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Mr. HOEVEN. Madam President, I rise to speak this afternoon about the escalating cost of gasoline at the pump--something that affects every American consumer. Crude oil prices are now more than $100 a barrel and the price of gasoline at the pump for our consumers is about $4 on average across the Nation. It is even more here in the District. Despite some correction recently in the oil commodity markets, the U.S. Energy Information Administration expects that prices this summer will average $1 more than they did just a year ago.
Gasoline price spikes are a form of stealth inflation eating away at the income of American families, impacting our economic growth, and deepening the hardship to the almost 14 million people we have still looking for work. Some economic analysts indicate that for each $10 increase in the price of a barrel of oil, it has the impact of reducing our economic growth by about two-tenths of 1 percent. Each two-tenths of 1 percent equates to 120,000 fewer jobs that are created just in the first year of that type of increase. So you can see it has a very significant cumulative impact.
Imported oil also greatly affects detrimentally our balance of trade. Last year alone that contributed to a $265 billion trade imbalance for our Nation. The high price of oil, whether it is at the wellhead or the price of gasoline at the pump, impacts every sector of our economy. It affects jobs, it affects economic growth, and it certainly affects the purchasing power of the American family; therefore, their standard of living and our quality of life.
So what do we do? Well, the fact is, oil prices are subject to the same laws of supply and demand as other commodities. When we increase the supply, that helps bring prices down. When we reduce demand, that helps bring prices down. Of course, just the reverse is true as well. When we have less supply or more demand, that tends to push the price higher. So clearly--clearly--we need to do all we can to produce more energy in this country, and certainly we need to produce more domestic fuel, more domestic oil and gas.
I don't know how many people realize it, but over the last few years--over the last approximately 5 years--oil imports into this country have actually been going down, and that is why I have brought this chart along which was prepared by the Congressional Research Service. As we can see from the chart, domestic oil was shrinking from about 1985 to 2005, and by 2005 we increased our imports to a total of 12.4 million barrels a day, approximately 60 percent of the total oil we consumed in 2005.
However, since 2005 things have begun to change. We have made progress. We have made progress both because we are producing more oil and gas in this country and also because we are using less. So we can see from 2005 to 2010 we have actually reduced the amount of oil we import into this country from about 60 percent of what we use to less than 50 percent. Today, about 49 percent of the fuel we consume is actually produced in this country. That is a significant reduction in our imports of about 3 million barrels a day from 2005.
So what changed? Well, what changed is we are producing more oil. We are producing more oil offshore and onshore in the lower 48, and we are also producing more natural gas liquids. As I said just a minute ago, we are also consuming less, and we need to continue to do both. In addition to those things, though, we are also increasingly relying on friendly governments for our imports rather than governments that are hostile to our country.
For example, by last year we were importing twice as much oil from Canada as we were from Saudi Arabia, and that is certainly a good development. We need to continue to not only produce more domestic oil but, to the extent we import oil, we need to bring it in from countries that are friends rather than countries that are foes, or certainly that may not share our beliefs and our interests. We have opportunities to do that.
For example, right now, very close to my State, we are working on a project which is the Keystone XL Pipeline. The Keystone Pipeline is designed to carry
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We have similar opportunities to boost the supply of domestic oil and gas on American soil as well, and not just in the lower 48 but also in Alaska. The Trans-Alaska Pipeline could help increase supply enormously, but right now it is only carrying about one-quarter of its capacity. The pipeline has the capacity to carry 2 million barrels of oil a day. Right now it is carrying something over 600,000 barrels of oil a day. So, clearly, that is a tremendous capacity that is not being utilized.
Senator Murkowski has eloquently pointed out that the State of Alaska holds an estimated 40 billion barrels of oil, the equivalent of more than 60 years' worth of imports from the Persian Gulf. Yet that oil is excluded from our Nation's reserve figures. The United States is already the third largest oil and gas producing Nation on Earth, with 28.4 billion barrels of proven reserves. But it also has an estimated 162, almost 163 billion barrels of technically recoverable oil, according to the Congressional Research Service. Only Russia and Saudi Arabia produce more than our country.
So the lesson in all of this is clear. We can and we must increase domestic production of oil and gas in our country. The record over the past 5 years clearly indicates we can do it. As a matter of fact, we are on our way to doing it, and we can do much more. For example, in my home State of North Dakota, we have been working over the last decade to increase oil production, and we have. Since 2005, North Dakota has increased its production of oil by more than 200,000 barrels a day. North Dakota is now the fourth largest oil-producing State in the Nation. We have passed States such as Oklahoma and, more recently, Louisiana. We have the opportunity to produce much more. We have just barely scratched the surface.
Last month, I hosted a meeting of the U.S. Geological Survey in Bismarck to make the case for a new, updated study of recoverable reserves in the Williston Basin. Of course, the Williston Basin covers parts of North Dakota, Montana, and extends into Canada as well. The last agency study was completed in 2008, and it indicated there are 3.5 to 4 billion barrels of recoverable oil in the Bakken Shale Formation, which is in the Williston Basin--3 1/2 to 4 billion barrels of recoverable oil. Industry scientists and engineers, however, who are working out in the Williston Basin right now feel that figure is low and the reality in terms of recoverable oil reserves in the Williston Basin is much higher.
