[Congressional Record (Bound Edition), Volume 157 (2011), Part 5]
[Senate]
[Pages 7129-7130]
[From the U.S. Government Publishing Office, www.gpo.gov]




                       ESCALATING GASOLINE PRICES

  Mr. HOEVEN. Madam President, I rise to speak this afternoon about the 
escalating cost of gasoline at the pump--something that affects every 
American consumer. Crude oil prices are now more than $100 a barrel and 
the price of gasoline at the pump for our consumers is about $4 on 
average across the Nation. It is even more here in the District. 
Despite some correction recently in the oil commodity markets, the U.S. 
Energy Information Administration expects that prices this summer will 
average $1 more than they did just a year ago.
  Gasoline price spikes are a form of stealth inflation eating away at 
the income of American families, impacting our economic growth, and 
deepening the hardship to the almost 14 million people we have still 
looking for work. Some economic analysts indicate that for each $10 
increase in the price of a barrel of oil, it has the impact of reducing 
our economic growth by about two-tenths of 1 percent. Each two-tenths 
of 1 percent equates to 120,000 fewer jobs that are created just in the 
first year of that type of increase. So you can see it has a very 
significant cumulative impact.
  Imported oil also greatly affects detrimentally our balance of trade. 
Last year alone that contributed to a $265 billion trade imbalance for 
our Nation. The high price of oil, whether it is at the wellhead or the 
price of gasoline at the pump, impacts every sector of our economy. It 
affects jobs, it affects economic growth, and it certainly affects the 
purchasing power of the American family; therefore, their standard of 
living and our quality of life.
  So what do we do? Well, the fact is, oil prices are subject to the 
same laws of supply and demand as other commodities. When we increase 
the supply, that helps bring prices down. When we reduce demand, that 
helps bring prices down. Of course, just the reverse is true as well. 
When we have less supply or more demand, that tends to push the price 
higher. So clearly--clearly--we need to do all we can to produce more 
energy in this country, and certainly we need to produce more domestic 
fuel, more domestic oil and gas.
  I don't know how many people realize it, but over the last few 
years--over the last approximately 5 years--oil imports into this 
country have actually been going down, and that is why I have brought 
this chart along which was prepared by the Congressional Research 
Service. As we can see from the chart, domestic oil was shrinking from 
about 1985 to 2005, and by 2005 we increased our imports to a total of 
12.4 million barrels a day, approximately 60 percent of the total oil 
we consumed in 2005.
  However, since 2005 things have begun to change. We have made 
progress. We have made progress both because we are producing more oil 
and gas in this country and also because we are using less. So we can 
see from 2005 to 2010 we have actually reduced the amount of oil we 
import into this country from about 60 percent of what we use to less 
than 50 percent. Today, about 49 percent of the fuel we consume is 
actually produced in this country. That is a significant reduction in 
our imports of about 3 million barrels a day from 2005.
  So what changed? Well, what changed is we are producing more oil. We 
are producing more oil offshore and onshore in the lower 48, and we are 
also producing more natural gas liquids. As I said just a minute ago, 
we are also consuming less, and we need to continue to do both. In 
addition to those things, though, we are also increasingly relying on 
friendly governments for our imports rather than governments that are 
hostile to our country.
  For example, by last year we were importing twice as much oil from 
Canada as we were from Saudi Arabia, and that is certainly a good 
development. We need to continue to not only produce more domestic oil 
but, to the extent we import oil, we need to bring it in from countries 
that are friends rather than countries that are foes, or certainly that 
