Jim Inhofe

Mr. INHOFE

Mr. INHOFE. Mr. President, in an attempt to refresh our memory on what happened with the overreach of the EPA, we might remember that it was from this podium, I guess, 2 weeks ago--it was on a Friday that we found out and we had access to a tape that we released to the public. It has been on the TV and everyone has seen it now. It is a tape of the region 6 administrator of the EPA, Mr. Armendariz. At that time, when talking to the regulators who were under his jurisdiction and along with the public at a public meeting that was taking place in Texas, he said: But as I said, oil and gas is an enforcement priority. . . . I was in a meeting once and I gave an analogy to my staff about my philosophy of enforcement, and I think it was probably a little crude and maybe not appropriate for the meeting but I'll go ahead and tell you what I said. It was kind of like how the Romans used to conquer little villages in the Mediterranean. They'd go into a little Turkish town somewhere, they'd find the first five guys they saw and they would crucify them. And let them die on a cross. Everyone would look at that. Then he said: And then you know that town was really easy to manage for the next few years. . . . So, that's our general philosophy. This is the EPA we are talking about, and this is 1 of 10 of the regulators. This happens to be the region 6 administrator. This regional administrator recently resigned when not only his statement received attention but also following public awareness about the manner in which he initiated the enforcement actions in region 6. We know about--and I have already mentioned in my previous remarks-- the company down in Texas. This company was cited by Armendariz. They are accused of groundwater contamination. They are accused of perhaps misusing hydraulic fracturing. All these were just accusations. But then they sent a letter to them and said we are going to fine you $33,000 a day--$33,000 a day. If we read those letters carefully, we will find out that decision isn't already made, it is not going to start, but to the person who is reading the letter, who receives the letter, they will think, I can stay in business for 30 more days and that is it. One has to ask the question: How many companies are out there that have received a letter such as this from the EPA and assumed they are going to have to start paying this fine, so they folded up their tent and they quit? This is what they want. They want to put people out of business. I told the story from this podium about a company in my State of Oklahoma. This was back probably 10 years ago. I received a letter--we had a lumber company in Oklahoma and the president of the lumber company said: I don't know what to do. The EPA has just put us out of business. I said: What did you do wrong? He said: I don't think I did anything wrong. He said: I have been selling our used crankcase oil to the same licensed operation for the last 10 years and some of that--this contractor was licensed by the State of Oklahoma and the Federal Government in the County of Tulsa. He said: We have been selling it to the same group, this organization, for 10 years. He said: Some of that has been traced to a site where they have said this came from our used crankcase oil, and they said for that reason you have violated the law and we are going to fine you $5,000 a day. Now, $5,000 a day, this is to a relatively middle-sized lumber company, Mill Creek Lumber, it is called--and they are still in business today--and that would have put them out of business. I said: Send the letter to me and let me read it. I read it and I told him they are just threatening you and trying to run you out of business. We have to wonder as to how many companies out there are closed now or out of business because of actions such as this. How many of these companies received a letter such as the operation did down in Texas saying we are going to impose $33,000 a day and, finally, they just fold up their tent and quit? We don't know that. There is no way of knowing. We have invited people from this podium to call and we have received calls from people who have been out of business. This is an intentional effort we are dealing with and have been dealing with for quite some time. So we introduced today, just a few minutes ago, S. 3053. I have a whole bunch of cosponsors--it looks like about 20 cosponsors--on the bill. What we do is a very simple thing. I have found in my experience in both the House and the Senate that the shorter and simpler we make something, the easier it is to understand. This is a little, small, two-page bill, and all it does is say that anyone who is going to be appointed--or nominated, I should say--as a regional administrator of the Environmental Protection Agency would have to be appointed by and with the advice and consent of the Senate. We have a list in our laws as to what has to have Senate confirmation. The Administrator of the EPA has to--and she went through that process and that person is Lisa Jackson--but not these 10 regional directors. So we are saying they should be subjected to the same advice and consent of this Senate, and we wouldn't have these kinds of problems. I suspect the Administrator of the EPA did not know what was going on in region 6 with Mr. Armendariz. I will give her the benefit of the doubt that she didn't. In fact, she was very critical of him once we stood here and exposed what was going on. This will solve the problem. I am going to invite people to join in. We have already introduced it. It is S. 3053. It is one that would force the administrators to be subjected to confirmation by this Senate. Keep in mind that these administrators, these regional administrators, have the power of life and death over many companies in America. I believe this will solve that problem, and I look forward to passing this bill and having it become law.

Mr. INHOFE

Mr. INHOFE. Madam President, today I wish to submit for the Record my remarks and a speech by Taiwan's top diplomat in Washington, Jason C. Yuan, of the Taipei Economic and Cultural Representative Office, who announced on April 25, 2012, the donation by his government of 1,150 metric tons of rice to Kenya through Feed the Children, a well-known and respected charity based in my home State of Oklahoma. The food emergency in the Horn of Africa is a stark humanitarian crisis and Kenya simply has not received enough rain to feed its people. Record-high food prices, internal conflicts, and insecurity in the region have exacerbated the situation. With malnutrition and disease on the rise, dane Kenyan families are required to travel long distances in search of food. It is evident that outside help must be provided. The people of Taiwan are providing that help. Its generous gift will have an immediate impact on relieving the hardships brought on by this first drought of the 21st century. Ronald Reagan once said that ``a hungry child knows no politics,'' meaning that the American people are always willing to open up their hearts and the blessings of their bounty to the less fortunate around the world. The people of Taiwan are doing the same thing today through this generous donation. Some may say that this gracious donation of rice is a mere drop in the bucket compared to the overall need in Africa. Yet one must remember that every mighty wave starts with a tiny ripple. I ask unanimous consent to have printed in the Record remarks from Ambassador Jason C. Yuan.

Mr. INHOFE

Mr. INHOFE. Would the Senator yield for a unanimous consent request?

Mr. INHOFE. I do not want to change the Senator's line of thought. It was beautiful and I want to hear every word. Madam President, I ask unanimous consent that after the conclusion of the remarks of the Senator from Tennessee, that there will be 10 minutes given to the Senator from Wyoming, Mr. Barrasso, and that I have the remainder of the Republican time.

