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Floor Statement: Energy, Financial Relief Package

Energy, Financial Relief Package - Wednesday, September 24, 2008 View video | Can't view the video?

Mr. President, I was pleased to see a report that the Continuing Resolution that will keep the United States government running while Congress adjourns during the election period and beyond, that the Continuing Resolution proposed by the Democratic leadership and the House will actually eliminate a moratorium or a ban on drilling and exploration in the Outer Continental Shelf, which is, of course, the submerged Federal lands off our coastline, which are reported to have, by all of the experts, huge volumes of oil and gas. This actually represents a tremendous development in the United States Congress for a long, long time now. We've been saying we need to develop more of America's natural resources, American energy here at home, so we would be less dependent on imported oil and gas from the Middle East. Until this point those pleadings, those requests had fallen, it seemed like, on deaf ears. But I want to congratulate the Democratic leadership in the House. This could go down as a bipartisan success that we should be proud of.

But I just want to remind our colleagues that this is only part of the equation. We've said that we need to find more American energy so we would be less dependent on imported oil from the Middle East. And where might we find that? Well, it's been documented that deep-sea exploration in the Outer Continental Shelf, the submerged lands on our coastlines, could produce as much as 14.3 billion barrels of oil. That's a lot. The Western oil shale, which I'm unclear whether the Continuing Resolution will deal with or not, but which currently has a ban on exploration and development of the Western oil shale is projected to have the equivalent of 800 billion barrels of oil. That is even more than the Outer Continental Shelf. Then, of course, is the Arctic coastal plain, which is estimated to have 10.4 billion barrels of oil for a total estimate of 824.7 billion barrels of oil right here in the good old USA.

Now, this would eliminate all oil imports once it got online and was being produced, it could eliminate the need for oil imports for more than 198 years, it's estimated. These are fantastic numbers and time periods. I know it's hard for us to conceive of, but even if these numbers are not exactly right, what it demonstrates is that we have a lot of great oil and gas reserves right here in America, and all of the money that T. Boone Pickens, through his advertising campaign to raise the visibility of this issue, all of the money which he has documented, which we are sending overseas to buy oil and gas, that we could actually reduce that dramatically by producing more here at home.

And we've said, of course, it is only part of the equation. While we need to find more, we also need to use less. Yesterday we also did really the third leg of the stool, we voted to extend the various tax credits and subsidies that would encourage the development of alternative sources of energy. In my state of Texas we're known as an energy state. I bet most people would be surprised to know that in addition to oil and gas, we are the number one electricity producer in the nation from wind energy. Obviously those alternative sources of energy are very important.

But I want to caution my colleagues, Mr. President, to the fact that no matter how much we act to eliminate the moratorium on the ban on offshore exploration, we still haven't done enough to open up the Western oil shale. We still haven't done anything at all to open up exploration and production in the Arctic coastal plain. And I know while this 847 billion figure seems like a lot what it would produce, it's estimated, once online is about 3 million additional barrels of oil a day, reducing our dependence tremendously.

But just as the President's elimination of the executive ban on offshore exploration is a hopeful sign, this elimination of the Federal moratorium on exploration production in the Outer Continental Shelf is likewise a hopeful sign. It's a necessary, but not a sufficient answer to our problem. And that's because significant oil and gas reserves that exist here in America where producers and leaseholders already have a right to explore and produce that oil and gas, and where they've invested more than $2 billion into these projects, because of lawsuits, opponents have blocked the drilling in a way that unfortunately is going to take years and years and years to resolve.

There are many examples of litigation thwarting drilling projects on existing leases. Now, the area I'm talking about specifically is that the Federal government has leased land and approved drilling in the Beaufort Sea off the coast of Alaska's National Wildlife Refuge. Too often long-term planning and heavy investments of human and financial resources necessary to develop and produce these reserves are frustrated and future investment discouraged when projects that have been extensively reviewed for their environmental impact and approved by the responsible Federal agencies are shut down and effectively thwarted by frivolous litigation. It is undisputed that oil and gas can be extracted from below the surface in a cleaner and more environmentally sensitive way than ever before.

