I would thank the gentleman from Iowa, and consider his comments to the fullest. I would congratulate my friends across the aisle for their attempts at activity in the first 100 hours. The truth is that, like my friend from Iowa, I am in…
I would thank the gentleman from Iowa, and consider his comments to the fullest.
I would congratulate my friends across the aisle for their attempts at activity in the first 100 hours. The truth is that, like my friend from Iowa, I am in business. My wife and I had a small business that we bought in, and we had four employees; 14 years later we had 50 employees. We sold that business when we came here. But I understand the creation of jobs and I understand the impact of taxes, the impact of what we do here in Washington. And I like the idea that we would move to bold action. I like the idea that we would compel these United States to be different and new and think differently. But I will tell you, there are some things that in the last 2 weeks have concerned me greatly.
Several years ago I had the opportunity to visit Egypt. When I was in Egypt, I noticed that almost every building had rebar and unconstructed pieces on top. So I mentioned to a friend of mine who was in the embassy that, why are all the buildings unfinished here? His comment was that they do not tax the buildings until they are complete, and so no one ever finishes their house, their home, the building they live in. The top floor is always under construction. And if they get that floor finished, they continue on and put rebar out onto a new addition that may never actually take place.
The truth is, that is a great example of one of the fundamentals of economics: The things that we tax more of, we have fewer. We tax complete houses, so in Egypt we have fewer full, complete houses. That same principle works here.
Now, yesterday on the floor of the House we heard much language that certainly appeals to many people in this Nation, that we are going to get back at those big greedy oil companies, that we are going to tax the people who have taken advantage of the American consumer. I would just point to the photograph on my right, this is what we are taxing. If the principle holds that we have fewer of what we tax, then we would understand that there are going to be fewer of these monstrous oil rigs. This is about a $1 billion to $1.5 billion project that sits out either in the Gulf of Mexico or off of the California coast and they produce tremendous amounts of oil.
I am from an oil producing State, New Mexico, but our oil wells are single wells coming up out of the ground. This one may have 20 or 30 wells that diverge out once it gets under the ocean. Our single wells may produce 50 barrels a day, and that would be a good well in New Mexico. These billion dollar investments might produce thousands or tens of thousands of barrels of oil per day. So like my friend from Iowa said, they contribute greatly to lowering the price of oil and, therefore, lowering the price of gasoline.
Now, in our friends' enthusiasm across the aisle to raise the taxes on those oil companies that have produced so much, what they are actually going to do is raise the taxes on these facilities so that we produce fewer of these and fewer gallons and barrels of oil and gallons of gasoline, which means simply that the price is going to go up at the pump.
Now, I am struck when we are faced with the comments that my friend from Iowa made; I am struck by the comments that he found issues in almost every bill that were like this, that had been poorly thought out yet not subject to the full complement of congressional hearings that they should have gone through, not subject to any amendment. And as I am thinking about his observations, I am drawn to a comment in the Detroit Free Press, and I would submit for the Record this entire document. But let me highlight this one quote. This is
Mr. Dingell speaking, talking about the new greenhouse special committee that is being suggested by the new Speaker. And Mr. Dingell says, ``We should probably name it the Committee on World Travel and Junkets.'' Mr. Dingell told the Associated Press, ``We are just empowering a bunch of enthusiastic amateurs to go around and make speeches and make commitments that will be very difficult to honor.''
[From the Detroit Free Press, Jan. 19, 2007]
Dingell Is Overstepped on Climate
(By Justin Hyde)
Washington.--The battle among House Democrats over global
warming heated up Thursday as House Speaker Nancy Pelosi
announced the formation of a special committee to hold
hearings on climate change, a job that had been under the
watch of U.S. Rep. John Dingell, D-Mich.
Dingell, who has long opposed tougher fuel economy
standards because of concerns about their effect on Detroit
automakers, will still maintain significant control over any
global warming bill through his chairmanship of the House
Energy and Commerce Committee. He has already asked former
Vice President Al Gore to testify on climate change and told
members last week that climate change would be a top priority
through a series of hearings to be held soon.
But the special committee reflects concern by Pelosi and
other Democrats who want fast action on global warming that
Dingell might object to provisions they support. Many House
Democrats support setting higher fuel economy targets on
vehicles as part of any effort to reduce carbon dioxide
emissions linked to a warming of the Earth.
Dingell said he had not seen a detailed list of the
committee's responsibilities.
Pelosi's move increases the likelihood that Democrats will
propose far tougher constraints on greenhouse gas pollution
than the Bush administration wants. She also has outflanked
for now--and angered--a few Democrats who head important
House committees.
