Press Conference with Reps. Peter Welch (D-VT); Nick Lampson (D-TX); Edward Markey (D-MA); Rahm Emanuel (D-IL); Heath Shuler (D-NC) - H.R. 6022, The Strategic Petroleum Reserve Fill Suspension and Consumer Protection Act
REP. WELCH: Thank you for coming. I'm Peter Welch, congressman from Vermont. I'm here with colleagues.
We today debated on suspensions -- a bill that would suspend purchases in the strategic petroleum reserve for the rest of the year. Historically, when that has been done by this President Bush, by his father, the first President Bush, by President Clinton, it's resulted in an immediate reduction in the price at the pump and the price per barrel of oil.
It sends a message to speculators that what steps we can take, practically take, we will take. There's been studies that suggest that this action could reduce the price at the pump by 25 cents a gallon. Just two examples in my state: A small trucking company, that would be $300,000 on their bottom line; a school district, a rural school district would be $30,000 on their bottom line.
No one believes it's a substitute for long-term energy strategy, but the question is: Are we going to take the steps we can that are going to help relieve the price pressure on folks that are hanging on by their fingernails?
Now, I want to introduce at this time the principal sponsor of this legislation, who has been a leader on energy policy in Congress, Representative Nick Lampson from Texas.
REP. LAMPSON: Thank you, Peter. It's a pleasure to join Peter Welch and Ed Markey in sponsoring this legislation, H.R. 6022, that is a critically important first step.
You know, the high price of petroleum is not only straining families' personal budgets, but the gas prices at the pump are straining the amount of money that they're having to pay for food and other personal household items. It's a point where -- people can't control it at this point and they're looking for anything we can do to make a change.
Families are starting even to rethink or even cancel their summer vacations, and that's going to be critically important to towns that are relying on tourism. So not realizing the urgency of this situation is absolutely naive. Immediate action is needed to alleviate prices and price stress for our consumers.
And so that's why I think this bill is a good compromise piece of legislation.
And when added to legislation that we will pass or introduce within a matter of a few days and debate over the course of the next week or two, we'll be able to not only address the short-term solution to our problems, which will give some immediate relief, small amounts of cents on the price of gasoline right now, but will be able to give us an expectation for a long-term energy strategy.
The bill that we are talking about answers the question that Congressman Joe Barton asked a while ago: Where's the money going to go? Well, we want to take money from the sale, ultimately, of some of the oil that's in the Strategic Petroleum Reserve and use it for the benefit of alternative energy research.
You couple that with the action that we've taken today and are taking today with this vote tonight, and I believe that we take very positive steps in the right direction for helping the consumer at the price -- or at the gas pump. That's what we're about. It's an action that we are compromising on, that we are finding common ground on. It's common sense. We can move forward with it.
And I'm proud again to join my colleagues in this and hope that Joe Barton will join us as a co-sponsor of the legislation that I will introduce later, as well as all of the members who are joining us here.
And I'll be happy to answer questions when we get to it.
REP. WELCH: Next is Congressman Heath Shuler from North Carolina, number -- District 11.
REP. SHULER: Peter, thank you. You and Nick have shown outstanding leadership in this piece of legislation.
Just a couple of weeks ago when the fuel price was not even -- they're not even now where they were then, but there was a lady who come up to me and she said that she had to pawn her wedding ring just to have enough fuel to go to work. That's unacceptable at this time. And we continue to see this administration's failed policy when it comes to sustainable, renewable energies, to find a new path for our energy policies, to ensure that we have our independence from the Middle East, our independence from petroleum, and to find these sustainable, renewable energies.
Congressman Markey has done an outstanding job in a lot of his legislation and being a true leader, but this is a first good step that would be able to help the people who most need a break, the people in my district, the people in Nick Lampson's district.
And all the members of Congress have people that they need a little extra help at this point in time.
In order for us to continue the hard work and dedicating ourselves to making sure that we can get legislation passed, that will be able to provide sustainable renewable energies and be able to lower the price and obviously have less carbon impact, carbon footprint.
So we've got our work cut out for us. We want to make sure that we have the support of our colleagues, on the other side, and that we can push this legislation through, that we can lower the cost of fuel for the people who need it most.
Thank you all.
REP. WELCH: Thank you.
Now we're going to hear from Congressman Ed Markey from Massachusetts who, as you know, is the chair of the speaker's Select Committee on Global Warming as well as a long-term member of the Energy and Commerce Committee.
