Domestic Oil Production

Floor Speech

Mr. INHOFE. Mr. President, I appreciate the majority leader making this arrangement. I was wanting to get a little more time than that. However, let me just mention two bills that I plan one to reintroduce, another to introduce, which I think are timely tonight because of something that is going to happen tomorrow.

Tomorrow I am going to reintroduce a bill making it clear that States are sole regulators of the hydraulic fracturing process, and there is a reason for bringing this up in the next bill.

I am pleased to be joined by Senators VITTER, PORTMAN, ROBERTS, ENZI, SESSIONS, COBURN, CRAPO, RISCH, SCOTT, CRUZ, HATCH, JOHNSON, and LEE.

Since 2008, domestic oil production has increased by 40 percent. This has never happened before. That is just in the last 4 years. Because of the new applications for such processes as horizontal drilling and hydraulic fracturing, we have been able to do this. But the most interesting thing is that with a 40-percent increase, 100 percent of that has been in State or in private land.

That is critical, because we keep hearing from this administration that they somehow want to take credit for the fact that we have had an increase in that period of time, when the fact is that has all been done on private land or on State land. None of it has been done on Federal land.

In fact, the Congressional Research Service came out earlier this year:

All of the increase from FY2007 to FY2012 took place on non-federal lands, and the federal share of total U.S. crude oil production fell by about seven percentage points.

That means that while we increased 40 percent, that which was on Federal land decreased by 7 percent. It just goes to show the real consequences of the administration's all-out war on fossil fuels. The President has made it so difficult for anyone to lease Federal land or obtain drilling permits that many producers have simply stopped working on Federal lands altogether. For those who remain, the process is dysfunctional and unfriendly.

For instance, it takes an average of 207 days to get a drilling permit on Federal lands. By contrast, in my State of Oklahoma it only takes 10 hours, and 83 percent of the Federal lands are off-limits.

I think we need to understand all the benefits that could be out there are in spite of this administration and the policies of this administration. We shouldn't be fooled. The President may claim he likes natural gas, but he is actually taking every step he can to impose more burdensome regulations on industries so he can shut them down in favor of his beloved renewables. This war against hydraulic fracturing is part of that effort.

I can remember when we had something that took place a few months ago called date night. A lot of the Democrats, on national TV at a joint session of the legislature, didn't like the idea when something came up that was not popular with the people at home and happened to be popular with Democrats, so they had date night, so individuals would be scattered out and they wouldn't have all the Republicans on one side and all the Democrats on one side.

I thought it was kind of interesting because, I won't mention her name, but one of my very good friends who happens to be a liberal Democrat, when the President stood up and made the statement, he said:

Now there is an abundance of good, clean, natural gas that we can have for the future.

I nudged her and I said:

Are you listening to this?

And she said back to me:

Wait a minute, you are going to hear something else.

He came out, and this is what he said right after that:

[we will be] requiring all companies that drill for gas on public lands to disclose the chemicals they use. Because America will develop this resource without putting the health and safety of our citizens at risk.

Which are other words for: However, we are not going to be doing hydraulic fracturing. This is kind of interesting because we cannot have natural gas production without having hydraulic fracturing.

In response to this charge by the President, the Department of the Interior recently proposed new regulations that would apply to any hydraulic fracturing that occurs on Federal lands. These new regulations cover everything from chemical disclosure to water use and cement bonding requirements. They add a massive new layer of regulatory compliance to any operator looking to develop reserves on Federal lands at a cost of as much as $250,000 per well. It costs that much more with no environmental benefits.

You might ask: Why no environmental benefits? It is because Lisa Jackson, who is Barack Obama's Director of EPA, stated on the record:

In no case have we made a definitive determination that the fracking process has caused chemicals to enter ground water.

In other words, in the last 60 years--and I can attest to the last 60 years because the first hydraulic fracturing took place in Duncan, OK, in my State, in 1949. Since then, over 1 million wells have been fracked without any ground water contamination.

So why would the President want to take the authority away from the States if they have such an excellent track record? It is because of his war on fossil fuels.

To combat this I am introducing the Fracturing Regulations Are Effective in State Hands Act.

The bill I am talking about simply makes it clear that States are the sole regulators of hydraulic fracturing, as they have been for the last 60 years. It includes Federal lands located within the borders of a State, so my bill would render the President's new regulations moot and ineffective and keep States in the driver's seat, effectively regulating the process.

I urge my colleagues to support this. This is something that would be a major effort. If you stop and think about the people talking about the bad economy and all that, you just go to the oil States and see what has happened. We could be enjoying this prosperity all throughout the country. We used to think of the oil and gas production as being primarily in the western part of the United States.

