STATEMENT OF WISCONSIN GOVERNOR TOMMY G. THOMPSON

BEFORE THE HOUSE JUDICIARY COMMITTEE

JUNE 28, 2000

GOOD MORNING MR. CHAIRMAN AND LADIES AND GENTLEMEN OF THE COMMITTEE. THANK YOU FOR THE OPPORTUNITY TO TESTIFY TODAY ABOUT THE HIGH GAS PRICES FACING DRIVERS IN THE MIDWEST AND THROUGHOUT THE COUNTRY AS WELL AS WHAT WE BELIEVE TO BE THE UNDERLYING CAUSES OF THIS PROBLEM.

 THIS MONTH, THE PEOPLE OF WISCONSIN AND ILLINOIS SAW SOMETHING THEY PROBABLY THOUGHT WOULD NEVER OCCUR, AT LEAST ANYTIME SOON – GAS PRICES OVER $2 A GALLON.

 IT’S A THRESHOLD ONCE THOUGHT UNIMAGINABLE BY MOTORISTS – SOMETHING OUR GRANDCHILDREN MIGHT EXPERIENCE ONE DAY, BUT CERTAINLY NOT ANYTHING WE WOULD HAVE TO WORRY ABOUT IN TODAY’S STRONG ECONOMIC TIMES.

 YET, OUR CONSUMERS ARE BEING HIT RIGHT IN THE POCKETBOOK BY FAST-RISING GAS PRICES THAT NOW THREATEN THE VIBRANT ECONOMY WE WORKED 14 HARD YEARS TO BUILD IN WISCONSIN.

 THE COST OF BUSINESS IS THROUGH THE ROOF FOR TRUCK DRIVERS – THE BACKBONE OF COMMERCE IN OUR STATE. CAB DRIVERS IN MILWAUKEE ARE RAISING RATES TO MEET THEIR HIGHER COSTS. EVEN PERSONAL HEALTH CARE WORKERS ARE STRUGGLING TO AFFORD THE DRIVE TO PEOPLE’S HOMES TO PROVIDE CARE FOR HOME-BOUND PATIENTS….

 THESE ARE REAL PROBLEMS FOR EVERYDAY PEOPLE CAUSED BY A REAL CRISIS REGARDING A STAPLE OF EVERYDAY LIFE  -- GASOLINE.

 THE DEBATE OVER THE CAUSE OF THIS CRISIS BEGAN IN CHICAGO AND MILWAUKEE, BUT NOW IS RAGING ACROSS THE ENTIRE COUNTRY. I BELIEVE THAT IS BECAUSE THIS PROBLEM GETS TO THE FOUNDATION OF THE ECONOMIC STABILITY OF OUR ENTIRE NATION.

 LADIES AND GENTLEMEN, THIS IS A PROBLEM BORNE OF THE FEDERAL GOVERNMENT – NOT THE STATES – AND A PROBLEM THAT MUST BE SOLVED BY THE FEDERAL GOVERNMENT.

 THEREFORE, I WOULD LIKE TO TOUCH ON FOUR PROBLEMS THAT I BELIEVE ARE DRIVING HIGH GAS PRICES AND THEREFORE MUST BE RESOLVED IN ORDER FOR PRICES TO DROP IN THE SHORT-TERM AND REMAIN STABLE FOR THE LONG-TERM.

·         FIRST, AND MOST IMPORTANT, THE FAILURE TO DEVELOP A COHERENT ENERGY POLICY FOR THIS NATION.

·         SECOND, THIS NATION’S OVER-RELIANCE ON FOREIGN OIL.

·         THIRD, THE CONSCIOUS DECISION NOT TO DEVELOP AND PURSUE MORE DOMESTIC OIL AND ENERGY SOURCES.

·         AND, FINALLY BUT IMPORTANTLY, THE FAILED EPA POLICY MANDATING THE USE OF REFORMULATED GAS IN THE MIDWEST.

 LADIES AND GENTLEMEN, AFTER EIGHT YEARS, THERE IS SIMPLY NO COHERENT ENERGY POLICY BY THE CLINTON-GORE ADMINISTRATION -- AND WE’RE ALL PAYING FOR IT. THIS FAILURE CLEARLY LEAVES OUR NATION VULNERABLE TO THE RADICAL CHANGES IN GAS PRICES WE EXPERIENCE NOW.

