THIS SEARCH     THIS DOCUMENT     THIS CR ISSUE     GO TO
Next Hit        Forward           Next Document     New CR Search
Prev Hit        Back              Prev Document     HomePage
Hit List        Best Sections     Daily Digest      Help
                Doc Contents      

The Administration's projections of an average of $1.46 per gallon for gasoline this summer--which is still 25 percent higher than last summer I might add--does not presume production disruptions at the refinery. I would like to point out that one of the reasons prices went up and supply ran dangerously low a few months ago was the unexpected shutdown of four different refineries that serve the Northeast.

[Page: S2500]  GPO's PDF

   Just last week, DOE's Energy Information Administration stated that, ``..... motor gasoline markets are projected to exhibit an extraordinarily tight supply/demand balance.'' Against this backdrop, we cannot depend upon the Administration's predictions turning into fact, when they have so far been so incorrect.

   Now is the time for Congress to act, even if the Administration refuses to. I want to at least make sure that American businesspeople and consumers have in their pockets what they would have otherwise paid in fuel taxes if the Administration is underestimating prices once again and gasoline hits $2.00 a gallon.

   Beyond the pump, consumers are getting hit with extra costs directly attributable to high fuel costs. If you've paid to send an overnight package lately, you probably noted that you were charged a surcharge--a fuel fee--because their cost of diesel fuel has increased by about 60 percent over the past year. And with a 150 percent increase in jet fuel , that airline ticket you buy today will probably include something you've never seen before--a fuel charge of $20.00. How long will it be before costs of other products will also be passed on the consumer?

   Consider the impacts to the nations' farmers. In some locations, the planting season has begun. The New York Times reported two weeks ago that a farmer paying 40 cents a gallon more this year to fuel his diesel tractors and combines, will be adding as much as $240 a day to his harvesting costs. In my home State of Maine, we are at the peak season for moving last year's potato crop out of storage and to the large Eastern markets. But the industry still can't get truckers to come into the State to move the potatoes because they are discouraged by the particularly higher price of diesel in Maine.

   The only help the potato industry has had recently in getting their product to market was certainly not due to the energy policy of this Administration, but to local truckers who turned to hauling potatoes because wet weather kept them away from taking timber out of the Maine woods.

   Soon, we will enter the summer months, when tourism is particularly important to the economy of New England and to Maine in particular. With the high price of gasoline, we need relief now, and that's what this bill provides. As a matter of fact, we could have used the relief in Northern Maine a few months ago--that's a big tourist season for them as snowmobilers from all over the East head to Maine to use the hundreds of miles of trails throughout the northern part of the State.

   The choices are clear--do nothing for the taxpayers who are being gouged by failed energy policies, or do something by supporting legislation that gives some relief at the gas pump right now. We should temporarily repeal the 4.3 cent per gallon gas tax and support a bill that also acts as a circuit breaker, giving citizens a break at the gas pump if gas goes over $2.00 a gallon while protecting the Trust Funds that build our highways and airports. I urge my colleagues to support this bill by voting for cloture.

   Mrs. FEINSTEIN. Mr. President, I am as upset by the gasoline price spikes as anyone else. Price spikes have been worse in California than in any other State. Today, as I speak, though prices have recently started to come down a bit, they still average more than $2 per gallon in some parts of California.

   Having said that, I feel obliged to oppose S. 2285, despite understanding the sentiment behind it. The problem with S. 2285 is that there is no way to guarantee that a reduction in the federal gasoline tax will be passed on to consumers. Why is this? Because price is a function of supply and demand, not taxes. And right now, world oil markets are extremely tight, so prices are high.

   The way to relieve the pressure on the market is to boost supply and reduce demand.

   With regard to supply, fourteen nations sell oil to the U.S. under a cartel known as the Organization of Petroleum Exporting Countries, OPEC. Like any monopoly, OPEC controls the price of oil by limiting supply. Decreased production in non-OPEC countries like Venezuela, Mexico, and Norway has also contributed to the squeeze.

