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Floor Statement: Gas Prices & National Energy Policy, Part II

Gas Prices & National Energy Policy, Part II - Wednesday, June 11, 2008 View video | Can't view the video?

Mr. President, I rise to talk about the squeeze on the family budget that's being imposed by a combination of circumstances that, frankly, cry out for some relief. This is how long it takes the average American family to work each year to pay their taxes. 74 days each year to pay their Federal taxes. Then you add state and local taxes on top of that. And as you can see, that's a good part of the year, about a third of the year that people have to work just to pay their taxes before they can begin to pay any of the rest of their bills. And then 60 days out of the year to pay for their housing. 50 days out of the year to pay for their health insurance. 35 days out of the year for their food. And 29 for transportation. Now, this is a -- this chart was prepared from a special report by the Tax Foundation dated April 2008, having to do with Tax Freedom Day. That was the date that they designate when you don't have to pay Uncle Sam or state and local taxes anymore. You're actually working for yourself. That's what we call Tax Freedom Day.

But I dare say that this chart would have to be updated when it comes to the costs of food and the costs of transportation. And that's what I'd like to concentrate on for my remaining few minutes here. Those related to the rising costs of energy, I mentioned on this floor before being at the Houston Food Bank two days ago, where I learned that the cost of food is being dramatically increased as a result of the cost of energy that it costs to produce it for our farmers. And, of course, that's being passed along to consumers, making it harder and harder on the most vulnerable among us, particularly seniors, people on fixed incomes to pay for their food costs. And then, of course, you add on top of that the rising cost of gasoline and fuel, and it presents a real human crisis in many instances.

Well, many folks have said, well, there's not much we can do about it, the cost of gasoline. They said that when gasoline was at $2.33 a gallon. Actual, Speaker Pelosi, before she became Speaker of the House, said that if elected Speaker, the Democrats would present a commonsense plan to bring down the price of gasoline at the pump. That was when -- that was the good old days, Mr. President, and when gasoline was $2.33 a gallon. Now it's $4.05 a gallon, and we are still waiting, I would say with baited breath, but we're waiting for that commonsense solution which has yet to come. But in the absence of a commonsense solution being offered by Speaker Pelosi, we have offered a solution that deals with the simple fact that when you have increasing worldwide demand for the same commodity, that one of the ways that you can bring down the price is to increase supply.

And when you talk about the ways that we can increase supply of gasoline, well, you necessarily have to talk about increasing the supply of oil. Then you get into the issue of how much of the oil that we depend upon to make into gasoline in our refineries is imported. Well, that figure now is about 60% of all of the oil that we consume and the various petroleum-related products are produced abroad and shipped into the United States. But we are in an ironic situation, Mr. President, where our dependency on imported oil is a consequence of our own failed policies here in the United States Congress. Because since 1982, Congress has imposed a moratorium on the development of America's natural resources right here at home whether they be on the western lands -- the oil shale, the outer contenintal shelf, surrounding our country or places like the Arctic National Wildlife Refuge and Congress placed those out of bounds, and we're the only country in the world that has placed our own natural resources out of bound and refused to develop those while we've increased our dependence on imported energy from dangerous enemies of the United States, countries like Iran, countries like Venezuela, who professes to be our enemy in South America.

You know, it's ironic the fact that years ago the United States and Cuba agreed to draw an imaginary line between our two countries and said Cuba had control of the submerged lands on the other side that of the line leading up to Cuba. United States had control of the 45 miles or so that represented American territory. But, Mr. President, you know who is developing the oil and gas that's right off -- 50 miles off of our southern shore of Florida? Well, Cuba has production agreements with Brazil, Venezuela, Spain, China, Vietnam, India, Malaysia, Canada, and Norway. That's right. While we refuse, as a result of a Federal moratorium on development on the outercontinental shelf, we refuse to allow Americans to produce American energy, the Chinese and others are developing -- are drilling and producing oil 50 miles off of our shore in the area owned by Cuba.

It's ironic, indeed, that we would prohibit Americans from producing American energy on American land so that we could remain increasingly dependent on foreign oil, and I think it's a terrible mistake. And Congress, looking around for the scapegoat as who's caused these high prices, I think, I would suggest, needs to look in the mirror. And we need to reassess and correct that mistake by making this natural resource available for production.

Now, Mr. President, some have come up with what I consider to be a misguided solutions that do nothing to produce additional supply of oil and gas. As a matter of fact, they try something we tried back in the 1980's, for example. That is, to raise taxes on oil producers here in America. And we found out in the 1980's, according to Congressional research service, that it ac actually reduced domestic oil production by 6%. Some may ask, well, how is that possible? Well, the fact of the matter is that 80% of the world's oil reserves are owned by national oil companies of foreign governments. Let me say that again. 80% of the oil reserves in the world are owned by oil companies that are owned by foreign governments. And only 6% -- 6% of the world's oil reserves -- are owned by stockholder-owned companies. In other words, the private sector, the Exxon-Mobils, the Conco-Phillips, the Chevrons, and the like. 6% of those privately owned or stockholder-owned companies - 80% are owned by countries like Saudi Arabia, Iran, Iraq, Kuwait, and others, just to name a few.

