[Congressional Record (Bound Edition), Volume 158 (2012), Part 3]
[Senate]
[Pages 3087-3089]
[From the U.S. Government Publishing Office, www.gpo.gov]




                                 ENERGY

  Mr. BINGAMAN. Madam President, I wish to speak for a few minutes 
about gasoline prices, which my colleague from Utah talked about a few 
minutes ago, also about domestic oil and gas production, and also about 
access to federally owned oil and gas resources. These are issues that 
have been raised by numerous Senators on this Transportation bill. They 
are issues of critical importance to our country's economy, to national 
security, and to resource management. I have been increasingly 
concerned that the issues we are debating and the facts that are being 
put out there are often not the true facts. There is widespread 
misunderstanding of what needs to be done to deal with this set of 
issues, in my opinion.
  Let me start with the issue that is most important to most Americans; 
that is, the price of gasoline at the pump--the price of oil and then, 
of course, the price of gasoline. We need to understand clearly what is 
causing these prices, and we need to be direct with our constituents 
about what is causing these prices.
  Let me state as clearly as I can what I believe is really without 
dispute among experts; that is, we do not face cycles of high gasoline 
prices in the United States because of a lack of domestic production, 
and we do not face these cycles of high gasoline prices because of the 
lack of access to Federal resources or because of some environmental 
regulation that is getting in the way of us obtaining cheap gasoline. 
As was made clear in a hearing we had in the Senate Energy Committee in 
January, the prices we are paying for oil and the products refined from 
oil, such as gasoline, are set on the world market. They are relatively 
insensitive to what happens here in the United States with regard to 
production. Instead, the world price of oil and our gasoline prices are 
affected more by events beyond our control, such as instability in 
Libya last year or instability in Iran and concerns about oil supply 
from Iran this year.
  First, I have two charts that I think make this point very clearly. I 
believe this first chart I have in the Chamber is very instructive. 
This is entitled ``Weekly Retail Price for Premium Unleaded Gasoline, 
Including Taxes Paid.'' There are two lines on the chart. The top line 
contains the weekly retail prices in Belgium, France, Germany, Italy, 
the Netherlands, and the United Kingdom. You can see how that has 
fluctuated. This is through January of last year. The comparable prices 
paid in the United States are reflected in this bottom line. And, of 
course, the lower prices are because we pay much less in taxes than do 
these other countries.
  So it is a useful chart that I think makes a couple of important 
points. The first point it makes is that the price patterns are 
remarkably similar in all countries; that is, the prices for gasoline 
in all of these countries reflect the world price of oil. Second, while 
the patterns are similar, the U.S. price is significantly lower because 
of the lower taxes we pay in this country.
  The second chart I have in the Chamber shows U.S. domestic oil 
production and U.S. gasoline prices between 1990 and 2011. Here, the 
red line is the change in domestic production year over year. The blue 
line is gasoline prices. What is striking about the chart is the lack 
of relationship between the two lines. Even with U.S. production 
increasing, as it was at some points, oil prices also were increasing 
and gasoline prices were increasing.
  So while domestic oil production plays an important role in the 
energy security and the economy of our country, its contribution to the 
world oil balance is not sufficient to bring global oil prices down. 
For this reason, increased domestic production unfortunately will not 
bring down gasoline prices in our country.
  We also need to understand the status of domestic production. Here 
again, the facts are often misunderstood. For example, we have heard 
the claim that the United States and the Obama administration have 
turned away from producing the domestic oil and gas resources we 
possess. The facts are very much to the contrary.
  At the hearing we had in January in the Energy Committee, James 
Burkhard, a managing director of IHS Cambridge Energy Research 
Associates, described our situation in this country as the ``great 
revival'' of U.S. oil production. He provided this next graph, which 
clearly demonstrates what we are experiencing in the United States. 
This graph shows the net change in production of petroleum liquids in 
the United States and in other major oil-producing countries between 
2008 and 2011. The U.S. increase is shown by this very large column 
here on the left. We can see that our increase in production is far 
greater than that of any other country in the world. The United States 
is now the third largest oil producer in the world, after Russia and 
Saudi Arabia.
  Another chart on domestic production is also instructive. This chart 
shows total U.S. oil production between 2000 and 2011. It clearly 
demonstrates that current increases in oil production are reversing 
several years of decline in that production. We have not had to change 
any environmental laws or limit protections that apply to public lands 
in order to get these increases.
  This next chart shows the percentage of our liquid fuel consumption 
that is imported, including the projections the Energy Information 
Administration has made out to 2020. The trend is very encouraging. In 
2005 we imported almost 60 percent of the oil we consumed. Now we 
import about 49 percent of the oil we consume. The Energy Information 
Administration projects that these imports will continue to decline to 
around 38 percent by 2020. This is an enormous improvement that we 
would not have thought possible even a few years ago.

