Frank Murkowski

Mr. MURKOWSKI

Mr. MURKOWSKI. I have another request that Senator Thomas be recognized for 5 minutes in the order.

Mr. MURKOWSKI. That is fair enough to me.

Mr. MURKOWSKI. I wonder if I could ask the Presiding Officer--so we will have the clarification of the words--to indicate what the unanimous consent request is.

Mr. MURKOWSKI. I believe Senator Thomas wanted to follow Senator Wellstone with 5 minutes.

Mr. MURKOWSKI

Mr. MURKOWSKI. Mr. President, I ask unanimous consent that the assistant minority leader be recognized in general conformance with our procedure and, after that, I may be recognized in morning business for about 15 minutes, followed by Senator Specter, followed by Senator Biden.

Mr. MURKOWSKI. Mr. President, I understand there is a bill at the desk due for its second reading.

Mr. MURKOWSKI. I object to further proceedings on this bill at this time.

Mr. MURKOWSKI

Mr. MURKOWSKI. Mr. President, on behalf of the leader, I have been asked to announce that the Senate will be in a period of morning business until 11:30 a.m., with the time in control of the majority leader and the Democratic leader or their designees. Following morning business, the Senate will resume postcloture debate on the motion to proceed to the H-1B visa bill. However, if an agreement regarding the Water Resources Development Act can be reached, the Senate may begin consideration of that measure during today's session. Senators should be aware that votes are expected during this afternoon's session. I thank my colleagues for their attention.

Mr. MURKOWSKI

Mr. MURKOWSKI. I thank the Chair.

Mr. MURKOWSKI

Mr. MURKOWSKI. Mr. President, yesterday I took the floor and discussed the problems associated with the price of oil and our increased dependence on imports from Iraq and the regime of Saddam Hussein. Yesterday, I told this body that oil had peaked at its highest price in 10 years. I am here today to tell you that oil has peaked for the second time in 2 days with the highest point in 10 years--$37.86 a barrel. There is a reaction occurring. It is rather interesting. I am going to discuss it briefly because my intention today was to talk about natural gas. Natural gas, as many of us will remember, 9 months ago was about $2.16. Deliveries in October are in the area of $5.40, a 44-percent increase in a relatively short period of time. The administration is reacting. The news today tells us that there is going to be a recommendation from the Vice President to open up the Strategic Petroleum Reserve to set up a heating oil reserve. There are a couple of things that are pending. One is the reauthorization of SPR in the EPCA bill, which is currently being held by a Member on the other side of the aisle. The administration is asking us to release the authority by passing EPCA. We are going to have to take care of that little matter first. But let's talk a little bit about the Strategic Petroleum Reserve because it is probably the most misunderstood issue on the burner today. SPR was created back in 1973 during the era of the Arab oil embargo at a time when this Nation was 35-percent dependent on imported oil. Today we are 56-percent--nearly 58-percent dependent on imported oil. We swore back in 1973 we would never be held hostage and would never have such exposure to the national energy security of this country. So we created the salt caverns in the gulf for storage. The question of the conceptual purpose behind this was the Mideast cartel was holding us hostage and, by having a reserve, it would act as a protection if our supplies were cut off. Congress dictated that we have a 90-day supply of oil in the reserve to offset the amount of oil we might import should it be needed if the supply were to be disrupted from the Mideast. It is kind of interesting to go back and look at the arithmetic. When the Clinton administration came in, in 1992, we had an 86-day supply in the Strategic Petroleum Reserve. Today, we have a 50-day supply. What has the Clinton administration done with that difference? They sold some of the SPR to meet their budget requirements. I think this is a dangerous level--50 days. I think it is inadequate to respond to any severe disruption that might occur. The Mideast has always been a hot spot with the possibility of a conflict at any time and cutting off supplies. We are seeing Saddam Hussein now threaten the U.N. as the U.N. attempts to hold Saddam Hussein financially responsible for damages associated with the Kuwaiti invasion. They are asking for compensation. But yesterday Saddam Hussein told the U.N. where to go. He said: No, I am not paying retribution. If you make me pay retribution, I will cut my supply and my production. Then what are you going to do? We know what the U.N. did. They backed off and said: We will take it up later. He is dictating the crucial supply of oil. As the administration talks about the merits of opening up the Strategic Petroleum Reserve, I think we have to reflect on what it was designed to do. It was to be used to give us the timeframe of ensuring that if the supply were cut off, we would have a buffer by having a supply on which we could call. But make no mistake about it. The media completely misses this point. SPR does not contain refined product. It contains crude oil. You have to take it out of the reserve. You have to move it to a refinery and then refine it. Our refineries are virtually at full capacity now. If you take the oil out of SPR and take it to a refinery, you are going to offset other oil that that refinery would cut. As a consequence, how much more refined product have you put on the market? I think the administration owes us an explanation as they contemplate, if you will, taking oil out of SPR. Mind you, the emergency we have is supply and demand. We are producing much less than we used to produce. Our demand is up 14 percent. Our product has fallen 17 percent. We are in a supply and demand crunch. As a consequence of that, we have a third factor many people overlook, and that is, we haven't built a new refinery in this country in 25 years. Nobody wants to build them. The reason is the permitting time, the complexity, and the Superfund exposure. And the industry simply isn't building them. We are almost up to our maximum capacity of refining. Now we are going to take oil out of SPR. We are going to displace other oil. We don't have any significant unused refining capacity. There is another factor in this consideration. What kind of signal does this send to Saddam Hussein? What kind of signal does it send to OPEC? It sends a signal that we are now dipping into our emergency supply. As we do, what does that do to our vulnerability? The Senator from Alaska believes it increases our vulnerability. It gives them more leverage. What are we going to fall back on then? What happens if we pull oil out of SPR and Iraq reduces production? We have a calamity. This isn't just something that is happening in the United States. If there is any question about the severity, ask Tony Blair. The Government of Great Britain is teetering on the issue of oil. Germany, Poland, and many areas of Europe are coming to the United States. There is absolutely no question about it. High oil prices have caused many Members, therefore, of this body to call for the release of SPR in a way to manipulate the price of crude. Some suggest as much as 30,000 barrels. One Senator was saying this action would bring OPEC to its knees. I think it will bring OPEC to its feet. They will say: Hey, there goes the United States; they are dipping into their reserve; now we've got them; we've have got the leverage. I think it is highly unlikely that this action is well thought out. This is not what the reserve was intended for. It is not what the reserve is to be used for. I hope the administration will not weaken our national security by releasing oil to drive down prices because it won't necessarily drive down prices. You are saying, well, the Senator from Alaska is from an oil- producing State, and he is just one man's opinion. Let me for the record submit an article from the Wall Street Journal of September 21. I ask unanimous consent that it be printed in the Record.

