Floor Statements

I thank the gentleman from New York for the question. There are several projects in the Office of Science and in the Department of Energy that are in various stages of planning, design, and construction. Like the National Synchrotron Light Source II project, these other projects may also be impacted if a long-term continuing resolution is enacted.

I very much appreciate my colleague's concern about the project at Brookhaven National Laboratory and will work with him to attempt to address these issues if a long-term continuing resolution becomes a reality.

Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. President, I ask unanimous consent that following my presentation, if there is a Republican speaker on the floor, they be recognized next, as has been the course, and that Senator Brown of Ohio be recognized as the next Democratic speaker.

Mr. President, yesterday, there was a hearing in the Congress, on the House side, dealing with someone I have spoken about on the floor at some length, and I wish to talk about that hearing and what it means. Then, following that, I wish to speak about the bill I introduced yesterday dealing with the price of gas and oil and oil speculation.

First, let me talk about the hearing yesterday and what we learned about the Defense Department and the State Department and others dealing with this man. This man's name is Efraim Diveroli. He is 22 years old and the president and chief executive officer of a firm that was awarded $300 million in contracts by our Federal Government. So this is a guy who took over a shell corporation that his dad had, and he was awarded $300 million in Defense Department contracts. He was the president of the company at age 22. He had a vice president, though. It is not as if the company was understaffed. This is a photograph of his 25-year-old vice president, who is a massage therapist--David Packouz. He was called a masseur, or massage therapist. So these two guys ran a company in Florida that had an unmarked office door. At one point, Mr. Diveroli, the CEO, says he was the only employee and at another point it was he and his vice president, the massage therapist.

They got $300 million from the Federal Government, from the Defense Department, and they were to provide weapons and ammunition to the Afghan fighters because our Defense Department wanted to help the Afghan fighters take on the Taliban in Afghanistan. Well, here is what these folks provided to the fighters in Afghanistan--40-year-old Chinese cartridges which came in boxes that were all taped and falling apart--this is an example. They were made in China in the mid-1960s. It is pretty unbelievable. The fighters in Afghanistan said this was junk coming from this company that got $300 million in contracts from the Defense Department.

Now, I had the three-star general come to my office. I am on the Appropriations Subcommittee on Defense, and we shovel a lot of money out the door for a lot of these Defense needs, some legitimate, some not, and I had a lengthy meeting with the three-star general who was in charge of this. I said: How on Earth could you have given a contract to a company run by a 22-year-old, who had very little experience, running a shell company his dad owned, a company where his vice president was a massage therapist? This is a joke, except it is not a joke when the American taxpayers are fleeced. He gave me a hundred excuses, this three-star general did.

But all he would have had to do is go to MySpace. Pull this man up on MySpace, the president of this company, and here is what he says on MySpace.

I like to go clubbing, go to a movie. I have taken a really

liking towards fine Scotch whiskey. I have had problems in

high school, so I was forced to work most of my teen years.

He probably grew up a little fast.

Got a decent apartment. Am content for the moment.

Go to MySpace. Is this the CEO of a company you want to give $300 million in contracts to?

This is an outrage. So a hearing was held yesterday, and here is what the hearing disclosed. There was a watch list at the State Department. This company--these guys--had small contracts with the State Department, and the State Department had compiled a watch list of 80,000 individuals and companies suspected of illegal arms transgressions and other things, including this company. Well, the fact is, the Defense Department never checked the State Department. Contracts have been pulled from this little company, but the Defense Department never checked, so they give them a $300 million contract, or a series of contracts, worth $300 million.

The reason they say it didn't show up is because they don't check on contractors that maybe are bad contractors if the contract is less than $5 million. That is, apparently, an asterisk.

I mean, I don't understand this at all. Government officials failed to review several of these contracts from this little company that had been canceled or delayed. They never raised red flags because they fell under the $5 million contract value that was the warning threshold. The contracting officer with the Army Sustainment Command had overruled a contracting team that raised concerns about this company. They said there was substantial doubt, but nonetheless the company got the contracts. Listen, this is shameful. We ought to do--and, yes, we in the Senate as well--ought to do a detailed investigation. We should bring people here under subpoena, if necessary, to find out who made these judgments and why they are still working for the Federal Government. Why aren't they long ago gone from the Federal payroll? This is not the end of it or all of it. I have spoken about dozens and dozens of contracts that are similar to this.

At any rate, yesterday, this hearing occurred in the House. I commend Congressman Waxman, who has been doing some of the most significant work in the Congress in investigating this. We need to investigate this on the defense spending side as well, those who appropriate this funding. This is shameful, and I think everybody involved in it ought to be embarrassed. We are shoveling money out the door to support the war in Iraq and Afghanistan.

I have shown pictures on the floor of the Senate of one-hundred dollar bills wrapped in Saran Wrap the size of bricks, and the guy distributing that cash in Iraq said he told contractors our motto was: We pay in cash, you bring a bag. It was like the Wild West, he said.

You think money isn't wasted? You think there isn't stolen money over there, when you are distributing money out of the back of a pickup truck and we are airlifting one-hundred dollar bills on C-130s, flight after flight, full of cash?

This is unbelievable what is happening with this contracting abuse, and this is one, small example.

I think all those involved in it ought to be brought before congressional committees and that we demand answers from them. Who is responsible, who is accountable on behalf of the American taxpayer? If they can't answer, they ought not be on the public payroll.

That takes care of my need for therapy to talk about this issue. It is almost unbelievable that the American taxpayer, en masse, is not gathering outside this Capitol saying, when we hear this kind of thing, we are outraged. So let me be outraged on behalf of them and say this cannot be allowed to continue.

Speculating on Oil and Gas

Mr. President, I came to the floor to talk about the issue of the price of gasoline. I had a guy in my office the other day that was the president of one of the larger corporations and this company was engaged in trading and all these issues. He was a fast talker. I mean, it was unbelievable to me. When he finished talking, I was out of breath. He was one of these guys who talked and talked and talked. His point was: Look, everything is working fine. The price of oil, the price of gas, that is what the market says it is. I said: Well, it appears to me there are substantial amounts of speculation. Over a period of time in this world we have seen some dramatic growth in speculation in certain areas. When it happens, the markets break and you have to come back and herd the speculators out and have markets available for the legitimate transactions.

This person said: Speculation, are you kidding me? These are normal transactions on the commodities market, the futures market for oil, as an example. There is supply, demand, and people are involved. I said: Well, tell me this, if you would: What has happened in the last 15 months? Tell me what has happened with respect to supply and demand that justifies doubling the price of oil in the futures market? Can you tell me? Then he spoke for 45 minutes, almost uninterrupted, and had not answered the question.

I said: That makes my point. At the end of this meeting, you can't answer the question because nothing has happened in the last 15 months that demonstrably alters the supply-and-demand relationship or that justifies what has happened with the price of oil. Nothing justifies doubling the price of oil in the last 15 months. The only conclusion you can come to--and many have and I certainly have--is that we have a carnival of speculation in the futures market by a lot of big-time speculators interested in making money. They do not want to own oil or take possession of oil. They do not want to use oil. They wouldn't be able to recognize oil at first blush. They wouldn't even be able to lift a 30-gallon drum of oil. They just want to make money speculating on oil.

So if we have a bunch of speculators in this carnival of greed who rush into these markets and drive up prices well beyond what the fundamentals would justify, it breaks the market. If the market is broken, we have a responsibility to set it right. When the commodities market for oil was established in 1936 by legislation, Franklin Delano Roosevelt said we have to be careful to have the tools to stop the speculators from taking over these markets. There is a specific piece in the 1936 act that talks about excessive speculation.

There is excessive speculation in the marketplace now, and it is running up the price of oil and gas. It is hurting every single American family, it is damaging this economy, it is dramatically injuring industries--such as airlines, truckers, farming, and others. The question is, What should we do about it?

Should we sit here somewhere in a crevasse between daydreaming and thumbsucking and decide to do nothing? Or should we finally decide we have to take some action when a market is broken?

Let me go through a couple charts. I have used them before so it is repetitious, but it seems to me it is useful repetition in describing a very serious problem.

Here is what has happened to the price of oil. There is no event in here that suggests this should be the price of oil. You double the price. There is nothing in here that justifies doubling the price. The fact is, people are driving less in this period. There were 4.5 or 5 billion fewer miles driven in this country in a 6-month period; 4.5 to 5 billion fewer miles driven, less gasoline used. That means lower demand. At the same time, in the first 4 or 5 months of this year, we saw crude inventory stocks rise, not fall. If inventory is going up and demand is going down, what is happening to the price of oil and gasoline? It is going up? That doesn't make any sense. That is not logical. That is a market that is broken.

Let me analyze what all that means. This is what a commodity exchange looks like. This is the New York Mercantile Exchange, called NYMEX. There are a bunch of folks who trade. They come to work and do a legitimate job. They are trained to do this job, and they are trading on behalf of others. But what has changed is, instead of it being just a legitimate market for

hedging between those who produce and those who consume, wanting to hedge a physical commodity, we have now people in this market who have no relationship to this commodity.

Will Rogers described it a decade ago. He described people who buy things they will never get from people who never had it, making money on both sides. That is speculation.

Here is what some folks have said about these issues. Let me describe, first, before I describe what some other folks have said about it, the 1935 act. It says, this is the commodities act that establishes this--

This bill authorizes the Commission . . . to fix

limitations upon purely speculative trades and commitments.

Hedging transactions are expressly exempted.

The point is the underlying bill authorizes the regulator, the Commodity Futures Trading Commission, to fix limitations on purely speculative trades. That is exactly what the Commission is supposed to do. But the Commission has largely taken a vacation from reality. It seems to have no interest in regulating. I am talking especially about the chairman and those who control the Commission.

Here is Fadel Gheit, 30 years as the top energy analyst for Oppenheimer & Co. He testified before our committee. I have spoken to him a couple times by phone. Here is what he says:

There is absolutely no shortage of oil. I'm convinced that

oil prices should not be a dime above $55 a barrel. I call it

the world's largest gambling hall. . . . It's open 24/7. . .

. Unfortunately, it's totally unregulated. . . . This is like

a highway with no cops on the beat and no speed limit and

everybody's going 120 miles an hour.

I encourage my colleagues, if you want to understand what is happening in this market, call Mr. Gheit. He has been involved as an energy trader with the large companies. He will give you an earful. I have had the opportunity to hear him not only in committee, but I called him as well and had a conversation about speculation.

The president of Marathon Oil Company: ``$100 oil isn't justified by the physical demand of the market.''

I am going to have a hearing this afternoon with the head of the Energy Information Administration, EIA. I fund this agency in my appropriations subcommittee--Mr. Caruso heads it. I wish to show what the EIA has projected on all these occasions for the price of oil and gasoline.

In May of last year, they projected this yellow line. That is where the price would go. In July of last year, they projected this yellow line. In September, they projected this. Do you see what the momentum is? In terms of what they are projecting, in every case they are demonstrably wrong--not just wrong by a little, wrong by a lot.

We spend over $100 million for this agency to get the best and brightest, to determine as best they can what is going to happen to the price of oil. They have always believed the price is essentially going to remain about the same or go down. The price, however, has gone way up. Why? Because unbridled speculation exists in this market with speculators driving up these prices.

Despite that, the EIA testifies and has testified repeatedly: They see some speculation but not very much.

If they believe this represents the fundamentals in the marketplace, how on Earth could the best estimators in an agency we spend $100 million a year on--how could they be this wrong? There is something fundamentally wrong with that piece.

Finally, 2 days ago, the House released a report that was done by a House subcommittee that talked about the explosion of speculation on the futures market. It went from 37 percent speculative trades in 2000 to 71 percent of the trades now that are ``speculation.''

I describe all that to say I have introduced legislation. I am talking to Republicans and Democrats in the Senate, hopeful of garnering cosponsors to move this legislation that addresses this issue by saying to the Commodity Futures Trading Commission: You have the authority to do the following, and you should do the following, just going back and reading the underlying law that created you. No. 1, identify those trades that represent legitimate hedging trades between a producer and a consumer with a physical product in which they wish to hedge risk. That is precisely what the market was established for. Distinguish that kind of trading from all other trading which represents nonlegitimate hedging, or speculation.

