[Congressional Record (Bound Edition), Volume 154 (2008), Part 7]
[House]
[Pages 10070-10078]
[From the U.S. Government Publishing Office, www.gpo.gov]




                        ENERGY POLICY IN AMERICA

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 18, 2007, the gentleman from Utah (Mr. Cannon) is recognized 
for 60 minutes as the designee of the minority leader.
  Mr. CANNON. I would like to speak this evening about energy policy in 
America, and the sources of energy, and I expect to be joined here in 
this discussion with several other Members of Congress. Adrian Smith 
from Nebraska is going to be speaking to us, and I will yield to him 
very shortly about the Alaskan National Wildlife Reserve; John Peterson 
will be with us about natural gas and the need to develop that 
resource; Rob Bishop will join us I think shortly to talk about what it 
means in the human costs to not have the resources that we need. We 
expect to be joined by Phil Gingrey of Georgia and perhaps John Shimkus 
of Illinois as well.

                              {time}  1845

  Let me begin by just saying that the U.S. policy to use corn for 
ethanol and

[[Page 10071]]

drive up the prices of grain worldwide and to not develop the resources 
that we have so richly in America are not morally neutral. They are 
profoundly wrong. So I hope that after some discussion about these 
issues tonight, our colleagues in Congress will begin to understand 
what the resources are and how we can use them.
  Now I would like to yield to the gentleman from Nebraska (Mr. Smith), 
and when he is finished talking about the ANWR issue, I would like to 
put that in perspective by talking about what other resources we have 
and how that fits. But drilling in ANWR is profoundly important. If we 
had done that some years ago, we would absolutely not have prices over 
$100 a barrel for oil.
  I yield to Mr. Smith.
  Mr. SMITH of Nebraska. Thank you to the gentleman from Utah for 
yielding me time so that we can have a bit of a conversation on energy. 
I truly believe that our country is lacking a balanced policy. I think 
that our country is lacking a commonsense policy, which certainly 
leaves consumers out of the mix for what they need with food, with fuel 
for their vehicles, energy to heat their homes, energy to run a small 
business. The list goes on and on.
  But as we do address and look to the future, I think that utilizing 
today's technology and even tomorrow's technology so that we can 
certainly use the resources afforded our country, we can do that in a 
very responsible manner, and that we would not have certain issues 
become symbols of I think an extreme agenda that are endorsed by I 
think a relatively small group of Americans.
  In 1980, the Congress, and President Carter, I will add, created the 
nearly 20 million acre Arctic National Wildlife Refuge, but they set 
aside 1.5 million acres of ANWR's northern coastal plain for the 
purpose of future energy exploration and development. Let me repeat 
that. They set aside, this is Congress and President Carter in 1980, 
1.5 million acres of ANWR's northern coastal plain for the purpose of 
future energy exploration and development. This parcel is known as the 
1002 area, named after the section of the act that set it aside for its 
energy resources.
  Energy exploration will be limited to just 2,000 acres of ANWR's 1002 
area, an acreage limitation made possible by 21st century technology. 
This 2,000 acres, I will add, is equivalent to one-tenth of 1 percent 
of ANWR's total acreage.
  According to the U.S. Energy Administration, the mean estimate of 
recoverable oil in ANWR is 10.4 billion barrels, all of which is now 
economically recoverable. That is more than the twice the proven oil 
reserves in all of Texas. That is almost half of the total U.S. proven 
reserves of 21 billion barrels. That represents a possible 50 percent 
increase in total U.S. proven reserves.
  EIA also estimates daily ANWR would provide 1 million barrels per day 
for 30 years. Will that affect oil prices? Absolutely. Is that a 
government subsidy? No. I hope that we can get beyond the policies of 
just saying ``no'' to domestic sources of energy. This is equivalent to 
what the entire State of Texas produces daily. ANWR's 30 year, 1 
million barrel per day supply, also equals 30 years of imports from 
Hugo Chavez of Venezuela.
  Let's talk about the revenue. According to a recent CRS report, at 
today's prices of $125 per barrel, ANWR development would deliver 
$191.1 billion in corporate income tax and royalty revenue to the 
Federal Government. Let's talk about fiscal responsibility. Bonus bids 
alone would deliver close to $4 billion to the Federal Treasury.
  Economically speaking, relating to jobs, ANWR energy production would 
create between 250,000 and 750,000 good jobs in America across the 
country. These are good, broad-based jobs in the energy sector that, in 
the end, help consumers. A study from the National Defense Council 
Foundation says that the figure could be as high as 1 million new jobs 
for Americans in all 50 States and the District of Columbia.
  In terms of environmental protection, ANWR's leasing plan will be 
certainly environmentally sound. The Interior Department must 
administer the leasing program to result in no significant adverse 
effect on fish and wildlife, their habitat, subsistence resources or 
the environment. The leasing program will be subject to stringent 
regulations that at a minimum will require some of these details. Let 
me share them.
  Meeting or exceeding environmental mitigation measures established in 
the prior environmental impact statement.
  Limiting exploration generally to the period between November and 
May.
  Imposing seasonal limits to protect breeding, spawning and wildlife 
migration patterns.
  Using ice roads, airstrips and other low impact transportation 
methods while limiting air traffic to reduce disturbance to fish and 
wildlife.
  Requiring pipelines and roads to be designed to minimize adverse 
effects on migratory caribou, other wildlife and surface water flow.
  Protecting streams, springs, rivers, wetlands and riparian habitats 
from the effects of water used in drilling.
  Treating and disposing of all waste products by use of a hazardous 
material tracking system and filing an annual report on waste 
management.
  Educating crew members on environmental protection methods.
  Complying with all applicable air and water quality standards and 
utilizing the best commercially available technology for the 
exploration and development, not only today, but in the future as well.
  I could go on and on with many of these details that assure the 
responsible development, exploration and henceforth the development, 
but let me give some perspective to this briefly.
  The size of the small wildlife refuges that currently exist barely 
measure as a fraction of ANWR's 19.6 million acres, yet the ecosystem 
and energy production in the refuges coexist without harm. Consider the 
size of these following National Wildlife Refuges supporting active oil 
and gas production, according to information provided by the U.S. Fish 
and Wildlife Service:
  Hewitt Lake National Wildlife Refuge in Montana, total size, 1,680 
acres; Hagerman National Wildlife Refuge, Oklahoma/Texas, 11,000 acres; 
Kirtland's Warbler National Wildlife Refuge in Michigan, 6,543 acres; 
Delta National Wildlife Refuge in Louisiana, 48,000 acres. We are 
talking about a good chunk there. San Bernard National Wildlife Refuge 
in Texas, 37,000 acres; Crosby Wetland Management District in North 
Dakota, 86,000 acres. But, my friends, ANWR in Alaska, the total size 
of the refuge is 19.6 million acres, and proposed development is 2,000 
acres.
  I would argue that what is best for consumers is a good, balanced 
energy policy that isn't just about petroleum. It is about many other 
sources. And the frustration from consumers in the Third District of 
Nebraska is getting higher and higher and higher, because they 
understand the economics of various sources of energy, whether it is 
biofuels that many people are speaking out against, or even nuclear 
power, nuclear energy that we know is friendly to the environment in 
terms of carbon emissions.
  Hydropower, it was interesting to learn that New Zealand is one of 
the world's, I would say, most green countries in terms of energy. They 
are about 80 percent dependent on hydropower. And there is so much 
pushback here in America on the development of hydropower, consumers 
are getting frustrated. It is not just policymakers, but it is 
consumers as well, because they can do the math.
  Clean coal technology, we have come so far with clean coal, and there 
is even greater promise in the future. Why would we want to sell 
ourselves short on that? Oil shale, that I know will be discussed here 
momentarily, certainly is a domestic source of energy. We heard earlier 
about some comments about becoming energy independent, oil independent, 
but yet there is so much pushback from developing our own resources in 
a very responsible manner.
  Mr. CANNON. Would the gentleman be willing to answer a couple of 
questions?
  Mr. SMITH of Nebraska. I will do my best.