However, that is not the case anymore. The Marcellus shale--talking about Pennsylvania, New York, and other States--could have great benefits by opening that area. To do that we want to continue the State regulation of hydraulic fracturing as it has been in the past.

I have another bill I am going to be introducing, and I think it is important. It closely relates to this and the speech the President is going to make tomorrow.

First of all, the 10th Amendment to the Constitution says:

The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

That is something we all know. We learned this many years ago when we were in school. Today the Framers would be shocked to know the government's annual budget is near $4 trillion a year, with consistent $1 trillion deficits under the Obama administration.

They would also be astonished to know that the Federal Government is involving itself in nearly every facet of American life, ranging from the absurd, such as protecting the small burrowing beetle in eastern Oklahoma, to the offensive, such as mandating that private companies provide contraceptives to employees despite objections of conscience.

I was reading a book written by a friend of mine, who is deceased now, Bill Bright. His book has a daily message. The one for today, which happens to be day 175, the 24th of June, is kind of interesting. It was written by Malcolm Muggeridge. He went back and talked about what we are--keep in mind this is 40 years ago. He talked about putting the frogs in cold water and then slowly heating it up, and of course they end up dying in the water. However, if you put them in, and it happened all at once, they would not notice. I think that is what he is talking about. Yet he said this is not happening today, but it could happen. If he were around today, I wonder what he would say. This is not the way it was supposed to be. The 10th Amendment was supposed to be robust.

James Madison, in Federalist 39, wrote:

In this relation then the proposed Government cannot be deemed a national one; since its jurisdiction extends to certain enumerated objects only, and leaves to the several States a residuary and inviolable sovereignty over all other objects.

He continues to say:

The powers delegated by the proposed Constitution to the federal government, are few and defined. Those which are to remain in the State governments are numerous and infinite. The former will be exercised principally on external objects, as war, peace, negotiation, and foreign commerce ..... The powers reserved to the several States will extend to all the objects which, in the ordinary course of affairs, concern the lives, liberties, and properties of the people, and the internal order, improvement, and prosperity of the State.

We talk about the Constitution a lot. Yet people seem to forget the very important parts of the Constitution. Given this, it should come as no surprise that for the first 100 years of our history, as States were added to the Union, the Federal Government sold off vast quantities of its land. If the Federal Government were to be limited, then why would they need to own a lot of land? In fact, we can see in this chart the Federal revenues from the land sales were a significant component in the total revenues until just before the Civil War, and then it dropped off.

Today the Federal Government owns over 600 million acres of land, and this chart shows how much of the country it actually is. It is astonishing. If we look at this chart, it shows most of it being in the western part of the United States, but it is all over the country.

This land is endowed with substantial natural resources. As we can see in this chart, a substantial amount of oil and gas is located in the tight shale formations on these Federal lands. These are Federal lands, and it shows the great potential out there which has recently proven to be highly productive because of the advances in technologies such as hydraulic fracturing and horizontal drilling.

As a result of these discoveries, oil and natural gas production has boomed across the country. In the last 5 years, oil production has increased by over 7 million barrels a day, which is 40 percent higher. As I said when presenting the bill right before this one, all of that was done in the private sector and in the State. While that increased by 40 percent, the Federal lands decreased by 7 percent. As the Congressional Research Service confirmed in the last report, it said all the increase in U.S. production from 2007 to 2012 took place on non-Federal lands.

President Obama is the reason this land is locked up. He has made it impossible for new oil and gas production to occur on Federal lands, and in addition to working to shut down development in areas such as western Oklahoma by proposing to list the lesser prairie chicken as an endangered species, he made the process of drilling on Federal land so difficult that it takes 300 days to get a drilling permit from the Federal Government while it only takes 10 hours to get one from Oklahoma. Further, 83 percent of the land is off limits to oil and gas production.

Today we are within striking distance of achieving energy independence. Due to this, we must be able to get to the resources on Federal lands because they are enormous. For instance, ANWR in Alaska holds 16 billion barrels of oil equivalent. The Rocky Mountain West holds 1.8 trillion barrels of oil equivalent. If we expanded oil and gas production to its potential in all Federal areas, the impact would be astounding.

The Institute for Energy Research recently issued a report based on the most recent government data about these off-limits lands and showed that if we enacted policies that allowed aggressive development of these Federal lands, the process would generate $14.4 trillion in economic activity, create 2.5 million jobs, and reduce the deficit by $2.7 trillion.

Had we stuck to the principles of our Founders as articulated in the Federalist Papers and ratified in the 10th Amendment, we would not be having this conversation because the States would already be in control. So what we are trying to do is make sure the States can go back and control and do something that has been successful. What we need to do is get back to the basics, which I am introducing in the Federal Land Freedom Act today. I want to thank Senator Vitter, and all the other Senators who are cosponsors of the previous bills are also cosponsors of this bill.

