[Congressional Record (Bound Edition), Volume 158 (2012), Part 3]
[Senate]
[Pages 4067-4070]
[From the U.S. Government Publishing Office, www.gpo.gov]




          REPEAL BIG OIL TAX SUBSIDIES ACT--MOTION TO PROCEED

  The PRESIDING OFFICER. Under the previous order, the Senate will 
resume consideration of the motion to proceed to S. 2204, which the 
clerk will report.
  The legislative clerk read as follows:

       Motion to proceed to Calendar No. 337, S. 2204, a bill to 
     eliminate unnecessary tax subsidies and promote renewable 
     energy and energy conservation.

  The PRESIDING OFFICER. Under the previous order, the time until 5:30 
p.m. will be equally divided between the two leaders or their 
designees.
  Mr. INHOFE. Mr. President, I ask unanimous consent that the time on 
each side be equally divided during the quorum calls.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. INHOFE. 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. CORNYN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. CORNYN. Mr. President, I come to the floor today to express 
concerns about the rising cost of gasoline and the Obama 
administration's efforts to further increase the American consumers' 
pain at the pump.
  As we all know, the average price of gasoline has now more than 
doubled since the first week of the President's inauguration in January 
2009, from $1.84 a gallon to $3.86. Furthermore, the Associated Press 
has reported the typical American household spends about $4,155 a year 
filling up at the pump--an all-time high--and 8.4 percent of the median 
household income, the highest percentage spent for gasoline since 1981 
when oil prices soared due to the crisis in the Middle East.
  The Energy Information Administration estimates that 72 percent of 
the price of a gallon of gasoline is made up from the cost of crude 
oil, which is a globally traded commodity. Although some would like to 
distract from the fundamentals, Congress cannot repeal the law of 
supply and demand.
  Indeed, President Obama used to agree with us. Last March, for 
example, he said ``producing more oil in America will help lower oil 
prices.'' However, his administration has adopted policies that 
directly conflict with our goal of lowering gasoline prices. To add 
insult to injury, with the public outcry, the President is out to 
further confuse the facts and actually take credit for increasing 
production when those increases have been on private lands outside of 
his control, and while opposing greater exploration on Federal lands 
under his purview. At the same time he is even seeking now to push 
prices even higher by raising taxes in his fiscal year 2013 budget.
  This week the Senate will be debating a bill by Senator Menendez of 
New Jersey to increase taxes on oil producers. I don't know of anyone 
who could reach any other conclusion than that by raising taxes on the 
people who produce oil and gas, it will raise, not lower, the cost of 
oil, thus the refined petroleum product known as gasoline. So, 
actually, by punitively and in a discriminatory sort of way raising 
prices on an unpopular sector of the economy, we will actually make 
matters worse, not better.
  The Tax Code supports the energy sector by providing a number of 
targeted tax incentives--or tax incentives only available to the energy 
industry. In addition to targeted tax incentives, there are a number of 
broader tax provisions that are available for energy- and nonenergy-
related industries. For example, the section 199 domestic production 
deduction incentive is available to most domestic manufacturers with 
income derived from production property that was manufactured, 
produced, grown, or extracted within the United States.
  So this section 199 provision applies to a whole host of American 
businesses, not just the oil and gas business. Yet the Menendez bill 
and the Obama administration continue to single out oil producers for 
tax increases, even though oil-related activities are already limited 
from claiming the deduction compared to other industries.
  Analysis by the Congressional Research Service for the energy 
targeted tax incentives shows that while the majority of U.S. primary 
energy production comes from fossil fuels, the majority of energy tax-
related revenue losses are associated with provisions designed to 
support renewables.
  During 2009, 77.9 percent of U.S. primary energy production could be 
attributed to fossil fuels--77.9 percent in 2009. Of the Federal tax 
support targeted to energy in 2009, an estimated 12.6 percent went 
toward fossil fuels. In contrast, in that same year, more than 10 
percent of U.S. primary energy sources came from renewable fuels.
  In other words, just to repeat: 10.6 percent from renewable, 77.9 in 
that same year from oil and gas, but notwithstanding the fact only 10 
percent of energy produced came from renewable fuels, 77.4 percent of 
energy targeted Federal tax support went toward supporting renewable 
fuels.
  If we want to put all these tax provisions on the table, I think we 
should do that. As a matter of fact, the Simpson-

[[Page 4068]]