Mr. MURKOWSKI. Mr. President, this article is entitled ``Summers Slams Plan to Sell Oil In U.S. Reserve.'' ``Treasury Secretary's Memo Says Greenspan Agrees It Would Be a Mistake.'' The Washington by-line of the Wall Street Journal: Treasury Secretary Lawrence Summers advised President Clinton in a harshly worded memo that an administration proposal to drive down energy prices by opening the government's emergency oil reserve ``would be a major and substantial policy mistake.'' This isn't the Senator from Alaska. This is our Treasury Secretary. Mr. Summers's vehement objection--which, he wrote, is shared by influential Federal Reserve Chairman Alan Greenspan . . . Indeed, today Vice President Al Gore--in his role as Democratic presidential candidate--plans to call on the administration to conduct ``test sales'' from the SPR as part of what he called ``a major policy speech . . .'' We have had a tradition of test sales from SPR under this administration. In 1991, we offered 32 million barrels; in 1996, decommissioning Weeks Island, 5 million; 1996, the recession bill, 12 million. We had swaps, appropriations in 1997. What we did is we bought high and sold low. We lost hundreds of millions of dollars on our sale. I only assume the government figured they would make up the difference on the volume. Our experience hasn't been very good. Let me get back to the other sale. Summers says it is a dangerous precedent. He warned that the DOE's 60 million-barrel proposal would ``set a dangerous precedent'' by using the SPR to ``manipulate prices'' rather than adhering to its original purpose of responding to a supply disruption, and added that the move ``would expose us to valid charges of naivete'' for using ``a very blunt tool'' to address heating-oil prices. Such a move, Mr. Summers argued, also would hurt the effectiveness of SPR in the event of a real oil-supply crisis, diminishing the ``psychological value'' of using the SPR again if Iraq makes good on implied threats to cut oil output, and undercut Saudi Arabia's cooperation with the U.S. Greenspan's Clout And he took the unusual step of invoking Mr. Greenspan, whose prestige has increasingly been used to influence economic-policy issues far beyond his purview of monetary policy. The letter begins: ``Chairman Greenspan and I believe that using the Strategic Petroleum Reserve at this time, as proposed by DOE, would be a major and substantial policy mistake.'' I ask Members to consider the mechanical function of what has to take place. There are some people in this body who just assume you pull it out of SPR and, bang, it is there for the heating oil requirements of the Northeast Corridor, or it is there to relieve our pricing. It isn't. It is not a refined product. It has to be refined. It has to go to refineries. The refineries are operating at nearly full capacity, and when you pull it out of your reserve, it is like taking it out of your savings account. What do you do for an encore when the savings account is gone? We are certainly not going to replace SPR during this timeframe when oil prices are at an all-time high. We increase the vulnerability of the United States; we increase the potential for further increases in the price of oil. There is one other point I want to make. The idea of a government- operated heating oil reserve, we don't really know what it means. But if I am in the business of storing heating oil, if I am a jobber in the Northeast and I know the government is going to store, I am not going to build up my reserve. Why should I? The government is going to take care of that. What does that do to the incentive of the private sector to build up reserves? We have to think this thing through. I hope that the press will question the Vice President a little bit on the mechanics of what the net gain is. What does it do to our national security? Does it make us more vulnerable to OPEC? I also request the media to check on whether we have the authority or not--because the administration is begging us to pass EPCA, which gives us the authority, allegedly, to reauthorize the Strategic Petroleum Reserve. We have a lot of bits and pieces that we haven't taken care of. It will be interesting to see what kind of explanation the American public is given because so often it is very easy to spin the story that the answer is SPR. Do you know what the administration is doing? They are buying more time, hopefully, to get through this election because that is the bottom line. We are heading for a train wreck on energy. I will throw a little bit more water in my remaining 2 minutes, not on SPR but on the realization of what is coming in the second show. The second show is natural gas; $5.35 per thousand cubic feet, October, next month. It was $2.16 6 months ago. Inventories are 15 percent below last winter's level. We will not have any new supply this winter. Fifty percent of American homes rely on natural gas and nearly 18 percent of the Nation's electric power. There we have it. The administration doesn't have a plan. We have introduced legislation to get this matter back on course, the bottom line, as Senator Lott and a number of us have joined together in coming down with what we think is a responsible energy plan that would increase the domestic supply. It would increase certain tax benefits that would ensure that we have the incentive in order to relieve the supplies associated with the realization that the next crash is coming on natural gas. I wanted to identify the specific mechanics associated with the issue of opening up the Strategic Petroleum Reserve and remind my colleagues that gas is right behind us in the crisis area, and the American taxpayer will bear the brunt of this. I hope the administration will rise to the occasion with some real relief. I yield the floor.