[[Page 3088]]

  Now, let me say a few words about natural gas because that is also 
something which greatly affects utility bills in this country and, of 
course, is very important to our economy.
  The good news continues as we look at natural gas. This graph shows 
U.S. natural gas production between 2000 and 2011. As we can see, there 
has been a dramatic increase in recent years. As we have heard from the 
International Energy Agency, headquartered in Paris, U.S. gas 
production grew by more than 7 percent in 2011. Our natural gas 
reserves are such that the United States is expected to become an 
overall net exporter of natural gas in the next decade. And natural gas 
inventories are now at record highs--20 percent above their level at 
the same time last year. In fact, there is so much natural gas being 
produced, frankly, some producers are shutting-in production. They are 
waiting and hoping that prices improve before they actually sell the 
natural gas they are able to produce today.
  This next chart contains production data for the world's largest 
natural gas producers for the years 2008 through 2010. There are three 
bars here. The green bar is 2010 production, the most recent data 
available. This chart shows that in 2009, the United States surpassed 
Russia and became literally the world's leader in natural gas 
production. The green bar shows that trend continued in 2010.
  So, unlike oil, the price of natural gas is not set on the world 
market. For natural gas, our enormous domestic resources and increased 
production have a significant effect on the price American consumers 
have to pay on their utility bills especially. Natural gas prices are 
near historic lows, and this is important to consumers who depend on 
this fuel for electricity, for heating. It is good for manufacturers 
who depend on natural gas. It is good for our economy overall.
  Further evidence of our extremely robust domestic oil and gas 
production is the fact that the number of oil and gas drilling rigs 
active in the United States exceeds that of most of the rest of the 
world. As of last week, there were 1,981 rigs actively exploring for or 
developing oil and natural gas in the United States. The best 
comparable figure we have for rigs operating internationally is 1,871. 
This does not include Russia. It does not include China. It is probably 
safe to say, though, that more oil and gas drilling is occurring here 
in the United States than in any other country in the world.
  Despite our relatively modest resource base for conventional 
petroleum, the industry in the United States has led the world in 
developing state-of-the-art technology for oil and gas exploration and 
production, tapping both conventional formations and unconventional 
resources, such as shale and tight sands.
  To use a boxing metaphor, we are ``punching above our weight'' in oil 
and gas production, thanks to the technology lead our companies have 
developed, and it is a success story our country should celebrate. Even 
in light of this good news on domestic production, we hear claims that 
the Obama administration has withheld access to the oil and gas that is 
available on Federal lands and the Outer Continental Shelf. So we in 
Congress are urged to mandate that virtually all federally owned oil 
and gas resources be leased for development more quickly without regard 
to any impact that might have on other resources or economic interests, 
without any scientific analysis that is currently required.
  Again, however, the facts tell us a different story. Secretary 
Salazar testified before our Energy Committee on February 28 that oil 
production from the Outer Continental Shelf has increased by 30 percent 
since 2008. It is now at 589 million barrels--in 2010. Annual oil 
production onshore on Federal lands increased by over 8 million barrels 
between 2008 and 2011. It is now over 111 million barrels of 
production.
  Industry has been given access to millions of acres, much of which 
they either have not leased--not chosen to lease--or they have not put 
into production. In 2009, 53 million acres of the resource-rich central 
and western Gulf of Mexico were offered for lease. Industry chose to 
lease only 2.7 million out of that 53 million acres. In 2010, 37 
million acres of the gulf were offered. Only 2.4 million acres were 
actually leased in that year.
  In June of 2012, 3 months from now, the administration will offer 
another 38 million acres in the central Gulf of Mexico for lease. The 
Interior Department estimates that these areas could produce 1 billion 
barrels of oil and 4 trillion cubic feet of natural gas. The 
administration has recently proposed a leasing plan for 2012 through 
2017 that would make at least 75 percent of the undiscovered, 
technically recoverable oil and gas resources on the Outer Continental 
Shelf available for lease.
  So even when the industry leases these resources, it often does not 
move to produce oil or gas from these areas they have leased. Onshore, 
out of 38 million acres currently under lease, the industry has about 
12 million acres actually producing. Offshore, there are a total of 35 
million acres under lease. Six million acres of that is actually in 
production.
  As of September 2011, industry held over 7,000 permits to drill 
onshore that were not being used. I have heard it stated that only 2 
percent of the acres in the Outer Continental Shelf are currently 
leased and that this is evidence of lack of access to the resources. In 
my view, this is a misleading way to think about the current situation.
  Just as oil is not found uniformly everywhere on land but instead is 
concentrated where the geology is favorable, the same is true offshore. 
The total acreage on the Outer Continental Shelf is huge. It is 1.7 
billion acres. Much of it does not have oil and gas reserves that can 
be tapped economically.
  Oil and gas occurs in the greatest quantities in only a few areas, 
such as the central and western Gulf of Mexico. It is those productive 
regions in which the industry expresses interest and which are the 
primary areas where leasing is occurring that the Obama administration 
plan would cover.
  The total 1.7 billion acres is not a useful metric without 
consideration of which of those acres actually have significant oil and 
gas resources that are economically recoverable. Much more relevant is 
the amount of the resources that are being made available. As I pointed 
out, Secretary Salazar has testified that the proposed 5-year oil and 
gas leasing plan they have put forward would make more than 75 percent 
of the Outer Continental Shelf resources available for development.
  The bottom line is, an increased amount of Federal acres and 
resources onshore and offshore are being made available to industry. 
Production on federally owned resources continues to increase. The 
increase in this production can be even greater if industry would lease 
and explore and produce on a greater percentage of the lands that are 
offered to them for lease, the lands that are believed to have some of 
the highest oil and gas resource potential.
  Before I close, let me return for a moment to the issue of gasoline 
prices. It is clear we are increasing our domestic production 
significantly but that gasoline prices continue to rise. So we need to 
look for other solutions. This does not mean we are powerless to help 
reduce the price of gasoline. We know what we need to do.
  If we want to reduce our vulnerability to world oil prices and to 
volatility of world oil prices, the most important measure we can take 
is to find ways to use less oil. One of our colleagues gave a good 
speech a few years ago in which he advocated that we produce more and 
use less. We are doing a pretty good job of producing more, and we need 
to do a better job of using less. We can do much better in this ``use 
less'' part of the equation without affecting the quality of life in 
this country. We can do that by being more efficient in our use of 
fuel, by diversifying our sources of transportation fuel away from oil.
  We have taken some first steps along this path, notably in the Energy 
Independence and Security Act of 2007. It passed the Senate with a 
strong bipartisan vote. That law required us to make our vehicles more 
efficient and to shift toward relying more on renewable fuel, and it is 
working. Demand is down. Biofuel use is up. Consumers save money on 
fuel for their vehicles.

