Energy

Floor Speech

ENERGY -- (Senate - April 29, 2008)

BREAK IN TRANSCRIPT

Mr. CORNYN. I thank the Chair.

I don't blame the American people for being upset at the price of gasoline they have to pay at the pump. Frankly, the biggest cause of those high prices is the Congress.

It has been 2 years since Speaker Pelosi said that her party, the Democratic Party, had a commonsense plan to bring down prices at the pump. I am left to wonder how long we will have to wait to hear what that commonsense plan is. So far, all we have heard is an escalation of the blame game, which, of course, here in Washington, DC, inside the beltway, is a world-class sport. The problem with the blame game is it doesn't actually solve any problems. I think what the American people are frustrated about, among other things, is Congress's intransigence, its unresponsiveness, and its unwillingness to listen to their concerns--legitimate concerns--about how they are going to balance their family budget, particularly when it comes to the rising cost of gasoline and the rising cost of health care.

As my colleagues can see, in the 2 years that have gone by--in almost 2 years--we have gone from $2.33 for an average price for a gallon of gas to $3.61. That translates for an average family to about a $1,400 increase in expenses a year associated with their gasoline costs--$1,400 a year. So the Federal Government has essentially imposed an additional tax by its inaction on the average working family in this country. Frankly, we have the tools available to us to remove that tax and remove that burden if we will simply exercise our ability to use those tools in order to begin to bring down that price at the pump.

History has shown that raising taxes on oil companies is no solution because ultimately we know who ends up paying for tax increases. Ultimately, they are passed on down to the consumer. So it may be fashionable to beat up on big oil and say: Let's tax the oil companies because they are making too much money, but do you know what. If we raise taxes on the oil companies, we all end up paying an increased price for gasoline at the pump. It also has the effect as we saw from 1980 to 1988; the so-called windfall profits tax actually caused a decline in American oil production, reducing domestic production by as much as 8 percent. So for those who are worried, as I am, about our dependence on imported oil, a windfall profits tax is simply no answer at all. In fact, it is counterproductive.

Of course, the problem then was the same as the problem is today, and that is a shortage of oil around the world. I have said it before and I will say it again: Congress can pass a lot of laws, we can repeal some laws, but we cannot repeal the law of supply and demand. Other countries around the world have or want more of what we have in this country, which is unheralded prosperity, primarily because of our use of a disproportionate amount of energy. India and China and growing countries such as those with a billion people each are using more energy, and we are not seeing the supply go up, particularly here at home. So we know that Congress has been one of the biggest obstructions to increasing oil supply and lowering prices at the pump.

My staff helped me research these figures to make sure we had justification for them. As we see oil now approaching--maybe it has gone over--$120 a barrel today, if we were to develop the known resources we have available in Alaska that the Senator from Alaska just talked about, it would be the equivalent of $55-a-barrel oil--$120-a-barrel foreign oil versus $55-a-barrel American oil. If we were to develop more of the Outer Continental Shelf in places such as the Gulf of Mexico, even beyond the horizon where you can't even see it from shore, we could produce that oil from American reserves at the price of roughly $63 a barrel--$63-a-barrel American oil versus $120-a-barrel foreign oil.

It seems to me we are missing a great opportunity, not only to help bring down the major price driver of gasoline costs--70 percent of the cost of gasoline is the cost of oil--but also to make ourselves more secure and less dependent on foreign sources of oil, enhancing our national security and helping to bolster our economy at the same time. But, as we have heard, Congress has consistently thrown up a roadblock at accessing these sources of American oil.

Now, some of my colleagues on the other side of the aisle have proposed another so-called solution to low supplies. They said: You know what. We are going to take OPEC to court. Let's sue somebody. Unfortunately, that is an all-too-common proposed solution where we are going to litigate, regulate, and increase taxes. But, frankly, it is a little bit--well, more than a little bit--impractical, and it would make us even more hopelessly tied to foreign nations and their production whims. So if your solution is, let's sue OPEC and force them to sell us more oil, does that make us less dependent on foreign sources or more dependent? I would suggest that even if it were practical, which it is not, it would make us more dependent on foreign oil and is not a solution.

We need to remember just how much of an impact high energy prices have on the everyday lives of working Americans. High prices drive up the cost of all methods of travel. We are here this week talking about our airlines, and we know what economic pressure has been put on the airline industry and on the prices of tickets that continue to go up because, frankly, the price of oil is coming close to bankrupting the airline industry and driving those costs. But, of course, whether it is the cost of driving the kids to school or driving to work, these high gasoline prices impact everyday Americans all across our great country.

As the Senator from Alabama noted, sometimes Congress's best intentions backfire in things such as ethanol subsidies, using corn, using food for fuel, and leading to skyrocketing--helping to lead to skyrocketing food costs, not to mention livestock feed and other unintended consequences. We need to recognize that while developing renewable fuels certainly has its place as a part of the answer, no single solution is a panacea. All of these have to add to our energy diversity and our energy mix in order to provide the relief the American people want and need.

Increasing the supply, which will help bring down the cost of oil and the cost of gasoline, as I said earlier, must begin here at home using America's natural resources. Why Congress would mandate, in effect, that we can't buy American, we have to buy foreign when it comes to oil, is beyond me, and it just doesn't make any sense. We can develop environmentally responsible oil production right here at home if Congress would simply act.

The only real commonsense near-term solution to bringing down prices at the pump is to take advantage of the enormous natural resources we have right here at home. It is estimated that if Congress stopped penalizing and handcuffing American energy production right here at home, we could produce an additional 2.7 million to 3 million barrels of oil a day. That would be 3 million fewer barrels of oil a day that we would have to buy from Canada, from Venezuela, and from nations in the Middle East.

Allowing American production would send a strong message to the American people and to the financial markets that we are working as quickly as possible to drive down gas prices for American families. It would reduce speculation on the commodities markets that is helping to drive up the price of oil because when the financial markets see the Congress doing nothing and see the supply of oil remain static and see the demand increase, it is going to continue to drive prices higher and higher.

Unfortunately, we have seen too many Members of Congress block sound energy policies that would give American companies access to our valuable natural resources, such as we have heard about oil deposits in Alaska, offshore deposits, and shale oil sites that the Senator from Alabama mentioned a moment ago.

I think most Americans take an instinctive pride in the ``Made in America'' label, and wouldn't it be nice when it came to the gas pump if we saw a ``Made in America'' label on that gas pump.

I appreciate the opportunity to talk about what I think is probably the No. 1 issue on the minds of most of my constituents in Texas and most people in America today. It is the reason we had a bunch of truckers here yesterday complaining about the inaction by Congress when it comes to the price of fuel they need to earn a living and move America's goods and services around this country and to our homes.

I hope the majority leader and Members of Congress will work together on a bipartisan basis to try to bring some of these policies to the floor as soon as possible and without a moment of unnecessary delay.

I yield the floor.

Source