Once you have determined what body of trading represents speculative trading--and it has been a carnival of greed, in my judgment, rushing and pushing up the amount of speculative trading, as I have shown--once you have done that, I suggest we impose a 25-percent margin on the speculative trading that is going on, in order to try to wring some of that excess speculation out of this market.

No. 2, I suggest the regulator have the opportunity to use their authority to either revoke or modify all their previous actions, including their ``no action'' letters, in order to shine the light on and see and regulate all the transactions that have to do with American products or trading in this country.

Strangely enough, the Commodity Futures Trading Commission itself said, for example, the Intercontinental Exchange, largely owned by American interests, that trades in London--that you can come here, you can set up an office in Atlanta, you can trade on computers in Atlanta, and we will decide of our own volition that we will not regulate you and you will be outside the purview of our sight. That is an unbelievably bad decision, and it needs to be revoked--not just that decision but so many others similar to it.

It would be nice if we would have a regulatory body that says our job is to regulate. We pay for regulatory bodies for the purpose of wearing the striped shirts; they are the referees, they call the fouls.

I think, having taught some economics in college, that the best allocator of goods and services in this country that I know of is the marketplace. Markets are wonderful. I am a big supporter of markets. But when markets are broken, the Government has a responsibility to act. We have a regulator that has been oblivious to open markets, in fact has accelerated and actually helped break them. I believe our responsibility at this point is to set this regulator straight and decide here are the conditions by which we own up to the responsibilities of the original act--allowing for legitimate trading and hedging but trying to shut down the speculation that has driven up the price of gasoline and that injures every family and every business in this country and damages the American economy.

My hope is, in the coming couple days and weeks, that Congress, and the Senate especially, will be able to consider the bill I have authored. There are other good ideas as well. I welcome all of them. But I think this is not a circumstance in which one of the options for the Congress is to do nothing. The American people expect more and deserve more and I think should get more from this Congress.

I have spoken to Senator Reid and many others, who are also very interested in moving on these issues. I hope it will be bipartisan. I am very interested in having Republicans and Democrats work on perfecting these issues so we can take action very soon.

I yield the floor.

Mr. President, the Senate is not in a quorum call, I expect.

Mr. President, I ask unanimous consent to speak for 10 minutes and that 10 minutes be applied to the 30 hours postcloture.

Mr. President, I yield the floor.

Mr. President, I rise to introduce a piece of legislation on behalf of myself, Senator Nelson of Florida, and Senator Carper dealing with the subject of energy speculation. I want to run through a couple charts, and I want to describe the reason for the introduction of this legislation.

This chart shows the price of oil and what has happened to the price of oil. The price of oil has nearly doubled in a year. There is no justification for it, no fundamentals of supply and demand that explain what has happened to the price of oil.

These commodity contracts, by and large, are traded in this country on something called the commodity exchange--NYMEX, it is called. This is what it looks like. They trade back and forth, and there are legitimate reasons to trade on the exchanges. Those reasons to trade on the exchanges are for legitimate hedging for actual physical petroleum products for future delivery. The problem is, with respect to the oil markets, the legitimate hedging has become a smaller part of what is traded. There is now this unbelievable speculation going on in the commodity markets. That speculation has perverted the market, broken the market, causing the price of oil and gasoline to be well above that which is justifiable.

We have an organization in the Government called the Energy Information Administration, the EIA. They are the ones who know what there is to know about energy issues. As shown on this chart, here is what they have told us. Back in May of 2007--last year--here is where they said the price of oil would be. Back in July, they said it would be on this line, as shown on this chart; back in September, on this line. I hope they were not buying any commodities on the basis of their advice--they would be flat broke in a month. Here is what happened to the price. It went straight up. All the while, the EIA did not seem to have the foggiest notion of where the price was going to go. Why? Because the fundamentals do not justify what is happening.

Now I have the EIA coming down to testify before my subcommittee this week. I want to ask them these questions. They insist there is very little speculation in this marketplace. But most experts insist this has become an unbelievable spectacle of speculation that injures America's drivers and consumers, injures our industry, and causes great damage to our economy.

A House study, just in the last few days, from the House Subcommittee on Oversight and Investigations, said here is what has happened to the commodities market with respect to oil. As to the oil futures market: 37 percent used to be speculators in that market. Now it has gone to 71 percent. The speculators have taken over that market.

When the Commodity Exchange Act was passed by the Congress in the 1930s, here is what the congressional report said: This bill authorizes the Commission--the Commodity Futures Trading Commission; that is supposed to be the regulating body--to fix limitations on purely speculative trades and commitments.

Hedging is exempted. But for purely speculative positions, we provided the authority to the Commodity Futures Trading Commission to deal with that because we did not want this market to be taken over by speculators.

I have used these charts many times.

This one has to do with Fadel Gheit, the top energy analyst for Oppenheimer & Co. Here is what he says:

There is absolutely no shortage of oil. I'm convinced that

oil prices shouldn't be a dime above $55 a barrel.

I call it the world's largest gambling hall. . . . It's

open 24/7. . . . Unfortunately, it's totally unregulated. . .

. This is like a highway with no cops on the beat and no

speed limit and everybody's going 120 miles an hour.

I will not show all the charts I have shown in the past, but the CEO of Marathon Oil says:

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

market.

It was recently reported Americans drove 4.5 to 5 billion fewer miles in the last 6 months than in the previous 6 months. So we are driving 4 or 5 billion fewer miles, using less energy. Four of the first 5 months of this year, crude oil inventories were up--not down, up. So if the supply of the product is going up and the use of the product is going down, the marketplace would have you believe--or at least you would expect--the price would come down. Instead, the price has gone up, which demonstrates this is not about market fundamentals. It is about an unbelievable orgy of speculation in the marketplace that is not justified.

Now the question is, Will Congress do something about it or will it just apply some lip gloss? Is this just something where we act as if we are doing something or are we going to drive the speculators out of this market? I am introducing legislation that is tough and real and will address this issue.

The regulating body here is the Commodity Futures Trading Commission. It has acted like most regulating bodies in recent years. Most of them are run by people who came to the Government not liking Government and not wanting to regulate. It all goes back to Mr. Pitt, back in 2001, in which he said: The Securities and Exchange Commission is going to be a business-friendly place. Well, we have seen a lot of these agencies that are business friendly. They just get out of the way and pretend they are in a deep Rip van Winkle sleep, and they are not going to see anything and they are not going to know anything and they are not going to care much about anything.

This agency is not much different--the Commodity Futures Trading Commission. The fact is, it has been asleep on its feet, just dead from the neck up. It is time for us to say to this agency: It is your job to regulate. The fact is, Franklin Delano Roosevelt, when he signed this legislation some 70, 80 years ago, said:

It should be our national policy to restrict, as far as

possible, the use of these exchanges for purely speculative

operations.

Franklin Roosevelt knew it. Why doesn't this Commodity Futures Trading Commission know it?

The legislation I am introducing today does a couple things. No. 1, it demands the Commodity Futures Trading Commission by date certain to distinguish between that which represents normal hedging transactions between producers and consumers of a physical product and the rest, which is speculation. It says this market is designed for normal hedging of risks between producers and consumers of a physical product. Others who are engaged in excess speculation are going to be slapped with a higher margin--a 25-percent margin requirement--that is either quadruple or quintuple the current requirement, depending on what is assessed between the 5- and 7-percent rate. But this essentially says to speculators: It is going to cost you more to speculate in this marketplace if you are one of these folks who just want to speculate to make a lot of money.

Will Rogers talked about this long ago. He talked about people buying things they will never get from people who never had it. That is what is going on with investment banks, hedge funds, and a lot of others who are neck deep in this marketplace. They have never seen a barrel of oil. They don't want a barrel of oil. All they want to do is speculate and make a bundle of money. The problem is, it is damaging this country.

My legislation, No. 1, requires the separation of legitimate traders verses speculators. It puts an increased margin requirement on the speculators to try to wring some of that speculation out of the market.

No. 2, it requires position limits that are significant, imposed by the Commodity Futures Trading Commission.

No. 3, it requires the Commodity Futures Trading Commission to revoke or modify any previous actions they have taken in which they have prevented themselves from being able to regulate and see the transactions that exist in this futures market.

Unbelievably almost, the Commodity Futures Trading Commission, which is the regulator, decided, on its own volition, that it would allow, for example, a London exchange, largely owned by American interests, to come in and trade on computer terminals in Atlanta, GA, and pretend they are not American. So the Commodity Futures Trading Commission said: Do you know what, we will do a letter of no action so we can't regulate and can't see it. That is unbelievable, in my judgment. It is an unbelievably irresponsible position for a regulator to have taken. It is taken, I suppose, by those who believe ``regulations'' is a four- letter word. It is not. If ever we wonder about that, take a look at what has happened to the price of oil and gas in a situation where speculators have taken over.

The Commodity Futures Trading Commission is a regulator of this market. It has done a miserable job. It has nearly all the authority it needs to do the right thing. What I propose to do with the Commodity Futures Trading Commission is wring the speculators out of this market. They have distorted the market, broken the market, and we end up in a situation now where the price of gasoline is devastating this economy. The price of oil is not justified by supply and demand. When that happens, there is a responsibility for this Congress to act. It is an urgent responsibility, in my judgment, now for this Congress to say what is happening is wrong, it is hurting this country's economy, it is hurting industries and the American people, and we need to do something about it. The best start, in my judgment, would be to pass this legislation I am introducing today.

One final point. I am reaching out to Democratic and Republican offices in the hopes that this will be a bipartisan piece of legislation that will address a very serious issue on an urgent basis and begin to do something that moderates the price of oil and gas that many experts have told us is 20, 30, and in some cases 40 percent above that which is justified by the marketplace. We should not stand for it. We do not have to. We ought to pass this legislation soon.

Mr. President, I rise to introduce a piece of legislation on behalf of myself, Senator Nelson of Florida, and Senator Carper dealing with the subject of energy speculation. I want to run through a couple charts, and I want to describe the reason for the introduction of this legislation.

This chart shows the price of oil and what has happened to the price of oil. The price of oil has nearly doubled in a year. There is no justification for it, no fundamentals of supply and demand that explain what has happened to the price of oil.

These commodity contracts, by and large, are traded in this country on something called the commodity exchange--NYMEX, it is called. This is what it looks like. They trade back and forth, and there are legitimate reasons to trade on the exchanges. Those reasons to trade on the exchanges are for legitimate hedging for actual physical petroleum products for future delivery. The problem is, with respect to the oil markets, the legitimate hedging has become a smaller part of what is traded. There is now this unbelievable speculation going on in the commodity markets. That speculation has perverted the market, broken the market, causing the price of oil and gasoline to be well above that which is justifiable.

We have an organization in the Government called the Energy Information Administration, the EIA. They are the ones who know what there is to know about energy issues. As shown on this chart, here is what they have told us. Back in May of 2007--last year--here is where they said the price of oil would be. Back in July, they said it would be on this line, as shown on this chart; back in September, on this line. I hope they were not buying any commodities on the basis of their advice--they would be flat broke in a month. Here is what happened to the price. It went straight up. All the while, the EIA did not seem to have the foggiest notion of where the price was going to go. Why? Because the fundamentals do not justify what is happening.

Now I have the EIA coming down to testify before my subcommittee this week. I want to ask them these questions. They insist there is very little speculation in this marketplace. But most experts insist this has become an unbelievable spectacle of speculation that injures America's drivers and consumers, injures our industry, and causes great damage to our economy.

A House study, just in the last few days, from the House Subcommittee on Oversight and Investigations, said here is what has happened to the commodities market with respect to oil. As to the oil futures market: 37 percent used to be speculators in that market. Now it has gone to 71 percent. The speculators have taken over that market.

When the Commodity Exchange Act was passed by the Congress in the 1930s, here is what the congressional report said: This bill authorizes the Commission--the Commodity Futures Trading Commission; that is supposed to be the regulating body--to fix limitations on purely speculative trades and commitments.

Hedging is exempted. But for purely speculative positions, we provided the authority to the Commodity Futures Trading Commission to deal with that because we did not want this market to be taken over by speculators.

I have used these charts many times.

