[Congressional Record (Bound Edition), Volume 154 (2008), Part 2]
[House]
[Pages 2653-2658]
[From the U.S. Government Publishing Office, www.gpo.gov]




               ENERGY ISSUES AND THE OIL AND GAS INDUSTRY

  The SPEAKER pro tempore (Mr. Wilson of Ohio). 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, it's good to be with you this afternoon.
  I want to spend most of the next hour talking about the oil and gas 
business and energy issues in general but specifically about the oil 
and gas business.
  In the interest of full and fair disclosure, I grew up in West Texas, 
home to much of the oil and gas production from the Permian Basin, and 
I now have the high honor of representing much of that region in 
Congress. My dad was in the oil business. He had a service company for 
the last 25 years of his career. I had oil and gas clients in my 
professional career. And so I hope the fact that I have some background 
and experience in this area doesn't disqualify me from talking about 
things that I know and that doesn't discount what I have to say.
  In looking at our overall energy picture, almost every legitimate 
projection of energy usage in this country, over the next 20-plus 
years, shows that crude oil and natural gas will continue to be a vital 
part, an important part of the energy complement for this country for 
the next 20-plus years, as I mentioned.
  There are no breakthrough technologies. There are no scientific 
advances that anyone can anticipate today that would reduce our 
dependency, particularly as it relates to driving cars and trucks and 
airplanes, on crude oil and natural gas. We don't produce enough of it 
domestically to meet the needs of our existing oil and gas needs, so 
consequently we import 60-plus percent of the crude oil, natural gas 
and gasoline products that we use every single day. And that percentage 
is growing, unfortunately.
  Most commentators, and I agree, would believe that this importation 
of crude oil and natural gas from foreign sources coming from countries 
whose leadership hate us, whose political schemes are directly opposed 
to what we would want to do, is not in our best interest and represents 
a strategic vulnerability that our country has to other parts of the 
world that in many instances can be far less stable than you would want 
to count on.
  So given the fact that we will be using crude oil and natural gas for 
the next 20, 30-plus years, and that we don't produce enough of it 
ourselves, it would seem that it would be in our best interest to 
promote policies that encourage and incentivize additional production 
of domestic crude oil and natural gas, policies and incentives like 
allowing the responsible and environmentally sound exploration of areas 
in this country which we currently, either by law or by executive 
order, prevent our crude oil and natural gas exploration companies from 
having access to, promoting policies that, to the extent that it is 
safe and sound, reducing and eliminating unnecessary bureaucratic red 
tape.
  You can look at the reasons we've not built a refinery in this 
country for a number of years is because of the long lead times it 
takes to get that done. The approval process, or the bureaucratic 
nightmare that companies have to go through, all of the money they 
invest on the front end, they don't get the return on that money until 
the plant is built and done, and the longer you extend that timeframe 
between when you start to when you actually

[[Page 2654]]

