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.
“THE PRICE OF GASOLINE” mentioning the U.S. Dept of Agriculture was published in the House of Representatives section on pages H3762-H3769 on May 13, 2008.
The publication is reproduced in full below:
THE PRICE OF GASOLINE
The SPEAKER pro tempore. Under the Speaker's announced policy of January 18, 2007, the gentleman from Iowa (Mr. King) is recognized for 60 minutes.
Mr. KING of Iowa. Madam Speaker, it is an honor to be recognized to address you here on the floor of the United States House of Representatives. And of all the issues that are before this country today, tonight, yesterday, last week, last month and tomorrow, energy is the number one issue that is on the minds of the American people.
And as the American people pull into the gas pump and pay $3.60 or
$3.70 for a gallon of gasoline, and if they are buying diesel fuel for their truck or maybe for their diesel automobile, they are up there at
$4.17 and $4.20 a gallon, and that inflation of the fuel cost is on the minds of all Americans. And it costs us all in a number of different ways.
I have a group of constituents, and a lot of them use something like a gallon, gallon and a half of gas to go to work every day. We don't all live in a compressed place in the inner city like millions of Americans do. Some of us live 25, 30 or 40 miles from our work. Even if we get a car that gets 20 or 25 miles to the gallon, we might still drive, if it's 25 miles to the gallon, 25 miles. That's a gallon of gas to get to work. And it's a gallon of gas to get home. And that gallon of gas at $3.60 adds up over the week, an extra gallon going to work, and an extra gallon coming from work. And if you do that Monday through Friday and sometimes for half a day on Saturday, that means that over the week, let's just say that gas is up $1.50 a gallon from where it was not that long ago, that's $1.50 extra going to work and $1.50 extra coming home from work. That's $3 a day, $20 a week, perhaps $18 to $20 a week, and that's $80 or more a month. That $80 more a month is a significant amount out of the paycheck of the American people, Madam Speaker.
We can deal with that, Madam Speaker, if we adjust. We can make these adjustments as we go. We can squeeze our budgets down. We can carpool a little bit. We might go to the auto dealer and buy ourselves a car that gets a little better mileage. And that's happening. Those dealers that are selling high-mileage vehicles are doing okay right now.
Some of the American people can't afford to trade up in their vehicles. And some of them have to drive the vehicles that don't get as good mileage. And some of them have to go to work every day. And when they pull into the gas pump, and they stick the nozzle in the tank and fill that tank up, they know that they're paying in most States a State tax, as well. Certainly where I come from in Iowa there is a State gas tax. And that goes to build our roads. And there is 18.4 cents of Federal tax on the gasoline that goes to build our roads. And when they stick that nozzle in the tank, squeeze that nozzle and fill the tank up or put in $20 or whatever it is they can afford, they don't mind paying that 18.4 cents because they want to drive, Madam Speaker, on a good road.
And yet that 18.4 cents doesn't all go to road construction, road improvement and road maintenance. A lot of that 18.4 cents is broken up into a number of different categories. Seventeen percent goes to mass transit. Three percent goes to trails. About 28 percent, according to the Transportation Committee a few years ago, goes to archeological and environmental compliance.
And if you add up the pieces of that gas tax, of that 18.4 cents, it comes up to the point where maybe one-third of the 18.4 cents in Federal gas tax actually goes to build and maintain the road that these cars that are paying the tax are driving on. So it's one thing to have a gas tax. And it's another to apply the gas tax to the place where it's used. If this is a user's fee, if we are taxing the gas because cars wear out roads, and trucks that use diesel and pay diesel tax wear out roads and we need to rebuild them, refurbish them and resurface them, then it doesn't make sense that such a high percentage of that gas tax dollar goes to something other than the roads that are being driven on.
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Now, the rationale is we need trails because that's where we put our bicycles, and that takes them off of the highway. Well, it does to some degree, but it's not a user's fee for the bicycles.
If we take the position that mass transit takes people off of the roads and puts them into, say, the subway system, for example, the
``L'' in Chicago, the Metro here in Washington, DC, then if it takes them off the roads and it slows down the congestion in our highways and it frees up our roads, if you put people in the subway, under the tunnel, in the city, it does do that. But the people that are riding under the city that don't own a car, that don't buy any gas, that are going back and forth cheaply from job to job, those people are getting a discount at the expense of the people that are paying the gas tax.
For example, and I will just pick a number, if you go down to the South Capitol stop, here in Washington, DC, and you decide you want to go out to Falls Church on the Metro, I think that's about a buck and a quarter to take that ride out to Falls Church. Well, you can't get a taxi ride out there for that, and you can't drive out there for that, but you can take Metro out there for a buck and a quarter. Now, that's nice, a lot of folks do that. They take that ride out there to Falls Church or points beyond. Travel around within our cities and Washington, DC, and most of the major cities in America are on the subway, and they do that very subsidized with the 17 percent of that gas tax that's paid for by people that are driving cars and buying gasoline.
I wonder, why is it that the majority in this Congress, headed up by Speaker of the House, Nancy Pelosi, and the San Francisco approach to energy, coupled with the Massachusetts approach to finances, how can the Democrat administration that's here, the Democrat leadership that's here in this Congress, how can they continue to bring education or bring energy bills to this Congress that constantly reduce the supply of energy, tax the energy more, regulate the energy more, seek to impose windfall profit taxes on our energy producers, do all of that, which reduces the amount of energy that's on our market, which drives up the cost of gasoline. Why do not the constituents of the people that are in this majority, the ones who hold the gavels to chair the committees, why don't their constituents rise up and say that's enough, I want cheaper gas. I don't want to pay $3.60, I don't want to pay
$3.70, I don't want $4 gas and I sure don't want to buy $129 crude oil by the barrel.
