[Congressional Record (Bound Edition), Volume 158 (2012), Part 3]
[Senate]
[Pages 4200-4206]
[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 S. 2204, a bill to eliminate 
     unnecessary tax subsidies and promote renewable energy and 
     energy conservation.

  Mr. REID. Mr. President, I ask unanimous consent the time until 3:30 
today be equally divided between the two leaders or their designees; 
that at 3:30 p.m. today the Senate adopt the motion to proceed to S. 
2204, and then the Senate vote on the motion to invoke cloture on the 
motion to proceed to Calendar No. 296, S. 1789.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Florida.
  (The remarks of Mr. Nelson of Florida are printed in today's Record 
under ``Morning Business.'')

[[Page 4201]]


  Mr. NELSON of Florida.
  I yield the floor.
  The PRESIDING OFFICER. The Republican leader is recognized.
  Mr. McCONNELL. Mr. President, what we are seeing in the Senate this 
week is exhibit A in what the American people just don't like about 
Congress. Gas prices have more than doubled under President Obama and 
the Democratic control of the Senate. This is an issue that affects 
every single American and drives up the cost of everything from 
commuting to groceries.
  What is the Democratic response? Well, it is legislation that even 
they admit won't do a thing to lower the price of gas at the pump. We 
have seven Democratic Senators on record saying this bill doesn't do a 
thing to lower gas prices. One of them has actually called it 
laughable. Yet that is what they are proposing here this week at a time 
when gas prices are at a national average of nearly $4 a gallon. This 
is what passes for a response to high gas prices for Washington 
Democrats--a bill that does nothing about it. I cannot think of a 
better way to illustrate how totally out of touch and irresponsible the 
Democratic majority has become.
  Look, Democrats know they have to say something about this issue, so 
what they are doing is taking a page out of the President's playbook 
and blaming somebody else. That is what this entire exercise is about--
blaming somebody else--and, frankly, the American people are tired of 
it.
  If Democrats don't want to do anything to lower gas prices, just go 
ahead and admit it. If Senate Democrats don't have any interest in 
lowering gas prices, then just say so, but don't waste the public's 
time by using the Senate floor to talk up a piece of legislation the 
only purpose of which is to convince people that you do. If the 
President doesn't want the Keystone Pipeline, why doesn't he just admit 
it? But don't insult the public by showing up for a ribbon cutting--for 
one part of it that you had nothing to do with while lobbying against 
the most important part at the same time.
  Americans are tired of the political games and double-talk on this 
issue. They are tired of the constant campaign. They sent us here to 
actually fix problems, not to avoid them, and on this issue there is a 
lot we could be doing to make things a whole lot better. So Republicans 
are happy to use this opportunity to talk about some of those things. 
Who knows. Maybe more Democrats will decide it is long past time they 
joined us in actually supporting and approving some of these proposals. 
But we are never going to solve the problems we face if Democrats 
insist on using the Senate to make some political point instead of 
actually making a difference in the lives of working Americans at a 
moment of urgency like this. And we are certainly not going to make a 
difference if we keep sort of flitting from one issue to another.
  We are now hearing that the Democrats want to move off this tax-hike 
legislation--maybe it didn't make the intended political point as 
forcefully as they wanted--to move on to postal reform. Evidently, the 
Senate schedule is driven not by the needs of the public but by the 
Democrats' perceived political needs, which seem to change from minute 
to minute around here.
  I would suggest that the Democrats learn to prioritize. Let's stick 
with one thing and actually do something. As I said, there is much we 
could do to address gas prices. Why don't we stick with that? This is 
something that matters to every American. Postal reform is important, 
but we all know nothing is going to get done on it until after we 
return from the Easter recess anyway. Let's make that the pending 
business when we return and put first things first.
  We were sent here to solve problems, not avoid them, and the refusal 
to come together on commonsense solutions such as the ones we are 
proposing on gas prices is precisely the kind of thing people detest 
about Washington, and they are perfectly right to do so. So I would 
suggest that our friends on the other side rethink this strategy of 
theirs and join us. Why don't we just try doing the right thing.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Franken). The Senator from Minnesota.
  Ms. KLOBUCHAR. Mr. President, I ask unanimous consent that I be 
allowed to speak for 2 minutes, Senator Boxer for 8 minutes, and then 
Senator Murkowski for 10 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                       Surface Transportation Act

