Gasoline Prices
Floor Speech
Mr. CORNYN. Mr. President, I come to the floor to express my concerns on behalf of the 26 million constituents I have in Texas about the rising gas prices and the administration's failure to take reasonable and rational and practical steps to help ease the pain Americans are feeling at the gas pump.
Just think about it. We know unemployment is unacceptably high and intractable, notwithstanding our private sector economy's best efforts to grow and to create jobs. So we know people are out of work. We know many of them are unable to pay their mortgages and are literally losing their homes to foreclosure. Those who are fortunate enough to have jobs are experiencing higher prices when it comes to food, when it comes to health care, notwithstanding the passage of the Patient Protection and Affordable Care Act, of which the President said the average family would save $2,500 in health care premiums. Last year alone, there was almost a double-digit increase in the cost of health care for most American families.
Now, to add insult to injury, we have higher gas prices, which are crowding out other spending and lowering the standard of living for American families who are struggling with the slow economic recovery we are experiencing.
The average price of gasoline in the United States has more than doubled since the week of the inauguration of President Obama in January 2009. In January 2009 a gallon of regular gas was $1.89. Today it averages $3.79 a gallon. The Associated Press reports that the average American household spent $4,155 filling up at the pump in 2011. That is the annual cost of gasoline for a typical U.S. household.
I remember arguments--passionate arguments--about the payroll tax holiday and the President holding press conference after press conference saying, if we would just pass the payroll tax holiday, then families would have $40 more a month spending money in their pockets. Well, higher gas prices have wiped that out and more.
Gasoline costs now amount to 8.4 percent of the median household income--8.4 percent. I am not telling anybody something they do not already know and they have not already felt, that they have not already experienced. Everyone has experienced the higher prices. This is the highest price for gasoline since 1981 when costs soared because of another crisis in the Middle East.
Weeks ago President Obama said there is very little he could do about high gas prices in the short term. I tell you, it is good he made those comments in Miami, FL, and not Midland, TX, because Texans know that greater domestic energy production would help reduce oil prices and, therefore, reduce gasoline prices. Roughly 70 percent of the price of gasoline is the price of oil from which gasoline is refined. You know, sometimes I feel as though in Washington, DC, we are operating in a parallel universe that has very little in common with the rest of the country. And here it is--not to mix my metaphors--ships passing in the night. But the fact is, the laws of supply and demand cannot be suspended by the Congress or the President of the United States. President Obama used to agree with that.
Last March, for example, he said producing more oil in America would help lower oil prices. Well, lipservice will not produce lower oil prices, but, yes, producing more oil will because the greater the supply--we know the laws of economics say, demand being the same, greater supply will lower prices. The fact is, there is greater demand all around the world, not just in the United States, as economies are growing in China, in India, and Brazil and places such as that.
To add insult to injury, this administration has adopted policies that have directly conflicted with the goal of lowering oil and gasoline prices. I do not know how to reach any other conclusion but to say it appears to me that the administration has intentionally enacted policies that will raise gasoline prices. I know they will deny that. They will say it is not true. But I do not know any other explanation.
Let me provide the evidence that leads me to that conclusion and perhaps you will agree. Today we learned that President Obama has been busy calling Senators on the other side of the aisle and asking them to vote against an amendment being offered by Senator Hoeven of North Dakota that would allow the Keystone XL Pipeline project to move forward--the President, on the phone calling Senators saying: Vote against the Keystone XL Pipeline amendment offered by Senator Hoeven.
The President has previously said there is not a single morning he wakes up that he does not think about creating jobs. But, apparently, he woke up today thinking about how to lobby against jobs because the Keystone Pipeline, in addition to providing an additional supply of crude oil from the tar sands in Canada that would be transported to the United States, would be turned into gasoline in places such as Port Arthur, TX--apparently, the President got up and thought: How can I obstruct additional supply? How can I destroy the jobs that would be created, which is directly contrary to what he professed he does when he wakes up each morning thinking about how to create new jobs.
The Keystone XL Pipeline is a $7 billion private investment that will create 20,000 jobs in construction and manufacturing alone. It will add tens of thousands of additional jobs throughout the economy in other sectors that will support the pipeline construction.