My constituents rise up and say let's do something. Why don't theirs? Why is it the red zones in America want less expensive energy and always--and why is it the people in the blue zones in America are willing to tolerate higher energy costs?
That question is one that actually has an answer. When one examines it, I come up with this conclusion. If you are driving on the roads of America, and, especially, if you live a long way from your work, that gallon or gallon and a half of gas that you have to burn to get to work and that much to get home again and do it every day, if you are in that kind of an environment, and you are paying for the gas, it matters to you right now, $3.60 gas matters right now, and you don't maintain the tax so much because you need a good road to drive on.
But if you go out every day and you don't own a car, if you don't own an automobile, and you go down into the subway and you get your season ticket or your daily ticket, and you run it through there and you get on the subway, you get on the Metro and you take your subsidized ride, you are not thinking, thank you, gas-buying America for helping to fund my ride on this subway today. You are just thinking this is the way the expenses are in my life, they aren't so bad, I can deal with that. I don't know what's wrong with those people that think we should not--and the people that are riding the subways in America don't understand why it is that those of us that are buying gas want to drill in ANWR, want to drill the Outer Continental Shelf, want to drill the nonnational park public lands in America and provide a distribution system, including pipelines, including collector pipelines, including access roads, so that we can pull this energy that's underneath this continent and bring it into the marketplace.
They don't understand that because it doesn't matter to them, because the gas price is paying for their ticket on the Metro, their ticket on the subway, their ticket on the ``L,'' their ticket on the trolley cars in San Francisco. That's the problem.
There's a political imbalance here. Alexander Titler said at one point, and I will paraphrase his statement, that when a majority of American people figure out that they can vote themselves benefits from the public treasury, on that day democracy ceases to exist. That is from Alexander Titler, more than 100 years ago.
He understood what would happen within this great constitutional republic that we have if we are going to let people go to the polls and vote, and if they elect representatives to come here to this Congress and go to the State legislatures and the county supervisors and the city councils in America and vote themselves benefits from the public treasury when there is a disproportionate share of tax that is being paid by a smaller percentage of the people. When a majority of the people in the United States of America, if they are to this point, where a majority of the people are not paying taxes, and yet they go to the polls and vote themselves benefits from the public treasury, look what happens.
They don't care how much tax there is on the rich, because there is no tax on the poor, at least so to speak, and the people that are riding the subsidized mass transit, they don't care how much tax there is on gasoline and they don't care how expensive it gets. After all, they are not paying the price for that.
But if we would index the price of a ticket from South Capitol to Falls Church to the price of gasoline, and if we would tax that ticket for the equivalent amount of gasoline so that they could help fund the construction of their mass transit and their construction and the maintenance of our roads, it would be a far more expensive ticket to take that ride on the Metro. The people that are paying the price would be demanding something entirely different of their Members of Congress.
This reflexion that we have here, this apathy about high gas prices, this apathy about short energy supplies, this reverence, this love, this almost irrational religion about opposing drilling in ANWR, a place that I can't imagine that oil could be in a more logical and better place for humanity to access it than ANWR. Now, having heard a lot of arguments against drilling in ANWR, I thought it was important for me to go up there and visit. I did do that.
As one who was signed up to go on the original pipeline back in 1970 that opened up the oil fields in the north slope of Alaska, I was signed up to go up there, and the court injunctions stopped the exploration and the development of that pipeline in 1970. I got married in 1972, the court injunctions were finally lifted later on that year. That was the year that my wife convinced me that I should stay home in Iowa, and I think it might have been very good advice. But, in any case, we began the right-of-way construction for the pipeline in 1972 or early 1973 and opened up the oil fields up there in the north slope of Alaska about that same period of time.
As we move forward till 1983, 1993, 2003, 35 years, in 35 years we have developed a lot of oil, we have pumped a lot of crude oil down through that pipeline to Valdez and put it on our oil tankers and headed them to points south and to oil refineries south of Valdez, Alaska. In all that time, despite of the fact that there have been some very minor leaks on the pipeline, and without regard to where the tanker did run ashore there in, I believe, it's Prince William Sound, those events will happen occasionally.
The cleanups took place immediately along the pipeline. The very minor leaks that they have had, they have been very minor spills. They have been cleaned up immediately. The impact on the environment has been either zero or negligible, depending on whether you want to make the environmentalist argument or the oil producers' argument.
But zero environmental impact or negligible environmental impact in any case does not remove the argument that it was the right thing to do. To drill the north slope, it was the right thing to do to build the Alaska pipeline. It's absolutely the right thing to do to move to the east and develop the oil fields in ANWR and pull that oil up out of the ground and pump it into the Alaska pipeline and send it south. That needs to happen. The oil is there.
I read an article in one of my local Iowa newspapers here over the weekend that said, so, why would you want to drill ANWR if there is a guarantee that the oil that's there would eliminate the United States' dependency on foreign oil for 5 years? The criticism was, what are you going to do in the sixth year?
Well, if somebody has got a 5-year solution for $3.60 gas, I want to take it. I want to take it right now. I want to punch those holes in the ground. I want to connect those pipelines up, and I want to get that oil coming south.