[[Page 10072]]


  Mr. CANNON. Thank you. They won't be hard. I might point out in Utah 
we had 76 billion tons of coal locked up by one monument that President 
Clinton made, the Grand Staircase-Escalante National Monument. That is 
the equivalent, the gentleman mentioned coal-to-liquid, that is the 
equivalent of 150 billion barrels of oil locked up in a monument.
  But let me make sure I have these numbers right, because they are 
actually startling. The whole Alaska National Wildlife Reserve is 19.6 
million, almost 20 million acres. That is bigger than most northeastern 
States.
  Mr. SMITH of Nebraska. Even bigger than the Third District of 
Nebraska, which is huge. Well, not acres-wise, but it is a large area.
  Mr. CANNON. The Third District of Utah is large as well that I 
represent, and that is about the size of that. And so we have about 1.5 
million acres that were set aside by President Carter and the Congress 
when the refuge was established for oil development. Now we are talking 
about 2,000 acres of land to develop oil on. That is the proposal. That 
yields 10 billion barrels of oil.
  Mr. SMITH of Nebraska. That is correct.
  Mr. CANNON. That would mean, I think you said, about 1 million 
barrels of oil a day.
  Mr. SMITH of Nebraska. Correct.
  Mr. CANNON. What would happen to the $120, now pushing on or moving 
toward $130, per barrel of oil if we had 1 million additional barrels 
of oil production a day?
  Mr. SMITH of Nebraska. Well, I can't make any promises, but certainly 
as it does speak to economics, there is concern that so much of the 
price of oil per barrel today is based on speculation, that the mere 
announcement that we would be opening up some domestic sources of 
petroleum resources, we would be perhaps warning those folks in the 
speculative world that things may change a bit.
  Mr. CANNON. Those speculators have virtually no downside. The upside 
is limited only by what they are willing to guess on in the future. So 
to bring that oil price down, I think we need to bring some new sources 
on or make it clear we are going to bring some new sources on. I think, 
like the gentleman, that would cause these prices to plummet.
  Mr. SMITH of Nebraska. Absolutely. I think the numbers certainly 
speak for themselves.
  Folks, in our economy, on the front lines of our economy, they can do 
the math. They are very frustrated with what is taking place right now. 
And while the Third District of Nebraska is a large place, I am not 
saying it is smaller than this subject area, but we even have 
opportunities with so many different sources of energy. Why would we 
want to take something off the table, when there are domestic supplies 
that with technology today and tomorrow we can do so much more?
  But more than that, it strikes me as absolutely amazing that the 
local folks of these subject areas, specifically ANWR, are supportive 
of this development. I think you spoke earlier of some places in Utah 
that you pointed out that the locals support. If it were truly going to 
plunder the environment, as many would speculate and suggest, the local 
folks would be fighting against that.
  Mr. CANNON. I think that is absolutely right. Reclaiming my time, I 
thank the gentleman. I would like to point out to him, I paid $3.59 for 
gas the last time I bought gas. That is obscene. It is obscene. If we 
had been thoughtful about ANWR, if we had acknowledged the desires of 
the people who live in ANWR, who care about the land in ANWR, we would 
be drilling there, having minimal effects, and producing a much, much 
lower price for gas. That is an obscenity that we ought to be rid of.
  Mr. SMITH of Nebraska. I drive a diesel vehicle, and even though 
diesel is more efficient on a gallon-for-gallon basis, it is painful. I 
close with that.
  Mr. CANNON. As you leave, I appreciate that. I drove to a new gas 
station the other day. I went to the pump and put my card in and got 
ready to pay for the gas, and as I did that, I reached over to get the 
gas hose and it said $4.39 a gallon. I was stunned. Then I looked. It 
was green and I realized that that pump had a diesel handle on it as 
well. The 15 or 20 percent better mileage you get doesn't cover the 
extra dollar that you pay, the 25 percent higher prices. So I 
sympathize with the gentleman.
  But I would point out that oil shale is essentially diesel fuel and 
then can be used for that, and if we develop that, it should bring your 
prices down, Mr. Smith, significantly, and all the rest of the world's 
as well, which I think is the right thing to do.
  Thank you very much for your time. We appreciate that.
  We are now joined by Congressman Bishop from Utah, who agreed to join 
us despite the fact he is hosting a group of German members of the 
Bundestag. So I would like to turn some time over to him to talk about 
whatever he wishes, but probably the human costs of these horrible 
energy prices and policies that we have in America.
  I yield to the gentleman.

