Floor Statements

Mr. President, I ask unanimous consent the Senate now be in a period of morning business with Senators permitted to speak for up to 10 minutes each.

Mr. President, I yield the floor.

I wonder if the Senator from Washington will yield for a question. I have to leave the Chamber due to another event.

First, I thank the Senator from Washington. Senator Cantwell has been unbelievably strong and supportive in getting us to this point of having passed the resolution of disapproval. We got it through the Commerce Committee. She was a leader in that effort. We now have voice voted it. It has passed the Senate.

I did want to say, as I said earlier, the issue here is simple. We have far too much concentration in the media. The Federal Communications Commission, at least the Chairman and two others who have been members, have become cheerleaders of more concentration. That means less localism. It means your local radio station, in many cases your television station, other media outlets, are run by somebody living 1,500 miles away, running homogenized music through a radio station having nothing to do with covering the local baseball team or news events. I think this moves in exactly the wrong direction. I believe there needs to be more localism and I think there has to be a procedure on localism at the Federal Communications Commission. There need to be public interest standards with respect to broadcasters that do not now exist. The standards have been emasculated. We have a lot to do to put this back on track.

Suffice it to say, the FCC was anxious to move in the direction of more consolidation, allowing newspapers to buy up television stations. We have had a ban on that for three decades. We prohibited the cross ownership in a market. The reason we have done that is pretty simple: We don't want there to be only one or a couple of dominant voices in a market. We want there to be many voices.

That is what our purpose is, to bring this resolution of disapproval. It is unusual to do this, but we did it. It got through the Commerce Committee, now through the Senate. It says to the Federal Communications Commission, get things right, do things right, don't truncate these things and cut the American people out of this process.

We have also said today we believe this is moving in the wrong direction. Everybody says there are more voices out there in the Internet and cable channels and so on. More voices but the same ventriloquist. We had one person testify from Los Angeles who came and said in my office we have 48 cable channels. I went through who owns the channels--42 of them are owned by the same few companies and that is the problem with concentration.

I again thank the Senator from Washington. She has done a great job and I am proud to work with her and Senator Snowe especially, on the other side, and Senator Lott when he was here, to accomplish this result.

Mr. President, I am not going to speak so much about what divides us. Today I wish to talk about what would unify us with respect to the two energy plans. We are going to vote on an amendment that is a bill I offered back in February of this year that would stop putting oil underground. Some say that doesn't mean very much in terms of energy prices or that it would not accomplish a lot.

We had testimony before the Senate Energy Committee by economists and an energy expert. Dr. Verleger testified that what's coming from the Gulf of Mexico is sweet light crude, the most valuable subset of oil. Despite the fact that it is a small percentage of the oil usage, it could have as much as a 10-percent impact on the price of sweet light crude. I don't think we should underestimate the significance of this proposal. At a time when oil prices are bouncing up in record highs, with oil prices at $120, $124, and $126 a barrel, we have speculators playing their fiddle. The oil prices dance up into the stratosphere; the economy is damaged; consumers get injured; and industries are going belly up.

The question at this time is, what unites us here? I will tell you one thing we can agree on. There are at least 80 Senators who have expressed themselves, including all three Presidential candidates. They have said let's stop putting oil underground. Is it a reasonable thing to do to set oil aside underground? We have something called the Strategic Petroleum Reserve. Let me show you what it is. This is what it looks like. Instead of oil going into the pipeline so you can convert gasoline to your automobile, it is going underground. This is what the SPR looks like. Here is where the SPR is being stored--at Bryan Mound, Big Hill, West Hackberry, and Bayou Choctaw.

The SPR is 97 percent full. The question is this: With oil at $126 a barrel and gasoline around $4 a gallon or more, and with the American consumer being burned at the stake, why should its Government be carrying the wood? Why should we be putting oil underground at a time of record-high prices? Who thinks it is smart to go out into the marketplace and take oil that is that valuable and stick it underground when it is having an impact of upward pressure on oil prices? That makes no sense at all.

As I said, all three Presidential candidates have said we ought to stop at this time. Eighty Senators have agreed with this decision. Somehow, the President and Vice President are insistent that we continue to fill the SPR.

Look, there are a lot of other things happening. Number 1, we need more production. I was one of four Senators who introduced the legislation, with Senator Domenici, that led to opening Lease Sale 181 in the Gulf of Mexico. That is additional production, and I am proud that became law. It should have been broader, but it got narrowed through the legislative process. I have a bill in to expand production in the Gulf of Mexico.

Yes, we need additional production, conservation, efficiency, and renewables. We need all those things. We have made progress in some of them. Last year, we finally passed reformed CAFE. We increased CAFE standards 10 miles per gallon in 10 years. That is a historic achievement after 32 long years in this Congress. We set us on a course toward renewables.

There are short-term, intermediate, and long-term solutions. John Maynard Keynes says that in the long run we are all dead. How about the short term? How about today? I know where there is 70,000 barrels of oil, including sweet light crude, that could go into the gas pumps and into cars and put downward pressure on gas prices. I know how we can take action and so do my colleagues. At least we can agree on that piece of legislation today.

Here is another point. There is unbelievable speculation in the commodities market. It is interesting. Let me give you a couple of charts that show this. The senior vice president of ExxonMobil said last month:

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

Mr. Cazalot, the CEO of Marathon, said:

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

marketplace.

A man who testified before the Energy Committee, Mr. Gheit, a senior energy analyst with Oppenheimer, said:

There is absolutely no shortage of oil, and I am absolutely

convinced that oil prices should not be a dime above $55 a

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

open 24/7.

The fact is, we have speculators, hedge funds, and investment banks that have never been in the futures market before and are in neck deep. They are driving up prices that have very little to do with the fundamentals of supply and demand. Should we ignore that and say that is OK?

Mr. President, I think I have consumed 5 minutes. I ask unanimous consent for 2 additional minutes.

Should we say that is OK, let's talk about other subjects? I don't think so. If you want to purchase stock on margin, you have to put up 50 percent of the money. If you want to control $100,000 worth of oil, the subject of such speculation, all you need now is a margin requirement between $5,000 and $7,000. It seems to me that the margin requirement ought to be increased to the point of wringing speculators out of the system. We need a futures market for legitimate hedging and for liquidity.

There are times when speculative bubbles develop. In this case, the bubble driving up the price of oil and gasoline at the pumps is damaging our economy. A lot of industries are suffering, including truckers and the airlines. It is hurting a lot of American families, and we can do something about it.

We have a couple different plans. Let's take the one common part of both plans, which is the amendment I offered as a bill in February, and pass that today because that will make a difference. Is it a giant step? Not at all. Is it a step that is finally at long last in the right direction? It is. So instead of getting the worst, let's try to get the best of both sides and say this we agree on, this we can do.

My hope is that at the end of today, at least this Congress will have said to the President and Vice President: Stop doing what you are doing. The last thing in the world we ought to do is put upward pressure on gas and oil prices. We ought to put downward pressure on that, and we can do that today with one single vote.

I yield the floor.

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

Mr. President, I am required by our leadership to object because they want to get the vote off on the time predetermined. I apologize for that, but that is what I am required to do.

Mr. President, let me conclude with a couple of thoughts. First of all, my colleague from New Mexico described the issues of speculation a bit. We do, in fact, in our larger proposal that we announced last week, have a provision dealing with speculation. And it is important that we do that because speculation is part of what is driving these prices. I showed comments from executives of some of the largest oil companies in this country that said there is no justification for the current price given supply and demand.

They said the price of oil should not be much above $50, $60, $70 a barrel. So what is happening? Well, let me come to that in a moment. Let me say, first of all, my hope is that today, here on the floor of the Senate, we will decide to do some good things.

Now, how do you do good things? You try to find areas of common interest and legislate moving ahead where you can. That is what Senator Reid has suggested in the underlying amendment that we will vote on dealing with stopping and halting the putting of oil underground in the Strategic Petroleum Reserve. This is something I introduced in the Senate back in February.

Now, as I said before, when the American consumer is being burned at the stake by high gas prices, its Government ought not be carrying the wood. I mean, it is that simple. We can do something about this.

We are talking about 70,000 barrels a day, 70,000 barrels every single day of sweet light crude that we are taking off the market. Dr. Philip Verleger, an economist and energy analyst, testified before the Energy Committee on the effects of such a move. He said although it is only three-tenths of a percent of usage, because it is sweet light crude, the most valuable subset of oil, it could have up to as much as a 10-percent effect on the price of oil.

So it seems to me what we do is, do what the Republicans and Democrats have now generally come together to say we should do, and say to the President: Look, you cannot put 70,000 barrels of oil underground every day. You cannot do that. The Strategic Petroleum Reserve is 97 percent filled, 97 percent.

Now, oil is $120, $126 a barrel; gas is going to $4 a gallon. Let me describe the situation we all understand that we face on this planet of ours. We stick straws in the planet and suck oil out. We suck out 85 million barrels every day. We are required to use one-fourth of that in this little spot of geography on the planet called the United States of America.

Let me say that again. We take 85 million barrels a day, and we need one-fourth of it to be used in the United States. Now, 60 percent of that which we use comes from outside of our country. That holds us hostage to others. And 70 percent of the oil we use in this country is used to fuel vehicles. So vehicles are an important part of this issue. I am proud to say this Congress, with this majority and some minority help, has passed for the first time in 32 years an increase of 10 miles per gallon in the next 10 years of CAFE standards. This will lead to better automobile efficiency and better gas mileage.

We made some progress in other areas. We opened production in Lease 181 in the Gulf of Mexico where there are substantial reserves. We made progress in the biofuels ethanol standards and renewable fuels standards. We have made some progress on all of those issues, but we have people coming to the floor today to say: Well, gas is $4 a gallon. Let's open ANWR. That means we get oil in 10 years.

As John Maynard Keynes said, in the long run we are all dead. What can we do in the short term? At least today, on Tuesday, we can at least do what we both believe--that is, what the minority and majority believe is appropriate--and that is stop putting oil underground and put some downward pressure on gas prices and oil prices. Give the consumer an opportunity to see some decent prices.

This speculation in the futures market is speculation that is driving up prices. We want to do something about that as well. But at least today we have one common theme; we can increase supply by 70,000 barrels a day of sweet light crude. Instead of it going into the supply that comes through the pump into the cars, which puts downward pressure on gasoline, it is now going underground, underground in the Strategic Petroleum Reserve. It makes no sense at all.

So I am saying: Let's stop doing bad things and let's start doing good things. We can start by taking the first step in doing that today.

Mr. President, how much time remains?

Let me make one additional point, if I can. It does not relate specifically to this amendment, but this issue of the free market. You have an OPEC cartel behind closed doors. You have oil companies that are bigger through mergers. You have a futures market that is now rife with speculation. There is no free market. So the American people deserve, it seems to me, a Congress that will stand up and take some steps to put some downward pressure on gasoline prices.

That is a step we can take today. It is a step that is not a giant step, but it is a step in the right direction that will put downward pressure on gas prices. It will help this country. My hope is, following this vote, we will see that both parties can contribute to something when we agree on it. I think this will be a good day to put downward pressure on gas prices.

Amendment No. 4737

Mr. President, I call up amendment No. 4737.

Mr. President, I ask unanimous consent that the reading of the amendment be dispensed with.

Mr. President, let me take the 1 minute.

This is a piece of legislation I introduced in February of this year. The Strategic Petroleum Reserve is 97 percent filled. We have oil and gas prices going through the roof in this country. We are putting 70,000 barrels of oil underground every day. It is a subset of the most valuable kind of oil: Sweet light crude, coming from the Gulf of Mexico.

We heard testimony before the Senate Energy Committee that even though it is a small part of our oil usage, this subset of oil--the 70,000 barrels a day put underground--could have an impact of up to 10 percent of the price of oil. I am not suggesting this does everything, but it is a step in the right direction.

