Commodity Speculation Reform Act of 2008

Mr. President, I sat and listened to this exchange, and it is

amazing to me after 32 years in the Senate that they want to bring up a bill and allow their bill and one substitute amendment that they know will fail, where there are components of that substitute amendment that they know will pass and will help us to find some oil and alleviate some of the pressures we have in this country.

I wish to address the legislation under consideration in the Senate today, the speculator bill.

Here we are, the Congress of the greatest Nation in the world, facing a national energy crisis, a crisis that affects every single American, the American economy, and America's place in the world, and this is the best we can do, this speculator bill? This is our answer, another proposal that will not produce one drop of oil or hardly any energy? It will not produce any energy. Frankly, I am embarrassed for this body and for the people we represent.

At some point, I wonder when the leaders of the Democratic Party will wake up and realize that blaming and taxing the energy industry does not equate to an energy policy. It is an anti-energy policy. Finding someone to blame is no substitute for finding more oil. And the answer to getting America to use less oil is not always more taxes and more mandates.

We are a country of addicts in that sense. The seeds of our addiction to foreign oil have been sown here by an anti-oil Congress. If Members of Congress are hunting for some of the blame, they are in luck because the blame begins and ends right here under the Capitol dome.

It is very clear that the most extreme environmental groups have an anti-oil agenda, and it is just as clear that the Democrats have adopted that agenda as their energy platform. It is a recipe for disaster, and America is reaping the whirlwind as a result.

Some are arguing for more solar, wind, and geothermal as an answer to high gas prices. I sponsored the current tax incentives for renewable electricity, and I hope my actions speak to my support for renewables. That is law now in the 2005 act. I know enough about energy to recognize trains, planes, automobiles, and ships do not run on electricity. They run on oil right now.

This first chart is solar, wind, and geothermal. They are not transportation fuels. Biofuels is still only 3 percent of transportation fuels, and yet that is the only other major alternative to oil at the present time. We rely on oil for 97 percent of our transportation needs, and the other 3 percent is made up mostly of biofuels, especially corn ethanol. I have strongly opposed the current ethanol mandate, but I have long supported free-market incentives for ethanol. In fact, I sponsored the CLEAR Act, as I mentioned, which is the current law giving tax incentives for E85 fuel and E85 infrastructure. We need as much ethanol as we can make, and I am all for it. But I also recognize that ethanol has so many inherent limitations that it will not be able to break us free from our dependence on foreign oil.

The fact is that we will have to tap into our Nation's gigantic resources of oil shale or we will remain addicted to foreign energy traffickers for the long haul. They are afraid to have a separate amendment up on oil shale because we should win that amendment. Anybody with brains would vote for it. There are 3 trillion barrels of oil in Colorado, Wyoming, and Utah, in oil shale, about 2 trillion of which is estimated recoverable--more oil than all the rest of the world combined. If we don't tap into those resources, we are going to remain addicted to foreign energy traffickers for the long haul.

When the Republicans controlled Congress in 2005, we passed a very bipartisan energy bill which promoted each of these very necessary unconventional oil resources, along with alternatives, renewables, and conservation. When the Democrats took over Congress, they immediately began dismantling every effort to develop oil from oil shale, oil sands, and coal-to-liquids even though they knew full well that we have more oil in those resources than all the rest of the world combined.

Chart 2 says world oil reserves are 1.6 trillion barrels. Recoverable U.S. oil shale is between 1 and 2 trillion barrels of oil.

In most cases, an addiction brings about financial ruin. Democrats in Congress have made a lot of noise about the tens of billions of dollars we spend each year on the war on terror, but apparently it does not bother them as much that our citizens send more than $700 billion every year to foreign governments to feed our addiction, some of which are not even friends; in fact, some of which are enemies. Congress's lamebrained anti-oil actions have put our people at the mercy of foreign governments that are smart enough to produce their own energy-- something we could do if they would open this bill to amendment. We are selling away our Nation's place in the world and funding the rise of our most aggressive competitors and even our enemies.

Of the major world oil shale resources, we hold 72 percent of the total. We can see Israel, Estonia, China, Australia, Morocco, Jordan, Brazil, United States, and the total world. Did you know, Mr. President, that China and Brazil have been smart enough to produce their own oil from oil shale for decades--China and Brazil--and that Estonia has produced oil from oil shale for over 90 years? We act as if we cannot do it. My gosh, of course, we can do it. Did you know the United States controls more than 70 percent of the world's known oil shale resources? Yet we are stopping its development because of their anti-oil agenda over there, and that is what is involved here, trying to cover it up with a so-called speculators bill that all of us will be glad to have in a final bill, but that does not produce one drop of oil to help our problems.

Is it because our industry cannot compete or is it unwilling to invest in oil shale production? They most definitely are willing, but the sad fact is that our own Government owns most of the oil shale in the United States and our own Government has said no because of these people over here.

The biggest argument I keep hearing against oil shale development is we cannot allow the Government to even establish rules for oil shale development because we just plain don't know enough about it yet. Think of Estonia: For 90 years, they have been producing oil from oil shale. Think of Brazil: For decades, they have been producing oil from oil shale. You think the greatest Nation in the world can't do it? We don't know how much water it will use; we don't know how much wildlife habitat it will use, they say; we don't know about the greenhouse gas footprint. Guess what. The Department of Energy has been studying oil shale for decades, and we have a pretty good idea about each of those questions.

Why do the Democrats say no to oil shale production? I hear some say they are concerned about water use. Let's take a look at water use compared to ethanol.

Mr. President, did you know oil shale uses less water than ethanol, no more than gasoline? Right now, corn does not rely on irrigation, for the most part. However, if we hope to increase ethanol's share of the fuel supply, we will have to move into drier areas that require irrigation.

Look at the water use. Ethanol takes 4 to 5 barrels of water and 1,000 barrels of water on irrigated lands. Oil shale, for the entire process--processing, upgrading, and land restoration--three barrels of water. A September 2007 article in Southwest Hydrology states that irrigated corn requires well over 700 barrels of water for each barrel of ethanol. A barrel of ethanol has about 30 percent less energy than a barrel of oil. In other words, to make just 1 oil-equivalent barrel of ethanol, it would take over 1,000 barrels of water. The Department of Energy reports that oil shale, for the entire process, including land restoration, would require just three barrels of water for every barrel of shale oil, about the same as gasoline.

Let's compare how much water it would take to make enough ethanol to produce 20 percent of our fuel with the amount of water it would take to produce the same amount of oil shale. Look at what it would take. Look at the red, ethanol. We can hardly see the red of the water required for oil shale. We would need about 64 cubic miles of water to produce that much ethanol and only .17 cubic miles of water to produce the same amount of oil shale.

It is time we stop confusing oil shale with Canadian oil sands. They require

completely different processes. Canadian oil sand production uses a lot of water and a lot of steam to produce oil from oil sands. With oil shale, you apply heat directly to the rock. The last thing you want in your process is water. They are very different, so let's stop pretending they are the same thing. And let's remember Estonia and Brazil. Isn't this country as good as them?

The other red herring often raised against oil shale is concern about land use and wildlife habitat. Mr. President, did you know that oil shale uses much less land than either ethanol or gasoline? One acre of corn produces 7 to 10 barrels of ethanol. One acre in the oil patch produces about 10,000 barrels of oil. One acre of oil shale produces between 100,000 and 1 million-plus barrels of shale oil. That is right, on average, 1 acre of oil shale will produce around 500,000 barrels of oil.

So those who are truly concerned about land use and wildlife habitat, let's look at how much land it would take to make enough ethanol for 20 percent of our fuel supply compared to the same amount of oil shale.

With regard to that green spot in the middle of this chart, it would take those five States to produce 20 percent of our energy needs from ethanol. Think about that. Producing 20 percent of our oil from oil shale would take the equivalent of the smallest county in Kansas being in production at one time, and as each oil shale acreage is used, it would be restored to nature, according to the very strict mining and gas laws already on the books. It is environmentally sound as well.

We are learning that land use is very important, and not just in terms of wildlife habitat and watershed protections. Scientists have determined that disturbing land for activities such as cultivating corn and switchgrass, or any other crop, releases a giant amount of CO2 into the atmosphere.

Look at this chart. Oil shale without carbon capture, 7 percent more than gasoline, but switchgrass for ethanol, including land use, is 50 percent more than gasoline. Greenhouse gas emissions for corn ethanol, including land use, is 93 percent more than gasoline. Oil shale is much more environmentally sound from the get-go.

Even taking into account that burning ethanol is an improvement over gasoline, the researchers discovered that when land disturbance is calculated, corn ethanol emits 93 percent more greenhouse gases than gasoline. Thank goodness for switchgrass, our new hope for the future of biofuels. The problem is that the same study calculates that switchgrass, even when grown on existing corn land, produces 60 percent more carbon emissions than gasoline. The Department of Energy calculates that oil shale production emits only 7 percent more greenhouse gases than gasoline, and that is without any carbon capture technology, which many in the industry plan to use.

Whether your concern is carbon emissions, water use, or wildlife habitat, oil shale is a better answer than ethanol. And when it comes to transportation fuels, ethanol is the only alternative of any real significance today. The fact is that I am for it, but let's not get confused on which one is more efficient and better. I am certainly not here to bash ethanol. I still believe we should produce as much as possible, but ethanol is the only current significant alternative to transportation fuels available today. It is important that we start dealing in realities around here and not just political puffery, is what we are hearing from the other side.

To be honest, when it comes to energy policy, it is like never-never land on Capitol Hill. On the one hand, we pass a giant mandate on top of giant incentives to produce ethanol, with all its limitations. On the other hand, we ban oil shale production which would give our people access to almost unlimited amounts of cheap energy. The oil shale industry is not asking for any mandates, environmental loopholes, or subsidies. They simply ask to have access to the Federal Government's vast oil shale resources.

I have no problem with debating the impact of speculation on oil prices. It is something we ought to be discussing. I have no problem with that. But it is not going to produce one drop of oil. It is no substitute for providing our people with the transportation fuels they need, and we will never accomplish that goal until we find more and use less.

Our goal as Republicans is to amend this bill so we can find more oil and use less of it so that we can solve our problems as we go into the future, where we get into not only hybrids but plug-in hybrids, electric motors, fuel-cell motors, hydrogen cars and, of course, nuclear, wind, solar, thermal, and geothermal. We have to do all of that. But until we can really move down that line, we have to have oil to run our transportation needs.

I yield the floor.

Madam President, I am disappointed to be here and to have to give this speech today. I am disappointed because I am, once again, on the Senate floor discussing the fact that the majority leader has decided to use the Senate parliamentary tactic to stop members from offering amendments and to close off debate.

We are going to spend until tomorrow morning or whatever time tomorrow we decide to have another vote on another cloture motion doing nothing. While we can raise issues, we cannot get any votes on any issues. This is all valuable time that we could be voting on issues for the American people, issues that would actually solve some of the gas price problems I hear about all over Wyoming and all over the country. It is the No. 1 concern in this country right now.

The majority leader has a rain delay that has put a halt to this match, but this game will get played. We will debate alternative energy, finding more oil on American soil, deep sea exploration, nuclear energy, oil shale. You cannot stop us forever because the American people have told us the most important issue on their mind is the issue of energy.

The majority leader has told the world's most deliberative body we cannot have a real debate about this issue. But the American people are telling him something else. Hopefully, soon he will listen. It is no wonder Congress has an approval rating that is less than 10 percent.

