Medicaid Formula Fairness Act of 2005

Mr. President, I send an amendment to the desk.

Mr. President, I rise in support of my amendment that I think would reverse efforts to manipulate the budget resolution process to pass what I believe is a controversial energy policy. This policy is so controversial it doesn't even meet the bar for what I think is reasonable legislation. It couldn't even gain the 60 votes needed in this body.

I think it is important that we have a continued debate on drilling in Alaska that meets the environmental and permit processes that any drilling in America would have to meet. And that is not what we are discussing in the underlying bill.

My amendment is cosponsored by Senators Feingold, Dayton, Lieberman, Kerry, and others, and would prevent oil and gas exploration and drilling within the pristine Arctic National Wildlife Refuge.

I appreciate that this debate over the Arctic Refuge coastal plain has continued for more than 2 decades. I know the Presiding Officer and my other colleague from Alaska have spent many hours on this legislation. But this issue has continued to stir the passions of many and polarized communities across our country. That is because this debate is more than just about the Arctic Wildlife Refuge. It is not simply about protecting one of America's last remaining great treasures. Rather, it is a debate that forces us to confront our priorities. It forces us to ask basic critical questions: Where do we go from here on the future of our energy policy? What inheritance do we want to leave our children from an environmental perspective?

We all must realize that God only granted the United States less than 3 percent of the world's remaining oil reserves and we as Americans need to do more with our own ingenuity to become less dependent on foreign oil.

Imagine a future where we don't turn a blind eye to oppressive regimes in the Middle East only because they happen to control the majority of the world's remaining oil reserves, or a future where Americans can drive hybrid or hydrogen-powered SUVs that get 40, 50, or even 100 miles per gallon. That is how we want to see our future. That is how we are going to save consumers who are being hurt at the gas pump today by these unbelievably high prices.

In the future we want Americans to have the opportunity to enjoy and appreciate this unique part of Alaska. That is why I believe the amendment I am offering today talks about our national priorities. That is why this is too important a question to slide into the budget bill. This bill circumvents the processes for permitting and environmental safeguards.

It is ironic that if this legislation passes we will actually be opening up drilling in a wildlife refuge with less protections than any other drilling in any other site in America. So instead of going to greater extremes to protect a particular wildlife refuge, we are going to have the weakest standard. The American people expect more.

I hope my colleagues appreciate that there are many flawed assumptions inherent in this drilling proposal. The simple act of putting a policy on a budget bill itself, I believe, is disingenuous.

But that is not all because section 401 will almost certainly never raise the $2.4 billion that drilling proponents claim it will. That is because the measure presumes to generate these funds by splitting revenues between Alaska and the Federal Government on an even 50-50 basis. But I think my colleagues might be surprised to learn that this 50-50 legislative language may not hold up in court. We just don't know right now. We do know the State of Alaska has long maintained it is due 90 percent of all the natural resource development revenue generated from Federal land within its boundaries, and we know this remains a controversial issue. Some have suggested this proposed 50-50 split in this legislation is merely a ploy to win passage. Some have suggested that once it passes, it will be followed by a court battle from the State of Alaska to force the Federal Government into a 90-10 split of revenue. So this $2.4 billion the United States might receive would be a much different picture.

My colleagues may be interested to know that even in June of this year, the Alaska legislature passed a joint resolution. It stated:

The Alaska legislature opposes any unilateral reduction in

royalty revenue from exploration and development of the

coastal plain of the Arctic Wildlife Refuge in Alaska and any

attempts that could coerce the State of Alaska into accepting

less than 90 percent of the oil, gas, and mineral royalties

from Federal lands in Alaska that was promised at statehood.

That is something that was passed by the Alaska legislature, showing us they have every intention to fight for a 90-10 split.

Later this week I will also offer an amendment that will get at this issue of trying to guarantee a 50-50 revenue split. I hope my colleagues will be recorded on that amendment and show they truly intend to have a 50-50 split and that this not just a ploy in which later the revenue scheme is changed.

I am also concerned that many Senators may not support my amendment because they believe drilling in the refuge can be done in an environmentally benign way. They actually believe we should move forward because they think drilling in ANWR can be done in a way that is environmentally sensitive.

I think they are wrong. There is no real way to sugarcoat the fact that the oil company records on the adjacent

Prudhoe Bay have been shameful. The facts speak for themselves.

According to the Alaska Department of Environmental Conservation, the Prudhoe Bay oilfields and Trans-Alaska Pipeline have caused an average of 504 spills annually--annually--on the North Slope since 1996. Through last year, these spills included more than 1.9 million gallons of toxic substances, most commonly diesel, crude oil, and hydraulic oil. It takes one spill to permanently destroy a section of this fragile arctic ecosystem. The people know this.

To quote an official from the North Slope city of Nuiqsut:

Development has increased the smog, haze, and is affecting

the health and the beauty of our land, sea, and air.

I can only imagine how devastating that must be for someone whose culture and experience is so invested in the vast open spaces and abundant wildlife.

The news media has reported widely on these issues of oil spills. 2 weeks ago, the Wall Street Journal, and many other papers, have reported on some serious allegations. They have uncovered evidence that indicates there has been intentional dumping of untreated toxic mud, a dangerous contaminated byproduct common to Arctic drilling.

We have seen reports that the owner of an alpine field was forced to pay an $80,000 fine for releasing 215 tons of excess carbon monoxide annually. And, yes, this is the same field that some of my colleagues visited last March, along with the Secretaries of Energy and the Interior. Yet it is not the pristine area. There is already evidence of pollution in that area. This is the same field my visiting colleagues characterize as the cleanest in the world. And I note the Alpine field is just 8 miles from Nuiqsut.

I also want the American people to know that the tradeoff for destroying our Nation's last great wild frontier will not be relief from skyrocketing gas prices. Our sacrifice will do little to decrease our reliance on foreign oils from countries that don't have our best intentions in mind. Here is why. The Energy Department's latest analysis estimates that even when the refuge oil hits peak production 20 years from now, it will lower gas prices by just one penny. A penny, Mr. President. That is not an estimate that I have come up with, that is the Department of Energy's own estimate.

That is not very impressive considering the fact that the constituents in my State of Washington are now paying twice as much for a gallon of gas as they did just 3 years ago.

I also urge my colleagues to vote for an amendment that my colleague from Oregon plans to offer. This legislation would prevent any of this oil from going to foreign markets, such as China. Senator Wyden has pointed out to us and many others, including those in the State of Oregon, that there is no guarantee that the Arctic Refuge oil would ever be used in the United States.

So if my colleagues think if we pass this legislation that somehow it is going to help the United States in the crisis we are in now, the Department of Energy analysis of the very little effect and the fact that this oil will not be kept in the United States are two reasons to support my amendment instead.

Mr. President, the American people feel strongly about drilling in the refuge and other protected areas of our country. They want to know that the Senate is working to pass appropriate legislation that manages these unique areas in a forthright and open manner. Our Nation must continue to preserve and protect the entire Arctic National Wildlife Refuge.

I understand that some of my colleagues believe it is appropriate to sacrifice this area for what will amount to about 6 months' oil supply, but I think all Senators today agree that these are questions that are not part of a budget policy. They are more fundamental about the discussions of what our national energy policy should be and the future of our country.

I hope my colleagues will also begin to finally start focusing on energy policies to diversify off fossil fuel, to recognize that God gave us only 3 percent of the world's oil reserves and that the best interest of the United States is to diversify off fossil and plan for a future that lowers gas prices, plan for a future that makes us more secure on an international basis.

Yes, I will.

Mr. President, I don't know what the agreed-upon order is this morning, whether we are supposed to use an entire hour or if we are going back and forth. I am happy to have the debate go back and forth and yield to my colleague.

I do.

Mr. President, I am going to yield to my colleague, Senator Feingold. Before I do, I point out there is a misrepresentation that somehow drilling in ANWR only covers a small area. Drilling in the refuge will really create a spider web of industrial activities over the entire 1.5 million acre coastal plain, so it is much larger than just a small footprint.

This legislation might also open up nearly 100,000 acres of native land on the Arctic coastal plain. So it is a much bigger impact than my colleague might have commented on. I want to make sure that point is clear.

The other issue is, I don't think there is anybody in America who still believes our future and the future security of America depends on fossil fuel. I have seen the television commercials from the oil industry. Even they are always talking about the future, and alternative fuels, and what they are doing to diversify our nation's energy supplies. I certainly hope they hurry up and do that because the high price we are paying at the pump and their exorbitant profits are not leading us to a better economic situation in America.

But at the same time, I don't think Americans believe our investments in the future should be about fossil fuel, they should be about diversifying to cleaner, more fuel free supplies. Instead we are now asking them to open up the Arctic National Wildlife Refuge for a very small amount of oil.

My colleague talked about a large number of jobs that may result from this. However, we have all heard the expectations for an energy economy of the future that invests in alternative fuels and various renewable energy sources. Some of those job investments can be more than 3 million jobs in America.

That is the energy economy that we want to see--not holding on to the past and exorbitant energy costs which the Department of Energy says is only going to give us a 1-penny reduction in gasoline prices--to get off fossil fuel.

I yield to my colleague from Wisconsin 7 minutes.

Mr. President, I yield to the Senator from Connecticut 3 minutes.

Mr. President, I yield 10 minutes to the Senator from Illinois.

Mr. President, I ask unanimous consent that Senators Collins, Mikulski, and Jeffords be added as cosponsors of amendment No. 2358.

I yield 5 minutes to the Senator from New Mexico.

I yield to the Senator 3 minutes.

Mr. President, how much time remains?

Mr. President, through the Chair, if I could inquire what the Senator from North Dakota is trying to propound in the unanimous consent request?

I thank the Senator.

I would like to go over what I think are the important reasons we should not drill in the Arctic Wildlife Refuge and why my colleagues should support the Cantwell amendment to strike this language from the Budget Reconciliation Act.

As my colleagues have said earlier, we should not be doing this in the Budget Reconciliation Act, and it really does set a precedent for what I hope is not further attempts to drill in other parts of the United States, whether it is off the coast of Washington, the coast of Florida, or anywhere else by simply thinking you can come to the budget process and open up drilling in various parts of the United States. It is a very dangerous precedent. It also lays aside very important environmental regulations that should be met by any drilling efforts in the United States. So here we are, about to allow drilling in the Arctic Wildlife Refuge, and it is going to have the less protection than any other public land.

Let me go through the 10 reasons I think we should not be doing this.

First, the Arctic Wildlife Refuge does not solve our current gasoline or heating oil supply problems, and I guarantee you, my colleagues are going to hear a lot about home heating oil and other problems when they go home after we break for this year and people see their high heating bills and the enormous cost increases they are paying. So this is no solution for our immediate problem. In fact, even if oil were flowing today from the Arctic National Wildlife Refuge, who is to say that OPEC would not lower its supply and keep prices high? Moreover, the fact we are talking about something that is not going to happen for 7 to 12 years from now is clearly not going to help us in the near term.

Second, the oil supplies in the Arctic Wildlife Refuge are not going to help us be any less dependent on foreign oil. We already know that our biggest problem is that this country is 50 percent dependent on foreign oil, and moving forward in the next 15 years that dependency will grow to over 60 percent. To me, that says the way to get off fossil fuel and foreign consumption is to diversify, something this bill is certainly not doing.

The third issue is that we really do need to get off fossil fuel. So how are we going to do that? That answer is that we need to diversify into alternative fuels, such as Brazil and other countries have done, to look at a biofuels strategy and become more self-sufficient. The United States only sits on 3 percent of the world's oil reserves. To plan a strategy that continues to focus on this is just shortsighted.

Fourth, drilling in the Arctic will not translate into savings at the gas pump. Let me repeat that. It will not in the near term translate into savings at the gas pump. The Energy Department, its own energy information administration, said that even when the Arctic Wildlife Refuge oil supply is at peak production, it will only reduce gas prices by a penny a gallon. So we are going to open this pristine wilderness area for a penny a gallon 20 years from now.

