FREE FLOW OF INFORMATION ACT OF 2007--MOTION TO PROCEED--Resumed -- (Senate - July 29, 2008)
BREAK IN TRANSCRIPT
Mr. CRAIG. First and foremost, let me thank the Senator from Rhode Island for his courtesy. We have been moving back and forth throughout the last number of days of debate. My presence on the floor allowed him to offer the courtesy--and I greatly appreciate it--to speak for 10 minutes ahead of him. He would be entitled to be next. I thank him for that.
Let me speak to what Senator Grassley has spoken to briefly in saying that the ranking Republican on the Finance Committee has spoken very clearly on the critical nature of tax policy to the economy. While that is valid, there is a tax at this moment in time that is being charged every consumer in America who buys gasoline at the gas pump. It is the tax of nonproduction. It is the tax of public policy that has denied our great country its continued ability to produce the necessary supply of energy to the phenomenal economy we have.
As a result of our failure to continue public policy that allowed production over the last 20 years, Americans are paying a higher price, a higher energy tax today at the pump than ever in our history; $4.10, $4.15, $4.20 gas is at this moment the No. 1 issue in America, not only taxing the pocketbooks of the average consumer but taxing the average family in a way that they not only feel less secure today because their energy bill has gone up over 20 percent this year but because we have a Congress stalled out at this moment. We have a Senate that is denying its responsibility to the American people to pass public policy that will allow us to continue to produce and, hopefully, drive down the price of oil.
In the absence of that kind of policy, what has happened in the last 6 months as energy prices have gone through the roof? American consumers have driven 40 billion less miles. They are voting with their feet at this moment and voting to stay away from the gas pump. As they stay away from the gas pump, as they drive less, as they conserve, not only are they changing the economy of our country, they are changing their lifestyles. I don't think they are very happy about it. In fact, those I talk to back home in Idaho are very angry about it. But they are having to do something to avoid the phenomenal tax energy has placed on the American family.
What happened in the last 2 weeks? Oil prices, world oil prices have begun to drop. They are dropping not because of increased supply, not because the Senate has done anything, but because the American consumer has said: We can no longer afford this. They are backing away from the pump and changing their lifestyle. It is truly an issue of supply and demand. Supply hasn't gone up in the last several months but demand is dropping.
Not only is demand dropping in our economy, it is dropping in Western Europe. It is dropping in Spain and Denmark, where there are significant recessions or downturns in the economy underway. In China and India, which have become the new large consumers of oil, our economy's slowdown is going to situate a slowdown in the Chinese economy, which has become a major supplier of goods to the American economy. That is just around the corner.
So are we going to be lulled into a sense of false security if energy prices over the course of the next several months drop below $4 a gallon and into $3 a gallon? Will the American consumer heave a sigh of relief and say: Crisis over?
I hope they don't. Here is why I hope they don't. It is very clear from this graph. This is a graph from 1890 to 2030 about the overall supply of oil in this country. Starting in about 1950, a very interesting pattern emerged that grew rapidly until today, when we buy our oil, 70 percent of it, from some other country; in other words, we don't supply it. We could supply it. We have the oil reserve under the ground. But for political purposes, we have denied ourselves, our market, our producers the right to go there and get it. Here is what has happened. The dependency has grown so that we are now nearly 70 percent dependent on foreign sources of oil. We are less secure today. We get whipsawed in the world market because oil is priced as a world commodity and now, in the last decade, China and India have entered the market in ever greater demand.
What I want to show next is a bit of a complication but it is true in the oil markets of today. Why do I know about it? I have been in Congress 28 years. I have spent a fair amount of time dealing with energy. All during that time, I have argued that if you don't produce, someday something would happen--it is called a breakpoint--that breakpoint would occur, and American consumers would all of a sudden find a phenomenal ramp-up in the price of energy at the pump, that tax I am talking about, that 20 percent hike in the cost of energy that American public policy produced for the American consumer in the last year.
Here is the chart. The dark area is U.S. production from 1970 to 2005. That is what we were producing. I shouldn't say just U.S. production; it was overall world demand production. What is interesting about it, this little green margin at the top was surplus supply. In other words, it was available. The market wasn't demanding it, but if the market demanded it, you could turn on a pump, turn a valve on a well somewhere in Saudi Arabia, probably, or maybe Venezuela, and you had spare capacity in the market. But as you will notice, this green margin, this spare capacity margin in world supply began to rapidly narrow starting in about 2000 through 2005. That is when China and India were entering the market at ever greater capacity because their economies were growing. They were becoming more wealthy, and they were using oil as a part of the energy supply to produce the goods and services they were selling to the world market. During that time, we were not expanding world capacity. So the margin, if you will, the bumper wasn't there anymore. Come 2005, we were nearly at a breakpoint. Beyond that, here is the rest of the story, and we know it today. There is no spare capacity out there. There is no way we can offset increased demand. So consumers in America and all over the world are starting to compete for the substance of oil by higher prices.
That is why for the last 2 weeks we have been on the floor talking about the ability to increase supply against ever-growing demand. But the market forces are at work. That demand has slipped off a little bit. Why? Because of that high tax at the gas pump. That doesn't mean it will go away, not at all. China and India are still consuming at ever-higher rates. They are simply going to grab that which we are not using today in the world market. So when our consumers want to come back to the market, when prices drop a little bit, will there be more oil in the market? There is a strong possibility there may not be, unless this Congress recognizes the error of its ways and allows us to get into the business of production again.
We have put off limits all around the United States vast quantities of oil that I and the world believe we ought to be producing. Guess what the American consumer is saying. In the State of Florida, where maybe a year ago or 2 years ago, 70 percent of Floridians would have said: Don't drill off our shore, I am being told by legitimate polling today that 70-plus percent of them are saying: Drill, produce. In fact, we believe that by the end of the week or early next week, the American people will see credible polling data that says nearly 80 percent of the American people are saying: You go produce that oil. Why are you asking foreign nations to supply it? We have the oil. Why aren't we drilling it?
You hear the argument here on the floor: My goodness, it would take 4, 5, 6 years to bring that oil online. I suggest that it wouldn't take 4 or 5 or 6 years. We know the oil is there, maybe 2 billion barrels of oil and literally hundreds of trillions of cubic feet of gas. Here are the pipelines. Here are refineries. Here is the infrastructure that could take this oil immediately out of what we call the eastern Gulf of Mexico, off the coast of Florida, and bring it into production within 2 to 3 years.
What does the marketplace say? What does that buffer out there, that green line on that other chart say, if, in fact, we were to do that? It would say: My goodness, there is now potentially spare capacity in the market, and prices begin to drop. No, we can't produce our way out of a crisis, but we can lessen the crisis while the American economy and technology are taking us to new forms of energy and to new ways to supply transportation.
I hope the Senate faces the reality that we have to get this country producing again. If we do, we can say to the American consumer: We will lower your tax burden at the gas pump, and we are going to create once again the kind of flexibility the American consumer has in their family budget. You lower the gas price, you lower the tax at the pump. That is the reality of what we are doing. It is a very real tax today. It has frightened the American consumer, and it has put our Nation in a state of insecurity.
I yield the floor.
The PRESIDING OFFICER.