Frank Murkowski

Mr. MURKOWSKI

Mr. MURKOWSKI. I ask unanimous consent the bill be read a third time and passed, the motion to reconsider be laid upon the table, and any statements relating to the bill be printed in the Record.

Mr. MURKOWSKI. Mr. President, I ask unanimous consent the Senate now proceed to the consideration of Calendar No. 943, H.R. 3995.

Mr. MURKOWSKI

Mr. MURKOWSKI. I ask unanimous consent the resolution and preamble be agreed to en bloc, the motion to reconsider be laid upon the table with no intervening action, and any statements relating thereto be printed in the Record.

Mr. MURKOWSKI. Mr. President, I ask unanimous consent the Senate proceed to the consideration of S. Res. 376, introduced earlier today by Senator Daschle and Senator Johnson.

Mr. MURKOWSKI

Mr. MURKOWSKI. I ask unanimous consent the Senate now proceed to the immediate consideration of S. 3201, introduced earlier today by Senator Frist, for himself, Mr. Cochran, and Mr. Moynihan.

Mr. MURKOWSKI. I ask unanimous consent the bill be read a third time and passed, the motion to reconsider be laid upon the table, and any statements relating to the bill be printed in the Record.

Mr. MURKOWSKI

Mr. MURKOWSKI. I ask unanimous consent that the bill be considered read the third time and passed, the motion to reconsider be laid upon the table, and any statement relating to the bill be printed in the Record.

Mr. MURKOWSKI. Mr. President, I ask unanimous consent that the Senate now proceed to the consideration of H.R. 4828, which is at the desk.

Mr. MURKOWSKI

Mr. MURKOWSKI. I ask unanimous consent that the resolutions be agreed to, the preambles be agreed to, the motions to consider be laid upon the table, that any statement related to the resolutions be printed in the Record, with the above occurring en bloc.

Mr. MURKOWSKI. Mr. President, I ask unanimous consent the Energy Committee be discharged from further consideration of the following resolutions, and further, the Senate proceed to their considerations en bloc: S. Con. Res. 114, S. Res. 368.

Mr. MURKOWSKI

Mr. MURKOWSKI. Mr. President, I ask unanimous consent that the Senate now proceed to consideration of H.R. 1715, which is at the desk.

Mr. MURKOWSKI. Mr. President, I ask unanimous consent the bill be considered read the third time and passed and the motion to reconsider be laid upon the table, and any statements relating to the bill be printed in the Record.

