[Congressional Record (Bound Edition), Volume 157 (2011), Part 5]
[House]
[Pages 7076-7082]
[From the U.S. Government Publishing Office, www.gpo.gov]




                           THE WESTERN CAUCUS

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 5, 2011, the gentleman from New Mexico (Mr. Pearce) is 
recognized for 60 minutes as the designee of the majority leader.
  Mr. PEARCE. Mr. Speaker, the Western Caucus has several members here 
tonight. We would like to talk about what is going on right now in the 
country. The administration seems to be waging a war on the western 
jobs, and that is carried out through a whole range of activities.
  A couple of weeks ago, the administration and the President said that 
the administration is not doing enough to address the high gas prices. 
The President said in a speech at Georgetown that he would like to cut 
foreign oil by one-third by drilling at home. Well, we have been in the 
process of offering him the solution to what he said he would like to 
do.
  Now, keep in mind that while the President is saying one thing, he's 
doing another.

                              {time}  1840

  While he says that we would like to drill for more oil here, 
understand that he has increased the moratorium on the offshore 
drilling. They have made it more difficult to drill in on-land areas 
through the Rocky Mountains. Know that they rejected Shell Oil 
Company's $4 billion NEPA study because a paragraph was omitted.
  So while we are hearing bold language from this administration about 
increasing the amount of oil that we are drilling here at home--and 
that would create American jobs but it would also create lower energy 
prices--understand that it appears that the President is not following 
through on what he said.
  So in the past couple of days, this Congress, this House, has passed 
out H.R. 1229, which says that we are going to put the people back to 
work in the Gulf of Mexico.
  I think everyone understands that BP is accountable and should be 
accountable for the problems that they caused, but we should not have 
killed 100,000 jobs offshore.
  Our Nation is stuck at 9 percent unemployment. We are stuck with a 
deficit that is having to be financed by our own Federal Reserve. We 
are putting the Nation's economy at risk because of the way that we are 
treating jobs and because of our deficit.
  So we are saying: Put the American workers back to work in the Gulf, 
produce American oil, produce American jobs, and bring lower prices of 
gasoline to the consumer.
  The same bill improves the safety by reforming current law. It sets 
timelines for the Secretary to act on permits to drill. Right now, one 
of the things that the Secretary is doing is holding off approvals for 
those applications for permits to drill, the APDs. Know that the 
administration has within its power to improve the situation with jobs 
immediately, but instead they are doing the things that harm our work.
  H.R. 1229 also establishes expedited judicial review processes.
  We also have passed in this House H.R. 1230, which says we are going 
to restart the American Offshore Leasing Now Act. It passed last week. 
It requires that the four lease sales in the gulf and Virginia take 
place. Those lease sales were previously scheduled, but instead of 
going ahead with them, the administration has put them on hold. Let's 
simply produce the energy which has been verified to be there, which 
would create American jobs and which would aid American consumers by 
lower prices of gasoline.
  H.R. 1231 has also been passed, which reverses President Obama's 
offshore moratorium. The President made a big deal just after he was 
sworn in 2 years ago about reversing the moratorium. But after one 
analyzed the moratorium that he reversed, we actually saw that he 
increased the moratorium, that more areas were put off limits to 
drilling rather than the message that he gave the American people.
  So H.R. 1231 says to the President: We would like for you to join us 
in creating American jobs, jobs that the West would be proud of, jobs 
that would produce energy, jobs that would produce high-paying careers 
and not just jobs. We believe that these are the things that the 
American people are looking for. This is the leadership that they are 
asking for out of Washington.
  H.R. 1231 requires each 5-year offshore leasing plan to include lease 
sales in areas containing the greatest known oil and natural gas 
reserves. Our offshore areas are tremendous reserves of energy. All we 
have to do is tap into them and use them. It requires that the 
Secretary establish a production goal when writing a 5-year plan.
  I am joined tonight by several members of the Western Caucus. Each 
one has got their own particular interest area where the administration 
appears to be conducting a war on western jobs. So tonight, to lead 
off, I would like to yield time to my good friend Cynthia

[[Page 7077]]

