America's Need for a National Energy Policy

Mr. INHOFE. Mr. President, when the Senator from Montana referred to me as a "producer", he was referring to the State of Oklahoma which is a production State. I don't think inadvertently he also referred to me as a producer. And I was.

I started out at the age of 17 in the oil fields. At that time, I was a tool dresser. Not many people know what a cable tool rig is. I was a tool dresser on a cable tool rig. There is no harder work in the world than being a tool dresser on a cable tool rig. That was before rotaries. Mostly, they were marginal wells--shallow wells.

When you picked up a cable tool--it weighed several hundred pounds--if you did not open up your hands in time, it went right down in there. I have a lot of friends who can't play the guitar anymore.

Frankly, I almost ended up in this business. It is a very admirable business. When we talk about economic development and economic stimulus, I think often about the oil fields in Oklahoma. I was a very young child at that time. We are talking about 50 years ago. I remember going to get lunch. You had to stand in line and wait to pay your ticket. That was back in the days when we really had economic stimulus. It came from this energy . That is something we don't talk about very much, but it is a very real thing, and it is particularly real when you personally experience it.

But I have to say that my major concern right now with our energy crisis with which we are faced--and it is a crisis--is how it affects our ability to defend America. I spent about 4 years chairing the Armed Services Subcommittee on Readiness. I am now ranking member. I see what our readiness problems are and what our military problems are as they relate to our dependency on foreign countries for our ability to fight a war. Several Members mentioned--including the Senator from Montana--that our dependency is directly related to our ability to be independent and to be strong. If we are dependent on Iraq for our ability to fight a war against Iraq, that is a crisis. That is a situation we are in right now. We are dependent upon foreign countries for our ability to fight a war.

But here are the facts. I think it is important that we talk about this from a military perspective.

First of all, the military is as dependent on foreign oil as the general public is. It takes eight times as much oil to meet the needs for each U.S. soldier as it did during World War II. In addition to that, the Department of Defense accounts for 80 percent of all Government energy use.

For all practical purposes, we are talking about the defense ramifications of this use. It is not like it was in World War II. Now it takes eight times as much oil. It is a very serious problem.

Iraq is the fastest growing contributor to our dependency. People do not understand that. They say: Wait a minute. Aren't we at war with Iraq? I guess by some definition you would have to say we are. They are shooting down our UAVs that are flying over some of the zones trying to protect us, as is required by U.N. resolution. Yet Iraq is the fastest growing source for United States oil imports. Shockingly, in the year 2000, $5 billion of American money went to Iraq to buy oil.

There is a lot of talk about sanctions. I am a believer in sanctions, if sanctions are going to really accomplish something. But how can we have sanctions against a country when we are paying them $5 billion in America money to buy the oil, particularly when that is used to defend America?

America's energy consumption is on the rise, but we are producing less domestic oil than at any time since World War II. Our dependency on foreign oil has dramatically increased since 1973, and it is projected to continue to increase--currently, about 60 percent. You hear 57 percent. You can justify some 60 percent, depending on how you calculate it. Sixty percent of U.S. oil needs are met by foreign sources.

In the mid-1980s, I traveled around the country with Don Hodel. Don Hodel was Secretary of the Interior. He was also Secretary of Energy . This was back during the Reagan administration. At that time, we were about 38 percent dependent on foreign countries for our oil. Don Hodel and I went to States that are consumption States and not production States, and explained to them that our dependency on foreign countries for our ability to fight a war was a national security issue--not an energy issue. In fact, we had a little dog-and-pony show. We would go back to, and including, the First World War. And every war since then has been won by the country that had control of the energy supply. You can't name one country that wasn't.

There were a lot of people who listened to us. We were in Illinois, in New York, in New Jersey, and in different States, trying to tell that story. It didn't sell too well then.

After the Persian Gulf war, people started listening and realizing that there is a relationship between our ability to be energy sufficient and the danger that we are facing.

In both 1995 and 1999, the Secretary of Commerce acknowledged, pursuant to a law requiring his assessment, that our oil dependency poses a threat to our national security. Keep in mind, this is before September 11. Additionally, in January of 1998, I elicited virtual consensus from all members of the Joint Chiefs of Staff that energy security was a too-often overlooked aspect of our national security needs.

