Stop Excessive Energy Speculation Act of 2008 - Motion to Proceed - Continued
Floor Speech
STOP EXCESSIVE ENERGY SPECULATION ACT OF 2008--MOTION TO PROCEED--Continued -- (Senate - July 23, 2008)
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Mr. SANDERS. Mr. President, let me begin by suggesting that a number of my Republican friends who come to the floor speak under the mantra: Drill, drill, drill; it is going to solve all our problems. Well, you know what. The American people, the people in Vermont are disgusted, angry, and frustrated that they are paying $4.10 for a gallon of gas. The people in my State--the Northern part of this country--are worried sick about how they are going to be able to heat their homes next winter when the price of home heating fuel may well be double what it was just a few years ago. Well, you know what. Drill, drill, drill is not going to solve the problem because President Bush's own Energy Department has told us very clearly that increased drilling offshore--what many of my Republican friends want--would have ``no significant impact'' on gas prices until the year 2030. Even then, its impact would be negligible.
So if you are outraged about paying $4.10 for a gallon of gas, it is of no help at all for our Republican friends to say: Well, gee, maybe in 20-some-odd years we may be able to lower the cost of gas by a few cents a gallon. We must do a lot better than that. We have some folks who think we should drill for oil in the Arctic National Wildlife Refuge. Well, President Bush's own Energy Department told us in 2005:
Drilling in the Arctic National Wildlife Refuge would only reduce gasoline prices by a penny per gallon and only in 20 years when drilling is at or near peak production.
So if we are serious about addressing the energy crisis this country has, and we don't want to wait another 20 or 25 years to lower gas prices by a few cents a gallon, we have to start looking at some other options. The first option we have to look at is taking a hard look at the excessive speculation which is now taking place in the energy market.
We have heard experts, energy economists, come before one committee or another to tell us, in fact, that the price of a barrel of oil today may be 25 to 50 percent higher than it should be under normal processes--supply and demand and the cost of production--because of excessive speculation. So we have to move aggressively on the speculation issue.
Second, because I know ExxonMobil feels that the public doesn't trust them, it is nice to see so many of my Republican friends who have such confidence in the oil industry, and who believe that if we allow the oil companies to drill offshore in areas where there has been a drilling moratorium, to ignore the fact that there are over 60 million acres of land they already have leases on, and people believe if a oil company is given more land to drill, then prices will go down. I am glad to see some people have confidence in the oil companies. I personally do not.
While oil prices have been soaring, it is important to point out that, year after year, oil companies have been making record-breaking profits. Year after year, they have been paying their CEOs huge and excessive compensation packages. Year after year, instead of investing in new machinery to, in fact, drill for more oil, they have been using their profits to buy back stock and raise the price of the stock.
Last year alone, ExxonMobil used $38 billion of their windfall profits to buy back their own stock in increased dividends to their shareholders. Mr. President, $38 billion is enough money to reduce gas prices at the pump by 27 cents a gallon for an entire year. But it is interesting to know that some of our Republican friends have so much confidence that if we gave our friends in the oil companies even more territory to drill on, in environmentally sensitive areas, they will absolutely do the right thing, that the oil companies are staying up nights--ExxonMobil and the others--worrying about the American consumer. If you believe that, I have a couple of bridges to sell you.
I think we have to take a hard look at the continued greed of the oil companies. It would be a nice thing if we had a President of the United States who wasn't, in fact, an oilman. It would be a good thing if we had a Vice President who wasn't part of the oil industry. It would be nice if we had a President of the United States who would bring the oil industry into the Oval Office and say, gentlemen--and they are gentlemen--stop ripping off the American people. You have to start lowering your prices.
Thirdly, when we deal with the myriad of problems we have in terms of energy, we have to be mindful not only of the greed of the oil companies, not only of Wall Street speculation, but we have to understand that right now--right now--this summer and this winter there are millions of Americans who need and will need immediate help to deal with the coming winter, as to whether they are going to be heating their homes, whether they are going to be going cold, and in fact we have to worry about people now in the southern States who are seeing temperatures of 110, 115 degrees, who cannot afford the rapidly increasing price of electricity, and are seeing their electricity turned off.
If you are old and you are sick and frail, do you know what. That 115 degree temperature is not particularly healthy for you. What we need to do--and I hope we can get the bill on the floor immediately--is substantially increase funding for LIHEAP. We have legislation that would double LIHEAP funding. I am proud to say this bill has tripartisan support. We already have 49 cosponsors, including 12 Republicans. I have little doubt that if we can get that bill on the floor, if the Republicans do not continue to object to Senator Reid's effort to bring it up, we can get not only 60 votes but maybe a lot more. There is companion legislation in the House. We can move this quickly, while we continue the debate on energy policy, and we should come together. We have the votes to significantly expand LIHEAP funding and make sure that old people who are trying to exist in 115 degree temperatures in the Southwest do not get sick from heat exhaustion because they don't have electricity, which is a problem that LIHEAP could address.
Of course, as part of this overall debate, it is very clear to many of us that we must, finally, in a significant way, a dramatic way, in a way that Vice President Gore was talking about a few days ago, break our dependency on fossil fuel, on foreign oil, and move this country to sustainable energy and energy efficiency.
That is an outline of where we want to go. I think some of my Republican friends are talking about very insignificant lowering of prices in 20 years or 25 years. I think we have to pass the speculation bill that is on the floor right now.
It is interesting to me that we have had executives of major oil companies who have come here to Congress--and people are saying, ``Why is oil $125, $130, $140 a barrel?'' Do you know what they say? The CEO of Royal Dutch Shell testified before Congress:
The oil fundamentals are no problem. They are the same as they were when oil was selling for $60 a barrel.
