Gulf of Mexico Energy Security Act of 2006

GULF OF MEXICO ENERGY SECURITY ACT OF 2006 -- (Senate - July 27, 2006)

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Mr. DURBIN. Mr. President, pending before the Senate is a bill that will allow us to drill in areas of the Gulf of Mexico that currently are not being explored for oil and gas. There is some controversy attached to this proposal--whether this is an environmentally sound decision to go into these areas. The fact is in many parts of the Gulf of Mexico there is currently exploration and drilling for oil and gas, so it is not the same as the debate on the Arctic National Wildlife Refuge in Alaska, where the administration was proposing that we drill in areas that have been protected for over half a century.

This area of the world and off the coast of the United States has been explored for quite some period of time, and oil and gas have been brought out of it.

It is going to be an interesting debate and a legitimate debate over whether this is the appropriate amount of exploration and whether it is environmentally responsible to do it in this fashion. But we should never believe that this debate is about creating America's energy policy. Sadly, America today--with gasoline prices going through the roof, with no certainty about our future when it comes to energy--does not have a national energy policy.

This administration, for 6 years now, has had an opportunity to come forward with a proposal that would move America away from dependence on foreign oil, but the administration has not done so. The only proposals we have received from them relate to very isolated, narrow issues. One of them I referred to earlier, whether the United States should now start drilling for oil and gas in the Arctic National Wildlife Refuge.

The House and the Senate have rejected that idea on a bipartisan basis. Their belief, which I share, is that we have reached a rather desperate moment in American history if the only way we can look forward in terms of energy self-sufficiency is to start drilling in some of the most environmentally sensitive places in America. That is why I have opposed drilling in ANWR in Alaska. That is why it has been defeated. The majority has felt this is not the way we should go.

This is a different issue. This is about drilling in the Gulf of Mexico.

We will debate it this week and vote on it next week. But we should not believe that passage of this bill is the creation of a national energy policy. The fact is if we pass this bill next week, it will have literally no impact on gasoline prices today and no impact on our dependence on foreign oil. If we are going to address that, we have to do it in a larger context. On the Democratic side of the Senate, we have proposed a bill that will move us forward, looking at the national energy picture and moving us toward breaking our dependence on foreign sources of energy in the future. That is important for us to do.

Today we are so dependent on foreign sources of oil that we are at the mercy of the OPEC cartel, and at the mercy of the major producers we are doing business with in countries around the world buying their oil and gas--and these countries are virtually our sworn enemies. There are many countries in the world that we send billions of dollars to as we buy their oil and gas that turn around and use the money we send against us in the war on terrorism. That is as horrifying as I can think of at the moment, that we would send American dollars to these countries to subsidize terrorist activities. Yet it is happening because we are so dependent on these foreign sources.

What can we do? What should we do? First, we should look at the obvious. Sixty percent of all the oil we bring into the United States of America is used for our cars and trucks. All of us are burning that oil as we drive around America. Sadly, the vehicles we drive in are less fuel efficient and get less fuel economy every single year. The vehicles are heavier, less fuel efficient, and we burn more gallons of gasoline each year to travel the same number of miles we went last year. I am speaking on average. There are some people who have fuel-efficient vehicles, but by and large, when you look at cars and trucks in America, that is the story. It doesn't have to be this way.

In 1975, we faced long lines at gasoline stations with the prospect that OPEC was going to cut off oil to the United States, and our Government made a decision that the first thing we needed to do was to have more fuel-efficient cars and trucks. At that moment in time, the average fuel efficiency of the fleets across America was about 14 miles a gallon. The Government mandated that over the next 10 years manufacturers had to have an average fleet fuel economy of cars that would virtually double to almost 28 miles a gallon in 10 years. The manufacturers of cars and trucks--particularly those in the United States--said it was an impossible goal which we could never reach, and that if we did, it would compromise the safety of the cars we would drive and would invite importation of automobiles into the United States. We did it anyway. We imposed the standard to increase fuel efficiency in America. Between 1975 and 1985 the average fuel economy of cars in America went from 14 miles a gallon to 27.5 miles a gallon. We achieved our goal. We did it without all of the terrible outcomes the opponents had suggested.

What has happened in the 21 years since then? What has happened since 1985 when we reached an average of about 28 miles a gallon for cars in America? Sadly, the fuel efficiency of cars in America has gone down progressively. Now it is around 22 miles a gallon, or 21 miles a gallon, meaning we are driving less fuel-efficient cars today than we were 21 years ago. And, of course, there was the truck loophole. We said when it came to fuel economy we would make an exemption for trucks. Someone invented the concept of a sports utility vehicle, SUV, and we called it a truck. It escaped the requirements of fuel efficiency. We all know those SUVs we are glutting the used car lots in America with, have some of the worst fuel efficiency of any vehicles we drive. They have helped to drive down our efficiency in America and driven up our dependence on imported oil.

A national energy policy has to include more fuel efficiency and fuel economy of cars and trucks we drive--and it can do it.