Moreover, I believe it is important for my colleagues to get about the real debate and pass legislation that focuses on the price-gouging activities that could be occurring in America. Instead of passing this on a budget bill, why don't we bring up by unanimous consent or on some other piece of legislation a price-gouging bill that gives the Federal Government the same power that 23 States have in prosecuting oil companies or others who are involved in manipulating the price of gasoline at the pump? That is what we should take extraordinary measures in the Senate to do, not this.

Fifth, there is no guarantee that the oil from the Arctic Wildlife Refuge will be used in the United States. My colleague, Senator Wyden, I am sure is going to talk more about this issue, but there is nothing under the current laws and regulations that is going to say that this oil is going to stay in the United States. So as my colleague from Illinois said, here is this product we are going to get from a wildlife refuge, and there is no guarantee that it is going to help our national security at all, that it won't be exported to the highest bidder.

Sixth, oil leasing in the Arctic Wildlife Refuge will not bring significant revenues to the Federal Treasury as a certainty. Right now, there is a big debate. There is a debate between the State of Alaska and the Senate about how royalties from the Arctic Wildlife Refuge should be divided. The State of Alaska has been very clear. They think they get 90 percent of those royalties. This bill tries to say they are going to get 50 percent. We know the State of Alaska is going to pursue that in court. The difference is a lot of money. If Alaska is successful, that means they will get 90 percent of the revenue assumed by this budget bill. This proposal says that the United States might get $2.4 billion. The State of Alaska is saying: No, no, no, you are only going to get $480 million. The difference between $480 million and $2.4 billion is a lot of money, and I would like to see clarity that if this have to happen we are not going to move forward without the guarantee that, in fact, we are going to see 50 percent of that revenue.

Seventh, the oil leasing in the Arctic National Wildlife Refuge, as one of my colleagues said, is about giving the oil companies something more of profits. The notion that they have had $30 billion in profits in the last quarter--$30 billion in profits in the last quarter--and yet they are not helping to diversify at a time when it is very clear to the American people that being overdependent on foreign oil and fossil fuel in general is not the right direction for our country.

Eighth, drilling in the Arctic National Wildlife Refuge will harm its ecosystem. Wildlife is going to be harmed. The fact that people think these things can work together is amazing. We should consider the reason the Wildlife Refuge was established in the first place, because it is a unique area. There is a lot of drilling that goes on in Alaska and a lot of area that is consumed by this. The original designation of the Arctic Wildlife Refuge was for the purpose of preserving this area.

Ninth, drilling in the Arctic Wildlife Refuge cannot be assumed to be environmentally benign. I know my colleagues would like to think that. But the fact is, in Prudhoe Bay and the oilfields of the Trans-Alaska Pipeline, there have been 4,532 spills from 1996 to 2004. In fact, the current rate of reportable spills on the Alaska northern slope is about 1 every 18 hours.

My colleagues would like to say this can be done in an environmentally sensitive way or that the environment is not going to be impacted. I don't believe that is true. I believe the number of oil spills that have been reported show that is not the case.

Mr. President, I ask unanimous consent to print in the Record a copy of the recent North Alaska oil company fines and penalties, the amount of money in penalties that have been paid by various companies over the last couple of years for either clean air violations or pipeline leak detections or other reasons for which various oil companies have been fined.

Mr. President, lastly, on these reasons why we should not move forward, is the notion that the Arctic National Wildlife Refuge is a symbol of this country's desire to protect and preserve wildlife areas and that somehow people would like to assume that long- term damage has not already been done to other parts that have been opened up for drilling.

In fact, a Environmental News Service article that summarizes a 2003 National Academy of Sciences report that says for three decades of oil drilling on the Alaskan North Slope, while it has brought economic benefits, for sure, it has also caused lasting environmental damage ``and a mixture of positive and negative changes to that area.'' The report found that some environmental damages will last for centuries.

Mr. President, I ask unanimous consent that this article be printed in the Record.

Mr. President, I think it is known that the environmental damage to the region has been done, that leaks and clean air issues are prevalent in the area, that oil companies are being fined for those violations, and that we cannot just go about drilling in the Arctic National Wildlife Refuge and think we are solving our problems.

In fact, I would like to show my colleagues a copy of a map of what we are talking about. Here is the Arctic National Wildlife Refuge. Here is the rest of northern Alaska. One can see the various designations of existing Federal and State leases. The active Federal leases are in yellow. This is the area under discussion. So all the rest of Alaska in this particular area--in yellow and red, and even in this beige, proposed Federal leasing plan--a lot of territory that is already involved in oil and gas production. Why not leave this last slice of Alaska's Northern coast alone and pristine?

A Washington resident, just to give my colleagues an idea, actually took some pictures of this area of the wildlife refuge. One can see it is a very pristine area with wildlife and streams running through it. We can imagine why someone wanted to preserve this area and why it is so important to the United States.

This happens to be, in my mind, a pretty infamous picture because when my colleague, Senator Boxer, and I were on the floor discussing this issue a few years ago, there was a copy of this picture that was at the Smithsonian, part of an exhibit done by a Washington photographer, a retired Boeing engineer who visited this area and took some pictures and had a public display at the Smithsonian. As soon as these pictures were used on the floor of the Senate, somehow his exhibit was sent to the basement of the Smithsonian and got a lot less attention because somehow, I guess, this picture portrays for the American people something some people didn't want to see or didn't want to have advertised so specifically.

Here is another picture of the area that depicts what an unbelievable, pristine resource this is for the United States. We can see how delicate the ecosystem of this region is and how challenging oil drilling activity in this region can be.

I say to my colleagues that I believe the American people, and certainly the news media around the country, have gotten the gist of what this debate is about because they have expressed their opinions about this as well. I think they have been right on track about this issue. I would like to talk about some of those opinions.

The Milwaukee Journal Newspaper said:

. . . This effort may succeed, not because it's good public

policy but because supporters are trying to sneak it into a

budget reconciliation bill . . . supporters of good

government should not allow that to happen.

That is one newspaper in the Midwest.

Another from the South, the Atlanta Journal-Constitution:

. . . As always, drilling advocates are using distortions and

half-truths, claiming that awarding extractive leases on

protected lands will significantly reduce the Nation's

dependence on imported oil while having minimal impact on the

region's fragile ecology.

That from a newspaper in the South.

From the Philadelphia Inquirer, another newspaper that has followed this issue. I thought they hit it right on the head in today's debate because they say:

Congress has wasted years trying to enact this single

proposal when, by now, ingenuity and investment in technology

could have developed better answers. Whether the United

States drills in the Arctic Refuge or not, this country has

no comprehensive plan to wean itself from oil. That's what's

really needed.

If I can finish for a second, and then I will yield to the Senator to make his request.

The Milwaukee Journal Sentinel is a summation of what this debate is about. We have debated this for years, and the reason it has been contentious is because a lot of people have concerns about this direction and proposal. But now to do this on the budget where the environmental safeguards that are applied to other drilling, where the NEPA process and other safeguards are ignored, where we are not sure what oil revenue the United States is really going to get to recognize in this budget, when we don't know whether we are going to keep this oil for economic security reasons, I agree with the Sentinel which said:

The reconciliation bill should be used to settle budget

matters, not to abuse the public's trust.

I will yield now to the Senator from North Dakota for his proposal.

How much time remains on each side?

On each side?

Mr. President, I'll take a few moments as I wait for my colleagues to come to the Senate.

I ask unanimous consent Senators Durbin and Salazar be added as cosponsors to this amendment.

Mr. President, I ask unanimous consent to have printed in the Record a National Congress of American Indians resolution that states their opposition to opening up drilling in the Arctic Wildlife Refuge.

Mr. President, while I am waiting for some of my other colleagues to speak, I point out a couple of things about this process. I showed a chart earlier that Americans across the country, and certainly the news media covering this, say this budget process is not the way to go about the opening up of the Arctic National Wildlife Refuge. More importantly, there are issues that are precedent setting and raise concerns such as, do my colleagues want to debate the fact that they think 50 votes versus 60 votes is the way to do this policy?

As a Senator from a State that now has to endure a survey for drilling off the coast of Washington, off the coasts of Oregon and California--and the Energy and Natural Resources Committee has been discussing opening drilling off the coast of Florida--this policy in the

underlying reconciliation bill is a very dangerous precedent. That is, that if you can go to a budget process and open up drilling, why can't you open up drilling in any other part of the country through this process?

I guess it is no surprise that the House of Representatives has actually already moved on legislation trying to open up drilling in other areas of the country. It is not a fantasy on my part that other Members of the other side of the aisle could be promoting drilling and could use a budget process for the same maneuver being used here. It sets a very bad precedent, a backdoor scheme.

Because what we are basically saying is that those oil interests are above the public interests, and they do not have to meet the same requirements. For example, the National Environmental Protection Act. I have heard a lot about Scoop Jackson today. My colleagues should remember who wrote the National Environmental Protection Act and got it passed. It was Senator Scoop Jackson. We are very proud of that. Why would we take NEPA and limit the alternatives that could be considered under this bill for proposal impacts to the environment? That is what it does. By throwing this language in the budget resolution instead of a normal process, we are limiting NEPA. We are limiting judicial review. Why should we limit judicial review? We do not do that in other areas of oil drilling, but for this more pristine of areas we will limit judicial review? All because we are doing it through the Budget process.

We will also be limiting the role of the Fish and Wildlife Service. Aren't they an integral part of planning for production in various parts of the country? Why can't current Bureau of Land Management regulations that provide for the Fish and Wildlife Service be used to provide for the protection of fish and wildlife? The answer is the Bureau of Land Management and Fish and Wildlife Service are out of their normal role because we put this in the budget process.

What about compatibility? Why does this legislation assume that oil and gas activities cannot be undertaken in a manner compatible with the Arctic Wildlife Refuge?

Transportation. The chairman has removed consideration in this underlying bill authorizing oil and gas from the coastal regions, which is unusual language considering there is a whole range of issues, including pipelines, ports, and systems. Again, NEPA, judicial review, Fish and Wildlife, Bureau of Land Management, transportation, and other compatibility issues are not being addressed because we are throwing this in the budget process.

What about the leasing provisions? I have talked a lot about this and I would love it if my colleagues from Alaska would support an amendment I plan to offer that specifies this cannot go forward until we verify that it is a 50-50 split or that it isn't going to go forward. This Senator would love to know that my colleagues from the other side of the aisle are so certain this is going to be a 50-50 revenue split that they are willing to support clarifying in the language that the actual opening up of the Arctic National Wildlife Refuge cannot go forward unless it is a 50-50 split. If they are so certain that is going to happen, they should be willing to support my amendment.

As far as the economic issues, I guarantee my State constituents know very well where their oil comes from. In fact, that has been the big complaint for a good part of the last 36 months, the fact that the FTC and other entities keep reminding the Northwest they are an isolated market getting oil from Alaska, yet our prices have gone up to over $3 a gallon.

My constituents, who are getting squeezed at the gas pump, want two things. They want us to have a price investigation and make sure that price gouging is not going on and do something to protect them. And, two, they want something that will bring true competition to the price of fossil fuels and help them in not facing high fuel costs in the future.

Even the Energy Department says it is not going to help my constituents. The Energy Department says in the peak years of production it would reduce prices a penny a gallon. I guarantee my constituents want more than a penny a gallon reduction in gas prices. They are not going to wait 20 years to get that. My constituents want to see real action on a price-gouging bill that we can push out of here that gives the authority to pursue the activities of record profits and make sure price gouging is not going on. They want us to get about diversifying the sources of energy we use.

Diversification will mean a lot to our economy. I can say high gas prices are costing our economy today plenty. If you want to talk about the airline industry, which has seen a 293-percent increase in fuel costs over a 5-year-period of time, yes, there are people in Washington State who are losing their jobs because of that. They want aggressive action today. They do not want to see 10 years from now 6 months of an oil supply that is not going to help them.