Mr. MURKOWSKI

Mr. MURKOWSKI. This administration seems to have limited success in the real goal and, as I have indicated, it appears to be manipulating prices in the world market for, one can only conclude, a political effect. Crude oil prices, as I said, were at a 10-year high, $37 a barrel. After SPR, they hit $32. But today, as I have indicated, they are back up to $36.40. Along the way, they might be making some millionaires out of the speculators who were lucky enough to win a bid on SPR oil. We asked the Secretary to explain how those went out, who got them, how were they offered because if it is true, how did the administration, with this kind of an opportunity for speculators who didn't have to put up any financial requirement, prove a capability to get their bid? It appears that anyone was eligible to play. Let's look at some of the bidders. Without being specific, very little was required of anyone who wanted to bid on the SPR oil. They did not have to show any financial capacity. The excuse was they were going to take care of that later. That was the official response from the Department of Energy. You didn't have to have any previous experience in the energy market; no track record. You didn't have to have any agreements with refiners who refine the oil. You didn't have any guarantee of even access to refiners and no guarantee that heating oil would be reserved specifically for the Northeast. They made this bid proposal without any requirement that you could not export it, without any requirement that it be held in the United States for the Northeast reserve. As a consequence, what have we really accomplished? All the winning bidders needed to do was promise to return more oil to SPR than the other bidders. You might have a pretty inexperienced bidder who wanted to get the bid and who didn't have to put up any financial responsibility proof, bid high, and get an award. Once you get an award, you can turn around and market it. For the larger companies that have the financial capacity, it is perhaps a little different. I don't begrudge anyone for making a return on an investment. But it is a rather peculiar and I would suggest a poor way for government to do business. As I think back at government sales, for example, in the forests, the Forest Service requires a participant who is putting up a bid to also show financial responsibility. You have to put up a letter of guarantee in your bank to even bid. What happened here is we had the letters go out from the Department of Energy to prospective bidders. They simply bid and got an award. Then they have to put up the financial responsibility under a letter of credit after the fact. In the meantime, if they are a broker, as a few of these folks were, with no experience and no refinery capacity, they are simply going to bid on the oil, and hopefully the price of oil will increase. They can sell their position to somebody else and walk away with a couple of million dollars. I guess that is part of what makes America great. But, by the same token, you wonder to whom that profit should belong. Should it belong to the taxpayer or the speculator who puts up nothing for the opportunity to get a position and then be fortunate enough to sell it so he can make a few bucks? We will have to see either today or tomorrow, when the letters of credit are due, whether some of these speculators have the financial capacity to actually meet the conditions after the fact. But I can tell you this. I have checked with several of the companies. These speculators have been busy trying to resell their positions. We will see how many are able to make good on their promises. But it is important to recognize the winners. What do they get? I don't want you to misunderstand. But they basically get to borrow the crude from SPR. And, if the price goes up, they can sell it at a higher price. They can take the money and buy back cheaper oil in 10 to 12 months to replace what they have borrowed from SPR with interest and, of course, keep any profits as a result. There is potentially millions of dollars--at whose expense? The taxpayer. I have a little bit of background in banking and business. I can tell you it is a poor way to do business, to put out a bid proposal without any financial requirement for performance. That is what the Department of Energy has done. I think it is totally inappropriate when other Government agencies such as the Forest Service have a proven list of bidders. I want to make another observation. Isn't it rather peculiar that we have a Strategic Petroleum Reserve with about a 56-day supply of oil in case this country finds its oil supplies in the Mideast, on which we are 58-percent dependent, cut off by some action and we don't have an approved list of bidders who have already proven their financial capacity or the wherewithal to refine the oil and get it to market so we can do this in a process of a very short time? If the supply is disrupted, we are going to need to move it in a short period of time. It doesn't appear to be the case. The Department of Energy evidently doesn't have a standing list of bidders who are willing to take the oil at a price, refine it, and get it out to the market. It appears that what we have done here is put this out to the highest bidder, and some of these speculators say: I didn't have to put up anything. I have nothing to lose. If I get a position, I can turn around and try to sell my position hoping that the price of oil has gone up, as it has today $3.50, and make a few bucks without any risk individually--because they haven't had to put up anything. Let's get this straight. I think this was done at a considerable risk to our national security, and as a consequence, the release of oil from SPR by this administration has not contributed one identifiable barrel to the heating oil reserve for the Northeast part of this country. Remember what we have achieved so far in the sale is identification that perhaps we will get at least a day's worth of heating oil. But it is not going to arrive until sometime in November. Further, most of the crude oil released from SPR appears to be going into the foreign markets because they are paying a higher price in Europe than we are paying in the United States. There is no prohibition against the export. The only folks who appear to benefit will be perhaps a few of the speculators and a few of the oil companies that hit the jackpot. I can't imagine the Vice President is going to generate any expanded support from it. But the losers are really the fuel-starved consumers in the Northeast, the people this was designed to help. I think that raises a number of questions regarding the administration's ability to basically manage the SPR. When I think of the situation, as I have seen it evolve, I think the Secretary and the administration owe us a few answers. For example, who bid on crude oil from SPR and what did they offer? Why were the winning bids selected? Who didn't get selected and why? Whom were the bids sent out to? What assurances did the administration get that oil release from SPR would be turned into heating oil in the Northeast? How did the winning bidders plan to refine SPR oil? How will they get it to market? Why didn't the Department of Energy have a preapproved list of bidders that might be required in a real supply emergency? Why wasn't financial responsibility part of the bidding process, similar to the way the Forest Service puts up timber for bid with financial requirements to be part of the bid submission? I have asked these questions of the Secretary. I look forward to his response. With regard to our national energy security, I think this administration really needs to respond to this question. The question is: Is that your final answer? Because that is simply not good enough for the American people. In conclusion, it is my intention, as chairman of the Energy and Natural Resources Committee, to hold a hearing, which I intend to call for next Thursday, on the Strategic Petroleum Reserve, to try to generate the factual information relative to just what has been accomplished and what assurances people of the Northeast have that this action will actually result in any increase in our reserves of heating oil for the coming winter in view of the circumstances that exist today--the conflict in the Mideast, the tensions, and the realization that, indeed, we are at a time when we have become so dependent on imported oil that our national energy security is dictated by the likes of Saddam Hussein, Iraq, and others who do not necessarily look for the best interests of the United States when they sell their product to us. I am always reflective on Saddam Hussein and the realization that now we are importing about 750,000 barrels a day from Iraq. How quickly the American people forget that we lost 147 lives in 1992 in the Persian Gulf war; we had 437 wounded. The cost to the taxpayer was in the billions of dollars. Now we are looking to Saddam Hussein as a savior for our addiction to oil. I think it is further interesting to note the action taken by Saddam Hussein in relationship to the demand on Iraq from the U.N. to begin to pay Kuwait for reparations from the conflict there in the invasion from Iraq into Kuwait. Saddam Hussein told the U.N., if you require payment now, I will reduce my oil production. It is my understanding that the U.N. said: We will talk about it next quarter. If you look at where we are today, we find the world's production and the world's consumption are almost equal. There is a little bit more production than there is consumption--just about 1 million barrels a day. But Saddam Hussein is producing 2.9 million barrels a day. His threat to cut production could increase the price of oil from $36 today to $56 tomorrow. I always recall the issue of Israel and our commitment to Israel's security. He ends virtually every speech with ``Death to Israel.'' If there ever is a threat to peace in the Middle East, it comes from Iraq. They are building up their missile-delivery capability, their biological capability, and as a consequence of what we are seeing today in the Middle East, the crisis is increasing by the hour, and as a consequence the threat is increasing. So this is all coupled with dependence, an increased growing dependence on imported oil and the inability of the administration to face up to appropriate relief associated with reducing our dependence on imported oil by producing more oil at home in the overthrust belt in Wyoming, Colorado, Utah--areas where the Federal Government is now taking nearly 60 percent of the public land and putting it off limits. In my State of Alaska, we are attempting to open up the small sliver of ANWR, roughly a footprint of 2,000 acres out of 19 million acres, a potential supply of 16 billion barrels that would replace what we import from Saudi Arabia over a 30-year period. These are the actions that could be taken as well as conservation and tax incentives to address our energy security. If we were to take these actions, there is no question in my mind we would be sending a strong signal to the Middle East. We would see a very significant drop in oil, much more so than occurred the other day when the President announced the sale of 30 million barrels from the SPR. I suggest we could expect at least a $10 to $15 a barrel drop in the price of oil. I was thinking about the remarks of the previous speaker relative to the political season we are in. I was reminded in the debate last night of a statement by the Vice President that he always opposed energy taxes. I guess perhaps the Vice President overlooked the fact that when the administration came in in 1993 the first tax they proposed was the Btu tax, British thermal unit, a tax on energy. It was defeated in this body. However, shortly thereafter there was the effort by the Vice President, who was sitting in the chair of the Presiding Officer, and there was a tie vote in the Senate. The issue was the gas tax, 4.5 cents a gallon. The Vice President broke that tie and that gas tax went into effect. In conclusion, I assume that the Vice President overlooked his record on increasing energy taxes and perhaps he should revisit his record and his memory.