                              {time}  1900

  Mr. BISHOP of Utah. I appreciate my good friend and colleague from 
Utah that clearly understands this particular issue.
  I want to start by introducing you to a character in American history 
by the name of Elbridge Gerry. Elbridge Gerry is a former Vice 
President, Governor of Massachusetts, signed the Declaration of 
Independence. He is also one of three people who spent the entire time 
at the Constitutional convention and then refused to sign the document.
  Now, we have had others; the gentleman up to my left who appear on 
the ceiling, one of the two Americans that we had in this icon of 
lawgivers in the history of the world. George Mason was one who stayed 
there and refused to sign the document. He had a specific reason, and 
that was it didn't have a bill of rights.
  Elbridge Gerry did not have a specific reason. He had a litany of 
little ticky issues that he thought were wrong with the document. They 
are so small and so insignificant that I have yet to find a history 
book that actually lists the reasons for his refusal to sign this 
particular document. In fact, I had a teacher that one time told me 
that he had a personality that was the kind so prickly that if the 
Savior said that the millennium will start on Tuesday, he would say, I 
can't do that, I have a haircut; we have to wait until at least 
Thursday to do it. Now, that is what he did.
  Despite the fact that he had a litany of problems with the document, 
the document itself turned out to be a pretty good document. As P.J. 
O'Rourke would say, the Constitution of the United States is 21 pages 
that is the operating manual for 300 million people, compared to the 
operating manual of the Toyota Camry which is four times as long and 
only seats five. The document worked.
  Well, one of the problems and the reason I am introducing you to 
Elbridge Gerry is we have an Elbridge Gerry attitude towards energy 
policy. We all agree that we need to be energy secure and energy 
independent, and we agree we have to do that. But we can't have 
windmills off the coast of Massachusetts. We need to be energy secure, 
but we can't have a liquid natural gas port on the East Coast. We need 
to be energy secure, but we can't do any kind of offshore drilling even 
if it is 100 miles away and no one can see it because it might bother 
the tourists who can't see the drilling going on. We need to be energy 
secure, but we won't go up to the arctic in Alaska to an area set aside 
by the Carter administration for the simple purpose of producing 
energy, and we won't drill there, as the gentleman from Nebraska just 
recently explained.
  We have this idea that we have all these ticky little reasons and 
details that we won't do this and we won't do that, and the end result 
is we miss the bigger focus and the bigger issue, and that is we need 
to be energy secure for our Nation and for the individuals of the 
Nation.
  Our policy towards energy has always caused problems. It has caused

[[Page 10073]]

problems for businesses, has for several years, and it is causing 
problems in the way people live their life. Because the issue is not 
our country's energy policy in the abstract; the issue is, how do 
people cook their food? How do people heat their homes? How do people 
create and hold on to a job? Because every time the price of energy 
increases, jobs are lost, incomes vanish, social programs suffer. Every 
individual in this Nation suffers with higher and increasing energy 
prices.
  Rising utility bills are indeed one of the major causes of 
homelessness in this country. And that means, when energy increases in 
price and cost, the poor and those on fixed income, and there is about 
43 million of them in the United States, are the first ones who are 
hurt and suffering. And how do our people react to this?
  There is a couple in Maryland who have decided to take their kids out 
of weekend activities. So their daughter that was in dance and 
gymnastics, they no longer drive them to these activities. A Vermont 
church found itself recently in a $10,000 arrears simply because it 
didn't budget enough for its energy. In Maine, in Wisconsin, schools 
simply have lowered the temperatures in their classes. So, in a 
district in western Wisconsin the kids in the winter are now wearing 
fleeces and zip sweaters, to the fact that they even had a fashion show 
to show kids how to dress warmly as they are now coming to schools. 
Unfortunately, they held it on a day when it was snowed out, but that 
is still the fashion show they tried to do. In Louisiana, they no 
longer run their sprinklers on the ball field. In North Dakota, they 
are talking about a four-day school week. In Iowa, they have cancelled 
trips for choirs, athletics, and field trips for the junior high kids.
  And schools simply don't have a way of handling this. You can't just 
put more money into the heating salary. Schools are on a very tight 
budget, with the majority of schools' budgeting coming from the cost of 
salaries, which simply means if energy prices increase, teacher 
salaries will decrease. They simply can't afford to do it in any other 
particular way.
  We have a Chicago nurse who has cut out her cable television. She 
can't afford it anymore. Elderly people on fixed incomes especially 
feel trapped in their apartments because they do not have the 
flexibility to go anywhere. They can't afford to. We have an example of 
an elderly gentleman in St. Paul, Minnesota who now travels most of the 
time on his electric wheelchair because electricity comes with his rent 
and that is for free, and he can plug it in in the apartment and he 
doesn't have to buy gas to get around. Now, that is what is happening 
to real people.
  It is happening to the country as well. In the military defense of 
this country, our costs in the last 3 years for energy for our military 
has risen from $3 billion a year to $7 billion a year.
  Our increase in prices are putting our Nation at risk, are putting 
individuals in jeopardy, and we simply cannot afford to talk about it 
any longer. We cannot afford to have secret plans that we refuse to 
identify any longer. We simply have to do something. Because for every 
dollar spent on higher energy costs, it is a dollar you can't spent on 
luxuries like tuna casseroles; for our energy is the great social 
equalizer of this country and it is the one that creates economic 
opportunity in this country. Our energy should not be those who are 
rich in government or rich in society or rich economically, the elite 
that can afford this.
  One of our Presidential candidates went in one day on three different 
jets, each of which spewed out 25,000 pounds of CO2 per 
hour. Now, the average American spews out 15,000 pounds of 
CO2 per year. And the solution to that was simple: 
Recognizing that they are now adding to the emissions in the 
atmosphere, they paid $11,000, and urged you to all buy mercury light 
bulbs made in China by coal-powered plants.
  Another one of our good friends who makes a great deal of emphasis on 
the fact of global climate change and global warming lives in a house 
that consumes 20 times the amount of electricity that an average house 
does in this country. And his solution to that? Paying offsets that he 
uses his own company to pay the offsets.
  We have a concept right here now of the elite who are not cutting 
back on their energy consumptions; they are simply paying for it with 
offsets in a similar way as medieval dukes used to pay for indulgences 
with the church. And yet, while they are still living in comfort in the 
elite, what we have is a situation that is harming individuals, and 
especially individuals who are poor, on fixed incomes, and the elderly.
  That is one of the reasons the Western Caucus will be introducing 
shortly a comprehensive energy bill, one that realizes that if we are 
going to solve this problem, not just talk about it but solve it, there 
are three principles that have to be introduced:
  We must increase the production of energy in this country. And we are 
going to have multiple speakers who will be talking on that aspect. 
That won't work alone. We also have to increase our efforts of 
conservation. We cannot solve the problem of our energy future without 
conservation efforts. But, we cannot solve the problem of our energy 
independence and our energy security needs by conservation alone. It 
has to work with other principles. Because it is true, every gallon 
that we save, every watt of electricity that we do not use is a gallon 
that does not have to be imported, does not become emitted.
  Yet, even by the strictest standards of conservation alone, we can 
account for only about one-half of the amount of oil that we import 
into this country every year. It would be hypocritical to rely on this. 
In fact, it would be, as the Ron Arnold book title says, our goal would 
be ``Freezing in the Dark.'' It has to be more than that.
  In addition to that, though, there is a third element that has to be 
there that will be an essential part of this bill, which is innovation. 
If you go back to the turn of the century, Jules Verne could not have 
imagined what would have happened in the next 100 years. He could not 
have imagined going from radios to I-pods, and rockets, computers, 
going from antibiotics to organ transplants. Couldn't even have 
imagined bottled water. But that has been the reality of the past 100 
years.
  We have technological abilities that sometimes come slow and 
sometimes come as fast as new cell phone plans that will provide the 
ability to use these two concepts to reach the needs so that we can 
become energy secure. We have certain specific problems that need to be 
addressed in this process of innovation. We have not had a new refinery 
built since 1976. In 1980, we had 324 in this country; today, there are 
148 that are operating. We can produce 17 million barrels of oil per 
day from our refinery capacity. Unfortunately, this country needs 21 
million barrels of oil per day from our refinery capacity.
  We have outdated processes and regulations that need to be put in 
place along with tax reform to encourage both conservation and 
production.
  We use about 5 million miles of electricity distribution and 1 
million miles of natural gas distribution lines. That is not enough. We 
need to be developing new corridors so that we can more easily 
transport energy from section to section.
  One of the other areas we are looking at is also the workforce. There 
has been a 90 percent drop in the number of petroleum engineers and 
geoscience graduates since 1982. At that rate, by the year 2010 we will 
find a 38 percent shortage in this critical profession that we need to 
try and find our way to use the knowledge that we have to build and 
move us into the future. We need to come up with smart meters, point of 
sales generations. We need to use the technological abilities that we 
have to find solutions.
  We need to use a system that has financial rewards and prizes to 
reach our technological goals, because we have found that voluntary 
innovation and experimentation are always preferable to bureaucratic or 
international intervention and regulation. Former efforts that failed 
were not driven by market forces, but they were driven into failure by 
self-serving governments. We need to combine all these three areas into 
one. But we cannot overlook the

