John Peterson

Mr. PETERSON of Pennsylvania

Mr. PETERSON of Pennsylvania. Mr. Chairman, I yield myself the balance of my time. I want to thank everybody tonight. There has been a good tone of this debate. There has been no personalities. It has been friendly, but I think it has been very informational. I want to share this letter with you. Mr. Abercrombie was supposed to. ``Supporters of the Putnam-Capps amendment are turning a blind eye to the problem, and they are jeopardizing millions of good-paying union jobs by prohibiting access to new sources of natural gas supply,'' says the Building and Construction Trades and Contractors. In fact, eight unions in the last few days have signed up in support of this legislation. Folks, this is not about 3 miles offshore. This is not about hearings. Did we have hearings before this authorizing language was placed in this bill 25 times? I was here 5 years before I knew I was voting to prohibit offshore production of natural gas. I would have been protesting a long time ago. Folks, this is about our future. America's richest energy source is natural gas. It is the cleanest, it is the mother's milk of all of our industries. American women in the North should not have to keep their thermostats at 55 degrees, and they have in my district. Churches in rural areas should not have to meet in the basement in January and February because they cannot a afford the gas bill, and they have in my district. Folks, natural gas prices are changing how people live in this country, and they are changing to where companies decide on whether they want to live here. When we lose the industries we have talked about, folks, it is happening. We cannot delay. They talk about the years it is going to take to get the supply. That is why we need to do it tomorrow. We need to do authorizing language. We need to have the President look at this issue with a bright eye. We have a lot of work to do, folks. But energy is the mother's milk of our country. We will never balance the budget without a growing economy, and our economy will stop growing if we do not have affordable, clean natural gas to fuel it.

Mr. PETERSON of Pennsylvania

Mr. PETERSON of Pennsylvania. Mr. Speaker, on rollcall No. 627. I was inadvertently detained. Had I been present, I would have voted ``yea.''

Mr. PETERSON of Pennsylvania

Mr. PETERSON of Pennsylvania. Mr. Speaker, I rise tonight to speak about an issue I have spoken about many times: the natural gas crisis that faces this country. Yes, we just passed an energy bill, but it did little to help our homeowners heat their homes. We have had a 500 percent increase in natural gas prices in the last 5 years. A month ago, when we were still facing the impact of Katrina, we had a 700 percent gas increase when it reached $14.50 when it had been $2 just 5 years ago. These natural gas prices, in my view, threaten homeownership, church ownership, schools, YMCAs, YWCAs, and small businesses. In my districts, those kinds of organizations are renewing their gas contracts, and they are paying 100 percent more than they paid last year and many times more than they paid a couple of years ago. Industries like the fertilizer industry are being crushed by these natural gas prices because 70 percent of the cost of producing fertilizer is natural gas. Forty-four percent of our fertilizer companies are now offshore, and our farmers are paying two and three and four times as much for fertilizer as they did just several years ago. The huge petrochemical industry that is dominated by America will not be for long because there are 20 chemical plants being built in the world and 19 are offshore. Why? Natural gas prices. Petrochemicals use gas not only as a fuel, but they use it as an ingredient for all the chemicals we buy every day. Polymers and plastics involved in everything we market today use natural gas as an ingredient and natural gas as a fuel. Forty to fifty percent of their costs are natural gas. We have huge reserves in this country of natural gas. We are not poor on natural gas. Congress and Presidents have chosen to lock it up. Our Outer Continental Shelf, that is the first 200 miles offshore, is rich in natural gas. We have a bill that we introduced today that will open up the Outer Continental Shelf. We increase States' rights from three miles to 20 miles so it will be all out of sight. There has never been a gas production well that has ever in any way soiled a beach. We need to unlock our natural gas supplies. Canada, Belgium, Great Britain, Norway, Denmark, Sweden, New Zealand, and Australia produce most of their natural gas offshore, right off of their coastlines. They have beautiful beaches. They are not a threat. There has never been a gas production well that has ever in any way caused beach problems. I urge Members of this body to deal with this natural gas crisis. We have to open up some supply or we are going to lose major industries. A million or more jobs will be gone in the next 2 or 3 years, some of the best blue collar jobs we have left in this country. We cannot just subsidize people with natural gas prices. We need to bring prices down by increasing supply because we have lots of it. We have lots of it in the Midwest. But on the Outer Continental Shelf on our coastlines, it is right close to our population centers, it is right close to our plants and our manufacturers. We will not make steel in this country in the years ahead if we continue. We will not make aluminum in this country. We will not produce anything that uses natural gas to melt it, to bend it, to twist it, to treat it because we cannot afford it. Europe pays half as much for natural gas as we do. China, Taiwan, and Japan are big competitors economically and pay a third of what we pay for natural gas. The rest of the world pays less than $2. It is time to get our heads out of the sand. It is time to open up our natural gas reserves in this country and pass House bill 4318, which would open up huge reserves on our shorelines to produce natural gas in this country so we can compete and have jobs for our working people.

