Gulf of Mexico Energy Security Act of 2006
Legislative Activity
Stay on top of the latest movement without scrolling through every action
Held at the desk.
August 2, 2006 • 12:44 PM
View full timeline
Introduced in Senate
July 20, 2006
Introduced in the Senate. Read the first time. Placed on Senate Legislative Calendar under Read the First Time.
July 20, 2006
Read the second time. Placed on Senate Legislative Calendar under General Orders. Calendar No. 529.
July 21, 2006
Motion to proceed to consideration of measure made in Senate by Unanimous Consent.
July 24, 2006
Cloture motion on the motion to proceed presented in Senate. (consideration: CR S8134-8135; text: CR S8134)
July 24, 2006
Motion to proceed to consideration of measure withdrawn in Senate.
July 24, 2006
Motion to proceed to measure considered in Senate. (consideration: CR S8211-8216)
July 26, 2006
Cloture on the motion to proceed invoked in Senate by Yea-Nay. 86 - 12. Record Vote Number: 217. (consideration: CR S8215-8216; text: CR S8215)
July 26, 2006
Motion to proceed to consideration of measure agreed to in Senate by Unanimous Consent. (consideration: CR S8329-8339, S8341-8361)
July 27, 2006
Measure laid before Senate by motion.
July 27, 2006
Cloture motion on the bill presented in Senate. (consideration: CR S8334; text: CR S8334)
July 27, 2006
Considered by Senate. (consideration: CR S8423-8444)
July 31, 2006
Cloture invoked in Senate by Yea-Nay Vote. 72 - 23. Record Vote Number: 218. (consideration: CR S8437; text: CR S8437)
July 31, 2006
Considered by Senate. (consideration: CR S8482-8483, S8485, S8486-8489, S8492-8513)
August 1, 2006
Passed Senate without amendment by Yea-Nay Vote. 71 - 25. Record Vote Number: 219. (text: CR S8511-8513)
August 1, 2006
Received in the House.
August 2, 2006 • 11:04 AM
Message on Senate action sent to the House.
August 2, 2006
Held at the desk.
August 2, 2006 • 12:44 PM
Voting History
3 votes recorded • Roll call available
SENATE
Roll Call AvailableAugust 1, 2006 at 5:09 PM
On Passage of the Bill S. 3711
Majority required: 1/2 (50%)
71 - 25
SENATE
Roll Call AvailableJuly 31, 2006 at 5:31 PM
On the Cloture Motion S. 3711
Majority required: 3/5 (60%)
72 - 23
SENATE
Roll Call AvailableJuly 26, 2006 at 10:05 AM
On the Cloture Motion S. 3711
Majority required: 3/5 (60%)
86 - 12
Floor Debate
22 membersWhat members said about S. 3711 on the floor
JB
MLL
PVD
LM
LEC+17
Floor Debate
22 membersWhat members said about S. 3711 on the floor
Mr. President, how much time remains on the two sides? Let me speak for a few minutes to give my view of the legislation. First, let me just say energy issues are very much on the minds of the…
Mr. President, how much time remains on the two sides?
Let me speak for a few minutes to give my view of the legislation.
First, let me just say energy issues are very much on the minds of the American people. Rightly so. We have oil trading at above $75 a barrel. We have the price of gas at the pump above $3 in most parts of this country today. Clearly there are a lot of explanations for that, but that is part of the reason we should be focusing on this set of issues.
We have high and growing demand for energy in the world. We have high prices because not only do we have high demand, we have constrained supply, and we have great uncertainty in the world. All of that affects the price of oil and the price of natural gas as well. Whether the uncertainty is in the Middle East, whether it is in the Nigerian Delta, whether it is threats of curtailed imports from Venezuela--there are all kinds of reasons the price of oil is high.
We need to focus on how do we begin to pursue a strategy that helps solve these problems. The truth is, our country is on the wrong track when it comes to oil and gas. According to the Energy Information Administration Annual Energy Outlook, our projected future demand for oil and natural gas is going to far outstrip our domestic production capabilities, and that circumstance is getting worse, not better. All of the projections are that after the passage of this bill, it will continue to get worse, not better.
We have the opportunity, the Members of the Senate and Members of Congress, to try to make some decisions to get the supply/demand equation better into balance. How can we use oil and gas more efficiently and thereby need less than the projections would indicate we might wind up needing? How do we substitute the alternative fuels in our energy mix on a faster basis, on an accelerated basis? How do we produce more and how do we find ways to be more efficient?
A year ago this coming Saturday, we had final passage of the comprehensive Energy bill we passed last year, the Energy Policy Act of 2005. On balance, I believe--I still believe and believed at that time--that was a good piece of legislation. Mr. President, 74 Senators voted for it. We had a majority of Republicans voting for it. We had a majority of Democrats voting for it. The bill was put together on a bipartisan basis in the Senate Energy Committee under the leadership of its chairman, Senator Domenici, from my home State of New Mexico.
When the bill came to the floor, of course, Senators on all sides of the many issues in that bill were given an opportunity to bring their amendments to the floor, to debate those amendments, to have them voted on, and despite the broad sweep of that legislation, we completed that process in 2 weeks.
After passage of the bill, we went ahead and had a very fair and open and inclusive conference with the House of Representatives that resulted in a conference report that enjoyed broad, bipartisan support.
The Energy Policy Act addressed energy production. It addressed energy conservation. It addressed energy technology and renewable energy, and it addressed oil and gas and coastal impact assistance, including assistance to the States which are most interested in this legislation. It made significant strides in the right direction on a host of issues.
I had hoped, frankly, that we could continue to move forward in the energy policy area this year by acting on a series of measures to address the remaining issues. There are clearly remaining issues that need attention. One of those is the lack of effective steps to increase efficiency in the use of oil and natural gas.
We did not do what we should have done in last year's Energy bill to deal with that issue. The Senate version of the bill had some good ideas in it. Unfortunately, they were dropped in the conference. We were not able to persuade the House to agree to those. For that reason, this past May, I joined with a bipartisan group here in the Senate to introduce S. 2747, the Enhanced Energy Security Act. That bill addresses oil savings and alternative fuel infrastructure and provides for a renewable portfolio standard and various other efficiency and conservation measures.
Another energy measure I hoped we could act on this year is S. 2253. That is the bill which would have required the Secretary of the Interior to offer for lease lands within this original lease sale 181 area we have been discussing as part of this legislation. Early this year, I joined with Senator Domenici to develop and introduce the bill on a bipartisan basis. The bill would have opened portions of the original lease sale 181 area that had been proposed for leasing in 1997 by the Clinton administration. That proposal by the Clinton administration was made after negotiations with then-Governor Lawton Chiles, our former colleague here in the Senate, Governor Lawton Chiles from Florida.
Those areas had been taken off limits by a decision by the Bush administration. I think some may not realize that we would not even be here today talking about opening lease sale 181 for possible drilling if the Bush administration had followed through on the Clinton administration's schedule for leasing. They proposed to do that, and it was on their schedule when this administration came into office.
The bill Senator Domenici and I introduced did nothing to affect areas under congressional moratoria or areas that had been withdrawn by Presidential decree or order. No part of the area to be leased was closer than 100 miles from any point in Florida.
We have a map here that will give people an idea of what was involved with lease sale 181. This is the bill which was reported out of the Energy Committee with bipartisan support. You can see the line there, which is the 100-mile line, showing we are not getting within 100 miles of Florida and showing the additional area that would be open for leasing.
I should point out that between the time Senator Domenici and I introduced S. 2253 and the date our committee had a hearing on that bill, the administration published its own draft proposed program for oil and gas leasing for the period 2007 through 2012. That 5-year plan called for a lease sale in the 181 area in the fall of 2007. The area the administration proposed for leasing contained about 3.07 trillion cubic feet of natural gas and 620 million barrels of oil.
The current state of play under current law is that even if this legislation does not become law, the administration plans to open that area for leasing beginning in the fall of 2007. It was good news when we learned the administration intended to proceed to lease this new area. It meant that a substantial new development of oil and gas would take place even if we didn't succeed with the bill Senator Domenici and I introduced.
At the hearing we had on S. 2253, I asked the Director of the Minerals Management Service, which is the agency with responsibility for this leasing, Ms. Johnnie Burton, whether the administration's plans would wind up coinciding with what the bill envisioned if passage of the bill was delayed. She replied that that certainly would be the case.
After the Energy Committee reported the bill in early March, we received additional evidence that the plans for leasing new areas in this draft 5-year plan were on fairly solid ground, and the new evidence was that the Congressional Budget Office booked the expected revenues from royalties and bonus bids in the budget baseline for this 10-year period, 2006 through 2016.
Even though a good portion of the oil and gas contemplated in the original bill reported by the Energy Committee was incorporated into the developing plans of the Minerals Management Service, I thought it made sense that with the balance of the initial area
opened by S. 2253, we go ahead with the bill and try to enact it. Unfortunately, at least from my perspective, events since the committee reported the bill to the full Senate have changed the bill in very substantial ways. In my view, this is not the bill that we worked on in committee. Several of our colleagues in the Senate took the position that S. 2253 should not move forward without certain modifications.
My colleagues from Florida expressed a desire for a long-term moratorium off the coasts of their State. My colleagues from other Gulf Coast States indicated that they would object to S. 2253 being considered without those States receiving a fixed percentage of the revenues from the oil and gas produced in the Federal Outer Continental Shelf off their coasts.
Both of these demands, which were satisfied in this bill, which has now come to the Senate floor, S. 3711, in my view, have undermined the goals of the original bill. Because S. 3711, which is the bill now pending in the Senate, locks up vast areas of the Outer Continental Shelf off Florida, and because the bill provides for the ceding to 4 of our 50 States billions of dollars of Federal revenues, I find myself in the position of having to oppose the bill.
The chairman of the Energy Committee will point out that S. 3711 opens two new areas in the Gulf of Mexico. That is true. Beyond the area proposed for opening by the new 5-year plan that I talked about, Minerals Management Service, S. 3711 opens a triangular sliver in the area known as ``the bulge.'' You can see that sort of orange area on here. That is new under this legislation. The legislation also opens the so-called 181 south area, which is currently under a congressional moratorium that expires this September 30.
There is also a Presidential withdrawal for that area which is 181 south. That is the lighter orange area down below the area that we have been talking about.
In order to get these additional resources that are provided for in this bill, which amounts to 2.76 trillion cubic feet of gas, S. 2711 puts 21.83 trillion cubic feet of natural gas in the eastern Gulf of Mexico off limits until 2022.
I don't think it is a very good trade for the people of America for us to give up access to 21 trillion cubic feet of natural gas in order to gain access to 2.76 trillion cubic feet. Some of that 21 trillion cubic feet of natural gas that is being put under a 16-year moratorium in this bill is in areas that have never been controversial in Congress. These areas were part of the original lease sale 181 area that every annual congressional moratorium had exempted.
We are talking about this entire yellow area. I think this chart is very similar to the chart that the Senator from Florida, Mr. Martinez, has been using. It shows a very much larger area that is being subjected to this 16-year moratorium than we have ever put under moratorium before.
These yellow moratorium areas that are within the blue of the original lease sale 181 area shown on the chart, these three resource- rich areas are not now under moratorium. If Congress does not enact S. 3711, these areas could be leased under the next 5-year plan, if the administration decided to include them, instead of being locked up until 2022.
Let me, also, for a moment show a chart that our colleague, Senator Craig, was using earlier this afternoon. He has a chart showing what is happening south of the area that we are locking up for the next 16 years. This is the thatched area down near Cuba. I think looking at his chart sort of brings home the unfortunate handicap we are putting ourselves under with this legislation. In fact, Senator Craig's bill, of which I am a cosponsor, would allow U.S. oil companies to participate in the development of this thatched area, the oil and gas resources in this thatched area down near Cuba, some of which is as close as 50 miles from the State of Florida. But at the same time in this legislation, we are saying we are going to prohibit drilling for the next 16 years in areas as far as 230 miles from the State of Florida. To my mind, that doesn't make good sense.
It would be ironic if Cuba proceeded with drilling in its waters to extract at least 4 billion barrels of oil under its territory, while at same time we were passing legislation saying there would be no drilling in the waters we control through 2022. That is exactly what this legislation says.
Referring again to Senator Craig's statement, he talked about the ``no zone''--the large ``no zone'' all around the country, where nobody wants to allow drilling. I will say we are adding to the ``no zone'' very substantially with this legislation by putting in this yellow area areas that had not been subject to moratorium and certainly have not been subject to anything such as a 16-year moratorium, as we are about to enact here.
In addition to being bad energy supply policy for the long term, S. 3711 is also, in my view, bad fiscal and budgetary policy for the long term.
The bill directs, as I think many have mentioned, 37.5 percent of revenues from new leases to the four States, Texas, Louisiana, Mississippi, and Alabama. Starting in 2017, a second royalty diversion using the same percentage would be applied to new leases in existing areas of the Gulf of Mexico open to production.
We have a chart which makes the case as to what we are talking about. We are saying, in the western Gulf of Mexico and the middle Gulf of Mexico, that we are, in fact, going to cede 37.5 percent of the royalties from production on new wells in those areas to these four States as well; that those are funds which otherwise would go into the Federal Treasury.
In order to avoid a point of order under the Budget Act, S. 3711 purports to cap the revenue sharing, from 2016 to 2035, at $500 million per year. And then it has a very interesting provision. It says ``net of receipts.'' Rather than actually capping the revenue sharing, the bill allows receipts from the 181 and the 181 south area to be added to the $500 million cap. That makes the so-called cap, in my view, at least much higher. However, even with the cap, the amount flowing to the four Gulf States is estimated to be somewhere between $27.5 billion and $30.5 billion during this period. After 2056, the full entitlement comes into play with estimated losses to the Federal Treasury of between $12.5 billion per year and $15 billion in 2056 alone.
This underscores the point which people need to understand--that this legislation calls for this sharing of revenue or ceding of revenue to these four States in perpetuity. This is not in any way sunset. There is no time limit. This is from now on. The legislation says these States will be entitled to the money.
As many of my colleagues know, I have strongly opposed diverting revenues from the Outer Continental Shelf. It is clear to me, in reading the history of this country and the laws of this country, that this is a Federal asset and that ceding of these revenues to State and county treasuries of coastal States is bad policy. The resources of the Outer Continental Shelf belong to the entire Nation. Over the years, there have been several attempts by coastal States to assert some form of ownership rights over the Outer Continental Shelf. In the 1940s, coastal States tried to issue leases to oil companies in these Federal waters. That led to a landmark decision in our Supreme Court in 1947. The Supreme Court ruled in 1947 that offshore lands were, and always had been, owned by the United States as a feature of its national sovereignty.
Having been stopped by the courts, the States turned to Congress to request that it turn these so-called submerged lands over to the States themselves. President Truman strongly objected to this. He vetoed the legislation that was sent to him. Let me read the quotation from his veto statement. He said that he could not:
approve this joint resolution because it would turn over to
certain States as a free gift very valuable lands and mineral
resources of the United States as a whole; that is, all the
people of the country. I do not believe such an action would
be in the national interest. I do not see how any President
could fail to oppose it.
That was the basis for his very veto.
President Truman left office and Eisenhower took a different view. He signed the Submerged Lands Act of 1954 that granted the coastal States title to submerged lands within 3 miles of their coasts.
Later that year, Congress also passed the Outer Continental Shelf Lands Act, asserting Federal control over the subsoil and the seabed of the Outer Continental Shelf. The legislative history of
these acts is clear. They were intended as a final settlement of the issue of who owned what on the Federal Outer Continental Shelf.
In recent years, as the resources of State waters which were granted under the 1953 act have been depleted, and as the great resource potential of the Federal waters has come into full review, a new drumbeat has arisen. The claim is that coastal States should have a preferential share of the resources of the Outer Continental Shelf over and above other States that, under current law, are equally entitled to these receipts, and under the Supreme Court's view are entitled to these receipts.
We are not talking about trivial sums of money. Oil and gas receipts from the Outer Continental Shelf are the third largest source of income to the United States after taxes and Customs duties.
Over the next several decades, it is estimated that oil and gas royalties from the Outer Continental Shelf will exceed $1.2 trillion. As we look to the future, a future in which we will have large bills coming due at the Federal level, with the retirement of the baby boomer generation, it is unwise, in my opinion, to consider permanently diverting these revenues away from the Federal Treasury to these four coastal States.
I have often heard the argument that we ought to give a percentage of Federal royalties to the Outer Continental Shelf, to the nearby States because Western States, such as my own, New Mexico, receive a portion of the royalties from the Federal lands within their borders.
Let me address what I believe is a false comparison head on. The first obvious point is that the Mineral Leasing Act which has been adopted made provisions for my State to receive 50 percent of the royalties for production on Federal lands. This Mineral Leasing Act does not discriminate against Louisiana, Mississippi, or any other coastal State. To the extent that the Federal Government reduces oil and gas and collects royalties on Federal land within their borders, the Federal Government pays 50 percent of those revenues to the States just as they do in my State, just as they do in Wyoming, just as they do in every other State in the Union.
Indeed, according to the Minerals Management Service, between 1982 and 2003 the Federal Government distributed $14.8 million to Louisiana from onshore Federal leases under the Mineral Leasing Act. The reason Louisiana did not get more was because there is very little Federal land in Louisiana that produces oil and gas. Most onshore oil and gas development in Louisiana takes place on State or private land and not on Federal land.
Louisiana, like any other State, receives 50 percent of the royalties collected by the Federal Government from Federal oil and gas leases. Western States, such as New Mexico, and eastern States have very different histories when it comes to patterns of life ownership. A long time ago, in the 19th century, a large part of States such as Louisiana consisted of public land. But the laws at that time allowed that Federal land to be patented and bought into private ownership or given to the State where it now forms the tax base for those States. That explains why there is relatively little Federal land in a State such as Louisiana. The State enjoys the ability to levee taxes, including severance taxes on all the oil and gas that is produced within the State, which is considerable.
The development of the western States took a very different turn in 1920 when it became clear that there was a significant amount of Federal land that had oil and gas potential. Instead of allowing that land to be patented and brought into private ownership under the mining laws, as had happened in earlier years in States further east, Congress passed a new law--and that is the Mineral Leasing Act I was just referring to. This act forges a very different bargain.
In return for keeping the lands with rich oil and gas resources under Federal ownership, therefore, out of the State's tax base, the Federal Government agreed to give the States a share of the Federal royalties as compensation for the lost tax revenue involved. This compromise represented no injustice to any State that had previously had all of its Federal lands converted into private land through land patents. These eastern States already had what the western States were giving up; that is, the ability to tax all of the economic activity within their borders.
If you read the legislative history of the Mineral Leasing Act of 1920, it is clear that the split of revenues between the Federal Government and the State governments was in compensation for removing lands from the tax base of the States.
So when you recognize the reason for the 50-50 split of royalties on Federal lands within the boundaries of States under the Mineral Leasing Act, it is clear to me that transposing this system to the Outer Continental Shelf makes absolutely no sense. Federal ownership of the Outer Continental Shelf takes nothing away from the tax base of any coastal State. To the contrary, Federal development of national assets on the Outer Continental Shelf actually results in enhanced economic activity, increased tax revenues in adjacent coastal States.
One report that illustrates this fact is published in 2002 by Louisiana Midcontinent Oil and Gas Association. It is entitled ``The Energy Sector Still A Giant Economic Engine for the Louisiana Economy.'' That title is a pretty good thumbnail description of the true impact Outer Continental Shelf activity has on the Gulf Coast States. That activity is a giant engine for their economies.
Here are some of the facts in that report. The report says the energy sector has a $93 billion impact in Louisiana and employs 62,000 people. The energy sector in Louisiana supports $12.5 billion in household earnings. It pays $1.14 billion in State taxes. Workers employed by the offshore oil and gas industry can expect to earn salaries between $75,000 and $100,000 a year. That was in 2002 when the report was issued. Oil exploration and production value-added income already exceeds $17 billion and refined value-added income is nearly $5 billion.
The same facts can be told for each of the coastal States that border the Gulf of Mexico. They derive substantial economic benefit from their strategic location next to these oil and gas deposits that are still owned by the United States.
For these reasons, I cannot support the current proposal to set in motion a permanent and a very large diversion of Federal royalties from the Outer Continental Shelf to these four States. I am sympathetic to the environmental damage that has been caused over the years to coastal wetlands. Much of that damage in the past was from causes other than oil and gas activities. An important source of the future threat is from factors such as global warming.
Last year, in the Energy Policy Act, we enacted a Coastal Impact Assistance Program that directed $1 billion be paid as mandatory spending over 4 years to the Gulf Coast States. I strongly supported that measure. I have strongly supported funding for reconstruction of the gulf coast in the tragic aftermath of Hurricanes Katrina and Rita last summer.
The policy rationale for the permanent revenue diversion proposed in this bill, in my opinion, is highly flawed, just as the energy policy rationale for the bill is also flawed. If you want to have a strong and fiscally solvent Federal Government, you need to be very careful about new spending entitlements and claims on Federal revenues being created by the Congress. The provisions of this bill do not reflect that kind of concern.
If we are to cope with the rising demand for energy, and particularly for natural gas, we must also approach that matter. Strictly giving up, for the long term, access to 21 trillion cubic feet of natural gas just to obtain just over 2 trillion cubic feet is shortsighted, in my view. Undertaking to solve our long-term problems with natural gas supply and demand by focusing just on the supply side I also see as shortsighted.
Let me talk a little bit about the precedent of what we are doing. I see that as another and somewhat separate reason for opposing this legislation. S. 3711 sets bad precedent both in the energy policy area and in the fiscal policy area. There is no reason I can think of why coastal States up and down our seaboards will not demand the same kinds of treatment being demanded by the States that are insistent upon the provisions in this legislation.
Let me put up the chart that shows what we are talking about. The Outer Continental Shelf is the blue area surrounding the country. Of course, this bill just deals with the gulf. We all understand that. But let's just think about the precedent we are setting that will come back to haunt us when we have this issue revisited in the future.
My sincere concern is that if we take the steps that we are proposing to take in this legislation that lock up Florida until 2022, or the areas off the coast of Florida going out at least 125 miles until 2022, we are well on our way to making these other resources unavailable also until 2022.
We are also setting a bad precedent in the fiscal arena, as well. Where production is allowed, other States are likely to demand the treatment that we are here affording to Texas, Louisiana, Mississippi, and Alabama.
Take Alaska, for example. If you do a little reading on where our undeveloped natural gas and oil resources are, much of it is off the coast of Alaska. The Federal Outer Continental Shelf off the coast of Alaska covers a vast area, some 600 million acres. The Outer Continental Shelf off Alaska's coast is more than twice the size of Alaska itself.
To give an idea of the immensity of this OCS area, the onshore lands of the State of Alaska comprise some 366 million acres. The Federal Outer Continental Shelf off Alaska contains vast resources, an estimated 26.6 billion barrels of oil, and 132 trillion cubic feet of gas.
If we start down this road, as this bill does, in my opinion, with respect to the Gulf Coast States, we will certainly be asked to give 37.5 percent of the revenues of producing these Federal resources off Alaska's coast to the State of Alaska. In fact, such a proposal has already been developed. Other States are likely to follow. This is a precedent that I think we will all come to regret.
I know there are strong feelings on the other side of this issue. I understand the sentiments that some have, but I am persuaded this is bad energy policy for the country, that this is bad fiscal policy for the country, and I hope that we are able to make some changes in this legislation before we finally dispose of it so we can correct these problems.
I yield the floor.
Mr. President, could I just indicate for my colleague, I appreciate his comments. We do have a couple of Senators who are in opposition who are coming to the floor and will wish to speak, too, at some stage. I do not want to line up so many proponents that they are not able to make their statements within a reasonable period of time. So if we can fit them in at some stage in the proceedings, that would be great, as soon as they arrive.
Mr. President, I ask unanimous consent that the order for the quorum call be rescinded. Mr. President, I have come to the floor again today to speak about the bill Senator Domenici and many of us…
Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.
Mr. President, I have come to the floor again today to speak about the bill Senator Domenici and many of us have brought before the Chamber. The Presiding Officer has been a great leader in this effort to fashion a bill that has many fine points and good points and needed points for the country.
One, it would provide us with a new source of oil and gas that will help us increase supply in hopes of reducing and stabilizing the price of oil and gas in this country. The other fine and wonderful point of the bill is that it takes a portion of the revenues that are now going into the Federal Treasury--but future revenues--and dedicates them to a conservation royalty, because Mother Nature every now and then needs its share, too. Being from Tennessee, Mr. President, and a leader in the environmental area, you most certainly can appreciate the value of that.
Of course, the great point for Louisiana, the gulf coast--not that those two points aren't very exciting to us as well--is the chance to have a new source of revenue to actually reverse decades of loss of precious and valuable wetlands. These wetlands not only protect the 10 to 15 million people who live along the gulf coast from Texas to Alabama, but also that will restore the wetlands, which we in Louisiana call America's wetlands because it is the mouth of the greatest river system in North America. So many of these wetlands help the industries of trade, commerce, oil, gas, fisheries, and the general environment for the whole Nation.
But today I wish to speak a little bit more about the history of how we got where we are today and then talk about the value to the Nation of taking such a positive step forward, a big step, a positive step and a step absolutely in the right direction. Yesterday, Senator Domenici, the chairman of the committee, and I spent some time clarifying the record regarding President Truman. The fact is, this was not Mary Landrieu's idea, as much as I would like to take credit for it; this was Harry Truman's idea: to establish a partnership with the States when oil and gas was first discovered, knowing it would take a strong partnership to sustain this effort over time, and an interest on the part of the Federal Government, the local government, and the State government to engage in the technology necessary and the financial wherewithal necessary to pursue this frontier, basically, whether it was the frontier of the West or the frontier on the Outer Continental Shelf, to get the natural resources to make this country great.
Now, of course, President Truman, having come from the experience of the Second World War, really understood what he was talking about because although our military and the allied forces were quite spectacular in winning that war, sometimes I think we forget that it was the steel workers and the iron workers and the shipbuilders and the boat builders and the women and the families who sacrificed at home, saving their pennies to send every spare item we could for the machinery necessary to win a war. Yes, it takes bravery. Yes, it takes men and women in uniform. But it also takes a lot of steel, a lot of supplies, a lot of petroleum, and a lot of natural resources to win a war. America won that war in large measure because we had the natural resources and the military might combined to provide the strength to the allied forces to win the great war.
It was America's oil production--America's oil production--that Winston Churchill said made him transfer the British fleet from coal- powered to oil. Here is a nation literally under siege, and a great leader makes a strategic decision. He would rather depend on American oil than maybe his supplies of coal in Europe to give him the staying power to sustain that war. In the Second World War, German tanks stalled for lack of fuel, and Japan had to cut the operations of her fleet. It was America's natural resources that propelled our allies to victory.
I think perhaps sometimes in this world in which we live, where everything seems so automatic and you just turn on a switch and the lights come on, you plug in your computer and it
gets booted up, you turn your coffee on in the morning and it automatically smells beautiful in your house, it takes a lot of effort to produce the energy which is necessary to make our lives the most comfortable the world has ever known and perhaps will ever know. But in the Second World War, they understood they needed lots of things to win that war, and one of them was the natural resources of oil and gas. We didn't know too much about the environmental aspects of it back then but, frankly, all we cared about was getting our troops home, beating the Germans, winning the war, and saving the world for democracy, which we did.
Then, through the 1950s and 1960s, we got smarter, just as you should if you are growing all the time and you learn, and we understood better about the environment. Then something went wrong in the 1960s. Something happened in the 1960s. We forgot where we came from. We forgot the sacrifices that had been made. We had a very dramatic spill off the coast of California--not a pretty picture. The country was on fairly good financial footing, and we just sort of started backing up. In my mind, we have been backing up ever since.
We need to get in a forward gear with a proper mindset to move this country back in the direction of natural resource production, with all the benefits of the new technology, with all the benefits of knowing the mistakes we made--no turning our back on them--not pretending the spills didn't happen, and not pretending oil and gas isn't a dangerous business at times.
I can remember seeing on television one night--I think it might have been on the Discovery Channel, which is a wonderful channel my family enjoys watching--they were talking about how we first designed hot water heaters. Of course, we take hot water coming in our house, clean water in America and hot water, for granted. It happens so frequently, we don't think about it. But when I was watching this on television, the story was saying we didn't always have hot water in our houses and it was quite a feat to try to get hot water heaters.
In the beginning, when people had them--and I am sorry I can't remember the year--they kept blowing up, and they would just blow people's houses up and people got hurt and people died. But nobody said: Oh my gosh, we just can't have hot water. We pursued and developed the technology, and now we take for granted the most amazing thing which is in almost every house in America: you can turn on the faucet--not in New Orleans, where you can't get any water pressure today, but in most places you turn on the faucet and get clean hot or cold water, to the temperature of your choice. But it didn't happen because there weren't accidents or problems, but we learned and we perfected the technology. You can say a thousand times how that happened in America, but for some reason we got stuck on this natural resource issue and can't get off of it.
We have an opportunity this week to move past the 1960s and 1970s and to be responsible at a time when our country needs more gas and oil. Now, we are going to move beyond petroleum. We are going to develop new technologies. If Senator Domenici has his way, he would have the 15 new programs we authorized in the last Energy bill funded to actually invest in new technologies.
We are good in this Chamber about talking about things, but actually we don't put the money to them. So we sort of pretend we are doing things. But even saying that, we are making progress. I would support more investments in alternative energies and real money for real projects to move in that direction. But until we do and as we are doing that, we need to drill for oil and gas where we can.
I want to show you here in America what the pipeline systems look like today. This is the pipeline system: an extraordinary network of private sector--with government support--pipelines that bring gas from Canada, that bring gas in from the northwest part of Canada, bring a multitude of riches from the gulf, the gas connections that move up through your State, Mr. President, all the way up to the Northeast. And then you can see another in north Texas, in Dallas, Oklahoma gasfields, because, of course, Oklahoma and Texas understand gas. They have a lot of it. It is shallow in large measure, but they are producing a great amount of gas for the Nation. This is what it looks like now.
This is the area which we along the gulf coast understand is rich in natural resources, and we have almost perfected the technology to reduce the footprint, to drill far down into the floor of the ocean, deep into the coastal areas here that are abundant in resources and provide the gas necessary to keep people cool in the summer, warm in the winter, and to keep the manufacturing sector of this country competitive because we have competitors now, big competitors--China and India--and if we don't want to lose every manufacturing job in America, and we are on track in some measure to do that, we better find some gas and oil somewhere here.
But in the 1960s, as I said, we got stuck in a place that has been dangerous for this country and went from being a net exporter to win the greatest war ever fought. But in the 1960s, the situation flip- flopped and the United States became a net importer of oil, a situation which has deteriorated to the point where today we import 60 percent of our oil. It would be bad enough if we were importing that oil from friends because when you deal with friends, maybe they would give you a good price and maybe, even if it was tough for them to produce it, they would still give it to you because they are your friends. But we are importing oil from places in the world that are not friendly, that are dangerous. When the price goes up, they are happy if it goes up higher because they know we are dependent on it. I don't know if Americans feel as strongly as I do, but I know people in Louisiana do. We are happy to have a mutual dependence, I guess. We don't think we live on an island, but we don't like to feel dependent. We like to feel strong. We like to have choices. When you owe people a lot of money or you get your oil and gas from people and can't get it yourself, it puts you in a dependent position--not a good place to be most of the time. That is the place we are in right now in America. So one of the reasons this bill is so important is that it reverses 30 years of drift, 30 years of not clear thinking about what dependency really means, and we have to make the change.
I would like to see this bill be a little broader in its scope, but it has been a compromise, and that is the nature of our political system. This is not a dictatorship, it is a democracy. We on the gulf coast have worked out a system that seems to work pretty well, protecting Louisiana and Mississippi and Alabama, and respecting our friends in Florida who have chosen a different path for this time, and that is just the situation we are in right now.
I think as we open this 8 million new acres here and we can see more of the benefits for the whole Nation, that perhaps, as some of us continue to speak and travel the country and speak about the benefits of being less dependent on foreign oil and gas and more independent, more self-sufficient, and developing alternatives and conserving where we can as well, maybe the situation will change. But this is the step which needs to be taken.
Some people say: Oh my goodness, there is just not enough oil and gas here. I want to tell you how much there is. It contains enough natural gas to heat and cool 6 million homes for 15 years. It holds six times the amount of liquefied natural gas imports we are importing today. It represents more oil than we import from Saudi Arabia, and it will produce more oil than found in the reserves of Wyoming and Oklahoma combined. So I know when you look at the whole country and you see just this little 8,337,000 acres, people say: Oh my goodness, that is not very much. But it is more than the reserves of Wyoming and Oklahoma combined. This is a very rich area, and Americans deserve to benefit from the natural resources that belong to them.
Believe me, people around the country, some people think: Well, they must not care about their environment.
I do not have a statistic about this, but I bet people in Louisiana and Mississippi and Alabama and parts of Texas spend more time in the water than anywhere else because we are hot most of the time and we like to swim. We swim in our bayous and we swim in
our lakes and we swim in our gulf water, and we swim all year because it is warm all the time. Our temperatures are good throughout the year.
I do not have statistics on it, but I bet you we fish more per capita. We have more fish than we know what to do with. I laughed when I told my children--I took them out fishing in the West--not to be critical of the West. It is beautiful, of course. But we fished in a stream, and the rule was, after you caught three fish, you had to throw them back. My son, who is 10 years old, said: Mother, I have never been to a place where you have to throw the fish back, because where we fish, we have limits, but they are pretty good limits. You can catch 30 redfish, lots of trout, and you keep them and then you eat them that night. This would be a sad world if you had to throw back every fish you caught. It is a matter of managing your resources. We do that very well.
People look at me, and they think: Mary, you are not saying the truth. But I am. The best fishing is around the rigs. The best fishing is around the rigs. And when you are on these rigs--these big platforms--you can look down, and you can see the fish. I do not need to read this in a statistic. You can see the fish around the rigging. Why? Because it acts as an artificial reef, and it creates a food supply, and the fish naturally gather there. So we have been doing this a long time in Louisiana. We would not suggest it.
We do have beaches. We do not have the same kind of beaches as Florida, but we have a proud and beautiful wetlands. We are concerned about our environment, and we know that while there every now and then are mistakes, the technology is getting better and better and better, and we can get American gas so we do not have to talk to Iran, if we do not want to, we do not have to send our troops to Iraq unless there is good reason, and we can keep our business right here in America.
I want my colleagues to know how appreciative I am, and Senator Vitter, for the help and support for this bill and what it will mean to the gulf coast and for Louisiana to save our wetlands. But I also want to say that for the Nation, as a Senator, I know this is the right thing. And it is long overdue. We have to open up resources in this Nation and use the technology.
Now, I do not know when we got off this track. I do not know when it happened. I do not know if it was gradual. But we have to be confident in our ability to move forward and to not be afraid but to be bold and press this technology so we can have the independence and energy we know we must have.
I look forward to the day when I do not think my children will have to be dependent on either China for financing or the Mideast for oil and gas, that they can be like my parents' generation: pretty darn independent. We better get back to that independency in this country. We can make friends when we want to, but we do not have to when we do not need to or do not want to.
In addition, I say to the Presiding Officer, because you have been so good about this issue, I want to say something about a program. There is a program--we have tried to make it a trust fund. We did not succeed. But in 1965 some very bold, progressive-thinking individuals created the Land and Water Conservation Fund because they knew the American population was going to grow exponentially.
We now have almost 300 million people in this country, and many people around the world who want to come and live here, as you know. So we created the Land and Water Conservation Fund, a little program relative to the billions of dollars we spend up here--only $450 million for the State side and $450 million for the Federal side--to try to provide some--in the scheme of things, it is pennies--to provide for parks and recreation and the expansion of bike trails and walking trails and to preserve the great outdoors.
I say to the Presiding Officer, you have been a great leader on the outdoors. When you think about the beauty of the Smoky Mountains and you think about the beauty of the Rocky Mountains in the West, you think: Please, God, don't let us ruin that. Let us keep it.
Well, the way you keep it is not by wishing for it but by paying for it. And the way you pay for it is to put it in your budget. We tried that, but it did not work. So in 1965 we spent $10 million in the whole country. In 1982, we spent nothing because it got zeroed out. Then, in the 1980s, it went back up. You can see basically the high point was in the late 1970s, at $350 million. One time, 1 year, we sent $350 million out to all the States, which is not very much money per State, to help them with parks and recreation. Even though this was not much, I will tell you what this money did. It built thousands of parks and thousands of ballparks for our kids to play in and helped shore up the urban parks in New York and New Orleans and Memphis. It saved the redwoods. It helped to establish the great wilderness in the Smoky Mountains. You could go on and on with what this little money has done because it got sent to the States. They stretched those dollars, and they made it work.
In this bill, we have a plan to fund this gradually until it will go up to, hopefully, $450 million out of new revenues. So it does not contribute to the deficit. It does not take one penny against any other program. But it helps us to build the parks and recreational areas so my children and grandchildren can continue to swim in those bayous, can continue to enjoy Lake Pontchartrain, and whether they are in an urban area in a little pocket park or in the great Smoky Mountains where they could walk for days without seeing a person and only a few bears-- wherever they are, they can enjoy it.
So that is a great thing this bill does. I hope it survives the conference and the negotiations because sometimes Mother Nature does not have the advocates she needs here in Washington. This bill we have presented is not only good energy policy--because we need more production--it is good environmental policy, and it is good economic policy.
One final argument I would make for the bill is this: I know anytime you bring a bill to the floor, everybody has an important amendment. I have several other amendments. People could not believe it, but I want to have several other amendments on this bill. I know my colleagues have some great ideas. And they say: Well, why can't we debate all sorts of other things? Why do we have to debate the focus of this bill?
I have an answer for that. Because we debated, for the last 6 years, an energy bill. We debated for 6 years--day after day, month after month, for 6 years--up until a few months ago an energy bill. We had CAFE amendments. We had alternative fuels. We had reliability amendments. We had nuclear power. We had amendments about how to distribute the waste from nuclear power. Should we use electricity? We debated and debated everything about it.
So I do not want people to be left with the impression that those of us who are on the Energy Committee provided no opportunity for people to debate. We literally took 6 years to pass--10 years--10 years, excuse me, to pass the last Energy bill. So 10 years we debated. We do not have 10 years. We have until August. We have until September. We have to limit the debate. I know it is unusual, but we have to take, in my view and in Senator Domenici's view, a positive step forward. We have time again to debate CAFE. We debated it for the last 10 years, and we will debate it again.