Rather than working on the issues that are important to our constituents, we continue to play ``gotcha'' politics. It is not getting us anywhere. It is certainly not improving our Nation's energy situation. This brand of nonlegislating that the majority continues to peddle is not making a gallon of gas cheaper.

When will the leaders let us put real proposals on the table? This body will take some and this body will leave some, but we should be taking action. What we have now is not action, it is acting, acting in the dramatic sense. We evidently think that if we can place blame on speculators and get a vote on that and be done, we can check that box off and say that we took care of energy for America. Americans are smarter than that.

The majority leader is preventing a vote on an amendment that would increase production on the Outer Continental Shelf. We cannot vote on an amendment that will allow for more production of diesel fuel from our Nation's most abundant energy source, coal. We cannot vote on extending the wind production tax credit. We cannot vote on extending tax credits for solar energy.

The majority leader has said we need to get an agreement on amendments. Our side has agreed we need to work on energy amendments because this is an energy debate. We have been willing to put aside all the other kinds of amendments. But, no, that is not enough. We want to be able to read each of them and decide whether they are meritorious before they are put on the table.

I am not sure why that is the case. It does not match up with our historical energy debates or, for that matter, any of our debates.

The Senate considered the Energy Independence and Security Act last year. At that time, gas was $3.06 a gallon. I talked a little bit about that bill because I called it the anti-energy bill and said there was not anything in that that was going to bring down the price of gas. Obviously, I was right. The price is up another dollar from that. But even on that one, there were 331 amendments that were filed. Of those, 49 amendments were agreed to, and 16 amendments received rollcall votes.

The Senate considered the Energy Policy Act of 2005, that is the previous bill to the anti-energy bill. Gas was $2.26 a gallon then. There were 235 amendments that were filed and, of those, 57 amendments were agreed to and 19 amendments received rollcall votes.

The crisis is even greater now. So there ought to be amendments being debated, considered. We should not have the parliamentary tactic that keeps us from doing amendments.

Anytime a bill comes in here, and it is a take-it-or-leave-it proposition, this body leaves it. So if you want to get something done, want to be able to check off the box, we need to be able to do some amendments.

Now, not only were both those bills fully amendable but both received significant floor consideration. We spent 15 days on the floor on one of them and 10 days on the other. Why? Because they are serious issues that deserve serious debate. We wanted to make sure ideas from both sides were considered.

As I recall, both sides lost some. But that is how it works. I have an amendment that relates to State mineral royalties. That amendment would encourage States to allow for energy production on their land by giving them their fair share of mineral royalties. We are not going to get to consider that. There are a number of other amendments that I would support relating to energy development on the Outer Continental Shelf in the States that want energy production and only those States that want it.

I would support an amendment to improve our Nation's energy situation by accelerating the development of coal-to-liquid fuels. That could be coal to diesel and coal to jet fuel. Those are the most expensive fuels in the United States right now. Those are the ones that have some great potential for decreased costs using our most abundant energy source.

We have more Btu's in coal--in fact, we have more Btu's in the clean coal in northeastern Wyoming than Saudi Arabia has in oil. It is an old technique from World War II, from converting that to, say, diesel, and also to convert it to jet fuel. Our military needs jet fuel. It can be done from coal.

Unfortunately, the majority leader has stopped me from doing so by using parliamentarian tactics to cut off the debate. He has also stopped me from

voting against a number of bad ideas I am sure we would see. I will not have a chance to vote against lowering the speed limit to 55 miles an hour. Why is that a bad idea? It actually led to higher traffic fatalities.

When we were talking about eliminating the 55-mile-speed limit, the argument was, if we do that, the number of fatalities in the United States would go up. Well, we raised the speed limit. We went back to where it was before.

Do you know what. Traffic fatalities went down. In Wyoming, the reason they went down is we eliminated a lot of those single-car accidents from driving the huge distances across our State at very slow speeds.

My dad traveled on the road. He said: At 55 miles an hour, you could watch a flower come up, grow, bloom, and wither before you got by it. So he started reading while he drove. But it kept him awake. So he did not have one of those single-car accidents where you roll your car.

Now, believe it or not, I agree with the majority party on some steps we could make to help this country be more energy independent. Wind tax credits are one example. By restricting Senators' participation, stopping them from representing those who put them in office is not going to get us any further than an empty gas tank, and that is what this bill in its current form is.

The bill before us blames speculators for our energy situation. It might be worth taking a moment to discuss exactly what speculators do. We have turned that into a cuss word. Oil speculation is two people or companies or organizations guessing what the price will be in the months to come. One of those entities thinks the price will be higher in the months to come, and so they buy the commodity now. Another entity thinks the price will be lower, so they sell the commodity now. The one who is right will make money; the one who is wrong will not. You can't have this kind of a transaction without two people who believe the exact opposite. Both are speculators. Both think they can make money based on their knowledge of the world and the gas supply at the current time.

What kind of entities do this? An airline might think the price of oil will be higher in the months to come, and, to stabilize their fuel costs, they will purchase oil futures for the next couple of months. If the prices go up, they will have stabilized their fuel costs and saved money. If they go down, of course, it will cost them what they bid it at, and they will lose money compared to what they could have gotten it for. But in order for them to have that market, there has to be somebody willing to bet against them, willing to say: Yes, I think the price is going to go down, and I am going to make that differential. Those are speculators. Without the speculator part of the deal, the airline doesn't have a deal. The airline cannot lock in a price for what they are willing to pay to make sure they will know in the future what their costs are going to be. That is speculation.

The market is a place where you anticipate what the cost will be in the months to come so that you can have certainty for what you are going to pay. Sometimes you guess right and you are paying below market value. Sometimes your guess is wrong, and you end up paying more than market value. What is commonly ignored in the debate about oil speculators is that for every dollar made, a dollar is lost by someone who would be called a speculator but without whom the market doesn't work.

Oil is not the only commodity that is traded. We speculate on the price of wheat, pork bellies, gold and silver, cattle--a number of other things. Speculation allows producers and consumers of these products the opportunity to manage the risk they have on buying and selling products that don't have a set price. This helps prevent wild fluctuations of price each and every day. That keeps major market failures from happening.

Earlier this week, I spoke about how the majority leader's energy speculation bill could have significant unintended consequences for institutional investors accessing commodities, futures, and capital markets. Today, America's largest pension funds wrote to me stating their concern.

The American Benefits Council wrote:

The Council is very concerned that the serious implications

of S. 3268 on retirement plan participants have not been

sufficiently evaluated. We are concerned that legislation

relating to energy policy could unintentionally harm the

long-term security of American workers and families.

I ask unanimous consent to have the letter printed in the Record.

I also ask unanimous consent to have an article on statistics on the 55-mile-an-hour speed limit printed in the Record.

I also have heard from other pension fund and institutional investor representatives that the provisions in the majority leader's bill have not been sufficiently vetted. Rather than pass a flawed bill on energy speculation, we should wait until we read the Commodity Futures Trading Commission's and the Interagency Task Force on Commodity Markets' report due out later this year. This issue is too important for us to act without all of the facts.

Few serious economists believe that this bill will do anything substantial to decrease energy prices. Warren Buffett, the Nation's wealthiest Democrat, doesn't think that it will make a difference. Neither does oilman T. Boone Pickens. Even the Federal Reserve Chairman, Ben Bernanke, believes that this bill will have little impact on the price of gasoline. And yet we are still prohibited from offering amendments. We are still prohibited from voting on amendments that will have a real impact on the price of gasoline.

It is unfortunate that the debate is turning out this way, because I agree that there should be more transparency in the market. That is why I am the cosponsor of a bill that allows for more oversight by the Commodities Futures Trading Commission. But in addition to that, the bill does something more. The Gas Price Reduction Act includes a provision to open up coastal waters in States where they want energy production. It ends the ban on the development of promising oil shale in Wyoming, Colorado, and Utah. At the same time it encourages increases in supply, it promotes the development of better technology so that we use less energy.

We should have the opportunity to vote on these proposals. We should have the opportunity to have a real debate on energy. Instead, we are going wrap up this debate and begin playing the blame game. It is disappointing that the Senate is working this way, and I hope we can stop playing politics and have a real debate in the near future. This issue is too important for the Senate to ignore.

Mr. President, what is the parliamentary situation?

I was a bit late arriving. I ask unanimous consent for 10 minutes.

Mr. President, fellow Senators, let me say to you that I rise to speak again on what may be one of the most important issues facing the American people.

Let me repeat, today we have before us a bill that addresses speculation in the energy business in the United States. I regret to tell you that the high cost of gasoline is straining our Nation's family budgets. The American people are looking to us to do something. Instead of providing some needed relief, the majority has brought a speculation-only bill before the Senate with limited debate and minimal, if any, opportunity for amendments. I am forced to say that in my 36 years in the Senate, I have never seen a problem so big met by a proposal or a solution that is so small.

The other side suggests that at this particular time in our history, there is no need to move beyond this, the one bill which the majority leader, using extraordinary rules, has brought before us under our rule called rule XIV. It has not been before committee, it has not been reported out by a committee; just put together in his office. And it is the Energy bill supposedly for the end of this year; it is all we are going to do, with the American people clamoring for us to do more since they are so burdened with the high price of gasoline. The American people, by an overwhelming majority, want action. They are getting nothing except excuses and evasion.

Yesterday, the majority continued to trot out a baseless proposal that they are calling ``use it or lose it'' in an attempt to convince Americans that despite all the evidence to the contrary, they are actually in favor of some domestic production. Make no mistake, if the Democrats wanted more production, they would have included in the underlying bill, the one I just described that the majority leader got before the Senate, if they wanted to address some real energy issues, then there is no question that all they had to do was add those issues to that bill, and those issues would be before the Senate.

If we needed any more evidence that most of my colleagues on the other side opposed new domestic energy production, it came in the form of a canceled Appropriations Committee markup.

In the news this morning, we read that the majority's spin on this decision is:

On the Interior Appropriations bill, the Republicans had

threatened to strike the ban on offshore drilling that has

been in effect for nearly 20 years, even though they have

been offered a separate vote to strike this ban on the Senate

floor. Their rejection of this offer makes it clear that they

are more interested in playing political games to score cheap

political points than to complete action on the bills that

fund America's priorities.

Can you imagine? I beg to differ. Republicans are not trying to score cheap political points, we are trying to get something done--something done to deal with the supply and demand imbalance at the heart of this energy crisis. Our rejection of the so-called offer to bring up a single amendment tells you more about the majority's decision to avoid, at all costs, a solution that measures up to the scale of the energy problem than it does about the Republican's desire to get our work done here in the Senate.

This ban on production of our own energy resources can no longer stand in the face of a growing crisis. What we are talking about now, Senators, is that starting 20, 25 years ago, some 27 years ago, the Congress of the United States decided, 1 year at a time, in the appropriations bills, that they would put a ban on drilling off the shores of certain States, until we got to the point where 85 percent of all the coastal areas of America have a ban, a congressionally imposed ban. You cannot go into those areas using the lease proposals of the U.S. Government and give oil companies, large and small, leases to drill and find oil and gas for the American people.

Now, obviously this ban on production of our own energy can't stand with today's problems. Those bans started when we were worried about oil spills, and they started when we didn't worry about the price of oil. They started when oil was so cheap that we did not care about producing our own. We could, with reckless abandon, put bans and prohibitions on drilling anywhere we wanted and nobody would get hurt and the American people would not suffer.