Mr. MURKOWSKI

Mr. MURKOWSKI. Mr. President, I would like to announce for the information of the Senate and the public that an oversight hearing has been scheduled before the Committee on Energy and Natural Resources. The hearing will take place on Thursday, September 28, 2000 at 10:00 a.m. in room SD-366 of the Dirksen Senate Office Building in Washington, D.C. The purpose of this hearing is to examine the impacts of the recent United States Federal Circuit Court of Appeals decisions regarding the Federal government's breach of contract for failure to accept high level nuclear waste by January 1998. Because of the limited time available for the hearing, witnesses may testify by invitation only. However, those wishing to submit written testimony for the hearing record should send two copies of their testimony to the Commtitee on Energy and Natural Resources, United States Senate, 364 Dirsken Senate Office Building, Washington, D.C. 20510-6150. For further information, please call Trici Heninger, Staff Assistant, or Colleen Deegan, Counsel, at (202) 224-8115. Committee on Energy and Natural Resources Committee on Foreign Relations

Mr. MURKOWSKI. Mr. President, I would like to announce for the information of the Senate and the public that a joint hearing has been scheduled before the Committee on Energy and Natural Resources and the Committee on Foreign Relations. The hearing is titled: Climate Change: Status of the Kyoto Protocol After Three Years. The hearing will take place on Thursday, September 28, 2000 at 3:00 p.m. in room SD-419 of the Dirksen Senate Office Building in Washington, D.C. Because of the limited time available for the hearing, witnesses may testify by invitation only. However, those wishing to submit testimony for the hearing record should send two copies of their testimony to the Committee on Energy and Natural Resources or the Committee on Foreign Relations. For further information, please call Trici Heninger, Staff Assistant, or Bryan Hannegan, Staff Scientist, at (202) 224-7875. Subcommitee on Forestry, Conservation and Rural Revitalization

Mr. MURKOWSKI

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

Mr. MURKOWSKI. Mr. President, I suggest the absence of a quorum.

Mr. MURKOWSKI

Mr. MURKOWSKI. Mr. President, I rise today to call the attention of my colleagues to an urgent matter, and that is the reauthorization of the Strategic Petroleum Reserve. The legislation is sitting here today and awaits clearance. It is contained in the Energy Policy and Conservation Act, or EPCA. We have a hold on the passage of EPCA, which contains the Strategic Petroleum Reserve reauthorization. Also in the EPCA package is the Northeast home heating oil reserve. I know this is of great interest to Members from the Northeast, who are concerned, legitimately, about the potential of higher prices for home heating oil this fall and this winter, particularly if we should have a very cold winter. The White House, the Secretary of Energy, has pleaded with Congress to pass EPCA, including the Strategic Petroleum Reserve reauthorization. I am chairman of the Energy and Natural Resources Committee. We passed a companion measure out of this committee. Now EPCA waiting on the floor. An effort was made last night to clear it. The administration claims it is an emergency that they have the reauthorization. They are contemplating going into the SPR and taking oil out of it to try an address this crisis. The merits of that deserve additional consideration by this body. I will just share this observation on the logic of such a move. SPR is a reserve, it holds about a 50-day supply of oil, which is to be used in the case of emergency disruption of our foreign oil. Currently our dependence on foreign oil amounts to about 58 percent of our consumption. However, because of the high prices and the inadequacy of our refining industry, we are facing a train wreck relative to energy prices, gasoline, diesel, and other petroleum products. If it seems I am being a little ambitious in citing the critical nature of this crisis, let me tell you that the Government of Great Britain and Prime Minister Tony Blair find it a real issue relative to the stability and continuity of that Government. The responses we have seen in Germany, England, Poland, and other countries to the increasing price of energy and what it means to the consumer is not only of growing concern, but it has reached a crisis mentality. During this country's last energy crisis, we had our citizens outraged. It was in 1973 when the oil embargo associated with the production from OPEC--it was called the Arab oil embargo--hit this country. We had gas lines around the block. People were mad, outraged, indignant. At that time, we were only 37-percent dependent on imported oil. Today, we are 58 percent. The Department of Energy contemplates we might be as high as 63 or 64 percent in the not too distant future. The oil price yesterday was the highest in 10 years, more than $37 a barrel. There are those who predict it is going to go to $40 a barrel. Here we have the reauthorization of the Strategic Petroleum Reserve, at the request of the administration, being held up by a Member on the other side of the aisle. There may be other reasons the Senator has seen fit to put a hold on this legislation. I certainly would be happy to debate one of the issues that concerns activity in my State. It is the measure that allows power plants smaller than 5-megawatts to be licensed through a state procedure in Alaska. It would allow our Native people in rural areas to have clean, renewable energy rather than the high-cost diesel power they now burn. I want to tell my colleagues, the Native people in Alaska really need this exemption. This is utilizing the renewable resource; namely, rainwater, snowfall. The inability of these small projects to support the cost of a Federal energy regulatory relicensing procedure--which is appropriate for large-scale projects--makes it absolutely beyond the capability of these small villages to utilize renewable resources associated with a 5 megawatt powerplant generated by water power. I do not know whether there is an objection on the royalty-in-kind provision. No other Senator has indicated an objection, nor has the administration. It is hard to understand an objection when the provision simply says that the Secretary of the Interior may accept gas and oil in lieu of cash payments. The Department of the Interior has that power now and is using it in pilot projects. The provision allows the Secretary more administrative flexibility to actually increase revenues from the Government's oil and gas royalty- in-kind program. Under current law, the Government has the option of taking its royalty share either as a portion of production--usually one-eighth or one-sixth--or its equivalent in cash. Recent experiences with the MMS's royalty-in-kind pilot program has shown that the Government can increase the value of its royalty oil and gas by consolidation and bulk sales. Under royalty-in-kind, the Government controls and markets its oil without relying on its lessees to act as its agent. This eliminates a number of issues that have resulted in litigation in recent years and allows the Government to focus more directly on adding value to its oil and gas. I would hope my appeal results in the administration, the Secretary of Energy, and others who believe very strongly that EPCA should be passed, including the reauthorization of the Strategic Petroleum Reserve. This action is especially timely, when indeed this country faces a crisis in the area of oil. I think the merits of the President having this authority at a time when we contemplated an emergency suggests the immediacy of the fact that this matter be resolved and addressed satisfactorily. We should adhere to the plea of the President to reauthorize SPR. I want the Record to note it is certainly not this side of the aisle that is holding this matter up. I would suggest it be directed by the appropriate parties to get clearance so we can pass EPCA out of this body.