But right now let's take this time to remember our history, to remember the great strength natural resources are for the country, to not think of this as helping the gulf coast, which most certainly needs help, but that it is the right thing for America at the right time for America, and in a way that honors the spirit of this body, which is open to debate. We do many debates, and will continue, but for this bill, let's pass it. Let's send a signal to the American people that we are changing course.
Today's debate is focused on 8.3 million acres of submerged land in the Gulf of Mexico, but it is really about something much broader and much more important. It is about our country's future.
It is hard to believe today, given the complete turnaround in circumstances, but the energy reserves of this country were once the security blanket for Western democracies.
When Winston Churchill, as First Lord of the Admiralty, transferred the British fleet from coal power to oil, he did so knowing that it was American oil production that he would rely upon in a crisis.
In the Second World War, as German tanks stalled for lack of fuel, and Japan had to cut the operations of her fleet, it was American natural resources that propelled the allies to victory.
U.S. energy production was a strategic asset that allowed our economy to hum in the 1950s and become the envy of our competitors during the cold war.
Yet sadly, we allowed this great strategic advantage to slip away.
Economics played its part. At the same time as U.S. energy resources became more scarce, readily accessible oil from the Middle East started to come online.
By the 1960s the situation had flip-flopped. The United States became a net oil importer--a situation that has deteriorated to the point where the United States must import 60 percent of the oil, making us the largest consumer of energy in the world.
The truly frightening thing is that this country is bracing to allow the same circumstance in natural gas. With seemingly no one guiding our strategic energy direction, this Nation is now preparing to double the amount of natural gas imported into this Nation by 2014. The country is faced with 45 planned or proposed liquified natural gas terminals. While it is obvious we need them, we must also acknowledge that we are building the infrastructure of dependence.
So one of the reasons this bill is so important, is that it reverses 30 years of drift, 30 years of policy avoidance masquerading as an energy policy. We are sending a signal to the American public and the world that we are serious about regaining the strategic initiative in energy.
We are in a hole that took a long time to dig, so we must understand it is going to take us a while to dig ourselves out.
But we are not going to allow American security to be crippled by this strategic weakness any longer. The idea that we can do this by additional exploration and drilling alone is false on its face. But it is equally false to say that the step we take today will not help.
For the first time in 20 years, America is taking approximately 6 million acres of land that is currently under moratoria out of moratoria. That is a signal that we are getting serious. Furthermore, we are opening up a resource-rich region of the coast. It contains enough natural gas to heat and cool nearly 6 million homes for 15 years. It holds six times the amount of our annual LNG imports. It represents more oil than we imported today from Saudi Arabia. It will produce more oil than found in the reserves of Wyoming and Oklahoma combined.
That is an important step, and it sends an important signal to the world.
A couple of months ago, I hosted a group of French Senators who are involved in energy issues for their nation. When I showed them a map of the coastal resources that we have put off limits in this country, their mouths dropped. They could not believe that we would place so much of our security in foreign hands, while tying the hands of American production behind its back.
We have taken an attitude that somehow drilling and tourism are incompatible no matter the distance involved. Do you know that our colleagues in France are drilling for oil on the outskirts of Paris? Now that is making energy independence a priority.
Richard Holbrooke is well known to Members of this Chamber and has engendered real respect in the foreign policy community. He stated that our failure to reduce our dependence on foreign oil is the greatest failing of this country over the last 25 years. I agree.
We can only wonder what an American foreign policy not hobbled by dependence on foreign oil would look like. I promise you this, everyone in the world would sleep a little safer.
Iran derives 50 percent its revenue, and almost all of its hard currency, from the sale of oil. We know where those revenues go. They go to Katushka rockets, they go to Hezbollah terrorists, they go to a covert nuclear weapons program.
It is fine to say that the United States does not buy oil from Iran. But oil is a global market. It does not matter if it is Americans who buy the oil from Iran or the Chinese. If demand is high, Iran will derive huge revenues.
The truly sick piece of this policy is that the American public pays twice. First, they pay at the gas pump, and then they pay taxes so that our Government can spend billions of dollars trying to undue the evil that Iran propagates around the world. It is like giving money to the neighborhood burglar so that he can buy a gun.
It is time that our country retake the high ground and the strategic initiative on energy. This is only the first step of many. Conservation, alternative energy, nuclear power must also all receive consideration and attention from Congress. But this is a step that we can take today.
It took the Congress a decade to pass an energy bill--we did it with bipartisan leadership last year. Imagine the signal we are sending by passing another important piece of energy legislation within a year of that effort.
Mr. President, I yield the time.
I suggest the absence of a quorum.
Mr. President, will the Senator yield? Mr. President, I ask unanimous consent to have 1 minute to ask a question. Mr. President, I chair the Energy and Natural Resources Committee. First, I thank the…
Mr. President, will the Senator yield?
Mr. President, I ask unanimous consent to have 1 minute to ask a question.
Mr. President, I chair the Energy and Natural Resources Committee.
First, I thank the Senator for supporting this measure. It is vitally important that we tell the American people that the price of natural gas rose dramatically today again. There is a big demand.
I think it is exciting to see some Senator like yourself, who has a vision for other things besides this, saying let's do this because we can do it now.
That is a point I want to make as chairman. Let's do this because it will break the mold, break the precedent of moratoria of no deepwater mining, deepwater drilling, and get on with great production. But I want to say to the Senator that I am aware of his bill. I am aware of some of the great ideas in it. I heard him mention it. We had a hearing on parts of it, as he probably knows.
I think it is fair to tell him that the truth is, with this short session, in this Senator's opinion--I really worked hard to get energy legislation passed and was able to pass a comprehensive bill that did some terrific things. He knows that--ethanol, even in the area of cars he is speaking of. We made some giant strides with that Energy bill--I don't believe we could start with the Energy bill this late in the session with the Senator's bill or somebody else's bill without doing nothing and just getting bogged down. I thought: Let's take what we can do and do it. But I don't want the Senator to think the great ideas that he has have been forgotten.
Would the Senator yield for a minute without her statement being interrupted?
I ask that following the remarks of the Senator, Senator Hutchinson of Texas be recognized for 5 minutes.
And that I, the Senator from New Mexico, follow her for up to 20 minutes.
I thank the Chair.
Thank you, Mr. President. Thank you, fellow Senators.
First, Mr. President, and fellow Americans, for those who have watched the Senate over the last couple days, it must have been a pretty enjoyable time because Senator after Senator came to the floor-- maybe 12 or 15 versus 2 or 3 opposed--12 or 15, all positive and for something, for a change, sending a signal here in the waning days of this session before we go home for a recess when it is hot out there and the price of natural gas is going up. The people know it, and they are hearing rumors that pretty soon we are going to be importing natural gas from all over the world, where we used to be a totally self-reliant country on natural gas.
We have made a mistake. In the last 17 years, every new powerplant we built--because we were frightened to death of nuclear power--we built for natural gas. We took this fantastic ingredient, this beautiful product of nature--natural gas--and we poured it into the powerplants. And we are still doing some. I did not think we were, but we are still building a couple. Rather interesting. I do not want to even insinuate by saying where, but we are building some.
In the meantime, millions of American homes have done what everybody thought was right, and that was to hook on to natural gas. Then across this land we built a manufacturing base, huge in size, made up of, for example, the chemical industry. I assume the occupant of the Chair knows about industries like that. Many Senators do, and they probably have been contacted by their industries--the fertilizer industry, the plastics industry, involving thousands of workers. What raw product do they use for manufacturing so they can employ and sell products? Natural gas.
So what happened? We used it up. All of a sudden, we had a big problem in the gulf and the price went through the roof. And we had some rigging and a few other things occurring that we found out about with that Houston company. But, in any event, what happened is the price of natural gas skyrocketed and the supply produced by Americans for Americans became insufficient to meet our needs, and we began to say: We are going to have to go buy natural gas around the world.
What a frightening thing. We just got through this huge problem of gradual dependence upon foreign crude oil to where we are more than 60 percent dependent, and there is nothing we can do about it. We cannot produce sufficient crude oil to change that equation, the crude oil needed to run America's transportation needs.
And when we complain, remember the old idea of Pogo: ``We have met the enemy and he is us.'' The transportation needs are 70 percent of the oil used. And that is your cars, ladies and gentlemen, your SUVs, the trucks and buses. That is 70 percent of the oil.
Now here we grow dependent for that. And here in America we grow more and more dependent upon natural gas. And here sits--while all of this is happening--along the seaboard of America a giant sea of natural gas and crude oil which has been taken off the market by what have been commonly called moratoria or moratoriums, saying: Do not touch that because it is off the sea coast of California; do not touch that because it is off the coast of New Jersey. In this case, we have a small piece of Federal real estate. I am not going to put the maps up again today, but it is 8.3 million acres. Sounds like a lot, but, believe me, when you look at the coast, it is small.
We are looking in this bill at 8.3 million acres, which we cannot put out to bid for American companies, large and small, to go drill for what is known to be there. What is known to be there? Oil: 1.2 billion barrels. What else? Natural gas, that thing I just talked about that builds an industry, that builds a manufacturing base, that keeps the price down. Right? It makes supply more rational.
There sits 6 trillion cubic feet of natural gas in that property. Well, that does not sound like anything except it is enough energy to take care of 6 million houses for 15 years. That is pretty good if you look at that as an average American.
So what we decided was: Yes, we surely, last year, passed a great energy bill--which I will talk about in a moment--but we couldn't get this one done, so let's get this one done this year for the American people. I regret to say we were moving forward with, again, locked arms with my colleague from New Mexico, Senator Bingaman, to get this done when we had to break. We had to break paths because I decided to stand for the past would get us the fruits of the past, which would be nothing, so that if we did not share some of the revenue with the surrounding States, we would still get no oil and gas, we would still be in moratoria, and we would get no revenue for the Treasury and no revenue for the States. But, most importantly, that beautiful product, natural gas, and the crude oil that is there with it would still be there and nobody could touch it.
So with that in mind, we worked and we worked and we worked, with the help of the great Senator, Mel Martinez, from Florida, who was courageous, and we protected his State sufficiently, I think admirably, for him to say yes. Today I understand his co-Senator said yes. Thank you, Senator. Thank you very much, Senator Nelson. He came here and said yes. Four coastal States said yes. They had been saying no more, and now we have an opportunity.
We do not need to wait around and say: Let's add 20 other items for the American people. You cannot add 20 more items. They still have to go to the House. They do not have 20 items waiting around. So whatever great ideas are pending, we cannot pass them, first, because if you keep adding them, it means you will not pass this bill, and, secondly, they do not go anywhere.
So let's do this one for the American people. And if this happens, it says, put that land out to the American drilling companies now, and a big portion of it will be available within a year--within a year.
Now, I will respond to Senator Bingaman's points in opposition.
I do believe that every point he made in opposition is refutable, and I will refute them later. But I want to say the simple fact is we had to go our own ways for one simple proposition. Both of us understood we needed to go ahead and deepwater drill this land, although with the passage of negotiations beyond the time that he and I--Senator
Bingaman and I--had reached accord, we added substantial property to this arrangement. But the point of it is, we broke on the proposition of: Shall we bring a bill to the floor with no revenuesharing with the States--which I concluded will never pass; we will not get it done, and we will be right back where we were--or do we do what we have done here and say the abutting surrounding States get a portion?
Now, let's get this straight: The Federal Government still gets the majority. They get 50 percent straight up of the royalty. And 12.5 percent is for the Statewide Land and Water Conservation Fund. And then 37.5 percent over time--which is not much in the beginning, but over time is substantial--is shared with the States that abut so they can say: We are sharing in the burdens while we are joining in sharing in the wealth.
We believe the precedent will flow, once this is done, and we will begin to look to other States, such as the State of Virginia, perhaps the Carolinas, perhaps Georgia, et cetera, and say: What about similar arrangements later? But right now let's give the people a gift of what is theirs now by passing this measure.
Now, there is one very positive thing that is happening that is big on the scene for the American people that is hard to appreciate because it takes time. That is the impact of the Energy Policy Act that is a year old this August. The energy policy bill is beginning to take hold. I regret to say the higher the price of crude oil, the more breakthroughs will occur on the part of innovators and technologists and companies that are making breakthroughs in terms of new kind of cars, new kinds of technology, because the price of crude oil is saying to them it is worth the investment and the risk in something new.
So the high price is bringing on new things. But the act we passed is bringing on huge results. We are in a renaissance period on nuclear power. I wish I could come here and show you the dedication of the next plant, but that takes a while. But 25 applications have taken place since that act, 25 applications for nuclear powerplants. So the Senators who come down here and say: Why do this bill; why don't we do more things; we did more things in this huge bill we passed. We created a nuclear renaissance in the United States.
Second, we have a revolution in biomass which is going to change rural areas into a more vibrant and diverse economic rural America because we are going to use farm products to fill our gasoline tanks with ethanol instead of crude oil. That is all in the Energy bill. The targets are set. The huge mandate is set. And we are rolling with 29 new plants having been built.
One of our Senators implied we should not be so narrow and take just this bill. Just this bill? Just this bill is pretty much--the one we are talking about, right? It is big. It was said: We should not do this. We should do many other things. We did the other things. I am trying to tell you, we did many of them, and we probably should start with a second round next year. But if we start trying to get more instead of this, we will get nothing for the American people, nothing for natural gas supply, nothing for our consumers to rely upon in terms of bringing the price of natural gas down. And that is what I want to do and want to get done.
So the Energy Policy Act did what I have described, and many more things, some of which I will describe later. But I am very proud that in the period of 12 months we will have passed an energy bill that has done all these significant things. They are moving along.
Right now we are wondering about the reliability of electricity on the grid. I can tell you that in the Energy Act the studies are just about completed. Within a month to 2 months they will be ready. And they will tell us how to fix the grid so it will be totally reliable, and the exchanges between the various portions of the electricity distribution system will all be made reliable so you will not have the kind of blackouts we talk about.
That is because of the Energy Act. But you cannot do it immediately. It is in the mill. That is happening, too. So when you look at it, Congress has done some important work in the energy field. Hybrid cars are coming on in large quantities because of the credit, plus the high price of crude oil.
We can continue, but in a nutshell this bill is good for the people who are burdened with the high cost of natural gas, the high cost of oil. It is their property. We ought to develop it and do it now. So it has been my privilege, having served here for quite some time, to be the leader in this particular area. Of that I am very pleased, proud, and grateful.
I remind everyone, while natural gas was taking a little bit of a back seat to the rising costs of energy, it has now joined a parade of increases. Today, my staff informs me that the price of natural gas reached a 5-week high, just in time for us to remind you that you better put this piece of property on the development table so that it can be rendered a productive piece which will, in fact, cause that price to continue to stop rising and to abate over time.
Mr. President, I have said on a number of occasions that passing this bill is the most important thing that we can do in the short term to move toward correcting the supply and demand imbalance of natural gas. I would like to take the time to refute some of the specific criticisms made against this bill by a handful of people.
First, I would tell you that if we do not develop our resources domestically, this revenue sharing question will be moot--because we will not have revenues to share. The capital will be spent overseas for foreign exploration and development and we will continue the cycle of sending our American dollars abroad for our energy sources for use here at home. The Gulf of Mexico Energy Security Act begins to address this problem.
Now, it is argued by a few that this bill is not worth doing because the Minerals Management Service is proposing to open parts of the 181 area in its recently published 5-year plan. Critics argue that since the administration has announced intentions or plans to open parts of 181 equal to 2 million acres--containing approximately 620 billion barrels of oil and 3 trillion cubic feet of natural gas--it is not worth passing this bill which opens over 8 million acres with 1.26 billion barrels of oil and almost 6 trillion cubic feet of natural gas. Even if I were to entertain that logic as being sound, let me tell you the pitfalls of assuming that the administration lease sale will go through as planned.
It starts with the very point that the critics make. In November 1996, the MMS announced and approved a 5-year plan that included an intention to offer 6 million acres known as the original lease sale 181 area for oil and gas leasing. The decision to include this area was the culmination of extensive consultation between the Federal Government and the State of Florida. However, in 2001 when the Department of the Interior went to lease this 6 million-acre area, the administration reduced the lease sale to 1.5 million acres. So recent past tells us that if we hang our hats on the draft plan as critics seek today, we will be disappointed. Critics say--trust the very process that disappointed us a few years earlier in the very same area. I say--in this bill--direct the Secretary to lease the area. I say--make it clear, make it direct and we will get all the resources, and there will be no doubt.
I ask this to those who would rely on a draft plan as a certainty. Since the time you were in school, have you ever written a draft that was the exact same as the final product? A draft is just that--a draft. It represents what could be opened, not necessarily what will be opened. History shows us the peril of assuming that a draft plan will be followed out to completion.
Furthermore, we should not assume that coastal states will sit by and go along with leasing without the compensation needed to fix the energy infrastructure and coastal environment that is so critical to our domestic energy survival. Last week, the State of Louisiana filed suit in Federal district court to block the upcoming lease sale 200 off of Louisiana. They did so because they claim that our flawed policies were inconsistent with their State coastal plans. This should be a warning to all of us. Today marks the beginning of the end of the days of turning our backs on our coastal States while we turn our energy dollars over to hostile regimes.
The critics of this bill will also say that we took too much property off the table in the Eastern Gulf of Mexico to
get the resources in 181 and 181 south. They point to the areas east of the military mission line off the Florida coast and say that we have given up access to 21 trillion cubic feet of natural gas off of Florida's coast. But this argument is illusory.
We do not have access to these areas currently. With or without this bill these areas are under executive moratorium--that has been set forth by two Presidents, one Republican and one Democrat--through 2012, and these areas have been under this executive withdrawal since 1990. Furthermore, for each of the past 16 years, Congress has placed an additional moratorium on these areas without a whisper of challenge. To say that this bill locks up these areas is not forthright.
These areas are locked up until 2012 and ultimately, under the authority granted to the President over 50 years ago in the Outer Continental Shelf Lands Act, the President can continue this moratorium at any time. The current executive moratorium expires in 2012 in the Eastern Gulf of Mexico. This bill extends this time on certain areas to 2022. Does anyone assume that the moratorium will be removed anytime soon? Does anyone see a viable path toward lifting this moratorium in the Eastern Gulf of Mexico off Florida in the near term? The answer, for the time being, is unequivocally--no.
Furthermore, Secretary Rumsfeld is on record as saying that, while the Department of Defense is fully supportive of the national goal of exploration and production of oil and gas offshore, the Department of Defense believes that any such activities east of the military mission line would conflict with essential military activities. Critics say that it is my bill that locks up these areas when in fact, these areas are deemed essential to our Nation's military needs. Until the President, Secretary of Defense, and both Houses of Congress render a different decision about this area, it is specious to suggest that this bill is locking up these areas to production.
Unquestionably, this bill opens up 8.3 million new acres to development of nearly 6 trillion cubic feet of natural gas and 1.26 billion barrels of oil. The proof of the substantive merits of this bill lie in its broad support around the Nation from America's agricultural community, manufacturing community, producers of chemicals and plastics, the textile industry, the utility sector, and small businesses. Literally, thousands of consumer groups representing millions of Americans and millions of American jobs say the same thing--that S. 3711 provides the much needed relief for the American people. I know that I only addressed a few of the criticisms of this bill, but I dismissed them, because they are not real. If I had all day to myself, I would continue to dismiss the criticisms one by one. I will leave that to my many distinguished colleagues who support this measure.
But I will say this--the criticisms are not based in fact, but rather cling to a flawed philosophy of the past. Over the next couple of days, people will trot out quotes, cases, statutes, and general precedent from years gone by. Mind you, all of this data and precedent will come from a time when we did not import 13.5 million barrels of petroleum per day from unstable regions of the world. All of this data and precedent will come from a time when we did not consume 22.2 trillion cubic feet of natural gas and pay more than 3 times the price for it that nations competing for our jobs pay. All of this data will come pre-Katrina and Rita, when our Nation's energy coast that hosts nearly 50 percent our refining infrastructure was ravaged by natural disaster. I ask the critics to rethink their policy of the past, to reexamine this precedent in light of the facts as they exist today, not as they would wish for them to exist.
This compromise agreement is the best thing that we can do now in the short term, to relieve the cost burden on the American consumer. America is watching.
I yield the floor.
Thank you, Mr. President. Mr. President, I rise to speak to the legislation before us, the OCS lease sale 181. I know there have been colleagues before me this afternoon who have spoken to the need…
Thank you, Mr. President.
Mr. President, I rise to speak to the legislation before us, the OCS lease
sale 181. I know there have been colleagues before me this afternoon who have spoken to the need for additional oil and gas reserves and resources in this country. The fact is, this Nation badly needs to accelerate its efforts to obtain more natural gas and more oil and doing it domestically.
We have heard the comments that we are addicted to oil, that we need to be looking to renewables, and I do not dispute or doubt that for one moment. We absolutely do. We need to be conserving more. We need to be focused more on renewables and alternatives. That is the next generation. But our reality is we are here and now with a reliance on fossilized fuels. We need to transition out of that to that next generation of fuels. But until we do so, we are in an extremely vulnerable spot, particularly with our oil and our nearly 60 percent dependency on foreign sources and with our natural gas and recognizing the trends in terms of our supply and the demand picture for natural gas.
In the past 5 years, the price of natural gas in this country has more than tripled, rising sevenfold after last summer's hurricanes. We all know the prices at the gasoline pump. There is not a day goes by where there is not some exchange about what somebody was paying somewhere for a gallon of gas at one location or another. And I can tell you, prices in my State--when you get out into the rural communities and you look at paying $4.50 for a gallon of gasoline, I can tell you, the hurt is real. The tripling of natural gas prices has had, of course, a very severe impact. And it is not just on those who heat their homes with natural gas. Manufacturing jobs--we have heard this today--manufacturing jobs have fallen by 3.1 million jobs, 18 percent in the past 6 years.
We talk to those in the petrochemical and chemical industry. Jobs in that industry are being forced to move overseas. We have had over 20 fertilizer plants in this country close. And as has been mentioned already on this floor, America's annual natural gas bill has risen to more than $200 billion a year. This is up from $50 billion, and that was just 6 years ago.
While natural gas prices today, following a warm winter, are temporarily below $6 per 1,000 cubic feet, we know the hurricane season is coming upon us in the gulf, we have global political disruptions, and we could have continued hot summer weather, and that we can anticipate a cold winter, and that any one of these--and certainly a combination of them--could promptly send our natural gas prices skyrocketing again.
I cannot speak to the issue of natural gas without mentioning the opportunity we have in Alaska for incredible quantities of natural gas coming down from Alaska's North Slope. And while we await the construction of a pipeline that can deliver this needed commodity from the North Slope into the lower 48, we have to recognize one of the best ways we can bring down prices that will increase the domestic supplies of gas is to produce more gas from the gulf coast, where the existing infrastructure is in place, and to figure out a way to get that gas to market quickly.
Mr. President, we cannot fool ourselves and say we can just snap our fingers and the price of natural gas is going to go down, we are going to have a ready and available supply just because we pass legislation. We recognize it is a period of time in coming. But what can be sent is the signal to the market that that supply of natural gas is on its way in an expedited manner.
The best way--the best way--to produce more gas quickly, to get it on more quickly, is to open parts of the eastern Gulf of Mexico. This proposal before us is to finally allow OCS development in part of formally proposed lease sale 181 off the Florida, Alabama, and Mississippi coasts and to open acreage south of that sale--some 8.3 million acres in all that have been previously closed in moratoria. In return for speeding such leasing, this bill prevents development within 125 miles of the Florida Peninsula, swaps out existing leases within that buffer, and prevents leasing east of the Military Mission Line to protect the military training facilities, at least until the year 2022.
This proposal, this legislation that we have in front of us, is a reasonable compromise. It was one that was attempted but not completed during the debate last year over the Energy Policy Act of 2005. So what we have in front of us today is an outgrowth of that bill.
In the Energy Policy Act, we allocated billions of dollars to foster energy conservation and greater energy efficiency. We moved toward and we pushed renewable energy development, such as wind, solar, and biomass. We funded new technology to further coal while working to help sequester the carbon. There was a push made on the front of a new generation of nuclear power. We funded hydrogen fuel-cell vehicle development and new transportation and building technology. There were good things contained within that Energy bill. But what was not contained in that legislation--or since that legislation was passed-- was an increase in domestic production of fossil fuel.
This legislation will balance last year's Energy bill by actually letting us get up to 5.8 trillion cubic feet of natural gas flowing to the market and, again, flowing to the market in a more expedited manner than might otherwise be seen.
There have been those who have stood on the floor today speaking about the various protections contained in this legislation. There is a protection of Florida's tourism and military bases. It doesn't jeopardize the fisheries. When we look to what happened last year when these massive hurricanes came through the gulf, while there were a few minor spills following those hurricanes, there were no well failures or major pipeline breaks from the record intensity of the hurricanes. So we look to the development that is out there in the OCS area and can really point to environmental integrity.
The proposal before us gives the States of Alabama, Mississippi, Louisiana, and Texas reasonable revenues to offset the impacts of OCS development off of their coasts, particularly, again, in view of what they suffered after Hurricanes Rita and Katrina. It allows the Federal Government to keep 50 percent of the revenues in the Federal Treasury. This is the exact same percentage that it gets from oil and gas development onshore, whether the onshore development is in New Mexico or California or Oklahoma. It gives the coastal States 37.5 percent to offset their cost as being the host for that offshore development. It also shares 12.5 percent of such revenues with all the States for park and habitat improvements through contributions to the stateside Land and Water Conservation Fund. This is an effort to help alleviate the truly chronic underfunding of the Land and Water Conservation Fund without affecting land ownership and private property rights. This money would generally go toward building ballfields, neighborhood parks, recreational opportunities, not buy up the private land or to harm private property rights.
As I have reviewed this legislation and have worked with the sponsors, I do need to certainly give credit to the chairman of the Energy Committee, Mr. Domenici, for his efforts in bringing this matter to where we are today, and also to my colleague from Florida, Senator Martinez, who has been working with the chairman to craft legislation that he believes will work for the people of Florida, and certainly to my colleague and friend from Louisiana, who has been working for years to achieve a level of revenue sharing for her State, a battle we know has been waged for many years. That is what I would like to speak to right now.
My only major disappointment with this measure is that it doesn't provide revenue sharing to all the States that choose to allow OCS development off of their coasts. The question has to be asked, why not? Why would you not include all of those States which have made the choice to allow for that development off of their coasts? If they are going to allow for it, why would they not be eligible or able to take advantage of Federal revenue sharing as well? I don't believe there is a rational explanation for not including all the States.
We have heard some of the arguments--that the Federal Government should share revenues with the States only in those waters from 3 to 12 miles offshore where Federal production
might drain onshore or State hydrocarbon reservoirs. Again, the question has to be asked: Why is that? For the past three decades, the Federal Government has shared revenues from onshore development with all States. The only possible excuse for not extending that policy to the offshore would be if the coastal States bore no impacts from offshore development. But that would imply that somehow or other the development offshore kind of sprouts magically from nowhere without any onshore activity. We know that is not the case.
I had the opportunity to go to Port Fourchon, LA, which is the jumping-off place for the offshore activity. It is a beehive of activity through there--airports and helicopter pads, all the services that have to come in, whether it is the food or the people moving back and forth, to support that offshore activity. We know that offshore activity just doesn't magically happen without some onshore impact. I know my friend from Louisiana has spoken quite eloquently to the impacts of OCS development in their waters. I will let her and others from the Gulf States speak to that impact.
I wish to talk about the impact of OCS development on my State of Alaska. In Alaska, we have been seeking some sort of Federal revenue sharing to offset the cost of OCS development along our 34,000 miles of shoreline for nearly two decades. For budget reasons, we lost out in the 1991-1992 Energy bill. We lost it again in 1995 with the Conservation and Recovery Act, CARA. It was proposed and debated. It ran into other political hurdles. And we lost again last year in the Energy bill. That was partially because you had certain landlocked States that didn't want to see current Federal revenues go to just the coastal States. But you have to stop and think, if there is not some fair form of revenue sharing to offset the impact costs, why should the coastal States allow OCS production, particularly given the recent ease of obtaining the moratorium to prevent them? And without such production, where are we going to be as a country? Americans will be paying even more when they fill up their cars, their trucks, cook their food, heat their homes. That is reality. That is the consequence.
In Alaska, we currently have OCS production from just one field. This is the Northstar field in the Beaufort Sea. It produced 22.4 million barrels of oil last year. Since it was within 12 miles of the shore, Alaska received $10.8 million in revenue sharing. If that field had been more than 12 miles from the shore, Alaska would have received nothing. There is actually a little bit of an exception to that because last year in the Energy Policy Act, there was a very small amount of aid that was directed to the State for 4 years to assist with the impact onshore of the offshore development.
Previously, Senator Bingaman made a point. I believe he was correct when he said that Alaska contains nearly a dozen OCS bases off of our coast, all but one of them--this is the North Aleutian Shelf, down near Alaska's Bristol Bay--being open to leasing. The North Aleutian Shelf is closed by Presidential moratorium. But when we look at Alaska's Outer Continental Shelf, we are looking at the potential of 26.6 billion barrels of oil and 132 trillion cubic feet of natural gas. This is according to the mean estimates. That production would more than double the Nation's known reserves of oil and nearly equal the amount of gas likely along the coasts of the rest of the Nation. But to accommodate OCS development and any proposed future OCS development in the Beaufort and Chukchi Seas--we have other potential areas, in Cook Inlet, the State governmental units--the State of Alaska, the North Slope Borough, local governments have to spend millions of dollars on hosts of services to protect, to regulate, to inspect, and to support the OCS development.
For instance, the State of Alaska's Department of Environmental Conservation spends more than half a million dollars a year to inspect and monitor oil and gas operations. This is just in northern Alaska. The State's Department of Transportation and Public Facilities spends nearly $10 million each year to keep the Dalton Highway going up to the North Slope open so that we can move oil and gas equipment and our supplies north. This also helps to maintain the Deadhorse Airport.
The North Slope Borough spends nearly $1 million for search-and- rescue capabilities. This is not counting the cost to the Alaska State troopers if they have to mobilize to assist oil workers who might perhaps get in trouble. The State of Alaska spends money on coastal zone planning to understand the impacts of OCS development. The State also spends millions of dollars on new infrastructure to handle the arrival and the movement of employees and materials that are needed to support the oil industry offshore.
Last week in Fairbanks, the State broke ground on a $90 million expansion of the Fairbanks International Airport terminal. This expansion is partially needed to accommodate the oil workers who may be jumping off for OCS work. Last year down in Anchorage, the State finished work on a 440,000-square-foot terminal expansion at the airport there, costing well over $100 million. So our airports are clearly impacted by the effects on the industry.
As things are happening, we see the impact within our communities. The local governments, smaller communities from Barrow to Kotzebue, Kenai to Dillingham, and Kodiak to Sitka, are all spending money to prepare for the possible development of the State's coast. The point is to recognize that there are very real costs to offshore development that are borne by the States that serve as service and support bases for the development.
It is true that States sometimes recoup part of the costs through income taxes on workers or through property taxes on businesses that will support the facilities onshore. They may gain a small stipend from Federal coastal zone planning funds. But when you look at how much is gained, it is fair to say that the recovery has seldom covered their costs.
So the question would be to the State: Why would you even welcome OCS development off of your coast? This is where you need to take the bigger picture. Our energy security, reliability, the whole issue surrounding the vulnerability we have as a nation because of our reliance on others for our energy sources, this is why it is essential that we as a nation figure out a way to produce more oil and gas domestically. Sharing oil and gas revenues with States in a fair manner will ensure that energy can get to market. It is that fact which is probably the difficulty with this legislation in terms of passage of a fair revenue-sharing system. That may be because we have some around here who would want to discourage States from allowing any OCS development, perhaps out of environmental concerns, perhaps displaced environmental concerns. But denying coastal States needed revenues is one way to discourage greater offshore oil and gas production.
Last week, Senator Stevens and I sought to ensure that any revenue sharing proposed in this bill would apply also to Alaska or to any State that allows OCS development off of its shores. We were told at that time that if that provision stays in, it would be a death sentence for this bill.
I have been asked many times in the past few days have I changed my position on this legislation, have I changed my position in support of opening lease sale 181 to exploration and development. I have not. I have not changed that. I remain committed to a sound policy, which I believe this is, that allows for the opening of lease sale 181.
I can appreciate why it was tailored so that revenue from the gulf would only be shared among the Gulf States. I can appreciate where they are coming from. I can appreciate the narrow scope of the Senate version and the delicate negotiation that went into it. But from a matter of equity, from a matter of fairness, for those States that are willing to open their coasts, their States, to allow for the development offshore, it is only right that allowing all the States who have OCS development off their shores to share in some form of revenue.
By structuring the revenue sharing that we have before us in this legislation in this manner, Alaska is the only currently producing OCS State that allows new development that would not receive any aid. It was suggested last week that, well, Alaska is asking for a special deal. That is absolutely not the
case. We are asking to be treated the same as any other currently producing State when it comes to revenuesharing. So to those of you who suggested this was something special for Alaska, it was absolutely not. It was equitable for all those States that are currently producing. So by excluding Alaska, we are the only State that is disenfranchised when it comes to the Federal revenue sharing right now.
I have had an opportunity to go down and observe for myself--so I have seen with my own eyes--what is happening in Louisiana, in the gulf, with the erosion. As I was presiding earlier, I was reminded again by the minority leader that Louisiana loses three football fields of land a day. But we also, in the State of Alaska, face serious erosion challenges. We have some 80 villages that are facing coastal erosion problems. I use the word ``problems'' lightly, because in some of the communities it is an absolute crisis; the villages are dropping into the ocean. We may not be hit by the hurricane forces we see in the gulf that are given names and much publicity through the media, but many parts of coastal Alaska are hit by storms that meet the definition of hurricanes. There are winds exceeding 75 miles an hour, waves and storm surges that can equal those of the hurricanes. The big difference is they are not named as hurricanes. We don't get that attention or that focus. Money from OCS development could help pay for mitigation efforts and perhaps, in some cases, pay for village relocation costs. So Alaska is not unlike the other Gulf States--Louisiana, Mississippi, Alabama, and Texas--for coastal mitigation and habitat protection.
I am sure we will have an opportunity on this floor to discuss a lot more about the coastal erosion problems in Alaska in the future. I do feel strongly that we need to pass a bill to speed oil and natural gas leasing in the Gulf of Mexico. It will provide natural gas for our Nation, while helping the Gulf Coast States gain the revenues they need not just to recover from the hurricanes but to deal with the coastal erosion and wetlands habitat loss issues they face.
I believe the formula for such aid should cover all States that allow OCS development off their coasts, while providing other aid to all States that need it.
I tell my colleagues that, regardless of the outcome of the bill--and I intend to support the measure--I will continue to seek to provide aid to all of the coastal States that allow OCS development, especially since all other States gain an equal sharing of revenues from energy development on-shore. It truly is the only equitable thing to do.
With that, I yield the floor and suggest the absence of a quorum.
Mr. President, I am proud to follow Senator Martinez from Florida, who has truly gone the extra mile in realizing his responsibility to his home State of Florida but also recognizing his…
Mr. President, I am proud to follow Senator Martinez from Florida, who has truly gone the extra mile in realizing his responsibility to his home State of Florida but also recognizing his responsibility to the Nation and trying to balance the two in a very intricate way. There isn't a Senator on this floor who doesn't appreciate the value and beauty of Florida's vast coastlines and recognize that they are not only a Florida treasure, they are a national treasure. We know we have the technology today, as has been clearly demonstrated over the last two decades, to drill not very far offshore anywhere and make sure that it is done in an environmentally sound way to
protect the beauty of those beaches and the vistas of those marvelous coastlines that make up the great State of Florida.
For Florida or any State to suggest that the oil that lies off its shore is not a national asset and, therefore, should be treated only as a State asset is simply wrong. It would be as though my suggesting, as a Senator from Idaho with millions of acres of Federal forest lands, that not one tree should be cut for the sake of building homes anywhere in our Nation. Why? Because of the environmental consequences, when we know today we, in fact, can cut trees in a clear, clean, and precise way, preserve the environment, and provide the fiber to the national fiber market, be it paper or 2 by 4s to build homes. It is also true of the minerals that lie under the subsurface of my property--but not my property, the Nation's property--on the Federal lands of the State of Idaho.
There is an intricate and important balance between what is a State's responsibility and a State's right and what is a Federal property and, therefore, the responsibility of the Congress in exercising the authority over that Federal responsibility, that Federal resource that we are today talking about in an important piece of legislation that is now before the Senate.
Embodied in S. 3711 is an effort to very carefully go at part of the resource that lies in the Gulf of Mexico that is a Federal asset and a Federal resource and do so in a way that clearly benefits the State of Florida but, more importantly, benefits every consumer in America today.
Here is the current situation that Americans face and that America simply cannot understand. Every area of this red zone around our country is a designated area by a Federal action in which we are not allowing our companies to develop and explore for gas and oil. I call it the no zone--no, you can't go there; no, you can't touch it; no, you can't drill; and, no, you can't develop. What does it mean to our country? Well, it means literally billions of barrels of oil and trillions of cubic feet of gas all around this area--Alaska, ANWR, the west coast from the State of Washington down to the border with Mexico off the coast of California, all around Florida, all the way up to the State of Maine. It is difficult to determine how many billions of barrels of oil are there, but we know that it is significant and it is phenomenal.
Let me give an example. On this little piece of paper is a green strip. It is a green strip that recognizes S. 3711. We are going to place it in its proper location in this debate. I am going to put it right there. That is all this bill does. How big is this spot? This spot is 8.3 million acres out of the Gulf of Mexico. This little spot, by this perspective, represents 1.6 billion barrels of oil, we believe, based on a U.S. Geological Survey, and 5.83 trillion cubic feet of gas right there, this little, tiny spot. Is it significant? In the mix of all of this, yes, it is. But more importantly, it says that a comprehensive broad policy under sound environmental guidelines could make this Nation tremendously less dependent on foreign oil and gas coming out of Canada.
