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.
“GULF OF MEXICO ENERGY SECURITY ACT OF 2006--MOTION TO PROCEED” mentioning the Department of Interior was published in the Senate section on pages S8423-S8444 on July 31, 2006.
The publication is reproduced in full below:
GULF OF MEXICO ENERGY SECURITY ACT OF 2006--MOTION TO PROCEED
The ACTING PRESIDENT pro tempore. Under the previous order, the hour of 3 p.m. having arrived, the Senate will resume consideration of S. 3711, which the clerk will report.
The bill clerk read as follows:
A bill (S. 3711) to enhance the energy independence and security of the United States by providing for exploration, development, and production activities for mineral resources in the Gulf of Mexico, and for other purposes.
The ACTING PRESIDENT pro tempore. Under the previous order, the time until 5:30 p.m. shall be divided equally between the two managers or their designees.
The Senator from Louisiana is recognized.
Ms. LANDRIEU. Mr. President, before the Senator from Florida leaves the floor--and he may be staying through the debate--he has been extremely essential and instrumental and vital to the compromise that has come forward. I want to thank him for his leadership. As he alluded to, the five States in the gulf coast came together--the States of Louisiana, Mississippi, Alabama, Florida, and the State of the presiding officer, Texas, and he did an outstanding job as part of the coalition as well--with an arrangement that would have many mutual beneficial parts. One, it is going to provide oil and gas, and particularly natural gas. That is in such short supply. The Senator from Florida knows and all of our colleagues from Florida understand that natural gas is a raw material that is used to literally produce almost every product in America that you can think of, from rubber tires, to the automobiles themselves, to the products of ethanol, to fertilizers, chemicals--you name it, natural gas is used as a raw material.
The prices are too high. They have to come down. The industry is doing a very good job of conserving, but we must open domestic supply, as well as--unfortunately, because the demand is so high--import liquefied natural gas, now that the technology has presented itself. But before we establish another network of dependency, let's at least do our part and produce the natural gas we have here. So on this bill, the Gulf Coast States have come together to open up 8 million new acres, four times more than the original bill--in the compromise we provided, four times more than the original bill to open natural gas for the country.
The other beneficial aspect of this bill is establishing a strong and reliable, trustworthy partnership between the Federal Government and the Gulf Coast States--the four producing States, of which Texas is one--and to say the infrastructure that we provide, basically allowing the Federal Government to access the land it owns--and there is no question that this land off the coast of the United States is owned by everybody, not just the States along the coast. But, frankly, as you know, without our highways and helicopter pads, and our sheds, and our boat launches, and our shipping facilities, and fabrication facilities, the Federal Government could not even access the minerals. So, basically, by providing the servitude and the services and the platform, if you will, to host this great industry, we are saying let us share in all future revenues--as you know, 37.5 percent. That is the second most important thing in my mind that has been established.
For Louisiana's purposes, and according to the way the bill is currently structured for all of the Gulf Coast States, we will use that money to restore a great coastline, to secure and buffer America's only energy coast. We don't have to roll the reels back or rewind the tape of Katrina and Rita. We know what megastorms can mean for the gulf coast. We have all lived through them. We have watched our families struggle. We have watched our constituents struggle, having lost homes, churches, and schools, having seen the great infrastructure, the huge pipelines and facilities, drilling ships, and oil rigs and platforms bent by the great winds and waves. We know how important it is to take a little bit of that money we are paying in taxes and reinvest back into the gulf coast to strengthen the infrastructure, not just for the people who live there in the big towns such as New Orleans and Creole, LA, and midsize towns such as Beaumont and Galveston, and Gulfport, and Pass Christian, but for the whole Nation, because the Nation needs the gulf coast to be strong and secure in these storms.
So using this money to restore the great wetlands, which our scientists know we can do--but, frankly, we have not had the money to do it. People say, Senator, get a plan. I could almost fill up this Chamber with plans our people have had--or I can say dreams our people have had.
We have dreamed all we can dream. We have thought all we can think about this. We need money to turn the dirt and restore the wetlands. The technology is there to do it.
That is another great reason that we can have industry and the environmental community support this bill shoulder to shoulder, because the uses of the revenue sharing are going to be of such benefits to our communities.
Besides the drilling and the additional revenues for the gulf coast and the additional gas for the Nation, we also have the benefit of directing these revenues to a great purpose, which is the restoration of these wetlands.
Just a little more on that subject that might bring this home to those who are listening. When Katrina and Rita hit--and we are just about a month away from the anniversary, August 29 for Katrina and about 7 weeks away from the anniversary of Rita--we lost an area the size of the District of Columbia to open water, 100 square miles. The District isn't 100 square miles today, as you know, Mr. President, because a portion was given back to Virginia, but about 70 square miles is the District of Columbia now. We lost in a matter of a few days that amount of expanse. It went from marsh to open water because of the catastrophic loss of this great wetland. At that rate, all of our communities along the gulf coast will eventually be threatened.
I laugh at my colleagues from Arkansas because the reason they are very supportive of this bill is because they told me privately: Senator, we don't want to be a coastal State; we like Arkansas the way it is.
I know that is a little bit of an exaggeration, but, Mr. President, you have been down to east Texas, to Padre Island, to Galveston and coastal communities in Texas. You understand the wetland losses that are occurring. Ours in Louisiana are exacerbated because we are the mouth of the Mississippi River. We are truly a delta, not just a coastal wetland, which you find all over our coast from the east to the west. But the delta, the mouth of the river system, is strong, yet fragile, and these wetlands are leaving us in extraordinary numbers. This money, this sharing of revenues we are going to get from this bill, will go a long way to build on the science and technology that is there to restore these wetlands. We know we can do it.
Mr. President, 37.5 percent will go to the gulf coast producing States for these purposes; 12.5 percent will establish a great stream of revenue for the Land and Water Conservation Fund that benefits the whole Nation.
I see the Democratic whip on the floor. I will wrap up my remarks in just a moment. I think I am scheduled later to speak.
I am very grateful to particularly Senator Salazar and others who stepped up--Senator Alexander--and said: Senator Landrieu, why don't we try, with Senator Domenici's leadership, to see if we can restore the real purpose of the Land and Water Conservation Fund when it was created in 1965.
I wish I could take credit for creating it. I didn't, but I have been determined since I got here to help fund it so we can live up to a promise we made to America's Governors a long time ago: If you want to build parks, we will help you. If you want to build recreational opportunities for your community, we will help you. The Federal Government said that and then backtracked year after year until today we are spending less than $40 million a year nationally. I would say that is a disgrace, $40 million nationally. The program is authorized at $450 million. At $450 million, it is still not enough, but at least it gives a few million dollars to each State to match private donations, to match faith-based donations, to match literally the pennies children collect for the planting of a tree in a park or the expansion of a bike path that means a lot to them. We can at least do our part in Congress, and this bill will do that.
Then finally, 50 percent will go to the Federal Treasury. So as those revenues come in, we can help reduce the deficit, help encourage drilling where people will accept it. Maybe they won't accept it everywhere. We have made a lot of mistakes in Louisiana, we admit it. We have learned from our mistakes. We have perfected the technology, and we believe we can minimize the environmental footprint and maximize the benefit to the Federal Treasury. There are many benefits.
I yield the time to those scheduled to speak as well. I have some time reserved later in the day. I yield back the remainder of my time.
The ACTING PRESIDENT pro tempore. The assistant Democratic leader.
Mr. DURBIN. Mr. President, I ask unanimous consent to speak as in morning business.
The ACTING PRESIDENT pro tempore. Without objection, it is so ordered.
Mr. DURBIN. Mr. President, first let me acknowledge my colleague from the State of Louisiana. No person has worked harder than Senator Mary Landrieu for a State devastated by Hurricane Katrina and the city of New Orleans, which is still in recovery. My colleague, Senator Obama, visited there 2 weeks ago and came back and told me personally of traveling for long periods of time within the city of New Orleans and seeing very few homes that have not been devastated by Hurricane Katrina and were still barely inhabitable, some virtually uninhabitable. It is hard to imagine in the United States of America, almost a year after the devastation of Hurricane Katrina, that great city is still reeling from all the damage done.
I know Senator Landrieu feels as strongly as anyone--maybe more strongly because of her personal experience--that the State of Louisiana needs a helping hand. I want to do my best to try to be on her side as she continues this battle. I thank her for her leadership on this issue.
(The remarks of Mr. Durbin pertaining to the introduction of S. 3765 are printed in today's Record under ``Statements on Introduced Bills and Joint Resolutions.'')
Mr. WARNER. Mr. President, when the matter of the pending Gulf of Mexico Energy Bill was first brought to my attention, and every day thereafter, I repeatedly spoke to the distinguished managers of this legislation about the need for States other than those specifically cared for in this legislation--namely, the Gulf States--the other coastal States to be permitted to amend this bill such that coastal States could begin the long process of asserting our rights as coastal States to those energy resources that, in all probability, are on the Outer Continental Shelf. Therefore, I readied an amendment that I send to the desk, and I ask unanimous consent that it be printed in the Record following my statement.
The PRESIDING OFFICER (Mr. Bond). Without objection, it is so ordered.
(See exhibit 1.)
Mr. WARNER. My amendment represents a unique opportunity for this Senate, and indeed the entire Nation as a whole, to seek to determine if we cannot, as several coastal States, help our Nation in this dire need for additional sources of natural gas, and possibly, in some instances, States might elect to include oil, to meet the ever-looming resource crisis.
I remember when the Energy bill which is now law was passed by the Senate. I stood at this very desk and I had an amendment very similar to the one which I am speaking about today. When that amendment was pushed to one side, I said I would stand here again, and here I am again today. But I understand--this is the 28th year I have been in the Senate--there are parliamentary means under the rules of the Senate to preclude Senators from offering amendments, and as such, I am being denied that opportunity.
The bill before us today represents a step in the right direction--
and I commend those who have worked on it--to open access to more natural gas and oil in the Gulf of Mexico. However, I, like many others in this body, believe that more must be done because there is such a time lag between the potential passage of my amendment and the actual recovery of gas and oil from any of these moratorium states. We have to begin, and I had hoped on this bill I could mark that beginning.
I worked with many of my colleagues on a proposal to address this supply issue by giving opportunities to the individual States to open up areas in the Outer Continental Shelf waters for the future potential exploration of gas and oil; thus, the coastal States. The amendment I crafted would address the current moratorium on energy and exploration in most of America's Outer Continental Shelf and is the evolution of various amendments and bills I have offered since the debate on last year's Energy Policy Act. It would give States the authority to extend the current moratorium prohibiting oil and gas development in most of the Nation's offshore waters or petition for waivers on their own terms to contribute to the Nation's energy supply. The facts, as I understand them, are as follows:
U.S. demand for natural gas will grow by 40 percent in this country in the next decade to decade and a half. The demand for oil in the United States will grow by 31 percent over the same period of time. At current rates, domestic production will only meet one-third--I repeat--
one-third of our demand growth, leaving us increasingly dependent on politically unstable regions. I shall not recount all of them because they are growing by day. Regrettably, it looks as if Venezuela, from which we receive a good deal of our energy supplies, could be placed in the column of ``politically unstable.'' Indeed, many parts of Africa have become unstable, and we all know at this very moment the tragic situation that is unfolding in the Middle East.
We must also be aware of the virtually exponential growth and demand in the developing nations, all competing in the world market for this fungible good named ``energy.'' China's energy consumption has grown by over 100 percent in the past 20 years. It is expected to double again in the next 20 years. Mexico's natural gas demand is expected to double by 2025. Energy consumption in India is expected to more than double in the next 20 years.
We are too dependent indeed on overseas supplies, so we turn to our continental limits. Indeed, the question at hand is about the Gulf of Mexico. The bill authored by Chairman Domenici does increase our supplies, and I am very hopeful the Senate will act in passing this important piece of legislation. I propose to support it.
I want to make clear that more must be done outside the Gulf of Mexico. With 20 percent to 25 percent of our domestic oil and gas production located in the Gulf of Mexico, we simply have to diversify our geographic supply.
The Gulf of Mexico is subject to natural disasters. It is a tragic situation, but history records it. As a result of last year's hurricanes alone, we will lose 30 percent of our oil and 21 percent of our projected annual natural gas from in the Gulf of Mexico. This is all because of the extended closure of a significant number of platforms. In fact, a report issued last month by the Department of Interior states that 12 percent of U.S. oil production in the Gulf of Mexico remains shut in almost a year after last summer's events. Hopefully, that production will eventually return to normal levels, but it shows a certain degree of fragility in that area of the United States upon which we rely for such a high percentage of our energy requirements.
The bill Chairman Domenici has brought to the floor will open up more than 8 million acres of oil and gas production. The amendment I propose would not directly open any areas or mandate any production. However, depending on the will of the individual States--and that is a combination of, depending on the State, the Governor, the legislature, and indeed the people themselves--my proposal would provide the opportunity for up to 350 million acres--mind you, 8 million acres under this bill pending--350 million acres to be considered for development. That is the coastal area around the United States.
Now, I fully recognize the concerns of the environmentalists, and many times I have tried to work on this, but we have to strike a balance. We must do that. We have an obligation to our citizens. Modern technology has enabled the drillers to put down pipes and other devices to extract the oil and gas which, if subjected to a natural disaster or other problem, seal up quickly and do not spew forth into the pristine ocean and on to the shores the pollution we have witnessed in other catastrophic situations usually involving the transportation of oil from overseas. The Minerals Management Service reports that since 1980, 4.7 billion barrels of oil have been produced offshore with a spill rate of less than one-thousandth of one percent. Technology has progressed and it must be accepted that production of and protection of our natural resources are not mutually exclusive opportunities.
Based upon preliminary resource estimates, my amendment could provide more than $2 billion in new Federal revenues and over $1 billion to States and their citizens that are willing to accept whatever risks still remain, who authorize production in Federal waters off their shores over the next 10 years.
Many of my colleagues have expressed concerns about the Gulf of Mexico bill, and they stem from what is in the House bill. They said they do not want to lift the moratorium as the House bill would do. Well, I am not going to inject myself into the conference. I will leave that to the able leadership of others. However, I will say that my amendment would not lift one square inch of the current Federal moratorium. Instead, it would establish a process by which the States can petition the Secretary of Interior, subject to their own specifications, for a waiver from the moratorium on natural gas or oil production in most of the Outer Continental Shelf. If a State would rather continue the moratorium beyond 2012, the amendment establishes a process that would authorize the extension of that moratorium for up to 10 additional years. The principle of my amendment is simply to enable the individual States to have more control over the waters off their coasts than they do today and more control than they would under the recently passed House bill.
I support the effort to open up areas of the Gulf of Mexico to enhanced energy production. However, it is my sincere hope that the Members of this body do not believe that this alone will solve our oil and gas supply problem. More must be done in conservation and more must be done in the area of American production.
The time has come for the Senate to act on the issue of American production of natural gas and oil. Energy Security is National Security and for the people of America to be dependent upon foreign sources of energy is dangerous to our economy and our way of life.
I have offered a balanced approach to address supply needs and environmental concerns. This is the way for all States to have a say in the policy. The current moratorium expires in 2012 and without legislation like that which I propose, these States would have no guarantee of protection.
Mr. President, I see a number of our colleagues waiting here. But I will return to this floor time and time again, as long as I can draw breath, to fight for the rights of the individual coastal States to decide for themselves--not to be mandated by the Federal Government but to decide for themselves whether they want to step up and help America reach its energy needs.
Now, I have talked to the managers of this bill--and at some point, maybe I can have a colloquy put into the Record today--but some assurances are being given to Senators who, like myself, represent the coastal States to see whether the legislation along the lines of the bill I have introduced today, a copy of which is appended to this statement, can, once again, be brought before this Chamber.
Exhibit 1
Beginning on page 17, strike line 19 and all that follows through page 18, line 17 and insert the following:
(f) Limitations on Amount of Distributed Qualified Outer Continental Shelf Revenues and Covered Revenues.--
(1) In general.--Subject to paragraph (2), the total amount of qualified outer Continental Shelf revenues and covered revenues made available under subsection (a)(2) and section 6(j)(1)(B) shall not exceed $500,000,000 for each of fiscal years 2016 through 2055.
(2) Expenditures.--For the purpose of paragraph (1), for each of fiscal years 2016 through 2055, expenditures under subsection (a)(2) and section 6(j)(1)(B) shall be net of receipts from that fiscal year from any area in the 181 Area in the Eastern Planning Area, the 181 South Area, or any area off the coastline of a covered State.
(3) Pro rata reductions.--If paragraph (1) limits the amount of qualified outer Continental Shelf revenue or covered revenues that would be paid under subparagraphs (A) and (B) of subsection (a)(2) or clauses (i) and (ii) of section 6(j)(1)(B)--
(A) the Secretary shall reduce the amount of qualified outer Continental Shelf revenue and covered revenue provided to each recipient on a pro rata basis; and
(B) any remainder of the qualified outer Continental Shelf revenues and covered revenues shall revert to the general fund of the Treasury.
SEC. 6. OFFSHORE OIL AND GAS LEASING IN AREAS OUTSIDE THE
GULF OF MEXICO.