This one has to do with Fadel Gheit, the top energy analyst for Oppenheimer & Co. Here is what he says:

There is absolutely no shortage of oil. I'm convinced that

oil prices shouldn't be a dime above $55 a barrel.

I call it the world's largest gambling hall. . . . It's

open 24/7. . . . Unfortunately, it's totally unregulated. . .

. This is like a highway with no cops on the beat and no

speed limit and everybody's going 120 miles an hour.

I will not show all the charts I have shown in the past, but the CEO of Marathon Oil says:

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

market.

It was recently reported Americans drove 4.5 to 5 billion fewer miles in the last 6 months than in the previous 6 months. So we are driving 4 or 5 billion fewer miles, using less energy. Four of the first 5 months of this year, crude oil inventories were up--not down, up. So if the supply of the product is going up and the use of the product is going down, the marketplace would have you believe--or at least you would expect--the price would come down. Instead, the price has gone up, which demonstrates this is not about market fundamentals. It is about an unbelievable orgy of speculation in the marketplace that is not justified.

Now the question is, Will Congress do something about it or will it just apply some lip gloss? Is this just something where we act as if we are doing something or are we going to drive the speculators out of this market? I am introducing legislation that is tough and real and will address this issue.

The regulating body here is the Commodity Futures Trading Commission. It has acted like most regulating bodies in recent years. Most of them are run by people who came to the Government not liking Government and not wanting to regulate. It all goes back to Mr. Pitt, back in 2001, in which he said: The Securities and Exchange Commission is going to be a business-friendly place. Well, we have seen a lot of these agencies that are business friendly. They just get out of the way and pretend they are in a deep Rip van Winkle sleep, and they are not going to see anything and they are not going to know anything and they are not going to care much about anything.

This agency is not much different--the Commodity Futures Trading Commission. The fact is, it has been asleep on its feet, just dead from the neck up. It is time for us to say to this agency: It is your job to regulate. The fact is, Franklin Delano Roosevelt, when he signed this legislation some 70, 80 years ago, said:

It should be our national policy to restrict, as far as

possible, the use of these exchanges for purely speculative

operations.

Franklin Roosevelt knew it. Why doesn't this Commodity Futures Trading Commission know it?

The legislation I am introducing today does a couple things. No. 1, it demands the Commodity Futures Trading Commission by date certain to distinguish between that which represents normal hedging transactions between producers and consumers of a physical product and the rest, which is speculation. It says this market is designed for normal hedging of risks between producers and consumers of a physical product. Others who are engaged in excess speculation are going to be slapped with a higher margin--a 25-percent margin requirement--that is either quadruple or quintuple the current requirement, depending on what is assessed between the 5- and 7-percent rate. But this essentially says to speculators: It is going to cost you more to speculate in this marketplace if you are one of these folks who just want to speculate to make a lot of money.

Will Rogers talked about this long ago. He talked about people buying things they will never get from people who never had it. That is what is going on with investment banks, hedge funds, and a lot of others who are neck deep in this marketplace. They have never seen a barrel of oil. They don't want a barrel of oil. All they want to do is speculate and make a bundle of money. The problem is, it is damaging this country.

My legislation, No. 1, requires the separation of legitimate traders verses speculators. It puts an increased margin requirement on the speculators to try to wring some of that speculation out of the market.

No. 2, it requires position limits that are significant, imposed by the Commodity Futures Trading Commission.

No. 3, it requires the Commodity Futures Trading Commission to revoke or modify any previous actions they have taken in which they have prevented themselves from being able to regulate and see the transactions that exist in this futures market.

Unbelievably almost, the Commodity Futures Trading Commission, which is the regulator, decided, on its own volition, that it would allow, for example, a London exchange, largely owned by American interests, to come in and trade on computer terminals in Atlanta, GA, and pretend they are not American. So the Commodity Futures Trading Commission said: Do you know what, we will do a letter of no action so we can't regulate and can't see it. That is unbelievable, in my judgment. It is an unbelievably irresponsible position for a regulator to have taken. It is taken, I suppose, by those who believe ``regulations'' is a four- letter word. It is not. If ever we wonder about that, take a look at what has happened to the price of oil and gas in a situation where speculators have taken over.

The Commodity Futures Trading Commission is a regulator of this market. It has done a miserable job. It has nearly all the authority it needs to do the right thing. What I propose to do with the Commodity Futures Trading Commission is wring the speculators out of this market. They have distorted the market, broken the market, and we end up in a situation now where the price of gasoline is devastating this economy. The price of oil is not justified by supply and demand. When that happens, there is a responsibility for this Congress to act. It is an urgent responsibility, in my judgment, now for this Congress to say what is happening is wrong, it is hurting this country's economy, it is hurting industries and the American people, and we need to do something about it. The best start, in my judgment, would be to pass this legislation I am introducing today.

One final point. I am reaching out to Democratic and Republican offices in the hopes that this will be a bipartisan piece of legislation that will address a very serious issue on an urgent basis and begin to do something that moderates the price of oil and gas that many experts have told us is 20, 30, and in some cases 40 percent above that which is justified by the marketplace. We should not stand for it. We do not have to. We ought to pass this legislation soon.

Mr. President, I would like to announce that the Committee on Indian Affairs will meet on Thursday, June 26, at 9:30 a.m. room 562 of the Dirksen Senate Office Building to conduct an oversight hearing on Access to Contract Health Services in Indian Country.

Those wishing additional information may contact the Indian Affairs Committee at 224-2251.

Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. President, this morning, watching television as I was getting ready to come to work, I heard a news report about how much less Americans were driving. I believe they said 4.5 billion fewer miles driven in our country in April, although it may have been January through April. I am trying to get that. But the New York Times yesterday had the same thing. It says: ``Driving Less: Americans Finally React to the Sting of Gas Prices.'' It described that in April of 2008, compared with the same month 1 year ago, Americans drove 1.8 percent fewer miles on public roads. So round it up. Americans drove 2 percent less in April, and presumably they used 2 percent less gasoline than 1 year ago.

If that is the case, that gas prices are up so Americans are driving less and using less gasoline--then demand is down, isn't it?

Well, demand is down--and we know that; it doesn't have to be confirmed by the New York Times yesterday. Demand is down. When gas goes to $4, people are wondering how on Earth do I pull up to the gas pump and afford to fill the tank? I had a tribal chairman come to the Senate yesterday. He described a mother who was driving her

daughter, who had threatened to commit suicide, to see a doctor. But the mother didn't have money or enough gas in the car to get back home, so she came to see the tribal chairman of this particular Indian tribe to try to get some money to put some gas in the tank to be able to drive home after driving her daughter to the doctor.

We know these stories. A lot of people can't afford this, so they are driving less. So if demand is down, then why are gasoline prices staying up?

Four of the first 5 months of this year, we have seen increases in crude oil inventories. Let me say that again: Crude oil inventory supplies in this country have increased 4 of the last 5 months. So if supplies are up, and demand is down, what justifies a continued increase in the price of oil? It is not justified. It is unbelievable speculation in the commodities markets.

I want to talk about that for a moment today. But I want to also note that in the Washington Post this morning, Steven Pearlstein had an article. It says: ``On Energy: Same-Old, Same-Old.'' And he is right about that. Same old thing, isn't it, on energy?

We can't live without energy. The fact is, we get up in the morning and flip a switch and the light goes on. We plug something in and our razor works. We get in the car, turn the key, and we can drive. We take energy completely for granted, and yet we are prodigious users of energy.

But we have a problem: Part of the problem is that divine providence, apparently, ended up putting most of the oil under the sands way on the other side of the planet and most of the demand is here. So we stick straws in this planet of ours and suck oil out every day. Eighty-five million barrels of oil every day we suck out of this Earth, and one- fourth is destined to be used in this little spot called the United States. We use a quarter of the oil every single day that is produced in this world.

That is pretty unbelievable when you think about it. So we have big problems. We use a quarter of the oil, and much of it is produced elsewhere--Saudi Arabia, Kuwait, Iraq, and Venezuela--in troubled parts of the world. We need to be less dependent on finding oil from off our shores, which means we need to be more diligent in finding ways to produce more here.

But it is not just producing oil, however. There are a lot of ways to produce energy. My colleagues on the other side, who have spent the last several days in this Chamber saying we have to drill here and drill there; that the only way you produce is to drill a hole someplace. Well, I know people like this. They are the dig-and-drill type. I call them ``yesterday forever.'' Digging and drilling, that is the only way they think you can produce energy.

What about planting a crop in a farm field and producing ethanol? What about putting up a wind turbine and producing electricity by taking the energy from the air? What about solar? What about biomass? There is so much more we can and should do with respect to the production of energy.

I will talk about that some more, but I want to come back to this issue of speculation. Right now, the price of gas is killing us. We have, I think, 12 airlines that have gone bankrupt in recent weeks and months. We have a whole lot of trucking companies that are now out of business because they cannot afford to continue to operate by paying current diesel prices to fill their trucks. We have farmers who can't figure out how they are going to order a load of fuel for spring's work and summer's work because it costs too much. We have a lot of families driving up to a gas pump and putting in only five gallons because they can't possibly afford to fill the tank.

What is causing all that? Well, we have what is called a commodities market that has now been infested with hedge funds and investment banks. Investment banks, for the first time in history, and in recent years, are in this commodity market speculating. They have actually purchased storage capacity in order to take oil off the market. That is not a particularly good way to bring down prices, is it? But that is not the interest of some of these speculators. They think increasing the price is fine. It is exactly what they want.

Will Rogers described all this years ago. He described people who buy things they will never get from people who never had it, making money on both sides. It wouldn't matter so much if the speculation on a commodity isn't so essential to this country. There is unbelievable speculation on oil and gas prices in this country, particularly oil prices at this point, that is damaging our economy. It is damaging our country, it hurts American truckers, farmers, and others, and we need to do something about it.

Now, the question is, what? I am going to hold a hearing next week. I chair the subcommittee that funds the Department of Energy, among other things, and it funds the Energy Information Administration. That is the agency we pay in the Department of Energy to tell us what they know about energy. This is not a policy group, but we spend a lot of money on the EIA. If somebody is talking about energy and giving you some analysis about energy statistics, it is probably the Energy Information Administration, run by Mr. Caruso. Mr. Caruso is going to testify before my subcommittee this coming week.

But I want to show you this chart. I am not showing this to demonstrate that the EIA is incompetent. That is not my allegation here. However, I wanted to show you what the Energy Information Administration has estimated each month, because they estimate what the price of oil is going to be. Nobody knows, so EIA makes the best estimate they can, because they have the best people and the experts. So here is what they have estimated.

By the way, this red line is the actual price, okay? Go back here in May 2007, and they estimated the price of gasoline was to be about here. In July 2007, they said here is where we think the price will be. In September of 2007, here is where we think the price is going to be. In November 2007, we think the price will go down, actually. In January 2008, the price is going to go down. March 2008, it is going to go down, and in April, it is going to go down.

Here is what actually happened. Oil prices went straight up, like a Roman candle. So the best people we have in the agency instructed to do this analysis say, here is our estimate of oil prices--and the fundamentals of the marketplace should reflect supply and demand. I assume they probably thought people were going to drive a little less as prices went up so that we would have more conservation. But they said, we think we are going to be okay on supply and have a little less demand and prices will moderate. Instead, prices went like this.

How can we be so wrong for so long? That is the question, I guess, for next week. But I have had a chance to ask the head of this agency at a previous hearing whether there is some speculation here. My notion is this is an unbelievable orgy of speculation, and that is what is happening to this market. The market is broken, doesn't work, it is full of speculators, and they are interested in driving up the price. They do not give a rip about the damage to the economy. But the answer from the EIA was, well, a little bit of speculation, but, you know, not very much. It was kind of a two-step shuffle with your hands in your pockets, ruminating. Wearing a gray sweater and smoking a pipe and ruminating: Well, maybe a little speculation.

You know what? I think the truth is--and this chart with these lines demonstrates how wrong we have been for so long--that there is a massive amount of speculation here. There are plenty of experts around who say this market is like a casino, open 24/7.

