Making Emergency Supplemental Appropriations for the Fiscal Year Ending September 30, 2006

MAKING EMERGENCY SUPPLEMENTAL APPROPRIATIONS FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2006

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Mr. DURBIN. Will the Senator yield?

Mr. WYDEN. I am happy to yield.

Mr. DURBIN. I ask the Senator from Oregon, I know he has been on the floor since this morning and I know this issue is of great importance to him and the Nation. I want to make sure for those who have been following the debate from the beginning that they understand exactly the issue.

As I understand it, we are talking about those private companies that drill for oil on lands owned by the people, by the Federal Government, and how much money they will receive for drilling oil. I ask the Senator from Oregon, if he could, in the simplest terms, to explain to me how much is at stake here? How much did the taxpayers pay in these royalty payments to those who are drilling for oil on land that the people, the Federal Government, owns?

Mr. WYDEN. I thank the Senator from Illinois for his question. We tried to get into this something like 5 hours ago. It is very helpful to have the Senator from Illinois asking exactly the question he has asked.

The way this program works is that the oil companies are supposed to pay royalties to the Federal Government when they extract oil from Federal lands. In order to stimulate production when the price of oil was cheap, the Federal Government reduced the amount of royalty payments the companies had to make.

It is my view and the view of all of the independent experts, including our former colleague in the House, Congressman Pombo, who chairs the Committee on Resources, it is the view of all of these experts across the political spectrum that with the price of oil soaring to over $70 a barrel, the discounted royalty payments amount to a needless subsidy of billions and billions of dollars. The General Accounting Office has estimated that at a minimum it would be $20 billion. There are projections because there is litigation underway.

For some oil companies, even this is not enough, so they keep litigating and trying to get more and more and more. There are estimates that if the litigation is successful, the Government would pay $80 billion just in royalty relief. And that $80 billion would pay a significant fraction of the entire cost of this emergency spending bill.

Mr. DURBIN. If the Senator will further yield for a question, so that I understand it, if I own an oil company and I want to drill on somebody else's land, in this case the land of the Federal Government, I was required to pay the Federal Government for drilling oil that belonged to somebody else that I was going to sell, and if the price of oil was so low that it did not justify drilling, they would appeal, the oil companies would appeal to the Federal Government, saying, we will pay less for what we are drilling because the price of oil is so low, thus this royalty payment for drilling oil on Federal Government land.

Now the tables have turned and the price of every barrel of oil brought out of Federal land is worth $70 to $75 and the Senator from Oregon is arguing why in the world would you give them relief from their royalty payments when they are making so much money on oil that comes out of Federal lands that we all own.

It would seem to me the Senator's argument is that the oil companies, which are doing quite well, thank you, are going to experience a windfall if the price of oil goes up and the amount they have to pay to the Federal Government continues to be discounted or lowered. So they want it both ways. They want the consumer to pay more at the pump and they want the taxpayers to receive less for the oil they are taking from land they do not even own.

Am I missing something in this analysis?

Mr. WYDEN. I think the Senator has said it very well. In a climate such as this, when prices are high, they get to privatize their gains and socialize their losses. This makes no sense at all. This is a program designed for a period when production was down and the price of oil was very low.

What I have tried to do--because I have spent a lot of hours sitting next to the distinguished chairman of our committee, the Energy Committee, who points out, and correctly so, that energy is a volatile part of our economy--I made an exception so that if the President of the United States says there is going to be a supply disruption or the price of oil falls back down again, bingo, we are back to looking at royalty relief.

The Senator from Illinois puts it very well.

To drive home the point, I say to the Senate, particularly the Senator from Illinois who did great work on the Low-Income Home Energy Assistance Program, we could have taken care of the needs of the Low-Income Home Energy Assistance Program plus have money left over for deficit reduction if we were to stop this wasteful expenditure of taxpayer funds.

Mr. DURBIN. If the Senator from Oregon will yield for a question, through the Chair, you were suggesting in your amendment we should no longer subsidize the extraction of oil by private companies from Federal lands when they are clearly in a very profitable position. We should no longer ask taxpayers to give up royalties which they were entitled to because the oil companies frankly are doing well and the discounted oil was designed for the times when they were doing poorly.

If I understand what the Senator is saying, the same oil companies have been going to court challenging the Federal Government when it comes to these royalty payments and royalty discounts, so with all the talk about too much litigation, it turns out some of these oil companies believe litigation is a healthy thing if it protects their profit margins and protects their Federal subsidy.

