[Congressional Record (Bound Edition), Volume 154 (2008), Part 5]
[House]
[Pages 6770-6774]
[From the U.S. Government Publishing Office, www.gpo.gov]




                                 ENERGY

  The SPEAKER pro tempore (Mr. Altmire). Under the Speaker's announced 
policy of January 18, 2007, the gentleman from Iowa (Mr. King) is 
recognized for 28 minutes, one half of the time remaining.
  Mr. KING of Iowa. Mr. Speaker, I appreciate the privilege to be 
recognized here on the floor.
  I would ask, as a point of information, do you anticipate Democrats 
coming to the floor for the next hour?
  The SPEAKER pro tempore. There is one group following the gentleman.
  Mr. KING of Iowa. I appreciate being recognized to address you on the 
floor of the House, Mr. Speaker.
  In the 28 minutes that I have been allocated, I think it's important 
to address some of the issues that were raised by the gentlemen in the 
previous hour, the 30-Something Group. That is that, gentlemen, you 
simply cannot suspend the laws of gravity or the laws of nature, and 
what goes up must come down. Water runs downhill. And supply and demand 
control the prices in the marketplace.
  I have fought this energy issue on this floor of Congress for some 
years now. And the lamentations that I'm hearing that come from the 
gentleman from Florida, his concerns about motions to recommit used to 
be concerns about the Republican majority. They still remain concerns 
about President Bush, and they still remain allegations about why we 
have high gas prices, why it is people can't pay their bills. But the 
Pelosi majority would suspend the law of supply and demand. There 
wasn't any discussion about that. It was all about profiteering of the 
corporations.
  Well, the first point I will make is that we have got to have some 
people producing energy. And let's just say, for example, if Exxon 
makes $10 billion a quarter, and that adds up to 40 some billion 
dollars a year, and if this Congress steps in and says we have a 
different deal, we want to change the deal, we want to put some 
windfall profit tax on you and every other American corporation that is 
now making some profits off their investment in the oil fields, and as 
this leadership on the Speaker's side has done through the farm bill in 
particular, which is push to change the deal on our oil leases and 
renegotiate them because of their belief that the people who signed 
those contracts, those companies that are providing oil and gas and 
diesel fuel for us are making too much money, Mr. Speaker, a deal is a 
deal. And when the Federal Government signs a deal for oil leases and 
those companies agree to pay royalties on the oil they pump out on a 
per barrel basis, if the value of that barrel

[[Page 6771]]