Such is not the case now. That is why I beg to differ with Democrats who say we are here playing some kind of politics. If there is any politics being played, it is the politics that is trying to prevent Republicans from presenting here on the floor amendments that try to do the people's business, that try to use this oil and gas that is ours in such a way that it will reduce the price of gasoline at the pump.

They have called hearings on their own proposals; they have canceled them. They have called for markups on their own bills which would include these same issues; they have canceled those hearings. They can avoid hearing testimony on their own policy proposals. They can avoid production votes on their own appropriations measures. They can even avoid real production votes on the Senate floor. However, my colleagues will not be able to avoid their constituents during the August recess.

Thus far this week, instead of action, we have heard a great deal of talk from the other side. We have heard tales of how Republicans are ``blocking another bill.'' I mean, it is really hard for a Senator like this one, who has been here 36 years--this is my last year--I have been in charge of energy legislation, been in charge or ranking member only for the last 4 or 5 years. Prior to that, I did budget work and other work. But in terms of being chairman or ranking member, it is only a few years. We got a lot of things done in those few years.

We are here since the Democratic leader brought a bill to the floor. It was his choice to bring it here. He brought the bill here in an extraordinary manner. It is now here, it is pending, and it should be treated the same as any ordinary bill that is pending.

It is a bill which allows for any responsible provision to be added to it as an amendment and a responsible provision, as we see it, that will help with the crisis confronting America and we say any amendment that will produce more oil, more gas that will be added to what America can drill for and use. That is important. We are not blocking anything.

Can you imagine, they bring down a bill that does one little thing that has been said by most experts to not even be needed. If anything, it is a minor problem. And they want to vote on it and go home and tell the American people they have done something about the energy problem? We turn around and say: Yes, let's do something about it, and we are the ones ``blocking'' another bill.

The majority has said they want something done on energy. This would be believable if the leadership on the Democratic side had not clearly stated in December that they would pivot away from highlighting accomplishments in the coming year, abandoning any attempt at accomplishments, and a staged attempt to manufacture the appearance of obstruction is transparently political.

This strategy of campaigning from the Senate floor has weakened the institution and left the American people without much needed leadership during this energy crisis. Instead of impugning the name of the American President from the Senate floor, instead of reading poll numbers on the Senate floor, instead of providing daily opinions on the status of the Presidential campaigns--Mr. President, I ask unanimous consent for 2 additional minutes.

Instead of providing daily opinions on the status of the Presidential campaign and special elections, the Senate could have been legislating.

We have been told that Republicans may be allowed to offer one amendment; I repeat that, just one amendment. And I repeat that in my 36 years, I have never seen a problem so big met by a proposal or a proposed solution that is so small. The offer of a single amendment was accompanied by a baseless assertion from the majority that they are willing to compromise and work together on energy legislation that both sides can live with.

We were told that one amendment from the majority and a competing proposal from the minority is how the legislative process is supposed to work. I disagree. The Senate passed bipartisan comprehensive energy legislation in 2005 and 2007. I was here every moment of it. The process for those bills, which passed both Chambers in the Congress and were signed by the President, was quite different.

Take the Energy Policy Act of 2005, for example. And now I will go through the history of that one and the two that followed it.

We devoted 10 days of the Senate's time to debating that measure. There were 19 rollcall votes held on amendments, 23 rollcall votes on the legislation itself, there were 235 amendments proposed, and 57 of them were agreed to. There is a similar story to be told of the Energy Independence and Security Act of 2007. Over 15 days, the Senate voted on 16 amendments, held 22 votes on the bill itself, saw 331 amendments filed and 49 of them agreed to.

We can look back further, of course, to a time when the Senate successfully moved legislation focused purely on environmental protection. During consideration of the 1990 Clean Air Act Amendments, the Senate devoted 5 weeks to a thorough and open debate. A total of 180 amendments were offered and 131 were ultimately acted upon by the full Senate.

And yet, we are told that one amendment from each side is how the legislative process is ``supposed to work.'' This approach is more accurately described as a lesson in how to steer the legislative process towards failure. The

American people want action, not excuses; they want real proposals, not political ploys; and they want genuine solutions, not small measures.

During the recent climate change debate, perhaps it was good that the majority undertook a process that was doomed to fail. The cap-and-trade bill would have increased gas prices by more than a dollar per gallon, and energy prices across the board would have increased as well. But now, as a growing majority of Americans from all political camps demand more energy production here at home, we have to get serious about doing the work that we have been elected to do. Advancing a bill that focuses on such a narrow part of the energy crisis we face, stifling the ability to offer amendments to that bill, cancelling markups, and abandoning hearings are not what the American people want from the Congress.

I am disappointed that we will not be offered the opportunity to act in a real way this week on the most important issue facing the American people. Despite the majority leader's assertions about the recent decline in the price of oil, talking will not solve what all experts say is a supply and demand imbalance. Solving this problem requires action and leadership. I hope we will see both before we depart for our home States in August.

It is pretty clear to me, and I think we are able to make it pretty clear to anybody who is interested, that now is the time to pass meaningful legislation that will help the American people through the crisis of the high prices of gasoline. While we are building a major plan and have come along with a minor plan, in a couple weeks we could knock out a very good bill. I am willing to sit down, bipartisan. If the majority side is willing and the chairman of the committee is willing to invite me, I will be there. Maybe we can do it. Thus far, it seems it was not possible. So we are trying the best we can to do the work for the American people. That means good amendments to a pending bill which we did not bring up, but it is there for us to use, pursuant to our rules.

I yield the floor.

I thank the Senator from Tennessee for his good work and good words on this important issue. I agree with him that it is a serious problem and it calls for serious answers. We need a response by the Senate when it comes to energy, when it comes to our dependency on imported oil. As T. Boone Pickens has pointed out in his crusade to try to help people understand where we are on this, he said we send $700 billion of American money to foreign countries to pay for the oil we import. That is because we are not producing enough here at home, because we are not conserving, and we are not far enough down the road in terms of coming up with alternative sources of energy.

What is Congress's role in all this? We have done some things. I think we ought to give credit where credit is due. We have passed a corporate fuel efficiency standard for automobiles. We have passed tax benefits and subsidies for things such as solar power and wind energy. We have encouraged the production of biofuels such as ethanol, although we are finding sometimes that the unintended consequences of using food for fuel creates problems in and of itself. Suffice it to say, this is a serious problem and Congress has, in many respects, acted I think appropriately to address some parts of the problem. Unfortunately, like so much of politics these days, this sometimes degrades into a name- calling contest. I am going to try my best not to engage in that. But I do want to respond to the accusation that was made earlier that somehow this is attributable to the current administration's tenure in office.

As you can see from this chart, the price of gasoline back when President Bush was sworn into office in January 2001 was $1.49 a gallon. It has grown over time to when the Democrats took control of the Congress, in January of 2007, to $2.33 a gallon. Then of course it has spiked since that time to now on the order of $4.06 a gallon on average, more than $4 a gallon. It has gone from January 2001 to today to more than $4 a gallon. While our friends who are in charge of the agenda and the floor schedule of the Congress, the Democrats who were put in a majority status, have been here, we have seen it spike to the figures of today.

That is not to say it is directly attributable to them, but I would say it is unfair to suggest that because President Bush has been in office since January 2001, he is the only one responsible. The fact is, it is our responsibility too. It is the majority leader's responsibility, I submit, to give us an opportunity to come up with serious answers to a serious problem and not play the same old broken game of politics and ``gotcha'' that turns people off so much when it comes to the Congress. It is no secret why the approval rating of the Congress is at historic lows. There is no secret to that. It is because people look at what is happening here in Washington, DC, and they say: They are not listening or they may be listening, but they are playing political games rather than trying to solve real problems on a bipartisan basis.

I know there is plenty of fault to go around, but why can't we work together to try to solve the most pressing issue for working families in America today, and that is the high cost of gasoline and energy? We know there is a bill on the floor that deals with one part of the problem. This has to do with the so-called speculation. Last month, Warren Buffett, one of the richest men in America and perhaps one of the richest in the world, the CEO of Berkshire Hathaway, said: It is not speculation that is the problem, it is supply and demand.

T. Boone Pickens, whom I mentioned a moment ago--who is spending $50 million of his own money--met with Republicans today, met with Democrats yesterday, to explain why he is spending so much of his own money to elevate the profile of this issue so it will be something Congress cannot run away from and neither can the Presidential candidates but is something they will have to address and solve. He said focusing solely on speculation is a waste of time.

Why would Congress deal with a bill that only addresses speculation? I would say I am not sure. What I am willing to do is certainly consider and probably support a bill that would be supported on the Democratic side that would provide for greater transparency of the commodity futures markets and would provide more resources to make sure we have more cops on the beat, so to speak, to police the commodity futures trading that goes on and to make sure that is not the problem or, if it is part of the problem, as the majority leader said yesterday--he stood here on the floor of the Senate and said he thought it was 20 percent of the problem in terms of the price of oil. I don't know if T. Boone Pickens is right; I don't know if Warren Buffett is right; I don't know whether the majority leader is right. Let's say the majority leader is right and it is 20 percent of the problem. Why in the world would we leave the other 80 percent off the table? Why would we settle for a 20-percent solution when we could have a 100-percent solution, in trying to address this important domestic issue?

We have come up with a lot of ideas. We have said we need to explore and produce more American oil so we have to buy less from overseas. We have been told no, we cannot do that. We have been told no, we can't produce more nuclear power to help generate more electricity. No, we can't investigate the possibility that we could use the coal we have here for new technology that would allow us to use that coal to make aviation fuel--as the U.S. Air Force is currently testing, a synthetic fuel made with coal-to-liquid technology.

Again--I don't think this is unfair and I think this is exactly what we keep hearing--it seems that the answer from the other side of the aisle is: No new energy. They want to investigate. They want to litigate. They want to raise taxes. But when it comes to new energy sources, they say no.

The one law that Congress of course cannot repeal or suspend, even here in Washington, DC, is the law of supply and demand. We know from the experts that there is rising demand in countries such as China and India, with more than a billion people each. They are buying cars, they are consuming more energy. They have watched us and they have seen that America consumes about 25 percent of the oil in the world, even though we represent a small fraction of the population. They look at that and they say maybe that is the reason for their great prosperity.

I think there is something to that.

We are having more and more competition globally for this scarce commodity. What is our answer on this side of the aisle? We say we need to find more and we need to use less. Find more, use less.

I heard the Senator from Tennessee bemoan the fact that the majority leader has said he will not allow a full debate and amendments to this legislation. I think it is absolutely critical that we allow full debate and amendments that would be likely to actually solve the problem, rather than go through what is a patently political exercise so somebody or another can check off the box and say: OK, we have been there, done that. Now we can go home on August recess. I believe we ought to stay here. Rather than go on recess in August, I believe we ought to stay here until we actually come up with a commonsense solution to this problem.

Some have said OK, if we start drilling today in the Outer Continental Shelf, it is going to take years for that oil to come on line. I wish we had thought better about that 10 years ago, when President Clinton vetoed production from the Arctic National Wildlife Refuge, which Congress had authorized, which would have produced 1 million additional barrels of oil 10 years ago. That would be flowing today if President Clinton had not vetoed that bill.

The fact is, oil is a globally traded commodity. That is where we get back

to the speculation question. Actually, the market is a pretty rational process. For everybody selling a contract for future delivery of oil, there is somebody who is willing to buy it. That is how the market works, a willing seller and a willing buyer. If Congress were to do the rational thing, the sensible thing, the thing that would actually have a positive impact by pushing gas prices downward, we would say we are open to producing more American energy, perhaps as many as 3 million additional barrels of oil a day here in America, which is 3 million barrels less than we have to purchase from abroad. That would give us some time.