If the Senator from Oregon would be kind enough to explain to me exactly what the impact of his amendment would be on this bill and how much money it could bring back to the Treasury for purposes already outlined--whether it is the LIHEAP program or money for education or health care, whatever it might be, that currently is going to oil companies that are doing well and experiencing record profits.

Mr. WYDEN. The Senator asks a very good question. This is the granddaddy, this is the biggest subsidy the Government gives--to the oil sector.

The General Accounting Office, which did a review of this, indicates that a minimal projection is $20 billion for the cost of the program. If the litigation is successful, it is up to $80 billion.

What we have is, at a time when middle-class folks, the people who are living paycheck to paycheck and being squeezed as hard as they are, at a time when our Government ought to be looking at trying to give them a break, give them a bit of help, what we are seeing is the middle-class folks have their tax dollars flow into the Federal Government and go out in terms of royalty relief at a time when the price of oil is vastly above the amount the President has indicated. It is for that reason I felt so strongly about this.

I also point out this is a program that grew under Secretary Norton. After the initial mistakes with the previous administration, it was added to by the energy conference legislation between the House and the Senate which sweetened the sweetheart deal even more.

I am saying this is enough. We do not need record royalty payments on top of record profits and on top of record prices. I have said I will draw the line. I have not done anything like what I have done today in the Senate since I have been here. I have had the pleasure of serving with the distinguished Senator from Illinois for a long time, going back to the days when I had a full head of hair and rugged good looks. I have never done anything like this. I regret this tremendously. But we have to protect the taxpayers of this country.

I am happy to yield if the Senator from Illinois has anything further.

Mr. DURBIN. I will ask the Senator, you are asking for an opportunity to call your amendment to be voted on up or down, whether this subsidy to profitable oil companies will continue or whether the money will come back to the Federal Treasury. Is that your intention in taking the floor?

Mr. WYDEN. That is exactly what I have been seeking since last night when I called the distinguished chairman of the committee, and what I indicated, contrary to what has been said in the Senate, I am not seeking any special treatment. I have not been seeking to be put first in the line. What I have been seeking is what I have seen virtually every week since I have been in the Senate.

The distinguished Senator from Illinois is an expert in the rules, and it is my understanding that what we customarily do, we debate a variety of amendments, then we cluster them into a group, five, six, eight--sometimes the number will vary--and at some point the Senate goes on a vote.

I offered to the chairman of the committee to be put in the second or third cluster. I don't have to go first if colleagues feel strongly about this, but at some point it seems to me we ought to say the Senate is accountable, at a time with record profits and record prices, for a program that is the biggest of them all. That is the Royalty Relief Program.

I am happy to yield further.

Mr. DURBIN. I ask a procedural point for those following this debate.

I ask the Senator from Oregon, it is my understanding that what the Senator is doing is consistent with the Senate rules which allows a Senator to take the floor and offer an amendment. As long as he can stand and offer his amendment and speak to it, he controls the floor, which is what the Senator from Oregon is doing. Many people have seen this depicted in movies and otherwise, but this is the classic element of the Senate procedure, that a Senator can insist on his right to have an amendment voted on. Clearly there is a disagreement in the Senate. Until that disagreement is resolved, as long as the Senator from Oregon can stand, if I am not mistaken--he can correct me if I am wrong--he is asserting his right as a Senator to do so.

Mr. WYDEN. I thank my colleague from Illinois. That is essentially my desire.

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Mr. DURBIN. Mr. President, it was recently brought to our attention by the Office of Compliance that the utility tunnels which carry steam and chilled water throughout the Capitol complex are rapidly deteriorating and are putting the workers who must enter these tunnels in extremely hazardous and potentially life-threatening situations. Falling concrete, the presence of asbestos, inadequate egress routes and a faulty communications system threaten the lives of the utility tunnel employees on a daily basis. Several of these tunnels are on the verge of collapse--not only threatening the lives of the workers in the tunnels, but potentially cutting off steam and chilled water to the entire Capitol complex. The $27.6 million in emergency funding that Senator Allard and I are requesting is critical to allow the Architect of the Capitol to expeditiously address the deplorable conditions that exist in these utility tunnels and make the changes necessary to assure that the health and safety of the workers is not jeopardized. This funding will allow the Architect's office to immediately begin critical design work on replacing the ``Y'' tunnel, which is in the worst condition, including structural repair, egress improvements, asbestos abatement, and temperature improvements. The funding will also accelerate work on replacing the roof on the ``R'' tunnel and for other communications, structural repairs, and emergency escape routes. Without this funding, we continue to place these employees in life-threatening working conditions. I urge my colleagues to support this critically needed funding.

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