Thank you, Mr. Hodes. Good evening. It is a pleasure to be here again. I want to just agree with one thing that our previous speaker from the other side of the aisle, Mr. King, had to say regarding biofuels. I think that there are ways in…
Thank you, Mr. Hodes. Good evening. It is a pleasure to be here again. I want to just agree with one thing that our previous speaker from the other side of the aisle, Mr. King, had to say regarding biofuels. I think that there are ways in which various biofuels, including corn, but especially cellulosic biofuels and nonfood crops can and should be used to extend the liquid fuels capacity of this country. But the main reason that I'm here tonight is because I've heard in the last several days a nonstop drum beat, a chorus singing from the same choir book and the same hymn book at every committee meeting I have been at, at every press conference I have heard, at every chance I see a Republican representative on television blaming the Democrats for the high price of gasoline and claiming, erroneously, that Democrats have been stopping drilling, that Democrats are opposed to drilling, and therefore we're responsible for the price of gas. This is not only false but ridiculous on the face of it. And I challenge it as a falsehood.
Specifically, I would say that over the last 8 years, the number of drilling permits issued by the government has gone up by 361 percent. So the lands are open. The oil companies own 9,700 plus leases that they have bid on and received the leases for. And as you say, Mr. Hodes, they have got done the environmental permitting on, the permits have been issued, and the way is clear for drills to go into the ground or into the offshore adjacent waters of the lower 48. But for some reason, no drilling is occurring.
Now I'm curious as to why exactly that is, if really the oil companies want to drill. And I would remind you, by the way, that our President George W. Bush said, when oil was going for $50 a barrel, that that was all the incentive the oil companies need. They don't need any more tax breaks or incentives. Fifty dollars a barrel is enough incentive to make them drill anywhere.
As this chart will show you, the total Federal acres leased and in production in 2007 were 91.5 million acres leased but producing only 23.7 million acres. There is a huge discrepancy between land that has been leased by the oil companies and that which they are using to actually drill and produce oil. Why is this? Could it be perhaps that they expect that speculators and market forces may drive the prices up further, not to mention their restricting supply might drive them up further, and that if they hold off for a couple more years, that same land and that same oil might be more valuable? And actually when you're making profits such as the gentleman from New Hampshire just talked about, I mean, how much money can you deal with? How many profits can you possibly figure out what to do with and where to invest in? And maybe it's better leaving them in the ground.
If I'm an oil company, I'm not necessarily thinking in the national interest. I'm thinking in the interests of my shareholders for the next quarter, for the next year, for the next shareholders' meeting, and for my next bonus if I'm the CEO. We had the CEOs of the top five oil companies testifying in this House before the Select Committee on Energy Independence and Global Warming. And when they were asked, ``Now that you have made the record profits of any corporation in the history of the world, would you commit to investing in one biofuels pump at every station that you own?'' And they said ``no.'' And when they were asked, ``If you would commit to advertising now that you have made the biggest profits in the history of the world for 3 years in a row, would you invest in advertising to tell people to conserve more and that it's patriotic to conserve and to drive a more fuel-efficient car and so on?'' And they said, ``Oh, we're already doing that.'' Which I frankly haven't seen. I watch enough television. I think I would have noticed if they were doing that.
And my friend, Mr. Walden, a minority member, a Republican member of the Select Committee from Oregon said, ``I'm a capitalist.'' I'm paraphrasing him now. I don't remember the exact quote. ``I'm a capitalist. I'm a small businessman myself. And if I made record profits for several years in a row, profits that I hadn't even dreamed of, I would start to think about whether I could lower my price to my customer. Have you at the oil companies thought about lowering the prices to the consumers?'' And one by one all five of them said, ``Well, we don't set the prices.'' And there was a chuckle through the room.
But I think there are various factors setting the prices. And one of them is collusion between the oil companies, which is why I have called for an investigation by the Federal Trade Commission and the Commodity Futures Trading Commission on exactly that fact, the fact that when crude oil goes up on the world market, the gas and diesel price spikes immediately with it. They go up simultaneously. But when crude prices go down, gasoline prices still go up. And if they come down at all, they come done slowly. It's kind of like rockets and feathers. The price goes up like a rocket, and it comes down like a feather very slowly.