It would also send a message to the commodity futures markets that in the future there is going to be additional supply that is going to come on line. That would help bring down the price of oil because 70 percent of the price of gasoline is related to the price of oil. I think that would have a dramatic impact on the price of gasoline at the pump and would provide the American people some relief at a time when they need some financial relief.

It would give us some time so we could do the research and use good old-fashioned American ingenuity to come up with alternatives, things such as in 2010, when many of the big automobile companies are going to introduce plug-in hybrid automobiles that you can actually plug into the wall socket in your home and charge the battery you can use then to commute to work or, if you believe what Boone Pickens has suggested, he said if Government would mandate that all new Government cars and trucks run on natural gas, that would relieve a lot of the pressure on gasoline and oil prices and bring down the price of gasoline by 38 percent.

I will be happy to.

Madam President, I appreciate the question and the opportunity to try to answer that. Let me do the best I can. I think there is the illusion here in Washington that every acre of land that is available for exploration is going to produce oil. As a matter of fact, in Texas--I am not unfamiliar with the term ``dry hole.'' As a matter of fact, this is a very complex enterprise, where you do seismic testing to try to figure out where oil is likely to be. Sometimes you are wrong and it costs millions, even sometimes billions of dollars to invest to try to produce that oil.

What the oil companies try to do is figure out where their chances are best so they start there. But the more land--including the submerged lands in the Outer Continental Shelf--that is available to them that now Congress has put out of bounds, I think the better the chances are they will be able to find it.

As a matter of fact, there are experts--I am not an expert, but I read what the experts say--who believe there are vast quantities of oil and gas available in the Outer Continental Shelf that are not available now on the lands to which they have access.

I would be happy to yield.

Well, I am delighted to try to answer that question, as well, because I think the Senator's question demonstrates--I am not complaining; I am not criticizing. You know we are not oil and gas experts, but I have had a little bit of exposure. Let me try to answer that.

There is not a big lake of oil under the surface of the land that is available to anybody who can punch a hole in the earth and then suck it out with a straw. So I do not think the analogy is apt.

These oil companies in America are owned by shareholders. They are not interested in drilling dry holes. They are interested in drilling where there is actually going to be some oil that can be produced. The more opportunity they have, the more lands available to them, the greater, they believe and I believe, they can maximize the likelihood that they will actually find oil.

This is not to help the oil companies, this is to help us quit sending 700 billion a year of American dollars to foreign countries for oil while we have more of it at home, if you believe the experts, about 3 million barrels a day.

Mr. President, my friend and colleague from Michigan is here, as well, who has been deeply involved in the issue of credit cards and the problems that are occurring.

I rise with my colleague Senator Levin to introduce legislation that would reform and prohibit credit card practices that harm rather than help American consumers and their families. The legislation is called the Credit Card Accountability, Responsibility and Disclosure Act, or the Credit CARD Act. It will, in my view, help bring an end to industry practices that candidly cost American families billions of dollars each and every year.

I cannot think of a better time to introduce this much needed legislation. This Chamber will, in very short order this evening, or as late as tomorrow, pass legislation to address the most important issue confronting our Nation's economy and the financial stability of our citizens--the collapse of the subprime housing market and the credit crisis it has brought about.

Unfortunately, far too many American families who are already being squeezed by the rising cost of food, oil, and gas, now find themselves forced to rely on short-term, high-interest credit card debt to finance life's daily necessities--including their mortgage payments--because of the ongoing credit crisis and a weak economy.

That growing reliance was highlighted in a report released last week by the Federal Reserve. The Fed's study reported that in May, revolving consumer debt, which is primarily credit card debt, reached an all-time record high of slightly over $961 billion. That is a 7-percent increase in the last month alone, which is on top of a 7-percent increase last year, and a 6-percent increase in 2006. At this rate, revolving consumer debt in our country, which is again primarily credit card debt, will

reach $1 trillion by the Christmas season of this year.

When I assumed the gavel of the Senate Banking Committee last January, one of the very first hearings I held was on the issue of credit card practices. At that hearing, I challenged card issuers, banks, and associations to stop engaging in practices that they were not prepared to defend before the committee.

It was my hope that the hearing and that warning would encourage the credit card industry to go through a period of intense self- examination. I had hoped the industry would scrutinize its practices and policies to ensure that credit was extended in the fairest and most transparent of terms to credit card customers. To be fair, some in the industry heeded that call. I applaud them and thank them for their efforts. Over the past year, a few credit card companies have voluntarily made changes to the way they do business, and many Americans have benefitted from those improvements.

Regrettably, however, far too few embraced this call. Even more regrettably, some that have made voluntary changes are reconsidering those steps in the face of mounting pressure to find new streams of revenue and capital, and to compete in a market where other industry participants are not engaging in these reforms, as their subprime mortgage market-related losses continue to rise. The temptation to go back to older practices to increase revenue streams is there. Unfortunately, the use of confusing, misleading, and very predatory practices, in some cases, appears likely to remain the standard operating procedure for many in the credit card industry for the foreseeable future if we fail to act. The list of these troubling practices is lengthy: Charging predatory rates and fees; engaging in deceptive marketing to young people; practices such as universal default; double-cycle billing; retroactive interest rate increases; ``any time, any reason'' repricing; and billings shenanigans--like shortening the period consumers have to pay their bills, or charging fees for payment by telephone--are just a few of the practices that could merit induction into a fairly crowded industry ``hall of shame.''

Even the financial regulators, whom I have been openly critical of for lack of appropriate oversight and response throughout the subprime mortgage market crisis, have recognized the harm these sinister practices pose not only to credit card customers but to our economy as well. In May of this year, the Federal Reserve, the Office of Thrift Supervision, and the National Credit Union Administration proposed rules aimed at curbing some of the very practices I have identified. In my view, this joint rulemaking is an important step in providing needed consumer protections in some areas, including a ban on retroactive interest rates and rules on payment allocation. But the proposed rules fall far short in other important areas--failing to address issues including universal default, ``any time, any reason'' repricing, multiple over-limit fees, and youth marketing.

These shortcomings underscore the need for the legislation Senator Levin and I will be talking about this evening.

I want to make it very clear--and I know my colleague feels the same way--that we are not opposed to credit cards. They are very valuable, very useful tools for consumers. So this bill is not designed in any way to deprive consumers of the use of credit cards. That is not the issue. When provided on fair terms, and used wisely and responsibly, credit cards are a valuable financial tool for millions of our fellow citizens. They can help an individual to build his or her credit history and to better pursue his or her financial goal.

But like many credit products, credit cards pose the potential to harm consumers as well as help consumers. Card companies have been far too apt to exploit the needs of consumers who are increasingly becoming ``hooked on plastic.'' That potential to harm consumers has grown in recent years as credit card usage has risen. Let me share some numbers with you to give you some idea of what has happened in this explosion of credit card usage by Americans.

Today, nearly 75 percent of American households have a credit card or a debit card, and 700 million credit cards are used to purchase in excess of $2.4 trillion in goods and services from over 7 million locations in the United States annually. In 1970, only about 16 percent of U.S. households used credit cards, and fewer than a million businesses accepted them.

As Americans have become increasingly reliant on credit cards, credit card companies have become more and more innovative in finding ways to access their customers. Over $17 billion in credit card penalty fees have been charged to the American people--new fees--in the last 2 years, since 2006. That is a tenfold increase from what was charged 10 years ago. That is $17 billion in new penalties and fees since 2006. Credit card companies are turning to innovative ways to profit-- including at the gasoline pump. They are laying on fees to gas station owners for each credit card transaction made at the pump. At the very time they are watching the price of gasoline skyrocket, the credit card companies are gouging the people struggling to meet those fees. Again, card companies are laying on fees to gas station owners for each credit card transaction made at the pump--a charge that those owners immediately pass on to customers, increasing the cost of gas for drivers. In some places, these fees can add an average of 3 percent for each gasoline transaction.

The combination of the growing needs for revolving debt and hidden fees charged by card companies is contributing to the avalanche of debt under which American consumers increasingly find themselves buried. Listen to this number, because this is the one that is stunning. To give you an idea of what has happened to the average family in this country with credit card balances, today the average household that carries a credit card balance owes close to $10,000 in revolving debt on their credit cards. The average family has a balance of $10,000 in revolving debt on their credit cards.

That is a millstone around the neck of the average American and their families--families that are already struggling to make ends meet and are under pressure from rising gas prices, food prices, skyrocketing health care costs, and a mortgage crisis that has robbed many families of their home equity or, worse yet, their homes.

That is why we are introducing the Credit CARD Act. This bill will help reform credit card practices that drag so many American families further and further into debt. It strengthens regulation and oversight of the credit card industry and prohibits the unfair and deceptive practices that in far too many instances work to harm, not help, a consumer's efforts to move up the economic ladder.

Specifically, the CARD Act would prohibit the worst of the industry's practices, including imposition of excessive fees; retroactive rate increases; universal default; ``any time, any reason'' changes to credit card agreements; and unfair payment allocation.

The bill also, importantly, contains a number of provisions aimed at protecting young consumers.

This legislation builds on legislation I have introduced in previous Congresses. It also incorporates several key concepts included in the legislative proposals put forth by some of my colleagues, notably my colleague from Michigan, Senator Levin, and Senators Menendez, McCaskill, and Obama. Each is an important cosponsor of this legislation, as are Senators Reed of Rhode Island, Akaka, Tester, Clinton, Kerry, Sanders, Whitehouse, and Casey.

This bill also has the support of a wide array of consumer advocates and labor organizations, including the Consumer Federation of America, Consumers Union, National Consumer Law Center, the National Council of La Raza, Service Employees International Union, the Center for Responsible Lending, U.S. PRIG, Consumer Action, Demos, Connecticut PRIG, and the National Association of Consumer Advocates.

As policymakers, we should expect consumers will act responsibly when it comes to using credit cards, and that should be an important point to make. But we also expect no less when it comes to companies that issue these cards. They need to act responsibly, and they are not, in my view. The Credit CARD Act will help strike the

correct balance of responsibility between credit card users and the card issuers. And by striking that balance, it will help provide American consumers with a fair chance to secure economic security for them and their families.

I thank Senator Levin and others--especially Senator Levin who already held hearings on this issue. We have talked about this at length over the years. We tried in other Congresses with very modest proposals to deal with some of these problems. We have always lost those battles. But I think the American consumers, regardless of their income, regardless of their social or economic status, feel very angry about what is happening to them. As a result, I think there is a growing opportunity for us to get something done on this issue.

So while our focus today has been on foreclosure issues, the credit card problem in this country that so many Americans are facing is one that I think is ripe for congressional action. Our hope and intention is to bring a bill to the floor of this Chamber before we adjourn for the year to give our colleagues a chance to express themselves on this issue.

Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

I thank my colleague.

Mr. President, the motto of the Republicans in the Senate is: Talk more, produce less. Do you know what we offered them this week? We said to the Republicans: Here is the opportunity of a lifetime. Do you have a position on speculation? Do you think it is an issue? If you do, put your proposal on the floor and we will put our proposal on the floor. We will have an equal vote requirement, equal debate time. We will go at it and we will let the Senate decide. We are not going to write your version of the speculation, you would not write ours, but you have every right to do that. The Republican response was: No, we are not interested in that. We don't think speculation is a problem.