(a) Definitions.--In this section:
(1) Adjacent zone.--The term ``Adjacent Zone'' means the Adjacent Zone of each State, as defined by the lines extending seaward and defining the adjacent Zone of each State indicated on the maps for each outer Continental Shelf region entitled--
(A) ``Alaska OCS Region State Adjacent Zone and OCS Planning Areas'';
(B) ``Pacific OCS Region State Adjacent Zones and OCS Planning Areas''; and
(C) ``Atlantic OCS Region State Adjacent Zones and OCS Planning Areas'';all of which are dated September 2005 and on file in the Office of the Director, Minerals Management Service.
(2) Covered revenues.--
(A) In general.--The term ``covered revenues'' means all rentals, royalties, bonus bids, and other sums due and payable to the United States from leases entered into on or after the date of enactment of this Act in a moratorium area.
(B) Exclusions.--The term ``covered revenues'' does not include--
(i) revenues from the forfeiture of a bond or other surety securing obligations other than royalties, civil penalties, or royalties taken by the Secretary in-kind and not sold; or
(ii) revenues generated from leases subject to section 8(g) of the Outer Continental Shelf Lands Act (43 U.S.C. 1337(g)).
(3) Covered state.--The term ``covered State'' means--
(A) a State for which--
(i) the Governor of the State requests the Secretary to allow natural gas or oil or natural gas leasing in a moratorium area; and
(ii) the Secretary allows the leasing; and
(B) effective for fiscal year 2017 and each fiscal year thereafter, a State--
(i) off which oil and gas activities on the outer Continental Shelf are conducted under a lease entered into on or after the date of enactment of this Act;
(ii) that is offshore of any State that is not a Gulf producing State; and
(iii) that does not have an area described in section 2(6)(B)(i) off the coast of the State, as determined on the basis of the administrative lines established by the Secretary under the notice published on January 3, 2006 (71 Fed. Reg. 127).
(4) Lease.--The term ``lease'' includes a natural gas lease under section 8(q) of the Outer Continental Shelf Lands Act
(43 U.S.C. 1337(q)).
(5) Moratorium area.--The term ``moratorium area'' means--
(A) any area withdrawn from disposition by leasing in the Atlantic OCS Region or the Pacific OCS Region Planning Area under the ``Memorandum on Withdrawal of Certain Areas of the United States Outer Continental Shelf from Leasing Disposition'', from 34 Weekly Comp. Pres. Doc. 1111, dated June 12, 1998; and
(B) any area of the outer Continental Shelf (other than an area in the Gulf of Mexico) as to which Congress has denied the use of appropriated funds or other means for preleasing, leasing, or related activities.
(b) Prohibition Against Leasing.--Except as otherwise provided in this section, prior to June 30, 2012, the Secretary shall not offer a lease for oil and gas, or natural gas, in a moratorium area.
(c) Option to Petition for Extension of Withdrawal From Leasing.--
(1) Option to petition.--
(A) In general.--The Governor of a State may submit to the Secretary a petition requesting that the Secretary extend for a period of time described in subparagraph (B) the withdrawal from leasing in a moratorium area for all or part of any area within the Adjacent Zone of the State within 125 miles of the coastline of the State.
(B) Length of extension.--
(i) In general.--The period of time requested in a petition submitted under subparagraph (A) shall not exceed 5 years for each petition.
(ii) Limitation.--The Secretary shall not grant a petition submitted under subparagraph (A) that extends the remaining period of a withdrawal of an area from leasing for a total of more than 10 years.
(C) Multiple petitions.--A State may petition multiple times for a particular area, but not more than once per calendar year for any particular area.
(D) Contents of petition.--A petition submitted under subparagraph (A) may--
(i) apply to either oil and gas leasing or natural gas leasing, or both; and
(ii) request some areas to be withdrawn from all leasing and some areas only withdrawn from 1 type of leasing.
(2) Action by secretary.--Not later than 90 days after receipt of a petition submitted according to the guidelines described in paragraph (1), the Secretary shall approve the petition.
(3) Failure to act.--If the Secretary fails to approve a petition in accordance with paragraph (2), the petition shall be considered to be approved 90 days after the date on which the Secretary received the petition.
(d) Resource Estimates.--
(1) Requests.--At any time, the Governor of an affected State (acting on behalf of the State) may request the Secretary to provide a current estimate of proven and potential gas, or oil and gas, resources that may result, and resulting State revenues, in any moratorium area (or any part of the moratorium area the Governor identifies) adjacent to, or lying seaward of the coastline of, that State.
(2) Response of secretary.--Not later than 45 days after the date on which the Governor of a State requests an estimate under paragraph (1), the Secretary shall provide--
(A) a current estimate of proven and potential gas, or oil and gas, resources in any moratorium areas off the shore of a State;
(B) an estimate of potential revenues that could be shared under this Act if resources were developed and produced; and
(C) an explanation of the planning processes that could lead to the leasing, exploration, development, and production of the gas, or oil and gas, resources within the area identified.
(e) Availability of Certain Areas for Leasing.--
(1) Petition.--
(A) In general.--On consideration of the information received from the Secretary, the Governor (acting on behalf of the State of the Governor) may submit to the Secretary a petition requesting that the Secretary make available for leasing any portion of a moratorium area in the Adjacent Zone of the State.
(B) Contents.--In a petition under subparagraph (A), a Governor may request that an area described in subparagraph
(A) be made available for leasing under subsection (b) or
(q), or both, of section 8 of the Outer Continental Shelf Lands Act (43 U.S.C. 1337).
(2) Action by secretary.--Not later than 90 days after the date of receipt of a petition under paragraph (1), the Secretary shall approve the petition unless the Secretary determines that leasing in the affected area presents a significant likelihood of incidents associated with the development of resources that would cause serious harm or damage to the marine resources of the area or of an adjacent State.
(3) Failure to act.--If the Secretary fails to approve or deny a petition in accordance with paragraph (2), the petition shall be considered to be approved as of the date that is 90 days after the date of receipt of the petition.
(4) Treatment.--Notwithstanding any other provision of law, not later than 180 days after the date on which a petition is approved, or considered to be approved, under paragraph (2) or (3), the Secretary shall--
(A) treat the petition of the Governor under paragraph (1) as a proposed revision to a leasing program under section 18 of the Outer Continental Shelf Lands Act (43 U.S.C. 1344); and
(B) except as provided in paragraph (5), expedite the revision of the 5-year outer Continental Shelf oil and gas leasing program in effect as of that date to include any lease sale for any area covered by the petition.
(5) Inclusion in subsequent plans.--
(A) In general.--If there are less than 18 months remaining in the 5-year outer Continental Shelf oil and gas leasing program described in paragraph (4)(B), the Secretary, without consultation with any State, shall include the areas covered by the petition in lease sales under the subsequent 5-year outer Continental Shelf oil and gas leasing program.
(B) Environmental assessment.--Before modifying a 5-year outer Continental Shelf oil and gas leasing program under subparagraph (A), the Secretary shall complete an environmental assessment that describes any anticipated environmental effect of leasing in the area covered by the petition.
(6) Spending limitations.--Any Federal spending limitation with respect to preleasing, leasing, or a related activity in an area made available for leasing under this subsection shall terminate as of the date on which the petition of the Governor relating to the area is approved, or considered to be approved, under paragraph (2) or (3).
(7) Application.--This subsection shall not apply to--
(A) any area designated as a national marine sanctuary or a national wildlife refuge;
(B) any area not included in the outer Continental Shelf; or
(C) the Great Lakes (as defined in section 118(a)(3) of the Federal Water Pollution Control Act (33 U.S.C. 1268(a)(3)).
(8) Great lakes.--The Great Lakes (as defined in section 118(a)(3) of the Federal Water Pollution Control Act (33 U.S.C. 1268(a)(3)))--
(A) shall not be considered part of the outer Continental Shelf under the Outer Continental Shelf Lands Act (43 U.S.C. 1331 et seq.); and
(B) shall not be subject to production.
(f) Neighboring State Concurrence.--
(1) Notice.--The Secretary shall provide notice to a neighboring State of any proposed lease of oil or natural gas in a moratorium area if the lease would be located within 20 miles of the nearest point on the coastline of the State.
(2) Objection.--Not later than 30 days after receiving the notice, the Governor of the State may object to the issuance of the lease on grounds that the lease presents a significant risk to environmental and economic resources of the State.
(3) Secretary review.--If the Secretary, after review of the objection and consultation with the adjacent State, concurs that the lease presents a significant risk described in paragraph (2), and that the risk cannot be reasonably mitigated, the Secretary shall not approve an exploration plan for the lease.
(4) Nonapplicability.--This subsection does not apply to a State covered by subsection (h).
(g) Natural Gas Leases.--
(1) In general.--Beginning with the 5-year outer Continental Shelf oil and gas leasing program for 2007 through 2012, the Secretary may issue a lease under this section that authorizes development and production of gas and associated condensate and other hydrocarbon liquids in a moratorium area in accordance with regulations issued under paragraph (2).
(2) Regulations.--Not later than October 1, 2006, the Secretary shall issue regulations that, for purposes of this subsection--
(A) define the term ``natural gas'' in a manner that includes--
(i) hydrocarbons and other substances in a gaseous state at atmospheric pressure and a temperature of 60 degrees Fahrenheit;
(ii) liquids that condense (gas liquids) from natural gas in the process of treatment, dehydration, decompression, or compression prior to the point for measuring volume and quality of the production established by the Secretary, acting through the Minerals Management Service;
(iii) other associated hydrocarbon liquids if the predominant component is natural gas and gas liquids; and
(iv) natural gas liquefied for transportation;
(B) provide that natural gas leases shall contain the same rights and obligations as oil and gas leases;
(C) provide that, in reviewing the adequacy of bids for natural gas leases, the Secretary, acting through the Minerals Management Service, shall exclude the value of any crude oil estimated to be discovered within the boundaries of the leasing area;
(D) provide for cancellation of a natural gas lease, with payment of the fair value of the lease rights canceled, if the Secretary determines that hydrocarbons other than natural gas and natural gas liquids will be the predominant production from the lease; and
(E) provide that, at the request and with the consent of the Governor of the State adjacent to the lease area, and with the consent of the lessee, an existing natural gas lease may be converted, without an increase in the rental royalty rate and without further payment in the nature of a lease bonus, to a lease under section 8(b) of the Outer Continental Shelf Lands Act (43 U.S.C. 1337(b)), in accordance with a process, to be established by the Secretary, that requires--
(i) consultation by the Secretary with the Governor of the State and the lessee with respect to the operating conditions of the lease, taking into consideration environmental resource conservation and recovery, economic factors, and other factors, as the Secretary determines to be relevant; and
(ii) compliance with the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.).
(3) Effect of other laws.--Any Federal law (including regulations) that applies to an oil and gas lease on the outer Continental Shelf shall apply to a natural gas lease issued under this subsection.
(h) Exchange of Leases for Areas Located Within 100 Miles Off States Imposing a Moratorium.--
(1) In general.--Effective beginning on the date that is 180 days after the date of enactment of this Act, the lessee of an oil and gas lease in existence on the date of enactment of this Act for an area located completely within 100 miles of the coastline and within the Adjacent Zones of States that have extended a moratorium under subsection (c) shall have the option, without compensation, of exchanging the lease for a new oil and gas lease having a primary term of 5 years.
(2) Tracts.--For the area subject to the new lease, the lessee may select any unleased tract--
(A) at least part of which is located within the area between 100 and 125 miles from the coastline; and
(B) that is located--
(i) completely beyond 125 miles from the coastline; and
(ii) within the same Adjacent Zone of the adjacent State as the lease being exchanged.
(3) Administrative process.--
(A) In general.--The Secretary shall establish a reasonable administrative process through which a lessee may exercise the option of the lessee to exchange an oil and gas lease for a new oil and gas lease in accordance with this subsection.
(B) Relationship to other laws.--An exchange of leases conducted in accordance with this subsection (including the issuance of a new lease)--
(i) shall not be considered to be a major Federal action for purposes of the National Environmental Policy Act of 1969
(42 U.S.C. 4321 et seq.); and
(ii) shall be considered in compliance with the Outer Continental Shelf Lands Act (43 U.S.C. 1331 et seq.).
(C) Withdrawal.--The Secretary shall issue a new lease in exchange for the lease being exchanged notwithstanding that the area that will be subject to the lease may be withdrawn from leasing under the Outer Continental Shelf Lands Act (43 U.S.C. 1331 et seq.) or otherwise unavailable for leasing under any other law.
(4) Priority.--
(A) Bonus bid.--The Secretary shall give priority in the lease exchange process under this subsection based on the amount of the original bonus bid paid for the issuance of each lease to be exchanged.
(B) Exchange of partial tracts for full tracts.--The Secretary shall allow leases covering partial tracts to be exchanged for leases covering full tracts under this subsection conditioned on payment of additional bonus bids on a per-acre basis, as determined based on the average per acre of the original bonus bid per acre for the partial tract being exchanged.
(5) Cancellation of lease.--As part of the lease exchange process under this subsection, the Secretary shall cancel a lease that is exchanged under this subsection.
(6) Conditions for lease exchange.--For a lease to be cancelled and exchanged under this subsection--
(A) each lessee holding an interest in the lease must consent to cancellation of the leasehold interest of the lessee;
(B) each lessee must waive any rights to bring any litigation against the United States related to the transaction; and
(C) the plugging and abandonment requirements for any well located on any lease to be cancelled and exchanged under this subsection must be complied with by the lessees prior to the cancellation and exchange.
(i) Operating Restrictions.--A new lease issued under this section shall be subject to such national defense operating restrictions on the outer Continental Shelf tract covered by the new lease as apply on the date of issuance of the new lease.
(j) Disposition of Covered Revenues From Moratorium Areas.--
(1) In general.--Notwithstanding section 9 of the Outer Continental Shelf Lands Act (43 U.S.C. 1338) and subject to the other provisions of this subsection, for each applicable fiscal year, the Secretary of the Treasury shall deposit--
(A) 50 percent of covered revenues in the general fund of the Treasury; and
(B) 50 percent of covered revenues in a special account in the Treasury from which the Secretary shall disburse--
(i) 75 percent to covered States in accordance with paragraph (2); and
(ii) 25 percent to provide financial assistance to States in accordance with section 6 of the Land and Water Conservation Fund Act of 1965 (16 U.S.C. 460l-8), which shall be considered income to the Land and Water Conservation Fund for purposes of section 2 of that Act (16 U.S.C. 460l-5).
(2) Allocation among covered states and coastal political subdivisions.--
(A) Allocation among covered states for fiscal year 2007 and thereafter.--
(i) In general.--Subject to clause (ii), effective for fiscal year 2007 and each fiscal year thereafter, the amount made available under paragraph (1)(B)(i) shall be allocated to each covered State in amounts (based on a formula established by the Secretary by regulation) that are inversely proportional to the respective distances between the point on the coastline of each covered State that is closest to the geographic center of the applicable leased tract and the geographic center of the leased tract.
(ii) Minimum allocation.--The amount allocated to a covered State each fiscal year under clause (i) shall be at least 10 percent of the amounts available under paragraph (1)(B)(i).
(B) Payments to coastal political subdivisions.--
(i) In general.--The Secretary shall pay 20 percent of the allocable share of each covered State, as determined under subparagraph (A), to the coastal political subdivisions of the covered State.
(ii) Allocation.--The amount paid by the Secretary to coastal political subdivisions shall be allocated to each coastal political subdivision in accordance with subparagraphs (B), (C), (D), and (E) of section 31(b)(4) of the Outer Continental Shelf Lands Act (43 U.S.C. 1356a(b)(4)).
(3) Timing.--The amounts required to be deposited under paragraph (1)(B) for the applicable fiscal year shall be made available in accordance with that paragraph during the fiscal year immediately following the applicable fiscal year.
(4) Authorized uses.--
(A) In general.--Subject to subparagraph (B), each covered State and coastal political subdivision shall use all amounts received under paragraph (2) in accordance with all applicable Federal and State laws, only for 1 or more of the following purposes:
(i) Projects and activities for the purposes of coastal protection, including conservation, coastal restoration, hurricane protection, and infrastructure directly affected by coastal wetland losses.
(ii) Mitigation of damage to fish, wildlife, or natural resources.
(iii) Implementation of a federally-approved marine, coastal, or comprehensive conservation management plan.
(iv) Mitigation of the impact of outer Continental Shelf activities through the funding of onshore infrastructure projects.
(v) Planning assistance and the administrative costs of complying with this section.
(B) Limitation.--Not more than 3 percent of amounts received by a covered State or coastal political subdivision under paragraph (1)(B) may be used for the purposes described in subparagraph (A)(v).
(5) Administration.--Amounts made available under paragraph
(1)(B) shall--
(A) be made available, without further appropriation, in accordance with this subsection;
(B) remain available until expended; and
(C) be in addition to any amounts appropriated under--
(i) the Outer Continental Shelf Lands Act (43 U.S.C. 1331 et seq.);
(ii) the Land and Water Conservation Fund Act of 1965 (16 U.S.C. 460l-4 et seq.); or
(iii) any other provision of law.
