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Capitol Comment
by Senator Kay Bailey Hutchison
A Missed Opportunity On Energy
June 22, 2007
High energy costs have a tremendously adverse impact on our economy and our daily lives. Studies have shown that each time oil prices rise by 10 percent, the negative effect on our national economy results in the loss of 150,000 American jobs. In addition, the U.S. Department of Energy estimates that by 2030, the United States will consume 28 percent more oil than we do today. Unfortunately, the U.S. Senate recently missed an opportunity to confront our growing dependence on foreign oil by passing an energy bill which does nothing to ease high gas prices or increase our energy supply.
The high cost of foreign oil is the largest single contributor to the record gasoline prices we are experiencing this summer. Over 60 percent of our petroleum comes from overseas—almost all of it from members of the OPEC cartel or third-world nations ruled by dictators who are hostile to America and collude with state sponsors of terrorism. Common sense says that we must control our own energy supply and not leave it to the whims of foreign despots who seek to harm us.
Thankfully, there is a way out of this trap. America is a land of abundant natural resources and immeasurable ingenuity. We must be willing to tap both these assets to increase energy production within our own borders. The Alaskan National Wildlife Refuge (ANWR), for example, could potentially provide 1 million barrels of oil per day—a 20 percent increase over current domestic production—but short-sighted policies have blocked exploration there for decades. And, even though the Outer Continental Shelf has enough natural gas to heat 100 million homes for 60 years and enough oil to drive 85 million cars for 35 years, the Senate voted down amendments to end a 25-year ban on expanded production there. Some Senators cited environmental concerns, but neglected to mention that ANWR is the size of South Carolina and the area that would be explored is smaller than DFW Airport. In addition, advances in modern technology allow us to explore for the energy we need with very minimal ecological impact.
This bill also failed to address a dangerous lack of refining capacity in the United States. A new refinery has not been built in America in 30 years, but our demand for gasoline and petrochemicals continues to rise. As we painfully experienced in the aftermath of Hurricanes Katrina and Rita, refinery setbacks can inflate energy prices enormously. The notoriously bureaucratic federal licensing process has dissuaded many companies from building new facilities, yet the Senate voted down an amendment I co-sponsored to remove these regulatory roadblocks.
Rather than encourage domestic energy production, some Senators attempted to amend the energy bill with provisions that would have burdened our oil and gas industry with approximately $29 billion in new taxes. The last thing we should be doing is discouraging domestic exploration with tax hikes and overregulation. When Congress passed “windfall profits” taxes such as these in 1980, domestic oil production dropped and oil imports increased by as much as 13 percent. Some of my colleagues are quick to make promises about lowering gas prices by taxing big oil companies. In reality, these taxes would be passed on to consumers in the form of higher prices at the pump. Fortunately, a group of my colleagues and I were able to block this tax hike amendment.
The continued failure by Congress to confront our core energy challenges will hurt America’s families and jeopardize our national security. With our oil imports in the hands of foreign rulers and our domestic industry undercut by misguided policies, it is likely that energy costs will continue to rise. It is time to get serious about energy. Unfortunately, with the passage of this energy bill, the Senate has squandered an opportunity to do so.
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