Volume 146, No. 117 covering the 2nd Session of the 106th Congress (1999 - 2000) was published by the Congressional Record.
The Congressional Record is a unique source of public documentation. It started in 1873, documenting nearly all the major and minor policies being discussed and debated.
“NATURAL GAS” mentioning the Environmental Protection Agency was published in the Senate section on pages S9331-S9333 on Sept. 27, 2000.
The publication is reproduced in full below:
NATURAL GAS
Mr. MURKOWSKI. Mr. President, it is my intention this morning to talk about natural gas and alert the American people to the crisis we have before us relative to this very important source of clean energy.
Over the last several days, I have talked about our energy policy, the fact that, to a large degree, our energy policy is determined by environmental groups, environmental pressures, and the Environmental Protection Agency, as opposed to a balance which suggests, indeed, we need to face the realization that we need all our energy sources coming together to meet the crisis we have today, as we find ourselves 58-
percent dependent on imported oil.
I will also speak on the dangers of Iraq and the realization that we are now 750,000-barrels-a-day dependent on Iraqi oil. The interesting thing is that Iraq has a production of nearly 2.5 million barrels a day, a kind of leverage on the world's supply of oil. What I mean is that the capacity of the world to produce oil and the demand of the world to use that oil is very close. We are somewhere in the area of roughly 1 million barrels a day of excess capacity over demand. With Iraq producing better than 2 million barrels a day, one can clearly see the leverage Iraq has should they choose to reduce production.
I have also talked about the Strategic Petroleum Reserve and the merits of pulling down 30 million barrels, which sounds like a significant relief, if indeed we can turn that into heating oil, but the reality is that we are going to get 3 to 4 million barrels out of that 30 million barrels in heating oil which amounts to a 2- or 3-day supply.
I do not want to mislead anybody. It is simply my attempt to alert the American people; there is no panacea. We are going to need all our sources of oil. To blame big oil on profiteering is really shortsighted, and the American people are too smart to believe some of the rhetoric out there.
Just look at where we were a year ago with the price of oil at $10 a barrel. Were the oil companies so benevolent then or was it supply and demand? Of course.
Who sets the price of oil? We had a hearing yesterday. Secretary Richardson was there. I think we all agreed that the price of oil, without question, is being set by those who supply oil, who have an abundance of oil, and that is primarily OPEC, Saudi Arabia, Venezuela, and Mexico. They have it for sale, and the price currently is somewhere in the area of $33 to $34. Last week, we had an all-time high in over 10 years of about $37.86.
Tomorrow I am going to talk about ANWR. I know something about ANWR. That is the narrow area in the coastal plain of Alaska. It is that small area that has been set aside out of the whole area of ANWR. Few people really understand the merits and the magnitude of the land mass and what we have done with it by congressional action.
There are 19 million acres up there. That is about the size of the State of South Carolina. We have taken 8.5 million acres and put them in a permanent wilderness. We have taken another 9 million acres and put them in a refuge, leaving 1.5 million acres of the so-called 1002 area to the determination of Congress as to whether or not we can open it up safely. Industry says, if the oil is there in the abundance it would have to be, the footprint would be about 2,000 acres. So I think we ought to keep this discussion in perspective.
I am pleased to say, one of the Presidential candidates supports opening it, recognizing that we have the technology, we can do it correctly, we can make the footprint small. If the oil is there, we could very well produce another million barrels a day. We have the pipeline capacity. One can certainly imagine what kind of message that would send to OPEC. You would see the price of oil drop dramatically. Also, as we look at the Strategic Petroleum Reserve, it certainly makes sense to know whether we have one sitting up in the arctic area adjacent to Prudhoe Bay.
Today, I am going to talk about the natural gas crisis in America because that crisis is here today. To give you some idea, yesterday we were quoting gas prices for delivery in October at $5.34 per 1,000 cubic feet. How does that compare with 9 months ago? Nine months ago, it was $2.16 per thousand cubic feet. What is it for November of this year? The November figures are out. It is $5.45 for delivery in November.
The significance of that can probably be reflected on who uses gas. The American public out there knows who uses gas. Fifty percent of our homes in this country rely on natural gas for heating. Natural gas provides 15 percent of our Nation's electrical power, and it is growing.
The reality is, we are not going to have any new supply in place before this winter. The reality is, the administration isn't going to be able to go into a strategic natural gas reserve, because there isn't any.
So what are we going to do? The projections are very clear. We are using about 22 trillion cubic feet of gas now. It is estimated we will be somewhere between 32 and 34 trillion cubic feet by the year 2010.