As I said earlier, when the American consumer is being burned at the stake by energy prices, the Government ought not be carrying the wood. Sticking oil underground is wrong at this point in time, and this amendment simply says: Stop it. Halt it.

Mr. President, reserving the right to object, I do not object, of course, but might I observe that I understood the objection to the previous unanimous consent request. My hope would be that in the coming hours today we might have some discussions between the leadership of the minority and majority so that we can proceed on the SPR amendment. I understand the objection was raised, but there has been an overwhelming amount of support by the Senate. I hope we could have those discussions this afternoon and perhaps proceed on the basis that Senator Reid has suggested.

Mr. President, am I listed in the order of morning business?

Mr. President, I am going to speak about energy and respond to a couple of things I heard on the Senate floor and talk about what we are going to be doing tomorrow. But first let me say I finished 2 hours of chairing a Democratic policy committee hearing in which three people testified: two previously serving with the U.S. State Department in the country of Iraq, and one, Major General Nash, who has a great deal of experience internationally.

I come away from that hearing after listening 2 hours to some very patriotic Americans, Judge Brennan and Mr. Mattil, who talked about their experience working for the State Department in Baghdad.

What I heard was unbelievable--almost unbelievable. They were there to try to be supportive of the anticorruption efforts that were underway by our Government and by Judge Radhi al-Radhi, who headed the Commission on Public Integrity in the country of Iraq. What they told me makes me almost furious.

They told me our State Department--yes, our State Department here in the United States--did everything they could to undermine the efforts of Judge al-Radhi and the Commission on Public Integrity and the section in the State Department that was in Iraq trying to root out corruption and support those who were engaged in anticorruption activity. Billions and billions of dollars have literally been stolen. The witnesses today who worked for our State Department in Iraq told us money that has gone through the hands of the Iraqi Ministries, an unbelievably corrupt government, ends up in the hands, among other places, of the insurgents, which then fuels the war against our soldiers. Our State Department, they say in testimony--and I encourage people to write to us and get a copy of this testimony--they say our Government and those in charge in Baghdad not only did nothing about it, but tried--because the Iraq Government, full of corrupt Ministries, was upset with the Commission on Public Integrity investigating them-- it was our Government that decided to be helpful to throw Judge al- Radhi out of that country.

This is a man whom they tried to kill. They didn't like him investigating corruption in Iraq so they tried to kill him. Yet our Government paved the way for the Iraqi Government to get rid of him, to throw him out of the country.

On Thursday of this week we are going to write a bill in the Appropriations Committee. I believe the President asks for $172 billion--that is with a ``b''--$172 billion additional, mostly for the war in Iraq and Afghanistan. The question is, how much of that $127 billion going through our Defense Department and then coming into the Iraqi Ministries, how much of that is going to be wasted? How much of that is going to stick in the hands of corrupt officials in the country of Iraq?

If we could dye that money purple and track it through those who stuff it in their pockets in Iraqi Ministries and then pass it along to the insurgents as part of the take, who would we see stealing this money from the American taxpayers, and who would we see undermining the work, every day, of soldiers in Iraq?

We can't leave the country of Iraq, we are told by this administration, until there is stability. There is not going to be stability until we address the issue of corruption. As long as we will turn a blind eye to corruption--which two people from the State Department who worked in Iraq told us today--as long as we turn a blind eye to corruption, which has been done; as long as we betray--yes, betray--those who were standing up in Iraq and risking their lives to get rid of corruption, we don't stand a chance of making an inch of ground in Iraq. In fact, the witnesses today said the Special Inspector General in Iraq, in reporting to us, the Congress, and the American people about progress made in routing out corruption, that Special Inspector General was given information from those in charge in our Government in Iraq that was inaccurate because those responsible for providing the information sent the right information to the Inspector General and then it was pulled back by the State Department and they sanitized it and rewrote it to give a completely different message.

We are not even getting the truth. We are being deceived. I want everyone to read the testimony that came today from Judge Brennan and others and understand what is happening.

As we start on Thursday on this issue of whether we are going to provide another $172 billion, we ought to understand how much of that money is being stolen, how much of that money is going to actually support the insurgency, and what is being done about it. I am going to send letters, as a result of the hearing that I and my colleagues held today, to officials in the State Department, to Secretary Rice, and others demanding to know what she knows and what they know and who is doing something about this and demanding accountability from those in the State Department relative to the testimony that was given today.

Mr. President, I didn't come to talk about that, but I just came from chairing that hearing for 2 hours. It is an unbelievable tale that is very distressing and very disappointing and just cries out for action by the Congress and action by the President and this administration.

I want to talk about oil prices a bit. I noticed today that some of my colleagues were talking about drilling in Alaska. They said that we should drill in ANWR. That has become the hood ornament for every conversation about energy. If we just drill in ANWR, then things will be fine.

ANWR is one of those pristine areas we have set aside. There are some who want to drill there as a first resort. If ever there is drilling in some part of the world that we have set aside as one of the few pristine areas left, then it ought to be a last resort. Why would you go there as a first resort?

If you take a look at the Outer Continental Shelf and where the reserves of oil and gas really are, You have on that list the Gulf of Mexico, the West Coast, and the Outer Continental Shelf of Alaska. They rank in that order. No. 1 is the Gulf of Mexico; No. 2 is California and the west coast; and No. 3 is the Outer Continental Shelf of Alaska.

I was there with three of my colleagues, Senators Domenici, Bingaman, and Talent, in the 109th Congress who introduced the legislation to open Lease Sale 181 off the Gulf of Mexico to get new oil and natural gas production. I am proud to say that became law. We got that passed in the 109th Congress.

It was narrowed when we passed it, so I have actually introduced another bill to expand that. I think we should be in the eastern Gulf of Mexico producing more, and we have made progress as a result of my past efforts with Senators Domenici, Bingaman, and Talent. So don't tell me about ANWR is going to solve all our problems. We are trying to open even more in the Gulf of Mexico for additional production.

With respect to the price of oil at this point, it's been bouncing around at the top like a roller coaster. But here is what is happening with the price of oil. It has nearly doubled in the last year. That should be no surprise to people. If you drive a car you know what is going on. It nearly doubled in the last year.

In my judgment there is nothing that justifies that, and I want to talk about that a little bit. There is nothing with respect to the fundamentals of supply and demand that would justify doubling the price of oil in one year. Take a look at what Stephen Simon, senior vice president of ExxonMobil, a company making enormous profits, said. By the way, they have permagrins. They can't help but smile all the way to the bank with their record profits, some of the highest profits in history. Mr. Simon, said on April 1:

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

Clarence Cazalot, CEO of Marathon Oil, said,

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

market.

Fadel Gheit, Senior Energy Analyst with Oppenheimer & Company who has more than 30 years in this business said to the Star-Telegram on October 26, 2007,

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

convinced that oil prices should not be a dime above $55 a

barrel.

He is talking about the futures market.

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

everyone is going 120 miles an hour.

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.

Here is an example of increases in the speculation in the futures market as opposed to commercial contracts. Speculation has rapidly increased. You can see it has gone up near the 40 percent mark. You will see where it has gone just in recent years, up, up, way up. What has happened is we have much more speculation in the futures market that determines the price of this commodity.

Who is making money with all this? I said the other day, I don't know this guy from a cord of wood. His name is Andrew Hall. There is a story in the Wall Street Journal: ``Trader Hits Jackpot In Oil As Commodity Boom Roars On.''

My guess is this fellow doesn't actually want to buy oil or actually acquire oil. He is just speculating in the futures market. Will Rogers said:

You will buy things you will never get from people who

never have had it.

Right? And you make money all along the way. You have the speculators in neck deep and hedge funds in neck deep in the futures market speculating. Here is a guy who made a quarter of a billion dollars in the last five years speculating in the futures market.

Some say the futures market, you need that. I agree you need that. You need that for liquidity, and you need it for hedging. That's absolutely true. But you don't need a futures market and should not allow a futures market for energy that ratchets up the price of energy in an unbelievable way, solely due to speculation. The fact is, it does great damage to our economy and does great damage to industries in this economy.

I believe we have had five airlines go bankrupt in the last month. We have trucking firms threatening to go belly up because they can't possibly afford to pay for the fuel and make a decent profit. This has an unbelievable impact in our country. It severely damages our economy.

I come from a State that is 10 times the size of Massachusetts.

So you can put ten Massachusetts in my State. We do not have a very large population, but we drive a lot. We are an agricultural state so we use a lot of fuel. Incidentally, per person we use twice as much fuel as New Yorkers use. We use twice as much fuel per person per capita as New Yorkers do, so when this shoots way up through the stratosphere, it hurts us much more than other areas of the country. We know this in a very personal way.

Now, what do we do about that? Well, I have talked about the unbelievable orgy of speculation in the commodity markets. We ought to dampen that speculation by increasing the margin requirements. Buy a stock on margin, you have to put up 50 percent of the money to buy the stock. Buy an oil futures contract, in most cases, you put up 5 to 7 percent to buy an oil futures contract.

If you have too much speculation in that marketplace which is well above that which is needed for liquidity and hedging and normal commercial functions, then you have too much speculative capability, and there is too much speculative activity. Thus, we ought to wring that out. I think there is a way to do that, and that is by increasing the margin requirements.

Now I want to go to the next piece of information, and that is the bill I introduced three months ago to suspend filling the Strategic Petroleum Reserve. I was thinking today about the movie ``Dumb and Dumber.'' I actually watched a little bit of it because it was so dumb. Dumb and dumber represents a policy of putting oil underground at a time when oil prices are up around $128 a barrel. I know ``dumb'' is not a term of art, but I cannot think of anything that would be dumber than continue a policy that makes no sense. Oil is going through the roof so let's stick oil underground by taking it out of supply, store it underground, and thereby increase the price.

Well, here is what we should do instead. This administration is now putting about 70,000 barrels of oil every single day, 7 days a week, at locations like Bryant Mound, Big Hill, and West Hackberry. These are places on the Gulf Coast with salt domes where we

store oil. What is the purpose? It is called the Strategic Petroleum Reserve. We call it the SPR for short. Because if we run into some trouble some day, we want oil preserved in an SPR, and we can call on that oil.

Here is what it looks like. It includes big old tubes that pump oil in the ground. This is the oil that ought to be in the supply pipelines right now so, when you drive up to the gas pump, you are paying a little bit less than you are now paying. Instead of it being available at the gas pump, it is being put underground in the SPR.

We are required as a country by international treaty obligations to have at least a 90-day reserve. We are at about 118 days if you take public and private stocks into account. We are well above our international requirement.

From what I can tell, there are 67 Senators who have signed letters or made statements to the President saying: Stop it. Do not stick oil underground at this time. This is oil that comes off the Gulf of Mexico as a royalty-in-kind oil. Instead of putting it in supply, they are sticking it underground. Furthermore, the Strategic Petroleum Reserve is 97 percent filled. It is 97 percent full. And when oil is $128 a barrel, we are sticking it underground. It makes no sense; it defies all common sense.

Yet 51 Democratic Senators sent a letter to the President, and 15 Republicans Senators sent a letter to the President. Also, the Republican Presidential candidate, John McCain, and said ``stop it.'' That's at least 67 Senators.

Last week, Doug Steenland, the President and CEO of Northwest Airlines testified before the Congress. He said:

Certainly with the prices at this level, and given the

demand out there, we don't need to be filling the Strategic

Reserve at $122 per barrel.

Now, obviously he has a vested interest, because he and others are engaged in the airline industry.

Here is a quote from James May, President and CEO of the Air Transport Association of America:

One of the most important and immediate steps that the

government can take to help the economy is to stop filling

the SPR.