begin to refine crude oil adds to your cost, it adds to the carrying 
cost, it adds to the cost of the money you've borrowed, and is a 
disincentive to actually entering into that particular business.
  So when we on this floor from time to time, today may have been one 
of those times, when we on this floor from time to time put in place 
new laws, new regulations, added taxes and other burdens on the 
domestic and international oil and gas companies, we are, in effect, I 
believe, cutting our nose off to spite our face, because increased 
domestic production offsets the need for additional import of crude oil 
and natural gas.
  No one that I'm aware of with any rational thought thinks that we can 
produce enough domestic crude oil and natural gas to completely wean 
ourselves from international imports or foreign imports of crude oil 
and natural gas. So it's not about totally doing away with those, but 
at least putting ourselves in a position to make ourselves less 
dependent on those foreign sources of crude oil and natural gas.
  My colleagues earlier this afternoon were talking about the high cost 
of gasoline. And gasoline is high here in the United States. It is 
higher in other parts of the world than it is here in the United 
States, but that's scant comfort to the consumers and the folks out 
there who are, as they stand at the pump and they watch that price 
ratchet up past $40 and $50 for a tank full of gasoline, the fact that 
there are people around the world paying more for their gasoline than 
we are is not much comfort as that happens.
  I understand that the high cost of diesel, whether it's ag producers 
or farmers or long distance truckers, whatever it is, adds to their 
operating cost. The cost of gasoline, of course, has taken an 
increasingly larger share of the family budget as that number goes up, 
and that's something that should be of concern to all of us.
  The bad news is that over time those costs will simply continue to 
get higher. Short of a worldwide recession, in which demand for crude 
oil and natural gas was dramatically lessened or reduced, we are going 
to continue to have increases in the price of crude oil, an increase in 
the price of natural gas, and that, of course, will be reflected at the 
pump.
  Our job should be to try to minimize those increases or delay those 
increases as long as we can, to smooth them out as best we can to allow 
consumers and businesses to make the accommodations they need to to 
begin to live with these higher gasoline and diesel prices that we're 
currently experiencing.

                              {time}  1800

  A big jump that we have seen from $30 a barrel to today, I guess, 
$100-plus per barrel has had an impact, a surprisingly limited impact 
to the extent that the economy that we've enjoyed over the last several 
years has not gone down as much as most folks had predicted with a 
rapid increase in crude oil and natural gas prices. But nevertheless, 
families are paying more out of their family budget each month for 
gasoline, and that's not going to get any better.
  We can make it worse with the policies that we pass on this floor to 
the extent that as we make it more expensive to find and produce crude 
oil and natural gas, we will add to the costs and the burdens of 
families that are unnecessary additions to costs by taking a different 
tack of promoting and incenting crude oil and natural gas producers to 
produce more, then we would help go a long way of providing additional 
supply as the demand goes up.
  So I was in Midland, Texas, in 1998 and 1999 when the price of crude 
oil was $10, $11 a barrel, a scant 9 years ago. It's hard to believe 
that today it's 10 times that number. But there's the yo-yo effect with 
respect to crude oil and natural gas prices. We have seen those prices 
go up and down dramatically over the last 40 years.
  I think the difference this time in this run-up is that China and 
India are much greater consumers of crude oil than they were in the 
late 1990s, so we were able to see a price drop to $10 a barrel. I 