Mr. INHOFE. First of all, Madam President, let me say we are very fortunate to have the Senator from Wyoming, with his background, come and give us his second opinion. The ratings are very high on his second opinion, and I am very glad of that. I am also very pleased we had the Senator from Tennessee talking about the big issue of today. There is no one--having been the Secretary of Education in a previous administration--who is more qualified to talk about student loans than the Senator from Tennessee. So I am very appreciative. Ironically, we have talked about two subjects, and I am here to talk about one totally unrelated that I think is equally critical--and I have to be critical--of this administration. I am going to state something that hasn't been stated before. I am going to release something that hasn't been released before, and I think it is very significant that people really listen. You know, this President has had a war on fossil fuels--and when we talk about fossil fuels, we are talking about oil, gas, and coal--ever since before he was in office. He is very clever because what he has attempted to do is to kill oil, gas, and coal when we had the huge supply of it here and yet do it in a way that the American people won't be aware over it. How many people in America, I ask the Chair, know what hydraulic fracturing is? I daresay more people know about it today than knew about it a short while ago. So today I wish to address for the first time ever the questionable actions recently taken by the Obama administration's Environmental Protection Agency to stop domestic energy production, particularly doing so by using hydraulic fracturing. Today I wish to draw attention to a little-known video from 2010 which shows a top EPA official, region 6 Administrator Al Armendairiz, using the vivid metaphor of crucifixion to explain EPA's enforcement tactics over oil and gas producers. This is a long quote, and I am going to ask everyone to bear with me because it is all a quote by Armendairiz. He is, as I said, the Administrator of region 6, and he is instructing at this time people who are working for them in what their behavior should be. So this is an actual quote I am going to use. It is a long quote. Bear with me. I was in a meeting once and I gave an analogy to my staff about my philosophy of enforcement, and I think it was probably a little crude and maybe not appropriate for the meeting but I'll go ahead and tell you what I said. It was kind of like how the Romans used to conquer little villages in the Mediterranean. They would go into a little Turkish town somewhere, they'd find the first five guys they saw and they would crucify them. And then you know that town was really easy to manage for the next few years. And so you make examples out of people who are in this case not compliant with the law. Find people who are not compliant with the law, and you hit them as hard as you can and you make examples out of them, and there is a great deterrent effect there. And, companies that are smart see that, they don't want to play that game, and they decide at that point that it's time to clean up. And, that won't happen unless you have somebody out there making examples of people. So you go out, you look at the industry, you find the people violating the law, you go aggressively after them. And we do have some pretty effective enforcement tools. Compliance can get very high, very, very quickly. That's what these companies respond to, is both their public image but also financial pressure. So you put some financial pressure on a company, you get other people in that industry to clean up very quickly. So, that's our general philosophy. Again, that is a quote from the EPA Administrator of region 6. He actually said: You know, it is kind of like the Romans, when they used to conquer little villages in the Mediterranean. They would go into a little Turkish town and find the first five guys they saw and crucify them. That is how you get their attention. I remember a few years ago a lumber company in my State of Oklahoma called me up and said: I am not sure what to do. The EPA is putting us out of business. I said: What do you mean, putting you out of business? This was a lumber company in Tulsa, OK--Mill Creek Lumber. The man who was calling me was the president. He said: We have been disposing of our used crankcase oil in the same legal, licensed depository for 10 years now, and they have traced some of this oil to a Superfund site, and they say they are now going to fine me $5,000 a day for that violation. Now, that is what the letter said. I said: Send the letter to me. That is a typical threat by the EPA to try to make you voluntarily go out of business. So he sent it to me, and sure enough that is what it said. Any concerned reader would look at that and say: They are going to put us out of business. He said they could stay in business maybe another 30 days and that would be the end. Well, that was a threat. That is what they do to intimidate people. It is not quite to the level of a crucifixion, but nonetheless times have changed and things have gotten worse over the past few years. So, yes, they have the enforcement tools, and they are able to scare people, intimidate people. And these are the very people who are working and hiring people and doing what is necessary to run this machine we call America. So according to Administrator Armendairiz, EPA's general philosophy is to crucify and make examples of domestic energy producers so that other companies will fall in line with EPA's regulatory whims. His comments give us a rare glimpse into the Obama administration's true agenda. No matter how much President Obama may pretend to be a friend of oil, gas, and coal, his green team constantly betrays the truth that the Obama administration is fully engaged in an all-out war on hydraulic fracturing, thinking people won't know that if you kill hydraulic fracturing, you kill oil and gas production in America. Not long after Armendairiz made his stunning admission, the EPA, apparently, began to zero in on the first crucifixion victims. The Agency targeted U.S. natural gas producers in Pennsylvania, in Texas, and in Wyoming, and in all three of these cases, before these investigations were complete, EPA made headline-grabbing statements either insinuating or proclaiming that hydraulic fracturing was the cause of water contamination. But in each of these three cases, the EPA's comments were contrived, and despite their best efforts they have been unable to find any science to back up their accusations. Of course, this administration has a propensity for making embarrassing announcements on days when they hope no one will notice. During the past 2-week recess, while Congress was out of town, the EPA released several late-Friday-night statements reversing their earlier assertions in these cases. Still, the problem is people are walking around believing these things are true. The Agency hopes they can admit they were wrong quietly, but we are not going to let that happen. We are not going to let them get away with it. The American people deserve to know exactly why the EPA is pushing ahead with such intensity to capture alarmist headlines, and then, when no one is looking and when their investigation shows they were wrong, quietly backing away from it. The EPA, in Texas, Wyoming, and Pennsylvania, not only reversed their assertions but did so with a stunning lack of transparency, strategically attempting to make these announcements as quietly as possible, at times they know Congress won't be looking. Let me quickly highlight a few of these examples. In Parker County, TX, the Agency's major announcement--the withdrawal of their administrative order--was announced at a time they knew Congress was adjourning for Easter recess. In Dimock, PA, the EPA made two announcements, and the same thing happened there. In Pavillion, WY, the EPA announced their reversal as Congress was wrapping up that week. So the same thing was happening. The EPA's general philosophy is to crucify domestic energy producers. Let's look at the three of their crucifixions. Parker County, TX. I think this could be the most outrageous of all the examples we will be talking about today. I will not have time to hit them all, but I will go back and make the complete statement I was going to make. Unfortunately, there isn't time to finish it now. But what happened in Parker County, TX, took place in region 6, where my State of Oklahoma is located. Despite Texas State regulators actively investigating the issue, EPA region 6 issued a December 7, 2010, Emergency Administration Order, which determined--I use the word ``determined'' because that is the word they used--determined that State and local authorities had not taken sufficient action and ordered a company called Range Resources to provide clean drinking water to affected residents and begin taking steps to resolve the problem. Along with this order, the EPA went on a publicity barrage in an attempt to publicize its premature and unjustified conclusions. The day of the order, EPA issued a press release in which it mentioned hydraulic fracturing--not once, not twice but four times--in trying to tie that to problems with groundwater contamination. The Agency claimed they also had ``determined''--again, they used that word--that natural gas drilling near the homes by Range Resources in Parker County, TX, had caused the contamination of at least two residential drinking water wells. Regional administrator Al Armendariz was quoted in a press story posted online, prior to him even notifying the State of Texas, that EPA was making their order--and the e-mails have been obtained from the day the order was released--showing him gleefully sharing information with rabid antifracking advocates--and this is a quote by this EPA regional administrator: ``We're about to make a lot of news . . . time to Tivo channel 8.'' He was rejoicing. In subsequent interviews, Armendariz made comments specifically intending to incite fear and sway public opinion against hydraulic fracturing, citing multiple times a danger of fire or explosion. When State regulators were made aware of EPA's action, they made it clear they felt the Agency was proceeding prematurely, to which Armendariz forwarded their reply calling it ``stunning.'' What was ``stunning,'' to quote Armendariz, were revelations about the way in which the EPA acted in this particular case, which led me to send a letter, at that time, to the EPA inspector general requesting him to preserve all records of communication in connection with the emergency order issued by the EPA region 6 administrator. Subsequent to the EPA's December 7, 2010, administrative order, on January 18, 2011, EPA followed through on Regional Administrator Armendariz's promise to ``make examples of people'' and filed a complaint in Federal district court, requesting penalties against Range Resources of $16,500 a day for each violation they alleged took place-- for each violation. I don't know how many violations there are. I think there are three or four. Again, this goes back to the same thing that happened in my State of Oklahoma with the EPA trying to put a lumber company out of business by EPA, except this is a larger company so there are larger fines. So $16,500 a day in order to align with Armendariz's pursuit of fines which ``can get very high very, very quickly.'' If these actions alone didn't create an appearance of impropriety and call into serious question the ability of Regional Administrator Armendariz to conduct unbiased investigations and fairly enforce the law, just 7 months prior to the region's actions in Parker County, Regional Administrator Armendariz laid the groundwork of how he planned to reign over his region. In a townhall meeting in Dish, TX, he ``gave an analogy'' of his ``philosophy of enforcement.'' Again, we have already talked about that analogy. This is a quote I highlighted at the beginning of my speech: It was kind of like the Romans used to conquer little villages in the Mediterranean. They'd go into a little Turkish town somewhere, they'd find the first five guys they saw and they would crucify them. And then you know that town was really easy to manage. Let me go back and be clear about this. This is President Obama's appointed regional administrator for the States of Arkansas, Louisiana, New Mexico, Texas, and Oklahoma comparing his philosophy of enforcement over the oil and gas industries to Roman crucifixions, where they would ``just grab the first five guys they saw'' in order to set the policy and to scare everybody else and crucify them. Fast forward to late Friday afternoon, March 30 of this year, just a few hours after Congress left town for the Easter recess. The Wall Street Journal reported that: EPA told a federal judge it withdrew an administrative order that alleged Range Resources had polluted water wells in a rural Texas county west of Fort Worth. Under an agreement filed by U.S. district court in Dallas, the EPA will also drop the lawsuit it filed in January 2011 against Range, and Range will end its appeal of the administrative order. Listen to this. A few weeks prior to EPA's withdrawal, a judge also concluded that one of the residents involved in the investigation worked with environmental activists to create a ``deceptive video'' that was ``calculated to alarm the public into believing the water was burning''--water that was the result of the hydraulic fracturing--when it appears the resident attached a hose to the water well's gas vent, not the water, and of course lit it on fire. I was on a TV show the other night by someone whom I will not mention their name--she happens to be one of my three favorite liberals--and she mentioned: ``This water is so bad it is burning.'' That judge showed what it was and of course made them cease from doing that. Remember, this is only one of the three recent high-profile instances of backtracking on behalf of the Agency, after they have already scared everybody into thinking it is a serious problem. Next we go into Wyoming--Pavillion, WY. Last December, EPA publicized and released nonpeer-reviewed draft findings which pointed to hydraulic fracturing as the cause of groundwater contamination. Again, the culprit is always hydraulic fracturing because we all know we can't get any large oil and gas out of tight formations without hydraulic fracturing. Here again, the EPA stepped in over the actions of the State and made a press announcement designed to capture headlines where definitive evidence linking the act of hydraulic fracturing to water contamination simply didn't exist. The announcement came in December, despite as late as November of 2011 EPA regional administrator James Martin saying the results of the last round of testing in Pavillion were not significantly different from the first two rounds of testing which showed no link between the hydraulic fracturing and contamination. That is three rounds of testing which showed no contamination from hydraulic fracturing. Yet only a few weeks later EPA announced the opposite. In another reversal by the EPA in the past few weeks, the EPA stepped back and quietly agreed to take more water samples and postpone a peer review of the findings, something the State of Wyoming had been requesting for quite some time. Again, the damage was done. They didn't do anything wrong. There was no water groundwater contamination at all. This is hydraulic fracturing. As I have mentioned so many times before, I know a little bit about this because the first hydraulic fracturing took place in my State of Oklahoma in 1949. There has never been a documented case of groundwater contamination as a result of it. Yet this administration is doing everything they can to destroy hydraulic fracturing. Dimock, PA, is the third site of the EPA's recent backtracking of its publicized attempts to link hydraulic fracturing to groundwater contamination. In this instance, the Pennsylvania Department of Environmental Protection had taken substantial action to and including working out an agreement with an oil and gas company ensuring residents clean drinking water. In line with the State's Department of Environmental Protection, on December 2, 2011, the EPA declared that water in Dimock was safe to drink. Just over a month later, EPA reversed that position. So they go back and forth. What do people remember? They remember this process of hydraulic fracturing is the culprit and is creating serious environmental problems. What is maybe more egregious was--to quote Pennsylvania DEP secretary Michael Krancer--EPA's ``rudimentary'' understanding of the facts and history of the region's water: Independent geologists and water consultants such as Brian Oram have been puzzled by the Agency's rationale for their involvement in Dimock because the substances of greatest concern by EPA are naturally occurring and commonly found in this area of Pennsylvania. Yet EPA has chosen this area to attack because of the presence of hydraulic fracturing. In other words, this has been going on for years, long before hydraulic fracturing. By the way, I have to say they used to attack oil and gas, but it was always out West in the Western States. The chair knows something about that. This is different now because we have these huge reserves that are in places such as New York and Pennsylvania. All that time there has not been hydraulic fracturing, but as soon as hydraulic fracturing came in, they said this is the result of hydraulic fracturing when it has been there all the time. Of course, this is part of the strategy to try to convince Americans we don't have the vast supply of natural resources we clearly have. I was redeemed by this. I have seen saying all along that of all the untruths this President has been saying, the one he says more than any other is that we only have 2 percent of the reserves of gas and oil and we use 25 percent. It is not true. I don't want to use the ``L'' word. I don't want to get everybody mad, but it is just not true. The U.S. Geological Survey revealed just a few days ago that President Obama's favorite talking point, that we only have 2 percent of the world's proven oil, is less than honest. The 2 percent the President quotes is proven reserves, but he ignores our recoverable reserves. This is coming from the USGS. Our recoverable reserves are some of the largest in the world. According to information gleaned from the USGS report, America has 26 percent of the world's recoverable conventional oil reserves. That doesn't begin to include our enormous oil shale, tight oil and heavy oil deposits. That is just a fraction of it. But that is 26 percent of the world's recoverable oil. Our problem is our politicians will not allow us--and particularly the Obama administration--to drill on public lands and to be able to capture that. We also hold almost 30 percent of the world's technically recoverable conventional natural gas. In other words, to put it in a way that I think is more understandable: Just from our own resources and at our own consumption level, we could run this country for 90 years on natural gas at our current level of consumption and for 60 years on oil. That is what we have. That is the answer to the problem. It is called supply and demand. There is not a person listening now who would not remember back in the elementary school days that the supply and demand is real. But we all know he remains fully committed to his cap-and-trade, global warming, green energy agenda--a plan that is to severely restrict domestic development of natural gas, oil, and coal, to drive up the price of fossil fuels so their favorite forms of green energy can compete. It is, quite simply, a war on affordable energy--and, at that time, they weren't afraid to admit it. Now they are backtracking a little bit--such as using hydraulic fracturing and not saying they are opposed to oil and gas. Do you remember Steven Chu, the Secretary of Energy, President Obama's man? He told the Wall Street Journal that ``[s]omehow we have to figure out a way to boost the price of gasoline to levels in Europe.'' We all know the infamous quote from President Obama. He said that, under his cap-and-trade plan, ``electricity prices would necessarily skyrocket.'' The President himself has been on record supporting an increase in gas prices. Although, according to him, he would ``have preferred a gradual adjustment'' increasing the average family's pain at the pump. But this isn't a plan that gets you reelected. So the gas prices have skyrocketed, and with the utter failure of Solyndra, President Obama's dream of green energy economy is in shambles. We can be sure we won't be talking about this plan to raise energy costs until after the election. I would have to say the President's own Deputy Energy Secretary Dan Poneman last month made a statement, and I appreciate it, because he said we have a very strong belief that the laws of supply and demand are real. They have been saying that the laws of supply and demand are not real. Gary Becker--I quoted this the other day. He is a Nobel Prize- winning economist, professor at the University of Chicago. He has said ``supply and demand are the cause of the vast majority of large fluctuations in oil prices, and it is hard to believe that speculation has played a major role in causing a large swing in oil prices.'' The President tried to say it is not supply and demand. We do not need to develop our own resources to bring down the price of gas at the pumps. It is speculation. Here is a Nobel Prize winner saying that just flat is not true. The President's budget proposal this year alone--I want to get back to how he has made this attempt to tax oil and gas out of business. The President's budget proposal this year alone amounts to a $38.6 billion tax increase on oil and gas companies, which would hit my own State of Oklahoma where 70,000 people are employed in oil and gas development especially hard. His proposal specifically would either modify or outright cancel section 199--that is the manufacturers' tax deduction that is something all other manufacturers would be able to enjoy--for the intangible drilling costs, IDCs: percentage depreciation, tertiary injections. All of these were in his budget--not just this year, not just last year, but every year since his budget 4 years ago--to try to tax the oil and gas companies out of business. His actions have not slowed his rhetoric. In fact, President Obama has become so desperate to run from his antifossil fuel record that he ran all the way to Cushing, OK. That is my State. We have a major intersection of the pipeline down there. This President, in his attack on fossil fuels, stopped the XL Pipeline that goes from Canada down through my State of Oklahoma. He came all the way to Oklahoma to say: I am in support of the pipeline that goes south out of Oklahoma into Texas. Wait a minute, that is because he cannot stop it. He could only stop the other one because it crossed the line from Canada to the United States. So he came all the way to Oklahoma to say he was not going to stop something that he could not stop anyway. President Obama is trying to take credit for the increase in oil and gas. I have to get this out because I think so many people do not understand this. The increase that is taking place in production is all on private lands. It is not increasing on public lands. It is decreasing on public lands, but on private lands he has no control. In the report by the nonpartisan Congressional Research Service, since 2007, quoting now from the CRS: About 96 percent of the [oil production] increase took place on non-federal lands. According to the Obama Energy Information Administration, total fossil fuel sales of production from Federal lands are down since 2008--they are down, not up--and during a time of a natural gas boom throughout the country. In other words we have gone through the biggest boom on private land, but he will not allow us to do it on public land, and that is where these tremendous reserves are. Gas sales from production on Federal lands are down 17 percent since 2008. Finally, according to PFC Energy, which is a global consulting firm specializing in the oil and gas industry, 93 percent of shale oil and gas wells in the United States are located on private and State lands, hardly the Federal Government triumph that the President falsely attempts to take credit for when you put all the pieces together. President Obama's election strategy is clear: Say great things about oil and gas, say great things about coal and the virtues of domestic energy production, but under the surface try hard to manufacture something wrong with hydraulic fracturing. Remember, not 1 cubic foot of natural gas can be retrieved in tight shale formations without using hydraulic fracturing. As I said before, that was started in my State of Oklahoma. We are going to make sure we are the truth squad that tells the truth about how we can bring down the price of gas at the pump. It gets right back to supply and demand. I am going to come back at a later date and give the long version of what I have just given in the last 45 minutes, but I see my friend from Tennessee is here. So I yield the floor.