Lummis from Wyoming such time as she would consume.
  Mrs. LUMMIS. Mr. Chairman, I thank the gentleman from New Mexico for 
yielding. I appreciate his leadership of the Western Caucus and look 
forward to this robust discussion tonight.
  The West is rich in natural resources. And natural resources, their 
good stewardship and using them for the benefit of our country is what 
the West does best.
  This administration is turning its back on the stewardship that is 
available in the West as we produce our natural resources and, instead, 
is taking away the jobs, the environmental progress, and replacing it 
with further dependence on foreign energy from places like Saudi Arabia 
and Venezuela.
  We can produce our own energy in this country. Between the resources 
of Canada and the United States, we can produce enough energy for us to 
meet our foreseeable needs. But that requires us to use the 
technologies and the jobs associated with those technologies that will 
create tens of thousands of jobs, in fact, hundreds of thousands of 
jobs. Instead, we are actually going in exactly the opposite direction. 
Let me give you an example.
  Fracking technology is advancing dramatically the ability of America 
to recover its rich natural gas resources, and it allows us to do so by 
casing a well with perforations. There is an explosion that cracks the 
tight sands or the rock. Then fluids are forced into these gaps in the 
rock, keeping the seams open, allowing this gas or oil to percolate 
back up the well casing and be produced, allowing Americans to use 
American-grown energy. But the attack on fracking technology is based 
not on science but on the idea that fracking could damage drinking 
water.
  None of us want to see our precious drinking water polluted by 
contaminants that some people believe are being used in fracking 
fluids.
  The States know their own geology better than anyone in Washington 
could and the very diverse geology that is different from State to 
State. You are going to be hearing later this evening from G.T. 
Thompson, a Member of Congress from Pennsylvania, where the Marcellus 
shale formation is being produced. I am going to talk about the use of 
fracking technology in my State, where the geology is very different 
from the Marcellus shale, but where it can be used in a responsible 
manner to produce American oil and gas with American jobs.
  The Wyoming Oil and Gas Conservation Commission, recognizing the 
concern that our drinking water could be imperiled, set about and 
created a set of rules and regulations to disclose the contents of 
fracking fluids and the processes that are being used by companies that 
are fracking wells in the State of Wyoming. Those rules are being used 
to provide people with the information that is needed to assure them 
that fracking fluids are not contaminating our water.
  Furthermore, there have been repeated stories, using an example from 
Wyoming, in Pavillion, Wyoming, of an area that some argue was fracked 
to the detriment of local water wells. Well, we are learning more and 
more about those water wells. And what we are finding is, out of over 
100 water wells in the area, only about one-fifth of them are 
permitted, and some of them are not even cased. Well, this allows for 
the natural percolation of gas into water that has nothing to do with 
fracking.
  If we look at the science and apply it correctly, using good 
stewardship principles, we can produce oil and gas and have good 
drinking water.

                              {time}  1850

  I even have a photograph from someone in my home State, Mr. Speaker, 
that has a flame coming out of a pond. The flame is a consequence of a 
natural methane seep coming out of the water that has been on fire as 
long as this gentleman can remember. These are natural phenomena.
  We need to make sure that we are assuring people in this country that 
drinking water will be safe at the same time we recover these 
resources. Those very assurances require scientists, they require 
environmental companies, they require fracking experts; more jobs, more 
oil and gas, more diverse energy for the American economy.
  Of course, clean burning natural gas provides us also an extension of 
the air quality that we value so well. These are American jobs that can 
be saved, nurtured and grown, and used successfully all over the United 
States, on and off shore.
  Mr. Speaker, you just acknowledged a project in the Beaufort Sea, 
which is off of the coast of Barrow, Alaska, 87 miles. Shell has put $4 
billion, as you pointed out, into preparing to produce that resource, 
and still does not have a permit to produce it. At some point, those 
investments begin to devalue their sunken costs in a way that may make 
companies like Shell look elsewhere. That takes jobs away from America 
and into countries where we are competing for jobs, and in places that 
sometimes are not our best friends when it comes to foreign policy and 
human rights.
  So, Mr. Speaker, let's produce oil and gas with American jobs, with 
good pay, with good benefits, and with the residual goal of having an 
all-of-the-above energy policy that benefits the West and the country 
as a whole.
  Mr. PEARCE. I thank the gentlelady for her comments.
  We are joined tonight by my good friend Mr. Thompson from 
Pennsylvania. Before I yield time to him, I would like to walk through 
just a brief list of some of the other ways that the government 
conducts war on Western jobs.
  Consider the listing of endangered species. No one of us wants to see 
a species be extinct or go extinct, but what we have seen is an extreme 
interpretation of the rules which kill jobs at the same time. I think 
there are ways that we could keep jobs and preserve species, yet we are 
not doing that right now.
  The Coho salmon was listed as endangered. As a result, the farmers in 
the Klamath Basin in Oregon have been forced into bankruptcy due to 
prohibitions on water use by the listing of the salmon.
  The Methow salmon, water rights holders in the Methow Valley of 
Washington lost the use of their water, and property owners and timber 
owners face restrictions on their properties because of the imposition 
of egregious stream buffers to protect the listed salmon.
  The listing of the salmon in general, the court case over whether 
hydroelectric dam operators have done enough to prevent the death of 
salmon in Washington and Oregon, billions of dollars have been spent to 
accommodate, according to Bloomberg Business Week, but the 
environmental groups continue to sue.
  The northern spotted owl, the listing has killed the entire timber 
industry in much of the West, especially in northern California and 
Oregon. The Mexican spotted owl, that listing also killed the timber 
industry in New Mexico and Arizona. Hundreds of thousands of jobs have 
been lost.
  The Delta smelt, the listing of that species, a small 2-inch fish 
that lives in the San Joaquin Valley, killed 27,000 jobs there. The San 
Joaquin Valley was the source of 80 percent of our Nation's vegetables. 
Now those vegetable farms are gone. Bankruptcy. We are now importing 
food from countries that can spray pesticides that are outlawed in this 
country, so our food supply is less safe. Fewer jobs, bigger government 
deficit, greater cost of vegetables and unsafe food supply.
  The gray wolf was listed by the Fish and Wildlife Service as 
endangered and has killed agriculture and mining jobs throughout the 
West. Still the list goes on and on. So it is not that these are just 
hypothetical ideas that the war on Western jobs is occurring by a 
government. These are ongoing processes.
  One group, the Center for Biological Diversity, has declared they are 
going to list over 1,000 species this year, that they are going to 
petition for the listing of over 1,000 species this year. Understand 
that their lawyers get reimbursed at the rate of $350 to $500 per hour. 
For every lawsuit that they bring against the government, every lawsuit