If we had done that 5 years ago, we would have that north slope connected to ANWR, and that oil would be coming out of the ground today. It would be holding down the increase in energy prices. It wouldn't have changed the world supply on such a point that it would be utterly dramatic, but it would be holding down the increase in costs and, in fact, it would be cheaper today if we had put that ANWR oil on the market 5 or 10 years ago.
If we go then to the Outer Continental Shelf, offshore to Florida in particular, natural gas prices have been volatile. They have been way up, they have come back down a ways. They are back up a little bit again.
High natural gas prices have almost destroyed the domestic production of fertilizer in the United States because natural gas is the feedstock. The cost factor of 90 percent of the cost of producing nitrogen fertilizer is the cost of natural gas when you go through the process of conversion of natural gas and anhydrous ammonia.
Because of high natural gas prices, that fertilizer business has gone offshore. We are sitting here with 406 trillion cubic feet of natural gas on the Outer Continental Shelf, and we can't go offshore to Florida and drill some natural gas wells 199.9 miles offshore? That's the 200-
mile mineral rights that were declared by Ronald Reagan back in about 1983.
We can't punch a well out at 199.9 miles to bring up the natural gas that we know is there and put it into the marketplace by the trillions of cubic feet, 406 trillion cubic feet? We are blocked from doing that because environmentalists say don't drill, don't drill in ANWR, don't drill the Outer Continental Shelf, don't drill 200 miles offshore in Florida because, well, maybe we would pollute the environment with a natural gas well, when there is not a single historical example of a natural gas well that's polluted the environment.
Natural gas comes up out of the ocean floor every day by the millions of cubic feet, and it bubbles to the surface just like we saw it bubbling to the surface during Katrina in the hurricane in the aftermath in the floods of New Orleans when there was a natural gas pipeline break. I actually saw two of those myself, alive, for real, bubbling up out of the water that had flooded New Orleans.
It wasn't a pollution into the environment, it had bubbled up into the atmosphere and was dissipated in the atmosphere. That's the worst thing that happens in a natural gas well is if you get a natural gas leak. It goes into the atmosphere, it does what it does, it bubbles out of the ocean floor every day all across the globe.
The environmentalists are opposed though. They are opposed because they are opposed to producing energy. They are opposed to having energy on our market. They team up with the tourism industry in places like Florida that is concerned that we will set up a drill rig out there at 199.9 miles offshore, way beyond our ability to be able to see it.
Let me think about this. Christopher Columbus figured out the world was round by watching the ships come into port, and he could see the top of the masts first. The closer the ship got, the more he saw the ship because he figured out the curvature of the earth put that ship a little over the horizon as it came forward. He could see the top of the mast, more of the mast. After a while he could see the hull, then he could see the whole ship. He surmised, correctly, well, the earth is round. That's why you don't just happen to see that ship materialize when it comes forward to you across the ocean.
For the same reason you can't see an oil rig, I am advised, about 12 miles out. You can argue that, and whether it's 12 more or less, but you don't see that oil rig at 199.9 miles.
Imagine a place on the surface of this earth that's 200 miles away from you. I think for me, roughly 200 miles would be if I were standing on the Missouri border, the southern border of Iowa. If I went down to Lineville and maybe Pleasanton and stood there, and I looked north about 200 miles to Minnesota, if there is a drill rig on the Minnesota border, I am not going to see it from the southern border of Iowa and Missouri, it's too far.
But we still can't put a drill rig out at 200 miles offshore in Florida because they are afraid that somebody might be concerned that they can see it from the beach of Florida, they might not drive down there and sit on the beach and it will diminish tourism? Yet the Chinese can bring in drill rigs within 45 miles of Key West and be punching oil wells down into the open sea north of Havana 45 miles south of Key West. Forty-five miles in the middle, the Chinese are there drilling oil for the Cubans, and we can't drill 200 miles offshore, and why?
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A vote went up in the Senate today that failed to open up ANWR. It failed to open up the Outer Continental Shelf, and it failed to open up the energy supply here in the United States of America. And yet 60 or so Senators voted no.
Here on this floor, if this vote comes up tonight, Mr. Speaker, or tomorrow, Mr. Speaker, I am confident that the votes don't exist in this Chamber for the responsible thing to take place, for us to step up and say let's tap into our energy supply. Let's drill into ANWR, let's drill the Outer Continental Shelf, let's go to the nonnational park public lands in the United States and drill the places where we have the oil.
There was some data that came out about 4 years ago that identified that if we would drill the nonnational park public lands in America for natural gas, we know there is enough natural gas there to heat every home in America for the next 150 years.
So what nation in its right mind would sit here and twiddle its thumbs and agonize over $3.60 a gallon gas, what Nation would set a policy that brought energy bills to this floor, over and over again, energy bills that diminish the supply of energy on the marketplace, tightened up regulations and made it more difficult to develop energy, imposed windfall profit taxes on energy producers. This is the Pelosi Congress that had a plan, had a strategy for energy? We had a new energy policy, what is it? It is at least $1.60 a gallon higher gasoline, that is what the energy policy is. There is no strategy to solve the problem. There isn't a strategy.
And so their constituents, Speaker Pelosi's constituents, give her a pass because they have the San Francisco trolley car subsidized by the gas buyers in America.
And the constituents coming out of New York, they give their congressmen and congresswomen a pass because they are riding on the subway subsidized by the gas buyers in America. Seventeen percent of the gas tax goes to mass transit.