(k) Repeal of Requirement to Conduct Comprehensive Inventory of OCS Oil and Natural Gas Resources.--Section 357 of the Energy Policy Act of 2005 (42 U.S.C. 15912) is repealed.
I yield the floor.
Ms. LANDRIEU. Mr. President, will the Senator yield for a question?
Mr. WARNER. I am happy to do so.
Ms. LANDRIEU. I thank the Senator. I know our colleague from Massachusetts is here to speak on another subject, but I would just ask a question of the distinguished Senator from Virginia.
First of all, I would like to thank him for the bill he has introduced. I know in the form of an amendment it won't be appropriate in this debate, but I thank him for that.
Would the Senator just explain briefly for maybe a minute or so the feelings of people in Virginia--your legislature has done a lot of good work--about the possibilities of opening additional drilling, perhaps at a later date, and how that might affect the neighbors of Maryland, Delaware even, and perhaps even the Carolinas? Could the Senator just comment for a minute about how those negotiations are potentially moving forward, if not for this bill, then maybe at a later time?
Mr. WARNER. Mr. President, I thank my distinguished colleague from Louisiana. Indeed, in two consecutive sessions of the General Assembly of Virginia, this subject has been on the agenda and bills have been passed by the House of Delegates and State Senate to send bills to the Governor. For whatever reason, Governor Warner--I am not here to criticize, but he saw fit not to let the bill become legislation, and Governor Kaine likewise disapproved of the language this past legislative session encouraging offshore development. I think progress has been made in our legislature as evidenced by the overwhelming votes of more than 75 percent of the State Senate and House of Delegates on this year's bill, and clearly the legislature is speaking for the people of Virginia, and they are ready to take on this challenge and to accept the consequences, whatever they may be. But I repeat: I think technology has gotten to the point where that risk is minimal, in my judgment. How it would affect adjoining States, that is subject to debate. If there were a mishap off the shore of Virginia and depending on the winds, the drift, the seas, and other things, if there were an accident which did emit some pollution, I am not sure anyone could write that into law as to what happens. It is important to note that my amendment includes provisions requiring the concurrence of neighboring states that would be within twenty miles of any production and, as I have said before, modern technology has made these risks very minimal.
But it is an important aspect worth consideration--any legislation of the type I have offered. But it would seem to me collectively the coastal States should look to this as a possible increase in their energy and financial resources. As a matter of fact, my bill allows the citizens of any coastal State authorizing such production to retain a significant part of the proceeds from such drilling. I thank you for asking the question.
Ms. LANDRIEU. I thank the Senator for his comments.
I yield the floor.
The PRESIDING OFFICER. Who seeks time?
Mr. WARNER. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. KENNEDY. Mr. President, I ask unanimous consent the order for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered. Who yields time?
Mr. KENNEDY. I ask the Chair, how much time remains?
The PRESIDING OFFICER. There is 51 minutes remaining on the minority side.
Mr. KENNEDY. I would like to yield myself 15 minutes.
The PRESIDING OFFICER. The Senator from Massachusetts is recognized.
(The remarks of Mr. Kennedy are printed in today's Record under
``Morning Business.'')
The PRESIDING OFFICER. Who yields time?
Ms. SNOWE. Mr. President, I yield myself 15 minutes under the previous time agreement.
The PRESIDING OFFICER. The Senator from Maine is recognized.
Mr. DORGAN. Mr. President, if my colleague will yield for a unanimous consent request, my colleague from Maine and I wish to speak in 15-
minute increments, taking the time from each side in the debate. I ask unanimous consent to follow my colleague from Maine.
The PRESIDING OFFICER. Without objection, it is so ordered.
The Senator from Maine.
Ms. SNOWE. Thank you, Mr. President. I thank my colleague, Senator Dorgan.
I rise today, along with my colleague, Senator Dorgan, to address the amendment before the Senate based on legislation that Senator Dorgan and I introduced regarding drug importation.
First and foremost, I thank my colleague, Senator Dorgan, for his relentless and dedicated leadership on this very important question which we hopefully can address once and for all here in the Senate and in the overall Congress because it certainly is an issue that deserves consideration. But more importantly, it deserves to become law because it is so important to the interests of the American people.
We have been joined on this legislation by a broad coalition of 30 of our colleagues and many of the leaders of the importation effort, along with Senators Grassley, Kennedy, McCain, and Stabenow unified with us in advancing this bipartisan legislation. Our voice has echoed those 7 out of 10 Americans who have called for the lifting of the ban on prescription drug importation. We have worked together to see that this legislation is considered in the Senate, and we have had 10 related hearings on this very matter in the Senate since 2004.
When we recently considered the Homeland Security appropriations bill, over two-thirds of the Senate responded to the increase in seizures of medications from Canadian pharmacies earlier this year by voting to stop impeding safe access to affordable medications.
Today, we must do more to respond to this issue. We must pass the legislation we have introduced which will ensure Americans have a safe and effective system to provide access to affordable medications. Our constituents are suffering as the cost of health care is rising rapidly in America, and prescription drug costs have led to that increase.
In response to a request of Senator Wyden and myself to track the price of medications most used by seniors, the GAO has repeatedly reported that the cost of these medications has increased at two to three times the rate of inflation as indicated by this chart. In fact, AARP reported recently that the fact is this the highest third-quarter increase in the cost of brand drugs since they began these studies. We can see here two to three times the rate of inflation in the cost of medications.
As a nation, we are growing older, and as we do we use more prescription drugs. At the same time, relentless price increases have made access to lifesaving drugs more and more unaffordable for Americans. The problem of affordability is shared by everyone. If you have prescription drug coverage, rapid price increases drive up your premiums. If you are one of the millions without drug coverage, the situation is far worse. You bear the full cost of the world's highest prices for medications.
Today, even with the new Medicare prescription drug benefit in place, over 46 million Americans are saddled with the burden of exorbitantly priced medications. A drug can be safe and effective, but what good is it if you can't afford to take it? That is why we simply cannot afford to postpone action any longer on this legislation. We have acted before repeatedly in the Senate and in the overall Congress. It has been law since 2000, when Congress last acted to allow importation.
We have also required certification by the Department of Health and Human Services, that the HHS Secretary must certify the safety of importation. Unfortunately, that has been the caveat and a disguise for blocking the importation measure. It has denied access to importation. The Department of Health and Human Services has not taken steps to ensure that we can allow Americans to import drugs safely from other countries--and in particular Canada. While the FDA was unable to point to any single individual harmed by Canadian drugs, they have actually denied importation from Canada. In Europe, in over 30 years of parallel trading of pharmaceuticals, no death or injury has ever been documented because they know it is safe.
While our constituents have found importation offers them access to lifesaving drugs, we have repeatedly heard from FDA how the practice threatens health. Opponents claim importation will cause harm, but they fail to note that the greatest prescription drug threat to the safety of Americans--that is, the inability to take drugs that are prescribed--exacts a toll of thousands of American lives every year. As Dr. Peter Rost--a former Pfizer executive up until a few months ago--
who joined Senator Dorgan and I and others in a press conference, observed, ``Holding up a vote on reimportation, stopping good reimportation bills has a high cost, not just in money but in American lives.'' He is a former executive of Pfizer who actually had the courage to make that statement.
Today, thanks to the intensive reporting of health professionals, we are seeing more evidence of the cost of unaffordable medications. In my own State of Maine, one of our physicians reported hospitalizing two patients in a single month--one of them in the intensive care unit with a dangerous heart arrhythmia simply because they could not afford to refill a prescription.
But Americans recognize the value of prescription drugs, and they have turned to affordable sources of these medications so they can preserve and protect their health. Many of my Maine constituents have used Canadian pharmacies and found both savings and safety. But dangers do exist. There are certainly those who would exploit consumers with dangerous or counterfeit medications. It is imperative that we work proactively to ensure that the importation of prescription drugs is safe.
That is why Senator Dorgan and I, along with our colleagues, have comprehensively addressed the various concerns that have been raised over the months and years about drug importation--so that we can get something done. But certifying safety isn't the answer; any measure should actually make it safe. And there are two key issues we must address as we consider importation legislation. First and foremost, is it safe? Second, will the legislation be effective in delivering real savings for consumers? Our legislation which is incorporated in the amendment before us today does both.
Our constituents have taken action to purchase the drugs they could afford--mostly in Canada--and have demonstrated that importation can be safe. In Europe, with over 30 years of parallel trading of pharmaceuticals, no death or injury has ever been documented. They know it is safe.
Dr. Rost, as I said, who was a Pfizer executive up until several months ago, stated from his own firsthand experience in Europe--and I quote:
I think it is outright derogatory to claim that Americans would not be able to handle reimportation of drugs when the rest of the educated world can do this.
And I agree. Under our legislation, Americans will receive imported drugs from 30 countries. In most cases, Americans will purchase imported prescription drugs from their local pharmacy. The pharmacist will receive those drugs from a U.S. wholesaler which imports them. These wholesalers will be registered, inspected, and monitored by the FDA. This higher level of safety is also a first step in establishing a higher standard for the handling of all medications in the United States.
Our legislation also allows individuals to directly order medications from outside the United States when using an FDA registered and approved Canadian pharmacy. Again, just as with wholesalers handling prescription drugs, the FDA will examine, register, and inspect these facilities on a frequent basis. The FDA will assure the highest standards for such essential functions as recording medical history, verifying prescriptions, and tracking shipments. But regardless of whether one purchases imported drugs from the local pharmacist or uses a Canadian pharmacy, we assure that a legitimate prescription and a qualified pharmacist will be vital ingredients in ensuring safety.
Toward that end, we have also worked with Senator Feinstein to incorporate provisions of the Ryan Haight Act to assure that as we provide safety in an importation system we do not ignore the need to assure safety and integrity in domestic internet pharmacies. These provisions will assure that properly licensed pharmacies and pharmacists are behind Web sites offering prescription drugs and that we no longer see prescriptions issued based on a submitted form or a telephone conversation. There must be integrity and a proper professional relationship between medical professionals and patients.
For those who say the consumers could unwittingly purchase an unapproved or suspect drug, our legislation assures that the drug received will always be FDA approved. If any difference exists in a foreign drug, even the most minute, our legislation assures FDA will evaluate the product and determine its acceptability.
We provide a process to assure imported drugs are the same FDA-
approved product, and if a minor difference exists, such as a coloring or inactive ingredient is different, and has no effect on the efficacy of the drug, our legislation assures that it will be tested and labeled so that differences are known. So there will not be motivation for a manufacturer to game the system by making a minor change in order to make a product unapproved and thus unimportable.
For those who say that counterfeiting is a threat, our legislation requires the use of anticounterfeiting technologies to protect drugs. The fact is, we can employ technologies like the one now used on the new $20 bill. We can do the same with prescription drugs. Moreover, this bill supports the development of future anticounterfeiting and track-and-trace technologies which we hope will be used to protect all prescription drugs.
For those who say consumers won't know who has handled an imported prescription drug, our bill requires that a chain of custody--a
``pedigree''--be maintained and inspected to help ensure the integrity of the imported prescription drugs. A pedigree for medications was mandated by law, believe it or not, back in 1988--that is correct, in 1988--and we still await its implementation by the FDA. Almost 20 years later, the FDA has yet to implement that requirement to establish a pedigree for medications to ensure that we have a chain of custody so we understand how they have been handled from the initial process of manufacturing.
Some even attempt to alarm Americans about the countries from which we import drugs, citing Latvia, Estonia, and Slovakia, members of the European Union. Another member is Ireland, where Lipitor is made.
I call your attention to this chart on which the European Union and other countries from which we would import is in blue. These countries meet or exceed our standards. In contrast, we have in red many additional countries in which the FDA inspects pharmaceutical manufacturing plants. These include China, India, Bulgaria, Jordan, and others with lower standards.
For those who say importation isn't safe, we show that it will be, and this legislation sets a model of improving safety in the handling of all prescription drugs. The safety has been attested to by none other than the former FDA Commissioner, Dr. David Kessler. He said our legislation `` . . . provides a sound framework for assuring that imported drugs are safe and effective. Most notably, it provides additional resources to the agency to run such a program, oversight by FDA of the chain of custody of imported drugs back to FDA-inspected plants, a mechanism to review imported drugs to ensure that they met FDA's approval standards, and the registration and oversight of importers and exporters to assure that imported drugs meet those standards and are not counterfeit. Some say the consumers will not see significant savings, but drugs imported under this program will be labeled as imports, and consumers will be able to compare the side-by-
side savings. With increasing consumer awareness of foreign prices and competition between importing wholesalers, we are confident of consumer savings.
Let me say in conclusion, I hope the Senate will give due consideration to this legislation. In the final analysis, it incorporates every issue regarding safety concerns, every measure, every standard that could be put in place to ensure we can have safe drug importation and accomplish the ultimate goal, ensuring affordable medications to the American people. They deserve it.
Mr. DORGAN. I yield myself 15 minutes from the time on our side.
The PRESIDING OFFICER. The Senator from North Dakota is recognized.
Mr. DORGAN. I thank my colleague from Maine, Senator Snowe, who has spoken at some length about the piece of legislation we have offered dealing with prescription drugs and the price of prescription drugs in this country.
Thirty-two Senators have cosponsored a piece of legislation. It is a bipartisan group, including Senator Snowe, myself, Senator Kennedy, Senator McCain, Senator Grassley and Senator Stabenow. A wide range of Senators have cosponsored a piece of carefully crafted legislation that allows the American people to import FDA-approved prescription drugs that are, in almost all cases, sold for a much lower price in other countries.
I will not go over all of the issues that have been raised by my colleague, Senator Snowe, because she has done an excellent job of laying out the issue. The issue, very simply, is this: The pharmaceutical industry prices FDA-approved prescription drugs in this country with the highest prices in the world. The American consumer is required to pay the highest prices for prescription drugs in the world. That is unfair.
This chart shows United States versus Canada. But the chart could show the United States versus Italy, the United States versus Germany, the United States versus Spain, and it would show the same result.
I ask unanimous consent to show in the Senate two bottles of Lipitor.
The PRESIDING OFFICER (Mr. Martinez). Without objection, it is so ordered.
Mr. DORGAN. The two bottles of Lipitor are identical bottles: same company, same pill, made in the same manufacturing plant, sent to different places. One is sent to the United States to be purchased by a United States consumer, and the other is sent to Canada to be purchased by a Canadian consumer. What is the difference? This is 40 percent less expensive than this one. The American consumer is charged more than the Canadian consumer.
Why is the American consumer not able to get that 40 percent discount or pay a price that is 40 percent less? The answer is, the pharmaceutical industry stops the reimportation of prescription drugs except for the small use by those who can go back and forth physically across the border. They do that because that enforces their pricing mechanism which requires the highest prices be paid by the American consumer.
Prevacid, 50 percent savings in Canada versus the United States--same pill, same bottle, made by the same company, shipped to two different places, and one is a dramatically lower price. Zocor, 46 percent difference; Celebrex, a 55-percent difference--and the list goes on. The American consumer is charged the highest prices in the world for these prescription drugs.
I, personally, think it is unfair. The way to deal with that is to allow the American consumer access, as others have access, to an international trading system; to say if you can purchase an FDA-
approved drug from Canada, you are welcome to import it into this country. The pharmaceutical industry says there are safety issues with that. There are no safety issues with that, not if it is an FDA-
approved drug produced in FDA-approved plants.
The Europeans have been doing something called parallel trading for a couple of decades. If you are in Germany and want to buy a prescription drug from Spain, no problem. You can do that. If you are in Italy and want to buy a prescription drug from France, no problem. Under a system called parallel trading, they are able to import and reimport prescription drugs to find the best price. Only in the United States are we prevented from doing that.
We put together a piece of legislation. We worked very hard on the legislation. Thirty-two Senators, Republicans and Democrats, have worked to accomplish this legislation.
On March 11, 2004, over 2 years ago now, at midnight in the Senate, I lifted a hold I had on a nominee in exchange for what I thought was a commitment by the majority leader to bring drug importation legislation to the Senate. I thought it was a commitment. He says he didn't think it was a commitment. I am not going to try to question his integrity but, nonetheless, we still wait 2 years later and are not able to have a vote on this legislation.
In July of 2005, my colleague, Senator Vitter from Louisiana, said he received a commitment from the majority leader to bring this very issue to the Senate if the Senate achieved a 60-vote demonstration of support for reimportation. The Senate met that hurdle when it adopted the Vitter-Nelson amendment on a 68-to-32 vote. On July 14, I and my colleagues--three Democrats and three Republicans--wrote to the majority leader saying: We have now waited for a long while, and we hope that you will decide to do what you had assured us you would do; that is, give us an opportunity in the Senate to pass this legislation.
The U.S. House has already passed legislation on this. The Senate clearly has the votes to pass it if the attempts to block it are ceased and we would be able to pass legislation that, according to the Congressional Budget Office, will save consumers $50 billion over 10 years, $5 billion a year. That is not an insignificant savings.