Mr. MURKOWSKI

Mr. MURKOWSKI. Mr. President, may I ask how much time I am allotted under the standing order?

Mr. MURKOWSKI. I thank the Chair, and I thank my good friend from Alabama. He indicated that the price of oil had risen. The price of oil yesterday rose to an all-time 10-year high, $37 a barrel. This is a very serious matter that is not receiving enough attention by this body, nor this administration. To give my colleagues an idea, from the Washington Post yesterday there was a quote that the price of crude oil contracts on the futures market on the New York Mercantile Exchange rose above $37 a barrel for the first time. Here is the more significant point. Analysts predicted that the price jumps, 2.7 percent yesterday and a total of 44 percent for this year, could continue indefinitely. I repeat--could continue indefinitely, especially with the uncertainty connected with Iraq's Saddam Hussein and his accusations that Kuwait was drilling near the Iraqi-Kuwaiti border and stealing Iraq's oil. Doesn't this sound a little like what happened in 1991 prior to the Persian Gulf war where we had the muscle demonstration by Saddam Hussein and later the implications of that war? This is serious business. If you don't believe it is serious, ask Tony Blair because the stability of the British Government is very shaky right now as a consequence of the price of energy, a 10-year high, expectations for the price of oil go as high as $40 per barrel and beyond in the near future. Why are we in this mess and why should American consumers care? I will discuss one segment of this today because Saddam Hussein has the world over a barrel. It is over a barrel of oil. Why should American consumers care? Well, Iraq is now in a position to set the market price of oil--and therefore, what you pay at the pump, what you pay to heat your homes, what you pay at the grocery store, and what the Northeast Corridor residents are going to be paying in this country this winter for fuel. God help us if we have a cold winter. Iraq is using its profits illegally for weapons of mass destruction. They are threatening the peace and stability of the entire Mideast region. They represent a threat to the security of Israel without question. Let us look at a little history on how this administration has basically failed to address this threat. Just before the Clinton-Gore administration came in, we carried out a very successful mission in Desert Storm. That mission was not without American casualties. We lost 147 Americans; 467 were wounded; 23 were taken prisoner. Since that time, we have continued to enforce a no-fly zone. We have flown over 200,000 sorties since the end of Desert Storm, at a cost to the American taxpayer of about $50 million per month. Yet here we are today more reliant on Iraqi oil. We are addicted to the imported oil. We are addicted to oil. In any event, as a consequence of our decline in domestic production, which has been 17 percent since the Clinton Administration took office, and a 14-percent increase in domestic demand during the same period, we are now 58-percent dependent on imported oil. During the Arab oil embargo--some remember this period of time, 1973--we had gas lines around the block at filling stations. The public was outraged. They were blaming everybody, including Government. That was 1973 when we were 36 percent dependent on imported oil; now we are at 58 percent. Today Iraq is the fastest growing source of U.S. foreign oil, 750,000 barrels a day, nearly 30 percent of all Iraqi exports. We fought a war over there in 1991. Here we are dependent on Iraq. It makes us powerless to respond. Weapons inspections are unable to proceed. We are concerned about it, but we don't do anything. Illegal oil trading is underway with other Arab nations. We know it, we enforce a blockade in the air, we don't enforce any kind of a blockade for the illegal oil shipments that are going out of Iraq. Profits go to development of weapons of mass destruction, training of the Republican Guards to keep Saddam Hussein alive. The international community is becoming increasingly critical of sanctions towards Iraq. But consider this: Saddam Hussein puts Iraqi civilians in harm's way when we go over and bomb his targets. Saddam has used chemical weapons against his own people in his own territory. Saddam could have ended sanctions at any time. All he had to do is turn over his weapons of mass destruction; that is basically all. Yet he rebuilds his capacity to produce more. He cares more about these weapons, obviously, than he cares about his own people. That he is able to dictate our energy future is an absolute tragedy of great proportion. Still, the administration refuses to act. What happened? Saddam is getting more aggressive. His rhetoric in every speech at the conclusion is ``death to Israel.'' That is what he says. What is the threat to Israel's security? It is Iraq. He has announced a $14,000 bounty on any American plane shot down, for the anti-aircraft crew that is responsible. Now he is accusing Kuwait of stealing Iraqi oil. Here we go again. That is the same thing that was done in 1990 shortly before he invaded Kuwait. Saddam is willing to use oil to gain further concessions. This is rather interesting, to show you the leverage he has because of his oil production. The U.N. was set to approve a $15 billion compensation measure for Kuwait as a result of damages from the Gulf war. That vote was set to take place next week. Iraq has retaliated and said: No, we are not going to pay that compensation. If you make us pay, we will reduce our output of oil. Now reports are that the U.N. has postponed that vote. That is their leverage. There is likely not enough spare capacity in OPEC to make up the difference if Iraq pulls back it's production. Here is the Wall Street Journal headline: ``Iraqi Pumps Critical Oil and Knows It.'' That is the leverage of Saddam Hussein today, and his leverage is growing each and every hour. This article says: European oil executives familiar with Iraq say the U.N. sanctions against trading with Iraq are breaking down in the region. Turkey, Jordan, Qatar, Dubai, and Oman are still openly trading with Iraq. Sanctions aren't working. Now he is strong arming the U.N. They have put off enforcing him to make compensation to Kuwait for the loss of damages associated with his invasion of that country. And his leverage is, hey, I will cut my oil production. The world can't afford to have that happen. Even if we took military action, we would need Saddam Hussein's oil to fuel our planes and bomb him. I would ask that the full text of the Wall Street Journal article from September 19, 2000 be printed in the Record.

