[Congressional Record (Bound Edition), Volume 156 (2010), Part 1]
[Senate]
[Pages 1354-1356]
[From the U.S. Government Publishing Office, www.gpo.gov]




                           BUDGET DISPARITIES

  Ms. MURKOWSKI. Madam President, when President Obama delivered his 
first State of the Union Address several weeks ago, I tell you I was 
pleasantly surprised by his remarks on energy policy. In addition to 
calling for bipartisan legislation, the President indicated his support 
for more nuclear energy and new oil and gas development.

[[Page 1355]]

I think those are all positive steps. They are taking us in the right 
direction, not least because they would draw strong support in 
Congress, and I think they would help create jobs all across the 
country at a time when we are looking at how we can boost the economy 
and create jobs. This is critically important.
  Having listened to the President's ideas, I looked forward to seeing 
how the administration would begin to act on them, how this would all 
play out in his new budget. When that document came out last Monday, I 
expected to at least see some progress in each of the areas mentioned 
during the State of the Union Address. Instead, I found some 
disparities--some were small; some were rather striking--between the 
President's words to Congress and the agencies' requests from us.
  This disconnect is both disappointing and perhaps a little difficult 
to explain. At the very least, it is apparent that the vision the 
President presented to Congress does not match what some of his 
agencies have in mind. I do not believe these are welcome shifts. Quite 
a few of the budget proposals would impair our ability to establish a 
comprehensive energy policy that addresses climate change and reduces 
our dependence on foreign oil. Instead of promoting bipartisanship--
which I think we all want to try to do--I am concerned these same 
proposals would only deepen the divisions we have within Congress.
  Let me fill out some of the details. Let's start with nuclear energy. 
During his remarks, the President indicated his support for a ``new 
generation of safe, clean nuclear powerplants in this country.'' To the 
administration's credit, I believe it did follow through on that one in 
the budget request. As I have said before, allowing the Department of 
Energy to guarantee more loans for nuclear plants is a step in the 
right direction.
  But I remind him, it has been a year, and this administration has yet 
to help finance a single nuclear project. That certainly is not due to 
lack of ability because the DOE has already had the authority to 
guarantee $18 billion in new projects. It certainly is not due to the 
cost because, if carried out properly, this important support would not 
cost American taxpayers a single dime. But I believe the administration 
took a step backwards in its budget, away from that progress when it 
chose to abandon the Yucca Mountain project. The end of the nuclear 
fuel cycle is just as important as the beginning. Yet DOE is abandoning 
our best option for a repository and further exposing taxpayers to 
billions for the government's breach of contract.
  We also need to make sure in America we are producing the raw 
materials used to generate nuclear energy. Here again, the 
administration took a step back last year by withdrawing roughly 1 
million acres of uranium-rich lands in Arizona. As a result, our Nation 
has lost access to some of its highest grade uranium reserves. This is 
kind of familiar territory for us. We should know by now that following 
the same path for nuclear energy that we have been following for oil 
will not work. It is not going to help improve our energy security. It 
risks trading our dependence on foreign oil for a similarly devastating 
dependence on foreign uranium.
  I appreciate the administration's direction with the loan guarantees 
with nuclear. I, again, support that. But when we turn to the 
discussion about where we go with oil and gas, I cannot say the same 
for domestic oil and gas production--at least when it comes to this 
budget and the various proposals for tax hikes, new administrative 
fees, and efforts to make the permitting process actually more 
burdensome.
  During his State of the Union Address, the President called for tough 
decisions to be made regarding new development. I had actually hoped he 
meant that his agencies were preparing to push forward with a plan that 
would allow America to develop more of its resources. But it appears I 
was mistaken. Instead of seeking to increase production, the budget 
request includes at least 21 new taxes and fees for the oil, natural 
gas, and coal industries--21 new taxes and fees. Collectively, these 
increases would raise producers' costs of business by an estimated $80 
billion.
  That is going to translate into higher energy costs for consumers, 
fewer jobs for the American people. We cannot forget what basic 
economics tells us: When you tax something, you get less of it. So we 
will probably become even more dependent on foreign energy as well.
  I ask unanimous consent that a list of all these 21 tax increases and 
fees for oil, gas, and coal producers be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