[[Page 7078]]

that kills jobs provides employment for lawyers in those groups, so 
know that the taxpayer is footing the bill but yet losing jobs in the 
meantime.
  I would like to recognize Mr. Thompson now, and thank him very much 
for being here tonight.
  Mr. THOMPSON of Pennsylvania. I thank my good friend from Hobbs, New 
Mexico, for yielding. Representing part of Pennsylvania, it is an honor 
to be part of the Western Caucus. I represent western Pennsylvania and 
central Pennsylvania and a little bit of eastern Pennsylvania. My 
district is so large, so rural.
  It has many of the same issues, Mr. Speaker, that fit very well 
within the Western Caucus. We have public lands. All of these issues 
you are hearing about tonight in terms of what government does as a 
huge barrier and to kill the jobs, they are the same things that we 
certainly experience in western Pennsylvania.
  Now, I am proud. I chair the largest subcommittee of Agriculture, 
Conservation, Energy, and Forestry, so I want to go down another road 
in which how government kills jobs, western jobs, whether it is the 
West or western Pennsylvania or, frankly, throughout the United States.
  We recently had a hearing reviewing the proposed United States Forest 
Service plan. Our National Forests, it is very clear they are not 
National Parks. Our National Forests were created to provide 
sustainable resources, predominantly timber, but timber is not the only 
thing. Our forests were created to provide us energy, access to oil, to 
natural gas, to coal, to minerals. So that is why they were put in 
existence.
  As we look around the Nation, certainly in my congressional district, 
my National Forest is relatively small compared to I think some in the 
West, 513,000 acres, but it is profitable and home to the world's best 
hardwood cherry. It has a management plan that says in a sustainable 
way, to keep the forest healthy they are supposed to harvest over 90 
million board feet a year. But yet for over a decade they have been 
doing 20 million. One of the members of my subcommittee, Mr. 
Southerland, talked about his National Forest, they harvest zero board 
feet out of his National Forest.
  Now, there are a lot of problems with that. First of all, if you 
don't harvest timber, if you don't manage that forest in a healthy way, 
you subject yourself to wildfires, to invasive species. It creates an 
unhealthy forest. But it also kills jobs, and that is what we have 
seen. We have seen that all across the Nation, in the West, frankly, 
all parts of the country with our National Forests where the Forest 
Service has failed to do its job in terms of managing the forests I 
think in a productive way. That point came out very clearly in the 
first of what will be I think a number of hearings that we are going to 
do on this issue.
  Frankly, timber production is down. I am proud to say that it is up 
to 40 million board feet in the Allegheny National Forest, but that is 
only with the persistence of kind of being with the Forest Service 
almost on a constant basis. But it is still a long ways from 90.
  The production of timber is down. That means timber jobs, first of 
all. Our sawmills, our timber industry, those jobs, in many parts of 
the country those jobs have gone away. They are extinct today. And the 
forest products jobs that come as a result of having that timber supply 
are going away.

                              {time}  1900

  And the economies. Our rural communities were taken in order to 
create these national forests by the Federal Government. And the 
economies of our rural communities that make up those forests depended 
on the promise that was made when the forests were formed that the 
timber industry, minerals, oil, gas, coal, all those sustainable 
resources would be provided, would be produced, and that would maintain 
the economies of those rural communities. Well, that's been a lie by 
the Federal Government. They haven't done that. They haven't met their 
responsibilities. And that has killed jobs and killed our economies in 
rural communities.
  In terms of energy, in my district I was sworn in for the first time 
in Congress in January 2009. Within a week of when I was sworn in, the 
Forest Service chose to place a moratorium on any new drilling permits 
in my national forest.
  Now, you have to understand, 93 of the subsurface rights are 
privately owned. So these are owned by private individuals. And they 
came in and imposed this moratorium because of some lawsuit, as my good 
friend talked about, and the taxpayers paid their lawyers and paid the 
organizations to file, basically, and we went over a year with people 
losing their jobs, families suffering for just that reason.
  Thankfully, a Federal judge overturned that decision. Of course, the 
Forest Service appealed and the Federal judge threw it out again. And 
now the Forest Service has appealed again. They've taken it down to a 
different court, down to the Philadelphia court, and we'll see what 
turns out there. But that's just another example of just bad 
government.
  My good friend Mrs. Lummis from Wyoming talked about the Marcellus 
natural gas. Let me just say that's all private sector. The government 
is not involved in it. Natural gas is mostly private lands. And it 
works. It has created over 88,000 jobs in Pennsylvania. I have counties 
that, for the first time in history, their unemployment rates are below 
both State and national averages.
  Prosperity is a good thing, and everybody benefits--not just the 
people that are getting the royalties or the leases, but, frankly, the 
churches, the Boy Scouts, the Girl Scouts, the little leagues, the fire 
departments, the hospitals, because rural folks are generous and they 
support good causes.
  And so the communities are growing. The annual average earnings are 
going up. Frankly, government is benefiting because local, State, and 
even the Federal Government is getting a little more tax revenue by all 
that economic activity. And unemployment is down and energy security is 
there, and it's lower energy costs for everyone, and it's private 
sector.
  If the government owned that land, we'd never be experiencing those 
benefits. Though, despite that fact, despite these are private lands--
and I'll end my comments with these, because I know we've got other 
Members that want to speak tonight--this administration is going after 
that natural gas production. They are. There are some in this body that 
are proposing Federal Government overreach.
  We're accessing that energy as a good steward. We've got regulations. 
The Department of Environmental Protection in Pennsylvania is a tough 
agency, but they do a fair job. They're always looking at their 
regulations. But we've got this administration who wants the Federal 
Government to employ the EPA and to send them into Pennsylvania and 
other parts of our country where we're producing domestic energy, which 
will essentially shut down our energy production and will shut down 
this prosperity, will shut down these jobs that are being created, will 
shut down the movement that we're making towards energy security.
  I want to thank my good friend from New Mexico for hosting this hour 
tonight. I'm proud to be a part of the Western Caucus and proud to be 
with you this evening.
  Thank you.
  Mr. PEARCE. I thank the gentleman from Pennsylvania for his comments. 
So far, the quote of the night is ``prosperity is a good thing.'' Yet 
our government seems to have a war on prosperity. Why is our government 
trying to undermine the economy when we're struggling with high 
deficits and unemployment? It defies imagination that that's going on.
  I would like to recognize now my good friend from Georgia (Mr. Broun) 
for such time as he may consume. I appreciate your being here. Georgia 
and Pennsylvania in the Western Caucus, that's the way it should be. 
We're west of somewhere. Thank you for being here tonight.
  Mr. BROUN of Georgia. Thank you, Mr. Pearce. I appreciate your 
yielding

