June 11, 2008
Statement

Floor Statement Supporting the Consumer-First Energy Act of 2008

Mr. REED. I thank the Chair.

Madam President, we have heard a number of interesting opinions on the reasons and potential solutions to the energy crisis in which we currently find ourselves. Unfortunately, yesterday many of my colleagues on the other side of the aisle blocked our ability to have a meaningful debate about the proactive steps we should be taking to address the issues that are contributing to skyrocketing prices Americans are paying at the pump.

All around the country, high gas prices are contributing to already shaky economic times for the American people. In my home State of Rhode Island, gas prices have increased by over 140 percent since 2001. Currently, Rhode Islanders are paying $4.09 a gallon for regular unleaded gasoline and $4.93 a gallon for diesel. Households in Rhode Island are paying $2,000 more per year for gasoline than they paid in 2001. That is $2,000 more than they were paying in 2001.

For the State economy, this means that families, businesses, and farmers in Rhode Island will spend $835 million more on gasoline this year than was spent in 2001 if prices remain at current levels. But these prices seem to be constantly accelerating. Rhode Island residents, farmers, and businesses are on track to pay over $1.44 billion for gasoline this year. That is an extraordinary drain on the economy of my State and on States throughout the Nation.

It is well known that our current energy crisis is due in part to the marriage of two uncontrollable circumstances: a fast-growing worldwide demand for oil and increasingly limited oil supplies. The Renewable Fuels, Consumer Protection, and Energy Efficiency Act, which was signed into law in December of last year, made important improvements to our national energy policy, and I am confident the provisions in that law will help to decrease our long-term dependence on oil and thus lessen our future vulnerability to its availability. However, there is also a number of controllable variables that are contributing to the volatility of energy markets that we must address immediately to ensure the high prices Americans are paying at the pump are not going into the wallets of speculators and oil companies looking to exploit these difficult times.

The Consumer-First Energy Act would take action by incorporating proactive measures to protect against excessive speculation, keep the hedge funds and oil companies honest, and require investments by oil companies toward the development of our Nation's renewable energy infrastructure or face a windfall profits tax.

Experts now estimate that well over 25 percent of the cost of a barrel of oil can be attributed to excessive speculation by the financial traders of energy commodities. Yet yesterday we failed to move forward on a bill that would clamp down on excessive speculation by preventing traders from routing their transactions through offshore markets in order to evade speculation limits and subject energy traders to stronger reporting requirements.

Many of my colleagues on the other side of the aisle say we must open up more land to drilling to solve the current crisis, increase the supply, and lower the demand. The fact of the matter is over recent years we have already opened up significant areas of the land and the Continental Shelf to oil companies and given them tax incentives to subsidize and encourage their exploration and drilling activities.

Over that same span of time, oil companies have reported bigger profits--almost $600 billion. Yet we still find ourselves in a precarious energy situation today. Moreover, the Minerals Management Service has reported that of all the oil and gas reserves believed to exist on the Outer Continental Shelf, 82 percent of the natural gas and 79 percent of the oil are located in areas that are already open to leasing. Onshore, 72 percent of oil and 84 percent of natural gas resources are either accessible already or are pending review.

We also hear very little about the nearly 91 million acres of land currently open to leasing in the Alaskan arctic area outside of ANWR, of which only 11.8 million acres have actually been leased.

The idea that we need to make more areas available to drilling to increase domestic production is not substantiated by the facts. We have broad swaths of land and Continental Shelf that are available for exploration and drilling. They are not being used. Until we have thoroughly reviewed and sited projects there, the idea that we have to open up ANWR is only a subterfuge, an excuse for inaction.

Indeed, in the last 4 years, the Bureau of Land Management has issued 28,776 permits to drill on public land. However, during that time, only 18,954 wells were actually drilled. Thus, oil companies are currently holding onto 10,000 unused permits which could just as easily help to increase domestic production as the lands that are currently protected under law. Clearly, the problem is not that there is a lack of places to drill.

Thus, drilling our way to energy independence is not the answer. Neither is increasing the importation of foreign oil and natural gas. The answer is investing in energy efficiency and renewable energy programs that currently save us more energy each year than the amount we consume from any single energy source, including oil, natural gas , coal, and nuclear power. These investments offer short-term and long-term solutions to strengthen our national security by reducing our energy consumption and making us less reliant on oil from unstable regions of the world. Moreover, they enhance our economic competitiveness by creating American jobs in this new green economy, and they protect our environment by reducing our carbon footprint.

There are actions the Congress can and should be taking, which were laid out in the Consumer-First Energy Act, that could ease the pinch people are feeling at the pump. My colleagues on the other side of the aisle also refused yesterday to debate a package of energy and tax extenders that would also go a long way to help investing in new renewable energy sources and the jobs these new sources would create.

Other economic indicators are equally discouraging, in addition to those concerning the energy sector. There are particular concerns in our economy today about inflation, slow growth in gross domestic product, significantly higher consumer borrowing, a rising Consumer Price Index for food, and other indications of difficult economic times.

But perhaps the most growing statistic and worrisome statistic across the country is unemployment. New monthly job numbers were released last Friday, and they were far worse than economists had predicted. The unemployment rate jumped to 5.5 percent from 5 percent in only 1 month.

In Rhode Island, 6.1 percent are jobless right now--unchanged over the past 2 months. This is the fourth highest unemployment in the United States, behind only the States of Michigan, Alaska, and California. It marks the highest unemployment rate in Rhode Island since August 1995--more than 12 years ago. The number of unemployed Rhode Islanders has risen to approximately 35,000, and it has been trending upward.

The Providence Journal reported today that about 41 percent of Rhode Island's unemployed in January, February, and March have exhausted their benefits. This is the highest of any New England State.

As we all know, the Senate and the House are currently reconciling an emergency appropriations bill. I was especially pleased the Senate version provided domestic spending for LIHEAP and unemployment insurance--two critical issues we are facing today: accelerating energy prices and exploding unemployment numbers. This domestic funding is critical to boosting our economy and helping those who are most in need.

Indeed, many economists have pointed to an extension of unemployment benefits as a quicker way to stimulate the economy than the rebate checks that were being passed out and are being passed out today. An extension of UI benefits provides a very high return on the investment, generating approximately $1.64 in gross domestic product per dollar spent. This is especially helpful at a time when people are saving less, making them ill-prepared to cope with a long-term economic slump.

In Rhode Island, it is estimated that the number of jobless who could immediately benefit from an extension of unemployment benefits ranges from 6,500 to 8,000 or more. Under the Senate-passed provisions, Rhode Island would not only qualify for an additional 13-week extension, but given our consistent 6.1 percent unemployment rate, we would trigger extended benefits of another 13 weeks. This means Rhode Island could receive up to 26 additional weeks of assistance to help amid these difficult times. That is why I will continue to press also for an extension of unemployment benefits.

We had the opportunity yesterday to move forward on progressive, proactive energy legislation, and it was stymied by my colleagues on the other side. We cannot let that happen. And we cannot also let the unemployed go without extended benefits.

Madam President, I yield the floor.

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