Higher Energy Taxes, ANWR One SolutionMr. President, I rise today to discuss current sky-high energy prices.
I was in Alaska over the weekend. Everywhere I went the price of gasoline was the main topic. Here in the Lower 48 with crude oil prices nearing the $120 per barrel mark yesterday, and gasoline having hit a nationwide average high of $3.60 for a gallon of regular – up 4 cents over the weekend – prices are high.
But in my home State of Alaska prices aren’t high, they are in the stratosphere.
In Bethel the price over the weekend was $4.98 a gallon. In Skagway, Homer, and Valdez, the site of the Trans-Alaska Oil Pipeline Terminal, all of these towns on the state’s road system, find regular selling for more than $4 a gallon. These prices aren’t high, they are unbearable.
I could talk about why prices are so high. But Americans are tired of hearing about world demand, that with the world using 85 million barrels a day there is very little surplus oil production capacity left. They are tired of hearing of the weakness of the dollar that is driving investors into buying oil as a safe haven against inflation.
They don’t care that Congress in 2005 and again in 2007 passed legislation to promote energy conservation, requiring an increase in vehicle fuel efficiency – that will begin to improve their mileage in seven years.
They don’t care that we funded research and the demonstration of alternative energy technologies from geothermal to ocean energy. They don’t care that we approved general loan guarantees to make nuclear, wind, solar and biomass advance and that we funded efforts to make more biofuels to help crude oil go farther.
All they care about is what we are doing to drive down prices. While we can halt filling up the Strategic Petroleum Reserve that will only add 70,000 barrels a day to the nearly 21 million that we are using. We could reduce the federal gas tax, currently at 18.4 cents, and dedicate the nearly $5 billion we gained in OCS lease sales this winter from sales in the Chukchi Sea in Alaska and from the Gulf of Mexico to offset the losses to the Highway Trust Fund. But that would only offset the revenue losses to transportation projects for a few weeks.
What we need to do is produce more of our domestic oil and gas supplies to help increase global oil supplies and thus drive down prices.
The U.S. has to stop its current energy policy that I call the ostrich policy. In some parts of the world, you may be able to find oil in the sand, but using your head to search for it is certainly not the most effective approach. In the meantime, our wallets are being drained at the pump and domestic energy production remains stagnant.
Some say we don’t have enough oil to make a difference. But the federal government through regulation and moratoria is preventing exploration in many of the places where oil and gas are most likely to be found in this country. If you take the areas covered by OCS moratoria: the Atlantic coast, parts of the Gulf of Mexico closest to Florida, and the Pacific coast, throw in the Arctic coastal plain and parts of the National Petroleum Reserve in Alaska, you have nearly 40 billion of the nation’s 112 billion barrels of remaining undiscovered oil off the table.
That is enough to power over 20 million cars for 60 years AND heat nearly 10 million homes for the same period.
Last year I came to this floor and urged my colleagues to consider allowing greater oil development in my home state of Alaska. Earlier this year I came and urged that we simply allow winter-only exploration in northern Alaska to confirm that the oil we think is there, truly is there.
Last year when I spoke the price of oil was at the $60 mark. I warned that if we continued to do nothing the price would rise. I am not here to say I told you so. I am here to say that it is time for this nation to snap out of its lethargy and actually explore for and produce more of our nation’s fuel needs.
Over a month ago I and Senator Stevens introduced new legislation to open a tiny part of the coastal plain of the Arctic National Wildlife Refuge to oil and gas development. Opening just a few thousand acres of Alaska’s Arctic coast to oil and gas production could produce up to16 billion barrels of economic oil by current government estimates.
To some that doesn’t seem like much. But without opening ANWR we will have to import between 780,000 and 1 million barrels of additional oil each day from overseas. That will only help to continue driving up the world price of oil.
Without ANWR, American domestic oil supplies fall sharply. The EIA predicts that Alaska will be producing just 270,000 barrels a day next decade from our existing aging oil fields, compared to the nearly 800,000 barrels a day my state is producing today.
The bill we introduced, the American Energy Independence and Security Act of 2008, will automatically open the coastal plain of the Arctic National Wildlife Refuge in northern Alaska, if the world price of oil tops $125 a barrel for five days. In return it allocates all the federal revenues that would come from that oil to both alternative energy development and to programs to help improve energy efficiencies and to those in need.
The revenue includes the estimated federal lease, bonus and royalty revenues within the first five years, plus all the federal oil production tax revenues over the life of the field.
This is an estimated $297 billion to fund wind, solar, biomass, geothermal, ocean, landfill gas, everything covered by the two energy bills that we passed in 2005 and 2007, plus programs like LIHEAP – the Low Income Home Energy Assistance Program – that provides aid to help low income residents pay for home heating and cooling, the weatherization program, that helps people improve their insulation to cut energy costs, and the Women’s Infant’s and Children’s nutrition program, that provides a safety net for nutrition costs.
The bill mandates that exploration occurs only in winter when no animals are on the coastal plain to be disturbed. It requires the use of ice roads that disappear in summer to protect wildlife.
It allows special areas to be designated to protect key habitat to keep any activity out. And it contains dozens of other stipulations to guard against noise, flight disturbances, spills or land-use problems.
The bill also sets up a special fund to help protect Alaska and Canadian Natives should they face any disruptions because of the limited development that would be allowed.
Opening ANWR does so many things. It makes us less dependent on foreign oil. It cuts our balance of payments deficit. It improves our economy, keeping our jobs at home, not exporting them to foreign oil producers like Venezuela.
More importantly, it signals that we are finally serious about helping ourselves -- that we will produce oil from ANWR -- will help to drive down the psychology and speculation that is currently acting to drive up world oil prices. Admittedly, opening ANWR tomorrow will not produce more oil tomorrow, but it will dampen the speculation that is helping to fuel higher prices.
It is absolutely the right thing to do today, and is vital to keep Americans from going bankrupt to fill their vehicles.
If ANWR’s opening was going to come at the expense of Alaska’s environment, I too would oppose it, but given the new technology that has been developed for oil and gas development in the Arctic, we can produce more energy from my state without harming wildlife or the environment.
It would behoove all of us to actually start thinking about solutions, not only increasing alternative energy and improving energy efficiency and conservation – that we need to get on with NOW but also by increasing domestic energy supplies.
ANWR is one way to show that we are serious about doing that. I hope we will seriously look at the current merits of opening ANWR.
Thank you and I yield the floor.