Tax Increases and New Fees Proposed for American Oil, Natural Gas, and 
 Coal Producers In the Administration's Fiscal Year 2011 Budget Request

       1. Repeal enhanced oil recovery credit;
       2. Repeal marginal well tax credit;
       3. Repeal expensing of intangible drilling costs;
       4. Repeal deduction for tertiary injectants;
       5. Repeal passive loss exception for working interests in 
     oil and natural gas properties;
       6. Repeal percentage depletion for oil and natural gas;
       7. Repeal the Section 199 manufacturing deduction for 
     income attributable to domestic production of oil, gas, or 
     primary products thereof;
       8. Increase geological and geophysical amortization period 
     for independent producers to seven years;
       9. Repeal expensing and exploration and development costs 
     for coal;
       10. Repeal percentage depletion for hard, mineral fossil 
     fuels;
       11. Repeal capital gains treatment of certain coal-related 
     royalties;
       12. Repeal the Section 199 manufacturing deduction for 
     income attributable to domestic production of coal and other 
     hard mineral fossil fuels;
       13. Levy new fees on applications for permits to drill 
     (APDs)
       14. Authority to collect $10 million in fees for on-shore 
     oil and gas production inspection on federal lands, and 
     parallel request for $10 million in fee collections under MMS 
     budget;
       15. $4.00 per acre fee on ``non-producing leases'' in both 
     federal lands and waters;
       16. Repeal of EPACT '05 provisions incentivizing production 
     of deepwater gas;
       17. Repeal mandatory royalty relief to deepwater oil and 
     gas production;
       18. Proposed increase in royalty from 12.5% to 20-30%;
       19. Modify rules for dual capacity taxpayers to effectively 
     create double taxation on income derived from foreign 
     holdings;
       20. Repeal LIFO (last in, first out) accounting procedure;
       21. Reimpose Superfund taxes disproportionately on the oil 
     and natural gas industry.

  Ms. MURKOWSKI. To be fair, these proposals that were laid out do not 
necessarily come as a total surprise to us. Many of these were also 
part of last year's budget. Last September there was a senior official 
from the Treasury Department who raised some eyebrows. He was 
testifying and said that somehow America overproduces oil and gas--
overproduces oil and gas.
  As we continue to import about 60 percent of our total supply of oil 
and even some of our natural gas, that claim is incredible to me. Our 
Nation clearly imports too much oil, and we use too much oil. But we 
certainly do not produce too much of it.
  The administration is pursuing at least some of these tax increases 
and fees in order to ``end fossil fuel subsidies.'' Those are the words 
they use. This is part of an agreement reached with the G20 last year. 
But interestingly, the G20 seems to have a very different idea of what 
that actually means.
  According to the group, developed countries such as the United States 
and Canada only indirectly subsidize fossil fuels such as with certain 
tax treatment, and even these quasi-tax subsidies are small in 
comparison to the developing or underdeveloped countries.
  If there are any direct fossil fuel subsidies that this 
administration could then eliminate, you have to ask the question: What 
would those be? As nearly as I can tell, there are two programs that 
would technically qualify, by the G20's definition, as direct fossil 
fuel subsidies. The first one is LIHEAP.
  Madam President, you are very familiar with that program, and I think 
you and I would be in complete agreement that this program, which helps 
needy Americans afford home heating

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oil and gas, should certainly not be eliminated. I think we have some 
considerable support in the Congress defending LIHEAP. The President, 
Vice President, much of the Cabinet, and dozens of other Senators 
certainly have gone on the record supporting it.
  The second direct fossil fuel subsidy in your region is the 
Northeastern Home Heating Oil Reserve. Again, I do not think the 
administration considered either of these programs when agreeing to 
phase out fossil fuel subsidies, but that is what they are--they are 
subsidies.
  To return to the budget request, the Department of Interior notes 
that:

       Repealing fossil fuel tax preferences helps eliminate 
     market distortions, strengthening incentives for investments 
     in clean renewable and more energy efficient technologies.