[[Page 10074]]

first and most important effort, which is simply production.
  We in the West perhaps have a different attitude. To be honest, the 
West produces the energy the East consumes. So I think by all rights we 
have the ability to be a little bit holier than thou, both 
realistically as well as spiritually. But the issue is, we have the 
ability in this country to be energy secure. The stuff is here. There 
is more energy imprisoned in this country than most nations actually 
have, and all we have to do is simply be wise enough to realize we need 
to go at it, we need to develop it, we need to conserve it, and we need 
to be creative in the way we distribute it.
  We can talk all day as some people do about profits that the 
companies are receiving, what we should do with those profits. At the 
end of that discussion, you have to realize it is a useless discussion, 
because you can talk all day about what we do with profits. Not one new 
barrel of oil is provided to anybody by that discussion. The only thing 
we need to do is start talking about going to where the energy is and 
developing it, conserving it, and being smarter in the way we do it. 
That means an attitude change. So our goal is to produce, to conserve, 
and be smarter in the way we do it. And by that method, that method, we 
will solve the problem.
  This Nation needs more than anything else to not talk about the 
issues any longer, not have secret plans about the issues any longer, 
but simply to do it. We have the resources, we have the capability, we 
have the ability to provide for ourselves into the future. And it is 
almost criminal if we do not do that in a comprehensive and 
intellectual way.
  I still have faith that this country can proceed into that future, 
and I hope America will join us in this effort to meet these criteria. 
And I applaud my good friend from Utah, who understands this issue 
instinctively, and his effort to bring this to the attention of the 
American people with a lot of different people who understand elements 
of this, and hopefully we can bring together a comprehensive plan for 
the future of this country so that we can have energy security and 
energy independence for our future.
  Mr. CANNON. Would the gentleman be willing to enter into a colloquy?
  We talked a little bit about innovation. I think that in the bill 
that we are proposing as the Western Caucus, we have some prizes in 
there for energy efficiency including what is under consideration, a 
prize for a motor or an engine or gasoline engine that would go say 100 
miles per gallon. And the gentleman probably knows this, but the 
typical engine in America gets about 17 percent efficiency. In other 
words, you get about 17 percent of the energy out. The highest 
efficiency are diesel engines on long-haul trucks, which get about 35 
percent; meaning 70, 65, or 83 percent is wasted in the process.
  If innovation would support us in doubling the efficiency of engines, 
what would happen to the price of gasoline in America and diesel?

