Creating Long-Term Energy Alternatives for the Nation Act of 2007--Continued

Floor Speech

CREATING LONG-TERM ENERGY ALTERNATIVES FOR THE NATION ACT OF 2007--Continued -- (Senate - June 20, 2007)

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Mr. WYDEN. Mr. President, I wish to pick up on the comments of my friend from Arizona and my friend from Mississippi, two Senators whom I have worked with on many issues and must unfortunately disagree with them on this one. I want the Senate to understand exactly what the implications would be if the Kyl amendment were to pass.

If the Kyl amendment were to pass, the major oil companies would receive billions and billions of dollars of subsidies that President Bush says the major oil companies do not need. I wish to be specific on this as we go to the debate with the Senator from Arizona and the Senator from Mississippi.

The President of the United States has said that when the price of oil is over $55 a barrel, the oil companies do not need incentives to develop and explore. Let me repeat that. President Bush has said when the price of oil is over $55 a barrel, the oil companies do not need incentives to explore and search for oil. The price of oil at this time is substantially over $55 a barrel. So if the Kyl amendment passes and we refuse to strip these incentives the President says aren't needed, we are going to continue business as usual.

The Kyl amendment says, essentially: Let us continue these practices we have had for the last few years that have done nothing--nothing--to reduce our dependence on foreign oil.

What we have had in the past are billions of dollars of subsidies. For example, in section 199 of the Tax Code, not for investing in refinery capacity, not for investing in new production, not for investing in renewable fuels but essentially continuing the practices that have nothing--done nothing to reduce our dependence on foreign oil. I have always said we ought to target tax breaks and incentives where there is an opportunity for new production. That is why I have always favored looking at potential incentives for small companies.

But that is not what this amendment is all about. This amendment is about continuing the giveaways for the big companies, the giveaways the President of the United States says are not needed.

So where we are is oil is at almost $70 a barrel, gas is over $3, more imports than ever, and it seems to me continuing business as usual as the Kyl amendment would do is not a case you can make. The Finance Committee amendment changes our course. It ends the section 199 tax breaks for the major oil companies. It takes steps to end our addiction to oil. It takes steps to end our addiction to continuing billions of dollars of subsidies that the President says are not needed.

Let us not continue these billions and billions of dollars in the name of a modern energy policy. It is not. The idea that shoveling all these breaks, these billions of dollars of breaks at the oil industry is somehow going to be good for America is not borne out by the record. It is not borne out by the record, and in my view, until we take these steps to protect taxpayers and protect consumers and protect the security of the country, I think what will happen is we will continue to increase our addiction to foreign oil, we will continue to have these prices, these staggeringly high prices of $70 a barrel and consumers will still get clobbered at the pump.

I am going to have more to say about this in the course of tomorrow, but I would say in closing--and I see my good friend from Arizona on the floor of the Senate--that if the Senate supports this particular amendment, the Kyl amendment, what it will be doing is it will be continuing billions of dollars in tax breaks that if you use the test applied by the President of the United States, those major companies do not need. No one has been able to make a case, it seems to me, that the President of the United States is wrong. In fact, every time this topic has come up, I have said I think the discussion ought to begin with the comment of the President. I credit the President for his statement because I think it reflects modern reality. The President knows a lot about the oil business, and the President says you don't need these subsidies when the price is over $55 a barrel.

But along comes the Kyl amendment, and the Kyl amendment says: No, I pretty much don't see it the way the President of the United States sees it. I am going to continue the billions and billions of dollars of subsidies when it is not needed.

The last point I would like to make very quickly deals with the Bingaman language. We have heard again and again that this somehow retroactively sweeps in and unravels previous agreements. That is untrue. Yesterday, I asked in the Senate Finance Committee the counsel about this. The counsel was very clear it applies prospectively, it does not apply retroactively, and it applies to all of the activity going on in the gulf.

The Government Accountability Office has said that in terms of our position in the world, we stand almost alone in terms of our position relative to getting a fair shake on revenue and protecting taxpayers. The reality--and the Bingaman amendment picks up on this--is taxpayers are getting fleeced by major oil companies when they drill on public land.

We are talking about our land, the people's land. We are not talking about private lands. We are talking about our lands. And the Bingaman amendment takes steps to correct that situation.

I hope my colleagues will reject the amendment of the Senator from Arizona. If I have made one point tonight, I want it understood, if the Kyl amendment is adopted, major oil companies would continue to receive billions of dollars of subsidies that the President of the United States has said they do not need.

Mr. President, I note that my colleague from New York has not arrived. The Senator from Arizona, I am sure, wants to respond. I reserve the time that was propounded in the request by Senator Baucus for Senator Schumer when he arrives. Since he is not here, and Senator Kyl is, I yield the floor to him with the reservation for Senator Schumer when he arrives.

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Mr. WYDEN. Mr. President, I will be very brief. The Senator from Arizona makes the point that he always does eloquently about markets, and I come back to the fact that President Bush has said you don't need subsidies when the marketplace price is over $55 a barrel. So what we want to do is cut back on the subsidies and begin to create the kind of market that I know the Senator from Arizona favors.

I also ask unanimous consent to have printed in the Record a Government Accountability Office report of May 1, 2007, which makes it very clear that taxpayers are being ripped off for the drilling by major companies on public lands.

There being no objection, the material was ordered to be printed in the RECORD, as follows:

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Mr. WYDEN. Mr. President, this General Accounting Office report makes it very clear that relative to all the other countries in the world, our taxpayers are not getting a fair shake. So this is ultimately about cutting back on subsidies the President says are not needed in order to create markets and to prevent the taxpayers of this country from being fleeced.

I thank my colleague. I know Senator Schumer has been patient.

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