  Ms. KLOBUCHAR. Mr. President, I rise today to stress the critical 
infrastructure needs across our Nation and urge the House of 
Representatives to act quickly and pass the surface transportation 
reauthorization bill that we passed in the Senate with an overwhelming 
bipartisan vote. The fact is that we have neglected the roads, bridges, 
and mass transit that millions of Americans rely on for far too long. I 
know that. A bridge collapsed just a few blocks from my house. It 
wasn't just a bridge, it was an 8-lane highway, and 13 people died and 
dozens of cars were submerged in the river. A bridge just doesn't fall 
down in America--well, it did that day--and I am committed to passing 
this highway bill. This bill is important for jobs, and it is important 
for drivers who sit in congestion. Americans spend a collective 4.2 
billion hours a year stuck in traffic at a cost to the economy of $78.2 
billion.
  So what is the solution? Pass this highway bill. It reduces the 
number of highway programs from over 100 down to around 30, defines 
clear national goals for our transportation policy, and it streamlines 
environmental permitting.
  I spoke to 75 highway contractors today, and they are ready to go. 
They want this bill to pass. Companies such as Caterpillar, which 
employs 750 people at its road-paving equipment facility in Minnesota--
I visited that company in August. Caterpillars' employees are the kinds 
of people who are out there on the front lines of American industry. 
They want to build these roads and are the ones who are building the 
products when we talk about ``Made in America.''
  With the short construction season for winter States such as 
Minnesota--my friend from California may not quite have the same 
situation--we cannot delay, delay, delay on this highway bill. We 
cannot stop these construction projects in their tracks.
  It is time to pass the Senate highway bill. It has bipartisan 
support, with 74 out of 100 Senators voting for this bill. I ask that 
the House of Representatives quickly pass this bill and get this done 
without delay. It means jobs, it means safety, and it means a future 
for America.
  I thank the Chair.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from California.
  Mrs. BOXER. Mr. President, I would like to thank my friend from 
Minnesota. Her leadership when she was on the Environment and Public 
Works Commission was amazing. We miss her leadership there. She is 
working so hard on other committees, but she still carries in her heart 
the great understanding that if anything is bipartisan around here, it 
is the highway bill and the transportation programs. We proved it here. 
So I thank the Senator.
  I wish to talk a little bit about Big Oil and this crying about Big 
Oil by my Republican friends here, and then I am going to segue to the 
battle to pass a transportation bill and the 3 million jobs that hang 
in the balance.
  First, I have to say that I listened very hard to the Republican 
leader, Senator McConnell, talk about what a useless thing it is to try 
to say to Big Oil, which has had these big subsidies for so long, 
decade after decade, starting when they were young companies--what a 
terrible thing it would be to take away those subsidies, billions of 
dollars, when they are making multibillion dollars and they are robbing 
us at the pump, pocketing the profit. We would like to see that money 
be used for alternative fuels, for energy-efficient cars so that we 
don't have to worry so much if the price of gas goes up a penny. If we 
are getting 50 to 60 miles to a gallon--I drive a hybrid car,

[[Page 4202]]