``We should probably name it the committee on world travel
and junkets,'' Dingell told the Associated Press. ``We're
just empowering a bunch of enthusiastic amateurs to go around
and make speeches and make commitments that will be very
difficult to honor.''
Pelosi announced Thursday that she would form a Select
Committee on Energy Independence and Global Warming, which
would hold hearings and seek suggestions for ways to address
climate change. She said Congress needed the committee ``to
communicate with the American people on this important
issue,'' and that Democrats would come up with bills by July
4.
``The science of global warming and its impact is
overwhelming and unequivocal,'' Pelosi said in a statement.
``We already have many of the technology and techniques that
we need to reduce global warming pollution, and American
ingenuity will supply the rest. With this new select
committee, we demonstrate the priority we are giving to
confront this most serious challenge.''
Pelosi and her aides did not disclose who would head the
committee or how many members it would have, but no members
of Dingell's Energy and Commerce Committee will apparently be
included. While the committee will hold hearings around the
country, Pelosi told members Thursday it will not have the
ability to write legislation--the key power of the Energy and
Commerce Committee.
What concerns Dingell and his allies is that Pelosi is
using a select committee rather than a simple task force to
highlight climate change. Under House rules, a select
committee will have to be created by a House vote, and Pelosi
aides say the committee will have Republican members--
features that sound more like a legislative body than a
Democratic communications tool.
The California Democrat has long backed environmental
issues and has asked Dingell and other committee chairmen to
submit their ideas for climate change legislation by June 1.
But once the select committee issues its findings, Pelosi
could rely on that for legislation or use it instead of what
Dingell's committee produces.
Energy issues already appear to be the hottest topic on
Capitol Hill. House Democrats celebrated the end of their
100-hour legislative blitz by passing a bill raising about
$15 billion in fees and royalties from oil companies. The
revenue is aimed at financing research for alternative fuels
and energy conservation.
President George W. Bush's aides have said energy issues
will play a key role in Bush's State of the Union address on
Tuesday.
White House spokesman Tony Snow told reporters Thursday
that the President's speech would address the ``needs of
security and, at the same time, also the environment.''
U.S. Rep. Bart Stupak, a Menominee Democrat and member of
Dingell's committee, said the select committee could be
useful to ``highlight the importance of global warming'' and
that it won't prevent Energy and Commerce from holding its
own hearings.
``However, the legislative writing ability has to remain
within the Energy and Commerce Committee,'' Stupak said. ``If
suddenly there was a special committee . . . that had
legislative writing powers, I'd be very concerned because
that's a direct assault on a sitting committee.''
Now, when I see our friends who I know don't intend to undermine the economy of this country make decisions like they did yesterday, I am concerned that Mr. Dingell is very accurate, that we have empowered a bunch of enthusiastic amateurs, that they do not understand the full consequences of their actions.
If we look at the Tunagate scandal where we have now exempted from all of America just one piece of America, SunKist and Del Monte as the parent corporation; every corporation in America, according to the minimum wage law, must, whether they can afford it or not, pay a new higher minimum wage. That is the potential of the majority. And yet they came in, the Speaker gave an exclusion to one company, one company based in her district.
Now, we have heard a lot about the ending of special favors and ending the culture of corruption, and yet one of the first things we do is get a special interest. That does not speak so well for the full intent to follow through in this new beginning that we have been given.
I would also point out that one of the greatest arguments made in the renegotiation, allowing government to negotiate the prices on medical prescription drugs, I would point out that one of the harshest criticisms of this bill yesterday, the energy bill, H.R. 6, was that government negotiators failed to get it right; that government negotiators failed to put the provisions in. They did not even ask the oil companies to put those provisions into the contracts, and yet it is the same type of negotiator who we are going to turn loose and say that now we are going to get better prices than what the private negotiators have. I simply don't believe it. I voted the other way. But we will see if our enthusiastic amateurs have gotten it right, or if we in fact do not increase revenues to the Treasury and in fact begin to limit access to prescription medications, which is what I have been told.
For an example, we can go and look at the Veterans Prescription Drug List, and we see that I think the number is only 30 percent of the drugs that have been introduced in the last 5 to 10 years are actually on the list for veterans. They don't have the same access that people on the Medicare prescription drug program do. So that would be a terrible shame if, in their enthusiasm to create a better plan, our friends have instead created a worse plan. I am certainly willing to work with them and see, but in the meantime I do worry.