don't think anyone realistically expects that to happen because you 
have got additional consumers in the market, and those consumers are 
China and Japan, as I mentioned. I was in China last April and was told 
that a thousand new cars a day are being added to the traffic pattern 
in Beijing alone. A similar statistic for Shanghai. These aren't cars 
or people that are switching from one car to another. These are folks 
who are getting off their bicycles and beginning to drive automobiles. 
So this is a net-plus increase in the demand for crude oil and natural 
gas that has not been there before.
  So while the prices are high, they will fluctuate some, but I don't 
think we will ever go back to the levels that we have seen 5 and 6 and 
7 years ago.
  The people who produce crude oil and natural gas, those companies are 
vilified in the press and, sad to say, with our Presidential candidates 
from time to time, as well as Members of this House come to this floor 
and will say some pretty outrageous things about the companies that 
supply us with the level of crude oil and natural gas that we have 
today at these prices as if they are some sort of a bad person.
  When we make critical statements, critical statements about 
corporations, and let's take ExxonMobil, for instance, because they're 
the easiest target having just released earnings this past week or so, 
earlier this month, showing that they had set a record for a 2007 
profit of some $40.7 billion. That is a huge number in any comparison, 
except, perhaps, maybe the total Federal budget. But it's out of 
context as it is taken most the time. It can be criticized, and some 
very unflattering adjectives are used such as ``outlandish,'' 
``unjustifiable,'' or ``appalling'' or ``ruthless.'' These words have 
been used by some of my colleagues to describe ExxonMobil, and that's 
unfortunate.
  Now, I'm not an apologist for ExxonMobil. They're a corporation, and 
if they've done something wrong, they should be held to high standards 
of conduct. But to the extent they have played the rules and played the 
game within the rules that are set for them, the fact that they have 
been successful, the fact that they have done well should not be held 
against them simply because the fact that they've done this well. They 
are not price gouging. Their prices are set by the international market 
like everybody else's. And the fact that they are big helps them do 
things that smaller companies simply cannot do.
  The investments, the billion-dollar investments that are necessary to 
explore for and to produce crude oil in some of the more remote areas 
of this world require huge investments, and it takes big companies to 
be able to do that. And the fact that ExxonMobil is in that arena and 
is successful at it should not be denigrated the way it is.
  Here is some of the bad things that ExxonMobil does, if you think 
that making money in the oil business is, in and of itself, bad.
  They produce some 4.2 million barrels of crude oil a day, an oil 
equivalence of some 637,000 barrels a day. So that's a sizable 
production of things. I don't have the exact percentage of total 
worldwide percentage that that is off the top of my head, but I think 
the production is about 80 million barrels a day. ExxonMobil is 4.2. So 
that is a sizable piece.
  When you consider the governmentally owned entities in that 80 
million, ExxonMobil is a small player, given the fact that Saudi Arabia 
and others, as a group owned by the governments, are much bigger 
producers than that.
  ExxonMobil, out of that $40.7 billion that they earned in 2007, they 
paid out $7.6 billion in dividends to their shareholders.
  Now, when we denigrate corporations, it's easy to do because we don't 
put a face on the corporation. We just think of it as an entity. But 
the truth of the matter is corporations can't do anything without 
people, employees, and directors and others at ExxonMobil. So when we 
make negative and ugly comments about this corporation or any 
corporation, we are, in