The industries that the Senator from Florida talked about that are losing their base, agriculture and nitrogen fertilizer, the petrochemical industry and natural gas that is now going offshore, and we are losing those jobs, all of that would stop if this Senate and this Congress and this Government got their heads on right about national energy policy. S. 3711 is a step in the right direction. Is it a big step? No, it is not. It is a rather small step. But it is a tremendously important step, as we head down the road of beginning to recognize that this Nation could, in fact, become very much self- sufficient in many ways in its energy needs through its own energy production.
You have heard some rather tired and old debate about needing a comprehensive energy policy, and we shouldn't do S. 3711 without it because it simply isn't broad enough. How can any Senator stand on the floor today who stood on the floor a year ago today and debate the Energy Policy Act of 2005, the most significant, broad-ranging energy development, energy conservation, new technology for energy bill that this Congress has ever passed? It is now law. It is now being implemented. And whether you are in the Midwest or the upper Midwest or in Idaho, we have ethanol refineries going up all around us. Twenty percent of the corn crop this year will be used in the production of ethanol and into the future. Why? Because of new technology and national energy policy. You don't need to reinstate or restate what we did last year. All you need to do is keep adding to it and strengthening it in a way that allows us as a nation to become increasingly self-sufficient.
S. 3711 does just that. Let me bring your eye back to the chart, back to this little, tiny spot on the map, this 3.8 million acres. That is a lot of land, isn't it? In this case, it is a lot of water. Under that water and in that land rests an opportunity to bring down the energy costs to the average American consumer by a significant amount and to make us less dependent on foreign sources for our oil today in areas of the world that are politically very unstable.
I could go on about a lot of facts, statistics, and figures. But let me take you to the real important part of this debate. It is called security for the average American family. America is frustrated today, and the average consumer and average mom and dad are tremendously frustrated because their cost of living is not keeping pace with their paycheck. Why? Because instead of driving to the gas pump and filling up for $10 or $15, they are paying $40 or $50 each time, or more. What does that do to a family budget? You may say that is one energy cost; they can surely abide that. Did you check their thermostats and their other energy bills, the cost of electricity to turn the lights on and keep their computer on for them and their kids? What about the temperature in the home in the cold winter months? All of that has costs significantly more in a very short period of time.
In 6 years--that is the life of one term of a Senator--natural gas prices that heat the homes of America have gone up 286 percent. While I know we ought to be concerned about all of the politics and all of the surrounding land and doing it environmentally sound, what we are talking about today is beginning to understand the burden and the sense of insecurity that the American consumer is suffering from and doing something about it. It would be one thing to say there isn't any more gas, there isn't any more oil, and we are shifting to a bunch of alternatives, and in the meantime you are going to have to pay the price.
The reason the American consumer is paying more at the pump today, more for their electrical bill and heating is because of politics, because the American politician for the last two decades has denied the American consumer the right to have access to the resources they are entitled to have. I hope we got the message.
S. 3711 begins to say to American consumers that we hear you. We may be a little late, but we hear you. In hearing you, we are going to bring 5.83 trillion cubic feet of gas online in a relatively short period of time--18 months to 2 years at the very latest. And we have the potential of bringing 1.6 billion barrels of oil into the gulf coast refineries. That is billions of barrels that we will not buy from Venezuela, Saudi Arabia or any other place that is politically unstable. We are going to produce it in this country. That should help bring down or stabilize the cost of gas at the pump.
The American consumer ought to be able to rely on its Government not to stand in the way of the private industry sector of our country and its ability to produce for that American consumer. But for decades upon decades, we have done just that, all in the name of environment--in most instances, even when we knew that the environment wasn't going to be damaged. And now we know for sure.
Remember Katrina? Remember what happened a year ago, as one of the most powerful storms in the world surged up the Gulf of Mexico and across the coast of Louisiana and Mississippi and Arkansas? It tipped over oil rigs out in the gulf, shut down thousands of wells that are in this green area. And no oil was spilled. Why? Because of the safety mechanisms, the environmental ability that our industries have today to do it right.
Few of you remember what happened off of the coast of California in the late 1950s and early 1960s; it was an oil spill
known as Santa Barbara. From that day forward, the environmentalists' call was: Remember Santa Barbara. The reason we had so much difficulty with this little sale was the ghost of Santa Barbara. Let me tell you, Santa Barbara is dead, buried, and gone. From that day forward, the American oil-producing industry learned lessons, developed technologies, wellhead shutoffs, did all of the right things not only in a voluntary way but also because of mandates of public policy from our Federal Government. We began to get it better, and it is the best it is today. Americans ought not fear drilling off their coasts because it is done right. Remember Katrina and not one drop spilled.
Let me talk about something else that simply demonstrates the reality of where we are. Let's dial up your scope and not look at the whole of the United States; let's go right to the gulf on this chart. Here we are. Here is 181. This is what S. 3711 talks about, this 8.3 million acres. We provide excellent buffer for the State of Florida all around. Yet we are going to allow production to come off in that area so that the American consumer can feel a little more secure, hoping that the price at the pump will not go up anymore and might go down a little, and their energy bills this winter may go down a little bit. But the reason I bring this to the floor is because of the speech I gave some months ago on the Senate floor about what is going on right here, the Northern Basin off Cuba, 50 miles from the Florida coastline. We have five foreign countries drilling there today. That is 50 miles off of our coastline; it is property that belongs to the Cuban nation. China is there drilling, as are Spain and Canada. It is not 120 miles away, not the big buffer zone we created to protect the Florida coastline from our own effort, our own expertise, from the world's best deep-sea drillers, the U.S. petroleum companies. In some instances there, it is nations that know little about the technology and are borrowing it from others and don't have our quick shutoff systems and our wellhead protection systems. They are not 120 miles off of our coast, they are 50 miles off of our coast, and we cannot do a thing about it.
Let me rephrase that. There is something we could do. Right now, we have prohibition that no U.S. company can go there. It is Federal policy, U.S. foreign policy. Why? Because it is Cuban. Yet the Cubans would love to have us there. Why? Because of our expertise and talent. They want their beaches protected. This particular area of Cuba has beautiful, sandy white beaches being developed by foreign interests today for resorts, so foreign tourists can come there from all over the world. They don't want those beaches at risk, but they also want oil developed. They would love to have us do it, but we have a prohibition against that. We will debate that on the floor.
I have a bill that 20-plus Senators are cosponsors of. It would change the policy and allow U.S. companies to play in that area, to bid, and to become the producer--not for a Chinese market but for a U.S. market. Isn't it phenomenal? Here we go, again. Here is the ``no zone.'' We say: No, you can't. No U.S. company can touch any of this. But right down here, we say: China can come and drill. We say that by the absence of good foreign policy; we don't say it in reality. But by denying ourselves the opportunity, we invite the world to come.
The reason it is important that I say this in the context of S. 3711 is for the American people to understand that, as we struggle to get it right, with lease sale 181 embodied in the Senate bill, it is but a small step in the right direction--albeit the right direction--with potentially a very significant impact to the consumer's pocketbook. At the same time, we have a long way to go as a country, as our economy struggles under dramatically increased energy costs, as the average family struggles to balance their budget, their household budget.
There is no way that mom's or dad's salary is going to go up 280 percent in a few months' time. It will not happen. Yet everything that is tied to energy, everything that is tied to the petrochemical industry, their costs have gone up dramatically, and all of those are put off on the American consumer. Did you hear the Senator from Florida? Twenty-five to thirty percent of our nitrogen production has gone offshore. Now, we are so silly that we are stepping on our food bills. Nitrogen goes on the ground, nitrogen produces crops, crops produce food, and food gets to the consumer shelf. By our public policy, we are suggesting that food costs will even go up, or at least the producer's costs will go up. If the producer's costs will go up, they will attempt to pass that through to the market shelf, to the grocery store. So not only by the absence of good policy are we going to cause mom to pay more to get to the grocery store, we are going to ask that she pay more when she gets there, all because of an incoherent lack of policy that doesn't fit the absolute needs of the American consumer.
I could go on a lot longer about national security and our dependence on foreign oil and, when that dependence is at risk, then we have to suffer or we put our military in harm's way, in part, to protect our foreign interests and keep rural stability. We will argue that it is in the name of human freedom, but in the process it holds down energy costs by creating a stable world.
Senator Domenici chairs the Energy Committee, and he has worked now for a year to produce the legislation that is before us. He recognizes, as do many of us who serve on the Energy Committee, the reality of where we are today and where we have to go. The American consumer will, I believe, feel the positive result of this legislation when it becomes law, when the drilling starts, when the marketplace recognizes that the potential of bringing 5.83 trillion cubic feet of gas to the market and 1.6 billion barrels of oil is very significant, and it is done in a safe way and environmentally sound way and it is out of harm's way from the rest of the world that is growing increasingly unstable, which happens to be one of the primary producers of crude oil for the world market. No, finally the Senate gets it.
Senator Domenici and I and members of the Energy Committee and this Senate struggled for 5 years to craft the Energy Policy Act of last year, a very significant bill.
A lot of work is underway. Billions are being invested in all forms of new technology and energy and energy development. But in the interim, in the next decade or two, as we transition this great economy of ours to different forms of energy, you don't turn off the energy you have, you don't tell the consumer not to drive the car for 5 years until we can get them a hydrogen fuel cell car that doesn't do any emission, or maybe is supplied by energy that is going to cost less. Our country doesn't work that way and it never has.
S. 3711 begins to put us in sync with reality. I say to the American consumer that we hear you. We hear you loudly and clearly and we grasp your sense of frustration and insecurity at this moment. Passage of this bill will help stabilize energy costs and, in some instances, especially in natural gas, it may well bring down those prices for the winter months and the heating months of 2006 and 2007. If we can accomplish that--and I think we can--then this Senate ought to vote unanimously for S. 3711. We ought not get caught up in the minutiae of the politics of the past because the minutiae of the politics of the past have produced $3 gas, have produced $10 and $12-per-million-cubic- feet gas, and have caused the American consumer to develop a sense of insecurity about themselves, their families, and their futures like none we have ever had.
The chairman of the Energy Committee gets it. That is why he has worked as hard as he has. I believe I understand those issues, and I am proud to be a cosponsor of this legislation.
Let us say to the American people: Let's take a step further. Let's erase this red area from surrounding the American coastline. Let's look at new offshore policy that says to the American consumer: Here is an opportunity, and we ought to deal with it in an environmentally sound way, instead of just saying no. You can't just say no and be able to deal with that at the gas pump the next day because when you do, that means the American consumer pays more.
I see that as the essence of this bill. And in supporting S. 3711, albeit a strong step, it is clearly a step in the right direction. Let's remember the responsibility we have to the consumer
as we effectively deal with and develop these resources because that consumer is also an environmentalist who wants it done in a safe and sound and environmentally clean way. That is what we are about.
I yield the floor.
Show 8 more
Mr. President, I ask unanimous consent that the order for the quorum call be rescinded. Mr. President, I rise today to discuss S. 3711, the Gulf of Mexico energy bill which is before the Senate. At…
Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.
Mr. President, I rise today to discuss S. 3711, the Gulf of Mexico energy bill which is before the Senate.
At the outset of my remarks, I say I come to the Senate today to speak about this particular bill with a heavy heart. It is a heavy heart because the approach which the Senate Committee on Energy and Natural Resources has taken over the last year and a half has been a good template for how we ought to do the business of our country; that is, bringing Republicans and Democrats together to try to work out an agenda in the best interests of America.
In this particular circumstance with this bill, with the opening of the gulf coast of Mexico, we did have a bipartisan bill that emerged from the Senate Committee on Energy and Natural Resources. Unfortunately, from the time it came out of the Senate Energy and Natural Resources Committee until today, it has been changed in some significant ways.
The concerns that have been raised by ranking members are legitimate concerns for several reasons. One is a reason related to the relationships in this Senate and how we get along with each other to try to come up with solutions to face the common problems we face in America today. We were able last year in the Senate Committee on Energy and Natural Resources and the Energy Policy Act of 2005 to put together the kind of broad bipartisan coalition that emerged in a good bill. It was not a perfect bill, but it was a good bill.
I hope the relationships that carried us to a successful conclusion with the Energy Policy Act of 2005 will be more the norm around here than the exception. I am hoping, as we work our way through this particular legislation, that those positive relationships will also be restored.
From my point of view, when we worked on the national Energy Policy Act of 2005, I saw that as an effort, as a Democratic and Republican effort to build a house of energy independence
for America. I saw the house of energy independence being built on cornerstones that are important for us to achieve energy independence.
We knew then and we know today that we could do much better with conservation. The experts at the Department of Energy tell us in the Senate, oftentimes in our Senate Energy and Natural Resources Committee, that we waste 62 percent of the energy we consume in America today. We in America can do better. We can do a lot better with conservation.
The experts also say we are at the dawn of a whole new revolution with respect to biofuels. There are many Members of the Senate who have worked to advance the cause of biofuels over the last several years. That renewable energy future for America has great potential to help build this house of energy independence.
Third, a key cornerstone is the new technology being advanced and explored throughout our country, including the possibility of looking at things such as coal gasification. We know coal for the United States is no different for us than oil is to Saudi Arabia. We have vast resources of coal. The only problem we have with coal is when we burn it, there are environmental problems created. As we have the technological breakthroughs in coal gasification, we can take advantage of one of the greatest natural resources we have in our Nation. So technology is one of the cornerstones, one of the keys that will help get us to energy independence.
Finally, the development of our natural resources is very important. For instance, on the gulf coast or mountain lands of my State of Colorado, it is important that we develop those natural resources in a way which is sensitive to the environmental impacts created from that development.
As we move forward and look at the possibility of the increase in the modest production which will come from the opening of lease 181 and the area to the south, we ought to look at other issues relating to energy and energy independence.
With gas prices over $3 a gallon and with growing instability in the Middle East and a deepening dependence on foreign oil, today should be the day in the Senate where we are talking about the broad array of ideas relating to energy independence. We ought not to be so narrowly focused on a very small development in the Gulf of Mexico--an important development, but nonetheless, in the grand scheme of getting us to energy independence, it is simply a small step in that direction.
Now is a time for this Nation to embrace new ideas with regard to energy. Now is a time for a real discussion of energy in this Senate. It is time for a new direction for America as we look at the future of energy for this country and for our world.
Gas prices today have jumped 25 percent in just a little over a year. And let's not forget they have doubled in the last 3 years. Today we are paying twice as much for gas at the pump as we were 3 years ago.
Second, we remember, at the near anniversary of Hurricane Katrina, the great disruptions that were caused across America because of Hurricane Katrina, those disruptions showed the vulnerabilities of our oil and gas infrastructure.
Third, today we are facing a deepening cycle of violence and confrontation in the Middle East, making it a stark reminder to all of us that our overdependence on foreign oil brings grave risks and dangers to America's security.
The American people and a large bipartisan group of Senators in the Senate share a vision for an energy-independent America. That vision is one which is powered by renewable energy. It is a vision which recognizes the new generation of clean coal and energy-efficient technologies. Unfortunately, because we are not allowed to amend this bill, we will not have the chance to have that discussion about these ideas which have been generated by many of the Senators in this institution. We should allow those ideas to come.
I will highlight four ideas I believe we should be considering in the Senate today.
First, we should create a national renewable electricity standard. We passed a renewable portfolio standard less than 2 years ago in Colorado. It is a modest standard. It was not a standard that required 30 or 40 percent; it required 10 percent of the power the utility companies deliver to come from renewable resources by the year 2037. That forward-thinking initiative has already spurred a boom in renewable energy production in our State, creating jobs and revitalizing rural economies. You see them in the wind farms in Logan County. You see it in the solar energy utility farms now being built across my State. We can do the same thing on a national level. In fact, Senator Bingaman's renewable portfolio standard that passed in the Senate last year but was rejected in a conference with the House was a step in the right direction. We should have that kind of a standard, or perhaps we could try flexible renewable electricity standards that account for regional differences in our country. There is no doubt that a renewable electricity standard would usher in a new era in renewable energy production across the country. That would, in turn, reduce our dependence on fossil fuels.
Second, we should establish aggressive goals for reducing our dependence on foreign oil. We should employ the full force of our policies in our Nation to achieve them. S. 2025, the Vehicle and Fuel Choices for American Security Act, which has 25 sponsors, Democrats and Republicans alike, establishes achievable goals of saving 2.5 million barrels of oil a day by the year 2015, 7 million barrels a day by 2026, and 10 million barrels a day by the year 2030. We should be having a debate on S. 2025 in the Senate today.
Third, we know we must do a lot more with biofuels. We must also do more to put biofuel-powered vehicles on the road. Right now, the United States consumes about 20 million barrels of oil a day. Two-thirds of the oil we consume is for transportation. We need to substitute that oil with biofuels, biofuels grown right here in America, on our farms and in our fields. To do this, we need to bring more gallons of biofuels to the market. We need to give consumers access to alternative fuels at filling stations.
We need to retool America's vehicle fleet to run more efficiently and on alternative fuels. S. 2025 does this, and we should bring to the floor that legislation so that we can have a discussion about the positive contribution that would make on our road to energy independence.
Finally, we should have a candid discussion of how we can improve the fuel economy of our vehicles. A number of proposals are circulating in this Chamber that would, for example, raise CAFE standards or implement a ``feebate'' program. Last week, Senator Coleman, along with Senator Obama, and others, introduced a bill that takes a somewhat different approach to raising fuel standards--one that moves us in an honest direction to have a much more efficient national vehicle fleet for America.
Mr. President, there are many other great energy legislative initiatives circulating in this body. You see them in the Clean EDGE Act, the Vehicle and Fuel Choices for American Security Act, the Enhanced Energy Security Act of 2006, the Alternative Energy Refueling System Act, and other bills that have yet to receive appropriate attention. We should bring them forward to the floor. It is not as if they belong to one party or the other. The Roman philosopher Seneca once wrote: ``The best ideas are common property.''
We ought to be thinking about energy independence, not as Democratic or Republican ideas. We should be thinking about them as American ideas. The question is, How do we as an institution, as the Senate, move forward in a new direction to get us to energy independence?
It is time that we write an additional chapter in the energy future of America that takes the building blocks of the Energy Policy Act of 2005 and moves forward with the great ideas that have been developed by so many Senators over the last year.
Mr. President, may I ask how much time I have remaining?
Mr. President, I see my colleague from New Jersey. Through the Chair, may I ask the Senator how long he will be?
Mr. President, I thank my colleagues. I think that order makes sense as we proceed with the discussion and debate.
I want to make a point about the contributions of my State of Colorado to oil and gas development for our country. We know natural gas prices are spiraling out of control, hurting families and farmers all across this country. Colorado farmers, for whom natural gas is an essential ingredient for their fertilizer, are already suffering under the weight of very high gas and diesel prices. Now they are also having to pay record prices for fertilizer. Needless to say, they are struggling to make ends meet.
Colorado is doing more than its fair share, much like Wyoming, to help our country produce more natural gas. There are currently some 29,000 producing natural gas wells in Colorado, and industry estimates project that between 24,000 and 27,000 new domestic gas wells will be developed every year to meet the growing natural gas demand in our country.
I am proud that Colorado is home to such a wealth of resources and that we can help our country through this energy crisis. But we have also paid a price for these contributions. We know the development must be done in an environmentally responsible way, but the rapid pace of exploration and development is having a huge impact on Colorado's land, water, and communities. The vast open spaces of the Rocky Mountain West are home to pump jacks, pipelines, roads, and compressor stations. Many communities are very concerned. Hunters and anglers are seeing habitat loss and wildlife depletion. Local communities are fighting to protect their watersheds from lease sales that could jeopardize the safety of their drinking water.
While I am proud that Colorado can help satisfy the Nation's energy needs, we should also be pursuing balanced production of our resources in the Gulf of Mexico. As much as possible, the country should share the benefits and burdens of our energy production, including the production and revenues from the Gulf of Mexico.
As I have said before, S. 3711 will make modest additions to our oil and gas supplies with additional leasing in the Gulf of Mexico. It is not, however, a perfect bill.
I deeply respect the concerns that Senator Bingaman and several other colleagues have made about the fiscal implications of this bill. The new areas being opened for leasing, they point out, come at a high price. These leases will be on Federal submerged lands on the Outer Continental Shelf, which belong to the taxpayers of all 50 States. Yet 37.5 percent of the revenues from those leases will be paid directly to only four Gulf Coast States--Texas, Alabama, Louisiana, and Mississippi.
I appreciated hearing Senator Bingaman's thoughtful presentation on the fiscal repercussions of this revenue distribution, and I applaud his work on the OCS issue, both in this debate and in the consideration of S. 2253, which was a bipartisan bill that emerged from the Energy Committee.
As I said, this bill is not perfect, but it does, for the first time, establish direct funding for the Land and Water Conservation Fund stateside grant program. It is truly historic that we are finally creating an honest to goodness conservation royalty for offshore leases. I appreciate Senator Lamar Alexander's work on this initiative.
In 1964, Congress passed the Land and Water Conservation Fund Act, which said that if we are going to drill for oil and gas in the OCS, we should be reinvesting a part of those revenues in parks, trails, and open space for the use and enjoyment of the American people.
President Kennedy's vision and Congress' vision was a bold one in the early 1960s. They authorized $450 million a year for the Land and Water Conservation Fund stateside grants program to be provided to States and local communities as matching grants, to help them build ball fields and trails, to help protect wildlife and open spaces across America.
Unfortunately, what was envisioned as a conservation royalty has been subject to the budgetary whims of Congress. This meant that the program has been consistently underfunded. Year after year, Congress has appropriated far too little money--an average of $94 million over the program's 42-year history. In the last 2 years, the President has proposed eliminating the program down to zero.
With this bill today, we finally create a permanent funding mechanism--a conservation royalty--that Congress envisioned in 1964. This is a new chapter in the history of the Land and Water Conservation Fund. It is the first step--only the first step--toward securing full and permanent funding for this overwhelmingly successful program.
As it is drafted, this bill does not provide the level of funding for LWCF stateside that the program needs.
I want to point to this chart, Mr. President, which indicates with the red bar on the left side that the authorization amount for the LWCF program stateside is $450 million. It averaged about $94 million. About 98 percent of the counties of America benefited from the grass from the stateside program. The amount of money projected to be supplied in the LWCF through this legislation is only $15 million a year. When you take that $15 million a year and divide it among the 50 States, every State would get approximately $300,000 per year on average. That is not a significant contribution relative to the historic amounts that have been made available to the States through the assistance of the stateside Land and Water Conservation Fund program. So it is important that, as we look at this issue and this legislation, we recognize that we should not be taking away the historic appropriations that have been made to the stateside Land and Water Conservation Fund. I am hopeful that we can ensure that those higher levels of funding for LWCF can, in fact, be made.
Mr. President, the prospect for LWCF stateside funding after 2017 is a little less clear. Because spending after 2017 is outside the budget window, it is not included in CBO's score of the bill. But based on available estimates of revenues and direct spending under the bill, it is likely that, beginning in 2017, stateside LWCF will receive at least $125 million per year. Indeed, it appears likely that beginning in 2018--12 years from now--stateside LWCF will receive additional funding from ``new receipts'' from the area 181 and 181 south.
Mr. President, Senator Alexander and I introduced legislation, S. 3562, that would fully fund the stateside LWCF. I have prepared an amendment that echoes that. It would provide at least $125 million per year of funding for the stateside LWCF program beginning in 2007 and at least $450 million per year beginning in 2017. My amendment would direct revenues from the renegotiation of leases issued for the production of oil and gas from the OCS that provides royalty relief without the necessary price thresholds.
The Federal Treasury is owed billions of dollars for those leases. Those leases mistakenly have provided royalty relief without these price thresholds. My amendment, with its $125 million annually between 2007 and 2016 and up to $450 million per year beginning in 2017, would ensure that stateside LWCF will be adequately funded.
Mr. President, I wish we were having a larger debate on the energy policy for our country. I wish we were bringing some of the new ideas on energy legislation to the floor. I believe the American people deserve a great public debate on our energy future and they deserve a comprehensive forward-thinking energy policy. But for now, we must satisfy ourselves with what is at hand: a bill that includes modest increases in production in the Gulf of Mexico and, I am proud to say, a conservation royalty.
Mr. President, I ask unanimous consent that Senator Pryor be the next Democrat to speak following Senator Wyden, with the understanding that we will go back and forth to a Republican Senator in between them if a Republican Senator is here.
Mr. President, I have enjoyed hearing my distinguished friend from Oregon, who is always an effective and enthusiastic advocate. We worked together on many things, and I hope we will on many more…
Mr. President, I have enjoyed hearing my distinguished friend from Oregon, who is always an effective and enthusiastic advocate. We worked together on many things, and I hope we will on many more things in the future.
I want to talk a little bit about the price of natural gas and how we can get it down. We have an opportunity to do that next week in the Senate. The Senate is considering the Gulf of Mexico Energy Security Act of 2006. It directs new oil and gas leasing in 8.3 million acres of the Gulf of Mexico. It directs the Department of the Interior to begin oil and gas leasing in designated parts of what we call lease sale 181--that is just the name of a geographic area--no later than 1 year after the bill becomes law, and directs leasing in 181 south, an area below the one just described, as soon as practical.
From the revenues that come from that, we will deal with those in the traditional way. First, there is a royalty, and 37.5 percent of the royalty will go to the affected States, which I assume includes Louisiana and Mississippi and Alabama, and perhaps the Presiding Officer's State of Texas. Then 12.5 percent will go to the State side of the Land and Water Conservation Fund under an arrangement that has been in the law for 40 years, to take some of the money we use from offshore drilling and use it for State parks, soccer fields, city parks. The money goes to the States.
We do a lot of things here in the Senate, and some may sound more relevant than others. But this is legislation next week that will affect blue-collar workers in America, it will affect homeowners, and it will affect farmers. It could affect the price of gasoline. The price of gasoline is set by the world marketplace, as the natural gas price is as well. But the major effect, I think, will be on the price of natural gas. Let me explain for a few minutes why I am talking about natural gas instead of gasoline.
If you stop and think about natural gas, one could easily argue that an extraordinarily high price for natural gas has more of an effect upon the lives of Americans than an extraordinarily high price of gasoline. A year ago, when the price of natural gas was about $15 a unit--to put that into comparison, that would be about the same thing as if gasoline were at $7 a gallon. That would be about the same thing. Now, imagine that. What if gasoline were $7 a gallon across the United States? We would have revolutions from Odessa, TX, to Mountain City, TN, and North and South, and in every direction. People would say: We can't stand that.
Well, we were having a very hard time a year ago with the natural gas prices at $15 a unit. Now, fortunately, they are back down to a little below $7 a unit. But this economy of ours, this United States of America, was built on a natural gas price of about $2. So it is three times as high as we were accustomed to it being.
And what difference does that make? Well, if we pass this legislation next week, we can reduce--or at least begin to stabilize--the price of natural gas, and that helps American workers. A lot of speeches are made here--and the Presiding Officer has heard as many as I have-- saying no more outsourcing. Let's not send jobs overseas. Don't let them go to Germany, India, and China. Why don't we adopt policies that stop that?
Here is a good way to stop jobs from going overseas. There are 1 million jobs in the chemical industry in the United States today. These are good, high-paying jobs. Most of them are blue collar, but many are white collar. These are manufacturing jobs in the United States of America, millions of them. A place like Eastman Chemical in Kingsport, TN, is an example. Eastman Chemical, as far as we are concerned in Tennessee, has been there about as long as the Great Smoky Mountains. My uncle used to work there. In the Appalachian part of Tennessee, where income has never been high, for a long time Eastman has paid a good, high, steady wage to families. It has transformed the area. There are good schools, good roads, strong families, and good communities, with 10,000, 12,000, or 15,000 jobs right there in that area. People drive 50 to 80 miles to go to work. Some have been working there three and four generations. Eastman makes chemicals. Out of what? The major raw material for chemicals at Eastman is natural gas.
The president of Dow Chemical testified before the Energy Committee that natural gas, used as a raw material, accounts for 40 percent of Dow's costs. So if the price of natural gas goes from $2 to nearly $7, as it is today, or to $15, as it was last year, what do you suppose happens? If Eastman is going to expand, or if Dow or another company is going to build another plant, are they going to build it in the United States? No, those jobs will go overseas, and they have been. There are maybe 100 chemical plants being built around the world. Only one is being built in the United States, and the major reason is the high cost of the raw material, natural gas.
So there is the first reason the vote we are having on Monday afternoon at 5:30 makes a difference to the average American and to all Americans. Well, none of us are average. We are all individuals. We like our jobs. There are a lot of jobs at stake, and it is not just the chemical industry that is affected by the high cost of natural gas.
A year ago, the Tennessee Farm Bureau joined me in sponsoring a roundtable on natural gas prices when they were at $15. One of those who was at the roundtable was the president of Saturn. The General Motors Saturn plant came to Tennessee when I was Governor. It is an innovative plant, and we are proud that they chose Tennessee. At the roundtable, the president of Saturn said to me: We have done about all we can, in terms of efficiency, to deal with this incredible cost of natural gas in our automobile plant. After this, it is going to begin to affect the cost of our cars.
If the cost of auto parts suppliers and the cost of automobiles that are manufactured in the United States goes up, the jobs go overseas. If you can put an engine plant in Germany, or some other kind of supplier in Mexico, they will do that because of the high cost of natural gas. So it affects manufacturing.
The Tennessee Farm Bureau was helping me host that roundtable because the high cost of natural gas affects farming. Farming uses a lot of energy and uses a lot of fertilizer. The biggest raw material in fertilizer is usually natural gas. So the price of fertilizer doubles when the price of natural gas goes up like that.
The rising price of natural gas affects millions of Americans-- workers, farmers, and also those who are heating and cooling homes with natural gas. What do you suppose the local gas company does after a while when the price of natural gas goes from $2 to $15? What do you think that will do to your local bill? It is going to go right through the roof. For retired families, for low-income families, the high price of natural gas hurts. So the vote we are having on Monday is about blue collar workers, about farm families, and it is about all the families who heat and cool with natural gas. That is the importance of natural gas prices.
Now, I see my friend from Arkansas here. I assure him that I am not going
to be too extensive in my remarks. I look forward to his. I have a few more things I would like to say.
The second point I want to make is that the bill we are dealing with Monday is part of a comprehensive plan. I have heard a few colleagues come here and say we cannot drill our way out of this big problem we have with oil. They are absolutely right about that. Everybody in this Senate knows that because we spent 10 years working on a comprehensive energy bill--the Energy Policy Act--which we enacted about a year ago after weeks and weeks of debate. It could have been called the ``Natural Gas Price Reduction Act.'' I am not going to stand here and say that bill is the reason the natural gas price has gone from $15 last summer to $7 today, but I hope it helped.
Market forces overrode all of that. But the Energy Policy Act surely put us on the right path, because to reduce the price of natural gas and to begin to stabilize the price of oil and make sure this big country of ours, which uses 25 percent of all of the energy in the world, has a steady supply of reliable, low-cost energy that is clean and as carbon-free as possible, we set this country on a different path by passing that comprehensive energy legislation a year ago, and we started with conservation.
We need to be more aggressive about conservation, and there may be a conservation bill that we ought to enact later this year or next year. We also aggressively moved to encourage nuclear power because nuclear power produces 20 percent of all of the electricity in America and 70 percent of the carbon-free electricity in America. That means it is our major weapon against global warming. If my friend and fellow Tennessean, Al Gore, were to do a sequel to ``Inconvenient Truth'' and call it ``Inconvenient Truth II,'' it would be about nuclear power. That is the solution to global warming.
So, first, we encouraged conservation. Then we began what is turning out to be a renaissance of interest in nuclear power.
Third, the Energy Policy Act included incentives for clean coal. We have a lot of coal. So if we make more electricity by nuclear power and more electricity by coal and we conserve to begin with, then there is less demand for electricity made from natural gas and the price goes down. Almost all of our new electric powerplants over the last 10 years were made by natural gas. That is like burning antiques in the fireplace to heat your home. That is a pretty dumb way to go about the business of producing electricity.
Let's conserve, build nuclear powerplants, encourage the use of clean coal, recapture the carbon, deal with global warming, reduce the price of natural gas, and that is not all. We also made it easier in the bill last year to import liquefied natural gas from overseas. That is a complicated process. We don't want to get into the same shape in natural gas that we are with oil, where we get most of it from overseas, but we can increase imports of LNG. Bringing it into terminals here and piping it into our system helps increase our supply, and that lowers the price and, apparently, that has begun to work.
Renewables help. There are some things we can do in that area. We can make ethanol from corn. We can make biodiesel from soybeans. I held a roundtable in Tennessee on biodiesel the other day. I even heard in a hearing that a factory is opening in Oak Ridge that will make ethanol from coal. We can make fuels from other sources, but we need a lot of fuel for cars and trucks, and we need a lot of fuel for electricity in this country that uses 25 percent of all of the energy in the world.
One thing we did not do last year was take any significant step to increase the supply of natural gas that comes from the United States. I think any logical person would say if you are going to take a comprehensive look at the high price of gasoline and the high price of natural gas and its affect upon Americans, you would want to include increasing the supply while we are transitioning to other forms of energy production. This is going to take us 5 or 10 years. In the meantime, we don't want to pay $7 for gasoline and $15 for natural gas. One way to do it is to increase our supply.
That is why we are voting on Monday on deep sea exploratory drilling in one of the most promising areas in the world for more natural gas. That is what we call Lease Sale 181. Someone said on the Senate floor there wasn't much gas down there. I heard the Senator from Louisiana say the following, and I believe this is true: It is enough to heat 6 million homes for 15 years.
It is six times the amount of the liquefied natural gas that we are importing today in the United States. That is a lot of gas. It is more oil than we import from Saudi Arabia, our principal supplier of overseas oil. It is more oil reserves than Wyoming and Oklahoma combined.
So in our great big economy, where we use 25 percent of all the energy in the world, it may only be a small part of our overall needs, but it is a lot when you think about heating 6 million homes for 15 years. And I suspect that if we move ahead aggressively to tap this new supply of natural gas and oil, it will help to stabilize the price of natural gas and might even move it down a little and help the blue collar worker, the farmer, and the homeowner.
Some say that energy independence is not a real goal. I don't agree with that. What I mean by energy independence is that the United States will not ever again be held hostage by some other country. It doesn't mean we won't buy oil from Mexico or natural gas from Canada. But we don't want to have to do that if we don't want to. So that is why, in the comprehensive Energy bill last year, we accelerated research for hydrogen fuel cell vehicles and gave incentives for hybrid cars. We want to reduce our dependence of oil overseas and transform our economy permanently. We don't want to drill our way out of the problem. We all know we can never do that.
Over the next 5 or 10 years, we'd better make sure we use the oil and natural gas we have available in this country if we want people to be able to drive their cars, work their farms, keep their jobs, and pay their bills. That is what we will be voting about Monday at 5:30.
We have been extremely careful with the environmental impact of this bill. I am very proud of Senator Domenici and others for what they have done on this issue. These rigs will be 125 miles away from Florida. You can only see about 20 miles out to sea. So that is a long way out. They are out of the way of airplanes and military craft. The technology we have means there is more natural leakage of oil from the sea floor than from all these rigs out there. So the environmental damage is minimal. Plus, we are going to take half the revenues from this drilling and use it for environmental purposes. I think that is great. Mr. President, 37\1/2\ percent goes for wetlands and other areas in the Gulf Coast heavily damaged by hurricanes, and 12\1/2\ percent is an outdoor recreation and conservation royalty. It is not a lot of money, but it begins to say that we are going to have an environmental benefit. It is a balanced formula that a majority of Senators can easily support.
Mr. President, this is a focused bill. This is a little left over work that we didn't get done last year when we passed a comprehensive piece of energy legislation that put that ``freight train'' energy policy moving slowly down the track in the right direction, toward large amounts of clean, low-cost, reliable, domestic-produced energy.
We had in that bill conservation, nuclear power, clean coal, and we made it easier to import natural gas. We had extensive support for renewables, but we didn't do anything about domestic supply. This finishes the job. So that is why this is a focused bill.
There are many other great ideas about energy, and whenever we subject ourselves to an energy debate, it will take us a long time because we have many good ideas and opinions. But from time to time, we need to take a focused idea about which there is emerging consensus and do it.
Two years ago, you could not even mention the idea of offshore drilling here. Last year, we had a majority of votes in the Senate for it, but we could not get to 60. This year, we got 86 votes on the motion to proceed, and we have a broad bipartisan consensus. I suspect in future years we will find other ways to permit, say, Virginia, for example, if it chooses, to permit drilling for oil and gas in certain areas offshore where
the rigs cannot be seen, and use some of those revenues from drilling to create a trust fund for education, use them to lower taxes, or use them to improve the coastlines of Virginia. I know if I were Governor of a coastal State, I would do that in a minute. I would rather not have an income tax, and I would rather have the best and biggest trust fund for my university system. That is exactly what Virginia could do, but we are not doing that here. We will address that when there is a consensus about it. There is a consensus about this.
As we move toward the end of the week and as people begin to think about what the Senate is doing that affects their lives, if you are a manufacturing worker in this country, we are going to affect your life at 5:30 on Monday afternoon. If you are homeowner paying your bill for 105-degree heat with natural gas, we are going to affect our life at 5:30 on Monday afternoon. If you are a farmer and have seen the price of fertilizer double, we are going to affect your life at 5:30 on Monday afternoon. We are going to vote for you if we vote for the energy security bill on Monday.
I yield the floor.
Madam President, I ask unanimous consent that the debate from 12:30 to 6:30 this evening on energy security be equally divided between the two leaders or their designees with respect to the motion to…
Madam President, I ask unanimous consent that the debate from 12:30 to 6:30 this evening on energy security be equally divided between the two leaders or their designees with respect to the motion to proceed to S. 3711; provided further that following any opening remarks of the two leaders on Thursday, July 27, the motion to proceed be agreed to, and the Senate then begin the consideration of S. 3711.
Madam President, before speaking on the Burmese Freedom and Democracy Act, I want to make a few comments about the speech of the Prime Minister of Iraq which we just had an opportunity a few moments ago to hear in the joint session over in the House Chamber.
Today we mark a step forward in the war on terror. A mere 3\1/2\ years ago, the dictator, Saddam Hussein, would have addressed his regime's legislature of lackeys. Today, the democratically elected Prime Minister of Iraq addressed a joint meeting of the U.S. Congress.
A mere 3\1/2\ years ago, the dictator, Saddam Hussein, ruled Iraq. He terrorized his own countrymen with murder, torture, and weapons of mass death. He posed a security threat to the entire region and to the United States. The international community decided he had to face serious consequences.
