Mr. Speaker, I thank the gentleman for his discussion on energy security. And for my discussion tonight, I would like to begin at the same point that my friend from Ohio from the other side of the aisle began. She was quoting accurately an…
Mr. Speaker, I thank the gentleman for his discussion on energy security.
And for my discussion tonight, I would like to begin at the same point that my friend from Ohio from the other side of the aisle began. She was quoting accurately an oil industry study which says that supply cannot keep up with demand, that prices are going to be high, that supply is going to be tight, and that is for the foreseeable future through the next decades.
Now, the response that we had in the Energy Policy Act of 2005 was literally to, number one, recognize that it is not possible to convert overnight; so we had incentives there for the very hard-to-get oil and gas. That is the deep, the very deep, ultra-deep, and then offshore.
Now, the offshore platforms are extraordinarily expensive. They maybe look something like this. Our friends from Louisiana would recognize many of these, and California. These units cost over $1 billion to $1.5 billion. We don't invest in them easily, but they produce a tremendous amount of energy. It is the belief of those who are concerned about the energy business, concerned about the fact that prices are high, that supply is low, they really only have two choices if prices are high and supply is tight. You can lower demand, which Americans have not seen to want to do, or you can increase supply.
So these units here, we had great incentives for those, and we felt like that would bridge us during the years to where consumers would begin to consume differently.
But I would ask our average listener, how many people do you know who actually put biodiesel in their car or their truck? How many are using any fuel other than straight gasoline? We have got some of it augmented by ethanol. But how many cars really do significantly reduce the consumption?
If the answer is not many, then you would be concerned about the time to convert. And we have had testimony in our Resources Committee where both sides of the aisle say we are probably on a 20- to 40-year conversion that you and your family probably will not drive a different car for 20 to 40 years that has a different power source than what it has got right now. So we either recognize the truth in the matter and we encourage supply while we are converting to those renewables, and the Energy Policy Act of 2005 had great stimulation. I think the difference, though, is that when we are confronted, as business- supporting conservatives, with the idea that the oil industry study says the supply is limited, it cannot keep up with demand, that we probably should increase supply.
Our friends on the other side of the aisle, and I would quote, said that we are going to reinvent our economy in the first decade of this century.
Now, it is not possible to reinvent an economy in 2\1/2\ years because we are already at year 6\1/2\. It is just not possible to reinvent an economy in 2\1/2\ years, and that becomes the great disconnect on the discussion.
I would like to spend the rest of my time talking about the energy suggestions that our current majority has. We have recently marked up H.R. 2337. We have recently passed that out of the Resources Committee. And I will tell you that we need to make one point perfectly clear, that H.R. 2337, the Rahall energy bill, which is intended to be a piece of the package that is brought to this floor, will cost Americans jobs. It will increase the cost of natural gas and gasoline. And it is going to stunt the growth of the alternative and renewable energy industry.
H.R. 2337 is called the Energy Policy Reform and Revitalization Act. It could be called the ``American Job Outsourcing Act,'' it could be the ``Chinese Full Employment Act,'' or it could be the ``Funding Mechanism for Hugo Chavez,'' but to declare that it is the ``Energy Industry of America Revitalization'' is intended to be a stretch of the facts.
During congressional hearings in Congress, we've heard a lot of testimony from witnesses talking about the impact of our actions on the cost of energy. So I would refer to another chart which simply talks about the cost of our energy is going to be increasing dramatically. We have received this testimony that the cost of energy probably will go up to a 23 percent increase in some areas, 29 percent on the California coast, 32 percent in the Texas region, 21 percent in the South, and in the Southeast, 19 percent; 20 percent in New York. So you see significant energy increases because of the increasing consumption of natural gas.
One witness, Paul Cicio, testified that America has lost 3 million manufacturing jobs to overseas competition due to this kind of energy increases. It is an important point because we need good jobs in America. High-tech industries and high-tech manufacturing are the future of our economy, yet they're tremendously energy dependent. You can't put a server farm in Washington or San Jose unless you have the energy to power it. You can, however, put it in Beijing because the Chinese are committed, like one of my friends said, building 544 coal- powered plants over the next 10 years to ensure they have enough cheap power. Cheap power is the key to keep their economy moving forward.
At the hearing we talked about, a couple of months ago, how Dow Chemical was going to build a $22 billion facility in Saudi Arabia because of the price of energy here in the U.S. And yet, what we're doing is restricting our access to energy here in the U.S. while we're not restricting the overseas, ensuring that we're going to import more energy, ensuring that jobs are going to continue moving to those cheap sources of energy.
American prices are simply too high, and we're doing nothing about it. And
the renewables, though they have promised, the renewables are far, far into the future, decades into the future, where they begin to affect us.
We can see that energy prices are already high and headed higher. The projections show that they're going to be 20 to 30 percent increases, which drive these billion dollar projects overseas.
I would comment that the Dow Chemical plants in both China and Saudi Arabia are going to take 10,000 jobs, those are 10,000 jobs which would be in the hundred thousand dollars range if they're here in America, and yet because of the low energy prices overseas compared to here, we're going to export those jobs. And it simply does not make sense.
Since 2000, our offshore gas production has dropped 40 percent. Our next chart will show that production decrease. It's very difficult to see, the yellow line is on the top, moves along here. And we see the energy decreasing as it moves across the chart.