[[Page 2655]]

effect, talking about the people who work there.
  ExxonMobil has some 82,000 employees worldwide. That's 82,000 
families who feed their families, feed their kids from hard work and 
the successful work at ExxonMobil; 82,000 families who own homes, 
82,000 families that try to find a way to send their kids to college 
and pay for health care and take care of the things that they need to 
do to put braces on their children and all of those kind of things that 
families do. Those people are no different than anyone else working in 
America or around this world. They've got the exact same cares and 
responsibilities that every parent has. And so to denigrate the 
corporation and, by extension, these 82,000 people is really unfair.
  Hidden in the conversation about the profits that ExxonMobil made of 
some $40.7 billion was the fact that they paid some $32 billion in 
taxes; $32 billion in taxes. Now, if you added up the bottom 50 percent 
of all individual taxpayers in the United States, I think that number 
is some $27 billion. And so ExxonMobil single handedly paid as much in 
taxes as half of the individual taxpayers in the United States, 
actually paid more than that half.
  And so as you talk about all of the bad things that ExxonMobil has 
done, saying they're guilty of some pretty rotten stuff: creating 
82,000 jobs, paying out $7.6 billion in dividends to their 
shareholders, creating the wealth that relates to what those 
shareholders do. Those shareholders have bought stock in this company. 
They bought it expecting to be able to sell it at some point in time in 
the future for a profit, which is not bad, because when they sell that, 
they will pay capital gains taxes on that. The 7.6 billion, to the 
extent it went to taxable entities and not to retirement plans or IRAs, 
those taxpayers pay taxes on that 7.6 billion.
  So there's an additional 7.6. The 82,000 employees that are U.S. 
citizens pay individual income taxes on their salaries as well. And 
they're paying the payroll taxes, and ExxonMobil is matching those 
payroll taxes in a responsible way.
  So, as you see, the comments made about the amount of money that 
ExxonMobil has made, please put it into context with the amount of 
money that they would have to invest in order to do that. The return on 
shareholders' investments is in line with other U.S. corporations and 
other industries within the United States. It should be a good 
investment. It should create wealth for the shareholders that are able 
to take advantage of owning that stock having bought it when hopefully 
the price is lower than what they could sell it for.
  So, as you hear comments, negative comments, if it is about the 
breaking of a law or something like that, fine. We will deal with that. 
But if it is just the fact that they're big and the fact that they 
found a lot of crude oil, natural gas, and produced a lot of it, then 
those are misplaced. And when you make those comments about what Exxon 
does within the rules, you are criticizing people. You are criticizing 
82,000 folks around this world who are getting up, going to work every 
single day trying to do the best job they can at providing a resource 
and a commodity that all of us enjoy each and every single day.
  I did not mention the fact that ExxonMobil refines 5.6 million 
barrels a day worldwide and almost 4.7 million barrels a day here in 
the United States. So, again, jobs are created up and down the stream 
with respect to the oil and gas business.
  As you look at energy policy, I think that we spend a lot of time in 
this Hall talking about what we should be doing, and yet we don't 
listen to each other very well in terms of what the impact is of what 
we are trying to do. And consequently, we don't have in place rational 
policy for what we should be doing in this country.
  There are two broad areas of energy that we should talk about 
separately: One is electricity generation and the other is crude oil 
and natural gas. That is what we use to drive our cars.
  With respect to electricity, we have had a dramatic event in Florida 
yesterday where we had a blackout, an infrastructure failure, overload 
of some sort that quickly got corrected, but it was a microcosm of a 
wreck that would happen if we didn't have adequate supplies of 
electricity.
  Now, the growth in this country in terms of population, with it comes 
an automatic growth in the use of electricity. That's just the nature 
of the beast. Now, we should be doing all that we can to conserve. We 
should be using smart appliances and smart light bulbs and doing all of 
those kinds of things. But the truth of the matter is, as the 
population of the United States increases, we need more energy, more 
electricity to be able to meet the needs of this increased population, 
whether that is lighting their homes, air-conditioning their homes, 
providing electricity to power the businesses in which they work. That 
is going to be a demand that is there and is growing.
  If we don't continue to invest in generating capacity, then we are 
going to get caught in a circumstance where our demand has outrun or 
outstripped our ability to supply that energy, and we will have very 
sizable increases in the cost of electricity.
  You can see what happened a number of years ago in California where 
they got caught in that exact same wrinkle. They discouraged generating 
capacity to be built in California, but yet the demand for electricity 
continued to increase and they got caught in circumstances where the 
demand was higher than the supply and they had a dramatic increase in 
prices. They had some regulatory issues involved that created that 
problem, but when you have demand that outstrips supply, you have large 
price increases in that arena. And those kinds of circumstances have 
the dramatic effect on individuals as well as businesses, because when 
you are putting your monthly budget together or your business plan for 
your company, you try to estimate what your costs are going to be over 
a near-term and mid-term circumstance; and you ought to be able to 
predict reasonably close what your energy costs should be over the next 
4 or 5 or 6 months. And when you get sharp spike increases, as was seen 
in California, then that wreaks havoc not only in the family budget but 
also with businesses that are subject to passing on those electrical 
costs through their products and services ultimately to consumers.
  So as we look at the electrical side of this thing, we should be 
promoting wind, as we see in west Texas, and solar and hydropower. All 
of these alternative and green sources of electricity should be 
promoted as well. But the growth in that side of the business cannot 
even keep up with the growth in the demand. We've got two 
circumstances: natural gas-generated electricity, we've got coal used 
to generate electricity, and we've got nuclear that is used to generate 
electricity. Those are the three main backbones of the current grid.
  And so as you look at those plants, they are all getting older every 
single day. Recently, the Nuclear Regulatory Commission has been able 
to go through a second round of licensing for existing plants and has 
been able, because of the good maintenance and upkeep and the proper 
operating procedures and plans that have been in place at the nuclear 
plants, have been able to extend the useful life of the current 
complement of plants we have for another 10 to 15 to 20 years, which is 
important, because the time frame of which a lot of that production 
capacity was built, they're all going to fall off the grid in a 
relatively short period of time, which means the supply is going to dry 
up if we don't create additional sources of electrical generation that 
can be counted upon.