This is something that is really vividly demonstrated by the fact that if you land or take off from an airplane at DFW Airport in the Metroplex in Texas, you can actually land at the DFW Airport and you will see a number of drilling rigs on the DFW Airport property. What they're drilling into there is something called the Barnett Shale, a prolific producer of natural gas right there in a highly populated area and it is being done in an environmentally responsible way, in a way that is safe to the human occupants of that area. In a way, that because of modern drilling technology, you can use a single wellbore, and basically go in all directions by thousands of feet, and produce a lot more natural gas in this case than you could have using old drilling technology. So just like when it comes to coming up with better sources of alternative energy, technology has produced a more efficient, more environmentally responsible way of drilling for oil and gas right here in the United States.

But to get back to my point, even if we lift this ban, all of these bans, unless we do something about the limitless litigation that prevents drilling from ever starting, we might as well have done nothing at all, because this effectively shuts down drilling and production of American energy as much as any moratorium could. And unless we reform this litigation system, any repeal of the drilling ban does really nothing to help consumers at the pump.

So I would urge my colleagues to work with me and all of us who are interested in trying to find a solution to this tremendous dependency on foreign oil. Lifting the moratorium is an important step, and I congratulate the Democratic leadership coming together with Republicans who have been calling for this for many, many, many months now. But no one should be fooled. And this would be the most cynical thing of all, if Congress pretended to actually be solving the problem when we know that this frivolous litigation effectively bans development of America's natural resources. This would be the most cynical move of all, if we did nothing about that second part, about the frivolous litigation. Because already I think the people across America look at Congress as appearing to do things, perhaps superficially appearing to be responsive to their concerns but in the end roadblocks continue to exist which impede, if not block, any realistic reform or progress on the particular subject.

And, so this is something that I hope we will not give up on. I think today, if in fact we do pass a Continuing Resolution that eliminates the moratorium on all Outer Continental Shelf exploration development, it will be a great day. It is a necessary, again, a necessary but insufficient way of addressing the ultimate dependency on imported oil. And we know that high energy prices affect our economy. As a matter of fact, even though prices have dipped some, the fact is that today, according to USA Today, the average price of gasoline is $3.72 a gallon in America. It had gone as high as $4.11 a gallon and has come down a little bit. But it's hard to remember just a year ago a gallon of gasoline sold for an average of $2.80 a gallon. In other words, it's up about 90 cents, 92 cents a gallon over a year ago, even though it has come down a little bit.

And the underlying problem that is putting so much pressure on gasoline and oil prices is, of course, the law of supply and demand and the fact that growing economies like India and China are using more and more energy, which means we are competing globally for the same oil, which, of course, unless we produce more, the law of supply and demand tells us that the price will continue to go up. So we shouldn't be fooled into thinking that we've either solved the problem by eliminating only the moratorium on the Outer Continental Shelf when there's more that remains to be done with the Western oil shale and the Arctic coastal plain. We shouldn't fool ourselves into thinking even if we were to lift those moratoria, that unless we address this frivolous litigation that has a way of bogging down this development in areas already leased and where lease holders and producers have already invested billions of dollars, unless we do something about that.

So I hope that we will return, if not this week, my hope would be we could do this at the same time. There are a number of proposals. Congressman Shadegg over in the House of Representatives has done good work in this area. Senator Ted Stevens from Alaska has got some very good and interesting proposals. I've heard Senator Kit Bond of Missouri talking about ideas he has. I've got a proposal we've been working on that we think will address the delays in this frivolous litigation while preserving to those who are genuinely harmed the right to recover compensation if in fact there is damage as a result of some misconduct on the part of the individuals who are producing or exploring for energy here in America.