Mr. MURKOWSKI. Think about the simple equation of Saddam's influence over the world right now. You don't have to be a mental giant to reach any other conclusion, but we buy Saddam Hussein's oil. We send him the money. He pays his Republican guards and builds up his biological and chemical weapons capability. We take that oil, put it in our airplanes and fly over and bomb him. And the process starts all over again. What kind of a foreign policy is that? How do we get back on course? Well, there is a solution. We have to reduce our dependence on foreign oil. We need to go through some avenues to do this. We need to increase our efficiency and maximize our utilization of alternative fuels and renewables. But we also have to increase domestic oil and gas production in this country. We have vast resources in areas like the overthrust belt in Wyoming, Colorado, and other States where we produce oil. We can produce more. But 64 percent of the public land has been withdrawn from exploration. Increased domestic supply is needed to lower prices, reduce volatility, and ensure safe and secure energy supply. My State of Alaska has been producing about 20 to 25 percent of all the total crude oil produced in this country in the last 20-some years. We can produce more. We have the technology and we can do it safely. Give us an opportunity. Let us show the American can-do spirit. Let us meet the environmental concerns with technology, not rhetoric. We must increase our domestic energy supply of oil to lower prices, reduce volatility, and ensure safe and secure energy supply. We have legislation to do it. Senator Lott and I and others introduced the Energy Security Act of 2000, S. 2557. If enacted, It would guide us toward rolling back our dependence on foreign oil to below 50 percent. That is a goal, an objective of the bill. To meet that goal, our bill would, among other things, increase domestic energy supplies of oil by allowing frontier royalty relief; improving Federal oil lease management; providing tax incentives for production, and assuring price certainty for small producers; allow new exploration in America's Arctic, in the Rocky Mountain States, and along the OCS areas for those States that want it; protect consumers against seasonal price spikes, especially with regard to Northeast heating oil users; foster increased energy efficiency, and provide new tax incentives for renewable energy to replace foreign oil. The bottom line is, the Clinton-Gore energy policy and our increased dependence on Saddam Hussein is a travesty on the American people, the American mentality, and the American memory. We fought a war in Iraq, and now we are dependent on their resources and unable, or unwilling to do anything about it. Saddam is leveraging the issue by his dictate to the U.N. that he is not going to give them compensation. If they make him, he will simply cut his production, and the world can't afford to have that happen. Finally, more U.S. dependence on foreign oil gives more leverage to Saddam Hussein to threaten regional stability. The administration seems powerless to respond for fear of cutting back on Iraqi exports. We are in a period almost as if it was during the last year of the Carter administration. Remember that time? We were being held hostage, if you will. We had hostages in our embassy in Iran. This time we have a country, a nation held hostage by Saddam Hussein. What will the effect be? It is going to be at the gas pump and in your heating oil bill. I haven't even talked about natural gas, and I will not do that today. I want to remind my colleagues that we have been talking about oil today. Tomorrow we are going to talk about natural gas. Natural gas, a year ago, was $2.16. Today it is $5.40 for deliveries in October. The GOP energy plan would defuse Saddam Hussein's threat. The Clinton-Gore plan wants to stand by until the election is over. They hope they get away with it. That concludes the amount of time allotted to me. Tomorrow I will talk about the price of natural gas and the effect it will have on the economy, your heating bills, and your electric bills. I yield the floor.