                              {time}  1915

  Mr. BISHOP of Utah. The gentleman is perfect, right on with this one. 
The problem we have is a simple concept of supply and demand. If the 
demand is great and the supply is not, the price goes up. And how do 
you simply get the price to come down? You increase the supply, whether 
by production increases or conservation increases or new technology 
increases. But, once again, spot on accurate.
  If we don't do that, it's kids who are freezing in classrooms; it's 
elderly who are stuck in their homes by the fear of going anywhere 
because they can't afford to get back; it's poor people who will lose 
their jobs because we don't have enough energy to expand the market.
  That's why we do this. We do this for people who are counting on us 
to have a wise, comprehensive policy.
  And we've found also, if you ask, prizes are a wonderful way because 
people are so creative. People are innovative. And if we allow that 
spark of creativity and innovation to come forth, we can solve every 
problem that we face. And it doesn't have to be done by experts sitting 
in a room in Washington. People have the ability to do that, and they 
have the ability to do it better than probably we can.
  Mr. CANNON. Heaven help us, from experts sitting in Washington who 
get paid to continue the problem instead of solve the problem.
  Thank you, Mr. Bishop. Appreciate your time.
  Let me just point out that production and conservation are both 
matters of innovation. We're going to talk tonight about new ways to 
innovate in production, and also in other areas of conservation.
  A new motor would conserve a great deal, a new, more efficient motor 
would conserve a great deal of energy. And I think that if you doubled 
the efficiency of engines on the highway today, or if you had an engine 
that doubled the efficiency, the threat of that doubling of efficiency 
would almost immediately result in a plummeting of the price of oil 
overnight, without any additional production.
  We're joined now by Congressman Peterson from Pennsylvania. And Mr. 
Peterson has been a great advocate of developing our natural gas 
resources with reasons why this is a critical part of what we're doing 
in the country. And I would yield to Mr. Peterson as much time as he 
may consume. And hopefully, at the end of your presentation, we can 
chat a little bit about what this means for America.
  Mr. PETERSON of Pennsylvania. I want to thank the gentleman from Utah 
and thank him for his leadership in the Western Caucus. Even though I'm 
from Western Pennsylvania and Central Pennsylvania, I've been a proud 
member of the Western Caucus my tenure in Congress, and have enjoyed 
working on the many issues that the West is interested in.
  $129 oil today. I remember a short time ago when it hit 80 and then 
it hit 90. I came down on the floor, thinking this Congress would start 
to react as if it was a crisis. Here we are today with $129. We've been 
over 120 for a week or so.
  Do we have a bipartisan Senate/House task force formed to deal with 
energy? No. Not an issue.
  Do we have a special committee in the Congress here in the House to 
deal with energy, maybe bipartisan or partisan? No.
  Is anybody calling for a special session that we deal with energy?
  No matter where I go, where I fly, what coffee shop I sit in, 
everybody's talking about energy prices. Why? Because a young lady said 
to me recently, Mr. Peterson, I make $320 a week. I'm raising two 
children as a single mom. I'm now paying $130 a month, no, $130 a week 
to drive to work.
  In rural America people drive distances to work. They drive distances 
to school. They drive distances to shop. They drive distances to go to 
the doctor. There's no transits, there's no cheap way to travel.
  She said, I'm spending $130 a week. I said, what are you spending to 
heat your home? She said, I'm spending $175 a month, year round, to 
heat my home with natural gas.
  What this young lady doesn't know that, since she told me that, 
energy prices have risen considerably. That was a few weeks ago. And 
what she doesn't know, and most Americans don't know that natural gas 
prices to heat our homes are going up measurably this fall.
  Last year, at this time, in the summertime, we put our natural gas in 
reserve, underground caverns because we can't produce enough during the 
winter heating season. Last year, at this time we were putting gas in 
the ground at $6.50 to 7, and that was a little bit higher than usual. 
Not a lot but a little bit.
  Today we're putting $11 gas in the ground. And I talked to one of the 
experts at the Energy Department today, and he expects that figure to 
rise. If we would have a major storm in the gulf, which we have not had 
for 2 years, and we always lose some production in the gulf when that 
happens, we could have 14, $15 gas go in the ground. If that's true, 
home heating costs next winter, with natural gas, and that's 62 percent 
of Americans, will double.
  Those who are heating with propane and home heating oil this year 
paid

[[Page 10075]]

