[Congressional Record (Bound Edition), Volume 154 (2008), Part 6]
[Senate]
[Pages 8418-8422]
[From the U.S. Government Publishing Office, www.gpo.gov]




                            THE PRICE OF OIL

  Mr. DORGAN. I want to talk about oil prices a bit. I noticed today 
that some of my colleagues were talking about drilling in Alaska. They 
said that we should drill in ANWR. That has become the hood ornament 
for every conversation about energy. If we just drill in ANWR, then 
things will be fine.
  ANWR is one of those pristine areas we have set aside. There are some 
who want to drill there as a first resort. If ever there is drilling in 
some part of the world that we have set aside as one of the few 
pristine areas left, then it ought to be a last resort. Why would you 
go there as a first resort?
  If you take a look at the Outer Continental Shelf and where the 
reserves of oil and gas really are, You have on that list the Gulf of 
Mexico, the West Coast, and the Outer Continental Shelf of Alaska. They 
rank in that order. No. 1 is the Gulf of Mexico; No. 2 is California 
and the west coast; and No. 3 is the Outer Continental Shelf of Alaska.
  I was there with three of my colleagues, Senators Domenici, Bingaman, 
and Talent, in the 109th Congress who introduced the legislation to 
open Lease Sale 181 off the Gulf of Mexico to get new oil and natural 
gas production. I am proud to say that became law. We got that passed 
in the 109th Congress.
  It was narrowed when we passed it, so I have actually introduced 
another bill to expand that. I think we should be in the eastern Gulf 
of Mexico producing more, and we have made progress as a result of my 
past efforts with Senators Domenici, Bingaman, and Talent. So don't 
tell me about ANWR is going to solve all our problems. We are trying to 
open even more in the Gulf of Mexico for additional production.
  With respect to the price of oil at this point, it's been bouncing 
around at the top like a roller coaster. But here is what is happening 
with the price of oil. It has nearly doubled in the last year. That 
should be no surprise to people. If you drive a car you know what is 
going on. It nearly doubled in the last year.
  In my judgment there is nothing that justifies that, and I want to 
talk about that a little bit. There is nothing with respect to the 
fundamentals of supply and demand that would justify doubling the price 
of oil in one year. Take a look at what Stephen Simon, senior vice 
president of ExxonMobil, a company making enormous profits, said. By 
the way, they have permagrins. They can't help but smile all the way to 
the bank with their record profits, some of the highest profits in 
history. Mr. Simon, said on April 1:

       The price of oil should be about $50-$55 a barrel.

  Clarence Cazalot, CEO of Marathon Oil, said,

       $100 oil isn't justified by the physical demand in the 
     market.

  Fadel Gheit, Senior Energy Analyst with Oppenheimer & Company who has 
more than 30 years in this business said to the Star-Telegram on 
October 26, 2007,

       There is absolutely no shortage of oil. I'm absolutely 
     convinced that oil prices should not be a dime above $55 a 
     barrel.

  He is talking about the futures market.

       I call it the world's largest gambling hall. . . . It's 
     open 24/7. . . . Unfortunately, it's totally unregulated. . . 
     . This is like a highway

[[Page 8419]]

     with no cops and no speed limit, and everyone is going 120 
     miles an hour.

  New Jersey Star Ledger:

       Experts, including the former head of ExxonMobil, say 
     financial speculation in the energy markets has grown so much 
     over the last 30 years that it now adds 20 to 30 percent or 
     more to the price of a barrel of oil.

  Here is an example of increases in the speculation in the futures 
market as opposed to commercial contracts. Speculation has rapidly 
increased. You can see it has gone up near the 40 percent mark. You 
will see where it has gone just in recent years, up, up, way up. What 
has happened is we have much more speculation in the futures market 
that determines the price of this commodity.
  Who is making money with all this? I said the other day, I don't know 
this guy from a cord of wood. His name is Andrew Hall. There is a story 
in the Wall Street Journal: ``Trader Hits Jackpot In Oil As Commodity 
Boom Roars On.''
  My guess is this fellow doesn't actually want to buy oil or actually 
acquire oil. He is just speculating in the futures market. Will Rogers 
said:

       You will buy things you will never get from people who 
     never have had it.