may not share our beliefs and our interests. We have opportunities to 
do that.
  For example, right now, very close to my State, we are working on a 
project which is the Keystone XL Pipeline. The Keystone Pipeline is 
designed to carry crude oil from the Canadian oil stands in Alberta, 
Canada, to refineries in the Gulf of Mexico. The problem is, we are 
still awaiting approval for that pipeline. U.S. approval of this 
project will cost our Nation not one penny but will increase the supply 
of oil and gasoline in our country and help hold down the price of 
gasoline at the pump. At the same time, it will help reduce our 
dependence on oil from volatile parts of the world and create thousands 
of good jobs in America. We all know how important that is at a time 
when our Nation still has 9 percent unemployment and millions of people 
are out of work.
  We have similar opportunities to boost the supply of domestic oil and 
gas on American soil as well, and not just in the lower 48 but also in 
Alaska. The Trans-Alaska Pipeline could help increase supply 
enormously, but right now it is only carrying about one-quarter of its 
capacity. The pipeline has the capacity to carry 2 million barrels of 
oil a day. Right now it is carrying something over 600,000 barrels of 
oil a day. So, clearly, that is a tremendous capacity that is not being 
utilized.
  Senator Murkowski has eloquently pointed out that the State of Alaska 
holds an estimated 40 billion barrels of oil, the equivalent of more 
than 60 years' worth of imports from the Persian Gulf. Yet that oil is 
excluded from our Nation's reserve figures. The United States is 
already the third largest oil and gas producing Nation on Earth, with 
28.4 billion barrels of proven reserves. But it also has an estimated 
162, almost 163 billion barrels of technically recoverable oil, 
according to the Congressional Research Service. Only Russia and Saudi 
Arabia produce more than our country.
  So the lesson in all of this is clear. We can and we must increase 
domestic production of oil and gas in our country. The record over the 
past 5 years clearly indicates we can do it. As a matter of fact, we 
are on our way to doing it, and we can do much more. For example, in my 
home State of North Dakota, we have been working over the last decade 
to increase oil production, and we have. Since 2005, North Dakota has 
increased its production of oil by more than 200,000 barrels a day. 
North Dakota is now the fourth largest oil-producing State in the 
Nation. We have passed States such as Oklahoma and, more recently, 
Louisiana. We have the opportunity to produce much more. We have just 
barely scratched the surface.
  Last month, I hosted a meeting of the U.S. Geological Survey in 
Bismarck to make the case for a new, updated study of recoverable 
reserves in the Williston Basin. Of course, the Williston Basin covers 
parts of North Dakota, Montana, and extends into Canada as well. The 
last agency study was completed in 2008, and it indicated there are 3.5 
to 4 billion barrels of recoverable oil in the Bakken Shale Formation, 
which is in the Williston Basin--3\1/2\ to 4 billion barrels of 
recoverable oil. Industry scientists and engineers, however, who are 
working out in the Williston Basin right now feel that figure is low 
and the reality in terms of recoverable oil reserves in the Williston 
Basin is much higher.
  That is why we are asking the U.S. Geological Survey to come out and 
do a reassessment. If they are right, the results will attract tens of 
millions of dollars in new investment to the region, creating more 
domestic fuel and lower prices for American consumers, more jobs in our 
State, in Montana, and more jobs for our country. Also, it will help us 
develop infrastructure and sustain economic growth throughout the 
region.
  In North Dakota we focused on creating more energy, more oil and gas, 
and more other types of energy as well by creating a legal, tax, and 
regulatory climate--a business climate--that encourages private 
investment and job creation. I have spoken several times on the floor 
of the Senate and more times than I can count at home and around the 
country about the need to