Bowles study identified more than $1 trillion of tax expenditures. But 
let's not just pick out one sector of the economy and, in the process, 
raise taxes and increase the price of gasoline at the pump as an 
unintended but clearly likely outcome.
  We know the Menendez bill is not about tax reform. This is about 
mixing the message and trying to drive a wedge between the American 
people and the people who actually create jobs. Unfortunately for the 
administration, raising taxes will, in fact, translate into higher 
prices.
  It is a fair question to ask whether this administration can defend 
its policies, such as their budget proposal to raise taxes where they 
argued these tax provisions should be repealed because they ``encourage 
overproduction of oil'' and are thereby ``detrimental to long-term 
energy security.''
  I am not sure most Americans understand that the official policy of 
this administration is that tax deductions should be removed because 
they encourage overproduction of oil in America. I thought the goal--
one of our goals--was to produce more at home so we would depend less 
on imported energy from abroad.
  Then there is the Keystone Pipeline, which is well-known. The 
President is the primary obstacle to the completion of that pipeline 
which will create more than 20,000 new jobs and produce 700,000 barrels 
of oil at refineries in the United States from a safe and friendly 
source--the nation of Canada. Because the President is blocking 
completion of the Keystone XL Pipeline, they are looking for 
alternative customers. Indeed, the Prime Minister of Canada has visited 
China to prospect that potential purchase.
  What is worse, it is not just that the President hasn't acted, it is 
that the President has actually lobbied in the Senate to defeat efforts 
to bypass his obstruction to the completion of the Keystone XL 
Pipeline.
  Well, the President must be feeling the heat because he showed up in 
Cushing, OK, to celebrate and to say he would expedite about one-third 
of the pipeline, which, ironically, doesn't require him to do anything. 
It certainly doesn't turn on the spigot in Canada to get the oil in 
that pipeline to come from Canada down to the United States.
  So we can see our Nation has no coherent energy policy. We see that 
not only is this an area that has been neglected to the detriment of 
the American consumer, but actually the sorts of policies being pursued 
by the administration--particularly with regard to the Keystone XL 
Pipeline and raising taxes on domestic oil producers--are designed to 
make matters worse for American consumers at a time when they are 
struggling to recover from this recession, with historically high rates 
of unemployment and too few jobs.
  Looking at all the evidence on energy prices, it is hard to come to 
any conclusion other than that high energy prices are part of President 
Obama's plan. The policies he has put in place have intentionally 
elevated the price of gasoline, much to the detriment of the American 
people.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Senator from the State of New Jersey.
  Mr. MENENDEZ. Mr. President, I rise in support of S. 2204, which is 
my legislation to repeal Big Oil subsidies.
  This bill is pretty simple. We end wasteful subsidies to the big five 
oil companies, and we use those proceeds to invest in clean energy, in 
creating jobs, and reducing the deficit. I think the American people 
are sick and tired of paying ridiculously high gasoline prices at the 
pump and then paying Big Oil again with our collective taxpayer 
subsidies. I think that money is better spent keeping our economy going 
and developing alternatives to oil that will create competition in the 
marketplace and help to reduce gas prices.
  We are poised to waste $24 billion over the next 10 years subsidizing 
only five companies that are poised to make over $1 trillion in 
profits--not proceeds, in profits--over the same time frame. And as we 
all pay more at the pump, Big Oil rakes in more money.
  Exxon boasts in its Securities and Exchange Commission filings that 
for every $1 increase in the price of oil, their profits rise by $375 