So the irony of ironies again, is to not only let us develop our own natural resources but actually to tax the privately owned or shareholder-owned companies that control 6% of the world's resources while not touching the 80% owned by foreign countries because, of course, we can't impose a tax on their production here in America. We can only impose a tax on our own companies here in the United States. And when we did that before, we decreased domestic production and we should have learned from that mistake, but, sadly, as a philosopher once said, those who refuse to learn from history are condemned to repeat it. And this is almost like Groundhog Day here in the United States Senate, where we continue to encounter the same failed solutions -- I should say non-solutions -- to the same problems and refuse to look at the most obvious of solutions staring us in the face, and that is to open up more of America's natural resources.

Now, earlier on the floor, the distinguished Democratic whip, Senator Durbin, talked about emergency situations and talked about price caps in an emergency and said, we're in an emergency declaring that Congress should dictate price controls on gas. But I would suggest to the distinguished Senator that if we have an emergency situation -- and I'd agree, we have something that profoundly affects our national security and our economic security and has a dramatic impact on food prices and on the average American family; we do have an emergency -- that we ought to reassess our decision to block exploration and production in the Arctic National Wildlife Refuge, in the outer continental shelf, in the shale oil in the western Federal lands and elsewhere, which by some estimates could produce as many as 3 million additional barrels of oil each day.

Now, that's not a panacea, but it's a lot of help in the near-term as we develop those natural resources. Of course that means that we depend that much less on imported oil. It creates jobs here in America at a time when our economy is softening, and unemployment rates are going up. And it it would help us be less dependent on some of the folks who wish us harm in this world. And, to me, it constitutes the kind of emergency that Senator Durbin was talking about earlier -- if you won't do it when gasoline is $2.33 a gallon, will do you it when gasoline is $4.05 a gallon, like it is today? Well, if you won't do it when gasoline is $4.05 a gallon, will do you it when it's $5 a gallon or $8 a gallon or how about $10 a gallon? At some point there has to be a tipping point at which the United States Congress -- and especially the United States Senate -- will wake up and look in the mirror and said, you know what? We need to reassess this. We need to take action on behalf of the hard-working American family to make sure that they don't continue to find themselves pinched not only by a rising tax burden, cost of housing, cost of health care, but rising food costs and rising transportation costs.

I have to say, I was shocked when I saw an interview recently of Senator Obama, our colleague from Illinois. He was interviewed by CNBC's John Harwood, who asked him the question, "so these high prices -- could these high prices help us?" And Senator Obama said, "I think I would have preferred a gradual adjustment." Well, I'm not sure exactly what he means by that. Certainly we haven't had a gradual adjustment. We have had a radical adjustment upward and all we've had, frankly, from our friends on the other side of the aisle is a refusal to open up America's natural resources while they offer what I have to say are misguided non-solutions, which produce no additional energy. Things like raising taxes on oil companies which we know will only be put on America's privately owned companies and can't be placed on national-owned oil companies in places like Venezuela and Iran, but also have the demonstrated experience of decreasing domestic production rather than increasing it. But also when you increase costs, especially increase taxes on the producer, eventually that's going to be passed down to the ultimate consumer. And so what it would do is have the effect of decreasing production, increasing dependence on imported oil, and raising the price of gasoline ultimately for the consumer at a time when we ought to be giving the consumer relief from these high prices, if we can. And I believe we can, by increasing supply.

So, Mr. President, I hope -- I hope our colleagues will reconsider their position because, frankly, I think the only thing standing between lower gasoline prices and the American people are the United States Congress. On our side of the aisle we've offered what we believe to be a commonsense solution that would increase supply, so we can help -- hopefully add to the supply -- with rising demand by countries around the world in a way that would allow us to provide some relief to the American consumer, as we transition ourselves to new alternative sources of energy that are not going to be immediately able to fill that role currently played by oil. So we know we're going to have to continue to depend on oil and gas for the near-term.

But as we transition ourselves into a clean-energy future by increasing the use of nuclear power to generate electricity, as good-old-fashioned American ingenuity creates things like plug-in hybrid cars that or the on batteries that we can charge overnight and drive in many parts of the country in a way that will provide an alternative to internal combustion engines which will also help us deal with environmental concerns as well, as we are on this bridge to a clean energy independence, we need to take advantage of the natural resources that God has given us. This is one of the things that has made our country so prosperous, the vast natural resources we have. But only the United States Congress is so mistaken as to impose a moratorium on the development and production of those natural resources and it's hurting hard-working American families and the American consumer. And we need to do something about it, and I hope we do on a bipartisan basis -- soon.