Volume 146, No. 83 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.
“OIL” mentioning the Environmental Protection Agency was published in the Senate section on pages S5873-S5876 on June 27, 2000.
The publication is reproduced in full below:
OIL
Mr. MURKOWSKI. Mr. President, it is appropriate I comment on the announced position by our Vice President today on his program to lower oil imports and stabilize climate change.
As identified in the AP summary of June 27, under a program to
``lower oil import and stabilize climate,'' the Vice President's plan for a national energy security and environmental trust fund calls ``for diverting more than $80 billion over the next 10 years from projected Federal budget surpluses for tax incentives to drive investment in energy efficient technologies for transportation and energy use.''
Notice it doesn't identify any new source of energy to relieve the shortage.
He proposes in a $4.2 billion program to encourage electric production from renewable energy sources such as wind, solar, and $1 billion for accelerated depreciation for investments and distributed power assets.
But the bulk of the plan is expected to cost $68 billion over the next decade and is dedicated to what Gore calls a technology for tomorrow, a competitive program designed to provide tax relief, loans, grants, bonds, and other financial instruments for emission reduction at powerplants and industrial facilities. He doesn't mention one word about what kind of energy he proposes we are going to use.
He indicates we will harness that uniquely American power of innovation. Innovation will not go in your gas tank and get you home or get you on a vacation. He goes on to say: We will say to the Nation's inventors and entrepreneurs, if you invest in these new technologies, America will invest in you.
The Presidential candidate said: Through the power of free market, we will take a dramatic step forward for our children's health, which will also be a dramatic new step towards a stable climate.
It is a good deal of rhetoric and sounds pretty good. But in reading that, one would come to the conclusion that we simply have not been doing anything in the area of renewables. I point out for the Record, in the last 5 years this country has spent $1.5 billion for renewable energy research and development.
What have we done over the last two decades? We have spent $17 billion over the last 20 years in direct spending, in tax incentives for renewables. My point is, we are all supportive of renewables, but how successful have we been? We have been putting money on them. We have been providing tax incentives.
Our total renewable energy constitutes less than 4 percent of our total energy produced. That excludes hydro. Mr. President, 4 percent is from biomass, less than 1 percent from solar and wind. Yet most of the money in the technology has gone to solar, wind, and biomass.
So when the Vice President suggests a program of expenditures, some
$80 billion over the next 10 years, we need relief now--the American consumer, the American motorist, the trucker. We see on our cab bills a surcharge. We see on the airplane bills a surcharge. We need relief now.
We have spent $1.5 billion for renewable research over the last 20 years and $17 billion in the same period in direct spending and direct incentives for renewables. My point is not to belittle renewables or their important role, but the reality is there is simply not enough. At less than 4 percent--excluding hydro--they simply are not going to provide the relief we need.
I think it is important we understand the Vice President's programs. While we all want to conserve energy, we want to reduce pollution, we want to reduce the Nation's dependence on foreign oil, the facts are in many cases we are not reducing the dependence on foreign oil. We are increasing. In 1973 and 1974 when we had the Arab oil embargo, we were 37-percent dependent on imported oil. Today, we are 56 percent on an average and we have gone as high as 64 percent.
In the Vice President's plan, I want to know how he plans to reduce the Nation's dependence on foreign oil when the Secretary of Energy is out soliciting for greater production from Kuwait, Saudi Arabia, and Mexico.
He wants to reduce the threat posed by global warming. I think that is a challenge for American technology and ingenuity. He wants to curtail brownouts by increasing electric grid reliability. What has the administration done of late in that regard? They have not worked with the Energy Committee, which I chair, on electric restructuring, which was designed specifically to address how we were going to provide an incentive for more transmission lines to be built so we could ensure that we would not have brownouts, how we were going to ensure that we would have adequate energy, whether natural gas, coal, oil, or nuclear.
This administration, right down the line, in its energy policy, specifically, has highlighted that it does not have an energy policy. We have seen that in our inability to prevail on high-level nuclear waste storage. We are one vote short of a veto override.
It is also important to go in and identify the new initiatives that the Vice President has indicated are in his policy statement. One is to
``extend incentives for natural gas exploration.'' That is actually in his statement. But let me refer to a statement our Vice President made October 22, 1999, in Rye, NH:
I will do everything in my power to make sure there is no new drilling--
No new drilling, Mr. President.
even in areas already leased by previous administrations.
