Homeowner Flood Insurance Affordability Act of 2013—Motion to Proceed—Continuedby Senator Lisa Murkowski
Posted on 2014-01-15
MURKOWSKI. Mr. President, I had an opportunity early last week to
give a speech at the Brookings Institution about the significant
opportunity of the United States when it comes to energy production and
our opportunity as a nation to expand our energy trade.
I was able to present this speech based on a white paper I have recently released. It is entitled ``A Signal to the World: Renovating the Architecture of U.S. Energy Exports.'' This builds on a document that I presented to this body, to my colleagues, to folks who care about any aspect of what is going on within the energy industry within our country and our energy opportunities. It is a document that I entitled ``Energy 20/20.'' It is 115 pages of not legislation but really concepts, discussion points, areas where I think we as a nation have an opportunity to lead when it comes to our energy potential.
When we talk about energy in our country, it is very easy to talk about kind of ``all of the above.'' I did make a very concerted effort to address all forms of energy we in this country are blessed to have, whether it is our traditional fossil fuels, our oil, our natural gas, our coal resources, whether it is the enormous potential we have with our renewable fuel sources such as wind, solar, geothermal, ocean energy, marine hydrokinetic, our hydropower, the opportunities that present themselves with our biofuels, and the importance, the great significance of nuclear within our energy portfolio.
I didn't want that document to only be yet another document that somebody produces and other good ideas that are thrown out there to just founder. I have been working to present a series of these white papers. I had an opportunity to present one several months back on natural gas. This week it is a paper on the architecture of U.S. energy exports. In several weeks I plan on introducing yet another.
I come to the floor this afternoon to share my thoughts on energy exports with the Senate--all energy exports--and to enter my recommendations on this important subject into the Congressional Record. My point, again, is not to trot out legislation in one area or another but as a nation to have us focus on our energy potential--all of our energy potential--and our opportunity to utilize this energy potential to share this amazing wealth we have, whether it is within our traditional fuels or whether it is within our renewables or our nontraditional, to really focus on what it means as a nation to be a nation that enjoys energy abundance rather than a nation that faces energy scarcity.
I think it is fair to say that for far too long the conversation has been based from a position of energy scarcity. It is time to change that focus, it is time to shift that dialogue, that debate, to how do we perform, how do we operate, how do we take advantage of our relative abundance.
Before I start my comments and kind of summarize my white paper and the speech I gave, I want to pause for a quick note. This is the cover of my white paper, which will form the basis for my remarks today. I chose a U.S. Navy photograph that was taken aboard the USS Carl Vinson. It was taken by Mass Communications Specialist 2nd Class James R. Evans. I want to make sure he gets the proper credit for the photograph, because as I look at it, it gives me the sense of optimism that I think we should all have about the future of our energy trade. I think that future is bright. I think it is promising.
Let us start the discussion by looking exactly at the opportunity that we do have before us. Simply put, the United States is both producing and exporting more energy now than ever before. We are producing and we are exporting more than we ever have before. Net energy imports are at a 20-year low and projected to fall below 5 percent of total consumption by the year 2025.
To put this into perspective, when I came to the Senate, we were importing about 60 percent of our oil at that time. Net energy imports, now at a 20-year low, are projected to fall below 5 percent of total consumption by 2025. So this is all energy imports.
Energy exports are reducing our trade deficit, and they are boosting American commerce around the world. We have been talking all this week and last about unemployment insurance--how we can work to improve the economy for those who lack jobs or are underemployed. Let me tell you, this is an area of opportunity when it comes to our energy production.
So energy exports are helping us with our trade deficit and they are boosting commerce and jobs, but the regulatory architecture--the framework we are operating under--that governs energy exports is antiquated. It goes back to acts that were passed in the 1930s, in [[Page S357]] the 1950s, and in the 1970s. Furthermore, they are applied unevenly across the sector. So my white paper proposes a series of recommendations to renovate our Nation's approach to energy trade and to strengthen America's global posture.
I know around here when you put an idea out on the floor, you also put a target on your back. But I think this is an important discussion for us to have. Again, I am not proffering legislation, but what I am pushing, what I am going to edge my colleagues toward is a greater discussion about energy and energy exports.