In March of 2003, America, as we all well know, led a multinational coalition of forces to depose the dictator and to liberate Iraq. Since then, the country has made remarkable progress as it throws off the shackles of tyranny and embraces democracy.
Iraqis have held three successful national elections, ratified a constitution, elected a permanent unity government, and formed a cabinet with a strong prime minister at its head: Prime Minister Nouri al-Maliki, whom we had the pleasure of hearing from just an hour or so ago.
It took our country 13 years to go from independence to the implementation of our Constitution. Iraqis have done it in 3--and under the glare of the 24-hour news cycle coverage and the threat of terrorist attacks.
When Prime Minister Maliki ascended to the podium today, it was hard to deny the importance of the moment. His presence in this Capitol represents a victory for democracy. And his country is, and will continue to be, an important ally in the war on terror. Of course, there will be many tough days ahead in Iraq. There is no denying that the security situation represents a real challenge. But America does not avoid challenges, and we do not abandon our allies when the going gets tough.
We are moving forward in Iraq. The country recently realized its highest oil production and export levels since before its liberation, and during the past 3 years, per capita income in Iraq has doubled.
I would also like to call to my colleagues' attention an article titled ``Iraq as a Sovereign Nation'' written by the Prime Minister that appeared in Monday's Wall Street Journal. It points to very tangible proof that Iraq is moving forward.
The Iraqi province of al-Muthanna, located at the southernmost border of that country, has become the first province in which local Iraqi forces have taken full responsibility for law enforcement and security, taking over for our coalition forces. President Bush has frequently said: As Iraqis stand up,
we will stand down. That is exactly what has happened in al-Muthanna, home to over a half million Iraqis.
Local Iraqi police and military have stood up and taken the place of 1,400 coalition troops. The Governor of al-Muthanna has command of the provincial police. Iraqi national police and Iraqi Army troops will operate in the province under the control of the Prime Minister and the National Government.
The transfer of power in al-Muthanna is only the first step. The Prime Minister writes that ``current estimates envision half of Iraqi's provinces transferring security responsibility before the end of 2006''--this year. He and I agree that this process should not be driven by an arbitrary timeline but by the situation on the ground; nevertheless, this is an encouraging sign.
He goes on to write that the decisions for future transfers of power will be made based on the threat assessment in the province, the readiness of the local Iraqi forces, the readiness of the local governmental authorities, and overall coalition force posture.
The historic achievement of local control in al-Muthanna represents an important step forward in our mission in Iraq. As Iraqis stand up, we will stand down, and we will leave behind a proud and free Iraq.
The Prime Minister ends his article by saying:
With God's help, and continued assistance from
the coalition, our regional neighbors and the larger
international community, our people will unite and
prosper. Together, we can and will succeed.
I think we should all commend the Prime Minister for his vision and leadership. America will and must continue to stand by Iraq. None of what has been achieved in the last 3 years there has been at all easy, but we have succeeded and we will continue to succeed because freedom and democracy are stronger than the terrorists' tools of mayhem and fear.
Great credit must go to President Bush for his strong leadership in the war on terror which has enabled us to reach this transfer of power in al-Muthanna, and soon, in other provinces as well. I also commend the Iraqi Government, Iraqi police, and Iraqi security forces for their hard work in promoting stability in the country.
Of course, Madam President, I know our colleagues join me in thanking the men and women of America's Armed Forces for their courage, dedication, and sacrifice.
Stability in Iraq means stability in the region and greater security at home. As the Prime Minister said in his speech just delivered, according to translation:
Do not imagine that this problem [of terrorism] is solely
an Iraqi problem, because the terrorist front represents a
threat to all free countries and free peoples of the world. .
. .The responsibility of facing this challenge lies on the
shoulders of every country and every people that respects and
cherishes freedom.
The Prime Minister is exactly right. For that reason, America must stand firm in the war on terror, and we must stand side by side with our Iraqi allies in their war on the terrorists.
Before I finish, let me say a few words about the current situation in the Middle East regarding Israel and Hezbollah. Israel is America's longstanding friend and an ally in the war on terror. In fact, the horrors of September 11 awoke many in this country to what Israelis face daily and have faced daily for literally years. That country has been and continues to be on the front lines of the war on terror. I, for one, support Israel's efforts during this intense time to do whatever it takes to defend her people and her borders.
Maybe some have forgotten, but the terrorist group, Hezbollah, killed 241 American service men and women in Beirut in 1983. Hezbollah's love of death and destruction is on a par with al-Qaida. They are enemies to every peace-loving, democratic country. They are a threat, and Israel has a right to pursue them wherever they exist.
Now, Madam President, if I may, I would like to turn to speak in support of the Burmese Freedom and Democracy Act, which is the bill before us this afternoon.
This May, along with a number of cosponsors, including my good friends, Senator Feinstein and Senator McCain, I introduced this bill for Senate consideration. Passage of this bill would mean continued sanctions against the illegitimate, dictatorial regime that currently holds Burma literally in its grip--the Orwellian-named State Peace and Development Council, or SPDC. This Senate will be acting on behalf of those in Burma who are being repressed. The Burmese people want these sanctions because they want democracy, justice, and freedom, and we stand with them.
I see my friend, Senator McCain, here to speak on this issue as well. He has actually had the privilege of meeting with Daw Aung San Suu Kyi, the hero of Burmese independence, an opportunity that has been denied to most because she has been essentially under house arrest for 10 of the last 17 years.
The broad, bipartisan coalition in this Chamber for this legislation indicates America's firm resolve to oppose the tyrannical SPDC regime, and America's recognition that Burma, under the SPDC, poses an immediate threat to its region. To put it simply, the allies of the Burmese people have a moral obligation to continue to stand up against the SPDC. I take great pride that we are continuing to do so.
As many of my colleagues are well aware, last year, the extension of sanctions was signed into law by President Bush on July 27, 2005. It enjoyed strong, bipartisan support and passed this body by a vote of 97 to 1. Unfortunately, recent events have reminded us of the need to keep up the pressure on the villainous SPDC regime.
Ibrahim Gambari, the United Nations Under-Secretary-General for Political Affairs, visited Burma in May as a representative of Secretary-General Kofi Annan. He met with the ringleaders with the SPDC as well as Nobel Peace Prize winner, Daw Aung San Suu Kyi, who, as I indicated earlier, is a political prisoner and has been the leader of that country's democracy movement for quite some time. Suu Kyi, as I indicated earlier, has spent 10 of the last 17 years in detention or under house arrest for her efforts to bring freedom and democracy to her people. Many other members of her party, the National League for Democracy--the NLD--have been detained as well.
After returning, U.N. Diplomat Gambari wrote a column for the International Herald-Tribune titled ``A Crack in the Burmese Door.'' After acknowledging the SPDC's years of repression and misrule, Gambari wrote:
Last month, something seemed to change. Burma's locked door
popped open a small crack.
Gambari wrote this based on his discussions with the SPDC. But I think we should judge actions rather than words, and those actions tell an entirely different story. In fact, nothing fundamentally has changed in Burma. Suu Kyi remains under house arrest and the regime continues to engage in outrageous behavior.
I do not share Mr. Gambari's optimistic view that the SPDC is ready to, as he puts it, ``turn a new page.'' In my view, the junta is only interested in deflecting growing pressure from the international community to change its repressive ways--and in avoiding the U.N. Security Council's consideration of a nonpunitive resolution that addresses the threat the SPDC poses to its own people and the entire region.
Shortly after Mr. Gambari's visit, Suu Kyi's house arrest was extended for another year--double the length of the extensions she typically receives, under the regime's perverted concept of a legal process.
Even worse, Suu Kyi's life. was threatened in a state-run newspaper. The New Light of Myanmar, a mouthpiece for the SPDC junta, printed the following in a story on July 6:
The days of Daw Suu Kyi and NLD are numbered. They are
heading for the tragic end . . . Daw Suu Kyi and the National
League for Democracy (NLD) pose the most dangerous threat to
the nation.
That is an ominous threat. And the people who make it have the power to see it carried out.
They have made an attempt on her life before, and are apparently threatening to do so again.
In addition to the immediate danger its misrule poses to the Burmese people, we cannot forget for a single moment that the military regime in Rangoon poses a significant and non-traditional threat to the entire region. Their litany of abuses is well known.
Refugees spill into Thailand, fleeing the SPDC's brutal war against ethnic minorities.
Illegal drugs pour across Burma's borders into China, India, and Thailand, and destroy the lives of the region's youth.
And an unchecked HIV/AIDS virus closely follows drug trafficking routes, leaving disease and human tragedy in its wake.
It is worth noting that the SPDC spent $70,000 in 2004 to combat HIV/ AIDS. This is in stark contrast to the millions of dollars spent on weapons from China and Russia--and, according to recent news reports, North Korea.
This is no time for the international community and multilateral organizations, including the Association of Southeast Asian Nations, ASEAN, to soften its stance on Burma.
I want to emphasize for my colleagues one very important point. This Senate has already done much on behalf of the Burmese people. Now it is time for the U.N. to do its part.
We need less talk and more action at the U.N. in support of democracy, freedom, and justice in Burma. We must keep in mind that the situation is so dire in Burma that the U.N. has already adopted 28 nonbinding resolutions regarding that country. It is now time for the U.N. Security Council to act.
The criteria and justification for bringing a country before the Security Council was outlined in a report commissioned by former Czech President Vaclav Havel and South African Archbishop Desmond Tutu. There is no one in this Chamber who does not applaud their sustained efforts to bring about a peaceful solution to the Burma problem.
In fact, the Senate passed in May a measure that I sponsored calling on the U.N. Security Council to discuss a binding, nonpunitive resolution on Burma that calls for the immediate and unconditional release of Suu Kyi and all other political prisoners in that country; an end to abuses against minorities, including the use of rape as a weapon of war; and the beginning of a meaningful national reconciliation process that includes the unfettered participation of the NLD and ethnic minorities with the SPDC.
It is time for the U.N. Security Council to take such action. It is time for free nations to stand for freedom.
I specifically call on the respective governments of Ghana and the Republic of Congo, current nonpermanent members of the Security Council, to support this resolution.
Ghana, in particular, is a country that values freedom and the rule of law, and support for the resolution would unequivocally demonstrate that they stand on the side of justice in Burma.
I urge our Representative to the United Nations to continue efforts to move toward Security Council consideration of a nonpunitive resolution on Burma. To do any less would be to take a step backward.
Mr. President, the Congress has stood with the people of Burma in their quest for freedom and democracy. It is time for the U.N. Security Council to do the same.
Madam President, I yield the floor.
If I can say to my friend from Arizona before he leaves the floor, it is hard to imagine that the world simply doesn't pay any attention to this outrageous regime. I ask my friend, if they had a weapon of mass destruction, probably we would be paying a little more attention to this pariah regime--does my friend from Arizona not agree?
I thank the Senator as well. He makes a very important point.
The United Nations has not responded to efforts to prod them into moving this item up on the agenda. It could well be because of the lack of enthusiasm, shall I say, of the Chinese and the Russians--two permanent members of the Security Council. Nevertheless, the efforts persist. This U.S. sanctions bill is important, but it is not going to get the job done. We know that. It would require multilateral sanctions of a dramatic basis, such as were imposed against South Africa, to get the job done. At least at this point, the ASEAN countries seem to be more interested in doing business there than they are squeezing the regime.
There was, however, one encouraging sign. Burma was scheduled to host the ASEAN meeting this year. That did, I think, embarrass the members to the extent that they were unwilling to do that. So ASEAN obviously is not meeting in Burma in 2006.
The struggle continues. I thank our colleagues. This is going to pass on a voice vote shortly. I thank our colleagues for their awareness of this issue. I think it is one that will be before us for some time to come.
I don't know if there are other speakers. I see the Democratic leader. Does he wish to speak on this bill?
I yield the floor.
I say to my friend from Nevada, I am not aware of any other speakers on either side.
How much time remains?
I yield the remainder of the time on this side.
Mr. President, I move to reconsider the vote, and I move to lay that motion on the table.
The motion to lay on the table was agreed to.
Mr. President, I will be glad to defer to the distinguished ranking member of the committee. I won't be long. I will go ahead and address this very important issue. I begin my remarks by thanking the…
Mr. President, I will be glad to defer to the distinguished ranking member of the committee. I won't be long. I will go ahead and address this very important issue.
I begin my remarks by thanking the distinguished senior Senator from New Mexico, Mr. Domenici, for his leadership in this area. He is one of our more knowledgeable Members. After years of watching him at play, I now refer to him as our No. 1 utility player. Whatever the problem was, he can be helpful. He is knowledgeable on budget issues, energy issues, and also has a practical side: Let's find a way to get it done. Once again, he has done that with this bill.
I know he wants to work with his committee. I know he wants to work with Members on both sides of the aisle. But I know more than anything else he wants to do the right thing for our country. So I thank Senator Domenici for his leadership. He has agreed to do some things in ways he would not do it if he could do it in a vacuum. But that is what leadership is all about. In the legislative process, you don't get it 100 percent the way you want it. You have to give a little and get a little to do the right thing, to produce a product for the American people. So that is the main reason I am here. I want to thank you for that.
I also acknowledge the leadership and encouragement of Senator Martinez, the Senator from Florida, and others from Florida who have been helpful in this effort. I have a great admiration for Florida. It is more or less a neighboring State--a little bit of Alabama intervenes between my State, where I actually live, and the Panhandle of Florida-- and I haven't been able to understand why they have been so opposed to oil and gas production in the Gulf of Mexico. I understand the concern about coastal areas--the beaches. But there has to be a reasonable and practical way to protect the American people and their needs for this production, and shield our beaches and our tourist industry from harm.
It is easy to say: No, no, I am not going to have it at all. It takes courage and leadership to say: Well, let's work this out in a way that would be the right thing for our military bases in the Panhandle of Florida, and for our tourist industries in Florida, Alabama, Mississippi, Louisiana, and Texas--we all have that--and take advantage of the tremendous resource that will help the American people, that will reduce our dependence on foreign oil. This is what this is all about.
It is not just the prices at the pump today; it is about the long- term plan. We have a problem here. It is a growing problem. Are we going to do something about it? This is a step in the right direction. That is the message here. Will this bill solve the problem tomorrow? No. It will have an impact almost immediately, because people will see we have taken some action and they will act. And it probably will have some impact on natural gas pretty quickly. But it is a clear statement to everyone that we realize there is a problem here and we are going to do something about it.
So I thank Senator Martinez for stepping up. Senator Nelson has been involved, and I hope we are going to have a unified group of Senators from the entire Gulf of Mexico area to endorse this concept. We have worked at that. Florida, Alabama, Mississippi, Louisiana, and Texas, have met and talked on a bipartisan basis about doing the right thing. I have been proud to be a part of that.
Senator Landrieu of Louisiana has been relentless--relentless--has she not, I ask the Senator?
She has worked this issue hard. Senator Vitter has made sure we have done it in the right way. He has looked at the language very carefully. I commend them in particular. Their State has probably been more active involving this issue than any other Gulf States. Their State has also taken some of the negative impact--on the coastal areas--in recent years. Therefore, it is only right that they get a higher percentage of the coastal impact fees and that they be recognized for their effort. Senator Hutchison and Senator Cornyn, Senator Cochran, Senator Shelby and Senator Sessions also deserve to be recognized. We have all been involved.
The next point I want to make is I don't quite understand why we are finding it harder and harder to produce a result. It is has become so hard to be bipartisan. I admit it is almost impossible to get a bipartisan agreement that is bicameral. Maybe it is just a sign of the times; maybe it is the political season we are in which may be a little more testy than normal. But here we have a perfect example of a bipartisan bill. A wide margin of you vote earlier on the motion to proceed to this bill, and we are now in the debate time on that. I predict when we get to the final vote, it once again will be bipartisan, probably higher than anybody would have thought. But this is the way it can happen. This is the way it should happen. So I am glad we are working in a bipartisan way.
I want to say: Look, we made some progress last year with our Energy Policy Act of 2005. It didn't entirely address our energy needs, obviously, but it was a step in the right direction. Now, here is the next step. For years, I have been stressing that our energy policy in this country has to be balanced. I would prefer to produce our way out of our energy situation. I believe we can have more: more oil, more gas, more hydrogen, more nuclear, probably more wind and solar energy too. We can do it all. But I finally came to the conclusion we are not going to be able to just do one part of this equation; we are going to have to produce more, we are going to have to conserve more, we are going to have to look for alternative fuels, and we are going to have to be innovative. I have made that concession. After all, it makes sense. Why don't we do the whole package?
That is what last year's Energy Policy Act began to do, it made some improvements in nuclear and in hydrogen and alternative fuels. However, we can't do all of those things instantly. Very few places are ready to build a new nuclear plant. My State of Mississippi may have been one of the first to build a new nuclear reactor. That is great. We need to move towards alternatives such as liquefied natural gas, and once again, we have to build the facilities. And that won't happen tomorrow.
In the meantime, while we need to make stronger conservation efforts and come up with more alternatives and innovative ideas, and we need more oil and gas. It is that simple. Now, we can get it some way or the other from Iraq, Venezuela, Nigeria, Iran or we can get our own safely. When I go to my State of Mississippi, people scratch their head and say, why is it that people from a certain part of the United States are determined we are not going to get oil out of ANWR? What is it to them, and what does it mean to the country?
For whatever reason, without impugning anybody's motives, we haven't done it. But we can do it in the gulf. We can do it in the Gulf of Mexico because we know it can be done. We think it will be in the best interests of our States and our people and we think it is in the best interests of America. It is there, it can be obtained safely, miles off the coast.
I want to emphasize right up front: This is not about putting oil rigs or
natural gas wells within the sight of the beach, although there have been natural gas wells in plain view from my front porch in Pascagoula, MS. It is not about that. We do not want our beaches to be threatened. This is going to be at least 100 miles away--in the case of Florida 125 miles away from this 181 and the other areas we are going to open. I think it can be done and it will produce very early results.
Look at what we are talking about here, freeing up 1\1/4\ billion barrels of oil that we won't have to get from some unstable government overseas, and almost 6 trillion cubic feet of gas, that is huge. Others in this country ought to be willing to do the same thing in other coastal areas. But I want to emphasize that this is not about any other coastal area; this is just about our area. We are prepared to step out, do the right thing for our country, take the risks. But we also want to get a little of the benefits, a little help in trying to deal with some of the problems we have in the coastal region.
By the way, one little aside: This bill will reduce the Federal deficit by almost $1 billion over 10 years--$1 billion--probably more. I think all of the numbers are understated. I think we are going to get more oil, more gas, more benefits, more money coming into the Federal Treasury and our States. We will do it without raising taxes or fees on anybody. So we get the benefit of additional supply, we get the benefit of impacting our Federal budget, drilling will produce hundreds of jobs, good-paying jobs. I know the people who work on those rigs out there in the Gulf of Mexico, and I know the kind of money they make. Yes, they work hard and they take risks and they are away from their families, but these will be good, new jobs for good, hard-working people--people who need a little help right now, these are the people who have been hammered by Hurricanes Katrina and Rita.
For decades, almost every dime generated from leasing of Gulf of Mexico areas for oil and gas all came to Washington--all of it came to Washington. Mississippi, Louisiana, Texas, and Alabama, the States which permit energy exploration off their coasts, reaped very little benefit, but they incurred a lot of the risks, some of the damage and some of the threats. We provide the infrastructure. These boats don't just take off from nowhere; they have to be built somewhere. All of this goes on--it is not all perfect, let me be honest about that. There are certain challenges. So we feel there should be an equitable distribution of the royalties from the Outer Continental Shelf to those of us who are on the front line.
For years States that allow energy production on Federal land receive 50 percent of the Federal revenues from these activities. Those of us in the gulf: zip--other than what we get indirectly through the Land and Water Conservation Fund and through Federal largess, which, in our area, is not much.
So we think this is important. We are trying to stand up and do what we think is right for our country, but we want to also do the right thing for our States. There is a coastal impact. We all know that. This is an acknowledgment of that. The Gulf States which will be producing this would get under this agreement 37\1/2\ percent of the Federal revenues from the new leases entered into after the date of enactment. Twelve and one-half percent, though, of the revenues would go to the Federal Land and Water Conservation Fund, for all of the States to use. We are not greedy, but we want our fair share for a change. There was a time when we wouldn't stand up, speak up, and fight for what is right for our people. This time, we are going to. It is a win-win. It is right for our country and it is right for us. I think this is a good arrangement.
The money that goes to the States--Senator Landrieu and I have felt it shouldn't all go to the States. Our State capitals and our State Governors are quite often not from the marshes of Louisiana or the beaches of Mississippi. We have to make them understand where we are and who we are. Once again, part of the problem over the years has been our own fault because the attitude in the south of Louisiana and the south of Mississippi is: Oh, well, we will do it ourselves. Well, we are trying to get a better rate. We are trying to make more sense. So 20 percent will go to the coastal counties that are impacted.
I know the Senator from New Mexico, Senator Bingaman, is here, and he cares about those areas. I want to tell him what these monies will be dedicated to. They will not be frivolously squandered on some project that is not along the coastline. The funds are going to go to coastal conservation, coastal protection, and restoration. Hurricane protection--hello--do we need to do that? By the way, if we don't do it, we know who is going to pay our bill because when we are flat on our back the Federal Government will have to come in again with hundreds of billions of dollars. Let's be proactive. Let's try to do a better job in protecting our coastal areas and our marshes. If we do not take action, the impact on fisheries could be absolutely detrimental. If you don't have these areas of brackish water, you are not going to have the shrimp and the fish we have been trying to develop there. This money will provide for mitigation of natural resource damage.
I firmly believe this will have a great impact in our area. It is the right thing to do. These areas will be better, and in some instances they will be restored. Louisiana is losing land every hour, and although we may not have that big a problem in Mississippi yet, this problem is only going to get worse. We can take action to protect the future.
We have a chance to do some innovative work. In my State of Mississippi, we are not trying to put things back as they were before Hurricane Katrina; we want them to be better. We are coming up with innovative ideas. We are thinking about how can we be better prepared to withstand a hurricane. These funds will make a huge difference in the long run.
I want to make this clear: I think this is a great effort that we will all be able to point to in the future and say that we did something great. This is something that will make a difference. We will be saying to the American people: We understand your pain, we feel it, and we are taking steps to do something about it.
This will not be the last effort. We are going to have to do more. But now is the time to do this. Now is when the people are suffering due to higher prices for oil and for natural gas. It has made it very difficult for people. This legislation will reduce our dependence on foreign oil, it will help us with our budget needs, it will provide more money to protect natural resources, and it will bring much needed funds and jobs to the gulf area which was hammered by Katrina and Rita. This is truly a plan which Congress should pass and be proud of and the President should adopt.
I look forward to working with my colleagues as we go forward in the next couple of days to complete action on this important legislation.
Obviously, people who have the time to look at this believe it has been a very unfair situation, one that for some reason or another we have tolerated for years. When they realize the way it is handled in other parts of the country, they feel very strongly it is time we step up and get some benefit.
It is also further exaggerated and exacerbated by the fact that if we believe that we are on the line, dealing with all the costs and all the potential problems that could go along with this, we ought to get some of the benefits so we can prepare for that.
I want to say that the people in the Senate and the American people have been very concerned, sympathetic, and helpful to us after the hurricane. But they know we have coastal impact problems. We need to address some of those problems now, not later, because they have become very serious. There are areas we are losing that are basically going into the Gulf of Mexico, and we can also take steps to preserve what we have and to better prepare for hurricanes, use for protection and mitigation for the future.
The people feel very strongly about it. It is not just our Governors who see this obviously as one way to help us deal with the future needs we have, but also just the rank-and-file people. We understand we need to get it done.
This proposal, which would give our Gulf States some share for our coastal impact, will give us the benefit of getting some help. Also, the people understand this is something we need to do for our country and are willing to do it
in the gulf. I wish the rest of the country would follow our lead. However, we are not going to fuss about that, we are just going to step up and do the job.
Our people do feel very strongly about it. They believe we have not been treated fairly and it is time to do something about it.
I yield the floor.
Mr. President, I ask unanimous consent that the order for the quorum call be rescinded. Mr. President, I rise today to join the discussion about the Gulf of Mexico Energy Security Act, and I want to…
Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.
Mr. President, I rise today to join the discussion about the Gulf of Mexico Energy Security Act, and I want to say at the outset that I support legislation to open up lease sale 181 as reported out of the Senate Energy Committee, and I support new environmentally responsible energy exploration in the gulf.
Obviously, this legislation before us differs from what we passed out of the Energy Committee, and we are still looking at the various impacts of this particular legislation. Some of my colleagues have come to the floor to talk about the larger energy debate, and I wanted to make sure I came down and expressed my concerns and comments about what we need to do to move forward on not just having a piece of energy legislation come to the floor that only has one particular provision in response to our energy needs, but what we can do for a broader energy strategy.
Many of my colleagues may have also turned on the television and seen that oil companies continue to report astronomical profit, and the public has a right to ask why. I hope that next week, when we take up the legislation dealing with the reauthorization of the Commodities Futures Trading Act, we might be able to discuss the issue of price gouging and what we can do to protect the public from those kinds of activities. I know many people in America are shocked to see, again, quarter profits from companies like Exxon jump 36 percent, and that is over last year's $10 billion record profit. So a lot of people in America want to know what we are going to do not only in the short term, but also in the long term on this energy issue.
I know that while we are only discussing this particular proposed piece of legislation on one issue, this Senator thinks it is very important to bring up a broader global context to the challenges that the United States faces in this energy crisis and why it is imperative, with everything going on in the Middle East, that we continue to be very aggressive about a U.S. energy policy that will get us off of our focus on oil and get us on to being a leader in the world economy not just in the United States on energy technology but around the globe.
Earlier this month, I spoke to the Washington Council on International Trade. That is in Seattle. It happened to coincide with the 33rd anniversary that Senator Magnuson had taken a trip to China to visit with the Foreign Minister. Maggie led that congressional delegation after President Nixon opened up the door to China, and he had a 2-hour meeting with the Foreign Minister there. It is interesting because there are notes from that meeting in which Senator Magnuson said he was going to talk about everything from the Pacific Northwest to energy issues, but he happened to scribble a little phrase on a piece of paper that is still recorded in history, which says that China can no longer be an island in the world. I certainly believe that China can no longer be an island in the world. Three decades ago, this policy was correct, but it is even more important today as it relates to our global energy needs and the United States and China working together.
It is no surprise that China's influence has come to the forefront of the global economy debate and that everybody realizes that we are tied together in so many ways. President Hu was recently in Seattle, and we discussed a variety of issues between the Pacific Northwest and, obviously, we have a great economic relationship in selling airplanes, coffee, software, and a variety of agricultural products to China. We continued those discussions.
What we see today is that the global energy issues are prevalent in our trading relationship with China, and they are also important to our national security issues and, obviously, to our environmental issues. That is why I believe it is time for us to take up and establish a formalized, high-level dialog between the United States and China on energy policy. There are various accidents of geology in this world, and I think I have said many times on the Senate floor that the United States only has 3 percent of the world's oil reserves. So when it comes to that situation, basically, China and the United States have landed in the same boat; that is, neither one of us can drill our way to energy security within our borders. But both of our economies have grown increasingly susceptible to these global energy spikes, and we need to act aggressively together to address these issues from a global security perspective.
As a result, I think it is in our mutual interest not to view ourselves as competitors for scarce energy resources but as global partners in the race to move beyond the petroleum dependency. Establishing a sustained cooperative relationship with China on energy policy will open up new markets for new American technologies and companies that we can help create and foster with our energy policy here.
Recently, Thomas Friedman wrote that you can, with these new markets, ``turn Red China into green China,'' providing America with economic opportunity and a long-term environmental benefit.
But here are some of the facts: Today, China accounts for 40 percent of the increase in oil demand. The number of passenger vehicles on the Chinese roads have more than tripled since 2001 and may equal the United States by 2030. So China faces a massive transportation infrastructure modernization. We know there are still 30 million Chinese who didn't, in 2004, have electricity. So trying to keep pace with the growing demand, China is essentially adding a huge 1,000- megawatt coal-fired plant to its grid each week. That is like adding the capacity every year to serve the entire country of Spain.
These new coal plants have created problems such as widespread pollution. Sixteen of the world's 20 most air-polluted cities are in China.
Even with the influx of plants and patchworks to the grid, there are various areas of the country that still have uncertain access to power. In 2004, China had a power shortage in 24 of its 31 provinces. They are struggling with the mammoth task of trying to keep pace with their energy needs. Since 2001, their consumption has grown at a rate 1\1/2\ times the growth of its overall economy. So we see that China, because it was poorly endowed with natural resources--except for coal--has increasingly become dependent on oil imports.
Now China relies on the Middle East for half of its oil, which is similar to our circumstances. Beijing has been racing around the world trying to lock in production for oil and gas in Canada and Saudi Arabia, and they are looking at suppliers for a variety of energy needs. Unlike the United States, they are looking in places such as Sudan, Angola, Burma, and Iran. As one of our distinguished international national security experts, Henry Kissinger, has suggested, energy resources may cause international conflict in the coming years.
So what do we need to do about that? I believe we need to get serious about this effort here and that the United States and China share concerns about high oil prices. We have a common interest in working together to mitigate global supply shocks and resulting price spikes.
Both nations need to work harder to increase energy efficiencies and to achieve continued economic growth. There is no reason the United States and China should not work together on the same side in virtually all international energy negotiations.
Currently, this is far from the case. Today, China views the United States as a competitor in these energy markets, and we look at them the same way.
The congressionally chartered U.S.-China Economic and Security Review Commission warned of a ``petroleum collision course well before the world's aggregate petroleum supply is exhausted.''
I think they are saying that because they realize this collision course could be avoided if we work aggressively.
This Senator believes we must take three concrete steps that will put us on a proactive path for engagement and cooperation.
First, President Bush should work with President Hu to convene a U.S.-China energy summit.
Second, we should put at the top of our agenda an effort to establish a U.S.-China working group with Cabinet-level leadership from the administration. Establishing such a group was one of the major recommendations of the U.S.-China Economic and Security Review Commission in a report to Congress in 2005.
Specifically, this proposal reinvigorated a 1995 U.S.-China energy efficiency and renewable protocol which I think we should get back to.
At the time, over 30 U.S. firms were involved in activities and programs which were designed to strengthen the bilateral cooperation and advance the role of the private sector by the United States in China's energy development.
A permanent working group would also be necessary to oversee any kind of joint R&D effort and could serve as an arbiter and negotiator for technology transfer issues.
And, third, I believe, in addition to the bilateral engagement, we should work to bring China into a membership of the International Energy Agency.
I know the Presiding Officer has thought a great deal about energy issues, energy cooperation, and protocols. The International Energy Agency is an intergovernmental organization with 26 different member organizations which prepares and seeks information about how to mitigate global supply and shocks.
In recent years, this organization has served as a clearinghouse for information on global energy prices and technologies. With China's membership in this organization, I believe we would see a lot more cooperation and information that could help us mitigate some of these spikes.
Some people have looked at China's energy policy and called it ``mercantilistic'' as they go around and buy up these resources at the wellheads in various regions of the marketplace. Encouraging them instead to be involved in the IEA would move Beijing to be a more constructive player in the global energy marketplace.
Clearly, these initiatives--a Presidential summit, establishing a direct U.S.-China working group, and promoting China's engagement in the International Energy Agency--are just a few steps down a very long road to a complicated energy security issue.
But it is clear that the economies of the United States and China are now intertwined, and our energy security should be considered with a common purpose.
This issue will color our relationship with China for decades to come, but if we are direct and proactive in our engagement, there is also opportunity, and an opportunity for the United States in meeting China's energy needs is key to their domestic stability and economic growth. Improved cooperation between our nations could have significant economic benefits for both countries.
Let me talk about that innovation for a second.
The reason I am raising this issue within the context of today's debate is because we are missing an opportunity today. Rather than simply focusing on drilling, we should be debating what is going to give America and American companies the lead in 21st century energy technology.
Because there is an opportunity on the horizon in China and other growing economies, there is a huge opportunity to export American technologies and products, but we need to seize the technology lead to do so.
Earlier, I spoke about the challenges China faces with its incredible growth in demand. Modernizing China's domestic energy infrastructure will require a $35 billion investment. That is every year for the foreseeable year--$35 billion in investment every year for the foreseeable future.
So we must work to open up these Chinese markets to grid management software, smart metering technology, new transmission technology, biomass and biofuels, and related innovations. These things are emerging technologies in the United States, which we
could further accelerate not just for our domestic benefit, but also as a supplier for that growing, demanding Chinese market.
Given the evolving nature of China's energy industry from its complete state-controlled entities into more hybrid models, we can help crack open these markets, I believe, overnight, and gaining entry, once again, requires us to be very proactive and engaged, with a sustained commitment. I believe whoever develops these technologies that break through to these economies will hold the key to the 21st century. I want the United States to be the technology leader there, and I want us to continue to look for these huge market opportunities to do so.
Essentially, China today has a 20-percent more fuel-efficient target than we do. The 2005 renewable energy law mandates that 15 percent of China's energy comes from renewables by 2020, and the plant also sets a 20-percent savings standard for new appliances and other technologies.
Consistent bilateral involvement with U.S. counterparts through a U.S.-China energy working group could help foster the changes that we would like to see with U.S. technology companies and could help us grow those businesses and opportunities.
Figuring out how to navigate these barriers, as I said, I believe requires greater cooperation and greater administration involvement in making sure there is a U.S.-China relationship.
The International Energy Agency estimates that China will spend $2.3 trillion over the next 25 years to meet its growing energy demands, and that just modernizing its electricity grid would require $37 billion annually, a figure that I referred to a few moments ago.
So these are great opportunities for U.S. markets. They are great opportunities to show that we can work together to be effective. For example, already some organizations on the west coast are working together with private foundations and public-private partnerships. For example, last year the State of California signed a pact with a sister province in China to provide technical assistance to work together on demand-side technologies. The agreement came in large part due to the work of the U.S.-China Efficiency Alliance, a nonprofit group that counts as its founding members and leaders various State officials, academics, environmentalists, and, obviously, some of the large utilities.
The reason China is a huge market for these kinds of opportunities and that this is taking place, obviously, from the west coast perspective is because the west coast has already had an aggressive trade relationship with China and also has been aggressive about these clean energy technologies. So this is happening to a certain degree already on the west coast, but it is a great economic opportunity for our entire Nation if we continue to accelerate it.
The question I have in mind today is, why are we ignoring this larger debate and opportunity? Why are we not debating a larger energy bill for the 21st century in which we continue to promote the energy innovation that can lead to a cleaner environment, better energy security, and certainly greater national security?
Fourteen years before he went to China, Senator Magnuson told the Seattle PI newspaper that failing to trade with China was basically ``pretending 700 million people in the world don't exist.''
Thirty-three years later, it is about time that the United States really understand that phrase. It is time that we understand the internal transformation and opportunity to work together on energy policy to solve some of our common problems and realize some of our great economic opportunities.
I hope next week we will continue to discuss various energy policies. I hope we will continue to open up this legislation to further amendments so that we can get to other issues that will really help the United States succeed in addressing our energy challenges.
Mr. President, I yield the floor and suggest the absence of a quorum.
Madam President, before he leaves the floor, I want to commend the distinguished leader from Nevada. He has for a long time championed the needs of consumers. In the West, we understand the…
Madam President, before he leaves the floor, I want to commend the distinguished leader from Nevada. He has for a long time championed the needs of consumers. In the West, we understand the devastation gasoline prices have had on our consumers. And his case for a new energy policy, a red, white, and blue energy policy that makes us free of our dependence on foreign oil, is a case he has eloquently made, and made frequently. I want him to know how much I appreciate his leadership before he leaves the floor.
I want to start the discussion about the legislation which is before us now by acknowledging the enormous pain and hurt so many citizens of our Gulf States have endured since Katrina struck their communities. Pictures of this tragedy are seared into our minds at this point. In the Senate, I sit next to the distinguished Senator from Louisiana, Senator Landrieu. She has brought passion, energy, and eloquence to the cause of securing help for those she represents so well as folks in the Gulf States try and get on their feet.
My view is that the challenge for the Senate is to reconcile the need to help those folks hurting in the Gulf States with the urgent need for Congress to legislate fresh, bolder energy policies for our entire country. My understanding is the distinguished majority leader from Tennessee, Senator Frist, will not allow amendments to this legislation. If that is the case, my view is this legislation does not balance the need to help folks in the Gulf States with the urgent need to get that fresh red, white, and blue energy policy for our country's future.
Does the Senate truly believe more shouldn't be done to promote renewable energy? Does the Senate truly believe more shouldn't be done to promote automobile efficiency? Does the Senate truly believe more shouldn't be done to protect consumers from exploitive practices? Does the Senate truly believe taxpayer dollars should be used to subsidize oil companies even though the President, to his credit, has said subsidies aren't needed when the price of oil is over $55 a barrel?
If no amendments are allowed under this legislation, which is my understanding from the statement made by the distinguished majority leader, essentially what the Senate will be saying to the country is if we go off and drill in the gulf a bit, then the country can call it a day as far as getting a new energy policy. I don't think that is good enough.
I support responsible drilling in the gulf. We obviously need more energy production. By any realistic calculus, we know oil will be part of our future and we are going to need to encourage production in a responsible way. In the Senate Committee on Finance, again, working on a bipartisan basis, the Senator from Wyoming, the distinguished Senator who sits on the Committee on Finance, Senator Thomas, has some excellent ideas in terms of encouraging production, particularly getting more oil from existing wells. We do need more oil production. But drilling alone is not the new energy policy this country needs. It is more business as usual.
We have been down this road before. In the 1990s, for example, the Congress passed a royalty program that was supposed to stimulate energy production and be good for the Gulf States and for our country as a whole. What it has done is something very different than what was envisioned. In fact, the sponsor of that legislation, our respected colleague from the State of Louisiana, former Senator Johnston, has said the program, as it has developed, is nothing along the lines of what he envisioned.
The Government Accountability Office has said with the royalty program created in the 1990s when oil was about $19 a barrel--it is over $70 a barrel now--that program that was created in the 1990s is going to cost taxpayers a minimum of $20 billion and possibly as much as $80 billion.