[[Page 7130]]

forge a legal, tax, and regulatory climate in America that will attract 
investment in the energy industry--whether it is wind, biofuels, coal, 
or oil and gas.
  At a time when America is struggling with a 9-percent unemployment 
rate, the need to create private sector jobs is absolutely paramount. 
It is job No. 1. Building our domestic energy industry is one of the 
keys to accomplishing that. The oil and gas industry alone supports 7.5 
percent of the U.S. domestic product and more than 9 million American 
jobs. Government doesn't create those jobs, but government creates the 
environment that empowers and unleashes the creativity and energy of 
American enterprise.
  The challenge confronting the U.S. energy industry today, however, is 
a climate of legal, tax, and regulatory uncertainty. This uncertainty 
is not only sidelining investment and impeding production but also 
hindering job creation and raising fuel prices at the pump for American 
consumers.
  We all want to ensure we have clean air and water, but at the same 
time we all want to develop our Nation's abundant natural resources and 
do it with good, sound environmental stewardship. Clearly, we need to 
look at our current legal, tax, and regulatory environment to make sure 
we have the commonsense, reliable rules that not only enable but 
actually empower companies to invest the hundreds of millions and 
billions of dollars in new technologies that will help us unlock the 
energy resources in this country, and do it with the kind of 
environmental stewardship we all want.
  It is vital for the rest of our economy. The reason for that is 
simple. If the energy industry cannot grow, neither can our other 
industries. They cannot create the jobs and opportunities our Nation so 
very much needs, and they cannot provide the affordable energy American 
families and businesses depend on every day. Impeding domestic energy 
production, moreover, is a national security issue as well as an 
economic issue. Increased dependence for oil on unstable parts of the 
world, such as the Middle East and Venezuela, puts not just our economy 
but our Nation and our Nation's security at risk. Yet rather than 
reduce constraints on production, rather than encourage more 
exploration and recovery, rather than make our country a better place 
to do business, our laws and regulations too often seem aimed at 
serving every other purpose but increasing domestic energy production 
and supply.
  Ironically, at a time when we need to invest and create jobs, 
billions of dollars are not being deployed. That is because energy 
investors are waiting to see what kind of rules will govern things such 
as fracking for domestic oil, hydraulic fracture, CO2 
management, and transmission line siting. Companies out there are ready 
to make billion-dollar investments that will have a lifespan of more 
than 40 years, but they do not know the rules of the road. By 
certainty, I don't mean more restrictive rules and regulations; I mean 
commonsense rules of the road that would not change arbitrarily or 
according to political crosswinds.
  A number of us in the Senate on both sides of the aisle are already 
working on commonsense initiatives to ensure that Congress, rather than 
government agencies, establish those rules. I have already spoken about 
some of those on the Senate floor. Today, I would like to talk about 
another one. Today, I want to discuss, for just a short period, another 
piece of legislation that I believe will help reduce the price of fuel 
at the pump--not by increasing production but simply by applying good 
judgment to the rules that govern distribution of gasoline in the 
United States.
  Senator Roy Blunt, myself, and a number of other Senators are 
promoting a bill called the Boutique Fuel Reduction Act of 2011. This 
legislation would simplify the Nation's fuel standards and make more 
fuel available to American consumers. It would give the administrator 
of the Environmental Protection Agency--the EPA--the flexibility to 
waive certain agency requirements pertaining to the use of specific or 
boutique fuels--specialty fuels--when extreme or unusual distribution 
problems are limiting supply.
  Currently, the increased use of different types of fuel for different 
parts of the country is causing artificial shortages in some retail 
markets and, consequently, higher prices at the pump for our motorists. 
A service station in one city that runs out of fuel may not be able to 
use a certain blend of gasoline available just 50 miles away because it 
is not approved by the EPA for use in that location. Unfortunately, 
under current law, the EPA can waive the requirements only during a 
natural disaster, not to meet shortages or price spikes such as we have 
today. The law we are sponsoring would change that.
  In addition to the bill, myself and a group of Senators--and House 
Members as well--have also sent letters to EPA Administrator Lisa 
Jackson, calling on the agency and the Department of Energy to complete 
the fuel harmonization study which Congress requested more than 5 years 
ago. That report was due in 2008. This report would examine the effects 
of the Nation's varying boutique fuels on retail prices and also assess 
the feasibility of developing national or regional standards to reduce 
the multiple varieties required today by the EPA.
  Having fewer types of fuel would make more fuel available during 
shortages, thereby putting downward pressure on prices at the pump. It 
would give refineries more options to meet demand and help stabilize 
and reduce the retail price of gasoline.
  We expect EPA and the Department of Energy to follow through on the 
congressional intent that was outlined in the 2005 law and conduct and 
complete that study as soon as possible, which correlates closely with 
the legislation we are sponsoring.
  Bear in mind, the measures I just discussed do not cost anything. 
They take no funding to work. Yet they can help us reduce fuel prices 
for the American consumer, for our American families. They can make 
doing business in America more affordable, reduce our trade deficit, 
and help get Americans back to work again.
  We need to increase domestic fuel production, and we need to provide 
regulatory relief in order to do it because high energy prices, whether 
it is fuel for our cars or electricity for our homes and businesses, 
impact virtually every sector of American life. That includes jobs, 
that includes economic growth, that includes the purchasing power of 
the American family, and ultimately includes our standard of living and 
our quality of life.
  Our future is fueled by energy and that future depends on the 
decisions and the choices we make right now. We need to get them right.
  I yield the floor.
  The PRESIDING OFFICER (Ms. Klobuchar). The Senator from Missouri.

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