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Blue Dog Coalition

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Location: Washington, DC


BLUE DOG COALITION -- (House of Representatives - July 08, 2008)

The SPEAKER pro tempore. Under the Speaker's announced policy of January 18, 2007, the gentleman from Utah (Mr. Matheson) is recognized for 60 minutes as the designee of the majority leader.

Mr. MATHESON. Madam Speaker, I am very pleased to be able to organize a special order this hour on the part of the Blue Dog Coalition. The Blue Dogs wanted to take advantage of this opportunity tonight to speak about energy policy issues.

I think that there is no doubt that when it comes to domestic policy issues that this country faces, that energy policy is right at the top of the list. I think it is clear that this country should be looking for a comprehensive balanced energy policy, and I think that represents the type of politics the Blue Dogs in the House of Representatives have often supported.

We have a number of issues that we really want to work through tonight, and I have a number of my fellow Blue Dog colleagues who are going to join me during this hour to talk about various energy policy issues. And I would like to start right now by recognizing my colleague from the State of Louisiana, one of the newest Members of the House, and someone who is prepared to really contribute on this issue, Representative Cazayoux from Louisiana.

Mr. CAZAYOUX. Madam Speaker, I gladly join Congressman Matheson in our discussion regarding a balanced comprehensive energy policy that the Blue Dogs such as Congressman Matheson and others support.

I believe that the high price of gasoline is an immediate problem that requires both swift action and long-term planning. It is the number one issue facing America today. It is one that hits home every time that we fill up our vehicles to go to work, when we attempt to go on summer vacation, and even when we go to the store to buy food.

I support expanding domestic drilling in the Outer Continental Shelf and in ANWR. This will not only reduce our dependence on foreign oil and lower gas prices, it will help our economy and create jobs. In fact, in Louisiana it was recently announced that a new oil lease in the Gulf of Mexico would generate $78 million for Louisiana to restore its coast.

I believe that one of the root problems of the high price of gasoline is our outdated refining capacity. That is why I support building new and improved refineries and updating old ones. We haven't had a new refinery built since 1972. We have to do a better job at allowing companies to build these refineries and incentivizing companies to build refineries so that we can expand our refinery capacity and stop importing refined gas and refined oil.

In addition to the issue of supplying gas prices, a strengthening economy and subsequently a strengthened dollar will also go a long way to improving fuel prices. I believe, and the experts support this, deficit spending is one of the root causes of our reduced dollar, and that is playing a huge role, I believe, in the price of oil and the subsequent price of gas in our economy. If we can start spending within our means in Congress, we believe that the dollar will become a stronger dollar, we can buy more foreign oil, because we are now importing 60 percent of our oil, we can do that in a more effective way and, therefore, the price of gas should go down.

But the talk of drilling, we should not stop there. That approach is a narrow approach. It is an approach I support, but it is not the end all. We have to have a multi-pronged approach to reach energy independence and security in the long term as well as the short term. That is why we voted to increase the oil supply by temporarily diverting oil shipments from the Strategic Petroleum Reserve. Experts estimate this will lower gas prices anywhere from 5 cents to 24 cents, and this just went into effect this past week and hopefully we will see some real lowered costs at the pump very shortly.

Also, I personally voted for an amendment to the Congressional Budget Resolution that would open up drilling in ANWR and the Outer Continental Shelf.

We as a body passed the Gas Price Relief for Consumers Act, and that allows the Justice Department to investigate foreign oil companies who conspire to drive up prices for American consumers.

We passed the Renewable Energy and Job Creation Act of 2008, which will help reduce our dependence on foreign oil by providing tax credits for renewable energy, including solar, biomass, geothermal, hydropower, and wind. We need to be aggressive in making sure that we harness the technological energy of our Nation, and this bill goes a long way in doing that.

We passed the Energy Markets Emergency Act, which directs the Commodity Futures Trading Commission to use all its powers, including emergency powers, to determine whether excessive speculation in energy futures markets is driving the price of oil up.

We passed the farm bill, which included a strong provision for biofuel production. And we know, the experts suggest that, without the use of biofuels, we would see gas prices 15 percent higher than they are now.

The bottom line is we need to work hard to create energy independence. That work must start today. In the words of one of my constituents: These cars just won't run on hope.

So we need to act to continue to increase domestic drilling, to increase our ability to harness our technological energy that America has succeeded in solving most of our problems and all of our problems in the past. And so we need to bring relief to hardworking Americans by reducing gas prices now.

Mr. MATHESON. I thank my colleague. And I appreciate the fact that my colleague from Louisiana highlighted the notion that there is not a single action that we need to take; that in fact we need a comprehensive effort, we need to look at a series of different opportunities to try to address both the supply and the demand side. And I appreciate his leadership on the issue and want to thank him for joining us in the Blue Dog hour.

Right now I recognize my colleague from Kansas, a long-time Blue Dog, Congressman Moore.

(Mr. MOORE of Kansas asked and was given permission to revise and extend his remarks.)