huge prices, and are going to pay much higher prices next year. Natural 
gas only went up about 10 percent. But that's going to change.
  Folks, America has chosen, the leadership in America has chosen to 
not produce our own energy, to lock ours up. Now, we did pass a bill 
today called, interesting name, the Gas Price Relief Act for Consumers 
of 2008. Now, wouldn't you think that's going to do something with 
prices?
  Well, here's what it does. It's trying to figure out a legal way for 
us to sue OPEC and other countries who we don't think's producing 
enough oil. If, you know, I think Saudi Arabia, I looked today, is 12 
million barrel a day. And the President was just there, and the Speaker 
asked him to ask for more oil, and I think he asked for more oil.
  A month or so ago, Vice President Cheney was over there, and the 
Speaker and others asked him to ask for more oil, and he asked for more 
oil.
  But now we're going to pass a bill saying that if they don't produce 
enough oil, and if we think they're kind of conspiring and not 
producing as much as they could, we want some court to sue them in.
  Well, it seems to me, we're a little bit vulnerable, because I want 
you to look at my chart here. Congress, for 27 years, has locked up the 
Outer Continental Shelf. That's offshore production of energy. Every 
country in the world produces out there, a major part of their energy, 
both oil and natural gas.
  We've also locked up major parts of the Midwest. Up here in Alaska, 
we locked up the portion of ANWR that was set aside for energy 
production. That's why it was set aside. I think we heard in earlier 
testimony here that 2,000 acres out of millions would have been 
actually the footprint. And yet, this Congress said no.
  Now, we've said no to Alaska. We've said no to the Midwest. The oil 
shale rock was recently locked up, not signed into law yet, but we 
passed a bill here with six plus votes, I think, to lock up the shale 
oil in three States in the West.
  We heard earlier about the huge coal lock up with one Presidential 
order. Congress, and three Presidents, have locked up offshore 
production.
  Now, we have the nerve to say that we're going to sue other countries 
because they're only producing 12 million barrels a day for us?
  I think maybe we ought to pass the bill that Americans could sue 
Congress and the administration for not producing adequate energy. We 
have been negligent.
  This Congress has the mind set that we're going to run this country 
with renewables. Now, I wish that was true. But let's look at the 
chart. The left of this chart is history. The right of this chart is 
the Energy Department's prediction. There's not much change.
  Hydro, non-hydro renewables. This is wind, solar and geothermal and 
woody biomass. And the one that's increased the most is woody biomass 
because a million Americans are now heating their home with pellet 
stoves. That's sawdust made into pellets.
  All the wood companies are drying their wood. If they dry their wood 
they're using wood waste now instead of fuel oil or diesel or natural 
gas because they can't afford that.
  And many power plants are topping off their loads. To keep under air 
emission standards they may use 80 percent coal and 20 percent wood 
waste. And we now have some plants coming on-line generating with wood 
waste. So woody biomass, and now we're talking about cellulosic 
ethanol, which will also be another use for woody biomass. So that's 
been the only one that's growing.
  Nuclear, we need, we have 45 to 50 plants that are now applying for 
new permits, and we need all of them to be completed by 2030 to stay 
equal.
  Coal, it shows coal growing. I don't believe that's going to happen. 
We've had about 60 coal plants in the country that have been turned 
down by States because of the threat of climate change legislation, 
which will put a tax on energy.
  When you hear people talking about carbon taxes and carbon trading, 
you need to realize that in every country that's went down that road, 
that will increase energy prices another 20 to 30 percent. Now, let's 
say it's 25. Well, at $4 gasoline, that means, with a carbon tax, 
gasoline would be $5 pretty quickly, without oil prices going up.
  Now, they show natural gas flat here. I disagree with the Energy 
Department, because every one of those 60 coal plants that have been 
turned down will be a natural gas fired generation plant. Just 10, 12 
years ago we produced 7 percent of our electricity with natural gas. 
We're now at 23 percent and growing. And whenever you deal with carbon 
in any country, the only field you can shift to is natural gas. It's 
cleaner. No knocks, no socks, and a third of the CO2. So 
it's the clean green gas.
  Now, we should be using more of it. But if we're going to use more of 
it, we need to produce more of it and we need to be out on the Outer 
Continental Shelf. As we showed before, we need to get into the 
Midwest, we need to do the coal to liquids, coal to gas, as we heard 
others talking about earlier. We need to do all of those things, and 
those are all doable.
  Folks, we need all the wind and solar we can get. And I'm for it. But 
if we double it in the next 5 years, we will be less than 1 percent of 
our energy use in this country. So it's not big numbers. We can't run 
the country on renewables.
  We're not increasing hydro. Folks, we're really not increasing 
anything. We're sitting on our hands. We're a policy-less country, as 
far as energy is concerned.
  The 2005 Energy Bill did a lot of good things. The reason we have 45 
to 50 permits on nuclear is because it streamlined the process and we 
now have all those in the pipeline.
  The unfortunate part, when we build these nuclear plants, the basins 
are going to come from Japan, that's the base because we don't have the 
ability to make them here anymore. And many of the components are going 
to come from Germany, which has a lot of capacity. And we've kind of 
lost our capacity.
  Mr. CANNON. Would the gentleman yield?
  Mr. PETERSON of Pennsylvania. Surely.
  Mr. CANNON. You know, looking at that chart is actually a little 
disturbing, because unless we produce a great deal more natural gas, 
our current reserves being diminished, or diminishing, we have to 
import a lot of natural gas. So if we're not going to do coal power 
plants, if that chart, instead of widening for coal, shrinks for coal, 
then you have to widen natural gas, which means you're going to have to 
import a great deal of natural gas.
  Mr. PETERSON of Pennsylvania. And that comes from Third World 
countries, dictatorships, the same type of countries that we're 
purchasing oil from.
  But let me tell you, it's not that simple. LNG, and I'm not opposed 
to it, but when a tanker is loaded with LNG it becomes a commodity, and 
countries like Japan and Spain and other countries that have no natural 
gas, live by it. They will currently, are paying 14 to $15 per thousand 
for a tanker load, and we can't afford to pay that. We're paying 11 to 
put in the ground. We can't put 14 and $15 dollar gas in the ground, or 
we are automatically doubling natural gas heating prices for next year.
  Now, natural gas is not just a heating fuel. We run our country with 
it. You know, we use--70 to 90 percent of the cost of fertilizer to 
grow corn to make ethanol is natural gas cost. That's what we use.
  Petrochemical business, 55 percent of their cost is natural gas 
because they use it as an ingredient and as a fuel.
  Polymers and plastics, 45 percent of the cost of that industry is 
natural gas because they use it as an ingredient, as a fuel. Almost 
everything we manufacture in America has natural gas in it as an 
ingredient, as a fuel.
  Really, I've had people tell me it's such a wonderful substance, we 
never should burn it, we should use it as the chemical that it is to 
make products. But we know that's not going be the case.
  We have lots of natural gas in America. Unfortunately, all the rich 
fields are locked up. Offshore is loaded. The

[[Page 10076]]

Roan Plateau in the West is loaded. They've just found the new Marcella 
Shale in the Pennsylvania, New York, West Virginia area. It's going to 
take a while to develop it. But we have lots, but we are not producing 
enough of it to keep it affordable. And we are looking at a huge spike 
that's coming at us right now.
  But LNG, we can only buy it in the off season. In the heating season, 
when we need it, we never can afford to pay for it because the other 
countries bid it up. And they have to pay the price because they don't 
have any other oil.
  Mr. CANNON. So here we are, the Middle East of coal. We have more 
coal than we know what to do with. We've stopped using coal. We don't 
use coal to liquid. We don't use those things because we can't 
sequester the CO2. That means, instead of expanding, coal 
declines. Coal declines. Natural gas goes up.
  So now all of sudden you just listed all the things that we use 
natural gas in. And I add those things all to be an inflationary 
environment where, in particular, food prices go up, or continue to go 
up, having doubled, in some cases tripled over the last couple of 
years.
  Mr. PETERSON of Pennsylvania. I was in a hardware store last month, 
and they had their coats on. And I said, what's going on? He said, in 
the spring and the fall season now we don't heat our store because 
people, working people are coming in to buy hardware and lumber, it's a 
lumber yard. And they said because it costs us 800 in the month in the 
spring and the fall season, now it's going to cost us a lot more than 
that in the winter, but we have to keep it warm in the winter. But in 
the spring months, when nothing will freeze, we shut our heat off. That 
saves us 800 a month. Those are two fall months and two spring months. 
That saves me $3,200 profits. So he said, we work with our coats on. 
Our customers come in with their coats on, they just leave them on and 
they don't complain. He said, that's how we do it now. We can't afford 
to heat our store.