And the people riding on the Metro here in Washington, D.C., they're riding around on transportation subsidized by the gas buyers in America.
There is no outrage over here because the folks on this side of the aisle have figured out how to tax the folks on this side of the aisle for their energy. There is no outrage over here because the folks on this side of the aisle don't believe we ought to have cheaper energy. And even if they did believe that, they don't believe in the law of supply and demand. This law of supply and demand which says if you increase the supply and decrease the demand, the prices will fall because the producers have to lower their price in order to sell their product. If you reduce the supply and increase the demand, the prices will go up because sellers will know there is a high demand for their product. Those consumers will be searching to buy that product, and the price will go up.
This Congress has reduced the supply of energy, all kinds of energy. The demand for energy is going up and the price is going high.
I mean, this is not a complicated equation, Mr. Speaker. The drug dealers in America figured it out a long time ago. If there are a lot of illegal drugs on the market and not many buyers, illegal drugs get cheap. If there is only a little bit of illegal drugs on the market, if our law enforcement people are successful and they interdict those illegal drugs at our southern border, for example, then if the supply has been shut down by an aggressive law enforcement effort, we know a couple of things happen: The price of illegal drugs goes up, and probably the quality goes down. That happens. The drug pushers have it figured out. Why is it that the majority in this Congress doesn't have it figured out? I think they do have it figured out, actually, Mr. Speaker. But my question is why do their constituents not have it figured out?
So the supply is down. The demand is up. The price for energy is up, and what is really going on, what is behind this all is not just a, I will say a lack of concern about the high cost of energy, but a belief, Mr. Speaker, that high energy prices will cause people to use less energy, drive less, maybe buy less, and shut down and diminish the consumption of energy in this country. And it is a belief on the part of the majority party that if you can start to slow down the consumption of energy, you are doing something really good because in their mind we are saving the planet.
If we use less energy because the cost is high, we will use less energy consumption. Less energy consumption means fewer greenhouse gases, fewer greenhouse gases escaping into the atmosphere means the abysmal energy policy that drives up the cost, the higher energy gets, the more you save the planet. That's what is going on in the minds of the people in San Francisco, in Massachusetts, in the inner cities of America, those people who are not faced with having to put the nozzle in the tank and pay 18.4 cents a gallon in tax and pay $3.60 or $3.70 for that gasoline, and be subsidizing the mass transit, the people in the city that are supporting their Members of Congress that are driving up energy prices, cutting down on supply.
You cannot suspend the laws of nature and nature's God. They cannot be suspended. What goes up must come down, that's gravity. That was Newton's law. The law of economics is that if you have a lot of supply and little bit of demand, the price goes down. If you have a little bit of supply and a lot of demand, the price goes up.
The sun comes up in the east, not the west. It doesn't rise over San Francisco and San Francisco values; and if you think you can suspend the law of supply and demand, then you're out there in Pe-la-la-losi-
land if that's what you think.
So our solution, Mr. Speaker, is this: And it is a Republican solution. It is a rational solution, and it is a commonsense American solution. It recognizes this: We have an overall energy pie chart, this circle, this 360-degree circle. In it are these slices of this energy pie. The slices are our consumption of energy, gasoline, diesel fuel, coal, natural gas, hydroelectric, nuclear, wind, ethanol, biodiesel, and the list goes on. Energy conservation is another slice of this overall energy pie.
You put that all together out there and what we need to do for our solution is grow the size of the energy pie. We need that pie chart of all of the Btus that are consumed in America. That energy that is consumed, we need a lot more on the marketplace. If we do that, if we increase the amount of Btus that are in this marketplace, then we will push the price down. And as we push our price of energy down, that means then that there will be more of that energy available. There has more energy available, more in proportion to the consumption we have. We push the price of energy down, and that means the cost of American goods get cheaper, not higher. That's the equation. That is not suspending the law of nature and nature's God. That is recognizing the laws of the economic dynamics of supply and demand.
And so, Mr. Speaker, this is simple commonsense, simple commonsense that the American people will understand once we convey the message to them, and this Congress needs a debate on energy. There is another debate that is going on on energy right now, and it is one that has been constantly harped at and chipped away at by the Wall Street Journal, the New York Times, and the Washington Post. The list of critics goes on. Generally it is critics that look around and they think that somebody is making some money and it is not them, and so they should figure out how to undermine that effort to make money.
About 10 or 11 months ago I had people come to me, Mr. Speaker, and say what do you think is going to happen? Can we lose the blenders' credit for ethanol? Can that be reduced or eliminated? How strong is the support for ethanol in the Congress? I would say to them, no problem, I don't think there is any problem. I am not finding a logical, cogent argument that says we should not be building ethanol plants and producing ethanol from corn. That was maybe 10 months ago, Mr. Speaker.
And yet as these 10 months have unfolded, I have seen more and more arguments, and some have come to the floor of this Congress, and they made some arguments. They were arguments of convenience, but not necessarily arguments of logic. In fact, I don't believe they could sustain themselves in the face of laboratory facts and a logical analysis.
So here's what we have done. I have shaken the hand that squeezed the nozzle that pumped the first gallon of ethanol into a tank. That was back in about 1977. That was a State senator from Corwith, Iowa, named Senator Thurman Gaskill. He squeezed the nozzle that pumped the first gallon. I think we ought to bronze that hand. Maybe we should have bronzed the nozzle. That was a dream and a vision back in 1977 when crops weren't worth much and they needed a way to expand the markets for the commodities that we were producing. They were looking for different ways to provide that marketing of our commodities, and so they began developing an ethanol industry.
