Stop Excessive Energy Speculation Act of 2008--Motion to Proceed

Floor Speech

STOP EXCESSIVE ENERGY SPECULATION ACT OF 2008--MOTION TO PROCEED -- (Senate - July 23, 2008)

BREAK IN TRANSCRIPT

Mr. CORNYN. I thank the Senator from Tennessee for his good work and good words on this important issue. I agree with him that it is a serious problem and it calls for serious answers. We need a response by the Senate when it comes to energy, when it comes to our dependency on imported oil. As T. Boone Pickens has pointed out in his crusade to try to help people understand where we are on this, he said we send $700 billion of American money to foreign countries to pay for the oil we import. That is because we are not producing enough here at home, because we are not conserving, and we are not far enough down the road in terms of coming up with alternative sources of energy.

What is Congress's role in all this? We have done some things. I think we ought to give credit where credit is due. We have passed a corporate fuel efficiency standard for automobiles. We have passed tax benefits and subsidies for things such as solar power and wind energy. We have encouraged the production of biofuels such as ethanol, although we are finding sometimes that the unintended consequences of using food for fuel creates problems in and of itself. Suffice it to say, this is a serious problem and Congress has, in many respects, acted I think appropriately to address some parts of the problem. Unfortunately, like so much of politics these days, this sometimes degrades into a name-calling contest. I am going to try my best not to engage in that. But I do want to respond to the accusation that was made earlier that somehow this is attributable to the current administration's tenure in office.

As you can see from this chart, the price of gasoline back when President Bush was sworn into office in January 2001 was $1.49 a gallon. It has grown over time to when the Democrats took control of the Congress, in January of 2007, to $2.33 a gallon. Then of course it has spiked since that time to now on the order of $4.06 a gallon on average, more than $4 a gallon. It has gone from January 2001 to today to more than $4 a gallon. While our friends who are in charge of the agenda and the floor schedule of the Congress, the Democrats who were put in a majority status, have been here, we have seen it spike to the figures of today.

That is not to say it is directly attributable to them, but I would say it is unfair to suggest that because President Bush has been in office since January 2001, he is the only one responsible. The fact is, it is our responsibility too. It is the majority leader's responsibility, I submit, to give us an opportunity to come up with serious answers to a serious problem and not play the same old broken game of politics and ``gotcha'' that turns people off so much when it comes to the Congress. It is no secret why the approval rating of the Congress is at historic lows. There is no secret to that. It is because people look at what is happening here in Washington, DC, and they say: They are not listening or they may be listening, but they are playing political games rather than trying to solve real problems on a bipartisan basis.

I know there is plenty of fault to go around, but why can't we work together to try to solve the most pressing issue for working families in America today, and that is the high cost of gasoline and energy? We know there is a bill on the floor that deals with one part of the problem. This has to do with the so-called speculation. Last month, Warren Buffett, one of the richest men in America and perhaps one of the richest in the world, the CEO of Berkshire Hathaway, said: It is not speculation that is the problem, it is supply and demand.

T. Boone Pickens, whom I mentioned a moment ago--who is spending $50 million of his own money--met with Republicans today, met with Democrats yesterday, to explain why he is spending so much of his own money to elevate the profile of this issue so it will be something Congress cannot run away from and neither can the Presidential candidates but is something they will have to address and solve. He said focusing solely on speculation is a waste of time.

Why would Congress deal with a bill that only addresses speculation? I would say I am not sure. What I am willing to do is certainly consider and probably support a bill that would be supported on the Democratic side that would provide for greater transparency of the commodity futures markets and would provide more resources to make sure we have more cops on the beat, so to speak, to police the commodity futures trading that goes on and to make sure that is not the problem or, if it is part of the problem, as the majority leader said yesterday--he stood here on the floor of the Senate and said he thought it was 20 percent of the problem in terms of the price of oil. I don't know if T. Boone Pickens is right; I don't know if Warren Buffett is right; I don't know whether the majority leader is right. Let's say the majority leader is right and it is 20 percent of the problem. Why in the world would we leave the other 80 percent off the table? Why would we settle for a 20-percent solution when we could have a 100-percent solution, in trying to address this important domestic issue?

We have come up with a lot of ideas. We have said we need to explore and produce more American oil so we have to buy less from overseas. We have been told no, we cannot do that. We have been told no, we can't produce more nuclear power to help generate more electricity. No, we can't investigate the possibility that we could use the coal we have here for new technology that would allow us to use that coal to make aviation fuel--as the U.S. Air Force is currently testing, a synthetic fuel made with coal-to-liquid technology.

Again--I don't think this is unfair and I think this is exactly what we keep hearing--it seems that the answer from the other side of the aisle is: No new energy. They want to investigate. They want to litigate. They want to raise taxes. But when it comes to new energy sources, they say no.

The one law that Congress of course cannot repeal or suspend, even here in Washington, DC, is the law of supply and demand. We know from the experts that there is rising demand in countries such as China and India, with more than a billion people each. They are buying cars, they are consuming more energy. They have watched us and they have seen that America consumes about 25 percent of the oil in the world, even though we represent a small fraction of the population. They look at that and they say maybe that is the reason for their great prosperity.

