GULF OF MEXICO SECURITY ACT OF 2006--Continued -- (Senate - August 01, 2006)
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Mr. GRASSLEY. Mr. President, I strongly support S. 3711, the Gulf of Mexico Energy Security Act. I would like to thank Senator Domenici, chairman of the Energy Committee, for his hard work in making this compromise possible. This legislation is a much needed step to increase the domestic production of natural gas and crude oil.
In recent years, the cost for natural gas has risen from the moderate, stable level of $3 per thousand cubic feet to $6, and even exceeded $10 last fall. Current prices are three times the average during the 1990s.
In just the past few days, natural gas prices have risen by nearly 15 percent. Why? Because the current heat wave crossing the country is putting a strain on our Nation's electrical grid--an electrical grid that is increasingly dependent on electricity generated from natural gas.
And, while the demand for natural gas has increased, we have done little as a nation to ensure that there is access to the domestic supply to meet the growing demand. For too many years, our country has had a ``natural gas and nothing else'' policy.
The Energy Policy Act, which we enacted a year ago, took significant steps to diversify our energy production and increase energy efficiency. The Energy bill included provisions to expand the use of clean coal and advanced nuclear technologies. It also included provisions to expand the use of renewable and alternative energy and energy conservation. All of these provisions will help in the long term to balance and diversify our energy portfolio.
However, we need to take action today to increase the supply of domestically produced energy. The fact is, consumers in the United States are paying some of the highest natural gas costs in the world. This puts our farmers, manufacturers, and industrial users of natural gas at a competitive disadvantage.
Few things are as important to the livelihood and well-being of Iowa's economy than natural gas. Although the State of Iowa is considered a national leader in the agricultural industry, our manufacturing industry actually contributes five to six times more to Iowa's economy than agriculture. Manufacturers have been particularly hard hit by the increase in prices because they consume over one-third of our country's natural gas. I have heard from manufacturers across Iowa who have urged Congress to act to increase the supply of affordable natural gas.
Farming is also an extremely energy-intensive industry. Farmers and ranchers need large amounts of natural gas for drying crops, heating buildings, producing ethanol, and most importantly, as the feedstock of chemicals and fertilizers.
The vast majority of the cost of nitrogen fertilizers is natural gas. Numerous domestic manufacturers of ammonia and nitrogen fertilizer have closed in recent years due to higher costs. As a result, prices for their products have increased. Ammonia for fall application this year will cost a farmer nearly $400 a ton. This is double what it was just a few years ago.
This legislation will also help my constituents with their home heating and electricity bills. A significant portion of Iowa households use natural gas for their home heating. Even while the past few winters have been relatively mild, home heating bills have doubled and tripled for some families. And, while I have been an ardent supporter of the Low Income Home Energy Assistance Program that helps the less fortunate pay for home heating, we must also recognize that the high prices are a result of the tight energy supply. One way to ensure that consumers aren't forced to choose between heating their home and putting food on the table is to lower the price for natural gas.
That is why I am eager to see this bill pass. The compromise bill before us will open up 8.3 million acres on the Outer Continental Shelf for oil and gas leasing. It requires that leasing begin as soon as practicable but no later than 1 year after the date of enactment. This area is estimated to hold 5.8 trillion cubic feet of natural gas and 1.26 billion barrels of oil. This legislation will take a significant step to enhance our county's domestic energy supply.
This bill is a proactive response to the rising cost of energy and our growing dependence on foreign sources of crude oil. It is a bipartisan agreement that has the support of the Gulf State Senators, and it deserves our full support. I encourage my colleagues to vote in support of this bill which will increase our energy supplies and help stabilize prices for our consumers, farmers, and manufacturers.