REP. MARKEY: Thank you, Peter. And thank you so much for your great leadership on this issue.
And to Nick Lampson, for yours. This is a generational issue. And your membership here as the new members of Congress, along with Heath Shuler, show that you're actually bringing the issues to the American people, that they want to have resolved, in your first term here in Congress.
Let's go through the history. When President Bush was sworn into office, the price of a barrel of oil was $30. But it actually dipped down to $20 a barrel within that year. Now as of yesterday, $126 a barrel.
In other words, it is now six times higher than it was when President Bush began his term of office. You wouldn't believe it was true, unless you had the statistical evidence to back it up. It just seems absolutely outstanding.
Next chart. When he took over, the price of a gallon, at the pump, was $1.45. And it did, over the next year, just the momentum, before he was actually able to get a full grasp on the presidency, went down to $1.11 a gallon. It closed yesterday at $3.72.
You couldn't make this up, that something could happen this radical, this negative for the American economy in such a short period of time. Unless -- you know, Daniel Patrick Moynihan used to say that if you really didn't want to hurt an issue, you engaged in benign neglect.
You didn't help it, you didn't hurt it. This is designed neglect. This is actually a policy which says to the oil and gas industry, you do whatever you want, and we're going to ignore the impact which OPEC ultimately can have upon the American people.
Now, let me give you a little bit of history in terms of the deployment of the Strategic Petroleum Reserve. President Bush's father deployed it in 1991. The price of a barrel of oil went down 33 percent. President Clinton deployed the Strategic Petroleum Reserve in 2000. The price of a barrel of oil went down 18 percent. And in 2005, President Bush himself deployed the Strategic Petroleum Reserve and the price went down 5.6 percent. So the history is there. It does work, but the president still continues to defy a history.
And by the way, that history includes his own history. In 2006, here's what President Bush said.. He said: I've directed the Department of Energy to defer filling the Strategic Petroleum Reserve this summer. So by deferring deposits until the fall, we'll leave a little more oil on the market. Every little bit helps. President Bush, in April of 2006, when the price of a barrel of oil was $67.
Here's what the president said two weeks ago: In this case, I have analyzed the Strategic Petroleum Reserve issue and I don't think it would affect the price.
The price of oil now: $132 a barrel. So this is, without question, a dramatic change in terms of the impact on the American people.
And ultimately, it comes down to how isolated President Bush is in the White House, because if he thinks of the White House as being a giant spigot that he can just turn and begin deploying the oil that the American people have paid for, as a weapon against OPEC, then we could begin to see the results immediately.
And so what's the consensus around America? Well, Barack Obama says, yes, stop filling the Strategic Petroleum Reserve now. Hillary Clinton, yes, stop filling it now. John McCain, yes, stop filling it now.
President Bush? No. Isolated, and not only in the White House, but economically in terms of the analysis of what the impact of this is.
So, as consumers get the shakedown at the pump, this Friday President Bush is going to meet with the sheikhs in Saudi Arabia to beg them to send us more oil. And while the president sent troops to the Middle East to look for weapons of mass destruction, he's avoiding using a weapon of price reduction here at home.
The president has said he does not have a magic wand to wave away the high gas prices. But he does carry a big stick. It's called the Strategic Petroleum Reserve. And the spigot is in the Oval Office. And he refuses to turn it. It would be the big stick that would begin to tell OPEC we are about to fight back on the way Americans are tipped upside down at the pump.
The president can do this today. It's about time he took action against OPEC. If he wants to really send a signal to Saudi Arabia, it will be, before he goes there this Friday, to announce that he's going to stop filling the Strategic Petroleum Reserve and start using it to send a message to the Saudi Arabians. That is something that they will understand.
REP. WELCH: Thank you.
And next, and our last speaker, is Congressman Rahm Emanuel, caucus leader.
REP. EMANUEL: Peter, thank you for your leadership. Nick, also thank you or your leadership. I just want to add a few points.
As Congressman Markey just showed, that every time we have used this instrument or tool to affect the Strategic Petroleum purchase, we have actually affected the price at the pump and the price per gallon because you're taking demand off the marketplace. It actually has a -- at every step of the way, we've seen the results.
One point also not mentioned. In fact, because of the -- because of past energy bills, there's about 200,000-plus acres of leased land, and leases that have been now given to the oil and gas industry to drill in the United States.