Mr. MOORE of Kansas. Madam Speaker, I thank the gentleman from Utah, thank you for presiding here. I want to talk for just a few moments about this energy crisis that our country faces.

Madam Speaker, I am the policy cochair for a group called the Blue Dog Coalition, which is using some of the time tonight, and I appreciate my colleagues being here to discuss the energy situation in our country.

Shortly after the last election when in fact there was a change in the majority in the House and the Democrats took control, the cochairs of the Blue Dog group and a group called the New Democratic Coalition, which I also belong to; I am not in the leadership there, but I have belonged to that since I have been in Congress for my tenth year now, we were invited over to speak to the President about policy. And this was the first time that we had been invited over to speak about policy. We had been invited for several other ceremonial things, but not about policy. So I really appreciated the opportunity to talk with the President.

In fact, the four leaders of the Blue Dog group met up in my office to talk about some ground rules since we only had a 45-minute meeting with the President. So we talked about how long we would take each if we had a chance to talk at all, and we decided we would each take about 2 minutes. And we talked and went through our items there.

But when we were leaving after this 45-minute meeting, the President was walking beside me. We were walking out the front door of the White House, and I said, ``Mr. President, you have an opportunity to be a hero to people in this country and maybe a few people around the world.'' And he said, ``Well, how is that?''

I said, ``Mr. President, do you remember, a little more than 30 years ago there was a man on television one night talking to the American people about the long lines at the gas pumps. He had a cardigan sweater on sitting in front of the fireplace. His name was Jimmy Carter.'' And the President said, ``I remember that.'' I said, ``Mr. President, President Carter said what we need is a comprehensive energy policy.''

And, you know, President Carter was right then, and I have faulted every Democratic and Republican President since President Carter for not doing what he said we needed to do back then, because that was the right thing. And what happened was President Carter made a few recommendations to Congress, and Congress passed a couple little things like the solar panels tax credit and a few other things. But a few months after President Carter talked to the American people, the long lines at the gas pumps went down, and I have said that every American adult in this country got attention deficit disorder and forgot about what he said.

And I wish we had done that back then, and I wish we had done that and had concentrated on that every year since then because we'd be in a whole different position as a Nation on the energy issue right now in this world.

I said, Mr. President, if you would do what President Carter said and appoint, I suggested to him, a commission, a bipartisan group of House Members, a bipartisan group of Senators and some experts on energy production and challenge them, Mr. President, to submit to you within 6 to 8 months a written recommendation of a comprehensive policy for developing energy to make us maybe not totally energy independent but to reduce by 60 percent, say, within 8 to 10 years our dependence on foreign oil, Mr. President, that would improve our national security. Right now, we are so dependent on nations in the Middle East to provide our security, our energy interests to us, that that is a security issue.

I said, Mr. President, I think drilling is an important part of this, but we cannot drill our way out of this problem. We have got to come at this from 40 different directions. I said, Mr. President, Kansas is in the top five States in the Nation in terms of potential for wind energy. We're not going to solve our energy problem by wind energy alone, but it can be a small part of a big solution to this problem. If we come at this from 40 different directions, including conservation, including just all kinds of different productions of energy, we could address this for the American people, and you would be a hero to people in this country.

He said that's a good idea. I'll think about that.

Well, unfortunately, he has got about 4, 5, 6 months left in his administration. I doubt seriously that anything is going to happen there now. He and the Vice President have been good friends, frankly, to oil companies, so I doubt anything is going to happen there now, but after this next Presidential election, whoever is elected, whether it's Obama or McCain, we need to ask him to do what President Carter talked about 34, 35 years ago. That is to appoint a commission. Come back with a national plan for reducing our dependence on foreign oil.

We can drill, but that's not going to solve the problem in itself. If we do what I'm talking about here, what President Carter talked about, I think that would be the right thing for our Nation and the right thing for our world.

Mr. MATHESON. Well, I thank the gentleman from Kansas for his thoughts, and I appreciate again the introduction of the notion that we need a comprehensive approach.

There is just not one silver bullet that's going to solve this circumstance. It really is consistent with what the Blue Dog energy principles that were adopted at the start of the 110th Congress say about fuel diversity, the recognition that long-term U.S. energy independence is going to come from putting everything on the table, everything from conventional oil and gas and from alternative sources such as oil shale and tar sands, nuclear, hydroelectric, geothermal, coal, and biofuels. If we're really going to take this issue on, we've got to look at it in that comprehensive manner.

Again, the Blue Dogs have adopted a set of principles that recognize the value of a diverse fuel mix within this country as a long-term solution of creating energy security for this country.

With that, I now would like to welcome another fellow Blue Dog to speak, who is a fellow member of the Energy and Commerce Committee and who is cochair for communications for the Blue Dogs in this Congress--Congressman Ross from Arkansas--who has in his years in Congress been a real leader on trying to address energy issues in this country. I welcome him to participate in this discussion.

With that, I will yield to him as much time as he would like to consume.

