FAA Reauthorization Act of 2007

Floor Speech

FAA REAUTHORIZATION ACT OF 2007 -- (Senate - April 29, 2008)

BREAK IN TRANSCRIPT

Mr. THUNE. Mr. President, today we debate the FAA reauthorization, and it is a debate that probably should have been joined a long time ago. This is a piece of legislation that has been kicking around here for a long time. I serve on the Senate Commerce Committee. I know both the House and the Senate reported bills out many months ago. We are finally now getting a bill on to the floor for debate. It is important we do this.

This is legislation that is critical to the infrastructure that supports our aviation industry, which is a critical industry to America's competitiveness, and if we look at what is happening in the airlines these days, obviously, we need to do everything we can to make sure we have a viable and effective aviation industry and commercial airlines are able to operate and provide the services to travelers who need to get, every single day, to places both here at home and around the world to conduct business and to recreate.

In the course of this debate, I cannot help but be struck by the fact that I do not see there is anything we can do in the FAA reauthorization that addresses what fundamentally is probably plaguing the airline industry more than anything else, and that is the high cost of energy.

I am looking at some information, graphs, some data. We can look at this graph for January of 2004 and see where the cost of crude oil and the cost of fuel for the airlines, for the aviation industry, was then and where it is today. Follow the red line, the way it tracks up. That spikes up. That is almost a straight vertical line.

If we take another graph which shows what the consumption of fuels is in the airline industry, the green line--you probably, Mr. President, cannot see this; it is too far away, but the green line shows consumption has been fairly static in terms of the amount of fuel that is used. But if we look at the expense or the cost of the fuel, it has increased at a sharp and dramatic rate.

My point very simply is that we cannot affect, I do not think, in a very substantial way, what is plaguing and ailing the airline industry and a lot of other industries in this country absent addressing the fundamental cost issue of energy independence.

If we look at where we are as a nation today and where we were 30 years ago, not much has changed. I remember as someone growing up during the oil embargoes and what we were experiencing in the late 1970s and a real concern at the time about our dependence, overdependence, dangerous dependence on foreign sources of energy. At that time it was 55, 60 percent. Here we are 30 years later and we are more than ever dependent on foreign sources of energy. Mr. President, 60 to 65 percent of our petroleum comes from outside the United States.

We have very little control over the supply. The only way we fix that, the only way we can impact energy costs in this country in a meaningful way is to increase supply.

We can talk a lot about a lot of issues with regard to this problem, this challenge we face as a country. There are some things we can do to impact the demand side, too, and we did that in the Energy bill last year. We increased for the first time in a very long time fuel economy standards so now automobiles are going to be built to standards that will require more miles per gallon than they currently get. That will help control, to some degree, the demand side. Obviously, I think individual consumers in this country, drivers in this country, are going to begin to take steps to reduce the amount of fuel they consume because it is impacting so adversely their pocketbooks on a daily basis.

But there is not anything we can do totally on the demand side to get us out of this mess we are in. We have to do some things to impact supply. I can't help but think that if we had taken some of these steps years ago, back in 1995 or thereabouts when President Clinton vetoed legislation that would have allowed oil exploration on the North Slope of Alaska--at the time it was argued, oh, it will take 5 to 10 years for us to develop this resource and when we do, it will not be that much anyway. It is only 1 million or 1 1/2 million barrels a day, and that is not that significant in the overall scheme of things. Here we are 10 years later. If we had done that then, this would be fully developed, we would have the barrels of oil on a daily basis, the daily equivalent of what we get from Saudi Arabia, available to meet our demand in this country.

It has probably been, since that time, half a dozen times we voted on that. In the House of Representatives, I don't know how many votes we had over there that would have allowed authorized exploration for oil on the North Slope of Alaska. We have had that vote in the Senate, since I have been here, on at least one occasion, maybe two times, where we were a couple votes short of reaching that magic 60-vote threshold that would allow us to move forward and explore some of these opportunities that we have to grow our supply, our domestic supply of energy.

Because he had listened to this debate for some time--I have been in the Congress, now, for the better part of 10 years and always was interested when the debate would come to the floor of the House or the Senate and you would hear both sides come to the floor and make their arguments--I actually went up to Alaska and visited the section 1002 area where it is proposed we develop this oil resource. We landed in Barrow, AK, in February, a couple years ago. It was 38 below. We visited a couple of the existing sites at Prudhoe Bay and then we went over to section 1002, which is the vast area we are talking about for development. What struck me is we are talking about a 2,000-acre footprint that would be used to access the oil below the surface, and with modern technology, you can actually get to those reserves below the surface with horizontal or directional drilling, with a minimal footprint on the surface, and it would be done during certain parts of the year where it wouldn't impact wildlife or anything.

Incidentally, there were caribou everywhere. Anybody who is worried about the caribou on the North Slope of Alaska, they have nothing to worry about because, if anything, it has been increased since the activity that has taken place up there.