Mr. INHOFE

Mr. INHOFE. Will the Senator yield for a question?

Mr. INHOFE

Mr. INHOFE. Mr. President, today I am pleased to introduce the reauthorization of the North American Wetlands Conservation Act, NAWCA. This bill has overwhelming bipartisan support, and I am pleased to have Senators Boxer, Vitter, Landrieu, Cochran, Johnson, and Klobuchar as original cosponsors. In fact, this is a conservation program that has long enjoyed support on both sides of the aisle. Back in 2006, I worked with my colleagues to pass the last reauthorization of this program by unanimous consent and was pleased that President Bush signed the bill into law. This bill also has the support of many conservation and hunting groups including: Archery Trade Association, Association of Fish and Wildlife Agencies, Boone and Crockett Club, Bowhunting Preservation Alliance, Catch-A-Dream Foundation, Congressional Sportsmen's Foundation, Conservation Force, Dallas Safari Club, Delta Waterfowl, Ducks Unlimited, Izaak Walton League of America, Mule Deer Foundation, National Assembly of Sportsmen's Caucuses, National Rifle Association, National Trappers Association, National Wild Turkey Foundation, North American Bear Foundation, North American Grouse Partnership, Orion-The Hunters' Institute, Pheasants Forever, Pope and Young Club, Public Lands Foundation, Quail Forever, Quality Deer Management Association, Rocky Mountain Elk Foundation, Ruffed Grouse Society, Safari Club International, Texas Wildlife Association, The Conservation Fund, Theodore Roosevelt Conservation Partnership, Whitetails Unlimited, Wildlife Forever, and Wildlife Management Institute NAWCA was first enacted in 1989 and incentivizes non-federal contributions to maintain and restore wetland habitat throughout North America. Since its inception, each Federal dollar has been matched, on average, by $3.20 in state and private funds. Not only do these funds help to support waterfowl populations that were once nearing all time lows, these voluntary projects also support nearly 7,500 new jobs annually. The success of this program lies in the fact that these projects are not top down regulations coming from the Federal Government. These projects involve multiple partners from private organizations and the Federal Government who work together voluntarily to protect and restore millions of acres of wetlands. In my home State of Oklahoma, NAWCA currently has 12 projects either completed or underway. These projects have conserved 26,869 acres of wildlife habitat and leveraged $11.3 million in partner contributions. These projects benefit outdoor recreation, hunting and fishing, as well as boosting local economies. NAWCA is a great example of how environmental conservation should be achieved. This program should put to rest the notion that voluntary efforts aren't successful. I would argue that these voluntary programs have been more successful and more cost effective than other mandatory Federal regulations. I look forward to this reauthorization moving quickly through the Senate. Thank you.