After September 11, Deputy Secretary of Defense Paul Wolfowitz said that U.S. dependency on foreign oil--now, this happened in a public hearing where we were; and I asked him the question about how it relates to our national security--he said that U.S. dependency on foreign oil ``is a serious strategic issue ..... My sense is that [our] dependency is projected to grow, not to decline ..... it's not only that we would, in a sense, be dependent on Iraqi oil, but the oil as a weapon. The possibility of taking that oil off the market and doing enormous economic damage with it is a serious problem.''

That is the Deputy Secretary of Defense, Paul Wolfowitz.

The President made energy a top national priority. He said it over and over again. Sometimes I wonder if people are listening. In an overwhelmingly bipartisan manner, the House of Representatives adopted a comprehensive energy policy which includes provisions to modernize conservation and infrastructure, increase domestic energy supplies, and accelerate the protection of the environment.

But that is not all that H.R. 4 has. H.R. 4 is a comprehensive approach to meet our energy needs. We have nuclear in there; we have oil and gas production. Let's just take the marginal production have been concerned about, because my State happens to be a major producer, or they used to be, of marginal wells.

A marginal well is a well that produces 15 barrels of oil or less a day. If we had all the oil that would have come from margin wells that have been plugged in the last 10 years flowing again today, it would produce more oil than we are currently importing from Saudi Arabia. That is a huge source. That is part of H.R. 4.

H.R. 4 also has renewables in it. People are talking about renewables. It has nuclear. Right now, to meet our energy needs to light our lights in America, we are only 20 percent dependent on nuclear energy . France is 80 percent dependent. Those very people who were marching and protesting back in the 1970s against nuclear plants now realize, after all the ambient air problems that have been coming up, that nuclear energy is among the safest, the cheapest, and the most abundant energy available, yet we are not using it.

That is why I offered the energy bill as an amendment to last year's Defense authorization bill. Here I am on the Armed Services Committee. I had chaired the Subcommittee on Readiness. I offered the energy bill to the Defense authorization bill so people would somehow reprogram their thinking and realize we were talking about a defense issue. We are talking about a national security issue when we talk about our energy dependence. So I offered it, and I was glad I did.

We, of course, are addressing energy legislation today. I am really highly troubled by the bizarre legislative path that this legislation has traveled. I know we have talked about this quite a bit. I hope the majority leader will allow fair up-and-down votes on issues such as ANWR. We need to vote on it.

I wish it were required for everyone who is going to be voting on ANWR to take a trip up to the north slopes of Alaska to see what we are really talkingabout. It is not a pristine wilderness. We are only talking about a very small, a minuscule part of that area up there, and we are talking about an environment where the Eskimos, the local people, are begging us to come in and open it up.

So we do not need just any bill; the Senate owes our country a strong energy bill, which should include hydraulic fracturing. Hydraulic fracturing is a system where water is forced in, in order to be able to produce the oil.

Some 80 percent of the wells now use hydraulic fracturing. In the last 15 years, we have had 100,000 wells that have used that process. There has never been any environmental problem with it.

Since 1940, when we started this process, there have been over 1 million wells that have used hydraulic fracturing. But some court came along and said they were going to have to look at the environmental concerns that go along with hydraulic fracturing. Wait a minute. If we have done a million wells, as we have, using that process, and there has never been a problem, why are we concerned about it?

We need to have a strong energy bill that has the tax incentives for domestic oil production. I have talked about that. We have a tremendous opportunity there. But, you see, you cannot go after marginal wells because it costs 10 times as much to lift a barrel of oil that way than it does in Saudi Arabia. So you have to have some type of protection in there so that a person who is making an investment in a well today--recognizing they are not going to have any production out of that well for a couple years--how do they know what the price is going to be when it escalates from $8 a barrel to $40 a barrel, and then goes back to $8 a barrel? There is no way they can afford to take that kind of a risk. Certainly, the Presiding Officer is someone who has been in the business world, and he understands that. You have to have an idea of what kind of investment return is going to be out there. H.R. 4 has that in it. We need to have that in our bill. It said, if the price goes down, and it starts going below $17 a barrel, as it approaches $14 a barrel, tax credits set in, so they know it is not going to go below that. It is a way of getting another large block of oil domestically.