Mr. MURKOWSKI

Mr. MURKOWSKI. Mr. President, I would like to announce for the information of the Senate and the public that the oversight hearing scheduled for Wednesday, September 20, 2000, at 10:00 a.m. before the Committee on Energy and Natural Resources has been rescheduled for Tuesday, September 26, 2000, at 9:30 a.m. in room SD-366 of the Dirksen Senate Office Building in Washington, DC. The purpose of the hearing is to receive testimony on the current outlook for supply of heating and transportation fuels this winter. For further information, please call Dan Kish at (202) 224-8276 or Jo Meuse (202) 224-4756. committee on indian affairs

Mr. MURKOWSKI

Mr. MURKOWSKI. Mr. President, my understanding is that we have 10 minutes in morning business.

Mr. MURKOWSKI. I ask unanimous consent that I might be allowed 15 minutes as in morning business.

Mr. MURKOWSKI

Mr. MURKOWSKI. Mr. President, let me draw your attention to a very significant event that occurred last week which involved the nuclear utilities companies in this country prevailing in the spent fuel claims case. Now, to many, this might not seem to have great significance. Those of us on the Energy Committee have gone through a long and somewhat tedious process to try to address the federal government's obligation to encourage the Congress, specifically the Senate, to reach a decision on how we are going to dispose of our high-level nuclear waste, with a recognition that almost 20 percent of the power generated in this country comes from nuclear power. As a consequence of that, and the inability of the Government to fulfill its contractual commitment to take the waste in 1998, the industry in itself is, you might say, choking on the pileup of nuclear waste that is in temporary sites around reactors throughout the country. Evidently, the administration does not value the sanctity of a contractual relationship very highly, because the ratepayers, over an extended period of years--several decades--have paid over 17 billion dollars into a fund which the Federal Government has managed, and that fund was specifically designed to permanently take the waste from the utility companies that generate power from nuclear energy. The August 31, 2000 decision was highlighted in The Energy Daily. The U.S. Court of Appeals for the Federal Circuit ruled that the power companies are free to seek damages against the Energy Department for its failure to take responsibility for spent nuclear fuel. Undoubtedly, this will ``prompt dozens of new lawsuits seeking billions of dollars in claims against the Government,'' industry attorneys indicated last Friday. Who is the Government? The Government is the taxpayers, Mr. President. As a consequence, the inability of the administration to meet its obligation under a commitment--a binding contract--results in the taxpayers being exposed to billions of dollars in damages. The article says: The U.S. Court of Appeals for the Federal Circuit handed the nuclear industry a sweeping victory Thursday when it rejected a government motion to dismiss a suit brought by utility owners of three nuclear power plants. The government claimed the utilities must first exhaust all administrative remedies available through the DOE before seeking monetary damages in the U.S. Court of Federal Claims. The decision means that nuclear utilities can return to court and will get a chance to prove their damages--to ask the court to determine the amount of damages the government must pay for DOE's failure to begin storing the spent fuel on Jan. 1, 1998. Congress set that date for the federal government to take responsibility for spent nuclear fuel in the Nuclear Waste Policy Act of 1982, which requires DOE to store the roughly 40,000 metric tons of waste generated and now stored at more than 100 U.S. nuclear plants. Some of those plants, I might add, are no longer active. They weren't designed for long-term, indefinite storage. Estimates of the potential damages faced by the government as the result of last week's decision vary widely. An analysis performed this year for the Nuclear Energy Institute showed the figure could be as high as $50 billion--costs that will be borne by the taxpayers--but that number is based on a worst-case assumption that the government will never fulfill its obligation, and the utilities' spent fuel will never be stored in a proposed federal level-high waste depository at Yucca Mountain, Nev. [where the Government has already expended over $6 billion.] The idea of the facility at Yucca Mountain in Nevada was to act as a permanent repository for the high-level waste. NEI General Counsel Robert Bishop told The Energy Daily Friday that the dozen or so utilities already having filed lawsuits against DOE allege some $5.4 billion in damages resulting from the government's failure to take the spent fuel. So we are seeing the suits filed at this early time. Bishop acknowledged, however, that the figure could be much higher if, as expected, utilities that thus far have been reluctant to sue the government take advantage of the Thursday decision and pursue their claims in court. ``You are going to see a lot of utilities deciding to do whatever they believe is in their and their customers' best interest.'' ``Some may choose to work with DOE as PECO did. Others may decide that it is in their best interest to seek relief in federal claims court.'' Jerry Stouck, an attorney in the Washington office of Spriggs & Hollingsworth and the lead attorney in the case, represents Maine Yankee Atomic Power Co., Connecticut Yankee Atomic Power Co. and Yankee Atomic Electric Co. He said the government has an easier way to avoid facing dozens of lawsuits from aggrieved utilities. ``The government can mitigate its damages by moving the [spent] fuel,'' Stouck said. ``The government already has indicated it is not going to honor its contract and move the fuel as it is required to do under the law, but they can avoid damages by moving the fuel. They won't avoid all of the damages, but they will mitigate a lot of the damages simply by moving the fuel.'' In its ruling, the court concluded that DOE's failure to begin taking used nuclear fuel did not constitute a ``delay,'' as the government had argued, that was resolvable under a standard contract that each utility signed with the department. It said that utilities are not obligated to seek resolution under the contract for damages caused by DOE's failure to perform its contractual obligation. It also stated unequivocally that DOE has breached its obligations under the contracts. And in a telling rebuke of the government's argument, the court made it clear that its decision extended beyond the specific suits brought by the Yankee plants. ``The breach involved all the utilities that had signed the contract--the entire nuclear industry,'' the court said in its 14-page order. The case now returns to the claims court to determine the level of damages DOE must pay. It is my hope that the majority leader, Senator Lott, will have an opportunity to bring this matter to the floor again for a vote. I advise my colleagues that we are one vote short of a veto override. With the recent ruling by the court, clearly the Federal Government and the taxpayer bear the responsibility of not taking the nuclear waste as indicated by the court order. According to the Department of Justice statement: We remain persuaded that the quickest and most efficient way to get relief to those utilities that are incurring costs as a result in our delay in accepting nuclear fuel is direct negotiation between individual utilities and the department. This is evidenced by the settlement agreement that we entered into last month with PECO. There you have it. The Department of Justice hopes they can reach some kind of a settlement. But in any event, that settlement is going to cost the taxpayers a substantial sum as a consequence of the Federal Government's unwillingness to honor the terms of a contract made to take that waste in 1998. It is my hope, as chairman of the Energy Committee, to hold a hearing on this matter because now we have a definitive decision made by the court and that puts the liability on the taxpayer and the Government. As a consequence, I think it is appropriate that we in this body come together and recognize our obligation. Our obligation is to override the President's veto and honor the contractual commitments to take the waste. This very important environmental issue affects almost every state in this Nation. On August 31, 2000, the U.S. Court of Appeals for the Federal Circuit decided two cases and held that nuclear utilities could seek millions of dollars in damages for DOE's failure to accept high- level waste by January 1998. The court's decision only confirms what I have said on this floor over and over again--the Federal Government has breached it's contract with utilities as a result, the taxpayer is going to pay. Conservative estimates from the utilities with claims pending are upwards of $5 billion. In the first case, the U.S. challenged the lower