That is the royalty program we have on the books now. As we start this discussion about setting up a new program, I want to make sure the Senate is up on how much money is being frittered away under the mismanaged program that is on the books today. One would think it is common sense to fix the old program before we start a new program. One would think it is common sense to take the savings generated by fixing the old program and applying those savings to paying for the new program before the Senate this afternoon. However, neither of those commonsense steps is being taken. A new program is being considered by the Senate today when Congress has not corrected the old program which even the oil companies acknowledge is not needed today, and even the sponsor, our former colleague, Senator Johnston, has indicated is not working.
I have talked with Chairman Domenici about this. Chairman Domenici has indicated he wants to fix this old program, this old, mismanaged program that has wasted so much of the taxpayers' scarce resources. We all know Chairman Domenici is a straight shooter and forthright and I have appreciated his discussions with me.
However, I don't think the oil companies are going to easily give up this multibillion dollar boondoggle, this sweetheart deal they have obtained. Time is not on the side of those who want to put a stop to the billions of dollars being needlessly dispensed under the 1990s program.
The legislation before the Senate now is one of the last opportunities the Senate will have to permanently fix the broken royalty program that began in the 1990s. Senator Kyl and I have been working in a bipartisan way to change this. There has been action in both the other body, the House, and in the Senate, in the Senate Committee on Appropriations where the distinguished senior Senator from California, Senator Feinstein, has done an excellent job of trying to advance the cause of stopping these subsidies, but my guess is the legislation the Senate has been able to at least start in the appropriations process may not even hit the floor of this body, and even if it does, the oil companies are very well positioned to run out the clock on the effort in this session of Congress to stop the needless subsidies that were granted in the 1990s.
For example, there is mediation now going on between the companies and the Government, but it is nonbinding, so the oil companies hold all the cards. The appropriations process, of course, only lasts for a year so the companies can run out the clock on that, as well.
Senator Kyl and I spent a lot of time in the Senate making the case for why this was a needless expense, particularly at a time when we have so many other needs in our country. That day, despite the fact I stood in this spot for almost 5 hours, we could not even get a vote on a measure to stop these subsidies that the General Accounting Office has calculated is at least $20 billion and possibly $80 billion.
Put me down as pretty skeptical that the oil companies are going to voluntarily give up these huge sums of money. As of now, in this session, one measure after another has failed in terms of potential steps that could protect the consumer. Let's review: The Federal Trade Commission, the agency that is supposed to protect the consumer and to deal with concentration and mergers in the oil industry, a big goose egg from the Federal Trade Commission. In fact, the chair, Deborah Majoras, has all but said that high prices are essentially good for the consumer because by her theory that will promote more energy production. That is a pretty astounding theory of consumer protection, but Senators can look it up. That is what she said before the Energy Committee.
The agency that regulates commodities? Zip, with respect to dealing with speculative practices, practices that contribute very significantly to the cost of oil. In fact, when oil company executives came before our committee--the distinguished Senator from Alaska will recall--one oil company executive said speculative practices are a big factor in driving up the cost of oil for our consumers. We have not seen anything to reign in those speculative practices.
How about stopping needless tax breaks? When the oil company executives came before the Energy and Natural Resources Committee, I went down the row and asked each one of the executives whether they needed all these tax breaks. They now have record profits, consumers have record prices, so I made the point, why in the world would you need record tax breaks? The executives, when they had to answer in broad daylight, said they did not need them. Ever since then, I have been trying to roll back some of those tax breaks. The President, to his credit, said tax breaks are not needed when the price of oil is over $55 a barrel, but we have taken only the most modest step. A tiny bit of the tax relief that the oil companies are getting has been rolled back under a proposal I made involving a drilling writeoff that the companies get.
So, Federal Trade Commission, zip; anti-speculative efforts, zip; tax breaks that are needless expenditures that the oil companies say they don't need, virtually nothing. So put me down as pretty skeptical given the fact that in each of those areas the Government has ducked taking on the oil companies. Put me down as pretty skeptical that somehow these oil companies are going to come to the table and walk away and leave behind $20 to $60 billion worth of breaks in royalty relief from the 1990s. I don't think it is going to happen. I hope it does.
Chairman Domenici is very sincere in his views, but given the track record in this Congress of the oil companies being able to escape any kind of effort at those various agencies I have outlined, I don't think the oil companies are going to voluntarily clean up a program in the 1990s that has been so mismanaged. My sense is it is going to be necessary to pass legislation in this Congress to force the companies to give up these needless subsidies.
There is a compromise with respect to how it could be done in a bipartisan way. It is a compromise that I and the distinguished Senator from Arizona, Senator Kyl, have been talking about. We actually proposed it to the distinguished chairman of the committee, Senator Domenici. I suggested what we might do is allow the negotiations between the companies and the Government under the 1990s royalty program to proceed for a bit longer. Possibly that will work. I am skeptical, but possibly it will.
But if those negotiations did not produce the savings for taxpayers and the cleansing of this old program that is so important, then we have to be tougher. After a period for negotiations, I would propose as part of a bipartisan compromise that the Senate then insist the companies get no new leases until the old program has been cleaned up. That would bring together some of the ideas advanced by the distinguished chairman of the Energy and Natural Resources Committee, Senator Domenici, and some of the ideas Senator Kyl and I and others have offered on a bipartisan basis.
We suggested that be done in this bill. We said: Here is an opportunity in this legislation to permanently fix the old program before you start a new one. We thought it was a chance to take two approaches Senators have been talking about and bringing them together and permanently fixing the program. I believe if the Senate does not do that, the clock is going to run down on the program, and I think, in all likelihood, the Senate, in the beginning of 2007, will be in much the same place it is today. I do not want to see that happen.
I think it is time for a fresh approach with respect to how our country makes energy policy. I think we need to be much bolder and much more creative. I have advanced ideas in this area; a number of Senators have. But we have seen precious little of that kind of bold thinking. What we have seen is essentially business as usual.
I hope colleagues will take a look at the analysis that has been done by the Senate Budget Committee of the impact of the legislation before us today. This is, of course, S. 3711. I asked the Democratic staff of the Senate Budget Committee to do an analysis of the impact of the bill before us today. The
legislation before us now authorizes at least a 50-year commitment. The oil companies, in my view, under this legislation have been able to parlay the suffering of our citizens in the Gulf States into something that I believe could become an unaffordable gravy train.
What the Budget Committee staff found is that between 2017 and 2055, the U.S. Treasury and Federal taxpayers would be out almost $20 billion beyond what is already going out the door under the broken royalty relief program from the 1990s that I have described once again on the floor of the Senate. But beyond that, all bets are off. Lost revenues after that could be as much as $12 billion to $15 billion each year.
So I would ask the Senate: At a time when clearly folks in those Gulf States are hurting, and the Senate ought to step in and be of assistance to them, does it make sense to authorize a 50-year program that, particularly after the initial period, will involve additional sums, additional untold billions of dollars of revenues that could be lost?
The challenge for the Senate now, it seems to me, is, first and foremost, to get some amendments to this legislation. I hope the majority leader, the distinguished Senator from Tennessee, Mr. Frist, will change his mind. I hope the distinguished majority leader will allow amendments on automobile efficiency, on renewable energy, on protecting consumers from exploitive practices, and protecting taxpayers from needless subsidies. We would not be talking about hundreds of amendments. I think amendments in those four areas would provide an opportunity to strike a balance in this legislation to make sure that urgently needed help is directed to these Gulf States, that efforts are being made to get a new energy policy for our country.
It does not make any sense, to me, for the Senate to say: Let's go drill a bit in the Gulf--and pretty much call it a day. But that is what the legislation in its present form essentially says. It says: At a time when the country desperately needs a new energy policy, when people are clamoring for it at townhall meetings and in chambers of commerce and in virtually every other place a Senator goes, what we are going to say is nothing doing. We are going to say a bit of drilling in the Gulf will cover it, and a bit of drilling in the Gulf can take place, even though billions of dollars are being wasted under a program--a previous program--that was directed to the Gulf States from the 1990s.
I think the Senate can do better. I think the Senate can do better on a bipartisan basis. Senator Kyl and I are ready to propose what we believe could be a bipartisan initiative that would involve recommendations made by the chairman of the Energy Committee, Senator Domenici, ourselves, Senator Feinstein, and others. We think we could save a big chunk of money--billions and billions of dollars--that could be applied to the new program that is being considered by the Senate today.
That is the kind of bipartisan work the Senate should focus on. I look forward to the discussion and particularly hope the distinguished majority leader, Senator Frist, will change his mind. This subject is too important to bar Senators from offering meaningful amendments and allowing the Senate to get a more balanced energy policy and securing the needs of our citizens.
Madam President, I yield the floor and suggest the absence of a quorum.
Fifteen minutes. Mr. President, I just ask that my and Senator Shelby's time slots be reversed. He has another appointment, and I would be glad to yield to him and take the slot you originally had…
Fifteen minutes.
Mr. President, I just ask that my and Senator Shelby's time slots be reversed.
He has another appointment, and I would be glad to yield to him and take the slot you originally had for Senator Shelby.
Mr. President, I ask unanimous consent that the order of speakers be as follows: Sessions, Menendez, Cochran, Landrieu, and Alexander.
Mr. President, I believe I had asked for 15 minutes. I will try to do it in 10. I ask that I be notified at the end of 10 minutes.
Mr. President, I travel my State, and I know that Senator Shelby, who spoke earlier, travels Alabama, also. We meet with people and talk with people. I see people back in my hometown in church and in other places, and I get asked about energy prices all the time. People are concerned about it.
I have studied some of the economic numbers in this country, and I am a bit troubled. I think it is a valid concern for our Nation that, while the country is doing well economically and unemployment is down, middle and lower income workers' salaries have not increased as much as we would like them to. In fact, the higher income salaried workers, wage and hour workers, are doing better percentage-wise than the lower income workers. That means the cost of energy impacts them significantly. They ask me to do something about it. I talk about what I have been trying to do since I came to the Senate 10 years ago, which includes voting and working to try to open up the ANWR region, where large reserves exist, and to support nuclear power and clean coal. I have been a supporter of ethanol, and I am hopeful that we will see ethanol, biodiesel and matters of that kind really advance as an option for America.
I have to tell you that the most certain and direct thing we can do is to increase domestic production of oil and gas in this country. That is what we are about to act on now. This legislation is a concrete, direct way that will make a difference in the price of oil and gas in our country.
One of my colleagues mentioned that some people like to use this phrase: Big oil companies. I want to make one thing clear: the reason we should open up production in the Gulf of Mexico is not to help big oil companies. We should open it up if, and only if, it is good for the American consumer and the American economy.
In fact, I am confident that many of the big oil companies will have no interest in producing oil and gas from the Gulf of Mexico. They may be sitting on large reserves of oil and gas right now, and they may be very happy with $75 a barrel. Why should they want a competitor to go out and produce more in some other area if it might reduce the value of the oil and gas reserves that they possess? It is a myth and a falsehood that this has anything to do with oil and gas companies.
What it has to do with is increasing the supply of natural gas and increasing the supply of oil for American consumers, keeping our wealth at home.
One thing is obvious to us: We very much depend on natural gas. Eighteen percent of U.S. electricity comes from natural gas--18 percent--is generated from natural gas. Nuclear power provides 20 percent of our electricity. Nuclear power is the only source of clean, reliable, and affordable electricity. Nineteen applications for nuclear powerplants have been issued since we passed the Energy bill last year. Nineteen applications for new nuclear powerplants have been issued since we passed the Energy bill last year. It will make a big difference, but I have to tell you, I don't expect 18 percent of electricity that comes from natural gas to be reduced any time in the future.
Oil prices are at high levels. On July 14, 2006, the price of crude oil closed around $77 a barrel. Many Wall Street analysts say it may hit $80 if this Mideast crisis continues. By comparison, the price of crude oil 2 years ago was $35 a barrel. That has been an increase of 100-plus percent.
High energy prices, for all practical purposes, result in a tax on the American consumer. And to whom do we pay that tax? We pay it to foreign nations. Many of those nations are hostile to us diplomatically and politically. They are not our greatest friends. In fact, somebody has written an article stating that the more oil wealth a country has, the less friendly that country becomes.
Mr. Bernanke, the Chairman of the Federal Reserve Board, in April of this year said:
Rising energy prices pose risk to both economic activity
and inflation.
On June 15, he said:
The steep increases in energy prices over the past several
years have had significant consequences for households,
businesses, and economic policy.
One article I saw recently estimated that higher energy costs have knocked down our growth in GDP by 1 percent this year.
The average price of gasoline has now hit $3.02. It is up from $2.28 a year ago. This hurts families. It hurts consumers. We know that. We hate to see that happen. We know there is a worldwide increase in demand for oil and gas. We know that China and India are growing. I was in South America recently. Almost every country I visited had been having a 5-percent or more increase in growth. That means they will use more oil and gas.
I will tell you it makes a big difference to a working Alabamian, a working man or woman anywhere in this country, who now has to pay an additional $50 a month for gasoline and maybe some more for heating as a result of natural gas.
Natural gas prices have risen dramatically. On July 14 of this year, natural gas in the United States was a little over $6.25 per million Btu's. Not too long ago it was $12. It has dropped about half, which is great news. But in Russia and Oman, for example, natural gas comes in at about $1.25 per million Btu. These higher costs do impact American businesses, particularly, as well as consumers.
The vice president of Nucor Steel in Tuscaloosa, AL, said recently:
The high price of natural gas significantly impacts our
ability to remain competitive and have a productive
manufacturing sector.
Some of the natural gas spike in prices is the result of speculation, it is the result of a fear of shortage, a fear that is out there. We have seen that prices have gone up and down in natural gas.
I would say this: Natural gas production in the Gulf of Mexico is at a point where we need to expand our areas of drilling. Natural gas wells produce for a good long time, but they dry up faster than oil wells do. And if we don't constantly replace them, then we have a problem.
We have had a controversy in Alabama recently about LNG, liquefied natural gas. This is natural gas that may be produced in the Middle East. It is liquefied, frozen or brought to a point of liquid by reducing its temperature. It is brought to the United States. A plant is set up, probably offshore, to heat it up and put it into the American pipeline after we pay the foreign shipper, after we pay the people to produce it in the foreign country, after we pay the foreign country for this natural gas. That is what Alan Greenspan told us we will have to do more of, importing LNG. And we will be doing more of that if we're not careful.
How silly it is to do that when right off our own shores we have huge reserves of natural gas. We could keep all that wealth at home in our Nation. We could produce that oil and gas so it goes right into our American pipelines without having to be liquefied. It would go right to the consumers around the country.
Mr. President, 60 percent of our oil comes from foreign sources, including, 49 percent from OPEC nations in all, 14 percent from Saudi Arabia, and 12 percent from Venezuela--boy, they have been taking action recently to see if they can discomfort the United States--10.5 percent from Nigeria, and 6.4 percent from Iraq.
We paid $200 billion last year for foreign oil and gas--$200 billion, wealth that Americans would rather see invested in our country, hiring Americans to produce oil and gas. They would pay taxes and be able to raise their families, have high wages and good retirement plans and good health care plans.
A lot of people have wondered why these companies try to buy up our ports and are buying up American industries. Why are these foreign countries able to do it? One reason is, a number of them are oil- producing nations. These oil-producing nations have wealth they don't know what to do with. They want to invest it wherever they can, and the United States is a good, safe place. I think that is a factor. The transfer of our wealth to foreign nations, many of whom are not our friends or allies, impacts American jobs and American companies.
With regard to where we get our natural gas, less than 20 percent of it is imported. Most of it is imported through pipelines from Canada or Mexico, but only 2.8 percent represents liquefied natural gas. That comes in from Algeria, Egypt, and Trinidad.
So we are, in many ways, a self-contained natural gas community. If we have a real shortage, the price is going to go up. It means if you heat your home with natural gas--and many Americans do--or if your business depends on natural gas for operations--and many American businesses do,
their costs are going to go up significantly.
If we produce natural gas off our coast and put it directly in our pipelines, that will help in a dramatic way to contain the price of natural gas in America.
Alan Greenspan recently said:
Notable cost productions for both liquefication and
transportation of LNG--Liquefied natural gas--and high gas
prices projected in the American distant futures market have
made us a potential very large importer. Access to world
natural gas supplies will require a major expansion of LNG
terminal import capacity.
He has been warning about that for some time. That is what we are wrestling with in Alabama today: Do we want an LNG plant? We already produce a lot of oil and gas offshore that goes directly into our pipelines. People are comfortable with that. We have had no significant spills in our State. We are comfortable with that. But environmentalists and others are uneasy about this LNG terminal and whether we should go in that direction.
So for every argument, from the environmental argument to the American economy, to reducing the cost, we would do better to use oil and gas offshore.
Conservation, alternative fuels, and domestic production are all important things we need to work on. The Government has had moratoriums on producing from offshore areas. It is something I have been involved in since I have been in the Senate, almost 10 years. We have had debate after debate, vote after vote, but for a whole host of reasons, we have not been able to get around this moratorium. We have not been able to produce more oil and gas in the Gulf of Mexico because of it.
The State of Alabama produces oil and gas in Mobile Bay. I live in Mobile. It is almost close enough to throw a rock at from Fort Morgan Peninsula and hit it. It is right off the coast. We have them in the gulf right off the coast. They produce a lot of oil and gas for this country.
In fact, I will show this chart. It is sort of amusing to me. I used to complain about it back in 2002. We were building a pipeline then. I see Senator Cochran from Mississippi is now on the floor. He has seen all this before. We have been producing oil and gas up in Mississippi and Alabama for quite a number of years.
In 2002, our good friends down in Florida, who want no drilling 125 miles or more offshore, objected to new natural gas exploration. But they were perfectly happy to build a pipeline to take our oil and gas down to Tampa, FL, so they can sit out on the dock and have their mint juleps and watch the sunset over the gulf before they go back in their big houses kept cool with air-conditioning run by natural gas. I understand their environmental concerns. But at some point, the producing States have to feel we have been taken here a little as chumps in this deal, getting not 1 cent from the 4,000 wells that exist in the gulf--4,000 wells.
By the way, we have 4,000 wells in the gulf, and this most powerful storm, Katrina, came through so did several other powerful hurricanes last year. Mr. President, over 3,000 of those wells were in the direct paths of those hurricanes, and we never had any significant spill of oil in the gulf. It goes to show how good the technology is, how hard they have worked scientifically to make oil and gas production safer. I think that is why Florida is beginning to reevaluate this and are being more amenable to the idea. Senator Martinez has worked hard to try to protect Florida's interest as much as he can but allow some additional drilling there. I think we have gotten past that. So I would say to my colleagues I have been in the Senate for 10 years and we have been trying to open up additional reserves in the gulf, and we should do that. But we haven't been successful. It hasn't worked. We have tried and tried and tried some more.
Now Chairman Domenici has worked his heart out, and Senator Landrieu, working on the Democratic side, has met him halfway, and they have worked and planned, and so many other Members of this body have worked on it.
So we have a proposal now which I think will clear this Senate, will open up huge areas, 8 million acres of gulf for production that can produce, and, as we heard from other speakers, large amounts of oil and gas. It will be done in a way that is bipartisan and in a way that we all can be happy about.
We can keep the oil and gas people busy for the period that the oil and gas moratorium on the other parts of the gulf remains in effect. So at that time we will see what happens. If there is a mess or if there is unhappiness--maybe nothing will change. Or, maybe at that point we can decide to open up more land in the gulf for production.
Mr. President, I don't know what my time was.
I have gone beyond the 10 minutes I was looking to speak--far too far. I will wrap up and say I thank each of the Members of this body who has worked hard to reach an accord that will have bipartisan support that should pass. Because this is important to the American consumer; it is important to the American economy; it is important to jobs in this country. It will reduce the transfer of American wealth to foreign nations where we are now sending it to buy the energy we must have.
This is not a little matter; it is a huge matter. Every now and then we have an opportunity to truly do something about an issue that our constituents have raised with us. They have asked us to do something about rising energy prices. This plan will work. It will produce large amounts of oil and gas for our Nation and it will keep us producing energy for quite a number of years.
This is what we should do to fulfill that obligation to our constituents.
I thank the Chair, and I yield the floor.
Mr. President, I yield myself 20 minutes. Mr. President, the Senate today is considering the Gulf of Mexico Energy Security Act. I believe this legislation is not appropriate energy legislation and…
Mr. President, I yield myself 20 minutes.
Mr. President, the Senate today is considering the Gulf of Mexico Energy Security Act. I believe this legislation is not appropriate energy legislation and also not responsible fiscal policy for the United States, as we face a Federal deficit of $8.4 trillion and looming cuts to many vital programs that the Federal Government must support. Next week we will begin to take up the Defense appropriations bill for this year. As we consider that bill, we will discover huge unmet needs to finance the current operations of our military. If we diminish the Federal Treasury, our ability to respond to that issue and a host of other issues will be contemporaneously diminished.
This legislation would mandate that almost 38 percent of revenue from Federal resources generated by new leases in new areas of production made available by this bill will be given to four Gulf Coast States. Revenues that currently would be provided to the Treasury for the benefit of the Nation as a whole will be diverted to four States. This bill, if passed, will cost the Federal Treasury billions of dollars over time. I am not alone in my opposition to this legislation. Taxpayer advocates and environmentalists share my concerns. I ask unanimous consent that the text of several letters be printed in the Record expressing these concerns.
In 1952, President Truman, speaking about proposals to give coastal States Federal offshore oil and gas revenue said:
If we back down on our determination to hold these rights
for all the people, we will act to rob them of this great
national asset. That is just what the oil lobby wants. They
want us to turn the vast treasure over to a handful of States
where the powerful private oil interests hope to exploit it
to suit themselves.
Those sentiments are not far off from today. In 1953,
Congress enacted the Submerged Land Act. This law provided
that each coastal State would have a seaward boundary of at
least 3 miles and that the Federal Government would
relinquish to the States the interests of the United States
in lands beneath the navigable waters within the State
boundaries. Importantly, the law affirmed the Federal
Government's ownership in lands seaward of the State
boundary. Revenues from Outer Continental Shelf drilling
belong to the American people in all 50 States. The
legislation the Senate is considering today violates this
pact with the American people, and it denies the Federal
Treasury and the American people essential revenue to address
the needs of our Nation.
Again, to quote President Truman, since his comments still ring true today:
I can see how Members of Congress from [affected areas]
might like to have all the offshore oil for their States. But
I certainly can't understand how Members of Congress from the
other 45 States can vote to give away the interest the people
of their own States have in this tremendous asset. It is just
over my head and beyond me how any interior Senator or
Congressman could vote to give that asset away. I am still
puzzled about it. As far as I am concerned, I intend to stand
up and fight to protect the people's interest in this matter.
Proponents of this bill argue that their coastal States deserve to share in the Federal revenues because they have tremendous costs and environmental challenges arising from energy development and production that benefits the whole Nation. They argue, with some validity, that they bear costs, although the benefits are shared by the entire Nation. I acknowledge that. I fully acknowledge that energy development is harming our coastal zones, leading to habitat loss and erosion. For this reason, in 2001 Congress authorized a coastal impact assistance program that provided Federal funding to States and local communities for mitigating the impacts of OCS oil and gas development and production. It is also the reason why I supported an amendment to the Energy Policy Act of 2005 that mandated $1 billion over 4 years in direct Federal spending to gulf coast States and other producing States for the purposes of remediating environmental problems caused by the extraction and production of energy. That is the right approach, to appropriate Federal resources, directed to help States address a problem that is caused in large part by production activity.
What I object to is a permanent entitlement that does not state specific eligible uses to mitigate the environmental harm of OCS production. For example, the bill before us today would allow the States to decide to fund a category described as ``mitigation of the impacts of Outer Continental Shelf activities through the funding of onshore infrastructure projects.'' This could cover any appropriate bricks and mortar project in any State along the gulf coast, from schools to highways to community centers, all of which I think could and would be legitimately argued by a State official as somehow mitigating the impacts of outer Continental Shelf activities.
So in a sense what we have opened up here is a general revenue sharing, not a targeted approach to mitigating the specific harms caused by the extraction and production of petroleum and natural gas products.
Nothing in this bill requires the States and communities to report back to taxpayers and the Federal Government how the funds are being used. I don't think there is any appropriate mechanism of routine reporting. I suppose that if you objected to a particular project, you might sue in Federal Court saying they violated the act, but that is hardly an appropriate and routine and rational way to ensure that the spending is appropriate.
Again, reading the very general language in the bill, I would think that you could make a case that a school, community center, and a range of other projects would be infrastructure that would mitigate in some way the broad effects of production of energy in these States. An argument may be made that a vote against the bill is a vote against the communities and people harmed by Hurricanes Katrina and Rita. I don't think that is true. This debate has to be about responsible national energy and responsible fiscal policy.
We in this body have voted to provide $123 billion to help the gulf coast recover. That money, because of our difficult financial situation, is literally being borrowed. The interest on that debt and the principal of that debt will be paid by all Americans. It is an example of why we need Federal resources in difficult times, because there will be other occasions where other Americans will see the same kind of suffering, the same kind of destruction that was visited upon the gulf coast, and we as a Congress have to be able to stand up, not just with words but resources, to help these people. As
we diminish the Federal resources by a very narrow revenue-sharing plan for four States, we diminish our capacity to respond.
We have also directed and voted recently for a $2 billion authorization for Louisiana's coastal restoration program as part of the Water Resources Development Act. If more money is necessary to restore the gulf coast, then more money should be provided, and that is not the sentiment of just the people who live there, that is the sentiment of the American people because, frankly, if any part of our country was similarly devastated, we would all be here asking our friends and colleagues to help us, and I think they would respond. What they may not be able to do, if we pass this bill, is respond with the same kind of financial clout because we will have already given Federal resources for the benefit of only four states.
There are other aspects of funding that inure to the benefit of these coastal communities. Section 8(g) of the Outer Continental Shelf Lands Act provides coastal States with a share of the revenues received by the Federal Government from leases on Federal tracts that are adjacent to and within 3 miles of a State's seaward boundary. That is a specialized source of revenue which goes to coastal States. Between 1986 and 2003, Alabama, Louisiana, Mississippi, and Texas received nearly $2 billion in revenues from the Federal Government under section 8(g). This funding is precisely the type of funding that could be used to mitigate the impacts of OCS production.
Further, the Coastal Zone Management Act's ``Federal consistency'' provision ensures that Federal actions, such as OCS leases for energy production, that are likely to affect any land or water use or natural resources of the coastal zone must be consistent with a coastal State's approved coastal zone management programs. That means that if Gulf Coast States put into place strong coastal zone management plans to protect against erosion and the loss of wetlands and environmental complications, the law would require a Federal OCS lease to be consistent with these plans and make these States less vulnerable to storms. So not only is this an issue of funding, it is an issue of States taking action to ensure that they have strong environmental protections, and these plans, in turn, according to the law, will be imposed upon the OCS leases.
Now, we understand that energy production is a burden to the States, but it is also, in many situations, an economic benefit to these very same States.
The oil and gas industry is central to Louisiana's economy, with an estimated $93 billion impact in 2001. Over $1.3 billion worth of oil and gas is produced annually in Alabama. The State receives direct benefits of approximately $285 million annually in the form of lease bonuses, royalties, trust fund investments, and severance taxes. In 2005, Texas petroleum and coal were valued at $8.89 billion. All of these revenues provide a strong and powerful force of economic progress for all of these communities. I daresay that, as much as a burden is imposed, there would be great reluctance for any of these States to try to curtail this economic production because it benefits the community.
Now, what is also troubling about the legislation is not only the fiscal implications, but also it is proposing a permanent entitlement that is unnecessary to generate new domestic natural gas and oil supplies. There are over 40 million acres of Federal Outer Continental Shelf under lease, but the oil and gas industry is sitting on over 33 million acres of undeveloped leases. They have less than 7 million acres in production, and there is 328 trillion cubic feet of recoverable natural gas in the nonmoratoria areas.
The United States consumes 25 percent of the world's energy, and yet we have less than 3 percent of the world's oil supplies. We cannot drill our way to energy security; yet this bill essentially provides only one way forward--to drill in the Gulf of Mexico. We deserve an energy bill that will reduce our dependency on fossil fuels and strengthen our economy.
On July 20, I joined 40 of my colleagues in sending a letter to the majority leader asking that we consider energy legislation that sets national goals to reduce our overall national dependence on petroleum by increasing fuel efficiency and alternative vehicle technologies, that protects Americans from price-gouging and market manipulation, and that levels the playing field for new renewable and energy efficiency technology and, more specifically to this debate we are having, ensures that new energy proposals that affect spending or revenues must be fiscally responsible and take into account the true long-term impact of these proposals. That is not the bill we are considering today.
I am left wondering why, as the Senate finally takes up energy legislation, we are not debating and voting on a bill to increase fuel efficiency in cars and trucks. Why are we not voting on oil savings provisions? Where are the provisions in our energy legislation to protect consumers from price-gouging or restore lost royalties to the Federal Treasury from oil and natural gas companies making record profits? Where is the mandated Federal funding dedicated to fully funding energy efficiency and renewable energy?
I hope the Senate will get to vote on an increase in fuel efficiency standards. Gasoline consumption in the transportation sector represents about 44 percent of total oil consumption in the United States each year. Including diesel fuel, the number jumps to 57 percent. To bring about any serious reduction in our dependence on foreign oil, we must increase the fuel efficiency of our cars and light trucks, as well as promote the use of hybrids and vehicles that use alternative fuels.
I also hope we will have a chance to amend this bill. I hope we have a chance to have a debate on an energy bill that will include not only supply-side considerations but also demand-side considerations. All of this legislation is important to consider, but I fear we will be constrained to this bill.
Finally, I am concerned that whatever we do in the Senate would open up a conference with the other body. Their legislation, H.R. 4761, the Deep Ocean Energy Resources Act, would lift the moratorium on offshore drilling for all of our coastlines, not just the gulf coast. I believe this would be a serious step, putting in jeopardy fisheries and marine sanctuaries, further depleting the Treasury, further eroding States' current positions with respect to drilling, and undermining environmental mitigation for energy development and production. My Rhode Island coastline, like the coastline of every State, is something we want to preserve and protect, and there is a fear that if the House version prevails, these coastlines will be jeopardized.
We are in a situation where we have a burgeoning energy crisis. We just have to go to the gasoline pump to figure that one out. This burgeoning energy crisis impacts our foreign relations. We have scores of troops across the globe today because of our dependency on oil. But this should not be the occasion to entertain legislation that is unwise in terms of energy policy and potentially very damaging to the fiscal integrity of the United States.
Before we open new lands to development, we need to ensure that the oil and gas industries are putting undeveloped leases into production, and we need to take meaningful action to reduce our consumption and increase renewable energy supplies. We need to be more independent with respect to energy, reduce our consumption of fossil fuels overall. This is an energy policy which we should pursue, and as a fiscal policy, we have to maintain Federal resources for Federal responsibilities.
I yield the floor.
Show 11 more
Mr. President, I want 15 minutes as in morning business. We could go back and forth. I think we could accommodate that quite easily if the Senator from Kansas wants to speak. I ask unanimous consent…
Mr. President, I want 15 minutes as in morning business. We could go back and forth. I think we could accommodate that quite easily if the Senator from Kansas wants to speak. I ask unanimous consent that following the Senator from Kansas, if I could have 15 minutes in morning business, and then go back to the other side.
Following my remarks, if the Senator from Alabama wants to go, I would be happy to agree to that.
Mr. President, I revise my request and ask that following
the remarks of the Senator from Kansas for 15 minutes, the Senator from Alabama for 5 minutes, and then I would be recognized for 15 minutes.
Mr. President, we have waited day after day in the Senate on political issues when we should be taking the Senate's time to make America more secure.
Last week, the majority leader mentioned port security in a long list of issues to be debated before the August recess.
While Senator Frist continues to pay lipservice to this important priority, I remain concerned that with only a week left before the August recess we have no firm schedule or commitment to bring this bill to the floor.
I am worried that while the majority says it wants to act, it refuses to put any action behind that rhetoric.
And here's the bottom line--if God forbid there is an incident at one of our ports--the fingers will point to this Chamber.
And people will want to know: Why did the Senate sit on a bill that passed
the full House and passed the Senate Homeland Security Committee? Why didn't we make these ports secure when we had the chance?
The only thing keeping the GreenLane bill from protecting us is the Senate's failure to take it up. We have to bring up and pass this bill before it's too late.
I am here today because nearly 5 years after 9/11 our country is still vulnerable to a terrorist attack.
Just this week, an article in the Seattle Times showed us that our ports are not secure.
A reporter was able to enter two West Coast ports simply by hiding in trucks that were entering those ports.
The reported walked around cargo containers in areas that are supposed to be secure.
In this case, the security gaps appeared to be on the ``land side,'' but as the article notes--an incident at any port--whether from the land or sea side--could shut down all of our ports. Time is not on our side.
Each year, 6 million cargo containers enter U.S. seaports. And that number is expected to quadruple in the next 20 years. These cargo containers carry the building blocks of our economy.
But without adequate security, they can also provide an opportunity for terrorists to deliver a deadly one-two punch to our country.
The first punch would create an untold number of American casualties.
The second punch would bring our economy to a halt.
Today, we are not doing enough to keep America safe. Standing in this Chamber, it can feel like the dangers at our ports are a distant concern. But given that our ports are connected to our Nation's transportation system and are often close to major population centers, the threat is never far away.
A recent example makes this threat crystal clear. On March 21, a container ship called the Hyundai Fortune was traveling off the coast of Yemen when an explosion occurred in the rear of the ship.
About 90 containers were blown off the side of the ship, creating a debris field 5 miles long. Thankfully there were no fatalities, and the crew was rescued. Fortunately, this incident does not appear to be terrorist-related.
Now I want to imagine this same burning ship sitting just a few feet from our shores--in New York harbor or Puget Sound, off the coast of Los Angeles or Charleston, Miami, Portland, Hampton Roads, the Delaware Bay, or the Gulf of Mexico.
Now imagine that we are not just dealing with a conventional explosion. We are dealing with a dirty bomb that has exploded on America's shores.
Let me walk through what would happen next. First, there would be an immediate loss of life. Many of our ports are located near major cities. If a nuclear device exploded at a major port, up to 1 million people could be killed.
If this was a chemical weapon exploding in Seattle, the chemical plume could contaminate the rail system, Interstate 5, and SeaTac Airport, not to mention the entire downtown business and residential district.
At the port, there would be tremendous confusion. People would try to contain the fire, but it's unclear who--if anyone--would in charge.
Then--when word spreads that it's a dirty bomb--panic would likely set in. There would be chaos as first responders try to react, and residents try to flee.
Next, our government would shut down every port in America to make sure there weren't other bombs on other containers in other cities.
That shutdown would be the equivalent of driving our economy into a brick wall. It could even spark a global recession. Day by day, we would feel the painful economic impact of the attack. American factories would not be able to get the supplies they need. They would shut their doors and lay off workers. Stores around the country would not be able to get the products they need to stock their shelves. Prices for these goods would spike, as demand began to outweigh the supply. And consumers would not be able to afford the items they rely on every day.
In 2002, we saw what the closure of a few ports on the west coast would do. It cost our economy about $1 billion a day. Imagine if we shut down all our ports.
One study concluded that if U.S. ports were shut down for just 9 days, it would cost our economy $58 billion.
Next, we'd realize we have no plan for resuming trade after an attack--no protocol for what would be searched, what would be allowed in, and even who would be in charge. There would be a mad scramble to create a new system in a crisis atmosphere.
Eventually, we would begin the slow process of manually inspecting all the cargo that's waiting to enter the U.S. One report found it could take as long as 4 months to get them all inspected and moving again.
Finally, we'd have to set up a new regime for port security. And you can bet that any new, rushed plan would not balance strong security with efficient trade. Unfortunately, the scenario I just outlined is not the stuff of fantasy. Rather, it is a realistic portrayal of events that could happen tomorrow.
Nearly 5 years after September 11, we still have not closed a major loophole that threatens our lives and our economy. Time is not on our side. We must act, and we must act now.
I approach this as someone who understands the importance of both improving security and maintaining the flow of commerce. My home State of Washington is the most trade-dependent State in the Nation. We know what's at stake if there were an incident at one of our ports.
That is why I wrote and funded Operation Safe Commerce to help us find where we're vulnerable and to evaluate the best security practices.
It is why I have worked to boost funding for the Coast Guard and have fought to keep the Port Security Grant program from being eliminated year after year.
Right after 9/11, I started talking with security and trade experts to find out what we need to be doing to both improve security and keep commerce flowing.
Last year, I sought out Senator Collins as a partner in this effort. I approached Senator Collins because I knew she cared about the issue, I knew she had done a lot of work on it already, and I knew she was someone who could get things done.
Since that day, we have worked hand-in-hand to develop a bill and move it forward. I am also grateful to Senators Lieberman and Coleman for their tremendous work.
We know we are vulnerable. Terrorists have many opportunities to introduce deadly cargo into a container. It could be tampered with anytime from when it leaves a foreign factory overseas to when it arrives at a consolidation warehouse and moves to a foreign port. It could be tampered with while it's en route to the U.S.
And there are several dangers. I outlined what would happen if terrorists exploded a container, but they could just as easily use cargo containers to transport weapons or personnel into the United States to launch an attack anywhere on American soil.
In fact, in April, 22 Chinese stowaways were found at the Port of Seattle. They had reached the United States inside a cargo container. In that case, they were just stowaways. Imagine if they had been terrorists sneaking into our country.
The programs we have in place today are totally inadequate. Last year, thanks to the insistence of Senators Collins and Coleman, the Government Accountability Office found that C-TPAT, the program in place, was not checking to see if companies were doing what they promised in their security plans. Even when U.S. Customs inspectors do find something suspicious in a foreign port, they cannot force a container to be inspected.
We have a very clear and very deadly threat. We know today that current programs are inadequate. What are we going to do about it? We could manually inspect every container coming into this country, but that would cripple our economy.
The real challenge is to make trade more secure without slowing it to a crawl. That is why Senators Collins, Coleman, Lieberman, and I have been working with all the stakeholders and the experts to strike the right balance. The result was the GreenLane Maritime Cargo Security Act. It provides a comprehensive blueprint for how we can improve security while keeping our trade efficient.
At its heart, this challenge is about keeping the good things about trade--
speed and efficiency--without being vulnerable to the bad things about trade--the potential for terrorists to use our engines of commerce.
I am happy to do that if I can have additional time to answer the Senator's question.