Mr. MURKOWSKI. Mr. President, my purpose in coming before the Senate at this late hour is to bring to your attention a rather catastrophic situation that is occurring in the world today. We are all familiar with the devastation associated with the breakdown of the peace process in the Mideast and the tensions associated with the conflict between Israel and the Palestinians. I think it is important to recognize another significant factor that has occurred today; that is, the price of oil has increased about $3.40 a barrel in one day. Currently oil closed at roughly $36.40. That is just a few cents under the all-time high of 3\1/2\ weeks ago where oil closed at $37 a barrel. Clearly, our increased dependence on Mideast oil, where we import about 58 percent of the total oil we consume, is a significant factor in recognizing that any conflict in the Mideast not only affects oil prices in the United States, because our supply is threatened, but it affects our stock market which has dropped rather dramatically today as well. Let me highlight a few things that I think represent an inconsistency in the administration's policies towards developing a sound energy policy. Perhaps you noticed, I am not wearing a dark shirt, a dark tie, the kind worn by Regis on ``Who Wants To Be A Millionaire?'' As you know, this is a TV show on ABC where contestants compete to win up to $1 million in prizes. It is my understanding that to win, contestants on the TV show must answer some questions, just as the administration has had to answer a series of questions regarding the lack of an energy policy. If contestants on the TV show get stumped by a question, they can use a so-called lifeline. For example, they can phone a friend. Well, we have seen when oil prices rose, this administration phoned their friends. They phoned the Saudis and asked them for more crude oil, and the Saudis obliged. Now, contestants can ask the audience--in other words, consult the polls--to see who has the right answers. Doesn't that sound familiar? The administration, of course, loves polls. Finally, TV contestants can use a 50/50 where only two choices are presented, one of which is the right answer, helps them out a little bit, not unlike the two contrasting energy policies that were presented by the major Presidential candidates. Well, the administration has used about all of its lifelines and still doesn't have an answer with regard to the energy policy. Now we find we are playing the game ``Who Wants to be a Millionaire'' with the Strategic Petroleum Reserve at the expense of our national energy security. Some of the lucky winners, speculators who bid on this crude oil released from SPR recently, stand to profit handsomely; there is no question about it. But we should reflect on what the purpose was. The purpose was to build up heating oil inventories in the Northeast. Well, it is pretty hard to make a case that anything realistic has been done as a consequence of the SPR sale to build up those reserves. I recall that the Vice President called on the President a few weeks ago to authorize the release of 30 million barrels of oil from the SPR. That was on September 21. Interestingly enough, the President responded the very next day. It is important to grasp that the aim of the emergency release, according to the administration, was to increase heating oil stocks in the Northeast and prevent high heating oil prices this winter. But what has been the result, Mr. President? Heating oil stocks in the Northeast have actually declined. They have declined 600,000 barrels since the President made his announcement. Those figures, which we reviewed, came from the American Petroleum Institute. That is a very disturbing trend because we are entering the winter season. It is getting colder up there and the reserves, again, are 600,000 barrels less than when the President made his announcement on September 21. One can question the motive. Was the motive to lower prices and provide an excuse, cover, throughout the winter heating season, and perhaps throughout the elections, to ensure that the administration was doing something about the energy problem, something about the price of oil, something about our dependence on the Mideast, something about meeting the obligation of having adequate heating oil reserves? I think the administration's premise was flawed from the start. If you consider these realistic facts, at the time of the SPR release, our refineries were operating at between 95 and 96 percent of capacity. That is a fact. Now, the oil in SPR is crude oil. In order to refine it, it has to go to a refinery. Furthermore, our pipelines for crude and finished product are already operating to capacity. We haven't had a new refinery for nearly two decades. And 37 refineries have been closed in this country in the last 10 years. So what we have is a situation where we have a bottleneck at our refineries, regardless of how much crude oil we have. New heating oil resulting from SPR releases can't be delivered until late November at the earliest because you have to take this oil out of the SPR in the salt caverns of Louisiana on the gulf coast and you can only recover about 4 million barrels a day maximum, and you have to move it through a pipeline, put it on a tanker, and transport it to a refinery that is already full. There would be no guarantee that the crude oil released from SPR would have to be turned into heating oil for use in the United States. In other words, when they made this sale, they didn't make any requirement that whoever was the successful bidder on the sale was prohibited from exporting it. As a matter of fact, they didn't even have to turn it into heating oil. There is no provision in the contractual terms that mandates if you are the successful bidder for the SPR oil, you have to either turn it into heating oil and put it in a reserve in the United States, or, for that matter, you can export the oil. You certainly don't have to refine the oil. The Wall Street Journal reported last week that heating oil from the United States is now being exported to Europe. We checked on that and found out that that is true. The heating oil market there is 50 percent larger than the U.S. market. Stocks are tight and prices are a few cents a gallon higher. I mentioned this to some of the principals in the Department of Energy and they said: We are letting the free market work. I said: It is certainly working because that is where it is going--to the highest return, which is Europe. So refiners are able to ship heating oil over to Europe because they pay a premium price at a time when there is a real shortage here in the United States. Another question is, Why didn't the administration, when it put up 30 million barrels, put in a prohibition on exporting that oil, a mandate that it had to be refined, a mandate that it had to go into a reserve? We took oil out of the Strategic Petroleum Reserve, which was designed to address our needs should there be a curtailment of supply from the Mideast, and here we have a situation where no provision was even given to ensure that the action of taking 30 million barrels out of SPR resulted in any increase in our domestic heating oil supply for the Northeast part of the country. And now the Department of Energy's Information Administration says that nearly two-thirds of the oil released from SPR--or 20 million barrels--will simply displace foreign imported oil. What that means is that we don't have the capacity in our refineries to take 30 million barrels; we are going to take 10. So instead of 30 million barrels, we will only get 10 million barrels of new crude actually from the SPR because of the displacement that I just explained. Now, the Department of Energy claims that these 10 million barrels can still yield 3 million to 4 million barrels of heating oil. On the other hand, the industry tells us--and they are in the business because they have to refine it--that roughly 800,000 to 900,000 barrels of heating oil is all we are going to get out of the 10 million barrels that are refined. I don't know who is correct, but I suspect the industry is. In any event, recognize that the United States uses roughly 1 million barrels of heating oil a day. So this pulldown of the SPR has either resulted in a 3-day supply or a 1-day supply. It sent a signal that we are so desperate that we are willing to reduce our Strategic Petroleum Reserve for the specific purpose of increasing the supply of heating oil, which we haven't achieved. One can question whether there was another motivation. Could that motivation have been to manipulate prices because prices did fall from $37 to about $32 after the announcement was made by the President that we were going to go in and sell 30 million barrels of SPR. But I point out where the price is today; the price closed at roughly $36.40 today. We are right back where we started. As a consequence, the SPR release will, as I have said, likely end up representing less than 1 day's supply of heating oil. It is clear to me that the release of oil from the SPR won't help at all in increasing heating oil supplies in the Northeast this winter. If this had been the real concern of the administration, why would they turn away the invitation offered by Venezuela's state oil company, PDV, to produce heating oil for direct delivery to the United States? Well, we have asked the Secretary this. We asked him in an extended letter. (Mr. CRAIG assumed the Chair.)