So I'm suspicious about a couple of things, one, the disconnect between crude and refined gasoline when they're coming down. They're connected when going up. They are not connected when coming down. Secondly, why so much leased acreage that is not being drilled on? And thirdly, why at this time when the prices are at a record, when America's families are being squeezed and hurt, and their budgets are being hurt, they're being forced to choose between food, medicine or gasoline, some people have given up their jobs because they can't afford to commute to those jobs, why at these times are these oil companies and our friends on the other side of the aisle choosing to put the pressure on and say drill in ANWR and drill in these environmentally sensitive areas?
By the way, two of the individuals who have been stopping offshore drilling, I haven't personally stopped any myself, but two of the people who have
are the President's brother, Jeb Bush, who is the Republican Governor of Florida who is opposed to drilling off the coast of Florida, and Governor Schwarzenegger of California, a Republican Governor who has been opposed to further drilling off the coast of California. So you can't just say this is a Democratic opposition even if we were opposing it.
But the fact is that we have seen an increase, a radical increase in leases that are made available, in leases that the oil companies bid for apparently believing there is something of value underground, 9,700 separate leases and 68 million acres of land currently available and not being used. And I suggest that our friends in the minority might think of another reason, or perhaps another policy, that would help us get out of the box we're in.
We have worked very hard in this Congress to try to develop new sources, to provide incentives and tax breaks and subsidies for renewable energies like solar, wind and geothermal and various kinds of biofuels. For the first time, we made a major investment of, I believe it was $6 billion or so in carbon sequestration so we can use the record amounts of coal that we have and still precipitate out the carbon so we don't release that carbon dioxide that causes the global warming.
And, by the way, I would say in sympathy to the folks from Mr. King's State and to the parents of the five Boy Scouts who were killed by a tornado there, and in sympathy to the folks in Cedar Rapids who are just now starting to pump out their basements and put their city back together, it used to be called the city ``that would never flood,'' by the way, that was under 12 feet of water from its most recent flood, in sympathy to the poor citizens of Myanmar who were struck by the cyclone a couple of weeks ago that was as strong as Hurricane Katrina but came to shore with no warning and no FEMA, and not even Brownie to save them, and in sympathy to the people in Georgia and in Florida with record droughts, and in sympathy to people of the Rocky Mountain States and the Western States with record fire seasons, and in sympathy to folks in the 19th District of New York, which I represent which has had three 50-year floods in the last 5 years, I would say in sympathy to all those folks and to protect them, that global warming is here, it is starting to change the climate. These extreme weather patterns fit the computer models of global warming. And if we want to pump and drill more oil and burn more fossil fuels, fine. But that had better not be our only solution, or we will see more tornadoes, more floods, more extreme weather catastrophic events and more global warming. And I think that is not what the American people want. What we want are fair gas prices, fair energy prices and a green, renewable, sustainable energy future.
I yield back to my friend from New Hampshire.
Thank you, Mr. Hodes.
As you were speaking, I was thinking about some of the things that we can do.
Westchester County, one of the counties that I have the honor to represent, has a loop of county bus service which has switched from diesel buses to biodiesel buses to hybrid biodiesel buses.
We have John Jay High School, at which I just spoke a couple of days ago, where the environmental club has a grease mobile, a diesel car they've converted to run on biodiesel that they made from cooking oil from restaurants in the area.
The Newburgh Free Academy, a public school in Orange County, New York, one of the counties I'm honored to represent, has a solar racing club that built a solar car which tied for first place in a race between Houston, Texas and Newburgh, New York. They were built without the faculty advisors' even touching the vehicle. The adults were not allowed to touch the vehicle. The kids had to build it by themselves. These students knew how to weld and fasten the car together and how to build it sturdily enough and how to make sure that the wheels rotated so that they didn't wobble and so on. The advanced placement math and science students knew how to calculate how many square inches of photovoltaic cells it took to power a certain number of batteries to drive the wheels.
They drove that car from Houston for 2,000 miles to Newburgh, New York, and tied for first place in a race that was sponsored by a corporation that put the money up for the entire educational and research experiment.
