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Stop Excessive Energy Speculation Act of 2008 - Motion to Proceed

Floor Speech

By:
Date:
Location: Washington, DC


STOP EXCESSIVE ENERGY SPECULATION ACT OF 2008--MOTION TO PROCEED -- (Senate - July 23, 2008)

BREAK IN TRANSCRIPT

Ms. CANTWELL. Mr. President, unless we change course, our Nation will soon be sending $1 trillion a year abroad to purchase foreign oil, and no amount of drilling is going to change that. That is why I am frustrated that we are wasting valuable time here on the Senate floor debating last century's policies instead of talking about tomorrow's solutions.

We know that today we are facing an oil crisis, but we also know that with less than 2 percent of the world's oil reserves, there is no way the United States is going to drill its way out of this quagmire. American families and businesses are depending on us to put aggressive new policies in place, not continue to dwell on the old policies that are not going to provide any relief at the pump.

Unfortunately, it seems as though there are some who only want to focus on big oil's top priority; that is, lifting the moratorium on Outer Continental Shelf drilling.

Pro-drilling advocates, and certainly the President of the United States, seem perfectly comfortable perpetuating what I think is a cruel hoax on the American people saying that drilling will lower oil prices. They are willing to imply, to insinuate, and to pretend that drilling off of our coastlines will somehow provide relief at the pump or somehow lessen our dangerous dependence on foreign oil.

The reality is even the biggest drilling advocates admit that opening our Nation's pristine coastlines will have no impact on pricing at the pump. That is right, no impact.

In fact, the President of the United States, on June 15, said:

I readily concede that, you know, it is not going to produce a barrel of oil tomorrow, but it is going to change the psychology.

My colleague who is running for President seemed to say a similar thing:

I do not see any immediate relief, but even though it will take some years, the fact that we are exploiting these reserves would have a psychological impact that I think is beneficial.

According to the Los Angeles Times, a senior adviser for Senator McCain also acknowledged in a news conference in a call to reporters that:

New offshore drilling would have no immediate impact on supplies or gas prices.

In fact, the White House went on to say the same thing:

There's not a real good short-term answer to high oil prices, and we've been very explicit about that from the beginning.

So I think it is safe to say many people are confused about what is being discussed here on the floor.

Another White House spokesman said:

Anyone out there saying that something can be done overnight or in a matter of months to deal with the high prices of gasoline is trying to fool people.

Now, this is from the same White House and Republicans that are now advocating that maybe there is a psychological advantage here that somehow supply that we will not see until 2030 could have an impact on gas prices today.

Well let me tell you what some energy experts told the Energy Committee's roundtable on oil prices Roundtable this past week. And for those of you who did not attend--we had many of our colleagues attend--we had two expert witnesses, Daniel Yergin, the chairman of Cambridge Energy Research Associates, an author of a very well-known book about oil, and Roger Diwan, an energy analyst at PFC Energy. They both firmly rejected the notion that the President's announcement he was breaking the Outer Continental withdrawal moratorium somehow caused a drop in oil prices. They were asked that question and basically laughed at the suggestion that lifting the moratorium could cause a drop in oil prices.

For those who want to pretend that opening up drilling could have any psychological effect, I think this chart illustrates what is going on. We see here on the left that prices are forcing Americans to basically consume less. Basically they are using 800,000 fewer barrels of oil than we did this time last year. But that certainly has not had a psychological impact on the price. We know that Saudi Arabia, here in the middle, announced that they were going to increase output by 500,000 more barrels a day. That announcement did not have any immediate impact. In fact, we saw oil prices surge to $140 a barrel.

So the lesson here is that even though these are significant reductions in demand and increases in supply happening it is not impacting world old price. So how can some of my colleagues argue that by producing 200,000 barrels a day, which is what the Outer Continental Shelf drilling would get you, that somehow that is going to have a psychological effect? How can they make that case when this amount of reduction of consumption cannot, and this amount of new supply did not; that somehow by producing 200,000 more barrels per day in 2030 is going to magically reduce prices today. I think what is clear is it does not matter how many oil fields we have, or how many holes we poke in the ground, it is not going to bring down the price. Only by ending our oil addiction and providing Americans with real energy solutions can we do that.

I am not the only one who believes that. The administration's own Energy Department has said similar things. In fact, in the Energy Information Administration's 2007 Annual Energy Outlook they have said:

Access to the Pacific, Atlantic, and eastern Gulf regions would not have a significant impact on domestic crude oil and natural gas production or prices before 2030.

No impact before 2030. That is 22 years from now. In 22 years, we need to have a significant reduction in fossil fuels or our climate will be giving us a lot more things to worry about than the price of oil.

Scientists are now telling us there is a 75-percent chance within 5 years the entire North Polar icecap will completely disappear in the summer months.

According to Tufts University, doing nothing about global warming will cost the United States economy more than 3.6 percent of our gross domestic product or $3.8 trillion annually by 2100.

