Energy Policy Act Of 2005

ENERGY POLICY ACT OF 2005 -- (Senate - June 23, 2005)

BREAK IN TRANSCRIPT

Mr. VITTER. Madam President, I rise in strong support of amendment No. 891 as well. I am proud to join my Louisiana colleague, Mary Landrieu, in doing so.

I want to make five important points why this amendment is clearly the right thing to do.

First, as Senator Landrieu said, this amendment has very broad, very deep, and very bipartisan support. I thank her for her leadership, as well as so many others who have come together and worked very hard to craft a responsible amendment to move this issue forward in a concrete way.

Senator Domenici, the chairman of the committee, has led in an extraordinary way on this issue and is the primary author of this amendment. We thank him. Senator Bingaman, the ranking member of the committee, has led on this amendment as well and is a cosponsor and supportive of it. We thank him. Senator Landrieu and I, of course, as well as Senators Lott and Cochran, Sessions, and others are all coming together, very broad based, in a bipartisan way to support this effort. That is point No. 1.

Point No. 2 is this is an utterly fair and just thing to do. In this overall debate about an energy bill, we are constantly looking for ways to secure our energy future, to increase our energy independence, to lessen our dependence on foreign sources, which is so troublesome, particularly in a post-9/11 world.

While in that debate, it is important to remember that there are a few States that have been leading that effort and have been doing their part all along, particularly these five coastal producing States--Louisiana, Texas, Mississippi, Alabama, Alaska, and California to a much lesser extent. So in this energy debate, it is certainly important to remember that some of us have been pulling our weight and far more than our weight every step of the way. Yet up until this moment, we have gotten virtually nothing for it.

While oil and gas and other mineral production on public lands onshore gives significant royalties to the host State--usually about 50 percent--that same sort of oil and gas production offshore gives virtually nothing to the host State, less than 1 percent.

That is utterly unfair and this amendment is a small initial step to correct that. As Senator Landrieu said, these coastal areas have produced $150 billion or more of Federal revenue, virtually no State revenue. This amendment would correct that injustice in a very small way by capturing a truly tiny percentage of that overall production and royalty figure for the host States.

Point No. 3 is that the host States, the coastal producing States, need this revenue to address problems directly related to this oil and gas production and our contribution to the Nation's energy security. In my home State of Louisiana, we have an absolute crisis going on. It is called coastal erosion. The easiest way I can summarize it is as follows: Close your eyes and try to picture a piece of land the size of a football field. That piece of land disappears from Louisiana, drifts out into the Gulf, lost forever, every 38 minutes. That is around the clock, 24 hours a day, 7 days a week, 52 weeks a year. The clock never stops. It goes on and on.

That loss is directly related to this oil and gas activity. So we have been contributing to the Nation's energy security, but the only thing we have gotten directly for it is these monumental problems which this revenue will help address.

Point No. 4 is that this amendment does not open any new areas to drilling. It does not provide incentives to open any new areas. Personally, I would like to do that. I think more of America needs to contribute to our energy security. I think we need to look in other areas. But clearly that is very politically controversial and this amendment does not attempt to do that in any way. So States that are not in the business, that do not want to be in the business, have nothing to fear from this amendment.

Point No. 5 has to do with the budget. All of us, led by Senator Domenici, a former budget chairman, have worked extremely hard so that this does not bust the budget in any way. We have bent over backward to fashion this amendment so it is within all the budget numbers.

A budget point of order may nevertheless be raised and I expect it to be raised. I want to explain what that is because it is not busting the numbers built into the budget. There is a reserve fund or a contingency fund within the budget that was part of the budget and part of the Budget Act specifically associated with the Energy bill. This amendment is well within the numbers of that fund and therefore does not go beyond the numbers of the budget. However, in the Budget Act, the chairman of the Budget Committee has the role of having to sign off on the use of that contingency fund. The chairman may not do that. He may therefore raise a budget point of order, and that is his right, and I respect his right and what he views as his obligation, but I want to make the point very clearly that is a technical point of order which is fundamentally different from an amendment which busts the budget numbers, which goes beyond the numbers built into the budget.