Recently, my wife and I made a decision about a car. We wanted to buy American and we wanted a hybrid. So we bought a Ford Escape hybrid. It is a good car, clean burning. We get about 28 miles a gallon, which is good but not great. I think we can do a lot better. Many of the cars that are coming in from overseas manufacturers get much better mileage. The people who make cars in America tell us there is no appetite for fuel-efficient cars in the United States. How wrong can they be? Toyota is about to come out with a Camry with a hybrid engine which will get better fuel mileage than most cars in the United States, and there is a 10-month waiting list to buy their cars. It tells me there is an appetite for obvious reasons. People understand gasoline is extremely expensive. If they can reduce their consumption of gasoline, they not only save money, but I think they know intuitively it is a good thing. It reduces the pollution and the greenhouse emissions.

Our failure to have a national energy policy leaves us in a position where we have foreign automobile manufacturers making fuel-efficient cars and hybrid cars and bringing them into the United States and selling them to American consumers who are anxious to buy their products.

The obvious question is, Why don't we have the leadership in Washington on a bipartisan basis that would create standards for fuel efficiency and fuel economy that would move the United States in the right direction on national energy policy? That is an important question. It is not addressed by this bill.

If we are talking about a national energy policy, this bill is not a national energy policy. There are other things which we should do as well. We have a situation in the United States where the oil companies are making outrageous profits. You can always tell when they have stepped over the line because when you open the morning paper, there will be a full-page ad where the major oil companies are explaining that they warrant that profit. Really?

ExxonMobil's second quarter profit jumped to the second highest level for any company in the history of the United States. ExxonMobil said today that it earned $10.36 billion in the second quarter, the second largest quarterly profit ever recorded by a publicly traded U.S. company. The earnings figures were 36 percent above the profit it reported 1 year ago. High oil prices, according to this Associated Press story, helped boost the company's revenue by 12 percent to a level just short of a quarterly record.

Think of this when you go to fill up at the gas pump. You reach into your pocket, pull out your wallet or your purse and pull out the credit card to pay for the gasoline, and the money that is coming right out of your checking account is going to record profits of the oil companies across America.

What has been done in Washington to try to contain these profits, to try to say that the oil companies are going too far by creating burdens and handicaps on individuals and families and businesses across America? The answer is nothing. Nothing has happened informally. The President has not called in the leaders of these oil companies and said it is not healthy for America's economy for you to be taking so much money out of this economy, driving up inflation, making the cost of business go up so that they have to lay off employees and can't expand if they would like to, and making the burdens for families who have to drive on a regular basis unbearable. The President has not done this. Other Presidents in history have. This President refuses to.

When it comes to the more formal means of turning to those Federal agencies that have the power over these oil companies, they have been virtually silent as Americans and consumers are fuming over what is happening at their gas stations.

I would say to my colleagues in Congress when they go home over this August recess to take some time and talk to the people they represent. Gasoline prices, frankly, are one of the biggest issues that trouble the people across America.

ExxonMobil's report of earnings comes a day after ConocoPhillips said it earned more than $5 billion in the quarter at a time when many drivers in the United States are paying $3 a gallon for gas--and more. ExxonMobil, the world's largest oil company by market cap, said earnings amounted to $1.72 a share in the April-June quarter compared with the profit of $7.64 billion or $1.20 a share a year ago. These results top even Wall Street's expectations. The oil companies are raking in this money at the expense of consumers and businesses across America.

If we want a healthy business climate in this country, we cannot allow one industry--the oil industry--to make outrageous profits at the expense of other businesses as well as the families and individuals across America.

I think what we have before us is a bill that is worthy of debate about drilling in the Gulf of Mexico. It is something we will debate, but we shouldn't believe at the end of the day, even if it is passes, that we have addressed the most serious challenge facing America. We still need a national energy policy.

We should remember two numbers as we engage in this debate. The numbers are 3 and 25. If you look at all of the energy available in the world, the United States has access in the continental United States and offshore to 3 percent of the energy reserves of the world. Yet every year the United States economy consumes 25 percent of the energy that is produced in the world.

We cannot drill our way out of this situation. We have to have environmentally responsible exploration and production, but we also have to deal with conservation and efficiency. It is not just a matter of reducing costs and reducing consumption. There is not another issue that is as important as energy. It is the issue of the environment. We have to understand that as we burn energy, as we destroy this energy for our economic purposes--carbon fuels, for example--we are releasing emissions into the environment. Carbon dioxide, for example, which ultimately form a cloud over our globe, this greenhouse effect which captures the heat of the Sun and warming the planet we live on to the point where we are seeing dramatic climate change in America and around the world. We are finding from those in the private sector who look at this in cold economic terms that decisions are made which suggest we are facing serious problems if we don't do something about it.

When the major insurance companies announce they are not going to write property insurance for many businesses on the gulf coast of the United States because of the severity of the hurricanes we have seen in the last few years, it is a wake-up call to America. When we know that the glaciers are melting, when we know the temperature is going up on this globe we live on, when we know species such as the polar bear are doomed to extinction if we don't make some serious changes, we have to combine this debate on a national energy policy with the national environmental policy that sets a standard--that says to the world engage us in this effort to protect the planet on which we live.

S. 3711 is an interesting and important bill. I am glad we are debating it. But make no mistake; it is not a national energy policy.

I reserve the remainder of my time and yield the floor.

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