Mr. President, I ask unanimous consent that the order for the quorum call be rescinded. Mr. President, I ask unanimous consent to speak for 20 minutes as in morning business. Mr. President, I was on…
Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.
Mr. President, I ask unanimous consent to speak for 20 minutes as in morning business.
Mr. President, I was on one of the Sunday weekend shows and was joined by one of my colleagues on the Republican side. The discussion on that program was about oil and gas prices and energy development. My colleague on the Republican side quite predictably said: Well, the problem is the Democrats do not want to produce any more oil. They stand in the way of producing oil.
It is such a canard. I wanted to come to the floor to talk about that a bit and also to talk about the fact that we are going to vote at 5:30 today on energy tax credits for renewables. Then we will see who in this Chamber does want to produce some energy, because we have had chances before, and the Republican side of the aisle, the minority side, has blocked our ability to produce.
I want to talk a little bit about that. I know they tend to think that unless you are sinking a hole in the ground someplace and sucking oil out someplace on the planet, you are not producing. Well, I happen to believe there are plenty of places to begin producing additional oil in this country. But drilling alone is not going to solve our problem. There are other things we must do that represent change that my colleagues on the other side of the aisle simply cannot embrace; that is, being aggressive on renewable forms of energy, wind energy, solar energy, biomass, and biofuels. It goes on and on. They do not consider that additional production, I guess.
Let me talk first about this issue of the alternative and renewable forms of energy. In 1916 this country put in place robust, permanent tax incentives to say to people: If you go looking for oil and gas, good for you, we want you to do it. We are going to give you some big tax breaks. That was put in place almost a century ago.
Here is what this country has done for renewable energy. In 1992 they put in place a production tax credit, a short-term, fairly shallow tax incentive if you want to produce renewable energy. It has been extended five times
since 1992, short term. It has been allowed to expire three times. So we have had the stutter-stop, stutter-start approach to dealing with the production tax credit for renewable energy.
This chart shows what happens every single time it has not been extended. The investment falls off the shelf. Last year, last June, we had a bill on the floor of the Senate that said, let us extend this for a long period.
I have a bill I introduced that said, I think the Congress and this country should say here is where we are headed. For 10 years we have been so dependent on the Saudis, the Kuwaitis, the Iraqis, the Venezuelans, and others for oil. Sixty percent of our oil comes from off our shores. We need to be less dependent, and one way to do that is to produce renewable energy right here at home.
So last June we put a bill on the floor of the Senate that said, for 5 years you can count on the production tax credit to pursue incentives for wind and solar and all of those kinds of renewable energies that are available to us. Here is the tax incentive for you for the next half of a decade.
Guess what. Thirty-four Republicans voted against it and killed it. They did not want to do that. Now they are talking about how much they want to produce energy. Well, let me talk about this production of energy. I happen to think, one voice here, we ought to produce in the eastern Gulf of Mexico.
If you take a look at where the oil is, the hood ornament for their discussion is always ``ANWR,'' one of the most pristine areas in America, set aside in legislation signed by Dwight D. Eisenhower. The other side always says, well, ANWR, we have got to produce in ANWR.
Even John McCain votes against producing in ANWR. John McCain said, I do not think you ought to produce in the Everglades, in the Grand Canyon, I do not think you ought to drill in ANWR. So enough about that.
If you take a look at where the oil is, on the outer continental shelf in the Gulf of Mexico, off the west coast, off of Alaska, by far the most significant reserves of oil are in the Gulf of Mexico, both the western gulf and the eastern gulf.
The area off of Florida in the eastern gulf ought to be open, in my judgment. But even more interesting are the Cuban waters just south of Florida. Many countries have leases to drill off Cuba's coast, including Spain, Canada, India. China is actually drilling onshore in Cuba, but we expect China to be wanting to drill offshore also. Our oil companies want to drill there. There is estimated to be half a million barrels a day production off Cuba. But we cannot produce there. Our companies cannot go in because we have this embargo with respect to Cuba, and the Bush administration is insistent on tightening the embargo rather than loosening the embargo. So there are half a million barrels a day of production there that our companies cannot go get.
Now, my colleagues introduced a piece of legislation on the Republican side for additional production, but it does not include producing in the eastern Gulf or off of Cuba. They do not want to produce there. So are they for production? Is that what they are talking about, or is this a big sham? We know they do not want to produce sustainable amounts of renewable energy because they have voted against it. They say they are voting against it because the bill increases taxes.