Now, there is a piece of the legislation yesterday that we all must read. If you have access to your computers, you can always look up H.R. 6, and go to page 10. That is section 2, title II, and we are under the section 204 and we actually then begin a long series of pages and we come to page 10 under section 204, item C. And I will read this, because you as colleagues will find this stunning that it is actually in print. That transfers item C, line 4, page 10: A lessee shall not be eligible to obtain any economic benefit of any covered lease or any other lease.
So President Clinton's team had negotiated bad leases, and now our friends are saying that those bad leases must be stopped. We simply need to stop them. We don't need to unravel them. We don't need to go through the thorny process of making it right for both sides as we unravel. We simply are going to punish you by not allowing you to derive any economic benefit from this type of installation. I will tell you, that undermines the full faith and credit of the United States. If we cannot depend on the word of the United States, then what do we have? I would draw parallels to things that other countries have done.
In Venezuela, Hugo Chavez in 2001 raised the royalty rates from 1 percent to 16 percent just like that. Now, I will tell you as a business guy, if you know that a cost is going to be 1 percent or 16 percent, it is sort of irrelevant, but you must know that the cost is steady. When he raised those rates just at a single point with no ability to redesign these types of infrastructures, then he severely limited the interest of people to invest in that country, and certainly
that is exactly what is happening. Foreign firms are already curtailing their investments in that country.
So in Venezuela we see that there is an attempt to change existing contracts, very similar to the way that we changed yesterday on the floor of this House of Representatives, and it has affected the desire of people to invest in Venezuela.
In Bolivia we have the same thing. The Bolivian government threatened to expel oil companies from that country in 2006 if they did not agree to new government terms on existing contracts. What has happened? I think you could forecast what has happened. What is done is that foreign investors are now beginning to reconsider whether or not they will actually be a part of the Bolivian economy or not. This is the thing that all shareholders, they will live with any certainty in life, but they will not live with uncertainty. And when we begin to change the contracts, they begin to pull their investments out and go to places where certainty is more of a potential.
In Russia we have seen the same thing. Companies such as Shell, Exxon, BP have had valid oil and gas leases in Russia for years. President Putin had a number of government agencies threaten to pull these leases for a number of suspect reasons. By threatening to pull these leases, Shell was forced to give up assets that were worth billions of dollars. So we see in Russia this attempt to maneuver contracts, to manipulate contracts much as what we did yesterday, and the effects are very bad. Long term, Russia will not have people who are willing to come and invest in that country.
In 2001, I had the opportunity to go as a company; my wife and I had a small company that dealt in oil and gas, repairs of oil wells. Russia was looking for such capability. So in 2001, I went with a team of people who did various different projects. We were the ones who did down hole repairs on oil wells. They took me, they showed me files of maybe 6,000 or 8,000 wells that were simple to correct, yet they in their technology in 2001 did not have access to even the basics that my father had seen here in the United States in the early 1950s when he was working in the same industry. My father retired from Exxon; his whole life was work.
So when I went back, I showed him the videos of the equipment that was in Russia in 2001. He said, ``Son, in 1950 we were more advanced than what we are seeing here.''
When countries are unwilling to allow people to have stable returns, it doesn't have to be high returns, low returns, but there must be stability and there must be predictability. When countries do not allow that, there will be no investments. And so here Russia was with over 6,000 wells asking me in 2001 to come and fix because they did not have anyone that was capable of fixing them.
I determined that the environment was very, very unsettling in Russia, so we actually opted not to become a part of the team that went there. There was a company that was about 10 times our size located in Abilene, Texas. They did go. That was about maybe a $50 million company, maybe a $100 million company. Within 2 years, they were selling everything at bankruptcy because the Russians, as you can predict, said, ``No. These assets are going to belong to us.''
So this contracting problem that was attempted to be cured yesterday in legislation I think is going to be, instead of a fix, is going to cause prices to be higher at the pump, investments to be less, and at the end of the day we are going to wonder if maybe we did not empower a bunch of enthusiastic amateurs to go around and make commitments on behalf of the Federal Government. We shall see. I wish my friends well.
I would say that I am not the only one who wonder about the contracts. Just day before yesterday the Washington Post had an editorial which declared that these elements that are included in the bill, the ones that begin to undo the contracts that we voted on yesterday and pushed by the majority in this House, the Washington Post declared those solutions to be ones that Russia and Bolivia would be proud of.
Now, that is not exactly the new direction that the American people were promised as we came into this session. So I would encourage my colleagues to please open the process up. With debate in committee, these shortcomings in bills could have been brought out. The rough edges could have been knocked off the bills. Instead, we have been faced with bills that have no amendments allowed, no debate in committees, no consideration in committees. And so I worry that our friends are circumventing democracy.