   Since OPEC is not bound by U.S. law, there are only a few things the U.S. can do to encourage the cartel to increase supply. The preferred alternative is diplomacy. Energy Secretary Bill Richardson has had some success on this front. OPEC ministers announced last month that the cartel would immediately increase supply by 1.7 million barrels a day. Mexico has also agreed to increase production by a small amount.

   It takes several weeks for production increases to be felt at the pump, in lower prices. And California has unique problems affecting its supply. No other State requires the kind of reformulated gasoline that California does. So the gasoline has to be refined in California. And California refiners have had problems--including two fires--operating their plants at full capacity. They are at full capacity now.

   Notwithstanding these problems, the announcement of OPEC production increases has driven spot gasoline prices down. They have dropped more than 40 cents, for instance, in the greater Los Angeles area.

   The spot price is the price of gasoline on the open market without taxes and other markups figured in. Spot prices are usually good harbingers of the price movement we will eventually see at the pump about a month or two later.

   But the increase in OPEC production is, at best, a short-term solution. By the middle of summer when demand for gasoline will peak, we may be back in the same predicament.

   As I said a moment ago, S. 2285 doesn't solve the problem of high gasoline prices. Under California law, if the federal gasoline tax drops by 9 cents per gallon or more, then the State tax automatically rises to off-set the federal decrease. The law is designed to protect the Highway Trust Fund. I have spoken with members of the California legislature about this. They do not seem inclined to change the law.

   Even if the law were changed, the price still wouldn't drop. At least that's what the chief executive officers of the three major California refiners told me. Collectively, they produce 70 percent of California's gasoline. None could guarantee that prices would drop at the pump. They cited the fundamental problem with supply, and also pointed out that they have no control over other entities in the supply chain.

   What are our options?

   The fact is, we have limited control over supply. Too much of the world's oil is produced elsewhere. The one thing we can control is demand.

   The best way to reduce demand is to require that sports utility vehicles (SUVs) and light duty trucks get the same fuel efficiency that passenger vehicles do. If SUVs and light duty trucks had the same fuel efficiency standards as passenger cars, the U.S. would use one million fewer barrels of oil each day.

   This is roughly equal to the U.S. shortfall before OPEC increased production.

   The Department of Transportation is responsible for setting fuel efficiency requirements under the Corporate Average Fuel Economy (CAFÉ) program. Abut two-thirds of all petroleum used goes to transportation, so boosting fuel efficiency is an important way to wean ourselves off OPEC oil and reduce the price motorists pay for gasoline. Consider, too, the significant environmental and health benefits of higher fuel efficiency.

   But CAFÉ standards have not increased since the mid- 1980s. And the situation is made worse by a loophole in the CAFÉ regulations. SUVs and light duty trucks --which are as much passenger vehicles as station wagons and sedans--are only required to average 20.7 miles per gallon per fleet versus 27.5 miles per gallon for automobiles.

   Since half of all new vehicles sold in this country are fuel -thirsty SUVs and light duty trucks , this stranglehold on energy efficiency has produced an American fleet with the worst fuel efficiency since 1980. We are going backwards!

   According to the non-partisan American Council for an Energy Efficient Economy , the U.S. saves 3 million barrels of oil a day because of CAFÉ standards . Close the SUV loophole, as I said a moment ago, and save another million barrels each day.

   Overall, SUV and light duty truck owners spend an extra $25 billion a year

[Page: S2501]  GPO's PDF

   The ``bottom line'' is that eliminating some or all of the federal gasoline tax won't lower prices at the pump. The best way to do that is to reduce our demand. The best way to reduce demand is to increase the gas mileage requirements for SUVs and light duty trucks .