The first resource I wrote about in my white paper was coal. I think we have to acknowledge these are some pretty uncertain times for what has truly been the backbone of the U.S. energy supply. Coal is projected to remain the top source of electricity for the next two decades, but we know it faces competition from other energy sources.
There is clearly a regulatory effort that will make the construction of new plants an extremely difficult endeavor, but I think we can see here that net exports of coal are at their highest level on record, and as a share of their production, they are at their highest level in 30 years. Exports of coal are presently free of burdensome regulations. I think they should remain so. I think other Federal regulatory agencies should not require climate change studies in the course of their permitting process for any proposed facilities. I say this because coal is going to be consumed around the world regardless of U.S. trade policy. We know that. We see that. We can point to the countries where they are seeing increased coal imports. The only question here--the real question here--is whether the coal is produced here in North America. If it is produced here in North America, the environmental standards are going to be high--higher than they will elsewhere. So the real question is: Do you produce it where you have stronger environmental standards or are you going to get it from countries where their environmental standards are held to a lower level? The next resource we are talking about is natural gas. There has been a great deal of discussion of late about natural gas. North America is quickly emerging as one of the world's most important hubs for the natural gas trade. Record levels are flowing to Mexico and Canada via pipeline. The buildout of seaborne export capacity, which requires the liquefaction of gas for loading onto cargo ships, is proceeding too slow under the watch of the Department of Energy. Other nations are approving capacity, they are securing financing, they are building projects, and they are contracting with customers. They are making these long-term contracts ahead of the United States. So a little more in-depth on this particular resource area, building on the white paper. I think DOE should expedite its review process for applications to export LNG to non-FTA countries. The last time an application was approved was back in mid-November, over 2 months ago now. I don't see the reason for continued delay here.
I do think we have to monitor the role of the other agencies that are involved. We have the FERC, we have the Maritime Administration, and we have the Pipeline and Hazardous Materials Safety Administration. I think it is important to understand whether this process is as streamlined and as functional as it should be.
There are some who are suggesting there needs to be a pause button pushed here, whether it is at DOE, the FERC, or at any other agency. No new study should be commissioned as the NERA study from 2012 is more than adequate and DOE has access to all the latest EIA and the other market data when it issues its orders. Our allies overseas and American workers here at home have waited long enough. We can do more and we can do it in an expedited manner.
The third area is natural gas liquids. A variety of fuels is produced alongside oil and gas as part of the energy renaissance underway here in this country. There is butane, propane, and pentanes plus. These are known as natural gas liquids, and they have various uses. They have not typically represented a major source of either revenue or volume to American exporters. Since the energy renaissance has begun, we have seen exports of more of these products on the uptake. We have seen them surge.
The regulatory structures that surround NGL exports are working pretty well. They are working smoothly. I don't think they require modification. Trade in these products plays a valuable role in reducing volatility and creating additional demand to stimulate production.
Next is the issue of crude oil and condensates. Obviously, this generates a little more interest and discussion, and that is OK, because again, I want to have this discussion.
We are producing more oil in this country today than at any point in the past 20 years. What has happened is this increase has resulted in a plethora of what is known as light tight oil, and this is coming from the Bakken, from Eagle Ford, and from other places around the country. This crude is lighter and sweeter than the U.S. refinery system was built to accommodate. Existing capacity upgrades to existing refineries and logistical feats to transport that light crude to appropriate refiners on the east coast--instead of over on the gulf coast, where you have the heavy refining capacity that dominates--have allowed for new volumes of light crude to be refined and brought to global markets as product.
So you have a situation where under existing regulations the Department of Commerce may license the export of crude oil under certain conditions, most notably if that oil is destined for Canada. But in addition, you have large amounts of condensates, another hydrocarbon, that cannot be exported, and these are also being produced along with the record levels of crude and natural gas.
Many producers fear that rising light crude production will soon exceed not only our light refining capacity but also the ability of our refiners to adapt to the new production slate. When this point is reached, when this mismatch occurs, the U.S. oil resurgence will collide with the de facto ban that we have on crude oil exports.
You are going to hear people say--the opponents will argue--that lifting the ban is somehow or other going to increase the price of gasoline. Well, coming from a State where we have probably some of the highest gas prices at the pump anywhere, that is not my interest. That is clearly not my interest. But I think there are a number of sound economic reasons why this is not going to be the case.