We would recognize that onshore gas is actually a flat stable line, but the offshore is decreasing rapidly. And yet the Outer Continental Shelf, where we have great potential large, large resources, we're restricting access to those areas. Meanwhile, in the Rocky Mountains, where we restrict access there, those are fields which already have been drilled, so it's not as if they're pristine. We just are limiting our access to our own resources, which then compounds the problem that Ms. Kaptur started out with initially. Prices are high, supply is tight. And we're seeing that supply gets tighter, and we're going to then increase the price.
Another thing that H.R. 2337, the Rahall energy bill, is doing is limiting shale completely. We're restricting the regulatory framework that was supposed to be out already and saying that it won't come forward. And without regulation, the industry is simply going to die. Now, that's important because in the long term, the 20 to 50 year term, shale causes America to be the Saudi Arabia of energy. If we consider just oil, Saudi Arabia has the dominant amount of energy in the world. But when we consider shale, the U.S. then becomes the dominant energy producer, and yet we're killing that industry completely.
We're in the shape that we're in today because of our decisions over the past 30 years. We chose not to build new refineries. We have chosen not to have nuclear energy. We have chosen not to drill more in this country, but instead, to restrict access on Federal lands, and so we simply have a problem of tight supplies and high prices. And those are going to continue for the foreseeable future.
Now, what does 2337 do regarding renewable energy? We hear our friends on the other side of the aisle talk about the need for renewables, but this bill begins to hurt the renewables. It begins to restrict the renewable energy development, also. It just doesn't make sense.
But we heard from four Democratic witnesses at one hearing that coal cannot be a part of America's energy future if we're to combat global warming, but according to the bill H.R. 2337, it's about the only energy source left because of restricting oil and gas in 2337. We also give deep restrictions onto the wind industry so that the Wind Energy Association came out opposed to the bill saying it cripples our industry.
The bill places new costs and restrictions on the solar industry, requiring new labor provisions, per acre fees, and purchasing restrictions. So this bill harms domestic oil and gas production, reducing domestic production, increasing our reliance on foreign oil, but it also begins to limit our development of the alternative energy sources, but even worse, the most restrictive thing for alternatives is that there were corridors that were implemented in the Energy Policy Act of 2005. Those corridors recognize that places where renewables are created are not where the population is generally. New Mexico is one of the few States that would be self-sufficient on wind, yet we can't consume all of the wind energy that we would produce there. And so there were corridors that were lined up to take the renewables from where they're produced maybe in New Mexico to Los Angeles or New York, wherever, and yet those energy corridors receive a death blow in this bill, H.R. 2337, which again is passed out on pretty well party lines and is coming to the floor of the House as a part of Ms. Pelosi's energy package. And yet you have to ask, where is the energy in the bill? Because I see where the limitations on oil and gas are; I see where the limitations on shale are; I see where the limitations on wind and solar are. Exactly where is the energy production going to come from?
I guess with the carbon sequestration that is in the bill, to the dismay of our friends on the other side of the aisle, it's going to ensure that coal is our only source of fuel for the future. But they're also trying to limit its use.
Finally, regarding royalties. This bill attempts to capture royalties owed to the American Federal Government. Like the chairman, I strongly believe that American taxpayers should receive the royalties that are due. Nevertheless, we differ when it comes to the method of collection.
I support a Royalty in Kind program where we simply declare the number of barrels produced. We can meter that, it's very easy. We don't have to calculate the price because the price changes every day. And so the take to the Federal Government changes every day if we're contemplating dollars, but Royalty in Kind is very simple, but it also puts a lot of accountants out of business, puts a lot of tax lawyers out of business. And so we could call the provisions here where we kill the Royalty in Kind program in 2337, the ``Tax Lawyer Full Employment Act.'' Because that's what it's going to do, it's going to put people in the courts saying, now exactly what was the price on November 7 of 2001 when you sold that gas? It would be so much easier just to take the meter reading, take the government's percent, and put it into the government's coffers.
In our legislative hearing on this bill, leading Members on the other side of the aisle chastised our royalty regime saying it parallels countries whose corrupt governments are blowing up the rigs. That was a quote. Then they're moving to this country to exploit our low rates. But how ironic is that? You wish for the U.S. to set an example for the world on climate change, but want to follow the lead of Venezuela and Nigeria on royalties.
I support increasing production that will bring good, safe jobs and energy to America. I support efforts to keep the ``American take'' as a portion of energy development to a reasonable level that ensures companies have the money to provide safe working conditions, keep their facilities up to date, and reinvest in development and exploration.
Finally, we had comments all through the time that the royalties received by the U.S. Government are so much lower than Russia, so much lower than Venezuela. Yet I would like to share a final chart with you that shows some of the problems.
This picture is in Russia. And I will guarantee you that you will see no oil field in America like this. The opponents on the other side of the aisle of the level of royalties that we take currently simply want to make a moral equivalency between the kind of government and regulations that allow this, and the government and regulations in this country which have produced one of the strongest energy economies in the world, which have produced the most dramatic economy of American exceptionalism in the world, and yet they're trying to unravel that and undo that.
I would hope that we all would look at the energy suggestions from our friends on the other side of the aisle, that we would carefully evaluate the fact that the supply cannot keep up with the demand, that prices are going to be high, and the supply is going to continue to be tight unless we do something about it.
I thank the gentleman for yielding tonight and appreciate the discussion on both what we've done in the past, and what we're looking for in the future according to 2337.