Mr. Merkley
Mr. President, I rise today to address one of the defining challenges of our
time–the restructuring of our Nation’s energy supply. Reforming our energy
policy is critical for multiple reasons: to improve our national security, to
create jobs and rebuild our economy, and to protect our children and our
communities from the damaging effects of carbon pollution. Today I want to
focus on just the first of these–improving our national security.
It has been said before and it will be said again, but it
deserves repeating until we in Congress act to change it: Our Nation is
addicted to foreign oil. This dependence makes us vulnerable to the whims of
nations that do not have our best interests at heart.
This afternoon, I would like to examine this problem in
some detail and consider the implications for a national energy policy that
will strengthen our national security and end our addiction to imported oil. I
emphasize that there is a cure. If we as a nation focus on smarter, wiser use
of energy and aggressive development of homegrown renewable energy sources, we
can indeed greatly reduce or eliminate dependence on imported oil, improve our
national security, and strengthen our economy, all at the same time.
Well, let’s talk about dependence on foreign oil. Our
dependence on foreign oil comes from two intertwined factors: First, our
economy depends upon oil for transportation. Cars, trucks, trains, planes,
boats that we use to move ourselves and our goods around the country are
entirely dependent on oil. Indeed, 95 percent of the energy used in our
transportation sector comes from oil. Second, our oil addiction relies on
foreign imports: 58 percent of the oil we consume is imported. Thus, access to
foreign oil is essential to the vitality of our economy. The result is that
maintaining access to this oil becomes a very high priority for our national
security.
Exactly whom do we depend on? The good news is, nearly 30
percent of our imported oil comes from our democratic neighbors to the north
and south in North America. But that is where the good news ends. Take a look
at this chart. Seventy percent of our imported oil comes from outside North
America, and this chart shows the top four nations outside North America from
which we import oil.
All four of these countries represent security challenges
for the United States. Saudi Arabia is No. 1 on the list. It is the source of
one in nine barrels of imported oil. And before addressing the fact that it
presents national security challenges, it should be noted Saudi Arabia has
often been a significant ally to the United States in our interests, in a
relationship going back decades. Nevertheless, the dependency on their oil
creates two national security issues:
First, the oil infrastructure and delivery systems of
Saudi Arabia are vulnerable to terrorist attack or to manipulation by
governments in the region. Consider the Strait of Hormuz. The Strait of Hormuz
is really a vulnerability for all Persian Gulf oil, 90 percent of which moves
through the Strait. The Strait is 21 miles wide, with a narrow shipping
channel. So, geographically, it is vulnerable to disruption, and Iran has
explicitly threatened to put pressure on traffic going through the Strait or
attempt to control it outright.
Second, the wealth we send to Saudi Arabia in exchange for
petroleum has not always served us well. Former CIA Director James Woolsey
testified in the Senate a few years ago that over the last three decades the
Saudis have spent between $70 and $100 billion to support conservative
institutions that often promulgate viewpoints and actions hostile to the United
States. The wealth dispensed in this manner has, in some cases, migrated into
terrorist organizations, like al-Qaeda, to recruit and build institutional capacity.
This has led former CIA Director Woolsey to say of our current military
conflicts, “This is the first time since the Civil War that we have financed
both sides of a conflict.”
Venezuela is No. 2 on the list. It is, of course, led by
President Hugo Chavez, a vocal critic of our country who has explicitly
threatened to cut off U.S. oil supplies. He told an Argentine newspaper that
Venezuela has, “A strong oil card to play on the geopolitical stage ….. a
card that we are going to play with toughness against the toughest country in
the world, the United States.”
The third nation on this list is Nigeria. Nigeria has had
a series of disruptions just this year due to civil unrest. In February, oil
companies reported to Reuters that 17 percent of the country’s oil capacity was
cut off from export because of attacks and sabotage by militants. According to
testimony given to our Senate Foreign Relations Committee by the National
Defense Council Foundation in 2006, Nigeria loses 135,000 barrels per day to
theft.
Iraq, No. 4 on our list, has gone through enormous
upheavals. Saddam Hussein’s forces destroyed much of the nation’s oil
infrastructure when President Bush launched the Iraq war in 2003. That
infrastructure has been subject to ongoing sabotage over the last 6 years. A
significant share of Iraqi oil, like its neighbors, moves through the Strait of
Hormuz, an additional point of vulnerability. Moreover, Iraq has not succeeded
yet in passing a national law to share oil wealth among the ethnic groups in
the nation, and the friction that comes from this continues to allow the
possibility of factional conflict and disruptions in supply.