                              {time}  1815

  So we've got a problem, going forward, with how to generate 
electricity. The green sources can't keep up with the growth in demand. 
Natural gas is an expensive commodity. We're not drilling for sources 
of domestic gas. And because natural gas is hard to import, those 
prices and costs of generating electricity using natural gas will 
continue to go up faster than the cost of using coal or nuclear.

[[Page 2656]]

  The backbone of the grid, for certainly my lifetime and perhaps even 
my children's lifetime and beyond, will have to be nuclear and clean 
coal burning technologies. I don't think realistically there is any 
other way to generate electricity on the scope that we're going to have 
to generate it on and get it done.
  If you don't acknowledge that, if you put your head in the sand, then 
you develop policies that will not promote a rational, orderly, 
thoughtful process of how to provide electricity for this country over 
the next 50 or 60 years, and that is an unfortunate circumstance that 
we see ourselves in.
  None of the alternative sources can fully replace everything that's 
going on, and yet we seem to be placing great reliance, or hope, that 
we can develop these alternative sources, green sources of electrical 
generation in time to offset the loss of the nuclear power plants that 
ultimately wear out, the coal-powered plants that ultimately wear out, 
and the natural gas that is a commodity of seemingly infinite supply. 
But that's wrong, too, because crude oil and natural gas are finite 
resources. There will be a day, a long time from now, when the last 
barrel will be produced and the last MCF of natural gas will be 
produced because it is such a finite resource and takes so long, 
millions of years, to create it underground.
  The argument about nuclear is that it's unsafe and unsound. It's 
dangerous. I had the opportunity to visit the Comanche Peak Nuclear 
Power Plant that's just on the eastern edge of my district. It's not in 
my district, it's just outside on the eastern edge. Quite frankly, I 
had never been to a nuclear power plant, and so it was an eye-opening 
experience for me. Everybody had the little meters on, DOSA meters on 
that will show whether or not you've had an exposure to radiation that 
is inappropriate.
  We actually, as a part of that tour, went into the storage facility 
for the spent fuel rods, the spent rods that they've used over the 
years to create the nuclear reactions. And I'll admit to being a little 
apprehensive. You simply walk through this door and you're standing in 
front of what appears to be a giant swimming pool. At the bottom of 
this pool of water are these spent rods. And I kept kind of glancing at 
my DOSA meter to make sure that I wasn't getting a dose of radiation. 
Sure enough, I was not. It's perfectly safe. But I didn't know that. 
Ahead of time, if you would have said that this spent fuel is stored 
underwater like that in an open arena pool, I would have been a little 
bit skeptical about how safe that was. But our nuclear industry is a 
safe industry and deserves to be exploited as we look at ways to 
generate electricity.
  The argument is that spent fuel creates a hazard and a problem for 
disposal and storage, and that's the case. But you have to weigh that 
against the way electricity is produced everywhere else. If we continue 
to use coal, until we learn how to capture the CO2 and 
sequester that CO2, the equivalent amount of electricity 
between producing with coal versus nuclear, the coal will have produced 
X tons of carbon dioxide that would have gone into the atmosphere, 
versus on the nuclear side, a small, relatively containable and 
handleable spent fuel that we have to deal with.
  So you look at the two. And clearly, given the emphasis on global 
warming and climate change, the folks who are proponents of that argue 
that CO2 and climate change are the single biggest things 
threatening our lives. Well, if CO2 is the biggest threat to 
our way of life, why not deal with that by using nuclear? I mean, 
nuclear waste has to be way down the list of things that are dangerous 
for us to deal with.
  I'm not a Pollyanna. I understand that when you build a nuclear 
plant, that it is subject to being somebody's target to do something 
stupid. But we have done a good job the last 7 years, since 9/11, 
protecting the nuclear plants, we'll get better at it, and assessing 