Mr. PETERSON of Pennsylvania

Mr. PETERSON of Pennsylvania. Mr. Speaker, I rise today to talk about what I think is really the issue of the day, and that is energy. Energy runs this country. Energy is what we use to get to work. Energy is what we use to run our homes. Energy is what we use to manufacture and process things. Yes, it all started 5 miles from where I live many years ago when Drake Well discovered oil. That is about 150 years ago. Energy then became the major component of the industrial revolution in this country and the world, and oil was king. Oil still plays a major role. I am not so sure it is king, but Drake Well was the beginning. Then we got into the World War I and World War II era, and coal was king. America is probably the Saudi Arabia of coal. We have coal in the West and coal in the East. The eastern part of the country furnished both soft and hard coal that fueled the Industrial Revolution. In recent years, we have had a shift from coal to natural gas. Now natural gas has always played a role. The major share of American homes are heated with natural gas. The majority of small businesses are heated with natural gas. Natural gas plays a huge role in manufacturing. I think that is the one that is least understood. This morning we had a hearing held by a group of American employers who employ millions of Americans. It was the American Chemical Association, American Forest and Paper Products Association, the National Association of Manufacturers, and 13 other agencies, Agriculture Energy Alliance, American Plastics Council. It goes on and on, rubber manufacturers, Fertilizer Institute. All of these people today had one message for Congress: Solve the natural gas problem that is forcing us out of business. The use of natural gas has been skyrocketing. I can show Members a chart that shows it. The red is the growing use of natural gas. We are right about at this point here, and it is only going to get worse because we have expanded the use of natural gas in this country, particularly for the generation of electricity. One-fourth of our natural gas now generates electricity, and that figure continues to grow. We now have an inadequate supply because as we have simultaneously increased the use of natural gas, we simultaneously locked up the major areas of this country that are rich in natural gas. We only have about 3 percent of the world's oil at our access, and we import about 60 percent of our oil. That is a path we cannot follow. We need to be veering from the use of oil everywhere we can because it is not that we are buying it from friends at a fair price. Just a few years ago, natural gas was less than $2 a thousand and oil was $10 a barrel. That went on for decades and that prevented other types of energy from competing because those prices were so cheap that we just became complacent as a country, not realizing that somewhere down the road, the price of these energy fuels could really be harmful to this country. Well, we are there today. We recently passed an energy bill that does a lot of things for the future. It does a lot of things for wind and solar and biomass and ethanol and the list goes on and on, hydrogen fuel cells, but they are all long term. There are incentives in that bill for promoting it. But it did little to promote natural gas. There were a couple of incentives for deep drilling, but in my view, natural gas is the crisis of the day. We have heard an awful lot on television about gasoline prices. Every newscast for weeks talked about the highest gasoline prices in history, and at one point after Katrina we were over $3, $3.25, unheard-of prices, and they have settled down now about a buck now. They are $2- something or $2.30 or $2.25, depending on where one lives, but they had come back down. At one point gasoline prices had doubled over a 5-year period, and that was all the news. But at the same time natural gas prices had increased 700 percent. That is seven times, and there was just little discussion of that. There has been little warning for the American public that heating their homes was going to be so expensive this year. There was little warning to our businesses who use natural gas as heat, who use it to melt, smelt, bend products, use it as an ingredient to making products. I think one of the things that was pointed out today was that 96 percent of things produced in some way use natural gas as an ingredient or as a heat to make them. So it is entwined in our whole manufacturing and production base that it really is the fuel that depends on where America goes. And the tragedy of natural gas prices when they have increased 700 percent is, we are the only country where that has happened. We are in a competitive world. We compete with the whole world in this global economy. And when we paid $65 and almost $70 for oil, all our competitors, all of the rest of the world, paid that high price. So it was painful, but it was equally painful to our competitors. Now, in natural gas, that is not the case. In natural gas, while we were paying $14.50, now about $11.50 or $12, but when we were paying $14.50, we were the only country in the world paying that. Canada was less. In Europe it is about half of what we pay for natural gas. And our big competitors like China, Japan, Taiwan, who manufacture a lot of products we buy in our stores, they are buying natural gas for a third of what we do. The rest of the world it is less than $2, and countries like North Africa and Russia are less than $1. So there is a huge cost differential for manufacturers and processors and people heating their homes in this country than the rest of the world, and that puts us at a huge disadvantage. And currently our schools and our hospitals and our YMCAs and YWCAs and our churches and colleges and universities and small businesses are buying gas at twice the price they paid last year, and most of them are purchasing on contract because they saved money on a contract basis in years in the past, but now it is costing them. And big producers, industries that are threatened, are the ones that met here today and talked to Congress saying, please do something to open up the supply of natural gas because the only thing that will make a difference on price is supply. So the steel companies and the aluminum countries and the brass makers and the petrochemical and the polymers and the plastics and the fertilizers, they all were pleading with Congress today in their hearing to open up supply, give us the chance to get fair prices for natural gas so we can compete. Mr. Speaker, this is an issue that we must deal with. If Congress does not step up to the plate and open up supply of natural gas, we will say good-bye to a million or more of the best manufacturing and processing jobs left in America. We have lost a lot of jobs in America to cheap labor and for lack of modern technology. But this is a crisis caused by government, caused by Congress, caused by the last three administrations who had Presidential moratoriums on natural gas production on the Outer Continental Shelf, and locked up millions of acres in the West also that are rich areas for natural gas and, at the same time, urged those who were producing electricity from coal to switch to natural gas. Florida is one of the States that have switched, and now 75 to 80 percent of their electricity is produced by natural gas. California is another big coastal State that is a huge consumer of natural gas. And yet both of those States have been fighting tooth and nail that we must not open up the Outer Continental Shelf for production. They claim that it will destroy their beaches, it will destroy their tourism. Mr. Speaker, there is no evidence to prove that. There just absolutely is no evidence. I have asked at every forum for months, Show me a natural gas production well that has polluted a beach. Now, I believe that we should do it offshore far enough that it is not visible, so it is not something that people have to look at. And I love to go to the beaches. I love the beaches as much as anybody, and I want them to be clean and pristine and nice and full of fish. And the proof is that in the parts of the ocean where we produce both gas and oil, fishing is very good. It has not been a detriment to aquatic life. In fact, the least imprint by those who know this issue best, and I am not speaking about big companies, I am speaking about scientists who know this issue best, the least imprint for energy production is when they get 20 miles offshore. Nobody sees it. Nobody knows it is there. The distribution lines are all underground. One might say, how can I prove that? Well, it is interesting. Canada is known as a very green, sensitive country. They produce offshore on both coasts. Great Britain, Denmark, New Zealand, Australia, Norway, Sweden, all environmentally sensitive countries who produce huge amounts of natural gas and oil on their Outer Continental Shelves. What is the Outer Continental Shelf? The Outer Continental Shelf is the first 200 miles offshore. The first 3 miles are controlled by the States under current law, and the next 197 miles are controlled by the Federal Government. Some years ago, the Congress, about 25 years ago, started passing language in every Interior bill that said the Department of Interior could not spend dollars to lease land for oil and gas on the Outer Continental Shelf. So that has effectively locked it up. And then we have had three Presidents in a row who have a Presidential moratorium that we could not lease out land for production on the Outer Continental Shelf. So here where, in the land of plenty with natural gas to spare, we currently produce 84 percent of our natural gas, we import 14 percent from Canada, and we import 2 percent in liquefied natural gas, which can come from anywhere in the world. It is a very difficult process. We have to have the largest ships known to man. We have to have very controversial ports where we bring it and turn it back into gas after we have liquefied it. And I am not saying that is inappropriate, but it is not the answer to the looming shortage of natural gas that is going to be around for the next 15 to 20 years because every projection I have looked at shows the need for natural gas growing much faster than the ability to produce it. We are actually drilling twice as many oil wells today as we historically did, and yet we are not producing a lot more natural gas. And the reason for that is, for the bulk of it, we are producing most of those wells in old, tired fields that we have been producing out of for decades and the bloom is off. The flush wells are gone, and the wells we drill do not last as long and have not held up. So as we continue to add and add wells to production, we are just not gaining. We are just not closing the gap. We are increasing the shortfall. And we realize that just in the short span of time we went from gas that was less than $2 to just a couple of weeks ago we had gas at $14.50, prices the industry never dreamed possible. We had had the highest gas prices this summer. They were running $6.50 and $7 and then $7 and $8 and were edging up towards $9, and everybody was just stunned because last year the average price in the summer was $5.30. The year before that was about $4.50. The year before that they were about 3-something. This was summer prices when gas was the cheapest, and that is when we normally put about 20 percent of our gas underground in storage caverns so that we have enough supply in the winter when it gets very cold and we use huge amounts of natural gas, one, to run our industries, and, two, to heat our homes and our churches and our businesses. Well, the summer prices have shown us a tremendous increase, from less than $2 to 3-something, to 4-something to 5-something, and then this year we were running at $7, $8, and sometimes more than $8 when Katrina hit. And then we went up to $14; we doubled. It shows us the sensitivity. A lot of people ask, how do we bring prices down? We increase supply. When we increase supply, the market comes down. But we cannot increase supply if we do not open up drilling. And it is interesting that some people just have a real problem with the ``drill'' word, but a gas well is not something to fear. It is a 6-inch hole in the ground with a steel pipe. They cement the bottom. They cement the top, and they let gas out. Gas comes out under its own pressure into a collection system where it is cleaned and impurities are taken out; and then it comes to our homes, and we just turn on our gas burner and cook our meals. We turn on the gas burner and heat our homes. Industry uses it in so many ways. I vividly remember in the late 1970s and early 1980s, I was a retail supermarket operator, and we had high gas prices then, high oil prices then, and we had three extremely cold winters, the coldest we had had on record for a long time. And during that period of time, in the retail supermarket, it was always difficult to make a profit in January and February and sometimes March. Then when warm weather came and winter costs left, we then came back to where we made a profit. Well, I remember those years because people spent so much money to travel because of oil prices being high and spent so much to heat their homes because of gas prices that by spring they had backed up and owed their gas company and owed energy bills, and they were clear into April, May, and almost June before they had those paid off to where they were shopping normally. And 60-some percent of the economy in this country is people shopping. About 60 percent of Americans spend every dollar they make from payday to payday, and when they spend a huge amount more for travel, like they have this year, and this winter they will spend a lot more than usual, in some places double, for heating their homes, there is going to be a lot less spendable income. The poorest among us, the young couples and the seniors among us who are trying to stay in their homes are going to be the ones who pay the severe price. The upper middle class will feel pain, but they will not be endangered. I believe, with the energy prices this year, we are going to see seniors who cannot adequately heat their homes. I already hear of churches who are talking of not using the sanctuary, only meeting in the basement. That is not the kind of society I think we want, and it is not one we should have. The current prices of natural gas are only abnormally high because Congress has failed to act. The Presidents have failed to lift the moratoriums on the Outer Continental Shelf. Eighty-five percent of our coastline, we get 40 percent of our energy in this country from just a small portion of the gulf under the States of Texas, Louisiana, Mississippi, and a little bit of Alabama. That is the only place we produce on the OCS in great quantities. There are a few places on the West Coast, but not many, that we produce a little bit of energy, that were there existing. But the moratoriums have locked up everything. And like I said earlier, we are the only country who has done that, and it makes no sense. Natural gas production is not a threat to our coastlines. It is not a threat to tourism. In fact, I think States like Florida and California who receive most of their electricity that has been produced by natural gas, when those long-term contracts end, they are going to have huge increases in electric costs because they make their electricity from natural gas. And many of those big companies have long-term contracts. The long- term contracts in my district that have been coming due, people are switching from $6 gas to $14 gas. I have had companies that even had to purchase $16 gas. Those are unheard-of prices, unthought-of prices. Monday I was at a celebration of a new lime kiln plant that is in my district, for a company, Graymont, a good company that spent $60 million to bring in a new kiln to make lime. I said to them right away, ``What energy do you use to make the lime?'' Because they have to heat it to 2,400 degrees. That is hot. They said, ``We use coal here. We are fortunate.'' But they said, ``We have lime kiln plants that use natural gas.'' I said, ``What are you are doing there?'' They said, ``They are shut down.'' We are going to find that people who make bricks, people who dry products, people who cook products, there are going to be companies that curtail production. Some are going to stop production. Why? Because they cannot pay the current natural gas prices and sell those products in a marketplace where they are competing with people in other countries where natural gas prices are a fraction of what they are here. We have to realize we are not an island to ourselves. Unfortunately, there have been a lot of reasons besides cheap labor that companies have chosen to produce overseas in other countries. Some are the legal issues because of the multitude of lawsuits in this country that we have inadequately curtailed, and we are the most lawsuit-happy country in the world, and multimillion-dollar lawsuits that cause companies to lose their profitability and go out of business and leave this country have been one of the reasons we have lost a lot of jobs overseas. Cheap labor. I have always said companies who use the newest, most modern technology can compete; but, unfortunately, we have a lot of companies who did not modernize their technology and are still very labor intensive, and they got to where they could not compete, and so they went overseas. But there is no reason that this country should lose one job, let alone a million jobs, and we could lose a million jobs, because of energy prices, because we have huge reserves on our Outer Continental Shelf. We have huge reserves in the Midwest; not as easily accessible to our coastlines where our populations are, but the Outer Continental Shelf is very accessible. I guess the tragedy is there is a piece in the gulf called Tract 181. It was not under moratorium, as the rest of our Outer Continental Shelf was; it just was not leased. It was there, ready to be leased. The Clinton administration had it listed to be leased. It was delisted for some reason. It is not in the current 5-year plan. There is movement to move it into the 5-year plan. I support that, but that is not enough. But that tract alone is the most quickly available to American consumers, because it is right next to where we produce gas and oil today; and the wells, as they would be produced, would be immediately hooked into the system that is there. The timely thing would be the process of leasing, and then all the paperwork and red tape companies have to go through to get those leases enacted and get the permits to drill the wells and located; and that would take maybe a year or a year and a half. But within 18 months, we could be producing out of that portion of the gulf that is called Tract 181, and I have yet to hear that anybody has a good reason why we have not opened up that tract. We know we have had protests from Florida. It is not their land. They should not have anything to say about it, in my view, except right at the top where it is close to the panhandle. They are currently talking about slicing that corner off and leasing about 70 percent of it, but we have to pass legislation to do that. Congress has to act. We have not acted. But, in my view, that is not enough. We have to open up the Outer Continental Shelf. Now, I have a bill that is cosponsored with Mr. Abercrombie from Hawaii, and he has helped me champion this bill. It would open up the Outer Continental Shelf all around this country, the 85 percent that is locked up. It would increase the States rights area from 3 miles to 20 miles. Now, that guarantees that no one would ever see a rig, no one would ever see the production platforms because, after 12 miles, even on a clear day, you cannot see them. They are out of sight. They are just not visible. Also, I am still waiting for someone to show me a natural gas- producing well that has caused pollution. Natural gas is a gas. In fact, the famous triangle down in the gulf had eruptions of natural gas that actually took planes out of the air. It was actually a crack that opened up a fissure in the ocean floor that allowed huge amounts of natural gas to escape into the atmosphere in a way that anybody who was in that area was endangered, and the ocean would just bubble because natural gas was coming up. Natural gas is everywhere underground. It is in lakes, in ponds, in our ocean floor. Natural gas normally seeps up and comes up as bubbles in the water, not harmful to our atmosphere, not harmful to our environment. Natural gas is the clean fuel. It is the one with no NoX, no SoX. If you are worried about CO2, only one-fourth of the CO2 comes from natural gas of all the other fossil fuels. It is almost the perfect fuel. I think the thing that many of us do not realize that was stated today in the news conference by all the production companies, and I have a picture here of everything from tires to cars to plastic objects, to paint, to makeup, face creams, skin softeners, shampoos, all are made from products developed out of natural gas. It is just a wonderful product that God has given us to use, and it is readily available. This country has no shortage of natural gas. We have a shortage because government has chosen not to allow us to harvest the rich bounty that is out there. We should be using natural gas as the bridge to the future. My vision is that if natural gas were more affordable, we could do like a college in my district that is now paying a premium that is using natural gas to power their bus fleet. All the buses there, many buses in cities in California use natural gas. Here in Washington, D.C. some of the buses use natural gas. Now, today, that is costing them more than if they were burning diesel; but we all know that diesel does not burn clean like natural gas; and for our cities, it would be environmentally advantageous to have all of our buses, all of our school buses, our transit systems, all of our taxi cabs, all of our short-haul vehicles, short delivery trucks, our air-conditioning and all the repair people that are out on the road and go home every night, they could all be powered with natural gas with a very inexpensive changeover. A gasoline engine can be altered to burn natural gas. The only problem with natural gas is storing enough of it so that you can do long-distance hauls. So all of our short-haul vehicles, all of our construction vehicles, all of our little engines that are running around in our airports, they could all be on natural gas; and we would benefit by clean air, we would save money if the prices were right. We could lessen our need for oil, foreign oil, from unstable parts of the world at prices set by cartels, groups who want to control us. There is no reason, there is no good argument why natural gas today, the price of it has become a barrier, but it should be the bridge. The first hydrogen vehicles have been run with natural gas as the fuel to make the hydrogen. Later that will change, but that is currently the easiest way to make hydrogen. So natural gas just feeds into our lives in so many ways, and it is so readily available in this country. The tragedy is that this country could lose a million or two jobs, because if we do not do something soon to open up supply, one fact that I can give you today is that there are 120 chemical plants, and these chemical plants are very capital intensive. That is one of the reasons they have not moved as quickly as they might have, because there are 120 plants at a cost of $1 billion each that are under construction in the world today. Mr. Speaker, 119 of them are in other countries. That shows us that the chemical plants of the future, and we are the leader today in making chemicals. We will not be the leader down the road. With these natural gas prices, we are forcing chemical plants to leave. We have already lost over 40 percent of our fertilizer industry because nitrogen fertilizer, between 70 and 80 percent of the cost of making it is natural gas, polymers and plastics; and we use plastics and polymers in every part of our lives. We cannot buy anything that does not have plastic on it, in it, or a part of it. Again, they use an ingredient of natural gas and they use natural gas to melt it and bend it and shape it. The problem is, as I said earlier, the parts of the world that we compete with, such as Europe, half our price. Dow Chemical a few years ago moved 200 jobs to Germany, not a cheap labor market, a very sophisticated workforce there, a very capable country with technology; Japan, Taiwan and China, a third of our price. And then the rest of the world, under $2 in countries like Africa, and Russia, less than $1. Mr. Speaker, it is imperative that this country step up to the plate. If we do not wait any longer, if we do not wait months and years, if we let the employers of this country, we let the producers of this country, the manufacturers of this country know that this Congress is serious about increasing the supply of natural gas, the price will come down. The capital investment is huge. They do not want to build new plants if they do not have to; they do not want to move if they do not have to. But if we continue to not open up the Outer Continental Shelf, it is my prediction that we will lose a million or more jobs in just a few years ahead. To prevent that, we have to open up some in the Midwest. We have to open up the Outer Continental Shelf, and we have to follow the lead of environmentally sensitive countries like Canada, the United Kingdom, Belgium, Norway, Sweden, Denmark, New Zealand, Australia who produce out there every, every day. Now, why have we not done this? Well, there is really a couple of States and a couple of Governors who have been steadfast opponents, California and Florida. They have argued vociferously that we must not do this. For some reason, they have been convinced that their beautiful coastlines will be ruined and that their tourism business, which is huge, will be ruined. Folks, there are no facts to prove that. There is no evidence to prove that. Those are just outrageous, outlandish statements that continue to be made and believed by many, but not true. I have asked repeatedly, come and debate me on how we will destroy our shorelines, how we will destroy our beaches by the production of natural gas offshore in the Outer Continental Shelf. That first 200 miles, from 20 miles to 200, that is 180 miles of the Outer Continental Shelf that we would open up. The Peterson-Abercrombie plan, as I mentioned earlier, we will remove the moratorium on all of our shorelines for natural gas only, giving the States 20 miles to protect, and then from 20 to 200, we will produce. Then we will allow States to opt out for oil if they choose to, and they would also be rewarded for a portion of the royalty. This is on behalf of homeowners, businesses, employers, churches, schools that we need to do this. Florida, for one State, utilizes 233 percent more natural gas than they produce, and they are surrounded by the richest natural gas reserves anywhere in America. I think that is unfair. I think as a State, they need to step up on the plate. They need to produce their fair share. Or they need to curtail their use. I remember just a few years ago when they were producing most of their electricity from coal. They have recently shifted, at the suggestion of the Federal Government, to natural gas production. Now their electricity is produced by natural gas, and I think, if you are going to be the biggest utilizers per capita of natural gas, and you sit in one of the richest areas of the world, you have to come in and help solve this problem. Because, Mr. Speaker, Florida and California are rich in tourism. Many of us love to go there and enjoy their beautiful beaches and enjoy their warm weather in the wintertime. But most of the people that I meet there are pretty successful. And as we lose the success in the northern parts of this country, as we lose the ability to manufacture and make products, as we lose those wonderful jobs that people can afford, nice homes, educate their children, have a nice vehicle, have a pension, those are the jobs that are produced by all of these industries that are being challenged by natural gas prices. And as we lose those, the number of customers, the number of people, I was a retailer for 26 years and I always speak of customers, those who will come to warm places like Florida and California to spend their vacation dollars will not have the money to do that. So they will lose in the end, and the cost of electricity there will sky- rocket when new contracts come in if these gas prices persist. They will pay horrendous prices. In fact, it is interesting. I have a letter here from the association, though the governments of Florida and California protest vociferously, the Associated Industries of Florida, and some said to minimize that that this was just a small organization. Well, it has 10,000 members of all kinds of businesses and industry, from mom and pops to large companies in Florida. And it says we appreciate the reviewing of all the current OCS areas, including the areas that have, until now, been off limits due to the moratorium, which included the Atlantic, Pacific and eastern Gulf of Mexico region. Research documents that these areas hold substantial undiscovered, but technically recoverable energy resources that will be absolutely critical to America's national security and to the continued growth of our economy and to securing jobs for virtually every sector of our economy. If America does not look to expanding exploration, this is Florida businesses speaking, drilling in those OCS areas, then America will unnecessarily pay a high price and incur a heavy burden. The U.S. Energy Information Administration forecasts that by 2025 petroleum demand will increase by 39 percent and natural gas demand, by 34 percent. Higher energy prices have exacted a toll on our economy by slowing our growth already. Natural gas costs for the chemical industry in America have increased by $10 billion since 2003. Of 120 chemical plants being built around the world with price tags of $1 billion or more each, only one is being built in the United States. As a result, Associated Industries of Florida recommends to the MNS, Mineral Management Agency, that expanded leases and sales are important to our country, to our citizens and to our way of life. To not utilize our available energy resources when it can be accomplished in an environmentally sensitive way would be a disservice to our country. We need to ensure that we have a brighter future by adopting the OCS leasing program. Now tomorrow I will be a part of a natural gas hearing that will be held by the Interior Committee and the Energy and Water Committee of Appropriations, and in those hearings we will bring in the users of natural gas and we will hear from them; and here is some testimony that I think will probably be there from the Illinois Farm Bureau. ``Whether it is gasoline, diesel, electricity or natural gas, farmers and ranchers must have access to reliable and affordable energy inputs. Unfortunately, our country's existing energy policies make it increasingly difficult for all of us to produce food and fiber for the United States and the world while providing for our own families. Based on USDA data, the American Farm Bureau estimates that increased energy input prices during the 2003 and 2004 growing season cost U.S. agriculture $6 billion in added expenses.'' That comes right out of the farmers' profits. And we know farmers do not get rich. Farmers work hard to produce the milk and the grain and the food that we feed our families. Based on USDA data, ``the 2005 growing season has been especially dismal from a business cost perspective for agriculture. Higher energy costs, and specifically natural gas costs, have come at a time when commodity prices are extremely depressed.'' So on top of high energy prices they have had low commodity prices, so they have not gotten a good price for their products. Natural gas is critically important to agriculture, because it is used both directly and indirectly in nearly every aspect of farm operations.'' Here we go, natural gas used again and again. ``Natural gas is used to produce nitrogen fertilizers and farm chemicals as well as electricity for lighting and irrigation. Natural gas and LP gas are also used in agriculture to dry grain as well as heat barns and confined facilities of livestock and poultry operations. Needless to say, it is vitally important that U.S. agriculture and associated industries have access to affordable supplies of natural gas.'' Then they go on to say, ``There are several reasons why the price of natural gas has skyrocketed. First, our national energy policy has discouraged domestic exploration.'' It is actually prohibited, not just discouraged; it is prohibited, recovery of oil and natural gas, which has made us more dependent on foreign energy sources. ``Second, many power plants have been forced to use natural gas for generating electricity in order to comply with environmental regulation, even though we have huge reserves of coal and the technology for its safe, clean use. The Energy Information Administration estimates demand for natural gas will increase 54 percent by 2025, with electric power generation accounting for 33 percent of that consumption.'' In closing, this is what the farm community said: ``The `perfect storm,' the combination of significantly higher energy and fertilizer cost, coupled with falling grain prices, spells serious trouble for rural America. For this reason, it is our hope Congress will act soon to further address the energy needs of our Nation and find solutions for this natural gas problem we face.'' It was interesting, my staff was contacted by a Florida paper recently that said, Why is your boss so persistent on this issue? Why does he not just say his piece and go away? They said, We checked it out, and he is not highly financially supported by the oil industry or the natural gas industry, and so why is he doing this? And I guess I was a little disappointed in that, that we would only do something because somebody supported us. And my answer to that newspaper is, I am speaking on behalf of the citizens in my district and all of rural America and all of America for affordable energy prices to heat our homes, for affordable energy prices to conduct our businesses and our churches and our Ys and our hospitals because that is what makes it tick. And these energy prices are going to put a kink in every budget in America, from homeowners to hospitals to retailers to education; they are all going to pay a significantly higher price. And our service agencies that are out there helping people, volunteering for people, their heating bills are going to be doubling this year, and that is going to take money away from the ability to help people. An interesting thing, going back to chemicals, which people just do not realize. Chemicals and plastics are used in 96 percent of all U.S. manufactured goods including computers, cars, clothing and more. Since 1998, the chemical industry has warned repeatedly that the U.S. is facing a natural gas crisis. And what have we done about it? I have been talking to the chemical companies for 5 years. They came to my office. They do not reside near me; they are not in my district. And I said to them, Why did you come to me? This was 3, 4 years ago. And they said, Well, someone said you were interested in the natural gas issue and you were stating that you saw natural gas as a problem. And I did many years ago. I attended breakfasts put on by the Edison Institute for Electricity. They kept showing this huge amount of natural gas that was going to be consumed for a 12-to-15-year period to make electricity until something else could take its place. And then I went to a breakfast briefing in the Senate and the speaker was Daniel Yergin, who wrote the book ``The Prize'' on oil, and he stated that this huge use and commitment of natural gas for electric generation, if it was not coupled with the opening up of reserves in this country in places we have not been allowed to drill, it would cause an escalation of prices. It would take a few years. And folks were here. I did not expect gas to be $14.50 this year. Many of us on the committee were talking that, you know, as it was $7, $8 and bumping around $9, approaching the fall that we would probably see $10 or $11 gas this winter. Well, when Katrina came and shut off some supply, we were clear up to $14.50, an unheard-of price, from $2 to $14.50. If milk was that kind of an increase, we would have $28-a-gallon milk. Would we not be dealing with that? I think we would. As I said earlier here, since 1998, the chemical industry has warned repeatedly that the U.S. is facing a natural gas crisis. Now the impact is being felt by all Americans. With winter fast approaching, the government warns that home owners who rely on natural gas for heat, about 52 percent of the Nation's households can expect at a minimum a 48 percent increase, and in some parts of the country, a 70 to 80 percent increase. We, in industry, have been feeling the pressure of high-priced natural gas for years and have done everything we could to remain globally competitive. For example, Dow has improved its own energy efficiency by 42 percent in the last 15 years. Since 2002, we have raised product prices more than 50 percent, shut down 23 inefficient plants in North America and shifted some production overseas to regions of the world where energy prices are lower. So there is no doubt that our company and our industry will continue to grow and thrive. It is simply a question of where. Now, I do not know how clear they have to say it before this Congress decides to do something about it. We have been warned by industry after industry after industry that these current natural gas prices will prohibit them from being profitable and competitive in this country; and if that is not a clear message, I do not know what it is. I urge my colleagues, I urge this administration, I urge the States of Florida and California to become a part of the solution to get away from the old rhetoric that natural gas is a dirty commodity. Natural gas is the clean fuel. Natural gas is the fuel that can bring us clean air attainment in our cities if we use it in transportation. It is the bridge that will get us to where $60 oil is going to change a lot. A lot of things are going to be competitive. A lot of things are going to work. You are going to see increases in all kinds of alternatives, but it is going to be slow and gradual. There is no quick fix. There is no silver bullet. So I am urging the Members of this Congress, I am urging this administration, I am urging the governments of California and Florida prospectively, because they have been the opponents; they are the ones who speak out and say, We must stop this. A natural gas producing well on our outer continental coast is not an environmental hazard. It is the future of America. It is what will make us competitive. It will make our farmers profitable again. It will make our chemical companies want to stay here and grow here. They are going to grow. They just stated that. They are going to grow. They are going to prosper somewhere. But will our chemicals in our hardware stores and our supermarkets be American-made? They are today. But will they be in the future? Will our farmers be using fertilizer from foreign countries? Some of them are today. In a very short period of time, they will all be using fertilizer from foreign countries because the gas prices of today just do not make it affordable to produce fertilizer, chemicals, polymers, plastic, steel, aluminum in this country. I have been joined by the gentleman from Iowa (Mr. King) who requested this hour, who had other duties take him away, and I would like to welcome him to join me.