I don't know how he can make that statement on October 22, 1999, and today and yesterday make the statement that he wants to extend incentives for natural gas exploration. Where is it going to come from? I certainly don't know where it is going to come from.
I could go on and on and identify each one of these, where there is an inconsistency. But the fact is, his program, at a cost of $75 billion to $80 billion over 10 years, supposedly from the surplus, is not going to do a single thing today to reduce gasoline prices. So what are we going to do? How are we going to relate to this? I think it is fair to say the Vice President misses the point.
To borrow a phrase from the Clinton administration: It is the gasoline prices, stupid.
We are paying more for gasoline than at any other time in our history. That is the fact. Gasoline and natural gas prices have doubled. Do you remember last March, we were paying $10, $11, $12 a barrel? Today we are paying $32 a barrel.
Natural gas, which is assumed to be a godsend, our relief, has gone from $2.65 per thousand cubic feet to $4.56 for deliveries in January. The American consumer has not felt this, but they will. And there will be a reaction. Wait until people start getting their gas bills around this country--not just their gas bill but their electric bill, because a good deal of the electricity is generated from gas.
So the Vice President wants to radically change the domestic energy industry in the future and he wants to spend $75 billion to $85 billion to do it. Think about the conventional sources of energy and the administration's position. Coal? They oppose coal. They oppose advanced technology, clean coal, expansion of the coal mines, expansion of the generation from coal. They have already identified nine plants they propose to close and it is a dispute whether the managers of these plants have purposely extended the life of the plants or, as the management says, in order to maintain the plants to the permits they have had to do certain improvements.
They oppose hydro. Their proposal is to tear down the hydro dams out West. There is a tradeoff there. The tradeoff is that you put more trucks on the highway if you do away with the barge transportation system on the Columbia River. It is not just a few more trucks on the highway; it is several hundred thousand because the barges are the most effective way to move volumes of tonnage.
They oppose nuclear--no nuclear. They oppose oil and gas drilling, as indicated by the comments of the Vice President.
I think it is fair to say Vice President Al Gore is OPEC's best friend because in reality the only answer they have is to propose to import more energy. Where are we getting that energy? Saudi Arabia and another country, which I find really gets my attention in the sense of being indignant. I guess I might say I am outraged. A few years ago, in 1991 and 1992, we fought a war in Iraq--Desert Storm. We lost 147 lives in that war. We had roughly 427 men and women who were wounded in that conflict. We had 23 taken prisoner. Since that time, we have enforced a no-fly zone over Iraq. That no-fly zone is an aerial blockade, if you will. It has cost the American taxpayer over $10 billion to enforce. Yet, from time to time, we launch a sortie to fly over Iraq, where they violated the no-fly zone. We drop bombs on various targets near Baghdad. This is part of our foreign policy.
Perhaps I can simplify this. It seems to me we buy their oil. The interesting thing is we start out with 50,000 barrels a day. Last year it was 300,000 a day. Today it is 750,000 barrels a day. We buy the oil, send Saddam Hussein the money. Then we put the oil in our airplanes and we go bomb him.
Maybe it is more complicated than that. There are a few people who are unfortunate victims. Saddam Hussein holds up a press release and says: The Americans and the British have killed so many Iraqi citizens.
That obviously rallies his people around him and the vicious circle starts again.
That is where we are getting our greatest single increase of oil--
from Iraq, a country where it wasn't so long ago we were sacrificing lives. It is from a tyrant who obviously is using the money he is getting from the oil he smuggles to develop his missile technology and his biological warfare capability. Clearly, he is up to no good and represents a significant threat to the Mideast and Israel as well, without question.
Here we have an administration, a Vice President, who has no real relief in sight. He has a 10-year program costing $80 billion that is not going to provide the American consumer with any cheaper gasoline tomorrow, the next day, next week, next month, or next year. But what the Vice President proposes is designing your future but ignoring the crisis at the pump. The Vice President wants the Government to tell you what energy you are going to use and what price you are going to pay for it. That is basically what we are doing with reformulated gasoline.