But this particular area is a very isolated, remote area on the North Slope of Alaska. The estimates run from somewhere between 6 billion and 16 billion barrels of oil beneath the surface or, as I said, the daily equivalent of about 1.5 million barrels a day, which is comparable to what we get from Saudi Arabia.

To put it in perspective, a 2,000-acre footprint, for those who come from my part of the country who have an agricultural background, that is the equivalent of three sections of farm ground. That in an area of some 19.2 million acres in what they call ANWR, this refuge area. But if you look at the State of Alaska in its totality, Alaska, believe it or not, is 7.5 times the size of the State of South Dakota. You could put South Dakota geographically into Alaska 7.5 times. That is how vast this area is up there. It is part of our country, part of an area that has enormous resources below the surface that could be very meaningful in terms of addressing America's energy needs.

When you visit that area, you cannot help but be struck with, No. 1, how supportive the governmental leadership is in that area--the Governor, the State legislature, in many respects most of the local citizens. There are always those who are opposed to this type of development. We heard from them as well. But overwhelmingly, the majority of people in that area want to see this development.

Here we are again facing a crisis as we head into the summer driving season, travel season, vacation season. Families are looking, making plans. In my State of South Dakota, farmers are getting into the field, and they are having to deal with the input costs associated with high fuel costs, diesel costs. This is an economic issue that affects literally every American but particularly those middle-income Americans and those who this summer are looking at making plans to travel. They are going to be facing $3.50 gasoline, perhaps higher than that. Who knows how high that is going to go?

My point very simply is we should have been taking these steps many years ago. We are now paying a price for inaction on the part of this Congress when it comes to the things we can do to add to supply in this country, to make sure we are taking full advantage of the domestic resources we have right here at home so we do not have to continue to allow other countries around the world to hold us over a barrel when it comes to our energy needs.

The other thing we ought to have been doing--again this is something that is long overdue--is developing more refinery capacity. We are pretty much maxed out. We have not built a new refinery since 1976. They will tell you they have added or expanded existing refineries, and all that is true, but at the end of the day we have not done very much in terms of addressing the refinery shortage we have in this country either. So when it comes to raw resources such as the oil, petroleum resources below the surface on the North Slope of Alaska, when it comes to the ability to refine that into gasoline, we have some deficiencies that are of our own making. I regret the fact that we were not able to find the votes in this body to do these types of things many years ago, when today it would make a big difference in the challenge we face.

The other issue, the other point I will make--because I think it gets back at this issue of how doing some of these things, although at the time they may have seemed to be not that substantial, could make a difference at the margin--is what has happened with renewable energy in this country. We are now generating about 7.5, almost 8 billion gallons of renewable fuel or ethanol in America today. One would think perhaps, when you use 140 billion gallons of gasoline on an annual basis, that that is not that big of a dent. But there was a study done by Merrill Lynch, it was reported in the Wall Street Journal a few weeks back, that were it not for ethanol, the price per barrel of oil and the price per gallon of gasoline would actually be 15 percent higher than it is today. So even though it is 7.5 billion gallons out of a 140-billion-gallon annual demand for gasoline, it is affecting the price because it is impacting supply in a positive way.

In the same way, if we had opened the North Slope of Alaska when we had an opportunity to do so, we would have that 1 1/2 million barrels a day coming into this country, which also would significantly impact the supply in a way that would begin to bring down prices. The only way we are going to bring downward pressure on prices is to increase supply. That is why I have been such a big advocate for renewable energy.

We are at 7.5 billion gallons today. The Energy bill that passed last year calls for 36 billion gallons of renewable fuel by the year 2022. I think we can reach that. We are not going to reach it with corn-based ethanol. We have to diversify the production of ethanol in this country with other forms of biomass, whether that is by woodchips out of our forests, whether it is by switchgrass, which we have an abundance of on the prairies of South Dakota--but there are a lot of opportunities for what we call the next generation, for cellulosics, to meet the demands for energy in this country. I think we should be moving full steam ahead when it comes to support for renewables so we can lessen the demand on foreign energy and we can become more energy efficient here at home and develop the supplies of fuel we have.

That being said, even if we get to 36 billion gallons of renewable fuels, we still will be way short of what we need. We are going to need a mix of fuels. We are going to rely on some of those traditional sources of fuel such as petroleum. Coal-to-liquid holds great promise in terms of being able to be used as a fuel, and coal is something we have in infinite amounts. We ought to be developing these types of resources. I think we also ought to be allowing States that want to, particularly some States in the upper Midwest, where ethanol is produced, to go to higher blends. We are at 10 percent ethanol today. There are States I think would like to go to higher blends. We ought to allow them, particularly when the studies are concluded by the Department of Energy and the EPA, which are determining the impact on drivability, materials compatibility, emissions--all those sorts of things. When they come back, which I believe they will, and conclusively determine that going to higher blends would not in any way adversely impact any of those metrics I mentioned, we ought to be moving to higher blends of ethanol because I think that also will help take pressure off oil prices as we continue to use more and more renewable energy.