When we did a presentation in our district on this, the students came in, wearing their solar racing club hats and their solar racing club T- shirts, and they showed the video of their car rolling down the highway with nothing but solar power powering it. By the way, this was a standing-room-only crowd who came to see this at the Bedford Town Hall in New York.
Afterwards, the adults came up to me as we were leaving, and they were saying, if these kids can do this on a shoestring, with no budget to speak of, where is Detroit? Why can't GM and Ford and Chrysler, our automakers, do this?
I would say that they can and that they should have been, but they're only now starting to. In fact, as to the Chevy Volt, as advertised on their Web site--it will be out, I believe, next year--they're planning this car to be a plug-in hybrid which will have a small internal combustion engine, but it will not be connected to the drive chain. The gas engine will only be used to drive a generator to keep the Lithium- ion batteries fully powered. When you drive this car, they say, on a 100-mile commute or less, it will run as an electric vehicle and will not use any gasoline. When you run it on an intercity trip of hundreds of miles, it will average 150 miles per gallon. That's supposed to be available next year.
I was at an event last week, and I talked to somebody from Toyota. They said, oh, that's nothing. In a couple of years, we're bringing out a car that's going to get 500 miles to the gallon.
Now, my feeling is that, when I was growing up and when we were in the middle of the space race and when President John Kennedy had challenged us that we would get to the Moon in 10 years, in our country, we were used to the position of leadership, and we thought, certainly, the United States has the ingenuity and the creativity and the expertise and the intelligence to be able to devise solutions for all of these problems. I still think we can, and I think we need to, and I think that the solution here is not to drill, drill, drill, and to open up more environmentally sensitive areas to be destroyed.
By the way, it was interesting to me that the polar bear was just put on the threatened list by the Secretary of the Interior. Then just this week, with a rulemaking process that doesn't have to go before us here in Congress, Secretary Kempthorne issued a rule indemnifying the top seven oil companies against any legal action should they kill polar bears in their exploration for oil.
So it's kind of a curious environmental consciousness that this administration seems to have where they give lip service to it on one hand, but on the other hand, they want to protect their friends in the oil companies from any risk at all at the same time that they open them up to all profit imaginable.
Just turning to this chart, natural gas is, of course, another one of the things we hear about, the oil and gas for which we bad Democrats are not allowing them to drill. Currently, how much natural gas is open to leasing? 82 percent. Closed to leasing is this small piece of the pie chart. This came from the Minerals Management Service in 2006. Technically, of the recoverable reserves of natural gas, 82 percent of them are open to leasing. This corresponds with the figures that we've been talking about in terms of oil that is open to leasing and that, in fact, has been leased and that is not currently being used.
I would contrast that with the inventiveness of Listening Rock Farm in my district, which is in the town of Amenia, New York. It's, actually, just barely north of my district. It's a renewable tree farm that's making biodiesel from wood waste and is running all their farm vehicles--their tractors and other vehicles and their road vehicles--on biodiesel made from wood waste, which is wood chips, sawdust, leaves, anything that doesn't go into the furniture that they make.
I would contrast it with Taylor Biomass, which is a company in Orange
County that is a private corporation but that takes municipal solid waste currently from the Town of Montgomery on a pilot project. They separate out the batteries and the solvents and the Raid and the insecticides and other bad things that you don't want to go into the groundwater or up into the air, and those things get taken away and are dealt with in a responsible way. What is left is gasified and burned to spin a turbine and to put kilowatts out into the grid and, at the same time, to produce ethanol. These are creative solutions to our energy problems that, I think, must be explored.
One thing I would share with our friend Mr. King is that we need to look at a wide variety of different kinds of energy around different parts of the country but, in particular, in the northeast where we have a hilly topography. There are many opportunities for small, low-head, hydroelectric power. In New York alone, the Department of Energy's Web site--the Idaho National Laboratory page--lists 4,000-some, low-head hydro sites, meaning small dams and small waterfalls, where, according to them, no lefty, environmental, tree-hugging organization--this is our DOE that we're talking about now--says that if we just put turbines where the water is already falling at these 4,000-some sites of low- head hydro potential that we could generate greater than 1,200 megawatts of power. That's about 60 percent of the output, the full output of the two Indian Point nuclear plants in my district. That's just for contrast.