So, so far, so good. I think we ought to acknowledge the progress that's being made after all of these months. But we're not there yet. And I hope we'll see continued cooperation as we actually help to bring down the price at the pump and reduce America's dependency on imported oil in a way that endangers our national security and threatens our economy at a time when our economy is quite fragile indeed.

I also want to just say a few words about the principles that guide my consideration and my vote on the proposal made by the Administration, by the Secretary of Treasury, Henry Paulson, and Ben Bernanke, the Chairman of the Federal Reserve Board. I have to tell you that I am extremely upset that we find ourselves in this terrible situation. And I can tell you that the phone calls I've been getting from my constituents are overwhelmingly angry at how we could possibly find ourselves in this situation.

First of all, I think there has been a perception that, listening to Treasury Secretary Hank Paulson, is actually not true, that this is somehow a bailout for Wall Street. In other words, the people who have profited mightily from the enormous sums of money that have been made recently on Wall Street, but in the end they're going to get off scot-free and the taxpayer is going to end up holding the tab. That is completely unacceptable. First and foremost, I think we need to ask ourselves how we can protect the American taxpayers. The vast majority of Americans played no part in the collapse of some of the largest financial institutions in America, and they shouldn't be forced to pay the price for the irresponsible and risky conduct of those that were at fault.

Secondly, we need to make sure that this American economy remains stable and that small businesses, which are the lifeblood and the job creators in our economy, have the ability to grow and to create new jobs. I think in the end economic growth is the key. What can we do to keep this great economy growing and producing jobs? I believe that responsible tax relief helps small businesses grow and helps create jobs. Now how would I know that? All I would have to do is look back to the tax relief that we passed in 2003, which cut the dividends in capital gains rate and which gave rise to a net increase and about 7 million jobs in America. That was what life was like before we hit the subprime mortgage crisis and high energy prices. But we ought to look to what works, and we shouldn't use this as an excuse to grow the size of government and increase the size of the tax burden on hard-working American families and small businesses, because that will make things worse, not better.

Third, we need to ask ourselves if this proposal does enough to safeguard transparency and accountability. And, frankly, I think a lot of work needs to be done here. I think the very fact that Moodys and other entities which actually grade the investment value of many of these mortgage-backed securities projects completely miss the target and fail to predict the precipitous drop in value of these subprime mortgages and the securities that are backed by these mortgages as evidenced that this is simply an opaque and nontransparent system and that not even the people that should know were able to evaluate what the true value of these mortgage-backed securities are. So I think we need to have certainly more transparency in this process, and we need to make sure that those who are responsible are held accountable.

Now, I would say that I'm very pleased to hear in today's news that the Federal Bureau of Investigation has decided to investigate, among other, the actions of Freddie Mac and Fannie Mae to determine whether fraud or corruption on the part of key players were the cause or contributed to the cause of our current financial turmoil. After the collapse of Freddie and Fannie, I sent a letter to the Attorney General of the United States, Michael Mukasey, and asked for a full investigation because in 2006, the very titans of industry who reaped millions of dollars in financial gain ended up with a slap on the wrist and no criminal penalty for cooking the books in order to generate larger bonuses and financial returns for themselves. That's completely unacceptable.

We need to make sure that those who are responsible for precipitating this financial crisis are held accountable. And if that means that they're guilty of crimes, that they should go to prison and pay the price as an example to others who would take advantage of the American taxpayer and would be motivated by the kind of greed that lets them forget their responsibilities not only to their shareholders but to the American people themselves. So I'm pleased that the Attorney General is taking an aggressive posture here and the Federal Bureau of Investigation is going to be conducting a thorough investigation. And I say let the chips fall where they may. I don't care who it is. I hope that they will pursue that to the fullest extent of the law.

So, Mr. President, I appreciate the opportunity to come and address these very important topics, and I hope as the days go by that Congress can work together in a bipartisan manner to try to find a way to address these problems. But certainly the initial proposal by the Secretary of Treasury is unacceptable on a number of bases. But he has my commitment, as do my colleagues. I'll do my best to work with them to try to protect the American taxpayer.