First, gasoline is a petroleum product and petroleum products are subject to global pricing, just as crude oil is. So to the extent that greater U.S. production of crude oil puts downward pressure on the international oil prices, then production increases have benefited U.S. consumers by marginally lowering the gasoline and the crude oil prices. American consumers are already generally paying a global price for petroleum products, including gasoline, and would also benefit to the extent that lifting the ban on crude oil exports would send a positive signal to oil producers to then increase production.
The second point here is the cost of inaction. Prohibition on the free trade of any product, with all things being equal, increases prices, it creates market distortions, it leads to misallocation of capital, and it has a deleterious impact on job creation. So to the extent the crude oil export ban contributes to supply disruptions and decelerating oil production, which affects unemployment, then the American consumer suffers these consequences. I have taken the position the status quo does not benefit the American consumer. In fact, not acting could actually negatively impact the Nation.
All sectors of the U.S. oil industry are global leaders. Upstream, American technology and expertise enables the growth in production. Midstream, a complex network of pipelines transports that oil across the country safely every day. And then, of course, downstream we have American refiners who are among the most advanced in the world. So lifting the de facto ban will strengthen this system by protecting jobs, boosting production, and enhancing efficiency and specialization.
I mentioned the Commerce Department earlier. They may retain sufficient statutory authority to lift the [[Page S358]] ban on its own as part of a larger swap. Some have suggested trading U.S. light crude for Mexican heavy, which sounds interesting, but it is a little more complicated than that. The President may also make a national interest determination that the present regulatory structure, which generally prohibits crude oil exports, is unnecessary and counterproductive. White House action on this matter is of course the shortest way from point A to point B, and if the President is so inclined, he can call me. He can count on my full support on this.
If the White House disagrees with this interpretation of its authority or it chooses to maintain the prohibition on exports, then I think it would be appropriate for the Senate to update the laws to reflect 21st century conditions.
After crude oil and condensates is the growing success story of our petroleum products and their exports. An enormous expansion of the American export profile in global petroleum product markets has accompanied the crude oil resurgence. Exports of petroleum products must continue without burdensome regulations. The U.S. refining industry is the global leader and delivers gasoline, diesel, and other fuel to American friends and allies around the world. These fuels will be consumed whether or not they are imported from the United States, which, again, uses the strictest environmental standards.
Of course, when we are talking about energy production and our opportunities for exports, there is our renewable energy resource. There is renewable technology. Producers of wind turbines, solar panels, and other renewable technologies also help reduce the U.S. trade deficit through our exports. Again, it is very important to make sure, when we are talking about energy exports, to truly talk about all of them, including our renewable technologies. I think the general lack of trade restrictions on renewable energy technology products doesn't need to be modified. If renewable technology is the future, then it needs to be competitive.
Finally, the last area is nuclear technology. The United States has been the undisputed leader of nuclear technology throughout the world. We have produced more nuclear power than any other nation. As the global nuclear trade has developed, what we have seen is that the U.S. market share has declined. I think the Federal Government must continue its efforts to help develop small modular reactors, and I think we can do this without putting international security at risk or violating nonproliferation controls.
The energy resurgence has fueled a beneficial expansion of U.S. energy trade. The evidence is clear that exports can help facilitate enhanced production by opening U.S. supply to global markets. Trade is creating jobs, increasing supply, and enhancing our Nation's security, without doubt. Competition and efficiency are the strengths of the American economic system. They are not defects. Trade and consumption will occur with or without us.
So the question is whether we can enhance or whether we will demote our global position. To the extent that American-made energy can displace other less clean sources, then the global environment will benefit from enhanced U.S. trade.
People come first, though. We recognize that. The Nation's opportunity to help us alleviate energy policy is one we should not miss.
I believe we need to send a powerful signal to the world that the United States is ready to reassert its role as a leader on energy, the environment, and trade. To me, that is a signal worth sending.
As I have said, this is a debate worth having in the Senate, in this new year, and I look forward to joining my colleagues. I know there are many on the other side who have differing views when it comes to our fossil fuels, but I think we would find alignment in other areas when we are talking about our energy exports and our great potential.
So as we are trying to build our Nation's economy, as we are trying to strengthen jobs across the country, let us not forget the enormous growth potential we hold when it comes to our energy production and potential for energy export.
I yield the floor.
The PRESIDING OFFICER (Mr. Merkley). The Senator from Ohio.