I want my constituents to understand a budget process that is a backdoor scheme that basically does not leave them any better off today or in the future than they are today is not a responsible solution to our energy needs. They want to see us truly come up with something that is going to get us diversified off our dependence on fossil fuels. With 3 percent of the world's oil reserves, the writing is on the wall. The United States needs to take a more aggressive action than drilling in the Arctic National Wildlife Refuge.

I remind my colleagues what the Milwaukee Journal pointed out:

The reconciliation bill should be used to settle budget

matters, not to abuse the public's trust.

That is what we are doing in this bill, trying to pass a wildlife refuge off as an oil field drilling opportunity when we are not addressing important issues. We are not addressing the environmental protections, the judicial review, fish and wildlife, the transportation issues, or the Native Alaskan issues.

We are setting down a very dangerous precedent. I don't want to see the same gimmick used for Washington State, for Florida, or other areas when this Senate thinks by sticking something in a reconciliation bill they can open up leasing of oil in the United States.

Some of my colleagues, I know, are going to talk about an important issue as part of this debate, whether this oil that is produced out of the Arctic Wildlife Refuge should remain in the United States. If this Senate believes this debate is about oil and making America more secure, getting off of our 50-percent dependence on foreign oil is what we need to do. To do that, most people will say we have to get off the fossil fuel consumption.

If my colleagues who want to support this amendment want to drill in Alaska, they ought to be willing to say the oil ought to stay in the United States. If you think it is part of our national security plan, then say it is part of our national security plan and keep it in the United States. I would go further to even say, why not create a refined product, like a jet fuel reserve, as they have in Europe? The Europeans figured out jet fuel is expensive. They have not only a strategic petroleum reserve, they have a jet fuel reserve. They figured out they do not want their airline industry subject to and their economy ruined by sudden price spikes.

I would go further than many of my colleagues in saying not only can the oil not be exported, let's put it in a specific reserve dedicated to a particular, important sector of our U.S. economy--transportation and aviation.

I look forward to my colleagues who, in committee, did not think it was such a great idea, who certainly thought that oil should be exported, who now say it shouldn't be. I am glad to see that change of opinion if that is what is going to happen in the Senate. This budget process is a backdoor end to opening a 6-month oil supply we will not see for 10 years and will not do a darned thing to help consumers now or when it is at peak production.

We shouldn't fool the American people by giving them false choices in what is not a solution, and false budget choices when we cannot even guarantee to them the $2.4 billion that is assumed in this budget.

The difference between Alaska winning and the United States winning on this debate is the difference between $2.4 billion and $480 million. So I hope my colleagues, besides looking at this

export issue and saying this oil should stay in the United States, will also look at the commitment in saying that, yes, we only think this should be opened up if the United States actually gets $2.4 billion. Because otherwise this whole scheme is a matter of false choices, false budget choices, false security choices, and false choices for the consumer. In the end, Americans are still paying high energy prices.

Mr. President, while my colleagues sort out who is going to potentially offer a second-degree amendment, I will yield the floor to discuss with my colleagues that process.

Mr. President, I ask how much time is left on each side.

Well, it is my understanding that one of my colleagues wants to offer an amendment that was part of the previous unanimous consent agreement. I would ask unanimous consent, until they figure that out, that time during a quorum call be equally divided between both sides.

Mr. President, I am happy to debate whatever amendment. Part of the previous consideration was to have a debate on a related amendment. I do not know where the Senator is in offering that amendment. Do we have a time period in which he might--if I can inquire through the Chair, does the Senator who is controlling the time on the other side know when the Senator might be available to offer his amendment?

Mr. President, I think my colleague from Oregon, who has been a champion on this issue throughout the committee process, is prepared to call up the Wyden-Talent amendment and to speak on it at this time.

How much time does the Senator from Oregon wish to have?

Mr. President, I yield the Senator from Oregon 7 minutes.

Mr. President, how much time remains on each side?

Is the Wyden amendment the pending amendment?

Mr. President, does the Senator from Oregon wish more time?

I will make a couple of comments in closing as we sort out the last on the Wyden-Talent amendment. This budget reconciliation act, as it stands now, without the Cantwell amendment striking the ANWR language, is a false promise to the American people. It is a false promise that they are going to have cheaper gas prices now or significantly cheaper gas prices in the future. It is a false promise on the amount of revenue that is going to be raised in the budget. It is a false promise that somehow this can be done in an environmentally sensitive way and that the area we have called for so long the Arctic National Wildlife Refuge can be preserved as it is. It is a set of false promises, and the American people deserve better. They know this is a time in which our country should be making serious plans to diversify our overdependence on fossil fuel and change, and they certainly don't want environmental considerations that have been long the standard for oil drilling in America to be tossed aside by a budget resolution.

They certainly don't want the fact that there have been, as one organization, the Alaska Department of Environmental Conservation said, 405 spills annually in the North Slope since 1996. They don't want to continue the trend in Prudhoe Bay and other Trans-Alaska Pipeline areas of causing 4,532 spills since 1996. The American people want to have responsible production moving forward that meets the standards that production in America has lived by. That is, by the same standards of the National Environmental Protection Act, judicial review, fish and wildlife, transportation issues, compatibility issue, protection of indigenous rights. They don't want a backdoor gimmick into helping the oil companies, who have already been making record profits, continue to make record profits on something that is going to offer very little for the American people.

I urge my colleagues to support the Cantwell amendment and to support the Wyden amendment when it comes up so we can be true to this issue and say we don't want to drill in the Arctic Wildlife Refuge as a way to get out of our problems. We want to make an investment in the right process and have oil companies live by the environmental standards they are required to today.

With that, I yield the floor.

I yield back the balance of my time.

Thank you, Mr. President.

I am pleased to be standing on the floor today about 8 months after the last opportunity that we had to debate the issue of development of a very small portion of the Arctic National Wildlife Refuge. During that time--during that 8-month intervening time--we have seen the price of a barrel of oil rise to as high as $73--now about $63. The chairman of the Energy Committee indicates that this morning it is about $59.

That rise has come because of a number of factors--continuing strong oil demand in China and India and other developing nations. It has come because of the effects of weather. We have seen the consequences of the hurricanes in the gulf. It comes also because the world fundamentally needs more oil.

Goldman Sachs, in August, predicted that oil will average $68 again next year.

Also, since the last time we debated the subject of ANWR, we passed an Energy bill. In that Energy bill, we addressed not only production, but we addressed conservation. We addressed renewable energy sources, alternative energy sources. But in terms of doing anything significant to directly increase domestic oil and gas production, we didn't do much in that Energy bill. We delayed that action until now.

I would like to take some time this morning to talk about why development of the Coastal Plain is not just necessary in light of the current events in the past few months, not just the price of energy but in light of what has happened up north in view of the technological change, the new data that has been developed in the past decade to prove, to establish, that we can develop ANWR oil without harm to the environment and to the wildlife that live there.

My colleague from Washington, who has proffered this motion to strike the ANWR provision, has said her amendment is really about national priority. I would suggest that the national priorities which are at stake with ANWR are priorities that relate to energy security, a priority that relates to environmental security, and a priority that relates to National and economic security.

These are what the priorities are about and this is what ANWR can do for us as a nation. It can help us with our reliance on foreign sources of oil, it can help us with jobs, it can help us build a stronger economy, and it can help us in terms of meeting our environmental obligation to our land.

Let me talk about some of these issues. First, national security. When we talk about the reliance we have as a nation on foreign sources of oil, it is not just talk. The reality is, this hits us, it impacts us in an incredibly significant way. Right now we are about 58 percent dependent on foreign oil. This dependency is expected to pass the two- thirds mark within the next 20 years. It threatens our national security. It threatens our economy.

When we see statements coming from Venezuela, for instance, one of our leading sources of imported oil, suggesting maybe they do not need to do business with the United States, and we recognize the competition for oil on the global market, competition from China, from India, we recognize we must do more domestically to meet our needs, to strike this balance between our need and what we are able to supply.

Chairman Domenici spoke to the jobs factor, the economic side, as well as what this means to our balance of payments. ANWR oil will help stabilize not only our national energy prices, but it will generate more than $30 billion in Federal revenues within 15 years.

We talk about reducing our balance of payments deficit all the time. People need to appreciate one-quarter of this Nation's trade deficit relates to what we pay other countries for our oil. Last year we paid $166 billion to buy oil overseas. We will pay even

more than that this year. We have to do something to address that balance of trade issue.

The jobs will be created. People associate jobs as drilling and exploration jobs. What they need to keep in mind is, when we have development of this size that we believe we can have on the Coastal Plain, this means jobs all over the country in terms of making the nuts and bolts, the pipes, the hauling, the shipping. This means increased commerce, increased job activity all over the country.

We throw around a lot of numbers, but look what it could mean to individual States: To my colleague from Washington, 12,000 jobs in Washington State; 80,000 jobs in California; 48,000 jobs in New York State; Pennsylvania gets 34,000; Florida, 34,000; Arkansas, 5,500. These are jobs associated with the activity that will go on up north. This is one of the reasons we have support across the country for opening ANWR, a small portion of the Coastal Plain, to oil exploration and development. People see the economic opportunity for them even in States that are thousands of miles away.

Farmers recognize this will help them with stabilizing what they need to do when they are planting the crops in the spring. Think of those products made from oil. We get so fixated on the transportation sector, but the reality is we derive much from petroleum. There are those that will say if we park every car in this country today, we would not have this incredible dependency on foreign sources of oil, we would not have this dependency.

However, I suggest we are a nation that is dependent on petroleum for many things. Transportation is incredibly important, but we have toothpaste, footballs, ink, life jackets, antiseptic, dentures, glue, clothing, food preservatives. So much of what we consume as a nation comes from petroleum products. We should not say, if we conserve a little bit more, we do not need to open ANWR. We need to face, as a nation, that we have a reliance on petroleum.

When we talk about the amount of oil available up north, again, we hear numbers floating all around. Some people say it is 6 months' supply; it is an insignificant supply. The fact of the matter is, and this is according to USGS estimates, ANWR's Coastal Plain has a 50-50 chance of containing the second largest oilfield in North America. As was stated before, what we anticipate to get out of ANWR would be the equivalent of the Texas oilfields. To those suggesting Texas is insignificant in terms of its contribution, we would say that is crazy.

Another example regarding what we anticipate to get from the reserves up North: the equivalent of what we have been receiving from Saudi Arabia for the past 25 years. Again, these are not insignificant amounts of oil.

What we anticipate we would receive from ANWR on a daily basis would have offset the oil we lost when the Gulf of Mexico was hit by the hurricane damage and we had all of the oil shut in.

If we are to discount the potential of ANWR, it is as shortsighted a viewpoint or perspective as we could ever have when it comes to our energy sources. This is akin to saying we should not open up Prudhoe Bay because, based on the reserves we know or expect to see there, we think it will only provide this country 3 years' worth of oil. That is what the estimates were. Prudhoe Bay has provided this Nation with up to a quarter of its domestic oil supply for the past 28 years.

We want to be given a chance on the Coastal Plain to demonstrate we can do something actively to reduce this country's reliance on foreign sources of oil.

Again, back to the national priorities. Care for the environment: We take that very personally in Alaska. I take it very personally. I was born and raised there. I am raising my kids there. I want my grandkids to be raised there. I want them to have the quality of life we as Alaskans enjoy. We take the obligation to not only create jobs and revenues for Alaskans, but we take the obligation to care for our land as one of our highest priorities. This is why it is significant. When Alaskans speak on this, 70 percent of Alaskans support developing ANWR. The residents who live on the Coastal Plain, the people of Kaktovik support opening ANWR because they can see the benefits to them, but they can also see they can have the benefits of jobs and revenues that can help them with their schools and their health clinics, that they can do that in balance with the environment, so their hunting, their subsistence, their whaling, is not sacrificed.