   Mr. GRAMS. Mr. President, like many of my colleagues, I've come to the Senate floor on a number of occasions in recent weeks to express my concern with rising fuel costs and the lack of an energy policy by this Administration. I don't have to remind my colleagues how the rising cost of oil threatens almost every aspect of our economy and communities. Senior citizens on fixed incomes cannot absorb extreme fluctuations in their energy costs. Business travelers and airlines cannot afford dramatic increases in airline fuel costs. Families struggling to feed and educate their children cannot withstand higher heating bills, increasing gasoline costs, or the domino effect this crisis has on the costs of goods and services. To be sure, this problem is impacting virtually every facet of American life and may only get worse as we approach the high energy demand of the summer months.

   I look at the situation we're now facing with high oil prices and limited supply and have a hard time understanding why it's such a surprise to so many people. I've heard Secretary Richardson refer to the fact that the Energy Department may have been caught ``napping on the job.'' Since coming to Congress in 1993, I've been saying the Energy Department is asleep at the wheel. We have an Energy Department that spends less than 15% of its budget, and even less of its time, on the core energy issues within the Department. I dare say that energy consumers are the last thing they think about over on Independence Avenue--certainly not the first.

   With all due respect to Secretary Richardson, I don't think he was necessarily caught napping on the job, but flat out neglecting the energy needs of this country. Under the tenure of the last three Secretaries of Energy, this Administration has done nothing but weaken our energy security, increase our reliance on foreign oil, shut down domestic oil and gas production, and ensure the closure or removal of many of our primary means of electricity generation--coal, nuclear, and hydropower. I think it's time that policy-makers in Washington come to the realization that we are now a nation with no energy policy and no ability to respond to even the most limited energy supply disruptions.

   Consider the recent effort of the Administration to address the oil price crisis. We've all witnessed this Administration's ``tin-can diplomacy'' over the past few weeks. Instead of planning for the energy needs of our country, this Administration waits for a crisis and then responds by sending its appointees to grovel, plead, or otherwise beg other nations into helping us out. The United States, thanks to this Administration, is a nation running around the world looking for a handout from friend and foe alike.

   It's embarrassing that the economy of our nation hinged on the decision of a few oil ministers sitting in a room in Vienna just a couple of weeks ago. Do we realize that Iran was blocking an OPEC increase of 1.7 million barrels of oil a day? The strength of our economy now may rest on the ability of OPEC oil ministers to convince countries like Iran to help us out in the future. That is quite a statement on the viability of the Clinton Administration energy policy.

   But still, this Administration maintains its steadfast opposition to doing anything here in the United States to dramatically decrease our reliance on foreign oil and increase our domestic exploration and production. ANWR is off-limits. They don't want to discuss off-shore drilling. They claim they're open to looking at some activity on public lands, but at the same time they're on a blitz to lock up every last acre of land they can find into some type of new, restrictive designation before President Clinton and Secretary Babbitt leave office.

   Well, the farmers of Minnesota can't wait for President Clinton or Secretaries Babbitt or Richardson to leave office before our country places a renewed emphasis on a sound, long-term energy policy. Truckers across America cannot wait for President Clinton to leave office to get some relief at the fuel pump. And energy consumers far and wide cannot stand by while this Administration begs countries like Iran and Libya to ``feel our pain.''

   Regrettably, I fear the oil supply and price crisis we're now experiencing is only an early warning of the pain the Clinton Administration's neglect of energy policy is going to level on American energy consumers. It won't be that far into the future before this Administration's appetite for closing down nuclear and coal-fired power plants and destroying hyrdopower facilities will bring similar price increases for electricity consumers.

   Many of us have suggested that we need to look closely at both short- and long-term approaches to easing the pain of the current oil crisis on American energy consumers and reducing our nation's reliance on foreign oil. I've spoken at length about how we need to focus our efforts on developing a long-term energy policy that puts American jobs and productivity first, instead of last. Doing so, however, will take time and produce few immediate results to help consumers in the coming months.