[[Page 7079]]

me some time. Let me go forward with what Mr. Thompson was just saying 
and what you were just commenting on about prosperity.
  Just today, I had a businessman in my office relaying to me a 
conversation he had with one of the liberal Democrat Senators, and he 
was talking about the issues that concerned him and his business. She 
was arguing over and over again about how government needs to do all 
the regulatory constraints on business and how businesses need to be 
taxed higher, and it's not fair for businesses to be making money at 
the levels that they are. In fact, just today, we saw some of our 
Democratic colleagues talk about the oil companies and the kind of 
money that they have been making with increased prices of gasoline. 
Finally, in frustration, this Democrat Senator said to this 
businessman: All you're concerned about is profit. You just want to 
make a profit.
  Well, that's what business does. It makes a profit for its 
shareholders. If it's a corporation, it makes a profit for small 
businesses.
  The policies of this administration, the policies that we've seen 
from our Democratic colleagues when Nancy Pelosi was running the House, 
now with Harry Reid running the Senate, and certainly the Obama 
administration, they're trying to destroy profits. They're trying to 
destroy our economy, in my opinion.
  In fact, the President, himself, has said that he doesn't mind seeing 
gasoline prices go up as long as they go up incrementally. He doesn't 
want to see the massive increases, but as long as they keep going up. 
His own Energy Secretary, Dr. Chu, fairly recently said somehow we have 
to find a way to make gasoline in the United States at the same price 
that it is in Europe, which is roughly $8 a gallon today. The policies 
of this administration are doing just exactly that.
  Today, in the Science, Space and Technology Committee, we were 
talking about fracking. The EPA scientist that is studying fracking 
admitted that there has not been one single incident--not one--where 
fracking has been implicated in contaminating drinking water. Not one.
  But I believe this administration is doing everything it can to try 
to destroy energy production in this country and to try to destroy the 
free enterprise system. In fact, the President, himself, said that if 
his policies go into effect, to use his own words, energy prices will 
``necessarily skyrocket.''
  Well, who's going to be hurt? Who's going to be hurt when fuel prices 
go up and food prices go up, not only gasoline and diesel fuel?
  I was talking to a manager in a restaurant just last week in Athens, 
Georgia, and was asking him about his food prices in his restaurant and 
what is going on because of the high cost of gasoline. He said his 
suppliers are adding a fuel surcharge onto the cost of the foods that 
he's buying and selling in his restaurant. And it's the policies of 
this administration that are doing that.
  Just yesterday, I had a constituent of mine who's an egg producer in 
Georgia come in and talk about some of the issues that he faces. I am 
from Georgia. I'm a good southerner, and I love my grits and cornbread. 
For folks who are not southerners, grits are made from corn. Cornbread, 
obviously, that's self-explanatory where that comes from. I think even 
Yankees will know that cornbread comes from corn, too. The thing is 
that I, as a good southerner, cannot see driving down the road, burning 
up my grits and cornbread in the fuel tank of my GMC Yukon that I used 
as my office, actually, when I was making house calls as a medical 
doctor.
  I hear our Democratic colleagues talk about we need to remove the 
subsidies for the oil companies. Well, the American people need to know 
that those subsidies are actually tax credits. They're not true 
subsidies as such. In fact, Harry Reid was recently wanting a subsidy 
for gold mining in his own State of Nevada. He also wanted us to 
continue funding the cowboy poetry festival in his home State.
  We've got to stop spending these outrageous funds that the Federal 
Government has been spending, and we need to start creating jobs in a 
strong economy. The best way to do that is to get rid of the policies 
of this administration that are destroying jobs, destroying our 
economy, increasing the cost of gas and diesel fuel for farmers and 
everybody in this country.
  But back to my egg producer friend. I've got a chart here that we 
made up in our office, a dozen eggs in Georgia. We have the subsidies--
which are really not subsidies for the oil companies; they're just tax 
credits. But we have subsidies for ethanol production, which are true 
subsidies. Our administration has tried to pick winners and losers. One 
of the winners that they picked is the ethanol production.