  Right? And you make money all along the way. You have the speculators 
in neck deep and hedge funds in neck deep in the futures market 
speculating. Here is a guy who made a quarter of a billion dollars in 
the last five years speculating in the futures market.
  Some say the futures market, you need that. I agree you need that. 
You need that for liquidity, and you need it for hedging. That's 
absolutely true. But you don't need a futures market and should not 
allow a futures market for energy that ratchets up the price of energy 
in an unbelievable way, solely due to speculation. The fact is, it does 
great damage to our economy and does great damage to industries in this 
economy.
  I believe we have had five airlines go bankrupt in the last month. We 
have trucking firms threatening to go belly up because they can't 
possibly afford to pay for the fuel and make a decent profit. This has 
an unbelievable impact in our country. It severely damages our economy.
  I come from a State that is 10 times the size of Massachusetts.
  So you can put ten Massachusetts in my State. We do not have a very 
large population, but we drive a lot. We are an agricultural state so 
we use a lot of fuel. Incidentally, per person we use twice as much 
fuel as New Yorkers use. We use twice as much fuel per person per 
capita as New Yorkers do, so when this shoots way up through the 
stratosphere, it hurts us much more than other areas of the country. We 
know this in a very personal way.
  Now, what do we do about that? Well, I have talked about the 
unbelievable orgy of speculation in the commodity markets. We ought to 
dampen that speculation by increasing the margin requirements. Buy a 
stock on margin, you have to put up 50 percent of the money to buy the 
stock. Buy an oil futures contract, in most cases, you put up 5 to 7 
percent to buy an oil futures contract.
  If you have too much speculation in that marketplace which is well 
above that which is needed for liquidity and hedging and normal 
commercial functions, then you have too much speculative capability, 
and there is too much speculative activity. Thus, we ought to wring 
that out. I think there is a way to do that, and that is by increasing 
the margin requirements.
  Now I want to go to the next piece of information, and that is the 
bill I introduced three months ago to suspend filling the Strategic 
Petroleum Reserve. I was thinking today about the movie ``Dumb and 
Dumber.'' I actually watched a little bit of it because it was so dumb. 
Dumb and dumber represents a policy of putting oil underground at a 
time when oil prices are up around $128 a barrel. I know ``dumb'' is 
not a term of art, but I cannot think of anything that would be dumber 
than continue a policy that makes no sense. Oil is going through the 
roof so let's stick oil underground by taking it out of supply, store 
it underground, and thereby increase the price.
  Well, here is what we should do instead. This administration is now 
putting about 70,000 barrels of oil every single day, 7 days a week, at 
locations like Bryant Mound, Big Hill, and West Hackberry. These are 
places on the Gulf Coast with salt domes where we store oil. What is 
the purpose? It is called the Strategic Petroleum Reserve. We call it 
the SPR for short. Because if we run into some trouble some day, we 
want oil preserved in an SPR, and we can call on that oil.
  Here is what it looks like. It includes big old tubes that pump oil 
in the ground. This is the oil that ought to be in the supply pipelines 
right now so, when you drive up to the gas pump, you are paying a 
little bit less than you are now paying. Instead of it being available 
at the gas pump, it is being put underground in the SPR.
  We are required as a country by international treaty obligations to 
have at least a 90-day reserve. We are at about 118 days if you take 
public and private stocks into account. We are well above our 
international requirement.
  From what I can tell, there are 67 Senators who have signed letters 
or made statements to the President saying: Stop it. Do not stick oil 
underground at this time. This is oil that comes off the Gulf of Mexico 
as a royalty-in-kind oil. Instead of putting it in supply, they are 
sticking it underground. Furthermore, the Strategic Petroleum Reserve 
is 97 percent filled. It is 97 percent full. And when oil is $128 a 
barrel, we are sticking it underground. It makes no sense; it defies 
all common sense.
  Yet 51 Democratic Senators sent a letter to the President, and 15 
Republicans Senators sent a letter to the President. Also, the 
Republican Presidential candidate, John McCain, and said ``stop it.'' 
That's at least 67 Senators.
  Last week, Doug Steenland, the President and CEO of Northwest 
Airlines testified before the Congress. He said:

       Certainly with the prices at this level, and given the 
     demand out there, we don't need to be filling the Strategic 
     Reserve at $122 per barrel.