and I don't visit the gas station that often because we get about 50 
miles to the gallon, so the shocks that come with the increase in gas 
are a little bit muted.
  But here is the story. Americans have made sacrifices. They are 
paying more at the pump. They are told by Big Oil: We are so sorry that 
Americans have to pay more at the pump because there is instability in 
the world. Americans have to pay more at the pump because our 
refineries are down, and we are really sorry.
  What they don't say is that they are exporting the oil they find in 
America to other countries. What they don't tell us is that they are 
pocketing the profits we are paying for. They are pocketing the 
profits. In 2010 the five biggest oil companies made $80 billion among 
them. In 2011 they made $140 billion among them. So no one can stand 
here--not even the esteemed Republican leader--and tell me that Big Oil 
is making sacrifices just like ordinary Americans. The people who are 
running away with our money that we are paying at the pump are Big Oil 
and the speculators on Wall Street who are playing around with the 
instability in the Middle East on commodity futures trading.
  So if you want to do something, let's take away those subsidies from 
these big oil companies that are making life miserable for the American 
people. But, no, our friends on the other side put up a fight, and they 
cite a couple of folks on our side who agree with them because they 
come from big oil States. I understand that. Let's stand up for the 
American people.
  Another way we can stand up for the American people is to speak with 
one voice and ask the House to take up the Senate bipartisan 
Transportation bill that passed this Senate overwhelmingly. The clock 
is ticking toward a shutdown, and extensions are dangerous. So my story 
on the Transportation bill is a beautiful story of compromise, working 
together here in the Senate, and a very ugly story about what the House 
is doing, which is dithering around, playing with fire. And I am 
telling everyone that extensions are death by a thousand cuts. They 
think they can just send over an extension and feel they have done 
their job.
  Well, let me say that what we found out today from the American 
Association of State Highway and Transportation Officials, AASHTO--
these are folks who are on the ground in our States. Today I spoke to 
the departments of transportation from North Carolina, Nevada, 
Maryland, and Michigan. I think most people know I represent 
California, and I will be back with all of the details. Senator 
Feinstein is talking to the transportation officials today. But the 
reason I am talking about these four States is because they have 
already calculated the job losses that have already begun because the 
House is dithering and will not pass our bipartisan Transportation 
bill.
  North Carolina, which is not a blue State--I spoke to Gene Conti, the 
secretary of the North Carolina Department of Transportation today, and 
what he said was that he has delayed the remaining 2012 project awards, 
which total $1.2 billion in projects and employ 41,000 people.
  The House is right down the hall. I had the honor of serving there. I 
hope they are hearing this while they debate an extension. An extension 
of this program is not benign. An extension of this program is 
damaging. An extension of this program means job losses--41,000 in 
North Carolina.
  I spoke with Scott Rawlins today, who is the deputy director and 
chief engineer of the Nevada Department of Transportation. He said he 
is holding up advertising for federally funded projects until there is 
a reauthorization bill committing Federal funds. He is required to slow 
down the development of future projects. He will not execute consultant 
agreements without reauthorization. And right now, today, AASHTO, the 
American Association of State Highway and Transportation Officials, 
tells me that 4,000 jobs are at risk in Nevada.
  What the Nevada people tell me is that in the good old days when they 
were in a boom, the State could come forward and take these extensions 
in stride. They had the funding to front-load their projects and not 
worry about the Federal reimbursement. They thought that reimbursement 
would come. A, they are very worried about reimbursement, and B, 
because of the recession that has hit some of our States very hard 
because of the construction slowdown in housing, they do not have the 
funds to fast-forward any of these projects.
  So North Carolina has 41,000 jobs at risk, and Nevada has 4,000 jobs 
at risk.
  I spoke to Caitlin Rayman in Maryland. She talked about the 
uncertainty, and she went into four or five different things she is 
trying to do now that she cannot do. It is because the House is 
dithering and they won't take up the bipartisan Senate bill and pass 
it. So 4,000 jobs are at risk in Maryland because projects are being 
delayed.
  I spoke to the director in Michigan, Kirk Steudle. He said several 
large construction projects have to be delayed.
  The PRESIDING OFFICER. The Senator has consumed 8 minutes.
  Mrs. BOXER. I ask unanimous consent for 30 more seconds, and then I 
will turn it over to my friend.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mrs. BOXER. So in Michigan it is the same story: 3,500 jobs.
  So I am saying to the House today--and I encourage my colleagues to--
and I know the Senator from New Hampshire is here and she is going to 
speak a little bit later about this--come to the floor with stories 
about their States.
  These extensions are dangerous and they will lose jobs. Tell the 
House to pass the bipartisan Senate bill.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Alaska.
  Ms. MURKOWSKI. Thank you, Mr. President. This is a good discussion on 
the floor today. I join with my colleague from California in urging 
that the House move to the Transportation bill. But that is not why I 
rise this afternoon.
  I wish to speak on the legislation that is before us. This is the 
Menendez proposal to raise taxes--raise taxes on American energy 
companies and I think inevitably prices to American consumers. It has 
been described as something else, but I suggest to my colleagues any 
effort to increase taxes on the energy companies that are providing a 
resource to us is nothing more than a tax on our energy companies. As 
we tax those energy companies, it is sure not going to make them 
produce things that are more affordable, more abundant. In fact, it 
will have the resultant effect: to impact prices to American consumers 
negatively.
  This legislation before us is not a new idea. This is something we 
have seen before. I think the numerous times we have rejected it leads 
me to the conclusion that it still remains a bad idea. It is a 
messaging bill that has failed over and over, and I think it deserves 
to see that same fate again.
  This very Congress, just a little less than a year ago, rejected this 
same tax hike. Anybody who is curious to see what it is we did back 
then just needs to look up vote No. 72, which was back in May of last 
year, just to see how all 100 Members of the Senate voted.
  Some have accused Republicans of using this opportunity, when gas 
prices are high, to push our cause, if you will, for increased supply 
and that somehow we welcome the aspect of higher gasoline prices. It 
was actually the President himself who said some see a political 
opportunity to call for greater domestic energy production.
  With oil sitting at over $100 a barrel, I think we all recognize 
there is impact out there. But I can tell my colleagues for a fact that 
my constituents don't view this as a political opportunity.
  I get a weekly summary of what is happening with gas prices around my 
State. Right now the average price of a gallon of unleaded in the 
United States is just a little shy of $4. Well, in my hometown of 
Anchorage, we are paying $4.14. In Juneau, which is our State capital, 
we are paying $4.24. In Barrow, the top of the world, they are at 
$5.75. Bethel is paying $6.33. They long for the day they could be 
paying closer to

[[Page 4203]]