goes up, the Federal Government's deal can't change, just as if the 
value of the oil goes down. If it costs more to explore and find the 
oil and more to get it on the market, Uncle Sam is not standing there. 
Speaker Pelosi is not standing there with her checkbook saying, well, 
it didn't work out so well for you; so we want to fill in the hole of 
the loss that you had. No. A deal is a deal. And when you shake hands 
on it or you just say, yes, that's what I agreed to, that is by 
definition a contract. And when you have a congressional piece of 
legislation, when you have the Federal Government negotiating a lease, 
you don't change that deal.
  And this Congress steps in and makes noises about windfall profits 
tax. And there are people sitting on the board of directors of these 
energy-producing companies, these companies where the more energy they 
produce, the cheaper gas gets for the American people because the law 
of supply and demand commands the price. Gas gets cheaper when you have 
more of it produced. And when companies make money, they invest that 
profit into research and development and exploration. When they do 
that, that puts more gas and more diesel fuel and more oil on the 
market, not less. And that keeps the price from inflating or it lowers 
the price. So if this Congress, led by this Speaker, steps in to change 
the deal, the people on the board of the directors of those oil-
producing companies, if they're logical, rational people and they 
control capital; so by definition they are logical and rational in my 
book, some of them are going to start to discuss how they can take 
those profits out of their oil company and invest them in someplace 
else where they might not be so vulnerable to a windfall profits tax or 
so vulnerable to a Congress that has shifted to evermore class envy, 
evermore resentful about capital returning to the stockholders, and 
when that happens--the mutual funds, the retirement funds, the 401(K)s, 
the investment funds of America that are our pension funds that 
supplement Social Security are many times invested in oil stocks and 
reserves and futures. The portfolio of America's retirement is what's 
being attacked by this Congress. And we have to let people and have to 
let companies make a profit when they invest and take the risk. You 
cannot suspend the law of supply and demand. But this Congress has. And 
I think you're off in Pah-la-la-losi Land thinking that you can suspend 
the law of supply and demand. You cannot.
  If we have more energy on the market, the price increase will either 
slow or it will diminish and be reduced. If we have less energy on the 
market, the price will go up if the demand also goes up. That is the 
equation that works here.
  So we have high gas prices, and it's pretty easy to figure out why. 
The American people that are awake tonight, Mr. Speaker, and especially 
those out on the west coast and in the mountain States, they will 
understand this equation, I think, fairly simply. There are three 
reasons that the gas price has been increasing. One of them is the 
world demand on gas and diesel fuel, on oil. That's why the per barrel 
crude oil price has gone up. By any measure it has gone up. The world 
demand has increased. We see the Chinese increase their demand, and as 
the Chinese demand increases, that puts more demand on the supply, and 
when the supply gets tighter, the price goes up. U.S. consumption has 
not diminished. It has marginally increased over the last few years. 
That uses up more.
  The oil reserves are being diminished some. And we're finding also 
oil in other places where we thought we couldn't produce it. There was 
an announcement here last week. USGS had announced what I believe was 
3.4 billion barrels of oil in an oil shale a couple of miles down, most 
of it in North Dakota and some of it in Montana. That's a huge oil 
find. The tar sands in Northern Alberta have a massive amount of oil, 
and we're preparing to bring a pipeline down from there and build a 
refinery in the Midwest if local people are willing. And if we can do 
that, we can keep the gas and diesel fuel prices in America from 
inflating out of sight. And, in fact, if we can bring enough supply in, 
we can cause those prices to go back down. Supply and demand is one 
component of this, and it's a pretty important component.
  The use and consumption of more energy globally is another component 
of it.
  And a third component of the high gas price is a cheap dollar. This 
dollar has been diminished in its price. And the commodities across the 
world, it takes more American dollars to buy things overseas to 
purchase into the Euro environment, the European Union, for example. It 
takes more dollars to purchase in Asia. But their currency buys more. 
So because their currency buys more, it takes more American dollars to 
compete against that. So perhaps 35 percent of the value of this crude 
oil on the marketplace is because the value of the dollar has been 
diminished. If you could take 35 percent or roughly a third out of the 
gas price today, you're down there near $2 a gallon.
  But the point that I want to make about this in this poster, Mr. 
Speaker, is this: The remarks made by the previous presenters are not 
consistent with this factual information that I have in this chart. And 
it works this way: On the day that George Bush was inaugurated as 
President, and I mean the first day, January 20 of 2001, the average 
gas price on the street was $1.49 a gallon, Mr. Speaker. That price 
stayed fairly flat. It appreciated some. And by the time we got out to 
2007, January of 2007, when this new Democrat majority in Congress was 
sworn in and Speaker Pelosi took the gavel where you're seated, Mr. 
Speaker, the gas on that day was $2.33.
  Now it's been about 15 months perhaps, perhaps 15 months of this 
Pelosi Congress, and gas has appreciated, gone up in price, from $2.33 
a gallon to $3.51 a gallon. That's a 50 percent increase in the price 
of gasoline in America in 15 months. And that isn't because President 
Bush has done something to increase the price of gas. It isn't because 
he hasn't been helpful and supportive and worked to try to get us more 
domestic energy supplies. It's because the people on that side of the 
aisle, Mr. Speaker, the people on the Democrat side of the aisle, have 
blocked everything since I've been in this Congress that put more 
energy on the market. They blocked everything.
  And we fought this on this floor to open up ANWR for drilling, a 
massive amount of oil up there. There's no environmental concern in 
ANWR. We were successful in drilling the North Slope. And I will submit 
that there is not an environmental spill in that part of the country 
that has a lasting and damaging effect. There was a tanker, the Valdez, 
that did run ashore and have a spill. But that was a matter of 
transport. It wasn't a matter of drilling, and it wasn't a matter of 
processing or pipelining it out of Alaska. It was after it left Alaska 
that that happened. But there was not a measurable spill up north that 
caused a problem. There is no environmental impact that's been a 
negative up there in Alaska, and there is no rational reason to 
prohibit drilling in ANWR. Yet the vast majority of the Democrats 
blocked the drilling in ANWR. When we were close, when we were within a 
handful of votes of being able to punch those holes up there and have 
that oil flowing down in here into the domestic United States, that 
would have been back when gas was, let's say, about $1.80.

