GULF OF MEXICO SECURITY ACT OF 2006--Continued -- (Senate - August 01, 2006)
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Mr. OBAMA. Mr. President, every one of us in Congress has heard from our constituents about the high cost of gas. A gallon is now $3 or more in most parts of the country, and there is every reason to believe that figure will continue to climb throughout the rest of the summer.
Americans are asking their Members of Congress to help lower some of these costs. And we should do that. But let us not kid ourselves. This is a problem that was decades in the making, and short-term political solutions--whether it is a tax rebate or more legislation to stop price gouging--aren't going to be the complete answer.
To be sure, most of these proposals would do no harm, and many would provide Americans some temporary relief at the pump. But in the long term, we can't rely solely on quick fixes designed to placate an anxious public.
We need solutions designed to permanently lessen our dependence on foreign oil. Unfortunately, both Congress and the White House have been unwilling to take the politically difficult steps necessary to confront one of the most pressing economic and national security challenges of the 21st century.
A perfect example is the bill before us. It does do some good things: it marginally increases the supply of oil, and it provides a financial boost to Gulf Coast States that could use the help.
But fundamentally, the bill only focuses on part of the problem--our inadequate supply of oil. Unfortunately, increasing supply can't be our only answer. Even if we opened up every square inch of this country for drilling, America only has 3 percent of the world's oil reserves. With our own Energy Department telling us that our demand for oil will jump 40 percent over the next 20 years and countries such as China and India adding millions of cars to their roads, this means that if we truly hope to solve this problem, we must focus on reducing demand.
Members on both sides of the aisle have suggested some innovative ways to do this. Senator Lugar and I introduced the America Fuels Act to increase the production of homegrown biofuels. And Senator Bunning and I have worked on a bill to produce liquid fuels from coal.
Unfortunately, we are not going to have a debate this week on how to reduce the demand for oil, because we weren't allowed to add any amendments to this bill that would focus on that problem. Because contrary to the judgment of every credible person who has examined our Nation's energy woes, the Republican leadership in the Senate believes we can solve our energy problems by just drilling more. That is not only dishonest; it is a disservice to our constituents who want us to work together to solve this crisis.
I would like to spend a few minutes today discussing two of the proposals that should have been part of this energy debate--two proposals that could have made this bill worthwhile.
First, we need to start producing cars that use less oil. Thirty-three years ago, this Nation faced an energy crisis that affected every American. In the shadow of a war against Israel, the Arab nations of OPEC chose to embargo shipments of crude oil to the West. The shocks were felt in national economies worldwide. Washington lawmakers responded by creating daylight savings time and a national speed limit. A new Department of Energy and a Strategic Petroleum Reserve was established. And Congress enacted Corporate Average Fuel Economy--or CAFE--standards, the first-ever requirements to reduce petroleum consumption in the vehicles we drive.
As a result, the gas mileage of cars doubled from 14 miles per gallon in 1976 to 27.5 mpg for cars in 1985. Today, CAFE saves us about 3 million barrels of oil per day, making it among the most successful energy-saving measures ever adopted. But that decade's worth of fuel consumption improvements ended more than 20 years ago, because CAFE standards are the same today as they were in 1985 27.5 mpg for cars.
To address this problem, I have joined with Senator Lugar and a bipartisan coalition of senators to propose the Fuel Economy Reform Act, which we have also filed as an amendment to the OCS bill.
This amendment would establish regular, continual, and incremental progress in fuel economy, but still preserve the expertise and flexibility of the National Highway Traffic Safety Administration--or NHTSA--to determine how to meet those targets.
Under this proposal, CAFE standards would increase by 4 percent every year unless NHTSA can justify a deviation in that rate by proving that the increase is either technologically unachievable, would materially reduce the safety of automobiles, or is not cost effective. For too long, the presumption has been that the public would have to prove to the auto industry why it should raise fuel economy standards. This proposal would flip that presumption by asking the auto industry to prove why it can't raise those standards.
Under this system, if the 4 percent annualized improvement occurs for 10 years, we would save 1.3 million barrels of oil per day--an astounding 20 billion gallons of gasoline per year. If gasoline is just $2.50 per gallon, consumers would save $50 billion at the pump in 2018. By 2018, we would be cutting global warming pollution by 220 million metric tons of carbon-dioxide-equivalent gases.
And yet, auto executives are right when they say that transitioning to more fuel-efficient automobiles would be costly at a time of sagging profits and stiff competition, and that's precisely why the Federal Government shouldn't let the industry face these challenges on their own.