Mr. PETERSON of Pennsylvania. Mr. Speaker, I guess I want to conclude with the following, that there is no one who has a good argument that we do not need to open a supply of natural gas. There are those who think there are other ways to do it, that LNG is the big answer. I do not think that is the big answer. It can be a help. But we what we really need to do, the natural gas supply that is the most readily available to population centers of this country is the Outer Continental Shelf. All leading nations produce there, and they have clean beaches. They have great tourism. It does not have to be a detriment. And I urge those from Florida and California who keep decrying that this is going to be the demise of their beaches and their tourism to show me the facts. Do not give me rhetoric. Do not make brash statements. Give me the facts of where a natural gas producing well has polluted a beach. I am asking Florida and California, who are huge consumers of natural gas, to join with us and be a part of the solution. This is a problem facing America. We cannot afford to have two States holding up the energy policy of this country who are the largest consumers of natural gas in enormous amounts per capita compared to other States, who use most of their electricity that is made with natural gas. And I urge them to come to the table as part of the solution. Show me where natural gas wells have polluted the beach, and I will be there. I have had no one take me up on that offer. Natural gas wells or natural gas flowing out of steel pipe into a collection system into our homes, into our factories. Natural gas will depend on whether America remains a competitive nation. It is so entwined in our economy and our lives that we cannot continue to have government curtail the production and expand the use.

Mr. PETERSON of Pennsylvania

Mr. PETERSON of Pennsylvania. Madam Speaker, I appreciate the opportunity to share tonight what I believe to be one of the most compelling issues facing this country, and it is our energy issue. Energy is what makes everything run. It heats our homes. It makes our businesses run. It helps us transport ourselves and goods from place to place. Energy is a part of everything we do. Now, I come from right near Titusville, Pennsylvania, where the first oil well was drilled, and nothing has changed the world more than when we found petroleum and how it developed our whole Industrial Revolution in this country and we became the leaders of the world and how we developed our transportation system. But today, you know, we hear a lot about the price of oil because it is published daily, and we hear a lot about the price of gasoline at the pump. And that is important to us. And it has been painful some time back when we hit over $3 for gasoline. But, folks, when gasoline prices were at $3, they had doubled in the 5-year period. The real issue facing America is the price of natural gas, which has increased 700 percent in the same period of time, 5 years. Why is it a crisis? Well, the impact is we heat our homes. It could threaten homeownership. We heat our schools, our hospitals, our YMCAs, our YWCAs, our churches, our colleges, our universities, our small businesses. Yes, everybody uses natural gas in some way, from cooking to baking to heating their homes, running something. And we have major industries like steel, aluminum, brass, all our metals, that melt steel, that heat it to bend it or shape it. Petrochemicals, they use natural gas as a heat. They use natural gas as an ingredient. Every chemical that we buy in the grocery store or the hardware store is a derivative of natural gas. Polymers and plastics, we do not have anything that does not have polymers or plastics connected to them. Again, polymers and plastics, a major ingredient is natural gas; and of course it is used again and again to melt it and to shape it. Fertilizer, our farmers have been devastated this year with huge increases in fertilizer cost. Nitrogen fertilizer, the one most common, 70 percent of the cost of fertilizer is natural gas. So our farmers have been hit very hard with the energy crisis because they have paid a lot more to run their tractors, to cultivate their farms. They have paid again to harvest their crops. They have paid with natural gas to dry the grains before they put them in storage in the big elevators. They have been hit with natural gas every way they turn. Why are natural gas prices more harmful than oil prices? Well, when we buy $65 oil, as it was a few weeks ago, or 58 or 59 or $60 oil, as it is today, that is the world price. And all our competitors, far and wide, around the world pay that same price. But that is not true of natural gas. When we paid $14 for several months, we are down around 12 now, maybe 11, still the highest price in the records that have ever been kept, we are alone. We are the only country paying that. Canada is considerably cheaper. Europe is usually about half of our price. Our economic competitors, Japan, Taiwan and China, a third of our price. Thinking of giving all those manufacturers and processors over there another huge advantage over us economically, not only cheap labor, but cheap energy. How can our employers compete when energy is a large part of their cost? The fact is they cannot. I was today at a celebration of the expansion of a lime company that put in new kilns and invested $60 million in my district. And I asked them, what fuel do you use to fuel these kilns to make lime, because you heat it to 2,400 degrees. And they said, we use coal. And I said, you can be glad you do. And they said, well, we have plants all over the States. We have plants in Canada and plants in Mexico. We have natural gas plants. And I said, well how are they faring? And they said, well, we are not running those. Today's natural gas prices we cannot afford to make lime. Folks, the problem we face with the natural gas prices that are going to be high for a long time to come, they are going to be devastating to homeownership. They are going to be devastating to small business. But they are going to force major companies to leave this country, because if they want to compete, if they want to make products that are saleable, you cannot pay three, four and five times as much. In South America natural gas is only $1.60. In Russia it is only 90 cents. And I named all of our other competitors. How did this happen? Well, for decades gas was under $2 and oil was around $10. Nothing competes, none of the renewables. None of the new initiatives work with those cheap, cheap prices that we had for a long time. Now, about 10 years ago we changed a major policy in this country. Historically, it was against the law to use natural gas to make electricity. It was considered not prudent. I think we were right then, but that was changed. And so 10 years ago we took away the limitation of using natural gas to make electricity, and today one-fourth of our electricity is made with natural gas. So huge reserves of natural gas now go into making electricity. Now, I remember at the same time when that was happening I went to a briefing in the Senate and a Daniel Yergin, who wrote the book ``The Prize'', a Pulitzer Prize-winning book, he said if we used a lot of natural gas to make electricity and we did not open up supply, in a few years we would develop a real shortage of natural gas in this country. That happened, because I remember the first year that it reached up over $3, that was from under $2 gas to over $3. That was a major bump in the cost of heating our homes and running our businesses. Well, the next year it was up in the high $4s and that again was a huge percent increase of natural gas costs, and we all watched and learned. The next year, the average price last year, the average price for natural gas during the summer months when we fill our storage, in the summertime we produce more gas than we can use and we put it in huge caverns, many of them in my district in Pennsylvania, and we store it for winter usage because we do not produce enough in wintertime. Last summer the average price was $5.30. That was the highest price we ever paid for summer gas. It was very alarming to those who watched that. This year was even worse. We were bouncing along between $7 and $8 all summer; and those were waiting for new contracts, waiting for the price to come down, it just never happened. Then as we were approaching the fall we got up to around $9 gas and sometimes even close to $10, and then came Katrina and the other storms and a shortage of gas coming out of the gulf, and we hit $14.50. And that was a record for gas prices in this country, and it stayed there for some month or two and now just recently has edged down into the elevens. But still it is way above. We were talking this summer that probably sometime this winter, when the cold Canadian air comes down into the States, that we could be looking at $10 and $11 gas this winter. Well, we are back at $10 and $11 gas now and we think that is pretty good compared to $14 a few weeks ago, but it is a huge shock to our system. It is not a price companies can pass on. I have companies in my district that, when it reached $8, they do not produce any more because they cannot pass that on. That cost makes it prohibitive. Now, how did this all happen? What could we do to fix it? Well, we have huge reserves in our West and we have huge reserves on our Outer Continental Shelf. What is the Outer Continental Shelf? That is our shoreline. The States control the first 3 miles of the Outer Continental Shelf, and then for the next 197 miles, 200 miles is controlled by the Federal Government. Historically, most countries in the world produce oil and natural gas there. But about 20-some years ago the President of the United States put a moratorium. It was supposed to be temporary; it was while we had an inventory to see where the best supplies were so we could open up with the least environmental damage. So that moratorium carried into the Clinton administration, and they just extended it to 2012, and our current administration has not dealt with it. Well, that has closed up 80 percent of our shoreline with huge reserves. Some estimate that it is 400 trillion cubic feet. Others feel it is far in excess of that because we have never used the most modern seismographic equipment to tell us what is there today, if we did that, because Congress has not allowed us to. We have not allowed the Outer Continental Shelf to be measured with the modern technology of today to tell us how much oil and gas is there, because if we found out there was a lot we might go after it, and that would be a terrible thing to do. Well, I am sorry, but there has never been a natural gas well that has ever polluted a shore. I am promoting natural gas production, and I will explain my legislation a little later here. But we have also not had a major spill from oil production in the water since 1969. I do not know how long the industry has to be perfect before we can do it there and be trusted. In the gulf when we had the series of storms that hit this year, the worst ever, a 60-foot wall of water, rigs were destroyed, platforms were destroyed, but there were no major spills because the technology that we have today works. The wells are locked in at the ocean floor, and the gas and oil is held there until we can repair the platforms, until we can reconnect those wells and get them back into the system. So it is safe technology today. Well, how safe is it? How can we be sure? Well, Canada is a very environmentally sensitive country. They produce right off the coast of Maine and right off the coast of Washington. They actually drill for natural gas in our Great Lakes every day and sell the gas to us. Does that make sense? I do not think so. The United Kingdom, an environmentally sensitive country. They produce a lot of their oil and gas both on their Outer Continental Shelf. Belgium, Norway, Sweden and Norway, very green countries. Where do they produce their energy? On their Outer Continental Shelf. New Zealand, Australia produce there every day. Our future depends on the price of energy. If we are going to have businesses that compete, if we are going to be able to afford home ownership, if churches are going to be able to heat their churches this winter--I have churches in my district that are talking about not using the auditoriums, but using their basements and not heating the rest of the church because they will not be able to afford to. Most of the churches and schools and small businesses in my district had $6 and $7 contracts for natural gas last year. They buy outside the controlled system. They buy direct from the producers and they use the pipeline that the public system has. And all of them have had a doubling, not a 10 percent increase, not a 20 percent increase, but a doubling of their gas costs for this year. So if a YMCA spent $12,000 last a month for natural gas, this year it will cost them $24,000. Most YMCA's, most churches, most small businesses do not have those kinds of cash reserves to use to heat their buildings. Now, who opposes our production on the OCS? Well, I have to be honest. We have a lot of good friends in Florida, and I love them dearly. But the Florida delegation and Florida State government has been a real obstacle to production on the Outer Continental Shelf. They have really been much of the dictation of policy, and for, I believe, all the wrong reasons. Now, the plan we have is the Peterson-Abercrombie plan. We want to remove the moratorium on all of our shoreline for natural gas only. We will give the States 20 miles of protection instead of 3. So when you get past 12 miles, it is all out of sight; nobody will know it is there. The production lines are all underground coming into the shore. And it is the best and most sensitive environmental way to produce natural gas. And there is no good argument, I have yet to have anyone show me an accident in the history of the production of natural gas offshore, of a natural gas well ever polluting a beach, ever polluting a shoreline, ever causing detrimental damage to fish and aquatic life. All the studies have shown that aquatic life and fish life are far more prevalent where platforms and drilling rigs have been because they like the protection from the hot sun. They congregate there, and the fishermen find that that is the best fishing. That has been historic. In the gulf when there was talk about not rebuilding some of the platforms, the fishermen were saying, Please leave them there. Please do not take them out. That is where we catch our fish. So it is not detrimental to aquatic life. It is not detrimental to clean beaches. It is not a sight problem because you cannot see it; it is out of sight. But it is about our home owners. It is about our businesses. It is about our employers, our churches, our Ys, our schools. There has never been a natural gas well that has polluted a beach or shoreline. Someone said in a debate the other day that there was no sense in doing this, that it would take 7 to 10 years for production. That is not true. It would take several years for production. Now Tract 181 in the gulf, I think it is a tragedy that it has not been leased. It was scheduled to be leased during the Clinton administration. And here we are 6 years later and Tract 181 has never produced. Now Tract 181 is about 200 miles from the Florida coast. It lies mostly under Mississippi and Alabama. It only gets near to Florida along the panhandle of Florida. And I am told now they will cut the corner off, so it is more than 100 miles from Florida, which really Florida should have never had any jurisdiction or should never have been able to stop the use and leasing of Tract 181. Tract 181 is the best known reserve we have. It is millions of acres, right beside where we produce in the gulf today. And every well that was drilled would automatically be hooked into the system, gas or oil, and we could help our supply problem. Now, I do not believe we can drill our way out of the oil problem in this country. I think we ought to be diverting from the use of oil everywhere we can. But natural gas is really the almost perfect fuel. There is no pollution to natural gas. It burns the cleanest of any fuel. Even CO2, you have one fourth of the CO2 that you have with other fuels. It is almost the perfect fuel. Now, I do not particularly think we should be using a fourth of our natural gas for electric generation, but that is a debate for another day, but we have to open up our supply so prices moderate. What could that do for us? Natural gas could be very much a part of our transportation system. We have a bus system in my district, State College, that uses all natural gas for their bus system. There are bus systems in California that are all natural gas. Today those systems are paying a premium. Historically, natural gas was less expensive than gasoline, but today it is more expensive. Now, in the cities, if you used natural gas, and a gasoline engine can be easily converted. This is not some expensive technology. All our short-haul delivery trucks, all our taxi cabs, all of school buses, all our construction vehicles, they do not have to go long distances, could be running on natural gas, saving the need to build refineries, saving the need to import more oil, and in the cities, helping them get attainment for the clean air mandates. Natural gas should be the bridge to our future, not the wall that it is today because of prices no one can afford. Natural gas is almost our clean, perfect fuel, and we need to be using it wisely. We need to be producing it, though, in quantities that are affordable. It really is a part of almost everything we create from fertilizers to all the chemicals, even face creams. Now I do not think the average woman when she puts on make-up or any of us who use skin softeners think we are using natural gas, but we are. Those are all made from a derivative of natural gas. It is just so much a part of our lives. It is almost hard to explain an item that we get out of the ground, gas, with all of these qualities that have such a part of our industries. Now, when these prices increase 700 percent, companies who use huge amounts of that just cannot exist. As I said earlier, the lime companies told me they were not running their plants that are on natural gas. They could not afford to sell the lime if they did that. So just think of a steel company. I spoke this spring at a breakfast of steel makers, and I gave them my natural gas speech, and a gentleman sitting at my table was quite alarmed. He said, I cannot believe what you just told me. And I said, Why? And he said, I used $10 million of natural gas last year to melt steel. I never knew, I thought there was a little price differential, but I never knew there was this huge differential, that my steel companies in neighboring countries could buy natural gas so much cheaper and have such an economic advantage on me in making steel. Folks, if we are going to have steel-making in this country, if we are going to make aluminum in this country and petrochemicals and fertilizer, and these are some of the best jobs we have left, they are all huge energy consumers. They all use huge amounts of natural gas. If our seniors, who are approaching their years and want to live in their homes, they are going to use a lot of natural gas to heat them, to heat their water and cook with. The current prices of natural gas are going to prevent homeownership. We are going to have a lot of people shut off this winter who could not afford to pay their gas bills, and they will be terminated. We can even actually have people freeze to death in our cities where people do not know they are there and do not know that they are having the problem. So I just find it an argument that I have been making for some time here in Congress, and I guess I have been so shocked and surprised that we have not been successful yet at opening up the Outer Continental Shelf and opening up the production in the Midwest. The Outer Continental Shelf, I think this is the most advantageous thing to do because the Outer Continental Shelf lies near the population. The bulk of the population in this country is along the shorelines; and so when you produce gas along the shorelines, you are going to have it near where the people are. One of our problems of Midwest gas is getting it to the market needs. We are told this winter that Wisconsin and Minnesota and Michigan, those areas are going to pay considerably more for natural gas than the Northeast because they are supplied out of the gulf more than the Northeast is. So with the gulf having so much of their gas still shut in from the storms, there is going to be a shortage in their pipeline system because these systems are not all connected. I want to share with you what the Associated Industries of Florida said, and then I am going to call on my friend from New Mexico who has just joined us, but while we have had all this opposition from the government of Florida, we also have the Associated Industries of Florida wrote a letter to our Minerals Management Service saying: ``We appreciate that MMS is going to review all of the current OCS areas, including the areas that have until now been off limits due to the moratoria, which include the Atlantic, Pacific and Eastern Gulf of Mexico regions. Research documents that these areas hold substantial undiscovered but technically recoverable energy resources that will be absolutely critical to America's national security and to the continued growth of our economy and to securing jobs for virtually every sector of our economy.'' They go on to say later in the letter: ``If America doesn't look to expanding exploration and drilling in these OCSs, then America will unnecessarily pay a high price and incur a heavy burden. The U.S. Energy Information Administration forecasts that by 2025 petroleum demand will increase by 39 percent and natural gas demand will increase by 34 percent. Higher energy prices have exacted a toll on our economy by slowing our growth from between .5 to 1 percent based on pre- hurricane prices. Farmers have paid $6 billion more for energy in the last 2 years. Natural gas costs for the chemical industry in America have increased by $10 billion since 2003! Of 120 chemical plants,'' this is an alarming figure, ``being built around the world with price tags of $1 billion or more, only one is being built in the U.S. ``As a result, Associated Industries of Florida,'' this is 10,000 business people, ``recommends to the MMS that expanded lease sales are important to our country, to our citizens, and to our way of life. To not utilize all of our available energy resources, when it can be accomplished in an environmentally sensitive way, would be a disservice to our country. We need to ensure that we have a brighter future by adopting an expansive OCS leasing program.'' I am pleased to be joined by the gentleman from New Mexico (Mr. Pearce) who understands this issue maybe even better than I, and I yield to the gentleman from New Mexico (Mr. Pearce).