It seems to me this is an issue that ought not be very controversial except, as I understand, to the prescription drug industry. Let me hasten to say there are some good people working in that industry. Those companies produce some miracle lifesaving drugs. But there are no miracles from miracle drugs if you cannot afford to take them. That is why I believe the pricing of those prescription drugs to the U.S. consumer, charging the highest prices in the world, is fundamentally unfair. It is why I and many others are attempting to remove a restriction in law that prohibits the reimportation of FDA-approved prescription drugs. In many cases, these drugs are actually made in the United States and then exported to be sold for a much lower price in other countries. Then the U.S. consumer is prevented from accessing those same lower priced drugs despite the fact they were made in this country.
We passed a prescription drug benefit in Medicare recently, and it has now been implemented. That had a provision in it that prevents the negotiation for lower prices--just as the VA and others have done. This actually prevents Medicare from negotiating lower prices. I cannot think of anything that makes less sense than a prohibition of the Federal Government from negotiating lower prices. But that is what has happened.
Since the prescription drug benefit in Medicare has taken effect, in the first quarter of 2006, we see while the inflation increased at 1.1 percent, we can see the increase in the price of prescription drugs on this chart. I have developed several of them--Ambien, Proscar, Atrovent inhaler, Lexapro--and the price on average has run triple the rate of inflation in the first quarter. This is like hooking a hose to the tank and sucking it dry.
It will break the bank from two standpoints: One, the cost of this program to the Federal Government; and No. 2, the ability of consumers to be able to access the same FDA-approved drug for lower prices from Canada and other countries just makes great sense. It is why 32 Members of the Senate have cosponsored the legislation before the Senate.
As I said when I started, the majority leader has indicated he fully expected legislation such as this to be in the Senate and to be considered. He said: But we will take it up in the committee of jurisdiction first. That happened last year, in April of last year. They had a hearing. We expected then, and they all said then: We will report legislation out and have time in the Senate to deal with it. But the fact is, it has not happened.
On behalf of the American people, who deserve to have the opportunity to have fair prices on their prescription drugs, this Congress, this Senate, ought to take up this legislation and pass it.
The legislation that is before the Senate is an authorization bill. We are now on the legislation. It is open for amendment. The amendment that I will ask to be considered is not an amendment that falls by the rules. It is an amendment that is perfectly appropriate under the rules. My understanding is that the bill on the floor of the Senate has been amended. I think we have a first-degree amendment and a second-
degree amendment. What has been done, as they say in legislative terms, the tree has been filled so that no other amendments are in order.
So in order to offer an amendment, which is proper, you have to ask that the current amendment be set aside, which is the last second-
degree amendment that was offered.
My expectation is, and I am told this request will be objected to, but let me say, even if it is objected to, I hope the majority leader will work with us. We have limited time. Representations have been made to a number of Members, including Senator Vitter, myself, and others, that we would have an opportunity in this Congress to deal with this issue.
The U.S. House of Representatives has done so; the Senate has not. My hope is the Senate would allow consideration of a very carefully developed bipartisan piece of legislation that nearly one-third of the Senate has embraced as cosponsors.
With that, I ask unanimous consent the pending amendment be set aside, that the Senate immediately consider the Dorgan-Snowe amendment number 4742 to make drug importation legal and safe.
Mr. ALLEN. On behalf of the leader, I object.
The PRESIDING OFFICER. The objection is heard.
Ms. SNOWE. Will the Senator yield?
Mr. DORGAN. I am happy to yield.
Ms. SNOWE. Mr. President, I appreciate all of the Senator's leadership on this issue, but would the Senator agree it is so important for our colleagues to recognize the savings that would be realized for our American consumers? Their counterparts in other countries pay 35 to 55 percent less, so this is an enormous savings both in terms of the U.S. Government and the $50 billion the Senator has mentioned, but also more than $6 billion in direct savings to the Federal Government and to the U.S. budget. Not only do we save $50 billion, with $6.1 billion of that in savings to the U.S. budget according to the CBO, but we begin to address the fact that the American consumers are paying $87 billion more than counterparts in other countries.
This is an enormous savings in all respects. Would the Senator not agree this also would advance those savings to American consumers but, as well, to our Government?
Mr. DORGAN. Mr. President, the large bipartisan group of Senators that has worked to put this bill together and endorsed the bill through cosponsorship has done so believing, first of all, that there is no safety issue. These are FDA-approved drugs that would be allowed to be imported, No. 1. And, No. 2, very substantial savings would exist. The Congressional Budget Office has said that it would be $50 billion over 10 years, $5 billion a year. There would be additional savings to the Federal Government itself.
At a time when we are up to our necks in debt, it is very important to do the right thing not only on behalf of the American consumers but also on behalf of our Government's fiscal policy. The right thing is allowing this to be an opportunity to access the identical FDA-approved drugs at the much lower price that they are being sold in virtually every other country of the world.
I yield the floor.
Mr. ALLEN. Mr. President, I rise this afternoon in strong support of the Gulf of Mexico Energy Security Act. This is commonsense legislation. It will have a powerful and positive impact on one of the truly most important challenges facing our country today: we need to reduce the price of gas. We need to reduce our dependence on foreign sources of energy. It needs to be reduced for our competitiveness. We need to reduce the dependence on energy for our national security, especially the amount of foreign oil we get from the Middle East.
American households, families, and businesses are paying high prices for gasoline. They are paying high prices for natural gas as well as diesel. Our country, the United States of America, is far too dependent on a single source of energy which is primarily located in a hostile, unstable region of the world, 8,000 miles away.
This dependence that we have on the Middle East needs to be reduced. We have paid a very high price for our energy dependence, not just in the actual cost of energy--which has skyrocketed in the last year, harming individuals, harming families, harming manufacturing jobs, having an adverse impact on our farmers and small businesses--we have also, as Americans, paid a high price in terms of our national security since our economy is becoming increasingly vulnerable to the whims of some Iranian mullah or some dictator in Venezuela.
Moreover, there is increasing demand around the world. Every barrel of oil produced in Saudi Arabia or Iran or anywhere else is in competition with the growing economies in Central Europe, and the very large growing economies in India and China--all competing for that same barrel of oil.
This dependence on foreign oil is a serious problem, a serious challenge which requires and demands a serious long-term solution. The old brain-dead energy policies of the past are not going to work in today's innovative and expanding global economy. We need to adopt a comprehensive, 21st century energy program that will increase energy affordability, energy reliability, and, above all, our mission of energy independence.
The best way to strengthen our energy independence is through more American energy diversity. We need to adopt a flexible, diverse portfolio of energy options. That, also, of course, first and foremost, must include increased domestic energy production, including American oil and natural gas. As to clean coal, American coal, we are the
``Saudi Arabia'' of the world in coal, and we ought to be using clean coal technology for electricity generation as well as gasifying coal or making it into a diesel-like fuel. We also ought to be using American advanced nuclear power for electricity generation.
We need to increase our refinery capacity. Right now, refineries are going at 100 percent capacity. When they shift from one formulary to another, there is disruption, increased prices, some shortages, and not just at the refineries but also in the pipelines. So we need more refineries in this country.
We need, as Americans, to conserve and become more efficient and smart in the use of our energy and our methods and even the engines of propulsion. We also need to unleash the power to free, creative minds and free markets right here in America. We have to unleash the best scientists, the best engineers, and the best technicians in the world. It is time to put them to work to develop a 21st century energy program.
Fuel cells can be part of it. Hybrids, clean-burning natural gas, the use of biofuels, whether that is soy diesel or ethanol, are part of the innovative ideas. Also, with advancements in nanotechnology, materials can be lighter and stronger, needing less energy to propel that particular vehicle. Nanotechnology is also making solar photovoltaics much more of a part of our options. Lithium-ion batteries are moving forward, and that is another method of propulsion for the future.
We have to adopt, we have to be determined, and we have to move forward with a comprehensive 21st century energy independence policy focused on energy production, innovation, and diversity. When we do that, we will see lower gas prices for American consumers. We will see more jobs for American workers and a stronger, more competitive and safer America in the world.
I believe that the Gulf of Mexico Energy Security Act, which is designed to expand deepwater exploration in the Gulf of Mexico, is an important first step toward a long-term energy solution. Although, I know there is much more to be done--and I will be offering an amendment to allow other States to have the same options as well--but this is a bipartisan measure, a bill crafted by Chairman Domenici and Senator Bingaman, with the support of Senators from, expectedly, Louisiana, Mississippi, and Alabama, and also breakthrough leadership from the Senators--including the Presiding Officer, Senator Martinez--from Florida.
This measure is going to permit energy exploration of 1.7 million acres in the eastern Gulf of Mexico, otherwise known as lease sale 181. It would also lift the production moratorium or ban for 6.3 million acres south of that area. Experts estimate that by permitting exploration of this area, we will eventually extract 1.26 billion barrels of oil and 5.8 trillion cubic feet of natural gas.
This home-produced American energy can run our cars, heat our homes, power our factories. And, best of all, the money stays right here in America instead of being sent outside of America. This will have a big impact on jobs.
People wonder: Why does it matter for jobs? Well, the natural gas aspect of this is very important. Our manufacturers of chemicals and fertilizers--which affects so many of us, particularly the farmers, but everything we use--those manufacturing jobs could be anywhere in the world, whether it is for chemicals, whether it is for fertilizers, manufacturing tires in Danville, VA, at the Goodyear plant. Those tires could be manufactured anywhere. And the cost of natural gas, the affordability, the reliability of it matters a great deal.
Plastics can be manufactured everywhere. But plastic manufacturers rely a great deal on petroleum-based products as well as natural gas. Forestry products for paper, cardboard, and lumber use natural gas. Again, it is very important we have affordable natural gas to keep those jobs in America rather than going overseas.
Now, as a former Governor, I believe a large portion of the royalties from the new deepwater exploration should be shared with the adjacent States. That is why I am supporting the revenue-sharing portion of this legislation, notwithstanding opposition from the White House. In this legislation, as much as 37.5 percent of the available revenues will go to the Gulf Coast States, many of which were severely damaged by Hurricanes Katrina and Rita.
Now, these revenues will free up money for worthy projects, such as education, transportation, and coastal shoreline erosion remediation. This is an outstanding bill. It will increase jobs and income, obviously, in the Gulf Coast States. It will help Alabama, Mississippi, and Louisiana, and Florida, but also the whole country. What is most important is that for the whole country this will increase the affordability of energy. It will increase our reliability of having energy in every State in our Union.
This bill will not harm our environment. I would remind my colleagues that hundreds of deepwater oil rigs were in the paths of Hurricane Katrina and Rita, and although these rigs were shut down and disabled by the roaring winds and the rising seas, not one of them released oil into the Gulf of Mexico. So this is a good record of performance that should alleviate any concerns about environmental safety.
I believe so strongly in this measure and this program that I want my own Commonwealth of Virginia to participate in it. This is why I am offering an amendment. And I will continue in the months and years ahead to allow not only the Gulf of Mexico States to share in revenues, and to permit those folks to have the deepwater exploration, but I want to permit and allow the people of Virginia to explore for oil and/or natural gas 50 miles off of our coastline and no closer than 25 miles from any neighboring State.
It would be a completely voluntary arrangement. My amendment allows deepwater exploration if that is the will of the people of Virginia. It simply gives the people an option. It gives the people a choice. And I sincerely believe the people of Virginia will choose to allow deepwater exploration once they are conversant with the facts and the opportunities. In fact, the General Assembly of Virginia, 2 years in a row, has passed legislation, with bipartisan support, to allow deepwater Outer Continental Shelf exploration far off the coast of Virginia.
Here are the facts. In the far part of the eastern seaboard, 45 miles off of our coast, Cuba is exploring for natural gas. Then in Canada, off the Grand Banks and the Maritime Provinces, they are exploring for oil and natural gas.
Now, for the U.S. area, and near Virginia, according to the Minerals Management Service, there are 1.23 billion barrels of oil and 11.68 trillion cubic feet of natural gas along the Mid-Atlantic Outer Continental Shelf. This remarkable, significant amount of energy is just sitting there, waiting for us to use it. Yet Federal law prevents the people of Virginia and America from using it.
Now, the gasoline prices are surging at over $3 per gallon. It is, to me, unbelievable and irresponsible to continue this obstructionist, detrimental restriction and regulation on Virginia and other States.
In my amendment, I have ensured that the people of Virginia are able to reap the benefits of any successful deepwater exploration far off our Virginia coast. Using Senator Domenici's legislation as a model, I have established that 37.5 percent of revenues would be allocated to Virginia. I recommend that half of these revenues would go to much needed transportation projects in Virginia. It could be for the third crossing down in Hampton Roads or for the widening of a variety of interstates across our Commonwealth. That would get half of the revenue.
A quarter of the revenue would go to reducing instate tuition at our Virginia colleges, and another quarter of the revenues would go to the coastal communities which are the counties on the eastern shore of Northampton and Accomack and to Virginia Beach, which they may want to use for shoreline or beach, sand replenishment.
Now, how much money are we talking here? Experts estimate that it could be nearly $3 billion over a period of time. That's right, $3 billion--all paid into Virginia's treasury, benefiting all Virginians, whether it is in education, whether it is for the shoreline, or improving our transportation.
Now, if Senators from other States think to themselves: I wouldn't want to have those jobs and those billions of dollars for my State, I would only say to them: Fine. That is your choice. I respect that choice. But please allow us in Virginia to make a choice as well, a choice that helps us and does not hurt any of the other States at all.
We did not get into this energy dependence challenge and predicament overnight, and we are not going to get out of it overnight. This legislation is a vitally important aspect of bolstering our energy security for generations to come. I support it, and I strongly advocate its swift passage because it is a long stride forward toward our ultimate American goal of America's energy independence. And for the future, I encourage my colleagues to support what I consider to be my fair, commonsense approach to empower the people of Virginia to explore for oil and/or natural gas in the deep water off our Outer Continental Shelf, if they so choose to do so.
This expanded proposal is consistent with the principles of federalism and free choice, and it respects the will of the people. It is a win-win situation for jobs, competitiveness, and, most importantly, it will incentivize and encourage the people of the States to join in with our national mission of energy independence.
I hope the underlying bill passes, of course. And I look forward--I see the chairman is here. I commend him for his outstanding work in a bipartisan manner. And I see Senator Landrieu here from Louisiana as well. This is a long stride forward. But please understand, Mr. Chairman, that I am going to continue fighting for Virginia. It is good for Virginia. It is also good for America because we need to have America independent from foreign sources of energy, particularly that from the Middle East. I say to the Senator, thank you for your leadership.
Mr. President, I yield the floor.
Mr. LEVIN. Mr. President, I intend to support cloture on S. 3711, the Gulf of Mexico Energy Security Act of 2006, and will vote for final passage. I am voting for cloture and for final passage because I believe we need to move forward to open up more areas for natural gas exploration to address the increasingly tight natural gas supply in the U.S. and its resulting high prices, but to do so in a way that protects our environment.
Over the past 6 years, the tight natural gas supply and increasing costs of natural gas has had a significant impact on consumers and particularly on the U.S. manufacturing sector, which depends on natural gas as both a fuel source and a feedstock and raw material. With U.S. natural gas prices the highest in the industrialized world, many companies have made decisions to move their manufacturing operations offshore. More than 2 million manufacturing jobs have been lost to overseas operations in the last 5 years, and I believe we need to take reasonable efforts to bring down the cost of natural gas in the U.S.
I agree with many of my colleagues that this compromise on offshore oil and gas exploration represents what is achievable in the Senate, and I urge the leadership on both sides to resist strongly any efforts by the House to broaden the scope of this legislation. If the bill comes back from conference with the House of Representatives without the Senate limits and environmental protections, I will not support the final product worked out by the conferees. Senator Reid's letter to Senator Nelson is very reassuring in that regard.
The PRESIDING OFFICER. Who yields time?
The Senator from New Mexico.
Mr. DOMENICI. Mr. President, I believe I have 15 minutes at this point.
The PRESIDING OFFICER. The Senator is recognized. There is no time limit.
Mr. DOMENICI. Mr. President, let me say, before the distinguished Senator from Virginia leaves the floor, here is how I see the situation in terms of coastal waters and the tremendous resources that are along the coast today, including the Senator's State. I see us on the verge of making the first breakthrough in 25 years. If this breakthrough occurs and this bill passes and this bill gets signed, the breakthrough is that your State and your people--openly and bright--might want it, too. In fact, you have been talking about that.
The point I am making is, we are doing this right. Let us get this one done, as you have said, and you certainly have not said we should not. I don't imply that. But the right thing for the country, in fact, of these prolonged moratoria is to pass 181 before us because it is big. It is real. It is right. It is now. It will happen and it will hurt no one. Besides, you will see bids to open with short periods of time saying: We will drill. You will see companies announcing what they are going to do. That will be the stimulus. I am not a football expert, but it is sort of like if the goal is to maximize, eventually, over time, the coastal production of America from a venue of stagnation, if that is the goal--and I am not there yet, but if that is the goal--what you do is you make the first 10 yards right now. This is the first 10 yards. This is the breakthrough.
Now you are going to see it, and you can say: Man, we can make it. Then your State will come, and other States will come. So I am very pleased we chose to limit it to the four States plus Florida and to this big piece called 181, plus 181 south, which you have lauded here today.