The Fuel Economy Act provides tax incentives to retool parts and assembly plants. But we should do more than that. We need to help the Big Three automakers with one of their largest expenses, namely, retiree health care costs, which ran almost $6.7 billion just last year. For GM, these health care costs represent $1,500 of the price of every GM car that is made, which is more than what they pay for the steel.
To that end, I also have filed an amendment to this bill based on the Health Care for Hybrids Act that I introduced last year. That proposal would set up a voluntary program in which automakers could choose to receive Federal financial assistance towards their retiree health care costs. In return, the automakers would be required to reinvest these savings into developing fuel-efficient vehicles.
With the American consumer demanding more hybrid vehicles--and that demand currently being filled by foreign automakers--this proposal could jumpstart the Big Three to commercialize new technology. More American hybrid cars also ensure that there is competition in this growing market, and would help keep car prices affordable.
If we had adopted these two proposals decades ago, when the call for energy independence was first issued in this country, today we wouldn't be nearly as beholden to the whims of oil-rich dictators and surging gas prices. And if we don't take these steps now, we will someday look back on today's $3 per gallon gasoline as the good old days. At that point, no amount of drilling on the Outer Continental Shelf will solve our problems.
We could have taken these commonsense steps now to reduce the demand for oil. We have the need, we have the technology, we have the resources--but with this bill, we refused to find the political will to get it done. We still owe it to the American public to find that will.
Unfortunately, this bill sends the wrong message. Instead of making tough political decisions about how to reduce our insatiable demand for oil, this bill continues to lull the American people into thinking that we can drill our way out of our energy problems. We can't, and for that reason, I plan to vote against this bill.
Ms. SNOWE. Mr. President, yesterday, while the Senate was voting for cloture on S. 3711, a bill that could ultimately lead to exploration on the Outer Continental Shelf of the Georges Bank in the North Atlantic Ocean, the Maine lobster industry gathered on a picturesque fishing pier in Maine to launch the ``Certified Maine Lobster'' initiative that could bring an added value to the State's $300 million lobster industry. My State accounts for 80 percent of lobster landings and is known for its lobster boats, lobster shacks, lobster buoys and lobster dinners along its scenic coastline. As a matter of fact, the Maine Lobstermen Association was formed to fight OCS drilling off the coast of Maine.
It is because of its very pristine value that fisheries and tourism are important economic engines for the State and I cannot stand by and let these natural resources be compromised through exploration and drilling. Last year, Maine lobstermen hauled in more than 60 million pounds for a boat price of $296 million.
While supporters of, S. 3711, the Gulf of Mexico Energy Security Act of 2006, say that this bill is only about the Gulf of Mexico, while at the same time stating that the bill is the first step toward opening up more areas to production. One supporter was even quoted as saying, ``The goal is to maximize over time the coastal production of America from a venue of stagnation.'' This does not sound like the bill pertains only to the Gulf of Mexico, as its supporters have stated and this has rightfully alarmed the people of my State, many who make their living directly or indirectly from the sea. Scientists, economists, and fishermen have worked for 20 to 30 years to restore the magnificent fish runs off the New England coast. To them, lifting the moratorium and allowing oil and gas drilling on the 185-mile-long broad, shallow and productive fishing ground of Georges Bank that stretches from Nova Scotia to Cape Cod is unconscionable.
As chairman of the Senate Commerce Subcommittee on Fisheries and the Coast Guard, the prospect of drilling in the Gulf of Maine and Georges Bank and risking New England's fisheries is unacceptable to me as well. I, along with Senator Menendez, wanted to offer a simple amendment to ensure that drilling within 200 miles of the coast of Maine and other coastal States would continue to be prohibited until 2022--the same protection as is given the State of Florida in this bill.
However, without following the usual amendment process, there can be no assurances that Maine's coast will be protected when this legislation is approved by a conference or that the Joint Ocean Commission's recommendation to convert current OCS revenues for ocean fisheries research will occur, and without those assurances, I have not supported moving forward.
I am extremely disappointed that the decision was made to prevent amendments during debate that ignores the need to address conservation. We were told it would take a week to get through amendments that would have been offered. Well, this bill was brought up 1 week ago, and, instead of having true and fair debates on conservation amendments this past week and up or down votes, we have spent it on moving to cloture and getting to final passage.
I believe that considering the leasing of additional OCS waters for oil and gas drilling should only be done with utmost caution and deliberation, and at the same time, I believe that our national energy policy should seriously focus resources on the development of renewable energy and an expansion of energy efficiencies as part of a national energy policy.