Well, they ought to meet with the CEOs of the major airlines. They ought to spend a minute talking to them about what they feel because they are paying the jet fuel costs and they are cutting back on service and they are cutting back on employment. That is the reality of what they face today. Speculation, manipulation is a major concern. We have a responsible approach to it. The Republicans refuse to offer an alternative. OK. That is their decision.

Then we said to them: Why don't you present your energy bill? The Republican leader came to the floor with a litany of things the Republicans believe in. For over a week we have said to them: Put it in a bill offered on the floor. They have said: No, no. We would rather come to the floor and complain, rather than come to the floor and debate our approach.

I listened to the Republican leader as he came to the floor, and it is very clear to me. They don't want a debate and a vote. They want this issue to drag out forever and ever, amen. That is not what the American people want. They want us to tackle this thing, offer alternatives on the floor, debate them up or down, go forward.

It troubles me when the Republican leader repeatedly says-- incorrectly--that when it comes to energy, from the Democratic view, we want to deal with speculation and, in his words, ``do nothing else.'' He forgets the whole second part of this--the Energy bill we are proposing on the Democratic side and they are going to propose on the Republican side. We offered them that. They turned us down.

I might also say there is no idea how many amendments the Republicans are going to offer. Two days ago, Senator Kyl and I were on the floor, and he said there were 25 amendments. Senator Specter walked up and said: I have 2, so make that 27. Then Senator Kyl said: Come to think of it, I have one too. We are up to 28. That was 2 days ago. This is growing similar to bacteria in a petri dish as the Republicans meet in their conference and dream up more amendments. That is good. It shows a creative mind at work, and it is a great exercise, but it isn't what the American people are asking for.

If you have a good set of ideas, offer them. You want to bring up more nuclear power, Senator Domenici? Put that in your package. You want to have more offshore drilling, put it in your package. You want to have coal to oil, put it in your package. If you believe in it, stand and fight for it. But they will not. They will not fight for it. They want to run. Run to the press and

explain that they are not being given enough time on the floor, if they could have a little more time, as days burn off the calendar as they stand and complain. They can't come up with a plan, and that is the unfortunate reality.

Then, they quote T. Boone Pickens. Mr. Pickens, I am sure, is a gifted man. I have never met him. I have seen him on TV. He has spent a lot of money to make sure we all get to see him. They have misquoted him on the floor so often. I have watched that ad he is paying millions of dollars for America to see, and I do remember the part of the ad where he says: ``We can't drill our way out of this problem.'' Mr. T. Boone Pickens said that.

You don't hear that from the Republican side. Their idea is we can drill our way out of this. They forget the reality. Of all the oil in the world, if you look at the vast quantity, we have 3 percent of it under our control--3 percent. We use 25 percent of the oil. You can't drill your way out of it. We know we are going to need exploration and production, but we know we need a lot more, including conservation, renewables, sustainable energy sources. That is the reality of what we face.

We have made this offer to them time and again. They will not accept it. They would rather come to the floor and complain.

When you go through the list, you see first drilling offshore. Democrats support that. There are 34 million acres currently under lease to oil companies for drilling they are not using. Why don't they start drilling there since they paid for this land?

Oil shale. That is in our bill. Even though that is 15 years away, we want to take a look at oil shale as an opportunity.

Incentives for batteries, of course we support that. There is no debate there.

Untapped American oil. We think there is untapped American oil in Alaska--23 million acres' worth that the oil companies aren't touching. They should go in there and take a look, drill for it, bring it forward.

Nuclear energy. I don't understand how Senator McConnell could come to the floor and say we could bring gasoline prices down with more nuclear energy. Could you picture a car being powered by nuclear energy? I can't. If he is talking about plug-in hybrids, he ought to clarify the example he is using.

There are plenty of things we can do. It should have started with a good-faith offer which we made to the Republicans and, frankly, they should have accepted.

I yield the floor to the Senator from Missouri.

How much time remains?

I will use it after the Senator speaks.

Will the Senator, through the Chair, yield for a question?

Is it not only true that we have 68 million acres of land we have leased to the oil companies, which they are paying us money to lease in order to find oil and gas, but they are not doing anything with it--some 34 million offshore, on the Outer Continental Shelf and some 33 million onshore that they are now leasing?

The Republican side of the aisle has become a one-trick pony--keep drilling, keep drilling, keep drilling. We know if we decided today to drill on any acreage here, it would be 8 to 14 years before we would see any oil coming from it. So this notion not only flies in the face of the 68 million acres they currently have, but it doesn't solve the problem.

As the Senator from Washington said, it makes the problem worse because we don't face the realities of what we need to do to have a national energy policy.

If the Senator from Washington will yield for another observation, she noted that when we elected President Bush and Vice President Cheney we brought two people in from the oil industry, and coincidentally, during this two-term administration, profits of the oil companies in America have reached historic high levels at the expense of our economy and families. The Republicans, the President's party, want to end this administration by giving them the biggest farewell gift anyone could ever wish for in the oil industry--millions and millions more acres so that they can, at their pace and in their time, decide to drill on.

It would seem to me, if you are honest about the oil companies and what they have done to this economy, this is the last thing we should be doing. We should be holding them accountable for the prices they charge, the profits they are reporting, and what they have done to the American economy. So I ask the Senator from Washington: The alternatives we have talked about over the years--fuel efficiency for cars, more efficiency in the appliances we use, the buildings we build, all of this is part of the big energy picture, is it not? It isn't just about keeping oil companies happy.

I would respond to the Senator from Washington, through the Chair, and say that I think America understands this. Sure, we are going to be drilling oil in America--we need to, for exploration and for production--but we know we only have 3 percent of the world's supply of oil--3 percent--and we use 25 percent of the oil. So we can't drill our way out of this.

Whether it is T. Boone Pickens or some friend of mine in central Illinois, it is obvious: You have to look for other solutions, and those solutions mean the oil companies are not going to be the answer to every question. Unfortunately, the Republican side of the aisle, time and time and time again, all they have to suggest is drill more oil and make more money for the oil companies.

That isn't the answer to America's energy problem. If it were the answer, we would have seen, as the Senator said, gasoline prices coming down as we made more acreage available for drilling over the last several years. It has not happened. They have gone up dramatically.

Mr. President, I ask the Senator from North Dakota to yield.

I wish to ask him a question because he has been a leader in the Senate on the question of speculation. I want to say that many of our Republican colleagues have come to the floor over the last several days saying virtually speculation is not the problem, not speculation. I know the Senator from North Dakota has ample evidence and many experts behind his position. He and I have joined with the leadership in coming up with an approach which will try to dampen the fires of speculation which may be driving up oil prices and creating volatility not reflected in the market.

I want to make sure the Senator from North Dakota is aware of what happened today with the Commodity Futures Trading Commission. They have charged an oil trading firm with manipulating oil prices, the first complaint to be announced since regulators began a new investigation into wrongdoing.

The CFTC accused Optiver Holding, two of its subsidiaries, and three employees with manipulation and attempted manipulation of crude oil, heating oil, and gasoline futures of the New York Mercantile Exchange, which is a regulated exchange, I might add.

``Optiver traders amassed large trading positions, then

conducted trades in such a way to bully and hammer the

markets,'' CFTC Acting Chairman Walter Lukken said at a press

conference. ``These charges go to the heart of the CFTC's

core mission of detecting and rooting out illegal

manipulation of the markets.''

I say to the Senator from North Dakota that his leadership on this issue and coming to the floor repeatedly to tell us about the possibility this was occurring I think has sparked this commission to come to life, at least today in terms of making these charges.

I am going to leave this story with the Senator because I want him to be able to put it in the Record every time our Republican colleagues come to the floor and say speculation is not an issue. It is enough of an issue that there was a civil action filed today against a company for hammering and bullying the market.

I know this is not in the nature of a question, but I wish to ask the Senator if he feels this action by the CFTC is an indication of what he has been saying over the last several months.

Mr. President, I think Senator Dole's idea of the kitchen sink approach is right on target. Maybe we will even find a way for the kitchen sink to somehow help us out here, but at least it is everything but the kitchen sink that Republicans are suggesting is the answer to our oil crisis.

There isn't just one answer. That is why we don't agree with the Democratic bill, which is simply to deal with speculators and speculation. I am going to talk about that in a moment. First, to reiterate what Senator Dole said, Republicans support a broad-based, balanced approach to this problem that recognizes there isn't one silver bullet, but through a combination of things such as conservation, such as renewable energy, such as producing a lot more oil and gas which this country has. Also, if we will simply lift the moratoria that currently preclude us from exploring for more energy, deal with speculation to the extent it exists, as well as certainly nuclear power--all of these things together can help us work our way out of the crisis. Part of it is short term, part of it is medium term, part of it takes long term. We have to look at this as a long-term problem.

I shake my head at those who say: Well, that particular solution doesn't do anything for 3 to 7 years. My answer is, of course, I have never completed a journey I didn't start. If we had completed some of the things we started years ago, we wouldn't be in the crisis we are in right now. However, we are stuck right now with one bill on the floor. Unfortunately, it is not the Republican approach, which is a balanced, broad-based approach, and includes new production, but simply the limited approach of dealing with so-called speculators.

I wish to talk a little bit about why only focusing on speculation isn't going to produce one more drop of oil, it is not going to reduce the price at the pump, it is not going to solve the problem and, in the long term, could actually hurt, and I will try to explain why.

It is propitious that yesterday a report came out that supports what I am now saying. We didn't have anything to

do with the timing, but I say it is propitious because it helps to answer questions that people have been asking. For over 3 months now the regulatory body of our Government that looks at speculation, called the Commodity Futures Trading Commission, has been testifying, and despite enormous pressure from the other side to point the finger at speculators, they have consistently said they don't think it is speculators. We believe it is the law of supply and demand, the fact that there is much more demand for oil than we are producing that is creating a problem.

Well, an interagency task force led by the CFTC and composed of staff from the Departments of Agriculture, Energy, Treasury, the Federal Reserve, the Securities and Exchange Commission, and the Federal Trade Commission all reaffirmed yesterday that:

Current oil prices and the increase in prices between

January 2003 and June 2008 are largely due to fundamental

supply and demand factors.

Furthermore, the report--and again I am quoting:

suggests that changes in futures market participation by

speculators have not systemically preceded price changes. On

the contrary, most speculative traders typically alter their

positions following price changes, suggesting that they are

responding to new information--just as one would expect in an

efficiently operating market.

The other side has ignored this CFTC analysis for a long time. I hope the new report will not be ignored, because what it illustrates is you are not going to solve this problem by trying to figure out a way to somehow regulate speculators. You have to deal with the law of supply and demand.

I tried to explain this to a younger person who was wondering what all of this debate was about, and this is the example I came up with-- or the analogy: These are investors, these so-called speculators, and what they are trying to do is to predict into the future what the price of something is going to be. Now, if they guess right, they can make money. If they guess wrong, they may lose money. They are researchers and they are looking at the best evidence they can. One of the things they look at is will there be more supply or more demand. Obviously, if there is more demand, then the price is going to go up. It is a little bit like the weatherman predicting the weather. The weatherman is a professional too and he looks at all of the research and he concludes that by this weekend we are going to have some rain. Now, he may be right, he may be wrong, but that is his job, to try to predict, and more often than not, he can predict it fairly accurately. What if we don't want rain next weekend? What if we don't think rain is a good idea? Are we going to muzzle or fire the weatherman and say: We don't want you to report this because we don't want the rain? Is that going to do any good? It doesn't do any good at all. If it is going to rain, it rains. If not, it won't.

