Energy

ENERGY

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Ms. MURKOWSKI. Mr. President, I commend the distinguished chairman of the Energy Committee who has taken such a leadership role on the issue of achieving energy independence for this country.

We all had an opportunity to go home over the past couple of weeks, and I think it is fair to say that without question, in every State across this country, the No. 1 issue our constituents are talking about is energy prices. With the crude oil prices passing an all-time high of $75 a barrel last week, I think it is fair to say we can anticipate that the prices will go higher and higher.

It seems we all want to blame someone. Americans want to blame someone--anyone--for the high prices. They want to blame the oil industry companies that have been showing record profits. They want to blame the filling station operators and accuse them of price gouging. They want to blame the oil commodities traders for bidding up the price of crude. They want to blame the Congress for allowing and perhaps encouraging these prices. Quite frankly, it is hard for us not to accept some of the blame. But what Americans don't want to accept is that these prices we are seeing are the result of nearly 20 years of incoherent energy policy.

The reasons for the price increases are many, and we have heard the chairman discuss many of them. But the biggest goes back to the lessons we learned in high school economics about the law of supply and demand. Today the world consumes 80 million barrels of oil a day. The U.S. is responsible for a quarter of that. Right now, our oil producers collectively around the world have the ability to produce at most 81 million barrels daily. So the demand is bumping dangerously close to maximum current supply, and that demand for the oil is booming.

We talked about China. China last week announced that its economy grew more than 10 percent last year, and its demand for fuel is rising an equivalent amount. Developing nations are outbidding industrial nations for oil, and the trend continues.

Demand for fuel in the Asian pacific region is likely to grow at over 3 percent annually for the next 25 years, nearly 5 times the growth rate of fuel use in North America and 4 times the rate in Europe.

In addition to the demand side of the picture, the supply side is down. Six percent of the Nation's oil production remains offline as a result of the damage from Hurricanes Katrina and Rita. We have often talked about the world's supply. The world's supply is uncertain, given the unrest we are seeing in Nigeria, the political events in Venezuela, rhetoric from Iran, supply disruptions that plague Iraq.

We here in Congress also have a place in this equation when we look to the supply side. It was 6 years ago that Congress passed the requirement that said by June 1 of this year the Nation's refineries must reduce the sulfur in diesel fuel from 500 parts per million to 15 parts per million, and refiners have spent the money, more than $8 billion, to comply. The changes are this: They are going to cut the diesel exhaust pollution by 90 percent. But it does take more fuel to make a similar amount of diesel, and it is costing the refineries more money to comply with the ultralow sulfur diesel rules.

Last year we were talking about MTBE and what to do about it. We didn't provide for an organized phaseout of MTBE, which means the refineries are rushing to acquire ethanol to replace MTBE in gasoline. What this does is causes a host of different price pressures, from the added costs of building new tanks to store the ethanol to the crush of finding railroad tank
cars to move the ethanol from the Midwest to the Northeast and down into Texas, where it can be blended into the gasoline.

Since it requires a special base form of gasoline, the ethanol-to-MTBE switch makes it difficult for us to import gasoline from overseas to relieve these price pressures, because outside of Europe there are few foreign refineries that can actually make this base form. So that means tighter fuel supplies that cannot readily be remedied by imported product.

We talk about the cost to us as Americans. According to the Energy Information Administration, we are already paying about twice as much for fuel today as we did in the summer of 2002. On the whole, our country is spending $212 million more per day for gasoline than we did last year, a half billion dollars more per day than 4 years ago. It is incredible.

What do we do about it? The chairman of the Energy Committee noted some of the steps, and noted some of the steps the President has advanced. But our first effort today is to conserve, to increase our conservation and efficiency efforts.

The PRESIDING OFFICER. The time of the Senator has expired.

Ms. MURKOWSKI. Mr. President, I ask unanimous consent for 1 additional minute.

The PRESIDING OFFICER. Without objection, it is so ordered.

Ms. MURKOWSKI. We must do the simple things first. Conservation, efficiency, make sure the tires are inflated, our cars are in tune, drive less, reduce the air conditioning--those small things that will make a difference. We have to move quickly to increase our fuel efficiency, continue to expand the use of renewables such as wind, geothermal, biomass, oceans, solar--all of those that are available. But we must increase our domestic supplies of oil and natural gas, and the first place we start is up in ANWR. We have the ability to do it. We have demonstrated that we can. Opening ANWR would produce up to 1 million barrels a day of additional oil for 30 years to meet the world demand and drive the prices down.

People are saying it is not going to make a difference today, and they are correct. But we didn't get to this place in 1 day. What we are anticipating is the need down the road. Anyone who thinks in 5 or 10 years there are not going to be anymore hurricanes or supply disruptions or production impediments is fooling himself. So let's plan for the future. Let's plan for our own domestic energy security by doing what we can in this country. The first place to start is by opening ANWR to limited oil exploration and development, and doing it in an environmentally sensitive and balanced manner.

I yield the floor.

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