                              {time}  2315

  Today, it's $3.51 and rising because of the barrier that was put in 
place by environmental extremists that do not have a rational argument 
that they can put up. All they do is put a green label on a bill, and 
as soon as it's green, the chicken littles on that side will run and 
vote for a green bill. I had people come to me and they said, We had 
the bill to drill in ANWR that allowed for, out of those millions 
acres, and I think it's 19.2 or 19.2 million acres, 2,000 of them to be 
used to punch holes down into the oil field. Two thousand acres. As the 
vote went up on the board, Mr. Speaker, people came to me and said, You 
are from Iowa; you know

[[Page 6772]]

what an acre is. You have farms there. How much is an acre? I said, 
Well, 43,560 square feet. That didn't mean a thing to them, that is the 
size of a country school house lot. That didn't mean a thing to them. 
How about the size of a football field? Oh. Okay. Two thousand football 
fields. I think I will be a no because, after all, it's green. It's 
labeled green.
  Environmentalists don't want to punch holes up there. It's the best 
place God could have put oil, that I can imagine. You go up there and 
do it in the permafrost and you drive out on the ice. And when the 
frost melts in the summertime, there's no sign that there was any 
traffic there at all. The most extreme environmentalists you could come 
with on that side, Mr. Speaker, I could fly them over ANWR and they 
couldn't point down to an oil well. I will fly them over the north 
slope. I will fly them over at 2,000 feet and they can't eyeball an oil 
well in the north slope of Alaska because it's not what they imagine 
and it's not drilling up there in a pristine alpine forest.
  I am here to tell you there's not a single tree up there, Mr. 
Speaker. Not one. Even though the Sierra Club ran adds that said we 
can't disturb--well, the images on the screen were pristine alpine 
forests. There's not a native caribou herd. But the one on the north 
slope of Alaska, where we did drill successfully, went from 7,000 head 
to 28,000 head, for those of you out there in Rio Linda. That is 28,000 
caribou where there was 7,000 before because now they don't drop the 
calves into the cold water on top of the permafrost, but get next to 
the nice warm pipeline and have their calves and they get nice and 
fresh then they gallop across the tundra.
  It's been a good thing for the environment, a good thing for the oil 
supply. Drilling in ANWR is a good thing. Drilling in the Outer 
Continental Shelf, especially around Florida, is a good thing. These 
prices would not be this high if we had been successful in those 
efforts, if there hadn't been a Democrat green coalition that blocked 
every effort to try to put more energy on the market, more Btus on the 
market. Because the equation is this, all of our energy is all wrapped 
up together. British Thermal Units ties it all together, whether gas, 
diesel fuel, ethanol, biodiesel, solar, hydroelectric, whether it's 
nuclear, whether it's wind energy, whether it's clean burning coal, 
whether it's latent solar heat, all of those things put energy out of 
the market. They are all part of the overall energy pie chart. The more 
energy we can put there, the cheaper it's going to get. And the more 
things that you do to take energy off the market, the more expensive 
it's going to get. And your thoughts are either denying the law of 
supply and demand, or the thing that I heard many of you voice, this 
thing you have convinced me now is that you want to see more expensive 
energy. That is what I believe. Because I hear the dialog, I hear the 
debate. You want more expensive energy because somebody will park their 
car and get on their bicycle and ride that instead of driving their 
car. Doesn't work for grandma out there in Iowa that has got ten miles 
in January to go to town. But it might work for somebody in Florida to 
get on their bicycle.
  More expensive energy why? Because we get more quality of life? No. 
Because you have this myopic vision that you can somehow save the 
planet if we had $6, $8, $10 gas. That is why you're taken by every 
energy action of this Congress since Nancy Pelosi took the gavel that 
has taken Btus off the market, shortened the supply, tightened this 
thing up. The demand has gone up, the supply has gone down. The price 
has gone up 50 percent in the 15 months that Nancy Pelosi has been 