I have filed an amendment to this bill that is also my stand alone bill, S. 3628, the EXTEND Energy Efficiency Incentives Act of 2006, that would extend the EPAct 2005 energy efficiency tax incentives until 2010--they currently expire at the end of next year having been shortened by the House in conference. Experts have calculated that, if fully implemented, the EXTEND Act will, by 2010, save 7 trillion cubic feet, Tcf, of natural gas while the Gulf of Mexico drilling bill before us would extract 5.8 Tcf by 2010. We simply cannot continue to drill ourselves out of this problem, and threaten our natural resources--we can do it with bold ideas that save much more than we can get from drilling.
A reliance on only fossil fuels retards progress in developing a sustainable and comprehensive 21st century energy policy. Furthermore, the recent fluctuation of the world oil and natural gas markets indicates that this commodity is not a reliable long-term energy source. There are uncertainties involved with fossil fuels that threatens the energy security of the United States and it is important that our nation recognize the situation and develop a diverse, sustainable and progressive energy plan through a market basket of fossil fuels, renewable energy and energy efficiencies.
Senator Feinstein and I were not allowed to offer our 10 in 10 bill as an amendment to this bill to require U.S. automakers to increase their average CAFE standards by 10 miles per gallon in 10 years. The bill would save 2.5 million barrels of oil per day by 2025, the same amount of oil we currently import from the Persian Gulf; and 420 million metric tons of carbon dioxide emissions by 2025, the equivalent of taking 90 million cars--or 75 million cars and light trucks--off the road in one year. Again, we can save rather than drill.
Exxon Mobil, the world's largest traded oil company, just reported a 36 percent gain in 2nd earnings. Exxon has prospered because of the high gasoline prices bolstered by the demand for supply. Increasing CAFE standards will decrease demand, lower prices and begin to put some of this money in the pockets of consumers rather than the large oil companies, who have increased output and taken advantage of the increase in oil prices, which remain over $70 a barrel.
The small increase from the latest NHTSA rule for CAFE standards for SUVs does little to save gasoline and only gives lipservice to an issue that deserves more serious consideration. Even a modest increase of only five miles per gallon in the fuel efficiency of our domestic automotive fleet would save approximately 23 billion gallons of gasoline each year and reduce oil imports by 14 percent.
This percentage is more than the 11 percent Venezuela provides for U.S. oil imports. The GAO reports that the U.S. is inadequately prepared to face the possibility of President Hugo Chavez' threat to cut off its oil imports to the U.S. The GAO reports that this disruption would cause an increase of $11 per barrel. So we are allowing Chavez to put us over a diplomatic oil barrel, so to speak. Why are we taking this risk with the trust of the American people and the economy when there are options that can be put in place to make us independent of Venezuela's oil--and political maneuvering?
Currently, the combined fleet average for all automobiles, SUVs, light trucks and passenger cars, is approximately 25 miles per gallon--that is down from the peak of 26.2 miles per gallon in 1987. The Feinstein-Snowe-Inouye-Chafee 10 in 10 bill would increase that combined fleet average to 35 miles per gallon by Model Year 2017--or ten mpgs 10 years from today.
Also, according to the 2002 National Academy of Sciences Report on CAFE, adequate lead time can bring about substantive increases in fuel economy standards. The NAS concluded that automakers can meet higher CAFE standards with existing technologies. We have the technologies today to increase our fuel economy standards. We have hybrids, more efficient engine technology, improved transmission technology, and composite materials that reduce the weight of the vehicle will all increase fuel economy standards without sacrificing safety.
I fear that the Senate conferees will come back from a conference with many of the provisions in the House bill, the Deep Ocean Resources Act, H.R 4761, a bill that replaces the moratorium that currently protects most of the nation's coastline from oil and natural gas drilling and develops a leasing system that would provide the option for states to allow drilling within 50 miles of their coastlines and allow drilling throughout the OCS beyond 100 miles. Currently, the moratorium protects the coastal area up to 200 miles out.
In passing this OCS drilling only bill today, the Senate has created lost opportunities that could have addressed how much we could save--along with how much we can drill. This is what the consumers want to hear--that we are addressing every avenue possible to keep money in their pockets the next time they go to the gas pump or pay their electricity bill or purchase heating oil for the coming winter. The Senate has let the consumers down once again. And, the bill does nothing to protect Maine's tourist and fishing economies and its 3,500 miles of coastline.
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