 AS A NATION, WE ARE FAR TOO DEPENDENT ON FOREIGN OIL SUPPLIES. IN FACT, WE ARE IMPORTING OIL AT THE HIGHEST RATE IN OUR COUNTRY’S HISTORY.

 TO PUT THIS PROBLEM IN CONTEXT, DURING THE ARAB OIL EMBARGO OF 1973 – WHICH RESULTED IN LONG GAS LINES AND GAS RATIONING – AMERICA WAS IMPORTING 35 PERCENT OF ITS OIL.

 TODAY, AMERICA IS IMPORTING 56 PERCENT – HITTING AS HIGH AS 62 PERCENT IN SOME MONTHS.

 THIS OVER-RELIANCE ON FOREIGN OIL IS EXACERBATED BY OUR LACK OF A CONSTRUCTIVE POLICY FOR DEALING WITH THE OPEC NATIONS.

 AND IT’S PARTICULARLY ALARMING THAT ONE OF OUR NATION’S FASTEST-GROWING OIL SUPPLIERS IS IRAQ. THAT’S RIGHT, SADDAM HUSSEIN.

 OUR DEPENDENCE ON FOREIGN OIL MAKES OUR ECONOMY TOO VULNERABLE TO THE WHIMS OF THE OPEC NATIONS AS WELL AS ONE OF OUR HARSHEST ENEMIES IN IRAQ.

 EVEN THIS GROCER’S SON FROM ELROY, WIS., CAN SEE THAT’S JUST NOT SMART.

 EXACERBATING OUR DEPENDENCE ON FOREIGN OIL IS OUR LACK OF DOMESTIC OIL PRODUCTION.

 THE ADMINISTRATION’S OVERBEARING ENVIRONMENTAL POLICIES DISCOURAGE ANY EFFORTS TO DEVELOP DOMESTIC OIL SOURCES NEEDED FOR OUR NATION’S SECURITY.

 TO PUT THIS FAILURE IN PERSPECTIVE, WE HAVE HAD 36 OIL REFINERIES IN THIS COUNTRY CLOSE IN THE PAST EIGHT YEARS ALONE, WHILE OUR NATION HAS NOT OPENED AN OIL REFINERY IN MORE THAN A QUARTER CENTURY.

 WE MUST ALLOW FOR MORE AGGRESSIVE EXPLORATION AND DEVELOPMENT OF DOMESTIC OIL – PARTICULARLY IN AREAS WITH GREAT POTENTIAL SUCH AS ALASKA AND OUR COASTAL REGIONS. IF WE DON’T, WE WILL BECOME MORE AND MORE AT THE MERCY OF SADDAM HUSSEIN’S OIL BARONS.

 A FINAL FACTOR IN THE HIGH COST OF GAS – PARTICULARLY IN MY STATE – IS REFORMULATED GAS. THERE IS A CLEAR, DISTINCT AND MEASURABLE TIE BETWEEN THE EPA MANDATE OF RFG AND THE HIGHER COST OF GAS.

 A STUDY BY THE CONGRESSIONAL RESEARCH SERVICE LAST WEEK CONCLUDED THAT R-F-G WAS RESPONSIBLE FOR 25 CENTS A GALLON OF THE PRICE INCREASE.

 THEREFORE, IF CAROL BROWNER WOULD SIMPLY GIVE US A WAIVER FOR THE TWO MONTHS LEFT OF SUMMER, DRIVERS WOULD SEE AT LEAST A QUARTER OFF THE PRICE OF GAS IMMEDIATELY.

 FOR THE OWNER OF A CAR WITH A 15-GALLON TANK, THAT’S A SAVINGS OF NEARLY $4 EACH AND EVERY TIME SHE FILLS UP. IN WISCONSIN, THAT’S REAL MONEY OUR FAMILIES CAN SPEND TOWARD THEIR SUMMER VACATIONS AND OUR TOURISTS CAN SPEND ON FISHING GEAR AND CHEESE.