I think there is something to that.

We are having more and more competition globally for this scarce commodity. What is our answer on this side of the aisle? We say we need to find more and we need to use less. Find more, use less.

I heard the Senator from Tennessee bemoan the fact that the majority leader has said he will not allow a full debate and amendments to this legislation. I think it is absolutely critical that we allow full debate and amendments that would be likely to actually solve the problem, rather than go through what is a patently political exercise so somebody or another can check off the box and say: OK, we have been there, done that. Now we can go home on August recess. I believe we ought to stay here. Rather than go on recess in August, I believe we ought to stay here until we actually come up with a commonsense solution to this problem.

Some have said OK, if we start drilling today in the Outer Continental Shelf, it is going to take years for that oil to come on line. I wish we had thought better about that 10 years ago, when President Clinton vetoed production from the Arctic National Wildlife Refuge, which Congress had authorized, which would have produced 1 million additional barrels of oil 10 years ago. That would be flowing today if President Clinton had not vetoed that bill.

The fact is, oil is a globally traded commodity. That is where we get back
to the speculation question. Actually, the market is a pretty rational process. For everybody selling a contract for future delivery of oil, there is somebody who is willing to buy it. That is how the market works, a willing seller and a willing buyer. If Congress were to do the rational thing, the sensible thing, the thing that would actually have a positive impact by pushing gas prices downward, we would say we are open to producing more American energy, perhaps as many as 3 million additional barrels of oil a day here in America, which is 3 million barrels less than we have to purchase from abroad. That would give us some time.

It would also send a message to the commodity futures markets that in the future there is going to be additional supply that is going to come on line. That would help bring down the price of oil because 70 percent of the price of gasoline is related to the price of oil. I think that would have a dramatic impact on the price of gasoline at the pump and would provide the American people some relief at a time when they need some financial relief.

It would give us some time so we could do the research and use good old-fashioned American ingenuity to come up with alternatives, things such as in 2010, when many of the big automobile companies are going to introduce plug-in hybrid automobiles that you can actually plug into the wall socket in your home and charge the battery you can use then to commute to work or, if you believe what Boone Pickens has suggested, he said if Government would mandate that all new Government cars and trucks run on natural gas, that would relieve a lot of the pressure on gasoline and oil prices and bring down the price of gasoline by 38 percent.

Mr. DURBIN. Will the Senator yield for a question?

Mr. CORNYN. I will be happy to.

Mr. DURBIN. Senator Cornyn probably heard, as I did, when President Bush said America is addicted to oil. I took that to mean that we try to find a way to move to alternatives and renewable and sustainable energy. I hear the Senator's speech moving in that direction as well.

Could the Senator tell me why he believes 68 million Federal acres of land, which we have now given to the oil and gas companies, which they are not using for exploration and production, is an argument for giving them more acreage?

Mr. CORNYN. Madam President, I appreciate the question and the opportunity to try to answer that. Let me do the best I can. I think there is the illusion here in Washington that every acre of land that is available for exploration is going to produce oil. As a matter of fact, in Texas--I am not unfamiliar with the term ``dry hole.'' As a matter of fact, this is a very complex enterprise, where you do seismic testing to try to figure out where oil is likely to be. Sometimes you are wrong and it costs millions, even sometimes billions of dollars to invest to try to produce that oil.

What the oil companies try to do is figure out where their chances are best so they start there. But the more land--including the submerged lands in the Outer Continental Shelf--that is available to them that now Congress has put out of bounds, I think the better the chances are they will be able to find it.

As a matter of fact, there are experts--I am not an expert, but I read what the experts say--who believe there are vast quantities of oil and gas available in the Outer Continental Shelf that are not available now on the lands to which they have access.

Mr. DURBIN. Would the Senator yield for another question?

Mr. CORNYN. I would be happy to yield.

Mr. DURBIN. If you were given the opportunity to lease either a barrel of rainwater or a lake to go fishing, I assume you would lease the lake. And I assume these oil and gas companies, in leasing this land, believe it is likely to have oil and gas.

So I ask you, if they have paid their money to lease Federal lands, 68 million acres--half of it offshore, half of it onshore--and another 23 million acres in Alaska, where is this mother load of oil you are so certain we are holding back from these oil and gas companies that would bring us the oil instantaneously and bring down gas prices?

Mr. CORNYN. Well, I am delighted to try to answer that question, as well, because I think the Senator's question demonstrates--I am not complaining; I am not criticizing. You know we are not oil and gas experts, but I have had a little bit of exposure. Let me try to answer that.

There is not a big lake of oil under the surface of the land that is available to anybody who can punch a hole in the earth and then suck it out with a straw. So I do not think the analogy is apt.

These oil companies in America are owned by shareholders. They are not interested in drilling dry holes. They are interested in drilling where there is actually going to be some oil that can be produced. The more opportunity they have, the more lands available to them, the greater, they believe and I believe, they can maximize the likelihood that they will actually find oil.

This is not to help the oil companies, this is to help us quit sending 700 billion a year of American dollars to foreign countries for oil while we have more of it at home, if you believe the experts, about 3 million barrels a day.

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