   In the short-term, I believe Congress must consider temporarily suspending some or all of the federal fuel taxes, which, along with state excise taxes, account for an average of 40 cents per gallon of gasoline. That is why I've joined Majority Leader TRENT LOTT, Senator LARRY CRAIG and a number of my colleagues in offering S. 2285--The Federal Fuels Tax Holiday Act of 2000. Our legislation would temporarily suspend the 4.3 cent tax on gasoline, diesel fuel, and aviation fuel while protecting both the Highway Trust Fund and the Social Security surplus. The bill will suspend the 4.3 cent tax starting on April 16 through January 1, 2001. For farmers, truckers, airlines, and other large energy consumers, this action will have an even greater positive impact on the large amounts of fuel they consume.

   This legislation reflects the leadership of a number of our colleagues. Senator BEN NIGHTHORSE CAMPBELL from Colorado has championed legislation to suspend the diesel fuel tax. Once a trucker himself, Senator CAMPBELL has led the way in assisting truckers and their families who are suffering as a result of the rising price of diesel fuel. And Senator MURKOWSKI, as Chairman of the Senate Energy Committee, has been a leader in calling attention to the growing energy needs of our nation and the Administration's energy policy failures.

   I want to add that I'm very aware that many of my colleagues have argued that 4.3

   cents a gallon has a negligible impact on consumers. To them, I say look at the amount of fuel a farmer or trucker consumes during an average week. Look at the diesel fuel required to operate a family farm or deliver products across this country. Or look at the tight profit margins that can make the difference between going to work and being without a job. I'm convinced this action is going to help farmers, businesses, truckers, and families in Minnesota and that's why I strongly support it.

   I firmly believe that federal gas taxes should go to the Highway Trust Fund for road, highway and bridge improvements. That's why we're restoring revenues being provided to energy consumers by the 4.3 cent gas tax suspension. The Highway Trust Fund will be reinstated with non-Social Security budget surplus funds from the current fiscal year as well as fiscal year 2001. In addition, no highway projects or airport projects will be delayed or jeopardized, because funds going into the trust fund are fully restored by the surplus. There will be no impact on these projects.

   If gas prices reach a national average of $2 a gallon for regular unleaded gasoline, federal excise gas taxes would be suspended, again without impacting the Highway Trust Fund in any way. This would suspend, until the end of the year, the 18.4 cents per gallon federal gasoline tax, the 24.4 cents per gallon tax on highway diesel fuel and kerosene, the 19.4 cents per gallon for noncommercial aviation gasoline, the 21.9

[Page: S2502]  GPO's PDF

   Let me make this very clear: we are not going to raid the Highway Trust Fund with this legislation. In fact, we've ensured that the non-Social Security budget surplus will absorb all of the costs of the gas tax reduction. I also want to assure my colleagues and my constituents that this legislation walls off the Social Security surplus. We will not spend any of the Social Security surplus to pay for the gas tax reduction.

   Our legislation is quite simply a tax cut for the American consumer at a time when it's needed most. We're going to use surplus funds--funds that have been taken from the American consumer above and beyond the needs of government--and give them back to consumers every day at the gasoline pumps. This legislation takes concrete steps toward more reasonable fuel prices, helping to serve as a buffer for consumers who are already feeling the impact of the high cost of gasoline and other fuels.

   In closing, I want to say that I look forward to working with my colleagues in the coming days, weeks and months in forging a number of both short-term and long-term responses to the needs of farmers, truckers, the elderly, and all energy consumers. I've been a strong supporter of renewable energy technologies and increased funding for the Low Income Home Energy Assistance Program or LiHEAP. I strongly support the efforts of my colleagues to increase domestic oil and gas exploration and production. I remain committed to finding a resolution to our nation's nuclear waste storage crisis--a crisis that threatens to shut down nuclear plants and further weaken our nation's domestic energy security. And I'll continue to be one of the Senate's strongest critics of the Department of Energy's unconscionable neglect of the long-term energy needs of our nation.

THIS SEARCH     THIS DOCUMENT     THIS CR ISSUE     GO TO
Next Hit        Forward           Next Document     New CR Search
Prev Hit        Back              Prev Document     HomePage
Hit List        Best Sections     Daily Digest      Help
                Doc Contents