  Now, obviously he has a vested interest, because he and others are 
engaged in the airline industry.
  Here is a quote from James May, President and CEO of the Air 
Transport Association of America:

       One of the most important and immediate steps that the 
     government can take to help the economy is to stop filling 
     the SPR.

  Why do we hear from airlines? We are hearing from airlines, truckers, 
or any number of industries or families and businesses. The airlines 
are hurt unbelievably by these prices and so are trucking firms. 
American families are pulling up to a gas pump trying to figure out how 
do I manage to pay for this tank of gas. It is not unusual to hear 
industry officials say: Stop it.
  John McCain, Senator McCain:

       With oil at over $100 a barrel and an adequate supply in 
     the [Strategic Petroleum Reserve], it is time to suspend 
     purchases.

  Now, why is it that everyone can hear this message except the 
President and the Vice President? I am told the Vice President is the 
one who is absolutely insistent that we keep putting oil underground. 
Why is it that everyone can understand and hear this message loud and 
clear except the President and his Vice President?
  Is it not probably time for all of us to insist that we do that which 
we know should be done? Fifteen Senators from the minority sent a 
letter to the President on April 29, 2008, and said:

       We write today to request that the U.S. Department of 
     Energy immediately halt deposits of domestic crude oil into 
     the U.S. Strategic Petroleum Reserve.

  Now, having said all of that, we are going to vote tomorrow on a 
piece of legislation I introduced in early February. I have spoken 
about it on the floor until people fall asleep when bring it up. I know 
repetition is difficult around here, but it is important to understand 
how urgent this is.
  The fact is, we all have one thing in common: None of us has ever 
seen nearly $128 oil until now. We have never seen the price of a 
barrel of oil go up to $120, $124, or $128 a barrel for oil. None of us 
has ever experienced that

[[Page 8420]]