Lastly, I would say that I'm interested that Texas recently passed the State of California as the State with the largest installed wind- power capacity. They have now become the leading wind generation State in the country. The reason, in part, is that Governor George W. Bush, when he was Governor of Texas, signed a renewable energy standard requiring that 10 percent of all electricity in Texas be generated by renewable sources of power.
Of course, once the industry knew that that was there, that was a requirement they had to meet, they more than met it, they exceeded it. They had passed California and became the top wind-power electric producer that T. Boone Pickens, one of the original oil tycoons in this country, was quoted recently as saying that he is more excited today about wind power than he ever was about any oil field he ever discovered.
The odd part of this picture is that now that George W. Bush is President of the United States, he threatened to veto our energy bill last year if it included a renewable energy standard in it. What was good for Texas, for some reason when he was President, wasn't good for the whole country.
Now, I wish that he would revisit that or explain it to us, but I believe that the same thing that was good for Texas would be good for the whole country. It doesn't have to be wind everywhere. It just has to be renewable. Some places will be wind, some places might be low- head hydro, some places might be biofuels, some places might be tidal power or wave power, but all of these things are available.
There are test programs and pilot programs that show they are effective. The sooner we start using them, the sooner we can get off this dependence on foreign oil and start to put our economy back to work and create new jobs and the new businesses, new technologies, here at home.
I yield back to my friend.
Well, I have a couple of comments. One is there is a bill that will be, I believe it's already been introduced, but we are going to be talking about more tomorrow called the Responsible Federal Oil and Gas Lease Act of 2008 introduced by Representatives Rahall, Markey, Hinchey, Emanuel and Yarmuth, among others, I am cosponsor as well, as are you, I believe.
What this will do, it's called, the slang version is the ``Use It or Lose It Act,'' which would compel oil and gas companies to either produce on those 9,700 leases that they have and those 68 million acres of land that they have already leased, either produce or give up those leases that they are stockpiling, and it would do this by barring the companies from obtaining any more leases unless they can demonstrate that they are producing oil and gas or diligently developing the leases they already hold during the initial term of those leases. The bill directs the Secretary of the Interior to define what constitutes diligent development.
By the way, the backdrop for this, the sort of origin for it, is that back a while in history, coal went through the same kind of speculation, where Federal coal resources were being abused, potential coal exploration areas were being leased by the coal companies, and speculation was driving the price up before that coal was actually developed.
Some people think that, and this is people in the financial markets as well as the energy markets believe that a significant portion, maybe as much as 25 percent in the increase in the cost of gasoline is actually speculation, people saying, well, that's a good place to put my money. I guess the stock market is kind of uncertain, and real estate has taken a hit lately.
Of course, I am not sure which commodities to invest in, but, oil, that looks like it's always going up. No matter what happens, I think I will put my money into oil. Of course, the more people that do buy oil futures, the more the price of oil goes up on the world market, and the more we wind up paying at the pump.
Companies which lease Federal coal resources are, already by law, required to diligently develop those leases. That's the result of this speculation in the past. The requirement has discouraged the rampant speculation that once did exist in the Federal coal leasing program. This same type of speculation now appears to be plaguing the oil and gas leasing program.
So under the Use It or Lose It bill, the Responsible Federal Oil and Gas Lease Act of 2008, oil and gas companies would have to either produce on those leases or give them up. I think that this is in the national interest, I think it's fair, because certainly the application for lease of a particular plot, whether it be onshore or offshore for production of oil or natural gas, implies that that company was intending to develop that resource.
And the Department of the Interior has I believe the right and the duty to make sure that our country's natural resources are used for the best and higher good of the people of this country. Not the CEOs or the stockholders of those corporation, but every American citizen, every person in the United States whose future depends on this economy and on the energy choices we make.
That's all I wanted to say, but I wanted to ask my friend from New Hampshire, since you have that lovely chart next to you, I wonder if you can comment on the Republican leadership's voting record on legislation that pertains to gas prices.