We have refineries now customizing gasoline because the Environmental Protection Agency has mandated certain formulas in various parts of the country. I am not here to debate the merits. But the reality is, it costs money. Why does it cost money? For a lot of reasons. We have lost some of our regional refiners. We have lost 37 refiners in this country, under Clinton-Gore, two administrations, 8 years. The refineries have not been replaced. We have not had a new refinery in this country for 10 years.
Why? There are a lot of reasons. One is there is an inadequate return on investment. Another reason is that the permitting takes so long. The third is the potential Superfund sites; they are just not an attractive investment. So we have constricted ourselves, we have put on more regulations, and the price is being passed on to the consumer.
While I applaud the Vice President for recognizing that American ingenuity and technology should drive future energy demands, the reality is that unless we increase our domestic supply, we are going to continue to have shortages and higher prices. The alternatives to that are not very bright from the standpoint of any immediate relief.
I am going to also make a reference to an article in the Washington Times, which I ask unanimous consent be printed in the Record.
There being no objection, the article was ordered to be printed in the Record, as follows:
Occidental Deal Benefits Gores
Sale of federal oil field boosts family fortune
(By Bill Sammon)
Vice President Al Gore's push to privatize a federal oil field added tens of thousands of dollars to the value of oil stock owned by the Gore family, which has been further enriched by skyrocketing gasoline prices.
Shares of Occidental Petroleum jumped 10 percent after the company purchased the Elk Hills oil field in California from the federal government in 1998. Mr. Gore, whose family owns at least $500,000 in Occidental stock, recommended the sale as part of his ``reinventing government'' reform package.
The sale, which constituted the largest privatization of federal land in U.S. history, transformed Occidental from a lackluster financial performer into a dynamic, profit-spewing, oil giant. Having instantly tripled its U.S. oil reserves, the company began pumping out vast sums of crude at low cost.
As the months went by, Occidental was able to sell the oil, which ends up at gasoline retail outlets like Union 76, for more profit. Rising oil prices have significantly improved Occidental's bottom line, said analyst Christopher Stavros of Paine Webber.
This year, the company posted first quarter revenues of
$2.5 billion, or 87 percent higher than a year earlier. That's a bigger increase than at nine of 10 other oil companies listed in a survey that Mr. Gore cited last week as evidence of price gouging.
The rise in Occidental oil prices, coupled with the acquisition of the Elk Hills field, has paid handsome dividends for the Gore family.
The vice president recently updated his financial disclosure form to put the value of his family's Occidental stock at between $500,000 and $1 million. Prior to the Elk Hills sale and gasoline price spike, Mr. Gore had listed the value of the stock at between $250,000 and $500,000.
Gore aides insist the vice president's push to sell Elk Hills does not constitute a conflict of interest. They point out the family's Occidental shares were originally owned by Mr. Gore's father, who died in 1998, leaving the stock in an estate for which the vice president serves as executor.
Although Mr. Gore continues to list the stock on his financial disclosure forms, aides said the shares are in a trust for the vice president's mother, Pauline.
``He doesn't own stock because he's trying to avoid conflicts of interest,'' said Gore spokesman Doug Hattaway.
``He's the executor of the estate, but he's not the trustee of the trust. It's a separate thing.''
Still, Mr. Gore's recommendation to privatize Elk Hills ended up enriching his mother, who is expected to eventually bequeath the stock to the vice president, her sole heir.
Last week, Mr. Gore began a concerted effort to blame skyrocketing gasoline prices not only on ``big oil,'' but also on Texas Gov. George W. Bush. Gore aides have emphasized that Mr. Bush once ran several oil-exploration firms and has accepted more campaign contributions from oil companies than the vice president.
The Texas governor has dismissed the attacks as an attempt to divert attention away from Mr. Gore's energy and environmental policies, which have driven up gasoline prices. Political analysts say the spiraling gas prices could imperil Mr. Gore's presidential bid because they are highest in the Midwest, which he must carry in order to win the White House.
The political and financial fortunes of the Gore family were established largely with oil money from Occidental's founder, Armand Hammer. Part capitalist and part Communist, Mr. Hammer became the elder Gore's patron more than half a century ago, showering him with riches and nurturing his political career through the House and Senate.