before. So what does it mean to this economy? Do we know? I guess not, 
but we are witnessing it. I guess we know what it means to the five 
airlines that are bankrupt.
  Do we know what it means to a trucking company? A guy called me the 
other day. He is running a trucking company in North Dakota that his 
dad started many years ago. They have a good operation. They are a good 
family company. They have made a good living for their family over many 
years. He said you know what. I do not see how we can avoid shutting 
this company down. We cannot afford the fuel costs. We just cannot 
afford it any longer.
  Now, what are the consequences of all of this, a family driving up to 
the gas pump and spending $50 or $60 to fill their tank?
  Here is what is happening: The speculators in the oil futures area 
are making a massive amount of money. No question about it. Take a look 
at hedge fund compensation. It is unbelievable.
  The OPEC countries, oh, man, they are going to the bank. They are 
going to the bank with our money. You pull up to the pump, you are 
lining the pockets of the OPEC and other oil producing countries. You 
are lining the pockets of the major integrated oil companies too.
  By the way, the major integrated oil companies now all have two 
names, because they all got married. They liked each other a lot, liked 
the bottom line. Now, it is ExxonMobil, and it is ConocoPhillips. They 
have all got two names.
  People say to me: what are you talking about? Why do you not let the 
free market work? Let the free market work. Don't you understand 
anything? Well, I actually used to teach a little economics in college. 
But this is not a free market at work. There is nothing about a free 
market here.
  No. 1, you have a cartel, a cartel of countries that makes decisions 
behind a closed door, and they have the capability to make those 
decisions stick. In fact, Saudi Arabia is now pumping 800,000 fewer 
barrels a day than they did two years ago. Does that decision have an 
impact on price? You bet your life it does. So you have a cartel. It is 
illegal to have a cartel in this country. You would go to jail for that 
in this country. But we have a cartel for oil producing nations.
  Then you have the major oil companies which are bigger and much 
stronger, with much more muscle in the marketplace. Why? Because 
everybody was shaking pom-poms while they wanted to merge. You want to 
merge? Absolutely. No problem. Get bigger. Fine.
  We are supposed to have 2,000 people working for this U.S. Government 
on antitrust enforcement. You cannot find one of them. I know they are 
getting paid, but you cannot find one of them. All of these mergers are 
approved. So now we have got the OPEC cartel, we have got the major 
integrated oil companies with more muscle in the marketplace. Finally, 
we have a futures market which has become an orgy of speculation.
  Then we are told just let the free market work. What is wrong with 
you? The free market is fine. I guess it is fine if you are on the 
receiving end of these policies. If you are the one who is the 
beneficiary, it is not fine. If you are the one who is going to the 
bank to make deposits, boy, this works out pretty well for you.
  But if you are on the receiving end of oil, gas, jet fuel prices or 
diesel prices, then you are in deep trouble. The fact is, this is 
damaging our economy, and it is going continue to damage our economy 
until we find ways to address it.
  I serve on the Energy Committee. I am also Chairman of the 
Appropriations Subcommittee on Energy and Water, so I spend a lot of 
time thinking about energy. I understand that in order to address our 
energy needs we need to do a lot of things, do them right and do them 
well. We need to produce more. I understand that. I described the need 
to produce more in the Gulf of Mexico, and what we are trying to do 
through legislative efforts. We need to produce renewable fuels, and we 
can and should do that. I think there is great capacity in renewable 
fuels in the U.S.
  We need to conserve more. We waste an unbelievable amount of energy 
in this country. We need to be much more efficient with all of the 
things we do. We get up in the mornings and never think. We flick a 
switch from ``off'' to ``on'' and everything comes on. We put a key in 
the ignition and turn it and somehow the engine starts, and we go to 
work. We do not think much about all of those issues, and make sure 
that conservation and efficiency are unbelievably important.
  So we need to consider production, conservation, efficiency, and 
renewables as important elements of an energy policy. But, again, when 
my colleagues come to the floor of the Senate and say: Well, you know, 
if we could have drilled in ANWR, boy, things would be terrific. That 
is all nonsense. I mean, we can produce much more without going to that 
which we ought to go to as a last resort, rather than a first resort.
  That is why many of us are trying to go beyond Lease Sale 181 in the 
Gulf of Mexico. We ought to be producing off Cuba as well where China 
is now allowed to drill and produce. So there is so much we can do. 
Let's take the first baby steps in the right direction and stop doing 
things that make no sense. Let's stop putting oil underground into the 
Strategic Petroleum Reserve.
  My hope is that, while we might disagree on a lot of things on energy 
policy, the one thing we can and I hope should agree on is to stop 
putting oil underground when it is going from $120, to $125, to $145 a 
barrel. I think there are at least 67 and probably 75 Senators who have 
expressed themselves on that. While we might disagree on other parts of 
energy legislation, we should not disagree on that, if a substantial, 
overwhelming majority of the Senate believes it.
  You know, one of the regrets I have had in the Senate in recent times 
is we often get the worst of what each party has to offer rather than 
the best of both. The fact is we have got two grand political parties 
in our country. I know on some things we have different beliefs, and we 
have differences of opinion. There are some things from time to time 
where we agree. This is an area where we agree right now. It is time to 
stop filling the SPR at this point. Not forever but at this point. That 
is an area of broad agreement in this Chamber. I hope we can manifest 
that agreement tomorrow when we cast a vote on legislation that I 
introduced three months ago. I have introduced amendments that 
Republicans like Senator Domenici and Senator Snowe have cosponsored. 
Many other Senators have signed letters. Senator McCain has expressed 
himself strongly and positively in support of this position. So let's 
do what we can achieve.
  Will it reduce the price of gasoline? Absolutely. Will it reduce it a 
lot? I do not know. Probably not a lot, but some. Dr. Philip Verleger, 
an economist and energy analyst, testified before the Energy Committee 
last year and pointed out that we are taking certain oil from the Gulf 
of Mexico and putting underground. This is sweet light crude, a subset, 
the most valuable subset of oil. He said that it had an impact of about 
10 percent on the price of sweet light crude oil.
  Let's do what we can do to put some downward pressure on the price of 
oil.
  Mr. President, how much time remains?
  The PRESIDING OFFICER (Mr. Salazar). The Senator's time has expired.
  The Senator from Arizona.
  Mr. KYL. Mr. President, tomorrow we are going to be voting on a 
couple of different bills, one of which was discussed by my colleague 
from North Dakota. The other is called the Domenici bill for the senior 
Senator from New Mexico.
  I believe that while the Domenici bill does not answer all of the 
questions with regard to energy production, it is a very good start 
because, first and foremost, it addresses the production side. We know 
there is a huge demand and not enough supply of energy. In many 
respects, the Domenici bill seeks to remedy that imbalance and provide 
for more production.
  In the last 30 years, U.S. consumption of oil has grown moderately. 
Our

