Senator Judd Gregg’s Senate Floor Remarks On The Rising Costs of Energy And The Importance Of Increasing Domestic Production
Jun 11 2008
Mr. Gregg: Mr. President, I want to rise to discuss the issue of energy which is a massive and important priority for us as a nation and for people simply trying to get through the day, driving to work or whatever they do that uses energy with the price of gasoline at over $4 a gallon and, at least in my part of the country, the fear of oil prices next winter -- which is the primary source of heating fuel for us in New England, being well into the middle of the $4 price range and potentially higher. That cost is something that most people find almost inconceivable, but more importantly it is extremely hard to afford and puts a tremendous amount of pressure on the family budget.
The question becomes how do we address this as a culture? How do we address it as a Congress?
We have had a proposal brought forward by the other side of the aisle which seems to ignore the concept of supply and demand and turns, basically, to trial lawyers and to taxes to try to address how you produce more energy. That's unlikely to encourage or to address this issue in a positive way.
The simple fact is this bill sets up a procedure where you're now allowed to sue Saudi Arabia, the Gulf Emirates or Iran over their production of oil. This is really cutting off your nose to spite your face. These are independent nations. The idea that you are going to resolve the issue of production and availability and price by suing these nations –some of which, for example, Venezuela, have great animosity to us – is absurd on its face.
It may make a good press release and may make a good statement, but it certainly does not do anything to produce more energy at a more affordable price for us as a nation. It may make a few trial lawyers happy, but that is about all it does. In fact, it may have the opposite reaction.
If I led a country, and the United States Congress passed a law that said they could sue my country, I would simply say to the United States, “Well, you can go pound sand. We don't have to ship you any oil at all and we certainly don't have to take the revenues that we generate from the oil shipments and reinvest them in the United States.” This is critical to us as a society for our own capital formation. So this, Mr. President, is counterproductive and, as I said, cuts off your nose to spite your face.
It is followed closely by an equally incoherent policy—the idea that you are going to tax American corporations at excessive rates over what you tax other corporations because they make profits that are deemed by members of the other side of the aisle to be "excessive." Basically, the philosophy of this position is, “We in Congress know how to spend your profits better than you, the company that produces those profits, knows how to spend them and somehow we, in Congress, will produce more oil and, as a result, reduce the price of oil if we simply take control over your profits so you can no longer invest those profits in the exploration for new oil or alternative energy sources.”
The idea that Congress could in any way efficiently handle these dollars has been proven to be a fallacy. Congress will simply take those dollars and spend them on whatever political issue we happen to feel most appropriate and whatever constituency we want to benefit the most; dollars which could be much more efficiently used. And most of the profits do not go into a pie in the sky, but they either go back into exploration to produce more energy or they go to stockholders through dividends.
Most Americans are stockholders. Working Americans have invested in pension funds through their place of employment and they are stockholders. In fact, well over 65% of senior citizens receive dividend income. Of course, those dividends are a function of profit for the companies that produce the dividends. The money flows back to the employees of the companies and for people who own pension funds which invest in those companies, whether an auto worker, or someone working in a factory in New Hampshire, or a high-tech individual with a 401(k). So those profits produce more economic activity and are more efficiently used in that manner and through exploration than they would be for us to confiscate those profits through an excessive tax because some members of the other side think it's good politics and, as a result, wish to target the companies which they see as good political fodder.
A much more logical approach to production and reducing the cost of energy in this country would be to actually do something about producing more energy for the American people. Unfortunately, every attempt to do that before has been stonewalled by the majority party -- stonewalled on the issue, for example, of producing more nuclear power.
We have a unique experience of this in New Hampshire. New Hampshire was the last state to bring a nuclear power plant online. It came online years after it should have at a cost dramatically more than it should have cost because of the opposition of the left - aggressive and very effective opposition - in stalling to bring the Seabrook nuclear power plant online.
What has happened since it brought online? It produced a lot of good, clean energy not only for the people of New Hampshire but for the people of New England who have benefited from the nuclear power plant. Unfortunately, the people of New Hampshire have been stuck with a bill of almost $1 billion in cost overruns driven almost entirely by the delaying tactics which were put upon the plant and the changed much on the other the aisle.