                              {time}  1910

  That's been a total failure, and what that has done is increase the 
cost of gasoline. It's increased the cost of food across this country 
too. In fact, the major ingredient in feed for chickens is corn. Corn, 
when I when I was farming back a number of years ago, was $2.50 a 
bushel. Now it's approaching $8 a bushel. In 2005, before this ethanol 
subsidy, the total feed cost per dozen eggs--so when a consumer goes 
out and buys a dozen eggs--the food cost in that dozen eggs was 21 
cents per dozen of eggs. Now, 2011, it's approximately 52 cents per 
dozen.
  So who pays for that? Does the egg producer? No, it's the consumer. 
When you go to the grocery store and buy a dozen eggs, you're paying 
more money for the failed policies of this administration, particularly 
when it has to do with energy.
  If we start drilling for oil, tapping into our natural gas supplies, 
start producing coal, particularly doing the clean coal technology that 
we have, having an all-of-the-above energy policy, what's going to be 
the long-term outcome for the American consumer? For every single 
American, it's going to lower the cost of eggs and milk and bread 
because it's going to lower the cost of the production of all the 
foodstuffs. Every single good and service in this country is affected 
by these high costs of gasoline and fuel oil, diesel fuel, et cetera. 
The people who are going to be hurt the most are the poor people, those 
on limited incomes, our senior citizens.
  I hear over and over again our Democrat colleagues say that 
Republicans are in the back pockets of Big Oil. Wrong. I would like to 
see us end all subsidies, all of them, but particularly the ethanol 
subsidy, which has not made any sense whatsoever. And let's start 
developing our own energy resources, which will create jobs here in 
America.
  Just yesterday and today, we've been debating three bills that came 
out of our Natural Resources Committee. Those three bills will enable 
us to start tapping into the God-given energy resources that we have in 
this country, help us to be less dependent upon foreign sources for 
energy. If the President will ever sign those three bills into law, the 
short-term effect, I think it's been estimated, is that 200,000 new 
jobs are going to be created. So 200,000 new jobs will be created just 
with those three bills, just to be able to open up developing our own 
energy resources here in America that the President is blocking. Long 
term those three bills, it's estimated, will create 1.2 million new 
jobs here in the United States, American jobs, and help create a 
stronger economy.
  The failed energy policies of this administration are hurting job 
creation. They are hurting our economy. They're raising the cost of 
gasoline. They're raising the cost of diesel fuel. They're raising the 
cost of fuel oil. They're going to hurt egg producers and thus egg 
consumers, consumers of all goods and services. Your food costs are 
going to go up. The cost of every good and service in this country is 
going to go up all because of the failed policies of this 
administration because we cannot develop our own energy resources, our 
God-given resources, that we have in this country. I submit if a nation 
is not energy independent, it's not a secure nation. And that's where 
we are today. We've got to become energy independent. And how is that 
going to happen?

[[Page 7080]]

  Former U.S. Senator Everett Dirksen one time said when he feels the 
heat, he sees the light. The most powerful political force in America 
is embodied in the first three words of the U.S. Constitution: We the 
people. When we the people start contacting Members of Congress, 
particularly the Democrat Members of the House, and the Members of the 
U.S. Senate, and demand that we develop our own energy resources here 
in America, that we have an all-of-the-above energy policy that looks 
at everything--nuclear energy, alternative sources, clean coal, oil, 
gas--everything, which we must do, and that's what Republicans are 
fighting for, if enough people all over this country will contact their 
Senators and their Members of Congress and say, let's develop our own 
energy resources, let's develop American jobs, let's develop a strong 
economy here in America, then we can do so. But it's up to we the 
people to be able to demand that from your elected Representatives.
  Thank you, Mr. Pearce, for yielding to me. I appreciate the great job 
you're doing as chairman of the Western Caucus, and I'm honored to be a 
part of that caucus.
  Before I close, I encourage people to go on my Web site, 
broun.house.gov, and they can actually look at all the things on this 
chart. They can look at it in fine detail and understand how high 
energy costs are creating high prices for eggs in the grocery store.
  Thank you, Mr. Pearce.
  Mr. PEARCE. I thank the gentleman for his comments and his 
perceptions.
  As he mentioned, it seems that Washington has a war on profits. I 
think that maybe our friends on the other side of the aisle don't 
understand that profits pay high salaries. If you work in an industry 
with no profits, you work at low salaries.
  Profits pay to reinvest in new buildings, creating construction 
dollars in neighborhoods. Profits are put into youth training, baseball 
leagues, soccer leagues. Profits are reinvested into new equipment, 
causing manufacturing firms to thrive. Profits are invested in 
dividends, and they cause increased values of stocks, helping retirees.
  And, finally, profits are the only thing that corporations pay tax 
on. They do not pay taxes on losses. So when we begin to talk about 
taking away the profits of companies, understand that we're talking 
about undermining the American way of life. This attack on profits is 
an attack on the American way of life.
  I am pleased to be joined tonight by a good friend from Utah (Mr. 
Bishop), and I yield to the gentleman.
  Mr. BISHOP of Utah. I thank Chairman Pearce from New Mexico for using 
the Western Caucus to illustrate some of these ideas and situations 
that are here.
  I'm also grateful that the gentleman from Georgia (Mr. Broun) was 
just here and tried to show how whenever you have a policy that 
prohibits or discriminates or lessens the amount of energy that we have 
in this country, it has a direct impact on individuals and people. As 
he was showing, it has a direct impact on the cost of food. For every 
dime that diesel fuel increases, that's $400 million the agricultural 
industry has to put onto the cost of food. Not just in transporting the 
food but for the fertilizer to grow it, for the boxing, the shipping, 
the manufacturing of it--all of those things are added to it. For every 
penny that the cost of gasoline increases at the pump, that is $1 
billion that's taken out of the household income of Americans.
  And whom is that going to impact the worst? Obviously the people at 
the lower end of the economic scale, who have the most difficult time 
making their budget stretch to pay for higher transportation costs 
through fuel, for higher food costs because fuel goes up, for higher 
heating costs because fuel goes up. They're the ones who are hurt.
  Now, I also appreciate Mr. Pearce for illustrating that actually we 
have a situation in which the West, without trying to be specific to a 
region, but the West has been treated with the heaviest hand over the 
past few years and has suffered the greatest consequences of that heavy 
hand.
  Last year, according to the Bureau of Labor Statistics, they simply 
said that the region that had the highest unemployment for last year 
and the year before happened to be the West. Six of the top 12 States 
that had the largest decline in employment-to-population ratio since 
the recession that began in 2007 are found in the West.