Now, what does it matter? Well, what matters is this is doing unbelievable damage to our economy and to our country. I would understand it--I wouldn't accept it, but I would understand it, if at least the supply and demand relationship here justified an increase in price, but it does not. Refineries in this country in recent months have actually cut back in their capacity because they have had too much inventory out there. Drivers are driving less, crude stocks in 4 of the first 5 months have been up, yet the price of oil continues to rise.

Now, the large oil companies that are going to the bank depositing our money have a permanent grin. They can't stop smiling. The Saudis and the OPEC countries can't stop smiling either because they are contributing

even more of our money to their bank accounts. This is not bad for everybody. This is good for some. It is just bad for most of the American people and bad for the economy of this country.

I believe that speculation is rampant and the regulatory authorities, the people who are supposed to wear the striped shirts and call the fouls, the Commodity Futures Trading Commission are largely doing nothing about it except for the last couple of weeks when someone has, apparently, lit their fuse or when the Chairman had some sort of epiphany overnight and said it looks as if we ought to start investigating this. The Chairman of the regulatory body has said repeatedly now, for many months: It is just the fundamentals, there are no problems here, the market is working fine, just fine. He said it last July, he said it in January, he said it in February, he said it in May, be happy, there is no problem here. The fundamentals of the oil markets are working just fine.

Then, all of a sudden, we had a kind of tipping point. The Chairman of the Commodity Futures Trading Commission said: There might be something wrong. We are going to look at it. And oh, by the way, we have been looking at it for 7 months.

It is a little confusing to me and I expect to the American people. Either the fundamentals were not right, or they were, back when he was assuring the American people everything was fine.

Having said all of that, it is pretty clear to me what is going on here. We have a dramatic amount of speculation, a bunch of big interests running up the price of oil on the commodities market--hedge funds, investment banks, and others--speculating, purely speculating in these oil markets.

I am going to introduce some legislation next week that addresses that subject. It will be the End Oil Speculation Act. It will require the Commodity Futures Trading Commission, which has largely been asleep at the switch, to use the authority it has to do what is necessary to separate legitimate trading for hedging purposes on the commodities market for oil from trading that is purely speculative. It will increase the margin requirement on trading that is purely speculative. It will do a number of other things that respond to the need to say: We believe this market should work. We think this market is necessary. But when a market is broken, the U.S. Congress has a responsibility to address it.

My legislation will have time requirements and will make certain that the Commodity Futures Trading Commission takes the action that is necessary to wring the speculation out of these markets. I will introduce that early next week.

I do want to say with respect to the Stephen Pearlstein article that I think he has it right--``same old, same old.'' He said: Somebody brings up offshore drilling, and immediately some say ``no,'' others say ``yes,'' some say ``there,'' others say ``nowhere.'' Should we do some offshore drilling? Sure. I supported offshore drilling in the Gulf of Mexico. I was one of four Senators who constructed the legislation that is now law that opens what was called lease 181. Substantial oil and natural gas are there. We ought to open much more of that on the eastern Gulf of Mexico. That is where the highest potential of recoverable oil is, in the Gulf of Mexico. We can do that safely.

The fact is, you need to do much more. We are not going to drill our way out of this problem. We need much more renewable energy and more conservation. By far, the lowest hanging fruit in the energy issue would be to retrofit all buildings in America. The Mackenzie study says that is the quickest and easiest way to achieve substantial savings in energy. There is so much to do and so much available to us in renewable energy, in conservation, efficiency, and also the other elements that come together outside of just drilling and digging.

I support some drilling and I support some digging. But that is not a policy, it is just a chant to say: Let's keep doing what we have been doing. That has driven us into a ditch. We want to get out of the ditch. We don't want to make the ditch deeper.

I am going to be introducing legislation next week to address this problem of speculation. My hope is that all those who believe, as I do, that this market is not working right will support this effort. When you have an increase in supply of oil and you have a decrease in demand, you would expect that prices would begin going down, not continue to go up on a steep path. This market is broken, and I believe Congress has a responsibility to fix it. That is what I hope my colleagues and I will be able to do beginning next week.

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

Mr. President, I ask unanimous consent that the Committee on Homeland Security and Governmental Affairs be authorized to meet during the session of the Senate on Friday, June 20, 2008, at 10 a.m.

Madam President, I wish to talk some about energy. I know the President, this morning, my colleague, Senator McCain, and others have talked a lot today about additional production.

I am one of the four Senators who initiated in this body several years ago, along with Senator Bingaman, Senator Domenici, and Senator Talent, the legislation that is now law that opened lease 181 in the Gulf of Mexico, where there are substantial oil and gas reserves. We opened that up on a bipartisan basis. In addition to cosponsoring that legislation, I have also introduced

legislation that would open more of the eastern Gulf of Mexico. I think it is a smart thing to do.

Let me say that the refrain today coming from the President and some others is: Just drill, drill, drill--believing the only way to produce more energy is to sink a hole someplace. There are a lot of ways to produce energy in addition to drilling.

We do need more production. We need more conservation. We need efficiency. We need renewable forms of energy. We need all of those things. But the discussion today is: Well, if we could just drill in ANWR--one of the pristine areas of our country that was set aside in legislation signed by Dwight D. Eisenhower as President of the United States--that 10 years from now we may have some oil, I guess.

Let me make another suggestion. How about allowing U.S. companies access for drilling off the coast of Cuba? India is interested in doing that. Canada is there. Spain is there. But U.S. companies are banned from there. There's potentially more than 500,000 barrels of oil that could be produced in these Cuban waters, available for leasing by oil companies. Our oil companies cannot do it because this administration is obsessed with the embargo against Cuba.

So I say to the President: You want to drill, drill, drill, and drill? How about drill down in this blue area, as shown on this map? Spain is there. Canada is there. China is looking at it. India is there. But, no, you have decided we are embargoed from having our oil companies look where there is potentially more than half a million barrels of oil a day.

Or how about the eastern gulf? I have legislation in on this. But it is interesting--the minority side, when they introduced their proposal to produce more energy by drilling more, they left this out of their proposal. Why? Because a member of their caucus does not want this to happen. So, therefore, it is not a part of their proposal.

So in my judgment, enough about drilling and drilling and drilling. If our solution to the energy issue is to drill and to dig, that is just yesterday forever. That is not a policy.

Now, here is what has happened to oil prices. Oil prices have doubled in a year. Now, I do not have to tell anybody that. If you drive your car to the gas pump, you figure that out. If you are a farmer ordering a load of fuel, you understand that. If you are a trucker trying to figure out whether you are going to be able to run your trucking business next week because you cannot afford the fuel, you know this problem. If you are one of nine airlines that have gone bankrupt in recent times, you know this issue.

Here is what has happened to the price of oil. Here is what has happened to speculation in the oil markets. It looks a lot like the price of oil, doesn't it? Speculation. This has nothing to do with people who want to buy oil. They want to buy paper back and forth and speculate. Look at what has happened to speculation. It looks like the same line with oil production. Will Rogers talked about speculators some nine decades ago. He talked about people who buy things they never get from people who never had it, trying to make money on both sides of the transaction. We have a futures market in energy because you must have a futures market. There are legitimate commercial reasons to hedge fuel prices, but when that market is broken and taken over by speculators, then it seems to me the Congress has a responsibility to deal with the broken market.

I am going to talk about what we should do about this speculation in a moment, but first I wish to talk about this response to drill as the only response to produce additional energy. It is interesting that in 1916 this country decided to encourage people to drill for oil and gas. If you could find oil and gas, we wanted to give you a big fat tax break in 1916. We made it permanent. I wasn't here at the time. We made it permanent and said, if you go looking for oil and gas and find it, God bless you. We are going to give you a large tax break.

Compare that with what America has done with renewable energy; wind, for example, and solar energy. We put in place a tax incentive for people to produce electricity from wind energy--a production tax credit, it is called. It was put in place in 1992, a short term, kind of a shallow tax incentive. It was extended five times, all short term. It was allowed to expire three times. So it has been stutter, step, start, stop. It is a pathetic, anemic, and thoughtless approach for a country to say to those who are producing renewable energy: We are behind you. We ought not do that. We did almost a century's worth of permanent tax incentives for people looking for oil and gas. To those who are trying to do wind and biomass and solar and all of the renewable forms of energy, we said: Well, we are not going to tell you whether we are going to keep providing these incentives.

I have a piece of legislation on energy production incentives that says let's decide to tell people that for the next decade, here is where America is going. Here is America's policy. We believe in wind energy. We believe in renewable energy. Count on it, because this is America's policy. That is what we ought to do.

We have people who stand up here in the Senate all day today--and the President at the White House--who say, the only production that matters is production by drilling a hole. Well, I am all for drilling holes where there is oil and raising some oil. But what about being less dependent on oil and especially less dependent on imported oil? Seventy percent of our oil now comes from off our shores. What about being less dependent on that? How about deciding there are other ways to produce?

Yesterday we had a cloture vote and that cloture vote would have extended--not by enough, in my judgment, but nonetheless would have extended--the tax incentives for renewable energy. Almost every Member of the minority voted against it. Why? Because it would have raised funds to pay for it by plugging a loophole that allows big hedge fund operators who get a billion dollars or a half a billion dollars a year in compensation to park that money overseas in a deferred account and avoid paying taxes to our country. So we were going to plug that loophole and the other side has an apoplectic seizure. It is unbelievable to me.

We are about production. We are trying to say here are the tax incentives necessary to produce more energy. Yes, it is renewable energy. It is an important part of our production need. And the other side says no, we don't support that because you are trying to make hedge fund managers pay their taxes as everybody else does. Well, not quite pay their taxes as everybody else. We were trying to plug the loophole that allows them to defer paying their taxes. But even if they had to pay them on time, many are paying a 15-percent tax rate on their earnings called carried interest. That is another story. They are paying less than the receptionist in their office, which is pretty unbelievable.

But my point is simple. We fought out here yesterday on the floor of the Senate to provide the tax incentives that will produce more energy, and all the way along, the minority is objecting. It is like a bicycle built for two. We are pedaling uphill and they are sitting on the backseat with their foot on the brake. Then they come out the next day complaining that somehow not enough is being produced and they get the President to say the same thing out of the White House. They try to get people to think that somehow by waving a wand and drilling a hole some place they are going to solve the problem of $4 a gallon gasoline or $140 for a barrel of oil. It is not going to happen.

Production is not just drilling. I support drilling. In fact, the U.S. Geological Survey just issued a recoverable oil assessment in my state--because I had requested that 2 years ago they do a survey. They completed their work and announced the largest survey or assessment of recoverable oil they have ever found in the lower 48 States: 3.6 billion barrels of recoverable sweet light crude. It is not as if we are not producing. We are. This is a new field called the Bakken shale field. But we are not doing enough with respect to renewables because of the attitude of the President and others in this Chamber who think the only way you produce energy is to try to sink a drill bit some place. There are a lot of ways to produce energy and we ought to be doing all of them. Instead we have dramatically shortchanged renewable energy.

I wish to turn for a moment to a solution of this issue of what is happening in the market that has caused the runup in price. There is nothing in the fundamentals of supply and demand of oil that justifies what has happened to double the price of oil--nothing. Oh, I suppose you could make the case that we have a perverted market someplace where people talk about free market. There is no free market. What an absurdity. In oil? Are you kidding me? First you have the OPEC countries sitting around a table in a closed room with their ministers making decisions about production and price. Then you have the oil companies with two names because they romanced and got married: Exxon romanced Mobil and now it is ExxonMobil; Phillips liked Conoco, so they got married and now they have two names. Bigger, stronger, more muscle in the marketplace. Then there is the futures market which has become an unbelievable amount of speculation. So there is no free market.

Let me quote some folks who have come to the Congress. This is Fidel Gheit, a 30-year veteran of the Oppenheimer Company. He is the top energy trader at Oppenheimer, a very respected organization. Here is what he says: There is no shortage of oil. I am absolutely convinced that oil prices shouldn't be a dime above $55 a barrel. I call it the world's largest gambling hall. It is open 24/7. Unfortunately it's totally unregulated. This is like a highway with no cops and no speed limit, everybody's going 120 miles an hour.

If you don't believe Mr. Gheit, how about Mr. Clarence Cazalot, CEO of Marathon Oil: $100 oil isn't justified by the physical demand on the market. Steven Simon, senior vice president of Exxon: The price of oil should be about $50-$55 per barrel.