the risks to those power plants and understanding the opportunities 
that some bad guys might want to do at a nuclear power plant. But 
getting exposed to it, which is probably not a good word, but at least 
understanding and becoming more informed about how the nuclear power 
plants work and how the controls are in place, the systems they have in 
place for fail-safe circumstances, in addition to developing new 
generation or next-generation power plants which use a different model 
that in and of itself is a safer model of a way to generate 
electricity, and approaching that in a rational, thoughtful manner is 
going to be in all of our best interests.
  And yet there are still an awful lot of people out there who are 
apprehensive to the point of not wanting to use nuclear because they 
believe that the risks are too great. We need to have these 
conversations between the folks who believe it's too risky and the 
experts who understand exactly what it is and how it works and where 
those risks are and where those risks aren't, to get those to come 
together and help us understand how we mitigate the risks and how we 
adjust them and go forward with a source for the grid that is clean, 
zero emissions, and is going to be one of those sources of electricity 
generation for the U.S. that is important to our grid. It's important 
already in France, and other countries of the world are using it safely 
without incident. And certainly we're as good as the French are at 
doing things, I would expect, and should be able to handle nuclear 
power in ways that are responsible, both to the areas where the plant 
would be, as well as to how we handle the spent fuel and the waste that 
is an issue, and where we store that. All those kinds of things can be 
solved and should be solved if we can begin to deal with the issue, and 
first dealing with our irrational paranoia about it, getting past that 
and dealing with the realities that the experts and the scientists 
could certainly help us understand that.
  So, Mr. Speaker, the national energy policy, we've had several 
attempts at it over the years. We currently don't have one that's 
rational, I don't think. We continue to penalize the oil and natural 
gas industry with added taxes, as we did this afternoon, with red tape, 
with regulation that prevents them from being efficient. We lock away 
vast areas of the United States to prevent domestic production of crude 
oil and natural gas. We don't have a thoughtful, rational approach to 
electrical generation and how we're going to get that. Clearly, clean 
burning coal and nuclear have to be exploited and explored. Yes, 
continue to work on the wind and solar and other ways of generating 
electricity, but the truth of the matter is that those are going to be 
at the margin of the electrical grid.
  Every American alive today, when they walk into a room and flick the 
switch on, expects the lights to come on. They don't know how that 
happens, but they expect it to happen. And except for yesterday 
afternoon in Florida, most all the time it does. When it doesn't 
happen, like what happened yesterday in Florida, it shows how 
vulnerable we are to not having electricity, what impact that has. You 
saw the traffic grids, the traffic parking lots across Florida because 
the traffic lights went out. You couldn't move traffic the way it 
normally moves. And all the people trapped in elevators and all that 
kind of anecdotal excitement that happens when that goes on helps give 
us a little bit of a sense of what a world without all the electricity 
that we need to produce and to use is not readily available at our 
fingertips at the flick of a switch.
  With respect to crude oil and natural gas production, again, as I 
mentioned earlier, we are going to be using it for a long, long, long 
time. If it's imported from countries that are not operating in the 
same thought patterns that we are with respect to human rights and 
women's issues and other kinds of things, if it creates a strategic 
vulnerability to this country to import crude oil and natural gas, then 
it seems logical to me that we would put in place policies and 
regulations that would promote the domestic production of crude oil and 
natural gas as opposed to hindering them.
  To reduce domestic supplies is wrongheaded. And when we increase 
taxes on the oil and gas business, that is money that is taken away 
from the