$4. We are so far beyond the national average, they don't view higher 
gasoline prices as any kind of a political opportunity. What they are 
asking for is that they do more. In fact, there is an imperative that 
we in Congress do more to address prices.
  I believe there is no question--there is no question--that we can 
bring additional resources on line, that we can bring several million 
additional barrels of American resources to market. There is no 
question but what it would do. It is going to help to create jobs. We 
know that for a fact. It will absolutely generate revenues. It will 
better insulate our Nation from the instability we have with the global 
price markets. We know that is what is happening right now. Every time 
Iran is mentioned, everything gets a little shaky out there.
  We know so much of this is due, in effect, to the fact that there is 
little spare capacity in the global markets. So let's look closer to 
home. What do we have closer to home?
  The President has suggested time and time again we only have 2 
percent of the world's reserves. Well, in fact, this myth about the 
U.S. oil scarcity is just exactly that. We talk about proven reserves. 
In fact, it is a much smaller piece of the pie: 20.6 billion barrels of 
proved reserves. But what needs to be understood and, unfortunately, 
doesn't make a good bumper sticker is that we have, as a nation, 
demonstrated incredible national reserves: 5.6 billion barrels of 
technically recoverable resources. We don't even count the 800- plus 
billion barrels of oil shale that are out there.
  So one asks the question: Why are we not going after the rest of the 
pyramid, the part in blue. So much of what we are facing is that so 
much of this is put off-limits. It is not accessible, and it is not 
accessible because of our government policies.
  I recognize there is more to it when it comes to an energy policy 
than just drilling, just increased domestic production. But it must be 
part of the solution, and it must be a significant part of the solution 
if we are going to talk about true North American energy independence. 
We must do more when it comes to conservation and efficiency. We need 
to build out toward the renewable energy sources of the future. If we 
want to have a bumper sticker, it is, ``Find More, Use Less.'' It is 
pretty simple.
  The chart lets us know we truly can find more here. But what we are 
facing with the Menendez bill that is in front of us takes us in a 
completely different direction. What the President and the Democratic 
leadership are proposing cannot by its own definition reduce our gas 
prices. If anything, we are just going to see them pushed higher, and 
my constituents back home just can't afford to see them pushed higher 
when they are paying above $5, above $6 per gallon at the pump.
  We know pretty basic economic principles are at play. Taxing 
something does not make it cheaper and more abundant. We know from past 
experience. Due to a failed experiment with the windfall profits tax 
that harmed domestic fuel production and collected far fewer revenues 
than what was expected, we know this is taking us in the wrong 
direction.
  Again, our problem is high fuel prices and their effect on average 
Americans. I have yet to hear anyone explain to me how raising taxes is 
going to lower prices. Even when we look at the subsidies that are 
extended in the Menendez bill, not even half of these are related to 
the transportation fuels.
  The first section in his bill is extension of credit for energy-
efficient existing homes. Well, I am all for that, but tell me how this 
ties in somehow to our Transportation bills. In terms of costs, it is 
even more unbalanced. So I am left at a loss to understand how 
permanent tax increases for oil and gas producers, in exchange for 
another year of subsidies for efficiency and renewable energy, is going 
to make any kind of a meaningful difference. It kind of says to the 
American people: Well, that $4 you are paying at the pump, too bad 
about that. But how about a government-subsidized dishwasher? That just 
doesn't work.
  Some will also come here to argue that increasing taxes will have no 
effect on production. In response to that, I ask unanimous consent to 
have printed in the Record at this point two news stories from last 
week.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                   [From Oilgram News, Mar. 22, 2012]

               UK Offers New Tax Breaks for Remote Fields

      (By Robert Perkins, Jillian Ambrose, and Nathan Richardson)

       London.--The UK government March 21 pledged new tax breaks 
     to boost the development of some remote, deepwater fields and 
     remove doubts over offshore decommissioning costs as part of 
     a package of measures to support the country's declining oil 
     and gas industry.
       Presenting his 2012 budget to Parliament, UK Finance 
     Minister George Osborne said the government would create new 
     tax breaks worth GBP3 billion ($4.75 billion) to cover large 
     and deepwater fields off the west of the remote Shetland 
     Islands in the Atlantic margin.
       ``We are introducing new allowances . . . for large and 
     deep fields to open up West of Shetland, the last area of the 
     basin left to be developed. A huge boost for investment in 
     the North Sea,'' Osborne told Parliament.
       The area to the west of the Shetland Islands is still 
     largely underdeveloped and could contain up to 20% of the 
     UK's remaining gas reserves, according to the government.
       The government said it also plans to increase existing tax 
     breaks for developing small fields and promised support for 
     investment in existing fields and infrastructure.
       As expected, Osborne also said the government plans to 
     enter into contracts with oil companies over future 
     decommissioning tax relief, helping to end the uncertainty 
     over the massive costs of decommissioning old oil and gas 
     production infrastructure in the North Sea.
       UK oil producers applauded the decommissioning move, 
     estimating it could spur an extra GBP40 billion of new 
     investment in UK waters and result in the recovery of an 
     additional 1.7 billion barrels of oil and gas equivalent 
     ``over time.''
       ``We see today's action by the Treasury as a turning point 
     for the UK's oil and gas industry--toward a more stable 
     future fostered by constructive collaboration between the 
     government and industry to ensure that the recovery of the 
     country's oil and gas resource is maximized,'' UK offshore 
     operators association Oil & Gas UK head Malcolm Webb said in 
     a statement.
       The new tax moves could result in further investment of 
     over GBP10 billion and the production of ``hundreds of 
     millions of barrels'' of oil and gas, the association said.
       The tax measures, which were widely anticipated, extend an 
     olive branch to an industry that has placed some of the blame 
     for last year's record 18% decline in UK oil and gas output 
     on a tax hike in the governments 2011 budget.
       Last year, the UK government unveiled a surprise tax 
     increase on offshore producers in a bid to tap the higher 
     earnings of oil companies due to rising oil prices.
       UK offshore operators said the move, which took an extra 
     $3.2 billion out of oil companies' pockets last year, would 
     damage confidence in the UK oil industry and hamper 
     investment plans.
       Under the decommissioning initiative, the government said 
     it plans to introduce legislation in 2013 giving it the 
     authority to sign contracts with oil companies operating in 
     the UK to provide assurance on the relief they will receive 
     when decommissioning assets.
       The government said it would consult further on the details 
     of the new contracts in the coming months.
       ``Confirmation that the government intends to enter into 
     contractual agreements on tax relief for decommissioning 
     costs improves the fiscal stability of the UK Continental 
     Shelf, while the targeted incentives for particular types of 
     fields will go some way in increasing the attractiveness of 
     areas currently starved of investment,'' Derek Leith, the 
     head of oil and gas taxation at Ernst & Young, said in a 
     statement.
       The UK oil industry has been lobbying the government over 
     the need for greater certainty around future decommissioning 
     costs for some years.
       In 2010, UK industry body Decom North Sea estimated the 
     total cost of decommissioning the UK's oil and gas production 
     assets had risen to around $46 billion.
       Under the contractual arrangement, every North Sea 
     participant would sign a contract with the government 
     guaranteeing that, if decommissioning tax relief falls below 
     50% in the future, the government would pay back the 
     difference.
       Currently, new North Sea entrants might have to post 
     security of as much as 150% of its share of the expected 
     decommissioning costs.
       If the industry were confident that the 50% tax relief on 
     costs now available would continue into the future, the new 
     entrant could