The first thing that happened is they went to ADM and Cargill and said you are the people producing ethanol. You have the skill and the technology and the talent and the infrastructure to do this. Those companies were not that interested. So they set about producing their own ethanol. I visited some of those farms where they got out the torch and the welder and the band saw and they put together a still that looked like it could have been, oh, in the mountains of Tennessee a couple of generations earlier. Sorry, Mr. Speaker, the metaphor just came to mind. It could have been a still anywhere down there in that moonshine country. And yet what it was, it was an ethanol production plant on farms in Iowa. As they built these plants, they would get their efficiency that they could get. They would reach a level, and then they would go back and take the torch and cut it up and start all over again. They finally built an industry. Minnesota led very well. I want to give them credit for that. They passed legislation in the Minnesota legislature that provided a tax benefit, and I don't remember exactly the structure, but it was up to 15 million gallons of ethanol for a plant that size. So it was a subsidy to get this jump started. And then they mandated that a blend of ethanol be in all gallons of gasoline sold in Minnesota, and that worked pretty good.
Some of those Minnesota farm boys went to work and put together their engineering degrees, and a couple of really good companies grew out of that. And other companies will grow out of it. And today, they are producing millions and millions of gallons of ethanol out of corn. This all grew because we needed to figure out how to market our products. It didn't grow necessarily because gas was high, but it sure fit into the situation we are in today.
Then here I am, Mr. Speaker, and people are coming to me and saying, What are we going to do about the high cost of food? Somebody told me the other day that food prices have gone up 64 percent. I reject that. I haven't seen a number like that. I don't believe a number like that, Mr. Speaker. I look back at the numbers for food inflation for 2007, and the ones I see are food that has gone up 4.9 percent; not 64 percent, but 4.9 percent. And they blame that all on ethanol because we are taking corn and converting it into energy. Food versus fuel. If you would Google ``food versus fuel,'' you will find all kinds of hits because that seems to be the argument du jour, food versus fuel.
I will argue that is not what should be debated here. But if it is, if food is up 4.9 percent over 2007, energy is up 18 percent over 2007. Why are energy prices higher, because we have a diminished supply and an increased demand. The law of supply and demand says energy costs went up 18 percent. Food went up 4.9 percent, but we dumped and produced 9 billion gallons of ethanol into that marketplace. And because we did that, into about a 142 billion gallon consumption of gasoline, because we did that we held down the price of gasoline with our ethanol.
I would submit to you, Mr. Speaker, that the food inflation, that 4.9 percent in food inflation, was driven up more by energy costs, high energy costs, than it was because there was corn taken off the market.
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In the first place, Mr. Speaker, the corn that goes into ethanol is not initially there for human consumption. I mean, it gets produced into some 300 different products, including high grade corn sweeteners. And that's a smaller percentage of the crop that goes into those things, Mr. Speaker. But what it does go to is primarily into animal feed and to livestock feed, cattle and hogs and poultry, primarily.
And so here's how the equation works. And I say this into the Congressional Record for that purpose, Mr. Speaker. We don't have less corn on the market for the 2007 production year. We've got more. We produced more corn than we've ever produced before. The law of supply and demand works. So using corn to produce ethanol would have to have taken corn off the market in order for the price of food to go up.
Well, here's the equation. We produced 13.1 billion bushels of corn in 2007. That's more than ever before. And we exported 2.5 billion bushels of corn for 2007. That's more than ever before. You can take your math and subtract that down. And then, from that we also converted 3.2 billion bushels of corn into ethanol, 3.2 billion bushels. But out of that 3.2 billion, we add back in half of that, because we didn't convert the corn into ethanol; we converted the starch into ethanol. We preserved the protein, rolled that back into the feed stock, and so that's worth 1.6 billion added back into that equation.
The net result is this: You take 13.1 billion bushels and you subtract 2.5 billion for export, you subtract another 3.2 billion bushels that went to ethanol, but you add back half of that, which is 1.6 billion bushels because that's back into the feed supply and dry distillers grain. You end up with 9 billion bushels of corn available for domestic consumption.
The average throughout the balance of the decade was 7.4 billion bushels of corn available for domestic consumption. Last year was 9. So we increased by 1.6 billion bushels the amount of corn that's available for domestic consumption.
And yet I've got economic and financial gurus around America that say ethanol has driven up the commodity prices and driven up the food cost prices. What's their math based on, Mr. Speaker? I've given the math for this. If you produce more corn than ever before and you put more into the domestic market than ever before, what's the argument that ethanol drove up the price?
I'd argue instead that the cheap dollar has driven up the price of food, and the cheap dollar has been a big reason why energy has cost us more. And so if we would shore up the value of our dollar and bring that dollar up to where it was in more traditional levels within the last couple to 3 years, we would see about 35 percent reduction in gas prices, diesel fuel prices, crude oil prices to the American dollar.
We'd also see a little reduction in our grain prices, corn, soybeans, soybean oil, those things that go into energy. And it would slow down some of our exports. And that's true, and it would shift our balance of trade back the other way.
On balance, I think it's the right thing to do, Mr. Speaker, shore up the value of the dollar, grow the size of the energy pie, put more Btus on the market in every way we can, continue and accelerate the construction of the nuclear generating plant in South Carolina, first one since 1975.
