Consumer First Energy Act of 2008--Motion to Proceed
Floor Speech
CONSUMER-FIRST ENERGY ACT OF 2008--MOTION TO PROCEED -- (Senate - June 11, 2008)
BREAK IN TRANSCRIPT
Ms. KLOBUCHAR. Mr. President, I just got back from my home State of Minnesota. Let me tell you, the price of gas is not just one of the issues people are talking about, it is the issue they are talking about.
In this last week, as we all know, gas prices have risen above $4 a gallon as the national average, and many of the people in the country cannot afford it. If you drive past a Costco store--I am a Costco member--you will see in the Twin Cities cars lining the block trying to get in to save a few pennies, to save a few nickles, to save some money. Those gas lines remind me of the OPEC oil embargo we have not seen since the 1970s. If you talk to people in the rural parts of our State, you will be shocked at their out-of-pocket expenses. They have a longer way to drive to work. With gas at $4 a gallon, some people are spending $20 a day to get to work in the morning and to get home at night.
Mr. President, as you know from your home State of Colorado, in some areas, there is not going to be a lot of mass transit. In some areas, they have to drive longer to get to work. Families cannot afford these prices. A few weeks ago, we saw stories in the paper saying that consumers were not changing their driving patterns, that they were comfortable with their commuting habits, and they were willing to pay a few dollars extra each week.
Well, $4 gas has changed all that. One in twelve Americans now have found a new way to go to work because they can't afford week after week of these gas prices. And we need more mass transit. I support that. That is a good thing. But we know for many Americans who have less income and are dealing with the problem of increased health care costs and who are dealing with the issue of an increase in the cost of food, and now these gas prices up to 4 bucks a gallon, when they have less disposable income, less money in their pocket, it is hard to afford things.
We simply cannot continue business as usual. When we have people going to a gas station and can only afford to fill half their tank with gas, we can't afford to keep going. That is why I am so shocked when I have seen what the other side has done. Time and time again, the same old argument. Well, I think these same old ideas are running on empty, just as the people in this country are running on empty.
The other side has blocked consideration of some new ideas and a new way to go forward with energy, both for short-term and long-term relief for the people of this country. I say this to my colleagues who voted against that bill and voted against allowing us to debate and allowing us to move forward with a new energy future: They are running on empty, and the American people know it.
Remember back when President Bush was asked about $4-a-gallon gas on February 28? The President said:
You are predicting $4 a gallon gasoline? That is interesting. I hadn't heard that.
Well, for the people in my State, $4-a-gallon gasoline isn't interesting, it is a budget buster. The fact is, this administration has failed to provide Americans with a meaningful energy policy that would provide relief from high gas and energy prices. They have been running on empty. This is why I am so frustrated that our colleagues blocked consideration of this important bill.
We are not proposing anything radical. We are simply asking that the Government enforce the laws on the books and make the marketplace work like it is supposed to.
As the Presiding Officer does, I come from a prosecutor's background, and I know we can have all the laws on the books we want, but if we don't enforce them, we are not going to get the relief we need. We are not going to help victims--or in this case consumers--if there are no cops on the beat and no
one is enforcing the laws or drawing the line.
As part of this important bill, the other side blocked us from even considering, from even debating having Federal regulators provided the tools to do their job, to crack down on speculation in the futures market and on speculators who trade in offshore exchanges just in order to avoid regulation. We want the Attorney General to have the authority to prosecute collusion by foreign governments.
We heard a witness in recent months come before multiple committees in Congress, the CEO of an oil company, and say: You know what. A barrel of oil shouldn't cost over $100. A barrel of oil should cost somewhere between $55 and $60. That is the true cost. We heard a witness in recent months describe our energy markets as a giant gambling hall without rules, as a superhighway without a traffic cop.
That is what we are dealing with. So we need a cop on the beat. The Consumer-First Energy Act gives us that cop on the beat. It addresses the problem of market speculation by stopping traders from routing transactions through offshore markets in order to get around the limits on speculation put in place by U.S. regulators. Why would they go to these offshore markets? We know why they are going there. They want to avoid any regulation in this country.
In fact, you don't even have to go offshore to find unregulated energy trading. The Commodity Futures Trading Commission is allowing the Dubai Mercantile Exchange in New York and the Ice Electronic Exchange in Atlanta to trade in U.S. oil futures without Federal oversight. I can't tell my constituents to rest easy because the Dubai Financial Services Authority is looking out for their interest.
We need to take action not only by regulating these offshore markets but also by making sure what is going on in this country is right. Now, we closed the Enron loophole, or we tried to do that with the farm bill, Mr. President, but there is clearly a lot more that needs to be done. There is a lot of speculation that is offshore and out of reach of our negotiations and our regulators. This bill will make those foreign trades in American oil and gasoline futures subject to reporting requirements so we can have a paper trail and keep track of what is going on.
The bill would also require the Commodity Futures Trading Commission to increase the margin requirement for oil trades. The margin requirement is currently set by exchanges themselves, kind of like the fox guarding the henhouse, and they have set the requirement so low--5 to 7 percent--that speculators can buy enormous amounts of oil with only a small amount of cash, and this has caused a tremendous amount of volatility in the price of oil and gas.
