National Defense Authorization Act for Fiscal Year 2009 - Motion to Proceed
Floor Speech
NATIONAL DEFENSE AUTHORIZATION ACT FOR FISCAL YEAR 2009--MOTION TO PROCEED -- (Senate - July 30, 2008)
BREAK IN TRANSCRIPT
COST OF ENERGY
Mr. SANDERS. Madam President, I suspect if people are watching what is going on here, they do not have any clue or understanding of what is taking place because, in fact, it is fairly incomprehensible. It is pretty hard to understand why bill after bill dealing with issues of enormous consequence for millions of Americans is being filibustered by the Republicans, which means we have to get 60 votes to end the debate, votes which we obviously don't have. From the beginning of the session, there have been 91 filibusters, which is more than anyone has ever seen in the Senate.
The reason the Republicans are filibustering today is because they want to pass the so-called Gas Price Reduction Act. That is the title of their bill. But I would argue that the title of this bill is a complete misnomer. The so-called Gas Price Reduction Act will not lower gas prices today, which stand at about $4 a gallon.
All over this country, people are deeply upset about having to pay these outrageously high gas prices. They are worried about what oil prices will be in the winter. They understand the impact of these oil prices on food and other aspects of our economy.
And the Republican legislation is entitled ``The Gas Price Reduction Act,'' but it is not going to reduce these gas prices which are so high today. That is not my view, that is President Bush's view. That is the view of everybody in the world. That is our Republican friends' view. They are saying, quite appropriately and correctly, that if you drill now, maybe in 10, 15, or 20 years, there will be some impact on prices. Well, maybe there will be and maybe there won't be, but there is no argument that in the midst of a crisis today, what they are proposing will have zero impact on our economy right now.
So whatever the merits or lack of merits--and I am not sympathetic to drilling in environmentally sensitive areas in the Outer Continental Shelf--what we should be clear about is that the Republican proposal will do zero to address the crisis of high energy prices today. And again, that is not just my view. President Bush's own Energy Department has said that increased drilling offshore would have ``no significant impact'' on gas prices until the year 2030, and even then its impact would be negligible. That is what President Bush's own Energy Department is saying.
So perhaps our Republican friends might want to change the title of their bill from ``The Gas Price Reduction Act'' to the ``No Significant Impact on Gas Prices; Maybe By 2030 Act.'' That would at least be a more accurate description of what they are trying to do. Maybe there will be some impact by the year 2030, but let's not fool the American people. The American people are angry, they are frustrated about what is going on today. And we could argue whether the Republican policy is good or not good, but let's not kid anybody, it is not going to have any impact on gas and oil prices now.
For those who think it is okay not to do anything or see any impact until 2030, I guess they could support what the Republicans are doing. But I know what is going on in Vermont; that is, workers can't afford $4 a gallon for gas when they are driving 50 miles to work and 50 miles back, and they surely can't afford the price of oil that is coming down the pike next winter. They do not want action in 20 years, they want action now. And in my view, Madam President, that is what we should be doing.
With the exception of my Republican friends here in Congress, there are very few people in this country who believe the oil companies give one hoot about the well-being of the American people. Our Republican friends are saying that if we just give these huge oil companies more acres offshore to drill for oil, they will certainly do the right thing, as they always have, for the American people. Let's just trust those big oil companies because they are really staying up day after day, night after night, worrying about the well-being of the American people. That is what their full-page ads in the New York Times and all their ads are telling us. Well, it is good to see there are at least some people in America who believe that. I don't, but apparently my Republican colleagues do.
Let me just mention to you, Madam President, just how much concern the oil companies have for the American consumer. While the American people have been paying $4 and more for a gallon of gas, ExxonMobil has made more profits than any operation in the history of the world over the past 2 consecutive years, making $40 billion last year alone. Oil prices are soaring, and ExxonMobil is making recordbreaking profits. But ExxonMobil, of course, is not alone. Chevron, ConocoPhillips, Shell and B.P. have also been making out like bandits. In fact, the five largest oil companies in this country have made over $600 billion in profits since George W. Bush has been President. Yes, they are deeply concerned about the high price of gas and oil. Yes, they really are. It is really upsetting to them. Last year, the major oil companies in the United States made over $155 billion in profits--in just 1 year.