[[Page 4204]]

     post a lower security, effectively only 75% of the expected 
     costs.
       However, the industry has not yet been prepared to accept 
     securities at the lower rate because there is uncertainty 
     over whether tax relief would continue in future governments.
       In steps to mitigate the tax hike impact on North Sea 
     operators last year, the UK government said it would consider 
     introducing a new category of oil or gas field which would 
     qualify for field tax allowances.
       It said, however, tax relief for decommissioning spending 
     will be restricted to the existing 20% rate to avoid 
     accelerated decommissioning.
       In addition to decommissioning costs, UK oil and gas 
     players also have been talking to the government on 
     allowances to boost specific projects, or categories, where 
     investment is marginal.
       In 2009, the UK introduced a new field allowance for small 
     fields and challenging HPHT--or high-pressure, high-
     temperature--and heavy oil fields, providing them an 
     allowances to offset against tax, reducing the rate of tax 
     paid once in production.
       In January 2010, the allowance was extended to remote, 
     deepwater gas fields to the west of Shetland.
       Osborne said the government also plans to increase the 
     allowance for small fields to GBP150 million, introduce 
     legislation this year to support investment in existing 
     ``brown fields'' and continue to look at further allowances 
     for HPHT fields.
       In documents supporting its 2012 budget, the finance 
     ministry said it expects its tax revenues from the oil and 
     gas industry to slip by 14% in the 2012-13 tax year as 
     declining production levels in the North Sea offset higher 
     expected oil prices.
       Oil prices are expected to average $118/b in the coming tax 
     year, up from $111/b in the 2011-12 period, the ministry said 
     without saying if the estimate is based on Brent or WTI crude 
     futures.
       Including a record 20% slump in gas production in 2011 due 
     to weak demand and a warmer than average winter, total oil 
     and gas output slumped 18% on the year. Over the previous 
     five years, the UK's mature North Sea fields had seen decline 
     rates average 6%.
       UK oil production peaked at about 2.6 million b/d in 1999 
     and gas output peaked in 2000. The UK became a net importer 
     of both commodities in 2006 and 2004 respectively.
                                  ____


             [From the Wall Street Journal, Mar. 21, 2012]

                    U.K. Plans Oil Sector Tax Relief

                           (By Alexis Flynn)