Mr. ROSS. I'd like to thank the gentleman from Utah for leading this discussion this evening on energy.

As the gentleman mentioned, I'm fortunate to serve on the House Energy and Commerce Committee and on the Energy and Air Quality Subcommittee. Through my work there, I've been working on ways to reduce our dependence on foreign oil and to address this energy crisis facing America and, quite frankly, facing the world, and I think there are several ways to do it.

There is no silver bullet. It's going to take a multifaceted approach. As Congress, we can't control the demand for oil in the world, but as a Congress, we can make an impact on the supply, and that's what I believe that this Congress needs to do.

Here is what we do know: In the next 8 years, there will be 100 million new cars on the road, 100 million new cars on the road in the next 8 years, not here but in China and in India.

Here is the other thing we know: If we do not change our current energy policy in this country, sometime in the next 12 to 20 years, depending on whose numbers you want to believe, we will go from being 60 percent dependent on foreign oil to being 100 percent dependent on foreign oil.

I've got a plan that, I believe, can go a long way toward fixing that. While we have a gasoline crisis today, in the next 35 years, it will be an electricity crisis. I've got a bill, H.R. 5437. It's called the American-Made Energy Act. It's 155 pages long. It's a multifaceted bill that takes a multifaceted approach to this energy crisis. Again, there is no silver bullet. Quite simply, my bill does this:

I propose that we drill in ANWR. There are 19 million acres in ANWR. My bill proposes to drill on 2,000 of them--one-sixth the size of the Dulles Airport. We've already got a pipeline going to Alaska, to ANWR, that can handle 2 million barrels a day; we're only putting 1 million in it. Let's fill it up and put the other 1 million barrels in it.

Additionally, we can drill off the coast. In fact, it was by executive order that Bush One chose to shut down drilling near the coast of Florida. That was a mistake. They're drilling much closer to the coast in Alabama than they are in Florida today because of an executive order issued by former President Bush, often referred to as Bush 41, I believe.

So this is not a Democrat or a Republican problem. I think both parties, quite frankly, have some blame to share here, but we don't have a Democratic energy problem or a Republican energy problem; we've got an American energy problem, and we need to fix it as a Congress. I think it would be most helpful if we did it, quite frankly, in a bipartisan way.

I'm not talking about drilling off the coast or in ANWR and utilizing 1940 or 1950 technology, not even utilizing 1990 technology. I'm talking about doing it while utilizing 21st century technology that can allow us to do it, to reduce our dependence on foreign oil and yet remain good stewards of this environment, of this land that God has given us to care after.

Then there are the lease and royalty payments from drilling in those areas. By drilling in those areas, we meet our short-term oil needs. We've got some great ideas. I've actually test-driven a hydrogen fuel cell car. You can drive it. It sounds like an electric golf cart, and it runs like a regular car, and when you stop, if you jump out and run to the tailpipe with a clean

glass, in time, it'll pour you a half a cup of water. They tell me you can drink it. I didn't try, Madam Speaker, but they say you can.

I mean these are not Star Wars-ish ideas. These are not ideas of the next century or of the next generation. They're here, but we need an energy policy that embraces them and that moves them from the science lab to every street corner in America where you see a gas pump today.

So my bill does this: It says drill in ANWR, utilizing new environmental technology. Drill off the coast, utilizing new environmental technology. Then the revenue from the lease and royalty payments, it's estimated, will total $80 billion. I want to take that $80 billion and put every dime of it into alternative and renewable fuels to move these ideas from the science lab to the marketplace.

This year, this administration will spend less than $4 billion on alternative and renewable fuels. Now, for a country boy from Hope, Arkansas, $4 billion sounds like a lot of money, but to put it in perspective, we will spend that amount in Iraq in the next 10 days. Bill Gates will spend twice that amount on research and development for Microsoft Corporation alone this year. When President Kennedy said he was going to put a man on the Moon, he didn't just say it; we invested in it. In today's dollars, it was $90 billion, and we did so much more than put a man on the Moon. We grew a new generation of innovators in this country who have created and who have invented a lot of the technologies that we're now beginning to take for granted.

It's time for another President Kennedy ``let's go to the Moon''-sized investment and, this time, with alternative and renewable fuels so we can reduce our dependence on foreign oil. That's exactly what I try to accomplish with the American-Made Energy Act, H.R. 5437.

I'd like to thank the gentleman from Utah for allowing me to come and to speak on my bill for a few minutes this evening, and I appreciate his leadership on these energy issues.

With that, I yield back to him.

Mr. MATHESON. Well, I thank my colleague from Arkansas for spending time with us this evening but also for trying to take a thoughtful and comprehensive approach. That's really what Blue Dogs are about. I think we really try to discuss items in the context of policy.

I'd just like to introduce one other factor into this discussion about the high gas prices that we face today and what we can do in terms of the price of oil, and it's consistent with what Blue Dogs talk about a lot. People probably didn't think I'd raise the issue of fiscal responsibility relative to oil prices, but it turns out that there is a significant relationship here. It has to do with the fact that, during the current administration, so much more money has been borrowed.