Let me tell you what it increases. It says to big hedge fund managers that they should invest in renewable energy because the government is going to invest in them over the long-term. By the way, the person who runs hedge funds and made the most income last year made $3.7 billion. If you are wondering, that is going home to say: Honey, I had a pretty good month, I made $308 million this month. That is making enough so that 4 minutes of work equals the average working man's salary for an entire year.
By the way, they get to pay a 15-percent income tax rate, which I think is an outrage. But even more than that, they have a game in which they defer a portion of their income tax by moving it offshore.
This legislation shuts that down and thereby raises the money to pay for some of our investment in renewable energy. The other side is upset about that. We are shutting down a tax scam for the wealthiest individuals. It is pretty unbelievable. I don't want to hear any more noise, deep sounds from the chest masquerading as thoughtful symbols from the brain, about production. The fact is, I believe in production. That is one part of addressing the issue. One part of it is producing oil. But a much more important part is renewable energy because we need to change the way we have been doing things.
We are so unbelievably dependent on Saudi oil and oil coming from troubled parts of the world. It makes no sense. We have an enormous appetite for oil. We sink little straws in this planet every single day and suck oil out. We suck out 85 million barrels a day, and we use one- fourth of it in a little place called the United States. Sixty percent of what we use comes from off our shores, much of it from troubled parts of the world, and almost 70 percent of that we use in vehicles.
We need to do a lot of things here, and we need to do a lot of things right to make us less dependent on foreign sources of oil. We need to make our vehicles more efficient, to conserve energy in every single way, to make all of our appliances more efficient. There is so much we have to do right, including produce more renewable energy.
We will have a chance in an hour and 15 minutes to vote once again on funding renewable energy. Most of my colleagues voted against it just days ago. I hope they have had some kind of epiphany recently and will decide that was the wrong vote and today they will cast the right vote.
Let me talk for a moment about what people are doing today as they drive up to the gas pump with their vehicles. They are driving their car up to the pump trying to figure out: How much can I afford? I have to stop at the grocery store on the way home. Or: I just bought medicine. How much can I afford to put in the gas tank?
They put whatever they can in that tank. And by the way, the OPEC nations smile all the way to the bank as they deposit our money. The big oil companies smile all the way to the bank as they deposit the rest of our money. But there is no justification for the current price of gas and oil. None. This market system is broken. It doesn't work.
There are three things that are making oil more expensive: No. 1, we have OPEC which is a cartel. That would be illegal in our country. But a bunch of oil ministers get together in a closed room and make judgments as a cartel. No. 2, we have big oil companies--much bigger because they were all given the green light to merge in recent years. They all now have two names--ExxonMobil, ConocoPhillips. They are bigger and stronger.
Finally, what I want to talk about is the issue of the futures market, which is the third piece that is simply broken. The futures market is an unbelievable carnival of speculation. It is supposed to be an orderly market by which people can hedge who are involved in the oil business. Now we have hedge funds, investment banks. We have all kinds of speculators, who will never be interested in ever taking delivery of oil, engaged in the futures market and driving up the price of oil and gas in a way that makes it at least 20 to 30 percent higher priced than a normal supply-demand market would justify.
In every month but one since January of this year, our crude oil stocks have increased. Let me say that again. In every month but one since January of this year, our inventory of crude oil stocks has increased. So supply is increasing.
On the other hand, people are driving slightly less, and there is a decrease in demand. So since January, you have both an increase in supply and a decrease in demand. What has happened to the price of oil and gas? It has gone up like a Roman candle. That means the market is broken.
Let me talk a little bit about what I think is happening in this market. Let me put up a picture of NYMEX. This is where they trade some of these oil commodity stocks. Some of it is what I call dark money, traded on exchanges that are not regulated or over the counter and can't be seen. This is the way it looks.
Let me quote Clarence Cazalot, CEO of Marathon Oil. He said last year:
$100 oil is not justified by the physical demand in the
market.
Stephen Simon, senior vice president of Exxon said:
The price of oil should be about $50-$55 a barrel.
Right now oil is flirting with $140 a barrel.
Let me say, when Exxon is going to the bank with our money to make a deposit, they have to be happy. But they are not using that money to invest in new production. In 2007, they used $31 billion of profit to buy back their stock and only $15 billion to invest in new drilling. They used twice as much money to buy back their stock in the stock market as they did to explore for new oil.