So what has gone haywire here? What is the problem? Well, we have a regulatory agency called the Commodity Futures Trading Commission. They are supposed to be the regulators. We have a lot of people in regulatory bodies these days who think regulation is a four-letter word. They came to their jobs with an Administration that said, ease up. Soften up. We don't want you to regulate very much.

So we have the Commodity Futures Trading Commission. The Acting Chairman of Commodity Futures Trading Commission testified yesterday. He doesn't have the foggiest idea of what percentage of the contracts being traded in these energy markets are contracts he can't see or can see, but he has already made a conclusion that excessive speculation is not the problem. Surprise, surprise.

Well, here is what Mr. Lukken has said, the acting head of the Commodity Futures Trading Commission. This is the guy who is supposed to wear the striped shirts and call the fouls and be the referee: Based on our surveillance efforts to date, we believe energy futures markets have been reflecting the underlying fundamentals of these markets.

July of last year. What is going on with the price of oil? ``Oh, it is just the fundamentals.'' That is what the head of the regulatory body says.

In January, 6 months later, one word difference. He said: Based on our surveillance efforts to date, we believe that energy futures markets have been largely reflecting the underlying fundamentals.

Nothing there, I guess, not from the acting head of the regulatory agency.

In February: We are confident that the futures exchanges and clearinghouses are functioning well, especially during these turbulent times.

No problem there. Be happy. Everything is working fine. Oh, the price of oil is doubling. We have an unbelievable amount of speculation going on, but don't worry, sleep well.

On May 7 he says: We can say with a high degree of confidence that people are not manipulating the energy markets.

Then at the end of May, this man had an epiphany. I don't know whether it was during his sleep or perhaps a staff meeting. He decided there might be something wrong: I am not willing to say there is speculation, but there might be something haywire here and oh, by the way, we have been investigating it for 7 months.

I don't know. It is kind of hard if someone has been saying for 7 months nothing is wrong and then says oh, by the way, we have been investigating it for 7 months. A curious way, for someone who is paid to be a regulator, to describe to the American people their regulatory responsibilities.

I think the evidence is pretty substantial that there is something going wrong in this marketplace, and when markets don't work--and sometimes they don't--there is a responsibility to take some action.

I used to teach a bit of economics. I think the market system is the best allocator of goods and services I know of. There are times, however, the market system breaks. It doesn't work. That is what has happened here. There is a bubble that has occurred with a wave and a rash of speculation into these markets that has driven up the price well beyond that which can be justified by the quantity of oil or the demand for oil. The fact is this: In 4 of the first 5 months of the year, crude oil stocks in this country--the inventory of crude oil stocks increased. In 4 to 5 months, we actually had more inventory of crude oil stocks. At the same time, demand was beginning to dampen. There was less demand, more supply, so one would think prices would come down. It didn't happen. Prices continued to skyrocket. Something is broken in this marketplace.

I am going to introduce legislation, I hope early tomorrow--and I hope with bipartisan support. My legislation is called the ``End Oil Speculation Act of 2008.'' It is a rather simple piece of legislation that deals with a complicated area. It would be designed, as we have written it, to eliminate manipulation and excess speculation of the futures petroleum market. By the way, existing law already has a provision with respect to excess speculation. But one would not expect, in my judgment, the current Commodity Futures Trading Commission's chairman to take action to address that, at least based on what he has been saying, that there is nothing at all wrong.

This proposal would restore the petroleum futures market to its original purpose and intent as a place for hedge transactions by commercial producers and purchasers involving actual, physical petroleum products for future delivery and their direct counterparts. That is legitimate hedge trading. I support it. That is as distinguished from trading that goes well beyond that; that is, people who are not interested in taking physical possession, people who are not in the oil industry but they are interested in trading paper based on a speculative interest in making money.

I suggest we revoke or modify all prior actions that fail to eliminate or discourage all non-legitimate hedge trading by, for example, applying position limits to all non-legitimate hedge trading. This legislation will require the Commodity Futures Trading Commission to segregate the kind of trading that exists, the kind of trading for which the market was established--typical commercial hedging--and the trading that has nothing to do with that at all but is simply and purely speculative trading. To distinguish between legitimate hedge trading and all other trading is necessary for a piece of legislation such as this to work. It will require that the Commodity Futures Trading Commission do so and do so by a time certain.

It would also provide that there would be regulation of all persons-- to the extent possible--who are engaged in trading in petroleum futures wherever the market is located unless and until there are regulations that are substantially identical to the Commission's regulations and that are fully and effectively enforced.

The proposal would provide an increased margin requirement that I spell out in the bill for the non-legitimate hedge trading, and that increased margin requirement would be designed to try to soak out the speculation in these markets and make it more difficult for the speculators.

The American people need some help here. They are the victims of a market that has the American consumer bobbing around at the bottom, watching these prices they can't afford go right to the top, day after day after day. How many more people are going to go to the gas pump and try to figure out how much can I put in and still buy the groceries I need? We had a man come to a meeting I held today who talked about the fact that a mother brought her

daughter to his office because she was talking about committing suicide. She brought her daughter in to get some medical help, but she didn't have enough gas to get back home. The mother had enough gas to get in with her daughter to see a doctor, but didn't have enough gas to get home. The mother stopped in the office of Ron His Horse is Thunder who is the tribal chairman of the Standing Rock Sioux Tribe to ask for some gas to be able to drive back home. The story is much sadder because the young lady then committed suicide some weeks later.

But think of the people around this country who are wondering, how can I afford the gas to go see the doctor, or to get to my job? Think of the owners of the trucking company that is trying to get by, which has been around for 30 years, but is thinking now that they can't continue. How about an airline that is struggling to make it and can't possibly afford to pay these jet fuel costs?

Does any of this matter to anybody? It does to me. If a significant part of the problem results from speculation, it seems to me we have a responsibility to deal with it. When markets are broken, we have a responsibility to address it.

My legislation will do just that. I don't claim that it is perfect or that it will be easy, but I do claim that it is not enough to come to the Chamber and talk about what we need to do is open ANWR. Ten years from now, good for us, we will have opened something that was one of the most pristine areas that we have set aside.

Do you want to drill? There is a lot more oil in the Gulf of Mexico than in ANWR. So let's not use a hood ornament called ANWR to describe America's current problems with respect to oil development. It is not accurate, and it is not, in my judgment, thoughtful. There are other ways for us to address this issue.

Mr. President, I am going to speak tomorrow, as well, as I introduce the legislation.

I yield the floor.

Mr. President, I would like to announce that the Committee on Indian Affairs will meet on Thursday, June 19, at 9:30 a.m. in room 562 of the Dirksen Senate Office Building to conduct a business meeting to consider pending legislative issues, to be followed immediately by a hearing to receive comments on a discussion draft bill to address law and order in Indian Country.

Those wishing additional information may contact the Indian Affairs Committee at 224-2251.

Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. President, I ask unanimous consent to speak for 20 minutes as in morning business.

Mr. President, I was on one of the Sunday weekend shows and was joined by one of my colleagues on the Republican side. The discussion on that program was about oil and gas prices and energy development. My colleague on the Republican side quite predictably said: Well, the problem is the Democrats do not want to produce any more oil. They stand in the way of producing oil.

It is such a canard. I wanted to come to the floor to talk about that a bit and also to talk about the fact that we are going to vote at 5:30 today on energy tax credits for renewables. Then we will see who in this Chamber does want to produce some energy, because we have had chances before, and the Republican side of the aisle, the minority side, has blocked our ability to produce.

I want to talk a little bit about that. I know they tend to think that unless you are sinking a hole in the ground someplace and sucking oil out someplace on the planet, you are not producing. Well, I happen to believe there are plenty of places to begin producing additional oil in this country. But drilling alone is not going to solve our problem. There are other things we must do that represent change that my colleagues on the other side of the aisle simply cannot embrace; that is, being aggressive on renewable forms of energy, wind energy, solar energy, biomass, and biofuels. It goes on and on. They do not consider that additional production, I guess.

Let me talk first about this issue of the alternative and renewable forms of energy. In 1916 this country put in place robust, permanent tax incentives to say to people: If you go looking for oil and gas, good for you, we want you to do it. We are going to give you some big tax breaks. That was put in place almost a century ago.

Here is what this country has done for renewable energy. In 1992 they put in place a production tax credit, a short-term, fairly shallow tax incentive if you want to produce renewable energy. It has been extended five times

since 1992, short term. It has been allowed to expire three times. So we have had the stutter-stop, stutter-start approach to dealing with the production tax credit for renewable energy.

This chart shows what happens every single time it has not been extended. The investment falls off the shelf. Last year, last June, we had a bill on the floor of the Senate that said, let us extend this for a long period.

I have a bill I introduced that said, I think the Congress and this country should say here is where we are headed. For 10 years we have been so dependent on the Saudis, the Kuwaitis, the Iraqis, the Venezuelans, and others for oil. Sixty percent of our oil comes from off our shores. We need to be less dependent, and one way to do that is to produce renewable energy right here at home.

So last June we put a bill on the floor of the Senate that said, for 5 years you can count on the production tax credit to pursue incentives for wind and solar and all of those kinds of renewable energies that are available to us. Here is the tax incentive for you for the next half of a decade.

Guess what. Thirty-four Republicans voted against it and killed it. They did not want to do that. Now they are talking about how much they want to produce energy. Well, let me talk about this production of energy. I happen to think, one voice here, we ought to produce in the eastern Gulf of Mexico.

If you take a look at where the oil is, the hood ornament for their discussion is always ``ANWR,'' one of the most pristine areas in America, set aside in legislation signed by Dwight D. Eisenhower. The other side always says, well, ANWR, we have got to produce in ANWR.

Even John McCain votes against producing in ANWR. John McCain said, I do not think you ought to produce in the Everglades, in the Grand Canyon, I do not think you ought to drill in ANWR. So enough about that.

If you take a look at where the oil is, on the outer continental shelf in the Gulf of Mexico, off the west coast, off of Alaska, by far the most significant reserves of oil are in the Gulf of Mexico, both the western gulf and the eastern gulf.

The area off of Florida in the eastern gulf ought to be open, in my judgment. But even more interesting are the Cuban waters just south of Florida. Many countries have leases to drill off Cuba's coast, including Spain, Canada, India. China is actually drilling onshore in Cuba, but we expect China to be wanting to drill offshore also. Our oil companies want to drill there. There is estimated to be half a million barrels a day production off Cuba. But we cannot produce there. Our companies cannot go in because we have this embargo with respect to Cuba, and the Bush administration is insistent on tightening the embargo rather than loosening the embargo. So there are half a million barrels a day of production there that our companies cannot go get.

Now, my colleagues introduced a piece of legislation on the Republican side for additional production, but it does not include producing in the eastern Gulf or off of Cuba. They do not want to produce there. So are they for production? Is that what they are talking about, or is this a big sham? We know they do not want to produce sustainable amounts of renewable energy because they have voted against it. They say they are voting against it because the bill increases taxes.

Let me tell you what it increases. It says to big hedge fund managers that they should invest in renewable energy because the government is going to invest in them over the long-term. By the way, the person who runs hedge funds and made the most income last year made $3.7 billion. If you are wondering, that is going home to say: Honey, I had a pretty good month, I made $308 million this month. That is making enough so that 4 minutes of work equals the average working man's salary for an entire year.

By the way, they get to pay a 15-percent income tax rate, which I think is an outrage. But even more than that, they have a game in which they defer a portion of their income tax by moving it offshore.

This legislation shuts that down and thereby raises the money to pay for some of our investment in renewable energy. The other side is upset about that. We are shutting down a tax scam for the wealthiest individuals. It is pretty unbelievable. I don't want to hear any more noise, deep sounds from the chest masquerading as thoughtful symbols from the brain, about production. The fact is, I believe in production. That is one part of addressing the issue. One part of it is producing oil. But a much more important part is renewable energy because we need to change the way we have been doing things.

We are so unbelievably dependent on Saudi oil and oil coming from troubled parts of the world. It makes no sense. We have an enormous appetite for oil. We sink little straws in this planet every single day and suck oil out. We suck out 85 million barrels a day, and we use one- fourth of it in a little place called the United States. Sixty percent of what we use comes from off our shores, much of it from troubled parts of the world, and almost 70 percent of that we use in vehicles.