 THERE ARE A LOT OF REASONS BEING GIVEN FOR THE INCREASED COSTS OF RFG, INCLUDING PIPELINE DISRUPTIONS, PATENT DISPUTES AND INCREASED REFINING COSTS.

BUT THE BOTTOM LINE IS THAT RFG IS DRIVING UP COSTS AND THE EPA SHOULD GIVE WISCONSIN AND ILLINOIS A TEMPORARY WAIVER.

 YET, THIS ADMINISTRATION REFUSES TO GIVE US ANY RELIEF, EVEN THOUGH THEY HAVE GRANTED A WAIVER TO THE ST. LOUIS AREA FOR SIMILAR PROBLEMS.

 WHAT IS PARTICULARLY TROUBLING ABOUT THE REFORMULATED GAS MANDATE IS THAT WE ARE BEING ASKED TO CLEAN POLLUTION THAT WAS NOT CREATED IN WISCONSIN.

 THAT’S WHY I HAVE JOINED WITH REPUBLICANS FROM MY STATE IN SUING THE E-P-A TO ASK FOR A WAIVER FROM THE REFORMULATED GASOLINE REQUIREMENT.

 WE BELIEVE THE SKYROCKETING COSTS OF REFORMULATED GAS IN WISCONSIN SUGGEST THE EPA DID NOT ADEQUATELY CONSIDER THE COSTS OF THE REFORULATED GAS MANDATE, AS REQUIRED BY THE CLEAN AIR ACT.

 LADIES AND GENTLEMEN, THE ISSUE OF RISING GAS PRICES ISN’T A NEW ONE. THAT’S WHY WE ARE SO FRUSTRATED IN WISCONSIN.

 WE FIRST BROUGHT OUR CONCERNS TO THE ADMINISTRATION IN LATE JANUARY-EARLY FEBRUARY WHEN PRICES STARTED TO RISE.

 AT THAT TIME, ENERGY SECRETARY RICHARDSON TOLD A NEWSPAPER THAT THE ADMINISTRATION WAS “UNPREPARED” FOR THE PRICE HIKES AND WAS “CAUGHT NAPPING.”

 SOME FOUR MONTHS LATER, WHEN PRICES FINALLY HIT THE $2 BARRIER, SECRETARY RICHARDSON AND THE PRESIDENT STILL HAD NO ANSWERS. MR. RICHARDSON TOLD THE PEOPLE OF WISCONSIN JUST TWO WEEKS AGO THAT “HE DIDN’T KNOW” WHY GAS PRICES WERE SO HIGH IN THE MIDWEST.

 WELL, IT’S TIME TO WAKE UP FROM THE NAP. WHILE THE ADMINISTRATION IS SLEEPING AT THE WHEEL, CONSUMERS ARE BEING GORED AT THE PUMPS.

 WE NEED REAL ANSWERS OR SOLUTIONS TO THIS PROBLEM FROM THE CLINTON-GORE ADMINISTRATON. THE BEST THEY CAN DO IS POINT FINGERS AND ACCUSE THE OIL INDUSTRY OF GOUGING.

 AND I MIGHT ADD THAT IF THERE IS ANY EVIDENCE OF GOUGING, WE FULLY SUPPORT APPROPRIATE ACTION BEING TAKEN AGAINST THE OFFENDERS.

 BUT THAT DOESN’T ELIMINATE THE CORE PROBLEMS MENTIONED ABOVE: THE LACK OF A COHESIVE ENERGY POLICY, INORDINATE DEPENDENCE ON FOREIGN OIL, THE NEED FOR MORE DOMESTIC OIL DEVELOPMENT, AND THE FAILED EPA POLICY REGARDING REFORMULATED GAS.

 IT’S TIME FOR DECISIVE ACTION TO BE TAKEN TO SOLVE THESE PROBLEMS AND STABILIZE GAS PRICES. THE VERY ECONOMIC SECURITY OF OUR NATION IS AT STAKE.

 THANK YOU FOR DRAWING ATTENTION TO THIS IMPORTANT ISSUE, MR. CHAIRMAN. THE PEOPLE OF WISCONSIN APPRECIATE YOUR ASSISTANCE.