Imposing A Minimum Effective Tax Rate For High-Income Taxpayers--Motion To Proceed
Mr. President, I ask unanimous consent that the order for the quorum call be rescinded. Mr. President, I want to concur with Senator Schumer about his comments on the passage of Senator Menendez's legislation, S. 2204. This legislation is…
Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.
Mr. President, I want to concur with Senator Schumer about his comments on the passage of Senator Menendez's legislation, S. 2204. This legislation is very important for America's energy needs, and I urge my colleagues to allow us to take up this legislation and let's act on it and let's move it to the other body.
There is one commodity just about everyone knows the price of: a gallon of gasoline. People will have a rough idea what a gallon of milk or a dozens eggs or a loaf of bread costs, but they will know to the penny what a gallon of gasoline costs. The price is rising, and people are understandably upset. They are upset because it costs more to fill up at the pump. But they are also upset because crude oil and gasoline price increases affect the price of every other commodity--including milk, eggs, and bread--that has to be transported from where it is produced to where it is consumed. Petroleum is a feedstock used in the production, not just transportation, of so many critical products, including fertilizer.
According to the U.S. Energy Information Administration, EIA, the retail price of a gallon of regular unleaded gasoline was 27 cents higher for the week ending March 5, 2012 than it was a year ago. EIA reports that vehicle fueling costs for the average U.S. household will be about $238 higher in 2012 than 2011.
According to EIA, the price of gasoline has increased dramatically every year--in 2011, higher than 2010, and 2012 is projected to be higher than 2011. This price increase is occurring despite the fact that the United States has stepped up its crude oil production considerably over the past 4 years by 1.3 million barrels per day. Production is at an 8-year high. The United States is the third largest producer of oil, behind the Saudis and Russia, and domestic oil consumption is at a 15-year low. Americans are driving 35 billion fewer miles today than they did in 2010.
If we were producing more and consuming less, then why are prices going up? Supply and demand would tell us that they should be going down. The answer is straightforward: Crude oil and all of the products derived from it, including gasoline, are fungible commodities traded on world markets. Increasing global demand for these commodities is putting a relentless upward pressure on prices.
Growing demand for oil in developing countries has reshaped the global market. Developing nations now consume 47 percent of the world's oil. In 1970, it was 25 percent. The number of cars in the world exceeded 1 billion for the first time in 2010, with one-half of the global growth occurring in China. Beijing adds 1,500 new cars every day.
Another reason for price increases is market uncertainty over crude oil supplies. Much of the world's crude oil is produced in the Middle East and North Africa, regions plagued with turmoil. Right now, the United States accounts for about 9 to 11 percent of the world's crude oil production. This is despite the fact that we have less than 2 percent of the world's total proven oil reserves. We have 2 percent of the world's reserves and we are producing 9 to 11 percent. We are, in fact, drilling here and drilling now, with more oil rigs in operation than the rest of the world combined, according to the Baker-Hughes rig count.
According to economist Steve Baker at the Center for Economic and Policy Research, even if U.S. production could be increased by one- third overnight, that would increase world supply by 3 percent which would lower the price of oil by 7 to 8 percent. As Baker notes:
This is not trivial, but it is not the difference between
$2 a gallon gas and $4 a gallon gas.
T. Boone Pickens said it best:
I've been an oil man all my life, but this is one emergency
we can't drill our way out of.
A recent Associated Press fact check analysis found that there is no correlation between domestic oil production and the price at the pump. I am for reasonable oil production. We need as much as we can get in a reasonable manner. As reported in the Washington Post of March 28:
A statistical analysis of 36 years of monthly, inflation-
adjusted gasoline prices and U.S. domestic oil production by
The Associated Press shows no statistical correlation between
how much oil comes out of U.S. wells and the price at the
pump . . . More oil production in the United States does not
mean consistently lower prices at the pump . . . U.S. oil
production is back to the same level it was on March 2003,
when gas cost $2.10 a gallon when adjusted for inflation. But
that's not what prices are now. That's because oil is a
global commodity and U.S. production has only a tiny
influence on supply . . . Factors far beyond the control of a
nation or a president dictate the price of gasoline.
The United States is incapable of having a significant impact on world crude oil and gasoline prices from the supply side of the equation, but domestic oil production does play an important role in bolstering our energy and economic security. We should produce where we can, in a safe and environmentally sensitive manner.
While increasing domestic production and decreasing domestic demand may not be lowering world prices, it does have a significant effect on imports. Our dependence on foreign oil is at its lowest level in 16 years. As a share of total consumption, oil imports declined from nearly 60 percent in 2005 to 45 percent last year, the lowest level since 1995. And nearly one-half of our imports come from the Western Hemisphere nations such as Canada and Mexico, while the Persian Gulf countries account for only 18 percent of our net imports.
The biggest impact the United States could have on oil and gasoline prices is not on the supply side, it is on the demand side. We account for close to 25 percent of the world's petroleum consumption, even though we account for less than 5 percent of the world's population. The best way to continue reducing our demand for crude oil and gasoline would be to: Promote fuel efficiency with higher CAFE standards. We have made progress. We are doing better. We know we can do better than our current standards; Replace conventional fleet fuels with alternative fuels such as propane, natural gas, and biofuels. That will help us consume less oil; Electrify transportation, focusing on hybrid and plug-in electric technologies. Here you get jobs in the United States helping our economy as well as helping our energy security; Boosting transit ridership by increasing funding for the Federal Transit Administration. People don't like to be stuck in traffic jams. Let's have a modern transit system that can help move our people;
Eliminating the tax expenditures that benefit Big Oil could generate over $20 billion over the next 10 years. This is the bill we are talking about, S. 2204, the Menendez bill. It takes the revenues we are giving to the oil industry and uses them to help pay for these green energy measures. This makes a lot of sense. It will hardly be noticed by the big five oil companies--BP, Chevron, ConocoPhillips, ExxonMobil, or Shell. They made record profits in 2011, $137 billion. I talked about $20 billion over 10 years. They made $137 billion in 1 year. That was up 75 percent from 2010. From 2001 through the last year, Big Oil has made more than $1 trillion in profits. Every penny increase in the pump increases their profit by another $200 million. So as we are suffering with prices going up, the big oil companies are making more and we are still giving them the subsidies, where we could be using those subsidies to help America develop alternative energy sources.
Big Oil has been getting big subsidies for 100 years. It is time to use that money for developing alternatives to oil. That is the best and most sustainable way to address the high cost of gasoline at the pump. S. 2204 will help us bring down the cost at the pump. It is good for our economy, good for our environment, and good for our national security.
Mr. President, I yield the floor.
Mr. President, I suggest the absence of a quorum.