again failed to act in a responsible fashion. We need a rational energy 
policy.
  I like to analogize that to how we would deal with our own investment 
portfolio. When they invest their own resources, Americans are 
constantly advised not to invest everything in one asset. Yet the 
United States has done that in our energy policy. We are far too 
dependent on petroleum as our source of energy, and we are far too 
dependent on foreign sources of that petroleum, as we have refused to 
develop and produce our own resources. We need to have a much more 
diverse energy policy and a more diverse energy portfolio, where we 
look at renewable fuels and alternative fuels, nuclear power. Yes, we 
will have to have a significant amount of petroleum for the future. We 
will still have a great need for petroleum, even as we seek to 
diversify. But there are is a lot we can do. Add to that what often is 
called the fifth source of energy, which is conservation, where we can 
be more efficient and much more effective in reducing our utilization 
of energy. Every barrel of oil not used, every kilowatt of electricity 
not used, is equivalent to one that is produced. We have to become 
aggressive in looking at these kinds of solutions.
  Now, I understand the public is frustrated with the $4-plus price of 
gas. I understand how appealing and seductive it is to say we can solve 
this problem if we just address those energy speculators. I actually 
wish that were possible. But so far, most of the experts are saying 
that is not the source of the real problem. The underlying problem is 
one of supply and demand.
  Now, there are things, as I said, we can do on the issue of the 
speculation in the futures markets. There are proposals to work on 
that, not the least of which is that we need to give the CFTC the 
authority to conduct the oversight of our futures markets to know what 
is happening and make recommendations to Congress about what changes, 
if any, should be made.
  One of the first things we can do is to move through this Senate the 
confirmations of three members of the CFTC who still languish on our 
docket: Walt Lukken, Bart Chilton, and Scott O'Malia. They need to be 
moved promptly. If we are going to address the oversight of our futures 
markets, we need to put the cops on the beat and we need to not only 
put the members of the CFTC in place, confirm them, but we need to give 
them the resources for 100 new staff members that we have identified we 
need so they can aggressively and effectively look at and oversee the 
futures markets. That type of activity is appropriate.
  But there are those who are proposing we do things to our futures 
markets that can cause great damage, and I am concerned the bill before 
us will do just that. The bill will not lower energy prices as it now 
sits because it attempts to address high oil prices but does so in a 
way that could actually increase volatility and make it harder for 
American companies to manage higher costs, and those costs will then 
have to be passed on to consumers.
  It also will make it more difficult for companies, such as commercial 
producers, to hedge against higher prices. It imposes severe 
restrictions on investors and professional market participants. This 
means they would not be

