Statement of Senator Michael B. Enzi
On S. 3268
July 24, 2008
Mr. President. I am disappointed to have to give this speech today. I’m disappointed because I am, once again, on the Senate floor discussing the fact that the Majority Leader has decided to use a Senate parliamentary tactic to stop members from offering amendments and has closed off debate.
He's the rain delay that has put a halt to this match. But this game will get played. We will debate alternative energy, finding more oil on American soil, deep sea exploration, nuclear energy, oil shale. He can't stop us forever because the American people have told us that the most important issue on their minds is the issue of energy. The Majority Leader has told the world’s most deliberative body that we cannot have a real debate about this issue, but the American people are telling him something else and hopefully soon, he will listen.
It is no wonder that the Congress has an approval rating that is less than 10 percent. Rather than working on the issues that are important to our constituents, we continue to play gotcha politics. It isn’t getting us anywhere. It is certainly not improving our nation’s energy situation. This brand of non-legislating that the majority continues to peddle isn't making a gallon of gas cheaper.
When will he let us put real proposals on the table? We'll take some and we'll leave some, but we would be taking action. What we have now isn't action, it's acting, acting in the dramatic sense. The Majority Leader is preventing a vote on an amendment that would increase production in the Outer Continental Shelf. We cannot vote on an amendment that will allow for more production of diesel fuel from our nation’s most abundant energy source – coal. We cannot vote on extending the wind production tax credit. We cannot vote on extending tax credits for solar energy.
The Majority Leader has said that we need to get an agreement on amendments. Our side has agreed that we need to work on energy amendments because this is an energy debate, but apparently, that is not enough. I’m not sure why that’s the case. It doesn’t match up with our historical energy debates.
The Senate considered the Energy Independence and Security Act last year. At that time, gas was at $3.06 a gallon. There were 331 amendments that were filed. Of those, 49 amendments were agreed to and 16 amendments received roll call votes. The Senate considered the Energy Policy Act of 2005 when the price of gas was $2.26 a gallon. There were 235 amendments that were filed. Of those, 57 amendments were agreed to and 19 amendments received roll call votes.
Not only were both of these bills fully amendable, both received significant floor consideration. We spent 15 days on the floor debating the Energy Independence and Security Act last year and 10 days in 2005. Why? Because these are serious issues that deserve serious debate and we wanted to make sure that ideas from both sides were considered.
I have an amendment that relates to state mineral royalties. That amendment would encourage states to allow for energy production on their lands by giving them their fair share of mineral royalties. We cannot consider it. There are a number of other amendments that I would support relating to energy development in the Outer Continental Shelf in states that want energy production. I would support an amendment to improve our nation’s energy situation by accelerating the development of coal to liquid fuels. Unfortunately, the Majority Leader has stopped me from doing so by using parliamentary tactics to cut off debate.
He has also stopped me from voting against a number of bad ideas that I’m sure we would see. I won’t have the chance to vote against lowering the speed limit to 55 miles per hour, which actually leads to an increase in traffic fatalities I won’t have a chance to vote against a number of bad ideas related to leasing.
Believe it or not, I agree with the majority party on some steps we could help to make this country more energy independent. Wind tax credits are one example. But restricting senators' participation, stopping them from representing those who put them in office is not going to get us any farther than an empty gas tank and that's what this bill in its current form is.
The bill before us blames “speculators” for our energy situation. It might be worth taking a moment to discuss exactly what “speculators” really do. Oil speculation is two people or companies or organizations guessing what the price will be in the months to come. One of those entities thinks the price will be higher in the months to come and so they buy the commodity. Another entity thinks that the price will be lower so they sell the commodity. For example, an airline might think that the price of oil will be higher in the months to come, and to stabilize their fuel costs, they will purchase oil futures for the next couple of months. If prices go up, they will have stabilized their fuel costs and saved money, but if prices go down, they will lose money.
The market is a place where you anticipate what the cost will be in months to come so that you have certainty for what you are going to pay. Sometimes your guess is right and you are paying below market value, but sometimes your guess is wrong and you end up paying more than market value. You see, what is commonly ignored in the debate about oil speculators is that, for every dollar that is made, there is a dollar that is lost.
I’d also like to point out that oil is not the only commodity that is traded. We “speculate” on the price of wheat, the price of pork bellies, the price of gold and silver, and cattle. Speculation allows producers and consumers of these types of products the opportunity to manage the risk that they take on buying and selling products that don’t have a set price. This helps prevent wild fluctuations of price each and every day and major market failures.
Earlier this week, I spoke about how the Majority Leader’s energy speculation bill could have significant unintended consequences for institutional investors accessing our commodities, futures, and capital markets. Today, America’s largest pension funds wrote to me stating their concerns. The American Benefits Council wrote: “The Council is very concerned that the serious implications of S. 3268 on retirement plans participants have not been sufficiently evaluated. We are concerned that legislation relating to energy policy could unintentionally harm the long-term security of American workers and families.” I request that the letter be entered into the Record.
I also have heard from other pension fund and other institutional investor representatives that the provisions in the Majority Leader’s bill have not been sufficiently vetted. Rather than pass a flawed bill on energy speculation, we should wait until we read the Commodity Futures Trading Commission’s and the Interagency Task Force on Commodity Markets’ report due out later this year. This issue is too important for us to act without all of the facts.
Few serious economists believe that this bill will do anything substantial to decrease energy prices. Warren Buffett, the nation’s wealthiest democrat, doesn’t think that it will make a difference. Neither does oilman T. Boone Pickens. Even the Federal Reserve Chairman, Ben Bernanke, believes that this bill will have little impact on the price of gasoline. And, yet, we are still prohibited from offering amendments. We are still prohibited from voting on amendments that will have amendments that will have a real impact on the price of gasoline.
It is unfortunate that the debate is turning out this way because I agree that there should be more transparency in the market. That is why I’m the cosponsor of a bill that allows for more oversight by the Commodities Futures Trading Commission. But, in addition to that, the bill does something more. The Gas Price Reduction Act includes a provision to open up coastal waters in states where they want energy production. It ends the ban on the development of promising oil shale in Wyoming, Colorado and Utah. At the same time it encourages increases in supply, it promotes the development of better technology so that we use less energy.
We should have the opportunity to vote on these proposals. We should have the opportunity to have a real debate on energy. But, instead, we are going wrap up this debate and begin playing the blame game. It is disappointing that the Senate is working this way and I hope that we can stop playing gotcha politics and have a real debate in the near future. This issue is too important for the Senate to ignore.