News Conference with Sen. Byron Dorgan (D-ND); Sen. Charles Schumer (D-NY); Sen. Robert Casey (D-PA); Sen. Bernie Sanders (I-VT); and Sen. Amy Klobuchar (D-MN) - Strategic Petroleum Reserve, Oil Prices, Saudi Arms Deal

Statement

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SEN. DORGAN: I think we'll begin.

As you know, we just completed a vote on the floor of the United States Senate dealing with the Strategic Petroleum Reserve. And by a nearly unanimous vote -- I believe there was one dissenting vote -- the Senate said to this president: Stop putting oil underground when the price of gas is nearing $4.00 a gallon. It makes no sense at all.

And I'm really pleased with the Senate vote. It's a step in the right direction. We don't claim it's a giant step, but we do claim it's a step in the right direction that will put downward pressure on gas prices and downward pressure on oil prices. And obviously, we'll want our House colleagues to move and find a way to reconcile the two bills.

But we have plenty of votes to override a veto if President Bush and Vice President Cheney continue to insist that they ought to take oil out of supply and stick it underground. The Strategic Petroleum Reserve is 97 percent filled. I said this morning, I mean, this is a case of when the American consumer is being burned at the stake by high energy prices, its government should not be carrying the wood. I mean, this makes no sense for us to take oil out of supply and putting it underground.

So I'm really pleased about this vote. I introduced this bill in February this year. We've had testimony before the Energy Committee that says this is a step in the right direction, that will put some downward pressure on oil and gas prices.

My colleagues have some other things to talk about. (Laughter.)

SEN. : We're behind the curtain here.

SEN. DORGAN: And I have to depart.

But I wanted to especially talk about that one piece of positive news, and there are other issues as well that we want to cover.

Thank you very much.

SEN. SCHUMER: Well, thank you Byron.

And what happened on the floor today is just a little taste of the things to come. The American people are desperate for ways that we can lower the price of gasoline. We have had no policy whatsoever when it comes to energy except to be positive to oil and gas. And that is no policy at all.

It's worked. If you look at President Bush's ideas, it's worked. Oil companies are making record profits. The price of gasoline is close to $4 in most parts of America and above 4 (dollars) in some, and they're doing fine. And OPEC is rich and buying up our industries and factories. What a bankrupt policy.

So today was the first step in reversing it. And first, I want to thank Senator Dorgan for his leadership on freezing the SPR. We in the Democratic leadership are urging our Republican colleagues to let us pass this as as a single bill -- not as part of flood insurance, which is how we had to bring it up -- so that it can go quickly to the House and be signed by the president. And so far, they've objected.

It will bring a little bit of relief. It'll bring about up to five cents of relief, which, as Byron said, is not a giant step, but it's a step. And we're going to keep working.

We're here today to talk about another issue. This is our next step. And as you know, Saudi Arabia has greatly reduced the amount of oil that it is pumping. They're producing nearly 2 million barrels of oil a day below capacity. In the past, Saudi has buoyed the crude price by limiting supply by anywhere from 1 (million) to 5 million barrels a day, and they're doing it again. If the Saudis were to pump an extra million barrels out a day, the price would go down 50 cents, and it would go down within a month or two, maybe even sooner.

So that is the quickest and best way to get short-term relief. We have lots of other ways to get longer-term relief.

And we are here today to say that the five of us -- Senator Dorgan, Senator Casey, Senator Klobuchar and Senator Sanders and I -- are introducing a resolution, a motion of disapproval in terms of the Saudi arms deal.

We are saying to the Saudis that if you don't help us, why should we be helping you? We are saying that the relationship has to be a two-way street. We are saying that we need real relief and we need it quickly.

You need our arms, but we need you to cooperate and not strangle American consumers. The president is going over to Saudi Arabia. He's leaving tonight. That's why we're introducing this resolution today.

I believe that Senator Reid will Rule 14 this, so we can bring it to the floor soon, we hope. And, but we hope in the meantime that our show of resolve will show the Saudis.

And maybe they will act on their own. Maybe the president will be able, with this new legislation hanging over their heads, to get the Saudis to do a lot more than they have done before.

Bottom line is, energy prices are burning a whole in every American's wallet and pocketbook. They're causing us to cut back on other things. They're hurting the economy overall.

And if you go anywhere in my state, from inner-city New York City to rural Batavia, where I was yesterday, the number one talk is about high gasoline prices.

This is the quickest and best way to get something done. And we hope that the president, instead of thwarting us and telling the Saudis everything is fine, will join us in an effort to get them to pump more oil and pump it quickly.

Senator Sanders.

SEN. SANDERS: Thank you, Chuck.

The vote that was just taken a few minutes ago is extremely important. It is extremely important not just that it is a step forward, one step forward, in trying to lower the price of gas and oil in this country. But what it should tell every American is that the members of the United States Senate are catching on.

It wasn't but a few weeks ago when many of the senators, well, no, I'm not going to support that legislation. Well, we just got 97 votes.