I will close by telling you something that you can now tell your people when this bill passes. On the day of the vote, for those who don't think this is a good bill, I want to remind them, and you can remind them, that it was just announced that natural gas had its biggest gain this year. Bloomberg announced that natural gas rallied to its biggest gain this year in the U.S. on a record-breaking heat wave, and the prices went up. So right now we are celebrating something very negative, that the supply is not sufficient. And with the excess heat, the price went up. What we want to tell them is, pass this bill. Start using these resources. Put them in our inventory, right? Get our businesspeople out there investing to drill, and we will have natural gas coming from 181, this big piece of real estate, energy laden, 6 trillion cubic feet on this one piece, enough for 6 million homes for 15 years, 1.2 billion barrels of oil on just this one piece. Get started, right? That is why we are going to do it.
I think we have the votes. But if you know anybody who is not for it, I say to the Senator, you tell them we celebrated the wrong thing today because we have been doing things wrong. It is time to do it right. That is what I think, and that is what this bill is. You are on the right track, and I commend you. This bill will get us started. I hope you understand that.
Mr. ALLEN. I am certain.
Mr. DOMENICI. We can't do it all at once. I am so pleased we picked the right one. And with the help of that man sitting in the chair, the Presiding Officer today--we call him ``President'' today, but he is actually a Senator--with his help, because he had a little guts, he decided to talk to his people instead of echoing. He went out there and talked and said: Let's do something. They agreed to this, after years of dilly-dallying, right? We are doing something for the country. The Presiding Officer, Mel Martinez, the junior Senator, is part of this three or four or five people who led this actual attack on this moratorium. Moratorium has something to do with death. That is what the moratorium was, death for us, this crazy idea that these resources should be locked up when you could drill for them and not hurt anybody. It is finally going out the window, little by little, with this bill. Two windows going out. We will see how it works. The public is going to say: Boy, it works. And then some more windows will go out later. And that is what you are talking about.
Thank you so much.
Mr. ALLEN. If I may, Mr. President----
Mr. DOMENICI. I yield to the Senator. I have the floor.
Mr. ALLEN. Will the Senator yield?
Mr. DOMENICI. Yes.
Mr. ALLEN. I would say to the chairman of the Energy Committee, I wanted to get on that committee in this session because I really do believe energy independence, energy security is the most important issue facing our country. The Senator has provided great leadership, working with a variety of different forces, and getting things done on a bipartisan basis. I agree that Senator Martinez was absolutely crucial in this bipartisan effort. I would hope, though, that you recognize that while I am introducing this amendment, I know my colleague, Senator Warner, has a different sort of amendment, trying to get to the same point. I hope I can count on you, and I hope the American people can count on you to work in a bipartisan fashion in the future, whether this year or future years, to allow the people of Virginia, if they so desire, to explore off our coasts and use this as a model in sharing revenues with the States because I think sharing of revenues with the States will be an incentive for States to help the national mission of energy independence and not allow that good energy to stay there fallow in deep water off our Outer Continental Shelves.
Mr. DOMENICI. I thank the Senator.
In response to what the junior Senator from Virginia just said, obviously, this bill sets not only the precedent of getting rid of the moratorium for deep water drilling off the coast of Florida, but it also sets a precedent of revenue sharing with the coastal States that surround the activity. That is what the Senator is talking about. Obviously, the Senator from New Mexico favors that. I don't have to answer his question specifically. I favor that. I took a gamble and said: I am one to do that. I started off saying, I think I can get it done. I think we can get it done without it. That is where I started, right, I ask the Senator from Louisiana? I reported a bill out, found out we probably would get nothing. I am not sure of that, but probably the country would get nothing, the coastal States would get nothing, the Treasury would get nothing, the coastal repair would get nothing. And we would be right back here telling the public: We can't do anything.
So when the coastal States and the Senator from Florida started negotiating with us about the coastal States and about Florida's linear protections, distance protections, I had to move from no coastal revenues. I am very pleased with the way it turned out because I believe over the long run we have by at least 10, maybe 20 years, accelerated the timeframe for coastal exploration. I am not saying forever because I think sooner or later reality had to set in. I think we are just pushing reality here and pushing hard, saying: OK, we are going to share, but we are going to get the resources.
We might be ready soon to have hearings in the committee, have other bills, move in other directions. But for right now, this is the best bill to clear the Senate.
We have this terrible 60-vote threshold in this place. You are aware of that. It is no longer a majoritarian place. There are 60 votes for everything. You ask for a motion for a pin to drop, and somebody says: I am going to filibuster. Right? You have to have 60 votes. Appointment of conferees is filibustered now. Somebody like Senator Byrd will say: Senator Domenici, don't think that is new. That was around forever. Of course, it was. But it wasn't used very much.
But you know that is being used now. A motion to appoint conferees on a bill is now an acceptable measure on which to have a filibuster. The point is, this is no turkey shoot, passing a bill in the Senate. You don't just have to sharpen up and hit one; you have to get 60 votes. That is why it is so important you know how to put it together. That is why we did this. That is why some people, looking down on this bill, wondering how far can you go--you know where that is coming from--how far we can go and still get something passed--have to understand, the 60-vote threshold probably, if we make it tonight, and even if we break it, the point is, it is fragile. You fool around with it and change it and you could go back down to 59, 58, and be dead again.
So if you want some energy for America, not big time, not like a whole new country has been invented, we still have a lot of coast left, a lot of other places left, but this is a big one. If you want this, you have to remember, you have to get 60 votes. We have got to get 60 votes here tonight. We have got to get 60 votes later on. And we better not be thinking too far ahead of our nose or we will find out we don't have the votes.
So I want to close by reminding everybody that the price of natural gas increased by a record amount. The public can note that. They might be thinking: Why didn't you do something about it? We want to tell them we are trying tonight to do something about it. We have a ways to go, right? We have to get it passed, and we have to get it past the House. But we are trying to do something about this report that says the price went up the highest amount. We are trying to do something about it. We don't guarantee anything, but we guarantee you that we are going to help if we add 6 trillion cubic feet of natural gas to the inventory of natural gas for Americans from this piece of real estate off the coast of Florida, off the coast of Louisiana that belongs to the people, that had a moratorium on it, that had a death wish on it: You can't do anything with it.
We are taking that off, and that is why it is important.
It is also important that everybody knows it is not easy to do because in the Senate you need 60 votes. No, you don't, people told me the other day. What is the matter with you, Senator? Fifty-one votes will do that.
I said: Well, we changed business in the Senate. Almost everything is a filibuster. I just explained that to you. This bill was filibustered. No question. So we have this fancy-named thing called cloture. That means a request that the filibuster be restrained. We are going to vote on that. Do you want to throw out the filibuster tonight? That is what the vote is going to be about. But that is the 60 votes. People should know that, and they should know that about our bill, whomever it is. This is tough sledding. Don't be thinking that we could change it helter-skelter. And if they are wondering why we have been tough on amendments, just remember with us, who knows what amendments would do to this bill.
It is a good bill like it is. Sorry to fellow Senators who want to offer amendments for a week. I am sorry. I wish you could preside, Mr. President, over wonderful debates, about 20 amendments or 30 on this bill. I hope we don't have to because I hope we close it up with the cloture vote, a couple of hours after that, maybe tomorrow, vote on final passage, send this bill to conference, and then take a little while with the House and have this same message to them: 60-vote problem in the Senate. Can't send them any old thing or we will get nothing.
I think my friend from Louisiana knows that. She is here. She knows what I am going through. I mean, she can comment on that. She does. It is not easy to get this through, if you are worrying about adding things to it or changing it.
I see the Senator would like to speak.
Ms. LANDRIEU. Will the Senator yield for a question?
Mr. DOMENICI. Of course.
Ms. LANDRIEU. The Senator is absolutely correct.
The PRESIDING OFFICER. The Senator has used 15 minutes.
Ms. LANDRIEU. I ask unanimous consent for 1 more minute for the chairman.
The PRESIDING OFFICER. Without objection, it is so ordered.
Ms. LANDRIEU. The Senator is on to a very excellent point. I was wondering if he could remind those listening, getting ready for the vote, one of the reasons the debate was restricted is so that we could move on this very important piece of legislation. But if the Senator would remind those of the good things that were done in last year's Energy bill on conservation so that we didn't need a broad debate, we did so many good things, as the Senator will recall, in the last Energy bill to conserve, promote renewables. The Senator is well aware of the many things since he led that fight.
Mr. DOMENICI. The Senator is absolutely correct. I have been referring to the Chair and the Presiding Officer in one way because it was the Senator from Florida, talking to him as the Senator from Florida. He has taken a seat as a Senator. Another Senator from the committee, Senator Lamar Alexander, has taken the Presiding Officer's seat.
(Mr. ALEXANDER assumed the Chair.)
Mr. DOMENICI. The question fits right in with all four. Lamar Alexander is on the Committee of Energy and Natural Resources, as is the Senator from Florida. A big participant is the Senator from Tennessee. I am looking at the Senator who took on the issue of natural gas, the Senator from Tennessee. We knew we could not do this on that bill, so we put it off. We did 10 or 15 major things that are still having an impact on America--everything from seeing to it that all possibilities for the alternative of shale being turned into oil be given a chance. It might happen. We promoted coal to gas, coal to liquid. The only thing keeping that from happening is the uncertainty of investment because the price of $70 is not certain. If we can address that issue, we will fix that, too. Ethanol came out of that bill. The whole idea of hybrid automobiles came out of that bill. Scores of that are in the area of conservation, which were promoted even before I was chairman; they are on that bill and are done. So this is a followup for some supply. That is why it is important that we get it done.
I thank the Senator for the question. There are many other things we could list. I thank the Senate for yielding me additional time.
I yield the floor.
The PRESIDING OFFICER. The Senator from Louisiana is recognized.
Ms. LANDRIEU. Mr. President, I think we are going to vote around 5:30. I may need 10 minutes to speak, and others may follow suit. I wanted to follow up on what Chairman Domenici said, as a member of the Energy Committee--and, Mr. President, you serve so ably on that committee, as does the Senator from Florida--to say exactly that point.
Some people have been critical of this debate, questioning why it is so limited. The answer is because almost everything was included in last year's Energy bill, which we debated for 10 years--a lot of debate, over weeks and months, over a 10-year period. This part was the part that was left out--actually increasing the supply of gas. As the Senator from New Mexico said earlier, today is probably a propitious day to be debating this because the price went up over a dollar.
Earlier today, the manufacturing association, the agricultural interests, and the paper and pulp industry shared a press conference. The equivalent price of gas to oil, when gas went up earlier to $15--it is now today at $8, yesterday at $7. But at $15, which is what our industry folks pay, and residents pay as well--that high price of gas--
it was the equivalent of a $7-per-gallon price of gasoline at the pump. So if you are thinking, because all of us know when we fill our tank up how expensive that $2.89 or $3.10 or $3.25 is--can you imagine the shock of going to the pump and having it say $7.50 a gallon? Imagine that. That is how high the price of gas got this year in the United States of America.
So the reason our farmers are supporting this bill, the reason rural communities are supporting this bill, the reason the manufacturing industries are supporting this bill, the reason the chemical association is supporting this bill, and many environmental groups as well, is because we must find more domestic supply to reduce the price of natural gas.
We are going to also have to import, unfortunately, more liquefied natural gas. I say ``unfortunately,'' although my State benefits from those imports. I can honestly say that I really belong to the group of Senators who believe we can be energy independent, and we should. This bill is the piece that didn't get done in the last energy bill, and it must get done before we begin writing another comprehensive energy bill, which we can and will do because there is always room for improvement.
I wanted to answer the critics about why just focus on this. It wasn't done in the last bill, so it needs to get done today. Why the gulf coast? Because the gulf coast Senators came together, working with Senator Domenici, and figured out our neighborhood. We live in the neighborhood of the gulf coast. Five States share the gulf; four of us drill and one doesn't. Maybe that one will one day, but who knows? That is for the State of Florida to decide. We will defer that debate. Texas, Louisiana, Mississippi, and Alabama came together and decided we wanted to stay in the business despite the fact that there have been difficulties to our coast. We believe in drilling and strengthening America's domestic reserves. We want to continue to serve the coast, but we can and will not any longer do it for free.
My critics say: Well, Senator, you are not thinking about all the jobs you get and about the taxes. I am thinking about the jobs created, and we are grateful. I am thinking about the taxes we get from onshore drilling. But I am also thinking about the $150 billion in royalties that have been paid by the offshore industry to the Federal Government, of which Texas, Louisiana, Mississippi, and Alabama got zero.
When I think about our beaches, our coasts, our marshes, our great fishing places, and our beautiful marshland, it is compelling that we would enter into a smarter partnership for the future than the one we failed, for many reasons, to enter into in the past. So I am proud to have argued and helped with our gulf coast Senators to negotiate a good deal, a square deal for the gulf coast, and a good deal for the Federal Government.
I also repeat that the country needs the gas now. The gulf coast needs the revenues now, the country needs the jobs now, and the companies in the industry need the competitive edge now. Today, again, at that press conference earlier, it was shocking to see how many manufacturing jobs have been lost. When the price of natural gas for our manufacturing sector exceeds the price of labor, we have a serious problem. That problem is getting addressed at 5:30 today when the Senate votes to open, for the first time, almost 8.3 million new acres of rich natural gas and send a positive signal to the markets and to the industry that we are serious again about finding resources right here.
Fifth, the companies in these industries need to gain a competitive edge. The States will get a reliable partner in conservation. Mr. President, you have done more to spearhead that debate since you came to the Senate. You did it as Governor of Tennessee, as a Secretary for our country. You have been a leader in conservation. I have spoken many times about the coast and wetlands. I am not quite as passionate or articulate as you, but I share your enthusiasm for the fact that this Nation is a great nation of the outdoors. It separates America from our European neighbors. It sets us apart from places like Japan. We have great open spaces. It is the character of America, as I have heard you say many times.
If we don't work harder to preserve those open spaces, they will not be there because they just don't happen; they are dreamed about, nurtured, and created, and not by words, not by wishes, but by money that buys and sets aside land. I know we cannot do it in every place and for the Federal part, but for the States, for our 50 Governors who are looking to the Federal Government to be a good partner and want to work with nonprofit organizations to expand conservation, I say to my colleagues that this bill finds balance.
We tried to do this in 1965 when some great Senators, such as Scoop Jackson from Washington and others, created the Land and Water Conservation Fund--the first time ever that the Federal Government said: Let's create a fund to help the States. It wasn't much of one. You could barely see this little dot. It was probably $10 million for all the States. That is just pennies. But it was a beginning. We went up to $75 million and back down to $50 million, and we kept trying, through the budgets, to get a little bit of money set aside for our parks and bike paths and soccer fields where our kids play. I am not just talking about suburban areas, I am talking about urban areas, such as small city parks in New Orleans or the large Central Park in New York. We did a pretty good job over time, and we have fallen off the wagon, if you will. It is time to get back up in the saddle and fund the Land and Water Conservation. That is what this bill does.
To some undecided Democrats who are thinking: What should I do, please consider that the country needs the gas, manufacturing needs their competitive edge back, the gulf coast could certainly use the revenues, the country needs the jobs, and the States need a reliable, steady stream of revenue for the Land and Water Conservation Fund that our Governors, legislators, mayors, county commissioners, and parish officials in Louisiana can certainly count on to help. It is down to
$40 million, one of the lowest levels it has been.
Under this bill, it will go up $450 million a year. Not right away, but over time it will go up to its full authorized funding. We are going to do what we can between now and the time the bill gets to the House to make these adjustments in these early years to get these numbers up. We will see. We cannot make any promises because there is a lot to be done. The idea is to pass this bill today and get something to the President's desk that he can sign.
I thank the administration for supporting the framework of the Senate bill, for Secretary Kempthorne's visit to Louisiana and Mississippi, to the gulf coast. I thank all Senators who have come down--almost all of them now have come before the anniversary of Katrina--and seen firsthand the great needs America's only energy coast has.
I want to show a final picture of the gulf coast because this is what I have shown so many times when I have come to the Senate floor. This is America's only energy coast. I am not making this up. This is a USGS satellite view of the Gulf of Mexico. You see the great boot of Louisiana, the mouth of the Mississippi River here, Mobile Bay, Galveston, and the great expanse of the Texas coast. This is America's energy coast. All of these are pipelines that are out into the gulf. There is no way to get oil and gas from this part of the gulf unless you connect it to someplace on land. Whether it is Port Fourchon, Venice, Buras, Gulfport, Pass Christian, Morgan City, Beaumont, Cameron--all of these towns and communities support this industry.
When I see people come to the Chamber and say this doesn't belong to the States, this belongs to the Federal Government, I am not even making the argument; I know this belongs to the Federal Government. What I am saying is the Federal Government could not access what it owns without a right-of-way through the States of Alabama, Mississippi, Louisiana, and Texas. It is as simple as that. You can own all the valuable land you want; if you cannot access it, it is as if you don't own it. That is what we are talking about, sharing these revenues to protect this great coastline. We most certainly need every penny we can get to build these levees to protect these people so we can keep the lights on in the Chamber.
I ask unanimous consent that Senator Alexander and Senator Hagel be added as cosponsors to S. 3711.
The PRESIDING OFFICER. Without objection, it is so ordered.
