WASHINGTON – U.S. Senator Pete Domenici today took part in an energy forum to discuss rising fuel costs and actions Congress could take to promote American energy sources to help ease strained family budgets while also reducing the nation’s dependence on foreign oil.
The conference was hosted by the Senate Republican Conference and featured testimony from a variety of energy sectors. Domenici is ranking Republican on the Senate Energy and Natural Resources Committee.
“The United States faces the immediate and growing problem of our dependence on foreign sources of oil and the high price of gasoline, largely as a result of a serious supply-demand imbalance,” said Domenici in his opening statement that was critical of several failed Senate votes related to expanding American energy production.
“Knee-jerk reactions against domestic production must stop. How could not a single member of the other side rethink their vote on adding domestic supply in light of the current prices and the current supply-demand imbalance around the world? The consequences of this vote will be felt by the American people. The consequences will be felt at the gas pump and the consequences will be felt in the family budgets around this country,” Domenici said.
The following is the text of Domenici’s prepared remarks:
I think it’s very important that our Conference is dedicating the time to discuss the important issue of energy and the rising costs that face the American people. The timing could not be better. With oil at around $127 and with the price at the pump nearly $4 per gallon, there is grave concern out there among the public.
The energy challenges that we face today are greater than ever before. With respect to the price of oil, growing economies around the world have driven an unprecedented world demand for oil. World energy demand will increase about 60 percent over the next 25 years with the large share of that growth coming from developing countries.
At the same time, Americans are also concerned about the state of our electricity generation. Little known during this great focus on the run-up of the price of gasoline is that the price of natural gas is over $11 today.
Our stagnant domestic supply and growing demand continues to be troubling. On coal, we generate about half of our electricity from coal. Coal is affordable, reliable and abundant – but the challenge of global climate change is a very real one that makes cleaning up our coal a necessity. On nuclear, we all know the great progress that we have made, but the drain of great demand for materials around the world and the uncertainties associated with bringing back an industry from near-death to a renaissance creates unique challenges for nuclear power.
Finally, the United States faces the immediate and growing problem of our dependence on foreign sources of oil and the high price of gasoline, largely as a result of a serious supply-demand imbalance. In just the past year, we have seen the price of oil increase by nearly 50 percent and we have seen the price increase over the past decade by about 370 percent. Meanwhile, our nation’s dependence on foreign oil has grown to 60 percent.
We hear a great deal about our trade imbalance from policymakers on both sides of the aisle. Consider this: Last year, we ran a $20 billion trade deficit with our NAFTA partners, a $251 billion trade deficit with China. But we spent $320 billion in oil and gas import expenditures last year.
In 2007, we spent more money importing oil than our entire trade deficit of each year since 1999. This dependence is unsustainable and is a threat to our way of life.
According to the EIA, the long-term increase in the price of crude oil reflects a tightening of supply and demand on the global oil market. Between 2000 and 2006 China doubled the number of cars on the road, but while here in the United States we have one car for every two people, in China they still have just one car for every forty people. With an economic growth rate of 12 percent annually, China’s demand for oil is outpacing our global supply of oil – and other commodities.
We are facing a new, unprecedented global challenge. And, the geopolitical unrest in many oil producing regions, such as Nigeria, only enhances our global supply problems. Around the world, we have seen moderate non-OPEC supply growth, low OPEC spare production capacity, tightness in the global commercial inventories and worldwide refining bottlenecks. Supply and demand fundamentals suggest that the price of oil will continue to rise, the price at the pump will continue to burden our constituents and the family budgets around this country will continue to be strained.
Amidst all of these troubling factors, votes in the Senate this past week were simply inexplicable. On Tuesday, by a vote of 97-1 the Senate voted to suspend filling the Strategic Petroleum Reserve for about seven months. This adds approximately 70,000 barrels of oil to the market.
At the same time, the Senate voted 42-56 against bringing billions of domestic oil and gas on-line by opening up ANWR, the OCS, and advancing coal to liquids and oil shale. Then, on a straight party line vote in the Appropriations Committee yesterday, the Democrats voted in favor of a moratorium on oil shale regulations. Later that night, Democrats voted against a motion to instruct conferees on the budget regarding OCS production.
This knee-jerk reaction against domestic production must stop. How could not a single member of the other side rethink their vote on adding domestic supply in light of the current prices and the current supply-demand imbalance around the world? The consequences of this vote will be felt by the American people. The consequences will be felt at the gas pump and the consequences will be felt in the family budgets around this country.