Why do we hear from airlines? We are hearing from airlines, truckers, or any number of industries or families and businesses. The airlines are hurt unbelievably by these prices and so are trucking firms. American families are pulling up to a gas pump trying to figure out how do I manage to pay for this tank of gas. It is not unusual to hear industry officials say: Stop it.

John McCain, Senator McCain:

With oil at over $100 a barrel and an adequate supply in

the [Strategic Petroleum Reserve], it is time to suspend

purchases.

Now, why is it that everyone can hear this message except the President and the Vice President? I am told the Vice President is the one who is absolutely insistent that we keep putting oil underground. Why is it that everyone can understand and hear this message loud and clear except the President and his Vice President?

Is it not probably time for all of us to insist that we do that which we know should be done? Fifteen Senators from the minority sent a letter to the President on April 29, 2008, and said:

We write today to request that the U.S. Department of

Energy immediately halt deposits of domestic crude oil into

the U.S. Strategic Petroleum Reserve.

Now, having said all of that, we are going to vote tomorrow on a piece of legislation I introduced in early February. I have spoken about it on the floor until people fall asleep when bring it up. I know repetition is difficult around here, but it is important to understand how urgent this is.

The fact is, we all have one thing in common: None of us has ever seen nearly $128 oil until now. We have never seen the price of a barrel of oil go up to $120, $124, or $128 a barrel for oil. None of us has ever experienced that before. So what does it mean to this economy? Do we know? I guess not, but we are witnessing it. I guess we know what it means to the five airlines that are bankrupt.

Do we know what it means to a trucking company? A guy called me the other day. He is running a trucking company in North Dakota that his dad started many years ago. They have a good operation. They are a good family company. They have made a good living for their family over many years. He said you know what. I do not see how we can avoid shutting this company down. We cannot afford the fuel costs. We just cannot afford it any longer.

Now, what are the consequences of all of this, a family driving up to the gas pump and spending $50 or $60 to fill their tank?

Here is what is happening: The speculators in the oil futures area are making a massive amount of money. No question about it. Take a look at hedge fund compensation. It is unbelievable.

The OPEC countries, oh, man, they are going to the bank. They are going to the bank with our money. You pull up to the pump, you are lining the pockets of the OPEC and other oil producing countries. You are lining the pockets of the major integrated oil companies too.

By the way, the major integrated oil companies now all have two names, because they all got married. They liked each other a lot, liked the bottom line. Now, it is ExxonMobil, and it is ConocoPhillips. They have all got two names.

People say to me: what are you talking about? Why do you not let the free market work? Let the free market work. Don't you understand anything? Well, I actually used to teach a little economics in college. But this is not a free market at work. There is nothing about a free market here.

No. 1, you have a cartel, a cartel of countries that makes decisions behind a closed door, and they have the capability to make those decisions stick. In fact, Saudi Arabia is now pumping 800,000 fewer barrels a day than they did two years ago. Does that decision have an impact on price? You bet your life it does. So you have a cartel. It is illegal to have a cartel in this country. You would go to jail for that in this country. But we have a cartel for oil producing nations.

Then you have the major oil companies which are bigger and much stronger, with much more muscle in the marketplace. Why? Because everybody was shaking pom-poms while they wanted to merge. You want to merge? Absolutely. No problem. Get bigger. Fine.

We are supposed to have 2,000 people working for this U.S. Government on antitrust enforcement. You cannot find one of them. I know they are getting paid, but you cannot find one of them. All of these mergers are approved. So now we have got the OPEC cartel, we have got the major integrated oil companies with more muscle in the marketplace. Finally, we have a futures market which has become an orgy of speculation.

Then we are told just let the free market work. What is wrong with you? The free market is fine. I guess it is fine if you are on the receiving end of these policies. If you are the one who is the beneficiary, it is not fine. If you are the one who is going to the bank to make deposits, boy, this works out pretty well for you.

But if you are on the receiving end of oil, gas, jet fuel prices or diesel prices, then you are in deep trouble. The fact is, this is damaging our economy, and it is going continue to damage our economy until we find ways to address it.

I serve on the Energy Committee. I am also Chairman of the Appropriations Subcommittee on Energy and Water, so I spend a lot of time thinking about energy. I understand that in order to address our energy needs we need to do a lot of things, do them right and do them well. We need to produce more. I understand that. I described the need to produce more in the Gulf of Mexico, and what we are trying to do through legislative efforts. We need to produce renewable fuels, and we can and should do that. I think there is great capacity in renewable fuels in the U.S.

We need to conserve more. We waste an unbelievable amount of energy in this country. We need to be much more efficient with all of the things we do. We get up in the mornings and never think. We flick a switch from ``off'' to ``on'' and everything comes on. We put a key in the ignition and turn it and somehow the engine starts, and we go to work. We do not think much about all of those issues, and make sure that conservation and efficiency are unbelievably important.

So we need to consider production, conservation, efficiency, and renewables as important elements of an energy policy. But, again, when my colleagues come to the floor of the Senate and say: Well, you know, if we could have drilled in ANWR, boy, things would be terrific. That is all nonsense. I mean, we can produce much more without going to that which we ought to go to as a last resort, rather than a first resort.

That is why many of us are trying to go beyond Lease Sale 181 in the Gulf of Mexico. We ought to be producing off Cuba as well where China is now allowed to drill and produce. So there is so much we can do. Let's take the first baby steps in the right direction and stop doing things that make no sense. Let's stop putting oil underground into the Strategic Petroleum Reserve.

My hope is that, while we might disagree on a lot of things on energy policy, the one thing we can and I hope should agree on is to stop putting oil underground when it is going from $120, to $125, to $145 a barrel. I think there are at least 67 and probably 75 Senators who have expressed themselves on that. While we might disagree on other parts of energy legislation, we should not disagree on that, if a substantial, overwhelming majority of the Senate believes it.

You know, one of the regrets I have had in the Senate in recent times is we often get the worst of what each party has to offer rather than the best of both. The fact is we have got two grand political parties in our country. I know on some things we have different beliefs, and we have differences of opinion. There are some things from time to time where we agree. This is an area where we agree right now. It is time to stop filling the SPR at this point. Not forever but at this point. That is an area of broad agreement in this Chamber. I hope we can manifest that agreement tomorrow when we cast a vote on legislation that I introduced three months ago. I have introduced amendments that Republicans like Senator Domenici and Senator Snowe have cosponsored. Many other Senators have signed letters. Senator McCain has expressed himself strongly and positively in support of this position. So let's do what we can achieve.

Will it reduce the price of gasoline? Absolutely. Will it reduce it a lot? I do not know. Probably not a lot, but some. Dr. Philip Verleger, an economist and energy analyst, testified before the Energy Committee last year and pointed out that we are taking certain oil from the Gulf of Mexico and putting underground. This is sweet light crude, a subset, the most valuable subset of oil. He said that it had an impact of about 10 percent on the price of sweet light crude oil.

Let's do what we can do to put some downward pressure on the price of oil.

Mr. President, how much time remains?

Mr. President, I would like to announce that the Committee on Indian Affairs will meet on Thursday, May 15, at 9:30 a.m., in room 562 of the Dirksen Senate Office Building to conduct a hearing.

Mr. President, I ask the Senator from Connecticut, how many amendments are remaining on this bill, based on what he knows at this time?

I am still trying to determine whether I can successfully offer an amendment. I know I have a right to offer it, but whether it is successful----

Mr. President, let me make a point again to the Senator from Connecticut and see if there is any mutual understanding on these issues.

To use one example, we had a city that was completely evacuated in my State by a flood 10 years ago--actually 11 years ago now. It was the largest evacuation of any city since the Civil War. A city of 50,000 was completely evacuated because of a flood. In the middle of that flood, there was a fire in downtown Grand Forks, ND. A city that was flooded and evacuated was on fire.

In the intervening 10 years, there has been a flood protection plan, a very expensive one, $416 million, built to protect that city. The residents of that city, I believe, paid 45 percent of the cost of that flood protection plan.

As I read title VII--I believe it is on page 9 of the legislation-- what is being said now is this city that has a 250-year flood plan, that is to protect against a 250-year flood, will be told: By the way, you residents, yes, you paid a lot of money for flood protection. It is blue ribbon, first rate, first class protection against a 250-year flood, but we have now decided you have to ante up $1 a day to buy flood insurance.

They are going to ask the question: What is this flood protection we paid for? We were told this was blue-ribbon flood protection. I know you have a 250-year flood protection levee; now we want you to buy flood insurance.

Is there anything in the legislation that allows FEMA to look at this situation, here is a levee that gives 100-year protection, here is a levee that gives 250-year protection, and here is one that doesn't give any at all? We have different kinds of insurance. Would FEMA be allowed to take a look at a new state-of-the-art, blue-ribbon, 250-year flood protection device and say those folks don't need to buy flood insurance, they just paid a substantial portion of the cost of a significant new flood protection device?

I ask the Senator from Connecticut, what is his intention with respect to that provision of the law?

I understand the notion of residual risk, and I think the Senator from Connecticut will agree those residual risks are different in different circumstances. I am not suggesting if you are behind a levee, wherever that levee is, you shouldn't have to buy flood insurance. But I am suggesting if you exhausted yourself and your community and your region producing a state-of-the-art flood control plan and spent a lot of money doing so, including your own money, and you are now told you have a 250-year protection, that when somebody from FEMA comes in and says, it doesn't matter a bit, it is irrelevant you built that, it

doesn't matter, you are going to be required to purchase what our friends from the committee have now enacted--if my colleague from Connecticut is saying this legislation either will or, as we might want to change it, could allow FEMA to take a look at that brand new 250- year flood protection plan and say, in this circumstance you have minimal requirements----

We don't have a problem with the merit and value of flood insurance. I think the program makes sense. We have an agreement, as it is currently written, and I hope we can perhaps modify it in a managers' amendment. On page 9, section 7, it appears to me FEMA would be required to come in and say: Ah ha, you are behind that levee; therefore, you must purchase this insurance. I hope what the Senator from Connecticut intends with this is that it be risk based because there will clearly be a different risk attached to someone who has a brand new levee system that they exhausted themselves paying for over the last 10 years. It is all done. They cut the ribbon, they celebrated, they had the town band out, in fact, but they are told by FEMA: That is not a factor.

Let's see if we can craft something between now and the end of the day. I would not offer the amendment; the Senator from Connecticut will offer it, and it represents our combined views about this issue.

I appreciate my colleague having this colloquy.

Mr. President, will the Senator withhold?

Mr. President, I ask for 5 minutes in morning business.

Mr. President, I wish to make a point. I don't know yet if there is a markup this afternoon of the Appropriations full committee. If there is, I am intending to offer a couple amendments to that markup. I wish to describe one amendment that I plan to offer, and that relates to dealing with oil and gas prices.

The price of oil is way beyond that which is justifiable by simple supply and demand conditions. It is bouncing around like a yo-yo up around $120 and as much as $124 a barrel of oil. There is no justification in the supply and demand of oil for that price. It is damaging to the economy, and it hurts a series of industries in this country. The airline industry and trucking industry are just two examples. It hurts every American as they pull up to the gas pump to figure out where they are going to get the money to pay for the gasoline price.

What is happening? At the moment, a couple of things are happening.

One, we have an unbelievable bubble of speculation in the futures market. I have people say to me: That is not true. It is true. It is hard to justify the current price of oil given the physical elements of the market today. What we have is people entering the commodities futures market that have no interest in buying oil. They buy oil and sell it. They never take possession of it. They buy what they will never get from people who never had it. They are making money on both sides of the transaction because they are waging. To put it plainly, they are gambling. That is speculation. We have an orgy of speculation on the futures market.