Mr. MURKOWSKI

Mr. MURKOWSKI. Mr. President, I share the concern expressed by my good friend from the State of Idaho with regard to the issue of global warming. Much of the rhetoric that has been used is not based on sound science. The reality that we have the technology, if given an opportunity to apply that technology, particularly in the developing Third World nations, results in a meaningful decrease of the concentrations of pollutants that we are all concerned about in association with clean air. I commend my friend from Idaho for bringing this matter, again, to the attention of this body with the recognition that, indeed, through science and technology, we can make a significant difference in reducing overall the emissions, particularly from the emerging nations.

Mr. MURKOWSKI

Mr. MURKOWSKI. Mr. President, in our desire to close the so-called 527 loophole involving campaign financing earlier this year, I believe we may have gone too far in the disclosure requirements. In the bill ultimately creating P.L. 106-230, we essentially adopted the House language without any amendments. When it became law on July 1, 2000, one of the provisions required candidates for state and local offices to file Form 8871 by July 31, 2000. The goal of the new law is to find out who is contributing to 527 political organizations that have proliferated in recent years. The organizations. including the Sierra Club's 527, were taking in large size donations and yet not have and to reveal who the donors were. Under the new law, contributions in excess of $200 by a single person must be disclosed. Expenditures by a 527 organization in excess of $500 also would have to be disclosed. However, these financial disclosures-- the heart and soul of the bill--do not apply to candidates for state and local elections. Clearly, the rules for state and local elections are to be regulated by the states, not the federal government. Yet, under the new law, candidates for state and local offices must file Form 8871 with the IRS. This form essentially notifies IRS that state or local officeholder has established a 527 organization. It must also list the name and address of the organization, the purpose of the organization; the names and addresses of its officers and highly compensated persons and identify a contact person and custodian of records and its Board of Directors (if any). Since we have exempted state and local candidates from having to file financial disclosure statements, I see no reason why they should be burdened with filing Form 8857. This requirement serves no purpose except to create needless paperwork for both the candidates and the IRS. That is why I am introducing legislation to exempt state and local candidates from this burden just as the current law exempts 527 Organizations that do not expect that they will raise $25,000 do not have to file this information. My bill is retroactive so that some candidates for local office who were caught unaware of the filing requirement do not face any penalties. It is my hope that after this election, when campaign finance reform will be debated in a less political environment, that this common sense technical amendment will be included in reform legislation.

Mr. MURKOWSKI

Mr. MURKOWSKI. Mr. President, in our desire to close the so-called 527 loophole involving campaign financing earlier this year, I believe we may have gone too far in the disclosure requirements. In the bill ultimately creating P.L. 106-230, we essentially adopted the House language without any amendments. When it became law on July 1, 2000, one of the provisions required candidates for state and local offices to file Form 8871 by July 31, 2000. The goal of the new law is to find out who is contributing to 527 political organizations that have proliferated in recent years. The organizations. including the Sierra Club's 527, were taking in large size donations and yet not have and to reveal who the donors were. Under the new law, contributions in excess of $200 by a single person must be disclosed. Expenditures by a 527 organization in excess of $500 also would have to be disclosed. However, these financial disclosures-- the heart and soul of the bill--do not apply to candidates for state and local elections. Clearly, the rules for state and local elections are to be regulated by the states, not the federal government. Yet, under the new law, candidates for state and local offices must file Form 8871 with the IRS. This form essentially notifies IRS that state or local officeholder has established a 527 organization. It must also list the name and address of the organization, the purpose of the organization; the names and addresses of its officers and highly compensated persons and identify a contact person and custodian of records and its Board of Directors (if any). Since we have exempted state and local candidates from having to file financial disclosure statements, I see no reason why they should be burdened with filing Form 8857. This requirement serves no purpose except to create needless paperwork for both the candidates and the IRS. That is why I am introducing legislation to exempt state and local candidates from this burden just as the current law exempts 527 Organizations that do not expect that they will raise $25,000 do not have to file this information. My bill is retroactive so that some candidates for local office who were caught unaware of the filing requirement do not face any penalties. It is my hope that after this election, when campaign finance reform will be debated in a less political environment, that this common sense technical amendment will be included in reform legislation.

Mr. MURKOWSKI

Mr. MURKOWSKI. Mr. President, I ask unanimous consent that an explanatory statement be printed in the Record.

Mr. MURKOWSKI

Mr. MURKOWSKI. Those confirmed are Robert Shamansky, to be a member of the National Security Education Board, and Robert Pirie to be Under Secretary of the Navy. I wish them congratulations.

Mr. MURKOWSKI

Mr. MURKOWSKI. Mr. President, I ask unanimous consent that the Senate now proceed to the consideration of H.R. 5107, which is at the desk.

Mr. MURKOWSKI

Mr. MURKOWSKI. Mr. President, I ask unanimous consent that the Senate proceed to the consideration of Calendar No. 945, H.R. 3671.

