Pete Domenici

Mr. DOMENICI

Mr. DOMENICI. I would like it read.

Mr. DOMENICI. Mr. President, let me ask the Senator from California, Is there any urgency on her side to conclude her remarks? We can wait. We have others who want to speak.

Mr. DOMENICI. I thank the Senator.

Mr. DOMENICI. Mr. President, we are awaiting Senator Boxer. I suggest the absence of a quorum.

Mr. DOMENICI. Mr. President, I yield myself just 5 minutes for some opening remarks. From our standpoint, I would like very much the distinguished Senator from Louisiana to take a few minutes of my time because the Senator from California spoke longer than 5 minutes. I will yield time to the Senator from Louisiana for his comments. First of all, Mr. President, it is too bad that the MMS, the Federal agency that is establishing these rules, doesn't have better credibility with those that they are proposing rulemaking against. You need not have the industry that you regulate think that you are totally against them--arbitrary, or somewhat capricious--in order to get your job done. As Senator Boxer has indicated on at least three occasions, this only affects 5 percent of the oil companies. That is MMS's view. That is the agency of the Federal Government that thinks these rules are wonderful. From my standpoint, I would like to tell you what the independent producers say. Frankly, I believe this is as valid as an MMS evaluation. The IPAA--that is the independents across America--say that the percentage of oil producers impacted by the oil royalty rule is 100 percent. In fact, this is their principal concern this year, that these proposed regulations, if adopted, will have a serious impact on many, many independent producers. Frankly, I believe that is the case. First all, MMS, the regulating agency, has permitted so broad a latitude under the rubric of unreasonable that I believe they can do almost anything. It is not certain what the rules will be when they are completed. They will be very uncertain. Litigation will not disappear. It will become more rampant. I would like the statement from the independent oil and gas producers--many of them from my home State, many very small, many going broke today because of low oil prices--be printed in the Record.

Mr. DOMENICI

Mr. DOMENICI. Mr. President, section 314(b)(2) of the Congressional Budget Act, as amended, requires the Chairman of the Senate Budget Committee to adjust the appropriate budgetary aggregates and the allocation for the Appropriations Committee to reflect an amount provided for continuing disability reviews subject to the limitations in section 215(b)(2)(C) of the Balanced Budget and Emergency Deficit Control Act. I hereby submit revisions to the 1999 Senate Appropriations Committee allocation, pursuant to section 302 of the Congressional Budget Act. The revisions follow: ------------------------------------------------------------------------ Budget authority Outlays ------------------------------------------------------------------------ Current Allocation: Defense discretionary........... 271,570,000,000 266,635,000,000 Nondefense discretionary........ 255,209,000,000 265,037,000,000 Violent crime reduction fund.... 5,800,000,000 4,953,000,000 Highways........................ ................. 21,885,000,000 Mass transit.................... ................. 4,401,000,000 Mandatory....................... 299,159,000,000 291,731,000,000 Total....................... 831,738,000,000 854,642,000,000 Adjustments: Defense discretionary........... ................. ................. Nondefense discretionary........ +425,000,000 +377,000,000 Violent crime reduction fund.... ................. ................. Highways........................ ................. ................. Mass transit.................... ................. ................. Mandatory....................... ................. ................. Total....................... +425,000,000 +377,000,000 Revised Allocation: Defense discretionary........... 271,570,000,000 266,635,000,000 Nondefense discretionary........ 255,634,000,000 265,414,000,000 Violent crime reduction fund.... 5,800,000,000 4,953,000,000 Highways........................ ................. 21,885,000,000 Mass transit.................... ................. 4,401,000,000 Mandatory....................... 299,159,000,000 291,731,000,000 Total....................... 832,163,000,000 855,019,000,000

Mr. DOMENICI

Mr. DOMENICI. I yield 3 minutes to Senator Gorton and the remaining time to Senator Gramm of Texas.

Mr. DOMENICI. Of course.

Mr. DOMENICI. When we do our 5 minutes each.

Mr. DOMENICI. We each get 5 minutes.

Mr. DOMENICI. Senator Boxer, I thought when I proposed that we go next, that I had little statements, not 20-minute ones, and three of them could go because they were short.