We had people testify in the Senate and House that it adds $20 to $30 to a barrel of oil. Should we sit back and watch a bubble develop and say, ``Whatever the consequences, that is fine?'' The answer is no, of course, we should not. Buy stock on margin and it will cost you a 50- percent margin requirement. If you want to buy oil on margin in the futures market for crude oil, then you pay 5 to 7 percent.

We have hedge funds neck deep in the futures market. We have investment banks neck deep in the futures market. Are they are oil experts? Do they want to own oil? No, they want to speculate on oil and make money.

The fact is, it is damaging this country's economy. We ought to wring that speculation out of those commodity markets. We ought to be increasing margin requirements. I know it is hard to do, but we ought to do that. When we see this kind of speculation damaging our country by driving up oil prices and driving up gasoline prices, we ought to do something about it.

Second, we are now putting oil underground right now. We are taking sweet light crude oil off the Gulf of Mexico and sticking it underground in something called the Strategic Petroleum Reserve. I think it is fine to have the Strategic Petroleum Reserve if we run into trouble. It is nice to have an oil reserve. Yet, that reserve is 97 percent full. Still, this administration is taking up to 70,000 barrels a day, every single day, and sticking it underground.

They say it doesn't affect the price. Of course, it affects the price. We had testimony before the Energy Committee that because it is a much more valuable subset of oil, called sweet light crude, that it has as much as a 10-percent impact on the price of oil and gasoline. So, of course, it affects the price.

I think it is nuts for this country to be taking $124 barrel of oil and saying let's stick that underground and save it for a rainy day. I tell you what, it is a rainy day these days when you have to pay this price at the pump. It is a rainy day these days when you see four, five airlines go belly up because they cannot afford the fuel. It is a rainy day these days when truckers say that we have to park the truck because we can't afford the fuel. An entire industry is at risk.

The fact is, we have to do something about it. I mentioned two things, both of which are tangible and real and both of which are causing this increase, at least a significant part, in my judgment, in the increase in the ramp-up of the price of oil and gasoline.

The President believes that there is not much anybody can do in the near term. This is not a time to wring our hands, mop our brow, gnash our teeth and say there is not much anybody can do. This is a time for us to try to figure out what is happening and try to respond to it. It is doing great damage to our economy.

In the longer term, I believe that there are things we need to do. We are unbelievably dependent on overseas oil. We are unbelievably dependent on Saudi Arabia, Kuwait, Iraq and Venezuela. Sixty percent of our oil comes from offshore. As I described before and others have, we stick straws in this planet and suck oil out of the planet. Every day we suck out 85 million barrels of oil. One-fourth of that has to be used in this country.

Let me say that again. The appetite of oil is this: One-fourth of all the oil we pull out of the planet every day is used in this little place called the United States of America. Sixty percent we get from outside our country. Seventy percent of it is used by vehicles. We have a lot to do.

After 32 years, we finally mandated an increase of 10 miles per gallon in 10 years on a range of vehicles. We also need to produce more. I and three others in this Chamber got the law changed to allow us to go into lease 181 in the Gulf of Mexico and finally produce more oil and gas. Frankly, we ought to open up more of the Gulf of Mexico. That is the greatest potential reserve on the Outer Continental Shelf. I and three others introduced the legislation and got it passed and opened up lease 181. If you look at the Gulf of Mexico, California, and Alaska, and the East Coast, the greatest potential reserves are in the Gulf of Mexico.

We need to conserve more and produce more. We need greater efficiency for all we use, and we especially need to move into renewables.

I understand we have to do all of that. At the moment and in the short run, we have to take specific steps that will put downward pressure on prices. John Maynard Keynes said, ``In the long we are all dead.'' That is an economist talking. We can talk about the long run here, but let's also talk about the short run right now.

What can we do to address something that most Americans understand is a very serious problem? The issue is price of gasoline? I am just saying this, and there are those who disagree with me. Look at the commodities market and look at this orgy of speculation. This is a bubble. Wouldn't it be nice if someone had looked at that bubble as it built with respect to home mortgages and home prices? We have seen a lot of bubbles. We have seen the tech bubble. We have seen the bubble in home prices. Every bubble bursts. This one will. But in the meantime, how many additional casualties will we see on the side of the road? Look at what's happening with American families, American business, American industries. How many casualties? The big integrated oil companies go to the bank with a ``permagrin.'' They can't stop smiling because they are depositing our money in their bank accounts. But it is not only the big integrated oil companies, it is the OPEC countries. They are going to the bank everyday with our money because we recycle this money to provide for a bank account for the Saudis and others just like we do for the major integrated companies.

I do not think there is any justification for this price. This Congress is prepared to act. Senator Reid and others have joined together, and I am a part of it to deal with this issue of putting oil underground. We are going to stop it in its tracks. I introduced a bipartisan bill a couple of months ago to suspension the filling of the SPR. Our entire caucus is also behind the proposition. We believe it's time to begin to wring this speculation out of the futures markets and stop this insidious rise in oil prices.

While we need to move beyond oil, right now we still need oil. There is no question about that. We need to find more, and we need to use less, to the extent we can. That means more production and more conservation. In the meantime, when markets do not work and people are doing things that have no common sense at all, such as putting oil underground when oil is $120 a barrel, then this Congress has a responsibility to act. We need to get things straight. Let's set things right; let's stand up here on the side of the American consumer and on the side of American businesses who need this energy.

One final point: In yesterday's The Wall Street Journal, they wrote one of those editorials that must make those folks grin like Cheshire cats as they sit there with their gray suits on, behind horn-rimmed glasses, deciding what to write next in the Wall Street Journal about the Senate. Did you see what those folks did in the Senate--Dorgan, Schumer, and others? What they did is said we should put pressure on the Saudis because the Saudis want to buy precision weapons for their own security from us. We should say that maybe they need to be producing more oil. Of course, the Wall Street Journal had an apoplectic seizure over that.

Here are the points. The Saudis are producing 800,000 barrels a day less than they did 2 years ago. It is not lost on them what this is doing to price. It is not lost on them, or it should not be, what this is doing to our country. They are pumping 800,000 barrels a day less than they did 2 years ago and then they say to this administration we wish to buy sophisticated weapons from the United States because we have our strategic military concerns in our region. Maybe we say to the Saudis: The United States has strategic concerns in our country as well. Why are you pumping 800,000 barrels a day less when you could be putting more oil on the world market? Partnerships work both ways.

I am very concerned about arming the Middle East. I am going to speak about that at some point later. But our point to the Saudis and the point in the Middle East was simple. If you are pumping 800,000 barrels a day less per day and then demand weapons from the U.S. without reciprocating then it's not going to work.

That is a long statement to say it is time for us to act. Senator Reid, Senator Klobuchar, other Members and I have decided we are not going to sit here like potted plants. When something is happening in the futures market and when something is happening to take oil off the supply to put it in the SPR, then we have a responsibility to act. I intend to be a significant part of that.

If we have the markup in the Senate Appropriations Committee this afternoon, I intend to offer a couple amendments at that appropriations markup. Unfortunately, I understand it may well be canceled this afternoon.

I am happy to yield.

It is the case. I have introduced legislation here in the Senate. Fifty-one Democratic Senators, including Senator Obama and Senator Clinton, signed a letter to the President saying stop sticking oil underground for the rest of 2008. Also, a couple of weeks ago our Republican colleague, Senator Hutchison, led on a letter to the White House saying, yes, we agree. We ought to stop sticking oil underground at this time. There were 15 Republicans who sent that letter. Further, Senator McCain said it was nuts to stick oil in the SPR while on the campaign trail. When you add that up, that is 67 people in the Senate. That is a veto-proof majority.

There are several views on that, but we know it is a lot more than zero like the Administration assumes. We don't know exactly what the savings would be. We do know this: If today 70,000 barrels, especially the sweet light crude--which is the most valuable subset of oil--were put back into this marketplace, then people have testified in the Senate that it could impact as much as 10 percent of the price of oil and gasoline.

We know it would impact the price. Some say 70,000 barrels is not very much given what is used in a day. It is true, 70,000 barrels is not all that much, but this is sweet light crude which is very different. We had an economist named Dr. Verleger testify before the Energy Committee and make that very point.

This is a more important point. There are plenty of Members of the Senate who have now joined on this.

I was just informed the markup starting at 2 this afternoon has been canceled. This is where I was going to offer this amendment, so the amendment I expect to be able to offer will now wait until next week. We will get this done. We cannot sit around and allow things to happen. We have to make things happen, good things happen for this country and for the economy.

I yield the floor.

Mr. President, I would like to announce that the Committee onIndian Affairs will meet on Tuesday, May 13, at 2:30 p.m. in room 562 of the Dirksen Senate Office Building to conduct an oversight hearing on ``the successes and shortfalls of Title IV of the Indian Self-Determination and Education Assistance Act: Twenty Years of Self-Governance''.

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

Madam President, I wonder if the Senator would yield for a question.

The last amendment that the Senator sent to the desk, my understanding is that it is an amendment very similar to something I was intending to offer, but I am not certain I understand your amendment, so if I could just work through it with you.

My concern about the underlying bill with respect to the mandatory coverage areas is that it requires the expansion of areas of special flood hazards to include areas of residual risks, including areas that are behind levees, dams, and other manmade structures.

Is your amendment designed to strike that provision?

But, if I might inquire further, is it the intention of the amendment to provide that there shall not be mandatory requirements on all of these levees, dams, and other manmade structures, which the underlying bill would require?

Madam President, I believe I looked at the amendment, and it does not strike what is in the underlying bill--all of section 7-- which I was intending to do with my amendment. I didn't quite understand the consequences of striking just a portion of it. But if the Senator from Connecticut who is on the Senate floor--when the Senator from Louisiana concludes, I would like to make a couple of comments about the reason for my concern about this matter, and perhaps we can visit. If our amendments have exactly the same impact, there is no reason for me to offer mine.

Madam President, I was surprised by what is section 7 in the underlying bill. I understand the substitute at the desk has it on a different page. I am talking about the same provision the Senator from Louisiana spoke about briefly; that is, an expansion of the requirement to have flood insurance in areas of special flood hazards, to include areas of residual risk, areas that are located behind levees, dams, and other manmade structures.

I am not surprised we want people to buy flood insurance if they are at risk of being flooded. That is not my point. But let me give you a case study, if I might, and talk about Grand Forks, ND. Eleven years ago--in fact 11 years ago about this time--the city of Grand Forks, ND, a city of nearly 50,000 people, was nearly completely evacuated. It was the largest evacuation of a city since the Civil War, and it was because of a flood on the Red River. It was a very significant flood; some said it was a 500-year flood.

All of us who went to that city and spent time there and went to the Air Force base--a major Air Force base--15 miles west of the city and visited with the citizens who had been evacuated--

tens of thousands of people--we will never forget that. So what happened in the last 10 years--by the way, let me speak about the memory of not only a city being flooded and evacuated, but in the middle of that city there was a raging fire. So there is a flood, and then buildings in the middle of the city that are inundated by water caught fire, and there was a major fire in the middle of the city. To watch firefighters work in a flood to try to see if they can't, in the middle of a significant city, put out a fire that is consuming a number of businesses in the downtown district is quite extraordinary.

Fast forward 10 years, and I think we have spent close to $400 million over a decade to provide unbelievable flood protection for that city. That is not going to happen again. There is a flood protection plan in place for that city that is very significant. That flood protection plan protects against a 250-year flood. The provisions in this bill talk about a 100-year flood. We have now flood protection for a 250-year flood. It is blue ribbon, first rate, brandnew flood protection for this city. So it is a little surprising to me to see a bill that says, by the way, we have just finished spending a lot of money to provide very significant 250-year flood protection and now we have one other decision; we want you to understand you should now buy flood insurance. It is only $1 a day, $300 or $400 a year, they say.

