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Gulf of Mexico Energy Security Act of 2006

Location: Washington, DC

GULF OF MEXICO ENERGY SECURITY ACT OF 2006 -- (Senate - July 27, 2006)


Mr. PRYOR. Mr. President, I rise today in support of S. 3711. I found the comments of our colleague from Tennessee, the distinguished junior Senator from Tennessee, very interesting. Basically, he and I are on the same page on this issue; that is, I hope S. 3711 is part of a larger, smarter energy policy for this Nation.

There are really two sides of this equation, and then there are some complications in between. Basically, the two sides are supply and demand.

We have not done a lot on the supply side in the last few years, so I think it is important for us to look at drilling as an option. Certainly lease area 181 makes a lot of sense. We have infrastructure there. Generally speaking, we know how much oil and natural gas is in lease area 181. It is not a big stretch for people in those industries to get out there and find that oil and gas and get it to the marketplace. So traditional drilling in that sense makes a lot of sense, in my mind.

Also, I hope the Senate will continue to work on legislation to encourage alternative fuels, such as biofuels--I know the President in his State of the Union Address mentioned cellulosic fuel, and that is important--ethanol, agriculture products, animal waste, et cetera. That is just smart energy policy, and it creates a supply of energy. And that is very important.

On the other hand, we need to look at demand and we need to look at conservation. Certainly, this country can do much more with regard to conservation, with some industries and some aspect of our economy, and also efficiency. We need to become more efficient and smarter and use technology to try to get smarter on our energy usage.

I certainly concur with what the Senator from Tennessee talked about, supply and demand. We know under the current conditions gas prices will not go down by themselves. We are going to have to do some things in this country to help the oil markets get where the American public want them to be.

Also, S. 3711 on offshore drilling makes a lot of sense because it is narrowly focused and narrowly tailored. It is the right policy at the right time. Maybe one of the more controversial parts of this bill is revenue sharing. I am from an interior State. Under the circumstances as presented today, I don't have any objection to revenue sharing. I know Arkansas will not benefit as much as the States on the coast, but that is OK. We know the devastation the hurricanes caused in that region of the country, and we understand that one of our 50 States--Louisiana, in particular--has been dramatically impacted and maybe forever altered by Hurricane Katrina. Certainly Alabama and Mississippi have had their share of hardship.

When we look at New Orleans and look at that coastal area of Louisiana, we understand they are in dire straits. We understand this is a unique time in history, and we need to get the resources to the gulf coast to help right now rebuild the gulf coast but also help with future storms.

The other point I like about S. 3711 is that it recognizes that the cost of energy ripples throughout all of our economy. A few moments ago, we heard someone mention that with regard to farmers and fertilizer, about 90 percent of the cost of fertilizer is the cost of natural gas. If we look at the plastic that is in this pen, some of that cost is in the petroleum and natural gas that is required to make this product. All that eventually, ultimately, gets passed on through the economy. So when we see very high natural gas prices and very high oil prices, we know it is inflationary and we know the damage those high prices can do to our Nation's economy.

Arkansans--and I think all Americans--feel squeezed right now. If a family used heat in the wintertime, if they cooked with natural gas, they paid an average of $920 in natural gas last year. That is a lot of money. That is an increase of $178 just over the winter months I am talking about. That is a lot of money. Those are real dollars to people in my State and I know people around the country.

The price of natural gas, which supplies a quarter of the energy used by Americans, has more than doubled in the past year, and demand is going to continue to rise. Demand will rise about 40 percent over the next 20 years. This is significant. This dynamic is something which we as policymakers need to be aware of and we need to work with that reality.

About a quarter of all natural gas is used to produce electricity. The rest is to manufacture plastics, cars, computers, medical equipment, and all sorts of products, even bottled water. Those bottles are made with natural gas.

This week, the price of natural gas was $6.15 per million Btu. We think about that and we may not have anything to compare it to, but let me tell you, Mr. President, in countries that we compete with for jobs, that we compete with for manufacturing, places such as Russia, natural gas is $1.25 per million Btu's. It is $6.15 here to $1.25 there. Look at the comparisons around the world. For whatever reason, we are paying more for natural gas, and it is putting the U.S. economy at a disadvantage.