Mr. INHOFE

Mr. INHOFE. Mr. President, today I am pleased to introduce the reauthorization of the North American Wetlands Conservation Act, NAWCA. This bill has overwhelming bipartisan support, and I am pleased to have Senators Boxer, Vitter, Landrieu, Cochran, Johnson, and Klobuchar as original cosponsors. In fact, this is a conservation program that has long enjoyed support on both sides of the aisle. Back in 2006, I worked with my colleagues to pass the last reauthorization of this program by unanimous consent and was pleased that President Bush signed the bill into law. This bill also has the support of many conservation and hunting groups including: Archery Trade Association, Association of Fish and Wildlife Agencies, Boone and Crockett Club, Bowhunting Preservation Alliance, Catch-A-Dream Foundation, Congressional Sportsmen's Foundation, Conservation Force, Dallas Safari Club, Delta Waterfowl, Ducks Unlimited, Izaak Walton League of America, Mule Deer Foundation, National Assembly of Sportsmen's Caucuses, National Rifle Association, National Trappers Association, National Wild Turkey Foundation, North American Bear Foundation, North American Grouse Partnership, Orion-The Hunters' Institute, Pheasants Forever, Pope and Young Club, Public Lands Foundation, Quail Forever, Quality Deer Management Association, Rocky Mountain Elk Foundation, Ruffed Grouse Society, Safari Club International, Texas Wildlife Association, The Conservation Fund, Theodore Roosevelt Conservation Partnership, Whitetails Unlimited, Wildlife Forever, and Wildlife Management Institute NAWCA was first enacted in 1989 and incentivizes non-federal contributions to maintain and restore wetland habitat throughout North America. Since its inception, each Federal dollar has been matched, on average, by $3.20 in state and private funds. Not only do these funds help to support waterfowl populations that were once nearing all time lows, these voluntary projects also support nearly 7,500 new jobs annually. The success of this program lies in the fact that these projects are not top down regulations coming from the Federal Government. These projects involve multiple partners from private organizations and the Federal Government who work together voluntarily to protect and restore millions of acres of wetlands. In my home State of Oklahoma, NAWCA currently has 12 projects either completed or underway. These projects have conserved 26,869 acres of wildlife habitat and leveraged $11.3 million in partner contributions. These projects benefit outdoor recreation, hunting and fishing, as well as boosting local economies. NAWCA is a great example of how environmental conservation should be achieved. This program should put to rest the notion that voluntary efforts aren't successful. I would argue that these voluntary programs have been more successful and more cost effective than other mandatory Federal regulations. I look forward to this reauthorization moving quickly through the Senate. Thank you.

Mr. INHOFE

Mr. INHOFE. Madam President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. INHOFE. Madam President, I ask unanimous consent to be recognized for up to 25 minutes.