We'll see what the voters of South Dakota say about building the Hyperion oil refinery in Union County, South Dakota. If they say yes, then that means that the pipeline down from Alberta in the tar sands in the northern part of Alberta comes down into that region and we refine gasoline there and send the gas and diesel fuel and the other petroleum products and send that to the points across the North American continent. That's a good thing for us. That means more gas and diesel fuel and more oil into the marketplace coming out of Canada.
I'd lot rather do business with the Canadians than I would the Middle Easterners. We're awful close to the same kind of people when you go up there and visit the Albertans, and I'd very much like to see that happen.
If we can continue to do that, if we can drill the Outer Continental Shelf, if we can drill in ANWR we can put that crude oil on the marketplace. We can expand the ethanol production from corn.
And we'll see how this cellulosic goes. I think it's five to 10 years away before we have an effective cellulosic production of ethanol.
We do all of those things, and we continue to put coal out here, which is one of the cheapest alternatives that we have, and develop nuclear, I would do hydro electric if we can figure out how to get it done, and to the extent that wind and solar will work, yes, we should do those things. All of those pieces of the energy pie need to be expanded so that there's more and more Btus on the market.
That, Mr. Speaker, is our solution. And yes, conservation is a part of that. And cars that can be more fuel efficient are a good thing. But to mandate that at 75 miles to the gallon says that there's lots of folks that would have to park their Harley. A lot of motorcycles don't get that kind of mileage, Mr. Speaker.
That's some of the energy piece that we're dealing with here. Another one is, another myth that needs to be blasted out of the water, Mr. Speaker, is the myth that it takes more energy to produce ethanol out of corn than you get out of it. It's simply not true. It can't be held up in a laboratory experiment, and it cannot be held up when you do that experiment in the ethanol production plant.
But according to Argon Labs, Chicago, here's the analysis, the argument that it takes more energy to produce ethanol than you get out of the ethanol. Here's what it actually takes.
If you set a bushel of corn at the gates of an ethanol plant, let's just say in Iowa, Mr. Speaker. It could be anywhere. It takes .67, two-
thirds of a BTU in energy of input into that plant to get 1 BTU of energy out in the form of ethanol from corn. Two-thirds of a BTU input, 1 BTU coming back out in the form of ethanol from corn.
But if you have a barrel of crude oil sitting outside the gates of the refinery in Texas, and you need to refine that crude oil and refine the gasoline out of the crude oil, it takes 1.3 BTUs in energy to refine 1 BTU out of the crude oil.
So remember that equation, Mr. Speaker. .67 BTUs to get the 1 BTU of energy out of corn in the form of ethanol. 1.3 BTUs to get 1 BTU of energy in the form of gasoline out of crude oil, almost twice as much energy to extract gas from crude as it takes to convert corn to ethanol, 1 BTU matched up against 1 BTU. That, Mr. Speaker, is the real analytical answer on where we are with this energy.
And as one of the gentlemen here and I have debated many times, his argument that it takes energy to produce a tractor, energy to produce the combine to farm the fields; it takes energy to pump the water and water to produce ethanol. This list goes on and on.
And as I look at this and I read the studies, and I read one of those studies. It was about a 63-page long study that supposedly concluded that it takes a lot more energy to produce ethanol than you get out of it. And I read through there and it's so much energy to produce the combine, so much energy for the tractor, seven trips across the field, so much fuel used in each one of those trips, allowing 4,000 calories for the farm worker per day, charged against the production of corn that we're convert to go ethanol. That, Mr. Speaker, is a, I will call it an obscene stretch of science, and it never should have been taken seriously, and would not have been if the people were quoting that
``scientific report,'' and I put that in quotes, that scientific report, if they were serious, if they were intellectually honest, they would have had to say this study doesn't hold water; it doesn't hold ethanol, and this study doesn't hold crude oil.
But my argument against that is that if you want to calculate seven trips across the field, the energy it takes to produce the tractor and the combine, 4,000 calories a day for the farmer, then you also have to calculate the energy that it takes to drill the oil well, produce the oil rig, set the workover rig up there, manufacture the pumps and the pump jacks and the piping and the casings and all of that equipment that it takes to complete the old field and do the collector lines that come in and set up the refinery and all of the energy that it takes to refine, including the 1.3 BTUs in energy for every BTU you get out of crude oil; and if that doesn't match up against the corn, from an energy standpoint, you still have to go calculate the energy that it takes to produce the battleship and cast the anchor for the battleship and produce the M-16s and the F-16s, and all of the equipment that it takes and all the manpower that it takes to defend our interests in the Middle East, including the bulletproof vests. And then there's the price of blood on top of that, Mr. Speaker.
No, there's not a comparison. It takes a lot less energy to produce ethanol out of corn than it does to produce gasoline out of crude oil, and that is an important part of this.
And we have a farm bill coming up, Mr. Speaker. This farm bill may be on this floor tomorrow. And as the people sat in the conference committee and brought their amendments forth and the process, you know, it's not a perfect process, and it's not one that if the public saw it all happen would be very comfortable with it, Mr. Speaker.
But they've done some things such as reduce the blenders credit on ethanol from 51 cents a gallon down to 45 cents, 6 cents dinged out of that. Some of that's rolled back up to cellulosic ethanol at $1.01 in blenders credit, under the hope that there'll be a cellulosic industry that would be built. It may be built, Mr. Speaker, with that kind of a subsidy. I don't know.