That is going to be pretty surprising to a lot of people who are still paying debts to fix up their houses from 10 or 11 years ago from that flood. They are going to ask the question: Why are we asked to buy flood insurance when you have built a very significant flood protection plan, with 250-year flood protection for our city, and now you say to us we all should go buy flood insurance. Are you daft? What are you thinking of? They would not understand this. I am trying to figure out what the requirement is.

I understand there are some manmade levees and dams and other circumstances that perhaps have risk attached to them, which are old structures. I understand that. There are some circumstances where those who take a look at this believe that more should participate in the flood insurance program. I understand all that. But to simply say that in every circumstance, including areas located behind levees, dams, and other manmade structures, everybody should have flood insurance, that doesn't make any sense to me.

I don't know how you explain that to somebody who was told we completed a terrific flood protection program that gives you a 250-year flood protection, but you need to pony up some money to buy new flood insurance. I think this is not a good provision, and I hope we will be able to remove it.

Yes.

Madam President, in my subcommittee that I chair on appropriations, dealing with energy and matter, we spent $2.2 billion on Corps of Engineers construction alone, to say nothing of maintenance, remediation, and other expenses. Just the construction in fiscal year 2008 was $2.244 billion. So we are spending a lot of money working on levees and dikes and other areas of protection. It seems to me--my colleague from Connecticut indicated this and he is absolutely correct--levees do fail, and I understand that. He is absolutely correct about that. Levees do fail. Manmade structures, from time to time, will fail. But it is also the case that some risks are substantially lowered, and there are some risks that are substantially elevated because of the condition of the levy and so on. My colleague from Louisiana is correct when she says let's not do something that is one size fits all.

Again, I will use the example I think is clear. If you just finished a new flood control program that you have worked on for 10 years with a 250-year flood protection, which is more than double the protection normally required to protect against a 100-year flood, at least understand the difference between what you have done there with public funding and what might exist somewhere else, where there is higher risk. It is hard to tell somebody, by the way, you have a new flood control plan, it works, it is terrific and it is new and it costs a lot of money; it will protect you against a 250-year flood, but you must buy some flood insurance, please, because we are worried that you are going to be hit by a 100-year flood. That is the kind of thing I hope we can avoid.

Earlier, I used a word I don't ever use. I don't know why I used it. I used the word ``daft.'' I wasn't applying it to anybody who wrote this legislation. I should quickly explain that.

It appears to me that, if this would pass, we may have to explain to some people something that is not able to be explained. You now have terrific flood protection, but we want you to buy flood insurance, even though we protected you with public funding, with a first-class flood protection system. It is not difficult for me to go to someone in a circumstance where there is risk and say I understand why you have to have flood insurance. You have to have a large number of people paying in. You have risk and you are going to have to buy flood insurance. I understand that.

The Senator is correct that sometimes levees do fail. We should not, it seems to me, with this small section in the bill, on page 9, subsection 2, under (b), we should not say, anyplace in America where you have a levee, a dam, a manmade structure, you are all in the same boat. That is not the right thing for us to do.

I hope that with the concurrence of the Senator from Connecticut, perhaps, we can talk through this as we move along and make some changes to that, which are thoughtful and address the issue of risk.

I thank my colleague from Louisiana, and I thank my colleague from Connecticut for his patience. As I conclude, I am going to visit with the Senator from Louisiana to see whether my amendment is sufficiently similar to hers so maybe we can deal with one amendment. If so, I will not add my amendment. I have filed it, but I will not call it up. If it is not sufficiently similar, I will call up my amendment later today.

I yield the floor.

Mr. President, I suggest the absence of a quorum.

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

Mr. President, my understanding is the pending business is on the FAA reauthorization bill; is that correct?

Mr. President, I hope no one is out of breath this week as a result of working on this bill. We had

one vote on Monday at 5:30 p.m. and have not voted since. With legislation this important to this country, why are we not able to move ahead and cast votes and finish this legislation?

This is about FAA reauthorization which includes the issue of modernization of our air traffic control system, which is very important. We read in the newspapers these days about the additional inspections that are required of airlines. We read about airlines going bankrupt because of fuel costs. We read that the FAA system for air traffic control is archaic. We are told that the GPS system in your car is more sophisticated than the system by which we move airplanes around this country in the air traffic control system. We hear the problems with the air traffic controllers, the contract problems they have had with the FAA, the shortage of air traffic controllers, the number who will retire in the near future, and the need for training of additional controllers. We read about all these things in the news. We read about systems that still use vacuum tubes in the air traffic control system because it is that old.

The question for this Congress is, can we pass legislation that reauthorizes the FAA functions and then provides the funding to modernize this system of ours?

We have a lot of people who visit this Capital city, and most of them fly in by airplane. This country moves back and forth quickly from coast to coast using, in most cases, commercial air transportation. They don't think very much of it, frankly. You can fly from one coast to the other in 5 or 6 hours. It is not unusual to leave one part of this country and end up in another part before lunch. It is a wonderful thing to have this system of commercial air travel. The fact is, this system will not survive for a number of reasons under the current circumstances.

As I indicated the other day, I believe there are four airlines that have declared bankruptcy in recent weeks. We also understand, in addition, what high fuel costs are doing to the airlines, and we are talking now about the airlines in this legislation before us. But I could talk about the trucking industry, or I could talk about families and farmers. I can talk about what the high fuel prices are doing to all of this country. There is no heavier user of fuel than an airline.

What is happening is the fuel prices are undermining the opportunity for many of these airlines both to continue operating, in some cases, and, in other cases, to continue operating serving smaller areas or less populated areas of the country. So fuel prices are a serious problem.

The other issue is the modernization of the air traffic control system, the system by which we provide for the safety of the American people. There is going to be a catastrophe one of these days, and then everybody is going to stand around thumbing their suspenders, scratching their heads, and saying: Why didn't we do something about it?

We have a bill on the floor of the Senate right now to try to address this situation, to try to modernize this system, and we have been at parade rest since Monday because we are not allowed to move forward. Everything is blocked. Everything is plugged up. This is unbelievable.

This is important. Some people around here treat the serious things far too lightly and then treat the light things too seriously and never understand the difference. Why is it on a Thursday that legislation as important as this, that should have been passed in previous years, cannot even get amendments up and cannot get votes off because we have people who have decided they are just going to block everything?

I told a group in North Dakota a while back about Mark Twain. Mark Twain once was asked if he would engage in a debate. He said: Oh, sure, as long as I can take the negative side.

We haven't even told you the subject of the debate.

He said: It doesn't matter, the negative side is going to require no preparation.

The negative side never requires preparation. Those who are out here saying, no, you can't, they want to block it. That requires no preparation. What requires preparation is to advance public policy that is in the interest of this country. Does anybody really think modernizing our air traffic control system is somehow a back-burner issue? We see what is happening in the skies in this country. They are absolutely clogged. In fact, because of fuel prices and other reasons, we have airlines now switching to smaller planes, these little regional jets skirting around the sky, hauling as many people but just takes more planes to do it. So that puts an unbelievable strain on the air traffic system.

The question is, Are we going to modernize it? Are we going to do what is necessary? Are we going to provide the funding? Are we going to finally get off this delaying nonsense that is going on and allow legislation to move forward that is essential for the safety of the air traveling public?

I hope the answer at some point soon is yes. This includes items such as the Airport Improvement Program, what is called the AIP, investing in infrastructure in this country. That is very important. Land at some of these airports and take a look at the infrastructure and ask yourself whether we need this investment.

It is interesting, if you travel around the world. If you go to Tegucigalpa, Honduras, and then get in a car and drive to Juticalpa. Take a look at the roads and ask yourself whether infrastructure matters. Land in some of the airports in some of these remote areas and take a look at what you are landing on and the infrastructure needs of that airport. Then ask yourself whether infrastructure is important.

We have always prided ourselves in this country on the investment in infrastructure. When you come to America, you see infrastructure that is maintained. We have always prided ourselves on that until recently, and now somehow infrastructure doesn't matter. It takes a back seat.

In my little subcommittee on appropriations that I chair, the President says: Let's cut water funding by $1 billion from last year's levels for the Corps of Engineers and the Bureau of Reclamation. These agencies fund much of the nation's water projects and were cut by $1 billion, even as we have 950 water projects in this country which we are paying for in Iraq. Think of that. Let's cut water projects in this country and investment in the future of this country by $1 billion, the President says. However, let's have 950 water projects that the American taxpayers will pay for in Iraq.

I think it is time to start taking care of a few things at home. One of them is the legislation on the floor of the Senate right now, and that is the FAA Reauthorization Act and the investment and the modernization of the air traffic control system. If we do not pay attention to that, we are going to run into very serious problems. I might also say, tragic problems because there is going to be some sort of spectacular tragedy, and then we are all going to sit around and say that somebody should have done something.

We are trying to do something. The fact is, we cannot even get a vote on an amendment on the floor of the Senate. It is unbelievable. As I said in the Mark Twain example, the easiest thing in the world is to oppose. It takes no talent, it takes no time to prepare, just oppose, oppose everything.

My hope is in the next couple of hours, perhaps there will be some here who wish to move ahead. I know Senator Reid has been on the floor offering unanimous consent requests. He has talked with the minority to see if there are conditions under which we might be able to move forward and get something done on some legislation. I understand it takes a while to get things done. I understand we should be deliberative. I understand there should be enough research so we don't have unintended consequences to what we do. Nobody has ever accused this body of speeding, ever, But this is ridiculous. This makes a glacier look fast.

My hope is that those of us who are elected to come here, who try to make some improvements in this country, who do what is necessary for the health and safety of the people of this country will soon understand that the FAA reauthorization bill is not just some other piece of legislation, that it is an optional piece of legislation. The modernization of the air traffic control system is not some option that we ought to consider like any other bill. This is urgent and necessary and timely, and we ought to do it now.

Energy

Mr. President, I wish to talk about energy. Several colleagues have spoken about energy prices, and I related energy prices to the airline industry a few moments ago. I mentioned several bankruptcies that have occurred recently, intensive heavy users of energy in the airline industry, and what it might mean. This country needs a commercial airline industry that works. Without it, there will be devastating consequences to our economy. The question is, What do we do here?

My colleague from Alaska made a point with which I agree. He talked about the speculation in these markets with respect to energy. I wish to talk about that issue. I have some charts.

This is a chart that shows the speculator activity in the oil futures market from January 1996 to April 2008. This is the activity by speculators in the futures markets. These are not people who want to buy oil or hold oil. They have no tanks in which to put oil. They are not interested in oil. They want to buy what they will never get from people who never had it. This is what speculating is about.

Here is the increase in speculation in the commodities market for oil. It is an unbelievable ramp-up, an orgy of speculation, having nothing to do with the fundamentals of oil supply and demand. There is no justification for the current price of oil if we simply look at supply and demand. Supply is up a bit; demand is down a bit. There is no justification with the current fundamentals of supply and demand that would seriously justify the current price of oil.

So then what has changed? What is different? Why is this price $115 or $120 a barrel for oil, acting like a yo-yo at the upper end? A couple issues have changed, especially this. We have hedge funds that are now neck deep in the commodities markets speculating on oil. We have investment banks that are speculating on oil. For the first time in history, I believe, investment banks are actually buying oil storage capacity to buy oil and take oil off the market to sell it later when it is more expensive. This is speculation, raw speculation. I suppose everybody is making money. The brokers are making money, the investment banks, the hedge funds--they are all wallowing to the bank full of cash, driving up the price of oil beyond what the fundamentals would suggest the price should be.

We know those people who are winning, but who are the losers? Well, our country. This is something that is providing great damage to our country's economy. Families drive up to the gas pumps, and it hurts to fill the tanks. Farmers, heavy users of energy and fertilizer that comes from energy, are losers. It is an unbelievable burden on family farmers. Airlines, they just cannot fly through this storm. They go belly up. The list goes on and on.