Let me tell you, Madam President, big oil companies are so concerned about Americans paying high prices for gas and oil that this is what they are doing with their profits. You see, our Republican friends would suggest that what the oil companies are trying to do is explore new areas, do new drilling, produce more oil, and lower prices. Well, I don't think so, frankly. I will tell you what they are doing with their huge profits.
In 2005, ExxonMobil gave its CEO, Lee Raymond, a $398 million retirement package--among the richest compensation packages in corporate history. They weren't going out looking for new land to drill on, they weren't building more refineries, and they weren't working on energy efficiency. They gave their CEO a $398 million retirement package.
In 2006, another one of those oil companies that is staying up nights worrying about the American people, Occidental Petroleum, gave its CEO, Ray Irani, over $400 million in total compensation--again, beyond comprehension to ordinary people.
In fact, there were articles recently in the press suggesting that one of the major problems ExxonMobil had is that they had so much cash in hand, they literally did not know how to invest it or how to get rid of it. That was their major problem.
The situation is so absurd and the greed of the oil companies is so outrageous that these companies are not only giving their executives huge compensation packages in their lifetimes, but they have also created a situation, if you can believe it, where these oil companies have carved out huge corporate payments to the heirs of senior executives if they die in office. I guess this is what happens when you have more money than you know what to do with.
In other words, if, according to the Wall Street Journal, the CEO of Occidental Petroleum dies in office, his family will get $115 million. The family of the CEO of Nabors Industries, another oil company, would receive $288 million. So it is not only giving out huge compensation packages; if the CEO dies in office, the family gets a huge package. Madam President, this would be funny if it were not so pathetic in the sense of the impact this type of spending has on the American people.
Not only are huge oil companies using their recordbreaking profits on big compensation benefits for their CEOs, but they are also spending large sums of money buying back their own stock. In other words, when they are making these very large profits, they are not going out drilling for more oil, as our Republican friends are suggesting. Overall, since 2005--3 years ago--the five largest oil companies have made $345 billion in profit and spent over $250 billion of that $345 billion buying back stock and paying larger dividends to their stockholders. That is what they are doing with their money. They are not going out and saying: Gee, how can we do more drilling? Gee, how can we lower the price of oil? They are buying up stock and increasing the benefits to their shareholders.
Last year, ExxonMobil, the largest oil company in our country, spent 850 percent more buying back its own stock than it did on capital expenditures in the United States. And that is a fact.
Let's not kid ourselves. The big oil companies--and I know we are not supposed to talk about this too much in the Senate, but anyone who doesn't believe these oil companies have huge political influence over what goes on here in Washington is surely kidding themselves. Since 1998, the oil and gas industry has spent over $616 million on lobbying. In a 10-year period, they have spent over $616 million in lobbying. Now, what does that mean? It means they hire the best law firms in town, they hire former leading Republicans and Democrats--anybody can come in and work with Members of Congress--to get their way. That is one of the reasons why, among many other reasons, this Congress, in recent years, has decided to give some $18 billion in tax breaks to oil companies despite their recordbreaking profits. Over $616 million in the last 10 years on lobbying, and since 1990 they have made over $213 million in campaign contributions. And that is a simple fact.
Lo and behold, what we are hearing today--just coincidentally, no doubt--is that the most important thing we can do in terms of the energy crisis is to provide more land offshore for the oil companies to drill at a time when they already have some 68 million acres of leased land, which they are not drilling on today.
The American people want action, and there are some things we can do--not in 15 or 20 years but that we can do right now. Not only do we need to impose, in my view, a windfall profits tax on these extremely powerful oil corporations, but we have to address what I perceive is a growing understanding that Wall Street investment banks, such as Goldman Sachs, Morgan Stanley, JPMorgan Chase, and hedge fund managers are driving up the price of oil in the unregulated energy futures market. In other words, they are speculating on energy futures and driving up prices.
