Press Release

July 21, 2008

Mr. CARDIN. Madam President, first, let me thank the assistant majority leader, the Senator from Illinois, for his comments. I was listening intently to his message, which I think is one that is very important for this Nation.

   The Senator talked about the fact that there is a significant amount of land currently available for drilling, and for reasons that are a little bit unclear, the oil industry has decided not to drill in those areas.

   He also expressed his confusion, as I do, as to why the Republicans have come forward and said: Let's talk about the energy issue, let's do something about it.

   But when it comes time to vote as to whether we can proceed on a bill that is important for our energy needs, the Republicans seem to vote against that so we cannot proceed.

   We had a bill before us that would have dealt with renewable energy sources and would allow us to deal with solar and wind and biomass and biodiesel. The Republicans refused to allow us to move forward on that, requiring the 60-vote threshold so we could not move forward on a major bill dealing with renewables, which is clearly an important part of an energy policy for this Nation.

   We had the Consumer-First Energy Act, legislation that would have brought forward a way to deal with the immediate cost of energy. The Republicans refused to allow us to proceed, used the filibuster to block that legislation that would have dealt with issues such as the oil cartel and the anticompetitive procedures they use to control supply and price of oil or to deal with price gouging or to look at ways we could take some of our resources and put them into renewables so we have a policy for the future or to deal with oil speculators.

   But, no, the Republicans used the filibuster to prevent a full debate on the floor of this body to talk about the energy policies of this country. So I return to the floor to tell Marylanders and the people of this Nation we need to do something about this. Marylanders are hurting today. I have talked about this before on the floor.

   I can take you to some homes of seniors who are making a very difficult judgment not to use air-conditioning this summer during these oppressive days, which may very well jeopardize their health, because they do not have the money to pay for their utility bills.

   They are making these tough decisions today in my State and States around the Nation. I could give you examples of independent truckers who are located in Maryland who do not have the money to fill their trucks with fuel because of the high cost of gasoline.

   They don't know what they are going to do, whether they will be able to stay in business. I can tell you of small business owners I have met who tell me they don't have any alternatives. They have to use their cars for business. They have to fill up the car with gasoline, and they can't afford to do it. They are using their personal credit cards, the most expensive way to borrow money, because of the high cost of gasoline. They are looking to us to do something so they can stay in business.

   I could take my colleagues to families who have to make tough judgments as to whether they can fill their gas tanks with gas or buy groceries because of the high cost of gasoline.

   I met with people from the nonprofit community. We had people in from Meals on Wheels, volunteers who deliver food to people who can't get out of their homes and depend upon a nonprofit in order to get meals. In these tough economic times, there is more and more demand for their services, but their volunteers can't afford to fill their tanks with gasoline. They are doing on it their own, because we are asking them to pay the extra cost of the fuel. They are having a tough time being able to carry out their nonprofit mission, which will put more pressure on governmental services.

   The list goes on and on as to why we need to deal with the energy crisis now and why we should have dealt with it before but for the filibusters Republicans have used.

   The Republican answer to this problem seems to be to drill. Let me take up that issue for a moment. Most recoverable offshore oil and gas is currently open to drilling. Today most of our offshore oil areas are open to drilling. According to the Minerals Management Service, 79 percent of recoverable oil is currently open to drilling and 82 percent of recoverable natural gas is currently open to drilling. According to the Department of Interior, only 21 percent of the Outer Continental Shelf is actually in production. My friend from Illinois gave the numbers: 68 million acres of the 90 million acres of the Outer Continental Shelf are not in production today. There is plenty of area available for drilling, but the oil industry has chosen not to drill in those areas. Instead they keep on mentioning ANWR, the Arctic National Wildlife Refuge. That is a pretty sensitive environmental area. We all know that. We know the risks involved in drilling in ANWR. It would represent .6 percent of
the world's supply. The National Petroleum Reserve in Alaska, which has been set aside for oil exploration, currently has available but not in production more oil reserves than are in the Arctic National Wildlife Refuge. So this isn't a point about where we have oil, we need to drill in order to get it. We have oil available. But the oil industry has chosen not to do this.

   According to the Energy Information Administration, projections in the Outer Continental Shelf access case indicate that access to the Pacific, Atlantic, and eastern gulf regions would not have a significant impact on domestic crude oil or natural gas production prices before 2030.

   The reason is we don't have a lot of oil in the United States. If we include all of the oil reserves, we have 3 percent of the world's reserves. We use 25 percent of the world's oil. We have 3 percent of the world's known reserves. So even if we produce at maximum capacity, we will not have a major impact on the pricing of energy.

   It is for that reason I want to show this chart showing remarks from T. Boone Pickens, who said:

   I have been an oilman all my life, but this is one emergency we can't drill our way out of. …..

   He goes on to point out:

    ….. But if we create a new, renewable energy network, we can break our addiction to foreign oil.

   If we produce every drop of oil we have in the United States, we are still going to be dependent upon foreign oil. We have to break our dependency on foreign oil. As Mr. Pickens points out, either in the short term or long term, oil is not the solution to our energy problem.