We see transportation costs have doubled. We know how important trucking and other transportation is in this country. That is overall in the economy. But when we look at transportation costs for a family, the average household with children will spend about $3,815 on fuel this year. That is a lot of money. There again, that is going to increase by about 100 percent as compared to 5 or 6 years ago. The people in my State and the people around the country certainly are feeling the squeeze. If you book an airline ticket today, it is probably going to be 11 percent higher, and a big piece of that is the cost of jet fuel.

One of the last couple of points I wish to mention about this legislation is that it is a compromise. It is a compromise in maybe the best sense of the word. We have a lot of competing interests, a lot of good ideas that have come into this discussion. Many of those ideas were included either in whole or in part in this legislation.

This bill will open 8.3 million acres in the Gulf of Mexico, and it lifts production bans in lease area 181. Again, I think that is the right policy at the right time. At the same time, it bans drilling within 125 miles, and that is good until 2022. Again, I think that makes sense. Congress is trying to be very sensitive to various States' needs, trying to respect those needs and those desires. We are attempting to do that, and I think we are accomplishing that in this bill.

Back to natural gas, lease area 181 in this bill will add about 5.83 trillion cubic feet, and that is a lot of natural gas. Right now, we use about 23 trillion cubic feet a year. So this is a significant help over time. It will take a couple, 3 years before that actually hits the market, but it will help. Also, it will produce about 1.26 billion barrels of oil.

The last point I would make is that this is a narrowly tailored bill. But there is one person who I think has shown complete tenacity in trying to get us to where we are today, where we will be Monday, and that is Senator Landrieu of Louisiana. She has been amazing. Of course, her State has been forever altered by Hurricane Katrina. Certainly, we join her in saying we
want Louisiana to come back stronger than ever. New Orleans is one of the great American cities, it is one of the cultural centers of this country, and we want it to come back stronger than ever.

Sometimes we forget how important that New Orleans area is to the entire country. It is one of the largest ports in the United States, and the fact that it is sitting right at the mouth of the Mississippi is critically important to the entire midsection of the country. If you live west of the Appalachians or east of the Rockies, you are impacted by what happens in New Orleans because that whole system, that entire Mississippi River basin or watershed, all the rainwater, all the floods--everything--eventually goes down the Mississippi. If the Mississippi is not functioning correctly down near New Orleans, it has a very adverse impact on flood control, on agriculture, on industry, on hydroelectric power, and on any number of things up and down this entire watershed, which is the largest watershed in North America.

I thank Senator Landrieu for her tenacity, for the example she set for all of us in fighting for her State and fighting for her country in a time when we need her leadership. She has shown that time and time again. I bet every Member of this body at some point or another has spoken with Senator Mary Landrieu about how important it is to rebuild the gulf coast area and Louisiana specifically. She has done a fantastic job. Even if I disagreed with this policy, which I don't, out of respect for her and the great work she has done, I would support her legislation because I know how important it is to her.

The bottom line is, Louisiana is one of the 50 States. It is a sister State. We came to the aid of New York after 9/11, and we should have. We have come to the aid of many States in specific regions after disasters and catastrophe, and we should. That is part of being one Nation, one people, E pluribus unum. It is time for us to come to the aid of Louisiana. It is a long-term proposition. Louisiana does not have an easy solution where we throw a few dollars at it and it is done. There are major infrastructure investments we have to make there. We also have to make them along the rest of the coastline in Mississippi and Alabama.

So I think this is an important first step. As I said, I hope that S. 3711 is part of a larger and smarter U.S. energy policy. I hope next year we will come back and revisit some of these very good ideas the Senators have talked about this week and in the previous months when we have been looking at this lease area 181 bill, because there are a lot of good ideas out there. I know Senator Warner and I have one that would open the entire OCS, and it is something we would love to have included here, but we understand we may have to wait until another time. But there are a lot of good ideas out there, and I think it is time for us to think long term and think about energy policy that makes sense for everybody.


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