We like to talk up North about the gains in technology that have been made over the past 30 years. They are stunning. We are proud to speak of them. Earlier, Senator Domenici spoke to the trip we took up North with several Members and the Secretary of Interior and Secretary of Energy. We went to an exploration pad built up on an ice pad. They make an ice pad, and the ice pad is connected by an ice road. This road is almost a Zamboni-type machine. They roll it out over the very frozen tundra and they create this road of ice. The ice buildup is probably a foot or so thick, maybe higher in certain areas as you approach stream crossings. The exploration pad is a pretty compact unit and very impressive in terms of the size and scope of the equipment used. They have Rollagons with tires that are 15 feet high. They are huge, immense pieces of equipment. They go in, haul in the exploration equipment over the ice roads in the middle of the winter. Keep in mind, the State, in consultation with other agencies at the Federal and local level, make a determination for exploration. You cannot come in and explore at any time. You have to do it during the season that is allowed. They make measurements as to the thickness of the freeze before they will allow any activity to begin construction of the ice roads or any activity on the tundra.

This is an example. This is not the exploration unit we went to, this is in the National Petroleum Reserve. It is very similar in size. We have the exploration rig standing taller in this photograph with a few outbuildings that allow those working out there to stay warm, get a little bit to eat. You can see the ice road going out there on the tundra. That is what it looks like in the winter. This rig probably is out there for 2 to 3 weeks. Then they pack up and move it to the next exploration area the company might be looking to. This is what it looks like in the summer.

This photograph is the exact same area we saw, Rendezvous 2 well, National Petroleum Reserve. This is exactly what it looks like during the summer. The ice pad has melted. All of the equipment was removed during the winter when the ice roads were there. What is left is this stub of that exploration well. It is tough to tell from this picture because it actually looks pretty tall, but that stub is only about as tall as I am. It might be about 6 feet, a little taller. That is what is left.

This is what we do up North. We do it for a couple of reasons. First, because we know it is the right thing to do. We need to make sure we are caring for the environment. Second, we have the toughest, the strictest environmental standards for oil exploration and drilling anywhere in the country, and I would say probably anywhere in the world. We are proud of it. We are proud of the results that come out of this. We can do the exploration. We do it in a safe and sound manner. We try to leave as little footprint as possible. We are doing that because it is the right thing to do, but we are doing it because we are working with the Native people who live up there, who have lived up there for generations, who want to be able to continue to hunt and fish and whale.

The caribou are free to room. The central caribou herd near Prudhoe Bay in the 30 years since we have had oil development has grown 10 times. Some say we scare away the caribou and the Native communities will not have the subsistence source. The fact of the matter is, the reality proves otherwise. We are doing what we should be doing when it comes to care for the environment.

Polar bears have not been mentioned today, but they might later in debate so I will address them. There are some who are concerned that man's activity there will be driving the polar bear from the Coastal Plain. The fact of the matter is we have very healthy polar bear stocks up North in the Coastal Plain area where we are talking about the potential for ANWR development.

We have about 29 identified dens. We use infrared detection to determine where the polar bear are actually denning so we do not go near them. We are taking the steps needed and necessary to care for the animals and the environment.

Other things we are doing to recognize we need to work with the environment, with the animals, with those who would live there, include drilling restrictions during the summer months to prevent noise activity. There are prohibitions on any kind of seismic activity when the whales are migrating through. We are using directional drilling so we go into the ground and under the surface, and we are able to drill out 3 or 4 miles in every direction so there is no disturbance to the surface.

We are talking about a 2,000-acre limitation. I will go back to the map of the Coastal Plain to again put it in perspective. We are talking about 2,000 acres. That is about the size of an average size ranch in South Dakota, according to what the Senator from South Dakota tells me--2,000 acres in an area. The Coastal Plain on this map is the green area. The Coastal Plain is 1.5 million acres. We are asking to drill and explore in an area the size of 2,000 acres out of 1.5 million. The other colored areas on the map indicate the wilderness area and the Refuge itself.

The orange shown on the map is the Refuge. The wilderness area is the yellow part of it. The whole Arctic National Wildlife Refuge itself is an area the size of South Carolina. It is 19.6 million acres. Of that 19.6 million acres, we have 8 million that are dedicated wilderness. We cannot, will not, have no intention of going in and doing anything. That is entirely protected.

The balance in the orange is all Refuge. We are not talking about any exploration activity or development in that area. The only area we are looking at exploring is the green area, the 1.5 million acres. And within that we are talking about 2,000 acres.

For those of you who live and work in the Washington, DC, area, that is about the size of Dulles Airport. Actually Dulles Airport is a little bit bigger than that. So that kind of helps put in context what we are talking about.

Now, the Senator from Washington mentioned this legislation would also open up and allow the natives of Kaktovik to open up and be able to explore on their lands that are contained in the Refuge. The 2,000- acre limitation applies to the natives of Kaktovik, the Arctic Slope. It applies to all lands within the Coastal Plain--all lands within the Coastal Plain.

If there is oil that is discovered and explored and produced on native land, that part is part of the 2,000-acre limitation. So we are not expanding this from 2,000, plus whatever might be found on the native land itself.

Let me speak a minute to some of the other issues that were raised by some of my colleagues. The point was made there is nothing in this legislation that would prohibit Alaska oil from being exported. In fact, that is the case. But I should remind my colleagues that very little--very little--Alaskan North Slope crude has ever been exported. We do not anticipate that it would be exported, given the demand on the west coast, given the demand in this country. None is regularly exported now, and it has not been exported regularly in the past 6 years.

Now, it is true that back in 1995 we had a glut of oil on the American west coast, and Congress did, in fact, vote to permit the export of Alaskan oil. So from 1996 to 1999 there was about 5.5 percent of Alaska production that was being exported over to the Asian countries to relieve that glut.

We are now in a different time, a different place. There is no excess oil on the west coast. At this point, even though we are allowed to do so, there is no oil that is being exported. So where is it going? Fifty percent of all of Alaska's gas, coming from Prudhoe Bay, goes to the California refineries. This is near San Francisco and LA. We have 42 percent going to Puget Sound up in Washington State, and 8 percent goes to the State of Hawaii. There is a very fractional amount that stays in Alaska for in-State refinery needs.

But what you also need to keep in mind is that it is cheaper for us to ship the oil to the lower 48 than to the Far East. It is a matter of pure logistics. It is 2,056 miles to LA versus 3,401 miles to Yokohama, Japan. So the economics of it suggests that it does not make sense to ship any oil from Alaska overseas at this point.

Now, another issue that was raised was the issue of oil spills. This is something that when you hear the debate, these issues raised, you kind of have to take a deep breath and say the statistics on a piece of paper do not tell the whole story, unless you have the facts, the footnote, and the background that goes with it.

It has been suggested there have been all of these spills up North, and these spoil the Arctic tundra. But what they do not mention is, the companies that are operating up there have to report every spill--every spill--of any nonnaturally occurring substance. So if there is a spill of saltwater, it has to be reported--anything more than a gallon of oil or chemicals, such as lubricating oils, hydraulic fuels.

So when you go up North, you will see in the wintertime--and will in the summertime because the vehicles during the cold winter months are kept running for a good portion of the time--each and every one of the vehicles has what they call a ``diaper'' underneath the transmission to collect any leaking transmission fluid. Because if that were to get on the road, if that would get on the surface, that could be a reportable incident.

The vast majority of the spills at Prudhoe Bay have been of saltwater, saltwater used in water flooding to enhance oil recovery. They have not been oil spills.

Now, the other thing you do not hear is that the average oil spill was 89 gallons. This is the equivalent of about two barrels of oil, and that of that, those two barrels of oil, 94 percent of that oil was absolutely, totally cleaned up. According to DEC, which is the State Department of Environmental Conservation, 93 percent of all oil spills were of less than 100 gallons in volume, two-thirds were of less than 10 gallons, and less than a quarter barrel of oil.

So over the past decade, for the past 10 years, up North, there have only been 11 crude oil spills of more than 1,000 gallons, and 97 percent of that oil was fully recovered.

We can talk about the spills and reportable spills, but if you look at a number, it is important to know: A, what was it that was spilled; B, how much; and, C, how the cleanup was handled.

Prudhoe Bay is actually one of America's cleanest areas. ANWR development, given the technology we have, we know is going to be even better.

Now, I have to address the issue of too little oil to even bother exploring. I mentioned it very briefly at the beginning.

The USGS has recently updated its estimates. In fact, it was just within the past week or 10 days or so that USGS released its updated estimates for the amount of economically recoverable oil that will be found in ANWR. What they are now saying is that at the prices we are looking at--they peg it as $55 a barrel--93 percent of all the technically recoverable oil will be economically worth producing. That is up from a previous estimate of 83 percent. It means we have a 50-50 chance the Coastal Plain is going to contain 9.7 billion barrels of oil. Again, this would be the second largest oil field in North America.

When we talk about the amount that is available to us, I think it is important to put that in perspective. We are talking about the second largest field in North America. Currently, Prudhoe has been operating and supplying 20 percent of this country's domestic energy needs. It has for 30 years. We want to be able to supplement that with ANWR.

There is one other point I do feel is important to address. Several of my colleagues on the other side have suggested that because ANWR is contained in this budget reconciliation package, it is not the appropriate place, and that for a major policy decision such as this, it has not been given the time and the consideration and cannot be in this process.

As the senior Senator from Alaska, the occupant of the Chair, knows, this is something that has been debated and discussed for decades. ANWR has been the subject of dozens of bills, literally many dozens of congressional hearings. Legislation to open ANWR passed the Congress in the 1996 Budget Reconciliation Act. It was vetoed by President Clinton. But we have had several bills that have been introduced since then.

In the 106th Congress, we had legislation. Six bills were introduced in the 107th Congress. Legislation to open ANWR was approved by the House in the 108th Congress. In the 109th, also, the House introduced legislation. There have been countless tours of the Coastal Plain, where many Members of this body have had the opportunity to go up and see it for themselves. ANWR has probably been one of the most thoroughly researched, debated, and discussed issues pending before the Congress for the past 18 years.

I do not think any of us can stand here with a straight face and say that Congress is acting too quickly on this issue. It is something that has been aired very publicly, and over a great deal of time, with a great deal of public input.

I would like to conclude my remarks by speaking very briefly about those people who live in the Coastal Plain, the residents of Kaktovik. These are a very hardy people who have lived there for generations and generations, and who want to remain. But they are in a community where energy costs are extremely high. It is very difficult to find any kind of economic activity in the area. They are primarily a subsistence- based village. But they want to make sure, like all the rest of us, their kids get a decent education. They want to make sure they have some access to health care within their community. They want to have certain protections, if you will--whether it be a fire truck to help them when they have a house fire, as they had a couple years ago and had no way to provide for the protection of the property in that home.

They view the opening of ANWR as an opportunity for them to be participants. But they are also looking at this from the very critical perspective of being the only Alaskans who live in this area who would be affected by the development. They want a seat at the table. They want to be consulted. They want to be heard. They want to make sure that, in fact, the development that does take place is done in concert with their needs as the residents of this area for generations and their needs as people who live off the land.

We are working with the people of Kaktovik. I have introduced stand- alone legislation, along with my colleague from Alaska, and along with my colleagues from Hawaii, that would provide not only for environmental protections to be written into how we develop ANWR, but basically we codify all of those items we have discussed over the years, whether they are the environmental concerns, whether it is the 2,000-acre limitation on development, but also a provision to provide for economic impact aid to the residents of Kaktovik and any other Alaskans who may be impacted, to provide for a method of consultation with the natives of Kaktovik and the region.

What we are trying to do through the stand-alone legislation is provide for, I think it is fair to say, safeguards. For all those who may be concerned that, well, this budget reconciliation says ``open up ANWR, the only limitation is a 2,000-acre limitation,'' be aware that what we are providing for in the freestanding legislation, I think, is a very comprehensive set of guidelines for how we move forward positively, as we look to achieve that balance between development and care and concern for our environment up North.

With that, Mr. President, I yield the floor.