If the prices are going to go up because Iran is rattling its sabers in the Persian Gulf, the prices are going to go up. If they don't, and the prices don't go up, it is not the speculators who make the price go up or down. The speculators are reporters. They are people who are trying to figure out what the price is going to be. They don't make it what it is; they are trying to figure out what it is going to be.

That is why the CFTC said they typically alter their position following price changes, reacting to new information. Again, it would be like trying to shut the weatherman up because we don't like the weather he is predicting. That is the role these speculators have. They are trying to predict the future and they actually help the market by setting a price that is useful to those who are trading in the market.

I appreciate that there are colleagues on the other side who are skeptical about this, but let me explain why I think it is unlikely that commodity traders actually push up the price of oil. Here is the explanation. They can only do this and drive up prices if they actually took physical possession of the product and then hoarded that, withheld it from the market.

But between 2003 and May of 2008, only about 2 percent of oil futures contracts actually resulted in physical delivery. Those are the utilities, airlines--folks like that.

If commodity index fund investors were, in fact, hoarding actual physical inventories to raise prices, one estimate suggests that they would need to fill storage tanks with more than 40 times the amount of oil currently held in the inventory at the Cushing oil terminal in Oklahoma where the West Texas intermediate oil contract is valued. Since we have not seen all of this frenzied new construction of oil storage tanks and facilities equivalent to 40 Cushing oil terminals, it is very clear that there is no hoarding occurring.

What is actually happening to supply today? Total oil stocks in the developed countries have been static. In other words, we have not been increasing the supply. A year ago, including strategic reserves, they amounted to about 4.1 billion barrels and today are at about the same level. Global demand, on the other hand, was 86 million barrels a day in 2007, while supply totaled 85.5 million barrels, creating a deficit of half a million barrels a day. As one would expect, prices are rising to reflect the fact that there is not as much supply as there is demand for the product.

I also think it is interesting that when you talk about speculators, you know the price has been going down in the last few days. I haven't heard anybody complaining that the price of oil is going down. If they are to blame for the price going up, maybe we ought to pat the speculators on the back for driving the prices down. Of course, they don't have that effect; I am being facetious. But who are these nefarious investors?

If you have a relative who is retired or a friend or someone who has a pension, you probably know a speculator. That is who is primarily investing in these kinds of funds. All investors want to diversify their portfolios to protect themselves against risk. You do that by purchasing as many different kinds of assets as you can, by investing in commodities. Pension funds and other institutional investors can protect beneficiaries like retirees from market downturns. In the current market, commodities are one of the few investments that have been actually generating positive returns. Under the legislation before us, if you declare these people bad investors or illegitimate speculators, you are going to be hurting regular investors in the market. I don't think we want to do that.

Interestingly, one of the pieces of legislation the Republicans have sponsored--the legislation called the Gas Price Reduction Act--is very similar to a bill introduced by my colleague from Illinois, Senator Durbin, who I think takes a thoughtful approach to speculation in the energy markets. Like our bill, his focuses primarily on increasing the resources available to the CFTC so it can continue to do its job and even do a better job of ensuring there is enough transparency in the system to enable it to continue to investigate and take action, if need be. With just a few modifications, I think the Durbin bill would be a good approach, as is the Gas Price Reduction Act, which Republicans have introduced, which strengthens the CFTC and makes sure it has the assets it needs to do the job we asked it to do.

In conclusion, I think everybody agrees that a stronger CFTC and additional transparency are good. I think we can all support that. It is part of that kitchen sink approach we heard talked about earlier, but it is only one small part of this. In no way are we going to see that approach drive down the price at the pump. As I said, it is little bit like the weatherman, these speculators. They find out what the price is and they, in effect, report it by their purchases or sales-- either one. But you don't improve anything by killing the messenger-- the speculator--any more than you improve the weather by shooting the weatherman.

As we proceed with the debate, I hope my colleagues will agree that while there may be a lot of good ideas--and one may be to strengthen the CFTC somewhat--that is not the answer to the crisis we face. It doesn't produce one more drop of oil or gas. At the end of the day, we are not going to be successful unless we find a consensus to enable us to produce more so that, along with using less, we can drive down the price of gas at the pump.

Mr. President, as the Senate debates a bill that will stop out-of-control speculation in the energy commodity markets, I would like to make a brief statement on this legislation and why it is essential that we act on it.

For weeks now, the Senate has heard testimony from experts, even oil executives, who attribute the shocking increase in oil prices to the influence of oil speculators.

Here are a few examples:

The [oil] fundamentals are no problem. They are the same as

they were when oil was selling for $60 a barrel, which is in

itself quite a unique phenomenon.

That was from Jeroen van der Veer, Chief Executive Officer, Royal Dutch Shell, Washington Post Apr. 11, 2008.

$100 oil isn't justified by the physical demand in the

market. It has to be speculation on the futures market that

is fueling this.

That was from Clarence Cazalot Jr., Chief Executive Officer, Marathon Oil, October 2007.

The price of oil should be about $50-$55 per barrel.

That is from Stephen Simon, Exxon Mobil Senior Vice President, Senate Judiciary Committee April 1, 2008.

What has happened in our markets? Clearly, we are not suffering from a supply and demand problem. Something else is happening.

In 2000, about 37 percent of the oil futures market was comprised of speculators who include investment companies and investment banks as well as institutional investors, like pension funds. Eight years ago, 63 percent of the oil futures market was represented by companies that were hedging the price of oil because they need oil to function, for example, the airlines.

How has the market changed in the past 8 years? Seventy-one percent of the oil futures market is in the hands of speculators who rarely take control of the oil they are bidding on, and only 29 percent represent companies that use it for the purpose that most of us would agree it should be intended.

So we know speculation is growing when it comes to oil, and we know the transactions have gone up 600 percent in the last 8 or 10 years.

What allowed this to happen? The infamous ``Enron Loophole,'' which was slipped into must-pass legislation in late December of 2000.

This loophole allowed energy futures to be traded without Federal oversight. Various investigations of the Enron collapse have pointed to this loophole

as crucial to Enron's manipulation of the California energy market which provoked an energy crisis in the State in 2000 and 2001.

Last month, with passage of the farm bill, the Congress finally succeeded in bringing a measure of oversight and transparency to this market, requiring the Commodities Future Trading Commission, CFTC, to review all contracts to determine which ones should be regulated as though traded on a major public exchange.

While this was a step in the right direction, and the result of much thoughtful discussion and debate, the farm bill provision can be improved upon and strengthened. That is why I introduced a bill to shut down the unregulated oil futures markets created by the now-infamous ``Enron loophole.'' It also removes energy from the list of exempt commodities; requires energy to be traded on a regulated market; and creates a new definition of what constitutes an energy commodity.

Senator Reid has introduced a leadership bill that reins in speculation by imposing position limits ensure that legitimate speculation doesn't get out of hand. It is a more complicated approach that leaves the door open for unregulated trading, but if it is done right, the approach taken by Senator Reid can get us where we need to be. And I am interested in working with Senator Reid to ensure that his bill gets at the problem.

I believe that some small but significant changes can significantly improve the bill. If our approach to dealing with excessive speculation is to impose speculation limits, then we must ensure that those limits actually operate as limits, not as loopholes.

U.S. speculators should not be able to circumvent speculation limits by trading on foreign exchanges, by setting up a subsidiary that would not be subject to the limits, or by trading both on and off regulated exchanges without aggregating the number of contracts so they count against the overall speculation limit set by the CFTC.

If we pass a bill that allows speculators to evade these limits, the bill's promise will remain unfulfilled, and we will have the worst of all worlds--a bill that purports to tamp down on speculation but fails to do so, and a bill that lets those who would dismiss the effect of excessive speculation on the price of oil say ``I told you so.''

My friends on the other side of the aisle, the editorial page of the Wall Street Journal and Wall Street financiers, call the effort to shut down excessive speculation misguided and say that the spiking price of the barrel of oil is just the market telling us that demand exceeds supply.

But ask yourself whether this makes sense. When the Saudis agreed to increase production, there was no drop in the price of oil. But the price of oil keeps spiraling, and while there is no evidence of dramatically increased demand, there is plenty of evidence that speculative money is pouring into the energy futures market.

The airlines, which hedge against increases in the price of jet fuel by participating in the energy futures market, are suffering. They are the legitimate hedgers who actually use the futures, and they are calling on us to take action against excessive speculation.

Meantime, the oil companies loudly will be claiming they need to drill in new areas off the coasts of Florida and California. They have a well financed campaign that says: Drill here; drill now; pay less. This is cruelly misleading and deceitful. Drilling everything we have in the waters below our coasts will do nothing to lower the price of gas.

If we open all our shores and give away billions in tourism, fishing, and all the economies of all the coastal States to boost oil production, the first drop of oil wouldn't be seen until the year 2017, and oil production would peak in the year 2030.

What could we get in the year 2030? We would get 200,000 barrels a day.

To put that number another way, as expressed by my colleague, Senator Menendez yesterday, ``the amount of gas we could get from offshore drilling is equivalent to a few tablespoons per car per day.''

It is simply wrong to think that opening offshore drilling will lower gas prices.

Yet the public relations machine of big oil continues to churn out falsehoods. They insist they are trying to find new oil that might help bring down gas prices, but the money they spend on exploration is nothing compared with what they spend on stock buybacks and dividends.

This is good news for shareholders but offers no help to drivers to offset the high cost of fuel.

Yesterday the Associated Press reported the 5 biggest international oil companies plowed about 55 percent of the cash they made from their businesses into stock buybacks and dividends last year, up from 30 percent in 2000 and just 1 percent in 1993, according to Rice University's James A. Baker III Institute for Public Policy.

The percentage they spend to find new deposits of fossil fuels has remained flat for years, in the mid-single digits.

In the first 3 months of this year, ExxonMobil Corp., the world's biggest publicly traded oil company, shelled out $8.8 billion on stock buybacks alone, compared with $5.5 billion on exploration and other capital projects.

ConocoPhillips has already told investors that its stock buybacks for April to June of this year will come to about $2.5 billion, 9 times what it spent on exploration.

This leads me to the conclusion of one oil expert who said, ``If you're not spending your money finding and developing new oil, then there's no new oil.''

Senator Reid has introduced a leadership bill that will rein in speculation. Over and over, the Congress has heard testimony that the question of supply and demand is not what is causing oil to be up at $130 a barrel, as I referred to earlier, statements by oil company executives that the price of a barrel of oil would be much less, given the normal vagaries of the market of supply and demand, even though there is a lot of demand out there in the world market. But as Senator Reid pointed out, in the underlying bill that is before the Senate, it is the speculators, unregulated after the law was changed to deregulate the markets, where there are no controls on how much oil they can buy on futures contracts or whether they have to use that oil, who continue to speculate and drive up the price. That is what this underlying bill is trying to address. They should not be able to circumvent speculation limits by trading, for example, on foreign exchanges if those oil contracts are for America.

I see my colleague from Pennsylvania is here, and I want him to have the time to which he is entitled.

What is confronting us is an effort to get us off focusing on the problem with this mindless statement that is out there, put out by the oil companies--look at who is sponsoring the advertisements on TV and in the newspapers; it is the only companies--and it is that statement: Drill here, drill now, pay less.

