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Public Statements

Reasons for High Energy Prices

By:
Date:
Location: Washington, DC

Mr. Speaker, we just got off two weeks of working in our districts around this country. At least I held about 10 town hall meetings, and I am sure many of my colleagues held more. We talked about the debt, we talked about the deficit, but one of the things that almost every one of these town halls insisted upon talking about was the high price of gasoline.

Let's start with this first exhibit we have here. This just gives the comparison of what the gas prices were somewhere in the United States, I can't tell where. January of 2009: Unleaded, $1.32; mid-range, $1.42; super, $1.52. Here is a picture taken in April of 2011: Regular, $3.99; mid-range, $4.09; the high powered stuff, $4.19 a gallon.

Mr. Speaker, the only party that can be blamed for this, unfortunately, is the Democratic Party, through the leadership of Barack Obama, President of the United States, because a vicious combination of the Obama administration's moratorium on offshore drilling and the devaluation of the American dollar through the administration's quantitative easing have resulted in the highest seasonal gasoline prices in U.S. history.

We have reached a point where if we don't pay attention, we are going to give up our ability to produce our own natural resources and be, as the President said to Brazil when he loaned them $2 billion or more, ``We will be glad to be good customers of yours when you find some oil out in the Gulf.''

Mr. Speaker, this is a broken energy policy. In fact, this is no energy policy at all. We are quite aware now that we have found substantial reserves that were unfound in the area of natural gas. In fact, there are those who report that the production of shale gas in the United States could result in us having enough natural gas to operate in this country for at least 100 to 150 years at present or projected usages, and yet we seem to have roadblocks thrown up in front of that production at every step.

We had a deep water accident, a terrible deep water accident, in the Gulf of Mexico. The President and the Energy Department put down a moratorium on drilling in the gulf, both deep water and shallow water. Even though the shallow water, they had had no massive oil leaks in the shallow water, it was included. So the Gulf of Mexico, one of the largest potential oil and gas fields in the world, was shut down for American production. Not for Chinese production, not for Brazilian production, not for anybody else who had an ability to make a deal with Cuba to get a lease offshore to drill, but for American production.

But he promised that after they got all of the cleanup done and after they examined what happened in the BP case, that they would lift the moratorium, and with a lot of outcry from the Gulf States, because for the first time, at least in the State of Texas, until the moratorium on drilling in the gulf, the State of Texas was looking pretty good on unemployment. We were still in the 6 percent range as the rest of the Nation was in the 10 percent range. But when you shut down potentially 250,000 jobs that relate to the drilling in the Gulf of Mexico, I don't know how many of those jobs are actually lost, but those were the ones at risk. And as a result of that and other factors, we're now up in the 8 percent unemployment range, which is still better than the rest of the country, but still a really direct cause of the moratorium in the gulf.

When the moratorium was lifted, they refused to issue permits. But first, because the Federal court told them to lift the moratorium, they lifted that moratorium and issued a new one the next day, or maybe 2 days later, which was, I would say, fairly much in contempt of the order of the Federal court in Louisiana. That Federal judge, in turn, made several comments about contempt of court. And so, finally, after years, the moratorium was lifted and another 6 months later, or 8 months later, a few permits were issued so that drilling could begin.

Remember this: Barack Obama, when he became President of the United States, President Obama promised that he was going to open up offshore exploration and enhance nuclear energy. He's failed to do both. The only energy policy that he's dealt with is one that we certainly need to develop. And no one here doesn't want to seek alternatives that are economically viable to make this country run. This country is an energy-driven country. Just look at the lights in this room. Think of the amount of windmills it would take just to power up this room almost 24 hours a day. But we're for--and, in fact, I would say the great State of Texas has the largest wind farm in the entire United States.

So when it comes to energy, we don't shy away from any kind of energy in our State. We are an energy State. We have been producing oil and gas in the State of Texas for I guess close to a hundred years, clear back to Spindletop. We are not the experts, but we're as close to experts as you're going to run into because we've been doing it through generations of Americans.

I remember when I was 17 years old, my big desire was to go work on an oil rig because the great pay those people got paid. My daddy wanted me to keep all my fingers so he told me I couldn't do it. But I always wished I could. It is something we grow up with. We don't think oil and gas are evil products, and we don't think that they are the curse of this country. We think they are the primary clean power source in competition with other power sources of the petroleum age. We think we do a good job of producing clean energy--and energy, we think, that is the cause of the great modern expansion of American Government.

Remember, when we're talking about petroleum products, we're not just talking about power for your automobiles and power for your trucks and power for your power stations and all the other things that we use with oil and gas. We're talking about plastic, we're talking about lifesaving chemicals, we're talking about clothing. There's a list of a hundred different products--I can't even list them all--that have come from the production of petroleum. And now, for some reason, we have an administration that treats petroleum and treats petroleum products like natural gas as if they were some kind of horrible evil poison because of this issue which is unresolved of carbon dioxide.