This is kind of personal for me and my constituents in Texas because we are an energy-producing State. We actually think that is good because it has created a lot of jobs. It has allowed us to weather this recession. People have voted with their feet, and they have moved from other parts of the country to Texas because that is where the jobs are so they can provide for their families and they can try to achieve the American dream.
Texas as a whole provides more than one-quarter of America's total refining capacity. Last month, when the subject of the Keystone Pipeline was very much in the news, I visited with a number of refinery workers in Port Arthur, TX, who expressed concern about the future of their livelihood. These constituents of mine in Port Arthur, TX, could care less about the politics in Washington, DC--who wins, who loses, the sort of stuff that seems to facilitate an obsession inside the beltway. But they were particularly upset--not just Republicans but Democrats, Independents, unaffiliated folks. They were particularly upset with the Obama administration's rejection of the permit for the Keystone XL Pipeline which, as I said, would terminate in the Port Arthur region and allow our State to refine an extra 700,000 barrels of oil each day and turn it into gasoline and other refined products that would increase the supply and thus, according to the laws of economics, have a tendency to bring prices down as we increase supply.
President Obama's behind-the-scenes maneuvers, this crusade, is the starkest reminder yet. He is the only thing standing between this country and more jobs and energy security. I regret to reach that conclusion, but I do not know of any other reasonable conclusion to raise.
Rather than asking Saudi Arabia and other OPEC countries to produce more oil in a region where our troops have been deployed for 10 years or more, is it any coincidence that in the oil-producing regions of the world that we depend upon for oil, where our American troops have fought and some have made the ultimate sacrifice to protect our country, to protect our economy, to protect our way of life, that there have been some in this Chamber who have suggested we ought to go, hat in hand, to Saudi Arabia, and say: Will you please open the spigot a little wider? Will you please supply us more oil so we do not have to do it in America? You can do it for us, and we can buy it from you.
Well, I believe this administration should work closely with our partners in Canada, a friendly country where we do not have to worry about a disruption of supply because if the Iranian threat to block the Strait of Hormuz comes to
pass, 20 percent of the world's oil supply passes through the Strait of Hormuz. You know what that would do to prices, not to mention other consequences which are entirely negative.
Canada is a reliable and geographically secure trading partner. Their oil exports are insulated from the potential supply disruptions in the Middle East. Rather than demonizing oil and gas companies that employ millions of hard-working Americans, while wagering more taxpayer dollars on boondoggles such as Solyndra, the Obama administration should take its regulatory boot off the necks of our domestic energy producers.
As I said, this is personal for me and my constituents because Texans are proud that our State remains the leading U.S. producer of oil and gas. As I stated, it is what has helped us grow and create an awful lot of jobs for which people are grateful. We know for a scientific fact that America has just begun to tap the potential of its vast resources. According to the Congressional Research Service, our country has more recoverable energy resources than Canada, China, and Saudi Arabia combined.
As American Enterprise Institute scholar Kenneth Green has noted, the Outer Continental Shelf of the United States alone contains enough oil to fuel 85 million cars for 35 years. Yet more than 97 percent of that territory is not under lease as a result of Obama administration policies. Expanding access to Federal onshore and offshore lands, eliminating permit delays in the issuance of leases could help reduce polices and strengthen our energy security while creating jobs and boosting revenue to the local, State, and Federal Government that would help us close our budget gap.
Unfortunately, the Obama administration's proposed offshore oil and natural gas leasing plan for 2012 to 2017 eliminates--eliminates--50 percent of lease sales provided for in the previous plan and imposes a moratorium on developing energy from 14 billion barrels of oil and 55 trillion cubic feet of natural gas in the Atlantic and Pacific Oceans. The moratorium on the natural resource rich Gulf of Mexico and persistent delays in permits for shallow and deepwater leases could result in a 19-percent decrease in production in 2012--a 19-percent decrease in production.
So we are not only talking about keeping the production static, we are talking about actually decreasing supply as a result of Federal administration policies. Decreasing supply will have the inevitable effect of raising gasoline prices as that happens, and then there is the regulatory impact. Everywhere I go in my State, and as I talk to people around the country--they come to visit us in the Capitol. If they are in the private sector, they say the biggest threat to their ability to start a new business or grow existing businesses and create jobs is regulatory overreach.