But I know this, that $1.01 in blenders credit for cellulosic ethanol sets that ethanol up as a separate kind of product that would be indistinguishable from corn-based ethanol or any other kind. And if food versus fuel is the argument, then with the food versus fuel argument, one day somebody's going to look out and decide, there's so much subsidy out here for my cellulosic, my switchgrass base ethanol that I think I'm going to take that field that's been corn rotated every other year, and I think I'm just going to put it into permanent switchgrass. Imagine how that works if that turns out to be millions of acres year after year after year in permanent switchgrass, because there's a subsidy, a cellulosic-based ethanol, that land will come out of food production and it will go into fuel production. Then we truly have a debate. We truly have a debate about food versus fuel, and that imbalance in cellulosic ethanol subsidy sets the stage for just that kind of a problem, Mr. Speaker.
And if I look at some of the other components of this farm bill, one of the components that I am very concerned about is the kind of veiled insertion of the Pigford Farms issue into the farm bill. Now, Pigford Farms, we might remember, goes back to pre-1995. 1995, then Secretary of Agriculture Dan Glickman stepped up in a press conference and he said to America, the United States Department of Agriculture has discriminated against black farmers. And in that confession it started a class action lawsuit. That class action lawsuit moved forward. There was negotiation on it, and finally they reached a consent decree. And that consent decree set up a way by which those black farmers that had been discriminated against could go file a claim, and that claim would be resolved.
Now, the claims were often $50,000 or the settlement was often
$50,000. The applications that came forward, they estimated there would be 2,500 applications, maybe as many as 3,000 applications that came from farmers that alleged that they were discriminated against, perhaps because they'd been denied a loan, for example. And I don't doubt, Mr. Speaker, that this happened, that we had black farmers that were discriminated against. And I don't doubt that there were some that deserved to be compensated for that discrimination.
But I question, Mr. Speaker, the numbers that have unfolded since then. We spent $1 billion in settlements to the black farmers that were going to be about 2,500. And this, by the way, is their attorneys that put this number on at about 2,500 claimants.
Well, those numbers of claimants have grown and grown and grown. The consent decree was resolved. There was a statute of limitations, a sunset on the time by which they could file a claim. And that sunset period of time has long since passed.
And then there was an effort to bring this forward before the Judiciary Committee and open up Pigford Farms again, Mr. Speaker. And I sit on the Ag Committee and on the Judiciary Committee. There are two of us that sit on both of those positions. And I look back at the numbers and I listened to the testimony, and I saw what was going on.
And the President of the black farmers testified that there were less than 29,000 black farmers. The number that was produced as the best estimate came at perhaps 18,000 black farmers. Now, the number that was estimated of those that might file claims, not the number discriminated against, but those that might file claims, came to 2,500, Mr. Speaker.
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So we're working with 2,500 that might have been discriminated against, that might have filed claims out of a universe of 18,000 black farmers. And today, we're looking at 96,000 claims on something that's been closed and settled all in and all up and all done, $1 billion for presumably 2,500 now grown to 96,000 claims, or potential claims, which is another $3 billion written into this Farm Bill in a nice little subtle way where you would hardly notice that it's there. And not very much of America knows what this is about.
I have talked to people who have administered these accounts and claims in the USDA. They had to reach out across the country and pull people in, bring many to Washington, set them down and deal with the claims and deal with the claimants one-on-one. And they went to the South to do that, too.
And I looked through some of these applications, and some of them are just ludicrous and ridiculous. And some of our FSA, at the time ASCS, directors, who sat there and day after day dealt with those claims, simply sat down and they poured their heart out to me, and said I cannot believe it. I can't believe my country is doing this. I can't believe my country carries such a guilt complex that they would open up the checkbook of American taxpayers for something that has this high a level of fraud.
And they tell me, Mr. Speaker, 75 percent minimum fraud rate in these claims. 75 percent. Now that may or may not be right, but I sat down with the administrator of these claims, had that discussion with this individual, and of the 96,000 claims, I asked, Have there been people discriminated against? Have black farmers been discriminated against? And the answer was, Yes, I believe there are. And I accept that answer on face value, Mr. Speaker.
Then I asked the question, Of the 96,000 claims, how many actually suffered discrimination? And the answer was, Mr. Speaker, 50. And when my staff asked the question while he was taking notes, 50,000? The answer came back, No, 50. Five-zero. Now that may or may not be the actual number, but I will submit, Mr. Speaker, that's a lot closer to the real number than the 96,000 that we're looking at in claims.
And this account, this slot that's written into the Farm Bill for Pickford Farms, the line that's in there at $100 million I will guarantee will be a lot higher than that. But this Congress cannot be in the business of taking taxpayer dollars from the hardworking Americans and putting them in the hands of people that decide they want to defraud the Federal Government when there is a consent decree and a resolution of a class-action lawsuit and the court wraps this up and says, Any claims that are not filed after this date are not valid.
We have no business in this Congress opening that back up again, because what we're doing is opening up the checkbook of the American taxpayer and handing a blank check to anybody, anybody that will come forward that's of color and say, Well, I wanted to farm; or, I would have liked to have filed for a loan; or, I did ask for one but nobody answered me; or, I went to the door and shook it but it was locked and it was or wasn't business hours. I may not know where the Farm Service Administration office is, but by golly, I wanted a farm and I was just so intimidated by their attitude I never tried.