The elder Gore enthusiastically returned the favors. In the early 1960s, Sen. Gore took to the Senate floor to defend Mr. Hammer against FBI Director J. Edgar Hoover, who wanted to investigate Mr. Hammer's Soviet ties.
In 1965, the elder Gore helped Mr. Hammer obtain a visa to Libya, where he opened oil fields that turned Occidental into a multinational powerhouse.
When the elder Mr. Gore lost his re-election bid in 1970, Mr. Hammer installed him as head of an Occidental subsidiary and gave him a $500,000 annual salary. The man who had begun his career as a struggling schoolteacher in rural Tennessee ended it as a millionaire oil tycoon.
The younger Gore also benefited from Mr. Hammer's generosity. He was paid hundreds of thousands of dollars in annual payments of $20,000 for mineral rights to a parcel of land near the family's homestead in Tennessee that Occidental never bothered mining.
When the younger Gore first ran for president in 1988, Mr. Hammer promised former Sen. Paul Simon ``any Cabinet spot I wanted'' if he would withdraw from the primary, according to a 1989 book by the Illinois Democrat.
Mr. Gore and his wife, Tipper, once flew in Mr. Hammer's private jet across the Atlantic Ocean. They hosted Mr. Hammer at several presidential inaugurations and remained close to the oilman until his death in 1990.
In 1992, when Arkansas Gov. Bill Clinton was considering Mr. Gore as his running mate, the elder Gore wrote a memo describing his son's ties to Mr. Hammer. The document was designed to provide Mr. Clinton with answers to possible questions from reporters.
Mr. Hammer's successor at Occidental, Ray Irani, has continued to funnel hundreds of thousands of dollars into the campaigns of Mr. Gore and the Democratic Party. For example, two days after spending the night in the Lincoln Bedroom in 1996, he cut a check for $100,000 to the Democratic Party.
Mr. MURKOWSKI. The title of the article is, ``Occidental Deal Benefits Gores.'' I don't begrudge the Gores or any families having any investment. What I do begrudge is the realization that the Vice President has lashed out and attacked big oil. I am not here to defend big oil. As chairman of the Energy Committee, we are having a hearing. We are going to invite the various oil companies and refiners to come in and explain to us why prices have gone up and what the future is likely to hold.
It is fair to point out Vice President Al Gore has been linking George W. Bush to big oil. I am not here to separate that, but as this article points out, the Vice President's efforts to push to privatize Elk Hills, which was a Federal oilfield in California, added a good deal--as a matter of fact, hundreds of thousands of dollars--to the Gore family estate fund. This was the Occidental Petroleum that bought Elk Hills.
Occidental's profits soared, and, of course, the Gore family stock in the company went from a listing of roughly $250,000 to $500,000, up to
$1 million, as a consequence of the privatization of Elk Hills. Again, I do not begrudge the Vice President and his family making a fair return on an appropriate investment. There is absolutely nothing wrong with it. But those who live in glass houses should not take baths. In this case, that fits the position of the Vice President.
Finally, I spoke on the floor Friday about the energy crisis we are having. I talked about the Clinton-Gore energy policy, or lack of it. After I spoke, my good friend from Iowa made some observations and statements about energy policy that I think warrant some consideration. I am going to take the time, with the indulgence of the occupant of the chair, to respond.
We do two things in Alaska well: We harvest timber, and we harvest fish. We do not have a great deal of agriculture potential. We do some hay, potatoes, barley, and oats, but we have a short season. Fish and timber we do well. So I know something about fish and timber. I do not know much about corn. I do know quite a little bit about energy, as chairman of the Energy Committee.
After reading the statement of the Senator from Iowa, I think a few of his observations deserve a little closer examination. The Senator suggested our investment in ethanol production, in hydrogen, fuel cell research, and renewable energy has been minimal. He said:
We need to get a few million dollars in for the use of hydrogen in fuel cells and fuel cell research.
Again, the reference I made earlier to what we have expended speaks for itself. What we have expended in these areas is truly not insignificant. It is a major expenditure in the area of over $20 billion overall in renewables. As a consequence of that, indeed, the Senator from Iowa would agree, we have been expending a good deal in these areas of promoting renewables.