Mr. INHOFE. I thank the Chair. Madam President, I voted against the motion to proceed to the Menendez bill on Monday because, quite frankly, it is just a bill to continue raising gas prices. I talked for quite some time yesterday on the Senate floor about this; that by raising taxes on the oil and gas industry it sounds good to a lot of people because people do not like the oil and gas industry. They have been vilified, so everybody thinks we ought to get the oil and gas industry. What they do not understand is--I think they understand it, but they will not admit it--that is the way to increase prices at the pump. Somebody has to pay for all that stuff. So even Senator Menendez and several Democrats have said this bill is not going to lower gas prices. It would raise gas prices. I do not think anyone who looks at it logically could come to any other conclusion. As I discussed Monday on the Senate floor, the Democrats' plan goes against everything we know about basic economics--higher taxes limits supply. Whenever we limit supply, the price goes up. I do not think there is a person out there right now who does not remember, back in their elementary school days, the basic concept of supply and demand. We have this huge supply out there. But if we cut the supply, then the demand is going to be greater, and the prices are going to go up. The bottom line is, President Obama and his allies do not have an answer to high gas prices. That is because high gas prices--higher prices for all the energy we use--are exactly what they want. This administration remains committed to a cap-and-trade, green agenda. It is a plan that severely restricts domestic development and drives up the price of gas and electricity. Let me put it another way. Their policies are designed to make recoverable traditional energy more expensive so their desired green energy can compete. There is no question that is what the Obama administration has wanted. You all remember--and we have quoted so many times on this Senate floor--that Steven Chu, the Secretary of Energy, told the Wall Street Journal: ``Somehow we have to figure out''--speaking on behalf of President Obama and the Obama administration; not so much the Democrats in the House and the Senate, but this is the Obama administration--he said: ``Somehow we have to figure out how to boost the price of gasoline to the levels in Europe.'' Well, the levels in Europe were ranging, at that time, when he made the statement, around $8. Well, we are getting up there. He is getting his way. This is something that is happening now. We all know the infamous quote from President Obama in 2008 when he said under his cap-and-trade plan--this is a quote now--``electricity prices would necessarily skyrocket.'' Notice the word ``necessarily.'' It is going to happen. The President had it right. The point of the cap-and-trade regulations is to make us pay more on our utility bills. A lot of times people do not draw the connection. Energy is energy. If we raise the price of energy on utilities, on utility bills, or gas prices at the pump, it all relates to the rest. If we somehow put coal out of business so we have to use more natural gas and more gas, then that raises the price because that makes more demand for that particular product. I think most people understand that. That is very basic. If we are serious about lowering prices at the pump, then we need to open the vast oil and gas reserves we have at home to develop. After all, CRS recently reported--this is kind of interesting because it was a CRS report; so far, I have not heard anyone counter this report--we have more recoverable reserves of oil, gas, and coal than any country in the world--more than Saudi Arabia, more than China, more than Canada, all of them combined. In fact, with more than 160 billion barrels of recoverable oil, we have enough to maintain America's current rate of production and replace all of our imports from the Persian Gulf for 50 years. That is just domestically what we could do. It is out there. A lot of them try to say: Oh, no, we only have 2 percent of the reserves. I have said this so many times, and yet the other side just keeps repeating it over and over: We only have 2 percent of the reserves, and we are using some 25 percent when, in fact, they are talking about proven reserves. Proven reserves are reserves where we have drilled and proved there is oil there. Recoverable are the areas where we have not drilled yet because we have not had an opportunity. So if we have a policy, as this administration has, not to allow us to drill for oil, then we cannot prove anything. So the 2 percent means absolutely nothing. It is totally false. The thing is they know it. The key is ``recoverable.'' We have more recoverable reserves in fossil fuels; that is, oil, gas, and coal, than any other country in the world. But today we have awful government regulations that prevent us from accessing it, and we are the only Nation that does this. I defy anyone to tell me the name of another country that does not develop its own resources. They all do it, and we have this President saying, well, we encourage them down in Brazil and Venezuela to drill but not here. Well, anyway, we have these reserves that we need to start doing something with. That is why I have submitted three amendments that will address President Obama's war on affordable energy. I am going to talk about them. First of all, amendment No. 1974 is the American Jobs and Domestic Energy Production Act. In order to increase the development of our wealth of resources, I have submitted a substitute amendment to this bill that will open literally billions of barrels of oil and gas for commercial development. It is something that will actually bring down the prices, directly bring down the price of oil, of gasoline at the pump. First, the bill opens significant portions of the Outer Continental Shelf for development. Right now, the entire east coast and west coast and much of the Gulf of Mexico are completely off-limits. For the most part, the only offshore development allowed is in the western portion of the gulf and in certain areas offshore of Alaska. But we have to keep in mind, to do this, we have to get the permits, and that is where they have dragged their feet. My amendment would require the rest of the OCS to be leased over time. According to a recent study, these areas have at least 63 billion barrels of recoverable oil and up to 186 trillion cubic feet of natural gas. Once brought fully online, this will create tens of thousands of new jobs and ultimately may bring in an additional $1.4 trillion in additional tax revenue for the government. My amendment would also require the administration to move forward with three lease sales that were conducted by the Bush administration but were subsequently pulled by the Obama administration after taking office. Additionally, my amendment allows ANWR on the Northern Slope of Alaska to be developed. Experts believe this area contains 16.4 billion barrels of oil and 18.2 trillion cubic feet of natural gas. I have been up there. People talk about ANWR and all this, and it is a beautiful area. They have systems now where we cannot even tell where they are developing it. I have seen polls ranging from 70 to 85 percent--and I can actually identify these polls--of the people in Alaska, they want to do it. Why are we, in our infinite wisdom in Washington, DC, telling them in Alaska they cannot go after their own oil and gas? I think it is ludicrous. Anyway, this amendment will correct that situation. My amendment removes also the statutory moratorium on the development of this resource, and it requires the Secretary of the Interior to begin an oil and gas leasing program in that area. Today, oil shale--particularly that in Western States--represents some of our greatest energy potential. Just a few years ago we didn't know this. We didn't have any idea of the size of this. Some experts believe the Western States hold as much as 1.8 trillion barrels of oil shale, of which 800 billion barrels is presently recoverable. This is simply an astonishing amount of oil, and it would do a lot to help lower the price at the pump. That is what we are talking about. Everything we have talked about on the floor in opposition to the Menendez bill is something that will lower prices of gasoline at the pump. My bill forces the administration to release 10 research and development leases that were approved by the Bush administration but then canceled by the Obama administration. Thereafter, the Obama administration would be forced to conduct additional oil shale leases on Federal lands. We have 93 percent of the Federal lands that are off-limits. That needs to be corrected. Lastly, my bill reserves the right of regulating hydraulic fracturing to the States. I know a little bit about this because the first hydraulic fracturing that took place in this country was in my State of Oklahoma in 1949. Since 1949, there has not been one documented case of groundwater contamination. It has worked beautifully, I think most people agree, now that it is better regulated by the States. The States differ in the depth of their resources, what they have to do to achieve it. It has worked. The old saying is ``if it ain't broke, don't fix it.'' We have to look behind the motive of the Federal Government. This administration, if they can stop hydraulic fracturing, can stop the production of oil and gas. I believe that is their motivation. It is a State process that is successfully regulated by the States, and in 60 years there has not been one documented case of groundwater contamination. Because States have done such a good job regulating fracking, I think they ought to continue having that exclusive right. My bill does this. It takes away the temptation of the power grab by the Federal Government to regulate this thing that doesn't need to be regulated at the Federal level, particularly when their motivation is to do away with hydraulic fracturing. If we do that and we talk about when they are trying to go after these types of formations, they cannot extract 1 foot of natural gas without using hydraulic fracturing. That is what the bill does. It would be a big win for energy production because we all know the administration's regulations would likely prevent anybody from ever using hydraulic fracturing again. I can remember when the President was giving his speech to the Nation at the joint session. All of a sudden, people caught on that he has had this war on fossil fuels. He started saying complimentary things about good, clean natural gas. I agree. But what we didn't hear him say-- because he said it so fast toward the end of his remarks--is we have to do something about hydraulic fracturing. If we kill hydraulic fracturing, we cannot get the natural gas we are talking about. All told, by tapping into our domestic supply of oil and gas, we could increase our economic output by trillions of dollars over the next several decades. It could increase government tax revenues by $2 trillion, and it would create hundreds and thousands of new well-paying jobs. We have the energy resources we need, and if we develop them, it will significantly improve our economy and, there again, lower the price at the pump. By raising taxes, as the Menendez bill would, it would only make the problem worse. I urge adoption of that amendment. The next amendment I introduced is the Gas Regulations Act of 2012. To hold the Obama administration accountable for their role in gas prices, I am also introducing the Gas Regulations Act of 2012 as an amendment. We actually have this, and we are going to try to introduce it as a bill. This amendment would require an interagency committee to conduct a cumulative analysis on certain EPA rules and actions that impact the price of gasoline and diesel fuels. My amendment is the companion amendment to a bill introduced last week by House Energy and Power Subcommittee Chairman Ed Whitfield. This amendment will help us to obtain a better understanding of the costs of all these levels of regulation. I have often talked about the regulation and what the cost is. It is kind of masquerading. I will read the cost of these regulations that this administration is accountable for and that directly relate to the increased price of gas at the pump. Tier 3 motor vehicle emissions and fuel standards--that would levy a $12 billion gas tax on refiners. Who will pay for it? You will and my wife will at the pump. New source performance standards for petroleum refiners could result in billions of additional environmental and compliance costs. Again, that will be passed on to the consumer. The RFS2 standards too would force Americans to consume 21 billion gallons of expensive biofuels, such as the one the Navy procured for $26 a gallon last year, instead of paying $3.50 a gallon. Ozone standards would result in a $676.8 billion loss in GDP. Again, these standards increase directly the price of gas at the pump. There is greenhouse gas PSD and title V permitting actions--again, another regulation. This regulation slows down the permitting process and would prevent upgrading refining capacity from coming online quickly. Again, this causes an increase in the gas price. People know pretty much the supply-and-demand argument, but they don't know what the regulations do. Anyway, this amendment No. 1963 is designed to do that. The next one I introduced is amendment No. 1967. This is kind of called the Inhofe-Upton Energy Tax Prevention Act. Fred Upton, a Congressman, actually passed this. I have introduced this now for 3 years. We have been trying to do this. Just yesterday, we found out President Obama fully intends to make good on his campaign promise that under his plan of a cap-and-trade system, electricity prices would ``necessarily skyrocket.'' That is what we are talking about with this amendment, cap and trade. People remember that. A lot of Republicans were concerned about this issue after Kyoto, and they said let's do something about this; this idea that somehow we are going to have to reduce and regulate greenhouse gases in order to do this. They are introducing cap-and-trade bills. It goes back to the Kyoto convention in 1993, when the famous meeting was held, and Al Gore went down to try to put it together in Rio de Janeiro 20 years ago. He was going to put this together to come up with an international convention called Kyoto, and they tried to, of course, get us to pass it. We saw it would cost the American people between $300 billion and $400 billion a year, and it would treat developing countries differently, so we didn't do it. The interesting thing about the Kyoto treaty is that the President-- then President Clinton--never submitted it for ratification in this body. After that didn't work out, they went ahead and did a second effort to do it through cap-and-trade legislation. We beat all the cap- and-trade regulations. The main reason is because it became evident the science was cooked--all put together by the United Nations. It started back in 1992. They developed something called the IPCC, which is the Intergovernment Panel on Climate Change, which was designed in order to, I believe, cook the science and make people believe we are going to have to do something and that CO2 and anthropogenic gases were causing global warming. We know what happened since that time, and with climategate, which showed they cooked the science. Consequently, we introduced this legislation. This legislation merely does one thing. It will take away the jurisdiction of the EPA to regulate greenhouse gases. My concern is this: We were able to stop all these bills from passing that would have imposed a tax increase on the American people. To give an idea how much that $300 billion or $400 billion would mean, in Oklahoma, I keep track of the number of families who file tax returns, and I do the math. If we do the math with what it would cost for cap and trade and do the legislation they were talking about passing, which we defeated on the Senate floor, it would cost each taxpayer in Oklahoma over $3,000 a year. What would they get for that? This is interesting. Even those people out there who think I am way off base and wrong, in terms of CO2 and anthropogenic gases-- keep in mind we asked the question to President Obama's Administrator of the EPA: ``If we were to pass cap and trade, would this reduce CO2 emissions worldwide?'' She said: ``No, logically, it would not.'' This isn't where the problem is. The problem is in China and in India. Those are the places where they would have to be regulated. But they don't regulate it to the degree we would here. We can carry that one step further. If we pass cap and trade, it would have the effect of increasing anthropogenic gases worldwide, because as our manufacturing base leaves the United States and seeks energy in those areas where there are less controls, that would have the effect of not reducing but increasing emissions. What we would attempt to do is to take away that jurisdiction. Here is the reason we want to do that. It is bad enough--when I talked about $300 billion to $400 billion it would cost to do cap and trade through legislation, if we do it through regulation, it will be a lot more for this reason: Most of the bills that were introduced, starting back in 2003, ending up with the Waxman-Markey bill, which was a couple years ago, these were bills that would regulate emitters that emitted over 100,000 tons a year. However, if we do it through regulation, it has to be under the Clean Air Act, and the Clean Air Act specifically says not those that emit 100,000 tons a year but those who emit 250 tons or more. That would be every church, every school, and every hospital in America. We cannot even approximate that cost. That is what doing cap and trade by regulation would do. Simply put, my third and last amendment would be to do here what they have already done in the House of Representatives, which is to take away the jurisdiction from the EPA. It directly relates to the price of gas at the pump. Take these three amendments, and if the Menendez bill should get through, with these amendments we can totally stop the increase of gas at the pump because that is what we will be faced with if we adopt the Obama-Menendez amendment. With that, I yield the floor.