Mr. President, the GreenLane Maritime Security Cargo Act does five things.
First of all, it creates tough new standards for all of our cargo. Today, we don't have any standards for cargo security.
Second, it creates the GreenLane, which provides an even higher level of security. Companies have the option to follow those higher standards of the GreenLane, and their cargo--those companies which agree to that--will be tracked and monitored from the moment it leaves a factory floor overseas until it reaches the United States. We will know where that cargo has been, we will know every person who has touched it, and we will know if it has been tampered with. The GreenLane will simply push the borders out by conducting inspections overseas before cargo is ever loaded onto a ship bound for the United States. And we will provide incentives for companies to use those higher standards of the GreenLane.
Third, our bill sets up a much needed plan to resume trade quickly and safely to minimize the impact on our economy.
Fourth, our bill will secure our ports at home by funding port security grants at $400 million. That funding will help our ports and our port operators to develop and implement security plans. They can use this funding to strengthen their perimeter of security, which would have helped prevent a number of security lapses that were highlighted this week in the Seattle Times article.
Finally, our bill will hold DHS accountable for improving cargo security. The Department of Homeland Security is long overdue in establishing cargo security standards and transportation worker credentials. We need to hold them accountable. The bill we have written provides the infrastructure to ensure accountability and coordination.
I take a minute to thank Senator Collins for her tremendous leadership on this critically important issue. I thank Senator Coleman for his leadership and work as chairman of the Permanent Subcommittee on Investigations. Senator Coleman has helped expose our vulnerabilities, and he has worked with us to develop solutions. I also thank Senator Lieberman for his leadership on this issue. I commend all the other cosponsors of our bill: Senators Feinstein, Snowe, DeWine, Salazar, Santorum, Graham, Cantwell, Durbin, and Byrd.
We are seeing tremendous progress on the House side with the Safe Port Act. I thank Representatives Dan Lungren and Jane Harman for their bipartisan leadership.
Finally, I thank the numerous Federal, State, and local officials as well as all the industry representatives for their tremendous assistance in crafting this legislation. Those people truly are the front lines of securing our Nation's ports. I have been very proud to work with all of them.
Right now, today, we have a choice about how we deal with cargo security and the challenges facing us. If we wait for a disaster, our choices are going to be very stark. We should make those changes now on our terms before there is a deadly incident.
Let's protect America before an image like this hits our television screens. Let's not wait until a terrorist incident strikes again to protect our people and our economy.
Earlier this year, the American people woke up and spoke out when they heard that a foreign government-owned company could be running our ports. That sparked a critical debate. Now we need to set up a security regime that will actually make us safer. Until we do, none of us should be sleeping well at night. A terrible image like this, a burning container ship with a dirty bomb in one of America's harbors, could be on our TV screens tomorrow.
This Congress needs to act today. We have heard the majority leader say we need to address port security, but words will not protect us from terrorists, words are not going to help us find a bomb that is hidden in a cargo container, and words won't help us tell which containers could be holding a group of terrorists who are trying to sneak into our country. We need more than words. The Senate needs to take up and pass the GreenLane Maritime Cargo Security Act. We only have a few days left before we can do this. We need to act. I urge the leadership, before the August break, to finally bring up and pass the GreenLane Maritime Cargo Security Act before it is too late.
I yield the floor.
Mr. President, recognizing that our colleague from the other side is here, traditionally, we switch sides on recognition. I ask that after our colleague from Wyoming speaks, that I have 20 minutes to…
Mr. President, recognizing that our colleague from the other side is here, traditionally, we
switch sides on recognition. I ask that after our colleague from Wyoming speaks, that I have 20 minutes to make mine.
Mr. President, today we heard some interesting news. I would have used the term startling, but based on the news we are seeing from the various war fronts, it is hard to find anything more startling.
The reference I make to this news is brought about by a report. I come out of the corporate world, so I am interested in corporate performance in this
country. I saw the report. If you watch television or read the papers-- ExxonMobil, I would say, had a pretty good year. Their profit for this quarter was $10.4 billion--for the quarter. That is up from $7.65 billion the same quarter last year.
That is pretty stunning news. It is the largest quarterly earnings of any corporation in America, save one. That is in the history of this country. In the history of this country, ExxonMobil, the quarter just ended in June, was the second highest in the history of the country.
If they were selling widgets or some product, we would say: OK, that is a pretty good job. But when they are selling a commodity that people are literally begging for by way of availability, it is a different picture.
This oil and gas is so much a part of our life that it is almost like the air we breathe or the water we drink. It is incredible.
That then spurred my curiosity. I am, going to file an amendment to the Energy bill. I send it to the desk.
I am sorry?
I am not offering the amendment, Mr. President. I am simply filing it.
I thank the Presiding Officer.
This amendment is to change the bill's title, to call it the ``Lee Raymond Oil Profitability Act.'' I propose that we rename the Energy bill to reflect Mr. Raymond's profitability courtesy of ExxonMobil.
It is quite a thing. As we look at the turmoil this country is going through while people struggle at minimum wage jobs and we see the kinds of profits that are being made off the backs of working people, it struck me, as I dug further into the history of the company--it is a pretty well-run company, but it is so profitable because Americans are going to the pump and buying gasoline at over $3 a gallon typically. I have seen it as high as $3.35 a gallon. People who work in these gas stations can't even afford to buy the gas they are pumping. That is how extraordinary this pricing is.
I come from the corporate world and I ran a very successful company. The company is called ADP. It has been in business 50 years. I started it with a couple of other fellows, and we watched our profits carefully. So I know how to read a financial statement.
When I see this, while people are stuck at minimum wage of $5.15 for 9 years--I am going to detail some of the extraordinary results Mr. Raymond got as a result of his leadership in that company. The profits, I think, are unconscionable. I don't understand where Board of Directors' conscience is, as I read his benefits program. There is no conscience, and there is no soul at all.
At the end of 2005, Mr. Lee Raymond retired from the chairmanship and CEO position of ExxonMobil. He was working and got a decent week's pay. I think his salary was running about $500,000 a week. That permits a lot of things to be acquired. But he also then held $151 million in stock options and holdings. His total compensation for 2005, including salaries, stock options, and pension, totaled $140 million. He made $140 million running a gasoline company where prices typically have gone, since January 2002, from $2.24--and any of the audience that sees this should mark it in their mind--it was $2.24 at the beginning of this calendar year; it is now $3. That is the average price. So it has risen some 36 percent I think is what the number works out to be.
It is incredible that during this period of time, while the average working person is struggling and things are getting harder and harder, the cost for gasoline, which is a requirement for virtually every family in this country--whether they have a car or are using fuel oil in their homes--it is outrageous that Mr. Raymond, in addition to those things I just mentioned, has seen his package of stock ownership and stock options go from $151 million in this period of time--$151 million he had at the end of 2005--to $250 million now, so it is a $100 million boost. Remember, he made $25 million in salary. But the absurdity of it all and the offensiveness of it all, is that Exxon's board also agreed to pick up Mr. Raymond's country club fees so he could make sure he could buy enough golf balls for a round of golf. Country club fees, use of the company aircraft, and still pay him another $1 million to stay on as a consultant for another year. Where is their conscience? I don't understand it.
So that is why my amendment would rename this bill the ``Lee R. Raymond Oil Profitability Act.'' That is what it ought to be called, so everybody knows what is happening in this country of ours. People are struggling for a living with a $5.15 minimum wage, which has been in place for 9 years. Those people are making $206 a week, if they are working at minimum wage, and they haven't had a raise in 9 years. That doesn't matter. Big business is the interest served by this Government and by the Bush administration. It is incredible.
When President Bush took over, gas was $1.06 a gallon. That was back at the end of 2000: $1.06. Now it is over $3 a gallon. Two years ago, President Bush threatened that if John Kerry was elected President of the United States, he would tax gasoline. Look at this: From $2.24 up to $3, this year alone. There is no limit. But that doesn't bother the conscience of the board members of ExxonMobil, and it doesn't bother the conscience of Mr. Raymond. If he asks for country club dues to be paid on top of everything else, to have an airplane for his private use, he feels entitled to it. These are company expenses, and because they are company expenses, they are tax deductible. It is shameful, I think, and I hope we will do something about it.
I rise to speak against this so-called energy bill. The bill is simply another gift to the oil industry. It is dressed up as some kind of benefit to consumers. I know the media likes to talk about who is winning the debate on this issue or that issue. But you don't see these commentators saying: Let's look back at the effects of legislation after it is passed. So here we are considering a second Republican energy bill. We should ask: What was the effect of the first Republican energy bill? My colleagues across the aisle said of the first energy bill that it would lower gas prices as it goes into effect. Well, here is what we have seen happen in just this year alone: up by 36 percent.
A few months after President Bush signed the first Republican energy bill, gas prices started to soar. So now we know what happens when you take care of the oil companies: Tax breaks and subsidies, and everyday Americans get charged more, pay through the nose, as we say, and now we are ready for a repeat performance.
Will this bill help get gas prices over $4 a gallon? Think about that, for the average family. Spend 80 bucks to fill up your gas tank. Right now you have to spend over $60 to fill up a 20-gallon tank. We have to do a reality check about who is writing these bills. President Bush and Vice President Cheney are both former oil company executives. They focus on helping their friends in the oil business. Big oil companies want to open up our coastline to oil drilling, to platforms, pipelines, and tankers.
Everyone jumps to attention in the Cabinet room there and they say: Yes, sir, as they do here on the Republican side of the aisle. And the oil companies' profits continue to explode.
Just this week, BP announced its largest quarterly profit in their history: $7.27 billion. BP is a piker compared to Exxon, which made over $10 billion. This was 30 percent more than the same period a year ago.
I remember hearing in the Commerce Committee when we asked about price gouging and so forth, and the oil company executives denied it: Oh, we don't price gouge, no. Well, somebody is making a heck of a lot of money while people who struggle for a living have to pay more than they can afford just to buy gasoline. Other big oil firms continue to enjoy record profits as well. Royal Dutch announced second quarter profits of $7.3 billion, almost $2 billion more than the same quarter a year ago. While Shell's profits increased 40 percent, its total revenue increased less
than 1 percent. So look what has happened. Their profits increased 40 percent, but their revenues increased less than 1 percent. I would like to hear an economist or an accountant explain how wonderful their management is, how good management must have been to pull that trick. In other words, sales were relatively constant, but profits jumped significantly.
Then there is our favorite, the poster company, ExxonMobil. In 2005 ExxonMobil raked in a record $36 billion in profits. That translates to almost $100 million a day in profit and more than $4 million every hour in profit for one oil company. And while all of these oil companies profit, consumers pay.
Now, as this Congress winds down its work for the year, the majority and the administration have proposed nothing that will lower gas prices at any time in the near future. They have nothing to offer in the way of a serious idea or a plan to reduce consumption, to improve efficiency, or to develop renewable sources of energy.
Whatever the question, the answer for this administration and the majority in this Congress is always the same: Hand over some more money to their friends in the oil industry, and give them more opportunities to drill and explore in environmentally sensitive areas. What do we get in return? Higher and higher gas prices. And now they want permission to drill in areas that are sensitive, areas where an oil spill could be disastrous. We had an oil spill in the Delaware River that separates Pennsylvania from New Jersey, and it didn't look too bad, but the cost to clean it up was $267 million. So there are a lot of risks with drilling in these areas. Higher prices aren't the only negative consequence of this bill.
The bill is going to harm our grandchildren's birthright to enjoy the natural beauty of our coastlines and beaches. I have seen the worst of oil spills. I was sent to Alaska with the Coast Guard 3 days after the Exxon Valdez ran aground. Exxon paid approximately $4 billion in compensatory damages and the punitive award was $5 billion, and that was in 1989. So we are looking at 17 years ago, and Exxon has yet to pay a dime on the punitive damages. The company has smart lawyers, and they have kept it bottled up in court. They say: Don't pay the bill, whatever you do. ExxonMobil makes $10.4 billion in a quarter, and the company is still trying to get out of paying the $5 billion that resulted from the court decision.
It is clear the plan is to pass this bill in the Senate, and then combine it with the House bill that opens up the coastal waters of New Jersey, Maine, New Hampshire, Massachusetts, Rhode Island, Connecticut, New York, Delaware, Maryland, Virginia, North Carolina, South Carolina, Georgia, Florida, California, Oregon, and Washington State to oil and gas drilling.
The effects of even one spill off the shore of New Jersey would be devastating. Tourism, a principal business for us, is a $26 billion industry in New Jersey, and it supports 390,000 jobs. My State has already seen how much economic damage can result from threats to our shore. In 1988, a bag of medical waste washed up on the New Jersey shore. The incident was widely reported in the media and we lost a third of our tourism revenues that year--one-third of our tourism revenue.
We can be sure of one thing: If we drill for oil, we will spill oil, and New Jersey and other States cannot afford to have oil washing up on their shores or polluting their water. States that depend on beaches and marine recreation and clean water for fishing and other activities can't afford to have oil spills along those shores. Our commercial and recreational fishing industries in New Jersey are worth hundreds of millions of dollars. An economic catastrophe would result from an oil spill that reaches our shores, whether the drill rigs are located in the waters off New Jersey or Massachusetts or Virginia.
In short, it is absolutely certain that the current bill can only go from bad to worse. This bill is a Trojan horse and it should be rejected by any Senators who are concerned about protecting their coastlines and their coastal economies. It also should be rejected by Senators who care about developing a long-term, sustainable energy policy, and by any Senator who has a vision for our country which says we owe our children and our grandchildren a clean environment. We owe them relief from what we see now. I have not even discussed fossil fuels and global warming.
In the Netherlands last week, they reported the hottest temperature in June--this past June--ever since temperatures have been recorded: 1704, I believe, was the year. The hottest month ever since that time, since 1704. We see evidence of global warming all over the place. I don't hear anybody on the Republican side standing up here and saying: My gosh, we have to find a way to get these temperatures normalized. We have to find a way to reduce the number of hurricanes. We have to find a way to reduce the ferocity of these hurricanes. We don't want any more Hurricane Katrinas. But here we are, big oil companies are soaking the public with $3 per gallon for gasoline. It is not fair. We can do better than ``more of the same.'' I hope my colleagues will hear from their constituents back home and oppose this bill.
Mr. President, I yield the floor.
Mr. President, I ask unanimous consent the order for the quorum call be rescinded. Mr. President, I ask to be recognized on the minority time relative to the debate on S. 2711. Mr. President, pending…
Mr. President, I ask unanimous consent the order for the quorum call be rescinded.
Mr. President, I ask to be recognized on the minority time relative to the debate on S. 2711.
Mr. President, pending before the Senate is a bill that will allow us to drill in areas of the Gulf of Mexico that currently are not being explored for oil and gas. There is some controversy attached to this proposal--whether this is an environmentally sound decision to go into these areas. The fact is in many parts of the Gulf of Mexico there is currently exploration and drilling for oil and gas, so it is not the same as the debate on the Arctic National Wildlife Refuge in Alaska, where the administration was proposing that we drill in areas that have been protected for over half a century.
This area of the world and off the coast of the United States has been explored for quite some period of time, and oil and gas have been brought out of it.
It is going to be an interesting debate and a legitimate debate over whether this is the appropriate amount of exploration and whether it is environmentally responsible to do it in this fashion. But we should never believe that this debate is about creating America's energy policy. Sadly, America today--with gasoline prices going through the roof, with no certainty about our future when it comes to energy--does not have a national energy policy.
This administration, for 6 years now, has had an opportunity to come forward with a proposal that would move America away from dependence on foreign oil, but the administration has not done so. The only proposals we have received from them relate to very isolated, narrow issues. One of them I referred to earlier, whether the United States should now start drilling for oil and gas in the Arctic National Wildlife Refuge.
The House and the Senate have rejected that idea on a bipartisan basis. Their belief, which I share, is that we have reached a rather desperate moment in American history if the only way we can look forward in terms of energy self-sufficiency is to start drilling in some of the most environmentally sensitive places in America. That is why I have opposed drilling in ANWR in Alaska. That is why it has been defeated. The majority has felt this is not the way we should go.
This is a different issue. This is about drilling in the Gulf of Mexico.
We will debate it this week and vote on it next week. But we should not believe that passage of this bill is the creation of a national energy policy. The fact is if we pass this bill next week, it will have literally no impact on gasoline prices today and no impact on our dependence on foreign oil. If we are going to address that, we have to do it in a larger context. On the Democratic side of the Senate, we have proposed a bill that will move us forward, looking at the national energy picture and moving us toward breaking our dependence on foreign sources of energy in the future. That is important for us to do.
Today we are so dependent on foreign sources of oil that we are at the mercy of the OPEC cartel, and at the mercy of the major producers we are doing business with in countries around the world buying their oil and gas--and these countries are virtually our sworn enemies. There are many countries in the world that we send billions of dollars to as we buy their oil and gas that turn around and use the money we send against us in the war on terrorism. That is as horrifying as I can think of at the moment, that we would send American dollars to these countries to subsidize terrorist activities. Yet it is happening because we are so dependent on these foreign sources.
What can we do? What should we do? First, we should look at the obvious. Sixty percent of all the oil we bring into the United States of America is used for our cars and trucks. All of us are burning that oil as we drive around America. Sadly, the vehicles we drive in are less fuel efficient and get less fuel economy every single year. The vehicles are heavier, less fuel efficient, and we burn more gallons of gasoline each year to travel the same number of miles we went last year. I am speaking on average. There are some people who have fuel- efficient vehicles, but by and large, when you look at cars and trucks in America, that is the story. It doesn't have to be this way.
In 1975, we faced long lines at gasoline stations with the prospect that OPEC was going to cut off oil to the United States, and our Government made a decision that the first thing we needed to do was to have more fuel-efficient cars and trucks. At that moment in time, the average fuel efficiency of the fleets across America was about 14 miles a gallon. The Government mandated that over the next 10 years manufacturers had to have an average fleet fuel economy of cars that would virtually double to almost 28 miles a gallon in 10 years. The manufacturers of cars and trucks--particularly those in the United States--said it was an impossible goal which we could never reach, and that if we did, it would compromise the safety of the cars we would drive and would invite importation of automobiles into the United States. We did it anyway. We imposed the standard to increase fuel efficiency in America. Between 1975 and 1985 the average fuel economy of cars in America went from 14 miles a gallon to 27.5 miles a gallon. We achieved our goal. We did it without all of the terrible outcomes the opponents had suggested.
What has happened in the 21 years since then? What has happened since 1985 when we reached an average of about 28 miles a gallon for cars in America? Sadly, the fuel efficiency of cars in America has gone down progressively. Now it is around 22 miles a gallon, or 21 miles a gallon, meaning we are driving less fuel-efficient cars today than we were 21 years ago. And, of course, there was the truck loophole. We said when it came to fuel economy we would make an exemption for trucks. Someone invented the concept of a sports utility vehicle, SUV, and we called it a truck. It escaped the requirements of fuel efficiency. We all know those SUVs we are glutting the used car lots in America with, have some of the worst fuel efficiency of any vehicles we drive. They have helped to drive down our efficiency in America and driven up our dependence on imported oil.
A national energy policy has to include more fuel efficiency and fuel economy of cars and trucks we drive--and it can do it.
Recently, my wife and I made a decision about a car. We wanted to buy American and we wanted a hybrid. So we bought a Ford Escape hybrid. It is a good car, clean burning. We get about 28 miles a gallon, which is good but not great. I think we can do a lot better. Many of the cars that are coming in from overseas manufacturers get much better mileage. The people who make cars in America tell us there is no appetite for fuel-efficient cars in the United States. How wrong can they be? Toyota is about to come out with a Camry with a hybrid engine which will get better fuel mileage than most cars in the United States, and there is a 10-month waiting list to buy their cars. It tells me there is an appetite for obvious reasons. People understand gasoline is extremely expensive. If they can reduce their consumption of gasoline, they not only save money, but I think they know intuitively it is a good thing. It reduces the pollution and the greenhouse emissions.
Our failure to have a national energy policy leaves us in a position where we have foreign automobile manufacturers making fuel-efficient cars and hybrid cars and bringing them into the United States and selling them to American consumers who are anxious to buy their products.
The obvious question is, Why don't we have the leadership in Washington on a bipartisan basis that would create standards for fuel efficiency and fuel economy that would move the United States in the right direction on national energy policy? That is an important question. It is not addressed by this bill.
If we are talking about a national energy policy, this bill is not a national energy policy. There are other things which we should do as well. We have a situation in the United States where the oil companies are making outrageous profits. You can always tell when they have stepped over the line because when you open the morning paper, there will be a full-page ad where the major oil companies are explaining that they warrant that profit. Really?
ExxonMobil's second quarter profit jumped to the second highest level for any company in the history of the United States. ExxonMobil said today that it earned $10.36 billion in the second quarter, the second largest quarterly profit ever recorded by a publicly traded U.S. company. The earnings figures were 36 percent above the profit it reported 1 year ago. High oil prices, according to this Associated Press story, helped boost the company's revenue by 12 percent to a level just short of a quarterly record.
Think of this when you go to fill up at the gas pump. You reach into your pocket, pull out your wallet or your purse and pull out the credit card to pay for the gasoline, and the money that is coming right out of your checking account is going to record profits of the oil companies across America.
What has been done in Washington to try to contain these profits, to try to
say that the oil companies are going too far by creating burdens and handicaps on individuals and families and businesses across America? The answer is nothing. Nothing has happened informally. The President has not called in the leaders of these oil companies and said it is not healthy for America's economy for you to be taking so much money out of this economy, driving up inflation, making the cost of business go up so that they have to lay off employees and can't expand if they would like to, and making the burdens for families who have to drive on a regular basis unbearable. The President has not done this. Other Presidents in history have. This President refuses to.
When it comes to the more formal means of turning to those Federal agencies that have the power over these oil companies, they have been virtually silent as Americans and consumers are fuming over what is happening at their gas stations.
I would say to my colleagues in Congress when they go home over this August recess to take some time and talk to the people they represent. Gasoline prices, frankly, are one of the biggest issues that trouble the people across America.
ExxonMobil's report of earnings comes a day after ConocoPhillips said it earned more than $5 billion in the quarter at a time when many drivers in the United States are paying $3 a gallon for gas--and more. ExxonMobil, the world's largest oil company by market cap, said earnings amounted to $1.72 a share in the April-June quarter compared with the profit of $7.64 billion or $1.20 a share a year ago. These results top even Wall Street's expectations. The oil companies are raking in this money at the expense of consumers and businesses across America.
If we want a healthy business climate in this country, we cannot allow one industry--the oil industry--to make outrageous profits at the expense of other businesses as well as the families and individuals across America.
I think what we have before us is a bill that is worthy of debate about drilling in the Gulf of Mexico. It is something we will debate, but we shouldn't believe at the end of the day, even if it is passes, that we have addressed the most serious challenge facing America. We still need a national energy policy.
We should remember two numbers as we engage in this debate. The numbers are 3 and 25. If you look at all of the energy available in the world, the United States has access in the continental United States and offshore to 3 percent of the energy reserves of the world. Yet every year the United States economy consumes 25 percent of the energy that is produced in the world.
We cannot drill our way out of this situation. We have to have environmentally responsible exploration and production, but we also have to deal with conservation and efficiency. It is not just a matter of reducing costs and reducing consumption. There is not another issue that is as important as energy. It is the issue of the environment. We have to understand that as we burn energy, as we destroy this energy for our economic purposes--carbon fuels, for example--we are releasing emissions into the environment. Carbon dioxide, for example, which ultimately form a cloud over our globe, this greenhouse effect which captures the heat of the Sun and warming the planet we live on to the point where we are seeing dramatic climate change in America and around the world. We are finding from those in the private sector who look at this in cold economic terms that decisions are made which suggest we are facing serious problems if we don't do something about it.
When the major insurance companies announce they are not going to write property insurance for many businesses on the gulf coast of the United States because of the severity of the hurricanes we have seen in the last few years, it is a wake-up call to America. When we know that the glaciers are melting, when we know the temperature is going up on this globe we live on, when we know species such as the polar bear are doomed to extinction if we don't make some serious changes, we have to combine this debate on a national energy policy with the national environmental policy that sets a standard--that says to the world engage us in this effort to protect the planet on which we live.
S. 3711 is an interesting and important bill. I am glad we are debating it. But make no mistake; it is not a national energy policy.
I reserve the remainder of my time and yield the floor.
Mr. President, I yield myself 20 minutes of Senator Bingaman's time. Mr. President, I rise in strong opposition to this bill which would do little, if anything, to improve the energy situation in…
Mr. President, I yield myself 20 minutes of Senator Bingaman's time.
Mr. President, I rise in strong opposition to this bill which would do little, if anything, to improve the energy situation in this country. It would end up costing the Federal Government tens of billions of dollars in the long run, and it would create an opening for those who want to eliminate coastal protections that tens of millions of Americans want and enjoy.
My primary concern with this bill is the fact that it does absolutely nothing to protect New Jersey. I don't think it does anything for 44 other States, either, but I am here to represent the people of New Jersey, and they are ill-served by the legislation.
We do have a large chemical industry in the State, and I am sensitive to the problems they are facing with the high cost of natural gas, which is a critical feedstock for them. I have received letters from the industry urging me to support this bill, saying we must pass this bill to lower gas prices and put ourselves on the path toward energy independence. But this bill will do nothing of the sort, particularly in the short term. I believe the outside groups supporting this bill know this, and they are hoping this is a ticket into a conference with the bill the House of Representatives passed last month, a bill that is stunning in its disregard for environmental protections.
The bill passed by the House would immediately eliminate the long- standing moratoria that protect our coastlines, not just in one part of the country but everywhere along the Atlantic, along the Pacific, the Arctic, and gulf coasts. Then it would be a free-for-all. States that wanted to could allow drilling a few miles off their shores. Neighboring States that could be heavily impacted by the drilling, particularly in the event of a spill, would have almost no say in the process. States that didn't want to drill would be given 50 miles of protection, way down from the 200 miles we have now. If a State wanted to get an extra 50 miles, it would have to apply to the Federal Government every 5 years for that privilege.
The House bill also has a provision that opens national parks and marine sanctuaries to drilling. As long as your rig is parked outside of a protected area, you are free to directionally drill into that region. No thought is given to the environmental damage that might be occurring, the drill cuttings and toxic metals that can litter the sea floor. But then again, some thought must have been given, because the House bill also provides broad waivers for a number of environmental laws.
One of the fundamental flaws of the House bill is an idea that we can split up the ocean into administrative boxes with each State controlling its offshore territory. But the ocean has no boundaries, and an oil spill will not respect any artificial lines we draw. There is territory off the eastern seaboard less than 75 miles from the coast of New Jersey the administration has already proposed opening to drilling. The House bill is yet another opportunity for that to happen. It is another assault on the Jersey shore, one of the most ecologically sensitive and economically important parts of the State of New Jersey.
Our beaches are part of our $222 billion tourism industry, which is responsible for over 10 percent of the jobs in the State. The New Jersey coastal counties are home to over 1.5 million people.
New Jersey is also home to a huge fishing industry. According to the American Sports Fishing Association, there are over 800,000 recreational anglers in the State, contributing over $1.3 billion and 12,000 jobs to the State economy. Our commercial fisheries are critical as well. The port of Cape May and Wildwood is the fifth largest commercial port in the country, by value. According to the National Marine Fisheries Service, New Jersey landed over 185 million pounds of fish last year, worth over $139 million.
The waters off the coast of New Jersey are home to over 300 species of fish and 300 species of birds, and our beaches are crucial stopping points for countless numbers of migratory birds, including some endangered and threatened ones such as the red knot.
The House bill is a direct threat to all of this, and if S. 3711 passes, the House will have an opportunity to move their bill forward another step toward becoming law.
I know we have been told that the Senate will try to avoid a conference--and I certainly appreciate that--and that we may be able to get the House to accept this bill as is. I have not heard any sort of commitment to that effect from the majority leader, and no one has presented a clear way to this body to avoid a conference with the House. The House, meanwhile, seems quite clear that it doesn't find this bill satisfactory at all. Richard Pombo, the chairman of the House Resources Committee who would lead the House delegation in a conference, has been fairly blunt about this. Here are two of his quotes:
Given the fact that the House bill passed with overwhelming
support, it is unlikely that the House would accept the
Senate bill without having the opportunity to debate at least
a couple of provisions, if not the opportunity to bring it up
to par with the House bill.
Referring to the Senate bill:
It is a third of the bill that the House passed
overwhelmingly in a bipartisan fashion just two weeks ago,
Pombo spokesman Brian Kennedy said yesterday:
The House passed a comprehensive national solution.
Here are two news reports from this week:
House Resources Committee Chairman Richard Pombo, the lead
advocate of the House plan, has scoffed at the idea of simply
accepting the Senate plan.
Richard Pombo said that if the Senate passes its bill this
week, he plans to work in conference to add as many of the
House provisions as possible.
Then yesterday, in an AP report:
Representative Richard Pombo, a key sponsor of the House
bill passed last month, said Tuesday he saw no way the House
would accept the limited Senate legislation as a substitute
for its bill--no way.
Any Member of this Chamber who believes we can get the House to accept this bill as is should listen to these statements and think again.
But I also don't believe this is all that great a bill to begin with. First, the fact is it doesn't do that much. Let me show you this map of the region we are talking about.
This region outlined in black, the contours of it are lease sale 181. The purple lines are the existing pipelines in the gulf over here, and the gray squares are the oil and gas platforms that already exist. This orange rectangle right here has already been opened. So S. 3711 would open this red area in the middle, and these two tan areas, but the red area is already likely to be open next year by the administration anyway. Congressional action isn't necessary here at all. It is not under a moratorium, it is not under withdrawal, so there is no need for us to act to get that gas.
The only new areas the bill opens are these two tan areas here, a wedge-shaped area in 181, and a bigger area called 181 south. They may look pretty big, particularly this one here in the south, but combined, these two areas have less gas than this red region alone.
Look how far these new regions are from the existing infrastructure in the region. Even if they were opened today, it would take years for companies to start developing them. And once they do start developing them some years down the road, there is not all that much gas there to begin with.
Here is the claim the proponents of this bill make: 5.8 trillion cubic feet of gas opened in this whole bill, which would be enough to heat and cool 6 million homes for 15 years. It would take care of the Nation's needs for 3 months. That is what they say. But how long will it take to get that gas?
Here are the estimates that the Mineral and Mines Management Service say even going out 50 years--even going out 50 years--we only get about 80 percent of that 5.8 trillion cubic feet, about 2\1/2\ months' worth.
Looking into the median term, in the next 15 years, this whole bill would open half a trillion cubic feet of gas. That is about 9 days' worth. The new areas, the areas that wouldn't be opened, anyway, provide less than half of that, enough to take care of the country for a cozy Thanksgiving weekend.
But in the near term, in the next 10 years, we get almost nothing out of this bill, and there will be absolutely nothing until 2011.
Take a look at these numbers from the Minerals Management Service and ask yourself, will this have a real effect on natural gas prices, with this type of supply? Will this have any effect on natural gas supply?
Nothing in the short term. But, in exchange for that ``nothing,'' we give away 37.5 percent of the royalties, money that could be used for homeland security, defense, housing, education--or actually helping the coastal States in this region to actually meet their challenges. I do believe we should help them meet their challenges, particularly Louisiana. Senator Landrieu has made a powerful argument on behalf of her State and those needs. But the question is, How do we best achieve that? Money for these other priorities we cede to four States, and for those four States it is a great deal, but for New Jersey and the other 45 States, I don't see how it is.
There are some people who might support this bill because of the money that will go directly to the Land and Water Conservation Fund stateside program. But the amount of money in that fund that we will get in the first 10 years is a trifle. These are the funding levels for the stateside grant program for the past 6 years--see where they are-- and the amount in this year's Senate Appropriations Committee report. The average over that time is about $82.3 million.
Under the bill we are debating, this new direct funding for the Land and Water Conservation Fund would provide a small fraction of what it had been getting in the past and barely even meet the lower funding levels of recent years. While this does not replace the appropriations process for the Land and Water Conservation Fund, it could make it harder in the future to get appropriators to provide additional funds to this program, beyond that which is allocated in this bill. This is no windfall for the Land and Water Conservation Fund, and it certainly doesn't make up for the giveaways from the Federal Treasury.
Finally, this bill provides statutory protections for Florida's western coast until 2022. That is unprecedented and treats Florida differently from all other coastal States. I do not begrudge Florida their attempts to get statutory protections to 2022. They deserve the right to try to protect their coastline. But New Jersey also deserves the right to protect our own. While we must fight each year for a 1- year extension to the drilling moratorium and are beholden to the whims of the executive branch which could remove the Presidential withdrawal at any time, Florida would be protected.
We simply seek the same protections Florida is being offered, a continuation
of the moratorium until 2022. So I will be filing an amendment, cosponsored by a broad, bipartisan coalition of Members from both coasts, including Senators Snowe, Feinstein, Lautenberg, Boxer, Collins, and many others, that would put the Atlantic and Pacific Oceans off limits to oil and gas drilling until 2022.
While we file those amendments, we are being told, unfortunately, that we will not be given the opportunity to offer any amendments to this bill. I believe that is wrong. We have record-high gas prices. We face even higher ones in the future due to instability in the Middle East. We are putting a squeeze on families around the country while allowing oil and gas companies to report new record profits this week. We also have an electric grid in California that is straining under a record heat wave, and global warming threatens to bring us even more heat waves like this in the future. Yet this is the only piece of energy legislation which is likely to move this year, and we are not likely to be given the opportunity to address any of the real energy problems this country faces.
There are a number of excellent amendments that are being filed by people on both sides of the aisle, amendments that would raise fuel efficiency or provide for a real plan to cut down on the amount of oil we use or create new incentives for renewable energy. I will be filing amendments to encourage the production of biofuels and the development of new vehicle technologies, increase the amount of renewable energy the Federal Government is required to purchase, spur the growth of transit-oriented development corridors to help reduce people's dependence on cars, and others.
But at the very least, we should be allowing other coastal States, such as New Jersey, the opportunity to protect their own beaches the same way Florida has already been taken care of in this bill. The complete lack of protections for the New Jersey shore in this bill and the lack of guarantees that something much worse will not come out of a conference with the House forces me to oppose this bill. That is our fundamental problem. I certainly hope, if the bill is to pass the Senate, it certainly does not come back in any way other than its present version, or else we will clearly be forced to do anything and everything necessary to achieve its defeat.
I yield the remainder of my time. I yield the floor.
Mr. President, if I could inquire of my colleague from Washington--and I have my colleague from Alabama who seeks recognition--maybe we can get some order set up here. I have a 15- minute…
Mr. President, if I could inquire of my colleague from Washington--and I have my colleague from Alabama who seeks recognition--maybe we can get some order set up here. I have a 15- minute presentation. I believe my colleague from Alabama is seeking recognition, if I could inquire.
I would inquire of my colleague from Washington a timeframe she would want, in an effort to establish some order.
If my colleague from Washington would be willing to allow 5 minutes for my colleague from Alabama to finish up his comments? Is that asking too much? I don't want to press it too far.
I thank my colleague from Washington in particular for allowing us to do this. It is very much appreciated.
I am happy to yield to the Senator from Texas.
I believe I am to be recognized for 15 minutes. If the Presiding Officer will notify me when 2 minutes remain?
Mr. President, I rise to speak on the pending business before the Senate, the Gulf of Mexico Energy Act, S. 3711. I wholeheartedly support this bill. We face a dire situation in this country regarding our energy dependence.
I believe this debate is about two numbers and those numbers are 3 and 75--$3-a-gallon gasoline and $75-a-barrel oil. That is what this debate is about, 3 and 75.
We are reminded about this every day. There are probably places in this country paying well over $3 a gallon for gasoline. The price of oil hit $75 this past Friday. There is a good possibility it will even go up from there. We need more domestic drilling to take place. We must reduce our foreign dependency, our dependency on foreign oil. In the future and in the near term as well we have to reduce our dependency on oil.
Things are striking. In the United States we burn 10,000 gallons of oil per second. The United States uses four times more oil than any other nation. Relative to economic output, the United States consumes 7.5 gallons of oil for every thousand dollars of GDP. Oil imports cost us--this is a 2003 number, so they are higher now--oil imports cost us $10 billion a month, as a nation. Those are 2003 numbers.
Energy economists estimate that since World War II, oil price spikes have cost the economy 15 percent growth and $1.2 trillion in direct losses. There is a $7.4 billion increase in the U.S. oil bill per year for each $1 increase in the price of oil. Imagine what that adds up to when you push $75-a-barrel oil. A $1 increase in the price of oil costs U.S. companies and consumers about $828 million in trucking costs each year.
In addition to these facts, we get a large amount of our oil from regions that are unstable at best and unfriendly at worst; 65.3 percent of the world's proven oil reserves are in the Middle East. The Middle East OPEC States already supply the United States with 2.5 million barrels per day, 25 percent of our daily imports.
Further, every day, 26 million barrels of oil flow through two points. One of those points is the Straits of Hormuz in the Persian Gulf. We know the instability that can happen there. A few targeted strikes against one of these two states or against oil facilities in Saudi Arabia, which holds a quarter of the world's oil reserves and essentially all spare capacity--if you can consider any of the capacity spare today--it could take several million barrels of oil off the global market every day for months and send oil prices soaring.
These facts, coupled with the increases in demand that are taking place in countries such as China and India, do not bode well for our national and economic security.
There will be very difficult if not potentially disastrous consequences to our economy if we do not reduce our dependence on foreign oil and, in the future, oil period. If we remain so dependent on foreign oil, we court disaster.
Currently, we have these two mega numbers, 3 and 75; $3-a-gallon gasoline and $75-a-barrel oil.
This bill, the Gulf of Mexico Energy Act, will help lessen the dire situation we are currently in. It opens up 8.3 million acres of the Gulf of Mexico for oil and natural gas exploration. It is something we need to do, we must do now to be able to help reduce our demand for oil products, for foreign oil.
I want to also talk about the midterm of what we need to do. This is something we have to do now to mitigate the situation we are currently in. We really need to do it. But on a midterm basis, we have to reduce our dependence on oil, period. That is why a bipartisan group of 28 Senators has put forward the Vehicle and Fuel Choices for America Security Act, S. 2025. I urge my colleagues to look at cosponsoring this legislation. I think it is the most bipartisan and comprehensive energy legislation pending in front of the Senate today.