As a member of the Senate renewable and energy efficiency caucus, I am a supporter of ethanol production, hydrogen, fuel cell research, and renewable energy. To support hydrogen research, I moved through my committee and into law the Hydrogen Future Act which is Public Law 104-
271. It was originally introduced in the House by Bob Walker and authorized the hydrogen research, development, and demonstrations programs of the Department of Energy.
In the nearly 5 years that have passed since that time, we have spent over $100 million on hydrogen and fuel cell research in the Department of Energy. Over the past 5 years, we have spent another $1.5 billion for renewable energy research and development, $330 million of which has gone for biomass research, including ethanol.
To support renewable wind energy, I have supported as a member of the Finance Committee a production tax credit for investments in wind energy.
To support renewable biomass energy, I have supported the repeal of the ``closed loop'' rule for the biomass energy tax credit in an effort to boost biomass energy production, including ethanol.
I am also a cosponsor of Senator Lugar's biofuels research bill, S. 935, which passed this body.
To support the deployment of distributed renewable energy, I have worked to make Alaska a test bed for many of these technologies. Alaska has scores of small communities that are not on a consolidated electric grid.
We are exploring the use of wind turbines, fuel cells, and other technologies to displace the expensive diesel fuel currently used in these communities because these are the technologies that will make sense in a developing world of energy.
These are all areas that are very important in the effort to decrease our imports of foreign energy and protect our environment, and I do support them personally, as well as in my position as chairman of the Energy Committee.
Senator Harkin's contention that we ``need to get a few million dollars'' for research in these areas suggests we are not making these investments when, in fact, we are. I did not want any of my colleagues or America to be misled.
Talking about gasoline prices again, Senator Harkin also encouraged me, as chairman of the Energy Committee, to subpoena oil company executives, to put them before my committee and start asking the
``tough questions'' in an effort to get to the bottom of the high prices.
Indeed, my staff and I had already been planning and have planned a hearing on gasoline prices to include representatives from the industry and the administration. We made that decision several days ago. That hearing, as announced, will be held on Thursday, July 13, at 9:30 a.m.
At that time, we plan to explore issues of gasoline supply problems and ask if deliverability, transportation, refining, and blending resources are adequate to supply our near-term and long-term gasoline needs. It is a matter of supply and demand. The supply is down, the demand is up.
But it may interest my friend from Iowa to know that subpoenas are unlikely to be necessary for the oil companies or their representatives. When our committee asks them to appear, they appear. They answer the questions asked of them, and I am not anticipating any problem with the oil companies responding to our questions.
On the other hand, I think you would agree, sometimes we do have problems with the administration. Secretary Richardson recently found it inconvenient to appear before our committee on the Los Alamos matter. So there is some doubt he will show up to answer, as Senator Harkin puts it, the tough questions.
We are considering asking the EPA Administrator, who is responsible pretty much for the reformulation of gasoline around the country, where the refineries are now customizing, and that would be EPA Administrator Carol Browner. There is some question she will appear. She may be worried the reformulated gasoline requirements have, in fact, balkanized the market and driven prices up. That might make her inclined not to attend.
While the Senator from Iowa said in his remarks Friday that reformulated gasolines were ``not the problem,'' I am personally not so sure of that. Consider the following facts: Under the Environmental Protection Agency regulations, fuel made for consumption in Oregon is not suitable for California's consumption. Fuel made for distribution in western Maryland cannot be sold in Baltimore. Areas such as Chicago and Detroit are islands in the fuel system, requiring special
``designer'' gasolines. Gasoline sold in Springfield cannot be sold in Chicago.
A recent Energy Information Agency report observed that an eastern U.S. pipeline operator handles 38 different grades of gasoline, 7 grades of kerosene, and 16 grades of home heating oil and diesel fuel.
Between Chicago and St. Louis, a 300-mile distance--think of this--
four different grades of gasoline are required. Is that necessary? I am not here to debate that point, but I am here to tell you that it all costs money and the consumer pays for it. It is estimated that reformulated gasoline costs an average of 50 cents more a gallon for the reasons I have outlined.
The predictable result is refiners lack the flexibility to move supplies around the country to respond to local or regional shortages. Again, I advise the President that 37 refineries have closed. No new ones have opened. Why? I think the answer is obvious.