So why are we talking about taking on all of this risk of drilling in the Outer Continental Shelf? For what? We are talking about something that is a fraction of the demand of oil the United States is going to need in the future.

In fact, the Energy Information Administration says we will be using 22.6 million barrels a day in 2030. But the most we would get from the Outer Continental Shelf drilling would less than 1 percent of what the United States will need in the future. So some of my colleagues have staked America's energy future on a proposal that is going to give us less than 1 percent of what the United States needs today.

In fact, the Energy Information Administration continued on this discussion and said that drilling in the Outer Continental Shelf and lifting the moratorium, that these 200,000 barrels a day would have a minimal impact on what the United States needs.

This particular chart shows you how much additional supply we will need, 2 million barrels more a day than we are currently using today. And this is what the Outer Continental Shelf will give us, only 200,000 barrels per day. So it is not exactly as if this is going to help much if at all in the future.

In fact, the Energy Information Office continues to say:

Because oil prices are determined on the international market, any impact on average wellhead prices is expected to be insignificant.

That is an analysis of drilling in all the offshore areas currently in moratorium. So the math is simple. Even if we drill in every last corner of our Nation, we would never be able to have an impact on world oil prices. The world price is always going to be set by others, leaving a critical aspect of our economy in the hands of OPEC.

As long as we use a quarter of the world's oil and have less than 2 percent of the world's oil reserves, facts that no amount of drilling can change, our country is vulnerable. It reminds me of the old adage: If you are in a hole, stop digging. But some want us to keep digging, digging toward a meager 200,000 barrels a day.

And that 200,000 barrels assumes that drilling off the coast of the Atlantic and Pacific is something people will want to do.

We have already heard from some States that think the risks are too great to their economies. For example we will not be able to drill the 10 billion barrels that are covered under the Federal ban off the coast of California, a State where bipartisan opposition exists to further drilling.

Here is what Governor Schwarzenegger said recently:

California's coastline is an international treasure. I do not support lifting this moratorium on new drilling off of our coast.

The Governor added:

We are in this situation because of our dependence on traditional petroleum-based oil. The direction our country needs to go in, and where California is already headed, is towards greater innovation in new technologies and new fuel choices for consumers. That is the way we will ultimately reduce fuel costs and also protect our environment.

I could not agree with the Governor more.

Governor Schwarzenegger is not alone in his straight talk because there are many citizens across the country from coastal States who also know the impact of what oil spills can have, that it can mean billions of dollars in economic loss. Ask the tens of thousands of people who lost their livelihood after the Exxon Valdez. I know some of my colleagues have made remarks that new technology somehow makes spills from offshore platforms impossible. I know the minority leader said recently there was not a single reported example of spillage in the gulf during the Katrina hurricane.

I respectfully--and I mean respectfully--ask the minority leader if he has seen the President's own report on lessons learned from the Federal response to Katrina. This is a copy of the cover of the report. It says:

Hurricane Katrina caused at least ten oil spills, releasing the same quantity of oil as some of the worst oil spills in U.S. history.

There it is. A report that basically says it caused ``ten oil spills, releasing the same quantity of oil as some of the worst oil spills in U.S. history.''

The report goes on to say:

All told, more than 7.4 million gallons of oil poured into the Gulf Coast region's waterways, over two thirds of the amount that spilled out during America's worst oil disaster, the rupturing of the Exxon Valdez tanker off the Alaskan coast in 1989.

This is a satellite image of the Gulf of Mexico on September 2, 2005, right after Hurricane Katrina hit. It shows the various areas of oil spills that did, in fact, happen.

Although there are oil risks, the fact is that most of our Nation's recoverable oil supplies and related infrastructure are, for better, or worse, in the Gulf of Mexico. That is not to say we can't have environmentally responsible oil and gas recovery. In fact, many of my Senate colleagues did support in 2006 opening more of the gulf waters after President Bush issued a Presidential directive stopping some of the drilling that was endorsed by the previous administration. But in hindsight, opening the gulf seemed to be another lesson in how we are not going to help impact the price. Back when we opened 6 million acres in lease 181, many oil companies promised it would have a dramatic effect on new production. It was going to be an incredible find. The price was at $57 a barrel.

But a year later the price was already $89 a barrel and we all know the price today. Obviously, access to more drilling didn't help us impact the price of oil then.

And with prices so high, why did the oil companies bid on only 200 million acres of the 500 million acres recently put out for bid in the Gulf of Mexico? Not utilizing existing leases seems to be a pattern with oil companies. In fact, many oil companies are not using 83 percent of the public offshore lands they have tied up in leases. That is an area larger than the States of New York or Alabama that is just sitting idle. This chart shows that 83 percent of the leases offshore are not producing energy, and the oil companies are choosing to only use this area in the green.