We filed it as an amendment on this bill, but as I understand the procedural situation we are in, it is unlikely this is going to come up now. It is still important that we look at this legislation and others to reduce our long-term dependence on oil. It is appropriate Members of Congress from every region of the country and every political stripe-- conservative, liberal, everything in between--have all arrived at this same point. For our national security and our economic security, we must reduce our dependency on oil.
It is common sense to reduce our oil consumption, and it is doable. This bill uses new ideas and does not visit old debates or fights. We know the edges of this debate where we divide this body. This doesn't go there. It says what areas can we agree upon, and let's press forward there. For too long our foreign policy has been dictated in part by our need for foreign oil. It is in the interest of America's security for us to look at ways of lessening our dependence on foreign oil, and it is also in the interests of our economy. The pocketbook of every American is affected when the price of oil goes up.
We can create market incentives to use the technology available today to deal with the problem that we are facing right now. We don't have to wait for any new inventions. We can start solving the problem today simply by sending the marketplace the correct signals. There is broad public support for reducing our oil consumption.
This, to me, is one of those American-type problems. We have a problem and it needs to be addressed and we can do it with good, old- fashioned American ingenuity. It exists. The great thing about this bill, S. 2025, is that our 10-year goal is for reduction in oil consumption of 2.5 million barrels per day. That is roughly 10 percent of our total oil consumption and the same amount we import daily from the Persian Gulf region.
How do we do it? Ethanol and renewable fuels must play a clear role in this fight. They are homegrown. We need to be more dependent on the Midwest than the Middle East. Therefore, this helps keep the money at home. We ventured down this road before, but we have never fully committed as a nation to renewable fuels. Now is the time to do it.
I am encouraged by the fact that so many people are literally buying into ethanol today, and into biodiesel--soybean-based diesel fuel. Bill Gates has invested over $100 million of his own money into ethanol. Richard Branson of the Virgin Empire, famous for his success in venture capitalism, is investing in ethanol. These are great signs for the future of renewable fuels, as it is an industry that needs capital investment.
As a government and as a people, we need to fully commit to make renewable fuels a viable alternative to petroleum-based fuel. As long as oil remains above $70 a barrel, the economics of renewable fuels makes good sense. It makes sense for us to continue to push its development, and it makes clear sense regarding our foreign policy and security needs.
Biodiesel is another renewable fuel option and is a farm success story. After Operation Desert Storm in the early 1990s, soybean farmers were struggling to maintain profitability. I was the Secretary of Agriculture in my State of Kansas at that time. Because
of high energy prices and low commodity prices, the farmers were struggling. The soybean farmers started investments in the development of biodiesel. It was a priority for farmers eager to contribute to our energy supply and develop a new market for soybeans. Farmers invested more than $50 million of their check-off dollars. These are dollars they tax themselves to be able to promote their industry. They did this to be able to conduct research and development in biodiesel.
As a result, the biodiesel industry has shown slow but steady success since the early 1990s. However, in the past 2 years it has grown exponentially. In 2004 there were approximately 25 million gallons of biodiesel sales. That increased to 90 million gallons in 2005, and currently it is on track to exceed 150 million gallons this year.
Likewise, we went from 22 biodiesel plants in 2004 to more than 60 biodiesel plants currently, and there are over 40 more plants currently under construction.
Congress has, and continues to put in place, policies that enhance our Nation's energy security. Renewable fuels are playing a significant role in helping to achieve this objective while providing economic benefits to farmers and rural communities.
Another key element to freeing ourselves from our foreign oil dependency is to introduce electricity as a transportation fuel option. Recently, I and many of my colleagues in the House and Senate test drove plug-in hybrid vehicles on Capitol Hill. These cars drive exclusively on electricity for the first 30 miles of every trip. After 30 miles, these cars switch to a normal combustion engine. Over 50 percent of all Americans drive less than 30 miles each day. That means we could have over half of our drivers in America driving exclusively on electricity, not using any oil at all.
The good news is that our electricity generation is produced here in America, whether it is coal, natural gas, nuclear, or renewable sources such as water power and wind. We would be fueling a majority of our transportation sector with American sources of energy as opposed to foreign oil. Plugging in your car during offpeak hours when power is in a surplus and cheaper would soon just become part of the modern daily routine like plugging in your cell phone before you go to bed. Offpeak electricity can be the equivalent of 50-cent-a-gallon gasoline.
The car I sat in, and other Members drove, went 100 miles a gallon by using the plug-in technology, the hybrid technology in the car, and fuel in a combustion engine--100 miles to the gallon, a car available today.
This was a modified Prius. I don't want to tell everybody that this is broadly available. But the people who have modified it to include plug-in technology were using this hybrid vehicle.
Not only will we be sending out money to countries that dislike us, but we will be buying American-made power instead.
Another great bit of news is that we already have the infrastructure in place to produce electricity as a transportation tool. All you will need is an extension cord and a wall outlet. We can't drill enough domestic oil to break our addiction to foreign oil.
However, this bill takes an innovative market-based approach to solve these problems. We can provide tax credits for the production and purchase of advanced technology cars. We expand the renewable fuels infrastructure through a variety of means. We also expand research and development in critical areas such as light-weight materials and cellulosic ethanol. This ethanol, instead of being made out of grain, is made of plant fibers or out of woodchips. We amend the Federal fleet requirements to reduce oil consumption by allowing electric drive technology to qualify under the EPA act.
We require 30 percent of the Federal fleet requirements to be met by advanced diesel, hybrids, or electric plug-in hybrids by 2006.
We also provide tax credits for companies that have fleets of 100 or more vehicles to purchase more fuel-efficient vehicles.
We are all solidly behind the ideas in this bill. It has 28 cosponsors, and we look forward to moving these ideas forward because it is critical for our national and economic security and our economy and our future that we do so, plus it is just good old American ingenuity that we would do something like this and lead the world in moving toward an important electric renewable source fleet of vehicles for our consumers.
Clearly, if we are to continue to live freely in this country, we must figure out a solution to our rising dependency on foreign oil.
That is part of my support for S. 3711. Near term, we have to do more production. Longer term, we have to reduce our dependency and our addiction to oil, period. Here is a bill and a way we can do it. As we observe what is taking place in the Middle East--even today we can see volatility in that region. As we observe what is taking place in our marketplace, I believe you can see a yearning for vehicles that get higher mileage and we can use with plug-in technology.
I think we have to pass S. 3711, and then in the future let's move this car fleet to be based more on renewables and to be based on plug- in technology using electricity.
I look forward to working with my colleagues to be able to accomplish that. I urge us in the near term to do what we have to do--pass this bill which is before us today.
I yield the floor.
I would be happy to yield during the remainder of my time.
I thank the chairman.
Mr. President, I intend to speak for about 15 minutes. I think that was part of our unanimous consent agreement earlier. I know there are other Senators who want to speak for and against. I wish to…
Mr. President, I intend to speak for about 15 minutes. I think that was part of our unanimous consent agreement earlier. I know there are other Senators who want to speak for and against.
I wish to begin again by thanking Senator Domenici for his strong and able leadership. I want to associate myself with the remarks of the chairman of the Appropriations Committee, the senior Senator from Mississippi, Mr. Cochran, who has been a real leader in our effort to pull a coalition of Senators together who are concerned about the Nation's energy supply and our growing dependence on areas of this world that are not friendly to downright dangerous. This coalition of Senators understands how important a partnership is to maintain a long- range, mutually beneficial relationship that helps the coastal States that agree to drill and the Nation that so desperately needs new supplies.
I am going to try to answer some of the charges that were made. As the chairman, the Senator from New Mexico, said, some of them are not worth responding to because they are so weak on their face. But some do need to be responded to.
One of them that I want to set right is President Truman's position. Somebody might say: Senator Landrieu, why is it so important to know what President Truman did? We need to look forward, not backward.
But you know, as a leader and as an elected official, I find it very helpful sometimes to understand history--the things we did right and the things we did wrong--because it helps us to make wiser decisions in the future. When so many lives depend on it--300 million, in this case, in the United States, and
more in the rest of the world--I think it is important for us, as fast as we move up here, to try to get it right. So I want to get something right for the record. If somebody wants to come down here and debate me, please do, because I have many books about the Tidelands oil controversy with which I am prepared to debate. I have excerpts of the veto letter Truman sent. I read the original law. Why would I do this? Because this is very important to my State.
The truth of the matter is this: In the late 1940s, we didn't know there was oil and gas in the waters off the coast. I think the first well was found in Pennsylvania, maybe the second one in Texas, and the first offshore well was off of a pier in California. I say a pier because that is the way they first were because nobody knew how they could swim out. They made a pier to walk out to put the rig in the water. And lo and behold, they discovered oil and gas. It wasn't soon after that first well, there was a second well offshore in Creole, LA. I know about it because it is in my State, a little town that was virtually destroyed by Katrina and Rita, where a lot of brave souls, pioneers--just like the West is proud of the cowboys and the pioneers and the wagon trains that went out West, those of us along the gulf coast, the roughnecks who started this industry, those who own pirogues and skiffs and flat boats and walked in the marsh are proud of the industry which we developed.
We don't hang our head in shame about it, despite the rambling up here about big oil companies this and big oil companies that. People have made a good living. It helped this country to be the strongest economy in the world and in large measure because of the way we manage our resources. We need to do a better job of that.
President Truman offered the Gulf Coast States 37.5 percent. He said the land belongs to the Federal Government. There is no question it is Federal Government land and it is Federal resources. But as your President, I will agree to share the bounty.
Why? Because he was a smart man. He was an able leader, and wise, and knew that sharing is always better than hoarding. It is the first lesson kids learn in kindergarten. Why we can't learn it in Congress I don't know. But President Truman figured that partnership is better than in lateral taking. So he offered us 37.5 percent and he put a bill in and sent it to the Congress. You can read what happened.
But because of States rights issues and all sorts of other politics of the time, the Congress, for whatever reason, decided the States should get 100 percent. They amended his law that he sent to Congress to give 100 percent and the Federal Government to get nothing. That, of course, didn't make any sense. And President Truman was correct. He vetoed it. I would have, too, if I were the President, and so would Thad Cochran, if he were the President back then. It didn't make any sense.
But for Members to come to the floor and read only a part of the history and use it for their argument is not being forthright. That is what history books will say. That is why those of us in Louisiana understood that it was Leander Perez, who was leading the charge for a greater share, 100 percent. We were so angry because we basically ended up with nothing. We should have taken the 37.5 percent.
That is what brings us here 50 years later--not to rob the Federal Treasury, not to ask for something that is not ours but to cut a good deal, a fair deal, a square deal for the people of the gulf coast, for the coastal States, and to honor the wise offer made to us by President Truman.
Here is a picture of it. I would have no such objection to such a provision, which is similar to existing provisions under which the States receive 37.5 percent of revenues from the Federal Government, oil-producing public lands within their borders. Because in the 1920s the record will reflect, when oil was discovered on land, the Minerals Leasing Act gave 37.5 percent to States such as New Mexico, to States such as Wyoming, to States such as Colorado. No oil or gas had been discovered in water. So there was no reason for the coastal States to be included.
The Senator from New Mexico is correct because western States came into the Union under completely different rules than the eastern States. There was a lot more western land. So the Minerals Leasing Act was passed. It was set at 37.5 percent. When oil and gas began to be discovered in little places such as Creole and off the coast of California, there was interest in having the coastal States at 37. But because there was an overreach, we got nothing.
Yes, we have had jobs, we have had economic opportunity. I am not denying that. But what I am saying is a partnership is always better than going it alone. The strategy of going it alone has resulted in not one new refinery being built in this country in the last 30 years and only expansion very recently, no new nuclear powerplants being built until recently, and no new areas opened under leasing because of no partnership.
I wanted to get the Truman issue straight this afternoon.
I also want to say that this bill is good overall energy policy. I know we cannot drill our way out of the situation we are in. But we had better change course. Since 1960, we have been on a course of further dependence on oil and gas. We are building and trying to permit more liquefied natural gas terminals, which is good, but we are building an infrastructure of dependence. We need to build an infrastructure of independence so that we can make wise choices and not be beholding to the suppliers of a commodity and a resource which we need to keep the lights on and to keep this economy moving forward.
This bill comes to the floor not saying it is the solution to all of our energy problems but arguing forcefully that increasing supply is important and saying we have not done that in over 20 years. We need to open areas of new drilling.
As a story, I had a group of French Parliament members from France in my office not too long ago. I cochair the French caucus. We talked about a lot of issues. They were particularly interested in the issue of energy. I put up a map of the United States. And first they asked me about nuclear because, of course, the French are leaders of the world in that. They produce a different kind energy technology than we do, and 80 percent of their energy comes from nuclear sources. They were asking me about that. They also asked me about other aspects of the energy legislation. I showed them a map of the United States. I said this is where we allow drilling, and this is where we don't, but we think we might have reserves in many other places. When they saw the map of how restricted drilling is they were dumbfounded. They said: Senator, why? This is a great country. America has resources. I said: Because we have a backward-looking approach. We have not recognized new technology. We have not recognized that you can drill in places and minimize the footprint and expand opportunities for the economy while making sure that you are protecting the environment.
This is a step in right direction. The gulf coast is our Nation's only energy coast. Three-hundred million Americans depend on this coast to work--and work we do.
This is a picture of a graph that I like to show. I have shown it many times. The red is a natural gas pipeline company, and all the pipeline companies that exist in the Nation. You can see there is a great cluster right here along the Texas coast, Louisiana, Mississippi and Alabama. It comes right here at Mobile Bay. This one lonely little pipeline brings gas right over here to Florida because we are not able to drill for several reasons. That is a subject for another day. But this is the gulf cost compromise. By the nature of it, we all can't get what we want. It is a compromise. These five States--four that are drilling States and one that is a nondrilling State--have come together, Senators Martinez and Nelson, all of us, to say: OK. Let's stop fighting and let us start working for the benefit of the country. Let us give Florida a reasonable buffer, new revenue sharing to these States, open some additional drilling and help the country get the domestic oil and gas it needs. Maybe it makes too much sense for people to vote for, but there is another reason that this money is so critical to Louisiana and Mississippi, Alabama and Texas and, in particular, Louisiana because our topography is
different. I know people can't grasp it because you do not see pictures of it very much. We don't have beaches similar to California and Florida. We have only two. They are 7 miles long each--Holly Beach on the west and Grand Island on the east. All the rest of our coast is quite expansive. It is marshland and grassland. It is the home of the mouth of the greatest river--the Mississippi River--system in North America. That river goes all the way through our country. So this land is very fragile. Because of global warming, and because of other things, because of some of the canals that were dredged back in the early days before we understood the degradation that can be caused, this coastal land is eroding. The hurricanes that are coming are more fierce and strong. We lost in Rita and Katrina alone total land equal to 73,000 football fields. We lose the equivalent of one football field every 38 minutes, 73,000 football fields in 48 hours. That is the size of the District of Columbia gone in 2 days because of the great surges from the water and wind from Katrina and Rita.
This money is critical. And unlike our opponents who say there is no direct use of this money, the people of Louisiana are poised to pass a constitutional amendment that all of that money will go to coastal restoration and hurricane protection.
I might add we are happy to do that. It is obviously popular and quite necessary in the State of Louisiana to do that. That is what our State wants to do. I might add that the interior States of New Mexico, Colorado, and Wyoming have no restrictions. The States that share 50 percent of their revenues have no restrictions on the way the money can be spent. They can reduce taxes with it. They can build universities with it. They can build highways with it. They could put it in a trust fund and give out a check to everybody who lives in the State. But we have targeted uses for these funds in this bill. We want them to go for general environmental purposes and to secure our coast--not just for the benefit of the 10 million people who live along the coast but the 300 million people who depend on this coast to be there decades from now, hopefully, centuries from now--a very valuable working coast for the Nation.
Energy comes from this coast, fisheries come from this coast, the Mississippi River empties into the gulf here, and 70 percent of the rain from the Midwest comes down through this river system. It is important that we don't wash it away.
I know my time is up. I will come back again to speak. Maybe there are some other Senators who would like to speak. But I wanted to get President Truman's position straight for the Record. I wanted to say that our uses are going to go for environmental purposes and I wanted to say that without this money the coast will wash away.
I yield the floor. I suggest the absence of a quorum.
Madam President, we are on a subject that is near and dear to the heart of the Senator from Florida--both Senators from Florida. It is a subject of which, a year ago, in bringing up an energy bill,…
Madam President, we are on a subject that is near and dear to the heart of the Senator from Florida--both Senators from Florida. It is a subject of which, a year ago, in bringing up an energy bill, there was an attempt to drill off the coast of Florida, and this Senator had to start his first filibuster. We were able to resolve that with the help of the distinguished senior Senator from New Mexico, Mr. Domenici, who, true to his word, let the Energy bill go on without bringing up the portions with regard to drilling off of Florida when it went to conference with the House of Representatives. And I have thanked Senator Domenici many times on this floor for being a man of his word.
I must say, in the negotiations that have brought this legislation to the floor now, I give great credit to the senior Senator from Louisiana, Ms. Landrieu, in looking out for the interests of her State in receiving revenue--what would come from new drilling that this legislation addresses not only for Texas, Alabama, Mississippi, but especially for Louisiana. It addresses those revenue needs that the State needs since it is losing all of those wetlands. We saw the results of that in the great tragedy of Hurricane Katrina a year ago. So I give great credit to Senator Landrieu.
But I also give great credit to Senator Landrieu because she knew the interests of Florida had to be protected in order for her to get an agreement because both Senators from Florida were willing to filibuster any legislation that threatened the interests of Florida. To her great credit--Senator Landrieu's--she worked with the two Senators from Florida. She also worked with the other gulf coast Senators. And what has been crafted is a piece of legislation that addresses just the Gulf of Mexico.
Now, you might wonder: Why does Florida not want its waters off the coast of Florida to be drilled? Well, this Senator is going to explain that. Certainly, there are economic interests with a $57 billion a year tourism industry that depends on pristine beaches. Certainly, there is the delicate environment--the 10,000 Islands, the Big Bend area, the bays and estuaries, Apalachicola Bay--all of these environmental areas that are so delicate to the ecology of the oceans where so much marine life is spawned.
But there is another big reason that most people do not understand, and it is right here as shown on this chart. Most people do not realize that the entire Gulf of Mexico off of Florida is restricted airspace. Why? Because this is the largest testing and training area in the world for the U.S. military. All of this area has restricted air use and naval use.
You wonder: When the U.S. Atlantic fleet training in Vieques--the little island off the eastern end of Puerto Rico--when it was shut down, why did most of that training come to Florida? It is because you can do combined air-sea exercises and land exercises from Eglin Air Force Base, Pensacola NAS--Naval Air Station Pensacola. Squadrons of Navy F-18s come down and spend 2 weeks, 3 weeks at a time, and are stationed there because when they lift off out of Key West NAS, within 2 minutes they are over restricted airspace where they can go about their training.
So here is a large part of the reason--as shown right here on the chart--why there is no drilling off the west coast of Florida in the Gulf of Mexico. The importance of what is called the Eglin Air Force Base Gulf Test and Training Range has been emphasized in the letter that was received by the Senate Armed Services Committee, signed by the Secretary of Defense, Don Rumsfeld. That letter was delivered to the committee last November, in which he says: You cannot have oil and gas rigs out here where we are testing and training sophisticated weapons systems, and where we are training our pilots--Air Force and Navy pilots--and where we now will have the F-35 all-pilot training for the new Joint Strike Fighter, the F-35 for all branches of service, all out here because of that restricted space. So Secretary Rumsfeld made it very clear: You cannot have oil and gas rigs.
I remember the Senator from New York, Mr. Schumer, one day said: Why should Florida be protected? Here, this is the reason. This is the historical reason, in addition to the reasons of the environment, as well as the economy of Florida in protecting our tourism industry.
So this is what we are dealing with, as shown on this chart. All of the yellow on this chart off the State of Florida is going to be protected until the year 2022. That is three planning periods of 5 years each. That is 15 years after the planning period of 2007 kicks in. All of that area--which is 125 miles from Fort Walton, it is 100 miles from Perdido Key, 100 miles off of the Alabama coast right here. Then it comes around, and it then follows this critical line, this black line that is called the military mission line, a military mission line that was established in 1981 by the Department of Defense in that they said they wanted no drilling east of that line. Therefore, that line becomes the critical line, of which you see that most of the area of Florida, then, is protected from drilling. And that is all the way through the year 2022.
That area, by the way--from this point off of Clearwater, which is in the Tampa Bay area--is 235 miles due west of the Tampa Bay area beaches. For Naples, it is in excess of 300 miles. No drilling. So you can see the protection for Florida also happens to be the protection for the U.S. military in these ranges.
Now, we have had people come to the floor and say they are concerned about this going down to the House. The House-passed bill basically lifts the moratorium for drilling off the Outer Continental Shelf of the entire United States--the Pacific coast, the Atlantic coast, and so forth.
I want to speak about the assurances I have been given when this bill will leave here and go to the House of Representatives. But let me tell you why this bill only deals with the Gulf of Mexico. From Florida's standpoint, from the military's standpoint, from the Nation's defense standpoint, we do not want to lift the moratorium and have drilling off the east coast of Florida and the rest of the southeastern United States because, look right here on this chart. Here is another major Air Force and Navy training area off the northeast coast of Florida and off the east coast of Georgia. In addition, right there is a place called Cape Canaveral. The Cape Canaveral Air Force Station is where we launch our rockets to put all of our satellites, our defense satellites, into equatorial orbit.
You can't have oil rigs out here where you are dropping the first stages of the expendable booster rockets that are putting our highly sophisticated and highly classified defense payloads into equatorial orbit. Just to the north of Cape Canaveral is a place called the Kennedy Space Center. It happens to have launch pad 39A and launch pad 39B from which we launch the space shuttle and, after the year 2012, it is estimated we will launch the new space vehicle called the Crew Exploration Vehicle. You can't have oil rigs out here where we are dropping the solid rocket boosters from the space shuttle when we launch, those two big candlesticks on either side of the external tank of the space shuttle. After they have expended their fuel 2 minutes into flight, they separate from the space shuttle and parachute back into the Atlantic Ocean. They are then brought back in, refurbished, and reused. You can't have oil rigs out here.
So as people talk about wanting drilling off the east coast of Florida, which this legislation in front of us does not address but the House bill does address, you can't do that out here with an interest of the Nation at stake--the military preparedness plus the defense of this country, with the important payloads that we are launching out of the Cape Canaveral Air Force Station, as well as the Kennedy Space Center. When people say that this legislation we are passing in the Senate does not address protections of the east coast, the east coast isn't a threat. Right now the east coast is under a moratorium until the year 2012. That is not where the threat is. The threat is here in the Gulf of Mexico. That is why we have the legislation before us that we do. That is why this Senator is coming to the floor to announce my support for this legislation, which I have helped craft and on which I have waited until today, until I had assurances that this legislation was not going to be in any significant way changed when it leaves this Chamber and goes down to the House.
What are those assurances? I have been authorized to say from the majority leader, Senator Frist--and I am reading from an e-mail to me. This is a quote Senator Frist sent to me today--
The Senate bill is a carefully crafted compromise and I
believe it represents what is achievable in the Senate this
year. I will not bring a bill back before the Senate that
does not provide adequate protections to the State of
Florida. I look forward to working with both Florida Senators
to achieve this goal.
Yesterday, I spoke personally to Senator Frist on the telephone. He told me he would do everything within his ability to keep it to the Senate version when the bill returns to the Senate. That is a pretty good assurance for this Senator to protect the interests of Florida.
I went to our leader on this side of the aisle, the Democratic leader, and Senator Reid has written a letter to me:
Dear Senator Nelson:
It is my expectation that the House of Representatives will
accept S. 3711 as passed by the Senate without amending it
and without modifying it in a conference committee. If the
House does not accept the Senate bill as passed, I will join
other Senators and Senator Nelson and produce the votes to
sustain a filibuster to prevent the passage of the bill when
it would return to the Senate.
That is the end of the quote from Senator Reid's letter.
Around here, you have to take a man at his word. I accept the word and the assurances of the two great leaders of our two great parties in protecting the interests of Florida. I am prepared to come and support this legislation and to thank the leadership on both sides as they have worked with the two Senators from Florida to try to do what is right for the country.
In the legislation that addresses the drilling, there is another important component for Florida; that is, there are a few leases out in this area from years past, decades past, that have never been drilled because they have never gotten the permits because of all that we have been going through, keeping these waters protected in a moratorium. Senator Landrieu has crafted a portion of the bill that revenue will go to four Gulf States from the revenue generated to the Federal Government from new leases. The interest of Florida, since there won't be drilling, is to get rid of the ancient leases that are never going to be drilled. So there is a provision in the legislation that will allow the swapping of these leases by their value for new leases in the area that can be drilled in what is called lease sale 181, and other leases in the central and western Gulf of Mexico, new leases that we want to be drilled where a swap would occur.
People say that is voluntary for the oil companies.
I ask unanimous consent for 3 additional minutes.
You would ask, if it is voluntary, why would they do it? Because there is a financial incentive for oil companies who want to pay for new drilling in 181 or elsewhere
in the central or western gulf, not to pay that by swapping out their financial interest in these ancient leases that are still here. They are of minor value compared to the entire value of the leases elsewhere in the Gulf of Mexico, but nevertheless that is there.
Why it is important that we keep the Senate bill intact and not expand it with any version of the House is because the House-passed legislation works for the Gulf of Mexico, but the House-passed version lifts the moratorium for the entire country and allows, with State legislative approval, drilling to come up to 3 miles off the coast of a State. Of course, Atlantic seaboard Senators, Pacific Ocean Senators, would be violently opposed to that, and then the Senators who start realizing that it starts getting into their military- restricted areas, their defense-restricted areas, would find that enormously objectionable. That is another reason we need to keep this legislation intact as it goes to the House and then comes back to the Senate.
My colleague from Florida, Senator Martinez, has made several statements on the floor--and it is my understanding that he will again--that he is given assurances that the protection of Florida will be there when this legislation comes back from the House. It is the privilege of this Senator from Florida to support this legislation.
I yield the floor.
Mr. President, I ask unanimous consent that the order for the quorum call be rescinded. Mr. President, I rise to express my strong support for S. 3711, the Gulf of Mexico Energy Security Act of 2006.…
Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.
Mr. President, I rise to express my strong support for S. 3711, the Gulf of Mexico Energy Security Act of 2006.
This is an important and timely piece of legislation that deals with an issue that is very near and dear to Floridians, which is protecting our gulf coast from drilling.
Protecting Florida's coastline is an issue of monumental concern to me and to my constituents, and I commend Chairman Domenici and his staff, as well as Leader Frist and Senator Mitch McConnell, for their hard work in forging a strong bipartisan compromise that allows us to do just that. I also thank the distinguished Senator from Louisiana for her work in bringing about this bill.
As Floridians know, and many of my colleagues have learned over the past several months, our beaches are extremely important to our way of life. We value their unique and fragile ecosystem. Our State's special scenery and fragile environment bring millions from across the Nation and the globe to enjoy its sugar-sand beaches and world class angling and boating.
I have spent a great amount of time and energy since arriving in the Senate fighting to protect Florida's treasures from the threat of offshore drilling, together with my colleague, Senator Nelson, as well as with the Members of the Florida delegation in the House of Representatives.
Several different pieces of legislation have been introduced over the past year in the House and the Senate that the Florida delegation has found extremely worrisome, and we have been successful up to this point in keeping drilling at bay. But the drilling battle has gotten fiercer and the stakes have gotten much higher as our Nation struggles to meet our energy demands in an increasingly uncertain world.
Pressure continues to mount in Congress to develop Federal deepwater resources in the Outer Continental Shelf. And because high oil and natural gas prices are not a Republican or a Democrat problem but they are our Nation's problem, there is a bipartisan majority that grows stronger each day behind the effort to open the Eastern Planning Zone of the Gulf of Mexico to more drilling.
So our options are whether to be part of a solution--a real solution that provides concrete protections for our State--or watch our protections be eaten away year after year by those who do not share Florida's values. I chose to be part of a solution for Florida.
I want to assure Floridians that Florida is protected under this bill. This legislation, which I was proud to help negotiate, will provide unprecedented protections for the gulf coast of Florida. This bill establishes in law a 235-mile buffer from Tampa and a minimum of 125 miles of protection from the Panhandle of Florida south through the year 2022. It provides over 300 miles of protection from Naples west. And it protects our very important military mission line. The military mission line is important to Florida because we are also blessed in Florida to host a great number of military facilities and the very important facilities in the Florida Panhandle. Eglin Air Force Base, Hurlburt Field, and the Pensacola Naval Air Station are facilities that rely on the Gulf of Mexico for training and for firing ranges, all of which would be incompatible with drilling.
Any lease within 125 miles of the coast, inside the no-drill zone, can be exchanged for new leases in deepwater in the Gulf of Mexico. In addition, the critical ``Stovepipe'' area located in extreme proximity to Pensacola will be protected from oil and gas exploration through the year 2022. These are historic protections that Floridians can count on for years to come.
I would like to make clear that this is not an opening for negotiation. I am firmly committed to this deal. Anything else that subtracts from the protections for our State as laid out in this legislation is not enough for our State. This is it.
To me, this compromise is a bridge to the future. It is my hope that by 2022, and maybe long before then, we will have developed a long-term energy strategy to lessen our dependence on oil. It is that simple and something I feel very strongly about for our future.
Just last year, the Senate passed a large, bipartisan Energy Policy Act that doubled the amount of ethanol in our fuel mix to 7.5 billion gallons. The bill also included provisions that I supported that increased funding for sugarcane and cellulosic ethanol development, as well as $50 million in loan guarantees to build alternative energy plants. We must buckle down and advance the use of renewables and alternative sources of energy. We are only
scratching the surface of our future potential, and we should not limit the capacity or ingenuity of America's scientists to tackle this energy problem. However, we need a bridge to get to that future. S. 3711 is a way to keep our industries and utilities running while we find new ways to power our cars, heat and cool our homes, and create our energy-- America's energy.
As important a priority as it is to Floridians that we protect our coasts and our environment, we must be realistic about our own energy demands. It is a difficult thing--and it has been a difficult thing as I have tried to fight for Florida's environment--to stand here and say we want no new drilling, we want no drilling anywhere in the gulf, when Florida's size alone makes it one of the Nation's largest consumers. And these consumers are Florida's families who are struggling to fill their cars and heat and cool their homes. These are struggling families who sit around the kitchen table while they balance their family budget and find the budget busted by ever-increasing energy costs. The rising cost of fuel and the strains that this is placing on their pocketbook are dominating talk of America's families.
In addition, we have to keep in mind how critical energy is to many of our industries that help drive the economies of our State. As a member of the Energy and Natural Resources Committee, I have heard countless testimony from our Nation's chemical, fertilizer, and manufacturing industries that are vitally dependent on increasing natural gas supplies within our Nation. Unlike petroleum, which is traded globally, much of the natural gas market is traded on a regional basis, and U.S. natural gas prices are among the highest in the world. For example, Florida provides 75 percent of the phosphate fertilizers used by American farmers and gardeners every day. The Florida phosphate industry is one of the State's oldest and largest economic engines, accounting for more than 6,000 direct jobs. The Tampa Port Authority estimates that that industry has created more than 41,000 indirect jobs and $5.9 billion of economic impact in the Tampa Bay region alone.
Prior to the significant increases in natural gas prices, the U.S. nitrogen industry typically supplied approximately 85 percent of U.S. farmers' nitrogen fertilizer needs. As a result of the continuing natural gas crisis, farmers have been forced to import more than 50 percent of the nitrogen fertilizers they use. In total, at least 21 nitrogen fertilizer production facilities have closed since July of 1998. Sixteen of those plants have closed permanently. That represents a 25-percent drop in total U.S. production capacity, while five plants remain idle even today. S. 3711 will provide over 5.8 trillion cubic feet of natural gas for our impaired industries, utilities, and also my constituents who are dealing with soaring heating and cooling bills.
I would like to focus now on a series of concerns that have been raised regarding this bill, how it is different and, in my opinion, better than OCS legislation recently passed in the House of Representatives. Let me say, first, that my colleagues in the Florida delegation worked tirelessly to find and obtain the best protection possible for our State under very difficult circumstances. Some have questioned the protections afforded to the buffer zone around Florida. The buffer zone provided by S. 3711, in my opinion, is clearly preferable to any other one that has been offered as an alternative. This legislation ensures that the Federal Government will continue to have jurisdiction over the Federal waters off each State's coast. We do not cede the responsibility of energy development, environmental protection or military preparedness to the desires of State legislatures. The buffer zone in the Gulf of Mexico is good through the year 2022 and also prohibits drilling in our military critical training areas.
Some have asked why Florida's Atlantic coast is not included in this bill. I would say, quite simply, that Florida's Atlantic coast has been under relentless attack for the last year and a half by those who want to drill. The Atlantic coast of Florida is still under a Presidential withdrawal until 2012, as well as the entire eastern and western coasts of the United States. This means that until the year 2012, the eastern coast of Florida is safe. Our compromise legislation in no way weakens the existing coastal protections. The House-passed OCS bill removes the entire Presidential withdrawals off of every coast and forces State legislatures to pass legislation every 5 years to keep or extend those protections.
Other coastal Senators have raised their objection to S. 3711 because they want to increase coastal buffer zones in their own States. This is a focused piece of legislation that deals only with the Gulf of Mexico. Adding additional protections to areas that frankly are not promising to the energy industry should not be an impediment to moving forward with this compromise bill. To quote the old bank robber, when asked why he robbed banks, he replied: Because that is where the money is. The area being opened for exploration is the most promising area of discovery for the industry and can be leased right away.
During negotiations, I chose to focus on protecting the area of Florida under greatest pressure, and I thank my colleagues, Senator Domenici, Leader Frist, and Senator McConnell, for honoring me and Florida's environmental concerns.
The last major concern that has been raised is objection to revenue sharing with western Gulf States and targeted revenues to the stateside Land and Water Conservation Fund. It is perfectly fitting and appropriate that we share revenues with the States that produce our Nation's energy and deal with its corresponding onshore repercussions. We in Florida do not want to participate in the development of this extensive oil and gas infrastructure but recognize that others in the western gulf pay the price to bring reliable energy to the country. We share 50 percent of revenues on public land within a State's boundary, and it is fitting that we provide energy-producing States with at least similar treatment. Sharing 37.5 percent of the new OCS revenues will not bankrupt the Nation, nor increase the Nation's national debt. Currently, these areas off the coast are not being leased and are providing no revenue to the General Treasury. Keeping 100 percent of zero revenues is just that--nothing.
Finally, for those concerned with funding the Land and Water Conservation Fund, S. 3711 will provide a real boost for the program. The mandatory funding stream established under this bill does not replace appropriated funding and does nothing to disadvantage the program in the appropriations process. The President's budget request has been zeroed out the last 2 years for this program and under our compromise bill, the Land and Water Conservation Fund will provide up to $450 million or 12.5 percent of the revenues generated from the new leasing each year.
This compromise was delicate and difficult to forge. Some argue more could have been done for Florida. Others protest that Florida is afforded far too many protections, given that our State consumes nearly 20 million gallons of petroleum per day. High oil and natural gas prices are not a Republican or Democratic problem, but they are our Nation's problem. It is imperative that we pass the Gulf of Mexico Energy Security Act to provide Florida with the critical environmental protections it needs, as well as bringing 1.25 billion barrels of oil and 5.8 trillion cubic feet of natural gas to keep our industries and Nation afloat as we develop future sources of alternative energy. Failure to act is not an option. I urge my colleagues to support this well-crafted, bipartisan measure.
I yield the floor.
Mr. President, we are debating the Energy bill, the bill that would allow drilling in deep sea waters off the coast of the United States in the Gulf of Mexico. We have heard a lot of conversation…
Mr. President, we are debating the Energy bill, the bill that would allow drilling in deep sea waters off the coast of the United States in the Gulf of Mexico. We have heard a lot of conversation about that. I don't want to repeat all of the arguments that have been made, but I want to put it in a perspective that I think might be useful to some who would be watching.
Of course, we have this debate against the backdrop of $3-a-gallon gas. Everyone gets excited about that, and they say it is caused by $75-a-barrel oil, and what can we do to bring down the price of oil? The law of supply and demand determines what the price might be.
There are those who think that is determined ultimately by oil costs, but that is not true. It is determined by the world market, and the United States is only one country that is drawing on the world market and asking for this oil to fuel our economy.
We must start with the understanding that the world runs on oil right now in a variety of ways and in a variety of places, which means that everyone in the world--whether they are in China or India, in Europe or the United States--needs oil.
Why oil? Why don't we have other kinds of energy? The answer is that historically oil has been the cheapest source of the energy we need. People said: Well, let's have wind, let's have solar. Wind and solar up until now have been unable to survive unless there is a serious government subsidy for it. As soon as the subsidy is withdrawn, all of a sudden we can't afford to generate energy from these other sources because it is cheaper to generate it from oil. So we have the infrastructure for oil built up, we have the infrastructure for gasoline for our transportation system built up, and it would take an enormous investment and a great deal of time to try to change it. So people need oil.
All right. There is plenty of oil in the world, and it is relatively cheap to produce in some parts of the world. But what is known as the lifting cost--that is, what it costs to lift a barrel of oil out of the ground and put it into that tanker--for Saudi Arabia is about $1.50. You can produce a barrel of oil at a cost of about $1.50 in Saudi Arabia. The lifting costs elsewhere are much higher than that.
If we come to my home State of Utah, where we have more oil than they have in Saudi Arabia, the lifting cost to get all of that oil is around $30 to $40 a barrel because the oil is locked up in rocks known as oil shale. That is why we don't produce oil from oil shale--not because it isn't there but because it can be produced more cheaply someplace else.
Since it is a world market, people put their oil on the world markets, and the world law of supply and demand determines what will be paid for it. The key number to keep your eye on to determine what the oil is going to cost is
the excess capacity that is available. Let me explain with some numbers.
Right now, the world as a whole is using about 85 million barrels of oil a day. The world capacity to produce oil is about 86 million barrels a day. These figures are not exact. They never are. They change from day to day. But let us use them as representative figures to illustrate the point.
All right. If you are in a position where you have to be sure you can get your oil for your future needs and you look at the world situation and say: You know, there is only a million barrels a day of excess capacity out there, and that million barrels a day could disappear with the snap of a finger--a problem in Iran, a decision by the oil minister in Saudi Arabia, another outburst--explosion, if you will--by the new President of Venezuela. A million barrels a day is not enough excess capacity to guarantee me that my oil will be there when I need it, so I will bid a higher price than I normally would pay just for the certainty that the oil will be there when I need it.