Corporate average fuel economy, the CAFE standards, while every single Senator has sworn an oath to uphold a government of the people, by the people, and for the people, some in this body seek to thwart the will of the people who drive vehicles and who express their will every day when they purchase vehicles at auto dealerships. It is called choice. This is America. We are supposed to have freedom of choice.

In greater numbers than ever before, all across this country, and particularly in my State of Oklahoma, Americans are purchasing minivans, sport utility vehicles, light trucks, and roomy cars for their safety, comfort, and utility.

I strongly support Americans' safety and ability to select whatever vehicle we deem fit for our purposes. We are not ``one size fits all.'' We are different people. I have 4 children and 11 grandchildren. I suggest to the Senator from Ohio, you try putting them in a compact car. They just don't fit. Our needs are different.

I think the bill should exclude renewable portfolio standards, RPS. The left again seeks to encroach upon the free market and the business of America through attempts to limit the use of coal, oil, natural gas, hydroelectric, and nuclear energy in an era when America is trying to ward off energy crises. We need all of the above. All of those things should be a part of this bill. But by shrinking the allowable percentage of power coming from these sources, we hamstring our ability to deliver needed energy and we weaken our Nation.

Price-Anderson. This is going to be controversial. It should not be controversial. This is a way that will allow us to get and expand into nuclear energy . Currently, 103 U.S. nuclear units supply about 20 percent of the electricity produced in the United States. Going forward into the future, nuclear energy must be a key component of any national energy plan. As ranking member of the subcommittee of jurisdiction, I believe the first step in that direction must be the reauthorization of Price-Anderson.

Finally, I would like to address the impact of overly burdensome regulations on our energy supply. In a recent report entitled ``U.S. Downstream: The EPA Takes Another Bite Out of America's Fuel Supply,'' Merrill Lynch concluded that EPA's clean air regulations ``will clearly have the impact of reducing existing U.S. refining capacity.'' In other words, the United States will have a greater dependency on foreign refineries.

When the price of gasoline goes through the roof, we all witness the incredibly irresponsible accusations that big oil companies ``were colluding.'' Price spikes occurred last summer because of the large number of poorly implemented environmental regulations. I have sat on that committee for 8 years now. We are at virtually 100 percent refinery capacity in this country. We started having new start reviews. We started having more and more regulations that really have nothing to do with the environment, and then we wonder why the price of fuel goes up.

It is supply and demand. We should know something about that in this country. When we are at 100 percent, we have more regulations that cost more money, and then some of the refineries leave and go down to Mexico. Then we can't even meet the current needs. What is going to happen? The price is going to go up.

The solution to high prices is not found in cheap political gimmicks such as releasing oil from the Strategic Petroleum Reserve. Rather, the solution relies on a national energy policy and having a highly effective and streamlined environmental regulation.

This is not a partisan notion. Going all the way back to the Carter administration, I tried to get them to have a national energy policy. Then Reagan came along. I thought we could get it in a Republican administration. I tried to get the Reagan administration to do it. They wouldn't do it. I tried along with Don Hodel, who worked in the Reagan administration. Then along came George the 1st from the oil patch. I thought, surely we will have a national energy policy at this time. He didn't have one. Of course, we haven't had one since.

We have that opportunity now. This President is committed to having a national energy policy.

When well thought out and reflecting consensus, environmental regulations can certainly provide benefits to the American people. But when regulations are rushed into effect without adequate thought, they are going to do more harm than good.

I see the Senator from Ohio in the Chamber. I remember before he was in the Senate, I held a hearing in the State of Ohio on new source review. We had testimony from refiners that replacing a 12-inch pipe triggered a new source review which cost millions of dollars in that case.

As a Senator and a grandfather, I want to ensure the cleanest environment in our Nation. However, I am convinced that environmental regulations can be harmonized with energy policy. Our current situation demands it.

I know that the extremist environmental community opposes any of the provisions and reforms which I have discussed. However, the environmental community does not have to answer to the American people when energy prices go through the roof. Nor does the environmental community have to worry about the national security implications of greater dependency on foreign oil.

My major concern, the reason I put this on H.R. 4 as an amendment to the defense authorization bill, is because I can't think of any single thing that plays a greater role in our future national security than becoming energy independent. Again, it is ludicrous that we should have to be dependent upon Iraq oil to fight a war against Iraq. It doesn't make sense. It is time we start making some sense.