When our current President took office, the national debt was around $6 trillion. We're approaching $10 trillion now. $4 trillion just in the last 7 1/2 years. Do you know what that has done among many other things? It has created a weaker dollar. Now, oil is a global commodity. It's traded all over the world, and it's traded under one currency, and that's the U.S. dollar. That weaker dollar means that oil costs even more for us in this country than it does for other countries with stronger currencies.

I've brought with me tonight this chart to graphically demonstrate the relationship, according to the Energy Information Administration, between the lower dollar--the weaker dollar--and how much the price has gone up in terms of dollars per barrel. It's pretty self-evident that we had a strong dollar for a number of years. Then in the early part of this decade, as the debt started to increase, the value of the dollar dropped precipitously, and the price of oil went up at the same time.

It's not the only factor associated with how expensive oil is in the world today, but clearly, in all of the discussion that we've been having about why the oil price is so high in the world, in my opinion, this particular issue has not received much attention.

The Blue Dog Coalition has this fundamental principle about balancing budgets and about living within our means. We tell people that you may not see the impact of this debt right away, but here is an impact because, with all of that increased debt, we've had to borrow so much money as a country that we've weakened our currency relative to the rest of the world. Therefore, because that's how it's traded all over the world, the price of oil on a dollar-per-barrel basis has gone up a lot.

So I wanted to introduce this concept, which is very appropriate within a Blue Dog Special Order hour here on the floor of the House of Representatives, to talk about the linkage between the need for fiscal responsibility and how it affects energy prices, which is something that, I think, ought to be part of this debate as well.

With that, I'd like to yield time to another one of my fellow Blue Dogs, another individual who is very thoughtful and measured in his approach, and that's the type of approach we need for a comprehensive energy policy. He is my colleague Mr. Scott from the State of Georgia.

Mr. SCOTT of Georgia. Thank you very much, Mr. Matheson. I certainly want to thank the gentleman from Utah for allowing me to share a few thoughts on what, I think, is the most urgent issue facing, really, the survival of the world, not just that of our country. I'd like to talk about this from an additional perspective.

This issue is rolling along on about four or five major legs. One is supply. Another is the weakened dollar, of which you spoke. Another is do we do more drilling. Then this other of which we have not dealt as we should, of which I believe is that leg of which we have to deal if we are going to really address the issue facing the American people, is the high price of gasoline. That leg is called demand. We've got speculators who certainly need to be reined in, and we're doing that.

I serve on the Agriculture Committee. We've had the Commodity Futures Trading Commission under Chairman Lukken to come before our committee. We want to make sure that we give him the resources and all that he needs to bring title regulation and transparency. We need to look at issues like swapping where these traders use others' pension funds to trade among themselves with little oversight. We need to close the Enron loophole. We need to make sure that everything trading with oil is done in the light and not in foreign exchanges that have very little regulation. All of that needs to be done.

Speculation and speculators play a vital role as well. So that we have to make sure that whatever approach we take there, that's a part of the infrastructure. And still we're not addressing the issue facing the American people until we address the issue of demand.

The only way we're going to bring down the price of oil, and subsequently the price of gasoline, is to reduce our demand and our dependency on oil. Oil's not in our future if we're going to have one. If we continue with oil, this earth is going to eventually burn up. We're getting to that point now. It is the oil and other matters that are causing global warming at such an epidemic rate that even if you drill for more, that creates more demand. And drilling is where we are now. That is not where we need to go for the future.

We have got to erase the high demand or else we're going to be in a footrace with China and India. If we continue at our pace on our current demand for oil, it will go up 22 percent in the next 10 years, China's will go up 160 percent, India 110, and developing countries in the Middle East will go up 125. Increase. The more oil you drill for, the more the demand, the higher the price.

Let me tell you something that happened. Just before we left, in Jidda in Saudi Arabia they had a conference. And at that conference, Saudi Arabia said, Okay. I tell you what. We're going to increase during the month of May by 300,000 barrels per day. Then in July and June, last month, they added another 200,000 barrels a day, increase, because we felt the more the supply, then we'd lower the price. No, no, no. Less than 24 hours. That happened on a Sunday. That very Monday, when the first market opened in Singapore, the price went up from $134 a barrel to $137, and now it's rolling along at $145. Does more oil, does more production, does it drive it up? It creates the demand.

So what do we do? We've got to move forthrightly on getting off of oil, getting off of dependency on it. We've got a great chance to do that. We have the means to do it. There is no country that has the technology, that has the smarts to be able to get alternative sources of energy to survival.

If Brazil can do it, why can't we? I went down to Brazil last year, spent a week down there going into the factories, into the production plants, and 85 percent of their automobiles are running on what is called flex fuel. In other words, ethanol made from sugarcane. Why can't we do that? No. We blindly want to go with ethanol, but we want to go make it on corn.

