FAA Reauthorization Act of 2007--Continued

Floor Speech

FAA REAUTHORIZATION ACT OF 2007--Continued -- (Senate - April 30, 2008)

BREAK IN TRANSCRIPT

ENERGY

Mr. SCHUMER. Mr. President, I rise today to address a serious issue and that is the dramatically rising cost of energy and its impact on American families. The problem with rising gas prices compounds the pain felt in the American economy. Today we learned the economy had stalled to a paltry .6-percent growth rate. If you factor out the highest 10 percent in income, the remaining 90 percent of Americans are clearly experiencing a recession. Only people at the very high end--the wealthiest, the best educated, by and large--are experiencing significant increases in income, and when you factor that out, everybody else is experiencing decreases in income. The vast majority of Americans are already in a recession, and they do not need any statistic to tell them that.

It is also obvious from today's data that the entire economy has stalled. The last time we had two significant quarters such as this, we were battling a recession in the 1990s. Americans are being squeezed at every possible pressure point--at the gas pump--I am going to talk about this issue later--the grocery store, by their mortgage company, and by their employers. Just because President Bush will not say the word does not mean Americans are not feeling like we are in a recession. If we look at income numbers for most Americans, that is absolutely true.

It is long past time for the President to work with the Congress to help get this economy and American families back on track. If President Bush simply gives speeches and brings out the same old saws, we know he does not want to work with us. He is simply trying to say: I am out here talking about this, but there is no real solution. Imagine, the solution to the oil crisis is ANWR, the Alaskan oil reserve, which has been defeated even in a Republican-controlled Congress, which would not produce a drop of oil for 10 years and would bring no relief to the American driver. But I guess it is better than saying nothing, at least if you are the President of the United States.

With regular gasoline prices in States such as mine already over $3.75 a gallon--over $4 a gallon in many other States--and with the entire national average threatening to surpass $4 a gallon this summer, it is no surprise Americans are outraged as they hear about record profits for both the big oil companies and OPEC. Sometimes I wonder if there is any difference because OPEC and the big oil companies are almost always in cahoots.

Gas prices are 63 cents higher than last year, more than double in the time since President Bush took office, and they show no intention of slowing down. Shockingly, our very own President responded with a surprise to a question at the end of February about the likelihood of $4-a-gallon gasoline by saying:

That's interesting. I hadn't heard that.

Well, Mr. President, I hope you hear us now because gas is at $4 a gallon already in many places in America, and it is only going higher. The only people who are happy about $4-a-gallon gasoline are big oil companies and OPEC in the Middle East.

We know the reason prices keep going up, of course, is in good part, world demand is increasing. We know, too, in the long run, we will not be able to reverse this price increase if we do not have a real energy policy. In fact, we have had no energy policy since President Bush took office. If you think it is energy policy to say let the oil companies do what they want, you are sadly mistaken. That is why we have $4-a-gallon gasoline.

This administration's energy policy is simply of, by, and for big oil and OPEC, of course, their partners, their buddies benefit. So in the long run, we need a comprehensive plan. We need conservation--that is the cheapest and easiest way to get lower prices--and we need new production of alternatives and also, in a reasonable and sound environmental way, new production of fossil fuels in America.

But we are also looking for some short-term ways to reduce the price of gasoline because even should we embark on a long-term energy policy that makes sense--and I am hopeful under the next administration, the new President, she or he, will make sure that happens--there are things we can at least attempt to do in the short term because people cannot wait 4, 5, 6 years to begin reducing the price. Even if tomorrow we were to implement a comprehensive policy, it would not be enough, it would not happen quickly enough.

So what can be done in the short term? One of the most important things that could be done quickly in the short term is to increase supply in existing reserves. The one country that has ample supply and has held back is our good ``ally''--and I use that word in quotes--the Saudis. The Saudis should
begin to understand that their relationship with America is a two-way street. They want our weapons, they want our troops to provide them with protection, but then they rake us over the coals when it comes to the price of oil.