Ms. LANDRIEU. Mr. President, I yield back the time in the event there are any other Senators wishing to speak for or against the measure.
I suggest the absence of a quorum and ask that it be equally divided between the two sides.
The PRESIDING OFFICER. Without objection, it is so ordered. The clerk will call the roll.
The bill clerk proceeded to call the roll.
Mr. BINGAMAN. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. BINGAMAN. Mr. President, in a few minutes we will be voting on S. 3711, which is the Gulf of Mexico Energy Security Act of 2006. I urge all Senators to oppose cloture on this bill which is the vote that will occur at 5:30. Last week, I outlined my reasons for my strong opposition to the bill. The bill is not good energy policy and, in my view, it is even worse fiscal policy.
Turning first to Energy, S. 3711 actually expands areas that are under moratorium off the coast of Florida. It also sets a precedent for imposing a new long-term congressional moratorium. The chart behind me has been referred to by many on both sides of this debate. This chart depicts the area, which is in yellow, that will be locked up under S. 3711 until the year 2022. For the first time, as I can determine, Congress will be enacting a multiple-year moratorium--not a moratorium for just 1 year, which we have done many times in the past but, rather, a moratorium until 2022.
In addition, Congress will be placing parts of this area under moratorium that have never been under a moratorium before.
The bottom line is that in return for access to an additional 2.76 trillion cubic feet of natural gas, the bill puts almost 10 times as much natural gas--that is 21.83 trillion cubic feet--off limits until 2022. Again, that is all of the area colored in yellow.
This is certainly not my idea of how we should be addressing our Nation's energy needs.
In addition, the claims of the natural gas that will be produced under the bill are exaggerated. The sponsors of the bill claim that 5.83 trillion cubic feet of natural gas will be produced. However, over half of that natural gas will be leased next year and produced anyway under the Department of the Interior's proposed plan. The actual amount of additional natural gas made available because of this bill is 2.76 trillion cubic feet.
Last year, the Congress enacted the far-reaching Energy Policy Act of 2005. The legislation addressed energy efficiency and energy production, nuclear energy, renewable energy, energy technologies, and energy taxes. We made progress, but there is much more work to be done. That is why I am deeply disappointed that the only energy legislation that the Senate is likely to consider this year is S. 3711, which I do not believe takes us in the right direction.
I am also disappointed that the right of Senators to offer amendments addressing other important aspects of energy policy will be cut off if cloture is invoked. There were amendments to S. 3711 filed by my colleagues that address important unfinished business on the topic of energy policy. Prominent among these are amendments to improve efficiency in our use of oil and gas. But there are also other meritorious energy amendments which my colleagues will not be able to offer if cloture is invoked today.
I turn now to the enormous adverse fiscal impacts of S. 3711. The bill would divert from the Federal Treasury 37.5 percent of revenues from the new sale areas to the four States--Texas, Louisiana, Mississippi, and Alabama. Starting in 2017, this percentage is applied to new leases in existing areas of the Gulf of Mexico that are open to production.
To put it simply, we are not talking about diverting revenues from the new lease sale area. Ultimately, S. 3711, by its language, would divert revenues from the entire Gulf of Mexico.
This is chart No. 2. The area that is highlighted is the area in the western gulf and the middle gulf which are open to production, and the revenue from new production in those areas would begin to be diverted to the four States I mentioned beginning in 2017.
As any Senator can see, this includes the entire western and central Gulf of Mexico and also, of course, the newly opened lease sale 181 and lease sale 181 south areas.
Even with S. 3711's so-called cap on revenues paid to the States for the period from 2016 to 2055, the amount flowing to the four Gulf States that would otherwise go to the Federal Treasury would be somewhere between $28.5 billion and $30.5 billion. Estimated losses to the Treasury balloon beginning at that later date of 2056, with annual losses between $12.5 billion and $15 billion starting that year.
There is no policy justification for diverting these Outer Continental Shelf revenues to the coastal States. The resources of the Outer Continental Shelf belong to the entire Nation. The Supreme Court ruled that offshore lands were and always have been owned by the United States as a feature of national sovereignty. In 1953, Congress passed the Submerged Lands Act which granted coastal States title to submerged lands to within 3 miles of their coast. This action by Congress several decades ago settled any issue of State equities.
Finally, there has been much discussion as to whether passage of S. 3711 will lead us to a conference on the House-passed bill, which is H.R. 4761. I understand that the minority leader has made a commitment that we will not accept any version of this legislation other than that which is before the Senate today. In my view, he is right to take that stance because the House-passed bill would take us down a road to even greater fiscal irresponsibility. The administration has warned that the House-passed bill would cost hundreds of billions of dollars.
In addition, the House bill contains many other far-reaching and extreme provisions that do not lead to the type of balanced energy policy that is in the best interest of our Nation.
For these reasons, Mr. President, I again urge my colleagues to oppose the motion to invoke cloture.
I yield the floor and suggest the absence of a quorum.
The PRESIDING OFFICER. Without objection, the clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. DOMENICI. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Cloture Motion
The PRESIDING OFFICER. By unanimous consent, pursuant to rule XXII, the Chair lays before the Senate the pending cloture motion, which the clerk will state.
The bill clerk read as follows:
Cloture Motion
We the undersigned Senators, in accordance with the provisions of rule XXII of the Standing Rules of the Senate, do hereby move to bring to a close debate on Calendar No. 529, S. 3711: a bill to enhance the energy independence and security of the United States by providing for exploration, development, and production activities for mineral resources in the Gulf of Mexico, and for other purposes.
Bill Frist, Pete Domenici, Richard G. Lugar, Mitch
McConnell, Kay Bailey Hutchison, Jim Bunning, Trent
Lott, Christopher S. Bond, Tom Coburn, Wayne Allard,
David Vitter, Mel Martinez, Thad Cochran, Jim DeMint,
John Cornyn, Lindsey Graham, Jeff Sessions.
The PRESIDING OFFICER. By unanimous consent, the mandatory quorum call has been waived.
The question is, Is it the sense of the Senate that debate on S. 3711, a bill to enhance the energy independence and security of the United States by providing for exploration, development, and production activities for mineral resources in the Gulf of Mexico, and for other purposes, shall be brought to a close?
The yeas and nays are mandatory under the rule. The clerk will call the roll.
The legislative clerk called the roll.
Mr. McCONNELL. The following Senators were necessarily absent: the Senator from Kentucky (Mr. Bunning) and the Senator from Arizona (Mr. McCain).
Further, if present and voting, the Senator from Kentucky (Mr. Bunning) would have voted ``yea.''
Mr. DURBIN. I announce that the Senator from Massachusetts (Mr. Kerry), the Senator from New Jersey (Mr. Lautenberg), and the Senator from Connecticut (Mr. Lieberman) are necessarily absent.
I further announce that, if present and voting, the Senator from New Jersey (Mr. Lautenberg) would vote ``no.''
The PRESIDING OFFICER. Are there any other Senators in the Chamber desiring to vote?
The result was announced--yeas 72, nays 23, as follows:
YEAS--72
AlexanderAllardAllenBaucusBennettBondBrownbackBurnsBurrByrdCarperChafeeChamblissClintonCoburnCochranColemanCollinsConradCornynCraigCrapoDeMintDeWineDoleDomeniciDorganEnsignEnziFristGrahamGrassleyGreggHagelHatchHutchisonInhofeInouyeIsaksonJohnsonKohlKylLandrieuLevinLincolnLottLugarMartinezMcConnellMurkowskiNelson (FL)Nelson (NE)PryorReidRobertsRockefellerSalazarSantorumSchumerSessionsShelbySmithSpecterStabenowStevensSununuTalentThomasThuneVitterVoinovichWarner
NAYS--23
AkakaBayhBidenBingamanBoxerCantwellDaytonDoddDurbinFeingoldFeinsteinHarkinJeffordsKennedyLeahyMenendezMikulskiMurrayObamaReedSarbanesSnoweWyden
NOT VOTING--5
BunningKerryLautenbergLiebermanMcCain
The PRESIDING OFFICER (Mr. Burr). On this vote, the nays are 23, the yeas are 72. Three-fifths of the Senators chosen and duly sworn having voted in the affirmative, the motion is agreed to.
Mr. FRIST. Mr. President, I move to reconsider the vote, and I move to lay that motion on the table.
The motion to lay on the table was agreed to.
Mr. FRIST. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mrs. BOXER. Mr. President, I ask unanimous consent that the order for the quorum call be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mrs. BOXER. Mr. President, thank you so much for your courtesy--and my colleagues. I wanted to be heard on this bill. I haven't spoken on it. It is a bill that I call a drilling bill; I don't call it an energy bill. I rise to speak against it, and I am against it for three very simple reasons.
First, I have no assurances--nor does Senator Feinstein--that the California coast will continue to be protected from new offshore oil and gas drilling. That protection is crucial to my State, to my State's economy, and, of course, it is crucial to the promise that we made to our children and our grandchildren--that this coast will be forever protected. It is one of God's greatest gifts to our State. Every history book that writes about California talks about the beauty of our State--and it starts with the ocean. We know if we lose that beauty it is irreplaceable.
I also wanted to make a point to my friends that in our State, offshore oil drilling is an issue that unites the vast majority of Republicans and Democrats. They do not want to see it happen, whether it is our Governor or our Democratic candidate for Governor. They are in full agreement. This is an issue that unites California.
Clearly, we know that our economy is heavily reliant on tourism. It is reliant on fisheries. And offshore oil drilling threatens both of those economic engines.
Second, this bill will drain billions of dollars from the Federal Treasury. That is indisputable. And it does nothing to help us meet the critical goal of reducing America's dependence on oil. As a matter of fact, this bill deepens our dependence on oil.
Achieving real energy independence must be more than just a slogan. In this unbalanced bill, we admit our addiction to oil. As a matter of fact, I heard many colleagues say we need more oil, that we need this oil. But with this bill, we continue to feed this habit.
I personally believe there are places in this country where you can drill off the coast. I respect Senator Landrieu very much, and I don't have a problem if there is unanimity that there ought to be drilling off her state's coast. And I support her efforts to have some conservation fund to restore the area. But what are we getting on the other side? We are getting drilling, we are feeding the addiction to oil. It seems to me we are getting nothing because we are not allowed to amend this bill with some forward-thinking amendments. We are getting, for sure, a greater and greater deficit and a greater and greater debt.
How would we better balance this bill? We should promote vehicle technologies that get better gas mileage. We can develop and incentivize the use of alternative fuels. We can encourage energy conservation.
We have seen countries such as Brazil just within a 10-year timeframe become independent of foreign oil--become energy independent. But guess what. Because the Republican leadership won't allow it, we cannot offer any amendments to alter this bill. It is either drilling and giving four States a ton of money to reward them for that, causing the Federal deficit to swell, or it is nothing.
It is sad because this is a great country. It is a country of great ideas. Yet the ideas on both sides of the aisle take a back seat to the same old, same old, drill, drill, drill.
We can't drill our way out of this problem. As tempting as the mirage of a quick fix might be, we must not endanger the California coast with new drilling. And that is what will happen if this bill is merged with the House drilling bill.
If the House would take the Senate bill, then I would breathe a sigh of relief for my State--and the west coast and the east coast can also breathe a sigh of relief. But we don't have any assurances that the Pombo bill, which will open up the door to drilling in the most beautiful areas, will not become part of this bill.
Let me tell you that Californians--again, across party lines--
rejected coastal drilling long ago. Even in the days when our State was a red State, we rejected offshore oil drilling across party lines.
It was because we had a devastating Santa Barbara rig blowout that contaminated our ocean waters and beaches almost 40 years ago. The memories of that are still ever present. The memories of that also became a warning sign that we want to preserve our precious coast.
The people of California decided that the potential benefits of future offshore oil and gas development were not worth the risk of destroying our priceless coastal treasures and our most important tourist industry that draws millions and millions to our coast.
I ask anyone listening to this debate: Is there a time when you visit California that you don't go to the coast? Everyone comes to our coast. What you do there is observe the wonder of an unspoiled coastline. There are certain areas where we do have drilling. But for many years we have kept the moratorium in place. When you go to our coastline, from the very far north of the State, down to the south, what you see is God's beauty. When you come to our State and you stay in our beautiful hotels and our bed and breakfasts and go to our restaurants, often having a view of our ocean, you can't help but come away in awe that this is a gift that has been given to us, and a gift that we must preserve. It brings dollars to our State.
This is one of those times when it is the right thing to do economically to keep that coast beautiful. It is the right thing to do spiritually. And, it is the right thing to do environmentally. The California State legislature understands it. In 1994 they passed a law that permanently prohibits oil and gas exploration in our State's waters. I thank them for that. We learned the lesson that drilling is dangerous. We learned it the hard way.
The Senate bill, if it is merged with the House bill, could be disastrous for the California environment and economy. We know it is disastrous for the Federal Treasury. By the year 2017, four States in our Nation would be entitled to $590 million per year; by 2022, $1.2 billion per year. These States will get part of the Federal Treasury. We cannot afford this kind of imbalanced fiscal policy at a time when the Federal deficit is expected to be $300 billion this year and the national debt is over $8.4 trillion and growing.
I think back to the year that President Clinton left office. The budget projections were that we were going to be debt free. Since my friends on the other side have taken control, deficits are back in full bloom. The debt is back and this bill adds to the debt and the deficit. How could we possibly do that today? Sadly, we are not only doing it with the energy bill, we are doing it in another bill I will talk about in a minute.
How about this? No amendments allowed to this bill. What is the other side afraid of? We might have an amendment that will pass? We might have an amendment that increases fuel economy for our automobiles? We might have an amendment that makes sure we have flex-fuel vehicles? We might have an amendment pass that invests in cellulosic ethanol so we can have more farmers get into this act and produce ethanol from products other than corn? That would not use up as much energy to produce.
Americans are paying $3 per gallon at the pump. By the way, in my State, in San Diego, I saw gas at over $4 for full serve. Talk about sticker shock, picture that one. There is not one thing in this bill about going after the gougers. What are they afraid of on the other side of the aisle? That we will go after the people who are essentially holding us up at the pump every single day?
They say the gas prices are going through the roof because of unrest in the Middle East and Nigeria and companies are simply passing along higher costs. If that were true, it would be one thing. It isn't true. How do we know?
While the American people are suffering, the oil companies are raking in record profits. If this were simply about passing along higher costs, the oil companies' profits would be flat.
I used to be an economics major. It is pretty basic. If you are passing along costs, your profits are flat. But if you are passing along costs plus a huge increase in profit, your profits are up.
Yes, Senator Cantwell, who had a great provision to go after the gougers, was not allowed to offer it as an amendment.
Oil executives prosper. We have seen them, by the way, come before our committee. Senator Cantwell and I tried to swear them in. The Republican chairman would not allow us to swear in the oil company executives. I found that to be a bit disgraceful. So they were not under oath. By the way, they did not tell the truth, either. The fact is, transportation fuel costs for families have doubled since the Bush administration has taken office. Yet we cannot offer an amendment to go after the oil companies because the Republicans, who run the House, who run the Senate, and run the White House, do not want the oil companies to face the music. Pretty simple.
I thought we were a country of, ``by and for the people.'' It turns out we are a country of, ``by and for the oil companies.'' You do not learn that in your textbooks.
We have to do better. Democrats have written a bill called the Clean EDGE Act that would require increases in flex-fuel vehicle production, that would make price gouging a Federal crime, would provide incentives for manufacturing hybrid cars, and would set minimum fuel economy standards for tires.
Why do you need standards for tires? Efficient tires on cars and keeping them inflated to the proper pressure improve mileage and would cut oil consumption by 160 million barrels per year. But we cannot offer an amendment. No, we cannot offer an amendment. They are protecting the oil companies. Why are we surprised? The President is an oil man. The Vice President is an oil man.
My Democratic colleagues and I have worked with Republicans to raise CAFE standards. That is the corporate average fuel economy. That is what CAFE is. The Ten-in-Ten Fuel Economy Act would raise CAFE standards for all vehicles, including SUVs, from 25 miles per gallon to 35 by 2017. This is a bill written by my colleagues, Senator Feinstein and Senator Snowe, but they cannot offer their amendment. Why? Because the Republicans want to protect the oil companies as the price for gas goes up.
By closing the SUV loophole, we could save the equivalent of one Alaska National Wildlife Refuge every 7 years. We do not have to drill our way out of this crisis in the God-given wild places. We just need to be a little smarter. We can do it.
I had amendments I would have offered that would have said the Federal Government has to purchase the most fuel-efficient vehicles available. It is kind of a no-brainer, but I cannot offer it. The President could issue an Executive Order today requiring that. He won't do that because he supports the oil companies, folks. Follow it, all of it; it leads back to that one point.
The average fuel economy of the Federal fleet was an abysmal 21.4 miles per gallon. I have had, for many years, a hybrid car. The new model, if it is driven properly, gets over 50 miles per gallon. Surely, we can do better than 21.4 miles a gallon.
I would have offered an amendment to promote research for cellulosic ethanol, a type of fuel produced by agricultural waste. Promoting this innovative fuel will reduce our dependence on oil and provide our Nation's farmers with new income sources. No, I could not offer it because they are protecting the oil companies. It all comes back to that.