For every unit of energy that it takes to produce a unit of ethanol from sugarcane, they can only yield less--they yield 8 units of energy. That's a great yield. With corn, for every energy it takes to produce it they can only produce less than 2 units of energy. It's not efficient. Plus, it drives up the price on food because corn is the basic for livestock. So corn ethanol is not the future. Nor should it be on any basic food.

But now our technologies say we can make ethanol from kudzu, from pine straw, from pinecones, and yes, sugarcane.

Now I ask you, here is a question that we need to ask and the American people need to ask Congress. Why can't we begin to offset our demand for gasoline to run our automobiles, offset, removing our demand bit by bit from importing oil from the Middle East and on oil to making up for that by pouring in ethanol? And why is it that we have a 54 cents-per-gallon tariff on every gallon of ethanol we would import from Brazil? It doesn't make sense. Why would we not want to import ethanol made from sugarcane, the most energetic, the most productive kind of ethanol, into this country from Brazil to offset the loss from importing oil from there as we build up our own capacity for ethanol?

And let me just share with you what we're doing in my great State of Georgia. Georgia is at the leadership--and I would like to say, Mr. Matheson, in my own district in Clayton County, for example, we have in Clayton County in Ellenwood, a plant that makes biodiesel fuel. And you know what they make it from? Not oil, not petroleum. They're making it from the fatty parts that you throw away from the chickens and from pork. And they're taking it. And this year, this plant, it's called the BullDog BioDiesel--you can tell we're from Georgia because it's the ``Bull Dog''--but it's the BullDog BioDiesel plant in Ellenwood. They will produce 18 million gallons of biodiesel fuel.

And it is not going to have to go on the world market like oil would. That's another thing we need to clarify because people think if we were to drill and get oil, that that oil will come straight on back here and it stays in this country. No. That goes to the world oil market and comes out at $145 a barrel if it was today. The price is there.

So my point is this: We need to understand that we are at a critical point in our history, quite honestly, as a civilization, and America must lead in this direction, and that leadership means cutting this demand and dependency on oil and moving to renewable areas. We're already moving with the battery cell automobile. Why can't we put greater emphasis on those things and those items?

And as I said, we certainly have to look at ethanol as a future because it would make up for the shortfall we would get once we are able to cut our dependency on oil, especially from the Middle East.

So I think that among all of the other things that we've got to do, and there are many things we've got to do, but essentially it comes down to the bottom line: You want the price of gasoline to go down? You want the future of the world to go up? Then what you do is you've got to cut the demand on that petroleum as a base of energy and move to another base of energy that does not threaten our economy or our environment.

Mr. MATHESON. Well, I thank the gentleman from Georgia for his thoughtful comments tonight. And it is no surprise. He's always been someone who tries to understand issues well. His comments really reflect a couple of the basic principles. You know, as I mentioned earlier in my remarks, the Blue Dog Coalition published a set of energy principles at the start of this Congress, and I think my colleague, Mr. Scott, really touched on two of the important components of those principles.

The first is that the Blue Dogs believe in the value of technology development, and energy policy should build on American strengths. One of the great things about this country is its ability to innovate. Research and development capability of this country surpasses any place in the world. Whenever this country has applied itself to solve a problem, it succeeds so well. And that type of innovation is what is going to allow technology to take us to a different place than we are today.

And I think Mr. Scott discussed some of those potential technologies in which he's familiar, and there is no question in the long run, if we are going to get to a position where this country is not as dependent on foreign oil, we need technology to take us to a new place in terms of particularly how our transportation and infrastructure are going to operate.

And the second Blue Dog energy principle I think Mr. Scott touched on very well is this notion of efficiency. You know, if you can do more with less, we all win. We use less energy, we save money, it's good for the environment. Energy-efficient technologies and energy conservation are other pieces to this puzzle.

I think an overriding thing we've said throughout this discussion tonight is that there is no single option here. There is no silver bullet. We, as Blue Dogs, support the furtherance of energy-efficient technologies. We think that we can continue to make progress and push the envelope and that, again, as a country that leads the world in innovation, we can also lead in terms of continuing to be more efficient in how we use energy.

Again, I thank Mr. Scott for his comments. As usual, very consistent with Blue Dog principles, and again, it helps further this debate about how we ought to move ahead in our national energy policy.

With that, I would like to recognize another of my fellow Blue Dogs, someone who has invested a lot of time and effort to develop an understanding of the energy issues and is a real substantive contributor to the policy debate, and that is my colleague from South Dakota, Representative Herseth Sandlin.

I will yield her as much time as she may consume.

Ms. HERSETH SANDLIN. I thank the gentleman for yielding, and I thank him for his leadership on the Energy and Commerce Committee and in other capacities and with the Blue Dog Coalition on energy issues.

And in citing our energy principles that the Blue Dogs stand by, we have a number of those that have been addressed already this evening, but fuel diversity is certainly one that I think deserves emphasis.