Mr. MURKOWSKI

Mr. MURKOWSKI. Mr. President, I ask unanimous consent that the bill be read the third time and passed, the motion to reconsider be laid upon the table, and any statements relating to the bill be printed in the Record.

Mr. MURKOWSKI

Mr. MURKOWSKI. Mr. President, if this country is ever going to achieve the goal of reducing our dependency on foreign sources of oil to at least 50 percent, we are going to have to provide incentives that will encourage our energy industry to recover oil and gas from nonconventional sources. In the aftermath of the twin oil shocks of the 1970s, Congress enacted Section 29 of the tax code which provides a tax credit to encourage production of oil and gas from unconventional sources such as Devonian shale, tight rock formations, coalbeds and geopressurized brine. This credit has helped the industry invest in new technologies which allow us to recover large oil and gas deposits that are locked in various formations which are very expensive to develop. Since the Clinton-Gore Administration came into office, it has sent up various proposals all designed to eliminate the Section 29 credit. As a result of their efforts, the Section 29 credit has not applied to any facilities placed in service since July 1, 1998. That makes absolutely no sense when we realize that today we are 56 percent dependent on foreign sources of oil. Doing away with this credit sends a direct signal to the market--this country will not lift a finger to encourage energy development at home. I think it is time to reverse the failed energy policies of the Clinton-Gore administration. As part of that effort, I am today introducing legislation that would extend the Section 29 credit until 2013 and allow it to apply to facilities that are placed in service before 2011. I am pleased that Senators Breaux and Stevens are joining me in this effort. Mr. President, if we are to retain the prosperity we have enjoyed over the last 20 years, we must have a stable and secure supply of oil and natural gas. Section 29 is an important provision that will allow our energy development companies to bring technologies on line to develop new energy deposits. Moreover, the bill expands the definition of qualifying investments to include heavy oil. In Alaska, there are several billion barrels of heavy oil in West Sak Prudhoe Bay that are just too costly to exploit because of the density of the oil and the fact that it is heavily laden with sand. Extension of the Section 29 credit could very well mean that these billions of barrels of heavy oil could be exploited and brought onto the U.S. energy market. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. MURKOWSKI

Mr. MURKOWSKI. Mr. President, I think Senator Domenici will be seeking recognition. First, I want to take 2 minutes to alert my colleagues to what I think is a very significant issue. Much has been made of late about the status of the Strategic Petroleum Reserve and the recommendation by Vice President Gore that we withdraw 30 million barrels out of the SPR so we can build up our heating oil reserve. Let me tell you what is happening to that. The administration forgot a very important detail when they put that oil up to bid for the refiners. They didn't mandate that the crude oil be refined into heating oil or that it be used to build inventories here in the United States for the benefit of the Northeast States that need that heating oil inventories built up. What will happen to the crude oil or refined product? It will go into the marketplace, and it is going to Europe because Europe is paying a higher price for heating oil than the United States. Currently, 167,000 barrels a day of distillate is exported. Let me tell you what came out of the Houston Chronicle, and I quote: The buyers can do what they wish with the oil, such as sell or swap it, said Department of Energy spokesperson Drew Malcomb, although whoever ends up with the oil has to get it out of storage by the end of November. The extra crude won't result in any additional heating oil because all the heating oil facilities already are operating at maximum capacity, Brown said. There you have it. You have an administration that said we had an emergency, we had to go into SPR, address our heating oil situation, while sending a message to the Mideast that we are reducing our savings account. Then we find we may not build up our domestic heating oil inventories at all with this oil, it is going up for sale into the market and ending up in Europe because the administration didn't mandate that if you bought the oil, you had to keep it here in the United States. Senator Stevens and I have experienced some demands relative to our inability to move our oil out of our State. It is inconsistent to me that the administration could make such a poor business deal. We have not accomplished anything with SPR. We have simply increased our exports of heating oil. I think it is a charade. I thank my colleague from New Mexico. But I did want to call that to your attention. Mr. President, I ask unanimous consent to have printed in the Record an article from the Houston Chronicle entitled ``Oil from Reserve in High Demand'' and two tables on distillate exports.