Will the Senator yield?

Mr. President, I have sort of a unique role in this argument, since I was in the Interior Department in the Eisenhower administration and helped create the Arctic Wildlife Range. It was specifically on this Coastal Plain, specifically specified it was subject to oil and gas leasing.

Then I was here at the time that Senators Jackson and Tsongas offered the amendment that created the 1002 area and, as this chart shows, it was specifically excluded from the Refuge. It is not wilderness. It never was wilderness, and it has never been closed to oil and gas exploration. Their amendment required approval of Congress of the action--of the results of the environmental impact statement required by the Jackson amendment.

Mr. President, I am wearing an Alaska bolo tie today because two of my friends, Laura and Crawford Patotuck, brought this to me and asked me to wear it when ANWR was up before the Senate. They are part of the Alaskan Native group that is here to support this bill and support proceeding with the oil and gas leasing.

I have heard some comments this morning about whether this is right, to have this provision in this bill. The Constitution of the United States does not require 60 votes to pass a bill. That is only a procedural rule of the Senate on how to end filibusters.

Filibusters plague the Senate. They continue to plague this Senate, and that is why the Budget Act was passed, to prevent filibusters on items that would bring about increased income of the United States.

Many people are talking about the 50-50 split between the Federal Government and the State of Alaska under the Mineral Leasing Act. It so happens I was the one who suggested it to Delegate Bartlett at the time the Statehood Act was before the Congress, that we add to that, the Statehood Act, the provisions of the Mineral Leasing Act which guaranteed to Alaska 90 percent of the returns from oil and gas leasing in Alaska because we were not subject to the Reclamation Act.

The Reclamation Act no longer has any application. So Congress has, for many years now, divided these receipts on a 50-50 basis, and this bill, when it becomes law, will specifically so divide it. That is not an issue that would be appealable to the courts. What would be appealable would be the original change in the law by the Congress if we ever decided to file that lawsuit. Alaska has never filed such a lawsuit.

I hope we will not hear anymore about whether this provision of this bill applies to Alaska as it applies to all Western States that have public lands. There is a 50-50 split on the royalties that are derived from oil and gas leasing.

One of my real joys this year was to receive a letter from my old friend, James L. Buckley, Judge Buckley, former Senator from New York.

I ask unanimous consent that a copy of this letter be placed on each desk because I think all Senators should read it.

Let me read it:

Dear Ted: Twenty-six years ago, after leaving the Senate, I

was a lead signatory in full-page ads opposing oil

exploration in the Arctic National Wildlife Reserve that

appeared in the New York Times and the Washington Post. I

opposed it because, based on the information then available,

I believed that it would threaten the survival of the

Porcupine caribou herd and leave huge, long-lasting scars on

fragile Arctic lands. Since then, caribou populations in the

areas of Prudhoe Bay and the Alaskan pipeline have increased,

which demonstrates that the Porcupine herd would not be

threatened, and new regulations limiting activities to the

winter months and mandating the use of ice roads and

directional drilling have vastly reduced the impact of oil

operations on the Arctic landscape.

In light of the above, I have revised my views and now urge

approval of oil development in the 1002 Study Area for the

following reasons:

1. With proper management, I don't see that any significant

damage to arctic wildlife would result, and none that

wouldn't rapidly be repaired once operation ceased.

2. While I don't buy the oil companies' claim that only

2,000 acres would be affected, even if all of the 1.5

million-acre Study Area were to lose its pristine quality (it

wouldn't), that would still leave 18.1 million acres of the

ANWR untouched plus another five million acres in two

adjoining Canadian wildlife refuges, or an area about equal

to that of the States of Connecticut, Massachusetts, Vermont,

and New Hampshire combined. In other words, it is simply

preposterous to claim that oil development in the Study Area

would ``destroy'' the critical values that ANWR is intended

to serve.

3. In light of the above, it is economic and (to a much

lesser degree) strategic masochism to deny ourselves access

to what could prove our largest source of a vital resource.

I emphasize this:

Having visited the Arctic on nine occasions over the past

13 years (including a recent camping trip on Alaska's North

Slope), I don't think I can be accused of being insensitive

to the charms of the Arctic qua Arctic. I just don't see the

threat to values I cherish.

With best regards,

Sincerely, Jim.

There is a man who has changed his views. I do believe we should all take

into consideration the fact that he led the movement, started the movement against the exploration and development of this Arctic Plain.

I must express my amazement that our colleague from Washington has introduced an amendment to strip this provision from the budget reconciliation. In 1980, former Washington Senator, and my great friend, Henry ``Scoop'' Jackson wrote a letter discussing the importance of ANWR.

He wrote this about ANWR:

Crucial to the Nation's attempt to achieve energy

independence. One third of our known petroleum reserves are

in Alaska, along with an even greater proportion of our

potential reserves. Actions such as preventing even the

exploration of the Arctic Wildlife Range, . . . is an

ostrich-like approach that ill-serves our Nation in this time

of energy crisis.

I say this: Not only does ANWR serve our important national security interest, it also serves the economic interest of the State of Washington.

The economic health of Puget Sound is tied directly to Alaska as illustrated in a report commissioned by the Tacoma-Pierce County and Greater Seattle Chambers of Commerce. Of particular importance is oil production from the North Slope.

Washington's refining industry purchases almost its entire crude oil stocks from Alaska. The report states that ``direct impacts from the refining of Alaska crude oil within the Puget Sound region include 1,990 jobs and $144.5 million in labor earnings. In 2003, oil refineries in Puget Sound imported $2.8 billion worth of crude oil from Alaska.'' Alaska oil provided 90 percent of the region's refinery needs.

Washington's refineries provide much needed gasoline and jet fuel supplies to the Pacific northwest. Without the opportunity to expand production at the Cherry Point refinery, more than 300,000 gallons of fuel per day are lost. This is fuel desperately needed by consumers in both Washington and Oregon.

Oregon has no refining. The refinery I mentioned is the one running Alaskan oil. Oil development is a major contributor to the health of Washington's economy. As oil wealth in the State of Alaska increases, so does the demand for Puget Sound goods and services. Perhaps this is why the chambers of commerce support balanced development of ANWR.

They understand that with Prudhoe Bay declining--it today only produces around 950,000 barrels a day from a high of 2.1 million barrels--additional oil resources must be developed to ensure the continued economic viability of the Puget Sound region.

The development of Prudhoe Bay contributed more than $1.6 billion into the Washington economy. ANWR alone is estimated to create over 12,000 new jobs in Washington alone, in addition to the revenues it will generate for the State.

None of these benefits will take place if Senator Cantwell's motion is allowed to pass.

Not only are decreasing oil output and declining revenues affecting the health of Washington, its major businesses are feeling the heat-- particularly the aviat1on industry.

The rise in fuel prices is greatly impacting our aviation industries. Our airline industry has lost over $25 billion in the last 3 years.

Sustained high jet fuel costs of $1.50 per gallon--which is almost triple that of 1998 and 1999--continues to hamper the health of this critical industry. Every dollar per barrel that the cost of oil rises costs the airline industry an additional $2 million per month.

High energy prices also prevent job creation in the transportation sector. The Air Transport Association estimates that for every dollar increase in the price of fuel, they could fund almost 5,300 airline jobs. This should be particularly worrisome to those members who represent constituencies in the airline industry and those businesses that support the airline industry.

At a time when Boeing, America's leading aerospace company, is struggling to reassert its dominance in the aviation field, the high prices of oil are devastating.

Fuel costs are the second biggest costs for airlines. Given these high costs, airlines can not afford to purchase additional aircraft.

And air transport, which generated revenues of $1.5 billion in 2003, are also at risk from high fuel prices.

Washington State consumes 17.6 million gallons of petroleum per day, including 7.3 million gallons for gasoline and 2.5 million gallons per in jet fuel. It produces none of its oil.

I ask the Senator from Washington, where will your constituents get oil if they do not get additional supplies from ANWR, when the pipeline in Alaska--the only known producing area--is declining almost daily?

Twenty-four years ago, during the debate on Anilca, I worked closely with Senator Scoop Jackson and Senator Paul Tsongas to ensure part of the coastal plain of Anwr remained open for oil and gas development.

Senator Jackson and Senator Tsongas promised oil and gas activity would take place in the coastal plain subject to an environmental impact statement which would have to be approved by Congress. In the spirit of compromise, they created section 1002 of Anilca, which set aside 1.5 million acres along the coastal plain of Anwr for oil and gas exploration and development.

It is not wilderness. It has never been wilderness. It has never been withdrawn. It has always been available for oil and gas development. It was once passed by the Senate, and President Clinton vetoed the bill.

I have fought now for 24 years to make sure that the promise made to me personally--made here on the floor of the Senate by Senators from Washington State and Massachusetts, Senator Jackson and Senator Tsongas--and that promise has never been fulfilled.

The Arctic National Wildlife Refuge is 19 million acres.

It is shown on this chart. The area set aside for oil and gas exploration the 1002 area, or the coastal plain is 1.5 million acres. Because of advances in technology, only 2,000 acres of this 1.5 million will be needed for production.

To put this in perspective, ANWR is about the size of South Carolina. The area needed for development is about the size of Dulles Airport. Development in the Coastal Plain is the equivalent of building an airport in South Carolina.

I want to go to chart 2 and show the Coastal Plain.

According to the U.S. Geological Survey, the Coastal Plain holds between 5.7 billion barrels and 16 billion barrels of oil.

Again, I emphasize that people are talking about 2 percent of the known reserves. We have a lot of unknown reserves, particularly in Alaska and the West, which have not been explored, and the area off our coast going toward Russia on the Outer Continental Shelf. Two-thirds of the Outer Continental Shelf of the United States has not been explored.

We are capable of producing, as the Senator from New Mexico said, a lot more oil and gas. We can produce 876,000 to 1.6 million barrels a day by developing the Coastal Plain. That would fulfill our pipeline backup. It is our country's single largest prospect for future oil production.

And, the actual amount of recoverable oil could be much larger. Remember, the first estimates at Prudhoe Bay were that there would be 1 billion barrels of recoverable oil. In the last 30 years, we have recovered 14 billion.

In 1973, at the time of the oil embargo, our country imported one- third of its petroleum. We now import almost 60 percent of our oil. By 2025, we will import almost 70 percent.

American dependence on foreign oil threatens our national security. We now rely on unstable and unfriendly regimes to meet our energy needs.

The coastal plain can produce over 36 million gallons of gasoline, jet and diesel fuel, heating oil, and other products a day. It can heat over 8.1 million homes, or provide all of the gasoline that Californians consume each day. America needs American oil.

America needs this American oil.

People who say it is only a day's supply are talking about if there were no other source of oil. It is a preposterous statement to say this area contains very little oil.

In 2004, our merchandise trade deficit was $651.52 billion, 25.5 percent of this deficit came from net imports of crude and petroleum products, which cost over $166 billion.

We are paying higher prices to meet our energy needs, and we are flushing jobs and money out of our economy.

Americans are paying more for gasoline, heating fuel, and consumer products. In the past 4 years, the average

price of gasoline has increased by $1.84 a gallon--that's a 75 percent increase!

For every $1 billion we spend to develop our domestic resources, we create 12,500 jobs. This means in 2003 we lost over 1.3 million jobs by importing oil instead of producing it here--1.3 million jobs outsourced in order to bring oil from other sources.

By developing our resources on the coastal-plain, we will create between 700,000 and 1 million American jobs. We will put up to $60 million back into the U.S. economy each day instead of sending it to foreign countries.

Probably one of the things most important to me is that our Alaska Native people overwhelmingly support development on this Coastal Plain. Out of the 231 Alaska Native villages, only one has opposed this. Yet they are the poster children for all of these environmental ads you see. One, the Gwich'in Village, opposes the initiative in this bill.

Alaskans overwhelmingly support development in the Coastal Plain; they know we can develop this resource in an environmentally responsible way.