                              {time}  1920

  Three of the top five States showing the most stress last year in the 
summer were found in the West, and unfortunately, Washington's 
misguided policies over the last several years are simply making these 
situations worse.
  Let me, if I could, talk about a couple of specific situations that I 
have found in my State that have added to this problem of what we call 
the ``war on the West,'' because they have had the dual whammy of not 
only increasing the price of energy, which is the price of living and 
the price of doing business, but at the same time of decreasing jobs in 
our particular area. Part of that is because the West simply has, as a 
region, over half of its land owned by the Federal Government. This 
government--it was not planned this way; it just kind of happened--owns 
1 out of every 3 acres in the United States. Yet, west of Denver, it 
owns 1 out of every 2 acres in the United States, and we get to have 
the fun of working with the heavy hand of the Federal Government on all 
sorts of efforts, especially when the Department of the Interior has 
unlimited, arbitrary and capricious powers given to them.
  For example, the Bureau of Land Management in the State of Utah went 
through what they call ``regional management plans.'' I have 16 areas. 
Half of them went through a regional management plan. The people on the 
ground, who are working there, who live there and who know that area, 
spent 7 years in developing a regional management plan, which means 
simply: How will the land owned by the Federal Government--and 
remember, it's still half of it--be used for development purposes?
  For 7 years, they held the public hearings, and they went through all 
the processes. They came up with their plan. The Secretary of the 
Interior came into office, and in the first few days, he simply said, 
Those plans don't fit the needs of this country because they authorize 
77 oil and gas leases, places where the professionals on the ground 
determined that the best use of government land was used to develop oil 
and gas in the State of Utah. The Secretary simply said no. He believed 
the last administration had made a rush to judgment, and therefore it 
was his best decision to suspend not only those oil leases but also the 
land management plans at the same time. He did it simply by the stroke 
of his signature. There was no work with it. There was no 
counterbalance. There was no checks and balance system. He simply said, 
I think it was wrong. It was a rush to judgment. I'm going to stop it.
  Now, like everything else, this situation went to court, and the 
judge ruled that, actually, the Secretary was wrong. There was not a 
rush to judgment by anyone other than the Secretary when he suspended 
those leases. However, because there was a timing element--one of those 
technicalities--and because those who were suing waited too long to 
file the lawsuit, the decision of the Secretary would stand. Now, what 
the Secretary said is, I'll be magnanimous, and of the 77, I'll let 17 
go forward. The other 60, they stay off the table. I don't care what 
the regional management plan did.
  The end result of that was simply that you don't have a whole lot of 
leases that will be put out for development. Unfortunately, it has a 
ripple effect through the community because not all leases are found on 
Federal land. There is also State land and very few pieces of private 
land; but oftentimes they abut one another, and if you block the 
leasing opportunity on this piece of land, it sterilizes the leasing 
development opportunity on its neighbor land at the same time. Plus, if 
all of a sudden the Department of the Interior is sending a message 
that they're going to be tough on this kind of development, industry 
gets the message, and they're not going to fight that kind of issue, 
and they will leave at the same time.