The representative from the State of South Dakota, an at-large district, a very rural district, as many of the Blue Dogs represent rural districts, the impact of these high gas and oil prices are having a disproportionate effect in many respects on my constituents who have to drive great distances to work, who have to drive great distances to get children to school, who have to put nitrogen fertilizer on crops, and who have to use great amounts of diesel and gasoline to plant and harvest those crops to maintain a safe, abundant cheap food supply.

So much has been made in recent weeks of high commodity prices. We just recently passed the farm bill. Overrode the President's veto twice to pass a farm bill that preserves the safety net. And as people point to those high commodity prices and think that farmers and ranchers have never had it better, one thing that I would hope that my colleagues, Madam Speaker, would keep in mind is that nitrogen fertilizer, which depends on natural gas, is an essential ingredient, and the high cost of gas and diesel are the input costs that are dramatically higher than they've ever been, that cuts into any profits, dramatically, that farmers and ranchers may be experiencing now that they're finally getting decent commodity prices that are saving taxpayers dollars because those are higher than the target prices and loan rates that we've set into law. And therefore we aren't making countercyclical payments and loan deficiency payments to farmers across the country because they have another buyer for that grain rather than just one buyer putting it on the export market at a lot less than the cost of production.

That other buyer is the local ethanol plant. And as my colleague from Georgia pointed out, we know that we're just maybe less than 2, 3 years away from the technology available to make commercially available not just corn ethanol and the dramatic increases we've seen in the improvements and the production process to make the efficiencies in the production process even better, but cellulosic ethanol. Cellulosic ethanol that can be developed in every region of the country given biomass sources, given other nonfood and feed crops that can be grown in every region of the country. And it's the importance of those technologies that can only be facilitated by the financing and some of the loan guarantees that we've recently passed, but the financing and the private market that are essential.

Which is why I strongly argue that, Madam Speaker, that it's not corn ethanol that should be blamed for high food prices; it is the high cost of energy, which is the focus of our discussion here tonight, and the transportation and the production and the marketing of the food to Americans across the country. We need corn ethanol as a bridge to cellulosic ethanol. And that is where the financing will follow, that's where the capital will follow to get us to second-generation ethanol production.

And we also have to look at other sources that currently aren't available. For example, woody biomass off the national forests which, in my opinion, should be able to be used for cellulosic ethanol production. It not only reduces the wildfire hazard based on the hazardous fuels that are lining the bottoms of our forests, but it is a proven technology for a use for cellulosic ethanol. If we don't use it, it sits there and rots and releases methane into the atmosphere, which is worse than carbon, or it burns and releases carbon into the atmosphere.

So the bottom line--and I think this is back to the Blue Dog principle of diversity of fuels--we shouldn't be so quick to take energy sources available domestically off the table. We shouldn't be reluctant to reevaluate long-held positions on a particular energy source in light of new technologies that can help us extract resources in an environmentally sound way; new technologies that can facilitate wind energy development, biofuels development, a whole host of other technologies on the electricity side, whether it's clean burning coal, hydroelectric power, solar power; and of course, in the transportation side, with vehicle technology and engine technology for flex-fuel vehicles and hybrid vehicles.

Already this Congress we've taken a number of important steps, not the least of which is the renewable fuel standard that we passed in December that, by many analyses, shows that is moderating the price of gasoline at 15 percent less than it would be otherwise without that increased biofuels production. So biofuels production is saving consumers money at the pump.

But obviously, we know that consumers are suffering with $4 gasoline, higher in some areas. We know that there are ways that we need to get at speculation that may exist in the marketplace for oil and other commodities, that we have the weak dollar that my colleague from Utah pointed out at the top of the hour that is affecting the increased costs per barrel of oil.

We, in addition to the renewable fuel standard, passed CAFE standards that go to the heart of conservation energy efficiency and the additional technologies that we know exist to help maximize those efforts.

We have passed legislation to ensure that the President no longer adds oil to the Strategic Petroleum Reserve, and we know that that Strategic Petroleum Reserve is yet another tool that we need to consider using as we move forward to give some relief to consumers at the pump.

We passed a bill that looks at the issue of how many leases are currently outstanding and how many millions of acres perhaps where there is natural gas and oil where we can facilitate production of those sources on public lands.

But we also know, as I stated, that we can't be taking energy sources off the table, and we have to be looking at where else, whether it's in the deepwater gulf or other parts of the Outer Continental Shelf, elsewhere on public lands, where it can make sense both economically and from an environmental perspective to be able to extract those resources, particularly natural gas, which does not pose the same types of environmental problems in drilling on the OCS. Although I think that technology, again, has brought us to a point that can minimize those types of spills. The oil shales that we know exist in a number of States, whether it's in Utah, Wyoming, Colorado, and of course, the other States, working with our trading partners and allies to our north in Canada as it relates to a natural gas pipeline, as it relates to oil pipelines that are being sited and under construction across South Dakota, to be able to get more oil into the Midwest where we oftentimes are at a disadvantage in being at the end of the line.