[[Page 8421]]

dependence on foreign oil has doubled to more than 13.4 million barrels 
per day, but our domestic production has remained relatively flat. 
Whether oil is purchased domestically or from foreign sources, we are 
feeling the negative effects of high prices more than ever.
  We have to do something to help bring down the price of oil and gas 
at the pump, and today's average was $3.78. What the Domenici amendment 
does is open up new production, for example, 2000 acres of the 19 
million acres of the Arctic Plain which was specifically designated for 
oil and gas leasing so that with its new environmentally sound 
directional drilling, very low footprint, at least a million barrels of 
oil could be made available, roughly 1 million barrels a day for 20 
years. That would make a big difference. It also allows that States on 
both the Atlantic and Pacific could petition the Federal Government to 
opt out of the current broad moratorium on drilling and, in a 
responsible, environmental manner unlock potentially millions of 
barrels of crude oil.
  The Domenici amendment streamlines and consolidates the refinery 
permitting process since frequently that is the bottleneck in getting 
refined gasoline to the consumer. It eases difficulties usually 
encountered when they want to build or expand refineries. We haven't 
built a new refinery in about 30 years.
  The amendment suspends delivery to the SPR, echoing comments of my 
colleague from North Dakota. This is not a magic bullet. Simply not 
buying some oil and putting it in the SPR, while it won't hurt anything 
and might actually help a little bit, is a very modest proposal and 
does nothing to actually add to the supply of energy. But the Domenici 
amendment includes this provision as well. It is not going to do any 
harm, and it could do some good. The amendment also allows for the 
long-term procurement of synthetic fuels by repealing section 526 of 
last year's energy bill which placed certain emissions requirements on 
Air Force fuels, for example, and repeals a provision of last year's 
bill that stipulated a moratorium on oil shale development. U.S. 
domestic oil companies are doing a lot of research into the potential 
for shale converted to oil. If we were able to accomplish this, we 
could produce much more oil in the United States as a result.
  The Domenici amendment is not perfect. I would, for example, not have 
included a coal mandate though, obviously, it would be good if we could 
convert coal to a liquid fuel that could be put into our transportation 
needs. I would have included a domestic oil royalty provision that 
would have required that new leases include price thresholds limiting 
royalty relief when gas and oil prices are high. That would improve our 
energy situation. I also believe it is important to look at some of the 
causes of the high oil and gas prices and some of the potential 
initiatives that will lessen our reliance on oil which reached $125 a 
barrel today. I will talk briefly about the weakness of the American 
dollar which has something to do with that.
  The bottom line is, there are very good provisions in the Domenici 
amendment. While I think it did not go far enough in some areas and had 
one mandate which is unfortunate, it is an amendment which I will 
support because it will actually produce oil. Much of what comes from 
the other side sounds good, but it doesn't produce a single drop of 
oil. Without that, we are not going to decrease demand to more match 
supply.
  I mentioned that one of the costs of oil for American consumers is 
the fact that our dollar has decreased in value relative to other 
currencies. There was a recent editorial in the Wall Street Journal 
which showed that the price of oil based upon gold or the value of the 
Euro has remained relatively constant, whereas compared to the price of 
a dollar, it has increased dramatically, because the dollar is worth 
less money. If a dollar doesn't buy you as much, you have to have a lot 
more of them to buy the same quantity of gasoline. I filled up two cars 
this weekend. In both cases, I could see the fact my dollars weren't 
going as far as they used to. That was one of the reasons I paid more 
for the gas I purchased.
  European and Asian nations are shielded from this because their 
currencies, like the Euro and the yen, have maintained their value. 
Europeans pay 80 Euros for a barrel of oil, while Americans are paying 
more than $125 as of today. So returning the United States to a strong 
dollar policy would greatly reduce the price U.S. consumers pay for 
oil. The Federal Reserve should switch its focus from maintaining 
economic stability to fighting inflation, its primary goal. In periods 
of slower economic growth, the Federal Reserve traditionally responds 
by reducing short-term interest rates, but that can exacerbate 
inflation which has increased substantially. The Federal Reserve needs 
to refrain from reducing interest rates further. Our currency is the 
foundation for our economy. Without a strong dollar, our economy will 
not be able to achieve the stability that is necessary to control oil 
prices for the economy.
  Something else we can do, as well as reducing our reliance on foreign 
oil and promoting reliable and affordable energy sources for the 
future, is to acknowledge that the mandates we imposed in the last two 
energy bills aren't actually helping to reduce oil prices but actually 
have caused them to increase.
  I support the development of cost-effective alternatives to fossil 
fuels, but the alternatives should not increase the already burdensome 
costs of energy and food on American families. As we know, last year's 
energy bill effectively mandated that fuel marketers blend $15 billion 
of corn ethanol. I support efforts to reduce the ethanol mandate 
included in the Energy bill. That will lower gas prices and help to 
lower food prices as well. Instead, I believe we should be focusing on 
other and better sources of renewable energy already available, 
specifically nuclear energy.
  Dr. Patrick Moore, one of the founders of Greenpeace, stated in a 
Washington Post op-ed 2 years ago:

       Nuclear energy is the only large-scale, cost-effective 
     energy source that can reduce . . . emissions while 
     continuing to satisfy a growing demand for power.

  We all know that other countries have relied significantly on nuclear 
power. Today, France meets 80 percent of its total energy needs with 
nuclear power and is even able to export surplus energy to Britain and 
Italy. On top of the clear benefits for France, the country has also 
experienced a steady decline in per capita emissions of CO2 
since the 1970s. On the other hand, we rely for electricity production 
on 600 coal-fired electric plants that ultimately produce, according to 
Dr. Moore, 36 percent of U.S. emissions or nearly 10 percent of global 
emissions of CO2. As the public increasingly becomes 
informed on the advantages of nuclear power, its misgivings about this 
renewable energy source should diminish.
  The benefits to Americans could be great--a clean and renewable 
source of energy that is produced right here in the United States.
  Finally, a word about the majority's energy proposal to increase 
taxes on domestic oil energy. According to a 2005 report by the 
nonpartisan Tax Foundation, oil companies have paid $2.2 trillion in 
Federal, State, and local taxes over the last 25 years. While it is 
important that tax policies be reviewed from time to time to ensure 
they still make economic sense, we must be careful not to take actions 
that would result in even higher prices for consumers. It is hard to 
imagine that raising taxes on the oil industry would not be passed on 
to consumers in the form of higher prices. Let's get to expanding our 
production so we can meet the demand for oil. Let's increase our use of 
nuclear energy which can make a big difference in providing electricity 
primarily for electricity production. Let's get back to a strong dollar 
which is one of the first things we could do without producing a drop 
of energy to reduce the cost of gasoline we put into our vehicles.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Maryland.
  Mr. CARDIN. Mr. President, I am pleased our colleagues have come to

[[Page 8422]]