court's finding that Maine Yankee, Connecticut Yankee, and Yankee Rowe (all shutdown reactors with tons of fuel remaining on-site) were entitled to damages. On appeal the court ruled that the utilities have the authority to seek civil damages from the Court of Federal Claims and rejected the government's argument that relief was available through the administrative process. In the second case, the court found that Northern States Power, now known as Xcel Energy, could also seek damages through the Court of Federal Claims. Utilities view both decisions as major victories. Not only do they not have to go through the administrative process first, (1) the court rejected the distinction between operating and shut down utilities, and (2) characterized DOE's failure to accept waste as a breach of contract, thus entitling the utilities to proceed directly to the Court of Federal Claims to prove their damages. About a dozen utilities have claims pending that are affected by these ruling. Before this ruling, DOE had been attempting out-of-court settlements with utilities. Only one, PECO, has made such a statement. This court ruling only underscores what I have been saying for years--the Federal Government has breached it's contract and that will cost tax payers billions. Since 1982, the Federal government has collected over $17 billion from America's ratepayers in return for a commitment to take nuclear waste from storage sites scattered in 40 states around the country and store it in one, safe central government- run facility, beginning in 1998. Several years ago, the U.S. Court of Appeals ruled that this is a legal, as well as moral, obligation. Now the court has ruled that failure to do so is a breach of contract and the utilities may seek damages. I have tried to help the Federal Government out of this situation. For several Congresses, I have worked on various pieces of legislation designed to keep our nuclear waste repository program on track. This Congress we took that legislation, S. 1287, further than we ever have before. In February, the Senate passed it by an overwhelming majroity-- 64 to 34. And then in March, the House took up the bill and passed it 253 to 167. From there, this legislation made it up Pennsylvania Avenue, to the President's desk, where he vetoed it. Why he did that, I don't know. In light of this recent court decision, maybe that doesn't look like such a good decision after all. Unless of course, the President is thinking of politics, and not tax payer liability. In any event, the President sent it back to Congress, where, on May 2, 2000, the Senate failed to override that veto. But we didn't fail by much. The actual vote count of 64-35 doesn't tell the whole story. Two Members, who have always been in the ``yes'' camp were necessarily absent. And the majority leader, in a procedural maneuver, switched his vote so that if we needed to revisit the issue, that opportunity would be available. So perhaps, we should now avail ourselves of that opportunity. Senate bill S. 1287 would help to limit the taxpayers liability for DOE's failure to accept waste by permitting the early acceptance of waste at the Yucca Mountain site, once construction is authorized. S. 1287 provides the tools that will allow the Federal government to meet its obligation to provide a safe place to store spent nuclear fuel and nuclear waste as soon as possible, while reaffirming our Nation's commitment to development of a permanent repository for our Nation's nuclear waste. At the beginning of this session, interim storage legislation, in the form of S. 608, the Nuclear Waste Policy Act of 1999, was introduced. Although the legislation had sufficient support to be favorably reported by the Committee on Energy and Natural Resources, I proposed that the committee consider a new approach to resolving the nuclear waste dilemma that might gain a full consensus and avoid the procedural difficulties encountered by the bill in the past. This approach was supported by the committee, and an original bill, which became S. 1287, was approved by the committee by a bipartisan, 14-6 vote. During committee consideration of S. 1287, we received many constructive comments on how to improve the bill, and a manager's amendment that reflects many of these were eventually considered and passed on the Senate floor. S. 1287, as passed the House and Senate contained the following major changes: Adds a savings clause clarifying that nothing in the bill diminishes the authority of any State under other Federal or State laws; Alters one of the milestones and the acceptance schedule for nuclear waste to make them consistent with the schedules contained in the Department of Energy's Viability Assessment for Yucca Mountain; Clarifies that the Secretary and a plaintiff may enter into voluntary settlements that are contingent upon new obligations being met, including acceptance of spent fuel under the schedules provided for in S. 1287; Adds benefits for local governments in Nevada that adjoin the Nevada test site; and Permits EPA to proceed with the radiation standard setting rule. If NRC, after consulting with the National Academy of Sciences, agrees that the standard will protect public health and safety and the environment and is reasonable and attainable, they may do so prior to June 1, 2001. I believe that the issues to be addressed by nuclear waste legislation have evolved and this evolution is reflected in S. 1287. This legislation gives DOE the tools it needs to complete the Yucca Mountain program, while providing a mechanism to rectify DOE's failure to perform its obligations under the Nuclear Waste Policy Act of 1982. Because DOE has failed to find a way to meet its obligation, our citizens will be left with what remedies the court can devise. After the August decision in the Court of Appeals, it is clear that the utilities can now go ahead and prove their damages. What the eventual damages are remains to be seen. This much I can say with some certainty: This remedy is bound to be expensive to the American taxpayer and is unlikely to result in used nuclear fuel being removed from the over 80 sites where it is stored around the country, in facilities that were not intended for long-term storage. If DOE is unable to open the Yucca Mountain repository on schedule, it is estimated that total damages from the Department's failure to meet its obligation will range from $40 billion to $80 billion. Clearly, such stop-gap compensation measures would drain money away from this and other Department of Energy programs, stopping all progress on the permanent repository. The American taxpayers would lose tens of billions of dollars, and we would still have no idea how we are going to get the nuclear waste out of 80 sites in 40 States. I have said it before, and I will say it again. S. 1287 is the most important environmental bill we have considered this Congress. The alternative is to leave waste at 80 sites in 40 States. S. 1287 also gives the Secretary of Energy the ability to settle lawsuits and save the taxpayers from an estimated $40-$80 billion liability. The bill would allow early receipt of fuel once the construction is authorized-- as early as 2006--assuming DOE can keep the program on schedule. Such early receipt would help mitigate a liability the courts have clearly said the government has. We have struggled with this problem for many years. The time is now. S. 1287 is the solution. Years of litigation to prove damages will cost money and waste valuable time. Utility consumers have paid over $17 billion into the Nuclear Waste Fund. We must solve this problem. We cannot continue to jeopardize the health and safety of citizens across this country by leaving spent nuclear fuel in 80 sites in 40 States. We should move it to one remote site in the desert. If we don't, we risk losing nuclear generation altogether--that's 20 percent of our clean generation. We cannot afford to do that. Our clean air is too important. This issue is too important. Let's not ignore reality. It's dangerous and it's expensive. Again, I remind my colleagues that in February, this body passed by an overwhelming majority vote of 64-34 to honor the commitments that were made under the contract to proceed by placing the waste at Yucca Mountain. The House took up the bill and passed it 253-167. It went down to the White House, where the President vetoed it. Why he did I don't know. I don't know whether they just disregard contracts down there. But now the burden is on the taxpayer. Now the burden is on the Senate to rise up and generate a couple more votes and override the President's veto. Again, we will be holding a hearing on this matter in the very near future. I encourage each Member of the Senate to recognize his and her obligation to honor the terms of the contract, proceed to take the waste, and put it where it belongs, at the site at Yucca Mountain in Nevada where the taxpayer has already expended some $6 billion to put it there. I see other Senators wishing recognition. As a consequence, I yield the floor.