We have worked extremely hard with the budget chairman's staff, I might add, hand in glove with them, to make sure this amendment falls within all of the numbers of the budget and is well below that contingency fund number specifically for the Energy bill. So if that budget point of order is raised, it is valid, but it is, in a sense, a technicality because our amendment does not go beyond the numbers built into the budget and the Budget Act.

Mr. GREGG. Will the Senator yield on that point?

Mr. VITTER. I would be happy to yield.

Mr. GREGG. Is it the position of the Senator from Louisiana, therefore, that when a discretionary program is taken and turned into a direct spending entitlement program, that that is a technical point?

Mr. VITTER. No. The point which I just made was that this amendment is well within all of the numbers laid out in the Budget Act. That was the point I was trying to make.

Mr. GREGG. Madam President, would the Senator yield for a question?

Mr. VITTER. I will be happy to.

Mr. GREGG. It appears to be the Senator's position that since this budget point of order involves taking a discretionary program and making it an entitlement program that that is a technical point.

Mr. VITTER. That is not my----

Mr. GREGG. My position is that is not technical.

Mr. VITTER. If I could clarify and respond to the question, that is not my position at all. My position, which I think I laid out pretty clearly, is this amendment is well within all of the numbers within the budget. It does not bust those numbers. It does not go beyond those budget numbers. That is what I said, that is what I meant, and I believe to the extent the Senator did not argue the point, it is confirmed.

Mr. GREGG. Madam President, would the Senator from Louisiana yield for a question?

Mr. VITTER. I will be happy to.

The PRESIDING OFFICER. The Senator from New Hampshire.

Mr. GREGG. The Senator from Louisiana appears to want to have it both ways, that the chairman of the Budget Committee has a right to make this point of order because the chairman of the Budget Committee is given that authority by the Senate in order to protect the integrity of the budget process, and when the chairman of the Budget Committee rises and asks a question which is the basis of his point of order, which is that this amendment takes a discretionary program and turns it into an entitlement program, and asks the Senator from Louisiana does he deem that to be a technical point, the Senator from Louisiana says, no, that is not my argument. My argument is something else.

Well, I would simply say to the Senator from Louisiana, he cannot have it both ways. He cannot say to the budget chairman he has the authority to do this and then say to the budget chairman, when he asks the Senator whether it is a technical point when the budget chairman elicits why he is doing it, that it is not a technical point.

It is a very unusual position to take, that moving a discretionary program to an entitlement program is a technical point, and that is the gravamen of the argument of the Senator from Louisiana.

Mr. VITTER. Reclaiming my time, I think I have laid out my position very clearly. This is a broad-based, bipartisan amendment. This is a fair amendment, particularly considering everything that these coastal producing States have given the country in terms of our energy security. Unfortunately, we are a very small number of States that have contributed in that way. This is designed to address a very real crisis in Louisiana and other coastal States. By the way, that is not some parochial problem. That is a national problem, as my colleague, the senior Senator from Louisiana, has outlined. It threatens national oil and gas infrastructure. It threatens national maritime commerce and ports. It threatens nationally significant fisheries.

Fourth, we are not opening new areas with this amendment. We are not providing incentives to open new areas with this amendment.

Fifth and finally, we are within all the numbers within the budget.

I thank the chairman of the committee. I thank Senator Bingaman and others. I thank my colleague, Senator Landrieu, for her leadership on this issue.

I yield back my time.

BREAK IN TRANSCRIPT

Mr. VITTER. Madam President, I wanted to briefly respond to each of the major points that the distinguished chairman of the Budget Committee has made because I believe, quite honestly and sincerely, he is misinformed about each of these points.

