Gas Price Reduction Act

Floor Speech

GAS PRICE REDUCTION ACT -- (Senate - June 27, 2008)

Mr. SPECTER. Mr. President, I have sought recognition to discuss legislation introduced yesterday entitled the Gas Price Reduction Act. I have agreed to join over forty of my Republican colleagues to cosponsor this legislation because I believe Congress needs to take action to address high oil and gasoline prices, as well as America's overall energy security going into the future.

My cosponsorship of this bill does not mean that every provision has my full support. My office received the final legislative text late yesterday morning and I have not had a great deal of time to analyze all of the details. That said, I have reluctantly decided to cosponsor this bill to signal my concern with the state of our Nation's energy situation. I have long supported efforts to reduce U.S. oil demand through conservation and efficiency whenever practical, as well as increase domestic oil production in an environmentally safe manner, and encourage energy markets that are free of price manipulation.

I am extremely concerned about the high cost of oil, gasoline, diesel and other fuels which are exacerbating our nation's already difficult economic situation and truly hurting American consumers and families. With oil near $140 per barrel and gasoline over $4 per gallon, we are facing an unsustainable situation.

The legislation introduced today proposes to increase the supply of oil, promote technology to lower fuel consumption, and increase oversight and transparency of energy markets. Specifically, the bill would allow consideration for oil exploration and production on the Outer Continental Shelf on the Atlantic and Pacific coasts with appropriate environmental protection at the request of a State's Governor and State legislature. Any authorized drilling could only occur beyond 50 miles offshore and only if the federal government determines that leasing would not create an unreasonable risk of harm to the marine, human, or coastal environment. Further, all existing environmental laws would have to be followed.

The second part of the bill would allow the Department of Interior to move forward with leasing of land in the Western U.S. to develop oil shale. It is my understanding that there are very large deposits of energy resources that could be tapped with significant investments in rock extraction technology. This resource is much less understood than oil and natural gas drilling. I support locating as many domestic resources as we can in an environmentally safe manner. However, I am concerned about claims made by opponents that opening these lands at this time is premature until Congress and the executive branch have the ability to study the results of research and development efforts. Further, some argue that Congress should first review regulations drafted by the Bureau of Land Management, but which are under review by the Office of Management and Budget. Finally, we should be fully informed about the energy and water inputs that may be necessary for extraction, as well as the greenhouse gas emissions associated with production of oil from shale.

The third title of this bill seeks to increase research, development and deployment of advanced plug-in electric cars and trucks. There is a great deal of emphasis being placed on the promise of plug-in electric vehicles as a replacement technology for today's fuel-consuming vehicles. The potential benefits of plug-in electric vehicles includes much higher energy efficiency, elimination of the need for oil, and use of existing and expanded electric infrastructure. The legislation under consideration would increase research and development for advanced batteries, which will be required to allow these vehicles to drive long distances without needing to recharge. The bill also authorizes a loan program for the re-tooling of advanced battery manufacturing facilities. Finally, it calls on the federal government to purchase plug-in electric vehicles to the extent practicable to help increase market penetration of the technologies and make significant reductions in government-related fuel use.

Finally, this legislation attempts to strengthen futures markets. There are concerns that the role of speculation in these markets is impacting today's oil and gasoline prices. Therefore, this bill authorizes increased funding and staff for the Commodity Futures Trading Commission--CFTC. It requires the President's Working Group on Financial Markets to conduct a study of international regulation of energy commodities markets. It codifies recent CFTC action on position limits and transparency for foreign boards of trade that are involved in the U.S. oil trading market. Finally, it requires the CFTC to gather information on index traders and swap dealers. Many of these proposals result from the fact that a lack of information in the oil markets is making it very difficult to pinpoint whether and to what extent new actors in the oil markets may be causing some of the price increases we have experienced.

I have been working for many years to tackle the high price of oil and gasoline and improve U.S. energy security. I have long been concerned about OPEC--Oil Producing and Exporting Countries--fixing the price of oil, which makes up the largest share of gasoline prices. I continue to work with my colleagues on both sides of the aisle to pass S. 879, the No Oil Producing and Exporting Cartels Act--NOPEC. NOPEC clarifies that it is unlawful under the antitrust laws for OPEC members to agree to limit the production or distribution, or to set or maintain the price, of petroleum products or natural gas.

Further, on May 7, 2008, I questioned top oil company executives on high oil and gasoline prices at the Senate Judiciary Committee. Among other points, I asked them to justify the record profits their companies have earned while Americans pay record high prices at the pump. When I was chairman of the Senate Judiciary Committee, I held two hearings in February and March of 2006 to consider the effects of consolidation in the energy industry and whether such concentration had resulted in increased prices of gasoline, other petroleum-based fuels and natural gas. Those hearings prompted me to introduce the Oil and Gas Industry Act of 2006 to require U.S. antitrust agencies to further consider whether mergers within the oil and gas industry have violated antitrust laws and if such mergers and information sharing among companies should receive further scrutiny.

Dating back to 2002, I was the lead cosponsor of fuel savings legislation, including the Carper-Specter amendment to save 1 million barrels of oil per day by 2015 and in 2003 the Landrieu-Specter amendment to save 1 million barrels per day by 2013, which passed by a vote of 99-1. I believe the foundation we laid in the Senate helped lead to the eventual passage of the first automobile fuel efficiency standard increases since the 1970s. On December 19, 2007, the President signed the Energy Independence and Security Act which contained legislation I cosponsored to increase automobile fuel efficiency standards to 35 mpg by 2020. This increase in efficiency, and the anticipated decrease in consumption, could substantially decrease oil use and bring down prices over time.

I commend my colleagues on both sides of the aisle for their proposals to address today's unacceptable oil and gasoline price situation. However, I do not think any purely partisan exercise will ultimately prove successful. While I joined my Republican colleagues in introducing legislation today, I am convinced that we must work in a nonpartisan fashion to tackle this issue of paramount importance to our constituents and the economic health of our Nation. As evidenced by the unification of the parties that occurred in December 2007 with the Energy Independence and Security Act, when the parties work together, the American people benefit. I recommend we all rise above politics and work toward constructive solutions to the energy crisis we currently face.

As we consider the Gas Price Reduction Act and other proposals, it is essential that we not act in haste, but rather consider all potential consequences. When we talk about opening new areas for domestic oil production, we must have all of the facts not just about the potential oil reserves, but also about the precise environmental impacts and the status of the advanced technologies like directional drilling that are purported to mitigate these impacts. When Congress involves itself in very complex energy markets, we ought to be very cautious to avoid unintended consequences that could exacerbate the high and volatile prices we have seen in recent months and years.

I look forward to working with my colleagues on these difficult, but extremely important matters.

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