[[Page 2657]]

exploration for new sources and new supplies of crude oil and natural 
gas.
  The mechanics of an oil and gas company typically says that when you 
find, through the exploration process, through drilling and finding it, 
you understand that there's a reservoir of crude oil or natural gas 
underground. Through scientific estimates and from petroleum engineers, 
you can determine what the value of those reserves are once you've 
drilled a well and begun to produce those.
  Typically what happens, the independent producers in particular then 
go to the bank with the reserve report that shows what they think the 
estimated value of that crude oil and natural gas is in the ground. 
They go to the bank and use those reserves as collateral to borrow 
additional dollars to drill with and to explore that field further or 
to increase production. And so each dollar that goes somewhere else 
other than back into production is a multiple of that dollar that is 
not used to explore for and to produce crude oil and natural gas.
  Most of the independents that I represent in West Texas are trying to 
drill in the United States. Statistics show that independents, as that 
term is defined, typically reinvest 600 percent of their profits back 
in the ground. In other words, they borrow six times as much money as 
they earn in a year in order to continue to grow their reserve base to 
replace the production that they've already produced and to continue to 
do the things that they do best. Major oil companies, such as 
ExxonMobil, are generally well above 100 percent, I think it's 170 
percent of their profits go back into the ground to explore for and to 
produce additional crude oil and natural gas, much of that is 
worldwide, which in a commodity such as crude oil and natural gas, 
there is really no distinction between the oil produced around the 
world versus domestic production as far as creating supply against the 
demand that is out there and is a growing demand as well.
  So a broad-based national energy policy that encompasses electricity 
production, how we drive cars and fly planes and drive trucks and those 
kinds of things, I think it is awfully important that this Congress 
come to grips with.
  I have not mentioned conservation, but that is a huge piece of the 
pie as well. We can use less per person than we currently are, and 
that's less electricity and certainly less gasoline in our cars.
  I have introduced a bill that would create a public-private 
partnership in order to help remind consumers that they have a direct 
role in energy usage in this country. The partnership would point out 
things that we can do individually, by choice, to reduce our own 
demand. Our own use of gasoline is an example. And it doesn't have to 
be draconian. I'm not talking about giving up your automobile and 
riding a bicycle to work. That's not rational. We're not going to do 
those kinds of things. But there are some small things that each one of 
us can do and choose to do on our own that would have a dramatic impact 
across the system. As an example, if we would arrange our affairs next 
week to use one gallon of gasoline less than we used this week, that 
would have a dramatic effect if everybody decided to do it. If the 
millions and millions of consumers and drivers out there would just 
simply use one gallon less, you would see a dramatic increase in 
inventories. When inventories go up, the folks who are in the business 
of retailing gasoline are very price sensitive, and their prices move 
around, up, and they also come down. But if their inventories begin to 
grow unexpectedly because we just simply used a little bit less 
individually, but if collectively across all the United States, you 
would see a big rise in inventory.
  Now that does two things. One, you would save the cost of that one 
gallon of gasoline. And at $3.50 a gallon, you may think, well, that's 
not all that much. But if you look at the impact that that savings 
would have across the system, you would save $3.50 per person, but you 
would also see a drop in the price of that gasoline because the 
supplies and inventories would go up. That means that collectively all 
of us would be better off.