All of these claims are rolling out here at us, and it's the taxpayers that will end up paying it, Mr. Speaker, $3 billion. Not $100 million. $3 billion wrapped up in the Farm Bill.
Another thing, Mr. Speaker, is the language that's in the Farm Bill that sets up and requires the Davis-Bacon wage scale for ethanol-
production facilities and biodiesel-production facilities. Davis-Bacon wage scale. That, Mr. Speaker, is this: federally mandated union scale for construction workers out there in the rural areas of America in the corn belt, in the soybean belt, in the farm areas where we have merit shop employees, good employees, highly skilled employees. We pay them what they're worth. Some of us bring them in and we give them a full year-round job and we give them health insurance, retirement benefits. We want to keep them. We set up the scenario by which we can keep our employees.
But if we're compelled, when we're working on ethanol-production facilities or biodiesel-production facilities, to pay a federally mandated union scale, that means there will be fewer trainees, there will be fewer vocations, there will be fewer that learn the skills; and we'll have to go into the union hall and hire people out there and put them into the job.
And I can tell you how that works: If you got somebody out there that's worth $16 an hour and the Federal Government mandates said you pay them $26 an hour, then you bring them out and you put them to work and you set them in the seat of the machine and you work them hard for all 60 minutes of every hour, and the instant you don't need them again, boom, they're gone. You send them back off the job site. And then you put your salaried employees in, and they've got to grease the machines and scoop the dirt out of the tracks and fuel them, and you may or may not do the maintenance; and the next day they come again. And you drive them. You drive them. You use them like machines because you can't afford to bring them along and train them. They have to be there. They have to know.
But if we allow merit-shop employees and let the employers do the hiring and the employers make the deal with the employees, what business is it of the Federal Government to tell an employer and an employee, We won't let you two make a deal on what you're worth? If the employer thinks you're worth $14 an hour and the employee thinks that's a pretty good paycheck, the Federal Government might step in and say, No, you have to pay that man $18.50 because the lack of wisdom of this Federal Government somehow is that the employer is a victimizer and the employee is a victim.
I met with an employer last weekend--I guess it's two weekends ago now, Mr. Speaker--who said, Here's how it is. It was last weekend. If we are paying too low of wages, nobody shows up and wants the job, and we can't recruit people to come in here and go to work. If we're paying too much in wages, there's a lineup outside that door, people that want to come to work for the company that's paying too much money.
There's a happy medium in the middle. We provide that happy medium. We pay the wages we need to pay to get good employees to go to work, and it is supply and demand that determines what wages are, wages and benefit packages, including health insurance and retirement benefits. Those are the things that come with a labor market.
We don't need the Federal Government to mandate a union scale and call a prevailing wage. And by the way, Davis-Bacon wage scale is not and has not in my judgment ever been a prevailing wage. It's always been an imposed union scale, and it is, as far as I can remember. I can't think of another one. So I'm going to say I believe, Mr. Speaker, it is the last vestige of Jim Crow laws here in America because Davis-
Bacon was designed to keep black construction workers out of the trade unions in New York City. That's a fact of history. It's a Jim Crow law designed to discriminate against black construction workers in the trade unions in New York City that happened in 1931.
It still has a process--I don't allege today that it's actively race-
based, but we do know that the unions kind of sort who comes and who goes within their unions, and it's different from place to place and locale to locale across the country. But it is a union scale, not a prevailing wage; and if we're to go out and do the survey, there are States that impose mini Davis-Bacon, they call it, which distorts the pay scale, too.
If supply and demand sets the price for oil and for gas and for ethanol and for biodiesel, it also sets the price for crude oil, for corn and beans and gold, and all of those commodities. Supply and demand, Mr. Speaker, needs to set the price for labor as well. It will do that without the Federal Government's help, and we will not build the renewable energy infrastructure that we could have built with Davis-Bacon requirements in this Farm Bill that's coming up.
We will not, and in fact, the Davis-Bacon scale drives the price up someplace between 8 and 35 percent of the cost of the project. I use 20 percent because that's the most common when you look at it. And I have worked in this all of my life. Nobody else in this Congress has the experience I have with the Davis-Bacon wage scale.
So 8 to 35 percent increase in the cost, averaging at 20 percent. That just tells you this: If you want to build five ethanol plants, strike the Davis-Bacon provision. If you only want to build four ethanol plants to save money, ride the thing out. If you want to build an apprenticeship program, a job skill that comes from within, something that emerges from companies that are training employees and building up this knowledge base, if you want to build that, don't have Davis-Bacon in there. You have to have a merit shop to get that done.
If you want the knowledge base in the Midwest where the renewable energy is so when we build out all of our energy plants and we get that done, we can export that knowledge and go around the world, you've got to strike Davis-Bacon, Mr. Speaker. If you want the Midwest to be to renewable energy what Texas is today to the expertise on oil, you've got to strike Davis-Bacon. You can't have that provision in there.
We need to grow the size of the energy pie, Mr. Speaker, and we cannot suspend the laws of nature and nature's God. You can't suspend the laws of gravity. The sun comes up in the east around Maryland and the eastern shore. It doesn't come up around San Francisco, and if you believe otherwise, you're out there in Pe-la-la-losi-land.
The SPEAKER pro tempore. The Chair would remind Members to refrain from improper remarks concerning the Speaker.
Without objection, the 5-minute special order entered in favor of the gentleman from Maryland (Mr. Gilchrest) is vacated.
There was no objection.
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