Hire More Heroes Act of 2015--Continued

Floor Speech

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Ms. MURKOWSKI. Mr. President, we have been discussing the value of having a multiyear transportation bill, a highway bill moving through the Senate. It is something that I, too, would like to see, but as with everything that we do around here, it is important how we do it. When you have a multiyear highway bill, it is important to ask the question, how are we paying for that?

One of the considerations that is in front of this body is to pay for $9 billion of this multiyear highway bill through a selloff of crude oil from our Strategic Petroleum Reserve--SPR.

I have come before this floor several times already during this debate to try to convince colleagues that this is exactly the wrong way to address our transportation priorities by selling off a national energy security priority; basically, an insurance policy that we have for this country, an insurance policy to ensure that at the time that we might be most vulnerable with our energy supplies, we have reserves, we have a safety net we can turn to in the event of an emergency brought about by a hurricane or natural disaster or whether it is a manmade disaster, war or something else that has caused global disruption.

In short, it boggles my mind that we would be willing, so willing and almost eager, to tap into this strategic asset for such short-term and limited gain. In the absence of supply disruption that justifies releasing oil from the SPR, selling our strategic reserves only worsens an existing competitive disadvantage for our American oil producers.

As you know, we have in place an outdated 40-year-old-plus ban on our ability to sell our domestic crude oil overseas. We are limited in our ability to export that. I think that is a wrong and outdated policy, and I am working with many, including the occupant of the chair, to lift this outdated policy. I have introduced legislation to do just that. We will actually have a bill before the banking committee tomorrow to, again, shed some light on the fact that it is so incredibly inconsistent from a policy perspective that we would be talking about lifting the sanctions on Iran, allowing Iran to access the broader global market so they can sell their oil reserves, so they can take advantage of the resources that will come to them to do who knows what mischief, while at the same time prohibiting, further prohibiting in this country our oil producers that opportunity to access the global market. By lifting the sanctions on Iran and keeping the oil export ban in place in this country, we are effectively sanctioning our own U.S. oil producers. That is wrong. Again, we are working to address that.

We are in a situation currently in which American companies cannot sell oil to the same countries that we let Iran sell its own oil to. Now, with this proposal in front of us to sell off some 101 million barrels of oil from the SPR, we are potentially going to saturate a market that is already oversupplied. Think about what that means to those in Oklahoma where the rig count in this country right now is down by half of what it was just last year. We are at a 5-year low with that. Our market is oversaturated.

This morning I introduced yet another white paper out of the energy committee. It is entitled ``A Turbulent World: In Defense of the Strategic Petroleum Reserve.'' This white paper outlines some of the history behind the SPR, why I feel so strongly and why I will continue to come to this floor to oppose the sale of 101 million barrels of oil from the SPR to pay for a portion of this highway bill.

Let's take a look at the history of when we have had emergency drawdowns. We have had exactly three emergency drawdowns ever. The Strategic Petroleum Reserve has been in place since the mid-1970s. We had a drawdown in 1991 with Desert Storm. We had a drawdown in 2005 when Hurricane Katrina hit and then in Libya in 2011 during their civil war.

This red right here is the 101 million barrels that this legislation seeks to sell off--101 million barrels. The total amount of sales from emergency drawdowns ever combined is 58.9 million barrels.

What we are talking about doing is, in one act, taking 101 million barrels and putting it out there on the market. In the 40 years that we have had access to reserves in the Strategic Petroleum Reserve, we have had three emergency drawdowns--one, a hurricane and, two, in the event of disruption for war, and together, all three of those totaled just shy of 60 million barrels. Yet this proposal is 101 million barrels.

We have exchanged oil out of the SPR a total of 12 times. This was in Hurricanes Isaac, Katrina, Lili, Ivan, Gustav, and Ike. We have created a home heating oil reserve. We have closed some ship channels for accidents. We have imported oil from Mexico. All of those exchanges, not drawdowns, but all of those totaled only 68.9 million barrels. Again, we are talking about a 101-million-barrel sale. We have also done test sales. We have done three test sales. In 1985, in 1990, and then in 2014. We have also closed down a reserve site--Weeks Island. We have sold off some barrels for that. The total for all of that activity was 15 million barrels for all four sales.

I have had people tell me: Oh, don't overreact here; don't overreact. This is no different than what we did with the two sales in 1996 for Federal deficit reduction.

Let's look at that chart. In 1996, we had a deficit reduction in May, which is shown in blue, and then in October we did further reductions, and that is shown in green. Both of those sales totaled 23 million barrels. Again, back in 1996, there was a total of 23 million, and what we are looking at with this legislation is, again, a selloff of 101 million barrels. That is not even a fair comparison. Selling 101 million barrels would be the equivalent of 60 percent of all of the oil that has ever left the SPR.