[[Page 7081]]

  The net result of this one action by the Department of the Interior 
was that unemployment in one rural county in Utah was a loss of 3,000 
jobs in a county that only has 30,000 residents. The unemployment 
tripled over a course of months and only and solely because of this one 
decision: that not only did we not have the ability of drilling on 
those Federal lands, but you also lost the opportunity for the private 
sector to go onto State lands and onto certain private lands. Then 
there was the ripple effect as they realized what simply happened, 
which is that the private sector said, I'm not going to put up with 
this. They took the investment capital that they were willing to put 
into the region of rural Utah and took it somewhere else where they 
didn't have to deal with the Department of the Interior.
  We have the same situation in the West in another particular area, 
specifically with oil shale. The U.S. Geological Survey, which oddly 
enough is part of the Department of the Interior, has estimated that, 
in a 16,000-square mile area of Colorado, Utah and Wyoming, there are, 
roughly, 2 trillion barrels of oil that can be extracted from oil 
shale. That is more energy than we get from Canada. This is not a new 
and unusual process. Estonia, in the Baltic states, has been using this 
same process of extraction from oil shale for 80 years, and they have 
done it successfully and in an environmentally friendly manner.
  We could copy that same proposal--but no. Once again, this 
administration has decided to slow-walk any development, slow-walk any 
allowance of projects to go forward to demonstrate what we can and 
cannot do. The net result of losing this opportunity for oil shale is 
at least $1.9 trillion added to the economy of this country, and there 
is projected to be up to 100,000 new jobs that would be lost simply by 
this one decision as well.
  Now, this is a small area, but if you compound that fact of what is 
happening not just in my State of Utah but what is happening in 
Colorado and Wyoming and New Mexico and Nevada and the rest of the West 
and if you see the compounded problem we have, you truly can understand 
why in the recession the West was the hardest hit--because we were 
dealing with the Federal Government in a way that was certainly unfair.
  I'd like to say one last thing before I yield back to the gentleman 
from New Mexico.
  In the last days, as the gentleman said, we have been talking about 
the ability of trying to jump-start our energy portfolio, our energy 
self-dependence, our energy ability in three bills specifically dealing 
with offshore development. We have that same potential for energy 
development onshore as well that we need to talk about at the same 
time; but sometimes we also need to talk here simply about 
understanding how words have meaning. We have been throwing around 
words in the debate over the last couple of weeks in a way that, I 
think, has been somewhat unfair and somewhat dilatory, and it has 
clouded the actual issue of what is going on.
  For example, there are those who are saying we don't need to actually 
develop any new oil or gas resources. There are plenty of leases out 
there that aren't being produced. I want you to know, when you deal 
with words, that ``lease'' is not the same thing as a permit to drill, 
and a ``permit to drill'' doesn't mean you're going to find anything 
for production. Just because there is a lease does not mean there is 
production. I had a company that was in my office today which has a 
lease in one of the Western States. They received the lease 6 years 
ago. Only this year did they finally check off all the boxes, run 
through all the bureaucratic hoops and do the environmental impact 
statements to get the permit 6 years later to finally start preparing 
to drill to see if it is actually productive. Those 6 years cost a lot 
of money to that company, money which could have gone to providing 
work, providing jobs, as well as resources to help grow the economy of 
this country. That's a real cost, and that is real and legitimate.
  We've heard comments before about how this country doesn't have 
enough oil because we don't have enough reserves to make it worthwhile. 
According to the CRS, Congressional Research Study, we have $1.2 
trillion worth of gas that is available for production here in the 
United States. That puts us in the top five countries in the world for 
oil. We are not an oil-poor country. However, when we talk about 
reserves, reserves are not the same thing as the amount of money that's 
available. Our reserves are a definition that is established by the 
SEC, and by the definition we use, we will always have fewer reserves 
than other countries, by definition.
  In addition to that, a reserve can't count as a reserve until you can 
actually get to it. When we put parts of this country off, when we have 
a moratorium, by definition, that takes us out of the reserve. So, when 
someone says we don't have as many reserves as other countries, it's 
probably true. That doesn't mean we don't have enough oil that can be 
used and produced. It simply means it doesn't fit the definition. 
``Reserve'' is not the same thing as ``amount of producible oil.''
  Just like as the gentleman from Georgia said, a subsidy--and we 
talked about all the subsidies the industries are getting--is when the 
government actually pays cash to somebody. The oil companies are not 
getting cash from the government.

                              {time}  1930

  A subsidy should not be confused with a tax credit or a tax 
deduction. If it were, when I fill out my long form and I write down my 
charitable contributions and get to write them off, that means the 
Federal Government is subsidizing me or subsidizing the charity to 
which I'm giving. That doesn't make any sense.
  What we need to do is talk about the words as the words really are 
meant to be and make sure that the words are used the proper way and 
not for some rhetorical effort to inflame the situation and reach some 
other result.
  The last word we need to talk about is simply ``jobs.'' Right now, 
there are twice as many government jobs as in all of manufacturing 
combined. In 1960, those ratios were reversed. We have gone to a lot of 
effort over the last 2 years to pass jobs bills, all of which produced 
government jobs. What we need to do is look at jobs in the private 
sector, and the private sector which creates a reliable, long-term job, 
a job that also equates wealth that goes back into the system and helps 
to grow our economy and grow our country.
  Those are the jobs we should be after, and those are the jobs we need 
to do. Unfortunately, we will never develop those jobs until we have a 
governmental energy policy that is reliable, that is not dependent on 
the whims of some foreign country, and that helps us develop the 
resources that we have in this country. We can do it and we need to do 
it, and I appreciate Mr. Pearce from New Mexico for bringing up this 
issue because that's exactly what we need to do as a policy.
  With that, I thank the gentleman.
  Mr. PEARCE. I thank the gentleman for his comments. He pointed out 
that this Nation is rich in shale oil. We do, in fact, have 2 trillion 
barrels in reserve in shale. That all was outlawed from use by the 
American consumers back in 2007 in a bill passed by Nancy Pelosi off 
the floor of the House.
  To put that in perspective, what does 2 trillion barrels of shale oil 
mean? We have only used 1 trillion barrels of oil completely in our 
history in just shale oil. That's not natural gas. That's not normal 
petroleum. We have double in shale oil what we've consumed up to this 
point.
  Another comment that was made earlier is that we subsidize and that 
consumers end up paying for things that they don't know they're paying. 
I just talked to a constituent last week. He said that he was given a 
tax credit for 40 percent of a solar facility that he put on his own 
home. That was from the Federal Government; from the State government, 
another 10 percent. So about 50 percent of the cost of the program was 
completely reimbursed by the government. But the big deal is they're 
paying him 22 cents per kilowatt hour of energy that he is able to