If this is what is happening with the ramp-up of speculation and it is causing an increase in prices, here is what has happened to oil prices. No one needs a chart to know this, but oil prices doubled in just over one year. Speculation goes up, up, way up, and oil prices have doubled in one year.

Let me cite some folks who have talked about this issue. Stephen Simon, senior vice president of ExxonMobil, April 1, a month ago:

``The price of oil should be about $50-$55 per barrel.'' This from an executive in the oil company. I do not think his company is complaining about where the price is. He is just being candid. According to him, the price of oil ought to be about $50 or $55 per barrel, assuming current fundamentals.

Clarence Cazalot, CEO, Marathon Oil, October 30, 2007:

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

market.

Experts, including the former head of ExxonMobil, say

financial speculation in the energy market 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.

Think of that.

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.

I understand the need for a marketplace futures market. It is required for hedging. It is required for liquidity. I understand it is necessary, and I understand we want one that works so there needs to be a futures market, but I also understand that when the futures market becomes something much more than just something that provides for hedging and liquidity. When it becomes an object of intense speculation, then there is a requirement for some intervention. No one quite knows what that intervention should be, but everyone ought to know that it is unhealthy when you have an unbelievable amount of speculation.

There are books written about bubbles in speculation. We have been through recent speculations. The tech bubble that occurred almost a decade ago. The bubble in housing prices is occurring. We have seen and understand about bubbles. This is a bubble of speculation.

Go back 500 years and read about tulip mania. If you have not read about it, I encourage to you do it. Yes, tulip mania. There was a time you could buy a tulip bulb for $25,000. With the hindsight of 400 or 500 years, we can understand how unbelievably absurd it was, but it was a bubble, a financial speculative binge that was almost indescribable.

What is happening in this marketplace now--and most experts will agree--is we have this unbelievable amount of speculation in the futures market that does not justify the current price. The American people and American industry deserve to have a government, in those cases, that steps in and says: There is something wrong here, and we are going to find a way to set it right. This is one of the areas.

This man--in fact, I talked to this man last evening--Mr. Fadel Gheit, the top energy analyst for Oppenheimer Company. He has been there 30 years, he has testified before the Congress, and he is a very interesting fellow.

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

convinced that oil prices should not be a dime above $55 a

barrel. . . . Oil speculators include the largest financial

institutions in the world.

He said further:

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's going 120 miles an hour.

That is pretty well said, it seems to me. It describes this bubble of speculation that does damage to our economy and needs to be addressed by this Government. It is not the case that everybody hurts as a result of this.

This is a Wall Street Journal article of February 28, 2008. This is Andrew Hall. I wouldn't know Andrew Hall from a cord of wood. I just see his picture here. Over the past 5 years, Mr. Hall's compensation has totaled well over a quarter of a billion dollars.

What does Mr. Hall do? He makes money by speculating in the commodities market, according to this article. He is not alone. I pulled this because it is an article about him and he has made a lot of money. He has made a lot of money as someone who speculates in these commodity markets.

Is speculation something that is good for these markets? Absolutely not. When you have a speculative binge that drives these prices way out of sight, well above that which would be justified, it can be devastating to the country's economy.

That describes what is happening with respect to speculation. To address the issue of energy, it requires a lot of things. We must do this. If we do not address the issue of speculation, we are not going to solve the problem. We are just not.

But there are other things to do. For example, this administration is putting close to 70,000 barrels of oil a day, every single day, underground. It is being put in something called the Strategic Petroleum Reserve. The Strategic Petroleum Reserve is a pretty good idea because it saves some oil for a rainy day. But just not for any rainy day, for an emergency, strategic emergency, something unanticipated, so we developed it for this purpose. That makes sense to me. But should we take oil when it costs $115 or $120 a barrel and stick it underground, 70,000 barrels? Of course not. That is absolutely nuts. Why would you take the highest priced oil in history, take it out of the supply, stick it underground and by doing so increase the price of oil and increase the price of gasoline?

A man named Dr. Philip Verleger testified before the Congress. He is an economist and energy expert. He said that, by taking a disproportionate amount of oil, a subset of oil called

sweet light crude, out of the supply chain, it has increased the price of oil by 10 percent. You know, with more than $100 a barrel oil, that is at least $10 a barrel for light sweet crude. It is the most Byzantine thing one can imagine.

I have a piece of legislation to stop it. There are now 67 U.S. Senators who have declared themselves to be in support of my approach. There is also a very similar bill that was introduced just the other day by some in the minority, and John McCain running for President out in the country said he supports it. So I have 51 who have signed a letter saying they support suspending the SPR fill for 2008. On top of that, some Republican Senators numbering 15, led by Senator Hutchison, also sent a letter to the President. That takes it to 66. John McCain is out there saying he doesn't believe we should do it, so there are at least 67. That makes it a veto-proof margin. So I say let's do it. End the speculation, and there are ways to do that. Second, stop putting oil underground. That ought to be important.

In addition to all of that, let me just say the other menu of issues is not really very complicated either. Should we produce more? My colleague from Alaska says you have to produce more. I don't disagree with that. I was one of four Senators here in the Senate who introduced legislation, now law, that opens up Lease Sale 181 of the Gulf of Mexico. It opens up an opportunity to substantially increase our production of both oil and natural gas in a new region of the Gulf of Mexico. Frankly, if you look at the offshore capability of the Gulf of Mexico and compare it to the offshore options off the West Coast, East Coast or in Alaska, by far the most significant reserves that are achievable by us are in the Gulf of Mexico. We have not even tapped the potential of the Eastern Gulf either.

I and three others initiated the legislation that opened up a portion of the Gulf of Mexico, Lease Sale 181. But there is a lot more to do because it got too narrow. Ought we go back there and produce? You bet we should. There is more production to be had.

In addition to that, conservation is unbelievably important and so is efficiency. Production, conservation, efficiency, and then renewable energy.

Again, we have new technology that allows us to take energy from the wind. I come from a state that has the most wind potential in America. My state has a distinction of being No. 50 in trees, so we are last in America in trees, and we are first in wind. I am not sure where the merits are there, but all of us who live there lean to the northwest because it blows almost every day. We are the Saudi Arabia of wind, as the Department of Energy suggests, and with the new modern wind turbines, we will continue to take energy from the wind and produce electricity.

We have a great experiment going on in which we produce electricity from wind energy and use that electricity in the process of electrolysis, separating hydrogen from water and storing hydrogen for vehicle fuel. It all makes a lot of sense and helps contribute to our energy future.

There are a lot of things we can and should do. This is not some mysterious illness for which we do not know the cure. This is not some strange disease for which we have no cure. We understand what is happening here, and with a little common sense, perhaps a deep reservoir of common sense, we could begin to fix it. At the very least, we ought to begin to take immediate action to stop putting oil underground, and stop it now. It is time to take some action to stop the unbelievable orgy of speculation in the futures market, and do that soon. Those are the first two steps, and they will reduce the price of gasoline. There is much more to do beyond that, but those are the first two sensible steps we ought to accomplish now.

I yield the floor.

Will the Senator yield for a question?

Mr. President, the Senator from Minnesota talked about the importance of renewable energy, which I certainly agree with her. Is it the case with renewable energy that we have done a pretty pathetic job as a country to incentivize renewable energy?

In 1916, we put in place tax incentives to produce oil and gas. They have been in place permanently for almost a century now, tax incentives to produce oil and gas. By contrast, with wind and solar and renewable energy, we put them in place in 1992 short term incentives. We have extended them short

term five times and have let them expire three times. It has been a pathetic response to renewables.

The current tax incentives expire at the end of this year, and I have introduced legislation to extend the production tax credit for 10 years. I believe our country ought to say to the world and to investors: Here is where America is headed for a decade. Count on it. Believe in it. Renewables, solar, wind, and so on need a clear signal for investment. You can count on these investments because this is where America is going.

Is it not the case, I would ask the Senator from Minnesota, that we have not nearly done the job in incentivizing renewables and establishing a national policy. Does she agree?

Mr. President, I would like to announce that the Committee on Indian Affairs will meet on Thursday, May 1, at 9:30 a.m. in room 562 of the Dirksen Senate Office building to conduct a hearing entitled ``Indian Energy Development--Regaining Self-Determination Over Reservation Resources.''

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

Mr. President, I know a couple of my colleagues will be coming to the floor, specifically Senator Cantwell will be coming to the floor, to speak about some energy issues in a moment. When she does, I will relinquish the floor.

I wanted to make a couple of comments. I listened with interest to my colleague from South Dakota making comments about the energy situation. We agree on much of what he has said and disagree on perhaps some amount of it. But renewable fuels, ethanol, providing renewable energy, all of that is very important.

The area where we would perhaps not agree is ANWR, which in my judgment ought to be a last resort rather than a first resort. But I might say to my colleague from South Dakota that particularly with respect to the Outer Continental Shelf, if you measure where oil exists, the best resources and reserves of oil and gas on the Outer Continental Shelf first are in the Gulf of Mexico; second, off California; third, off Alaska.

One of the things we have recently done on a bipartisan basis in this Congress was to pass something called Lease 181, which opened up a portion of the Gulf of Mexico for development of oil and gas. I was one of the four Senators who led the effort on that. I was pleased to do that because we are now

producing and are going to be producing more oil and more natural gas from one of the most productive areas in the eastern Gulf of Mexico. So production is certainly one of the areas we ought to be concerned about, as the Senator indicated. Production, conservation, efficiency, and renewables, all of these are important elements of an energy policy.

No one has ever accused this Congress of speeding. I understand that. This system is not established to be necessarily efficient. It has checks and balances, which makes it very hard to get things done. But there is an urgency at this point, an urgency for families, for farmers, for truckers, yes, for businesses and airlines with respect to what is happening with the price of gasoline.

There are a lot of reasons for all of this, and I am not here to try to ascribe blame, I am here to say: Let's fix some of these things. I am going to offer an amendment, by the way, to the FAA reauthorization bill, that deals with something that as of today I note that 67 Members of the Senate have agreed to.

Some while ago, I introduced the notion of prohibiting the further movement of oil underground into the Strategic Petroleum Reserve. I have introduced legislation on that matter. Long ago I introduced it, had discussions with the Energy Committee about it. I had 51 Senators sign a letter to the President to say: Stop putting oil underground when the price of oil is $115, $120 a barrel. Stop taking oil out of supply and putting it underground into the Strategic Petroleum Reserve. It is already 97 percent full. Why would we take oil out of supply to put upward pressure on prices, on both oil and gasoline, at a time when oil is at a record high? That makes no sense. Let us use at least some reservoir of common sense. Fifty-one Members of the Senate signed my legislation, signed the letter to the President in support of my legislation.

Today, 16 members of the minority signed a letter to the President. They have also introduced legislation. So 51 and 16, 67 members agreed, that includes the person who spoke on the floor today. Senator McCain has called for the identical policy. That is 67. That is veto proof. If 67 Members of this Senate say to this President and this administration: Stop sticking oil under the ground, nearly 70,000 barrels of sweet light crude every day--that is the most valuable subset of oil. We have had testimony before the Energy Committee that suggests it has put as much as a 10-percent increase on the price of a barrel of oil or a gallon of gasoline. And while families and farmers and truckers and airlines and all of these businesses are trying to figure out how on Earth do we pay this fuel bill, and while we see the damage and the dislocation of this country's economy because of it, this administration merrily goes along sticking oil underground. It is unbelievable. At the very least you ought to expect some common sense here.

Now, what has gotten us into this mess? Well, let me describe what is happening with Saudi Arabia. And if ever we should wonder about the danger of being overly dependent on oil from off this country's shores, this is the chart that shows why.