So we are sitting here on the verge of something that will ultimately shut down our economy. I can tell you from personal experience, because my wife sent me to the grocery store three Sundays ago and one of the things on her list was avocados. And this is in Texas. We're pretty close to Mexico. We're pretty close to California. Two avocados cost a dollar and a quarter. The next week she sent me back to get two more and they were a dollar apiece. So I started watching those things, and holy cow, they have gone up three times since that first purchase of avocados. And you wonder why. Maybe it's weather; maybe it's crop failure. Maybe it's the fact that the cost of energy is going up daily to power the fleet of trucks, to power the diesel-driven trains, to power the automobiles of America. As gas prices go up or diesel prices go up, so do the prices of food. And now the two inflationary prices that we see going forward are food and energy. This is serious stuff.

I'm very pleased to have a fellow Texan join me here today, Blake Farenthold. He's a new Member from down on the Texas gulf coast in a city that grew up with petroleum surrounding it, Corpus Christi, Texas. I'm going to yield to my good friend, Mr. Farenthold, whatever time he needs to talk about his views on energy.

BREAK IN TRANSCRIPT

I thank the gentleman.

And reclaiming my time, as an expansion of what you just said, let's talk about some of the things that the Democrats in this House and the President have talked about as the solution to the high price of gasoline. And that is they're going to cut the tax breaks for the oil producers, and they named Chevron, Exxon, BP--what they call the majors. They're going to cut those tax breaks. Therefore, they're going to make sure that those billion dollars worth of profit are not going to be there because they're going to reduce these tax breaks they have given, which they say are billions of dollars.

Well, let's just stop and look at what these tax breaks are about. All the oil and gas produced offshore in other countries is not subject to American taxation, and that's where the majors now produce somewhere between 80 and 90 percent of all their production. In fact, those drilling inside the continental United States, almost all those people drilling shallow water offshore and a few of those people drilling deepwater offshore, none of those people are majors. They're all from, as you were talking about, the entrepreneurial spirit of the wildcatter and the small producer who is going out in an attempt to expand domestic production. By the way, they're the only ones that take advantage of any tax breaks that are there, and they're not billion dollar companies that we use as examples.

So the cuts, the way I understand it, are not even going to affect ExxonMobil or affect Chevron or these big producers from overseas because those tax breaks don't pertain to that production. They only pertain to production in the United States. And those are done by independents. Almost the vast majority are done by independents.

So the only people that get hurt again by the tax policies of the Barack Obama administration are the small business men. Just like everything we see coming down the pike at us seems to be targeted at the small, independent entrepreneur who is trying to make it go.

So don't be misled to think that the majors, where we see all these massive amounts of money they're making, are the targets that are really going to be hit by the shot that our colleagues on the Democrat side of the aisle have proposed that we should take in getting rid of, as they call them, subsidies, which are really tax breaks, to the producers of domestic production.

By the way, all production offshore, they've shut it down. Just recently, Shell Oil Company, after dumping a couple of billion dollars in an offshore operation off the coast of Alaska, pulled out completely because, before they could even get started, after dumping a couple of billion dollars, with a ``b,'' into that production field out there, the EPA came in with more and more stops and stop orders and other things, and they finally threw up their hands and said, We're going someplace else. We're not drilling in American waters anymore. It's not worth it.

So right now where we know we have production for oil and gas, we have an administration that is fighting that production tooth and nail. This has cost jobs in the industry, as we pointed out. This has made our dependence on foreign oil bigger.

Here's the skyrocketing price of the Obama administration since he's been in office. Here is another chart that shows you the offshore field production of crude oil, thousands of barrels per day. And look at this. This is where that production was: 250,000 barrels up to 400,000 barrels; down again, and I guess that was in 1999 during the Clinton administration that it went down;
and back up in the Bush administration. The end of the Bush administration, down to 100,000 barrels of offshore production today. From 400,000 to 100,000 since the Obama administration.

Nobody can argue that the Obama administration is anything but violently opposed to the oil and gas industry. And they are doing everything they can to throw big roadblocks in front of production.

Then you wonder why the speculators are saying the price of a barrel of oil is going up. Because they're speculating. Do you know how many millions of gallons of aviation fuel a company like American Airlines or United

Airlines or Continental Airlines, any of these major airlines, burn every week? Do you know what they have to do in order to stay ahead of increasing prices on fuel? They have to speculate on futures on the cost of fuel. And I'm not blaming the airlines. There are plenty of other people that are speculating because they say, Let's see, what's going on in the world? We're finishing up a war in Iraq, which is one of the major producers, but it's been out of the market for years and is barely getting back in. We're sitting here with a moratorium on all the offshore domestic production. We're not opening up any Federal lands for production anywhere in this country. The Obama administration has shut down the leasing practices on any public lands.

By the way, Texas is the only State in the Union that didn't turn their public lands over to the Federal Government. But the rest of the country, in areas like Idaho, Utah, we know there's production up there, up in Wyoming, up in Montana--all that stuff that the Canadians are now producing across the border, the fields on our side of the border are being curtailed by the administration. They just don't want to produce oil. They just want to buy it from foreign sources.

And about these foreign sources, the people who study the market say, My gosh, Libya is not available anymore; Iraq's not available, and what happens if we've got no production at home?


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