Mr. PETERSON of Pennsylvania. Madam Speaker, there are a couple of issues maybe we can both talk on. You talked about fertilizer and the cost to farmers. I know those prices have doubled a couple of years in a row, and it has been a huge, huge cost to farmers. Forty-four percent of our fertilizer industry has left this country in the last 3 years because of natural gas prices; and if we do not deal with them, they will all leave. Our farmers will be using Russian or South American fertilizer, and this is a tragedy because a lot of people have been employed in this country in the fertilizer business. They make money making the fertilizer, storing the fertilizer, then hauling it to the distribution centers and to our farmers. The question I wanted to ask you is, today, we are drilling in old, tired fields that we have been producing out of for years. They are drilling deeper; and like I said, they are drilling horizontally trying to get more gas. We are drilling more than twice as many wells as we historically did. If your problem is putting a hole in the ground, that is going on in spades today; but we are not getting more gas. We are getting the same amount of gas that we were getting before when we were drilling half as many wells. If we were in fertile, productive fields, we could probably drill a lot less holes in the ground, am I wrong there, and have a lot greater production of gas because we would be in new, fertile fields where the gas pressure is high and we would get great production.

Mr. PETERSON of Pennsylvania. Well, the thing I have found, and I was at dinner tonight with some friends, some scientists, and they were stunned to know about the difference in prices. Everybody thinks that oil and natural gas is a world price, and I have to explain that to most people. When I explain this issue in my district, I just do not have people opposed to the production of natural gas on the Outer Continental Shelf because they know that we desperately need it to heat our homes, to run our businesses and to make products. It is such an integral part, and it is the clean fuel; as I said, it is almost the perfect fuel. If we could produce enough natural gas that the price was more affordable, maybe a little less than gasoline and fuel oil costs, it could be the bridge to the future. It could relieve the need for building more refineries, which will take years. It can relieve our need to increase our dependence on foreign oil from unstable parts of the world. Now, there are those who think liquefied natural gas is the way to go, and I do not really want to get into that discussion tonight, I think it can be helpful, but many are pinpointing our whole future. That means we build the most expensive ships, we build very controversial ports to bring the gas back, because you chill it, you put it in ships, bring it back here, regasify it and put it in these ports; and many people look at those in a very negative fashion, plus it is very costly. But I am even more concerned about where we get it. We get it from countries like Algeria, Nigeria, Libya, and Russia. Do we want to be further energy dependent on Third World countries that are unfriendly, with unstable governments, when we have such an ample supply here? There are many who feel that the Outer Continental Shelf has more than twice as much gas as the gentleman mentioned, 400 trillion cubic feet, but one of the reasons we do not know is we have not really measured it. The law has prevented us from having modern seismographic measurements of what is on the Outer Continental Shelf for either gas or oil. I want to share something I have here. Osram Sylvania has three plants in my district and 14 plants in the Northeast, and here is what they said in a letter that I received from them, dated October 26: ``In the past 5 years, we have seen natural gas prices escalate from $3 per Mcf to well over $10 on the spot market. As compared to natural gas costs in 2000, our bills in 2005 will be $24 million higher. In fact, for 2004 to 2005 alone, gas costs for us have escalated by $7 million. This is the single largest rate of increase in any of our costs of production. At current supply levels, we expect to see gas prices exceed $12 per Mcf in '06 and '07,'' I think that will happen this winter, not next winter, ``which will add another $7 million to our energy bills. Accordingly, since 2000, the rate of annual increase will exceed 25 percent.'' That means their cost of gas went up 25 percent a year. Here is the important part. ``Furthermore, while the vast majority of our production is based in the United States,'' that means they are making their products, and part of these are light bulbs, they are all, almost all, made in the United States, ``nearly 60 percent of our competitors' products are manufactured outside of the United States, some in Europe, where natural gas costs are less than $5 per Mcf, and Asia, particularly China, where gas is less than $4 per Mcf. By 2007, competitive disadvantage will be over $20 million on top of the wage gap versus China, which is already overwhelming. We are deeply concerned that if natural gas prices continue to skyrocket, our competitiveness will erode, having unhappy consequences for a U.S.-based manufacturing strategy. While some people may argue that passing the cost on to consumers is the remedy, price increases in the lamp market, with so many global competitors, it is an impossibility. Price increases to consumers to cover natural gas cost increases should be unnecessary as long as a timely, viable natural gas strategy is implemented. Globally competitive energy costs, especially natural gas, are a necessity to maintain our financial vitality and keep good paying and suitable jobs in the United States. We agree with you that coastal offshore drilling for new natural gas supplies carried out in a responsible and expeditious manner is the most important priority in new energy legislation that should be taken up and enacted by Congress before the end of 2005.'' Would the gentleman from New Mexico have any examples he could share?

Mr. PETERSON of Pennsylvania. Madam Speaker, as someone who has been in the business, the gentleman can speak to this, but I often describe a gas well as a 6-inch hole drilled in the ground. A steel pipe is placed in that hole, it is cemented at the bottom, it is cemented at the top, and then we hook it to a pipeline system and we let gas out. Is that a fair description?

Mr. PETERSON of Pennsylvania. Madam Speaker, the point I want to make tonight, and we were debating this issue on the Interior bill, sooner or later we will open up the Midwest and improve the permitting process. We are having a hearing on natural gas on Wednesday. I would like the gentleman to come and be my adviser. We will have the Energy and Interior Departments there, and we will be there all morning dealing with the natural gas issue. If we do not deal with this issue, and the gentleman said it best, we will sooner or later. If we deal with it now, we will maintain the fertilizer business in this country. We will maintain the petrochemical, polymers and plastics, steel and aluminum and brass. All of those businesses, I have talked to their CEOs and associations. They have spoken for the last couple of years, but Congress and this administration have had a deaf ear. They cannot compete having natural gas prices twice that of Europe, three times that of Taiwan, China and Japan, five times that of South America, and 10 times that of Russia and be competitive. There is just no way they can make those products in the United States. We will be saying good-bye to several million jobs in this country that are the backbone of the blue collar workers in this country who have a good job that pays benefits, they can afford a home, afford a new vehicle, and send their kids on to college and have the American Dream. We are going to say good-bye to those.

Mr. PETERSON of Pennsylvania. Madam Speaker, too many of our urban Members do not understand that timber is one of the most renewable resources. I come from the hardwood forest of Pennsylvania, one of the best timber areas in the country; and I also come from an original oil well and some of the early gas wells, but we do not compare to the southern production in energy. I want to share a release put out by Dow Chemical. Mr. Liveris, the CEO, noted that the domestic price of natural gas, which was approximately $2 per million Btu 6 years ago, exceeded $6 in February of this year, increased to $10 in the days just prior to Hurricane Katrina, and then jumped to $12 immediately after the hurricane struck the gulf coast. We all know when the first Canadian air comes south and goes all of the way down the coast and jacks up the use of natural gas, and the prices always spike, they will go even higher. When he wrote this, the price of natural gas was $14, which is equivalent to $7 per gallon for gasoline and $28 per gallon for milk. He noted that this renders the United States chemical industry, which uses natural gas as a fuel and a raw material, simply uncompetitive with the rest of the world. It does the same to aluminum, it does the same to brass, it does the same to steel, it does the same to polymers, plastics and fertilizers. Those industries will leave our shores. Several million Americans will not have a decent job, and a lot of them will not have money to take their vacation on our beautiful coastlines.

Mr. PETERSON of Pennsylvania. Madam Speaker, I close with the following statement: what this Congress does in opening up production of natural gas and bringing the price down, allowing our industries to compete and our seniors to heat their homes will depend on whether we remain a leader Nation or become an also-ran Nation. Natural gas is the clean fuel that I think really sets our future, and what we do about it depends on what kind of country we are.