This bill would reestablish the principles of Federalism when it comes to the energy policy of our Federal lands. The bill gives States the right to develop all forms of energy resources, including renewables, located on Federal lands located within their borders. To get the authority, all a State would need to do is figure out how it would release, permit, and regulate energy activities on its Federal lands.

Upon a State's declaration to the Federal Government that this program has been created, the energy development rights would automatically transfer to the State. The Federal Government would retain ownership of the land and its resources. The royalty share would remain unchanged. It would be a split, 50-50, between the State and the Federal Government as enumerated in the Minerals Leasing Act.

The Energy Information Administration on Friday said the United States could become a net oil exporter by 2040.

This bill could make it happen much faster than that. There is a guy named Harold Hamm, the CEO of Continental Resources, arguably one of the most successful operators--maybe the most successful--in the country. I called him up because people in the administration keep saying if we are able to drill on public lands, it would take 10 years before this would reach the economy. They are talking about the high price of heating a home or cooling a home or the price of gasoline.

So I said I am going to go on a national show, and they are going to ask me the question of about 10 years, because I know that is not true. So I told Mr. Hamm that I would like to quote him as an authority, and so he should be honest with his answer because I am going to use his name on national TV. If we had everything set and we are going to go ahead and start drilling now, how long would it take the first barrel of oil out of the ground to reach the market? Without hesitating he said 70 days. Then he went through and explained each step in the process from drilling to hydraulic fracturing to transportation and all of this. He said it would take 70 days.

That was just a few months ago, and no one has challenged this since then. Energy independence today--this is a reality we could be living in, and it would dramatically improve our economy.

Unemployment continues to hover around 8 percent nationwide, but in States such as Oklahoma and North Dakota we are at full employment. Why? Because of energy development. With greater development of Federal energy resources, we would see a dramatic improvement in our economy, and there is simply no reason not to do it. The States have clearly demonstrated they are capable of handling oil and gas development processes and regulations. They have been doing it for 100 years on State and private lands. Why shouldn't they be able to do it on Federal lands as well? I think the 10th Amendment trusts the States and the Senate should do the same.

I bring this up now because tomorrow there is going to be a speech. President Obama is going to give a speech on--I would say global warming, but they don't call it that anymore since the globe isn't warming. It is a climate speech on the unilateral first steps to regulating greenhouse gases under the Clean Air Act--now we are talking about powerplants--new and existing plants; energy efficiency of appliances. He will be talking about that. He will talk about renewable energy production on Federal lands, but he will not be talking about the cost of these regulations.

We all remember what he has already done. Utility MACT set new limits on mercury, coal, and oil-fired powerplants at a $100 billion cost and 1.65 million jobs lost. MACT means maximum achievable control technology. What this administration has been trying to do is mandate emissions that are below the technology to get there. Boiler MACT set strict new limits on emissions of hazardous air pollutants from industrial and commercial boilers costing $63.3 billion and 800,000 jobs.

The same thing is going on now with what he is not talking about but what he is planning on doing. Ozone, for example. He is going to be promoting--from the information we have now, it would put 2,800 counties out of attainment, including every county in my State of Oklahoma. It could result in 7 million jobs and hundreds of billions in costs, and it could shut down oil and gas production in western Oklahoma.

Greenhouse gas for refineries, first ever greenhouse gas limits on refineries; second largest emitter after powerplants. What we are talking about is, he is going to be able to go through and continue in his effort, in his war on fossil fuels, and he is going to attempt to do it through the regulations. Let's keep in mind, he tried--they have been trying, I should say, since 12 years ago with the Kyoto treaty to regulate through legislation, all the way up to the most recent bill which was the bill that was defeated last year--the Waxman-Markey bill--and that would have regulated emitters of those who emit 25,000 tons or more.

Now, that was bad. That would have cost about $400 billion a year. However, if he is successful--he being the President--in doing this through regulations what he couldn't do through legislation, it would be under the Clean Air Act, and it wouldn't be regulating those who emit 25,000 tons or more. It would be 250 tons or more. It would affect every school, every hospital, every apartment building.

I would like to have people aware of that as the President makes his speech tomorrow. I know he has an obligation. I know that prior to the last election he would not come out with these regulations because he knew that would be damaging to his reelection efforts. However, now he has that commitment to the far-left community who would like to shut down the U.S. and the energy that keeps it running.

So let's be attentive to what he says tomorrow, and I will be anxious to respond to his speech at that time. In the meantime, we do know for a fact that we have the ability to be totally independent from any other country or anyone else in providing our own energy to run this machine called America.

I thank the Presiding Officer, and I yield the floor.

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