Hello, I'm Senator Jim Inhofe from Oklahoma, and I am proud to be one of the hundreds of lawmakers on all levels of government to sign the Americans for Prosperity "No Climate Tax Pledge." This pledge states clearly that climate change legislation should not be used to fund a dramatic expansion in the size and scope of government. As I add my name to the list, I am also here to call on all those who oppose the largest tax increase in American history to join me in signing the pledge by going online to http://www.noclimatetax.com/.

I have worked tirelessly over the past ten years to expose cap-and-tax for what it really is: the largest tax increase in American history. I began by leading the opposition against Kyoto in 1997 and have successfully led the fight against the cap-and-trade tax in 2003, 2005 and most recently in 2008. Today as American consumers continue to face tough economic times, the last thing Washington should be doing is raising the price of gas at the pumps, energy in our homes, and the cost of food in our grocery stores.

It’s an unfortunate fact of history that some myths have remarkable staying power. In this case, we are referring to the time-honored Acid Rain myth. This is a myth with compelling surface appeal, yet it takes only the slightest reflection to see why it’s false.

The myth goes something like this: cap-and-trade was successful in reducing SO2 and NOx at low cost; cap-and-trade is the method of choice for reducing greenhouse gas emissions; therefore, cap-and-trade will be successful in reducing greenhouse gas emissions at low cost. For several reasons that we’ve stated before, this nifty syllogism is wrong.

There is yet another facet to the myth, as its propagators have recounted over the last several weeks. In an attempt to undercut numerous economic analyses showing cap-and-trade of the greenhouse gas variety destroying jobs and raising energy prices (see, for example, the release yesterday of the Energy Information Administration’s analysis of Waxman-Markey), proponents of energy rationing note with relish the industry’s “doomsday” cost estimates of the Acid Rain program in 1990. As two Senators recently wrote in the Washington Post, “Naysayers said the cost to business [from the Acid Rain program] would be more than $50 billion a year, but health and other benefits outweighed the costs 40 to 1.”

What are we to believe from this? It seems that industry said the program would cost billions more than it actually did; note that these are the same people making the same arguments today about cap-and-trade; therefore, don’t believe them. Case closed. Or so it seems.

Drastic action to stop a potential multi-billion-pound fraud was taken by the UK Treasury on Thursday when it imposed a zero rate of value added tax on carbon credits – the allowances issued as part of a scheme to help curb greenhouse gas emissions.

Losses to the exchequer so far are unlikely to have exceeded a few hundred millions pounds, but the Treasury said in a statement that “there now exists a substantiated and increasing risk of the UK becoming a major target for the fraudsters during the next few months”.

The move is highly unusual because changes to VAT need to be agreed by the European Parliament. The decision to press ahead with the change without prior permission reflects the severity of the threat posed by the fraud. Similar steps have already been taken by France and the Netherlands.

The ease of trading carbon credits means that the fraud, if unchecked, could have been even more costly than similar VAT frauds committed with mobile telephones and computer chips. These cost many billions, but have now been substantially reduced by changes to the VAT system.

(CNSNews.com) - Sen. John Barrasso (R-Wy.) said the cap-and-trade legislation passed by the House of Representatives could be a boon for organized crime in the United States by creating a carbon credit industry that could spawn fraud, money laundering and other criminal activities.

Barrasso spoke Thursday after a hearing by the Senate Environment and Public Works Committee that focused on climate change and national security.

"The hearing this morning was specifically about national security and climate change, and I view a big part of that is what Interpol is saying--187 different countries are involved--and they're saying if you need carbon credits, the place to turn to is organized crime if we put in a cap-and-trade program."

Barrasso asked that a May 30 article by Reuters News Service be entered into the record. The article features an interview with Peter Younger, an environmental crimes specialist with Interpol, the world's largest international police agency.

In the article, Younger refers to the United Nations REDD program--Reducing Emissions from Deforestation and Degradation--that would generate billions of dollars by rewarding countries that conserve forests and allowing them to sell for profit "carbon credits" to developing countries, an idea similar to the cap-and-trade legislation being debated in the U.S. Senate.