Mr. PETERSON of Pennsylvania

Mr. PETERSON of Pennsylvania. Mr. Speaker, I thank the gentleman from Iowa, the gentleman from Virginia, and the gentleman from Arizona for the good job they did bringing up the security issue of this country. The number one issue is immigration enforcement, protecting our borders, and handling that issue in a much better way than we have historically done in this country. But the economic issue facing this country is the price of energy and the availability of energy. Natural gas is the clean fuel. It is almost the perfect fuel. It is what we heat our homes with. It is what we heat most of our schools, our hospitals, our YMCAs, our churches, our colleges, our universities. Most of our small businesses and mostly all commercial businesses run on that. Many, many industries use it in many, many ways. So 25 percent of the energy in this country is natural gas. We have heard a lot of discussion about oil and gasoline prices. In fact, on the evening news the American public understands the issue pretty well because it is reported well. But natural gas is not reported well. It is not talked about and not understood much. Gasoline prices were double, they were at their peak after Katrina. Natural gas prices were 700 percent what they were 5 years ago. Now that is just a huge increase. A gallon of milk would be $28. I think we would have panic in this country if a gallon of milk were at $28, yet there is no panic in the country about natural gas, except from those who use a lot of it, but they are having a hard time getting government to listen at any level. You just heard my friend from Iowa talking about the fertilizer industry and the tremendous amount of energy that is used for fertilizing natural gas. Petrochemical is one of the best-paying industries we have left in America. All the chemicals we buy at the hardware and grocery store, all the chemicals we use in the manufacturing process, one of the basic ingredients is natural gas. Plus, natural gas is used to heat those products and make them in the first place. Most petrochemicals, 40 to 50 percent of the cost of production is natural gas, thus putting them at a huge competitive disadvantage compared to the rest of the world. Polymers and plastics. We all know how polymers and plastics are such a major part of our life. Almost everything we touch has polymers and plastics as a part of it. Even for you ladies, skin softeners and makeup, the basic ingredient for skin softeners is a product derived out of natural gas. We heard about the plight of the farmers. The farmers have a real energy issue, because it hits them from when they plant, it hits them when they harvest, it hits them when they dry their grain, using natural gas usually. They just get hit again and again, and it has been very difficult for them to be profitable. Why is natural gas such an issue? It is not a world price. When we pay $60 in this country for oil, the whole world does. When we pay $65, the whole world does. But when we pay $14.50, we are at 12-something today, we are an island to ourselves. The rest of the world is much cheaper. Europe is under half what we pay. Now, our big competitors, Japan, Taiwan, and China, they are a third of what we pay. When you add cheap labor to those countries and the ability to engineer, they are bright countries, very sophisticated countries, they have learned from us. When you give them another advantage of the energy they use to make products, and especially products that consume a lot of natural gas, you give them this huge advantage. The rest of the world is under 2. As my colleague said, Russia is 95 cents, and I think North Africa is 80 cents. How can our employers and our companies compete when energy is a large part of their cost and they have to compete with other countries? They cannot. Our large employers are hanging on hoping government will do something about this crisis, and something major. Not tinker, but something major, and soon. Soon. If we do not, I think Representative Pearce said a few weeks ago here on the floor that we are going to solve this, that we are going to change this, and we can do it now and save a million or two jobs in this country, some of the best jobs we have left, or we can do it later and hope we can recover, and many of those jobs we will never get back. How did this happen? Well, for decades, natural gas was two bucks. Oil was $10. Nothing could compete with that. Renewables could not really grow because those prices were so cheap that nothing could compete. That went on for decades. Ten years ago, a major shift in policy also happened. Congress legislatively for a time permitted natural gas unlimitedly to be used to make electricity. We used to use make about 6 to 7 percent of our electricity with natural gas, and it was only allowed at peak power. That is early in the morning and into the evening, when we use more electricity than we normally do. You can turn a gas plant on and off, but you cannot do that with coal and nuclear, so gas was allowed to be used for peak power. Well, they took the prohibition away about 10 years ago; and now 25 percent of the electricity in this country is made with natural gas. Well, there were those who predicted that if we did not open up supply that would cause a shortage down the road. And when a few years went by, that is exactly what has happened, because we have it locked up. How did it get locked up? Well, there was a moratorium many years ago, about 25 years ago, put on by President Bush. It was supposed to be a temporary moratorium where we would have an inventory and that inventory would take a few years. But then he did not win reelection. President Clinton came in, and he extended the moratorium through 2012, and our current President has not touched it. Shortly thereafter, Congress placed a moratorium on the OCS. So now we have a Presidential moratorium and we have a legislative moratorium that has been preventing the production of natural gas on the Outer Continental Shelf for about 20 some years. Now, what is the Continental Shelf? Well, the first three miles of our offshore is owned by the States and then from 3 to 200 miles is owned by the Federal Government. So 200 miles is what is called the Continental Shelf, and that is where many countries produce a huge amount of their energy because there is lots of it there. Now many feel that that 400 trillion cubic feet that was mentioned is way underestimated. Because the work that was done was over 30 years ago, and the measuring devices we have today, the seismographic instruments, are so much more accurate. But government has prevented that from being done. We actually had a bill that the State of Florida prevented from passing so we could not measure. In fact, the current energy bill had a measurement in there but did not have funding in it, so it was a paper measurement, which I do not know how you do that. We were not going to be able to spend any money. But they are protesting that measurements not be done today, the State of Florida. Now Canada, a very environmentally sensitive country, the U.K., Belgium, Norway, Sweden, Denmark, New Zealand and Australia, they all produce both gas and oil. We are only talking about natural gas, but they produce both gas and oil on their Continental Shelf, and that is really where most of the world does it. Now what is the advantage of that? I think my friend from Iowa said that very well. It is where the population is. As you go up and down our coastlines, and 85 percent of our coastline today is part of the moratorium. We only have 15 percent we produce in. That is where the population is. We do not have to build 5,000 mile high-pressure expensive lines. You just hook into the cities where the population base is and then hook into the system that is already serving them that comes in from Texas and Oklahoma and the gulf, and the system is hooked together. It is by far, by far the best place we can produce and produce quickly. Now why are we doing that? Well, number one, it is the Florida delegation; and the government of Florida has had a huge influence in this body. They have actually prevented it, and they are currently opposing all measures to open up the Outer Continental Shelf. We have the Peterson-Abercrombie plan, and I think my friend from Iowa is a sponsor of that, and what we want to do is to move the moratorium. We want to give the States control of the first 20 miles. You can only see production for about 12 miles. So, after 12 miles, even from a tall building, you cannot see it. So we will say, all right, States can control 20 miles, both gas and oil. From 20 miles out, gas will be open for production in all the Outer Continental Shelf. And Florida will be included. They should help out, too. And then oil would be left up to the States, and they could petition the Department of the Interior to remove the moratorium on oil if they so chose to. That gives us a huge opportunity to produce the gas that is needed, in my view, to give our industries and give our citizens the ability to have affordable natural gas to heat our homes, to run our businesses and fuel the big industries that are going to leave this country. There has never been a natural gas production well that has ever harmed a beach or that has ever been a problem even on land. A natural gas well is a six-inch hole in the ground. You put a steel casing in cement at the bottom and at the top, and you let gas out into a pipeline. This is not a threat to any environment. It is not a threat to creatures. In fact, in the gulf, the best fishing is where we produce both oil and gas, and all the fishermen will tell you that. I keep hearing about all this potential pollution. And then someone said the other day in a debate it would be 7 to 10 years before we could get production. It will take a few years, but it will not take 7 to 10 years. That was a very inaccurate statement. Now, what is interesting about Florida, which is really the opposition here, they use 233 times more natural gas, they are huge users, than they produce; and they sit in the best, most fertile fields of the country. All around them are huge fields of natural gas and some of the best natural gas, and they are not only not wanting us to produce it, but they have actually prevented us from leasing tract 181, which was not under moratorium and that was scheduled to be released under the Clinton administration to be leased and has not been leased today due to much of the protesting of Florida. And that is unfair to the rest of this country. I love my friends from Florida who are here. They are great people. But the Florida government leadership, the Florida State government leadership, in my view, has been very wrong on this issue and has not only prevented production off their shores but has really prevented production that was very vital to this country's economic future and prevented us from having the gas reserves we need so that prices could be normal. If natural gas prices were normal, we could be expanding the use of it. I have a bus system in State College, Pennsylvania that is all natural gas. Today they are paying a premium to do that. In all the cities all of our buses, all of our school buses, our transit systems, all of our taxi cabs, our short-haul vehicles, our service trucks could all be on natural gas, and we would have cleaner air in the cities, and some of those cities could reach clean air attainment. Natural gas can be the bridge to our future. It can be the bridge to renewables or a bigger part of our energy portfolio. There are so many ways natural gas can displace other fuels, especially oil and our need for oil. It can displace the need for more refineries if we fuel part of our transportation system with clean burning natural gas. And one other fact on Florida, 75 percent of the electricity they use is generated by natural gas, and that is because just recently they tore down their coal plants and went to natural gas. I want to share with the Members, though the Florida delegation and the Florida State government is vehemently against any change, here is what the Associated Industries of Florida said recently in a letter to MMS, the Mineral Management Service: ``We appreciate that MMS is going to be reviewing all of the current OCS areas, including the areas that have until now been off limits due to the moratorium, which include the Atlantic, Pacific, and Eastern Gulf of Mexico regions. Research documents that these areas hold substantial undiscovered but technically recoverable energy resources that will be absolutely critical to America's national security and to the continued growth of our economy and to securing jobs for virtually every sector of our economy.'' Now, the Associated Industries of Florida gets it. They go on to say: ``If America doesn't look to expanding exploration and drilling in these OCSs, then America will unnecessarily pay a high price,'' like we are today, ``and incur a heavy burden. The U.S. Energy Information Administration forecasts that by 2025 petroleum demand will increase by 39 percent and natural gas demand will increase by 34 percent. Higher energy prices have exacted a toll on our economy already by slowing our growth from between .5 percent to 1 percent based on pre- hurricane prices. Farmers have paid $6 billion more for energy in the last 2 years. Natural gas costs for the chemical industry in America have increased by $10 billion since 2003. And of the 120 chemical plants being built around the world with price tags of $1 billion or more each, only one is being built in the United States. ``As a result, Associated Industries of Florida recommends to the MMS that expanded lease sales are important to our country, to our citizens, and to our way of life. To not utilize all of our available energy resources, when it can be accomplished in an environmentally sensitive way, would be a disservice to our country. We need to ensure that we have a bright future by adopting an expansive OCS leasing program.'' Osram Sylvania, a big company that owns a lot of plants in this country, here is what they said: ``In the past 5 years, we have seen natural gas prices escalate from $3 per MCF to well over $10 on the spot market. As compared to natural gas costs in 2000, our bills in 2005 will be $24 million higher.'' Mr. Speaker, again, I thank the gentleman for yielding to me.