million. For every $1 the price of oil goes up, they boast in their 
filings that their profits--not proceeds, profits--rise by $375 
million. The American driver's pain is Big Oil's profit.
  What is Big Oil doing with its profits? Well, the answer is not 
useful. As you can see in this chart, the profits from the big five oil 
companies were $137 billion in 2011. That is an impressive 75-percent 
increase from 2010. Did they use that extra money to produce more oil, 
as some of my colleagues here would suggest? No, they didn't. They took 
your money and actually in that time frame didn't produce a drop more 
of oil. As you can see, despite the fact that overall U.S. production 
is higher now than it has been in the last 8 years, last year these 
five companies actually produced 4 percent less oil.
  So it is fair to ask: If they did not invest to produce more oil, 
then what are they doing with this $137 billion in profits, this 75-
percent increase in profits in 1 year? Well, they spent about $38 
billion repurchasing their own stock to enrich themselves, and they 
spent nearly $70 million on campaign contributions and lobbying to 
protect their billions of dollars in subsidies. As you can see here, it 
was a pretty smart investment. For every $1 they spent in lobbying, 
they got about $30 in subsidies. One might say that is not a bad return 
on their investment.
  So instead of giving these subsidies to Big Oil so they can enrich 
themselves and seek to affect and control our political system, I think 
we could use some of those funds to reduce the deficit. I think we can 
all agree we need to reduce the deficit, but there seems to be some 
considerable disagreement on how to do it. Last week, those on the 
other side of the aisle came out with what I call the Romney-Ryan 
budget, their proposed budget, and it would drastically cut funding for 
wounded soldiers, for seniors, for students, but it leaves in place 
these wasteful subsidies even though we have this enormous profit.
  Through some political sleight of hand they defy reality when they 
tell us with a straight face that we have to make tough choices, and 
then they cut funding for wounded soldiers, for seniors, and students 
but won't touch the subsidies for Big Oil.
  Somehow, in this Republican parallel universe, logic is turned on its 
head and we are asked to believe that fairness doesn't mean treating 
everyone equally. It means more for the very rich and more for Big Oil. 
But we don't live in a parallel universe. We live in the real world. 
Fairness means that working families should not be the only people 
sacrificing. And we can't lower the deficit while we give taxpayer 
dollars away to Big Oil companies that are making record profits and 
not producing more energy. It is amazing to me that anybody can come 
and make that argument.
  What makes these subsidies even more ridiculous is that when we 
pressed those who have supported the industry or those who have come 
from the industry, everyone seems to admit that oil companies do not 
need these subsidies. Former President Bush, who was very good with the 
oil industry, said that oil companies do not need incentives to drill 
when oil hits $55 per barrel. Those were his remarks. Now it is over 
$100 a barrel. So if they didn't need incentives to drill when it was 
at $55 a barrel, how does anybody come to the floor and suggest they 
need incentives now when it is over $100 a barrel?
  Then the former CEO of Shell said that subsidies are not necessary 
for drilling and production. That is pretty much probably clear when 
they are making $137 billion in that 1 year, and where they will make 
$1 trillion over the next decade.
  Of the $24 billion we save by cutting these subsidies to the big 
five, we can use over $11 billion to extend a series of critically 
important expiring energy tax incentives. These clean energy 
technologies will cut demand for oil, they will drive economic growth, 
will create jobs, and will allow America to lead the global clean 
energy market.
  Despite Big Oil's rhetoric--let me tell you, it is amazing. I see 
they are