The Saudis and big oil are in cahoots, and this administration has coddled both of them for far too long. There is no better evidence of this cozy cooperation than BP and Shell reporting record earnings this week and ExxonMobil and others on deck to do the same.

The bottom line--the sad bottom line--is the whole Bush tax cut for middle-class families this year will line the pockets of OPEC. Let me repeat that. The whole Bush tax cut for middle-class families this year will line the pockets of OPEC. People will pay out more because of the increase in energy prices than they got back on any tax rebate. The stimulus checks we are all so proud people are receiving, the stimulus checks families will receive in the mail next month will, in all likelihood, go to paying eye-popping gas and grocery bills this summer and end up in the coffers of countries such as Saudi Arabia. Therefore, people will pay more for gasoline this year than they will receive from their stimulus checks. It is galling to think our stimulus checks will be lining the pockets of OPEC.

Yet despite all this, last week, Saudi Arabia's Oil Minister said there was no need to increase supplies by even one barrel of oil. However, as they are saying no, no, no to U.S. consumers, the Saudis are planning to double oil production for China.

Despite record billion-dollar profits, it seems the big oil producers, such as Saudi Arabia, the United Arab Emirates, and Kuwait, are willing to turn a blind eye to the supply demands and leave Americans with skyrocketing prices at the pump. In Saudi's case, they have not produced as much oil in the last 2 years as they did in 2005.

I urge my colleagues to take a look at this chart when they get a chance because it says it all. Here is Saudi oil production in 2005. It is lower in 2006 and lower still in 2007. This is not new production they have to explore for, this is not something where they have to change things around. They can order the new production and we could have millions of extra barrels of oil a day out there in the markets within a month or two, and the price would come down significantly.

The countries are putting profits straight into their pockets. So that is why I, along with four others of my colleagues, have demanded the Bush administration stipulate that Saudi Arabia, the United Arab Emirates, and Kuwait must increase their oil production or risk that Congress will block their lucrative arms deals while they stick it to American consumers at the gas pump.

The administration has proposed selling roughly $14 billion in arms to gulf countries that are members of OPEC, and it is clear to us that without pressure from this administration, oil prices will continue to rise as countries such as Saudi Arabia will continue to reap the reward of high prices.

It is terrible that this administration, after making the American taxpayer foot the bill for its war in Iraq, is now rewarding the very countries that are driving up the price of oil.

Congress has the authority to block these arms deals, and we want to put the administration on notice that if they fail to deal aggressively with OPEC countries that are not producing at their full capacity, we will seriously consider blocking this and other arms deals.

On their face, I question the merit of these deals, $14 billion in arms, but it is particularly egregious when Americans are paying through the nose to put money in the pockets of the administration's friends in the Middle East. OPEC nations may have to protect themselves with these weapons systems, but American consumers and our economy also need protection from high oil prices, exacerbated by OPEC's stranglehold on supply.

The administration needs to use all the leverage it has to influence the OPEC cartel to stop manipulating the world's oil supply to its member nations.

Again, to those who say we cannot do anything in the short term to reduce prices, look again at this chart. Saudi production in 2005, Saudi production in 2006, Saudi production in the last full year we have numbers for, 2007, it is lower and lower. The Saudis have not kept the supply flat; they have decreased it at a time when the world is thirsty for oil.

At a time when the world is thirsty for oil, we know they are driving down supply, increasing the price. Yesterday, President Bush said there is not much you can do about the price of oil. Mr. President, we beg to differ. Get your friends, the Saudis, get your close buddy, the King of Saudi Arabia, to begin producing more oil. If they produce half a million more barrels of oil a day, the price would come down a very significant amount and at the same time it would stop the speculation that keeps driving up the price of oil. We would get a double benefit.

We need to ask ourselves what the economic consequences are for our Nation--not only from the long and expensive war in Iraq but from this administration's cozy relationship with the only international organization he seems to have any high regard for--OPEC.

I yield the floor.

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