Mr. PETERSON of Pennsylvania

Mr. PETERSON of Pennsylvania. Mr. Speaker, I rise tonight to talk about an issue that is the most important and pressing issue facing the country today. That is number 1, the price of energy, and, number 2, in particular, natural gas. I was not going to talk about what we just heard here, but I feel little bit compelled to talk from the last two previous speakers. They talked a lot about energy company profits, which are unfortunate, I think. But how can energy companies benefit from us in such a great way when things are so difficult for the users of energy in this country? When you allow the marketplace to be short of gas or natural gas or oil, then you allow the traders in New York to bid up the price. When there is a shortage, the price goes up. The big companies that own millions of acres, great reserves and own it in the ground, when they produce it at $65 a barrel, they are going to make a lot more money than when they produce it at $35 a barrel. So if you want to beat them, you want to make sure that we have ample supply, that there is lots of gas, natural gas, that there is lots of oil to produce, that there is lots of coal. There is lots of all the energy portfolios. Then they cannot make excessive profits because the oil they own, or the natural gas they own in the ground, is not two and three times more valuable than it really ought to be. Those are basic economics. The one comment that I found interesting is this current administration has not worked to break up OPEC. I never heard anybody say that before. OPEC is a group of countries who have for years played a big influence in oil prices, because they sort of combine their resources, and decided how much oil they were going to put in the marketplace. At one time, they did have the ability to lower it by dumping millions more per day on the market or raising it by taking 1 million or 2 million a day off the market. When the shortage started to show, the Wall Street traders could run the price up. They could get the high price for a while. When there was resistance from America, then they would bring it back down. In the meantime, they made a lot of money. The riches did not go to American companies, they went overseas. Now, how government can break up organizations of governments that are sovereign countries, I mean, I do not understand how we have any role to play. Now, today, they do not have the same monopoly they did. With China and India becoming huge energy consumers, along with us, the marketplace is short. All the oil that can be pumped is being utilized. So there is no slack. I am told that they do not really have the ability to dump an extra 1 or 2 million barrels on the marketplace today that they used to have. So they can take oil away and force the price up, but they cannot add extra oil and bring the price back down. I wished I knew how we could beat OPEC. I do know how we can beat OPEC. But it is interesting, one of the Members that was here just speaking to us was in a committee meeting markup that I was in the other day. I will not mention any names but we had a debate on opening up Tar Sands in the West. My memory is he was opposed to it. We had an argument opening up ANWR. My memory was he voted against it. We had a discussion about opening up the OCS, that is, the Outer Continental Shelf. He was opposed to it. Well, if those are the three ways that you bring energy to the marketplace, then we do not have to import as much energy, and we hopefully can get the price down. It is interesting the lack of understanding in this country who sets the oil prices, who sets the natural gas prices. The issue I really wanted to talk about tonight is natural gas, and that is the clean fuel, the almost perfect fuel. There is almost no contaminants. When you burn it, it is a clean, blue flame. There is very little pollution, I think a fourth of the CO2 if you consider that pollution, of fossil fuels, but today, it is $14.00 per 1,000. Yesterday, it was almost $15 all day long, and I guess that was the highest it stayed for one day in the history of this country. Five years ago, natural gas was a little over $3. Fifteen years ago, it was under $2. Gasoline prices have dominated our news, and we have seen more newscasts about people at the pump and the price of gasoline because right after Katrina it did get up to $3, and most of us are not used to paying $3. Europe's been paying that for a long time, even more than that. We were not used to paying that. I know I shuddered at how much it cost me to fill up my wife's Cherokee, 6-cylinder engine, but it was close to $50, and that was sticker shock to fill up one vehicle and spend $50. Natural gas, though, is the one that I believe has this country in serious potential economic trouble, and why do I say natural gas? Number 1, while gasoline prices almost doubled when they were at $3 there at about 155 or 160 percent of where they were 5 years ago now as they have come back down, but natural gas prices are 700 percent more than they were 5 years ago and maybe even a little higher percentage than that. When this country buys $65 oil and produces it into products, the whole world does, but when we pay $14 per 1,000 for natural gas, we are all by ourselves. Natural gas is a product that I do not think a lot of people understand how we use it. We heat our homes and cook our meals in not all households but many of them. We heat the majority of our schools and the hospitals and the YWCAs and YMCAs. Most of our small businesses use it to heat their places. Then, in the industrial side, we melt steel with it. We melt aluminum with it. We bend steel and aluminum by heating it. The industry that has been hit the worst is fertilizer. Our farmers have really been hammered with fertilizer costs. Why would you need natural gas for that? Well, when you produce nitrogen fertilizer, that is the one that really makes plants grow fast, 71 percent of that cost is natural gas. When you can buy gas in every country in the world cheaper than here, where do you think the fertilizer companies are going to make fertilizer? In the last 2 years, 44 percent of our fertilizer factories have left the States because of natural gas prices. Going on down the list, petrochemicals, every chemical we buy at the hardware store and grocery store that we use to clean products with, they are all made from a natural gas base. Often half the cost of making petrochemicals is natural gas because it is an ingredient, and it is also fuel used to heat it and make the product. Polymers and plastics, what do we have that does not have polymers and plastics in it? Almost nothing. Everything has polymers and plastics. Most of that has been made in this country, but polymers and plastics, when they are produced, they have both oil and a lot of natural gas in the production process and as an ingredient. So 40 to 45 percent of the cost of polymers and plastics come back to natural gas. I was at a company in my district last week who makes the basic products for skin softeners, face creams and hand creams, and you know what one of the basic products is? A derivative of natural gas. Another company there made the mucilage for labels, largest company in the world making labels. What was the base product for making the glue that goes on labels? Natural gas. I do not think a lot of Americans realize that, but from face creams to fertilizers to all kinds of chemicals and polymers and plastics, natural gas is the major ingredient, and the price of that natural gas has made us uncompetitive. While we are at $14, Europe has been at $6 or $6.50. China, Taiwan, South Korea and Japan have been between $4.50 and $5. Those are our economic competitors making products, competing against us, and some of those countries have cheap labor. Now they have an energy that is used so extensively in the manufacturing process where they have almost a three-to-one advantage. Then you go to the rest of the world, and most of the world's less than $2. So, if you are going to make petrochemicals and make a profit, you are going to make polymers and plastics, if you are going to melt steel and iron ore or make fertilizer, where are you going to do it? You are going to do it in a country where it is $14 or are you going to go do it where it is $6 or are you going to go to South America where it is $1.60? At the current time, 120 chemical plants are being built in the world. One of them is in the States. 119 of them, many of that 119 are being built to displace American jobs because they can produce their products far more competitively in foreign countries. How do we change this? We have to open up supply. It is interesting, about 10 years ago, this country, this Congress, made a decision that we would remove the prohibition of using natural gas to generate electricity. We used to only allow natural gas to be used as electric generation early in the morning when we had peak power needs and in the early evening when we went home and were eating our meals and the factories were still running and the lights were coming on and we used more power right then than at any other time of the day. At that time of the day, the electric companies have to produce more power than they do during the middle of the day or during the night when we are all sleeping. So peak plants were allowed to use natural gas because it is cheaper to build them, and you can turn them off and on. It is hard to turn a nuclear plant off and on. It is hard to turn a coal plant off and on, but you can turn a natural gas plant off and on and you can use it for peak power needs. When we changed that law and allowed natural gas to be used, 98 percent of all power generation in this country that is new and was built in the last decade is all natural gas. We now consume one-fourth of the natural gas that this country has to consume to make power, to make electricity. So that has made the marketplace very, very short. The other problem is we have not opened up supply. I remember a number of years ago when I was attending breakfast as a new Member of Congress that the Edison Electric Institute was putting on, they showed this 12 or 15 years of time that we would use a lot of natural gas to make electricity, and then other sources would come back in line and take up the slack. At the same time, I went over to a breakfast in the Senate with Daniel Yergin, who wrote the book on oil, a Pulitzer Prize book, and he talked about the oil industry. He stated that if we go down this road, as was being proposed, and we did not open up supply, it would cause severe economic problems in this country because natural gas prices would become unaffordable. That is exactly what has happened. In my view, it is Congress and the last three administrations who are all equally at fault. Twenty-some years ago, a prohibition was placed in law by Congress and a moratorium was placed by the President at that time that you could not produce oil and gas on 85 percent of the Outer Continental Shelf, and the Outer Continental Shelf is the land offshore for the first 200 miles. The first three miles are controlled by the States. The next 197 miles are controlled by the Federal Government, the Federal waters. Then you go into international waters. Why would we do that? I am not quite sure why they did it at that time. I was told it was done temporarily by the President, that we were going to have an inventory and find out where our best reserves were, and then we would know where to produce. That never happened. The next President came in and he made it last to 2012, and the current administration has not dealt with it. So we have a presidential moratorium from producing there and we have a legislative moratorium. I was here a number of years and voting on Interior appropriations bills unaware that every one of those bills I passed said you cannot spend a dime to lease land on the Outer Continental Shelf so it can be produced. Why would this country do that? The argument is that you cannot do it and have clean beaches, that you cannot do it and have nice shorelines. Let me see what the rest of the world does. We can go north to a country that is considered very environmentally sensitive, Canada. They produce oil both oil and gas right off of the main coastline in Canada and right above Washington, off that coastline, and they drill in our Great Lakes every day, and produce gas only, not oil, and sell it to us. In fact, we get 14 percent of our natural gas from Canada. We produce 84 percent of our own, and we get 2 percent from LNG, that is liquefied natural gas, and I will talk about that later. That is another issue. So, Canada produces there. The United Kingdom, are they not a pretty environmentally sensitive country? I think so. How about Denmark, Sweden, Norway, New Zealand, Australia? They all produce on their Outer Continental Shelf. You go past 12-miles, you cannot see it, you do not know it is there. It is interesting, in the gulf, when the storms hit so hard there this year, the fishermen were saying to the oil companies now, if you are not going to produce here any longer, we want you to leave the rigs and the platforms because that is where the good fishing is. Every study has shown where we are producing oil and gas in the Outer Continental Shelf, there is a lot more aquatic life because they like the shade, they like the cover, and that is just where the good fishing is. I want to read you an interesting article to prove that I think with today's technology oil and gas production both are not an environmental threat. It says here: ``The most cited reason is to protect `the State's tourism dependent economy and environmentally sensitive shoreline.' '' That is what States like Florida and California have been telling us. ``Objections which are based more on fear than fact. Of the hundreds of thousands of gas wells drilled in the U.S., not one has ever been declared or caused an environmental hazard,'' not one. A natural gas well is a 6-inch hole in the ground. You put a steel casing down it, you cement the bottom and cement the top, and you let gas out. ``As for oil, the last environmental hazard was a spill in California over 36 years ago.'' Technology has really improved since then. ``Light years away when you could consider the advances made in advanced drilling technology. ``To demonstrate how safe offshore energy production is today: there were 113 production platforms destroyed, 52 damaged, 8 drilling platforms destroyed and 19 damaged by Katrina and Rita. Yet there were no significant spills and no spills of any kind which resulted in contact with sensitive habitat.'' We just know that this storm was one of the hardest to hit the gulf. ``Simply put, there is no basis in science or recent history to the claim that offshore energy production presents a real or potential environmental hazard to any State's shoreline. A fact accepted by countries such as Norway, Sweden, Denmark, Australia, United Kingdom and Canada noted `green countries' which willingly drill off their coastlines. ``As for the problem of aesthetics, all production platforms can easily be placed away out of sight of even the tallest tourist by placing them no closer than 20 miles off shore.'' In my view, this argument just does not cut water. Anyway, I have been one who has been proposing that we open up the Outer Continental Shelf. I have been involved in this natural gas issue for the last 5 years. For a number of years, I stood right back here in this aisle and argued with Members of Congress who are no longer here but who were in powerful positions, trying to convince them that all the charts and graphs put out by the Energy Department showed me that we were approaching a very big shortfall on natural gas in the future, and because it is so involved in our whole economic basis, it is so involved in heating our homes and running our businesses and making so many different products, that we could not afford to let natural gas prices excel to the point of where it would make this country noncompetitive. Today it is at $14. Earlier I was talking on the phone to a gentleman who is the head of the Christian Youth Center in a community in my district. He said he just signed a contract. Last year they bought their gas for $7. He just signed a contract for $14. That means that organization is paying twice as much for heat this year. I have talked to all kinds of companies, and most are signing contracts for $14 and $15. They never dreamed they would pay that much. A couple short years ago, they were at $3 and $4. When you are a company that bakes things, a company that heat treats metal, a company that uses huge amounts of natural gas, you are suddenly placed in a noncompetitive position with the rest of the world. That is where this country is at. This is a government-caused shortage. We have decided to expand use of clean natural gas, but at the same time we have refused to produce it, and you cannot import it like you can oil, thank God. There are those who think importation is the answer. I do not think so. I think it can be helpful, but I hope it does not become our long-term policy. Liquefied natural gas, you liquefy it at very low temperatures. You place it in the most expensive ships known to man, and then bring it into ports. Then you have to warm it back up, turn it back to a gas and have it injected into our system. The part I have not been able to get an answer on, we have four such ports that can receive liquefied natural gas and regassify it and put it into the system. The one I know about is Baltimore, and I was told they are at 63 percent capacity. When you can buy natural gas in foreign countries for $2, $3 and $4, I do not know why the ships are not lined up. There is something flat about this system because it is not being utilized to the capacity this country has. Big oil would like us to go down that road. They would like to build the ships. They would like to build the ports and they have the money to do that. I think that is a flawed philosophy because who do we buy it from? We buy it from Libya, Algeria, Nigeria, and Russia, not exactly our friends, and unstable countries, countries that do not always treat us very fairly. For the short term, I think we should take all we can get, but I do not think we should build our long-term natural gas supply system that way. The chart that I saw recently showed by the year 2020, 38 percent of our natural gas would come from LNG. I do not think that we can make that happen. I hope we do not make that happen because we have trillions of cubic feet off our shores, all up and down our coastlines. I have a map, and it shows 85 percent of our coastline, California coastline, and from Maine to Florida all locked up. The outer continental shelf is from 2 miles to 3 miles loaded with natural gas. My proposal is we open it up for natural gas. We give the shorelines 20 miles of protection so you would never see it, and then the States have the right to open it up for oil. We cannot drill our way out of our oil problem, but this country can be self-sufficient on natural gas. We can produce enough natural gas so our price is half of what it is today, maybe even lower than that, where our industries are competitive, where our seniors can afford to heat their homes, and where our YMCAs and churches and our schools can afford to pay their energy bills. This is going to hit education. Their energy bills this winter are going to double. And at the same time I was talking to the refinery in my district who is very concerned about where the price of home heating oil is going to be this year because he has never been in the position where at this time of the year they did not have any in storage because they cannot produce enough home heating oil. Some schools and hospitals have dual tanks because if one is not available, they have the other. It is very important that you never lose heat in a hospital. But home heating oil, this refinery said they did not have any in storage tanks. They have been making more gasoline because of the gasoline shortage, and home heating oil has been selling so fast they cannot produce enough to have any in storage. It will hit the fan on that issue in January and February. When cold weather is here and has a grip on us and there is a short supply, we will see prices for home heating oil that will make natural gas look like a bargain, if you can even buy it. Mr. Speaker, this country is facing, I believe, the greatest pressure on our economy because of the price of energy and specifically natural gas. It is one we do not have to have. This has been by choice, and then by willingness of no one to face up to where we are at today and change it. I propose to this Congress, and I have been promised we will have a discussion, I have a proposal that would open up the outer continental shelf all of the way around this country. We would open it up for natural gas. We would give the 20-mile cushion so it is out of sight, and we would allow the States the rights, and we would reward the States for those who produce and provide the energy this country needs. I have asked our leadership, and I have been told it will happen, that we will have a debate in the Committee on Resources. And if I can get my bill out of there, and I am hopeful because we passed an amendment similar to that a few weeeks ago, and that bill got stalled because of great opposition from the Florida State government and the Florida delegation. So we did not deal with the issue on the floor. But I have asked that we have a clean up or down vote, that we have lengthy debate, that we tell the American people about how natural gas, and I believe natural gas, if we had ample supply, the use of it could be expanded. We passed a bill last week to incentivize the expansion of refineries. Natural gas could be utilized in all of our school buses because a gasoline engine with a slight adjustment can burn natural gas. Our construction vehicles, city transit vehicles, we could have a large number of vehicles in this country that do not have to travel long distances and can be refueled every night use natural gas. Swan Delivery Company that sells ice cream and frozen products, they have advertised for years that they are the company that is green, they burn natural gas and not gasoline. Now they are paying a huge premium for that. That shows us it can be done. I have a bus system at State College in my district, they are all natural gas. Today they are paying a premium for being good stewards of the environment burning the clean fuel. And the West is full of natural gas, but that is not as obtainable because we have inadequate pipeline systems to get it out to the States. The outer continental where we have, I am told, over 400 trillion cubic feet, and many think it may be double that, that is a 50- to 70-year supply. We would not need to import any from Canada. We could use it for transportation. The first hydrogen cars would really be run on natural gas because that is how we can make hydrogen today most efficiently. So it can be the bridge to the future as we bring on renewables. Mr. Speaker, $60 oil is going to make a lot of things work. We are working now on making fuels out of coal. We are making fuels out of grain. I have a company in my district that just bought a landfill, and they are going to make ethanol out of garbage. All kinds of things are going to work, but it is not quick. It is going to take time. So an ample supply of the clean fuel that has no contaminants, that we can use in so many ways and is so much a part of our economy already, natural gas can be our bridge, but $14 natural gas has been the wall that this country is going to hit at a high rate of speed. I was a retailer for 26 years. I vividly remember the late 1970s and early 1980s when we had very high natural gas prices, and we had extremely cold winters. I remember as a retailer it was always difficult to make a profit in January and February. You were lucky if you did not lose money, and then you started making profit in the spring and summer. But during those years, people were so far behind in their spending because they had spent so much money to heat their homes, and petroleum prices were up, too. Sometimes it was clear into May before business became normal again because people were spending so much. This winter people are going to spend twice as much to drive their car, and almost twice as much to heat their homes. They are going to have a whole lot less money for spending, and 70 percent of Americans spend all of the money they earn every paycheck, so the marketplace is going to be very soft for retail business and commerce, in my view. It is all going to be caused because this country has been unwilling to realize that energy prices are a direct correlation of supply. And we are much more dependent on foreign oil. ANWR could be helpful, and other drilling would be helpful, but on natural gas, there is no valid reason that we have the highest natural gas prices in the world that makes our petrochemical companies uncompetitive, that makes our plastic companies and polymer companies uncompetitive. Several weeks ago Alcoa Aluminum Company in Pittsburgh ran a release, and the headline did not say this, I had to read the whole article to pick it up, and I read it twice to make sure I was correct. It said in the article if energy prices persist to be consistently high as they are today in America, Alcoa Aluminum will have to, and it said especially natural gas, we will have to reconsider whether we can produce here. Now, I thought that was a message that should have been the headline. I thought it should have read, ``Alcoa said current natural gas prices may prevent us from doing business here.'' That was not the headline. I forgot what the headline was, but it was sort of an innocuous headline. Nobody read that and seemed to understand what it said. It said we have to reconsider whether we can produce here. Mr. Speaker, I have had chemical companies and fertilizer companies tell me how it is almost impossible for them to continue being here, and they have told that to the leaders of Congress and I am sure they have told it to the administration. But for some reason we are here tonight and today and yesterday, and we have no real plan of action to bring on natural gas supplies that can allow Americans to heat their homes cost effectively or small businesses to operate efficiently. Or for the major companies, which are the best blue collar jobs that we have left in this country, to stay here and prosper here and be competitive in a global marketplace. This is an issue that I do not think is complicated. I think it is quite simple. I have been concerned about it for 5 years. Unfortunately, all of my predictions have come true, and it is even worse than I expected. Tonight I urge my colleagues, I urge the people in this country, we have to open up the supply of energy in general but natural gas in particular. It is the fuel that can give us a strong economy, that can help us affordably live in our homes, small businesses stay profitable, and allow the large production companies that make all of the products that I have mentioned, whether it is bending, melting, smelting, cooking, you name it, if it uses natural gas, today they cannot do it competitively. If we do what we should do and open up supply, America will continue to be the land of opportunity and we can compete with anybody because we have the best workforce.