Speaker of the House. And I have to listen to the drivel that says 
there is some other reason because what, we didn't go after the 
windfall profits of the oil companies? I don't think so. That means 
everybody delivering oil is a crook and everybody is fixing prices and 
going along with it. It is supply and demand. That is the bottom line 
on this energy piece.
  As I look at my colleague from Michigan, who actually comes to the 
floor with a significant amount of expertise, I would be very pleased 
to yield such time as the gentleman may consume. Mr. McCotter from 
Michigan.
  Mr. McCOTTER. I appreciate that. Thank you. We have a fundamental 
agreement and yet a disagreement. I think that everyone can see that 
there are three key elements to America's energy situation: Production, 
conservation, and innovation. We all agree on conservation. We'd like 
to see America more energy efficient, and we differ on whether or not 
what the extreme would be in terms of conservation. Republicans 
generally would hope that they would be community-oriented 
conservation, recognizing these tiny ripples of hope, citizen 
engagement in protecting their local environment would be the most 
efficacious way to deal with this situation rather than pass an 
overarching bill in Washington, with no citizen participation and only 
hope and more regulation, taxation, and burden upon America's industry 
and upon the American people.
  In the area of innovation it is a very stark difference. Our side of 
the aisle believes that the free market and the genius of the American 
people will come up with the innovative solutions necessary to move us 
toward green fuels and a cleaner environment. The other side of the 
aisle believes the government knows best, and if they just capture 
enough revenues from the hardworking American people, they will then 
determine what ideas will work and will not work and force them upon 
the market.
  But it is most noticeable in the area of production where the two 
sides differ. We believe production is essential. The gentleman from 
Iowa has properly laid out we live in a global economy. Supply and 
demand are the keys to the crisis today. If America does not produce 
more energy from its own sources, the cost will continue to go up 
because the supply will remain constricted, if not finite, and the 
demand will continue to grow from developing countries such as 
Communist China, India, and others.
  What we believe is necessary is a declaration of energy independence 
which, like our own country's Declaration of Independence, recognizes 
that it would not happen overnight, it would not be easy; it would 
require sacrifice, and yet together we would get there.
  We need to continue to produce domestic energy as we transition 
through a free market-based approach to innovations that will get us to 
a green energy policy and through the community-based conservation that 
will help foster and perpetuate energy efficiencies within our 
communities, within our homes.
  Now the difference between these two policies is clear in the chart 
that the gentleman from Iowa has put before us. As someone who does not 
come from Iowa, but from Michigan, once known as the arsenal of 
democracy, a proud manufacturing State, the State that put the world on 
wheels, we see what the cost of energy does. It is not an abstract 
number, it is a situation which causes an intense amount of pain and 
anxiety to the constituents of my district and the constituents of my 
State.
  Manufacturing requires energy. We know the manufacturing sector has 
been decimated by unfair trade competition and other unfortunate 
policies. Yet, when you take the cost of energy on top of it, you are 
almost signaling the death knell of the manufacturing base as we know 
it and as we would like to preserve it, because that cost of energy, as 
it rises, is put into everything the manufacturer must do. And in the 
age of global competition, it becomes increasingly difficult for the 
manufacturer to keep his costs down, his fixed overhead rising, and in 
the end, there comes the push, especially from the tier one and tier 
two suppliers, the push comes from above to either eat the cost or send 
it offshore.
  We also are starting to see what the government dictates in terms of 
innovation with the emphasis on ethanol and others is we are beginning 
to hear stories about food shortages in the United States, we are now 
beginning to hear about how the cost of basic staple commodities is 
rising. Again, in our