There are estimates that 25 to 50 percent of the cost of a barrel of oil is attributable to unregulated speculation on oil futures. I know the Presiding Officer's committee has had hearings on this issue and other committees have had hearings on this issue. We have heard from some leading energy economists, and we have heard from people in the oil industry themselves who tell us that 25 to 50 percent of the cost of a barrel of oil today is not due to supply and demand or the cost of production but is due to manipulation of markets and excessive speculation. In essence, Wall Street firms are making billions as they artificially drive up oil prices by buying, holding, and selling huge amounts of oil on dark unregulated markets.
Some of my Republican friends claim that the increase in the price of oil has nothing to do with speculation, but it is interesting to me that we have had executives of major oil companies--major oil companies--who have come before Congress and who are saying, ``Why is oil $125, $130, and $140 a barrel?'' Do you know what they say? The CEO of Royal Dutch Shell testified before Congress and said:
The oil fundamentals are no problem. They are the same as they were when oil was selling for $60 a barrel.
This is not some radical economist. It is not some leftwinger. This is a guy who is the head of Royal Dutch Shell.
The CEO of Marathon Oil recently said:
$100 oil isn't justified by the physical demand in the market.
I know my Republican friends have a lot of respect for the oil industry, a great competence in them. They love them and give them huge tax breaks. So maybe they should listen to what some of these guys are saying in terms of oil speculation.
Some people have suggested or implied that those of us--including people in the oil industry--who believe speculation is driving up prices are into some kind of conspiracy theory, that we just want to demonize Wall Street or big investment banks such as Goldman Sachs and Morgan Stanley. Well, I would like to briefly read an excerpt from a research paper done by Goldman Sachs US Economic Research dated June 2, 2008. This is what they say, and I find this interesting:
Lawmakers and regulators have begun to respond to these concerns--
Concerns about high oil prices--
but we still think it is unlikely that there will be any significant legislative changes enacted this year. In fact, it is entirely possible that Congress will adjourn for the year without enacting any further legislation focused on commodity speculation.
And then this is the interesting thing they say:
However, the debate itself could break the rise in energy prices for a brief period until there is greater certainty regarding the legislative and regulatory outcome.
In other words, what Goldman Sachs is saying is that even the debate on speculation in the oil industry could have an impact on slowing down oil prices, and it may well be that is the case. We have seen that in the last 2 weeks or so.
Let's talk a little bit about recent history and speculation and market manipulation in terms of the energy market.
In 2000 and 2001, our friends at Enron successfully manipulated the electricity market, and the results, of course, were that in California and on the west coast electric rates went up by 300 percent. It is interesting to remember--and I remember this--what Enron was saying at that time.
They were saying don't blame us, it is a supply and demand issue.
I gather those Enron officials, who may be in jail today, are perhaps still saying that, but we know a little bit differently.
We also know that BP artificially increased prices on the propane gas market. They were fined for that over $300 million. We also know Amaranth, a hedge fund, manipulated prices on the natural gas market. In fact, in 2006, Amaranth cornered the natural gas market by controlling 75 percent of all the natural gas futures contracts in a single month.
In other words, the idea of manipulation and speculation and control of a market is not a new idea. We have seen three instances in the last 8 years, with Enron, BP, and Amaranth doing just that.
Given that reality, why would we think it is so shocking that is taking place right now in terms of oil?
Let me conclude by saying it is imperative that we move now in terms of addressing the energy crisis. People all over this country are hurting. They want us to act, and we must act. To my mind, one of the things we have to do is to move this country aggressively forward in terms of energy efficiency and in terms of sustainable energy.
Our Republican friends talk about wanting to grow more energy, increase energy supplies. Let me inform them the Sun does that, the wind does that, geothermal does that, biomass does that. It is incomprehensible to me that time after time legislation has come before this body--including today--which will simply extend the tax credits that have been given for sustainable energy, and we cannot even do that.
There are huge economic gains, not to mention moving forward in terms of global warming and reducing greenhouse gas emissions if we do that. Yet we cannot even get the votes to do that.
We can move forward in terms of a windfall profits tax. We can move forward in speculation. We can move forward in terms of energy efficiency. We can move forward in terms of encouraging the growth of sustainable energy. Those are the things that we can do now. I believe those are the things the American people want us to do.
I yield the floor.
BREAK IN TRANSCRIPT
Source