Alaska natives overwhelmingly support development on the Coastal Plain. Of 231 Alaska native villages, only one--the Gwich'in--opposes development.

And the tide of public opinion among all Americans has begun to turn; they know development in the Coastal Plain will help lower energy prices, reduce our dependence on unstable and unfriendly regimes, and grow our economy.

Let me turn to charts 4 and 5 because I think this is very important.

We constantly hear that this is a pristine place, the most beautiful place on Earth. That is the area in wintertime. I defy anyone to say that is a beautiful place that has to be preserved for the future. It is a barren wasteland, a frozen wasteland, and there are no porcupine caribou at all there during that period of time.

The Coastal Plain is a frozen, barren land for 9 months of the year with an average temperature of minus 50 degrees.

A majority of wildlife species use the foothills of the Brooks Range, about 60 miles from the Coastal Plain.

Put up the other chart, please.

This is what it looks like in the summertime.

My colleague, Senator Murkowski, the great partner I have, showed where there was one well drilled with a 6-foot pipe sticking up. The rest of it is constant, constant tundra, no trees, no beauty at all.

The porcupine caribou herd uses the Coastal Plain for only 6-8 weeks per year, when development will not take place.

The herd spends the majority of its time in Canada, which has no seasonal or bag limits for native residents. It is estimated that an average of 2,900 caribou are harvested in Canada each year.

There is no evidence that oil development will harm the porcupine herd. In fact, all evidence points to the contrary. The central Arctic herd at Prudhoe Bay has grown ten fold, from 3,000 in 1974 to over 30,000 today.

There is no evidence that oil development has harmed the reproductive activities of polar bears, a replica of which I proudly wear on this tie.

Resource development and conservation are not mutually exclusive.

Oil and gas companies use ice pads and roads to protect tundra and the ecosystem. They employ directional and multi-lateral drilling to reach reservoirs of oil and gas, which reduces the impact to the land.

In fact, the Clinton administration issued a report which demonstrated that oil and gas can be removed in an environmentally sensitive manner.

Development of the Coastal Plain will be subject to the strictest environmental standards in the world. With these standards and our advanced technology, responsible development and conservation can coexist.

Very clearly, a vote for this motion is a vote for the status quo, which my good friend Ronald Reagan used to say ``is Latin for `the mess we're in.' ''

A vote for this motion closes our domestic energy resources to production. It's a vote for continuing to import more than 60 percent of our Nation's oil. It is a vote for outsourcing more than 1.3 million American jobs a year.

A vote for this motion is a vote to increase home heating bills and transportation costs. It's a vote to diminish our national security by relying on rogue nations and unstable regimes for our energy needs.

Who would expect a Senator to come to this Senate floor and offer an amendment that exports 1.3 million American jobs every year, will cost us $200 billion annually by 2025, and leaves our national security vulnerable to the whims of unfriendly regimes. But that's exactly what this motion does.

A vote for this motion is not just a vote against developing our domestic resources on the Coastal Plain. It's a vote for closing our Nation's single greatest prospect for future oil production and backing out of the promise that was made to Alaskans--and all Americans--when Senators Scoop Jackson and Paul Tsongas created section 1002 of the Alaska National Interest Lands Conservation Act.

A vote for this motion is a vote against Alaska Natives, who overwhelmingly support development on the Coastal Plain because they know we can balance stewardship and conservation with resource development.

We cannot continue to increase our dependence on foreign oil. We have the capability to continue to increase our production of oil and gas.

When you look at this proposal, this is an amendment to export 1.3 million American jobs overseas. It will cost us $200 billion annually by 2005. Why is it in this bill? That is the reason we want to stop that. We want to stem the flow of jobs leaving this country. We do not want to go beyond 60 in importing our oil. As a matter of fact, we want to reverse that. We want to go back to the promise that Senators Jackson and Tsongas made when they created this portion of this area, a reserve for exploration and development. The Coastal Plain has been set aside for exploration and development.

I close with this: An old bull is what they call us when they reach my age in the Senate, World War II type. We remember when a Member's word meant something in the Senate and when the word of a Member who has left the Senate was still fulfilled. We remember when the Senate would do everything in its power to honor a promise.

In our State, we quote Robert Service: ``A promise made is a debt unpaid.'' This is a debt unpaid to this Senate, to the country, to Alaska, to proceed with what Senators Jackson and Tsongas outlined in 1980, to explore for and develop that oil in the area, if it is possible to do so.

I understand other Senators wish to be yielded time.

How much time would the Senator like to have?

I yield 5 minutes to the Senator.

I object.

We have only 4 minutes left.

Are we still on the parliamentary inquiry?

We could enter into a time agreement now, could we not, on the Wyden-Talent amendment?

The current time agreement refers to a Talent amendment. I ask unanimous consent that be the Wyden-Talent amendment.

Therefore, that is for the purpose of the Senator being able to yield time to Senator Wyden to start the process.

Mr. President, I yield the Senator such time as he requires.

How much time remains on our side?

Mr. President, I state for the record, we are prepared to accept this amendment, provided it waives the Byrd rule for further consideration by the Senate and also waives the Byrd rule as applied only to this amendment in a conference report when it returns to the Senate.

I reserve the remainder of our time.

Mr. President, if the Senator will yield for an inquiry, we are prepared to accept the amendment which specifically says the Byrd rule is waived for this amendment only, and this amendment, if totally unchanged, as it returns from the conference, but only this. But I am informed that--and I inform the Senator--if this goes to conference, any Senator could raise the Byrd rule against the whole report if it remains in there, unless we also waive it as to this section.

Has the amendment been filed?

Mr. President, must it be filed now to comply with the existing time agreement?

Parliamentary inquiry: Can that amendment be amended later, if it is left alone right now?

I thought we had a time agreement to ban second-degree amendments.

Another parliamentary inquiry: Is that amendment subject to a Byrd rule point of order now?

I didn't hear the Chair. Yes or no?

Further parliamentary inquiry: If that is adopted and brought back in the conference report, it would be subject to the same consideration?

Another parliamentary inquiry: That is an amendment to the Cantwell amendment?

It is an amendment to the provisions in the bill.

That is correct.

Mr. President, is it possible to pose a question through the Chair to the Parliamentarian as to whether, if adopted, it would be subject to the point of order under the Byrd rule?

I seem to be hearing that it is because of the condition of the bill right now, that the time has not expired, et cetera. Is the Parliamentarian ruling because of the time situation or giving us an actual ruling now on application of the Byrd rule to this amendment?

Do I have any time remaining?

I will use 30 seconds.

I intend to raise a point of order against this amendment unless it is clearly ruled at the time the vote takes place that the Byrd rule will not apply to this amendment here on the floor of the Senate now, during consideration of this bill, or when the bill comes back as a conference report.

I reserve the remainder of the time.

I am prepared to yield back the balance of our time if the Senator is. I yield back the balance of my time conditioned on the Senator yielding back the balance of her time.

Mr. President, I rise today to join Chairman Grassley in introducing the Hospital Fair Competition Act of 2005.

This bill, based primarily on recommendations of the Medicare Payment Advisory Commission (MedPAC), will improve the accuracy of Medicare's inpatient hospital prospective payment system (PPS); prevent the establishment of new specialty hospitals to which physician-owners can self-

refer, while allowing existing physician-owned specialty hospitals to continue with restrictions; and allow ``gainsharing'' arrangements to foster improved physician-hospital efficiency. This legislation is important for patients, taxpayers, and the Medicare program, and I urge my colleagues to support it.

About 17 months ago, Congress passed the Medicare Modernization Act-- the MMA. This 400-page bill included many important provisions, including long-awaited outpatient drug benefits under Medicare.

The MMA also included a small provision--Section 507--related to the construction of physician-owned specialty hospitals. These facilities specialize in cardiac, orthopedic or general surgical care, and are partly- or wholly-owned by physicians. The provision was a response to growing concerns over physician self-referral, and placed a moratorium on the construction of new, physician-owned specialty hospitals, while ``grandfathering'' existing facilities and those in development.

Having reviewed several independent analyses on this issue, I believe Congress was right to place a moratorium on specialty hospital construction. And I also believe that moratorium should effectively be extended permanently, while allowing existing facilities to continue operating in their current capacity.

Some view specialty hospitals as innovative, focused factories for high-quality, specialized care. Advocates for these facilities say that by focusing on a limited number of services, specialty hospitals provide excellent care at a good price, while adding competition to the health care marketplace.

Others say specialty hospitals flourish because they exploit a Medicare loophole allowing physician-owners to select patients who are healthier and, therefore, more profitable.

For my part, I don't want to stand in the way of innovation or competition. For example, I'm glad that Congress brought innovation to Medicare in the form of outpatient drug benefits. That was long overdue.

And hospitals and physicians should work together in innovative ways to improve efficiency in health care. The U.S. spends twice as much--or more--per-person on health care compared to any other developed country. And yet, our health outcomes are worse than theirs. We should get a better bang for our health-care buck, and we can take steps to that end by encouraging quality and accountability in health care.

That's why I am pushing to advance incentives for quality improvement in Medicare, so patients--and taxpayers--get the most for their money. I introduced legislation last year to require that Medicare pay dialysis providers and Medicare managed care plans based on the quality of care they provide. And I am working on legislation to extend these principles of paying for quality to other parts of Medicare.

As for competition, I'm all for it--as long as it's carried out on a level playing field. But when it comes to physician ownership of specialty hospitals, I'm not convinced the playing field is level. That's because physicians alone choose where patients go on the playing field--either to community hospitals or specialty hospitals. Some liken physician-owners of specialty hospitals to coaches who choose the starting lineup for both teams--in this case, the specialty hospital team and the community hospital team.

And for the third time, a Federal agency has told us that the healthiest teams, that is, the most profitable patients, end up at physician-owned specialty hospitals.

In 2003, the non-partisan Government Accountability Office (GAO) reported that, by and large, specialty hospitals care for relatively healthier patients than their community hospital counterparts. GAO surveyed 25 specialty hospitals, and found that 21 of the 25 had a less acute mix patients than community hospitals. GAO determined that of the hospitals studied, 17 percent cardiac patients seen by specialty hospitals could be classified as severe cases, compared with 22 percent in general hospitals. And about 5 percent of orthopedic cases in specialty hospitals were severe, compared with 8 percent in community hospitals.

Earlier this year, on March 8, MedPAC issued its MMA-mandated report on specialty hospitals, and arrived at findings similar to those of the GAO. MedPAC found that despite shorter lengths of stay, physician-owned specialty hospitals are not more cost efficient than community hospitals. MedPAC found that specialty hospitals tend to treat lower shares of Medicaid patients than community hospitals. And, just as GAO did, MedPAC found that specialty hospitals treat patients who are generally less sick--and therefore, more profitable--compared to community hospitals.

And while the Department of Health and Human Services has not officially issued its MMA-mandated report on the topic--but is expected to shortly--HHS reported on March 8 that, based on the small number of facilities it studied, specialty hospitals tend to care for a healthier patient population than their community hospital counterparts.

I believe the phenomenon of specialty hospitals treating healthier patients is the result of a loophole in the Stark self-referral law. This loophole--related to the ``whole hospital exception''--is one that should be closed. If it is not closed, Congress will effectively sanction the practice of physician self-referral that has been prohibited for years.

In 1989, the HHS Inspector General reported that patients of referring physicians who owned or invested in independent clinical labs received 45% more lab services than Medicare patients in general.

In 1992, a study found that physical therapy visits per patient were 39% to 45% higher in facilities with physician ownership compared to those without. In short, the authors of the study found that utilization and charges per-patient were higher when facilities were owned by physicians with an ownership interest.

In response to these studies and others like them, Congress passed the Stark laws, to prevent physician self-referral, first in the area of clinical labs, and subsequently in 10 other areas, including physical therapy and certain imaging procedures.

But the Stark laws did not address the issue of physician self- referral to specialty hospitals. In part, that's because there weren't many specialty hospitals at the time. As the GAO pointed out in its 2003 report, the vast majority of specialty hospitals were built in 1992 or later.