Mr. INHOFE

Mr. INHOFE. Mr. President, I rise to introduce S. 2248, a bill that would clarify the States' sole authority to regulate the process of hydraulic fracturing at the State level as opposed to the Federal level. I am pleased to be joined by Senators Murkowski, Vitter, Sessions, Cornyn, Risch, Hoeven, and Lee as cosponsors. The reason for this bill is the State jurisdiction of a process called hydraulic fracturing, which has taken place since 1949. In 1949, the first hydraulic fracturing well took place in Duncan, OK. It is interesting that there has not been one documented case, in over a million wells using this process--in 60 years--of groundwater contamination. As a matter of fact, numerous studies, including reports by the Groundwater Protection Council, the EPA, and recently the Energy Institute at the University of Texas at Austin, have found no evidence of hydraulic fracturing posing a risk to water wells or groundwater. A lot of people believe--and I am among them--that the reason to take it over at the Federal level is to do away with hydraulic fracturing. It is interesting that, recently, with some of the shale deposits and discoveries that have been made in the United States, we have been able to get in there, using this process, and come up with huge reserves and start producing these reserves. In every case, without exception--in fact, I will go so far as to say you cannot get one cubic foot of natural gas out of a type formation without using hydraulic fracturing. The process is and will continue to be a safe process. Despite the evidence, in President Obama's recent campaign rhetoric, this administration continues to wage an all-out war on domestic oil and gas development. During the State of the Union Message--it was interesting because, apparently, now because of the high price of gas at the pump, the President is feeling political pressure, so he is coming out and saying: No, I am not against all fossil fuels, even though he has been for 4 years. And he started talking about clean, plentiful, cheap natural gas. I agreed with that; that is what it is. However, at the same time, if he could have that rhetoric and be able to make the case that the Federal Government needs to take over the process of hydraulic fracturing to be under his control and he can stop that process, he can cut off almost all production altogether. According to the nonpartisan Congressional Research Service--and this is one that came out this month--since 2007, ``about 96 percent of the [oil production] increase took place on nonfederal lands.'' A recent study also found that 93 percent of shale oil and gas wells are on private and State lands. The Department of Interior is in the process of issuing rules which will further discourage production on Federal lands and federally regulate disclosure of fracking fluids, well integrity, and waste water. According to Secretary of Interior Ken Salazar, these are rules which they hope will serve as a model for future regulation of State lands. The Obama EPA alone is looking to regulate hydraulic fracturing through its offices of Water, Air, and Toxics. What does this legislation do? It is simple. It makes clear that the States have the sole authority to regulate hydraulic fracturing on any land within their borders. This would include Federal lands within the borders of a State. It also requires hydraulic fracturing on Federal lands to comply with the State laws of which the Federal lands are located. Activities related to hydraulic fracturing are already regulated at the Federal level under a variety of environmental statutes, including portions of the Clean Water Act, Safe Drinking Water Act, and the Clean Air Act. States better understand their unique geologies and interests. I happen to be from Oklahoma, which is an oil State, and it varies from State to State. Louisiana deposits are found at a different level than ours in Oklahoma. Recently, people think of all these deposits being located in the West. However, the Marcellus discoveries that have been made are actually in New York State and Pennsylvania, so their local regulations are much more applicable than it would be if you did it at the Federal level. I invite cosponsors. Here we are in the United States with more recoverable reserves in oil, gas, and coal than any other country in the world. We can be completely self-sufficient from the Mid Eastern oil if we get politics out of the way and use our own resources. We are the only country in the world that doesn't develop its own resources. This is the answer to the problem--the answer to the price of gas at the pump. It is one more option. We need to get out of the way of this process called hydraulic fracturing. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. INHOFE

Mr. INHOFE. Mr. President, I rise to introduce S. 2248, a bill that would clarify the States' sole authority to regulate the process of hydraulic fracturing at the State level as opposed to the Federal level. I am pleased to be joined by Senators Murkowski, Vitter, Sessions, Cornyn, Risch, Hoeven, and Lee as cosponsors. The reason for this bill is the State jurisdiction of a process called hydraulic fracturing, which has taken place since 1949. In 1949, the first hydraulic fracturing well took place in Duncan, OK. It is interesting that there has not been one documented case, in over a million wells using this process--in 60 years--of groundwater contamination. As a matter of fact, numerous studies, including reports by the Groundwater Protection Council, the EPA, and recently the Energy Institute at the University of Texas at Austin, have found no evidence of hydraulic fracturing posing a risk to water wells or groundwater. A lot of people believe--and I am among them--that the reason to take it over at the Federal level is to do away with hydraulic fracturing. It is interesting that, recently, with some of the shale deposits and discoveries that have been made in the United States, we have been able to get in there, using this process, and come up with huge reserves and start producing these reserves. In every case, without exception--in fact, I will go so far as to say you cannot get one cubic foot of natural gas out of a type formation without using hydraulic fracturing. The process is and will continue to be a safe process. Despite the evidence, in President Obama's recent campaign rhetoric, this administration continues to wage an all-out war on domestic oil and gas development. During the State of the Union Message--it was interesting because, apparently, now because of the high price of gas at the pump, the President is feeling political pressure, so he is coming out and saying: No, I am not against all fossil fuels, even though he has been for 4 years. And he started talking about clean, plentiful, cheap natural gas. I agreed with that; that is what it is. However, at the same time, if he could have that rhetoric and be able to make the case that the Federal Government needs to take over the process of hydraulic fracturing to be under his control and he can stop that process, he can cut off almost all production altogether. According to the nonpartisan Congressional Research Service--and this is one that came out this month--since 2007, ``about 96 percent of the [oil production] increase took place on nonfederal lands.'' A recent study also found that 93 percent of shale oil and gas wells are on private and State lands. The Department of Interior is in the process of issuing rules which will further discourage production on Federal lands and federally regulate disclosure of fracking fluids, well integrity, and waste water. According to Secretary of Interior Ken Salazar, these are rules which they hope will serve as a model for future regulation of State lands. The Obama EPA alone is looking to regulate hydraulic fracturing through its offices of Water, Air, and Toxics. What does this legislation do? It is simple. It makes clear that the States have the sole authority to regulate hydraulic fracturing on any land within their borders. This would include Federal lands within the borders of a State. It also requires hydraulic fracturing on Federal lands to comply with the State laws of which the Federal lands are located. Activities related to hydraulic fracturing are already regulated at the Federal level under a variety of environmental statutes, including portions of the Clean Water Act, Safe Drinking Water Act, and the Clean Air Act. States better understand their unique geologies and interests. I happen to be from Oklahoma, which is an oil State, and it varies from State to State. Louisiana deposits are found at a different level than ours in Oklahoma. Recently, people think of all these deposits being located in the West. However, the Marcellus discoveries that have been made are actually in New York State and Pennsylvania, so their local regulations are much more applicable than it would be if you did it at the Federal level. I invite cosponsors. Here we are in the United States with more recoverable reserves in oil, gas, and coal than any other country in the world. We can be completely self-sufficient from the Mid Eastern oil if we get politics out of the way and use our own resources. We are the only country in the world that doesn't develop its own resources. This is the answer to the problem--the answer to the price of gas at the pump. It is one more option. We need to get out of the way of this process called hydraulic fracturing. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. INHOFE