   Having said that, I do believe we need to produce oil where we can. I am baffled as to why the oil industry is not using the 79 percent of currently leased area to produce more oil that would certainly be part of the solution to the energy problem. We can't drill our way out, but we certainly should produce what we can. Maybe this chart helps explain why the oil industry is not drilling where they can. The blue line represents the price of gasoline, showing when it was about $1.50 a gallon, going up to now where it is close to $4 a gallon. The red line represents the profits of the oil industry. It is amazing. As gasoline prices go up, oil profits go up. These are quarterly profits. So one might suspect that the oil industry is not exactly interested in bringing down the cost of gasoline. Their profits go up, as the costs go up. Maybe that helps explain some of the reason why production is not at the maximum capacity we currently could have.

   Let me urge my colleagues as to what we should be doing. In the short term, we need to look at a lot of different alternatives. Again, I am for producing what we can in an environmentally sensitive way, but I urge my colleagues to consider S. 3268, the excess speculation bill. Let me try to make this clear. We are dealing with what is known as index speculation. These are speculators who never take the product. They are allocating a part of their portfolio to oil futures. It is an investment for them. It is not a commodity transaction. These are not airline companies or trucking companies that do want to buy futures in oil because they need that for their business. They are going to take the product because they need the product. These are pure speculators.

   According to Michael Masters, a hedge fund manager, index speculators added to the supply equal to China's increase in demand of oil over the past 5 years. That is a dramatic amount of activity in the marketplace. It is equal to 70 percent of all the benchmark crude trading on the New York Mercantile Exchange; 70 percent is in index speculators. Just 7 years ago it was 37 percent. So we see the dramatic increase over the historic levels of commodity trading.

   My friend from Illinois indicated that perhaps oil should be at $60 a barrel. Masters says $60 to $75 a barrel, if Congress fixed the loophole in index speculation. Edward Krapels, an energy security analyst, says it is 50 percent of the pump price. I am not an economist. I don't know what it is. But I do know this is something we can do, and it could have an immediate impact on the price of gasoline at the pump. That is what my constituents are asking us to do. This is something we should do. We should not let speculators add to the price.

   S. 3268 reins in index speculation. It provides higher margin requirements for those who speculate, more disclosure. This is common sense. Let's get this done.

   If we are looking for other things we can do to help in the short term, let me encourage my colleagues on the other side of the aisle to withdraw their objections to the bill Senator

has introduced that would add resources to the LIHEAP program. That is for energy assistance for low-income families. If we are looking for who has been hurt by the energy crisis, it is low-income families throughout America. Let's do something to help them. Let's target our relief to those who have been disadvantaged as a result of what has happened to energy prices.

   These are some things we can do that can have some impact in the short term. I must tell my colleagues, I hope we don't leave this debate without talking about what we need to do in the long term so we don't come back to this issue. I would hope that in the 1970s we would have learned our lesson, with long gasoline lines, and done something for energy security in America. But we need to become energy independent. We need to become energy secure. We need to do this for national security reasons. I need not remind my colleagues that we have committed our Armed Forces because of the vulnerability of America to oil. So for national security, we need to become energy independent.

   We need to become energy independent for our environment. Global climate change is real. Using less oil, fossil fuels will make us a cleaner country and will help our environment. It is something we should be doing.

   We came close this year to moving forward on a global climate change bill. We should do that for the sake of our environment and our energy policy. What we have learned over the last several months is that when we don't control our energy, when we are dependent upon other countries for our energy needs; i.e., oil, overnight we can see a huge increase in the price of energy which can have a devastating impact on our economy. I don't know what the right price is for energy, but I do know if we controlled our own energy sources, our economy would make that judgment, not some country halfway around the world that decides how much oil will be available to the U.S. consumer.

   For all those reasons, we need to become energy independent. One way we can do that–and we have all agreed–is to be more efficient in the use of energy. Last year we came together and increased the CAFE standards. If we had done that 10 years ago, the energy savings today from an increased CAFE standard on an annual basis would equal three times the amount of oil we could get from ANWR at maximum production. Energy efficiency works. It has to be part of our energy policy as we move forward.

   Yes, we have to deal with alternative and renewable sources. We have to deal with biofuels and wind and solar. I also believe we need to have responsible use of nuclear power. I think that is an important part of an energy policy that makes us energy self-sufficient. We can do that.

   We need a national commitment. We made that type of commitment, as we did before, when our national security was at stake during World War II. We can do it again. We can be equally successful.

   I have an offer to my colleagues. On behalf of the people of Maryland and of the Nation, let's get together on this. This is a national priority. It should not be a partisan issue. This is an issue Americans are asking that we deal with, that we become energy independent, that we do what is responsible in the short term to help those who have been victimized by the extreme increase in energy costs. Let's work to do that. Let's take out the profits of the speculators. Let's deal with those who have been victimized and then work together to develop an energy policy for America that will truly make us energy independent so that we can control our security, our economy, and be good international citizens on the environment. We can do all of that by working together and putting America's interests first.

   I yield the floor.