Has nothing to do with Alaska; has nothing to do with anywhere else. Just right here in the United States. I think, Eddie, it's about a little over 9,000 permits, that Congressman Nick Rahall has indicated to us, that could be drilled immediately, immediately here in the United States.
And none of the energy companies who own those permits have done that. Eddie and I -- Markey and I and others are talking about, in fact, a higher fee structure for every year and every time that goes by, that they decide not to use that permit that they purchased and not drill, so the price continues to go up, as a way to get more supply on the market.
Not dealing with Alaska, not dealing with other sensitive environmental areas, permits that have been leased already on public lands, that could immediately affect the supply.
This is one tool. That is another tool that's available. And then using our time, rather than continually face the president's veto on alternative energies, renewable energies, but speeding up our efforts on hybrids and electric cars to come to market.
There's a whole new technology field out there. And we need to be investing in that. Twice the president has already vetoed that type of legislation. It's time that we get a bipartisan majority to deal with his veto and make sure the American people seize their future.
And lastly I think that the indication is, and what we need to do is, focus on a policy that begins to put America's interest at the center of it and an energy policy that indicates that we understand, this is not a problem that was created overnight.
But we do have tools available to us to deal with that. That is everything from the Strategic Petroleum; to beginning to drill where, we know, we already have leased lands; to beginning to invest in alternative energy, that will get us on a path to independence, and dealing with that.
And the final point is, although Vice President Cheney indicated that conservation was maybe a personal habit, they need to put conservation at the part and parcel of a comprehensive energy policy. For too long we've delayed and now we see the price of that delay at the pump.
This today is a proper first step. It's a short-term step but it has immediate impact to then give us the wherewithal, to begin to take the other types of steps we need, to begin to secure America's economic and energy independence.
REP. WELCH: Any questions.
Q (Off mike.) Six Democrats are going to bring up a House resolution dealing with Saudi Arabia, trying to stop arms sales to Saudi Arabia unless they drop down the price of oil.
Anything you guys are going to bringing up -- bills, anything else?
REP. LAMPSON: Obviously, the bill that we proposed is going to provide new money to pay for that alternative energy research that we have been missing out on. The Department of Energy has lost 85 percent of its research budget over the last several years.
And we're proposing a wide range of already authorized alternative energy projects that have come through various committees that range from wind, solar, saving energy, using less, even down to deep water -- ultra-deep water recovery for natural gas. All of those things are in this mix, and it's going to take a broad range of our effort that's really going to decrease the price. This is the first step. That provides significant greater steps as we go through it.
REP. MARKEY: What the speaker is committed to is sending a message to the oil industry that we are not going to stand on the sidelines as they continue to reap record profits, block tax breaks for the renewable energy industry -- wind and solar, specifically -- and at the same time not spend their profits in renewable energy research. That is the worst possible scenario for our country as the oil industry is reaping these record high profits.
So we are committed to ensuring that there is an extension of the wind and the solar and renewable tax break. We're committed to ensuring that hearings are going to be held. Next week, I will have a hearing with the Secretary of Energy, Sam Bodman, before my committee next Thursday on all of these issues on the day that we break for the Memorial Day session.
So all of these issues will be up before the Select Committee on Energy Independence. There can be nothing more central.
Amongst all the issues is why doesn't the president begin that light-crude swap where you sell the oil at the top, the light crude, and repurchase just heavy crude so that you keep the number of barrels constant inside the Strategic Petroleum Reserve.
The president refuses to even do that even though the price is pegged, globally, to the price of light crude, this constant that is being used. We can basically cut $10 a barrel off the price of a barrel of oil just by doing that and replacing it with $10 cheaper crude oil.
So all of these things are made possible, but the signal has to be sent to the speculators in the oil marketplace that the White House is going to use the bully pulpit, that they're going to -- that the president is going to cooperate with the Congress, and that we're not going to allow speculators to increase by 20 (dollars), 25 (dollars), $30 a barrel, which most experts believe is now the premium that the speculators are building into the price of a barrel of oil to capitalize upon the fact that the Bush administration has stand -- stood on the sidelines.
So all of this is what part of the agenda is for the next couple of weeks. And I think that you're going to see -- in addition, by the way, the Judiciary Committee is going to have in the oil executives next week as well. So this is going to be "Energy Week" heading into the Memorial Day weekend, so that people will know whose side the White House is on and whose side the Democratic Congress is on in terms of the escalating price of gasoline at the pump.