So I think that it's important tonight that we focus on not only what we've already done but what more we are prepared to do to enhance the diversity of fuels, to enhance the diversity of options both in the transportation sector and the electricity sector to make us less dependent on foreign oil, to create jobs, to enhance technologies that create the jobs for the future, for the young men and women that are looking into careers in science and environmental engineering and mechanical engineering and a whole host of opportunities it affords to every region of the country, if we take the steps that we need to take, reevaluate those long-held positions, look at information with a fresh look and glance, and be willing to take some risks because that's what it's going to require to do right by our constituents.

And I thank the gentleman for yielding.

Mr. MATHESON. Well, I want to thank my colleague from South Dakota who is always a very substantive participant in any public policy discussion we have here in Congress, and I know she's invested a lot of time and effort when it comes to the energy issue. I really appreciate her participating in this Blue Dog discussion.

There are a couple of points that were raised by my colleague from South Dakota that I think merit one more mention. The discussion of what we've done in this Congress, there have been some actions that have been taken, and one of them is going to bear fruit in the long run. We're not going to see a result right now. It's a process that came out of the Science Committee, of which I'm a member.

The chairman of that committee, Mr. Gordon, another Blue Dog, pursued a really aggressive effort to invest in basic research, in R&D, tried to put Federal funding out there to really get things going in a more aggressive way than it has in the past. He created a program called ARPA-E. It's designed after a previously created program within the Defense Department that's called DARPA, which created a lot of research that's helped us with technology advancements in the defense arena. And this legislation created a comparable effort in the energy policy arena, and our Blue Dog colleague, Mr. Gordon, has been a real leader on that. And that is another action this Congress has taken that is an important step to take. And I know we're frustrated by $4 gas today, and that program, the ARPA-E program, is not going to reduce the price of gas next month. I understand that.

But the point is there are a series of steps we need to take. There's some short-term, some mid-term, some long-term strategies, but we need to put them all on the table now. We need to do what we can do to make progress on this issue.

The second point that my colleague from South Dakota said--and I just want to emphasize--is she talked about opportunities and activities that we can work with our partners, including in Canada. When she mentioned Canada, it reminded me of the fact that as a country Canada has placed a tremendous emphasis on developing their tar sands resources.

Now, I represent the State of Utah and a significant amount of the oil that is refined in refineries located right in the Salt Lake City area comes from Canada. It comes from the tar sand resource in Canada, and it is piped to the United States.

Now, we can do that here, too. We can maybe take a page out of the Canadian book on how they, as a country, made efforts to develop that resource. It's an unconventional resource, and they took the steps and they made a significant commitment. It has not been without costs. It has not been without setbacks. There are lessons to be learned there, too, which we as a country should do.

And I understand that the tar sand resource we have in the United States--and we have it in my own State of Utah--is a little bit different composition than the Canadian tar sands. I understand that there are differences, but there's so much that we can learn from that, and it's a viable source of production today in Canada.

And so I appreciate the mention of how we can learn from others and learn from our partners, and I don't know if you had something you wanted to add to that point.

Ms. HERSETH SANDLIN. Well, not specifically to that point, but I did want to mention--and I know you have the gentleman from Georgia who wants to make another point, too, so I will be quick.

The gentleman from Georgia (Mr. Scott) and I are both on the Agriculture Committee, and you may have mentioned this. One of the bills that we'll be taking up tomorrow is a bill that you have introduced, and so I think it's important for our constituents who, understandably, don't feel like they're getting a fair shake every time they go up and fill up their vehicle, that they understand that we are doing something here in Washington.

We are having a set of three different hearings in the Agriculture Committee this week. There are other committees having hearings. This is a complicated issue, and we are determined to get it right and to do what we can to get the speculation out of the market and to give the Commodities Futures Trading Commission the authority it needs and to understand this problem, whether it's over-the-counter, whether it's swaps, whether it's what's going on with the foreign exchanges, the issue of transparency, and your bill is one of those that we'll be taking a look at which we think makes an important step in addressing that issue.

Mr. MATHESON. I appreciate that. I'd like to hear from Mr. Scott.

Mr. SCOTT of Georgia. Absolutely. And I just wanted to complement what my colleague from South Dakota, Ms. HERSETH, has said because I serve on the Agriculture Committee with Ms. HERSETH.

And this agricultural farm bill, in my estimation, in my 6 years here I've dealt with many bills, but as far as our future and our domestic and international needs, this farm bill is by far one of the absolute, most impactful bills we've had that touches on this. And I think we would do well to share with the American people--and you have alluded to so much of that already, very eloquently I might add--but let me just also point out that what's in this bill because this is so important.

We've mentioned ethanol, but it's so important that the people of America know that we have $4.2 billion in loan guarantees in this bill for the construction of ethanol plants, and we are putting the emphasis, as you said, on cellulosic. This is why it's particularly, in my part of the Nation, in Georgia, we are so excited about this bill. We not only have the biodiesel plant in Ellenwood in Clayton County, but over in south Georgia, in Soperton we have a cellulosic ethanol plant that is producing energy off of wood chips, just what you talked about.