[[Page 4069]]

spending a lot of that money, all this money here not making oil, but 
they are spending it on television to scare everybody and to say that, 
Oh, if you take any of those subsidies away, somehow prices will rise. 
Well, we know that, despite Big Oil's rhetoric, cutting subsidies will 
not raise gas prices. We know that. Why? Because experts from the U.S. 
States Treasury Department, from the nonpartisan Congressional Research 
Service, and from oil executive testimony that came before the Finance 
Committee that I sit on, made it very clear that is not the case.
  But more than that, some of the most important tax policies that will 
be extended in this bill will help drive down gas prices by creating 
competition for oil as a transportation fuel. These incentives include 
the one for biofuels such as cellulosic ethanol, biodiesel, also 
incentives for natural gas and propane used as a transportation fuel. 
There are also incentives for alternative fuel refueling infrastructure 
and for electric vehicles. Taken together, these incentives are laying 
the groundwork for a truly competitive market where we are not beholden 
to one type of fuel to power our vehicles. But the good news doesn't 
even end there. There are also tax incentives that will help the United 
States compete for the renewable industries of the 21st century.
  For example, the section 1603 Treasury grant program has helped 
finance renewable energy projects around the country. It has leveraged 
over $35 billion in investments to create tens of thousands of energy 
projects. In my home State of New Jersey alone, 750 grants were given 
for solar, geothermal, landfill gas, hydropower, wind projects. These 
projects are worth over $350 million, creating many jobs, and will help 
New Jersey on energy bills for decades to come.
  Another important renewable energy incentive is the production tax 
credit for wind. Since the last reauthorization of PTC in 2005, wind 
power capacity has more than tripled. But if that production tax credit 
is not extended, it is estimated that annual installations of wind will 
drop by more than 75 percent and wind-supported jobs will decline from 
78,000 in 2012 to 41,000 in 2013, and total wind energy investment will 
drop by nearly two-thirds. So it is time to get back to reality. It is 
time to tell middle-class families struggling to make ends meet that 
fairness means everyone--everyone--pays their fair share when it comes 
to reduce the deficit. It means ending ridiculous taxpayer giveaways to 
the five most profitable companies in the world.
  I cannot understand how the oil industry is spending money on radio 
and other forms of media to say, Oh, my God, If you take any of our 
subsidies away--and these aren't even all of the subsidies they have. 
These are just a couple, the $24 billion over 10 years. They are going 
to make $1 trillion over 10 years. So you are telling the American 
people that when you are going to make $1 trillion over 10 years, we 
collectively as taxpayers must still give you $24 billion or else 
somehow $1 trillion minus $24 billion wouldn't be enough for you in 
profits that you would gouge the consumer at the pump? I don't think 
the American people are going to accept that.
  It is time for us to stop wasting taxpayer money on oil subsidies and 
use this money to invest in clean energy, in jobs, in lowering the 
deficit. All of that can be done on this opportunity when we vote in 
favor of moving forward on S. 2204, the Repeal Big Oil Subsidies Act. 
It is time to put the interests of the American people ahead of the 
money interests in this Congress with this vote, and then moving 
forward.
  I hear my colleagues may very well vote for us today to have a 
debate--which I more than welcome. I am looking forward to it. I have 
got a lot more to talk about in this regard--but then won't vote at the 
end to repeal the subsidies. So I guess what we will hear is a chorus 
of voices that will speak about defending Big Oil and defending its $24 
billion in subsidies, and justifying that even with $1 trillion in 
profits they still need to get their hands into the pockets of 
taxpayers and take another $24 billion in addition to what they get at 
the pump so they can make even more profits. And, somehow, there will 
be a justification to that. I hope the American people will be 
watching, because that type of justification is beyond comprehension. I 
know it as I hear it from families in New Jersey.
  I hope we will have this debate. I hope we will be able to move 
forward. I want to be able to talk about how I hear my colleagues talk 
about drill, baby, drill. Well, I was incredulously amazed that 
actually we are now exporting from the United States millions of 
gallons of gasoline and refined petroleum products every day to other 
places in the world. It seems to me that if we drill it here, 
particularly on Federal lands and water, we should keep it here because 
obviously the bigger the supply we have, the more we are going to 
create downward pressure on prices. But I think most Americans would be 
pretty shocked to know that we are actually exporting. They think 
everything that is created here is kept here, which is why I found it 
interesting--I keep hearing my colleagues talk about the Keystone 
Pipeline. Well, there are those of us who said, You know what. If you 
will make it with materials made in America so that we can ensure 
American jobs are created with it, and if you keep the energy here and 
not export it someplace around the world, then there are a lot of 
people who would say: Yes, along with the right environmental 
safeguards, let's consider it. But overwhelmingly that was voted 
against. So so much for American jobs. So much for securing American 
energy. Because what is the use of a pipeline to bring an energy source 
and then have it sent to other places in the world? That doesn't help 
us.
  I am a big believer if we are going to drill it on Federal lands and 
water, we are going to keep it here, we are going to help us lower 
prices. I am a big believer if we are going to do something such as 
Keystone, let's make sure it is made with American materials and made 
with American hands and, at the end of the day, the energy is kept in 
the United States. I am a big believer in saying at a time of shared 
sacrifice, it is wrong to ask working families to do more and yet give 
the oil companies $24 billion, when they will make $1 trillion in 
profits. It is wrong to say to a wounded soldier we are going to cut 
programs in his long-term health care that will ultimately help him get 
back on his feet, but we are going to give Big Oil $24 billion. It is 
wrong to tell students who are trying to determine their future and get 
access to that college education and who will encumber themselves with 
significant costs along the way, no, they pay more, but we are going to 
give Big Oil $24 billion. It is wrong to tell seniors we are going to 
end Medicare as we know it, but we are going to give Big Oil $24 
billion. That is beyond my comprehension.
  I look forward to the debate because it is going to be very 
interesting to see some of the remarkable ways in which people are 
going to have to explain that. I don't think it is explainable to the 
American people. Tonight's vote starts a process: Which side are we on? 
Are we on the side of the American taxpayer or are we on the side of 
Big Oil? I hope an overwhelming number of our colleagues will, starting 
tonight and moving toward final passage, say we are on the side of the 
American taxpayer and the American consumer. If we do that, we can 
create some justice in this process. We can help create competition in 
the energy market to drive down prices, we can reduce the deficit by 
another $12 billion, and we can be a lot more fair to working families 
in this country. That is the choice before us. That is a choice the 
Senate will make in a positive way.
  I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER (Ms. Klobuchar). The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. BINGAMAN. Madam President, I ask unanimous consent the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BINGAMAN. I thank the Chair.