There is still genuine opposition to nuclear power. Nuclear power is a clean form of energy and it is something we should be turning to. France--a country which is not often held up as an example around here for policy--has 80% of its energy coming from nuclear power.
We should be equally aggressive.
For those states that feel it is appropriate, they should be allowed to explore for oil and gas off their shores. It works in Louisiana. You could almost look at Katrina as a positive example. Although Katrina was a horrific disaster, there was not one barrel of oil spilled as a result of that category five hurricane coming up the gulf and going through New Orleans. It wiped out the city, but all the oil rigs were functioning – and there were a lot of them in the Gulf of Mexico – and they survived the storm without a leak, without a spill of any kind. That shows that drilling in deep water can be done in an environmentally safe way.
And, yet, the other side of the aisle resists and stops any attempt to allow other states to explore for oil and gas. Virginia has expressed an interest in doing this. And Virginia may have a very large potential energy source off its coast. It may be really far out there in deep water, but energy may well be there. There’s no reason why we should not take a look at that type of an approach. We need to produce more American energy because we cannot rely on energy from other nations, especially in the Middle East.
Another example is oil shale. The technology for recovery of oil shale has gotten to the point where it is extremely sophisticated and, again, environmentally safe. All of the activity occurs below the ground. There's virtually nothing that occurs above the ground other than the actual pumping out of the final product, which is a kerosene type product that can be used for jet fuel.
We have a reserve of oil shale which exceeds the reserve of Saudi Arabia. Think about that. We have, in our Western states, enough oil from shale, recovered by underground methods and that has no significant environmental impact, to actually produce more oil than Saudi Arabia. Are we able to pursue that? No. Why? Because the other side of the aisle refuses to do that, refuses to allow exploration or participation in oil shale in the West.
Those are just a few examples of the type of expansion and approach that we should take towards more American energy, which is totally resisted, regrettably, by members of the other side of the aisle speaking for aggressive groups on the left. We're not going to produce more energy, and we're not going to reduce energy costs by setting up a regime to sue Saudi Arabia or Venezuela. We’ll have probably just the opposite effect. And we'll certainly affect the willingness of those countries to invest in the United States. We're not going to produce more energy or reduce energy costs by putting a tax on companies that produce energy and taking money that can go to the individuals, working Americans, through dividends, or can go to greater exploration out of the pipeline and giving it to people here in Congress to spend on their special interest groups.
The only way that we're going to get more energy and reduce our reliance on foreign energy is if we produce more energy in the United States, which we can do. We have the reserves. We're just not allowed to use them.
We can pursue other forms of energy production, nuclear for example. We can also pursue renewable energy, although it can’t carry the entire need. Of course, we should also look at other areas, such as conservation, such as using a different type of vehicles, different type of engines - something that is a hybrid or all-electric engine.
But to have an electric car, you have to have electricity produced, which means that you have to have electrical plants and you have to be sure that it is clean and not producing nitrates. And to do that, you should be using nuclear power and using clean coal technology.
You will need initiatives that will produce something in the way of energy, not political statements which produce something in the way of hyperbole.
And there is a bill that will carry these initiatives forward, the expansion in the area of nuclear energy, the opportunity to pursue over the horizon exploration, and using shale oil through underground recovery. Yet, that bill has been held up and stopped by the other side of the aisle.
So the question today becomes, how do we better improve our position? How do we make sure that we have less dependence on foreign oil and begin to bring down these prices of gasoline and home heating oil? And the answer is simple. Beyond the conservation and renewable issue, where there is agreement, produce nuclear and other forms of clean energy.
If we need to make progress in this area, we need to take a hard look at drilling for off-shore oil for those states which are willing to pursue that course of action. There are going to be states on the Gulf of Maine, like Maine and New Hampshire, unwilling to do it because of the fisheries. But if Virginia wants to pursue that, they should have the opportunity to do it, and it can be done in an environmentally safe manner, as shown by Katrina. And, secondly, we need to look at oil shale, where there is a reserve that exceeds the amount of oil reserves that Saudi Arabia has, that can be produced underground and without environmental harm. These are substantive, specific approaches, and that's what we need at this point.
Mr. President, I yield the floor.