Now, if we are going to solve this problem, we have to do a bunch of things. But just drilling is not going to solve it because if you do just that, it is going to be years and years before the fruits of that effort come in. In fact, it has been said over and over, there are 68 million acres under lease that have not been drilled. There are plenty more acres out in the Gulf of Mexico, without getting close to Florida, without getting over the line into the military mission area, where the largest testing and training area of the U.S. military in the world is, off the coast of Florida in the Gulf of Mexico. There is plenty. So we ought to drill.

But at the same time, let's go after what is causing these prices to go through the roof. Speculation is a big part of it. If you want to get down to it, let's strengthen the U.S. dollar against the world's other currencies, by getting our fiscal house in order and starting to balance the Federal budget. That would help a lot too.

So it is an extremely complicated issue that a simple slogan is not going to solve. That is what this debate is trying to bring into focus. The American people can see through the simplified slogans of ``drill here, drill now.'' We need to get to a real solution.

Mr. President, I see my colleague from Pennsylvania is in the Chamber, and I wish to yield the floor so we can hear from him.

Mr. President, I wish to speak on the bill.

We are in an energy crisis. Don't let a 10 percent drop in oil prices fool you. We are in for a long battle with energy costs and America will need to step up if we want to keep driving our cars, flying our jets, and fueling our economy.

But this bill before us today isn't about lowering prices. it is about finding someone to blame so Americans don't blame the Democrats for failing to act in Congress.

Democrats need a scapegoat because under their watch America has become more addicted to oil than ever and gas prices have more than doubled. They don't want to solve your problems. They don't want to face the environmental lobbyists who don't care how much Americans pay for energy as long as it doesn't come from oil and coal. They want to find someone to blame. They have blamed oil companies, Republicans, the Middle East, and the military. Today it is energy speculators.

I say the time for scapegoats and politics is over. Americans don't want excuses or even someone to blame--Americans want solutions.

They want to be able to afford to drive their truck to work every day. They don't want to worry about turning on the air conditioner or how much it is going to cost to heat their homes this winter.

Back home in my State of Kentucky I have seen how much these prices are hurting families. I know many people who moved farther out into the suburbs to get a bigger yard and more for their real estate investment. Now those same people are stuck using $4.50 gasoline for their workday commute. Another community in eastern Kentucky is fighting to keep local bus service running to their senior center.

Many older Americans rely on bus and shuttle services to get out of their homes and are being cut off from their community services because of high prices. There are even places that have gone to a four-day school week to cut back on the cost of busing students.

These people want solutions for energy prices, not more politics.

The best way to address high prices is to get more fuel on the market. America has domestic energy resources that we only need to open up.

I have supported bills and amendments that would expand offshore drilling, start coal-to-liquid fuel production, encourage alternative sources of jet fuel, expand cellulosic biomass fuels, and many other issues. Facing these issues is what Congress should be working on.

For example, I think one part of our solution should be more offshore drilling. More domestic oil means less we have to buy from the Middle East, lower transportation costs, a more stable supply, and therefore lower prices. So why have the Democrats in Congress stopped us from acting on this one issue?

If it is because of the environment, I say we will make sure any new drilling is the cleanest and safest in the world. If it is because we are not sure what to do with the Federal revenue, I am ready to discuss it and develop a compromise. What is the problem with letting individual States choose whether or not to drill offshore? Even if it takes a decade to get to full production, we have to start somewhere.

Congress should at least have the debate and vote on the issue. But every time we try to address even one energy production issue, we are stopped in our tracks and blocked from offering amendments.

I am tired of watching this Democrat-led Congress do nothing. The energy crisis has gone on long enough. We can talk all day about who to blame and make up excuses, but that won't bring down energy prices.

Instead, we find ourselves discussing another bill that tries to blame someone rather than address the problems of domestic production and supply.

The other side is selling you a bill of goods when they say this legislation would impact energy prices. I hear they have a great deal for you on a bridge in Brooklyn too.

This bill will undermine legitimate hedging activities and threatens the liquidity of the commodities marketplace. Futures markets make it possible to buy and sell things at a specific price and date in the future. These markets allow participants to offset risk of price changes to those willing to take risks.

This legislation would also make us citizens subject to foreign rules and regulations related to energy trading. Understanding U.S. laws will not be enough, as energy traders will be required to consult with foreign boards of trade and will be subject to the regulations made by foreign governments.

This bill would also encourage traders to use foreign markets that do not

have as many regulations and take American jobs and business activity with them. But my principal concern with this bill is that it asks a Federal regulator, the CFTC, to wade into the marketplace and make a determination of what is and what is not legitimate trading activity.

Let me explain how this works. How many Americans stock up on an item when they see a good sale at the grocery store? I know I do. Or maybe some people wait to buy in bulk with buy one get one free coupons.

While we don't resell our groceries to someone else, this simple act of timing our purchases or varying how much and when we buy is similar to what traders do in the commodities markets.

Now imagine the Government used this same legislation to regulate grocery shopping that has been proposed for the energy markets. It would mean the Government would keep track of all your purchases and determine whether you were a legitimate or non legitimate grocery shopper. Do you want the government penalizing you if they feel you are overbuying a certain product?

Buy too many hot dogs in 1 month and the Government could impose limits on your purchases or keep you out of grocery stores altogether.

While this legislation isn't going to regulate grocery stores, this bill is the beginning of more government regulations that will limit your options. Maybe next Congress will regulate the precious metals market and determine that buying gold jewelry is a non legitimate purchase, penalizing Americans who want to buy jewelry. Or will the government say that collecting shotguns is a non legitimate purchase that increases the cost of shotguns, allowing it to limit sales to gun collectors?

Allowing the Government to over regulate any market is a recipe for disaster that puts Americans' freedom at risk.

In America, we are proud of our open markets and lack of government interference. We need the already established rules to stop illegal activities such as price manipulation and cornering markets, but we do not need new regulations that prohibit normal market activities, such as buying and selling commodities as an investment or as a price hedge.

I will support efforts to make the markets as transparent as possible. Information allows traders to most efficiently allocate resources and make sure prices actually reflect supply and demand. But I find it unreasonable to on the one hand say the market needs to be more transparent so it can work efficiently, and then on the other mandate new requirements and regulations that will clog the market and prevent it from working normally.

The bottom line is that this legislation will not bring down energy prices.

However, there is something Congress and America can do about prices--we can produce more of own energy. I strongly believe that America should use every resource it has to produce energy. Our dependence on Middle Eastern oil is worse than simply paying too much at the pump; it is a threat to national security. Every gallon of fuel we make from biomass, domestic oil and gas, and coal is a gallon of fuel we don't have to buy from the Middle East. It is just that simple.

We need a Manhattan Project for energy in America.

The greatest minds we have should be working on ways to produce alternative fuel, capture and use carbon emissions, produce clean electricity, and improve oil and gas production.

We should agree to take politics out of clean energy and ensure that government programs are technology and feedstock neutral. Too often I see tax incentives and programs that pick and choose what technology or process America should use.

To support all these alternative technologies, we need to change the way government spends money.

I think we should pick performance-based goals--like zero emission alternatives to oil--and let the marketplace decide the most efficient way to achieve it. If you can produce an environmentally sound transportation fuel, we should not care whether it comes from coal or switch grass.

If you can produce a megawatt of clean energy, we should not care if it comes from waste heat on a paper mill or from underground geothermal. By opening up our options, we will get more for the Government dollar and America will see results faster.

I believe the most important alternative fuel technology is coal-to- liquids. We are sitting on a huge coal reserve that we can turn into diesel for our trucks and aviation fuel for our planes. And our military can no longer rely on imported oil from the Middle East. The Air Force has tested this fuel, and it burns cooler and cleaner than conventional fuel. It has less pollution as well. And I know that with the right government incentives and carbon capture technology, we can make coal-to-liquid fuel with less greenhouse gases than oil-based fuels.

Kentucky coal can help bring down the price of oil, provide a secure fuel for our military, reduce pollution, and create jobs.

While new domestic production will go a long way to bring down prices, we should also think about conservation efforts. There are the simple things like turning off lights we don't use and more important measures like the increased fuel economy standards Congress passed. But there are other ways to reduce fuel use using technology. For example, we have a company in Kentucky that produces retrofit kits to reduce diesel fuel use while trucks are idling.

The answer to America's energy problems is more domestic production, clean technologies, and conservation. We have the resources and know- how to make clean energy, but for the last few decades our government regulations have held us back. We should not find more ways to over regulate our markets--we should vote now to open up domestic production and pursue promising alternative fuel technologies that will actually bring down the prices of oil and gas at the pump for the American people.

Mr. President, I ask unanimous consent to speak for 12 minutes.

Mr. President, I wish I could come to the floor and say there is a quick fix for gasoline prices at the pump. This is needed as much as anywhere in California where gas prices are high and at times the very highest. I wish I could say there was this quick fix, but I cannot. I wish I could say if we could drill all of the Outer Continental Shelf, if we could drill on all of the public land in America, the price of gasoline at the pump would drop immediately, but I cannot.

In all good conscience, I do not believe opening the Outer Continental Shelf to new drilling would lower the prices at the pump anytime in the near future. In the first place, it takes 2 years for MMS, Minerals and Management Service, to do the contracts. Secondly, all drilling rigs are now leased. There need to be new rigs. Thirdly, there is no additional refining capacity. Fourth, drilling in the Outer Continental Shelf and on public lands in America over the last 8 years has increased by 361 percent and, at the same time, the price of oil has doubled. So there is no relationship between drilling on the Outer Continental Shelf, drilling on public lands in America, and the price of oil. I deeply believe this.

Some say it is simply a problem of supply and demand, but physical supplies of oil and natural gas have remained relatively stable over the past year. In fact, if you remember, executives from oil companies testified before Congress recently and asserted that the price should be about $60 a barrel if it were just a matter of supply and demand.

Some point to instability in the Middle East and Africa's production regions. Others have pointed to the falling dollar. These are certainly factors. But I cannot explain the sharp uptick in prices we have seen at the pump over the last few months.

So what is really going on? What is new in this picture? Consumption in America has dropped 3 percent this year over the same period last year. So what is new? There is only one thing that is different, there is only one thing that is new, and it is a massive influx of speculation in the marketplace. This is the 800-pound gorilla.

Increasingly, experts now say rampant speculation in energy markets accounts for anywhere from 25 to 40 percent of the energy price increase. Some will say even more. So I think we have to take a look at why this is the case and what we can do about it.

In May, Congress took a major step forward in the effort to bring more oversight to energy futures markets when we enacted legislation to close the notorious Enron loophole. The Senator from Minnesota just referred to it. I had worked on this for 6 years. I came to the floor when Phil Gramm argued against it. I lost. I got just 48 votes. We came back again. We finally got it in the farm bill this time, and the notorious Enron loophole today is closed.

What was that? This loophole was created in 2000 when a measure was inserted in the dark of night into a must-pass appropriations bill at the behest of Enron and others to essentially eliminate them from the Commodity Futures Modernization Act. Two commodities were left out: energy and metals.

During the western energy crisis in 1999 and 2000, we saw the costs in my State soar from roughly $8 billion in 1999 to $27 billion in 2000 and then to $27.5 billion in 2001. The reason for this was, in the main, manipulation, fraud, and reckless speculation of the worst sort, all because you could trade on electronic platforms with no transparency and there was no antifraud, antimanipulation oversight by the Commodity Futures Trading Commission.

When all was said and done, these energy traders left California taxpayers with an increased bill of about $40 billion. To date, 32 companies have pled guilty to market manipulation and settled $6 billion in claims.

In recent years, we also saw the $6 billion collapse of the Amaranth hedge fund because of unregulated speculation in natural gas futures on electronic exchanges. And the list goes on.