With no amendments, we have a narrow drilling bill that busts the budget. We had an opportunity to work together across the aisle and come up with a comprehensive energy bill. But instead, we are going to protect the oil companies.
So we have more of the same failed policies that, in the end, could, in fact, endanger all of our coasts.
Once again, we call on the Republican leadership to start standing up for an energy policy for this country; not a narrow drilling bill that busts the Federal budget but an energy policy that will save the budget of the American people and help our economy by being on the cutting edge of these technologies.
If a country such as Brazil can do it, aren't we a little embarrassed that we can't? We are so far behind, it is extraordinary. I guess when you run the Senate for the oil companies, that is what you get at the end of the day.
I find it incredible that this Republican Congress that is supposed to care about fiscal responsibility has thrown fiscal responsibility out the window.
You have this bill that will drain the Treasury of over $1 billion a year over time. Then we have this grand compromise in the House headed our way that is going to make changes in the tax laws that impact the top 8,200 wealthiest families in America. It will cut their taxes and, again, rob the Treasury of billions of dollars. Guess what they say. They didn't care too much about that.
Let me tell the truth about what is headed our way, folks. The moderates on the House side went over to the leadership and said--these are the Republicans--we need to vote on the minimum wage because we may lose our seats. We are looking crass and cold because we have never had the ability to vote for the minimum wage because you never let us get it through. So we need to pass a minimum wage increase.
The leadership said: We have not done that in 10 years. We are not about to do it now. But maybe we could figure out a way to twist that around and cut back on that minimum wage increase and let those people at the bottom of the ladder struggle a bit longer while we give tax breaks to the wealthiest 8,200 families. But we will send it over to the Senate, and if they vote no because they decide they do not want to bust the budget, they will look bad because they have been calling for an increase in the minimum wage.
A long time ago when I was a girl, there was a great man who went up against Senator Joe McCarthy. He said to him: Have you no shame? We ought to bring out those words again. I say to my friends, have you no shame? People who work at the minimum wage have not had a raise in almost 10 years. You, Senators, have had a raise almost every year. How about tens of thousands of dollars of raises?
Finally, because you are caught between a rock and a hard place, you decide to pass an increase in the minimum wage, but you do it over 3 years. I never heard any Senator say: I will take my raise over 3 years. Never, and we get thousands of dollars in 1 year. I never had a colleague come over from the other side of the aisle against raising the minimum wage, saying: We will take our raise in 3 years. We will wait 3 years for another increase. No, we get our cost-of-living adjustment, while minimum wage workers are going to wait 3 years.
By the way, for some the House bill will be a pay cut. Some States, such as my State, where employers cannot reduce the state minimum wage paid just because a worker receives tips, will now be allowed to cut that worker's wages.
Have you no shame? Anyone in this Senate live on $10,000 or $11,000 a year? Do you think if you work your fingers to the bone you should be stuck at that level for 10 long years, while people at the top, like us--and, by the way, we are not at the very top, but we are at the top 1 percent or so--we get our cost-of-living adjustments every single year.
I have so much respect for working people. I have tried every year since I have been here to give them a pay raise. I want to give them a pay raise where they can hold their head high and support their families, not tell them they have to wait 3 years to get their full increase after being held to $5.15 an hour for 10 years.
By the way, there are many Republicans who do not believe in any minimum wage. There are some I have heard who have been here 20 years and have voted against it every time. So if they had their way the minimum wage would be $2.25 an hour. I am waiting for the Republicans to come up and tell me they want to take their cost-of-living adjustment over 3 years. Then I am waiting for them to say, if they have a spouse who works: If my spouse gets a little extra money, I will give back some of my raise--as they have done with their tip policy.
I say to those at the very top of the income ladder, the billionaires out there: You are not asking for this. The truth is, many of us here are very willing to say, on the estate tax, that the exemption should be lifted. We have said that. I am on an amendment to do that. Because it is true that the price of houses has gone up, and we do not want to have this estate tax be an onerous burden to anyone--not to a family, not to a farmer--and we can work it out. But what is coming to us in this ``minimum wage train'' is a lot more than an increase in the minimum wage. It is a cruel hoax because it does not give minimum wage workers that raise in a year--after they have waited for 10 years.
And for those workers that receive tips, it may actually decrease their wages if they live in one of six states, including California, that doesn't reduce the minimum wage employers must pay because they get tips. And, of course, it is coupled with this big gift to the richest families of America, which means, at the end of the day, millions--hundreds of millions--and eventually billions of dollars will be drained from the Federal Treasury. And the very people who claim to be fiscally responsible are at it again, adding to the deficit, adding to the debt.
This is really a time for people to stand up and be counted. This is really a time to speak the truth. This is a tough time in the world. All of us are heartsick about what is going on in the world, and we all pray for an end to the fighting, not only in Lebanon and in Israel but in Iraq where things are deteriorating every single day. Hard times. In the middle of these hard times, is this the time to say to the wealthiest 8,200 families: ``We are worried about you''?
And we will have less money for our troops and we will have less money for our kids. This Senate and this Congress has underfunded the No Child Left Behind Act. Oh, everyone said this was the greatest thing since sliced bread. And I voted for it. I really thought George Bush and my Republican friends would fully fund it. I wrote the afterschool section there. We have a million kids on waiting lists. We cannot take them. Funding for that program has been frozen for years now. This President signed the largest increase in student loan costs ever and the biggest cuts in education ever, but they are going to give a big tax break to the richest 8,200 families. I do not get it. I do not think the American people get it. We are going to find out pretty soon.
We have an energy bill that Leader Frist would not let us amend. He is not letting us offer any amendments to slow our oil addiction, to go after the oil companies, to create a bold, new energy policy, get us on the path of energy independence. And then, with Democrats calling for an increase in the minimum wage for 10 years, they give it to us over a 3-year period, when they take their raises to the bank. It is an outrage. Have they no shame? Have they no shame? I do not know. I do not know.
I always say here, sometimes I feel like Alice in Wonderland, and I feel that way today. But my voice will be raised on these issues. And the American people will be the judge if these are the kinds of priorities they want: a drilling bill, no energy independence, no antigouging legislation; a minimum wage increase, long overdue, that takes away money from some minimum wage earners; and two budget-busting bills--this one and the one that has the estate tax cut--that are going to add billions and billions to our debt. By the way, in closing, we should know who carries that debt: foreign countries, folks. They pick up the bonds. If they decide to take their money and go home, we are left in a mess.
So I hope the American people are listening in on these debates. I look forward to discussing these matters as they come up before the Senate.
I thank my colleague very much for his patience.
Mrs. FEINSTEIN. Mr. President, I rise today to oppose S. 3711, which will allow drilling in the gulf and create a new revenue-sharing scheme to provide additional resources for the Gulf States.
Let me first say that I am not opposed to drilling in the gulf. In fact, in 2001, I voted to open a portion of the gulf, known as lease sale 181, to drilling. That vote was a codification of the agreement between former President Clinton and the former Governor of Florida, Lawton Chiles. Yet the agreement was repudiated after President Bush came into office and reduced the amount of acreage that could be drilled in the Gulf of Mexico at the request of Florida's Governor Jeb Bush.
In fact, I rise today in opposition to this bill not because it opens up areas of the Gulf to drilling, but because it protects the west coast of Florida from drilling until 2022--10 years beyond the current Presidential moratorium, while providing no additional protections for California's coast.
California should be accorded the same protection as Florida gets in this bill.
An oilspill would scar our coastline, costing billions of dollars and destroying vulnerable marine ecosystems.
In addition, a healthy coast is vital to California's economy and our quality of life. Our State's Ocean-dependent industries are estimated to generate $17 billion of revenue each year.
That is why Californians continue to be nearly united in their opposition to drilling off the coast. Today, 64 percent of Californians oppose drilling, and the number of Californians opposing drilling off our coast has only grown.
The opposition to drilling off of California's coast dates back more than 30 years. In 1972, California voters passed a citizen-initiated proposition which created the California Coastal Zone Conservation Commission, charged with developing a statewide plan for protecting the State's coastal resources. In the years that have followed, 17 cities and 9 counties have passed voter-approved ordinances opposing oil drilling.
In 1994, the California Legislature passed a bill that prohibited the extraction of oil and gas in State waters. Every year since the passage of this law, the State legislature has passed joint resolutions opposing oil drilling off the California coast.
The Governor, the California Resources Secretary, the Secretary of California Environmental Protection Agency, and the Lieutenant Governor, have all been on record supporting the moratorium on offshore oil and gas leasing activities off the coast of California.
Resources Secretary Mike Chrisman, who is also the chairman of the California Ocean Protection Council, has in fact stated:
Any pending federal legislation regarding Outer Continental Shelf (OCS) oil and gas leasing must retain all protections from the Congressional leasing moratorium and should seek to make these protections permanent.
Governor Schwarzenegger has sent a letter to every Senator expressing his ``opposition to any measure that would weaken the national oil and gas leasing moratorium that has been protecting the California coast for the last 25 years.''
I will ask that the Governor's letter be printed in the Record.
This bill cannot be viewed in a vacuum. Last month, the House of Representatives passed a bill that would lift the current moratoria that exists for the Pacific and Atlantic coasts.
Congressman Pombo, a key sponsor of the House bill, has said that the House will not accept the Senate bill. Congressman Barton, chairman of the House Energy and Commerce Committee, said on Wednesday, July 26, that ``we would certainly encourage--the Senate--to go broader'' than allowing drilling in the gulf.
Without a concrete commitment from the House leaders that they will take up the Senate bill and pass it without amendment, I cannot support this bill.
I would also like to express my disappointment that we have been denied an opportunity to offer amendments to this bill.
First, I believe we need a vote on an amendment I have cosponsored, authored by Senator Menendez, which would extend the moratoria for the Pacific and Atlantic coasts through 2022. For California, this would extend the Federal moratorium by 10 years as it is set to expire in 2012.
This amendment would provide the same protections to California as the underlying bill does for Florida. In so doing, the amendment would reliably protect the California coast by enacting a long-term legislative moratorium.
But we will not be allowed to consider this, or any other amendments that would promote energy efficiency and new energy technologies.
With oil prices at $75 per barrel, and natural gas almost $7 per million Btus, we need real fixes to our energy problems.
Unfortunately, the underlying bill is not going to fix this nation's energy problems.
I have also filed an amendment, with the bipartisan support of Senators Snowe, Durbin, Chafee, Inouye, Collins, Cantwell, Lautenberg, Boxer, Menendez, Lieberman, and Reed to increase fuel economy standards by 10 miles per gallon in 10 years.
Not only is this technologically feasible to do today, the proposal would also save more oil in just over 1 year than the underlying bill will generate.
Specifically, this amendment would save 2.5 million barrels of oil per day by 2025, the same amount of oil we currently import from the Persian Gulf every day.
That translates into 912.5 million barrels of oil per year, or just less than the 1.25 billion barrels that the underlying bill would generate.
Increasing fuel economy standards would also prevent 420 million metric tons of carbon dioxide from entering the atmosphere, or the equivalent of taking 90 million cars--or 75 million cars and light trucks--off the road in 1 year.
Perhaps most importantly, though, the bill would save consumers as much as $2,500 over the life of a vehicle.
So if we are serious about bringing down the cost of gasoline at the pump, this amendment would be considered and adopted by the Senate.
And if we want to have a real impact on natural gas prices, we would be promoting energy efficiency.
California has proven that energy efficiency works--through the most aggressive energy efficiency policies in the Nation, the State has kept its per capita energy use flat while the rest of the Nation's energy use has increased by 50 percent.
That is why Senator Snowe and I wanted to offer an amendment on tax incentives for consumers to install the most energy efficient technologies in both residential and commercial buildings.
While proponents of the underlying bill say that lease sale 181 and 181 south will provide 5.83 trillion cubic feet of natural gas, our amendment would save 7 trillion cubic feet of natural gas. In other words, we can save more natural gas through the Snowe-Feinstein energy efficiency tax incentive package than from lease sale 181 and 181 south combined.
I also have significant fiscal concerns with the underlying bill.
While I commend Senator Landrieu for shepherding a proposal through the Senate that will generously benefit her State, I have concerns about the cost of the proposal.
According to estimates, the bill will cost the Treasury approximately
$20 billion from fiscal year 2007 through fiscal year 2055.
This bill creates a new permanent Federal entitlement for just four States that could cost the Federal Treasury $12-15 billion per year in 2056 and every year thereafter.
At a time this Nation is facing a mounting national debt of $8.4 trillion and a crushing Federal deficit of $300 billion, we should not be creating a new entitlement program for four States that could cost us hundreds of billions of dollars over the next century.
We are already struggling to meet our long-term commitments and face a looming entitlement crisis as baby boomers retire, straining the already overextended Social Security and Medicare systems.
For all these reasons, I am going to vote no on cloture and no on the bill.
Before I close, though, Mr. President, I would like to say that Senator Landrieu has been a tireless advocate for her constituents. I had hoped to support her in her efforts to restore coastal Louisiana.
Unfortunately, though, given the potential for a bill to come back that would threaten California's coast, I must vote against this bill.
I ask unanimous consent that the Governors letter to which I referred be printed in the Record.
There being no objection, the material was ordered to be printed in the Record, as follows:
Governor Arnold Schwarzenegger,
July 12, 2006.Hon. Dianne Feinstein,Senate Office Building,Washington, DC.
Dear Senator Feinstein: I am writing each member of the United States Senate to express my extreme disappointment about the recent action taken by the House of Representatives to approve the Deep Ocean Energy Resources Act (DOER).
I have repeatedly expressed my opposition to any measure that would weaken the national oil and gas leasing moratorium that has been protecting the California coast for the last 25 years. When I ran for Governor, I promised the people of California that I would do everything in my power to oppose efforts to weaken federal protections against offshore oil drilling. The DOER would be the beginning of the end of these protections that we have enjoyed for the last 25 years. In fulfilling my promise to all Californians I continue to oppose this bill in the strongest terms.
I have been asked to consider new amendments to the bill, but I can tell you that certain things are not negotiable. Our coast is not for sale and no amount of promises of money or other ``incentives'' will alter my position on that. California has the most aggressive energy-efficiency measures in the nation. Because of our efforts, California's per capita energy use has remained nearly flat, while nationwide energy use has increased by nearly 50 percent.
Let us change this debate and start talking about a comprehensive energy policy that incorporates the full range of energy efficiency measures and alternative energy sources that can keep this nation running strong now and for generations to come.
I urge you to oppose the Deep Ocean Energy Resources Act and to also oppose any amendments intended to make this bill appear acceptable to the American people. Absent an amendment that would uphold the current moratorium in perpetuity this bill is an unacceptable approach and no amount of tinkering will fix it.
Sincerely,
Arnold Schwarzenegger.
land and water conservation fund
Mr. ALEXANDER. Mr. President, I commend the chairman of the Committee on Energy and Natural Resources for his leadership in moving this bill to the floor. Is it his understanding that the conservation and outdoor recreation royalty established by his legislation has tremendous value for the stateside program of the Land and Water Conservation Fund over the long term?
Mr. DOMENICI. Yes, the Senator from Tennessee is correct. Those who want to make sure our citizens have access to the great American outdoors have long advocated the principle that some of the funds from offshore oil and gas drilling should become a royalty for conservation and outdoor recreation, providing a reliable and permanent stream of funding for the Land and Water Conservation Fund. This basic concept was proposed in 1962 by the Outdoor Recreation Resources Review Commission--also known as the Rockefeller Commission--and it was also a primary recommendation of President Reagan's Commission on Americans Outdoors in 1986. This legislation is an important first step in the right direction, one that has been 40 years in the making.
Mr. SALAZAR. I join the Senator from Tennessee in expressing my appreciation for Chairman Domenici's leadership, and I wish to thank both of my colleagues for working with me on providing this permanent funding stream for the LWCF stateside grant program. This program supports the state and local parks and recreation projects that improve the quality of all Americans' lives, and enables American families to enjoy our precious natural resource of open spaces.
Mr. ALEXANDER. Would the Senator from New Mexico clarify whether this conservation and outdoor recreation royalty would prevent additional appropriations for the Land and Water Conservation Fund stateside program?
Mr. DOMENICI. No, it would not. The LWCF stateside program will continue to be eligible to receive funding in the appropriations process just as it is currently. The mandatory funding stream established under this bill would not replace appropriated funding, and does nothing to disadvantage the program in the appropriations process.
Mr. SALAZAR. The Senator from New Mexico makes a critical point. The projected revenues for the LWCF stateside program under this bill are important, but they are not sufficient to keep that program, which has contributed to the improvement of 98 percent of the counties in the United States since 1964, strong and vital. And I know that all of us aim to bolster the LWCF stateside grant program, and to achieve the level of support envisioned by Congress's authorization. So we must supplement the revenues directed to LWCF under this bill with meaningful annual appropriations. I have spoken to the majority leader about this issue as well, and he has assured me that he shares my concerns. I look forward to working with him and with all of my colleagues on this issue in the years ahead.
Mr. ALEXANDER. Would the Senator from New Mexico support an appropriation of $100 million in fiscal year 2007 for stateside LWCF?