Mr. MURKOWSKI

Mr. MURKOWSKI. Mr. President, I would like to announce for the information of the Senate and the public that an oversight hearing has been scheduled before the Committee on Energy and Natural Resources. The hearing will take place on Wednesday, September 20, 2000 at 10:00 a.m. (immediately following the scheduled markup) in room SD-366 of the Dirksen Senate Office Building in Washington, DC. The purpose of this hearing is to receive testimony on the current outlook for supply of heating and transportation fuels this winter. For further information, please call Dan Kish at (202) 224-8276 or Jo Meuse (202) 224-4756. subcommittee on forests and public land management

Mr. MURKOWSKI

Mr. MURKOWSKI. Mr. President, I rise today to support passage of S. 1608, the Secure Rural Schools and Community Self-Determination Act of 2000. This bill will restore the financial and resource management links between the rural communities of America and our natural resource agencies. The precipitous drop in financial support for education and infrastructure needs of our rural counties will be restored by S. 1608. These payments will now be steady and reliable. This bill also reverses the inward turning, and belt-way centered, thinking of resource managers by creating collaborative processes for natural resources management in our rural communities. S. 1608 will provide rural communities and their public lands managers the opportunity to work together to improve the ecosystems by investing in the public lands. I would like to express my appreciation for the months of work that have been put in on this bill by my fellow members of the Energy Committee: Senator Craig and Senator Wyden. Bringing this bill to the floor today is the result of countless hours of briefings, dialog and negotiation with Senator Craig, Senator Wyden, their staff, the National Forest County & Schools Coalition, and all the other groups that have expended time and effort to assure that the educational needs of the kids in rural communities would not be neglected. I would also like to express my appreciation to the Forest Service, Department of Agriculture, and others in the Administration who have been helpful in coming to the final product we see here today. In closing I thank all those who have contributed to crafting S. 1608 for their hard work. I urge my colleagues to vote for this bill. And finally I look forward to the federal government reestablishing its support to the rural communities of this country so that they can maintain their school systems and provide other needed county services.