Mr. MURKOWSKI

Mr. MURKOWSKI. Mr. President, I would like to address a couple of situations that I think are paramount in our consideration of issues before us today. I know most of my colleagues are aware of the current situation in Belgrade and the uprising against the dictatorship of Milosevic. I understand the situation is very grave at this time. I know we are all hopeful there will be no serious loss of life as a result of the uprising. I am sure my colleagues will join me in our prayers and hopes that the opposition's Kostunica will be successful in ousting Milosevic and instituting a democratic and peaceful new government in Yugoslavia. I know the Senate hopes for the best and that the nightmare in Yugoslavia may soon be at an end. Unfortunately, we have a similar situation in the Middle East and the fighting that is going on between the Israelis and the Palestinians. Over 67 people have been killed. I think it appropriate at a time when we are facing an energy crisis in this country to recognize the volatility associated with the area where we are most dependent on our oil supply; namely, the Middle East. Fifty-eight percent of our oil is imported primarily from OPEC. As we look at the situation today, we recognize the fragility, if you will, and the sensitivity associated with relying on that part of the world, particularly when we see the action by this administration in the last few days of drawing down oil from the Strategic Petroleum Reserve which is set up for the specific purpose of ensuring that we have an adequate supply in storage if, indeed, our supply sources are interrupted. By drawing that reserve down 30 million barrels, we sent a signal to OPEC that we were drawing down own our savings account making us more vulnerable, if you will, to those who hold the leverage on the supply of oil; namely, OPEC, Venezuela, Mexico, and other countries. I wanted to make that observation and further identify, if you will, that we have a situation that needs correction. We still have time to do it in this body; that is, to pass the EPCA reauthorization bill. As a consequence of the effort by the majority leader yesterday to bring that bill up--H.R. 2884--the reauthorization bill, I think it is important that we recognize why we need it. First, it reauthorizes the Strategic Petroleum Reserve. The authorization expired in March of this year. It creates a home heating oil reserve with a proper trigger mechanism that is needed. It provides State-led education programs on ``summer fill" and fuel budgeting programs. It requires the Secretary of Defense to concur with drawdowns and indicate that those drawdowns will not impact national security. It strengthens weatherization programs by increasing the per-dwelling allowance. It requires yearly reports on the status of fuel supply prior to the heating season. We have worked hard at trying to bring this to the floor and get it passed. Yesterday, the Senator from California indicated there was still opposition to the bill. It is my understanding that comments were made about the bipartisan substitute we have offered. As a consequence, I believe there is a need for a response. One, the Senator claimed that we could take up and pass the underlying bill--H.R. 2884--without amendment. This simply can't happen. The underlying bill does not contain responsible trigger mechanisms to protect SPR from inappropriate withdrawal. The Secretary of Energy has asked for a more responsible trigger mechanism than is contained in the underlying bill. The Secretary is right. We need that. This is our insurance policy if we have a blowup in the Middle East. Second, by accepting the House bill, we would lose the opportunity to strengthen the weatherization program contained in the substitute and we would also lose the mandate for a yearly report from the Department of Energy on the status of our fuel heading into the winter contained in the substitute. These are important issues. I am sure the Senator from California would agree that she would support these. But, as a consequence, to suggest that we can accept the House bill that doesn't include the triggering mechanism is the very point that I want to bring up. The Senator from California also said the Federal Government should not be in the oil business and that they don't do well in the oil business. I certainly agree. We don't do well with the Strategic Petroleum Reserve. We have bought high and sold low out of that reserve. But it is even more important now that we have moved some of our oil to build up a heating oil reserve. Isn't it ironic that the facts are, since the beginning of this year, more than 152,000 barrels of distillate--heating oils, light diesels, and so forth--have been exported each day. We are exporting fuel oils and heating oils that we ought to be holding in our reserve since we have a shortage of heating oil for the Northeast States that are so dependent on it. That is not what we are doing. According to today's Wall Street Journal, that number is ballooning even higher because of tight supplies and higher prices in Europe. In other words, we need more of it here, but we are sending it over to Europe--as opposed to the administration putting a closure or requiring that crude oil be taken out of SPR and be refined for heating oil and held in this country in reserve. That isn't in the requirement for the 30 million barrels that went out of SPR. The companies that bid on it can do whatever they wish with it. So we haven't accomplished anything. Where is it going? It is going to Europe. I agree with the Senator from California that the Federal Government should not be in the oil business. They are doing a lousy job of it, and their SPR withdrawal is strictly a political cover to try to imply that the administration is doing something about the crisis so we don't get too excited about the election that is coming up. It is a charade. The Senator from California claims the royalty-in-kind provisions are a charade allowing oil companies to pay fair market value--and this Senator is trying to undercut efforts to resolve valuation issues. While I would like to take credit for all the provisions in our bill, in fairness, they were worked out with the ranking member of the committee, Senator Bingaman, and the administration. In fact, the royalty-in-kind program was initiated in 1994 by none other than Vice President Gore as part of the reinvention of government to test new, more efficient ways of collecting its royalty share. If the Senator from California is saying that Al Gore's efforts to reinvent government have been a failure and have cost the American taxpayer millions of dollars, I would certainly respect her opinion. Furthermore, a provision requires that the Government receive benefits ``equal to or greater'' than it would have received under a royalty evaluation program. Finally, the Senator accused me--the Senator from Alaska--of trying to move this program ``in the dark of night.'' Well, I am disappointed by that statement. Prior to even taking this substitute up on the floor, my staff approached the staff of the Senator from California to work to resolve concerns in a good-faith effort. The staff of Senator Bingaman, the ranking member of the Energy Committee, which I chair, spent countless hours answering the Senator's questions and addressing her concerns. Unfortunately, those efforts evidently have been unsuccessful. So any argument that the RIK language in this bill has not gone through an appropriate process pales in comparison to that alleged lack of process involved in a ``rider'' on the same subject the Senator from California supports in the Interior appropriations bill. You cannot have it both ways. The arguments are simply empty rhetoric premised on the assumption that oil companies are inherently bad and any program dealing with them must be flawed. The implication is that the oil companies are profiteering. There is no mention that we were selling oil in this country at $10 a barrel a year ago. Now it is $33 a barrel. Who sets the price of oil? Is it ``Big Oil'' in the United States? No. It is OPEC. OPEC provides 58 percent of the supply. It is Venezuela and Mexico. You pay the price, or you leave it. I am prepared to bring up this bill under a reasonable time agreement, debate the issue at