That was the CEO of Royal Dutch Shell. My friends say it is supply and demand. That is not what a number of executives from the oil industry, who presumably know something about the issue, are saying.
The CEO of Marathon Oil recently said:
$100 [this is back when it was $100 oil] isn't justified by the physical demand in the market.
The senior vice president of ExxonMobil, Stephen Simon, told the House Energy and Commerce Committee:
The price of oil should be at $50 to $55 per barrel.
So you have folks from the oil industry, who, I suspect, know something about oil fundamentals, who are telling us that the price of oil today is way, way, way higher than it should be. One of the reasons they point to is the role of speculation. By ``speculation,'' we mean that as a result of an action by Senator Gramm back in 2000, with the so-called Enron loophole, energy trading has been deregulated. We have seen the results in a number of areas. Some people say: You guys are talking about speculation; you are into conspiracy theories. You are pointing out the bad guys there, and you are trying to create demons.
Let's look at recent history. Is the idea of speculation in energy markets a new idea? Well, in 2000 and 2001, our friends at Enron successfully manipulated the electricity markets, and the results, of course, were that in the western part of our country, electric rates went off the wall. I remind you that during that discussion you may remember that what Enron was saying was: Don't blame us; this is supply and demand. Well, some of those people who were telling us that, I suspect, are in jail now, because as everybody knows, Enron manipulated prices big time until they were finally uncovered. Enron collapsed, and some of their executives, I believe, are now in jail. That was manipulation of the electricity markets in 2000 and 2001.
That is not all that has happened in the last decade. In 2004, energy price manipulators moved to the propane market. Many people use propane to heat their homes. That year, the CFTC, Commodity Futures Trading Commission, found that BP artificially increased propane prices by purchasing enormous quantities of propane and withholding the fuel to drive prices higher. In other words, they manipulated the propane market and prices went up. By the end of February of 2004, BP controlled almost 90 percent of all propane delivered on a pipeline that stretches from Texas to Pennsylvania and New York. BP's cornering of the propane market caused prices to increase by 40 percent during the month of February 2004, which eventually caused them, because of their illegal manipulation of the propane market, to pay a $303 million fine.
So, again, when we are talking about speculation, and people say you are into conspiracy theories, etc, etc, etc--we have, in 2000 and 2001, Enron manipulating the electric market; and, in 2004, we have BP manipulating the propane market.
But it goes on. In 2006, energy price manipulators moved to the natural gas market. When Federal regulators discovered that the Amaranth hedge fund was responsible for artificially driving up natural gas prices--natural gas. So we had electricity, propane, and now we are on natural gas. Amaranth cornered the natural gas market by controlling as much as 75 percent of all of the natural gas futures contracts in a single month. The skyrocketing cost of natural gas, because of Amaranth's control of the market, cost American consumers an estimated $9 billion. Shortly after Amaranth was suspected of manipulating natural gas prices, the hedge fund collapsed.
Today, there are many who believe that what happened in electricity, what happened in propane, and what happened in natural gas is now happening in oil. I think we should not be shocked by that, given the recent history I have mentioned. I think we have to move very aggressively in dealing with speculation.
Let me take this opportunity to say a few words about the LIHEAP legislation. The bill we introduced would increase LIHEAP funding by going from $2.5 billion to over $5 billion. Basically, it is a doubling of funding. That, in fact, is the amount that has already been authorized. We should be very clear. In terms of the need to increase LIHEAP funding, we are literally dealing with a life-and-death situation. People will die. People will die of exposure to cold. People will die of heat exhaustion if we do not move, and if we do not move quickly.
It is important to understand, because CNN cameras do not go there--they do not go to an old person's house in Tucson, AZ, who is struggling with 110 and 115 degree temperatures without electricity. They don't go to a low or moderate income home in Vermont and Maine when people are trying to stay warm, when the temperature gets 20 below zero. The truth is that more people have died from the extreme heat and hypothermia since 1998 than all natural disasters in this country combined, including floods, fires, hurricanes and tornadoes. I know we all see and appreciate the pain people in the Midwest are experiencing today with the floods. We appreciate and want to respond to the crisis in California with the fires. But the fact is that more people die from exposure to cold and to heat than from these natural disasters, as terrible as they are.
To give you an example--this is hard to believe, and many people don't know this--over the past decade, more than 400 people have died of heat exposure in Arizona. That is one State. That is 400 people in the last decade, including 31 people in July of 2005. All of these deaths could have been prevented if these people had had air conditioning.
What I worry about is that electricity prices are going up because fuel prices are going up. Our economy is tanking, and we are seeing a record number of disconnects. So I ask people to be concerned about what happens when it gets 20 below zero in Vermont and in Maine. I also ask people to be concerned about what happens when people get disconnected from their electricity in Arizona, Nevada, Texas, and other States.
Let me simply conclude that, clearly, we are in the midst of a major energy crisis. There are a number of aspects to that crisis and they have to be addressed. I hope that, as a Congress, while we debate those issues, we come together, as I think we are, in saying that no one in this country this year should die of heat exposure, no one in this country should die through being frozen to death when the temperature gets very low in the northern part of our country.
I thank, again, the 49 cosponsors of this legislation. It is tripartisan. Both Independents are on it. We have 12 Republicans on it. The rest are Democrats. I thank them all. I thank Senator Reid for trying his best to try to get that bill to the floor as soon as possible. The AARP and dozens of other national organizations know how important it is that we pass an increase in LIHEAP funding and do it as soon as possible.
I yield the floor.
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