Mr. DOMENICI. I was pleased that the Senate Committee on Appropriations included $30 million for the stateside program in the fiscal year 2007 Interior and Related Agencies appropriations bill. This was a significant improvement over the President's budget request and the House Interior bill, both of which zeroed out stateside for the second straight year. Still, there is room for improvement. I would share the Senator's interest in adding to the stateside funding in the Senate committee mark if appropriate offsets can be found. In fiscal year 2007, zero revenues will be allocated to stateside LWCF from this conservation royalty because it will take time for the new areas to be brought on line and begin producing. So we will need to appropriate funding in fiscal year 2007 to fill that gap.
Mr. SALAZAR. That would certainly be in the interest of all Americans. Of course, we commit to working together to support LWCF with supplementary appropriations beyond the next fiscal year as well. Only constant vigilance and steady support will ensure that the provision providing a permanent stream of funding for LWCF in the bill before us acts as it was intended--as a strong and growing core, but not the totality, of support for this vital program.
Mr. ALEXANDER. I thank the Senator from New Mexico, and look forward to working with him to ensure adequate funding for the Land and Water Conservation Fund.
Ms. COLLINS. I would also like to thank Chairman Domenici, as well as Senators Alexander and Salazar, for confirming that the LWCF funds provided by this legislation are intended as additional funds to supplement the program, not a replacement for full funding through the normal appropriations process. I would also note that over 50 senators signed the Collins-Salazar-Alexander letter in support of $100 million in funding for LWCF-stateside in fiscal year 2007. As evidenced by this support, this program is absolutely vital to communities throughout the Nation. Almost every county in the Nation has taken advantage of this program to conserve open spaces or build playgrounds, ballparks, and trails. I sincerely hope the Senate will restore this historic level of funding through the appropriations process, in addition to those funds that will be made available under this bill.
Mr. ALEXANDER. I thank the Senator from Maine.
Securing Our Energy Future
Mr. COLEMAN. Mr. President, I rise today to speak about America's energy crisis, and I am glad to see that my friend, Majority Leader Frist, is on the floor to discuss this issue with me.
High natural gas prices continue to be a terrible burden for Minnesota's families and businesses. High natural gas prices had a severe impact on Minnesotans last winter--I am sure many of my colleagues remember the push that I, along with Senators Snowe and Collins, made early this year for emergency LIHEAP assistance--
assistance the majority leader helped us deliver. Moreover, I don't need to remind my farm State colleagues of the severe impact high natural gas prices have had on their input costs, straining even the most efficient farms.
Whether high natural gas prices or $3 gas at the pump, high energy costs take a toll on all Americans, which is why I will vote in favor of the Gulf of Mexico energy bill that will provide 1.26 billion barrels of oil and 5.8 trillion cubic feet of natural gas. Yet I believe this bill is only a piece of the larger energy mission America must accept.
Clearly, Americans feel the strain of high energy costs at home, in the car, and at work, but all must realize our foreign oil dependence threatens our very economy and national security.
I would like to ask the majority leader about the importance of fuel independence to our national and economic security and the need to build upon the Gulf of Mexico energy bill by considering, on this floor, additional energy proposals that will help to secure our energy future.
Mr. FRIST. I thank my friend, the Senator from Minnesota, for his question because I truly believe energy security is one of the great challenges this Congress must continue to address.
As we all know, America is dangerously dependent on foreign sources of energy--much of it coming from countries with unstable governments or with interests contrary to those of the United States. And this disparity will only increase if we do not take action to increase the amount of American energy that we use here in America. The bill before us today, the Gulf of Mexico Energy Security Act, will do just that. As my friend from Minnesota mentioned, it will reduce our dependence on foreign oil and natural gas by opening more than 8 million acres in the Gulf of Mexico to domestic exploration. The area opened up under this bill is estimated to contain 1.26 billion barrels of oil and 5.8 trillion cubic feet of natural gas.
However, as I said on the floor last week, while this bill is a critical step toward addressing the energy challenges we face, it is only a first step. There is more that we can--and must--do to break what the President called our ``addiction'' to oil. We must diversify our energy resources, increase the use of renewables and alternative sources such as ethanol and biodiesel, clean coal technology, and nuclear power, and we must take steps to reduce consumption by consumers. Finally, we must do more to encourage the development of the innovative new technologies that will wean us off of foreign oil in the future.
Mr. COLEMAN. Mr. Leader, I appreciate those comments. Some people dismiss such an ambitious goal as reducing our growing dependence on foreign oil, but I recall a time when the Moon was also once out of reach. We all know the power of America's innovative, relentless spirit when called to an objective, no matter how formative.
I am particularly pleased the majority leader supports an aggressive, multifaceted energy strategy that includes renewable fuels and energy conservation. As a member of the Foreign Relations Committee, I know we cannot afford to rely on oil imports that are subject to the whims of Hugo Chavez in Venezuela or the political stability of Nigeria. The fact is that countries rated by Freedom House as ``not free'' produce more than two-thirds of the world's oil and have nearly 80 percent of the proven reserves.
I believe the imperative is clear: America must free itself from its oil dependence, and I believe the solution is also clear: renewable energy and energy conservation. The Vehicle Fuel Choices for American Security Act that I have coauthored and now has 27 cosponsors lays out an ambitious plan for saving 2.5 million barrels of oil per day in 10 years, roughly the amount of oil we currently import from the Middle East, through renewables and energy conservation. Further, the bill will promote E85 fueling infrastructure and speed the development of cellulosic ethanol, while investing in the development of efficient vehicle technologies and assisting auto manufacturers' transition to fuel-efficient vehicle production.
Last week, chairman of the Energy and Natural Resources committee, and my good friend, Pete Domenici expressed on the floor his affinity for the ideas in this bill, and a portion of the bill has already received a hearing in the Energy Committee. Mr. Leader, will you work with me to develop an energy package that boosts our renewable fuel production and energy conservation?
Mr. FRIST. I will tell my good friend from Minnesota that I do not consider the Gulf of Mexico energy bill to be the last word on energy policy this year. I am well aware of your proposals promoting renewables and energy conservation, and I look forward to working with the Senator and Chairman Domenici on many of these important ideas in the months ahead.
Mr. COLEMAN. Mr. President, I thank the Senator for his support and leadership on energy issues. I believe America faces a great threat in foreign oil dependence, but more importantly, I believe in Americans' ability to accomplish the impossible. I know if Congress will put forth a vision and provide the tools to accomplish that vision, Americans can break our addition to foreign oil.
I yield the floor, and I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The bill clerk proceeded to call the roll.
Mr. SPECTER. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. SPECTER. Mr. President, I think there is no doubt, given the energy situation in the world and in the United States, that there is a need for the United States to work toward energy independence and to have additional exploration, development, and production activities where they can be done in an environmentally safe way.
I believe that, all factors considered, S. 3711 is, on balance, at a close question, worthy of enactment. But I think it would have been vastly preferable had the leader not filled the tree so as to prevent further amendments so that the Senate could have undertaken a broader examination of energy issues, done more than just authorize further exploration but instead taken positive steps on other important lines.
For example, I filed an amendment numbered 4741, which would have made very significant changes in the antitrust laws in the United States, which would have had a significant impact on reducing our dependence on OPEC oil and would have promoted competition in the oil industry by taking a firm stand against anticompetitive mergers.
The oil and gas industry has seen over 2,600 mergers since the 1990s, including transactions involving the largest oil companies in the nation, like Conoco's merger with Phillips, Chevron's merger with and Texaco, Exxon's merger with Mobil, Ultramar Diamond Shamrock's merger with Valero, and many others which will be specified in a statement I will append at the conclusion of these extemporaneous remarks.
My amendment would have required the Government Accountability Office to study whether remedies ordered by the antitrust enforcement agencies to ensure that mergers do not substantially lessen competition have been adequate. Once the study was completed, the antitrust enforcement agencies would then be required to consider whether any additional remedies are necessary.
The amendment would have required the Federal Trade Commission and the Justice Department to consider whether current merger laws are adequate, given the particular problems that exist in the oil and gas markets. The thrust is to determine whether we need to change the Clayton Act to make it tougher to get massive mergers in these markets approved.
I know there are those who contend that the mergers provide efficiencies. But I think it is virtually incontrovertible that these mergers lessen competition. When you have Exxon and Mobil and the other oil companies merging, there simply is less competition. This amendment stops short of amending the Clayton Act, but does require a study to see if the Clayton Act ought to be changed.
This provision was included in S. 2557, the Oil and Gas Industry Antitrust Act of 2006, which was taken up by the Judiciary Committee, which I chair. We had two hearings and a markup and the Committee reported it to the floor. So, this was an ideal occasion to consider this legislation--as part of the debate over an overall energy policy aimed at lessening dependence upon foreign oil.
A second part of S. 2557 provided that OPEC would be subject to our antitrust laws. It is obvious that OPEC is a cartel that fixes output and prices for oil, an arrangement that would violate our antitrust laws. However, they are currently exempt. By statute, we could bring them under our antitrust laws. It would have made a lot of sense to do that, especially at a time when we are considering the legislation now pending, S. 3711.
In addition, I believe it would have been very beneficial to our national energy policy to have considered an amendment offered by Senator Bingaman, No. 4692, which provides for oil conservation. Senator Bingaman and I have cosponsored legislation in the past which would have lessened the amount of oil projected to be consumed in the United States under an oil conservation system. When we are considering S. 3711 and we are considering the basic issues as to how to achieve energy independence for the United States, and provide security for the United States, there are other avenues that this legislation should have explored. However, we were prevented from doing so by the procedures adopted by the Republican leadership, which precluded additional amendments. I think that is contrary to the public interest, and I expressed that view to the leadership.
I thought we ought to have an opportunity to consider additional ways of achieving energy independence. Once the so-called tree is filled, you cannot offer any further amendments, so that I could not offer amendment No. 4741, which is the legislation reported out of the Judiciary Committee under the caption S. 2557, the Oil and Gas Industry Antitrust Act of 2006, nor could we take up the amendment offered by Senator Bingaman on oil conservation. I think that is most unfortunate. Once the tree is filled and these amendments cannot be offered, there is no alternative but to move for cloture, move to complete action on the bill so that we can take up other important matters to come before the Senate which are awaiting action on the docket.
I ask unanimous consent that the full text of my remarks be printed in the Record
There being no objection, the statement was ordered to be printed in the Record, as follows:
Floor Statment Offering S. 2557, the Oil and Gas Industry Antitrust Act of 2006 as an Amendment to S. 3711, the Gulf of Mexico Energy Security
Act of 2006
Mr. President, I seek recognition to speak on my amendment that I have filed to S. 3711, The Gulf of Mexico Energy Security Act of 2006. My amendment was reported by the Judiciary Committee earlier this year as a stand-alone bill, S. 2557, The Oil and Gas Industry Antitrust Act of 2006. My amendment fits in well with the goals of S. 3711 because it is aimed at ensuring that the oil and gas industry is responding to the forces of supply and demand, not market manipulation.
Over the years, the oil and gas industry in the United States has become significantly more concentrated. Over 2,600 mergers have occurred in the industry since the 1990s, including transactions involving the largest oil and gas companies in the nation.
As recently as March, the Department of Justice approved Conoco-Phillips' acquisition of Burlington Resources, a merger that created the Nation's largest natural gas company and the third largest oil company.
The Federal Trade Commission also recently approved Occidental's acquisition of Vintage Petroleum, a transaction that would create the fifth largest U.S. oil company.
Last summer, the FTC approved Chevron's acquisition of Unocoal and Valero's acquisition of Premcor. The latter transaction created the Nation's largest refiner.
In 2002, Valero acquired Ultramar Diamond Shamrock and Phillips merged with Conoco.
In 2001, Chevron bought Texaco and Ultramar Diamond Shamrock acquired Total.
The year 2000 saw the merger of British petroleum and ARCO.
The largest transaction occurred in 1999 when Exxon merged with Mobil.
Other transactions have included British petroleum's acquisition of Amoco, Marathon's joint venture with Ashland Petroleum and another joint venture that combined the refining assets of Shell and Texaco.
As an industry becomes more concentrated, the remaining competitors are able to exercise market power and prices inevitably rise. Market power is a particular problem in the petroleum industry because consumers are generally unable to respond to rising prices. While some conservation is possible, consumers still must get to work and, as prices rise, homeowners generally do not stop heating their homes. As a result, even moderate increases in concentration can provide oil and gas companies with substantial market power.
The Judiciary Committee held two hearings on the issue of concentration in the oil and gas industry earlier this year. The Committee heard considerable testimony indicating that concentration and market power could impact prices. At one of the hearings, Joseph Alioto, an attorney who is currently challenging the Shell/Texaco transaction that I just mentioned, testified that after the transaction, Shell and Texaco increased the price of Texaco gasoline, which had traditionally been lower than the price for Shell gasoline. Later, the companies raised prices for both brands of gasoline--by 50 to 70 percent in some areas. In another example, an FTC investigation uncovered internal communications indicating that one major oil company had exported Alaskan oil to East Asia in an effort to reduce supply and raise prices on the West Coast. That company clearly knew that it had the ability to exercise market power in West Coast markets.
My amendment would require the Government Accountability Office to study whether remedies ordered by the antitrust enforcement agencies to ensure that mergers do not substantially lessen competition have been adequate. Once the study is complete, the antitrust enforcement agencies must consider whether any additional remedies are necessary. My amendment also requires the FTC and Justice Department to consider whether current merger laws are adequate given the particular problems that exist in oil and gas markets.
During its hearings, the Judiciary Committee also heard testimony from the oil companies. They argued that the market for crude oil is a ``world market'' and they could not possibly affect the price. This contention may be true. Pretty much everyone knows that the ``big boys'' in the world oil market are the members of OPEC. They openly exercise their market power in the world market for oil. OPEC is a cartel engaged in limiting the supply, and in doing that, fixing the price of oil. Cartels violate U.S. antitrust laws. They violate Section 1 of the Sherman Act, which prohibits agreements in restraint of trade.
Since OPEC members sell their product to the United States, they would normally be subject to U.S. antitrust laws. However, certain judge-made laws prevent the Justice Department from prosecuting OPEC members for fixing the price of oil. My amendment would eliminate those laws and allow the Justice Department to pursue price fixing by OPEC members. As I said at the outset, my amendment ensures that petroleum markets are responding to the laws of the supply and demand, not the manipulation of a few countries, or a few companies, or a few corporate executives.
While the U.S. companies may not control the world market for crude oil, the market for refined products is different. At the level of production where crude oil is turned into gasoline and heating oil and other refined products, the major U.S. oil companies do exercise market power. At the Judiciary Committee's hearing, Severin Borenstein, who is a Professor of Business and Public Policy at Berkeley and holds a Ph.D. in economics from M.I.T., testified that ``market power in the refining industry is becoming a serious problem.''
Significant anecdotal evidence exists that the major oil companies exercise market power in refined product markets. For example, during an investigation involving gasoline price spikes in the Midwest, the FTC concluded that at least one firm had excess supplies--and capacity to produce even more--but had limited the amount that it sold in order to keep prices high. My amendment would address some of this conduct by clarifying that it is unlawful for oil and gas companies to divert, export or refuse to sell existing supplies with the intention of raising prices or creating a shortage.
Increased concentration not only conveys market power, it makes conspiracy easier. At the hearings conducted by the Judiciary Committee, David Boies, the antitrust litigator that prosecuted Microsoft for the Justice Department, testified about evidence that British Petroleum and Exxon have conspired to limit the supply of Alaskan natural gas that is sold. Boies testified that Exxon and British Petroleum had ``decided between themselves that they would prefer to withhold this gas and maintain artificially high natural gas prices throughout the U.S.''
Current antitrust laws prohibit such conduct, but collusion is not always so straightforward. Simply put, if there are few enough competitors in a market, each competitor knows that if it lowers its prices, other competitors will notice and lower theirs. As a result, a competitor does not have the normal incentive to sell more by lowering its prices. Such conduct frequently results when competitors can easily share information with each other. In other words, actual conspiracy may not be needed. As Tom Greene, the Senior Assistant Attorney General for California testified, ``[T]he more concentrated the industry, the less explicit the communications that are required to organize prices and limit production.''
U.S. oil companies appear to have several mechanisms by which they are able to share market information. The Judiciary Committee came to no conclusions as to whether the sharing of information among U.S. oil companies is truly a problem, so my amendment directs the Federal Trade Commission to study the Issue.
As I have said, my amendment will help ensure that the oil and gas industry is responding to the forces of supply and demand, not market manipulation. I understand that we are not able to vote on amendments to S. 3711, but I urge my colleagues to suppose the Oil and Gas Industry Antitrust Act of 2006 at such time as it receives a vote.
Mr. SPECTER. Mr. President, in the absence of any other Senator seeking recognition, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. SPECTER. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. SPECTER. Mr. President, I ask unanimous consent that at 5 p.m. on Tuesday, August 1, the two pending amendments be withdrawn, S. 3711 then be read the third time, and the Senate proceed to a vote on passage of the bill, with no intervening action or debate; provided further that no motions to proceed be in order during Tuesday's session of the Senate.
The PRESIDING OFFICER. Without objection, it is so ordered.
____________________