Mr. DOMENICI. I wanted Senator Burns to discuss his 5-minute statement.

Mr. DOMENICI. Mr. President, since I have considerably more time than the distinguished Senator from California, I would like to make a few remarks and then save a few minutes for Senator Gorton, the manager of the bill. Mr. President, fellow Senators, first of all, there has been a lot of talk about lawsuits that are out there that have been going on for years on end. Essentially, fellow Senators, the reason that a new set of regulations and rules were supposed to be adopted was so we wouldn't have all of that litigation; so that we have a more clear-cut definition of what is market value for oil and gas, rather than leave so much to subjectivity, to arguments and disputes. Let me suggest, if that is the case, that I can almost promise the U.S. Senate that if the rules that the Minerals Management Service is proposing to adopt are adopted that they will all be back in court over and over again, because they are unintelligible. They leave many opportunities for the Minerals Management Service to second-guess. They leave at times many opportunities to go back in an audit and even undo the market value as determined by a company upon the advice of people from the MMS. Mr. President, when I was a Senator in the middle of the Iranian- prompted crisis where we had lines--Senator Hutchison's statement was that they even shot at each other in New York in one of those lines early in the morning because somebody thought one car was moving ahead of them. You might have been Governor, I say to the occupant of the Chair, when that happened. You may remember that. During that period of time, a gentleman in my State, who is currently one of the most successful and marvelous businessmen in the retail marketing of oil and gas products in my State, was down in a little office where his business was beginning. He begged me to come and see him. I went to see him. And a grown man was on the brink of falling apart. Whenever he would talk, he would cry, because the then-U.S. Government Energy Department had been told by Congress to enforce some very vague rules about gouging. Here comes auditors to that man's office. He can't give them enough. They come back month after month, and his business is floundering. And they want more information. They want to go back further in time. They want him to bring in his customers and let them talk to the enforcing agency about the various arrangements. I pledged to him right then that, not knowing the facts, I would see that he was treated fairly. He was. He succeeded in getting around that, and is surviving, as I have just indicated, bountifully. Mr. President, what we don't want to let happen is we don't want a new set of regulations that permit a bureaucracy, however much we must rely on them--the MMS--to go into American energy producers in the manner that I have just described for my good friend down in Artesia, NM. I contend that is what is going to happen, because, pursuant to congressional requests, some of us, Democrats and Republicans, sat down at the table with the MMS and the industry. And it is absolutely a cinch based upon the disagreements that occurred around that table and the failure on the part of the MMS to consider what many of us thought to be a very reasonable request; that if we let these get adopted, we haven't seen anything yet with reference to tying up this money in litigation and arguments. As a matter of fact, there is even a position in these new rules where the MMS can actually contend that a company would sell below market value to avoid the 12.5-percent royalty. Does that make sense to anyone? When you sell below market and give something away, you are giving away 12.5 percent to the Government, but you are keeping 87.5 percent of your own money. Right? But there is something in here to make sure they don't sell below market. There are so many nuances. I am not sufficiently expert. Again, I think I know when I see something that isn't going to work. Let me conclude. Industry is not to blame for the current rule. The MMS wrote it. All producers are affected by it--not 5 percent. Under current law, MMS can collect the royalties that are fair market value. Nothing is stopping them. Anybody thinking we are going to stop collecting royalties is mistaken. We are going to keep on collecting them under a set of rules that are very unreasonable and complicated. But why substitute another set that we think is going to do equally as bad and maybe move even more arbitrarily against the producers of energy in this country? There is a concept within it that you are guilty until proven innocent. There is, as I said before, a notion that producers will sell cheaply to avoid a royalty. Why would anybody do that? I just explained that to the Senate. There is extensive opportunity for second-guessing. The scourge of the regulated is to have regulators second-guess. That is the scourge. You have one answer and you thought you were abiding by it. But they second-guess it and you get audited. And there is another set of rules. These rules are unworkable. One well, 10 different valuation calculations for on-shore oil; one well, 8 different valuation calculations for off-shore. For whatever has been said here today about who we are working for in opposing the Boxer amendment, actually what I believe is happening is we are saying to a bureaucracy of the U.S. Government that we have had a good view of how you make rules, we think you are doing it in an unreasonable manner, and we would like you to do it better, so we are not going to give you any money to enforce what you have proposed to do. Essentially, all the arguments have been made about how important gas and oil production is for our Nation. We understand that. But this is not an issue about anybody cheating. It is an issue about whether a new set of rules is better than the old ones when we firmly believe they are not. I reserve the remainder of my time.