length, and have the Senator from California offer an amendment to strike the provision if she finds it objectionable. That is her right. I support that right. But it is time we move the Senate version of this very important bill to reauthorize the Strategic Petroleum Reserve, and establish a home heating oil reserve, and get the administration focused on the reality that the oil they propose to take out of SPR is being refined and sent over to Europe to meet their heating oil demands. That is the reality. If we don't move this legislation, the Senator from California will have to bear the responsibility. It is unconscionable to me at a time when we face an energy crisis--not only oil and natural gas but other areas and in our electric industry--that we find some other important bills being held up. We have passed out of the Committee an electric power reliability bill. The purpose was the recognition that we have a shortage of generating capability in this country. We have not expanded our generating capacity to meet the demand. As a consequence of that, we have not progressed with a distribution system to meet the demand that is growing. So out of the Committee, along with Senator Gorton, we specifically worked to get an electric power reliability bill. It is sitting here waiting for passage. What it does--and the administration wants it--it sets up a way to share the shortage. That sounds ironic, but we have a shortage of generating capacity. We have seen spiking costs very high, hundreds and thousands of dollars, for short periods of time. The reliability bill administers in a fair manner, to ensure that if there is any surplus in one area, it is moved to other areas without the exposure of spiking. We cannot seem to move that on the floor of the other body. We are going into a timeframe where, if we get a cold winter and higher electric demands, we will need that legislation. Another bill, of course, that we considered is our electricity deregulation bill, a comprehensive bill. The problem was there was a mandate to have 7\1/2\ percent of our energy derived from renewables. That is easy to say. The administration mandated that bill. But there is no way to enforce it because we simply don't have the technical capability to achieve 7\1/2\ percent of our energy from non-hydro renewables. It is less than 2 percent now. They say we haven't spent enough money or been dedicated or made a commitment. I remind my colleagues, we have extended in 5 years $1.5 billion in direct spending to subsidize development of renewables. We have given tax incentives for renewables of $4.9 billion. I support renewables, but we just can't pick them up. The wind doesn't always blow outside. In my State of Alaska, it is not always sunny. Solar panels do not always work. As a consequence, I remind my colleagues, when you fly out of Washington from time to time, you don't leave here on hot air, you need energy. We have a crisis. We have not passed the electric power reliability legislation, we have not passed comprehensive electricity deregulation, and we are in a situation where we have taken oil from SPR and now we are seeing that oil move to Europe. I want to use the remaining time to do a contrast because I want to emphasize the significance of the energy policies as proposed by our two Presidential candidates. Make no mistake, on energy policy the differences between Vice President Gore and Governor Bush could not be more clear. Let's look at costs. We have added up the Bush proposal, $7.1 billion over 10 years. The Gore proposal, which the newspapers have added up-- which are usually somewhat favorable to the Vice President--costs 10 times more than that, somewhere between $80 and $125 billion. They are still trying to pin down the figures. The Vice President wants to raise prices and limit supply of fossil energy, which makes up over 80 percent of our energy needs. By discouraging domestic production, the administration has forced us to be more dependent on foreign oil, placing our national security at risk and, of course, raising prices. The Vice President's only answer in the first debate was to give you solar, wind, biomass technologies, that are not yet available. Again, I remind my colleagues, we have spent $1.5 billion in direct spending and $4.9 billion in tax incentives over 5 years trying to develop more renewables. In contrast, Governor Bush would expand domestic production of oil and natural gas, reduce imports below 50 percent, and ensure affordable and secure supplies by developing resources at home. He would invest ample resources into emerging clean fossil technologies, renewable energy, and energy conservation programs, but, most of all, he won't bet on our energy future. Governor Bush will use the energy of today to yield cleaner, more affordable energy sources for tomorrow. Now, let's look at the record. The Vice President has said he has an energy plan that focuses not only on increasing the supply but also working on the consumption side. The facts show the Vice President doesn't practice what he preaches. The administration has actually decreased energy supply during the past 7\1/2\ years. They have opposed domestic oil production and exploration. We have 17 percent less production since Clinton-Gore took office. We have closed 136,000 oil wells and 57,000 gas wells since 1992. They oppose the use of plentiful American coal and clean coal technology. The EPA makes it uneconomical to have a coal-generating plant. The demand is there for energy, but clearly coal is simply almost off limits because of the process. We force the nuclear industry to choke on its waste. We are one vote short in this body of passing a veto override, yet the U.S. court of appeals, in a liability case, ruled the Government had the responsibility to take the waste. The cost to the taxpayers here is somewhere between $40 and $80 billion in liability due the industry as a consequence of the Federal Government's failure to honor the sanctity of the contract. They have threatened to tear down hydroelectric dams. Where are they going to place the traffic that moves on barges? Put it on the highways? That will take away 10 percent of our Nation's electricity. They ignored electric power reliability and supply concerns. Go out to San Diego and see the price spikes there--no new generation, no new transmission in southern California. They have claimed to support increased use of natural gas, yet they have kept Federal lands off limits to natural gas production; approximately 64 percent of the overthrust belt in the Midwest-- Wyoming, Colorado, Montana--is off limits to exploration. We all remember in this body the Vice President coming and sitting as President of the Senate, utilizing his tie-breaking vote in 1993 to raise the gas tax. We recall initially he wanted a Btu tax to reduce consumption of energy when the administration first came in. There has been a series of taxes. We heard a lot about it in the debate the other day. The Vice President said the tax plan favors the richest 1 percent. Yet 2 percent of the people pay 80 percent of the taxes. He didn't mention that. Talking about crude oil and the Vice President, instead of doing something to increase the domestic supply of oil, the Vice President seems to want to blame big oil for profiteering as a cause for high prices. This simply is an effort to distract attention from the real problems, to cover for this Administration's lack of a real energy strategy. One year ago, oil was being given away at $10 a barrel. Who was profiteering, Mr. Vice President? Were American oil companies simply being generous? The small U.S. companies-- ``Small Oil''--were suffering, with 136,000 stripper and marginal oil wells closed. Our domestic energy industry was in real trouble. Stripper wells cannot make it at $10 a barrel. The six largest oil companies--Al Gore's ``big oil''--only comprise 15 percent of the world oil market. In contrast, OPEC--Saudi Arabia, Iran, Venezuela, Mexico, Iraq--produce 30 million barrels a day and control 41 percent of the world's oil market. OPEC controls the supply. Therefore, they set the price, not the United States. If we don't like their price, I guess we don't have to buy their oil. But obviously we are addicted to it. By discouraging domestic exploration and increasing our