                              {time}  1930

  These costs of natural gas, costs to heat schools this year are going 
to double. Costs to heat our hospitals are going to double. Almost 
everything that we use gas for will probably come close to doubling 
this year. It's going to be terribly inflationary, and it's going to 
make some businesses just noncompetitive.
  Mr. CANNON. You and I have been talking about this issue for years 
now, and we've seen no increase, a modest increase in some drilling in 
the inter-mountain west, but very little new sources.
  And what's happened to costs of gas, that is, natural gas, over the 
last 3 years?
  Mr. PETERSON of Pennsylvania. Someone was talking the other day here 
on the floor that we're drilling twice as many wells and we don't need 
to drill more. Well, we're drilling in old, tired fields. We're 
drilling the cracks and crevices that we haven't drilled before. You 
get out into some fertile territories, there's huge gas fields. Just 
huge. In fact, off the coast of Florida, there was a huge gas field 
that I think the lady from MS said it was called very sweet gas and it 
was tremendous volumes, and we actually bought the leases back so we 
wouldn't produce it. Yet 50 miles offshore, we have Cuba cutting deals 
with China, Norway, and Canada. They're going to produce gas 50 miles 
off the Florida coast, and we can't produce 100 miles off the coast. 
Does that make sense? I don't think so.
  Mr. CANNON. I don't think so either, and I don't think the American 
people think so. And I think the American people are really fed up. You 
can't double or triple people's natural gas costs, their heating costs 
in their homes. You know, personally sometimes I drive in the 
wintertime even without a coat on. If I jumped out of my truck and went 
into that store, I'm not sure I would be comfortable, but that's one of 
the costs that we're imposing on people.
  We cannot--the American people are not going to allow us to maintain 
these idiotic policies that lock up resources while people are actually 
going hungry in other parts of the world because we're using corn for 
ethanol and we are taking natural gas, and instead of turning it into 
fertilizer, we're bidding it off to the Japanese, the Chinese, and the 
Indians.
  Mr. PETERSON of Pennsylvania. Well, the good news is within the next 
3 to 4 weeks, we will be offering an amendment to the Interior bill 
that will open up on the offshore--let me put my sign back up, my chart 
back up here--in part of the gulf, east Atlantic, Pacific. Both oceans 
will all be open from 50 miles out for gas and oil.
  Now the site distance is level. So if you're at your condo at the 
beach, when it gets past 11 miles, you won't know it's there. We're 
going to be 50 miles out. Now, I'd like to come in to 25 or 30 because 
there's a lot of energy in that section. But we're going to go 50 in 
hopes that a majority of Congress, House and Senate, will feel the heat 
from back home and we will open up production.
  Canada, Great Britain, Ireland, Sweden, Norway, Australia, New 
Zealand, all of these very sensitive environmental countries, they all 
produce. Canada laughs at us. They actually produce in the Great Lakes. 
They produce in Lake Erie where I live and they sell us the gas. And I 
asked them the last time they were in, Do you slant drill to our part 
of the lake? And he smiled and he said, You bet.
  Now, we don't allow drilling there either.
  We could actually drill the Great Lakes from offshore. We wouldn't 
even have to get in the lakes. But since 1913, Canada has produced in 
the Great Lakes, and now they're selling us, because we get 15 percent 
of our natural gas from Canada. Our largest producer of oil outside of 
our own is Canada, and it's also the only major source we have of 
natural gas other than our own, and I think 2 percent LNG. I think 15 
percent of our natural gas. Thank God Canada produces. They also 
produce right off of the Washington coast, right off the main coast. 
Right off within sight of us, they're producing energy with no negative 
results.
  I hope in the next 3 or 4 weeks that Congress will feel the heat, 
understand this issue a little better. A lot of people in the country, 
a lot of people in Congress don't realize that natural gas is not a 
world price, and when we're putting $11 gas in the ground, that's the 
highest price for natural gas coming out of the ground anywhere in the 
world. In South America, it's a buck-something. In Russia, it's a buck 
something.
  So our fertilizer, 50 percent of our fertilizer industry has went 
offshore now. Polymers and plastics are going offshore. Petrochemicals 
are going offshore. Those are the best blue-collar jobs left in 
America, and they need natural gas to produce.
  Mr. CANNON. Those are the best blue-collar jobs in America and 
Democratic policies are driving them offshore.
  Mr. PETERSON of Pennsylvania. And if carbon capture and 
CO2, if you have those who believe that's such an evil 
force, that the CO2 we breathe out is a poisonous gas, if we 
put carbon capture and CO2 payments ahead of affordable 
available energy, America will be a Section 8 Nation. We won't compete 
with anybody in the industrialized world because our energy costs will 
prohibit it.
  Mr. CANNON. You and I are on the Resources Committee together. We are 
going to have a vote on this issue, and every American is going to know 
because every talk show host and every newspaper is going to talk about 
this vote because this vote is about the cost of energy.
  And included in that mark-up we are going to have a vote on ANWR, and 
we will have other votes that I think will be profoundly important.
  It was in the mark-up a year ago that the Democrats, over our 
objections and over our votes, insisted that BLM not be allowed to go 
forward with its regulatory scheme for oil shale. We're now a year 
behind on that. It was in the appropriations bill last year. The 
Democrats put a provision that prohibited the use of any money that BLM 
had for processing permits on BLM property.

[[Page 10077]]