That is why we are asking the U.S. Geological Survey to come out and do a reassessment. If they are right, the results will attract tens of millions of dollars in new investment to the region, creating more domestic fuel and lower prices for American consumers, more jobs in our State, in Montana, and more jobs for our country. Also, it will help us develop infrastructure and sustain economic growth throughout the region.
In North Dakota we focused on creating more energy, more oil and gas, and more other types of energy as well by creating a legal, tax, and regulatory climate--a business climate--that encourages private investment and job creation. I have spoken several times on the floor of the Senate and more times than I can count at home and around the country about the need to forge a legal, tax, and regulatory climate in America that will attract investment in the energy industry--whether it is wind, biofuels, coal, or oil and gas.
At a time when America is struggling with a 9-percent
unemployment rate, the need to create private sector jobs is absolutely paramount. It is job No. 1. Building our domestic energy industry is one of the keys to accomplishing that. The oil and gas industry alone supports 7.5 percent of the U.S. domestic product and more than 9 million American jobs. Government doesn't create those jobs, but government creates the environment that empowers and unleashes the creativity and energy of American enterprise.
The challenge confronting the U.S. energy industry today, however, is a climate of legal, tax, and regulatory uncertainty. This uncertainty is not only sidelining investment and impeding production but also hindering job creation and raising fuel prices at the pump for American consumers.
We all want to ensure we have clean air and water, but at the same time we all want to develop our Nation's abundant natural resources and do it with good, sound environmental stewardship. Clearly, we need to look at our current legal, tax, and regulatory environment to make sure we have the commonsense, reliable rules that not only enable but actually empower companies to invest the hundreds of millions and billions of dollars in new technologies that will help us unlock the energy resources in this country, and do it with the kind of environmental stewardship we all want.
It is vital for the rest of our economy. The reason for that is simple. If the energy industry cannot grow, neither can our other industries. They cannot create the jobs and opportunities our Nation so very much needs, and they cannot provide the affordable energy American families and businesses depend on every day. Impeding domestic energy production, moreover, is a national security issue as well as an economic issue. Increased dependence for oil on unstable parts of the world, such as the Middle East and Venezuela, puts not just our economy but our Nation and our Nation's security at risk. Yet rather than reduce constraints on production, rather than encourage more exploration and recovery, rather than make our country a better place to do business, our laws and regulations too often seem aimed at serving every other purpose but increasing domestic energy production and supply.
Ironically, at a time when we need to invest and create jobs, billions of dollars are not being deployed. That is because energy investors are waiting to see what kind of rules will govern things such as fracking for domestic oil, hydraulic fracture, CO2 management, and transmission line siting. Companies out there are ready to make billion-dollar investments that will have a lifespan of more than 40 years, but they do not know the rules of the road. By certainty, I don't mean more restrictive rules and regulations; I mean commonsense rules of the road that would not change arbitrarily or according to political crosswinds.
A number of us in the Senate on both sides of the aisle are already working on commonsense initiatives to ensure that Congress, rather than government agencies, establish those rules. I have already spoken about some of those on the Senate floor. Today, I would like to talk about another one. Today, I want to discuss, for just a short period, another piece of legislation that I believe will help reduce the price of fuel at the pump--not by increasing production but simply by applying good judgment to the rules that govern distribution of gasoline in the United States.
Senator Roy Blunt, myself, and a number of other Senators are promoting a bill called the Boutique Fuel Reduction Act of 2011. This legislation would simplify the Nation's fuel standards and make more fuel available to American consumers. It would give the administrator of the Environmental Protection Agency--the EPA--the flexibility to waive certain agency requirements pertaining to the use of specific or boutique fuels--specialty fuels--when extreme or unusual distribution problems are limiting supply.
Currently, the increased use of different types of fuel for different parts of the country is causing artificial shortages in some retail markets and, consequently, higher prices at the pump for our motorists. A service station in one city that runs out of fuel may not be able to use a certain blend of gasoline available just 50 miles away because it is not approved by the EPA for use in that location. Unfortunately, under current law, the EPA can waive the requirements only during a natural disaster, not to meet shortages or price spikes such as we have today.
The law we are sponsoring would change that.
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In addition to the bill, myself and a group of Senators--and House Members as well--have also sent letters to EPA Administrator Lisa Jackson, calling on the agency and the Department of Energy to complete the fuel harmonization study which Congress requested more than 5 years ago. That report was due in 2008. This report would examine the effects of the Nation's varying boutique fuels on retail prices and also assess the feasibility of developing national or regional standards to reduce the multiple varieties required today by the EPA.
Having fewer types of fuel would make more fuel available during shortages, thereby putting downward pressure on prices at the pump. It would give refineries more options to meet demand and help stabilize and reduce the retail price of gasoline.
We expect EPA and the Department of Energy to follow through on the congressional intent that was outlined in the 2005 law and conduct and complete that study as soon as possible, which correlates closely with the legislation we are sponsoring.
Bear in mind, the measures I just discussed do not cost anything. They take no funding to work. Yet they can help us reduce fuel prices for the American consumer, for our American families. They can make doing business in America more affordable, reduce our trade deficit, and help get Americans back to work again.
We need to increase domestic fuel production, and we need to provide regulatory relief in order to do it because high energy prices, whether it is fuel for our cars or electricity for our homes and businesses, impact virtually every sector of American life. That includes jobs, that includes economic growth, that includes the purchasing power of the American family, and ultimately includes our standard of living and our quality of life.
Our future is fueled by energy and that future depends on the decisions and the choices we make right now. We need to get them right.
I yield the floor.