reliance on foreign oil, the Vice President would take away that option, essentially, forcing us to pay OPEC's price for oil, holding us hostage to foreign governments, as the case is now. What about Governor Bush? He would encourage new domestic oil and gas explorations. As he said Tuesday: The only way to become less dependent on foreign sources of crude oil is to explore at home. Charity begins at home. Just opening up the ANWR Coastal Plain in my State of Alaska to exploration would increase domestic production by a million barrels a day. I bet it would drop the price of oil $10 to $15 a barrel. The same amount, a million barrels a day, is slightly more than what we import from Iraq. Here is a person we don't trust, whom we fought a war against, yet we are dependent on, and that is Saddam Hussein. Shouldn't we produce this oil at home rather than risk our national security by relying on Iraq for energy needs? Yesterday I gave a few facts, not fiction, about oil exploration and gas exploration in my State. My colleague from Nevada, who is not on the floor today, continued to refer to outdated estimates and recoverable oil from ANWR using oil prices. He said at a price of $18 a barrel, ANWR was likely to yield a low-end estimate of 2.4 billion barrels, but that still is 1 million barrels a day for 6 years, Mr. President. And the prices will be much higher than that--they will be $25 a barrel, or more. According to the U.S. Geological Survey, the ANWR Coastal Plain is likely to yield 10 billion barrels of recoverable oil, nearly as much as Prudhoe Bay. But it is interesting to reflect on Prudhoe Bay because that one area has supplied one-fifth of our oil needs for the last 20 years. ANWR could do the same for the next 20 years. Remember the realities associated with estimates. They estimated Prudhoe Bay would produce 10 billion barrels, and it has produced over 12 billion and is still producing over a million a day. I want to talk about natural gas because Governor Bush's energy plan is more than just increasing the domestic supply of oil. He would also expand access to natural gas on Federal lands and build more gas pipelines. The Vice President makes no mention of natural gas, leaving the most critical part of America's energy mix policy simply unsaid. Yet natural gas is vital for home heating and electric power. 50 percent of U.S. homes, 56 million, use natural gas for heating. Natural gas provides 15 percent of our Nation's electric power, and that generating capability has no place to go for more capacity other than natural gas because you can't get permitted. Mr. President, 95 percent of our new electric power plants will be powered by natural gas as the fuel of choice, but this administration refuses to allow the exploration and production of gas, or the construction of pipelines, to increase the supply of gas to customers. Demand has gone up faster than supply. This yields higher prices. And our demand for gas will only increase. The EIA expects natural gas consumption to increase from 22 trillion cubic feet now to 30 to 35 trillion cubic feet by 2010. The administration touts natural gas as its bridge to the energy future--our cleanest fossil fuel--fewer emissions, efficient end use for industrial and residential applications, huge domestic supply, no need to rely on imports. Yet they place Federal lands off limits to new natural gas production. Where are we going to get it? Mr. President, 64 percent of the Rocky Mountain overthrust belt is off limits. The roadless policy of the Foreign Service locks up 40 million acres of public land, and there is a moratorium on OCS drilling until 2012. Where is it going to come from, thin air? Al Gore would even cancel existing leases. He made a statement in Rye, NH, on October 21, 1999: I'll make sure there is no new oil leasing off the coasts of California and Florida. And then I would go much further: I will do everything in my power to make sure that there is no new drilling off these sensitive areas--even in areas already leased by previous administrations. The American people ought to wake up. Where is our energy going to come from? Now there is no strategic natural gas reserve, is there, like we have for an oil, for the Vice President to fall back on in the case of natural gas prices. This administration simply ignored energy, and now we are in trouble and they are covering their behind. Natural gas is now over $5.30 per thousand cubic feet. Less than 10 months ago it was $2.16. The differences are clear. The Vice President would limit new natural gas production and force higher prices for consumers. Governor Bush would encourage domestic production of natural gas and the construction of pipelines to get it there. We talked, finally, about renewables. The Vice President said Tuesday that: We have to bet on the future and move beyond the current technologies to have a whole new generation of more efficient, cleaner energy technologies. That sounds fine, but how are we going to get there? I think we all agree in this case our energy strategy should include improved energy efficiency, as well as expanded use of alternative fuels and renewable energy and a mix of fuel oil, natural gas, nuclear, and hydro. But the critical question is how do you get there from here? The Vice President would make a bet. He would bet that by diminishing supply of conventional fuels such as oil and natural gas, you will be more willing to pay higher prices and make renewables competitive. He will support higher energy taxes, just as he did in 1993 when he cast the tie-breaking vote to raise gas taxes. And he will favor more regulations, more central controls on energy use standards for each part of our everyday life. The Vice President will tell you what kind of energy you could use, how much of it you could use, and how much you would have to pay for it. In contrast, Governor Bush would harness America's innovative technological capability and give us the technologies of tomorrow by using the American ``can do'' spirit. Governor Bush would set aside the up-front funds from leasing Federal lands from ANWR, for oil and gas-- the ``bid bonuses''--to be earmarked for basic research into renewable energy. He has a plan. It is a workable plan. It is not smoke and mirrors. The production royalty from oil and gas leases would be invested in energy conservation and low-income family programs such as LIHEAP or weatherization assistance. Using tax incentives, Governor Bush would expand use of renewable energy in the marketplace--building on successful experience in the State of Texas. As a result of Governor Bush's efforts on electricity restructuring, Texas will be one of the largest markets for renewable energy, about 2000 new megawatts. Finally, Governor Bush would also maintain existing hydroelectric dams and streamline the Federal relicensing process. Al Gore would breach the dams in the Pacific Northwest. The Vice President will try to lay the blame on Congress. He said we have only approved about 10 percent of their budget requests for renewable energy. Here again the Vice President is twisting the facts. According to the Congressional Research Service, we have provided $2.88 billion in funding for renewable energy since 1992; 86 percent of their request. The conclusion, the bottom line, is the contrast between the candidates and their energy policies could not be more clear. The Vice President wants to raise prices and limit the supply of fossil energy which makes up over 80 percent of our energy needs, replacing it with solar, wind, and biomass technologies which are just not widely available or affordable today. Governor Bush would expand the domestic production of oil and natural gas, ensuring affordable and secure supplies. He won't bet on our energy future. Governor Bush will use the energy of today to yield cleaner more affordable energy sources for tomorrow. The choice for the American consumers on November 7 is clear. Support a candidate with a positive plan to reduce dependence on Saddam Hussein, the Middle East, and other areas; produce here at home and use all our energy resources, our coal, our oil, our hydro, our nuclear, and natural gas because we are going to need them all to keep the U.S. economy going. Remember, you can't fly out of here on hot air. I yield the floor.