"If you are going to trade any commodity on the open market, you are creating a profit- and-loss situation," Younger told Reuters. "There will be fraudulent trading of carbon credits."

"In future (sic), if you are running a factory and you desperately need credits to offset your emissions, there will be someone who can make that happen for you," Younger said. "Absolutely, organized crime will be involved."

I am very happy my colleague is offering this amendment and am pleased to support it.

With the current $1.8 trillion 2009 deficit and out-of-control spending by this President and Democrats in Congress, it is critical that we protect American families and focus more on offsets.

The underlying bill transfers $7 billion from the general fund to the trust fund to repay it for historic emergency spending that should have come out of the general fund.

This amendment takes unobligated stimulus funds and redirects them to the Highway Trust Fund. I support this. However, this amendment ensures that these actions will be fully paid for.

Taking the funds from unobligated stimulus funds is the right way to go.

Stimulus spending is supposed to be fast and generate jobs. If money has not even obligated yet, it is, by definition, not stimulating the economy. Thus, it should be targeted for cuts.

This approach is very similar to an amendment to the stimulus bill Senator Boxer and I crafted that would have tripled infrastructure spending by taking unobligated stimulus money from elsewhere in the bill and redirecting it to ready to go infrastructure projects.

This amendment would take idle stimulus money and redirect it to repaying states for construction projects that are underway now.

I support this amendment and urge my colleagues to do the same.

I am fully supportive of the Bond amendment. The rescission is bad for every state and bad for the highway program. This amendment corrects an accounting provision in SAFETEA that removes $8.7 billion of what was supposed to be unneeded contract authority.

Contract authority is a form of budget authority unique to the highway program that provides States with certainty of federal funding and allows for long range transportation planning.

When we passed SAFETEA there was well over $20 billion in unneeded contract authority, but since then appropriations bills have reduced this to levels that will make the rescission very difficult for most States. In fact, some will not have sufficient excess contract authority to cover their share of the rescission.

This rescission was not intended to have real funding impacts on states, but a provision in the Energy Independence and Security Act of 2007 changed how the rescission was to be implemented. Now states stand to lose about $400 million of real money. This means projects will be canceled and jobs will be lost.

The Oklahoma Secretary of Transportation, Gary Ridley, recently told me my state stands will be forced to cancel $40 million in projects that were supposed to begin this year.

For this reason, this amendment can't be put off. We must pass it now; otherwise States will have to cut planed projects in anticipation of the rescission.

Some are arguing this amendment will somehow endanger the passage of the trust fund rescue. I flatly reject this argument. The other body is still in session and we should never bow to its whims.

In the same week that Senator Inhofe went to the Senate floor to discuss the important role hydraulic fracturing, a new study was released by Penn State University, highlighting employment gains in the Marcellus Shale region of Pennsylvania. The study examines the safe and steady deployment of hydraulic fracturing technology, the technology’s contribution to an economic boom, and describes efforts in Congress to impose new federal regulations as an “ominous proposal.” The Marcellus Shale area is expected to employ 100,000 more people at salaries $20,000 above the average annual salary in Pennsylvania.

The study notes:

“The Marcellus gas industry in Pennsylvania generated $2.3 billion in total value added, more than 29,000 jobs, and $240 million in state and local taxes during 2008. With a substantially higher pace of development during 2009, economic output will top $3.8 billion, state and local tax revenues will be more than $400 million, and total job creation will exceed 48,000.” (Pg 3)

The study also takes aim at anti-fracturing legislation in Congress:

“There is little question that this type of legislation would accomplish little in terms of protecting potable freshwater but would be disastrous in terms of the domestic oil and gas industry, raise prices for gasoline and natural gas, and ultimately derail any efforts to address the need to reduce carbon emissions.” (Pg 38)

Imposing new federal regulations on hydraulic fracturing would be a "disaster," Senator Inhofe warned on the Senate floor in a speech yesterday.