Mr. PETERSON of Pennsylvania

Mr. PETERSON of Pennsylvania. Mr. Speaker, I move that the House do now adjourn.

Mr. PETERSON of Pennsylvania

Mr. PETERSON of Pennsylvania. I thank the gentleman very much. I really appreciate the gentleman's support because he brings a lot of knowledge because he has watched it. He has seen it happen in his part of the country. He knows it can be done appropriately; it can be done environmentally right. Let us conclude with talking about our proposal. We have added an amendment that, currently, the Federal Government owns the Outer Continental Shelf except the first 3 miles. I think there are a couple of exceptions to that where the States have 9 miles in one place. I do not know how that happened, but normally it is just 3 miles. So the Outer Continental Shelf, which are Federal waters, are from 3 to 200. Then you are in international waters. Now, our proposal, the new amendment we have added, would say, all right, States can control oil and they can choose to opt out of both the legislative and the Presidential moratorium. They have the right to do that. So that would mean a State legislature, house and senate, would have to pass it. Their Governor would have to sign it. They then have to petition the Department of the Interior to open it up. That is going to take some time. At best it would be several years. I was in the legislature for a number of years. It is hard to get a house and a senate to agree on the fine prints of the bill. I can hear those arguments in the States as they happen. I am willing to concede 20 miles. When you are producing, you can see 12 miles. On a clear day after 12 miles they claim you cannot even see a pimple on the horizon. So let us give them 20. Now, there is lots out there so we are not giving away the store totally. So now nobody on the beach or the east or west coast or the gulf would not see a rig. They would not know it was there. We will say we will give the States the first 20 miles for both oil and gas, but on natural gas from 20 to 200 that is Federal waters and that is open for production. To me that would send a clear message. We will deal with some other proposals that will tinker with this thing, but they do not really fix it. If we open up the Outer Continental Shelf as we have talked, that is where the gas is close to the population. Where is the population in this country? They are in the gulf. They are on the east and west coast. The majority of this population is not in the Midwest where there are other reserves. The problem with getting to those reserves is getting it to the people. But on the Outer Continental Shelf, you are close to the population centers. You can bring that gas right in to where it is needed in our largest cities, our largest populations, our largest factories and make this gas affordable. I believe we can send a message to the chemical companies. We can send a message to the polymers and plastics companies, the fertilizer companies. Bear with us, because the statistic that I saw the other day really scared me. Petrochemical people have been talking to me for 3 or 4 years. I said, Why did you come to me 3 or 4 years ago? They said, Some people said you understand our looming natural gas problem. It is hard to get people around here to deal with it. I said, Yes, I have been speaking about natural gas, and I was wondering why you came to me. You are not from my district. You are not even close to my district. They were the big companies. And they said, Well, we want to solicit your help. We have to get natural gas if we are going to stay here. The statistic I wanted to mention was the Manufacturing Association chairman said the other day in the hearing there are 120 chemical plants being built in the world; 119 in the rest of the world and one here. Those are jobs that American men and women can work at and have a nice home, have a nice vehicle, have a savings account for their kids' education and have the American Dream. Those are really the best jobs left in America, and we are not going to lose them to cheap labor. We are going to lose them because we have not dealt with the natural gas issue that they just cannot afford to pay. I talked to three or four companies this week that went from $7. They do not buy from the distribution system that our homes buy from. Most companies buy direct. They pay the distributing company a flat line fee, but every company I talked to was currently buying gas at the $14 price because this spring when their contracts were up, the price was higher than expected and the consultants told them, do not buy yet, it is going to get cheaper. Well, it did not get cheaper. Now they are paying $14. And when you use millions of dollars of gas a month and you are paying twice as much, how do you make that up? You do not. That comes right out of the bottom line. ALCOA, a Pittsburgh corporation, a month ago said the following on a Monday morning, AP story: if energy prices in America persist high like they have been, especially natural gas, in parentheses, we will have to reconsider if we can produce here. Do we want to say good-bye to ALCOA Aluminum? Do we want to say good-bye to U.S. Steel? Not only the steel and aluminum makers, but those who bend it, those who shape it, those who heat treat it. I have pottered metal companies in my district who make parts for cars and parts for everything that moves. Now, after they make those through the presses, then they run through them through heat treatment. That is natural gas. So it is just utilized so much; and like I said, chemicals and fertilizers, it is almost beyond comprehension what a major part of our success of America has been clean, affordable natural gas. So I want to thank the gentleman for joining me in this discussion. I know he is going to join me in the debate because we are going to debate this. When all of us Members of Congress can get this message out to the American people, they are going to vote to open up the OCS, to get adequate supplies of natural gas, so we can heat our homes, so we can run our businesses, and so we have a strong economy.

Mr. PETERSON of Pennsylvania. Mr. Speaker, I rise tonight to talk about what I believe is the number one issue facing America. It is the energy issue. And the one part of our energy debate that, in my view, has been neglected is natural gas. Natural gas is the fuel that we use to heat our homes, we cook our meals, we heat our schools, hospitals, YMCAs, YWCAs. Most small businesses use natural gas. We melt steel. We melt aluminum. We make nitrogen fertilizer, all fertilizers; and 71 percent of the cost of making fertilizers for our farmers is natural gas. It is used as an ingredient in all our petrochemicals. All the chemicals that we buy at the hardware store and the grocery store, the cleaners, skin softeners, all have a natural gas base to them. Polymers and plastics are made from both petroleum and natural gas. From face creams to fertilizers, everything we manufacture in this country, they use natural gas to make it; and they use natural gas as an ingredient. Now, the crisis in natural gas is the price. Currently, the price is somewhere between $13.50 and $14 a thousand. That is a crisis because just 5 years ago, it was $3.30. Eleven years ago it was less than $2. That is an 1,100 percent increase in 15 years and a 700 percent increase in 5 years. If milk had increased the same, it would be $28 a gallon for milk. Would we be dealing with it? Yes, we would. I have been just stunned by the reluctance of anyone but a small group of us to take on the issue of natural gas. It is the clean fuel. It is the safe fuel. It is the abundant fuel. It is the one we could be totally self-sufficient on if we just produced it. We get a lot from the Gulf and we get a lot of it from the Midwest, and it is scattered around the country. We get very little from the Outer Continental Shelf, because 85 percent of our Outer Continental Shelf is locked up. What is the Outer Continental Shelf? The State owns 3 miles out into the ocean and the Federal Government owns 3 miles to 200 miles, and then it is international waters. That is the Outer Continental Shelf. That is the shelf before the ocean gets real deep, and, in most parts of the world, that is where they produce a great amount of their energy, both gas and oil. Canada produces out there, right off the coast of Maine, right off the coast of Washington. They actually produce in our Great Lakes and sell us the gas. Denmark, Sweden, Norway, Great Britain, New Zealand, Australia, all produce both oil and gas on their Outer Continental Shelf. In fact, that is their greatest source of supply. Well, why is America short on natural gas? We produce 84 percent of our own. We import 2 percent from foreign countries, which is called LNG. You have to liquefy it, put it in very huge ships, bring it, build ports, turn it back into gas. There is a lot of fear about those. I do not think they are unsafe, but there is a fear factor. We get 2 percent that way. And we get the rest from Canada, who is the only neighbor who can import us natural gas. Now, we could be totally self-sufficient, because we have had a moratorium from producing gas or oil on the Outer Continental Shelf for 22 or 23 years. That happened under President Bush-one. President Clinton extended it to 2012, and currently it has not been addressed. About the same time, leadership in the House put a moratorium on also, a legislative moratorium. So we have two moratoriums, a presidential and a legislative moratorium that says we cannot produce gas or oil in our most productive field, the Outer Continental Shelf. Now, we have lots of it in the Midwest, but it is not as easy, and we have lots of gas in Alaska and they have been trying to build a pipeline for years, it will be another 10 or 12 years, if it gets built. In the meantime, the supply that we have of natural gas and oil, and I am promoting natural gas, not oil, because we cannot drill our way out of our oil problem. We have about 3 percent of the world's oil, but we have a unlimited supply almost of natural gas. There was a switch in policy in this country about 10 years ago, this was about the year before I came. The decision was made to use natural gas to make electricity, to generate electricity. Historically it was always prohibited, and you could only make electricity at peak power time, that was in the morning when we are all cooking and doing our things at home and the factories are running, and then in the evening time when we are running the washing machine and doing the dishes and cooking, so we were using a lot of natural gas, a lot of hot water and things that take energy. That is when we have this peak demand. So for electric companies to meet that peak demand, it was easier to have natural gas plants, they are quicker to build, and you can turn them on and off. You cannot do that with coal and nuclear plants, but with the peaking plants for natural gas. So it was only allowed to be used for peaking, and I think about 8 percent of our electricity was created. Now one fourth of our electricity is produced from natural gas. Many years ago I attended some breakfasts by the Edison institute. We were talking about this 10 to 15 year period when in this country we would generate a lot of electricity with natural gas. I had some concerns about that, because I knew there was so much land in the Midwest, millions and millions of acres where you could not produce it, where there was a lot of it, and the Outer Continental Shelf was locked up. I thought, where are we going to get all this natural gas? Daniel Yergin, who wrote the book, ``Expose' on Oil,'' a Pulitzer Prize winning book, was speaking over in the Senate, and I went over with a group of House Members and listened to him. At that time, this was 6 or 7 years ago, he predicted if we did not open up supply and move forward with this program of making electricity out of natural gas, we would have a short supply at high prices. Why is $14 natural gas worse than $65 oil? Well, they are both harmful. But gasoline prices, which have dominated the news, you hear it every night, in fact I was debating a Member of the Florida delegation the other day on one of the networks and we were talking about natural gas and the Outer Continental Shelf. In the prelude to us, the two hosts were talking about oil and gasoline prices. I said, ``Folks, you just talked about oil and gasoline. We are here to debate natural gas. That is a different fuel.'' So the American public knows that gasoline prices have increased. They have not quite doubled, they are 80 percent greater than they were 3 or 4 years ago. But at the same time, natural gas is 7 times more costly. In my view, tonight is really the first cool night here in Washington, and cool weather is just starting to come down the East Coast, those Canadian fronts are starting to come down. The furnaces are going to be turned on. As these Canadian front start coming down, the early ones go all the way to Florida, and you will have tremendous gas consumption up and down the coast as we heat our homes and run our businesses and keep our schools and hospitals warm and all the other things we do with natural gas. So, here we are with $14 natural gas. When we have $65 oil, the whole world pays that. But when we have $14 natural gas, we are the only country in the world to pay that. Canada is $2 or $3 cheaper. Europe is about $6. China, our big fears competitor, gives them another advantage, they are $4. So when they melt steam, melt aluminum, bake products, heat treat products, melt anything, cook anything, bake anything in China, it costs a third as much as it does here. You add cheap labor to that and now you show how it hurts us competitively. The rest of the world is less than $2. In fact, in South America, in Trinidad, it is $1.60. In Trinidad, American companies are building steel plants, they are building aluminum plants, they are building fertilizer plants, they are building chemical plants, polymers and plastic plants. Why? Because the amount of natural gas used at all of those productions is immense. I talked to a fertilizer company the other day that uses $3 million worth of natural gas a day. That is kind of an unbelievable figure. Do you think they are going to do that very long in America when it costs $14, and you can go to South America and do it for $1.60? Mr. Speaker, that is the job side. If we do not deal with natural gas in this country, we are going to export really the best working man jobs we have left. People working in polymers and plastics and petrochemicals and fertilizer plants make good wages. They are sophisticated jobs. It is very sophisticated machine and equipment. Last year, Dow Chemical, one of our big ones, moved 2,000 jobs to Germany. Why? Natural gas is a lot cheaper. That is not a cheap labor market, but they have the sophistication, the technology there, because these are high-tech companies. They are not simple tasks. The people that run these have to be very skilled. So the fear I have is that we are just going to lose 1 million or more of the best jobs left in America? Why? Because they cannot afford to be here and pay these exorbitant natural gas prices that no one else has. It is like tying both hands behind our businesses and saying compete. Do hand-to-hand combat here with your hands tied behind your back. Let us go back to families. We are just approaching the winter season, especially in the northern part of the country. Seniors and the poorest of our communities struggle to make ends meet. Their gas bills, I know people who have told me already that they have set their thermostats at 55. That is no way Americans should live. I know other people who have not yet turned on a furnace. They are literally dressing warm with layered clothing and said they are not going to turn it on because they know the price of natural gas. In Pennsylvania we have a system where they argue once a year about how much it costs to deliver gas, but then every 90 days the natural gas prices pass through whatever they pay. Where I live, we are going to get a big increase in November. We are going to get another increase in February and we are going to get the third increase in May. We already got one in August. I think August was in the teens. They are predicting the one in November to be close to 40 percent, and nobody knows what it will be. But no one projected $14 gas for this time of year. Some thought we might reach $11 or $12 during the winter crisis, but here we are in the fall when we are still utilizing minimal amounts, but the storms have curtailed supply, and the generation of electricity just continues to grow and suck up our natural gas. Folks, in my view, the rubber is going to hit the road in the next few months. I have just been joined here by the gentleman from Louisiana (Mr. Jefferson), and I will turn to him in a moment. But we were having a debate on the floor on this issue in spring, and I think the gentleman from New Mexico (Mr. Pearce) said it best. He said, folks, sometime we are going to get our act together and open up the Outer Continental Shelf for production where we have such an abundant amount of natural gas, and the secret is, do we do it now and preserve a million good jobs, keep people in their homes, keep people affording to heat their church, their YMCAs, their community centers, or do we wait until that all falls apart, we lose those million or more jobs, those companies move offshore because they cannot compete here, and people actually lose their homes to foreclosure and lose the ability to maintain their residences as they would like to in elder years. This is a crisis that is facing this country, and it is one that I think has been caused by inaction. I have been one, and several of us have been predicting this for years. We looked at all the charts and graphs. We are using more and more natural gas and we are producing the same amount. One of the things that I have noticed is I think we are drilling almost twice the number of wells daily now than we did before, and we are not getting any more gas and the reason is that we are in these old, tired fields that have been producing for decades and the volumes are gone. We are drilling deeper, which costs more, and we cannot even maintain an equality to or supply. It still continues to be flat, and we are doing all of that production. Why? We are not out producing gas where it is plentiful, where those fields are rich. My proposal is, and then I will turn it over to my friend from Louisiana, my proposal is we need to open up the Outer Continental Shelf to natural gas production. Both coastlines have been locked up, over half of the gulf has been locked up where there is rich amounts. One of our big opponents has been Florida. They have been fighting most viciously to not let production happen anywhere near them; yet they use 233 times more natural gas than they produce, and they are in one of the richest fields there are, and 75 percent of their electricity is made from natural gas, which is going to come back to bite them when this all comes home. So I am going to now ask the gentleman to join me and let him share his thoughts. I thank him for joining us at this hour of the evening.

