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

Floor Speech

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

BREAK IN TRANSCRIPT

Mr. WYDEN. Mr. President, I am going to take a few minutes this afternoon to discuss the tax provisions in this legislation because I think they are very much in the public interest and something I have been working on for many years.

In the last Congress, for the first time in many years, the executives of the major oil companies--we are talking about Shell and BP and Exxon, the big five companies--were in front of the joint hearing I attended, a joint hearing of the Energy Committee and the Commerce Committee.

With the executives there before this important hearing, I asked all of the oil CEOs if they agreed with a recent statement that President Bush had made. President Bush, of course, an oil man himself, hardly somebody who has any predisposition against the oil industry, recently said that: When oil is over $55 a barrel, the oil companies do not need incentives to explore and develop for oil.

I asked each of the executives that day, the first time they had been asked the question in years and years, and to a person, the executives said they did not need those subsidies. Every single one of the executives said it. What was so stunning about it is that their admission was completely contrary to everything the Congress has been doing pretty much for the previous decade.

For the previous decade, the Congress had just been throwing one subsidy after another at these major oil companies, amounting to billions and billions of dollars. Yet in the last Congress, when the executives were asked to go on record and publicly state their position, the executives admitted they did not need the money that the Congress has been throwing at them, the billions of dollars in subsidies the Congress has been throwing at them.

So what we have is essentially a time now when the companies are making record profits, and they are charging record prices when clearly they do not need record subsidies. That is what the Senate Finance Committee legislation does with respect to the tax provisions. I have reviewed them. They are clearly targeted at the major companies. They are not targeted at the independents and the small companies, and we ought to be taking steps to help them. In fact, I particularly credit our friend and colleague, the late Senator Thomas, for doing extraordinary work over the years, some of which I was privileged to work on with him, to help those small independent companies. Our good friend, the late Senator Thomas, championed that work. This is not going to affect those small independents. This is targeted at the major companies, the companies that, when I asked them--the first time they had been asked in years--admitted they did not need the billions of dollars worth of subsidies they were getting.

It ought to be put in the context of what it means for the consumer. Our friend from North Dakota began this discussion as well. The reality is, when somebody pulls up to a gasoline station in New Jersey or Oregon or anywhere else, they are paying what amounts to a ``terror tax.'' That is what we ought to call it. Our addiction to foreign oil is literally a terror tax because when you pull up to that filling station in Oregon or New Jersey or anywhere else, you pay this huge price. Eventually, some of that money gets into the coffers of a government in the Middle East, and they backdoor it to people who want to kill us.

Our addiction to foreign oil ought to be put in a context that is appropriate. It is a terror tax. This legislation which has been put together by a number of committees helps us to move away from that addiction to foreign oil. That is why I support it. By taking away some of the subsidies to the major companies, subsidies they have now claimed they don't even need, it makes it possible for us to look at some opportunities for developing renewable energy sources at home.

I was at a filling station not long ago in Oregon that hopes to get all its fuel from Oregon crops--not from oil from the Middle East--waste oil and other products. That is our vision of an important part of our energy supply in the future. If we get out of the business of shoveling billions and billions of dollars worth of subsidies to the major oil companies, subsidies they have now made clear they don't need, we can begin to develop a very different energy future.

One last point I wish to make relates to a debate I am sure we will have, and that is a quick comment about the provisions which were added yesterday, Senator Bingaman's provisions, to the legislation. We are going to hear a lot about how somehow this is taking illegal action with respect to oil royalties; it is taking action retroactively, and it is illegal. We are going to hear that probably many times in the course of discussion of the Bingaman legislation that was added yesterday.

The first thing I wish to make clear--and we were told this yesterday by counsel, because I asked about it--is that the Bingaman provision would be applied prospectively on oil produced on Federal offshore leases in the Gulf of Mexico. It would apply to future activity, all oil produced on Federal offshore leases in the gulf. As we go to this discussion and we are told repeatedly that this in some way unravels previous agreements, that this is illegal, this is retroactive, I hope colleagues will remember that we were told yesterday that it applies prospectively. It does not change the terms of any existing oil and gas lease. We are clear with respect to the Bingaman provision. It doesn't change the terms of any existing oil and gas lease, and it would be applied prospectively on oil produced on these Federal offshore leases and all oil produced on those leases in the gulf.

One last point with respect to this issue is comments we have received from the Government Accountability Office with respect to the amount of revenue the Government receives from oil production from the gulf. What the Government Accountability Office has told us on this point is that the taxpayer receives revenue with respect to this production that is lower than virtually anywhere else in the world. They have done a comparison to take a look at all of the other countries where you have similar activity going on. Basically our take, the revenue for the taxpayer, hard-working taxpayers across the country, is lower than virtually anywhere in the world. The only place that is even close to us is where you have an oil company doing most of the production, essentially a government corporation.

The reality is, with respect to drilling on our lands--and that is what I am talking about here, the people's lands, public lands, our lands--the taxpayer has been getting fleeced for years and years. The Bingaman provision begins to right the scale to get a fair shake for the taxpayers.

I hope colleagues will support the work done by the Finance Committee with respect to the tax titles. It is important that they know the major oil companies have now admitted they don't need the subsidies, and the price per barrel is way over the amount the President said was the level when we ought to stop paying out subsidies. I hope colleagues will look at the facts with respect to the important provisions that were added yesterday by Senator Bingaman. I am of the view that taxpayers have been fleeced with respect to oil drilling on their lands, the people's lands. The Bingaman provision begins to right the scale.

I will have more to say on this issue down the road.

I yield the floor and suggest the absence of a quorum.

Source