       London.--Oil and gas firms operating in the U.K. North Sea 
     will be guaranteed tax relief for the costs of retiring old 
     rigs and platform and be given fresh tax allowances totaling 
     K3.5 billion ($5.55 billion) for harder-to-access deep water 
     fields.
       The move comes as the U.K. seeks to spur renewed investment 
     in its energy sector, Chancellor of the Exchequer George 
     Osborne said Wednesday in his annual budget speech to 
     lawmakers.
       The measure ends months of uncertainty among the region's 
     oil producers and comes after intense talks between 
     government and industry over possible measures to aid 
     investment in the North Sea.
       The move extends an olive branch to the industry, which was 
     incensed by a surprise hike in the windfall tax on oil and 
     gas profits last year. A record 18% decline in oil and gas 
     production in 2011 was blamed in part on the tax increase.
       Mr. Osborne said Wednesday the government will sign 
     contracts with companies such as Premier Oil and Apache Corp. 
     guaranteeing tax relief for the lifetime of a project. The 
     ironclad government assurance on decommissioning could pave 
     the way for at least K17 billion of new investment over the 
     life of the North Sea basin, said Mr. Osborne.
       In addition, it will provide tax allowances for companies 
     investing in fields located in the deeper waters west of the 
     Shetland Islands that are much harder to reach and require 
     greater amounts of capital investment.
       Mr. Osborne said the fresh allowances for this harder-to-
     reach exploration and production would total some K3.5 
     billion.
       Under current rules, the government covers between half and 
     three-quarters of the costs of dismantling old fields by 
     making them tax deductible, but there are fears among many 
     companies--and the banks that lend to them--that these rules 
     could change.
       An entire production facility needs to be removed once a 
     reservoir has been exhausted, with its wells plugged and the 
     site returned to as natural a state as possible. The process 
     is expensive and complicated, and poses a number of 
     environmental and safety challenges.
       Decom North Sea, a nonprofit organization jointly funded by 
     the industry and the government, expects the cost of 
     decommissioning efforts to reach about K30 billion by 2040.
       The issue is particularly acute for the smaller independent 
     firms that are leading much of the next wave of investment in 
     the North Sea, wringing out the last drops of oil from many 
     of the older fields that were sold off by majors like Exxon 
     Mobil Corp. and BP PLC.
       These companies have been hamstrung by the legal 
     requirement to provide security, usually letters of credit or 
     large cash deposits, against future decommissioning costs. A 
     tougher economic environment means these companies are 
     finding their access to capital restricted and lenders less 
     willing to issue letters of credit against a backdrop of 
     fiscal uncertainty and declining North Sea production.

  Ms. MURKOWSKI. Mr. President, these are news stories, not editorials. 
One is from Platts Energy; the other is from the Wall Street Journal. 
Both detail an announcement from the British Government that it is 
going to reverse its own taxes on the oil companies.
  Last year, England decided to do essentially what is being proposed 
with the Menendez bill. They were responding to high oil prices, and so 
they moved to increase taxes on the industry. Well, the result is not 
going to come as a surprise. When the government made it less 
economical to produce oil by hiking their tax rates, companies stopped 
producing and they were making their investments elsewhere.
  In the years since Great Britain imposed its tax hikes, its 
production decline has tripled from 6 percent to 18 percent. Let me 
repeat that. In the year since Great Britain imposed tax increases on 
oil producers, production decline accelerated from 6 percent a year to 
18 percent a year. Now Britain is in the process of doing an absolute 
about face. They are likely going to offer $5.5 billion in tax relief 
to the oil companies to try to bring the production back.
  I am sure some here would refer to that tax cut as a subsidy and 
ignore the inconvenient fact that higher tax levels lead to lower 
production. They don't lead to cheaper fuel; they lead to lower 
production. Yet even in the face of high fuel prices and compelling 
empirical evidence, the proposal in front of us is going to take us 
down the exact same path that Great Britain went down last year. It 
would make the clear mistake of driving production away when I think we 
need it most. The outcome in England just helps prove this is a 
seriously defective idea and a dangerous one. So we just need to look 
at what has happened across the pond.
  If the Senate were really serious about addressing gasoline prices, 
we would be taking long-overdue steps.
  The PRESIDING OFFICER. The Senator has consumed 10 minutes.
  Ms. MURKOWSKI. Mr. President, I don't see anyone in the queue, if I 
may have another minute to wrap up.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Ms. MURKOWSKI. If we are really serious in the Senate about what we 
are doing in terms of increasing our long-overdue requirement to up our 
oil resources, our oil production and supply, we know how. We have 
opportunities from our neighbors to the north in Canada with the 
Keystone Pipeline. We clearly have opportunities in Alaska from the 
Outer Continental Shelf, from the Rocky Mountain West. We still import 
about half of our oil supply and about half of that is from OPEC.
  One last chart, if I may. Right now, about 47 percent is OPEC; non-
OPEC is 53 percent. If we were to add to our mix in this country what 
we could get from Keystone, which is the middle pie, but look where we 
would be as a nation. If we were to plus up our activity with domestic 
production, bring on Keystone, and with our existing resources, our 
imports from OPEC are reduced to a minimal amount. We talk about North 
American energy independence, and we truly could be in that position 
where we are not vulnerable--not vulnerable to the volatility of the 
markets, not vulnerable to the volatility that comes from OPEC setting 
the prices as they do, not in a situation where we are spending 
millions and billions of dollars to import a resource we need but that 
we have as a nation.
  I can't fathom why the Congress would want to drain our economy by 
raising taxes on the very businesses that help minimize our foreign 
dependence, help create good-paying jobs for our families, and truly 
help to make a difference to Americans around the country in the long 
run.
  With that, I yield the floor.
  The PRESIDING OFFICER. The Senator from California.