We need to do a lot of things here, and we need to do a lot of things right to make us less dependent on foreign sources of oil. We need to make our vehicles more efficient, to conserve energy in every single way, to make all of our appliances more efficient. There is so much we have to do right, including produce more renewable energy.

We will have a chance in an hour and 15 minutes to vote once again on funding renewable energy. Most of my colleagues voted against it just days ago. I hope they have had some kind of epiphany recently and will decide that was the wrong vote and today they will cast the right vote.

Let me talk for a moment about what people are doing today as they drive up to the gas pump with their vehicles. They are driving their car up to the pump trying to figure out: How much can I afford? I have to stop at the grocery store on the way home. Or: I just bought medicine. How much can I afford to put in the gas tank?

They put whatever they can in that tank. And by the way, the OPEC nations smile all the way to the bank as they deposit our money. The big oil companies smile all the way to the bank as they deposit the rest of our money. But there is no justification for the current price of gas and oil. None. This market system is broken. It doesn't work.

There are three things that are making oil more expensive: No. 1, we have OPEC which is a cartel. That would be illegal in our country. But a bunch of oil ministers get together in a closed room and make judgments as a cartel. No. 2, we have big oil companies--much bigger because they were all given the green light to merge in recent years. They all now have two names--ExxonMobil, ConocoPhillips. They are bigger and stronger.

Finally, what I want to talk about is the issue of the futures market, which is the third piece that is simply broken. The futures market is an unbelievable carnival of speculation. It is supposed to be an orderly market by which people can hedge who are involved in the oil business. Now we have hedge funds, investment banks. We have all kinds of speculators, who will never be interested in ever taking delivery of oil, engaged in the futures market and driving up the price of oil and gas in a way that makes it at least 20 to 30 percent higher priced than a normal supply-demand market would justify.

In every month but one since January of this year, our crude oil stocks have increased. Let me say that again. In every month but one since January of this year, our inventory of crude oil stocks has increased. So supply is increasing.

On the other hand, people are driving slightly less, and there is a decrease in demand. So since January, you have both an increase in supply and a decrease in demand. What has happened to the price of oil and gas? It has gone up like a Roman candle. That means the market is broken.

Let me talk a little bit about what I think is happening in this market. Let me put up a picture of NYMEX. This is where they trade some of these oil commodity stocks. Some of it is what I call dark money, traded on exchanges that are not regulated or over the counter and can't be seen. This is the way it looks.

Let me quote Clarence Cazalot, CEO of Marathon Oil. He said last year:

$100 oil is not justified by the physical demand in the

market.

Stephen Simon, senior vice president of Exxon said:

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

Right now oil is flirting with $140 a barrel.

Let me say, when Exxon is going to the bank with our money to make a deposit, they have to be happy. But they are not using that money to invest in new production. In 2007, they used $31 billion of profit to buy back their stock and only $15 billion to invest in new drilling. They used twice as much money to buy back their stock in the stock market as they did to explore for new oil.

From the New Jersey Star Ledger:

Experts, including the former head of Exxon Mobil, say

financial speculation in the energy markets has grown so much

over the last 30 years it now adds 20 to 30 percent or more

to the price of a barrel of oil.

A man named Fidel Gheit, who testified before the Energy Committee, has worked for 30 years with Oppenheimer Company. He is the senior energy person at Oppenheimer. He says:

There is absolutely no shortage of oil. I'm absolutely

convinced that oil prices shouldn't be a dime above $55 a

barrel. I call it the world's largest gambling hall . . .

It's open 24/7.

Unfortunately, it's totally unregulated. This is like a highway with no cops and no speed limit and everybody is going 120 miles an hour.

With that backdrop, here is what has happened to the amount of speculation in the commodities market. It has gone up, up, and up just exactly like the price of oil and gas.

The question is, should the Congress do nothing about this or should the Congress do something? If the answer is the Congress should do something, then what? My belief is we have a responsibility to do something. Many of my colleagues believe it as well. There is nothing wrong with speculation. Markets often work with speculators. But when speculation becomes excessive, there is something wrong because the market then doesn't work.

Will Rogers described this sort of thing 80 years ago. He described people buying things they will never get from people who never had it and making money on both sides of the transaction. I guess that is all right if the speculation is not doing something that damages the American economy or injures most American consumers. But these are not free markets. There is no free market. I hear all these folks talking about: You have a free market. What you really need is more production. Sink a few wells here and there.

But they are not even genuine about that, as I just described to you. They are not very interested in sinking wells off the coast of Florida, for example. Let me show that chart again. I know why, when the minority party put up their proposal, they didn't want to sink wells in the Eastern Gulf of Mexico, which offers a significant opportunity. One of their Members, one of their Senators, is concerned about drilling off of Florida, so they leave that off their list. I know why they don't want to suggest that we should be able to drill for oil off of Cuba. Spain has a lease to drill off of Cuba. Canada also has a lease. India has a lease to drill off of Cuba. I know why the minority isn't pushing to allow American companies to drill off of Cuba. President George W. Bush is the one who says we can't do that. So they don't want to talk about subjects that are uncomfortable. They just want to bleat about the issue of ``production'' from their standpoint.

Production means a number of things. Production means, yes, producing some more oil. The largest assessment in history of the lower 48 States of recoverable oil was made 2 months ago by the U.S. Geological Survey at my request. They studied what is called the Bakken shale in Montana and North Dakota. There is dramatic new drilling and a lot of additional production there right now. They concluded that 3.6 to 4.3 billion barrels of recoverable oil, using today's technology, exists. I support drilling in the Bakken. We are drilling. We have some 70 to 80 drilling rigs active in the Bakken shale right now. But we are going to vote at 5:30 on another question of production. Then I want to see who comes to the floor to talk about production in the future.

Do they really want to produce enough renewable energy to help us reduce our dependence on Saudi Arabia and Kuwait and Iraq and Venezuela? I hope so.

We have to get over this notion that the only kind of production that matters is sinking a well someplace. We could produce, and have been producing, billions of gallons of fuel for vehicles in farm fields. We are now up very close to 9 billion gallons, and we are headed much higher than that. We also can produce substantial electricity from wind, except that when we try to do anything other than increase the production tax credit by 12 months, the other side objects. Again, whether it is a production tax credit for wind or solar energy or other renewable energy sources, this Congress and this country ought to not just talk about 12 months. We ought to say: Here is where America is headed. We understand this is a serious problem. We believe we are going to produce substantial amounts of renewable energy. Other countries have done it.

Brazil is an example. We are going to do this in a way that allows all of us to understand we must be less dependent on foreign sources of oil.

We can do that. We went to the Moon in 9 years. Do you think we can't find a way to be less dependent on foreign oil? I believe we can. But we can't do it, if at 5:30 today the minority still objects to having hedge fund managers who make billions pay their fair share of taxes and objects to what we would use that money to pay for, and that is extending the renewable energy tax credits so that we become less dependent on foreign oil and produce more energy from renewable forms of energy. That is just a fact.

At 5:30 today we will have plenty of opportunity to see who really supports additional production. I hope, on a bipartisan basis, we might be joined by the minority and see if we can't put this country on a track to produce much more energy from renewable sources.

I yield the floor.

I ask unanimous consent that the order for the quorum call be rescinded.

Mr. President, I was just visiting with my colleague from New Mexico. I was unaware of the Supreme Court decision this morning. But the decision by which they have overturned some legislation that retracted the right of habeas corpus for those who might be suspected of some sort of illegal activity and so on in this country, that decision by the Supreme Court is a very important decision.

I could not believe when the Senate passed a piece of legislation saying that someone who is apprehended or detained in this country would not have the right of habeas corpus. That is a different kind of country than I know. There are countries in this world where they can pick you up right off the streets and say: Do you have papers? Even if you have papers they can throw you in jail, and you have no right to anything, including filing a writ to say: A government cannot hold me. A government must prove there is reason to hold me.

That is unbelievable that this Congress it--not with my vote. But I commend the Supreme Court. I haven't had much opportunity to do that recently, I must say. But their ruling this morning gives me some hope.

Mr. President, we have a cloture vote at 3 o'clock this afternoon. I wanted to mention the important subject of the cloture vote is dealing with some Medicare changes.

Medicare is an unbelievably important program. Prior to Medicare, not many people look back and remember this because most of us have lived our lives with Medicare in existence. Before Medicare, one-half of the American senior citizens had no health insurance at all. Does anybody think that an insurance company says: You know what. We have a new business plan. Our plan is we want to find people who are old and provide health insurance for them. That is not the way a business plan works. If you are selling insurance, you like to find somebody young and healthy.

As a result, if you go back to the 1950s, early 1960s, you will find that one-half of senior citizens of this country had no health coverage. Now, it is a very small percentage that have no health coverage. The vast majority of American senior citizens are covered by Medicare. It is a good program.

I grew up in a little town of 300 people. We had a guy named Doc Hill, Dr. Simon W. Hill. He came into town and he stayed until he died. He practiced medicine. We did not have a Medicare Program, but he tried to give everybody whatever health care they needed. He tried the best he could. We had no lawyer in our town, so he was never sued. He pulled the tooth of my neighbor. He was not a dentist, but he was a doctor. The neighbor had a terrible toothache, we were 50 miles from the nearest dentist, so Doc Hill pulled his tooth. It turns out he pulled the wrong tooth. But, you know, the fact is, Doc Hill did the best he could. He practiced medicine in my hometown. I think he delivered close to 2,000 babies decade after decade after decade. He ran his own Medicare and Medicaid Program. If you did not have any money, you got health care to the best he could give it.

If you had money, he would charge you an arm and a leg. If you had 24 fryer chickens, he would take that; maybe a quarter beef, maybe half of a hog--whatever it was, he ran a program in a little town.

Well, that is all gone. That does not exist anymore. The fact is, we now have a Medicare Program that serves America's senior citizens with health care and says to them: If you get sick, here is a program that is to provide some help to you.

Now, my colleague, Senator Baucus, and the Finance Committee have brought a piece of legislation to the Senate floor, and we have to have a cloture vote on it this afternoon because the other side is objecting. My hope is that we will have sufficient votes this afternoon to advance this bill.

It makes some changes in Medicare that need to be made because we are bumping up against a deadline at the end of this month. Among other things, it reauthorizes the special diabetes program. That is something in which Senator Domenici from New Mexico and I have been involved. We have introduced some reauthorization legislation here.

The diabetes issue is a scourge in this country. I chair the Indian Affairs Committee in the Senate, and the fact is, we have some areas on Indian reservations in this country where 40 or 50 percent of the adult population are affected by diabetes. Go there and go to their dialysis units and see all of them sitting hooked up to dialysis units. Then see how many have lost their legs through amputation. See how many of them have early heart disease as a result of their diabetes. This piece of legislation by Senator Baucus and the Finance Committee begins to address some of those issues.

It also makes reforms to what is called the Medicare Advantage Program. Now, some of my colleagues have come to the floor and said, well, this bill cuts Medicare. That is total rubbish. This does not cut Medicare. It takes one portion of Medicare, called the Medicare Advantage Program, which pays more for healthcare as opposed traditional Medicare.

This is one of those little pilot programs that some in this Chamber wanted, so they seeded it with extra funding. Well, the extra funding has been a waste of money, a tragic waste of money. And this gets some of the waste and abuse out of it. If my colleagues are upset about getting rid of waste and abuse, I am sorry. Maybe they will not sleep very well if we pass this bill. But the fact is, when we see waste and abuse, we ought to go after that. That is what the Finance Committee and Senator Baucus have done.

They have used that funding they have achieved by getting rid of some waste and abuse in the Medicare Advantage Program. They have used that funding to address some other urgent issues.

If we do not do anything by the end of this month, we will see a 10- percent cut to physician payments. Well, physicians in my State are already at the bottom of the wage index on physician payments. And the fact is, a 10-percent cut would be devastating to senior citizens in my state who rely on Medicare. It seems to me we should not be doing things that will predict a degradation of health care. We should not be doing those things.