So the oil goes from $50 a barrel to $60 a barrel to $70 a barrel. We have seen it approaching $80 a barrel. Then when word comes out: Well, that excess capacity is a little more than a million barrels a day. Well, I may not want to bid quite so much for the oil. And the price will settle down a little. When there are indications that the supply of oil will be more secure in the future, the price starts to come down.
This is what we see in what is called the futures markets because people are buying oil for the future. They are making long-term contracts.
All right. The key ingredient in bringing the price of oil down is to make sure the surplus capacity above the amount of oil we use gets bigger and bigger. Right now, as I say, it is only about a million barrels per day. If it were 2 million barrels a day, if there were an additional source of oil, then the price would come down because you would have a bigger cushion to be sure you can get your oil in the future.
Look, there is overcapacity of 2 million a day. Back in the days when oil was available for $30 a barrel or $25 a barrel, the excess capacity was 5, 6 and 7 million barrels a day. People were comfortable making long-term contracts because they knew that excess capacity would make the oil available to them.
Just as a side note, in this body, we approved, along with the House of Representatives, back some 6 years ago authority to drill in Alaska. President Clinton vetoed that bill. It takes about 6 years for that kind of investment to bring oil on line. If the bill President Clinton vetoed had been signed, we would have an additional million barrels a day of oil on line in the world right now. That would virtually double the amount of excess capability that is currently available. But that was not done. We are where we are.
That is why this bill we are debating is so important--not just for the amount of oil that is there but for the amount of increased capacity it will deliver to the world markets when it comes on line. And then what happens? Then, by virtue of that amount of excess capacity above the amount the world is using, the futures price for oil will start to come down. That is the way the law of supply and demand works. Around here we have never been able to figure out a way to repeal the law of supply and demand. That particular law trumps virtually everything else we do.
That is one of the reasons I am supporting this bill, to say the time has come for the United States to have that impact on the world price of oil by virtue of our ability to produce that additional capacity.
But there is something else here as important as oil with respect to what is available to us in what we call area 181, and I am talking about natural gas. The same thing that I have to say about the impact of excess capacity on oil applies to natural gas. Natural gas is something more than just energy. This is why natural gas is doubly important. Yes, we use natural gas to heat our homes. We use natural gas to cook our meals. We use natural gas to generate electricity. Natural gas is the fossil fuel of choice. Everyone wants it. Everyone says it is clean, it is plentiful. Historically, it is cheap. Let's put in natural gas. When everyone wants it, that means the demand for it goes up, that means the supply gets tight.
We discovered a few years ago something about natural gas that is very obvious but that some people had not realized. Natural gas is the one form of energy we cannot import. Natural gas gets imported by pipeline. The only place we can bring in natural gas once we have tapped all of the natural gas available in the continental United States is by pipeline from Canada and Mexico. There is a lot of natural gas elsewhere in the world, but we cannot bring it to the United States because it comes in by pipeline.
Now, it can be liquefied. It can be put on a ship. It can come here as LNG, liquefied natural gas, but we don't have that many ports that can receive LNG. It is a very major financial investment to build the port, to equip the port to handle LNG, to build the tankers that can handle LNG. There are those who are doing that, but in the meantime the amount of natural gas available in the American economy is confined by the rising demand.
Natural gas, the petrochemicals in natural gas, are a critical element of the chemical industry. When the price of natural gas goes up, the price of all of our chemicals goes up. It is a critical element in the fertilizer industry. We are proud of our capacity to produce enough food to feed all of America and still make it a major export, but we cannot do it if the cost of fertilizer drives farmers off the land. And the cost of fertilizer is tied to the cost of natural gas.
When you realize that in area 181 there is not only enough oil to change the balance of the overcapacity that can bring down the futures market in oil, there is also enough natural gas to have a significant impact on the price of natural gas and help us with lower costs in the chemical industry, lower costs in agriculture, lower costs with fertilizer across the board, you realize that opening this area for exploration and drilling is something that should have been done a long time ago.
We know one of the main reasons why it was not. It has to do with State interests and State concerns about what will go on. This bill very cleverly and carefully crafts a series of royalty incentives to get the States on board.
With Senator McConnell, I went down to Mississippi and then to New Orleans to see firsthand the devastation. In the presentation that Senator McConnell and I received was an exposition of the damage out in the Gulf of Mexico to those lands that have acted as some kind of a barrier for future hurricanes. That area desperately needs to be rebuilt. It needs to be rebuilt for economic reasons, it needs to be rebuilt for environmental reasons. It is in serious trouble. The State can't afford to rebuild.
But with the revenues that are in this bill for the State of Louisiana, there is a possibility that they can start to rebuild and produce enormous benefits for all of their people and for all of the country. This becomes a source of revenue that can be dedicated to that particular ecological activity that is good environmentally and good economically.
So you put it all together, you have a bill that I think should pass unanimously. I know it won't. We never do anything unanimously around here unless it is completely noncontroversial, and something of this kind always has a little controversy connected to it. It probably comes as close to being the right bill at the right time in the right place as anything we have seen.
A year ago we passed a comprehensive energy bill that has us started down the road toward increased nuclear activity with respect to creating electric power. This bill, coming a year later, is a logical companion piece to the bill we passed a year ago because it starts us down the road toward alleviating the upward pressure, the constant upward pressure on the price of oil and the price of natural gas and doing it in a way that those States that have previously resisted this kind of economic activity now say we understand and we will participate in a beneficial way. That is why this bill is bipartisan. That is why it is supported by the Senators from the States most heavily hit by Katrina and the other hurricanes that occurred.
One of the things Katrina taught us that should give us further comfort as we debate this bill is that our technology for deepwater drilling is sufficiently stable that it can withstand a
hurricane of Katrina's force and not produce any kind of an oil spill, not produce any kind of an ecological difficulty.
It is interesting to recognize the greatest ecological damages from oil spills have come from tankers bringing oil across the ocean, rather than from oil platforms drilled in the ocean. If we want to reduce our dependence upon the oil being shipped in the most dangerous way in terms of the environment, we should pass this bill and proceed with this activity.
It comes as no surprise that I express my strong support for this bill for economic reasons, for environmental reasons, and for long-term planning reasons. It is, as I say, the right bill at the right time and in the right place.
I yield the floor.
Madam President, while the majority leader is still here, I understand the procedure he has followed, and that is to do what we refer to here as ``filling the tree'' with amendments so that other…
Madam President, while the majority leader is still here, I understand the procedure he has followed, and that is to do what we refer to here as ``filling the tree'' with amendments so that other amendments cannot be offered.
I ask unanimous consent that the pending amendment be set aside so that I may be able to offer an amendment.
Hearing objection, I wish to take a few minutes and explain the amendment I was intending to offer so that Senators will understand what the alternatives are that we could be considering today.
Madam President, just to pick up on the point the majority leader was making, I certainly want to build on the good work we did in this body last year with the passage of the Energy Act of 2005. I believe very strongly that the way to do that is to have an open process, allow Members to offer amendments, allow those amendments to be voted on, and see what the will of the Senate is. Unfortunately, that is not the process which is being used in connection with S. 3711.
I stated extensively yesterday the substantive reasons I think S. 3711 is not good legislation, and I will repeat a few of those points.
Let me talk about the amendment I wanted to offer this morning. The amendment I was going to offer consists of the text of S. 2253, which is the legislation we reported out of the Senate Energy and Natural Resources Committee on a bipartisan basis in March. My amendment would take that language and it would modify it to add the so-called 181 south area for leasing.
Let me put up a chart so everybody knows what is involved here. The white area on this chart, the box there, is the area that we proposed in our Energy Committee bill that we reported to the floor to open for leasing. That thatched area to the right of that, to the east of that on the map, is an area which would be open with the consent of the Secretary of Defense or under appropriate circumstances and conditions which would be specified by the Secretary of Defense. That is what our bill called for.
As I say, I would propose in this amendment, if I were able to offer it, to add the yellow area below that which is now being referred to as 181 south.
The legislation we came out of committee with and I would desire to have us consider on the floor today would require that the lease sale be conducted within a year. It would provide that leasing in the 181 area south be done as soon as practicable after the date of enactment.
Overall, the amendment I would like to have been able to offer would make available 7.37 trillion cubic feet of natural gas and 1.58 billion barrels of oil. These are substantially more energy resources than the 5.83 trillion cubic feet of natural gas and the 1.26 billion barrels of oil made available under the pending legislation; that is, S. 3711.
At the same time, the legislation we came out of committee with and that I wish we were able to consider on the floor would provide there would be no leasing closer than 100 miles from the Florida coast at any point and leasing east of the military mission line under the bill, as I indicated, could only occur with the prior consent and agreement of the Secretary of Defense.
The 1-year timeframe for conducting the lease sale in this 181 area is intended to allow for full compliance with all environmental laws. The amendment does not impose any new leasing moratorium, such as the pending bill would. Also, it does not divert revenue from the Federal Treasury to four coastal States, as the pending bill proposes to do.
Earlier this year, I was pleased to work with Senator Domenici to develop and introduce S. 2253. That is the basis of the amendment I am offering. We had a hearing on the bill in committee. We reported the bill with a very strong bipartisan vote.
However, after the committee reported its legislation, several colleagues indicated they had problems with this bill, in particular my colleagues from Florida, who sought a new long-term moratorium off the Florida coast, which has been agreed to by those who are now advocating the pending legislation--this is a 16-year moratorium in a very large area--and my colleagues from other Gulf Coast States have insisted upon a provision that cedes to their States Federal revenues for oil and gas produced in the Federal Outer Continental Shelf off their coasts. Thus, S. 3711, which was written by Senators Domenici, Landrieu, and others, includes significant new provisions that I believe undermine the goals of our original bill.
I am disappointed we did not have a chance to vote on the bill which was reported out of the committee. I believe the Senate would have acted favorably on that bill had it been given an opportunity to do so.
S. 2253 is good energy policy; it is responsible fiscal policy. S. 2253 would have resulted in oil and gas being produced without locking up vast areas of the Outer Continental Shelf and without raiding the Federal Treasury at the same time.
As I stated in the Senate yesterday, because S. 3711, which is the pending bill, locks up these vast areas of the Outer Continental Shelf off the coast of Florida, and because the bill provides for the sharing of billions of dollars in Federal revenues, I must strongly oppose it.
The pending bill, S. 3711, expands areas under moratoria and sets precedence for imposing new long-term congressional moratoria.
This next chart is the one many Senators have been using to make many different arguments on the Senate floor, but the point is very clear when one looks at this chart. There is a vast area, the yellow area on the chart, that is being put off limits to oil and gas development for a very substantial period, 16 years, longer than virtually any of us are likely to be in the Senate.
The Department proposed, as I understand it, in return for gaining access to 2.76 trillion cubic feet of natural gas over what the Interior Department proposed--this bill currently pending in the Senate puts 21.83 trillion cubic feet of natural gas off limits until 2022. I think that is a mistake. I think it is a bad deal for America.
Two of these areas within the original 181 lease sale area that are more than 100 miles off the Florida coast would be offered for lease under my amendment. And most importantly, my amendment would not impose any new moratoria on Outer Continental Shelf leasing.
Likewise, the amendment I would offer would not include the ceding of Federal revenues to the four Gulf Coast States.
Let me make it very clear: I recognize there are needs to protect the wetlands along the gulf coast, and I recognize that the Federal Government should provide assistance to these
States to accomplish that wetland restoration and protection work. But I believe very strongly that should be money that comes out of the Federal Treasury. We should not be taking a stream of revenue that has historically always gone into the Federal Treasury--that is, royalty from production in the Outer Continental Shelf--we should not take that stream of revenue and divert a substantial portion of it directly to those States. We should, instead, bring those funds into the Federal Treasury, determine what the needs are for those States and for other communities in the country, and then appropriate the funds appropriately to meet those needs.
That is my strong view. That is what the amendment I would have offered would contemplate, that is what current law contemplates, and that is what the Supreme Court has always said was the appropriate course. Of course, I cited former President Truman and his strong position, which is consistent with the position I am advocating today.
In summary, the amendment I would like to have offered this morning, if the majority leader had not blocked our ability procedurally to offer amendments, would open this area called 181 south and also a larger portion of the 181 area originally than the pending legislation proposes to do. There would be an additional 1.5 trillion cubic feet of natural gas made available. There would be an additional 300 million barrels of oil made available for our Nation over and above what is being made available under S. 3711.
The amendment would accomplish this in a manner that protects Florida's coast without imposing new leasing moratoria. It would also do so in a manner that protects the fiscal interests of our Nation. I regret I am not able to offer the amendment today for consideration.
Moreover, the amendment would achieve greater oil and gas production without setting dangerous precedents. I think one of the most disturbing things about what the Senate is preparing to do, if it goes forward and adopts S. 3711, is that we are setting precedents, both for putting areas off limits to production for long periods of time--a 16- year statutory moratorium--for areas that have not been subject to statutory moratorium, in some cases at all. I think that is a big mistake. I think the precedent we are setting with regard to so-called revenuesharing or ceding of revenues, Federal production revenues and royalties to coastal States is also a very major mistake, and it sets a very bad precedent which will come back to haunt us.
I know very well that the other Senators who represent coastal States will in the future come to this Senate floor and insist, as the Senators from these four Gulf Coast States have insisted, that if production is going forward off their coasts, their States are entitled to Federal revenue as well.
This is bad policy. This is bad energy policy. It is bad fiscal policy. It is a course of action that I believe the Nation will regret in future years if we go forward with it.
I am disappointed that there is no place in this debate for us to offer amendments to correct the policy. I am also disappointed that there is no place in this debate for us to address other important energy-related issues. We should be proposing amendments to this legislation with regard to energy efficiency. We should be considering the legislation that Senators Obama and Lugar have proposed with regard to vehicle fuel efficiency. We should be considering a variety of bills--S. 2747, the Enhanced Energy Security Act, which tries to put in place a variety of provisions that would add to the efficiency with which we use energy in this country. All of those are legitimate issues we should be able to address by amendment to the Energy bill on the Senate floor.
In fact, if we were building on the Energy Policy Act work this Congress did last year in the first session of this Congress, we would be, in fact, allowing those other very meritorious amendments to be considered as part of our debate as well.
I regret that. I regret the decision of the majority leader to deny us the right to offer amendments.
Madam President, I ask unanimous consent my amendment be printed in the Record.
I yield the floor.
Mr. President, I ask unanimous consent that the order for the quorum call be rescinded. Mr. President, let me ask that my time be taken from the time allotted to Senator Bingaman. Mr. President, I…
Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.
Mr. President, let me ask that my time be taken from the time allotted to Senator Bingaman.
Mr. President, I will speak to an issue I spoke about nearly a month ago in the Senate. Because nothing has happened substantially since then, I wanted to raise the issue. We are coming to the end of the legislative session. We will be here the rest of this week and next week. The time for consideration is going to be devoted to legislation the majority leader has already described. Then we are off in August for an August break, back in September, off in October for the election.
The issue I want to talk about is the Indian Health Care Improvement Act. The reason I want to do that is I want to describe something that is happening in this country that very few people think much about, perhaps some don't care much about, but I know that there are some in this Senate who do, and I believe they would agree with me that we need to move forward and pass the Indian Health Care Improvement Act.
Let me describe why this is urgent. Some while ago I came to the Senate and told my colleagues about a young woman--I did that with the consent of the young woman's relatives--a young woman named Avis Littlewind. Avis was, I believe, 14 years old. Avis took her own life. She laid in a bed for 90 days. She was supposed to have been in school. Instead, she lay in a fetal position in bed. At the end of that time she took her own life.
No warning signs went up to anyone, nobody from the school, nobody from the mental health area, the tribe, or the family. Somehow she just escaped attention. She, like her sister, 2 years before her who had also taken her life, decided that life was hopeless, that she was helpless, and she ended her life.
I went to that Indian reservation because there are clusters of teenage suicides on some of these reservations. We had a cluster on the Standing Rock Indian Reservation shortly after that period.
I talked to the folks on this reservation, the school officials, the family members, the classmates, the tribal council. I discovered that had this young woman been referred to treatment, there was very little treatment available, very little mental health capability available to this young girl, and that is the case on most reservations.
Because I have known about the sad situation with respect to health care for American Indians for some long while, I was not particularly surprised at what is happening with respect to mental health treatment on reservations.
We have a trust responsibility for American Indians. We have a trust responsibility for their health care. We
fail miserably. We have tried--my colleague, Senator McCain, myself, and other members of the Committee on Indian Affairs--to put together a piece of legislation to extend the Indian Health Care Improvement Act and try to make some improvements in delivery of health care to American Indians--yes, for children, but elderly folks and others who are suffering. Yet that piece of legislation languishes. Senator McCain and I just talked about it yesterday, and the committee wants to get that legislation through, get it passed, complete it.
Let me describe the circumstances in terms of numbers. Then I will talk about some of the Indian folks who have had some difficulty. We have a responsibility under Medicare. Here is what we provide: The per- person expenditure on Medicare is $5,900 a year. We also have a responsibility, by the way, for health care for Federal prisoners, those whom we arrest and convict and send to Federal prison, putting them away from society. We provide a cell, a bed, and we are required to provide for their health care. With respect to their health care, we spend $3,800 a year for Federal prisoners' health care.
We have a responsibility, a trust responsibility, for the health care of American Indians, as well. That responsibility is met in this manner: Indian Health Care Services medical care, $1,900. We spend exactly one-half of what we spend for Federal prisoners on health care for American Indians. The per capita expenditures are exactly one-half.
I have asked the Indian Health System, the folks in charge, how much health care is delivered versus what is needed. The answer is about 60 percent. Forty percent is not available. So the question is: Who is sick, who is hurting, who is injured, who does not get treatment on these Indian reservations?
I mentioned, when I spoke about this before, that one of the chairmen of the Indian tribes in my State said that you cannot get sick after June. The answer is: Don't get sick after June. If you get sick after June, our contract health money is gone, and you are not going to get any help because then the criteria is the only help you get is life or limb. If you lose a limb or lose your life, you get help; otherwise, hobble around in pain. Whatever that chronic condition is, sorry, tough luck, out of luck, out of money. Don't get sick after June.
What an unbelievable message. This is not a Third World country. This is a big country, and we do a lot of things. But some things we don't do nearly well enough; and that is, keep our promise and keep our trust responsibilities with respect to health care for Native Americans.
A man from the Turtle Mountain Band of Chippewa Indians in my State said: Well, the doctor told me that I needed an MRI urgently on my knee. But he said: The Indian Health System facility on Turtle Mountain has no money, so you don't get an MRI. You have a bad knee, you have trouble, you have pain, but we are sorry, there is no money to find out what the problem is. No MRI.
A member from the Mandan, Hidatsa, and Arikara Tribes had a daughter who was born prematurely and suffered some complications as a result. That child died when she was 2 years old because they did not have any funds, the Indian Health Service had no funds to send that young child to a high-risk hospital, one that could probably begin to treat those conditions.
The chairman of one of the tribes told me one day about being out riding a horse with another tribal member when the other member was injured. He was bleeding severely from his injury. That reservation does not have a 911 emergency service. There was no ambulance to take the man to the hospital, not to mention that the health facility on the reservation is not open after hours anyway. And it is not open on weekends.
On that reservation, there are isolated communities, some 30 minutes, almost an hour from an ambulance or a health care facility. So the chairman of this tribe then tried to play doctor and made a tourniquet and tried to find a way to get this person to a health care facility before the person bled to death.
It is pretty unbelievable what is happening with respect to Indian health care. We have a very serious diabetes issue. The prevalence of diabetes on Indian reservations, in many cases, is not double or triple or quadruple; it is even much higher than that. The Indian diabetes mortality rate is quadruple the diabetes mortality rate among other Americans.
On the Spirit Lake Indian Reservation, a couple of the elders ran out of insulin. It was not a very good beginning to that story. You need insulin if you have diabetes. But it got much worse. They went to the Indian Health Service clinic that serves that reservation, and there was no insulin available--none. They said: We will not get another shipment for 24 hours.
That sort of thing goes on because there is not sufficient resources devoted to meet our responsibility to the Indian health needs.
In addition to the kinds of things I have described--these things are rampant--in addition to that, we have this methamphetamine scourge that has a devastating impact all across this country but especially on Indian reservations. The statistics that describe the problems and the chronic difficulties that the Indian Health Service confronts dealing with methamphetamine is just, as I said, devastating.
At a recent hearing we had in the Indian Affairs Committee, a young woman who is a tribal judge from the Turtle Mountain Chippewa Reservation testified that methamphetamine is related to 90 percent of the cases of tribal individuals who enter treatment on the reservation. And there are very few places to get treatment, as a matter of fact.
The plain fact is, this is an area of responsibility for this Congress, and we are not meeting it. We passed a piece of legislation through the Indian Affairs Committee a long while ago, describing the need and describing the requirement for reauthorizing the Indian Health Care Improvement Act, and that bill languishes. We have lots of things to bring to the floor of the Senate that should not be here and do not need to be here. This Congress often treats the light far too seriously and the serious far too lightly.
This is a serious matter, and we ought to be dealing with it. We ought to deal with it now. We have responsibilities. Go to Indian reservations and take a look at these children and ask yourself whether the health care of these children ought to be a function of whether this Congress decides to appropriate enough money. It ought not be. A sick child is a sick child anywhere in this country and ought to feel, and their parents ought to feel, they have access to decent health care when that child is sick.
So on behalf of myself and Senator McCain and other members of the Indian Affairs Committee, I say that I believe this is a priority. This is not a Third World country. I do not want anybody to say to me: In our area the refrain is ``Don't get sick after June 1 because there is no money.'' Let's not have that happen in this country anymore. Let's provide the funding that we require for the Indian Health Service to do what they should do to provide the kind of health care we know is necessary.
Once again, we have responsibility for prisoners whom we incarcerate in Federal prisons, and we have trust responsibility for the health care of American Indians; and we are spending half as much for the health care for American Indians per capita as we spend on Federal prisoners. That, in my judgment, is a shame. I am not suggesting we spend too much on Federal prisoners. They are our charge. They are incarcerated. We are responsible for their health care, but so too are we responsible, under a trust relationship, to help take care of the health care needs of that population.
Mr. President, I hope that with the cooperation of the majority leader and others in this Chamber, that Senator McCain and I and others can move this piece of legislation through the Senate and through the House and get it to the President for signature--the sooner the better.
Mr. President, I yield the floor.
Bill Text
2 versions available
[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 3711 Engrossed in Senate (ES)]
109th CONGRESS
2d Session
S. 3711
_______________________________________________________________________
AN ACT
To enhance the energy independence and security of the United States by
providing for exploration, development, and production activities for
mineral resources in the Gulf of Mexico, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Gulf of Mexico Energy Security Act
of 2006''.
SEC. 2. DEFINITIONS.
In this Act:
(1) 181 area.--The term ``181 Area'' means the area
identified in map 15, page 58, of the Proposed Final Outer
Continental Shelf Oil and Gas Leasing Program for 1997-2002,
dated August 1996, of the Minerals Management Service,
available in the Office of the Director of the Minerals
Management Service, excluding the area offered in OCS Lease
Sale 181, held on December 5, 2001.
(2) 181 south area.--The term ``181 South Area'' means any
area--
(A) located--
(i) south of the 181 Area;
(ii) west of the Military Mission Line; and
(iii) in the Central Planning Area;
(B) excluded from the Proposed Final Outer
Continental Shelf Oil and Gas Leasing Program for 1997-
2002, dated August 1996, of the Minerals Management
Service; and
(C) included in the areas considered for oil and
gas leasing, as identified in map 8, page 37 of the
document entitled ``Draft Proposed Program Outer
Continental Shelf Oil and Gas Leasing Program 2007-
2012'', dated February 2006.
(3) Bonus or royalty credit.--The term ``bonus or royalty
credit'' means a legal instrument or other written
documentation, or an entry in an account managed by the
Secretary, that may be used in lieu of any other monetary
payment for--
(A) a bonus bid for a lease on the outer
Continental Shelf; or
(B) a royalty due on oil or gas production from any
lease located on the outer Continental Shelf.
(4) Central planning area.--The term ``Central Planning
Area'' means the Central Gulf of Mexico Planning Area of the
outer Continental Shelf, as designated in the document entitled
``Draft Proposed Program Outer Continental Shelf Oil and Gas
Leasing Program 2007-2012'', dated February 2006.
(5) Eastern planning area.--The term ``Eastern Planning
Area'' means the Eastern Gulf of Mexico Planning Area of the
outer Continental Shelf, as designated in the document entitled
``Draft Proposed Program Outer Continental Shelf Oil and Gas
Leasing Program 2007-2012'', dated February 2006.
(6) 2002-2007 planning area.--The term ``2002-2007 planning
area'' means any area--
(A) located in--
(i) the Eastern Planning Area, as
designated in the Proposed Final Outer
Continental Shelf Oil and Gas Leasing Program
2002-2007, dated April 2002, of the Minerals
Management Service;
(ii) the Central Planning Area, as
designated in the Proposed Final Outer
Continental Shelf Oil and Gas Leasing Program
2002-2007, dated April 2002, of the Minerals
Management Service; or
(iii) the Western Planning Area, as
designated in the Proposed Final Outer
Continental Shelf Oil and Gas Leasing Program
2002-2007, dated April 2002, of the Minerals
Management Service; and
(B) not located in--
(i) an area in which no funds may be
expended to conduct offshore preleasing,
leasing, and related activities under sections
104 through 106 of the Department of the
Interior, Environment, and Related Agencies
Appropriations Act, 2006 (Public Law 109-54;
119 Stat. 521) (as in effect on August 2,
2005);
(ii) an area withdrawn from leasing under
the ``Memorandum on Withdrawal of Certain Areas
of the United States Outer Continental Shelf
from Leasing Disposition'', from 34 Weekly
Comp. Pres. Doc. 1111, dated June 12, 1998; or
(iii) the 181 Area or 181 South Area.
(7) Gulf producing state.--The term ``Gulf producing
State'' means each of the States of Alabama, Louisiana,
Mississippi, and Texas.
(8) Military mission line.--The term ``Military Mission
Line'' means the north-south line at 8641' W. longitude.
(9) Qualified outer continental shelf revenues.--
(A) In general.--The term ``qualified outer
Continental Shelf revenues'' means--
(i) in the case of each of fiscal years
2007 through 2016, all rentals, royalties,
bonus bids, and other sums due and payable to
the United States from leases entered into on
or after the date of enactment of this Act
for--
(I) areas in the 181 Area located
in the Eastern Planning Area; and
(II) the 181 South Area; and
(ii) in the case of fiscal year 2017 and
each fiscal year thereafter, all rentals,
royalties, bonus bids, and other sums due and
payable to the United States received on or
after October 1, 2016, from leases entered into
on or after the date of enactment of this Act
for--
(I) the 181 Area;
(II) the 181 South Area; and
(III) the 2002-2007 planning area.
(B) Exclusions.--The term ``qualified outer
Continental Shelf revenues'' does not include--
(i) revenues from the forfeiture of a bond
or other surety securing obligations other than
royalties, civil penalties, or royalties taken
by the Secretary in-kind and not sold; or
(ii) revenues generated from leases subject
to section 8(g) of the Outer Continental Shelf
Lands Act (43 U.S.C. 1337(g)).
(10) Coastal political subdivision.--The term ``coastal
political subdivision'' means a political subdivision of a Gulf
producing State any part of which political subdivision is--
(A) within the coastal zone (as defined in section
304 of the Coastal Zone Management Act of 1972 (16
U.S.C. 1453)) of the Gulf producing State as of the
date of enactment of this Act; and
(B) not more than 200 nautical miles from the
geographic center of any leased tract.
(11) Secretary.--The term ``Secretary'' means the Secretary
of the Interior.
SEC. 3. OFFSHORE OIL AND GAS LEASING IN 181 AREA AND 181 SOUTH AREA OF
GULF OF MEXICO.
(a) 181 Area Lease Sale.--Except as provided in section 4, the
Secretary shall offer the 181 Area for oil and gas leasing pursuant to
the Outer Continental Shelf Lands Act (43 U.S.C. 1331 et seq.) as soon
as practicable, but not later than 1 year, after the date of enactment
of this Act.
(b) 181 South Area Lease Sale.--The Secretary shall offer the 181
South Area for oil and gas leasing pursuant to the Outer Continental
Shelf Lands Act (43 U.S.C. 1331 et seq.) as soon as practicable after
the date of enactment of this Act.
(c) Leasing Program.--The 181 Area and 181 South Area shall be
offered for lease under this section notwithstanding the omission of
the 181 Area or the 181 South Area from any outer Continental Shelf
leasing program under section 18 of the Outer Continental Shelf Lands
Act (43 U.S.C. 1344).
(d) Conforming Amendment.--Section 105 of the Department of the
Interior, Environment, and Related Agencies Appropriations Act, 2006
(Public Law 109-54; 119 Stat. 522) is amended by inserting ``(other
than the 181 South Area (as defined in section 2 of the Gulf of Mexico
Energy Security Act of 2006))'' after ``lands located outside Sale
181''.
SEC. 4. MORATORIUM ON OIL AND GAS LEASING IN CERTAIN AREAS OF GULF OF
MEXICO.
(a) In General.--Effective during the period beginning on the date
of enactment of this Act and ending on June 30, 2022, the Secretary
shall not offer for leasing, preleasing, or any related activity--
(1) any area east of the Military Mission Line in the Gulf
of Mexico;
(2) any area in the Eastern Planning Area that is within
125 miles of the coastline of the State of Florida; or
(3) any area in the Central Planning Area that is--
(A) within--
(i) the 181 Area; and
(ii) 100 miles of the coastline of the
State of Florida; or
(B)(i) outside the 181 Area;
(ii) east of the western edge of the Pensacola
Official Protraction Diagram (UTM X coordinate
1,393,920 (NAD 27 feet)); and
(iii) within 100 miles of the coastline of the
State of Florida.
(b) Military Mission Line.--Notwithstanding subsection (a), the
United States reserves the right to designate by and through the
Secretary of Defense, with the approval of the President, national
defense areas on the outer Continental Shelf pursuant to section 12(d)
of the Outer Continental Shelf Lands Act (43 U.S.C. 1341(d)).
(c) Exchange of Certain Leases.--
(1) In general.--The Secretary shall permit any person
that, as of the date of enactment of this Act, has entered into
an oil or gas lease with the Secretary in any area described in
paragraph (2) or (3) of subsection (a) to exchange the lease
for a bonus or royalty credit that may only be used in the Gulf
of Mexico.
(2) Valuation of existing lease.--The amount of the bonus
or royalty credit for a lease to be exchanged shall be equal
to--
(A) the amount of the bonus bid; and
(B) any rental paid for the lease as of the date
the lessee notifies the Secretary of the decision to
exchange the lease.
(3) Revenue distribution.--No bonus or royalty credit may
be used under this subsection in lieu of any payment due under,
or to acquire any interest in, a lease subject to the revenue
distribution provisions of section 8(g) of the Outer
Continental Shelf Lands Act (43 U.S.C. 1337(g)).
(4) Regulations.--Not later than 1 year after the date of
enactment of this Act, the Secretary shall promulgate
regulations that shall provide a process for--
(A) notification to the Secretary of a decision to
exchange an eligible lease;
(B) issuance of bonus or royalty credits in
exchange for relinquishment of the existing lease;
(C) transfer of the bonus or royalty credit to any
other person; and
(D) determining the proper allocation of bonus or
royalty credits to each lease interest owner.
SEC. 5. DISPOSITION OF QUALIFIED OUTER CONTINENTAL SHELF REVENUES FROM
181 AREA, 181 SOUTH AREA, AND 2002-2007 PLANNING AREAS OF
GULF OF MEXICO.
(a) In General.--Notwithstanding section 9 of the Outer Continental
Shelf Lands Act (43 U.S.C. 1338) and subject to the other provisions of
this section, for each applicable fiscal year, the Secretary of the
Treasury shall deposit--
(1) 50 percent of qualified outer Continental Shelf
revenues in the general fund of the Treasury; and
(2) 50 percent of qualified outer Continental Shelf
revenues in a special account in the Treasury from which the
Secretary shall disburse--
(A) 75 percent to Gulf producing States in
accordance with subsection (b); and
(B) 25 percent to provide financial assistance to
States in accordance with section 6 of the Land and
Water Conservation Fund Act of 1965 (16 U.S.C. 460l-8),
which shall be considered income to the Land and Water
Conservation Fund for purposes of section 2 of that Act
(16 U.S.C. 460l-5).
(b) Allocation Among Gulf Producing States and Coastal Political
Subdivisions.--
(1) Allocation among gulf producing states for fiscal years
2007 through 2016.--
(A) In general.--Subject to subparagraph (B),
effective for each of fiscal years 2007 through 2016,
the amount made available under subsection (a)(2)(A)
shall be allocated to each Gulf producing State in
amounts (based on a formula established by the
Secretary by regulation) that are inversely
proportional to the respective distances between the
point on the coastline of each Gulf producing State
that is closest to the geographic center of the
applicable leased tract and the geographic center of
the leased tract.
(B) Minimum allocation.--The amount allocated to a
Gulf producing State each fiscal year under
subparagraph (A) shall be at least 10 percent of the
amounts available under subsection (a)(2)(A).
(2) Allocation among gulf producing states for fiscal year
2017 and thereafter.--
(A) In general.--Subject to subparagraphs (B) and
(C), effective for fiscal year 2017 and each fiscal
year thereafter--
(i) the amount made available under
subsection (a)(2)(A) from any lease entered
into within the 181 Area or the 181 South Area
shall be allocated to each Gulf producing State
in amounts (based on a formula established by
the Secretary by regulation) that are inversely
proportional to the respective distances
between the point on the coastline of each Gulf
producing State that is closest to the
geographic center of the applicable leased
tract and the geographic center of the leased
tract; and
(ii) the amount made available under
subsection (a)(2)(A) from any lease entered
into within the 2002-2007 planning area shall
be allocated to each Gulf producing State in
amounts that are inversely proportional to the
respective distances between the point on the
coastline of each Gulf producing State that is
closest to the geographic center of each
historical lease site and the geographic center
of the historical lease site, as determined by
the Secretary.
(B) Minimum allocation.--The amount allocated to a
Gulf producing State each fiscal year under
subparagraph (A) shall be at least 10 percent of the
amounts available under subsection (a)(2)(A).
(C) Historical lease sites.--
(i) In general.--Subject to clause (ii),
for purposes of subparagraph (A)(ii), the
historical lease sites in the 2002-2007
planning area shall include all leases entered
into by the Secretary for an area in the Gulf
of Mexico during the period beginning on
October 1, 1982 (or an earlier date if
practicable, as determined by the Secretary),
and ending on December 31, 2015.
(ii) Adjustment.--Effective January 1,
2022, and every 5 years thereafter, the ending
date described in clause (i) shall be extended
for an additional 5 calendar years.
(3) Payments to coastal political subdivisions.--
(A) In general.--The Secretary shall pay 20 percent
of the allocable share of each Gulf producing State, as
determined under paragraphs (1) and (2), to the coastal
political subdivisions of the Gulf producing State.
(B) Allocation.--The amount paid by the Secretary
to coastal political subdivisions shall be allocated to
each coastal political subdivision in accordance with
subparagraphs (B), (C), and (E) of section 31(b)(4) of
the Outer Continental Shelf Lands Act (43 U.S.C.
1356a(b)(4)).
(c) Timing.--The amounts required to be deposited under paragraph
(2) of subsection (a) for the applicable fiscal year shall be made
available in accordance with that paragraph during the fiscal year
immediately following the applicable fiscal year.
(d) Authorized Uses.--
(1) In general.--Subject to paragraph (2), each Gulf
producing State and coastal political subdivision shall use all
amounts received under subsection (b) in accordance with all
applicable Federal and State laws, only for 1 or more of the
following purposes:
(A) Projects and activities for the purposes of
coastal protection, including conservation, coastal
restoration, hurricane protection, and infrastructure
directly affected by coastal wetland losses.
(B) Mitigation of damage to fish, wildlife, or
natural resources.
(C) Implementation of a federally-approved marine,
coastal, or comprehensive conservation management plan.
(D) Mitigation of the impact of outer Continental
Shelf activities through the funding of onshore
infrastructure projects.
(E) Planning assistance and the administrative
costs of complying with this section.
(2) Limitation.--Not more than 3 percent of amounts
received by a Gulf producing State or coastal political
subdivision under subsection (b) may be used for the purposes
described in paragraph (1)(E).
(e) Administration.--Amounts made available under subsection (a)(2)
shall--
(1) be made available, without further appropriation, in
accordance with this section;
(2) remain available until expended; and
(3) be in addition to any amounts appropriated under--
(A) the Outer Continental Shelf Lands Act (43
U.S.C. 1331 et seq.);
(B) the Land and Water Conservation Fund Act of
1965 (16 U.S.C. 460l-4 et seq.); or
(C) any other provision of law.
(f) Limitations on Amount of Distributed Qualified Outer
Continental Shelf Revenues.--
(1) In general.--Subject to paragraph (2), the total amount
of qualified outer Continental Shelf revenues made available
under subsection (a)(2) shall not exceed $500,000,000 for each
of fiscal years 2016 through 2055.
(2) Expenditures.--For the purpose of paragraph (1), for
each of fiscal years 2016 through 2055, expenditures under
subsection (a)(2) and shall be net of receipts from that fiscal
year from any area in the 181 Area in the Eastern Planning Area
and the 181 South Area.
(3) Pro rata reductions.--If paragraph (1) limits the
amount of qualified outer Continental Shelf revenue that would
be paid under subparagraphs (A) and (B) of subsection (a)(2)--
(A) the Secretary shall reduce the amount of
qualified outer Continental Shelf revenue provided to
each recipient on a pro rata basis; and
(B) any remainder of the qualified outer
Continental Shelf revenues shall revert to the general
fund of the Treasury.
Passed the Senate August 1, 2006.
Attest:
Secretary.
109th CONGRESS
2d Session
S. 3711
_______________________________________________________________________
AN ACT
To enhance the energy independence and security of the United States by
providing for exploration, development, and production activities for
mineral resources in the Gulf of Mexico, and for other purposes.