                              {time}  1830

  Now, how do you save a gallon of gasoline? You do some simple things 
like you keep your tires aired up to the proper limit. You take the 
extra weight out of the trunk of the car so you're not hauling it 
around. You think each day about what are the trips I'm going to make 
today. How can I drive a few miles less today than I drove yesterday, 
and just be smart about it. You can be a safer, more polite driver to 
the extent that as you accelerate your car, if you're not aggressive in 
accelerating it, if you don't slam the accelerator down and race away 
from red lights and stop signs, if you drive a little friendlier than 
some of us are used to, that uses less gasoline as well.
  So there are a lot of things that you and I can choose to do. It 
doesn't require a government mandate. It doesn't require a bureaucracy 
to administer. It's just simply all of us working in our own best 
interests to save a little bit of gasoline. And, again, 1 gallon this 
week less than I used less last week would have a dramatic impact on 
those prices, and we would all collectively benefit because we would be 
doing what we ought to be doing, and that is conserving the resources 
that we've got responsibility for.
  The same thing applies to electricity. Using less electricity, you 
could do a lot of things, and we all can do that, to reduce the growth 
in the demand for electricity. Again, you're not going to read at night 
by candlelight or campfire or lanterns. We're not going to do those 
kinds of things, but we can have a dramatic impact on electrical uses.
  I had a client when I was with Price Waterhouse back in the early 
1970s, Recognition Equipment. Recognition Equipment made some pretty, 
at that time, sophisticated optical readers, and they had a very 
complicated cost accounting system in which they would allocate their 
indirect costs, heating and air-conditioning and lighting and all those 
kinds of stuff, would allocate those to their products that were being 
produced. As you remember, in 1973 we had the Arab oil embargo and 
prices shot up from $3 a barrel to 30 bucks a barrel. There was a big 
push to use less electricity, to use less energy. REI went all through 
their plant and did everything they thought they could do rationally to 
reduce their electrical usage; things like they went to every other 
light in the hallways and all kinds of things. They were able to so 
dramatically reduce their electrical usage that it screwed up or messed 
up their indirect cost allocation to their products, and they had to go 
back through and readjust the amount of money that they were applying 
to come up with the cost of their products through their process. So we 
can do those kinds of things when we have to. Typically when we have to 
is when the prices get so exorbitant that we are forced to do it. We 
can choose to do those things ahead of time without being forced to.
  I currently represent a chain of convenient stores in west Texas 
where I know the folks who run it, and we were talking about gasoline 
uses. They make a lot of money selling gasoline at these convenience 
stores. And 2 years ago when the price first started going over 3 bucks 
a gallon, they could see a dramatic difference and a change in their 
consumer patterns when the price of gasoline was above $3 versus when 
it was below. Consumers would immediately react to that. Now we have 
become desensitized or less sensitive to the $3 number, and that new 
number is somewhere north of that where we would feel the pain enough 
where we would be willing to make some changes in our own personal life 
to do that. We don't have to wait for that price to go up in order to 
motivate us to do those kinds of things. There should be plenty of 
motivation for us to be able to take the kinds of conservation steps 
that each one of us individually could do as a free-will choice that 
would help this issue tremendously as we move forward.
  In conclusion, Mr. Speaker, there are no magic bullets. There's no 
magic wand that we could wave across this problem and instantly fix it. 
It requires

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thoughtful compromise across a lot of folks who are in this arena, 
folks who have legitimate concerns, legitimate worries, legitimate 
issues. Working through those, working off of sound science, looking at 
rational approaches to things and not taking the extremes is going to 
be important as we as a society continue to move forward with an energy 
policy that makes sense.
  Calling each other names, talking about the producers of crude oil 
and natural gas like ExxonMobil in some very unflattering terms is 
counterproductive to the system. Beating up ExxonMobil makes absolutely 
no sense if you think that the product that they are producing is 
something that we need. Now, you may not like the prices that they're 
producing it at, but those 82,000 people who work for ExxonMobil are 
human beings. And when they hear their company denigrated by folks in 
this Chamber and Presidential candidates and others because they have 
been successful working within the rules and within the laws, that 
sends a really bad message to folks who are providing a service, 
providing a commodity to us that we simply can't get along without.
  So thank you, Mr. Speaker, for allowing me this time tonight. I would 
encourage my colleagues to thoughtfully think about the words they use, 
the adjectives they use as they describe this problem. This is not a 
Republican issue. It's not a Democrat issue. This is an issue that's 
important to every single American out there. It's one that deserves 
our best, thoughtful consideration. It deserves our listening to each 
other and hearing the concerns each of us have and working toward a 
solution and actually putting it into place.

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