The Finance bill and Senator Baucus have brought a piece of legislation to the floor that avoids that 10-percent payment cut and establishes a 1.1-percent increase instead through fiscal year 2009.

It is the right thing to do. Now, if you decide you do not want to vote for cloture, to even allow this to proceed, then you are saying: You know what, just whack these programs. It does not matter what kind of health care exists in our States. It does not matter what happens to the senior citizens.

If that is your view, you know, God bless you. But it is sure a far cry from my view. I think we have responsibilities to make Medicare work, to provide decent funds for the providers so that our senior citizens have health care that all of us can be proud of.

There are many other features in this piece of legislation that are important. It talks about prompt payment to Main Street pharmacies. We have drugstores and pharmacists on the Main Streets across this country that are not getting the kind of prompt payment they should get. And some of them are threatened with the closure of their business because we have a system that is not reimbursing them as it should.

It improves access to telehealth, which is very important. This is a rather new form of delivery of health care, and Medicare is a part of it. It works. I have been in clinics, and I have seen the delivery of very sophisticated CAT scans and the delivery of x rays to a radiologist 150 miles away to get a reading and to be sent back to that rural clinic.

All of that makes a lot of sense. It gives us access to some of the best in the country through telemedicine. Then, in addition, the telemental health part of that is an opportunity for psychologists and psychiatrists to be engaged in telemental health, particularly on Indian reservations and elsewhere, where we have some of the highest rates of suicide any place in the country. Accessing telemental health services can be very important.

On the northern Great Plains--I know the Presiding Officer is from Montana. In Montana, North Dakota, on the northern Great Plains, the rate of suicide among Indian youth--I am talking about Indian teens--is not double, triple, or quadruple the rate across the country, it is 10 times the national rate. That is why telemental health is so important for all elements of our population, but also especially in Medicare for senior citizens. We are doing it in other areas. Extending it to Medicare makes a great deal of sense.

The improvement of the quality of health care in Medicare, the prevention of the 10 percent in payment cuts to physicians, the diabetes prevention program, the elimination of the wasteful payments to Medicare Advantage, are just a few of the examples of why we must expect our colleagues will vote for cloture at 3 o'clock this afternoon. This is the right vote. It is an important vote.

Now, we have been through--yesterday it was energy, with gas at $4 a gallon, and oil at somewhere around $130, $140 a barrel, the minority decided to embrace once again their just-say-no policy on everything. It does not matter what it is, just say no.

It reminds me of an old codger in his eighties who was once asked by a news reporter who said: Well, you have been around a long time. You must have seen a lot of changes in your life.

He said: Yeah, I have been against all of them.

We have people on the floor of the Senate who have decided they are against everything--just say no. My hope is after just saying no yesterday to energy issues at a time when gas is $4 a gallon, it is unbelievable to me they would just say no to begin addressing that, but they did.

My hope is that today, on behalf of health care for senior citizens, they would finally decide to just say yes. If they will do that at 3 o'clock, we will pass this cloture petition and we will take what the Finance Committee and Senator Baucus have offered in the spirit of improving Medicare and saying to senior citizens and saying to their health care providers: We are going to do the right thing.

There is a time urgency. By the end of June we have to solve this matter. And I hope my colleagues will be listening and understand that we need this cloture petition to prevail at 3 o'clock this afternoon.

I yield the floor.

What remaining time exists?

Mr. President, I will not object if an additional 3 minutes is added to the time on this side following the Senator from Louisiana.

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

I ask unanimous consent to use 23 minutes.

Mr. President, there has been a lot of helium in this Chamber in recent hours. I have been watching and listening and heard a lot of discussion about why we cannot produce more energy.

Well, in fact, we are producing more energy. I announced about two months ago, with the U.S. Geological Survey, their assessment of the largest assessment of recoverable oil they have ever announced in the lower 48. That is called the Bakken shale, which underlies eastern Montana and western North Dakota.

They say it has up to 3.65 billion barrels of technically recoverable oil in it. The fact is, we are producing more oil and gas. My colleagues who talk about the need to produce more should understand that I and three others, two Democrats and two Republicans, from the Senate who lead the effort to open what is called lease 181 in the Gulf of Mexico in the 109th Congress. Substantial oil and gas reserves exist there, and we have opened a portion of that--not nearly enough by the way.

I notice that, in the Republican offshore proposal offered by my colleagues on the other side, they carve out opening the area in eastern Gulf of Mexico where there is substantial opportunity to achieve new oil and gas reserves.

In fact, companies from India and companies from China are now exploring for oil in Cuban waters. Our companies want to go there, but American companies are not allowed access in that area. They are not allowed to drill in waters off of Cuba because of the embargo against Cuba.

So this administration has decided, well, we do not want to produce oil off of Cuba despite the fact those waters are open. My understanding is some wells drilled by India have now struck oil. The Chinese are there too, but we cannot drill just miles away from Florida in Cuban waters. So next time I hear about people saying, well, people on this side of the aisle do not want to support additional production, we have supported additional production. That is a fact.

The hood ornament on that argument from them is always about ANWR, a pristine area set aside in legislation signed by President Dwight Eisenhower. Well, the fact is, ANWR should never be a first resort; perhaps a last resort in a critical time. But there is much we can and should do. I am going to talk about some of it this afternoon to address these issues. Yes, produce more, and I have described how I and others have supported more production.

We need conservation and greater efficiency. We waste a prodigious amount of oil and energy in this country. We can conserve much more. With everything we do, every switch we touch from the morning until the evening, all of the appliances that we use, dramatic new efficiency is important.

We also need more focus on renewable energy from wind, solar, and geothermal. There are so many different forms of energy that need to be a part of the solution, including the biofuels which are a part of our future.

Having said all of that, I want to go though a couple of charts because what is happening today is almost unbelievable. We have people driving to the gas pumps this afternoon, and we have people who have ordered a load of gas delivered to their farm this afternoon. We have airlines that pull the airline up to the gate and then have to load up with fuel. We have truckers at the truckstop trying to figure out at the next truckstop how they stop and get a load of fuel and afford it.

Look at what has happened. Oil prices have doubled in a year. There is not one justification in the fundamentals of oil supply and demand for a doubling in price in a year. There is no justification for it. In fact, this country has had an economic slowdown, and we are using slightly less energy than we did before. So demand is slightly down in this country. Since January, the oil and gas inventories in this country have been up slightly. Demand is down slightly down, and production is up slightly. Yet, the price of oil doubles.

There is nothing in the fundamentals to justify what has happened to this oil market. Now, I think I understand what has happened to this market, and here is the line that describes it. It is called speculation. We all know what speculators are. We have lived among speculators. Perhaps our neighbors speculate. We all know speculators.

Will Rogers described them about 80 years ago. He said that these are people who buy what they will never get from people who never had it and expect to make money on both sides of the trade.

That is speculation. Speculators in the oil market are not people who want oil. These are not people who ever want to take delivery of oil. They are not people who would know about the viscosity of oil or perhaps how to drill for oil, nor would they care. They are interested in trading in a commodities market for the purpose of making big profits.

They are not ever wanting to take delivery of anything. They are simply speculators for the purpose of making a profit. Now, that is not why the commodities markets were established. They were established for hedging purposes, legitimate reasons to have a market. You should have, and must have, a market for commodities. For hedging purposes you need some liquidity in the market.

But what has happened in this market is a perversion. We have speculators in this market who have driven the price way up. In fact, I have just spent an hour today with the head of an organization called New York Mercantile Exchange, NYMEX, in New York. He came down and we talked for about an hour. We agree on some things and do not agree on others.

This is a pit in which they trade commodities in NYMEX. Well, they trade the crude oil on the NYMEX. One of them is West Texas intermediate crude, for example.

You have people who wear these jackets, they bid. As you see, they throw paper on the floor. At the end of the day, people who have never touched a quart of oil, let alone a barrel of oil, have decided what the price is going to be for the coming days and months.

It is not the only commodities exchange. This is also occurring on the Intercontinental Exchange in London and Dubai. It is a large, global market, but only part of it is regulated. Only part of it is available for us to inspect and see. Much of it is out of our view. Much of it I call dark money. It exists out there, but you cannot see it. It is not transparent or regulated. It has a profound impact on the price of oil, and therefore, it has a tremendous impact on what it is going to cost consumers to fill a car with gas, a farmer to order a load of fuel, airlines to buy jet fuel. We have airlines and trucking companies going bankrupt and many more struggling to make it through this.

Now, I understand we have had 12 airlines in recent months declare bankruptcy. We have a lot of trucking companies, mom-and-pop trucking companies, who are going belly up because they cannot afford to buy fuel for their trucks.

The airlines are barely able to afford to buy the jet fuel for their airplanes. Drivers pulling up to the gas pump are having a difficult time trying to figure out how to pay $60 or $70 for a tank of gas.

I pulled up behind an old car about 30 miles north of Minot, ND, one day some while ago. It was pretty much a wreck. The back bumper was hanging down about halfway. It had a lot of dents and rust. And it had an old, faded sticker on the bumper which said: We fought the gas war and gas won.

Probably not surprising. Gas won. Well, gas is sure winning these days, $4-plus a gallon, diesel well above $4 a gallon, and oil flirting with $140 a barrel. Now, some say, well, that is just the market at work. There is no market at work here. This is a perversion.

Let me talk about the oil market. You have ministers representing nationalized companies under the banner of OPEC. Now, this is a cartel. Cartels are illegal in this country. It is a crime. It is criminal. So you have a cartel of countries that go behind closed doors and have their oil ministers make judgments about how much they are going to produce and what price they want to get for it in the international marketplace. That is No. 1. There is no free market aspect to a cartel. I expect most people would agree.

Second, the major integrated companies are all much bigger and much stronger with much more muscle in the marketplace.

Why? Because they have all merged. They all got romantically entangled, decided they want to pair up. Pretty soon, Exxon is not just Exxon; it is ExxonMobil. Phillips Oil is now ConocoPhillips. They all have two names and a lot more muscle. They are bigger, stronger, and more powerful forces in the marketplace.

Third, you have a futures market that has become an unbelievable amount of speculation, driving up prices. So you have a cartel with OPEC; bigger, stronger oil companies; and a futures market that is rife speculation.

Fadel Gheit, senior energy analyst, who worked 35 years with the Oppenheimer & Co., said:

There is absolutely no shortage of oil. I am convinced that

oil prices shouldn't be a dime above $55 a barrel. I call it

the world's largest gambling hall. It's open 24/7.

Unfortunately, it's totally unregulated. This is like a

highway with no cops, no speed limit, and everybody is going

120 miles an hour.

I have talked to Mr. Gheit by telephone. He was a witness at a hearing in December 2007. I have a sense of what he is about and what he thinks. He believes this market is a complete perversion. It is rife speculation, with people driving up the price of oil, having nothing to do with the fundamentals of supply and demand.

It is not just Mr. Gheit from the Oppenheimer and Co. We see this in the New Jersey Star Ledger:

Experts, including the former head of ExxonMobil, say

financial speculation in the energy markets has grown so much

over the last 30 years that it now adds 20 to 30 percent or

more to the price of a barrel of oil.

If the former head of ExxonMobil is saying there is so much speculation that it has added 20 to 30 percent to the price of a barrel of oil, the question is whether that is credible?

From the senior Vice President of ExxonMobil:

The price of oil should be about $50 or $55 a barrel.

The president of Marathon Oil, Clarence Cazalot, Jr.:

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

market.

During a question-and-answer period with reporters, he suggested a more reasonable range for crude oil prices would be between $55 and $60 a barrel.

The Commodity Futures Trading Commission is supposed to be the regulating body. I know regulation is a four-letter word in this Chamber for some. It is not for me. A free market works only when it is open and free. When the arteries get clogged, bad things happen. We have seen a lot of clogging of the arteries in this so-called free market system. But we have a referee for the free market system. It

is called the Commodity Futures Trading Commission, the CFTC. The CFTC is supposed to be a regulator, but like a lot of regulators, it seems to be pretty much asleep at the switch. I will describe why and how in a minute.