Mr. INHOFE. Mr. President, we are going to have a vote this afternoon. It is going to be a procedural vote. Some will be voting different ways. There is a substance behind the issue at large. Last week, President Obama visited Cushing, OK. It may have been the first time he has ever been to Oklahoma. I do not know. He claimed that under his watch, he said, ``America is producing more oil today than at any time in the last 8 years.'' It seems that in the midst of $4- to $5-a-gallon gasoline, he is trying to convince the American people he is not one to blame. Clearly, he is the one to blame. That is why I think it is important to set the record straight. After all, it was Obama's Energy Secretary Steven Chu--we cannot forget this--who said: ``Somehow we have to figure out how to boost the price of gasoline to the levels in Europe.'' That was his Energy Secretary who was speaking on behalf of President Obama. So the motive is to raise the price of gas. Right now, we are almost over halfway there. We all remember the President's statement during the 2008 campaign when he said: ``Under my plan, electric rates will necessarily skyrocket.'' His policy agenda has been in lockstep with this goal. President Obama has had a 4-year war on fossil fuels, and now we are paying for that at the pump. As to the oil and gas taxes, nowhere has the President been more resolute in stopping oil and gas development than in his tax proposals, every budget since he was sworn in. Now we are talking about four budgets this President has presided over. Keep in mind, when a budget is designed by a President, whether he is a Democrat or Republican, it is the President, not the Democrats, not the Republicans, not the House, not the Senate, it is the President who is responsible for that budget. In every budget the President has called for the elimination of all tax provisions made available to the oil and gas industry. This year these tax increases totaled about $40 billion over 10 years. So while the President was going around the country last week trying to convince everyone he is actually pro oil and gas, he laid the groundwork for Senator Menendez to push a bill through the Senate to raise taxes on the industry. Senator Menendez's bill, S. 2204, proposes to either modify or outright cancel the following tax provisions for major integrated oil and gas firms. First, the section 199 manufacturer's tax deduction; secondly, intangible drilling costs, sometimes referred to as IDC; third, the percentage depletion; and, four, the foreign tax credit for oil and gas firms. Last time we actually had a vote in the Senate on these provisions was in June of 2010. I remember it very well because that was when the distinguished Senator from Vermont Mr. Sanders offered an amendment that would have raised taxes on oil and gas producers by $35 billion over 10 years by repealing section 199--same thing he is trying to do-- percentage depletion and IDC. While the Menendez bill is a little different, it applies to the larger companies, those with substantial production levels. It is important to point out that the Sanders amendment--and I led the opposition to the Sanders amendment--was defeated almost 2 to 1, 35 to 61. The President insists these tax and accounting provisions are actually subsidies, but nothing can be further from the truth. This has not been done yet, to my knowledge--been explained. It is so important people understand what these provisions are. Section 199 is the manufacturer's tax deduction. Section 199 was added to the Tax Code as a part of President Bush's 2004 tax law. It was designed to support domestic manufacturing, and it did this by providing a 9-percent tax deduction for manufacturers, effectively lowering their tax rates from 35 to 32 percent. The provision was phased in between 2005 and 2010. But, in 2008, something strange happened. The oil and gas industry was singled out so it could only claim a portion of that deduction. In other words, all other manufacturers of all other goods in America could claim that deduction, except oil and gas. The Menendez proposal would repeal section 199 from major integrated oil companies. In the President's budget, a similar proposal was scored at $11.6 billion. I am going to add all these in a minute and let everyone know why we are paying so much at the pump. What is most interesting to me about the section 199 tax deduction is that it is available to any company in the United States that creates any kind of manufactured goods here at home. Firms that build and sell refinery equipment, airplanes, washing machines can all claim the deduction. It may be surprising, however, that the deduction is also available for movie producers--not oil and gas producers but movie producers. That is right. The American film industry can claim a deduction for making movies. So President Obama and Senator Menendez are putting their Hollywood friends and movie stars ahead of an industry that makes us less reliant upon oil imports from the Middle East. There is no surprise there. The next thing is--that was section 199. That is a manufacturer's deduction, applies to all, and benefits all manufacturers to encourage domestic manufacturing. The second thing is intangible drilling costs, IDC. This is a little bit more complicated. But the intangible drilling costs are expenses oil and gas firms incur when they drill and prepare new wells. These costs often total between 60 and 80 percent of a well's cost. They are generally not recoverable and include things such as site preparation, labor, design. Intangible drilling costs are firmly grounded in sound accounting principles. Every basic accounting course discusses the principles of cost recovery. It is safe that businesses should be allowed to write off their expenses from the revenue they earn to account for the cost of doing business. That is logical. No one is going to disagree with that. When purchasing substantial capital equipment, depreciation is often used to recover the costs of an investment over its useful life. But things such as wages are nearly always deducted immediately because once a company has paid an employee for work, it has no lasting value. To retain the value, they have to keep paying the employee. Hence, it is an immediate expense, and it is deducted from the revenue when determining the net profit. The IDC deduction has been on the books since 1913. This is not anything new. We have lived with it for almost a century. Most of the costs associated with the preparation of new wells should be classified as an immediate expense--things such as labor. The expenses of IDCs make sense. To claim it is a subsidy is totally dishonest. Every company, regardless of whether it is an oil or gas firm or any other company, is allowed to recover costs associated with their investments in business operations. If this is going to be labeled a subsidy for the entire economy, then we have big problems. Current law allows most oil and gas firms to write off these expenses as an alternative to capitalizing their costs into the total value of the asset being developed and then depreciated. But at some point along the way, the law was changed so that major integrated oil firms are required to capitalize 30 percent of their IDCs and amortize them over a 60-month period. The Menendez bill would eliminate this option and require oil and gas firms to capitalize all of their IDCs. A similar proposal was in the President's budget scored as a $13.9 billion tax increase. We are going to add that up in a minute. Together with the repeal of section 199, an IDC should compromise 10 percent of America's oil and gas production capacity by 2017. This translates into a potential loss of 59,000 jobs, 600,000 barrels of oil a day in domestic production, and the loss of $15 billion in capital expenditures in 2012, and potentially $130 billion over the next 10 years. Percentage depletion is very similar. It has been with us. Since 1926, small producers and millions of royalty owners have had the option to utilize percentage depletion to both simplify their tax filing and to account for the decline in the value of the minerals produced from their properties. Current law allows small producers to take a 15 percent deduction from the gross income from a given producing property in lieu of a complicated depreciation deduction. This tax provision is particularly important for the production of America's nearly 700,000 low-value, marginal wells, making it essential to Oklahoma. Even though the small marginal wells only produce about two barrels a day, they account for 28 percent of the total production. We are one of the, if not the, largest marginal States out there. These are truly the little guys, and the President wants to go after them and destroy the incentives that keep the older wells producing by repealing percentage depletion. If he were able to do this, it would increase taxes on the industry by $11.5 billion. What is most interesting about the Menendez proposal is that it only applies to major integrated oil companies, which are not even allowed to claim percentage depletion, proving that 2204 is nothing more than political theater. As to the modification of the foreign tax credit for dual capacity taxpayers, the United States is one of the only developed--I think it is the only developed country in the world that has a global corporate tax system. This means the IRS and Uncle Sam reach all over the world to tax profits made by U.S. companies outside of our borders. When we combine this with our 35-percent corporate tax rate, which is one of the largest and highest on Earth, our corporate tax policies are the worst in the world. The global corporate tax system works like this: When a U.S. firm is operating overseas, they pay taxes on those profits in the country in which they are operating. For example, a U.S. company makes a product in South Korea, sells it to the South Koreans, and they make a $1 million profit. Because their corporate rate is 22 percent, as opposed to ours at 35 percent, the firm pays $220,000 in taxes. That makes sense. If a U.S. firm has made the same product and profit in the United States, it would be subjected to a 35-percent tax, which would be $350,000 in corporate taxes. This also makes sense except it is too high. However, because of our global corporate tax system, if a firm does this same thing in Korea, they have to pay the differential between 22 percent and 35 percent when they bring the money back into the United States. Wait, we want to bring the money back. We want to stimulate our economy. Why would they have a disincentive to bring that money to invest in America? In this example, a U.S. firm would have to pay an additional $130,000. They would be doing a great thing for foreign countries but certainly not for us. It doesn't make any sense at all. Senator Menendez's bill makes this awful policy even worse by limiting the ability of major integrated oil firms to account for the taxes they pay in other countries when they calculate what they owe the United States. The President made a similar proposal in his budget this year, and if enacted it would raise taxes by about $10 billion over 10 years. You would pay for more of this at the pump. Instead of making the corporate tax system even less competitive than it is today, we should aim to completely reform it so we move to a territorial system that doesn't reach outside our borders to collect more taxes. Those are the major provisions of the Menendez-Obama bill. If they were enacted to the extent proposed by President Obama's budget, they would be a tax hike of $47.1 billion. Again, that relates to the cost of gas at the pump. The President claims he is doing this in the name of forcing the oil and gas industry to pay its fair share. He claims it would not harm domestic oil production. But this claim rejects the well-known process companies follow when making investment decisions. Successful oil and gas companies, like those in all industries, are faced with seemingly endless opportunities. To sort through the opportunities they have to have a way to rationally decide which projects are in the best interest of their investors and which are not. Most companies do this by determining which investments will give the highest rate of return given the risk. Taxes play an incredibly important role in this matter. If taxes increase, then cash flow from the project decreases. Therefore, taxes in the United States increase; the competitiveness of domestic projects decreases significantly relative to the opportunities available abroad. When the rubber meets the road, this means the U.S. oil and gas firms--especially the big ones--targeted by the Menendez-Obama bill will be more likely to select international projects than U.S.-based projects, and this is bad for our economy. As to the other ways Obama is killing oil and gas, the taxes aren't the only thing the President is doing. They are significant. I mentioned four of them that are significant. But look at the Keystone Pipeline. I just got back from Oklahoma, a visit there. It is another example of why he was in Cushing, OK, the central part of Oklahoma. For those who are not familiar with it, that is sort of the intersection of all of the pipelines. He said he was going to expedite the permitting of the southern leg of Keystone. That would be the leg going from Cushing, OK, down to the Houston area. What he didn't say is that this is the part he doesn't have any control over. In other words, he has no control over the southern half. The reason he does over the northern half is because that crosses a country boundary from Canada to the United States. But he doesn't have a say in this. He could not stop it if he wanted to. Obviously, he would want to because he has demonstrated that. Moreover, his action to block the northern leg is preventing the immediate creation of over 20,000 jobs and up to 465,000 jobs by 2035. I don't think anybody argues with that analysis. The President's effort to stop hydraulic fracturing is another example. Much of today's renaissance in oil and gas production is the result of the advancements in this technology. He has done everything he can to paint a nasty and suspicious picture of it. He has 10 Federal agencies, including the EPA, the Department of Energy, and the Bureau of Land Management looking at ways to regulate hydraulic fracturing at the Federal level. In addition, he has also kept millions of Federal lands off-limits to oil and gas. As far as the hydraulic fracturing, I know a little about that; we had the first hydraulic fracturing that took place in Duncan, OK, in 1949. There has not been one documented case of ground water contamination using hydraulic fracturing. The only reason he is opposed to it is that this is part of his war on fossil fuels. If he can stop hydraulic fracturing, he will stop all of these types of production, and everybody knows that. We have already done that. So we have the tax problems, the pipeline, and hydraulic fracturing. In addition to that, his attempt has been to stop production on Federal lands and make Federal lands off-limits to oil and gas exploration, and even through some lease-sales conducted during the Bush administration, citing the need for more environmental review. Today--and this is significant--83 percent of Federal onshore lands are inaccessible or restricted to drilling. No drilling is allowed on the entire east and west coasts. No drilling is allowed in ANWR, in Alaska, and very limited drilling is in the gulf. Oil and gas production is skyrocketing in States such as North Dakota and Texas simply because the President has very little control over the drilling there. That is not Federal land. This is in Texas, Oklahoma, and North Dakota. The Congressional Research Service concurs, stating in a recent report that about 96 percent of the increase in oil and gas production since 2007 took place on nonfederal lands. In other words, it has happened in spite of the President's efforts. The President imposes all of these punitive taxes because he doesn't have control over private lands. He tries to say: In my administration we expanded production. That has happened in spite of his policies. At end of the day, all of President Obama's oil and gas policies make it harder for U.S. firms to justify projects at home. This is to the detriment of our economy. Just look at the increase in taxes, the killing of the pipelines, the stopping of hydraulic fracturing, making drilling off-limits. To let you know what States are missing out on, a Friday New York Times front-page article ran about oil and gas development going on in west Texas describes how this helped the local economy, saying new-found wealth is spreading beyond the fields in nearby towns. Petroleum companies are buying so many pickup trucks that dealers are leasing parking lots the size of city blocks to stock their inventory. Housing is in such short supply the drillers are importing contractors from Houston. The hotels are leased out before they are even built. Two new office buildings are going up in Midland, a city of just over 110,000 people--the first in 30 years--while the total value of downtown real estate has jumped 50 percent since 2008, with virtually no unemployment. Restaurants cannot be found. They cannot find people to work because they are fully employed. One of the individuals from Oklahoma, a great producer, went up to North Dakota. He is up there right now. I talked to him yesterday and he said: The biggest problem we have is that we cannot hire anyone. It is full employment. Things are great. That is what the rest of the country is missing out on. When we make the United States less competitive for U.S. oil and gas firms, as the President's tax policies propose, this sort of red-hot growth goes to places such as Azerbaijan and Nigeria instead of Midland, TX, and Oklahoma City. Rather than help our economy, the President's tax policies make us more reliant on foreign oil imports from unstable regions of the world. I don't know about you, but I would rather see pickup truck dealerships running out of vehicles to sell in Cushing, OK, than in Caracas, Venezuela. The President will not admit this, but we have seen what punitive tax hikes do to the oil and gas industry. They hurt our economy. President Carter, way back in the early eighties, confirmed this with the windfall profits tax. He was going to punish the bad oil companies. As a result of that, it decreased domestic production by 3 to 6 percent, which increased American dependence on foreign oil sources by 8 to 16 percent. Almost all of it was from the Middle East. It doubled our dependence by putting taxes on the oil industry here. A side effect was also declining, not increasing, tax collections. Since we know what happens when we do this sort of thing, we don't need to try the experiment again. Regardless, the President and most on the left insist that taxpayers are subsidizing oil and gas firms. But, apparently, they have not been reading the facts. The Tax Foundation recently estimated that between 1981 and 2008, oil and gas companies sent more money to Washington and State capitols than they earned in profits for shareholders. The administration's own Energy Information Administration reported that the industry paid about $35.7 billion in corporate taxes in 2009. The oil and gas industry sends $86 million per day to Federal and State governments, and their effective income tax rate is over 41 percent, which may be the highest of any industry in America. But the President and congressional Democrats want them to pay more. In addition to these tax increases, Secretary Salazar recently told Congress his department is planning to raise the onshore royalty rate by 50 percent. These are the royalty rates to ensure taxpayers get a fair return on the development of oil and gas leases on public lands. If what we are trying to do is raise more revenue, we should get it by growing the economy. We have used the figure over and over that with each 1 percent increase in economic activity that translates into about $50 billion in new revenue. We can do that by unlocking more domestic supply for development, and this will lower prices at the same time. We have plenty of it. The CRS report recently stated we have the largest combined oil, natural gas, and coal recoverable reserves on Earth--more than any other country, more than Saudi Arabia, more than any other country. This means we have a 50-year supply of oil in present consumption in the United States, for 50 years, just exporting our own development or 90 years' supply of natural gas. At the end of the day, this bill, and the rest of the President's proposals, will only make U.S. oil firms less competitive compared to their international peers. It will raise the cost of energy by restricting global prices. It will force us to become more reliant on others, which will make us more vulnerable from a defense and economic security perspective. The only way to resolve this problem and to do something about reducing the price at the pump is to start developing our own resources. A minute ago I talked about what is happening in Midland, TX, and North Dakota, and what is happening in some areas in Oklahoma. I can remember when I was a little kid I worked on cable-and-tool rigs. That was very difficult at the time. A man by the name of A.W. Swift had 18 cable-and-tool rigs. At that time, instead of rotaries, they would pound down. Sometimes I would work two shifts. One night I was working the second shift, and the well blew up. The owner had one son named Burt. Burt was killed and I wasn't. When I stop to think about the prosperity in those days of the oil and gas industry in Oklahoma, I think about the nearby town of Pawhuska, where people had to wait in line to pay their lunch bill. It was full employment and not an empty storefront. But up until we started producing again in Oklahoma, it was very much almost a ghost town. Now things are coming back, and we can take advantage of that. In spite of the tax policies of President Obama, we are coming back, and we can do this throughout the United States. The most important thing we can do is make sure the Menendez-Obama bill to increase taxes on the oil and gas companies in the United States is defeated. We hope we have the opportunity to do that. With that I yield the floor. I suggest the absence of a quorum.