This is going to be primarily the result of the utility industry in this country--an industry we take for granted because the lights usually work. We are an electronic society. We depend on computers, e-
mail. This power has to come from somewhere. You have your air-
conditioners, your heating. The demand is up.
It is going to cost the industry somewhere in the area of $1.5 billion to put in more infrastructure. We are concerned about pipeline safety. As more gas is utilized, we are putting more pressure on our pipelines. This is a multiplier of demand, of price increases. The reason so much pressure is on natural gas is we do not have a policy on oil. Our policy is to import more oil. Before the 1973 Arab Oil Embargo, after which we created SPR, we were 37-percent dependent on imported oil. To give you some idea of where we are going in that regard, today we are 58-percent dependent on imported oil.
The administration has always favored clean gas as the alternative. But now we are using our gas reserves faster than we are finding new reserves. When you are in business, and you are selling your inventory faster than you are replacing it, you have a problem. This is an alert to the American people and, hopefully, my colleagues because we are facing a train wreck. It is coming. The signs are here. The administration has yet to address what they are going to do about it.
Certainly releasing the crude oil in SPR isn't going to help the gas situation because the demand is there. The reason the demand is there is quite simple. I have indicated oil is not the answer, simply because we become more dependent on imports.
So let's move to hydro. What do they want to do? They want to take down hydroelectric dams. The tradeoff of that, of course, is putting the barge traffic on the highways.
Coal: We have an abundance of coal. We have clean coal technology. But you have not seen a new coal plant built in this country in the last several years. I think the last one was back in the mid-1990s. You can't get permits.
Nuclear: Twenty percent of our power comes from nuclear energy. Have we built a new plant in this last decade or the last two decades? No one in their right mind would build a nuclear plant because the Government will not fulfill its contractual commitments to take the waste that it agreed to do and the ratepayers have been paying for the last two decades.
So everywhere we look--everywhere we look--we are check-mated. We can't find an alternative source other than gas. That is why American consumers should care.
According to the Energy Information Administration, Midwestern families will spend as much as 40 percent more on heating this winter because of higher natural gas prices; that is, expecting a typical winter. A real cold spike could cause some real problems. I am not suggesting you go out and sharpen your saw or put gasoline in your chain saw, but it isn't a bad idea. I know that is being done in the Northeast Corridor.
So we have an increased demand, no new supply, and this adds up to higher gas prices for the American people this winter, make no mistake about it.
What has the administration done about it? As I have said, it used to be that natural gas was kind of a seasonal fuel, stored underground in the summer, drawn down for winter use. But we now have a large summer demand for natural gas because more and more electric powerplants rely on natural gas. Here is the figure: Over 96 percent of all the new plants will be gas fired. If they all come on line, we simply do not have the gas supply.
Again, permits are obtainable for gas, unlike coal and fossil fuel. We can't get enough natural gas from existing wells to fuel these new powerplants if they all go on line. I had one CEO of a major oil and gas company tell me: We are virtually out of natural gas. We can no longer store gas in the summer. Our winter stocks are low. With a cold winter, prices are going to go up. Reserves are not adequate to buffer surges in consumer demand.
As I have stated, even if this winter is normal, we will still face natural gas prices--we know it already--they are going to be over 50 percent higher than last year--$2.16--and I indicated earlier they are currently $5.45 for November delivery. The simple reason is, the demand is strong and supply is not keeping pace. The market responds with what? Higher prices. It is supply and demand.
The administration touts natural gas as its ``bridge to the energy future'': Our cleanest fossil fuel, fewer emissions; efficient end use; no need to depend on imports. Yet as they express this and encourage you to use gas, their actions simply do not match the rhetoric. Rather than encourage new supplies, they stifle supplies.
Proof: This administration has placed Federal lands off limits to new natural gas exploration and production. They have taken the Rocky Mountain overthrust belt--that is Wyoming, Colorado, Montana--these States have a tremendous capability for producing oil and gas. Well more than 50 percent--about 56 percent--of the public land in those areas, the overthrust belt, have been taken off from any exploration or development for oil and gas.
Now the Forest Service comes along with a roadless policy to lock up 40 million acres of national forest, eliminating any exploration for oil and gas. We have a moratorium on OCS leasing and drilling until 2012.
The Vice President would even cancel existing leases. He made a statement in Rye, NH, on October 21, 1999:
I will make sure that there is no new oil leasing off the coasts of California and Florida. And then I will go much further: I will do everything in my power to make sure that there is no new drilling off these sensitive areas--even in areas already leased by previous administrations.
I do not know what that means to you, Mr. President, but it means to me that he is not going to support OCS activities of any consequence, and he is even going to attempt to cancel and negate some of the existing leases.