[[Page 6773]]

economy today, which is slowing down, the cost of energy, the cost of 
gasoline in particular is the cause. In my mind, this is the cause. 
Because it is one important commodity that is continuing to go up in 
price without any relief in sight, and it also has spillover costs to 
all of the other commodities related to it.
  There is nothing that does not wind up on your kitchen table that 
does not require energy to produce and transport. There is nothing in 
your home that you turn on, your Internet, or anywhere else, that does 
not require energy. As the cost of energy goes up, the cost of 
everything goes up. If we do not help increase the supply of energy, 
the costs will continue to rise, the American people will continue to 
suffer.
  Now there will be an attempt, because evidently production 
conservation and innovation in a sound way is not palatable to some in 
this chamber, indeed a majority, there would be the attempt to shift 
the blame for the rising costs of energy to the producers. I am no fan 
of any multinational corporation. But then, again, I am not their 
executioner either. Because I remember what Ronald Reagan once said, 
Corporations are not taxpayers, corporations are tax collectors.
  You want a windfall profits tax, you want a punitive tax on oil 
companies, energy producers, you can do it. And where are these energy 
producers and oil companies going to get that revenue from? They are 
going to pass the cost right onto the American people at their pumps, 
because Americans right now cannot survive without driving their cars 
to work. They cannot survive without energy. It would seem to me that 
these are simple lessons that we should have learned in our youth.
  Then it occurred to me as I watch my children grow up, we have an 
entire generation of voters that were not alive in the 1970s. They did 
not live through the OPEC oil crisis, they did not live through 
taxation upon energy producers, they did not live through the syn 
fuels, where government raised taxes, put money in a fund, handed it 
out and we were going to be energy independent, or when Jimmy Carter 
went on TV and declared that by turning down the thermostat to 68, this 
was the moral equivalent to war.
  The gentleman from Iowa and I have in the past talked about our love 
of history and its need to be taught in the schools. Because anyone 
with a remote understanding of the 1970s would understand that the 
failed policies of the 1970s are inadequate to meet the pressing energy 
needs of today. What we need is a 21st century energy strategy, not a 
failed 1970s Jimmy Carter policy that actually helped pave the way 
toward more energy dependence in America.
  So I thank the gentleman for what he is doing today, and I would 
encourage my colleagues to go back and look at what was tried before 
and failed and then perhaps they would be more amenable to coming 
across the aisle in joining with us to try to take concrete steps to 
alleviate not only the rising cost of energy but the rising cost of 
everyday life that is associated with it.
  I yield back to the gentleman from Iowa.
  Mr. KING. I thank the gentleman from Michigan for coming down to the 
floor and adding to this dialog.
  Mr. Speaker, as I listen to Mr. McCotter and reflect upon his remarks 
that corporations are tax collectors, that they actually don't pay 
taxes, it's Ronald Reagan's position, my position, Mr. McCotter's 
position. They will pass those costs along to the consumer because in 
the end it's the last stop of the retail that pays the taxes. That is 
the people in the end. The consumers in the end will pay the price. If 
they raise the taxes, we will see the prices go up. If we make energy 
more scarce, the price will go up. If we are punitive towards companies 
that are producing this energy and risking their capital, their capital 
will go elsewhere.
  If that happens, then there will be less oil on the market, not more. 
The price will be higher, not lower. The energy will be more scarce, 
not less. Because of these policies that have come forth in the 
beginning of this 110th Congress, we see the action that has taken 
place here. We see what has happened from the very first day, Mr. 
Speaker, of the new 110th Congress, the day that Nancy Pelosi took the 
gavel, and it became clear that there was going to be an energy 
scarcity policy. Gas went from $2.33 over 15 months to over $3.51 a 
gallon, perhaps more than that today. That is a 50 percent increase in 
just 15 months. I have stipulated the reasons for that. Energy is more 
scarce, it's less certain. This economy is also in a decline.
  It's interesting to me that I don't hear a lot of discussion about 
the real reasons for that, Mr. Speaker. I look at it this way. When the 
new hands took over and picked up the gavels here to be chairs of the 
committees in Congress, in the House and the Senate, and we had the 
chairman of the Ways and Means Committee, Mr. Rangel, from New York, 
who a long time had waited to become chairman of the Ways and Means 
Committee, we had pushed pretty hard to make the Bush tax cuts 
permanent, those tax cuts that slowly the authorization expires and 
will automatically kick in as dramatic tax increases in the next couple 
of years. I watched as the chairman of the Ways and Means Committee 
went on the talk show circuit all over television, and I presume radio 
too, and he was constantly asked by the pundits, What will you do with 
the Bush tax cuts? Will you make them permanent?