[[Page 7082]]

sell back into the system. Now, that 22 cents needs to be compared to 
the 7 cents that electricity normally costs. So the consumer is tagged 
with three times the cost of electricity that is provided by solar 
power that is bought from individual producers. The consumer will pay 
more for the power. It is not an easy process to understand, but 
consumers will ultimately pay all of the higher energy costs.
  We hear much today in Washington about the subsidies for Big Oil. Be 
aware that there are no subsidies for Big Oil. There are simply write-
offs that every company is allowed to take legally; write-offs to 
encourage them to invest in machinery; write-offs that sound like 
depreciation, amortization; write-offs that are allowed by accounting 
techniques across the board in this country. Understand that when we 
begin to penalize these oil companies, we're going to cost America 
jobs.
  So let's talk just a bit about the different supposed subsidies that 
are, in fact, legitimate write-offs that companies are given.
  The suggestion was made that we repeal the expensing of the 
intangible drilling costs. The intangible drilling costs usually 
represent 60 to 80 percent of the cost of a well. Historic U.S. policy 
allows a deduction for development. That's since 1913 in this 
government's Tax Code; and yet, today, we're talking about reversing it 
at a time when we're starving for jobs, 9 percent unemployment, and 
we're going to talk about making it harder to employ people in this 
country.
  Other businesses are able to expense their research and development 
projects. Pharmaceutical companies, IEC specifically targets U.S. oil 
and gas companies. It will discourage innovation in the energy sector 
at a time when we need more innovation, not less. Disallowing the 
expensing of intangible drilling costs will put the American consumer 
in a worse position and endanger American jobs.
  The second idea that's talked about in raising taxes for oil 
companies is to do away with the write-off, the dual capacity rule. The 
dual capacity rule was to ensure that income that is taxed by another 
nation is not also taxed by the U.S. It's something that the U.S. has 
been alone on in taxing double. We tax not only the amount that is made 
here but the amount that is made in other countries, the profits made 
in other countries. That's a tax inversion that has cost us many jobs.
  Now then, we have the allowance of dual capacity rule in place to 
stop that, and yet our friends on the other side of the aisle are 
saying that we must stop this practice. All it's going to do is make 
the U.S. more inhospitable for investment in energy resources. At a 
time when we're seeing $4 gasoline, at a time when our economy is 
struggling, when we need jobs, we're talking about making American 
businesses less competitive and making American jobs more scarce.
  The final section is maybe the most egregious of all, that is, the 
repeal of section 199 manufacturing exemptions for oil and gas 
companies. In 2004, the Congress enacted section 199 for manufacturing 
companies to encourage them to bring jobs back to this country. From 
2004 to 2007, the oil and gas industry was responsible for 2 million 
new jobs that were created. The oil and gas companies currently support 
9.2 million jobs. Almost all manufacturers receive a 9 percent credit. 
That's, again, in order to encourage them to come back to this country.
  The oil and gas companies have only been receiving a 6 percent credit 
because they've already been picked on by the people in this town. But 
now they're suggesting that we would want to completely do away with 
the manufacturing credit. Keep in mind, that's the refining of 
gasoline. That's the definition of manufacturing in oil and gas.
  So at a time when we're starving for jobs, we're going to make U.S. 
manufacturers, the U.S. refineries, less competitive. We're going to 
encourage Venezuela and Hugo Chavez to send more jobs there, to take 
more jobs and to send more gasoline here. It just doesn't make sense.
  Tonight, I'd like to wrap up with this one picture about the status 
that our country is in. Our country right now has a tremendous problem 
with its economy. The problem is this: in Washington, we spend $3.5 
trillion. Our revenues to the government are $2.2 trillion. That's a 
$1.3 trillion deficit. The accumulated deficits over the lifetime of 
this country are almost $15 trillion.
  I show those deficits running out the end of the pipeline into our 
debt barrel to show the accumulated debt to the Nation. I also show a 
green sludge pouring over the edge of the barrel because we've got $202 
trillion of accumulated costs of Social Security, Medicare, and 
Medicaid. These are the things that are wrecking our economy.
  This chart given by OMB and CBO, the Congress, and the White House 
both show that our economy is going to fail in 2038 because of these 
practices. At a time when we're starving for jobs, this administration 
has a war on western jobs. It has a war on our energy. It has a war on 
the jobs in the timber industry. It has a war on our way of life.
  This is not the time to be conducting partisan politics in this town. 
It's a time for us to create jobs. With each job created, the 2.2 is 
greater because each person pays in increment more taxes, but they also 
are no longer receiving welfare, unemployment, and food stamps. So the 
3.5 decreases.
  The path forward is simple. We simply ask that the President get on 
board.

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