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able to purchase the risk of higher prices from commercial producers 
who want to pass that risk on through derivative products.
  Let me give an example. Let's say there is an oil producer who wants 
to build a new drilling rig and needs to finance that construction with 
a bank loan. Let's say this producer needs a $5 billion loan to engage 
in this new production that could help us. Any lender will insist that 
this producer lock in the price of its oil for at least 3, probably 5, 
years to make sure the producer has the cash flow to repay the loan. 
The oil producer goes to swaps dealers to look for the price of its oil 
and to hedge its loan for the next 3 years.
  If we do not have an effective and smoothly running futures market, 
then that producer will not be able to effectively hedge the loan and 
will not be able to essentially obtain the contracts necessary to 
assure the bank that the producer can deliver on the loan. If the loan 
is not made, the investment is not made, and the production does not 
occur.
  Those are the kinds of things that could happen if we improperly undo 
the smooth functioning of an effective futures market in this country.
  The bill will also substantially limit the ability of pensions and 
other investors to protect themselves from higher prices and declining 
stock prices. It will allow the CFTC to break private contracts, 
something that I believe is going to be very detrimental in the 
marketplace.
  But the bottom line, as I see it--and I will probably come back to 
the floor tomorrow to speak in more detail, as we have evaluated this 
bill more carefully--the bottom line is, even if the futures markets 
are the reason the price of oil is going up, the United States, simply 
by banning or regulating futures contracts in the United States, cannot 
change the conduct of investment in futures globally.
  Petroleum is a global product. Petroleum futures are marketed 
globally. If we tell individuals or companies or entities they cannot 
invest in futures or their investment in futures will be subject to 
extremely high regulatory restrictions in the United States, they can 
simply go to Dubai, they can go to London, they can go elsewhere and 
invest in futures where there are exchanges that are willing and able 
and anxious for their business to come. These requirements in the 
current bill do not exist in these other markets, such as in the United 
Kingdom, which is actively seeking the jobs and tax revenue that come 
from the financial services companies that work with these industries. 
The bill will help accelerate the relocation of the derivatives 
business from the United States to London.
  There are many other things we need to talk about. Yes, there are 
things related to the speculation in the futures markets that we can 
and need to do, but we have to be very careful.
  As I said at the outset, I hope the debate we have in the Senate is 
not just about the futures markets. It has to be about the oil prices 
and what needs to be done in this country to deal with them. For 
example, the vast amount of the U.S. oil reserves, which are huge, are 
locked away from production. There will be proposals that need to get a 
vote on this Senate floor that we open that production. The first 
example I will give is the Outer Continental Shelf.
  It seems to me we need to be as aggressive as possible in opening our 
production in the Outer Continental Shelf. The information I have is 
that 14 billion barrels on the Atlantic and Pacific shelves are 
available. If we were able to access that, that would be more than all 
of the U.S. imports from the Persian Gulf countries over the last 15 
years.
  There will be proposals to go into the oil shale areas in Colorado, 
Utah, and Wyoming. I understand more are being identified in North 
Dakota and Montana. The oil shale areas have more than three times the 
oil reserves of Saudi Arabia. Yet the United States will not allow us 
to access them. And we pay Saudi Arabia to bring us its oil and 
increase our balance of payment problems.
  We need to look at conservation, where we work on plug-in electric 
cars and trucks, and move to a situation in which we get much more 
efficient in our country with regard to our energy. If we could 
increase the efficiency of our buildings and our transportation system, 
I understand, globally, we could probably reduce by one-third the 
energy consumption.
  There are ideas that abound like these that we must debate on the 
floor of the Senate. As we get this opportunity, I am confident the 
American people, with the common sense my Idaho constituents are 
showing, can weigh in and help Congress understand, help this Senate 
understand the kinds of moves we must take. We must be bold. We must be 
comprehensive. We must look at the supply issues. We must look at the 
demand issues. And we must look at the market issues. But we must act.
  I will conclude, Mr. President, with just that reminder from my 
constituents because, as I said before, as I read these e-mails, one 
thing that comes through unbelievably clearly to me is that the 
American people get it. My Idaho constituents get it. They know we can 
have a better energy policy, and they know that energy policy is 
achievable. They want Congress not to just take a baby step, not to 
duck the issue, or not to just take one little piece of the solution 
that might work a little bit; they want us to move forward with 
legislation that will address production of our own supplies and 
resources, expansion into new R&D technology, conservation, efficiency, 
renewable and alternative fuels, nuclear power, and many other areas. 
We have to do it fast. We have to do it now.
  So my call tonight is an urgent plea to my colleagues, first and 
foremost, to get the issue of energy on the floor of this Senate, and 
then secondly to have a full and open and robust debate over all the 
ideas our colleagues can bring forward and to craft a bill that can 
then become a gem but more importantly can become a very rational, 
effective national energy policy for our country. If we do that, we 
will do one of the most important things we could possibly do with our 
time in the Senate in the next few weeks.
  With that, Mr. President, I thank you and yield back any time I may 
have remaining.
  The PRESIDING OFFICER. The Senator from Louisiana.
  Ms. LANDRIEU. Thank you, Mr. President.
  I am so happy to be able to speak for the next 10 or 15 minutes. It 
is important for me to do that. I said I would come to the floor every 
day we are in session until we leave--whether it is in the morning that 
I get that opportunity or in the afternoon or before going home at 
night--every day until we leave in August to speak about this issue, 
because I agree 100 percent with my colleague from Idaho and I want to 
associate myself with all of his remarks, from the first paragraph, 
through the middle, until the end, because he is absolutely correct in 
his assessment of a couple issues: one, the anger, frustration, and 
pain our constituents are feeling at this moment; the truth he spoke 
about the fact that this is Congress's fault; the fact that he said the 
American people get it and understand it. They don't just get it in 
Idaho, I say to the Senator, they get it in Louisiana. What a shame it 
will be for us to leave in August or September or October or ever until 
we get this done.
  There is a moment of opportunity. There is a window. That window has 
been created, unfortunately, by extraordinarily high and historic 
prices that are forcing the attention on this issue. When we force 
attention, the pressure comes to bear to really make some headway. When 
prices are too low, there will occasionally be--or when they are low; 
they can never, maybe, be too low. But when they are lower, there is 
interest. But it is fleeting. Or maybe the prices are low, and we have 
a little bit of a rush for some environmental legislation. We deal with 
it, and we move on to other things.
  But there is no moving on to anything else right now in America 
because this energy price--this energy

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price--is unsettling to this economy in ways that I don't have to 
explain tonight, and my time is limited. I will leave that up to 
others. But I agree with my colleague from Idaho and associate myself 
with his remarks.


                              Health Care

  Mr. President, also, briefly, before I get back to energy, I wish to 
thank my colleague from Oregon who spoke so kindly about the two of us 
and our efforts on health care because it is another issue that has to 
be addressed but without the urgency, in my view, that the energy issue 
has to be addressed.
  I am very proud to be working with him and 15 other of our colleagues 
in a bipartisan effort to bring down the cost of health care in a new 
and innovative approach. I am looking forward to working on that once 
we solve the energy dilemma here.


                        Cosponsorship of S. 911

  Mr. President, I ask unanimous consent to be added as a cosponsor of 
the Caroline Pryce Walker Conquer Childhood Cancer Act, S. 911, 
sponsored by my good friend, the Senator from Rhode Island, Mr. Reed. I 
would like to be added as a cosponsor and want to thank Senator Coburn 
for lifting the hold on that bill so we can actually get it passed.
  The PRESIDING OFFICER (Mr. Salazar). Without objection, it is so 
ordered. The Senator will be added as a cosponsor.
  Ms. LANDRIEU. Thank you, Mr. President.

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