  This is another exercise in semantics and some political buzzwords. 
When the government gives actual subsidies and gives actual tax breaks 
to renewable energy development, these are entitled ``incentives for 
investment.'' When the government refrains from taxing oil and gas 
producers more than they are already taxed, it is not an incentive for 
investment anymore. But now we are calling it a ``market distortion.''
  I lay this out to hopefully be able to verbalize my concern.
  When the President spoke before the Congress at his State of the 
Union Address, when he spoke about tough decisions on new oil and gas 
exploration, I had hoped we would finally begin to be using more of our 
resources to meet our own energy needs. But from looking at the new 
budget, it looks more as though our energy producers will be the ones 
who will be making the tough decisions. They are going to be making a 
tough decision as to whether they continue to operate here, whether 
they shut down, whether they head overseas or whether they produce our 
energy.
  The final area I wish to address is the issue of climate change. 
During his address, the President called on the Congress to develop 
comprehensive energy and climate legislation. But a few days later, 
when the budget came out, the EPA requested more than $40 million in 
order to begin regulating greenhouse gas emissions on its own.
  Here in the Senate we have at least 41 Members already on record as 
opposing that approach. That is about as bipartisan as any climate bill 
has been--as we have been--in this Congress. By allowing the EPA to 
move forward, the President is actually limiting Congress's ability to 
develop a bipartisan climate bill. Instead of debating cap and trade or 
a carbon tax, we are going to spend at least some of our time talking 
about the EPA's regulations. As I have said many times before, EPA's 
actions will harm our economy at a time when we can least afford it.
  I also believe the debate over climate policy belongs here. It 
belongs in the Senate. It belongs in the House. It belongs here in 
Congress because that is where the best interests of our constituents 
can fully be represented.
  The truth of the matter is the administration is looking to have it 
both ways. On the one hand, its budget assumes a cap-and-trade bill 
will pass and on the other it is seeking millions of dollars to impose 
these backdoor climate regulations. I hope the administration will 
change its mind on the matter and decide to work with us as we work 
toward a balanced and comprehensive bill. But I think we recognize that 
the threat of regulations has not worked. I do not think it will work. 
I think it is time to take that command-and-control approach off the 
table.
  Some may wonder why I have taken the time to point out that the ideas 
in the President's State of the Union Address do not entirely match the 
priorities that were outlined in the administration's new budget. This 
is not intended as a criticism of the President. I am ready to work 
with him on the ideas he has offered to see if we can make some real 
progress for the American people. But, instead, I raise these issues 
because I believe they help illustrate why we have had such a tough 
time agreeing on a path forward. I am happy to work with the President 
and his administration on nuclear energy, on offshore development, and 
work toward bipartisan legislation. But I am not willing to support 
many of the energy-related proposals we are seeing now within the 
administration's new budget.
  Again, you might ask the question, why does it all matter? It matters 
because the budget is filled with programs that are authorized by 
Congress which are supposed to reflect not only our priorities but the 
priorities of the American people. And while it may not be readily 
apparent, the budget does send the signal about whether our work here 
is going to be continued by the executive branch. If the agencies seek 
to promote just some of our goals, and actually hamper others, that 
will only make Senators more cautious about what they are willing to 
support, especially if it is part of a comprehensive package.
  Madam President, I am going to close this evening by simply 
reaffirming what I have said before. I am ready to work with the 
President on the ideas he has offered up during his State of the Union 
Address to help make those tough decisions on offshore development, to 
ensure a new generation of nuclear powerplants is built, to play a 
constructive role in bipartisan legislation.
  But the energy proposals contained in the budget also make me 
question whether all of those priorities would receive equal treatment 
if put into law. I hope the agencies would carry out all of Congress's 
priorities--not just some--that could be contained in a bipartisan 
energy bill. The President's address several weeks ago makes me think 
that, in fact, this is all possible. But the new budget makes me 
question whether, in fact, that is the case.
  With that, Madam President, I thank the Chair for the time and yield 
the floor.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. WHITEHOUSE. Madam President, I ask unanimous consent that the 
order for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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