These are all parts of a solution. We need supply. But we have not taken the necessary steps to add to supply. If not now, I don't know when. When we get prices such as we are seeing, and the impact that is having on transportation industries such as aviation, such as trucking, such as agriculture, these are impacts on our economy that are only going to bring great economic strain to many industries and a loss of jobs.

We can do something about it. We ought to be doing something about it. We need to now authorize, even though we have had many opportunities to do it in the past--we ought to do it on the North Slope of Alaska and offshore and other places where we have these reserves. We ought to allow refineries to be built. We tried to get legislation through that would allow refineries to be built on BRAC bases; in other words, bases that were closed through the BRAC process, and it was blocked by the Democrats on the Environment and Public Works Committee.

Even when it came to the renewable fuel standard last year, that passed through the Senate and House and ultimately was signed into law, there is a deficiency there as well which has come to light now and a change that was made at the very 11th hour by the Speaker of the House that prevents biomass, residual types of biomass such as slash piles that are generated in our national forests, to be used to make cellulosic ethanol.

That makes absolutely no sense. We have waste products in our forests that add to fuel loads that create fire hazards. All we are simply saying is these types of products could be used to make next-generation biofuels and help grow our supply of renewable energy, and that was stripped out, at the 11th hour, by the House in the conference.

That is very unfortunate because it is steps such as that, it is steps such as blocking legislation that would allow for expedited permitting of refineries on BRAC bases, it is things such as blocking a vote on opening the North Slope of Alaska to oil exploration--those are the types of things that are stopping us. Those are the types of steps and maneuvers in the Senate and the House that are stopping us from adding to the supply of energy so we can do something about it, so we can impact, in a meaningful and positive way, the high prices that are affecting consumers across this country.

I wish to make one observation as well with regard to renewable energy because ethanol has come under a lot of criticism of late, much of it I think inspired by opponents of ethanol, such as oil companies. People are talking about the high cost of food, and food prices have gone up in this country. But if you think about it, the amount of corn that goes into a box of corn flakes, for example, it is about a nickel. If you think about what impacts the cost of the things we buy at the grocery store, transportation has a profound impact on the cost because you have transportation, you have packaging, processing--all those things which are very energy intensive. So when you have high energy prices, high fuel prices such as we are facing today, that has more to do with the costs of food than the cost for a bushel of corn is ever going to have, when it comes to corn flakes or when it comes to popcorn or many of the other things that are being mentioned now by some of these groups opposing ethanol.

I also would point out what I mentioned earlier and that is that were it not for ethanol--this again was reported upon by the Wall Street Journal a few weeks back, a study done by Merrill Lynch--oil prices, per-barrel oil prices and per-gallon gasoline prices would be about 15 percent higher. Couple that with the fact that a high commodity price means the Federal taxpayers under our farm programs are not making payments to producers to the tune of a savings of about $8 billion last year, according to the USDA, and there are lots of impacts that are not being mentioned by those who are specifically singling out ethanol and criticizing ethanol for the increase and runup in food costs.

Add to that or couple that with this piece of data that comes out of the USDA, that $8 billion in savings in taxpayer payments would be made under farm programs that were not made, that didn't go out this last year because of high product prices. That is a substantial savings to the taxpayers of this country. Again, couple that with the fact that ethanol has contributed 15 percent reduction in the overall costs of fuel in this country, ethanol is having the impact we hoped it would by increasing supply and taking pressure off the price at the pump in this country.

High fuel costs, high food costs, all these things are impacting consumers across this country. We cannot solve that problem. We cannot solve the problem of the airlines until we do something to develop our domestic resources right here at home.

We have some supplies, some reserves underground even in places that previously had not been contemplated as a source of energy, in places such as the Dakotas where we are now finding there are some reserves down there, that with prices being what they are may be economically recoverable. We should be doing everything we can to develop domestic resources, whether it is on the North Slope of Alaska, whether it is offshore, whether it is in the Dakotas, in the form of oil below the surface, or corn that grows above the surface that is renewable that we can use every single year. We need to be developing resources right here at home that will lessen our dependence upon foreign sources of energy and do something to take the pressure off these high gas prices we are seeing today that are affecting every single American.

I hope we will pass a comprehensive energy bill, one that includes increasing our supply, one that finally, once and for all, will allow us to get to that 6 to 16 billion barrels of oil beneath the surface on the North Slope of Alaska, which is widely supported by the political leadership in Alaska, the local citizenry there, that increases the amount of renewable energy we use in this country by allowing States that choose to increase and go to higher blends, perhaps to 20 percent or 30 percent ethanol. These are all things we could and should be doing today--allowing refineries to be built on bases that have been closed, and allowing for expedited permitting when it comes to constructing those refineries. These are all things that ought to be part of this energy solution. I think people are going to hold this Congress accountable if we do not take steps in that direction. My hope would be that before we move out of here before the next break--we have got a break coming up in a couple of weeks--we will take some action that will do something meaningful to lower energy prices for people in this country, increase our supply to build new refineries, to support the increased use of renewables. Those are all things that will happen and provide solutions and meaningful relief to the hard-working people in this country who are now faced with much higher gasoline prices.

I yield the floor.

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