From the New Jersey Star Ledger:
Experts, including the former head of Exxon Mobil, say
financial speculation in the energy markets has grown so much
over the last 30 years it now adds 20 to 30 percent or more
to the price of a barrel of oil.
A man named Fidel Gheit, who testified before the Energy Committee, has worked for 30 years with Oppenheimer Company. He is the senior energy person at Oppenheimer. He says:
There is absolutely no shortage of oil. I'm absolutely
convinced that oil prices shouldn't be a dime above $55 a
barrel. I call it the world's largest gambling hall . . .
It's open 24/7.
Unfortunately, it's totally unregulated. This is like a highway with no cops and no speed limit and everybody is going 120 miles an hour.
With that backdrop, here is what has happened to the amount of speculation in the commodities market. It has gone up, up, and up just exactly like the price of oil and gas.
The question is, should the Congress do nothing about this or should the Congress do something? If the answer is the Congress should do something, then what? My belief is we have a responsibility to do something. Many of my colleagues believe it as well. There is nothing wrong with speculation. Markets often work with speculators. But when speculation becomes excessive, there is something wrong because the market then doesn't work.
Will Rogers described this sort of thing 80 years ago. He described people buying things they will never get from people who never had it and making money on both sides of the transaction. I guess that is all right if the speculation is not doing something that damages the American economy or injures most American consumers. But these are not free markets. There is no free market. I hear all these folks talking about: You have a free market. What you really need is more production. Sink a few wells here and there.
But they are not even genuine about that, as I just described to you. They are not very interested in sinking wells off the coast of Florida, for example. Let me show that chart again. I know why, when the minority party put up their proposal, they didn't want to sink wells in the Eastern Gulf of Mexico, which offers a significant opportunity. One of their Members, one of their Senators, is concerned about drilling off of Florida, so they leave that off their list. I know why they don't want to suggest that we should be able to drill for oil off of Cuba. Spain has a lease to drill off of Cuba. Canada also has a lease. India has a lease to drill off of Cuba. I know why the minority isn't pushing to allow American companies to drill off of Cuba. President George W. Bush is the one who says we can't do that. So they don't want to talk about subjects that are uncomfortable. They just want to bleat about the issue of ``production'' from their standpoint.
Production means a number of things. Production means, yes, producing some more oil. The largest assessment in history of the lower 48 States of recoverable oil was made 2 months ago by the U.S. Geological Survey at my request. They studied what is called the Bakken shale in Montana and North Dakota. There is dramatic new drilling and a lot of additional production there right now. They concluded that 3.6 to 4.3 billion barrels of recoverable oil, using today's technology, exists. I support drilling in the Bakken. We are drilling. We have some 70 to 80 drilling rigs active in the Bakken shale right now. But we are going to vote at 5:30 on another question of production. Then I want to see who comes to the floor to talk about production in the future.
Do they really want to produce enough renewable energy to help us reduce our dependence on Saudi Arabia and Kuwait and Iraq and Venezuela? I hope so.
We have to get over this notion that the only kind of production that matters is sinking a well someplace. We could produce, and have been producing, billions of gallons of fuel for vehicles in farm fields. We are now up very close to 9 billion gallons, and we are headed much higher than that. We also can produce substantial electricity from wind, except that when we try to do anything other than increase the production tax credit by 12 months, the other side objects. Again, whether it is a production tax credit for wind or solar energy or other renewable energy sources, this Congress and this country ought to not just talk about 12 months. We ought to say: Here is where America is headed. We understand this is a serious problem. We believe we are going to produce substantial amounts of renewable energy. Other countries have done it.
Brazil is an example. We are going to do this in a way that allows all of us to understand we must be less dependent on foreign sources of oil.
We can do that. We went to the Moon in 9 years. Do you think we can't find a way to be less dependent on foreign oil? I believe we can. But we can't do it, if at 5:30 today the minority still objects to having hedge fund managers who make billions pay their fair share of taxes and objects to what we would use that money to pay for, and that is extending the renewable energy tax credits so that we become less dependent on foreign oil and produce more energy from renewable forms of energy. That is just a fact.
At 5:30 today we will have plenty of opportunity to see who really supports additional production. I hope, on a bipartisan basis, we might be joined by the minority and see if we can't put this country on a track to produce much more energy from renewable sources.
I yield the floor.