Why don't we hear more about why they aren't choosing to drill? It doesn't make sense, given what the price is. We know one of the reasons may be that every single available drill rig, drill ship is being used right now. You can't go and drill when you don't have the equipment. According to the House of Representatives, oil companies have access to over 100 billion barrels of conventional oil in areas not under moratorium. That is how much is already there in existence on land that can be leased. It is already there. It is already available. But clearly the oil companies can't, or it is in their financial interest not to, utilize this vast amount of public land they already have.

The fact is, depending on oil companies to get us out of this mess is exactly what has gotten us into this mess. It is not a viable solution. We need to break our addiction to oil.

The question is, What can we do today to help bring supply and demand into balance? Last week, Dr. Yergin told us at the gas prices forum:

If Americans took a few precautionary steps when driving, including properly inflating their tires, demand for oil would decrease by 600,000 to 700,000 barrels per day.

That is something we can do now, not in 10 years, not 20 years. We can do it now. In fact, there are many things we can do now to reduce our dependence on oil. More efficient tires is one of them at 300,000 barrels per day; keeping your car tuned, 400,000 barrels a day; commuting with an extra passenger once a week, 200,000; keeping tires properly inflated, 200,000; and other ideas. These are things that can have an impact today, not like drilling which will only have an insignificant impact and only in 2030.

These are the things we should be working on aggressively. These are the low-hanging fruit we should be grabbing. Drivers are desperately seeking any measure that they can use to lower prices at the pump. That is why the Bush administration should speed up its rulemaking on a provision in the 2007 energy bill that established fuel efficiency tire labeling. We need a national campaign of public awareness to show consumers how to properly inflate their tires. I am for giving away air pressure gauges at the stations and making sure there is a national education program in place. We can start helping consumers today.

According to tests by the Consumers Union, choosing the right tires and maintaining them with the proper pressure can save consumers about $100 based on today's gas prices. It is critically important we take actions such as this that will help consumers, that will give them some relief.

To me, the debate over drilling highlights a generational change that we actually need in Congress. Americans know it instinctively. They know many of our institutions and safety nets are not working when it comes to this issue.

Think of what a different situation we would be in if we had spent the last 8 years acting more aggressively to build a clean energy future that our country desperately needs. For example, we could have been investing more in plug-in electric hybrid vehicles, which would have had a tremendous impact on oil addiction. The Pacific Northwest National Lab found that our current electricity infrastructure could support an estimated 70 percent of America's passenger vehicle fleet. Seventy percent of our Nation's cars could be supported by today's electricity grid, if we would have gotten plug-in hybrids into the marketplace. Fully utilizing the grid would displace 6.5 million barrels of oil a day, an amount equivalent to 50 percent of what we import, and cut our greenhouse gases by 20 percent. That is the type of policy we should have been pursuing.

Juxtaposed to drilling, the 6.5 million barrels of oil plug-ins could save is basically 32 times the savings of what the proposal for Outer Continental Shelf drilling would be. Obviously, that could have a significant impact.

The study also found that charging a plug-in electric vehicle at the current national electricity rate would cost the equivalent of just $1 a gallon. Instead of paying the fuel prices you are paying today at $4, you would be paying only $1 to plug in your car. A car that gets 100 plus miles per gallon. It would have such an unbelievable impact on the American consumer and the economy and opportunity.

There is a lot more we could have also done in the last 8 years. There is much more we could do now in making sure we extend expiring clean energy tax incentives that will save $20 billion in clean energy investments. I don't think it is too late to get the extender package and have 42,000 megawatts of planned renewable energy projects in 45 States go forward. That is the equivalent of 75 baseload electricity generation stations. I hope we can see progress on that bill.

Passing clean energy incentives will also provide renewable energy that will lessen demand for natural gas, lowering household electricity bills, to say nothing of what New England is facing with the high price of fuel for their homes.

Also under the Baucus extender bill, consumers can utilize $500 in tax incentives for measures that make their homes more efficient. This could lower their home heating bills by 20 percent or more. That is a huge opportunity for us moving forward, if we would only pass the legislation.

I don't know how much time I have remaining.

The PRESIDING OFFICER. There is 6 1/2 minutes remaining on the majority side.

Ms. CANTWELL. I will take a minute or two more.

These solutions I talked about are solutions we can do now. They are near term. If you look at this chart of what options we have for the future, this is what drilling and the moratorium can save us in barrels of oil by 2030, less than a million barrels a day. Here is what efficiency in automobiles and trucks and the measures I described in the last few minutes can do in saving us on energy and oil consumption, over 6 million barrels per day.

We have to get off this 27-year debate and get on to an energy future that will help make America more secure. We must move faster, further past these old energy policies, past convoluted logic and on to an opportunity where the United States can become an energy leader. We know there are countries that are already doing it. Let's make sure we have learned the lessons from our global neighbors about changes they have made. Let's commit to a real energy strategy on renewables. It is something America deserves and something we need to pass as soon as possible.

I yield the floor.

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