[[Page 4205]]


  Mrs. BOXER. Mr. President, I am going to yield in just 2 minutes 
because I know Senator Sanders is here. I really feel I need to respond 
because it is very important to note that under the leadership of 
President Obama--for decades we did not drill as much as we have 
drilled now. We have more wells pumping than at any time in recent 
memory. I think it is an important point.
  Of course, we are not going to drill off the coast of some of our 
precious areas because we have to support the fishing industry, we have 
to support the recreation industry, the tourism industry. But all this 
argument about drill, baby, drill and we will solve everything does not 
work because we threaten jobs when we go to certain areas that are 
pristine and very important sources of economic income for our States. 
Plus, if you ask my colleagues on the other side, they will not support 
keeping the oil in America--they will not--and we are exporting more 
oil than we ever have before.
  So this thing gets very interesting when we look at it. Still, in 
all, the big oil companies--as we all make our sacrifices at the pump--
are bringing in record, record, record profits. They ask us to make 
sacrifices because there is instability in the world, but they are 
pocketing those increases. Yet our Republican friends cry bitter tears 
because we want to suggest that subsidies they got decades ago--kept on 
undisturbed billions of dollars--we would like to see those funds go 
into making it easier for America's families to be able to buy more 
fuel-efficient cars, to be able to find alternative fuels, et cetera, 
et cetera.
  When I come back to the floor after this discussion on the postal 
reform, I am going to talk more about the highway bill. The House is 
about to vote on a 60-day extension. Let me tell you, that is 
dangerous. I hope colleagues over there will not do that because, I 
have to tell you, every day we extend the highway trust fund for a 
short period of time, we lose jobs, and we need certainty.
  I am happy to yield the floor at this time.
  The PRESIDING OFFICER. The Senator from Vermont.


                         Postal Service Reform

  Mr. SANDERS. Mr. President, later this afternoon--actually, in a 
fairly short while--we are going to be voting on whether to proceed 
with the Postal Service reform bill, and I hope we vote yes. I hope we 
have a strong bipartisan vote to go forward. I will tell you why.
  About 9 or 10 months ago, the Postmaster General came up with a 
proposal for the Postal Service. In my view, that proposal from the 
Postmaster General is an unmitigated disaster for our country and 
especially for rural America.
  This is what his original proposal outlined: What he proposed was the 
shutting down of more than 3,600 mostly rural post offices. If one 
lives in a rural State such as mine, one knows how important rural post 
offices are, and their function is beyond being just a post office. In 
many small communities throughout this country, post offices are the 
center of the town. It is where people come together. It is what 
develops a sense of community. In some cases, it is what that small 
rural town is all about. If we shut down that rural post office, in 
some instances we are literally shutting down that town.
  We should also understand, in the midst of the serious financial 
problems facing the Postal Service, shutting down 3,600 mostly rural 
post offices would save the Postal Service one-quarter of 1 percent of 
their budget. So the original plan--which has since been modified--was 
to shut down 3,600 rural post offices, and I would suggest whether one 
is a conservative Republican or a progressive Independent, that is not 
good for their State, not good for America.
  In addition, the Postmaster General's original proposal talked about 
shutting down some 220 mail processing facilities all over this 
country. That is approximately one-half of the mail processing plants. 
If he did that, that would end overnight delivery standards for first-
class mail.
  At a time when the Postal Service is facing extreme competition from 
e-mail and the Internet, in my view, the last thing we would want to do 
is to slow down mail service. I think I speak for many Members of the 
Senate who say, if we move in that direction, making mail delivery 
slower, we are beginning the death spiral for the Postal Service. Many 
businesses, many consumers will be saying: Sorry, I am going to look 
elsewhere to get my packages, get my mail delivered.
  Furthermore, the original proposal from the Postmaster General was to 
shut down Saturday mail delivery and, in the process, reduce the 
workforce of the Postal Service--in the midst of the worst recession 
since the Great Depression--by over 200,000 jobs.
  Senators Lieberman and Carper, Senators Collins and Scott Brown, the 
ranking members of the committees, came together and put together a 
bill which was significantly better than what the Postmaster General 
had proposed, no question about it.
  Some of us felt the Lieberman-Carper-Collins-Brown bill did not go 
far enough, and we have been working with the chairmen of the 
committees to try to improve that bill, and I think we have made some 
success. I think if we look at the managers' amendment, we will see 
stronger guarantees to make sure we are not shutting down rural post 
offices all over America; that if we shut down processing plants, it 
will be a significantly smaller number than was originally proposed, 
and that also we would maintain strong mail delivery standards--if not 
as strong as I would like, at least stronger than what the Postmaster 
General originally proposed.
  Here is my fear: The Postmaster General is raring to go. If he 
perceives and the board of postal commissioners perceive the Congress 
cannot act, they are going to go forward and bring forth a proposal 
which will not be as strong in protecting post offices and workers and 
the American people as we can do. So what we managed to do back in 
December was get a 5-month moratorium to prevent the shutting down of 
rural post offices and processing plants. That expires on May 15.
  I think it is terribly important we begin the process, we vote to 
proceed within the next hour, we bring that bill to the floor, there is 
an open process by which people, including myself, will bring forth 
amendments to make the bill even stronger than it is right now.
  I would point out to my colleagues, in terms of the financial 
problems facing the Postal Service, clearly, they have to deal with the 
serious problem, the very real problem that first-class mail has gone 
down very significantly, being replaced by e-mail. There is no question 
that is a real, legitimate problem.
  But what is not a legitimate problem is that the Postal Service 
uniquely in America--not in local governments, State governments, 
Federal agencies or the private sector--the Postal Service alone is 
being asked to put $5.5 billion every single year into their future 
retiree health benefits program. According to the inspector general of 
the U.S. Postal Service, given the fact there is some $44 billion in 
that fund already, with interest rates accruing, we do not need to put 
more money into that fund. There is widespread agreement the Postal 
Service has overpaid into the Federal Employees Retirement System some 
$10 billion or $11 billion; into the Civil Service Retirement System, 
at least a couple billion dollars and perhaps a lot more.
  The bottom line is this: If we are serious about protecting rural 
America, if we are serious about protecting 3,600 rural post offices, 
if we believe the post office must continue being an important part of 
what America is about--so important to our economy and to small 
businesses--and we do not want to delay mail service, slow down mail 
service, we do not want to shut down half of the mail processing plants 
in this country, I think it is important we begin that debate and vote 
for cloture.
  With that, I yield the floor.
  The PRESIDING OFFICER. The Senator from Connecticut.
  Mr. LIEBERMAN. Mr. President, I rise to urge our colleagues to vote 
for cloture to proceed to the Postal Service bill. I will speak very 
briefly.
  This a great American institution, right there from the founding of 
our