The Saudis, who have the largest reserve of oil in the world by far, have reduced their production by 800,000 barrels a day since 2005. They have reduced production by 800,000 barrels a day. That is part of the problem. So we sit here in the United States with a prodigious need for energy to make this economy work. And, by the way, as an aside, I have said before: We stick straws in this planet and suck oil out of the planet. We suck out 86 million barrels of oil a day. One-fourth of it is required here in the United States of America. We use one-fourth of everything that is produced every day in this world, on this planet. One-fourth of that oil is used here in the United States. We have an enormous appetite. So we need to conserve; we need more efficiency in the use of energy. We have done some things in that area. The CAFE standards increased fuel efficiency by 10 miles per gallon over 10 years. We have done some things in a range of these areas, but we are far too dependent on foreign sources of oil. When the Saudis decide they are going to cut back oil production by 800,000 barrels a day, and they say to us: Oh, by the way, with our strategic relationship, we want you to sell us precision munitions, it seems to me we ought to not be arming to the teeth the Middle East.

But aside from that, strategic partnerships run both ways. You cut your oil production by 800,000 barrels over 2 years; and by the way, we would like some strategic weapons for our strategic need in the region--it does not seem to me that is the way a partnership should work.

But let me describe with a couple of charts what is happening with this strategic reserve. Here we see that oil prices have nearly doubled in 1 year. There is no natural reason for that. The supply-demand relationship in the marketplace does not justify this. The marketplace simply is not working.

We have these people who shake the cymbals and worship at the altar of the marketplace. By the marketplace, that is the greatest allocation of goods and services known to mankind. Well, I believe it is a great allocator of goods and services. I used to teach economics in college briefly, and I understand the marketplace. But the marketplace needs a referee from time to time because sometimes the marketplace does not work; the arteries get clogged, it does not work.

So here is what has happened in a year. Oil prices nearly doubled in a year. Now, my colleagues have used quotes, and I have used many quotes. I am going to use one by Mr. Gheit, because Mr. Gheit said it all. He said: There is no shortage of oil.

Who is Mr. Gheit? He has worked for 30 years for Oppenheimer and Company, the top energy analyst for Oppenheimer. He said:

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

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

Oil speculators, including the largest financial institutions in the world--he said:

I call it the world's largest gambling hall. It is open 24/

7. Unfortunately it is totally unregulated. This is like a

highway with no cops and no speed limit and everybody is

going 120 miles per hour.

What is he talking about? He is talking about hedge funds neck deep in the futures market. He is talking about investment banks neck deep in the futures market. Is this because hedge funds and investment banks want to wallow in oil? Do they want to bathe in oil? Do they want to take it home and store it in their garage? They do not want to see oil. They want to speculate and make money.

They have made a lot of money. People who never had it are buying things from people who never will get it. So they are making money on both sides of the transaction.

Now, what does that do when you have this kind of unbelievable speculation? It causes the runup of prices in a very dramatic way. There is a trader named Andrew Hall. I would not know him from a cord of wood; never met him, never will, I suppose. He earned $250 million on the commodity market over the past 5 years, one-quarter of a billion dollars. He was betting. All of this is betting. He is betting long term, short term. He is not somebody who takes oil as a commodity; he just bets.

There are a couple of things we ought to do. I will be very brief. One, in order to be engaged in the futures market, as I have said before, if you want to speculate in the commodities future market for oil, for example, you only require 5 to 7 percent down; only 5 to 7 percent margin. You can control $100,000 worth of oil with $5,000 to $7,000 of your own money.

If you wanted to wager, that is a good way to do it, I suppose. If you want to do it in the stock market, to do this on margin, it takes 50 percent to buy in the stock market. But if you go to the commodities market, you can speculate to your little heart's content with 5 to 7 percent. That makes no sense. It ought to be 25 percent, in my judgment, or perhaps if you want to buy oil futures, you ought to take possession of the oil.

But one way or another, when you have a market that is not working, and you have speculation running out of control, I think there is an obligation on the part of this Congress to address that. Because that speculation is driving up the price of oil, and driving the price of gasoline well up beyond where the fundamentals would suggest. It injures the American drivers, consumers,

business, and it injures this country's economy.

The second point I indicated I was going to make is on the Strategic Petroleum Reserve. This chart shows what the Strategic Petroleum Reserve looks like. These are holes in the ground, and we shove oil down those holes. We save it for a rainy day; it's 97 percent filled at this point. We are putting just under 70,000 barrels a day every day underground right now.

Sixty-seven Members of the Senate as of today have expressed themselves publicly. They think it is the wrong thing to do. They think this administration is making a mistake and they ought to stop it. Now, why do people say that? Because they know if we stop taking that 70,000 barrels of sweet light crude and sticking it underground, it will be part of the inventory out there, and they know that would put downward pressure on gas prices and downward pressure on oil prices. That is why 67 people have come to this conclusion.

The question is: What do we do to try to stop this? Well, when you put oil underground, you drive up to the gas station, you see the effects of this kind of policy. The question is: What do we do to put some downward pressure on prices? Stop filling the Strategic Petroleum Reserve and stop it now.

There is a bill on the floor of the Senate, the FAA reauthorization bill. I am part of the committee that has produced this bill. We need to modernize the system for aviation in this country. It is desperately in need of modernization. It is going to cost some money to do that, but we do not have much choice. We have had, I think, four airlines declare bankruptcy in the last month and a half.

A substantial part of it, announced by every one of those airlines, had to do with the price of jet fuel.

I am going to offer, as an amendment on this bill, legislation that would call a halt to filling the Strategic Reserve. To stop taking oil and sticking it underground, and put some downward pressure on jet fuel prices, downward pressure on gasoline prices. Some say this doesn't fit on this bill. It does. Fuel prices are why three or four airlines have gone bankrupt in the last month and a half.

I will be over here tomorrow speaking about this topic because I believe strongly that we should do something about this issue.

My colleague Senator Byrd used to talk about Aesop's fly. He described the fable Aesop's fly who was sitting on the axle of a chariot who would observe: My, what dust I do raise. There are some here in the Congress who have that notion, that if you just make a little bit of noise and have a little bit of activity, you can claim a lot of success. The fact is, that is not what the American people want this time. They want this Congress to understand the urgency, understand the problem, understand what it is doing to this country's families, and do something about it. When you have speculation that runs out of control, this Congress has a responsibility to do something. We can't have someone else do it, we can't wait for somebody else. It won't get done. If we don't do it, it won't happen.

These are two steps I believe we ought to take: No. 1, increase the margin requirement and stop the speculation in the futures market to begin to put downward pressure on prices; No. 2, stop putting oil underground when prices are at a record high and put downward pressure on prices. If we did both of those things, I am convinced we would bring oil and gas prices back down and we would provide some relief to the American driver and to the American economy.

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

Mr. President, I wanted to discuss two things today. One is a hearing I have just concluded of our policy committee, and then I want to talk about the price of gasoline and oil.

Let me talk first about the hearing I just concluded of the Democratic policy committee. It is the 13th hearing I have done on the issue of contracting in Iraq and Afghanistan, especially waste, fraud, and abuse of contracting in Iraq. I have held a good many hearings. I am not easily surprised any longer about what I hear at these hearings of the unbelievable waste and fraud and abuse in Government contracting, where American taxpayers are being fleeced and where our soldiers are being disserved by waste and fraud and abuse.

I do get surprised, even though I say it is hard to surprise me. Today I hear about the stealing of artwork and rugs and crystal, the stealing of gold in Iraq in some of the palaces by contract employees, the stealing of gold and melting down of gold to make spurs for cowboy boots--something I hadn't heard before--the charging of a 100-percent markup on a little thing like a laptop computer. There is testimony today of the purchase of 300 laptops to be delivered to DynCorp in Iraq. They were purchased for $1,400 apiece, and then the Government is charged $2,800. That is a 100-percent markup.

A witness told us that a colleague of his was killed in a car in Iraq in a high-risk area. He was on an official assignment in an unarmored car and that car

was hit with an ambush and he lost his life. He said that colleague should have been in the armored car, but the armored car was being used to transport prostitutes from Kuwait back to Baghdad for the enjoyment of this particular contractor's employees. So I say, I try not to be surprised, but the depth of incompetence and waste and fraud and abuse in contracting in Iraq is unbelievable.

I started the hearing today by describing again, as I have a couple of times, a piece of work done by the New York Times that I wish perhaps would have been done by the Pentagon or by the Congress in terms of oversight.

This is Efraim Diveroli, the CEO of a firm awarded $300 million in a contract by the Pentagon to arm the Afghani fighters. Our Pentagon wanted to provide weapons and ammunition to the Afghan fighters, a perfectly reasonable thing to do because they are taking on the Taliban and al-Qaida in Afghanistan. To arm the Afghan fighters, they contracted with a company who had a 22-year-old CEO. This company was largely a shell company established by this young 22-year-old's father. It had been an inactive shell company, but now it is behind an unmarked door in Miami Beach, FL. So a 22-year-old CEO gets a contract with the Pentagon. His 25-year-old vice president is a massage therapist, a masseur. So you have a 22-year-old and a 25-year-old massage therapist running a company, and they get, we are told, a third of a billion dollars in contracts from the Pentagon.

By the way, the contracts were to provide ammunition to the Afghan fighters. Here is a photograph, again, crediting the New York Times. It is first-rate reporting by three reporters. Here is an example of what they shipped to the Afghan fighters, ammunition including 40-year-old, Chinese-made cartridges, and the pictures of what the Afghan fighters received from this $300 million contract--boxes taped up, bulging at the seams and bursting at the side with bad ammunition. It is unbelievable.

The question is, How is it the Army Sustainment Command in Illinois provided a $300 million contract to a company that had a 22-year-old president of a company that used to be a shell company for most of its existence and a 25-year-old massage therapist as a vice president and they run off with a third of a billion dollars of the Pentagon's money?

Actually, the taxpayers' money, isn't it? So who is going to answer to that?

After the New York Times did their story, the Pentagon then suspended this contract. But my understanding from a discussion with a high- ranking Army official in the last week or so, that high-ranking Army official was saying privately: No, the contracting with that company was perfectly logical and legitimate. It is just that the goods that were provided the Afghanis didn't meet standards.

You tell me how a general in charge of this kind of contracting can decide to take what had been a shell company and give a 22-year-old and a 25-year-old masseur a third of a billion dollars. You justify that to the American taxpayer. It is not going to happen. That cannot be justified.

It is long past the time for this Congress to do something about it. We now have a very large urgent supplemental appropriations request in front of Congress. How much of that money is for this purpose? How many of those contracts would be as embarrassing as this contract? How many of those contracts will go to allow the kinds of things I heard for 2 hours this afternoon at a hearing I just held in the Dirksen Building? When are we going to have some feeling that some of this stuff is going to be straightened out?

I have described before what we should do about it. Some of my colleagues have put in place a piece of legislation called the Truman Commission. I fully support that. But that is a commission of people outside of our Government that will study and make recommendations on Government contracting. It is a good thing to do. I fully support it, but the President is not implementing that commission, despite the fact it was passed into law. But what we really should do as well, because you cannot delegate accountability for this, we really need what is called a Truman committee. That is a committee, a select committee, bipartisan committee in the Senate similar to the Truman committee of the 1940s. Harry S. Truman created a bipartisan select committee in the Senate. It cost $15,000 at the start of the Second World War.

They held 60 hearings a year. It was bipartisan. It had subpoena power. With a $15,000 cost as they started it, it saved the American taxpayers $15 billion. This Congress needs a Truman committee. Three times we have voted on it. Three times the minority voted against it. Because it takes 60 votes, we do not now have a Truman committee.

In nearly every other major war, every other conflict, we have had some kind of select committee to do the kind of oversight, to provide the focus on the waste and fraud and abuse. But that has not been the case now. We need to fix that. We need to make that happen. We have voted on it three times, and we will be voting again because the American taxpayers deserve that kind of oversight, that kind of accountability, and so, too, do the America soldiers who are being disserved by this waste, fraud, and abuse.