Mr. PETERSON of Pennsylvania. Mr. Speaker, Florida has been one of the big opponents, but recently we received a letter that was sent to MMS, the Mineral Management Agencies, urging them to open up the Outer Continental Shelf as soon as possible. The largest business association of Florida, with 10,000 members, sent a very clear message, a 2-page letter that my staff said, I am surprised you did not write this letter because it sounds like you talking saying, we must open the OCS. Yes, here in Florida we love our tourism businesses; but if people are not successful in America, they are not going to have money to come to Florida and have their vacations, because tourism is a huge part. I am not trying to pick on Florida, but they have been much of the reason we have not dealt with this issue as a State. I have not understood that, because they are great consumers of natural gas. They are a big farm State. You take farmers, who get hit by the energy issue probably as many times as anybody. When they plow their fields, they use petroleum. When they harvest, they use petroleum. When they dry their grains, they use natural gas. When they plant, and I missed this in the beginning, they use fertilizer, which up to 71 percent of the cost of making fertilizer is natural gas, and those prices have doubled and tripled in the last few years. Farmers do not set the prices that they sell the products for, and with these huge energy cost increases, they just cannot raise their price. They are subject to whatever the markets pay and, unfortunately, it has been low pay a lot of the time, and that is why we are always trying to keep our farmers healthy and working, but it is very difficult. But energy is playing a huge, huge role with our farmers.

Mr. PETERSON of Pennsylvania. Well, we really are appreciative of your support. And many other Democrats have come on this issue, and we both have been working both sides of the aisle. If we get a chance, and I am going to share with you that we have been promised that there is going to be an energy bill in Resources tomorrow as part of reconciliation, and we have chosen not to try to amend that, because that is going to be a complicated bill. We are getting great resistance. So we have been promised that if we do not amend that bill, that my bill, our bill, will be given consideration in the Resources Committee, we will have a hearing in the near future. We will have a vote, if we can get it out of committee, and I have strong belief we can, because we have already successfully passed that amendment on another bill that they have since held up and did not bring it to the floor because of our amendment winning, opening up the Outer Continental Shelf, then we have been promised that we will a chance on the floor. So all I have asked for is for a timely format where we can debate this in committee, have a hearing first and then mark up the bill and pass it, bring it to the floor, and have a debate on this issue alone, not tied into all of the other issues that are going on the reconciliation act, but get focused on that. I was promised that by the leadership of the House. So I am really looking forward, because that is what I have been wanting. It is interesting to me in my district. When I talk to any group that I talk to, I have people that are part of very green organizations who did not particularly like production or drilling, and they will come to me and they will say, I think you are right. You know, I have just spoken to group after group, because I keep saying someone debate me and show me a natural gas producing well that has caused a dirty beach, that has caused pollution in the waterways. It does not. As I said earlier, Canada drills off the coast of Maine. They drill off the coast of Washington, right near it. They drill in the Great Lakes, our Great Lakes, and sell us the gas. We get 14 percent of our gas from them. And I have nobody yet saying they want to debate this issue, that natural gas production is some wild polluting threat to our environment. You are familiar with it. You live where it happens.

Mr. PETERSON of Pennsylvania. If we would produce the right amount of natural gas, and the price would moderate and be cheaper than oil, it should, all of our hospitals and our schools have dual capacity. They have to have a redundant heating system. So they will have fuel tanks full of fuel oil, and they will have a gas line, and then they, if one system goes down or something, then they have the back-up, because you cannot have a hospital or school without that. Now, what happens is they also use that to advantage economically. In the last couple of winters, they have used a lot of fuel oil because gas has been higher than normal. So now we are adding to our need for oil, which we depend 65 percent on foreign countries, and we have a lack of refining capacity. We passed a bill last week dealing with refining capacity, but natural gas, I say, can be the bridge to the future of renewables and other energy because it is the clean fuel. There is no pollutants. It is one-fourth of the CO2. I have bus system in State College, Pennsylvania, that is all natural gaps. Now, that used to be a savings for them. Now it costs them considerably more. They are getting penalized. But in the cities where we have pollution problems from vehicles, we can have all of our buses, school buses, transit buses, taxicabs, short-haul vehicles, construction vehicles, service people servicing our air conditioning and refrigeration, and all of those short-haul vehicles could go home and gas up every night and run on natural gas, because that is a cheap conversion. So we could really take away the need for so much foreign oil, and we could have less pollution in the air. And also everybody knows that the hydrogen fuel, I have been a supporter of hydrogen for years. How we will run the first hydrogen car, and I have ridden in a couple, is they have a natural gas tank on them, because natural gas is the easiest way to make nitrogen, so the first natural gas cars will have a natural gas tank. Then they will use the natural gas to make hydrogen, which will burn more efficiently than natural gas does and even cleaner yet. It is the bridge to the future. In my view, natural gas should be what we are really using a lot of, but we got to produce a lot of it to get the price down. I was a retailer. I had a supermarket for 26 years. I was in business during the late 1970s and early 1980s when we had our other energy crisis, when natural gas was high, and we had at that same time our news magazines were all talking about global chilling then. They were talking about the new ice age because we had three or four severe winters in a row. And I remember in my store, historically it was hard to make money and profit in December or January and February, and maybe March you started to make a profit. But in those years when you had those cold winters and high energy prices, people just purchased less. Business was tough. And I think that is what we are going to find this year, because people are going to be spending a lot more to drive to work, drive to school, and then they are going to be spending a lot more to heat their homes. And about 70 percent of Americans spend every dollar they earn every paycheck, and when they spend twice as much to drive and twice as much to heat their homes, they are going to have a whole lot less money to spend, and the economy is going to get soft. Actually we can fall into a recession, and it will be energy costs, and most of them have been.

Mr. PETERSON of Pennsylvania. I am not a big fan of LNG. Right now we need everything we can get, and it is okay in a pinch. But we buy it from Libya, Algeria, Nigeria, Russia. Do we want to go down the same road we went down with oil, of buying another part of our energy portfolio from countries that do not have real stable governments, that are not exactly good friends of ours, in fact, who are working to form a cartel as we speak, so they can, their terminology is, so we can get a fair price for our natural gas? When you have an abundant supply of your own, I think it is just not an appropriate policy to be going to foreign countries, and you have to build the most expensive ships known to man. You have to build these very controversial ports. I do not know about the ports in the gulf, you may, but we have a port in Baltimore that I do not think has gotten above 63 percent capacity in utilization. I do not understand that. When can you buy gas in other countries for $2 or $3, liquify it and bring it here in a ship? Why the ships would not be lined up and why that port would not be accepting all of the gas it could, because it is pretty profitable to go from $2 to $14, but for some reason it is not happening. I have not been able to get answers on that, but I have asked a lot of people and I do not know whether the ports in the gulf, are they running wide open.

Mr. PETERSON of Pennsylvania. As we recap here as the evening grows short, we have been chatting here awhile about natural gas, the clean fuel, the abundant fuel, the one we have lots of. We are not short on natural gas. We are short because we have locked it up. Much of the Midwest is locked up, and 85 percent of the Continental Shelf has been locked up. To me that is bad public policy. We need to deal with that. We need to have that debate. The mineral mines management have been taking information from the public on what they should do in the next 5-year plan; and 80-some percent of those communicating, and it is thousands and thousands and thousands have been produced in the Outer Continental Shelf. Very strong support for it. In fact, 80-some percent of those from Florida who are very opposed to this, public policy leaders there, were produced, most people know that a natural gas producing oil has never harmed anything. What is interesting, and the gentleman is more from the gulf area, but I am told that after Katrina that one of the fears were by the fishermen that some of these platforms would be removed from the gulf and they would lose their best fishing. I have been told by the people over at mines and management who have to manage all this nationally that every test that has been done, there is more wildlife, there is more aquatic life, there are more fish and creatures around where we produce than where we do not produce. They like the break. They like the shade. They like to be in around those platforms and under them, and that is where the good fishing is.

Mr. PETERSON of Pennsylvania

Mr. PETERSON of Pennsylvania. Mr. Speaker, I move that the House do now adjourn.

Mr. PETERSON of Pennsylvania

Mr. PETERSON of Pennsylvania. Madam Speaker, I thank the gentleman for yielding me this time, and I rise today with affection for my knowledge and memory of Bill Clinger and working with Bill Clinger. I want to thank my colleague from Pennsylvania (Mr. English) for his leadership in putting this together and which I am just so glad to cosponsor. I have known Bill Clinger for a long time. I was thinking back on Memory Lane this morning of when I first met him. I got to know him in Warren. And I remember when I first ran for the State House in 1977, I went to his office and sat down, and he was one of the first to reach in his drawer and pull out a check and help me with my campaign and wished me well and said he hoped in another year or two I would help him because he was planning to run for Congress, and so we worked together the whole time. I also remember Bill Clinger and his lovely wife, Judy. Judy was a great attribute to him. She was someone who everybody loved and just served him so wonderfully as his closest friend and helper. Also, his great love of his family, Vijou, Willie, Jimmy, and Julia. His first love was his family. Everybody knew that from his weekends and time with them. Also his love of the Chautauqua Institution. Fortunately for Bill, I believe he is chairman of the board there, at least he was last year, that is running the institution. That is a bright spot in southern New York State that serves Pennsylvania and New York as well, bringing culture and entertainment and all kinds of wonderful things to a rural area that does not always have those luxuries. I remember back vividly that Bill put together a wonderful staff. It was just a great group of young men. Ric Peltz was my best friend. Out in the field we worked together nearly every day. He was the field guy. Most of his Washington staff went on and were leaders in the Ridge administration in Pennsylvania, and many are running associations here in Washington now. They were just a bright young group that has really made a difference. And you have to give Bill the credit for picking this kind of talent and giving them an opportunity. I also remember he was chief counsel for EDA under the Ford administration. That may be where I first met him and where he really developed a knowledge of our economic development system. One of his legacies was the Clinger-Cohen bill, which put the Government Responsibility Act in place, which held government agencies responsible. During his time and tenure, one of the problems that faced Pennsylvania, and I as a Senator and he as a Congressman, was the abandonment of railroads. He and his staff just led that fight. Pennsylvania now, in my district, has the most regional railroads, and it is thanks to Bill Clinger. He saved many of those lines from being totally abandoned and helped form the regional railroads. One that I remember was the Allegheny Railroad that connected Erie and Emporia, Pennsylvania, which the wood industry used exclusively. The Oil Creek, Titusville Railroad, which is a scenic railroad through a beautiful park, and the oil heritage region that is now there was one of the first real successful scenic lines in Pennsylvania. The Nittany and Bald Eagle lines, which became part of the Seda Cog Rail System, which is now serving that region well. The Tioga County, Wellsville into New York line. These were all lines that Bill Clinger and his staff and his efforts preserved and are now serving this area well. The 219 passing lane was an issue where he got funding numerous times to take a crooked road and get passing lanes on the hill. They all wanted a four-lane highway, which probably will never happen; but he did a lot of improvements to that. Another area where he really excelled was bringing the use of our waste coal piles in Pennsylvania into making energy. He was the one that helped put together the scrubgrass plant in Venango County, and the Ringgold plant over in Clarion County, and was very helpful in bringing the Allegheny Particle Board plant that makes particle board using wastewood into our region. He brought the FCI McKean Prison, which now employs hundreds of people in my district; and those are legacy issues that he and his staff were directly involved in and responsible for. He also was one of those who created the revolving loan programs that our EDA and Appalachia Regional Commissions use now to help small communities with small grants that they continue to use over and over by reloaning them to small businesses. Some of those revolving loan programs are quite large now and are very much a part of our economic development system. In fact, his legacy recently in this administration, Ric Peltz, who was the one I worked with, is now the co-director of the Appalachian Regional Commission, and has just continued the legacy of Bill Clinger back here in Washington. In fact, I want to say this before I conclude. I had lunch with Bill this summer over at the La Colline, one of his favorite eating places, and he is just doing well. He is mentally sharp and in good spirits and happy with what his life is allowing him to teach and be a part of the leadership of the Chautauqua Institution, and he and Judy are doing just fine, and I want to publicly thank them for their friendship to me and the legacy they left in Pennsylvania and in Washington. One of the toughest issues he worked on was a compromise on wilderness. We had a Congressman in Pennsylvania who wanted to make the Allegheny National Forest all wilderness, and he cut out a compromise and got that passed. Also the wild and scenic rivers, those were a little more controversial issues, he took some heat for those, but I think they were good decisions. He was wise in how he handled them in taking on those tough issues, and I think when he was here he chaired the Wednesday Group, which now may be the Tuesday Group or I think may even have another name. But Bill was a leader. If you knew Bill, you liked him. If you knew Bill, you knew he was smart and you respected him. Today, I think it is a delight to honor him by naming the Warren post office the William Clinger Post Office. I had a Senate office for years right around the corner, and great traffic in that part of town. People will see it and remember, as they should, that Bill Clinger was their Congressman and he served them admirably.

Mr. PETERSON of Pennsylvania

Mr. PETERSON of Pennsylvania. Mr. Speaker, I thank the gentleman for yielding me this time. I rise, after listening to the last two or three speakers, because we are short of energy in this country because we have locked up our energy. We are short of energy in this country because we have built no refineries to process the oil that we purchase now from Third World countries. We cannot shut down supply; we cannot shut down our capacity or not increase our capacity with the growing need and not have high prices. When we restrict supply, we give the power to the big companies. When we bring on supply, our market system works, and prices will come down; but then we have to have, we have to have the refineries to refine it. To not pass this bill today is a tragedy. I am going to support this rule, even though my amendment that I think was very important to open up supply was not allowed to be a part of it. I want to tell my colleagues, natural gas is an issue that this Congress has to deal with. We have to deal with the supply of oil and gas both. We have to deal with having the capacity to process and provide the products. This winter, home heating oil is going to be in very short supply. In some markets, it will be way higher than others because it is not an even distribution system. But natural gas is the one thing that we have to deal with this fall, in my view, because natural gas has not doubled; it is 700 percent more. We are going to endanger home heating. We are going to endanger major industries who are natural gas-intensive. We have companies who use it. Polymers, plastics, petrochemicals, fertilizers use natural gas as an ingredient and as a fuel. They cannot afford $14 and $15 natural gas. They will leave American shores. My brick companies are closing down until it gets less costly. The last plant they are shutting down because they cannot properly make glass and compete with these natural gas prices. It is the one we have where we can be totally self-sufficient in this country on the clean fuel natural gas that fuels our industry, heats our homes, heats our schools, heats our hospitals. Folks, let us not go home this fall until we deal with natural gas.