REP. EMANUEL: It's worth reminding you -- I know you know this, but one of the things we did in the first year was pass, after 25 years of debate, an increase in the CAFE standard. It doesn't have an immediate impact, but it was a dramatic step on energy policy. And that was against a great deal of opposition, not only by the administration but by powerful special interests that didn't want to see that happen. Delayed it for 25 years.
We've taken actions (besides what ?) we're going to vote on here today. We've consistently twice have already sent up the renewable energy tax credits. We're marking that up again in the Ways and Means Committee. We found a different way of handling, we think, an issue that the president has with that, but hopefully we'll get that done.
Third, we've asked the FTC and others, and we have done it in Congress, to deal with the issue of speculators and what role they have in the price -- in the run-up in the price of energy.
Fourth is, and I think most important, as Congressman Markey just told us, is dealing with the issue of heavy versus light crude can also have an impact.
As Nick Lampson said, there's a broad array of tools in the toolbox. This president has refused to use any of them. Any of them. Won't deal with the Strategic Petroleum question (we said here ?), issued a veto threat. Will not sign the alternative energy tax credit. Doesn't deal with light versus heavy crude. So at every step of the way, unless you're willing to open up Alaska, his answer to the energy problem is "no." And we're saying, no, that has not worked for 25 years, and we don't have enough time left to deal with that now.
Q Would the House also pass a resolution of disapproval on Saudi arms sales? The Senate's talking about doing that.
REP. WELCH: (To colleagues) Does anybody know where we stand on that?
REP. : (Off mike.)
REP. WELCH: Yeah. I don't think we have an answer on that right now.
Q What about the proposals in the Senate to raise margins for energy futures and also to regulate offshore trading on U.S. terminals?
REP. WELCH: Well, I'll speak for myself. I strongly support that. I mean, part of the price in the barrel of oil and at the pump is because speculators have got a grip on the market. I mean, that happened in the 2002 energy bill. In the dead of night and at the request of that great American company Enron, there was a provision put in the energy bill that totally deregulated the trading of forward contracts in energy. And it resulted at one time in a hedge fund in New York having about 75 percent of the energy future market in home heating oil. And it's given them a grip on the price. And there are many commentators that think that's a very significant add-on to the price.
One of the reasons why this bill, even though it affects -- on the Strategic Petroleum Reserve -- even though it only affects 70,000 barrels a day, what it does is it shows that we are going to fight the speculators. And they're going to fear the fact that they don't control the market if they see that the government is on the side of the consumer and on the side of our small businesses.
Q The $184 million that was left over after -- (off mike) -- is there any interest on the part of Congress to repurposing that to some other use, or will you keep it in the SPR account, where by law it currently has to stay?
REP. LAMPSON: It needs to be used. And it needs to be used with the money that's going to be generated from the sale of the oil that I will propose within the next few days with another piece of legislation.
Again, this is a first step. We think it's a good first step.
It's going to send a message. We will send a bigger message.
And we want to increase the impact of our short-term decrease in price that's going to help the consumer immediately, but also take into consideration the long-term expectation of an energy policy that's going to address all of the alternative energy research that we have been failing to do for a very long period of time. That money needs to be used, and we will have a proposal that we'll share with you just within a day or two.
Q (Off mike) -- run that past the speaker yet?
REP. LAMPSON: Yes. Yes, we have. And it is going through the system now.
Q Are you going to bring up another gasoline price gouging bill or sort of a federal law?
REP. EMANUEL: That's under discussion. You know we've passed that before, even with the president's veto threat. That's under discussion, whether we're going to look at that.
The first thing we're doing is what we've just brought up today, which is dealing with the strategic petroleum. Nick's talked to the leadership about his proposal dealing with the excess revenue and using that as a funding source for alternative energies or other type of instrument. So all -- that one in particular, though, is under discussion.
I do -- I think it's worthy, again, of taking it a step back. I mean, we have had a massive price run-up. You have speculators. You have a cheap dollar that's affected it. Nobody should lose sight, also, of the fact that obviously given how more precarious the situation is in the Mideast because of the war, it has also had an impact on the price.
And so at a minimum, given all these other tools that are available, we think the president should join us and try to deal with the price of energy, the price of gasoline at the pump, the price a barrel -- of a barrel of energy and starting help us turn around a strategy that for too long has relied on drilling, not dealt with conservation, not dealt with alternative energy and not dealt with America's economic and energy independence.
REP. WELCH: Thank you all very much. Thank you.