We have scientists and engineers and chemists working right now at the University of Georgia and Georgia Tech fine-tuning how we extract cellulosic ethanol from pine straw and pine trees. I mean, these are renewable areas, and we're putting the incentives in.

Also in the farm bill what we've done, we recognize, as she spoke so eloquent, too, about the corn pressure, that we wanted to also give some emphasis to the cellulosic ethanol. So we have increased the tax credits for ethanol made from cellulosic means, while we slightly decreased it from corn to take some of that pressure off.

So I did want to talk for a moment about the leadership of the Agriculture Committee in the future of our energy needs, particularly when it comes down to our renewable fuels, but I also wanted to talk for a moment about this is a world issue, and it's a complex issue.

The question that I'm pondering with and I think we all should is this one. Fifteen years ago, just 15 years ago, the price of oil was less than $15 a barrel. Now here we are, 15 years later, and it's busting at about $150 a barrel. Somewhere, somehow we need to ask the question, how and why, because clearly if we're going to find our way out of this mess we have got to examine how we got into this mess.

Well, I did a little bit of examining, and it comes down to this. Right now, the world uses 85.4 million barrels of oil per day. Now, I ask Mr. Matheson, you might want to know, that's good, well, how much does the world produce? They produce 85.6 million barrels per day. And as I mentioned earlier, Saudi Arabia just like that said we can increase production just like that, 500 barrels a day.

Now, what I'm talking about here is that a lot has happened, but one of the most significant things that has happened has been China and India and the underdeveloped world that is putting tremendous pressure here and an OPEC cartel that tends to want to play like Russian roulette with us.

So this is why I am saying and I am concerned that if we move towards drilling, wherever it may be, I am just one voice here. There are all areas of leadership, and my leadership is going to be in trying to get alternative energies on the market, trying to bring down the 54-cent tariff that we have for keeping ethanol out so that we can have some competition.

Even as we're speaking, I believe the world is listening, and they're listening to what America is saying. And if America is saying we're making moves to get you out of the back pockets of the American people and we're going to move into a situation where we don't need you, we're going to bring that price down. You watch what we say. If it takes drilling, if it takes a threat of drilling, if it takes moving it and getting the oil companies finally to move on the 68 million acres that we've already leased to drill on--and that is the other question, Mr. Matheson. Not only the other question about what happened in the 15 years, but why is it that we've given the oil companies 68 million acres to drill on and everybody is saying drill, drill, and not one drill has hit the ground in those 68 million acres?

The American people ought to get an answer to that. If they want more drilling, why haven't the oil companies drilled on the 68 million acres that's there to drill? Those are some very serious questions that I think we need to ask and examine thoroughly.

But I will say this, this Congress is speaking with a loud, precise voice. And I believe the more energetic we speak with this voice, the more precise we speak with it, the more action-oriented we speak with it, both Democrats and Republicans, all of us speak in a loud voice together, saying enough of this, we're not going to take it anymore and move forward with some alternatives, that will get these oil folks out of our back pockets. That's what the American people want. And that's what is going to bring down these oil prices, shaking the demand.

Mr. MATHESON. I again thank my colleague for his comments. I think that he has helped describe the global picture. We haven't discussed that enough about we're part of a global market. And it's important for us to take the lead and develop fuel diversity and try to develop some level of greater independence, because outside of that, in some respects our actions are the tail wagging the dog. And we need to get beyond that as a country. That's not a comfortable position for this country to be in.

The first sentence of the Energy Principles Document that the Blue Dogs created at the start of this Congress is that energy independence is a matter of national security and economic security. This country faces so many great opportunities if technology does take us to a new place. We will be in such a better position in terms of our economy, in terms of our foreign policy, in terms of our position in the world. And we can make the world a better place with that technology development, too. That's the exciting opportunity for beyond our borders as well.

Blue Dogs supports promotion of a forward-looking, market-based comprehensive national energy strategy. As we've discussed many times tonight, there are short-term, mid-term and long-term issues. It's a complicated issue. In fact, each of the sub-issues on their own are complicated in their nature. And sometimes in the world of politics the rhetoric gets really simple. But on this one, it's time for us to roll up our sleeves and act in a way this body is supposed to act, in a deliberative, thoughtful way to generate comprehensive legislation that truly tries to solve problems and achieve progress. That's what we're elected to do. I think the Blue Dog Coalition approaches most issues in that way. I think we really don't care about if it's a Democratic idea or a Republican idea, we're trying to make progress.

And so as I close this hour and this discussion of energy issues, I suspect
that we will be back talking about this again. This issue is not going away. It's something that we all need to learn more about and we all need to work together. None of us have all the answers, but we need to work together as a Congress to try to find solutions as best we can.

With that, I thank all of my Blue Dog colleagues for joining me tonight.


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