Mr. DOMENICI. Mr. President, I would like to state for anybody who would like to speak in opposition to the Boxer amendment that we have a few minutes left. I would like to ask unanimous consent that on our side, when appropriate, that the following order for our speakers be the order: Following Senator Nickles, who will speak for 10 minutes, the Senator from Louisiana will speak for up to 5 minutes; then Senator Hutchison for 25 minutes. That will leave some additional time for additional Senators, or for me. We would like to do it in that order pursuant to the rotation from one side to another. I ask unanimous consent that be the order.

Mr. DOMENICI. Mr. President, will Senator Nickles yield for an inquiry?

Mr. DOMENICI. Mr. President, if the Senator will yield briefly, I ask unanimous consent that the next speaker on our side be Senator Nickles and he be allowed 10 minutes.

Mr. DOMENICI. Thank you. Mr. President, I thank Senator Boxer for agreeing to this unanimous consent. I very much appreciate it for some personal reasons. I ask unanimous consent that when all debate time is consumed, or yielded, that the amendment be set aside until the hour of 5:50; and, at that time, there be 10 minutes for debate for closing remarks prior to the vote on the motion to table the Boxer amendment.

Mr. DOMENICI. Not off your time; off the bill. Mr. President, let me just say, immediately after Senator Landrieu spoke, I wanted to get up, but I did not timely, so Senator Boxer spoke. But I commend her. I think she made a very brief statement today, but I think it was right on point. For those who are looking for a succinct wrap-up of what this issue is about, that 5 minutes is a very good summary. The issue is whether the new set of rules is going to solve the problem of litigation and of making things clear and reasonable and easy to understand, or is it going to invite more litigation? And I think the industry, small and large, come down on the side that it is too complex, leaves too much to the subjectivity of the Mineral Management Service, and has a number of rules that are so arbitrary and onerous that this is not going to help us out of the mess we are in. I am saying it my way; I think Senator Landrieu said it her way. But before we are finished, we will talk about that some more. I yield the floor.

Mr. DOMENICI. Will the Senator from Texas permit me to use a minute off our time?

Mr. DOMENICI. I yield 2 more minutes.

Mr. DOMENICI. I don't want to do that. I said that Senator Nickles will go next. If you have somebody, they will be next. If you don't, Senator Landrieu will go next, and back and forth. But our times are now set for three Senators. As Republicans are recognized, they will speak in that order.

Mr. DOMENICI. Mr. President, I send a letter to the desk and ask unanimous consent it be printed in of the Record from the Revenue Department of New Mexico indicating they support the oil moratorium.

Mr. DOMENICI. Mr. President, I say to Senator Bumpers, in particular I speak of the last 2 minutes of his statement. I commend him for what he said and his concerns about the condition of our country, and in particular--I use a different word--but the cynicism that is generating by leaps and bounds about politicians and people in public life. We can't have our democracy and have that continue indefinitely. It will go right to the heart of it. Having said that, I was going to say something a little bit more jovial and just suggest that your eloquence is going to be greatly missed, but the fact that you keep losing, could it mean that you happen to be wrong? I yield the floor.

Mr. DOMENICI. I thank the Chair.

Mr. DOMENICI

Mr. DOMENICI. Mr. President, for the information of all Senators, this morning the Senate will resume debate on the Interior appropriations bill with Senator Boxer being recognized to offer an amendment regarding oil royalties. There will be 3 hours for debate on the amendment. At the conclusion or yielding back of time, the Senate will proceed to a vote on a motion to table the Boxer amendment. Following that vote, it is expected that further amendments to the Interior bill will be offered and debated. Therefore, Members should expect rollcall votes throughout today's session and into the evening in relation to the Interior bill or any other legislation or executive items cleared for action. The leader expresses his thanks to colleagues for their attention.