STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS
BREAK IN TRANSCRIPT
By Mr. KOHL:
S. 1996. A bill to authorize the Secretary of Energy to temporarily prohibit the exportation of a finished petroleum product or liquefied petroleum gas from the United States if the Secretary determines that the supply of the product or gas in any Petroleum Allocation Defense District has fallen or will fall below expected demand; to the Committee on Banking, Housing, and Urban Affairs.
Mr. KOHL. Mr. President, I would like to address an issue that I know my constituents in Wisconsin are worried about; indeed, something that all Americans should be concerned about. On Tuesday, the Energy Information Administration (EIA) announced the most recent outlook for home heating costs. For the average family, the cost of heating oil will increase approximately $325. And for families relying on propane, they can expect to pay an increase of about $230. I would like to stress that this is the average; in some areas, the prices could be much higher. And while these increased costs will place an undue burden on all sectors of the economy, the heaviest toll will clearly be on middle and low-income families.
Yesterday, executives from several major oil companies were called to Capitol Hill, to defend the nearly $33 billion they earned last quarter. The answers they gave, for why Americans could expect to pay significantly more to heat their homes this winter, often were directed at the economics of supply and demand. The Chairman and CEO of ConocoPhillips argued that prices are ``a function of longer-term supply-and-demand trends, and lost energy production during the recent hurricanes.'' John Hofmeister, the President of Shell Oil Company, told Senators that the industry is doing everything in its power to ``supply shortfalls.''
Given the testimony of Mr. Hofmeister, I find it surprising to note that currently, American companies are actually exporting products that could be used for home heating. According to the EIA, between January and August 2005 more than 48 million barrels of refined product was exported out of the U.S. This amount is 24 times the size of what is stored in the Northeast Heating Oil Reserve. While some of this went to both Canada and Mexico, large quantities were also sent to Argentina, Chile, France and Peru.
I believe my constituents would be shocked to hear that while the oil companies are blaming high prices on low supplies, they are also reaping the benefits of exporting home heating oil abroad. That is why, on November 4th, I, along with 11 of my colleagues, wrote to several of the major oil companies and refiners, asking them to voluntarily halt all unnecessary exports of products that could be used for home heating. Such action would not be without precedent: in 2000, some refiners, including Shell Oil, voluntarily suspended heating oil exports after consulting with then Energy Secretary Richardson. We have not yet heard a response from any of the companies.
I remain hopeful that these companies will help American consumers by temporarily suspending their unnecessary exports. Yesterday's hearing, however, did not inspire confidence in the companies to act on behalf of consumers rather than profits. That is why I am introducing the Stop Heating Oil Exports bill today.
My legislation would grant emergency powers to the Energy Secretary to halt all unnecessary exports in the face of a serious price spike or supply shortfall. It is that simple. If the Secretary finds that demand will heavily outpace supply, then he or she should be able to stop exports--thereby temporarily improving supply, and preventing a major price spike, such as the one we can expect this winter.
Yesterday, the oil companies cautioned those of us in Congress against policy changes that would amount to long-term involvement in energy markets. I would assure these executives that my legislation is a simple, short-term answer that is designed to protect American consumers. The companies have a chance to do the right thing, to increase supply and avoid the significantly increased home heating prices that have been forecasted.
I believe that in the future, if they fail to use such an opportunity, the Energy Secretary should have the power to intervene on behalf of consumers. I would remind my colleagues that in 2000, as many as 4 refiners voluntarily suspended exports, citing ``market conditions'' and the desire to ensure adequate supplies of home heating oil for the winter. And I would remind the President of Shell that his company was one of them.
Americans across the country could face potentially life-threatening conditions this winter, when temperatures drop and home heating prices soar. I believe that the oil companies have it in their power to prevent such a crisis--if they fail to use it, I believe it is the responsibility of the Federal Government to protect American families. I ask unanimous consent that the text of our legislation be printed in the RECORD.
There being no objection, the bill was ordered to be printed in the RECORD, as follows:
BREAK IN TRANSCRIPT