We have effectively taken out a total of 161 million barrels and moved that out of this SPR since it was created in 1975, about 40 years ago. We have had three emergency drawdowns, we have had the exchanges I talked about, we had test sales, and then we had the sales in 1996 with the Federal deficit reduction. If we take all of that together--everything in the history of the Strategic Petroleum Reserve that we ever sold off or exchanged--it brings us to 161 million barrels, and now we are talking about selling 101 million barrels, which is 60 percent.

I think it is important to put into context because this is a big fat deal. Yet we are acting like this is just another withdrawal from your ATM. Just go down, check the balance, there is enough money in there so it must be OK.

Let's talk about the strategic environment we are operating in right now. There is a nominal drawdown capacity of 4.4 million barrels per day. I mentioned this the last time I was on the floor. The drawdown capacity is subject to some discussion in terms of what we are actually able to pump out, and that is why we do test sales. It is to make sure it works as it was designed.

Secretary of Energy Moniz has suggested that our distribution rate--our ability to move this once we take it out--is significantly less than this nominal drawdown capacity of 4.4 million barrels due to congestion and changes in midstream infrastructure. This is one of the reasons I have been banging the lectern, and Senator Cantwell, the ranking member on the energy committee, has also been joining me in saying that doing this is not appropriate. We have significant maintenance issues within the SPR that we need to address. There is somewhere between $1.5 billion and $2 billion that it is going to take to address some of the shortcomings we have in the SPR, some of the maintenance and operations aspect of it. As we speak, there is a study underway to determine the right size of the Strategic Petroleum Reserve. What do we need to do in terms of maintenance?

If we go ahead and sell off 60 percent of what we have done historically throughout the whole lifetime of the SPR to fund a highway bill for 6 years--again, it just causes one to wonder why we are doing this because of the strategic environment and the drawdown capacity we have.

We have a pretty volatile world out there, and I think we all know that. We have unplanned disruptions, unplanned production outages, if you will, in Saudi Arabia, Kuwait, Iraq, Nigeria, Libya, and Iran. These are around 2.5 to 3 million barrels per day. These are pretty tense regions of the world, and I don't think anyone would dispute that.

On the next chart what we see is our drawdown rate of 4.4 or thereabouts is greater than the daily production of Iran, Iraq, Venezuela, Nigeria, Algeria or Libya. I don't think anybody would suggest that any of these countries in blue exudes stability or security.

Look at the transit chokepoints. A drawdown rate of 4.4 million barrels per day is bigger, in fairness, than the capacity of some of the other areas that would be clearly noted as these chokepoints. We have the Panama Canal at the end, the Turkish or Danish Straits, and Bab el-Mandab off the coast of Yemen. If something went wrong in more than one of these critical parts of the supply chain at once, we could be overtaken by upheaval in the global oil market without much recourse and our ability to respond would be dramatically lessened. And 4.4 million barrels per day is less than the oil that transships the Suez Canal and its accompanying pipeline. It is a fraction of the oil that goes through the Strait of Malacca or Strait of Hormuz which moves 15 to 17 million barrels per day.

This my central point. Our Strategic Petroleum Reserve is a tremendous national security asset, and we need it because the world is just simply more turbulent. I have been told: Look at what is happening domestically. We are importing less and producing more; therefore, we don't really need all of this. We don't need this safety net. We cannot immunize ourselves from global events and just suggest that somehow or other we need it less. It is like you go to the doctor and get a clean bill of health and you go home and you say: OK. Now I don't need life insurance or health insurance because the doctor just said I am fine. You know what. The world is not fine, and we know that. At a time when spare capacity is low and the global threat environment is heightened, selling 101 million barrels of America's strategic reserve to pay for legislation that makes almost no contribution to improving our energy security, I think, is just a foolish error of historic proportions.

I will restate what we would be doing if we moved forward with the pay-for as has been outlined. We would be conducting the largest sale in the history of the Strategic Petroleum Reserve since it was created in 1975. It would be greater than all of the previous emergency drawdowns combined. We are going into hurricane season. We don't know what may be coming at us in the Middle East. Yet we are proposing to pay for a short-term fix to the highway trust fund with a buyout of unprecedented proportions.

Last time I was on the floor, I said this is like cashing out your homeowner's insurance to pave your driveway. It is not the right pay-for.

Again, I, too, want to make sure we do right by our transportation infrastructure. It is important. It is about jobs and the strength of our economy, but we are also obligated to make sure the decisions we make in this Senate--in this Congress--are there to provide for our security as a nation.

I want to know that if we need these ready resources, we haven't moved precipitously to sell them off. The last time I checked this morning, the price of oil was at about $50 a barrel. Is this really a good time to sell at $50 a barrel?

I thank the Presiding Officer for his attention. I think those of us who have been following this issue with great interest are concerned and are conflicted because we want to make sure we do right by our highway systems, but I also want to make sure we do right by our national energy security, and selling off 101 million barrels of Strategic Petroleum Reserve is foolhardy.

With that, I yield the floor.

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