[[Page 4206]]

country. In fact, it is in the Constitution to provide post offices. It 
is an institution that is today in trouble. Last year, it lost almost 
$10 billion. Why? Part of it is the economic recession, but the real 
explanation is that mail volume has dropped 21 percent in the last 5 
years, and mostly that is because people are using the Internet and e-
mail instead of traditional mail. Yet the Postal Service not only 
itself provides a great service, but it facilitates various sectors of 
our economy that employ 7 million people--mailers, mail order catalogs, 
and the like.
  Our committee, when confronted with this crisis--and the statement 
from Postmaster General Donahoe that if nothing was done, he would have 
to begin curtailing operations sometime this year because he would 
essentially run out of enough money to operate the Postal Service as it 
is--tried to get together and work on a balanced program. We reported 
out a bipartisan bill. Some people said it was too much; some people 
said it was too little. We think it was just about right.
  There has been a lot of dialog with Senator Sanders and others, 
people on both sides of the aisle. When we take this up--and I sure 
hope it is ``when'' and not ``if'' because I do not know how we could 
just turn away from this problem and essentially say to the Postmaster: 
We are not going to provide you any help; you are going to have to 
handle this. What he is going to do is close a lot of post offices, in 
my opinion, close a lot of mail processing facilities, raise prices to 
the extent he can under existing law.
  This is a balanced program. It creates some protections for small and 
rural post offices before they can be closed. It creates new standards 
in the delivery of mail so the Postmaster will, in his wisdom, be able 
to thin out employment at some of the mail processing facilities, 
perhaps close some of them but nowhere near what he wanted to do 
earlier.
  The Postmaster asked us for authority to go from 6 days of delivery 
of mail to 5 days of delivery of most mail, and we essentially said: 
You may have to do that, Mr. Postmaster, but do not do it for 2 years. 
See if the other things we are authorizing you to do enable you to get 
the Postal Service back in fiscal balance. But if not, after the 2 
years, with the process we ordained, they will have to go to 5 days of 
delivery.
  Here is the bottom line: We are trying everything we can to save this 
great institution. It is not a relic. It is a fundamental part of the 
modern economy, and it has some great resources. First is its presence 
all over the country. One of the things we are doing--we worked on this 
with Senator Sanders and others--in the substitute, we will create an 
advisory commission, a new commission which will be charged with the 
responsibility of not only reviewing the operations of the Postal 
Service to make sure it is being managed and run most efficiently but 
for looking for a new business model, for new ways to use the great 
assets of the Postal Service--one, that it is all over the country in 
the post offices; and, two, that no one else can cover the last mile of 
delivery to everybody's house or business in the country regardless of 
where you live, including the iconic burros that help deliver the mail 
in the Grand Canyon and the mailmen on snowshoes who deliver it in 
rural parts of Alaska. Right now, FedEx, UPS, and others use that 
service of the last mile to complete their delivery to their customers.
  We want to see if we can figure out how the Postal Service can make 
more money so it can stay alive. This is a great American institution 
which I believe has a great future, but it is not going to have it 
unless we help.
  So here we are challenged again. Are we going to fall into 
ideological rigidity or partisan conflict and let this great 
institution slide and fall into a deep crisis or are we going to work 
together, as I believe our committee has, to present a bipartisan 
solution which will guarantee, in a very different time in American 
history, that the post office--the U.S. Postal Service--can play as 
vital a role as it has throughout all the rest of our history.
  I yield the floor.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. REID. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Under the previous order, the motion to proceed to S. 2204 is agreed 
to.

                          ____________________