the floor to talk about the energy crisis. Energy prices are soaring. 
The Bush administration is doing virtually nothing to help consumers. 
Congress must act.
  I am pleased to hear so many of my colleagues come to the floor to 
talk about ways in which we can act to try to help the consumer. 
Americans are hurting today. In my own State of Maryland, my 
constituents are not only suffering from increased gasoline prices, but 
electricity prices rose by 72 percent in 2007. For a typical family in 
Maryland, they have seen a huge increase in their energy costs. For 
gasoline alone, the average Maryland family spends in excess of $4,500 
a year. They have seen an increase in gasoline prices of 153 percent 
during the Bush administration. If you are a small business, you are 
vulnerable. Small businesses spend 20 to 30 percent more on energy to 
produce the same product as a larger company; 62 percent of small 
businesses have to use a vehicle as part of their business. They don't 
have the same options larger companies have to invest in energy 
efficiency as far as equipment is concerned. They certainly don't have 
the same financing that large companies have. So in these difficult 
times they have to put mortgages on their homes or, in some cases, even 
use credit cards. When they use their credit cards, it is the highest 
possible interest rates they can get. So Marylanders are hurting. 
Americans are hurting on the energy cost.
  The first thing we should have done and we should do today is have an 
energy policy that makes us energy independent. I have heard a lot of 
my colleagues talk about it. We have taken some steps in that direction 
on energy legislation that we passed, but we certainly can do a lot 
more on the area of energy independence.
  We need to be energy independent first and foremost for the security 
of America. We should not be depending on some country halfway around 
the world which we disagree with on their international policies 
because we need their oil and we are dependent on their oil, and we 
can't do everything we wish to do with that country on foreign policy 
issues. Secondly, we have to become energy independent for the sake of 
the environment.
  The environmental risks are real. To give one example of global 
climate change and what greenhouse gas emissions are doing because of 
the use of petroleum and fossil fuels, I met with my Maryland watermen 
over the last week and talked about the fragile condition within the 
Chesapeake Bay and how it is difficult for the different species, 
including oysters and clams and rockfish, to survive. One of the 
reasons is the water at the surface is too warm. This is not conducive 
to good, healthy aquatic life. So the health of the bay is impacted by 
our dependency and use of oil.
  I could talk a lot about our coastal lines in Maryland with the 
rising sea level and what that is doing as far as the safety of the 
people who live in my State. So for the sake of our environment, we 
need to become energy independent and use less fossil fuels.
  As we have learned in this economic time, for the sake of our 
economy, we need to become energy independent. We need to control our 
energy sources so we can control the economic impact and not have to 
again be hit with uncertain energy cost increases. Part of that is 
going to be a renewable portfolio, alternative fuels, conserving fuel. 
We all know that. But we also need to take immediate action to help the 
consumer.
  As oil prices are rising, gasoline prices are rising, oil companies 
profits have gone through the roof. The five largest oil companies in 
2007 had profits of $103 billion. That is $2 billion a week in profits. 
In 2008, BP Oil has already shown a 63-percent increase over its 2007 
profits. So the consumers are paying more and the oil companies are 
making a lot more. We need to take action. We need to pass the Consumer 
First Energy Act. I thank Senator Reid for introducing this bill. I am 
proud to be a cosponsor. I hope we will shortly take this up and be 
able to pass it. It will help consumers today.
  First, it deals with $17 billion that oil companies receive in tax 
breaks. Remember, the profits of five companies were over $100 billion 
in 2007. We are talking about tax breaks we are giving which should be 
used for energy independence. Instead it is making us more dependent 
upon imported oil. What this legislation would do would be to modify 
these tax breaks and put the money into an energy independence security 
trust fund so we can become independent in energy needs.
  We have heard a lot of conversation about the Strategic Petroleum 
Reserve. What is happening today is that the Federal Government is 
buying 70,000 gallons of gasoline every day. Economics 101, supply and 
demand, we are increasing the demand for gasoline by 70,000 gallons a 
day. That has a direct impact on the price of gasoline. We have 97 
percent of our needs already in the Strategic Petroleum Reserve. There 
is bipartisan effort to stop the filling of the petroleum reserve as we 
are hitting these huge increases in cost to the consumer. This 
legislation deals with that. We should be having better tools to pursue 
those who are price gouging. This legislation deals with that.
  I heard the Senator from North Dakota talk about the speculators. 
This legislation deals with that. Let me explain that. As Senator 
Dorgan pointed out, we have speculators, investors who are buying paper 
on future oil who are causing the price of oil to go up, which means we 
pay more at the pump. We should be regulating what we call the margins 
at a much higher level. Margins mean they have to put up not much 
money. They buy it on credit. Well, this legislation would have the FTC 
regulate the margin sales and purchases of futures on oil. That makes a 
lot of sense. It would calm the speculators and save us at the pump. It 
is another way we can reduce the cost immediately to the consumer. And 
it deals with offshore speculating, something else we should do.
  The legislation also gives the Attorney General the ability to go 
after collusion on price fixing in gasoline.
  So all these provisions in the Consumer First Energy Act are aimed at 
trying to bring down the cost to the consumer now and keep it lower 
than it is today. It would provide immediate help and would bring us 
closer to meeting our goal of energy independence for the sake of our 
national security, for the sake of our environment, and for the sake of 
our economy.
  So let's remember the struggles of American families with rising 
energy costs as we work together. Let's put aside partisan differences, 
and let's pass the Consumer First Energy Act to provide real relief to 
the consumers in America. It is in the best interests of the consumers. 
It is in the best interests of our country. I urge my colleagues to act 
in a bipartisan way to pass this most important legislation.
  With that, Mr. President, I yield the floor.
  The PRESIDING OFFICER (Mr. Whitehouse). The Senator from Texas.

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