Instead, the Stark law included a provision that has come to be known as the ``whole hospital exception.'' While the Stark law prohibits physicians with ownership interest in only a hospital department from referring patients to that department, the law does allow physicians to refer to a facility they partially own, under two conditions. First, the physician must have admitting privileges in that hospital. Second, the physician must have a financial interest in the ``whole hospital,'' not just a department of the hospital.

As the GAO explained in 2003:

``The premise [of the whole hospital exception] is that any

referral or decision made by a physician who has a stake in

an entire hospital would produce little personal economic

gain because hospitals tend to provide a diverse and large

group of services. However, the Stark law does prohibit

physicians who have ownership interest only in a hospital

subdivision from referring patients to that subdivision. With

respect to specialty hospitals, the concern exists that, as

these hospitals are usually much smaller in size and scope

than general hospitals and closer in size to hospital

departments, the exception to Stark could allow physician

owners to influence their hospitals'--and therefore their own

financial gain through practice patterns and referrals.''

The problem with the ``whole hospital'' loophole is that it treats a 10-bed surgical facility the same as a 500-bed community hospital, even though that 10-bed facility more resembles a department of the 500-bed hospital than it does the hospital itself. This loophole is unfair, and our bill closes it, by preventing the establishment of new specialty hospitals to which physician-owners can self-refer.

Let me note that our bill does nothing to prevent the construction of new specialty hospitals--as long as self-referral is not part of the business model. Hospitals specializing in one type of care or another have existed in this country for years, and should be encouraged--as long as their owners and referrers are not one and the same.

Opponents of this bill will likely make at least three claims. First, they

will state that preventing the construction of new, physician-owned specialty hospitals is anticompetitive. Second, they will suggest that since the average physician-owner's share in a specialty hospital is small, economic incentives to self-refer are minimal. Third, they will claim the bill thwarts health care quality. Let me take these claims in turn.

As I stated previously, I am all for competition--as long as it's fair. But I don't think it's fair to further a system in which physician-owners can send healthier and more profitable patients to facilities they own, while sending sicker, less-profitable ones to hospitals they don't own. There's a reason Congress acted to mitigate the effects of physician self referral over 15 years ago, and I see no reason why that principle should not be extended to the specialty hospital setting.

On the issue of economic incentives, some argue that physician self- referral to specialty hospitals is a non-issue, since physicians typically own a very small share of a particular facility. In fact, MedPAC found that in about one-third of specialty hospitals they surveyed, the largest share owned by a single physician was just two percent. And as a group, physicians own just over a third of the typical heart hospital. But MedPAC also pointed out that about one- third of orthopedic and surgical hospitals were owned almost entirely by their physicians. Perhaps more important, MedPAC showed that even a relatively small ownership interest can reap large profits for an individual physician investor. Page 21 of MedPAC's March report on specialty hospitals says:

What is the order of magnitude of physicians financial

incentives to increase utilization when they own a hospital?

What follows is a hypothetical example of the marginal profit

associated with a group of cardiologists each referring just

one additional patient (above the current patient load) for

coronary artery bypass graft (CABG) surgery. In fiscal year

2002, the base payment for CABG surgery with cardiac

catheterization (DRG 107) was roughly $24,000. Our

examination of Medicare cost reports and hospital financial

statements suggests that variable costs equal approximately

60 percent of the DRG payment, roughly $14,400. Hence the

marginal profit--payments minus variable cost--would be

$9,600 per patient ($24,000-$14,400). If 10 cardiologists

owned a 3 percent interest each and they all induced one

additional surgery per year, each cardiologist's income would

increase by $2,880 ($9,600 3% 10).''

In other words, even a small ownership share--just three percent--can provide a strong profit motive--and a strong incentive toward self- referral.

Finally, let me address the third claim that will likely be made against this bill--that it thwarts the provision of quality care. Specialty hospital advocates claim that due to the focused nature of their mission, physician-owned specialty hospitals provide better quality and outcomes than their community hospital counterparts. But recently the New England Journal of Medicine published a study showing that patients undergoing certain heart procedures in specialty hospitals were less likely to have coexisting conditions than those being treated at general hospitals. The authors of the study stated, ``. . . given that we found no significant differences in outcomes between specialty and general hospitals with similar volumes or between specialty cardiac hospitals and specialized general hospitals, it could be argued that the specialty-hospital model itself does not yield better outcomes.'' They also said, ``. . . our study provides no definitive evidence that cardiac specialty hospitals provide better or more efficient care than general hospitals with similar procedural volumes.''

In short, there is solid evidence that despite being less efficient, physician-owned specialty hospitals care for healthier, more-profitable patients, leaving community hospitals to care for sicker, less- profitable ones. Economic incentives toward physician self-referral in specialty hospitals are significant. And there is slim evidence that specialty hospitals provide better care than community hospitals.

Given this evidence, it's clear that Congress should not facilitate the construction of more physician-owned specialty hospitals. And while we support ``grandfathering'' existing facilities, let me make clear that we do not intend to create another grandfathering period if the legislation is not enacted before June 8, 2005. The intent of this bill, even if it passes after June 8, is to effectively make permanent the MMA-mandated moratorium.

But this bill does more than simply prevent the establishment of new, physician-owned specialty hospitals. It also takes steps to mitigate ill incentives in the inpatient PPS, by making the PPS more accurate for all providers of hospital care--community hospitals and `grandfathered' specialty hospitals alike.

Medicare spends about $100 billion per year on inpatient hospital services, and it's important that this system be accurate. Accordingly, MedPAC recommended a number of steps to improve the accuracy of the Medicare inpatient payment system. These recommendations should mitigate incentives for all hospitals to choose healthy patients over sick ones, and to focus on some diagnoses at the expense of others.

Medicare pays hospitals for inpatient services based on roughly 500 Diagnosis Related Groups (DRGs), which bundle services needed to treat a patient with a particular disease. DRGs cover most routine operating costs attributable to patient care, including routine nursing services, room and board, and diagnostic and ancillary services. Under current law, just over five percent of the base payment for all DRGs is set aside for inpatient outlier payments, even though some DRGs have almost no outlier cases. The Hospital Fair Competition Act directs the Secretary to adjust the DRG relative weights to account for differences in the prevalence of high-cost outlier cases, thereby removing their disproportionate impact on the payment system.

The bill also improves accuracy of the DRG weights. Currently DRG weights are based on the national average of hospital charges for a particular DRG. The rate of growth for these charges may vary dramatically, depending on the service. For example, MedPAC has found that hospital markups for ancillary services (e.g., supplies, operating room time) tend to be higher than those of routine services (e.g., room and board, nursing care). As these ancillary and routine charges grow at different rates, the DRGs reflect that growth, gradually skewing the system away from the true costs of providing care. In short, a charge- based system causes Medicare to pay too much for some services, not enough for others. The Hospital Fair Competition Act directs the Secretary to substitute the charge-based system with one based on hospitals' costs, as well as base the DRG weights on the national average of hospitals' relative values in each DRG.

Mind you, we believe that the Secretary currently has the authority to make the payment changes outlined above. The Hospital Fair Competition Act simply directs the Secretary to do so. We also believe the Secretary has the authority to promulgate regulations defining what a ``whole hospital'' is. When Congress passed the ``whole hospital exception'', it did not intend to allow self-referral to facilities that are effectively the equivalent of a hospital wing or department. We believe the Secretary can and should exercise his authority to close the ``whole hospital'' loophole by regulation.

Mr. President, some say that the proliferation of physician-owned specialty hospitals is a function of physicians' desire for control over their workplace. They argue that physicians typically have no say in day-to-day hospital operations, and thus little incentive to improve the quality or efficiency of the care they provide in the hospital. MedPAC's recommendations for ``gainsharing'' stand to alleviate some of that concern, by giving physicians more control over their workplace.

Gainsharing arrangements allow physicians and hospitals to improve hospital efficiency without the undesirable effects of physician self- referral. In a gainsharing arrangement, hospitals and physicians share cost-savings gained by means such as streamlining the purchase of medical devices, substituting less-costly items used in surgical procedures, and maximizing operating room efficiency. While gainsharing arrangements must be developed carefully so as not to compromise quality of patient care, gain sharing has the potential to align physician-hospital incentives so that care

can be delivered in the most cost-effective manner.

I realize that gainsharing arrangements are not a panacea toward improving physician-hospital relations. We can and should do more to give providers of all types a better stake in improving their workplace and the quality of care they provide. That's why I am pushing initiatives to tie Medicare payment to quality, so that--unlike the current system--the best providers are not paid the same rates as mediocre ones. This system of paying for quality stands to improve accountability across the spectrum of Medicare provider types, and give both patients and the government more for their money.

We all know that Medicare's long-term fiscal future is much in doubt. Hardly a day passes without a warning about Medicare's finances and the retirement of the Baby Boom generation that will complicate the long- term financial picture of the program.

Given these warnings, it's imperative that we make the most of the resources at hand, and--where possible--make Medicare a better more responsible buyer of health care. By leveling the playing field regarding patient referrals; improving the accuracy of Medicare's inpatient hospital payments; and giving physicians a larger stake in their hospital workplaces, this bill stands to do that.

Chairman Grassley and I believe these changes will go a long way toward improving much of what ails hospital payment under Medicare, and we urge our colleagues' support for this important legislation.

Is the Senator finished? I notice she is still standing.

I don't think there is any agreed-upon order.

Is it correct that the Senator from New Mexico may proceed on the hour in opposition to the amendment at this point?

Mr. President, I have a number of Senators on this side of the aisle who wish to speak, and they certainly are going to have their turn. I thank the occupant of the chair for being here this morning.

Obviously, this is an issue that some people think is very important to the State of Alaska, and there is no question that it is. But this is an issue that is important to the American people. Every day Americans are worried about our future. We just saw hurricanes in the States of Alabama, Texas, Louisiana, and Mississippi shut down oil production in that part of the Nation. All of a sudden, America found out that when we have that much less oil--the amount that the hurricanes took off the market--everything happens for the worst for America.

I want to start with a simple proposition. The minimal amount expected to be received by the U.S. people from ANWR is about equivalent to all of the oil that was shut down by the hurricanes. Just think of that. Everybody was listening to televisions were talking about and, newspapers were printing all of the oil rigs onshore and offshore that produce energy for America that were shut down causing this enormous problem for America. One estimate is that ANWR will yield that much oil or more, which is a pretty good starting point.

I am not going to go into much detail about this ANWR language that was produced by the Energy and Natural Resources Committee in response to a budget request made by the full Senate, and I am not going to talk about the $2.5 billion estimate, other than to say I do not believe anybody is going to challenge it successfully before the Senate. It has been arrived at by the Congressional Budget Office, the authenticator of numbers for the Senate. That number is not dreamt up. This is not the White House, this is not the Energy Committee, this is not the Alaskan Senators; this is the Congressional Budget Office, an independent entity that is supposed to do estimates that we assume should be used by us.

They say the legislation, as drafted, will produce at least $2.5 billion over the period of time recommended by the budget instructions.

That makes it relevant to the budget reduction bill that is before us. It will, when it happens, because of the bids that will be made, reduce the deficit by $2.4 billion. That makes it relevant to a big deficit reduction package of all of the actions that exceeds $39 billion.

Having said that, let me then say, since it is important and it is relevant

and it will yield revenues to the Federal Government, the next point I wish to make is how many votes are going to be required to pass this ANWR legislation. This is a majority-vote situation. Some say: Oh, this is not the right way to do it. We should leave it under what they call the normal proceedings. Normal proceedings would, I say to the opposition, require 60 votes, and we have done something that will only require a majority vote.

I ask the American people who are listening and those who are concerned about this, What do you as Americans expect the Senate to do when they are voting on a measure that affects the American people? Since your first and early days of being educated about the American system, did you not assume that a majority of Senators voting would pass a measure in behalf of the American people? Isn't that what we thought was the rule, 51 votes wins? They say: No, you shouldn't let this great reserve of oil that belongs to us, that we ought to use, you shouldn't let 51 votes pass it. You ought to use 60 votes under some filibuster rule.