No. 1, the idea that there is no causal linkage between the problem, at least in Louisiana we are trying to address, and offshore oil and gas production: Nothing could be further from the truth. I am glad the distinguished Senator has read ``Rising Tide.'' But I suggest he needs to read a lot more and maybe come to Louisiana.

There are, of course, several causes that have all worked to create this coastal erosion problem, but one of the biggest has been all of the oil and gas service activity which comes off the swampy coast of Louisiana. All of that 50 years of activity has created channelization of our marshes. That has directly led to the intrusion of saltwater into the marshland, the loss of vegetation, which is the glue that holds it together, and this coastal erosion.

There is an absolute identifiable, scientifically proven, causal connection between offshore oil and gas activity and this coastal erosion problem.

It is not speculative. It has been scientifically proven. Are there other contributing factors? Of course. Is levying of the Mississippi a significant factor? Of course. But there is a direct causal connection.

Point No. 2, the chairman has suggested there is no relation between this money and energy production. Again, nothing could be further from the truth. The amendment specifically states these States share in this fund in direct proportion to their Outer Continental Shelf energy production. The way to calculate how much each State gets is according to what activity, in meeting the Nation's energy needs, goes on off our coast. There is a direct connection between the calculation of the money and this activity. Again, a direct connection in terms of what money the States get directly dependent on what OCS oil and gas activity exists.

Point No. 3 causes me the most angst being from Louisiana, the notion that there is no justice to this amendment, or that this is somehow a rip-off to the advantage of Louisiana and other coastal States. Nothing could be further from the truth. We have worked 50 years to produce energy in this country. We are one of the only States in this country to have done this. The other States are also represented in this amendment. Yet we have gotten hardly anything for it and truly hardly anything for it in terms of direct revenue to the State.

States that have onshore mineral production or onshore oil and gas production on public land get a 50-percent royalty share. A State such as Louisiana that has this production offshore in the OCS gets less than 1 percent. Yes, there is a justice issue, but the justice issue is weighted in our favor.

I note two things, in particular, the distinguished Senator from New Hampshire mentioned. He talked about other conservation needs. What about the conservation needs brought about by coal activity in West Virginia? The chairman should note West Virginia gets a 50-percent royalty share that directly relates to that activity. Put us on par with West Virginia. We will take that; we will take 50 percent. The fact is this is a pittance compared to that.

Is there a justice problem? You bet there is. West Virginia produces coal, and that is great for the country, and they get a 50 percent royalty share. We produce oil and gas, and that is great for the country, and we get less than 1 percent. This is a justice issue, and all the justice arguments are in our favor.

The Senator also mentioned that Louisiana has a windfall because 3 miles off our coast is State waters. That is true. But the distinguished Senator from New Hampshire should note that for Texas, that seaward boundary is 9 miles. For Florida, that seaward boundary is 9 miles. Yet because of historical accidents and idiosyncracies, it is only 3 miles for Louisiana and Mississippi and Alabama. Everywhere else it is 9 miles or more. For Louisiana, Mississippi, Alabama, it is a third of that, about 3 miles.

You bet there is a justice issue. But, again, the injustice for 50 years and more has been against us. We are trying to correct that in a truly modest way with this amendment.

Fourth and finally is the budget point. I reiterate and am very specific and very clear: This amendment is wholly within the numbers built into that budget. As the chairman knows, built into the budget is a fund specifically dedicated to the Energy bill. This amendment is well within those numbers.

There are lots of things in the Energy bill that are mandatory spending. There are lots of tax provisions. There are lots of other provisions that basically can amount to mandatory spending. This is the same as that. There are lots of other things that are not subject to future decisions or future appropriation or other decisions. This is tantamount to that, and it is within the numbers built into the budget for the Energy bill. We have bent over backwards, worked very hard, to make sure that was the case.

BREAK IN TRANSCRIPT

Mr. VITTER. Mr. President, I follow up on some of the previous comments regarding this coastal amendment and quickly underscore two very important points.