Mr. INHOFE. Mr. President, I ask unanimous consent the order for the quorum call be rescinded.

Mr. INHOFE

Mr. INHOFE. Mr. President, I ask unanimous consent that the time on each side be equally divided during the quorum calls.

Mr. INHOFE. I suggest the absence of a quorum.

Mr. INHOFE

Mr. INHOFE. Mr. President, I ask unanimous consent that at the conclusion of the remarks of the Senator from New Mexico, I be recognized for up to 25 minutes.

Mr. INHOFE. Does the Senator wish to continue?

Mr. INHOFE

Mr. INHOFE. I ask for the yeas and nays.

Mr. INHOFE

Mr. INHOFE. Mr. President, first of all, I will make this very brief. I appreciate the comments of the majority leader. It was not necessary, but it is very meaningful to me personally. Also, about Senator Boxer, she and I are at opposite extremes on many issues. I have always said that conservatives should be big spenders in two areas: national defense and infrastructure. We have to look at this in the future so that we don't have to go through it again. I thank all of those on her side and on my side who helped to move this forward. I thank Ruth VanMark, who has been with me for 22 years. She is now getting off of probation. Again, I thank all of you for your cooperation.

Mr. INHOFE

Mr. INHOFE. Mr. President, I didn't want to take a lot of time before the vote because I knew we were anxious to get it done, and certainly we have been through this so many times--passing a transportation bill and a reauthorization bill. I was asked by one of my Republican Members: We have done so many of these extensions, what would be the difference between an extension and a short 2-year bill? I commented: You can't get any of the improvements. You can't do any of the planning. I would also like to say this to my Republican friends: I regret some of them voted against it, not being fully aware of some of the great reforms we have in the bill. I appreciate the fact that Senator Boxer was agreeing to some aspects that she didn't agree with philosophically, such as some of the streamlining and enhancements. We have now resolved the enhancement problem so decisions can be made by the States. So I think that was good. I wanted to at this point mention our staff, even though I already mentioned Ruth VanMark earlier. I was kidding when I said she is off of probation. She has been loyal to me for 22 years and been through several of these bills with me. Let me also mention James O'Keeffe, Murphie Barrett, Kyle Miller, Dimitri Karakitsos, and Alex Renjel. So we have a great team over here, and, of course, they have a great team also on the Democratic side, with Bettina Poirier, David Napoliello, Andrew Dohrmann, Grant Cope, and Tyler Rushforth from Senator Boxer's office. So, Mr. President, some good reforms have taken place, and we need now to get serious about what we are going to do in the next short while in preparation of a much longer and better and more robust highway reauthorization bill. Of course, first is to get with the House Members, get into conference and see what we can accomplish. Again, I thank all the staff, all the people working on this bill, Senator Boxer, and, of course, the majority leader, Harry Reid, as well as Mitch McConnell. I yield the floor.

Mr. INHOFE

Mr. INHOFE. Mr. President, I ask unanimous consent for 10 seconds.

Mr. INHOFE. I would note--

Mr. INHOFE. Mr. President, I ask unanimous consent for 30 seconds.