And the reason for that is that senators are going home to their states and people are saying to them, "Hey, we can't survive economically if the price of oil and gas continues to rise." So today you almost had unanimous support for freezing oil in the SPRO and not putting any more oil into it.

That to my mind is simply one step. Clearly, we need to move forward on a windfall profits tax. Clearly, we need to deal with the issue of speculation, which is driving oil prices up off of the wall.

But there is another issue out there, and that is -- I think as most Americans know -- Saudi Arabia has the capacity to produce substantially more oil than it currently is. And if they do produce that oil it will lower prices in our country and they must do that.

What all Americans also understand is that OPEC -- the reason for existence of OPEC is to function as a cartel which controls prices. That is their very reason for existence. And to my mind, the time is long overdue for this president, who tells us how much he believes in competition, to say to OPEC that we are going to challenge their very existence so they cannot continue to function as a cartel, colluding to limit production and artificially raise prices.

So I think the issue that we're dealing with today, which is one part of a multi-pronged approach, is to say to Saudi Arabia, increase oil production, to say to OPEC, your time has come and gone. The world can't function well with a cartel that artificially controls production.

Thank you.

SEN. SCHUMER: Senator Casey.

SEN. CASEY: Thank you very much.

I think it's really a basic question here for the president, one of leadership. He's either going to demonstrate the kind of leadership the American people -- the American people have a right to expect from him. And what does that mean? That means putting pressure on the Saudis to increase production. And it also means using every tool at his disposal to provide some relief at the pump: $3.73 at the pump right now is an exorbitant amount of money for Americans to be paying. And it's going to go up, unfortunately.

I think the president needs to demonstrate leadership. And while he's talking to the Saudis about oil production -- as he should, and he should have done it long ago -- he ought to tell them at the same time that they're not paying their fair share with regard to Iraq reconstruction.

So if they want our help on military equipment and technology, if they want our help in other ways, they should pump out more oil, pay their bills in terms of Iraq reconstruction; and he should get behind efforts here in the Congress to provide relief at the pump.

SEN. SCHUMER: Senator Klobuchar.

SEN. KLOBUCHAR: Thank you, Senator Schumer.

Well, this week we have a new record, and that is that when American drivers are going up to fill up their trucks, they're off the charts. The gas pump literally can only go up to 99.99, and now for many of them it's over 100 and it won't register on the gas pump. We are literally off the charts in our current price of gas. Meanwhile, truck drivers who visited my office today told me it now is costing them over a thousand dollars to fill up the diesel trucks because of the cost of diesel.

It is time for action. I'm pleased that we were able to get this amendment passed today, but like Senator Schumer, I would rather see a comprehensive package. But if we're going to have to do it one scrap at a time, that's how we'll do it.

I think we need to do something about speculation. That is clearly what I'm hearing all the time from people in this business. And we also have to move on taking the oil giveaways, putting them in the long-term plan for remewables.

But this is something we can do right now, since the president is going to Saudi Arabia. For years the Saudi government has used its leverage over world oil supplies to drive up prices, and Saudi Arabia is currently producing 2 million barrels per day below its maximum capacity. Through this resolution, we are calling for our government to use its leverage -- and it has some leverage -- over the Saudis to compel them to restored their daily oil production to reasonable levels. This is the time to act.

Thank you.

SEN. SCHUMER: And just to be clear, our resolution will be introduced today. Senator Reid will Rule 14 it in time for the president before he leaves on his way to Saudi Arabia. And again, we're hoping that the president will change course and persuade the Saudis with some leverage in his hand to start pumping more oil. They've cut back. They're 800,000 barrels a day lower today than they were in 2005.

We're ready for your questions.

Q Does the resolution -- it disapproves the arms sale.

SEN. SCHUMER: Correct.

Q Does it also mention the -- (off mike)?

SEN. SCHUMER: No. It's a strict resolution of disapproval. We hope we don't have to bring it to the floor. We hope the Saudis will do this on their own. But if not, we believe that it's a two-way street.

Q (Off mike.)

SEN. SCHUMER: That's right. The resolution of disapproval is simply on the arms sale itself, which I think you have 90 days to do from the time the arms sale is mentioned.

Yes, and it comes automatically to the floor.

Yeah.

Q Oil producers say that the windfall profits tax won't actually do anything to benefit supply or reduce prices. Why are Democrats still pushing that?

SEN. SCHUMER: Well, we don't disagree.

SEN. SANDERS: Is that what oil companies really say? Oh my goodness, they must be absolutely right.

SEN. SCHUMER: Right. And by the way, the windfall profits tax that we have will encourage them to start producing alternative fuels because the money that we collect from the windfall profits tax will go into tax breaks for alternative fuels. And that's the long-term way to do this.

But the bottom line is very simple, and that is that they've had their way in every way for the last seven years, and look where it's brought us. We don't listen to them anymore.

SEN. KLOBUCHAR: And just -- you know what else they said? They said before Congress that gas really shouldn't be this high. It should be at $55 per barrel. So if that's true, then we've got to change government policy to make it true.

