Energy and Water Development Appropriations Act, 2007

ENERGY AND WATER DEVELOPMENT APPROPRIATIONS ACT, 2007 -- (House of Representatives - May 24, 2006)

BREAK IN TRANSCRIPT

Mr. LYNCH. Thank you, Mr. Chairman.

Mr. Chairman, my amendment simply asks that the Energy Department develop a plan to respond to potential disruptions in worldwide oil and natural gas production and distribution.

Throughout the last year, we have witnessed a 38 percent spike in the price of crude oil and concurrently a sharp rise in the average cost of gasoline to American families, reaching over $3 a gallon. In recent weeks, crude oil prices have risen to over $70 a barrel.

Among the chief factors that have been cited in the cause of the recent spike has been increased worldwide consumption and demand as countries such as China and India have experienced significant economic growth. China alone over the past 4 years is responsible for 40 percent of new demand around the globe.

However, it is the United States that remains the world's leading oil consumer, consuming over 20 million barrels a day, while producing only about 7 million barrels a day. Notably, our high oil consumption, coupled with the weakened reserve position, means that the United States for the most part will continue to rely on world markets for its crude oil supply. Currently, 70 percent of U.S. oil consumption is projected to be satisfied by imports of crude oil and petroleum products by the year 2025.

Regrettably, our growing dependence on foreign oil not only poses a substantial risk to our economic security but may also serve to compromise the effectiveness of American foreign policy, as high domestic demand leaves the United States susceptible to the threat of hostile oil-related political reactions by foreign governments in oil-producing countries.

Iran, for example, is the second largest producer within OPEC and has repeatedly issued thinly veiled supply interruption threats in response to our efforts to curb that country's uranium enrichment program. In Venezuela, President Hugo Chavez, whose country is the United States' fifth largest source of crude imports, has asserted the possibility of retaliatory actions stemming from his opposition to U.S. policy.

It is clear that our overall economy is severely impacted by the spikes in crude oil and the prices of gasoline. The growing uncertainty of the oil reserves available to the United States is also greatly called into question. As long as we as a Nation continue our addiction to foreign oil, we will be beholden to the actions of these rogue states.

Last week, in a Government Reform Subcommittee, we heard the Under Secretary of Energy say that in the event of any disruption of any of these major players around the globe that supply us with oil and natural gas, we would have to immediately go to the U.S. Strategic Petroleum Reserve to satisfy any shortage. That is not a good long-term solution.

We have had threats in the past. We had Arab oil embargoes in this country back in 1973, and we had a plan in place to deal with that shortage. Right now, according to the Secretary of the Energy Department, we have no surplus reserves. We have no untapped reserves in the event of a shortage.

This amendment would call on the Energy Department to develop such a plan to deal with these contingencies, to deal with reallocations and to deal with the crisis that would develop in the event that any of these countries discontinued their supply of oil to the United States.

Mr. Chairman, I realize that you can only do so much in any one bill, and I thank the chairman and the ranking member for all their good work on this bill, but this is something that needs to happen, and I just ask the chairman and the ranking member to work with me to force the Department of Energy to develop this plan.

BREAK IN TRANSCRIPT

http://thomas.loc.gov/