                              {time}  2330

  Are there some there that you will commit right now that you will 
want to save and protect of those tax cuts, or will you just simply 
want to see them all expire and have that automatic, huge, 
unprecedented record tax increase?
  Well, the chairman didn't address that subject matter, by my 
recollection, one at a time or in groups. But eventually as he did 
enough of the talk show circuits, the talk hosts would ask the 
question, and by a process of elimination, the capital investment in 
America pretty much concluded that no part of the May 28, 2003, Bush 
tax cuts would the chairman of the Ways and Means Committee want to see 
made permanent.
  Capital saw that and realized that by about late January-early 
February of 2007, just about the time gas prices started to shoot up 
here, Mr. Speaker. That is the time that the capital investment of 
America understood that capital was going to be more expensive, because 
the Bush tax cuts were not going to stay or be made permanent.
  When capital gets more expensive and it is looking down the line, it 
tightened things up. And you can go back and look at the record, Mr. 
Speaker. You saw industrial investment decline indexed directly to the 
period of time that Nancy Pelosi became Speaker, Charlie Rangel became 
the chairman of the Ways and Means Committee, and that gas began to 
shoot almost straight up here on this chart, going on to its 50 percent 
increase in prices over a 15-month period of time.
  At that same time, capital got more expensive, and because of that 
more expensive capital, industrial investment declined. That was the 
first indicator that we were going to have an economic problem on our 
hands. That was the lack of investment in industry that led all of 
this. Along behind it came the subprime mortgage component of it, which 
in the grand scheme of things isn't as big a hit on our economy as the 
higher gas prices.
  Then, as Adam Smith said, there are two components to the price of 
everything. One is the cost of the labor and the other is the cost of 
the capital. The capital price went up, then the cost of goods and 
services went up, and capital investment went down.
  We can expect this decline in our economy because of a number of 
things: Energy prices are skyrocketing because the policies that are 
coming out of this Congress are taking energy off the market, and 
capital prices are going up because the tax cuts are unlikely to be 
made permanent between now and 2010. So automatically those tax 
increases will kick in, and the investment markets see that.
  Those are the reasons that are watching this economy decline today.

[[Page 6774]]

The subprime is a small part of it. But it is such a small part of it, 
when you think of what the subprime really is, it is about a $150 
billion loss. We will burn about 142 billion gallons of gasoline. Those 
142 billion gallons of gasoline, $1 a gallon for one year would pay for 
the subprime.
  So let's keep our rules straight. Let's understand we can't suspend 
the laws of supply and demand. Let's put some energy on the market. 
That includes conservation.

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