Our energy situation is a crisis. It's a domestic crisis and it's a national-security crisis. It's a domestic crisis for obvious reasons: Rising fuel costs are forcing up prices in just about every consumable item, including food. It's a national-security crisis because it has the potential of bringing the United States to its knees. Much like President Reagan's arms buildup broke the back of the Soviet Union, our reliance on foreign energy supplies can break us, too. Our enemies know that.
We can't drill our way out of the crisis, solarize our way out or ride cornstalks out. Only a wide-ranging, comprehensive plan will lessen our dependence on foreign oil, eliminate the economic threat posed by Middle-Eastern and South-American oil-producing nations, and bring sanity back to fuel prices.
Every solution carries a price. Corn grown for ethanol creates food shortages. Wind turbines kill migratory birds. We need to keep that in mind as we explore all alternatives available to lead us back to energy sanity. Balance is required.
Therefore, a wide-ranging, balanced and comprehensive plan includes:
Expanding production of alternative-energy sources, including solar, wind and ethanol.
Limiting speculative oil trading.
Expanding domestic production of oil and gas.
Constructing new and efficient refineries.
Developing alternative-energy sources will take time, but Congress can help expedite it with incentives to the industry. To that end, I support extended tax credits for solar and wind-power generation, which, unfortunately, Congress recently blocked. I have also sponsored bills that promote solar, fuel cells and advanced biofuels technology, among other alternatives. Now is the time for Congress to encourage creative American scientists and engineers to rise to the challenge.
Conservation also needs to be part of the mix. The energy bill passed by Congress and signed by the president in December calls for greater efficiency standards for appliances, energy-efficient lighting and new incentives for energy-efficient windows and construction design. The United States has the highest per-capita energy consumption in the world, partly, of course, because we also are among the most technologically advanced. But, there is room to conserve without sacrificing our standard of living.
Expand refinery capacity
We also need to expand our refinery capacity. A new refinery has not been built in the United States in the past 30 years. Through innovation, current refineries have been able to keep upbut only barely and not always. Any catastrophea refinery fire or a natural disastercan take one or more off-line, cutting supplies of refined oil products and increasing prices. It's happened several times during the past decade, and consumers have suffered for it.
Consumers also suffer from artificially inflated prices. Oil-market speculation is based partially on guesses about how much oil will be available in the future. The power of speculation was driven home recently when the administration issued a nonbinding executive order about opening offshore assets, and just the hint of domestic independence forced the price of oil to drop.
Gas prices should be based on supply and demand as it exists, not as it may exist five or 10 years down the line. I am committed to the free-enterprise system and, as such, am not against taking a risk on a well-informed hypothesis on future earnings.
But when speculation becomes wildly inflated, as I believe it is now, and hurts the ability of middle-class Americans to commute to their children's ballgames or put food on the table, it becomes a detriment to our free-market economy. Congress needs to impose some limits. I have lent my support to one bill that addresses the issue and am looking at others.
Given all that, we still must increase domestic production for the plan to work. The U.S. economy relies on oil, something we cannot change overnight. No energy policy has more impact on our national security than our refusal to expand domestic production.
In 1985, the United States imported less than 30 percent of its oil. Three years ago, analysts predicted that by 2025 we'd be importing 68 percent. It didn't take that long. Today, we're already importing two-thirds of our supplies.
Even if alternative fuels come on line at the fastest pace possible, over the next several years, alternatives will cut only 0.8 percent from our imported-oil needs. In contrast, just opening a desolate section of Alaska to oil production would cut imported oil by 4 percent.
To bring domestic production on line, we need to start now becauseas opponents of domestic production keep pointing outit takes time to develop local supplies. If President Clinton had not vetoed production in Alaska 10 years ago, we would have a million barrels of oil per day flowing today.
Needle in a haystack
Referring to that section of desolate frozen tundra as the Arctic National Wildlife Refuge is a misnomer. While the proposed development site is in ANWR, the site is small and ANWR is vasta needle hidden in the proverbial haystack. Also, when I visited the proposed site, I did not see a single animal or other form of wildlife. I did, however, meet native Alaskans who seek oil development because their lives would greatly improve from it.
Alaskans want oil development.
Californians traditionally have not, but national security is now a significant factor and it's time to reconsider developing the Outer Continental Shelf. The OCS alone would replace the oil we now import daily from Saudi Arabia. Technology advancements now make it far safer to drill in the OCS than to ship oil thousands of miles in rusty tankers from Venezuela or the Middle East.
States should have the option of opening the OCS to development. I urge Gov. Arnold Schwarzenegger to consider national security and the needs of everyday Californians before rejecting it out of hand. Everyone remembers the oil-rig disaster in the Santa Barbara Channel, but that was 40 years ago. Technology has progressed significantly.
As a senior member of both the Permanent Select Committee on Intelligence and Foreign Affairs Committee, I know our national security is threatened by resting our energy policy on the whims of foreign governments. We need to decide if it's worth handing our future to Saudi sheiks, Iranian clerics and avowed anti-American Venezuelan President Hugo Chavez because we're stuck in the past, or whether we still believe American ingenuity is far superiorand that we can do it cleaner and more efficiently.
I know all too well the pain felt by middle-class Americans because of soaring fuel costs. My wife, Janice, and I raised four children here, all of whom are now grown, married and have children of their own. Our children and grandchildren are among those struggling to meet daily expenses as the cost of foreign-oil dependence skyrockets. They are among those threatened if we continue to rest our energy policy on the whims of foreign despots.
When the world knows we are serious about becoming energy independent through all the resources and ingenuity available to us, prices will drop, our economy will rebound and we will have increased our national security.