Mr. President, I would like to make a comment about energy, the price of gasoline, and the price of oil.

It is not surprising to people what is happening in this country. We see the price of oil and the price of gasoline, especially the price of gasoline, go up, up, and up because the price of oil has gone skyrocketing in recent months. I have a chart that shows what has happened to the price of oil.

You can see from April of 2007 to April of 2008 the increase in the price of oil. One might say, there must be something in the supply and demand--the need for oil relative to the supply of oil--that causes this to happen. After all, it is the market system, isn't it? No, it is not the market system. There is no free market here. There is nothing about a free market here.

A substantial portion of the oil is on the other side of the world, controlled by OPEC countries. That is not a free market. They sit in a room with a closed door, and the oil ministers of the OPEC countries then make decisions about supply and the effect on price that reflects their self-interest. So this is not some natural result of a market system.

I made the point a couple days ago that Saudi Arabia, which has the largest known reserves of oil in the world, is producing 800,000 barrels a day of oil less than they did 2 years ago. Think about that. The largest producer of oil in the world has cut back production by 800,000 barrels a day. Is it surprising that the price goes up and up? That is one reason, isn't it? The largest supplier of oil has cut back production.

What is another reason? Another reason is this administration--a smaller reason but nonetheless a reason--is taking oil from the Gulf of Mexico as royalty-in-kind oil and putting it underground. Here is what this administration is doing. At a time when oil is $110 to $120 a barrel, bouncing around like a yo-yo, this administration is taking 62,000 barrels of oil every day and sticking it underground in what is called the Strategic Petroleum Reserve. The Strategic Petroleum Reserve is 97 percent filled. Yet when oil is at a record high, this administration is continuing to stick oil underground, taking it out of supply and putting it underground. That is an unbelievably inept policy because it puts upward pressure on oil prices and upward pressure on gas prices.

The fact is, this isn't just any oil. This is sweet light crude which is a subset of oil, the most valuable subset of oil. And we have had testimony before the Energy Committee saying this activity does affect the price of oil and the price of gasoline in a negative way.

When I say putting it in the Strategic Petroleum Reserve, this chart shows where they are putting it. This is what it all looks like. This is the SPR, the Strategic Petroleum Reserve. The oil goes underground. They had a choice with that oil. The choice would have been to put it in the marketplace and perhaps reduce some of these prices. Instead they stick it underground. It is a bad policy. I aim to change it in our appropriations process, in the supplemental. One way or another, we are going to vote on this.

Do you really think that at $115 to $120 a barrel, we ought to be sticking

oil underground and increasing the price? I don't.

There is another thing happening with respect to the price of oil. I just mentioned the Saudis cutting production back 800,000 barrels a day over the last 2 years. I just mentioned putting nearly 70,000 barrels underground every single day by this administration. That further cuts the amount in the supply line.

But there is something else happening with the price of oil. An orgy of speculation is occurring in the futures market for oil and gas. This didn't used to happen. The futures market is necessary. It is necessary to hedge. It is necessary to provide liquidity. I understand all that. But the futures market has become something unbelievably speculative. We have hedge funds neck deep in the futures market. Do they want oil? They don't want any oil. They just want to bet on oil. They want to gamble on oil. These are people who want to buy something they will never get from people who never had it and make money on both sides of the transaction in a futures market. We have hedge funds making big bets on oil in the futures market. We have investment banks making big bets on oil. Investment banks didn't used to be engaged in the futures market, but they are now.

In addition to that, in addition to the investment banks working in the futures market, we have investment banks that are actually buying oil storage for the purpose of taking oil off the market and putting it in storage until oil is more valuable later.

That is what is happening. We have not previously had that occur. So we have this binge of speculation in the futures market that has nothing at all to do with the supply and demand of oil. Why is this happening? At least in part it is happening because in the stock market. If you want to buy stock on margins, you have to pay 50 percent of the margin. You have to come up with half the money. If you want to buy stock on the margin, come up with half the money. If you want to buy oil on margin in the futures market, all you need to come up with is 5 to 7 percent. If you want to control 100 million dollars' worth of oil contracts, $5,000 to $7,000 will do it for you.

It is almost unbelievable what has happened with respect to the speculation in these futures markets. My belief is, we should change the margin requirements on the futures markets. When there is excess speculation, it injures this country's economy. It damages the American economy. This excess speculation has been pushing up oil prices in a very significant way.

Yes, there is a combination of things that are happening. One is, as I said, the Saudis cut back production by 800,000 barrels a day. Our Government, the Department of Energy, is sticking nearly 70,000 barrels a day underground of sweet, light crude. But it is also the case that a significant part of this, in my judgment, comes from a binge of speculation on the futures markets. I believe we should increase the margin requirement at least to 25 percent.

I want to go through a couple of observations.

On April 1 of this year, Stephen Simon, a senior vice president of ExxonMobil testified that:

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

Oh, really? Then why isn't it? This is from an oil expert saying: I think the price of oil should be around $50 or $55 a barrel.

Well, this company is making plenty of money off of the current price of oil. The price is double. That company must grin all the way to the bank. That company, the Saudis, the OPEC countries, and the other large oil companies, they must be smiling all the way to the bank. But Mr. Simon says the price of oil should be about $50 or $55 a barrel.

Mr. Clarence Cazalot, Jr., the CEO of Marathon Oil said:

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

market.

That was during a question-and-answer period with reporters. He said a more reasonable range for crude oil prices was between $55 and $60 a barrel. Now, understand what he said. He said: ``$100 [a barrel] oil isn't justified by the physical demand in the market.'' He is the CEO of one of the large oil companies in the country.

This price is not justified by supply-demand.

Well, we are told the market system works; supply-demand determines the market price. I used to teach a little economics in college, and you teach supply-demand curves. You also talk about a free market, there is no free market here, of course.

As I started to say earlier, we have the OPEC countries, that is a cartel. We have the big oil companies--all with two names now. ExxonMobil, ConocoPhillips--they all have two names because they found they like each other and they wanted to marry up. So they merged. So they have much more muscle in the marketplace. Then we have the futures markets which have become a binge of speculation.

A New Jersey Star Ledger article from January of this year said:

Experts, including the former head of Exxon Mobil, 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.

Fadel Gheit is a man who came to testify before the Senate Energy Committee. Fadel Gheit is an energy analyst for Oppenheimer & Co. I think he has been with them for 25 or 30 years. He knows this business. Here is what he said:

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

absolutely convinced that oil prices shouldn't be a dime

above $55 a barrel. . . . Oil speculators include ``the

largest financial institutions in the world.''

He said:

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's going 120 miles per hour.

Now, here is a picture of NYMEX, the New York Mercantile Exchange, where you can trade commodities such as oil. You will see the trading pits. A lot of people have made a lot of money in those trading pits. In fact, I have a Wall Street Journal story that describes this that is titled: ``Trader Hits Jack Pot in Oil, as Commodity Boom Roars On.'' This describes Mr. Andrew Hall. Mr. Andrew Hall has earned a lot of money, about $250 million--a quarter of a billion dollars. It says:

The commodities market's historic surge is generating huge

paydays on Wall Street. One of the biggest beneficiaries has

been Andrew Hall, an enigmatic British-born trader who, five

years ago, anticipated an important shift in the way the

world valued oil--and bet big.

The point of this is, here is a man who made a lot of money. I do not begrudge a man making a lot of money. But he made a lot of money by betting. He bet big. Isn't that interesting? As I said before, the notion of buying something you will never get from somebody who never had it--that is the futures market. It provides liquidity, yes. But when it goes way beyond liquidity and encompasses a binge of speculation, that is damaging and harmful to this country, then it seems to me it is not anything about the market system.

Anybody who has studied history and knows economics knows we have seen binges of speculation before. Go back four or five centuries, and you will read about a tulip bulb--one tulip bulb being sold for $25,000 because there was a speculative binge which, in the rearview mirror, looks completely irrational with respect to the price of tulip bulbs.

Well, we have seen over the centuries many of these binges of speculation. We now see it in the futures market, in my judgment, in part because the margin requirement is so unbelievably low: 5 to 7 percent. We now see binges of speculation that are driving up the price of oil and causing the American consumers an enormous amount of lost income and great difficulty.

There is a group of truckers who have come to Washington, DC, today. I was talking to somebody who was a little disadvantaged--He said he got slowed down on some travel up Constitution Avenue. I said: Well, that is an inconvenience, but think of what truckers are going through right now--a whole lot more than inconvenience. When it costs a substantial amount of money--one trucker talked about that it cost $1,000 to fill his truck with fuel. That is a lot more than an inconvenience.

I talked a week or two ago about how I think there are three airlines--perhaps now four--that have announced bankruptcy as a result of fuel prices.

We have working folks who will drive up to the gas pump tonight to try to

fill their tank, trying to figure out how to get the money. Where does the money come from to pay for the gas?

At the same time, we have people who are engaged on the futures market and who are going to the bank with the largest profits ever seen.

I think we have a right to ask in this country--when we have a market that is not a free market; when we have a perverted market, first by OPEC, a cartel, second by excessive speculation on futures markets-- don't we have a responsibility to do something? I think the answer to that is clearly yes.

So my hope is we will, first, decide to support an amendment that I will offer to the supplemental that immediately shuts down placing nearly 70,000 barrels of oil every single day underground at a time when we need that in the supply pipeline. Why should we allow the Department of Energy to be taking oil at the highest possible price and sticking it underground? We can fix this, and we can fix it soon, within a matter of weeks, if we had the will to do it.

Second, while we have not previously legislated on the issue of a margin requirement for engaging in speculation on the commodities exchanges, I think if the Commodity Futures Trading Commission or other entities will not do it, I think Congress should. After all, Congress created the mechanism by which these exchanges exist. We created the referee for the exchanges, and if it does not work, then we have a responsibility to fix it.

I recall--and it does not relate to the oil companies--but I chaired the hearings on Enron over in the Commerce Committee. I had the CEO of Enron come and testify in front of me and take the fifth amendment. Ken Lay came and said he could not speak and took the fifth amendment. But when he did speak later he said he did not know anything about what was going on.

The fact is, there was unbelievable speculation going on on the west coast on wholesale electricity prices and the manipulation of markets, and it cost tens of billions of dollars to west coast consumers who were bilked out of that money.

When the system does not work, when regulatory authorities are not willing to regulate, when those who are supposed to be referees in this free market system are not making sure a perverted system is changed to make sure it works, then we have a responsibility in Congress to deal with it and to respond to it.

So I believe very strongly there are a few things we can do. First, stop SPR oil from going underground; second, find ways to increase the margin requirement on the futures market. There are several other approaches we can use as well.

But I would conclude by saying this: I am just a little tired of people talking about the free market. There is no free market here. I want oil companies to do well. I want them to find more oil. I was one of four people in this Chamber who led the fight--successfully, I might add--to open Lease 181 in the Gulf of Mexico where there is substantial oil and gas reserves. I believe we should produce more, and I witnessed that by being one of four Members of the Senate who helped get that done.

We should conserve more. We should provide much greater efficiency with all the things we use. We should provide much greater effort to renewable energy. We should do all of those things. But even as we do them, in my judgment, we have a responsibility to address this issue of oil and oil pricing. Even the oil companies say there is no justification, given the current supply and demand, for the price of oil to be above $60, $65 a barrel. We have heard it in the statements of people who run our major oil companies.

The rest of it is going up to the hedge funds and the investment banks and others who are making massive amounts of money at the expense of truckers, at the expense of airlines, at the expense of the ordinary American drivers who are trying to figure out: How on Earth do I pay this bill?, and stopping excessive speculation.

We need to fix this, and the sooner the better because I believe it is damaging our economy.

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