[[Page 4070]]




                             Cloture Motion

  The PRESIDING OFFICER. The cloture motion having been presented under 
rule XXII, the Chair directs the clerk to read the motion.
  The assistant legislative clerk read as follows:

                             Cloture Motion

       We, the undersigned Senators, in accordance with the 
     provisions of rule XXII of the Standing Rules of the Senate, 
     hereby move to bring to a close debate on the Reid motion to 
     proceed to Calendar No. 337, S. 2204, a bill to eliminate 
     unnecessary tax subsidies and promote renewable energy and 
     energy conservation.
         Harry Reid, Robert Menendez, Richard J. Durbin, Patrick 
           J. Leahy, Patty Murray, Carl Levin, Charles E. Schumer, 
           Bernard Sanders, Amy Klobuchar, Al Franken, Benjamin L. 
           Cardin, Sheldon Whitehouse, Sherrod Brown, Mark Udall, 
           Daniel K. Akaka, Debbie Stabenow, John F. Kerry.

  The PRESIDING OFFICER. By unanimous consent, the mandatory quorum 
call has been waived.
  The question is, Is it the sense of the Senate that debate on the 
motion to proceed to S. 2204, a bill to eliminate unnecessary tax 
subsidies and promote renewable energy and energy conservation shall be 
brought to a close?
  The yeas and nays are mandatory under the rule.
  The clerk will call the roll.
  The assistant legislative clerk called the roll.
  Mr. DURBIN. I announce that the Senator from California (Mrs. Boxer) 
is necessarily absent.
  Mr. KYL. The following Senators are necessarily absent: the Senator 
from Utah (Mr. Hatch), the Senator from Utah (Mr. Lee), and the Senator 
from Illinois (Mr. Kirk).
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The yeas and nays resulted--yeas 92, nays 4, as follows:

                      [Rollcall Vote No. 59 Leg.]

                                YEAS--92

     Akaka
     Alexander
     Ayotte
     Barrasso
     Baucus
     Bennet
     Bingaman
     Blumenthal
     Blunt
     Boozman
     Brown (MA)
     Brown (OH)
     Burr
     Cantwell
     Cardin
     Carper
     Casey
     Chambliss
     Coats
     Coburn
     Cochran
     Collins
     Conrad
     Coons
     Corker
     Cornyn
     Crapo
     DeMint
     Durbin
     Enzi
     Feinstein
     Franken
     Gillibrand
     Graham
     Grassley
     Hagan
     Harkin
     Heller
     Hoeven
     Hutchison
     Inouye
     Isakson
     Johanns
     Johnson (SD)
     Johnson (WI)
     Kerry
     Klobuchar
     Kohl
     Kyl
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lugar
     Manchin
     McCain
     McCaskill
     McConnell
     Menendez
     Merkley
     Mikulski
     Moran
     Murkowski
     Murray
     Nelson (FL)
     Paul
     Portman
     Pryor
     Reed
     Reid
     Risch
     Roberts
     Rockefeller
     Rubio
     Sanders
     Schumer
     Sessions
     Shaheen
     Shelby
     Snowe
     Stabenow
     Tester
     Thune
     Toomey
     Udall (CO)
     Udall (NM)
     Vitter
     Warner
     Webb
     Whitehouse
     Wicker
     Wyden

                                NAYS--4

     Begich
     Inhofe
     Landrieu
     Nelson (NE)

                             NOT VOTING--4

     Boxer
     Hatch
     Kirk
     Lee
  The PRESIDING OFFICER. On this vote, the yeas are 92 and the nays are 
4. Three-fifths of the Senators duly chosen and sworn having voted in 
the affirmative, the motion is agreed to.


                            vote Explanation

 Mrs. BOXER. Madam President, I was absent from the vote to 
invoke cloture on the motion to proceed to S. 2204, the ``Repeal Big 
Oil Subsidies Act.'' Had I been present, I would have enthusiastically 
vote ``aye.''
  Mr. SCHUMER. Madam President, I suggest the absence of a quorum.
  The PRESIDING OFFICER (Mrs. Hagan). The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. DURBIN. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

                          ____________________