As my colleague from Louisiana has explained, this is merely treating those coastal producing States that have produced so much of the Nation's energy needs, taken care of so much of those needs, simply treating those coastal producing States fairly.

If only more States were like us in producing far more energy than we consume, of course, this energy crisis we are facing would be less and less onerous, but that is not the case.

In particular, the distinguished chairman of the Budget Committee was in the Senate and said his State produced more energy than it consumed. I would love to hear the distinguished chairman's sources for that. I checked with the U.S. Department of Energy and they flatly disagreed. The most recent figures I could obtain, September 5, 2003, certainly include the nuclear energy plant the distinguished Senator from New Hampshire was referring to. That produces far less than the State of New Hampshire consumes. In fact, the total energy production from New Hampshire comes from that nuclear facility, .036 quadrillion Btus. The total energy consumption of New Hampshire is .329 quadrillion Btus. So, according to my source from the U.S. Department of Energy, the best information I have, dated September 5, 2003, New Hampshire consumes about nine times what it produces from that nuclear plant or any other source.

I use that as an example because, unfortunately, the coastal producing States we are talking about are in the distinct minority. We do produce the Nation's energy needs. We do produce far more energy than we consume. That is great for the Nation. I wish that load were spread around more, but it is not. That is a very important element of this debate.

The second point that directly flows into is a question of fairness. The Senator from New Hampshire talked about some boondoggle to coastal States. Nothing could be further from the truth. We are simply asking for a small, modest modicum of fairness. This amendment covers 4 years, 2007, 2008, 2009, 2010, 4 years, and then it goes away. During those 4 years, the royalties into the Federal Treasury from this offshore production are expected to be $26 billion. Under this amendment, during those 4 years, our share is $1 billion. That is less than 4 percent. Meanwhile, onshore oil and gas and mineral production is shared in terms of royalties on public lands 50 percent to the States and 50 percent to the Feds.

The Senator from New Hampshire, when he was here, cited the example of West Virginia coal production. That royalty share on public lands is 50/50. We will take 50 percent. If the Senator from New Hampshire wants to offer that amendment, we will accept that. We are only asking for 4 percent for 4 years and then it goes away.

This is fair. It is a fair way to treat those few States that help produce the energy the Nation needs. Those are very important points.

I hope all Senators remember those points as they vote, particularly on an amendment that is squarely within the budget, that does not bust any of the numbers within the budget.

BREAK IN TRANSCRIPT

AMENDMENT NO. 802 RECALLED

Mr. VITTER. Mr. President, I rise to engage in a colloquy with the distinguished chairman about one amendment in particular, amendment No. 802. It is based on an underlying bill I introduced, the Alternative Energy Enhancement Act, which would provide some regulatory structure and some royalty sharing for new alternative energy that is developed offshore, particularly on the Outer Continental Shelf. These are new forms of energy which are not in production now, things such as solar energy, thermal energy, wave energy, methane hydrates.

First, I compliment the chairman for his work on the bill because the underlying bill includes most, if not all, of the regulatory provisions of my bill. What it does not include is royalty sharing. I would like to ask the chairman if he could continue to work with me as this energy bill goes to conference to create a fair system of royalty sharing for these new forms of energy, noting that it is absolutely no loss to the Federal Treasury because those revenues are not coming in yet.

Mr. DOMENICI. The Senator has my assurance. Just as I have tried to do that in the past, I will continue to do it. It cannot be included in this bill for a lot of reasons, including those the Senators from offshore States understand. We will continue to work on it and see how we can move it along in due course.

Mr. VITTER. I thank the chairman.

Mr. DOMENICI. Will you pull your amendment after this colloquy?

Mr. VITTER. Yes, this first amendment is No. 802. My second amendment we can deal with much later on. We don't to have deal with it immediately.

Mr. DOMENICI. Will you withdraw it?

Mr. VITTER. Mr. President, I withdraw amendment No. 802.

BREAK IN TRANSCRIPT

http://thomas.loc.gov