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Public Statements

Blue Dog Coalition

Floor Speech

By:
Date:
Location: Washington, DC

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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.

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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.

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