In EPACT 05, Senator Inhofe successfully included a provision to clarify that hydraulic fracturing was not to be regulated by the EPA under the Safe Drinking Water Act. This was in response to a 2004 EPA report which concluded that hydraulic fracturing poses a minimal threat to underground drinking water and that no further study of the issue was warranted.

Today a small number of Congressional Democrats oppose hydraulic fracturing. As Ian Talley of the Dow Jones Newswire reported in June, U.S. lawmakers have introduced legislation that "industry warns could prevent development of trillions of cubic feet of natural gas by putting regulation of a key production technique under federal oversight." Current efforts to target hydraulic fracturing come from legislation introduced by Rep. Diana DeGette, D-Colo., and Rep. Maurice Hinchey, D-N.Y., and in the Senate, by Sen. Bob Casey, D-Pa., and Sen. Charles Schumer, D-N.Y.

Yet the use of hydraulic fracturing has wide bi-partisan support.

In fact, immediately following Senator Inhofe's floor speech, Senator Dorgan (N-ND) said on the Senate Floor, "My colleague was speaking as I came to the chamber and I agree with most all of that which he described with respect to hydraulic fracturing. He's describing something that affects our ability to produce a domestic supply of energy." Sen. Dorgan added, "My colleague has said it correctly: decade after decade, no one has found any evidence that there is any contamination with hydraulic fracturing." (Watch Video)

Further, Rep. Dan Boren (D-OK), pointed out in the Oklahoman, hydraulic fracturing had been used in an estimated 1 million wells and had not posed any problems to drinking water. In fact, approximately 35,000 wells are hydraulically fractured annually in the United States and close to one million wells have been hydraulically fractured in the United States since the technique's inception, with no known harm to groundwater. Concerning a recent push for legislation banning the practice, Boren said the regulation called for in the bill would be "disastrous for the industry," but predicted it wouldn't advance in Congress.

Colorado Governor Bill Ritter recognizes the value of the practice. In the Denver Business Journal, the Governor characterized the bills pending in Congress imposing new federal regulation on hydraulic fracturing as "a new and potentially intrusive regulatory program."

The Grand Junction Sentinel in Colorado recently reported a number of Colorado counties have adopted resolutions against the pending federal bills.

States are passing their own resolutions opposing new federal regulation of hydraulic fracturing. For example in March, the North Dakota legislature passed a concurrent resolution to not subject hydraulic fracturing to needless and new federal regulation. North Dakota is home to the Bakken Shale where oil wells are reported to be producing thousands of barrels a day.

Even officials from the Obama administration are on record. The Wall Street Journal earlier this summer noted, "Under Carol Browner, currently President Barack Obama's energy and climate czar, the EPA in the mid-1990s decided that federal regulation was unnecessary. ‘There is no evidence that the hydraulic fracturing at issue has resulted in any contamination or endangerment of underground sources of drinking water,' Browner wrote in 1995 as head of the EPA in a letter rejecting federal oversight of a potentially precedent-setting case in Alabama."

Senator Inhofe, Ranking Member of the Senate Environment and Public Works Committee, delivered a floor speech yesterday, July 27, 2009, highlighting the nation's vast reserve of energy resources recoverable through hydraulic fracturing techniques and set the record straight on a number of falsehoods concerning hydraulic fracturing regulations.

"Democrats in the House and Senate have introduced legislation imposing new federal regulations on hydraulic fracturing," Senator Inhofe said. "Some of these members claim the allowing the practice is a loophole in federal law and that it is free from regulation. Mr. President, that is completely false. Through my leadership position on the Senate Environment and Public Works Committee, I have a long history of working on environmental and energy issues, and I can tell you new federal regulation of hydraulic fracturing would be a disaster."

Immediately following Senator Inhofe's speech, Senator Dorgan (D-ND) commented: "My colleague was speaking as I came to the chamber and I agree with most all of that which he described with respect to hydraulic fracturing. He's describing something that that affects our ability to produce a domestic supply of energy." Sen. Dorgan added, "My colleague has said it correctly: decade after decade, no one has found any evidence that there is any contamination with hydraulic fracturing."