Now, Iran isn’t on this list. We have an embargo against
Iran. We don’t import oil from there, but it is still worth mentioning. Many of
our allies get oil from Iran and their oil supplies are large enough to affect
the world markets and thereby the stability and cost of our own supply. Again,
turning to former CIA Director Woolsey testifying in the Senate, he noted that
Iran derives 40 percent of its government budget from oil exports. According to
the RAND Corporation, higher oil revenues have not just emboldened the Iranian
Government to defy the United Nations regarding their nuclear program but also
helped Iran to finance the activities of Hezbollah and Hamas.
Our dependence on foreign oil makes us vulnerable to a
disrupted energy supply, and the risk is heightened because most of the world’s
proven reserves are controlled by just a few governments. State control means
countries can and do manipulate energy supply. We had a case this last year
when Russia manipulated gas markets to dominate new democracies in Eastern
Europe.
The Energy Modeling Forum at Stanford University brought
together a group of leading experts to assess the chances of a major oil supply
disruption. They identified major areas of the globe where oil disruptions are
most likely due to geopolitical, military or terrorist threats. Those areas
include Saudi Arabia, the rest of the Persian Gulf, Russia, the Caspian states,
and a group of nations in Africa and South America–which account for 60
percent of world oil production.
So the threat of disrupted supply is a serious one for our
economy, as we found out during the oil shocks of the 1970s, which cost our
economy about $2.5 trillion. If repeated today, such a crisis would cost our
American economy about $8 trillion. We were reminded of the threat of supply
disruption again when Hurricanes Katrina and Rita disrupted supplies and caused
price spikes here in our Nation.
These don’t supply the United States, but they do supply
our allies, and in a global oil market these supplies are interdependent. A
disruption of European oil supplies would have effects on our economy.
We also expend extraordinary resources to maintain our access to foreign oil
because it is so important. It is important to the success of our economy.
While estimates vary, according to a study produced by the National Defense
Council Foundation, they estimated that the direct and indirect security and
military costs relating to securing our access to oil amount to about $825
billion. That equates to more than $5 a gallon, on top of the price we pay at
the pump. So we cannot allow our Nation’s security and the health of the
American economy to rely on the whims of unstable, unreliable, even hostile
governments.
If we refuse to address our single greatest point of
vulnerability, we fail in our most fundamental duty to protect this Nation. It
is clear we need to end this addiction. We need to be energy self-sufficient.
But how are we going to get there? One answer, which we heard chanted in
rallies across America last year, was: Drill, baby, drill.
It is true, that we could increase production from
American reserves in the short term with an aggressive drilling strategy. In
fact, I support changing leases on hundreds of thousands of acres already
approved for petroleum drilling and converting those into “use it or lose it”
leases because major oil companies have secured those leases, and they are
sitting on them without doing a thing.
Nevertheless, drilling is not, and cannot be, a long-term
strategy for the security of our Nation for one simple reason: America uses a
lot of oil but has, globally speaking, limited reserves. In fact, the United
States has just 2 percent of the world’s oil reserves, as this chart shows
right here. Here we are, down here at the small end, with Mexico and Europe.
Then, we see Eurasia, with 7 percent; Africa, with 9 percent; Central and South
America, with a little bit more; then Canada; and then the whopper, the Middle
East, which makes my point about security for our supplies.
We have looked at the reserves side
of this, but now let’s look at the consumption side. As this chart shows,
America, which has only 2 percent of the reserves, consumes 24 percent of the
world’s oil. So we only have one-fiftieth of the supply but we consume
one-fourth of the output. Now that’s a formula for trouble. A nation would be
in a strong position if it had very high reserves and very low consumption, but
it is vulnerable if it has very low reserves and very high consumption.
Unfortunately, that is right where America is.
To make things
worse, the price of petroleum is going to continue to rise as the thirst from
China and India increases. Because of the position we are in, our addiction to
imported oil will only grow if we don’t significantly change our energy
strategy.
So what about other
fossil fuels? In my home state, energy speculators are looking to build
terminals to import LNG, liquefied natural gas. Where does LNG come from? Well,
there are vulnerabilities there as well. Top producers include Qatar,
Indonesia, Malaysia, United Arab Emirates, and Oman.