I have some experience with this because I chaired the hearings in the Senate over in the Commerce Committee on the Enron scandal. I had Ken Lay, now deceased, come to our hearings. He was the CEO of Enron. He raised his hand, took an oath, sat down, and took the fifth amendment. He was subsequently sentenced to prison but died before he went there. Once exposed, several in the Enron Corporation went to prison because we discovered it was a criminal enterprise. Among other things, it soaked billions of dollars of ill-gotten gains, particularly out of consumers on the west coast through wholesale electricity prices. That happened under the nose of what was supposed to have been a Federal regulator, the Federal Energy Regulatory Commission.

During that time, I raised the question about the speculation and the manipulation of the marketplace by Enron and others. Vice President Cheney scoffed and said: There is nothing going on here. Shame on all of you for suggesting there is something nefarious happening. It turns out Dick Cheney was dead wrong, supporting the energy interests ahead of the public interest. We found out later it was a criminal enterprise. We found out later that the regulator did nothing other than sat by and watched what was happening.

Now we have a regulator, the Commodity Futures Trading Commission, which is supposed to be wearing the referee's shirt with stripes that calls the fouls with respect to energy trading. The Commodity Futures Trading Commission has actually allowed a lot of this to occur, this speculation, by issuing what are called no-action letters so that a number of commodity trades can move to the dark side so they can't be seen and regulated by the regulator. In fact, the regulator is saying that it is OK for us not to see you or understand what you are doing which is kind of unbelievable. It defies credibility to hear a regulatory body say: We don't want the information with which to regulate you.

Let me describe what Mr. Lukken, the head of the Commodity Futures Trading Commission, the regulatory body, has been saying. I am using the description that he is ``parroting'' the assertion by those involved in the market. These are the very speculators who make a lot of money in these markets and want us to believe that nothing is really happening. There is not substantial speculation. This is just a lot of good people selling and buying back and forth.

Here is what Mr. Lukken says:

Based on our surveillance efforts to date, we believe that

energy futures markets have been reflecting the underlying

fundamentals of those markets.

That was last July. Mr. Lukken says: Gosh, things are fine. Don't worry. Be happy. Everything is OK. The fundamentals justify whatever is going on. That was last July.

The acting Chairman of the Commission, Mr. Lukken, again said in January of this year:

Based on our surveillance efforts to date, we believe that

energy futures markets have been largely reflecting the

underlying fundamentals of these markets.

You will note he said in January exactly what he said in July, but he changed one word. It must have been a mistake. He changed one word. He essentially says: Hey, don't worry about the price of oil and gas. This is all about fundamentals. So the Chairman of the regulatory body says things are OK once again.

In February, acting Chairman Lukken says:

The Commodity Futures Trading Commission is confident that

U.S. futures exchanges and clearinghouses are functioning

well, especially during these turbulent economic times.

Don't worry. We regulators have our hands on it. We have it all figured out.

On May 7, the acting Chairman of the regulatory body says:

We can say with a high degree of confidence that people are

not manipulating the energy markets.

That is really interesting because just two weeks ago this same person, Mr. Lukken, who has told us now for a year, while the price of oil has doubled, there is really no speculation, this is just supply and demand at work. The fundamentals of the marketplace are working. Don't worry, be happy. Nothing nefarious is going on. There is no manipulation, then all of a sudden, two weeks ago, this man must have had some sort of epiphany. I don't know what he ate for dinner, but suddenly he woke up and made an announcement that the CFTC wants to find out what is going on in this marketplace and for the last 7 months they have been investigating it. Really? That is interesting. What about his statements during the last year they had already concluded nothing was wrong?

I wonder at what point Americans should be relying on the word of Mr. Lukken when he was telling us in January there is nothing going on. It is just the fundamentals at work. Yet, he was reassuring us in early May there was nothing happening. Perhaps a couple weeks ago, he apparently, in some startling 180-degree turn decided to figure out what is happening.

Mr. Lukken, the acting Chairman, and his nomination is before this body, said we are now going to something called the Intercontinental Exchange and others. Incidentally, it is a foreign exchange but an exchange in London, largely founded by American companies, trading on computer terminals in Atlanta, GA, and other places in the U.S. but allowed to do it without oversight or regulation by the CFTC because they exempted them with a letter of no action. It basically is saying we are not going to find out what is going on. Really? I thought you knew what was going on. You have been assuring us all along that you knew what was happening. Turns out now he admits they don't have nearly the information with which to judge whether there was excessive speculation.

By the way, the Administration, to the extent it was doing anything, called for the creation of a task force of several agencies, including the CFTC. They act as if the barn is on fire at the moment. They go from no motion to slow motion to some sort of hyperspeed, I guess. But I have almost no confidence in statements for 6 or 8 months saying that the doubling of the price of oil is just fine, and it is unrelated to either manipulation or speculation.

I had one of the presidents of one of the largest investment banking firms come to my office. I think we spent an hour speaking. At the end of the hour, he answered every question except the one he couldn't answer, the one I kept asking: If you say fundamentals are at the root of why the price of oil has doubled, then tell me what those fundamentals are that justify the doubling of the price of oil. Is it that supply is down and demand is up? If that is not the case, what are the fundamentals? Those who argue that this speculative binge cannot answer the question, what fundamentals justify doubling the price of oil?

The importance of that is this: I used to teach a little economics-- not very much--in college. I taught economics briefly. I tell people I was able to overcome that experience and go on to lead, nonetheless, somewhat of a productive life. Economics is psychology pumped up with helium. That is all it is. Everybody says they know this, that, or the other thing. Economics is about human behavior. But I understand enough about the economics of this issue to understand you have binges of excess and speculation, and we have seen them in history. You can find books about them. They will take you back to the days when tulip bulbs were sold for $25,000 for one bulb in a binge of speculation that is still written about today, 400 or 500 years ago. We have bubbles of speculation that occur. In most cases, it is not terribly damaging to a country or an economy. Who cares if you can buy a tulip bulb? Who cares if you can afford it?

Consider this. The price of oil jumps to $135 a barrel. The price of gas goes to $4 a gallon. You have OPEC countries going to the bank depositing our money in their accounts. The major oil companies going to the bank depositing our money in their accounts. Airlines are going broke, and trucking companies not able to afford to run their trucks. The average American family is trying to figure out how they can afford to put gas in the car and get to work. When all of that occurs, it is long past time for this country to say:

What on Earth is happening and how do we fix it? When you have a market that doesn't work, there is a responsibility for the regulator and the Government to take a step and fix that market.

This futures market is not the market that was established many decades ago. That market was established for a specific purpose, a laudable purpose. It was to allow orderly trading for delivery of petroleum commodities. It has now become an unbelievable cesspool of speculation that has driven up the price of oil in ways that deeply damage this country. This Congress has a responsibility to deal with it.

I am working on legislation that would mandate the Commodity Futures Trading Commission to take the steps that are necessary to shut that speculation down, to stop the dark money and markets, to put it all on the regulated side and then to increase margin requirements in order to wring the speculators out of this market. I believe that could decrease the price of oil and gas by 20, 30, 40 percent. It is not just me. I have quoted those who run some of America's major oil companies and experts involved in some of the trading at some of the largest institutions who believe speculation now has driven up the price of oil and gas by 20, 30, 40 percent.

There is a lot to say about what is happening in our country and a lot to say about the need for regulators to begin doing what we pay them to do. I will describe the legislation I am working on at greater length. I appreciate the indulgence of my colleagues.

I yield the floor.

Mr. President, the consensus among scientists, whose expertise I respect, is that there's something happening to the climate of this planet that we need to be concerned about. As a result, I believe that the Congress needs to enact climate change legislation to address global warming It is one of the significant challenges of our time. Addressing the issue of climate change will require a national commitment of all the resources that are available to us to change course and protect our planet.

I voted no on the motion to invoke cloture today, but this should not be seen as a statement of my opposition to enact mandatory, climate change legislation in the future. The specific proposal that has been brought to the floor of the U.S. Congress by Senators Boxer, Lieberman, Warner, Kerry, and others is a legitimate and thoughtful piece of legislation.

The Senate has voted on climate change legislation in 2003, 2005, and now in 2008. In all three cases, many Members have expressed their opposition to any mandatory legislation. Yet, during this 5-year period, there has been a significant shift in public awareness, the certainty of the science, and the demand for legislative action. I hope that industry in this country will understand what we are required to do and start preparing for it.

When there is a new President and a new Congress in 2009, I predict that there will be another debate, and there will be passage of landmark U.S. climate change legislation. Major pieces of landmark legislation such as the Clean Air Act, the Clean Water Act, Superfund, and others took several Congresses to be refined and enacted. I believe that time for climate change legislation will be in the 111th Congress.

In order for our country to dramatically shift our energy use to a lower greenhouse gas emitting blend, a strong commitment from all sectors of the economy is needed. We need a ``moon shot'' approach to increasing energy efficiency and conservation, renewable energy production and technologies that allow us to capture and sequester carbon emissions from fossil fuel energy generation.

I am a big fan of renewable energy, including wind, solar and geothermal energy as well as biofuels. In order for these energy sources to become a larger portion of the energy used in this country, however, we need to demonstrate a robust commitment to funding research and development to increase the efficiency of renewable energy and drive the costs down so they are competitive with fossil energy sources. Until they are cost-competitive, we need to provide long-term incentives that signal certainty to potential investors. Even as we strongly support our renewable energy research, development and deployment, we also need to understand that in order to meet our energy needs we will need to continue to use fossil fuels--but use them in a different way.

For example, we use coal to produce about 50 percent of the electricity we now use in this country. Coal is going to continue to be a significant part of our energy future, so that means we must make a major research push to find ways to the capture the carbon and sequester the carbon.

The climate change bill that is now on the floor includes what is called ``kick start'' funding and ``bonus'' funding that its authors say addresses the needs of the industry to get carbon capture and storage. However, the bill does not provide any funding for the substantial research and development that will be necessary to find ways to capture the carbon and safely sequester it.

Similarly, advancing renewable energy will require substantial funding, of which there is not enough in the underlying bill. There is money in the underlying bill for demonstration and commercialization of technologies, both in the renewable area and carbon capture and storage. But there is not the kind of funding that will be necessary to fund the research and development at the front end of the process for both carbon capture and renewables.

I prepared and filed amendments to address those two deficiencies. Together, my amendments would add $30 billion in the first 12 years to carbon capture and storage and renewable energy. The amendments provide a full commitment by our country to fund the necessary research and provide the opportunity to succeed in both areas on the front end. We will not succeed in our quest to address global warming unless we invest in these areas of research. The product of research for the environmentally safe use of coal and the expanded use of renewables is what will allow us to meet the targets in the global warming bill.

Today, however, we find a tangled procedure in the United States Senate by which we are asked to vote to shut off debate and vote cloture on the Boxer substitute. This means that my amendment and others designed to improve the bill will not be allowed to

even be offered. That is because the minority blocked the process when the bill came to the floor, so no amendments have been allowed to be offered. Therefore, none are pending, and post cloture, only pending amendments can be voted upon.

In short, voting for cloture means I would be voting to deny myself the opportunity to offer the important amendments I have just described. I am not prepared to do that. I am prepared to seriously address global warming. I will count myself as someone who is going to vote to advance appropriate legislation to address global warming. But I am not going to vote this morning to prevent myself from offering the amendments that I think are necessary to make this legislation work.

Let me state again, I think my colleagues that have brought the Warner-Lieberman-Boxer bill to the floor today have done some good work, and I am appreciative of their effort. The bill in its current state is not ready to become the law of the land. We need to have a serious debate about this legislation, amendments need to be considered, the bill needs to be modified in significant ways before it should be passed by this Congress.

Let me repeat, a piece of legislation that will have some of the most significant consequences for the environment, for the economy, and for a way of life than anything we have done in many decades in this Congress has been brought to the floor and will now be subject to a cloture vote without any opportunity to offer an amendment. That is not a process that I can support.

Mr. President, my colleague, Senator Lautenberg from New Jersey, just described something that is very important. He described the role of himself and others, and particularly the occupant of the chair as Presiding Officer, in working on the new GI bill. I was proud to be a cosponsor. I join him in hoping that President Bush will agree with the majority of the House and the Senate to look favorably upon this bill and agree to sign legislation that includes this bill. We owe it to America's veterans. I appreciate the comments made by my colleague from New Jersey.