[[Page 3089]]

Our percentage of imported oil has dropped by over 10 percent.
  How do we continue on this path forward toward reducing oil use and 
dependence? I think there are three areas we can focus on. First, we 
need to enable further expansion of our renewable fuel industry, which 
is currently facing infrastructure and financing constraints. Second, 
we need to move forward the timeline for market penetration of electric 
vehicles. Finally, we need to make sure we use natural gas vehicles in 
as many applications as make sense based on that technology. Every 
barrel of oil that we are able to displace in the transportation sector 
and that we therefore do not need to consume makes our economy 
stronger.
  Obviously, it also helps our personal pocketbooks. It makes us less 
available to the volatility of the current marketplace. This is not to 
say we should not keep drilling and that the Obama administration 
should not continue to move forward with its plans to bring even more 
supplies into the market. We lead the world in innovative exploration 
and production technology. It is helpful to our economy and our 
national security to increase domestic supply, and that is exactly what 
is happening.
  But in the many debates we will have in the future over issues 
related to gasoline prices, we need to recognize the key issue very 
clearly is not lack of access to federally owned oil and gas resources. 
Our public lands contain many resources and uses that Americans value. 
We do not need to sacrifice science or balance the protection of these 
other resources and economic interests in order to have robust domestic 
production.
  The long-term solution to the challenge of high and volatile oil 
prices is to continue to reduce our dependence on oil. This is a 
strategic vision that President George W. Bush, who had previously 
worked in the oil industry, clearly articulated in his State of the 
Union speech in 2006. We subsequently proved in Congress in 2007, the 
year after that State of the Union speech, that we have the ability to 
make significant changes in our energy consumption and that it is 
possible to mobilize a bipartisan consensus to do that. The bipartisan 
path the Senate embraced in 2007 is still the right approach today.
  As part of whatever approach we take to energy and transportation in 
the weeks and months ahead, we need to be honest with our constituents 
about what works, and we need to keep moving in the direction that we 
began moving in with that 2007 bill. We need to allow the facts and not 
the myths to be our best guide.
  I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Oregon.

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