We know during the last election the voters gave us divided government. They made it harder for the Obama administration to single-handedly pass policies such as the President's health care bill, such as the stimulus, such as Dodd-Frank on a partisan basis. So we got divided government. What we did not get is an ability to stop the regulatory overreach of executive branch agencies.
If the President is serious about looking for every single area that we can make an impact on gas prices, as he pledged in Miami, he must reverse the regulatory overreach of the last 3 years. The U.S. Chamber of Commerce reports that the Environmental Protection Agency alone is moving forward with 31 major economic rules and 172 major policy changes. That is not something Congress is legislating. That is what the EPA is doing on its own because they are an executive branch administrative agency. But they are going to have a negative impact on our energy supply. The Chamber of Commerce rightly calls this an unprecedented level of regulatory action. It has a chilling effect not only on energy production, it has a chilling effect on jobs, something we need more than anything else as our economy struggles to recover.
Even as gas prices have approached $4 a gallon, the Environmental Protection Agency has proposed a tier 3 rule to cut air emissions from fuels in light-duty vehicles. This rule alone would force refiners of oil to gasoline to make dramatic changes in the way they do business.
A recent study concluded the rule would increase the cost of manufacturing gasoline by 12 to 25 cents per gallon. So as high as they are now, once this rule goes into effect, the price we pay at the pump could go from 12 to 25 cents higher.
It could also inflate the refiners' operating costs by $5 billion to $13 billion annually and lead to a 7- to 14-percent reduction in gas supplies from U.S. refineries and force as many as seven U.S. refineries to shut down.
We have already seen recent reports of a number of refineries on the East Coast that produce gasoline in America shutting down because they cannot do business economically under this regulatory burden. Beyond the tier 3 rule, the American energy producers are deeply worried about the EPA's proposed greenhouse gas regulations which will serve as an energy tax on consumers. They are also worried, as if that wasn't enough, about the agency's new source performance standards and its boiler maximum achievable control technology rule.
I know a lot of this sounds arcane and is not something people talk about over the kitchen table. But each one of these cumulatively have had a negative impact on the gasoline prices that are directly harming American families in their pocketbooks, lowering their standard of living and making it harder to get by even as they struggle with the slow economic recovery.
Collectively, if we were to have a moratorium on these regulations at least until we begin to see unemployment come down and the economy grow, gas prices come down--collectively, these regulations will put more U.S. refineries out of business and will lead to ever higher gasoline prices at the pump. Conversely, if we were to have a temporary moratorium, it would provide much needed relief to hard-working American families.
If that weren't enough, the U.S. Fish and Wildlife Service has been very active as well. I mentioned Midland, TX, which is part of the historic Permian Basin, which is a huge source of oil and gas production. Thanks to new technology and innovation, it is experiencing a second boom and creating lots of jobs and a lot of American energy. What a surprise it was when the U.S. Fish and Wildlife Service announced its intention to list the sand dune lizard--a 5-inch lizard in the Permian Basin--as an endangered species without adequate investigation of the science. It threatened the jobs of nearly 27,000 Texans in the Permian Basin, which is home to more than one-fifth of the top 100 oilfields in America.
Looking at all of the evidence on energy prices, it is hard to come to any conclusion other than that higher energy prices are part of President Obama's plan. He talks about green energy and green jobs. Those are great, but they only supply a low single-digit percentage of our energy needs. We have to produce American energy, our oil and gas reserves.
President Obama's policies have intentionally elevated the price of gasoline to the detriment of the American consumer. One of the things we can do is pass this Keystone XL Pipeline amendment. It will eventually provide 700,000 barrels a day of oil from Canada to be refined in America, creating jobs and creating more supply, which will have a beneficial impact on gasoline prices, notwithstanding the other policies I have mentioned this morning.
I hope my colleagues will support Senator Hoeven's amendment. I certainly will. I would love to hear the contrary argument. Unfortunately, we hear nothing but crickets when we start talking about all of the beneficial effects of this policy.
I invite my colleagues who might not come from an energy-producing State to go on the Internet and Google or use Bing or whatever search engine they use and type in ``U.S. oil and gas pipelines'' and look at the picture that comes up. They will be astonished, perhaps, to see all of the pipelines that are operating safely, without the public knowing about it, providing the oil and gas and other refined products we need in order to keep our economy growing. This pipeline is not a threat to the environment because we have adequate safeguards in place, and have for a long time.
Mr. President, I yield the floor.
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