Remember what the CEO of the oil company said: Oh, no, no, no, this shouldn't be. Oil shouldn't be priced at over $100 a barrel. It should be $55. Well, where is all this money going? It is going to build five-star hotels in the middle of the desert somewhere. We have been investing in the sultans of Saudi Arabia instead of the farmers and workers in this country where we should be developing a long-term energy policy.
A final area where we can take immediate action is in our dealings with the OPEC nations. OPEC is a cartel of oil-producing countries that meet and decide how much oil to produce and thereby control prices. They make no pretense of having a free market system. They do not obey the laws of supply and demand. They gather together and they set production, which determines prices. As a former prosecutor, I call that kind of behavior collusion, and it is illegal in this country. But the members of OPEC are foreign governments, and so far they have gotten away with it.
As oil exporting nations, the members of OPEC could provide us with some relief. They have the spare capacity to increase their production of oil and ease the pain being felt by the people in this country. But OPEC recently met and decided not to increase production, at least until the fall, after the summer driving season when prices always rise. Not only that, Saudi Arabia has actually decreased production since 2005.
Think about it. Our country spends $600,000 every minute on imported oil. That is money leaving the pockets of American consumers, American drivers, going into the coffers of foreign countries. By refusing to step up production, OPEC nations are saying: We don't think prices are high enough yet. Let's let them go higher. Well, I think they are.
This bill that was blocked by the other side was going to put a stop to some of this OPEC price setting by allowing the Attorney General to bring enforcement action against foreign governments that are engaging in collusion and hold them to the same standards of fair dealing we already have in place in this country.
So those are some short-term ideas, in addition to the ones we were able to pass, which was to temporarily halt putting oil into the Strategic Petroleum Reserve when the prices are high. We got that done. But there are other things even more important. To do something about what is called the gambling hall when it comes to oil speculation, to do something about price gouging, to do something about the OPEC nations--these are short-term things that are doable and that the people in my State, who are lining up in those Costco lines, want to see. But, once again, we were blocked by the other side.
Our people are running on empty. They are tired of this, and the other side is running on empty when it comes to ideas. We need a bold new future, a long-term solution. American consumers also expect that their corporations should invest sensibly for the long-term interests of our country and our economy. That is what works. That is how business works.
But here is what is going on. This Congress, in the past few years--before I got here--gave a bunch of giveaways to the oil companies. I don't know, $17 billion, something like that. So we, the people, have a say in what these oil companies do when we are giving them a bunch of tax giveaways.
The Consumer-First Energy Act imposes a windfall profits tax on oil companies. It doesn't just say, no; every oil company gets a windfall profits tax. We could say that given that the big oil companies raked in $36 billion in just the first 3 months of this year. But it says, if they invest in renewables and do what they are supposed to do given they have gotten these subsidies--that they invest in their refining capacity and do things like that--then they would not have this windfall profits tax. But if they don't and they are taking the taxpayers' money and they are raking in the bucks and the prices are getting jacked up, then they are going to get a windfall profits tax.
Why should these big companies be getting $36 billion in the first 3 months, making no progress in terms of a long-term energy policy, and then the consumers are paying over $4 a gallon at the tank? It makes no sense. The oil companies' profits since this administration took office are over $600 billion and counting.
Now, you can make the argument for high profits if this money was being used to develop alternative resources, but it is not. Time and time again we keep going backwards, not forward.
So this provision says if they take their profits they get from American families and businesses and reinvest them in the country's energy future, that is fine. If they don't, we are going to take a portion of their money and invest it in the farmers and the workers of the Midwest instead of the oil cartels of the Mideast.
We know what we need for a long-term energy policy. We need investment in hybrid electric cars. We are not that far away. In 2 years, the Chevy Volt is going to give us 30 to 40 miles by plugging it in and then it converts over to fuels. We have great advancements in biofuels, something the Presiding Officer and I have worked on very hard, going to cellulosic ethanol but going beyond even corn-based ethanol so that we look at getting energy from switchgrass and prairie grass and algae and all kinds of biomass and residue from logging. These are all in our future. But we have to actually put those incentives in place so the investment follows.
We have tried. We have done some things, but we need a bold energy direction in this country, and that is what this bill was about that the other side blocked. They are running on empty with ideas, and the American consumers are running on empty with their tanks. When American families are facing the kind of economic squeeze they are facing today, they expect action from their Government. They expect that their Government will protect their interests to make sure the markets are fair and honest and transparent. They expect their government is going to watch out for them, not for the oil companies.
We have proposed legislation that would do these things. It would give the Government the tools to protect consumers in the short term, and it would begin to set our country on a smart, sustainable course for the long term toward energy independence. You can put your head in the sand and pretend it is not happening, or you can look for a new future. Does that involve, as our friends on the other side have been saying, increased production in our country? Of course it does. We live in Minnesota, next to North Dakota, where we are seeing the discovery of more oil. That is a piece of this; that is a piece of it. But the other piece is looking to the future with renewables and biofuels and new kinds of technologies. And if we keep going the old way, giving that $17 billion to the oil companies and not investing in a new future, we are going to end up even worse than we are now, and that is running on empty.
It shouldn't take $4-a-gallon gasoline to bring us to the brink of action on sensible market reforms and a smart long-term energy policy, but that is where we are. That is where we are. It is time to act. I implore my colleagues on the other side not to filibuster this bill. We must move ahead and we must do something for the American people.
Mr. President, I yield the floor, and I yield back the remainder of the majority's time in this half hour as well.
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