Where is it going to come from? He conveniently ducks that issue. Al Gore claims to have invented the Internet, but he refuses to provide natural gas that is needed to provide electricity to power it.
We use more electricity today. We are an energy consuming country--e-
mails, electronics, computers. Even if we had access to more natural gas, regulation after regulation inhibits construction of new pipelines to get gas to the consumer.
The Northeast Corridor: There have been nothing but delays--3 years of delay. The Federal Energy Regulatory Commission, FERC, that regulates and has to approve it, has been sitting on it. This would have given the Northeast Corridor a clean source of fuel. Most of this is Canadian gas. It has taken forever.
This administration wants you to use more natural gas, but at the same time they make sure you can't get it. That sounds like a recipe for higher prices, if you ask me, higher home electric costs, heating costs. Then what happens to the problem? It is going to get worse. The demand is expected to grow from 22 trillion cubic feet to over 35 trillion cubic feet by the year 2010. Without new exploration and new production, natural gas prices are going to go even higher. We are going to pay more to heat our homes, run our businesses.
When higher heating bills arrive this winter, we will want to thank the President and Vice President Gore for causing a natural gas crisis in America, one that was predictable, one that we knew was coming.
We have been asleep. The train wreck is coming. The solution is obvious: increase domestic supply of gas. Increased domestic supply will obviously lower prices, reduce volatility, and ensure a safe and secure energy supply.
I am all for alternative energy. I am all for conservation. But the reality is, transportation does not move on hot air. Members of this body don't go home on an airplane that flies on hot air. It flies on fuel. Our homes are not heated by hot air from Washington. They are heated by natural gas, 50 percent of all homes. That is 56 million homes in this country.
We found 36 trillion cubic feet of natural gas in the Prudhoe Bay oil field while searching for oil. We never looked for gas. Now there is a possibility the economics will favor bringing that gas down from Alaska for distribution in the lower 48 States, but don't think it is going to be cheap gas. You have to amortize the cost of a pipeline that is going to run some 1,600 miles down through Alaska, follow the Alcan Highway, going through Canada and into the Canadian prebuilt system for distribution into the U.S.
The fact is, we have proven gas, but the market has never been able to sustain the cost. At this range, the feasibility of that project is very costly. The most important thing we can do, however, is to increase access to proven natural gas that is likely to be found on Federal lands. We need to depend on all sources of energy--oil, gas, clean coal, hydro, and nuclear--and we need to conserve.
That is why Senator Lott and others have introduced the National Energy Security Act of 2000, S. 2557. Briefly, it would increase the domestic gas supply by allowing frontier royalty relief; improving Federal gas lease management; providing tax incentives for production; and assuring price certainty for small producers. It would require the administration to develop a comprehensive strategy to ensure that natural gas remains affordable and available to American consumers. It would allow new exploration for natural gas in America's Arctic as well as the Rocky Mountain States and along the OCS areas.
As I have indicated, we have substantial potential for new reserves, but if you don't have access to the areas, you might as well leave it in the ground because it will never be developed. We want to remove the disincentives for utilities to use natural gas, protect consumers against seasonal price spikes, especially with regard to Northeast heating oil use, and increase funding for energy efficiency and weatherization assistance to reduce winter heating bills.
A noted economist, Daniel Yergin, stated that this current energy
``shock'' could turn into a world crisis--that is paraphrasing the exposure that we have today. You can ask Tony Blair from Great Britain about the price of energy that is threatening his Government. Unless we take the kinds of actions outlined in this policy plan of the Republicans that we have submitted before this body, as represented in the legislation, S. 2557, the National Energy Security Act, we very well will face a current energy shock that could turn into a world crisis. Just look at the stock market this morning; it is pretty shaky.
There is probably more to come because of the uncertainty over where we are with regard to energy and the spiraling costs. It is referenced in a taxi ride to Capitol Hill; there is a surcharge. It is referenced in your airplane ticket now. You can't figure out the airplane tickets anyway; they are so confusing whether you fly on Thursday, Friday, or Sunday, or before a.m. or p.m. It is in there, all your truckers, all your delivery systems. Everybody is now facing the reality that energy costs are higher. It is going to have an effect.
Finally, thanks to the failed energy policies of Clinton-Gore, we are going to pay more for gas this winter. We must increase domestic supply of natural gas to meet demand. This administration continues to make new exploration and production not just difficult but almost impossible. We pay the price.
This GOP energy plan encourages short-term efforts to minimize spike hikes this winter and increase supply in the long term.
Tomorrow, I hope to talk a little bit about where the oil and gas is likely to be found.
The PRESIDING OFFICER. The Senator from Iowa.
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