The rules of this Senate say you do not filibuster this kind of bill. You go back to the old American way of voting, and 51 votes prevail.

I hope, finally, after decades of work, that we are rid of the 60- vote impediment to getting these assets, these reserves, these resources opened up for our people, and we are back to the old- fashioned 51-vote approach, and that finally America will say: These are our resources, they belong to us, and we ought to go up there and, under as strict environmental laws as can ever apply, because they are the American laws, produce oil there.

To put it in perspective as to how much property we are going to affect, if this bill, as propounded by the Committee on Energy, is passed by this Senate, we will use up to 2,000 acres. It will not be in one place. It will be in various places, but it will be 2,000 acres.

Mr. President, that is 2,000 acres out of a refuge that is being talked about regularly as something that we should preserve and keep for posterity, and this Senator--and I believe everyone who favors ANWR--says: Amen, preserve it.

How big is it? It is 19 million acres. And 2,000 acres, I say to the Senator from Illinois, are going to be used. The refuge is 19 million acres. I don't want to draw conclusions from that. People can see themselves, 2,000 acres. Or can they? I guess you can't even see it. Mr. President, 2,000 acres out of 19 million acres is hardly visible.

We can see the Arctic National Wildlife Refuge on this chart. The ANWR Coastal Plain is in green. The proposed development is that little tiny red square. I don't know if the TV cameras are good enough to see it, but that is the 2,000 acres, 3.13 square miles. It is on the green piece on the chart. That is the size of a piece of real estate out of that entire area--the green, the yellow, and the orange--that will be used for the production of oil out of ANWR.

I cannot believe the American people--if they understand after this debate is finished that that is what we are talking about--could conceivably believe that this vote should fail today and we should continue to say: Everything is wonderful in America. We can get our oil from Saudi Arabia. We can get it from Mexico. We can get it from around the world. But don't bother to get it from America. It is just not what we ought to do.

This country of ours has become dependent on our own States getting 80 percent of our oil from four States: Texas, 22 percent; Louisiana, 21 percent; California, 18 percent; and Alaska, 20 percent. That is just the way it is.

So, fellow Americans, our future, as far as American production, is tied to those States. We do have some new finds in the West, and they are exciting, but they are not going to be anywhere close to this.

Incidentally, mentioning Texas, some people say this is not very much oil. I heard somebody mention that the 10 billion barrels that are going to be produced there is not very much. Let me tell you how much it is: It is equal to the reserves of Texas. So for those who think it is not very much, maybe we ought to say to the American people the entire production of Texas is not very much. Maybe we could say we don't need the oil from Texas. If we go out there and find we don't like the way it is produced, just shut it down. It isn't important. There would be absolute turmoil in this country if somebody said, Take the oil from Texas and close it down, we don't need it; it is just what Texas produces, and we don't need it.

So the American people understand, when this 2,000 acres is producing, it is estimated by reliable estimators that it will cause the reserves under the ground to be the equivalent of those in the State of Texas. That is a pretty big piece of the oil future of the United States.

Let me talk a minute about a couple of other things that happen when you open ANWR. First, in the United States these days, we are all wondering what is happening to American jobs. How come everything is going overseas? How come the American working man, the American construction worker who used to make good money--how come there is not enough work in that field? How come big construction projects are not being done here anymore? How come it is just reported that out of the over 400 chemical plants that are worth more than $1 billion, each that is being built in the world, one of them is being built in the great United States of America and the rest of them all over the world? We are asking ourselves, What is happening to our country? What is happening is we do not develop our own resources, and thus they are developed elsewhere and there are no jobs in America to produce what we have.

I have another chart here behind me, and then that will be all that I will use. This is one prepared by the Wharton School. Some will say, and I will answer before they do, that this chart was produced a few years ago. It was. But do you know what Wharton School did when they produced it years ago? They used $55 a barrel. People on the floor of the Senate said: Throw it way. At $55 a barrel, they have to be wrong. We just asked them 2 years ago: Would you please bring it current? They said: Now we know we are right. We estimated $55, and I will tell you today it is $59-plus on the market in the United States. So the Wharton study is certainly as good as we can get.

Look what it says. If you develop ANWR, the United States of America, for Americans, will produce 128,000 manufacturing jobs; mining, including oil--all high-paying jobs--84,000; trade, 225,000 in various trade activities; the service industry, 145,000; construction per se, 135,000; and then a combination of finance, real estate, and others, which is that FIRE, 19,500. The total is 736,000 jobs.

Has anybody produced such a bill on the floor of the Senate? We say let's have a jobs bill. We introduce a bill to train people who are unemployed so they can go to another job. We introduce a bill that says when people are laid off, we will train them for another job, and this will produce a big number of jobs. Has anybody ever introduced a bill, had a proposal, made a suggestion, argued in favor of--anything on the floor of the Senate that could produce 736,000 jobs, new jobs for the people of the United States? Of course not, because we do not produce jobs in the Senate. We don't produce them with bills, either, job training bills. We produce them when we do things or eliminate things that cause entrepreneurial investment activity that produces wealth, and with wealth, jobs.

That is what we have here, no doubt about it. At $50 a barrel, which is the Wharton study, that is what it will yield. Anybody who thinks that by the time we get to ANWR it will not be $50 a barrel and it will not yield this I believe is hiding under their Senate desk as they vote no here in the Senate as far as ANWR is concerned.

Having said that, I want to take 3 minutes and tell the Senate about an experience I had. I went to Alaska, after many years. My friend, the occupant of the chair, and our new Senator from Alaska recently pushed me to do it. I went in about March of last year. It was awfully cold. I know that. I have one great picture--I cannot believe I survived.

But what I saw, every Senator who is against this proposal ought to honestly go see what is going on. There is one production pad called Alpine. In its completed stage, it is 60 acres of property. In its completed stage, it is 60

acres. On that 60 acres is the production capacity for 150,000 barrels a day. Got it? That is 150,000 barrels a day. The 60 acres, when we saw it, was solid ice. It had oil wells on it that were drilled, many of them, in less than 1 year, all close together, many of which were vertical and horizontal, meaning you drill a well down and then go out sideways and you go out for 3 or 4 miles, 5 miles. When we get around to ANWR, they are going to be drilling out 10, 15, 20 miles. So from one piece of real estate which we are worried about we will get literally scores of underground wells producing oil that is coming to the surface, unified, and then put in a distribution facility and delivered.

All of that work will be done in the dead of winter--the trucks, the tractors, the moving things, the supplies, all come on winter roads. We were there, so we could see the winter roads.

When the summer comes, the ice melts, the roads disappear, the tundra is right back where it was, and Alpine, the 150,000-barrel production wells are there, covered by whatever covers them from the weather, and out comes a spout from which the oil goes on stakes that hold up the pipeline, and there it is, delivered to a source to go to be used by Americans as they need oil to live, survive, make a living, and keep up their standard of living.

Some say we should not be dependent upon crude oil and carbons in the future. I submit there is nobody suggesting that we know how to get off of the transportation system we are currently using, in the short term. We are going to be on that for some time, even when we engage in the largest program we can, in terms of new ways to get our mobility, whatever it is--maybe hydrogen engines. It is going to take us many years, during which time we are going to import oil from overseas in huge quantities and send American bounty to foreign countries, greatly increasing our foreign trade balance, by the billions of dollars, all because we send our money overseas to acquire oil.

I beg the Senate to once and for all do the right thing regarding our future. Say no to sending more of our resources overseas. Say no to fewer jobs for the American people for the future. Say yes to the unions of the United States that represent these workers who are here en masse, begging us to pass this so they will have jobs. Say yes to American business that is frightened about our competitive future, and say at least we are going to take one step forward, not another step toward complacency, toward not caring about our future and standing on principles that are not applicable today.

We know how to drill for oil without damaging the tundra, without damaging the surface to any significant degree. We ought to say yes, today, to a very good budget reduction bill which in its totality will reduce the budget $39 billion--not a little pittance--of which ANWR will yield $2.5 billion. That is not too shabby a number.

It will require 51 votes for those who want to take this out. In the end, we will need 51 votes to pass the bill. I believe that is fair. It is such a huge resource for America. It should be passed or denied not by 60 votes but by 51 votes, the majority vote in the United States. Argue as you may in opposition to this. This is not the way to do it. Then what do you say the way to do it is? To require 60 votes? Who ever heard of that as an American principle? That is a procedure that does not apply here. The Senate has said it doesn't apply here. The old American way of 51 votes applies, and that is why we are here.

I want to close in one rebuttal. We are going to hear a lot that this oil doesn't do much. Whenever the amount of oil produced is equated to the total American picture, I want to answer it this way: Accepting a mean calculation of 10.4 billion barrels of oil in ANWR, it would supply every drop of oil for the entire State of Florida for 29 years. Hear that, the entire State of Florida for 29 years; the entire State of Arkansas for 146 years; Hawaii, 249 years. We will not be using oil that long, but people should surely get an idea that this is a pretty significant resource for our country.

I thank all those who helped put this bill together in our committee. I hope sometime during the day we will have a vote and it will be a vote where we say, for a change, we believe in America's future and we are going to do something about it.

I yield the floor.

Parliamentary inquiry, Mr. President.

How much time remains?

Senator, you have 26. We have 3. I would yield the floor, hoping that you all would speak, if you have more opposition. You have plenty of time. We don't have but 3 minutes.

Mr. President, I have only 3 minutes remaining, but I want to yield that 3 minutes to Senator Sununu, and then I will yield the floor for the other side to continue.

We understand it, and there is no objection.

Reserving the right to object, I want to ask a question. With reference to the pending amendment, would you refresh my recollection here, Senator Talent has a right to offer an amendment?

Is that the time in which it would be debated?

We have no additional time. Has that been checked with him?

I am not sure.

I reserve my right to object only because I am not sure that is what he wants.

Is there any way the Senator can fit it in later on for 10 minutes?

Is that the only other amendment in the list that applies to ANWR? On that list?

Even though Senator Cantwell has an extra 5 minutes, is it all right that we go and the Senator accumulate that time?

I yield myself 3 minutes, and then I will yield the management of the time to the senior Senator from Alaska for the remainder of our time.

I want to respond to one of the issues raised by pointing to the map here. I have conferred with the Senator from Alaska and others about this Coastal Plain. If you see, it is in green and you see these words, it says:

Not wilderness. Creation of the coastal plain oil and gas

exploration area.

This little box is within that, 20 acres. It is not within a wilderness area. It is not a wilderness. It was established by President Eisenhower, and contrary to what was said on the floor, it was done that way for the very reason it was thought to have an abundance of natural resources; to wit, oil and gas. Therefore, it was set aside for an exploration area, the future use of which was to be determined by the Congress.

Isn't that interesting? Contrary to what has been said, we are doing exactly what President Eisenhower's set-aside intended. It intended it to be an oil and gas exploration area, for that purpose, to be determined in the future. By whom? Us. The very thing we are doing here.

My last observation: For anybody in the United States who is worried about America and its natural gas future, its natural gas price that is going through the roof, that this particular winter Americans are going to be terribly upset when the price goes up dramatically, with gasoline at the pump so high. It was a month ago that Americans were beginning to worry about their future. It is interesting to note that the State of Alaska, one of ours--not Russia, not some country that we don't know about--actually contains sufficient natural gas that if we would have been on our toes, we would have had sufficient natural gas from our own State to where this crisis would not be occurring.

There are a lot of reasons. But one of them is the constant carping that we can't do it because of environmental reasons, when we can. We know how to do it. We do not have to destroy the wilderness. We don't have to destroy the tundra. But if we keep doing what we are doing, we can destroy our economy. That is the issue.

I am pleased to be part of this. I hope we will vote before the day is out on this issue, and we will finally prevail. I yield the floor.