Thank heaven that we have school trust lands that can be developed for 
oil shale. But without that, we would be in real trouble.
  Mr. PETERSON of Pennsylvania. Well, maybe 30 years ago when oil was 
$10 a barrel and natural was $2 a thousand, it was smart to use theirs. 
But when it's $129 a barrel and $11 for natural gas, I think it's time 
to produce our own. Americans do not need to be sending all of our 
resources to these other countries.
  Mr. CANNON. And you and I talked about the increase in price that 
went from $2 to $9 briefly and then it came back down a little bit, but 
we talked about how if we don't do this Outer Continental Shelf 
Development, if we don't do the inter-mountain west and other and gas 
resources, we'd be in the predicament that, lo and behold, we're in 
today.
  We're talking about families doubling the price of heating their 
homes, businesses, doubling or tripling the price of heating their 
business because of failed policy.
  We have energy. We need to develop it.
  Mr. PETERSON of Pennsylvania. If your foreign competitor is melting 
steel or making a product with $1.25 natural gas, you have a huge 
disadvantage, and that's what's actually happening.
  Mr. CANNON. That's right. You cannot compete.
  Mr. PETERSON of Pennsylvania. Thanks for the time. In a couple, 3 
weeks we will have the opportunity to fight to open up offshore 
production of oil and gas, and that alone I think will take some, if we 
could pass that, House and Senate, have the President sign it, I think 
that would take some of the excitement out of the oil market and oil 
and gas would settle down because everybody feels there's a lot of hype 
in there because the traders see it keep going up and they keep bidding 
it up to make money.
  And so we have Wall Street, you know, 15 to 20 percent of our energy 
prices might be Wall Street making money. But if you take the risk out, 
you make sure that we have adequate supply opened up, that takes that 
away; and I think we could see a settling down of the markets, and we 
might see some measurable price decreases because if we don't, it's 
going to be a hot summer and it's going to be a long, cold winter for 
America.
  Mr. CANNON. These traders are betting that Saudi Arabia and other 
OPEC countries won't act contrary to their own interests and allow the 
price to keep going on up, and that's why you get the speculative bill 
that we had today.
  Mr. PETERSON of Pennsylvania. In fairness to those countries, they're 
producing more and more energy, and we have chosen not to produce very 
much of our own only in the whole entire fields. And yet we pass a bill 
so we think we can sue them because they're not producing enough? I 
find that interesting. The bill ought to be that the American public 
can sue us because we've locked up our resources and forced them to buy 
foreign expensive energy.
  Mr. CANNON. I actually used to be a lawyer, and I can't imagine a 
legal theory upon which you sue a sovereign country. I can imagine a 
legal theory upon which you react to Congress, And you know what that 
is? Vote for someone else.
  Mr. PETERSON of Pennsylvania. Well, that is something they all have. 
And I think, in my view, we need to be watching very closely as we 
elect a President, do they have a bona fide energy policy for America.
  Mr. CANNON. Thank you, Mr. Peterson. We agree on that point. I think 
that for the first time in maybe our tenure in Congress, we're going to 
see a huge increase in the Natural Resources Committee markup of an 
energy bill to see if we're going to actually drill in ANWR, if we're 
going to drill in the Intercontinental Shelf and loosen up our drilling 
elsewhere around the country.
  But that sort of begs the question, right now we're talking about 
various kinds of oil and gas. Let me put some context here.
  In our conventional oil resources we have about 50 billion barrels 
that we know about. That includes 10 billion in ANWR. These are in the 
United States of America. We have some oil sands. Those are very 
difficult to develop in America. They're very different from the oil 
sands in Canada where each grain has a little molecule of water so the 
oil comes off the sand with just a little bit of heat.
  We have about 100 million barrels of oil on the Outer Continental 
Shelf, and all of that adds up to about 200, 225 million barrels of oil 
that we have available to us today in the United States.
  Think about that. 225 barrels of oil. We now have, and I'm going to 
pull up a chart here. We have in oil shale about 1.4, 1.3, let's see, 
that's ``trillion'' barrels of oil. I'm sorry. That's not ``billion'' 
barrels of oil, that's ``trillion'' barrels of oil in Colorado. In 
Utah, we have about 800 million barrels of oil and Wyoming about 500 
million barrels of oil. Those are millions. We're not talking about a 
lousy 225 million barrels in all of our other resources. We're talking 
about 2.6 trillion barrels of oil that are available to America today 
in oil shale.
  Now, let's pull up the map, if we can here. This is a map of Utah. 
Idaho is over in the corner, southeast Wyoming and northeast Colorado, 
and you can see the dark green are areas with more intense reserves of 
oil shale and that the lighter green are areas where you have not quite 
as dense oil shale. And these are the areas that have the oil that we 
were just talking about, 1.2 trillion barrels in Wyoming, 800 million 
barrels in Utah. These reserves are different, and the way to get them 
out, the way to get the oil out is going to differ between those.
  Let's talk for just a moment about why we can be actually talking 
about producing oil out of shale today whereas it did not work in the 
past.
  In the old days, and over here you see on the side it says ``past oil 
shale efforts,'' we used heat to convert kerogen. We broke the shale up 
and put it into a rotary kiln, and then heated it up. The problem is 
you needed enough heat in that rotary kiln to get the kerogen out, but 
at the same time, that was hot enough so that the rock melted into 
itself; and so you would have to shut the operation down occasionally 
and go in with sledge hammers, literally, and knock the rock out that 
had melted into itself.
  Today you use chemistry and minimal heat to convert the kerogen to 
oil.
  That's a profound difference, and there are about six different 
companies, four large companies and two small companies, that are using 
different kinds of technology to get with a smaller amount of heat to 
convert that kerogen to take it out of the shale. Kerogen, by the way, 
is a lot like diesel fuel and comes out of the system, very close to 
that. Needs to be cleaned up a little bit. It's like JP-8 diesel fuel.
  In the old days, we mined this. We had a strip mine or room and 
pillar mining, and then we brought the shale to the surface to be 
processed. Today, the focus is on in situ recovery and conversion.
  Back in the day, low-quality energy, intensive product, or low-
quality energy, intensive product to refine; that is you had to put a 
lot of energy in it and it was hard to refine. And today you have high-
quality value product with minimal cost to refine, and then we were 
focused on the resource back then, and now we're focused on balanced 
environmental, technical, and economically sustainable methods.
  The fact is we've transformed the way we work technologically in the 
world today, and we can get these resources out of the ground much more 
cheaply.
  Let's talk just for a moment about the reserves that we have--or what 
we use imported to the United States and the world's reserves.
  The Saudi Arabians have about 264 billion barrels of reserves that we 
know about. Canada has about 179 million or billion barrels of oil, 
Iran has 138, Iraq, 115, and Kuwait 102. And the people that supply 
this oil are Mexico, and these are average barrels per day that we 
import.
  So from Canada we import about 2.43 million barrels of oil, from 
Mexico 1.53,

[[Page 10078]]

from Saudi Arabia 1.49, from Venezuela 1.36, and from Nigeria 1.13, and 
then we import a great deal more from other countries who export lesser 
amounts to us as we go.
  These are not exactly the kind of people that we want to be relying 
on except with the exception of Canada perhaps and also to some degree 
Mexico, and that's improving.
  And in the last couple minutes we have before we finish this, let me 
just say that this is complicated. The natural resources is complicated 
and the technology is complicated, but we've advanced dramatically in 
our knowledge and understanding of how to do that. We have now, today, 
for the first time in 30 years a commercial test going on here in 
eastern Utah of how to get oil shale out of--oil out of shale, and we 
think that test will be done about September 15, and the projection is 
we will be able to get oil out of shale for $30 a barrel.
  Now consider this: Trillions of barrels of oil at about $30 a barrel. 
That's profound. I think that cost is going to actually go lower than 
$30 a barrel, and I'm about to introduce a bill that will allow the 
President to cut through the permitting processes and allow us to 
develop our oil shale at a reasonable time using reasonable 
understanding of the technology and the environmental impacts so that 
we can actually bring that shale to market, bring down the cost of oil, 
stop funding our enemies in Iran and Saudi Arabia and Venezuela, and 
start producing oil in America.

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