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Oil Drilling

Floor Speech

Location: Washington, DC

OIL DRILLING -- (Senate - July 15, 2008)


Mr. BIDEN. Will the Senator yield for a question?

Mrs. MURRAY. I will be happy to yield.

Mr. BIDEN. First of all, I agree with everything the Senator just said. But if, in fact, if I am not mistaken, all of the reserves that are estimated to exist off of your shore and ours--in Delaware they want to drill as well--if all the reserves in the entire continental United States, the Gulf of Mexico, the Pacific Ocean, the Atlantic Ocean--if they all exist, and they all meet the expectation of the best, most probable high return, we still only represent 3 percent of the total world oil reserves.

My problem is my Republican colleagues who tout themselves as being big businessmen who understand how the business world works in the market economy, it always amazes me how they fail to remember how cartels work. The cartel called OPEC controls the vast majority of the oil resources. Not one of these wells would come on before 10 years--not one. That is according to our Department of Energy. Not one for 10 years.

When they come on, what makes anybody think that the outfit that controls 60 or 70 percent of the world's oil reserves isn't going to just pump 3 percent less? Does anybody think that OPEC, knowing that we had 3 percent of the world's oil reserves, is going to continue to pump at the rate they are pumping? I promise you they will reduce the amount of oil they pump just like they always did to 3, 4, 5, 7 percent less, guaranteeing that whatever the price was will be sustained.

What I do not understand is, I do not understand our friends, including the President, who was a businessman of sorts--I don't mean that; I am not being a wise guy--who was in the business world prior to this, doesn't understand how cartels work. Is there anywhere in the President's offshore drilling where he has gotten a commitment from OPEC that they will continue to pump at the rate they are pumping now? Are you aware of any such?

Mrs. MURRAY. The Senator from Delaware raises a good point. Of course he hasn't gotten that kind of commitment from the OPEC countries. Of course he has not. They are focused on a profit, as they are doing quite well today.

The Senator is right. If we were to go ahead and use this moment in our history when we have some big decisions to make to just say: Oh, we will drill more, there is absolutely no guarantee that OPEC will not control that supply.

Mr. BIDEN. If the Senator will continue to yield for a moment, the thing I want everybody to understand is, as a guy named Yergin, who chairs the Cambridge Research Group, who advises not all but most of the major world oil companies, explained to me once, he said: You know, oil is like filling your swimming pool. If you put a hose in your swimming pool and you keep filling it and filling it, it takes a long time to raise an inch or two. It has virtually no impact on the total size cubic feet of your swimming pool or the amount of water in it. The second thing is, all the oil that goes into that swimming pool all goes into one big pool. It is all the same price.

If you notice, people pumping oil in Texas are not charging less than people pumping oil in Saudi Arabia. If you notice, people pumping oil in California are not charging less than people pumping oil in Venezuela. If you notice, when the OPEC price goes up ``American'' oilfields benefit.

I am not suggesting the American oilfields are in collusion with OPEC, but guess what. Americans think, if we pump our own oil, we will be independent. It ``ain't'' our own oil.

Mrs. MURRAY. I remind the Senator, if we were to do that, that oil would not come to America where our constituents would be able to use it.

Mr. BIDEN. The oil on the Senator's side of the country would not. One reason I voted against the Alaska pipeline is instead of going through Canada to the United States, it would go to Japan, figuratively speaking.

Mrs. MURRAY. So it goes there today.

Mr. BIDEN. I hope we start talking about basic facts. If everything we think we have under the ground that we control as the United States--on the Continental Shelf, off the Pacific Ocean, in ANWR--everything out there, we have 3 percent of the world's proven oil reserves. It doesn't give you much of a bargaining chip. It would be one thing if you say: You know, every bit of the oil we pump that we control goes to the United States, and we are only going to charge $2 a barrel. Wouldn't that be great? Or $10 or $20 or $30 or $50. But I kind of notice, those guys down in Texas charge us exactly the same price as those guys wearing robes in Saudi Arabia charge us. Isn't that kind of funny? And if you only control 3 percent of the oil reserves and pump it all, all the folks we don't like so much who control 60 or 70 percent of the reserves, they just pump 3 percent less, and the price is the same. We cannot drill our way out of this.

I thank my friend from Washington for pointing this out.

I yield the floor.


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