This has typified the energy marketplace. So it became clear that a legislative fix was needed. We finally got that done, as I said.

The bill, which is now law, ensures that all major trades of energy futures that could drive up prices or have what is called a price discovery impact are placed under the oversight of the Commodity Futures Trading Commission. The new law imposes limits on rampant speculation, prevents fraud and manipulation, requires traders for the first time to keep records, and provides an audit trail to the CFTC. This was a significant victory. It is signed into law.

But as we continue to learn more about what is really going on with energy futures markets, it is clear more work remains to be done. We are learning about additional loopholes that must be closed, and the legislation before us is critical to ensure that we can level the playing field in energy markets, that there is transparency there.

First, the problem of large institutional investors, such as pension funds; this is what is new in this market. From 2003 to 2008, institutional investments in commodity index funds rose from $13 billion to $317 billion. That is in 5 years, from $13 billion to $317 billion.

One might say, what does that have to do with it? Daniel Yergin, to a great extent, said what it has to do with it when he said:

Oil has become the ``new gold''--a financial asset in which

investors seek refuge as inflation rises and the dollar

weakens.

``Investors seek refuge.'' So the implications are potentially devastating, and here is why. Unlike gold, energy and agricultural commodities meet essential needs in everyday lives of average people. They are limited. They are not potbellies. Energy is limited in the amount we have.

These institutional investors, the big pension funds, such as my own, the California Public Employee Retirement Fund, has invested over $1 billion in these markets. These institutional investors are trading long on energy futures prices. In other words, they are betting that the prices in these future markets continue to rise. They are not hedging against the risk of changing oil prices, as airlines and utilities frequently do. They never take delivery of a product. They participate in the oil markets only on paper. Yet these investors, the big ones, are currently exempt from CFTC regulation when they execute these trades through brokers or dealers. These trades are called swaps.

Currently, the CFTC limits speculation positions to a total of 20 million barrels of oil and 3 million barrels of oil in the last 3 days of a contract. However, these same investors avoid these limits by executing their trades as swaps. This is a mistake. Institutional investors have become speculators.

Last month, the CFTC announced that it will review trading practices for these investors, and this is a positive step. But legislation is still needed to level the playing field and close the loophole. The bill before us will limit the size and influence of institutional investor positions in energy markets.

To further increase transparency, this bill also requires the CFTC to begin distinguishing between the institutional investor index trader and the swaps dealers who broker their trades. This legislation closes the swaps loophole, bringing transparency and speculative position limits to contracts executed through swaps dealers, in that way preventing a price discovery function as much as possible to keep prices from continuing to escalate.

Specifically, the bill gives the CFTC the authority to begin collecting data on large over-the-counter traders so that it can determine whether price manipulation or excessive speculation is taking place. This would ensure that the CFTC has a clear picture of all

trading in over-the-counter commodity markets.

The London loophole, what is the London loophole? I think we also must prevent U.S. crude oil contracts from being traded on international exchanges without robust oversight.

I ask unanimous consent for 2 more minutes, please.

A recent CFTC report found the traders were using the London exchange to trade U.S. crude oil futures to avoid U.S. regulations--in other words, go around it. Trades exceeded U.S. speculation limits every single week since 2006.

Last month, CFTC announced that it would limit this offshore market speculation and require recordkeeping and an audit trail for these traders. That is a start. But legislation is still needed to codify the regulation. This legislation will require foreign exchanges with customers in the United States to adopt the same speculation trading limits and reporting requirements that apply to U.S. trades, ending the regulatory race to the bottom. This language is based on legislation that Senator Levin and I introduced previously.

I believe very strongly that we must ensure that American energy commodities are protected from manipulation and excessive speculation, regardless of where the commodities are traded.

Bottom line, this bill brings transparency, it brings accountability, it brings recordkeeping, it brings oversight to the energy markets. It would impose sound, proven economic principles to markets that are currently broken and where speculation has increased so dramatically that it is pushing up the price. It would close regulatory and legislative loopholes that prevent the CFTC from enforcing the Commodity Exchange Act in energy commodity markets.

I hope my colleagues will support the bill. I suspect it may not pass. I hope it does because there is no question in my mind that the 800-pound gorilla in the price of gasoline at the pump is excessive speculation on commodities futures markets dealing with energy.

Mr. President, I yield the floor.

Madam President, no issue at the present time is hitting Americans any harder than the high price of gasoline at the pump. American families are hurting.

For a variety of reasons, we are paying more for a gallon of gas and more to heat and cool our homes than ever before. There are a number of factors contributing to rising energy costs, such as a weak dollar and an incredible surge in demand from the developing world.

It is not entirely clear what the magnitude of the role is that speculators might be playing in this situation. For certain, speculation is not the major contributing factor for $4-a-gallon gas. Even so, we have a responsibility to ensure that speculators aren't doing something illegal or profiting at taxpayers' expense.

That is why I have joined 43 of my colleagues in introducing the Gas Price Reduction Act, which will put more cops on the beat at the CFTC to ensure there is no foul play occurring between those participating in the oil futures market and those investing in the oil market itself. This regulatory body needs more help so they can be more effective at their job and give the American people the kind of assurance and transparency they should have about the work of this trading environment.

This act also commissions a study to better examine and understand the influence these speculators have on the cost of oil.

We have heard much lately concerning speculators and what they may or may not be doing to influence the price of gas.

On July 21, Treasury Secretary Henry Paulson, Fed Chairman Ben Bernanke, SEC Chairman Chris Cox, and the Chairman of the CFTC stated in a signed letter:

To date, the President's Working Group has not found valid

evidence to suggest that high crude prices over the long term

are a direct result of the speculation or systemic

manipulation by traders.

That is a pretty strong statement coming from the people we trust in overseeing major parts of our economy--the Secretary of the Treasury, Chairman of the Fed, Chairman of the Securities and Exchange Commission, and Chairman of the Commodities Futures Trading Commission.

While I believe speculators are an area of concern, the bigger problem

stems from simple economics and the law of supply and demand. Our efforts should be focused on getting right to the heart of the matter by working to increase our Nation's energy supplies and reducing our demand. It is not enough to do one or just the other; we must do both. According to the International Energy Agency, global demand is 86 million barrels of oil per day and global supply is about 85.5 million barrels per day.

While Congress's record in increasing energy supplies has been scant as of late, we have made progress in recent years.

In 2006, I helped negotiate, with Senator Nelson, the opening of 8.3 million acres in the eastern Gulf of Mexico. This area is estimated to contain 5.8 trillion cubic feet of natural gas and 1.25 billion barrels of oil, and it is currently open and available for exploration. This area was denied until 2006. It is now open and available for exploration.

The Gas Price Reduction Act honors the compromise that was reached in 2006, protecting Florida's gulf coast, while empowering other States to explore for oil and gas if it is supported by the Governors and State legislature.

I believe increasing our Nation's domestic energy supply is perhaps the most critical component to lowering gas prices, and to overlook it would be grossly unwise. In addition to increasing our Nation's domestic supplies, I also believe we should have access to affordable alternatives.

Currently, Americans are paying a premium on Brazilian ethanol because we have a 50-cent-a-gallon tariff on Brazilian ethanol. If we mean what we say about offering cleaner, renewable alternatives to gasoline, I propose we eliminate this tariff. I plan to introduce an amendment that does just that.

The amendment I am proposing would repeal the 54-cent-a-gallon tariff on foreign ethanol that was extended for 2 years--December 31, 2010-- under the recently passed 2008 farm bill.

The 2008 farm bill also extended the blenders credit for ethanol producers for 45 cents a gallon, which creates a trade barrier of 9 cents per gallon. Ethanol producers can also receive a small blenders tax credit of 10 cents a gallon if they produce less than 60 million gallons of ethanol per year.

My amendment helps to stop these protectionist policies and offers alternatives to hard-working Americans who are paying too much for gas.

On the other side of the equation, more must be done to reduce demand and promote conservation.

This Congress took a significant step by mandating CAFE energy standards in the Energy bill we passed in 2007, which was the largest increase in fuel economy standards in nearly 30 years. According to the Department of Transportation, these new fuel standards will save over 55 billion gallons of fuel and save American motorists more than $100 billion over time.

But that is not enough. These standards will go a long way in helping to increase fuel economy, but more must be done to foster the market for efficient energy alternatives and other breakthrough technologies.

One of the more promising technologies in this area is advanced batteries for plug-in hybrids. The Gas Price Reduction Act contains $500 million in research and development for advancements in plug-in technology and $250 million in direct loans for manufacturers who retool factories to produce plug-in batteries. It will help to make batteries in many of the current hybrids more affordable and longer lasting.

In the long term, I envision a market where renewable fuels are viable and available and drivers will have affordable alternatives to fossil fuels such as gasoline. My State of Florida has been a leader in helping to make this vision a reality. The State recently created the Florida Energy Systems Consortium, which brings together researchers and resources from State universities to develop renewable energies.

The University of Central Florida--a member of the consortium-- recently announced it is receiving $8.75 million in grants to focus on how technology can make new and existing construction projects more energy efficient. In addition, with the help of $20 million from the State of Florida, the University of Florida is currently building the State's first biorefinery, which could produce clean cellulosic ethanol to power our cars.

As we continue to discuss the ongoing energy crisis, I urge my colleagues to consider the consequences of failing to offer viable solutions to the American people as they grow increasingly worried over dwindling energy supplies in America. Now is not the time for the politics of energy. It is not the time for us to look for one- upsmanship in the political game. It is time for us to act on a problem that is hurting American families throughout the State of Florida and throughout the United States.

We need to address this problem. We need to put us on a track of finding more and using less--a track that, where possible, is environmentally safe, where we can produce more domestic energy, while at the same time turning loose the energies of this Nation, the technology, to look for future opportunities for different blends of fuels, different types of automobiles, and other ways we can improve the efficiency of our fleet so that we can increase the opportunity for the American people to live in a world that is cleaner and in which they can afford to drive their kids to school and go to work. When we have alternative fuels available, they may not have to be totally dependent upon fossil fuels or imported oil.

I believe this is imperative, and it is an issue of national security proportions. We cannot continue to transfer our wealth overseas. We are transferring, year after year, $750 billion to countries that are not particularly our friends. Some of them, in fact, would be considered hostile to us. Nonetheless, we purchase oil from them because of our necessity; our need is too great.

The fact is, we know there is plenty of political opportunity on both sides of the aisle on this issue. The American people are focused on this, and the American people are saying: Please do something about this. Hear our cry for help.

I say that this is the time for bipartisan cooperation, for us to come together, Republicans and Democrats, put partisan interests aside, put American interests first, and look for ways to cooperate, work together, and do what is doable, do what can be done.

On five occasions, I have voted to open ANWR to oil exploration. Whether that is acceptable or not, let's come together and decide. I would be prepared to support that once again. If that is a deal- breaker, let's not go there. Let's look for those common-ground areas where we can agree and move forward with a comprehensive energy plan.

Let's not say we have done our job by simply looking at speculation as a scapegoat. We can deal with that and add transparency to it, but that is not an answer in and of itself.

We have to have a comprehensive approach that tackles the issue of supply, that tackles the issue of demand, where we have more oil available, where the supply is increased from domestic production, American production on America's lands and shores, and where we can also reduce our consumption, utilize less. That will make America a safer place. Then we can go home for this August break and face our citizens and let them know we did a job they sent us here to do; not to play politics but to get the job done for the American people.

I yield the floor and suggest the absence of a quorum.