Other folks argue
we can extract more oil from Canadian tar sands or turn our abundant domestic
coal into transportation fuel. But it is worth observing that these strategies
require extraordinary energy to produce fuel and emit extraordinary amounts of
pollution in the process. So we have to look elsewhere to find a solution, and
the place to look is energy efficiency and renewable energy.
Energy efficiency
is the fastest and cheapest way out of our dependence, and we know it works. In
response to the 1970s oil crisis, the Nation doubled the required gas mileage
performance of our cars and trucks and saw per capita oil consumption plummet,
even as our economy grew. Our progress in this area has not been steady,
however. It has stagnated over the last two decades.
Progress resumed
this year, when President Obama made the announcement that we would increase
gas mileage standards to more than 35 miles per gallon 5 years ahead of the
date scheduled. But we can do better. China beat us to 35 miles per gallon, and
35 miles per gallon isn’t sufficient. We could aggressively develop and employ
plug-in hybrid technology–cars with highly regenerative braking that can go at
least 30 miles on a charge, enough to cover the daily commute, with no
petroleum at all.
We need to deploy
efficient strategies for the trucks that carry out our commerce–similar
strategies with efficient body design. We need to move goods by rail and barge.
A barge can move a ton of cargo 576 miles on a gallon of fuel, and a train can
move a ton of cargo 413 miles on a gallon of fuel.
We should give our
families and workers better transportation options, better access to rail and
bus lines. We know from experience that with the right policy choices, we can
use far less energy to power our economic activity.
We use a fraction
of the energy today for gross domestic product that we did 30 years ago. If we
give American scientists, engineers, and businesses the right incentives,
tomorrow’s economy will be orders of magnitude more efficient.
The other half of
the equation is renewable energy, produced right here in America. It is the
second major weapon in the war against oil addiction. Renewable electric energy
can replace oil by providing power for plug-in electric vehicles.
I have heard
Senator Reid describe Nevada as
the Saudi Arabia of solar power, renewable electric energy, and I have heard
the good Senator from North Dakota describe North Dakota as the Saudi Arabia of
wind power, renewable electric energy. We need to seize this Nation’s potential
for renewable electric in wind, solar, wave, and geothermal.
We can also
transition to homegrown renewable liquid fuels in the form of biofuels. In my
State of Oregon, as one example, we have lots of fiber that can be converted,
forced biomass that can be converted into fuel. We can produce biobutanol,
biodiesel, and bioethanol. Producing biofuels from agricultural and forestry
waste and waste from nonfood crops raised on marginal lands, we can produce
significant quantities of energy and create jobs and wealth for America’s
farmers and timber workers.
If an American car
can go 30 miles with renewable electricity and then, if needed, switch over to
a 50-mile-per-gallon engine burning cellulosic biofuels derived from forest
biomass, that car isn’t using a single drop of imported foreign oil. It is
running on 100 percent red, white, and blue energy.
Mr. President, in
energy efficiency and renewable energy, we have twin elements that can break
our addiction to foreign oil, but to achieve that self-sufficiency we need a
comprehensive energy policy, a comprehensive strategy for saving energy and
producing our energy here at home. That Mr. President, is what President Obama
called for and what the Senate Committee on Environment and Public Works is
developing–drafting a comprehensive system of incentives and investment that,
in combination with energy policies crafted by the Senate Committee on Energy
and Natural Resources, will reduce our fossil fuel dependence and put us on the
track to energy self-sufficiency.
Now some say that
energy conservation and renewable energy are too expensive. They could not be
more wrong. Every economist will tell you that the cheapest energy is the
energy you never use. Even today, renewable solar, wind, and geothermal are cheaper
than imported oil when you factor in the huge price we pay to maintain our
access to that oil.
And let me add,
when we stop spending $2 billion a day on imported oil and spend that money on
renewable fuels here in the United States, we are going to create a lot of
good-paying jobs for America’s families.
Mr. President, Depending on a
few foreign nations for imported oil is a colossal mistake. We need to change
course, improve our national security, and spend our energy dollars here in
America to create jobs. That is why I hope every member of the Senate will join
me in supporting our 2009 Clean Energy and Jobs Bill when it comes to the
Senate floor this fall.
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