These are among the questions we will explore in our hearing, and I hope we will have good cooperation from the industry and good cooperation from the Clinton-Gore administration.
There are a few things we do know before the hearing.
Even before we convene the hearing, here is what we already know. Americans are now paying more for their gasoline than at any other time in history. Our dependency on foreign oil is at an all-time high--
higher than any other time in history.
Again, we fought a war 9 years ago over threats to our oil supply. I have indicated the loss of life we have had, the prisoners who were taken, and those who were wounded.
Further, domestic oil production is down 17 percent since the start of the Clinton-Gore administration.
I think it is important for Members to recognize we have a little history to indicate why we are in this predicament.
We will almost assuredly have brownouts this summer when energy usage exceeds energy supply. That is because the Clinton-Gore administration has actively curtailed domestic energy production in all forms in virtually all areas of this country.
For 8 years, President Clinton and Vice President Gore have been warned that our foreign oil consumption was increasing and our domestic oil production was decreasing. One can only assume they chose to ignore the warnings, and now we have record prices for gas and home heating oil.
This is a problem of leadership. Both the President and the Vice President and my good friend, Senator Harkin from Iowa in a speech, suggested that the oil companies are to blame. It is the blame game played around Washington, DC, all the time. And maybe the oil companies are partially responsible. I am not ruling that out.
But leadership is not assessing blame. Leadership is about preventing the crisis before it happens. Sadly, the crisis is here, and Americans are paying the price. Perhaps even worse, the most powerful Nation on Earth--the most powerful Nation in the history of the world--is at the mercy of a handful of oil-producing nations because we are not producing our own domestic resources.
Where would we get them? We have the Rocky Mountain overthrust belt all around Wyoming, Montana, New Mexico, and other areas. We have the OCS off the Gulf of Mexico, Texas, Alabama, and Mississippi, and my State of Alaska. We have the resources here. There is absolutely no question about it. We have the technology. We also have an administration that would much rather send the Secretary of Energy overseas to beg for increased production from OPEC and from Saddam Hussein than generate domestic oil production here at home where we are assured we would have a continued supply. We could keep the jobs here and the dollars here.
If we were willing to fight for oil supply in the Persian Gulf, we ought to be willing to drill for it domestically here in the United States.
I talked about what the Vice President has said about this. I have noted the Vice President's sudden interest, as expressed on his campaign trail, about the prices paid by gasoline consumers, and again, his suggestions that the oil companies are to blame.
Surely this cannot be the same Vice President Gore who cast the tiebreaking vote for higher gasoline taxes in this Senate body.
Surely this is not the same Vice President who wrote in his book,
``Earth in the Balance,'' that: ``Higher taxes on fossil fuels . . . is one of the logical first steps in changing our policies in a manner consistent with a more responsible approach to the environment.''
Perhaps the Vice President doesn't have to buy gas as the rest of us, but someone needs to tell him that raising taxes on gasoline only hurts hard-working Americans.
In summary, to conclude, I think the energy policy of the Clinton-
Gore administration can be summed up in a single word. That word is
``no''--no domestic oil exploration or production, no use of coal, no use of nuclear power, no use of hydroelectric power, no to increasing supplies of natural gas, and no to new oil refineries.
We have a better idea; that is, the National Energy Security Act of 2000, introduced by Senator Lott, myself, and others because it encourages domestic production, energy efficiency, renewable energy, and other energy resources, with the goal of decreasing our oil imports to a level below 50 percent.
We have a goal in our energy policy, in our Republican plan. Ask the Clinton-Gore administration what their energy policy is, what their goal is. As I see it, it is an $80 billion expenditure on renewables coming about in 10 years, when today, if you exclude hydro, only 4 percent of our energy comes from renewables. I wish there were more.
Anyway, this is the kind of balanced approach that I think will keep energy supplies stable and affordable for America. I urge my colleagues to support the National Energy Security Act of 2000, which was raised here on the floor the other day and the leader assures me is pending.
I thank the occupant of the chair and the clerks for prevailing at this late hour. I have been asked to close the Senate today. So with their indulgence, I will proceed. My reason for keeping you here tonight, obviously so late, is the inability to get floor time in morning business because of the accelerated schedule. So I hope you will understand.
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