And second thing I'll tell you is when they were -- refinery issue came before our Joint Economy Committee, they blamed it on ethanol competition, when in fact there are only 1,200 ethanol pumps in the country.

SEN. SCHUMER: Yes.

Q There is a good possibility of adding Venezuela to the list of states that sponsor terrorism. This would affect even more the price of oil. What would be the reaction of the Democratic Party?

SEN. SCHUMER: Don't know yet. Haven't really studied it. Anyone? No. I guess we all don't know yet.

Q There's also a bipartisan movement to tackle speculation in the marketplace. There is a problem --

SEN. SCHUMER: Yes.

Q There are two proposals. One is to tackle the offshore trading on U.S. terminals and the other's to raise margins, which I believe you have expressed against, feelings against that --

SEN. SCHUMER: No, I have not.

Q You do support raising the --

SEN. SCHUMER: Let me just say, I think what we've done -- and you can look at the package we've put in -- we haven't set a specific margin because that's done by the CFTC, but our proposal asked them to have a significantly higher margin. The one question that we have to make sure of -- and I think we dealt with in our legislation -- and that was the issue -- is we don't just want to allow the trading to go over to London and not change anything. So we've redrafted the legislation so it affects the actual person doing the speculating as opposed to the exchange.

SEN. KLOBUCHAR: And both of those are in our bill. And in the third one is closing the Enron loophole which is in the farm bill.

SEN. SCHUMER: Right.

Q When will that speculation material hit the --

SEN. SCHUMER: Well, we have a five-part bill. We just broke out this. The Republicans insisted on doing their energy package, including such immediate ideas as drilling in ANWR. And so we just put forward this one part of our package. The other four pieces will be on the floor and be debated in the next month or so.

Q You're not going to break those out separately?

SEN. SCHUMER: As of now, no.

Q The resolution -- there are a number of arms sales that you -- (off mike) -- last month.

SEN. SCHUMER: Yes.

Q This resolution doesn't deal with those arms sales, does it?

SEN. SCHUMER: It deals with the Saudi. It deals with $1.2 billion of Saudi arms sales, but not --

Q These are ones that have already gone through though, right?

SEN. SCHUMER: No, they can still be disapproved.

Q But those arms sales were announced, or the Congress was notified in mid-January, and so the 90-day --

SEN. SCHUMER: Yeah, but, well, there's a technical reason that it's still -- it's still -- we're still able to do it. It was announced then, but it wasn't submitted to Congress until -- do we know when?

STAFF (?): The weapons haven't been delivered. As long as they haven't been delivered, we can --

SEN. SCHUMER: Right.

Q But what is the force of that disapproval?

SEN. SCHUMER: If the disapproval were to pass the House and to pass the Senate, they couldn't sell them.

Q By a 50-50 vote, or -- ?

SEN. SCHUMER: Correct. Comes up and it has to come automatically to the floor, that's right, so it can't be filibustered.

Q And so wouldn't that -- (off mike)?

SEN. SCHUMER: Like any motion of disapproval. There's one -- there's a motion of disapproval coming to the floor this week on the FCC that Senator -- on the FCC that Senator Dorgan is doing. A motion of disapproval comes to the floor within a certain period of time and requires only 51 votes, and has to be voted on.

Q You mentioned 50 cents -- a million-barrel increase in Saudi production would reduce the cost of -- I'm sorry, I missed that, of what -- of what 50 cents?

SEN. SCHUMER: Gasoline. Fifty cents a gallon at the pump, at minimum. It's 50 to 75 cents. We've chosen the conservative estimate.

Q Now, Bush has asked the Saudis to increase production before. Cheney, I think, asked the Saudis recently. They got turned down twice. What does that suggest to you?

SEN. SCHUMER: It suggests that just asking them isn't enough, and that's why we've introduced our resolution.

SEN. SANDERS: It also suggests that if you look at some of the statements --

SEN. SCHUMER: Go ahead, Bernie.

SEN. SANDERS: It also suggests that if you look at some of the statements that candidate George W. Bush made in 2000, what he said is that, hey, I know a lot about the oil business. That's what I am. And I'm going to go speak to OPEC, and we're going to jawbone with OPEC and we're going to raise oil production.

That's what he said in the year 2000.

x xx production. That's what he said in the year 2000. Well, it's 2008, and maybe it's high time that he began to do that.

SEN. SCHUMER: (To staff) How much time do we have left on the vote?

STAFF: Five minutes.

SEN. SCHUMER: Five minutes. Okay. We'll take this as the last question.

Q Are you not concerned that if this arms sale doesn't go through, that Russians will supply their own arms? While their technology, you may argue, is not -- (off mike)?

SEN. SCHUMER: Saudis much prefer -- particularly on the laser- guided missiles and bombs, we're the only ones who do it.

Q But in terms of developing a closer relationship with one of the countries that is increasingly hostile to the U.S. --

SEN. SCHUMER: We are being drained by a billion and a half dollars a day in this country. We're losing our wealth. Our economy is heading south. That is the highest priority, not the Saudis getting the top-notch weapons.

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