Thursday, February 16, 2006

Mr. President, I rise to address some troubling information about natural gas, energy, and the prices of energy as well as its availability. This information came from a hearing held in the Air subcommittee of the EPW Committee last week, and I think it is of sufficient importance to all Members and all States in the Nation that I rise to speak to my colleagues about it.

We all know that American families and workers are suffering from high energy costs. They will suffer even more if we do not balance our environmental concerns with their energy needs. That is why the hearing held last week in the Air subcommittee is all the more important. If we fail to heed the warning our families and workers are sending us about high energy costs and their lost jobs, their lost incomes, their lost standards of living, then we risk doing even more harm.

The people I am talking about include manufacturing workers who used to make chemicals, plastic products, automobile parts or fertilizer. Many of them are now out of work because their employer moved to a foreign country with cheaper natural gas prices.

The pain, obviously, doesn't stop with workers. Families suffer from lost wages. Most of those who are lucky enough to get a new job will be working for lower wages. Does that mean that those wages have to move even lower? Do they have to live with a broken-down car even longer?

In addition, seniors on fixed incomes are particularly vulnerable to high natural gas prices. Across the Midwest, indeed across the country, many depend on natural gas to heat their homes in the winter and cool their homes in the summer. What do we tell them: Wear a coat inside during the winter and turn on a fan during the summer? We all know of the tragedies that hit our seniors in summer heat waves. What do we tell their families?

Some have said we should tell our workers and their families that we are going to hurt them even more in order to fight climate change. We will pass proposals to cap carbon emissions which, by the way, will raise energy prices even more. For some, I guess today's energy prices are not high enough. Some are willing to drive power and heating bills even higher in their fight against global warming. Some do not care that there are no technologies currently available to capture and store carbon dioxide. But they are working on finding those. We are not there yet.

Some are willing to stop using cheap and abundant fuels, such as coal, and force ourselves to use only the expensive and very limited supply of natural gas. Every year, recently, we have had an opportunity to vote on the McCain-Lieberman proposal. Every year we hear about how it will deliver a $100 billion hit or more to the economy. Thankfully, every year the Senate kills this job killer.

Last year, as part of the Energy bill debate, we passed a sense of the Senate stating support for climate change strategies that did not hurt the economy. I think we can all agree with that. It sounds simple, but as we consider the ``McCain-Lieberman lite'' proposals, we have to look at whether a second generation of proposals will actually spare our families and workers from more pain.

Since we still do not have the technologies to capture and store carbon, they will present other dubious arguments. Some will pin their hopes on projections that future natural gas prices will fall from triple historic levels, where they are now, to only double historic levels, where they were a few years ago. This will somehow make carbon caps affordable.

Not only do I doubt that natural gas prices will return to historic lows, States represented by Members advocating these proposals are actively trying to block actions necessary to increase natural gas supply and get prices down. Government natural gas projections, which we found very dubious, include a prediction that natural gas prices will fall in the coming decades. However, that prediction depends upon liquefied natural gas imports rising by 600 percent by 2030, a sixfold increase in LNG imports. I find such hopes mind-boggling. How could we increase LNG imports by 600 percent at the same time we have coastal States from Maine, Massachusetts, Rhode Island, Connecticut, and Delaware opposing or blocking LNG terminals?

By the way, these Northeastern States blocking natural gas imports through their States are the very ones proposing we punish Midwestern States using coal by forcing them to switch to natural gas to make electricity--the natural gas that they will not allow us to get through LNG.

Others who claim carbon caps will be affordable, pin their hopes on rosy economic analyses that say we can buy our way out of the problem. They propose, instead of cutting carbon emissions, powerplants will be able to purchase, hopefully, cheap credits from others who, hopefully, cut their own carbon emissions elsewhere.

They are running models from MIT, Stanford, and Harvard that say the price of buying carbon cuts in other countries will be cheaper than forcing U.S. powerplants to reduce their own carbon emissions. I can't dispute these are smart people, but I wonder if they are reading the newspaper. Their models show a ton of carbon cuts costing just over $1 a ton. At that price, they say it would be affordable. Unfortunately, last week the price to purchase a ton of carbon reductions was $31. You do not have to be from Harvard to do that math. That is 31 times more expensive. Do we believe that the cost of carbon credits will drop by 97 percent after we impose our own cap, when you see the increasing demand for energy from India and China? That I do not believe is likely.

Europe's system to cap carbon is certainly in a shambles. European countries are failing miserably to meet their Kyoto carbon-cut requirements. Thirteen of the fifteen original EU signatories are on track to miss their 2010 emissions targets--by as much as 33 percent in Spain and 25 percent in Denmark. Talks to discuss further cuts beyond that, when Kyoto expires, have only produced agreement to talk further. It sounds similar to the Senate these days. We can talk well, but doing things is difficult.

If Europe is, for all practical purposes, ignoring their Kyoto carbon commitments and there is no agreement to continue with carbon caps after Kyoto, how can we expect the creation of enough credits? In the alternative, if Europeans suddenly decide to rush and meet their commitments by buying up massive amounts of credits to meet their shortfalls, how will there be enough credits for a U.S. demand bigger than all of Europe combined?

While these questions are complicated, their consequences are simple. A mistake on our part could add significantly to the misery of our manufacturing workers. A mistake on our part will add to the hardships families face paying their heating and power bills. And one more thought: Iran and Saudi Arabia are furiously busy expanding their petrochemical industry, based upon their vast supplies of natural gas.

I ask unanimous consent an article on that subject be printed in the RECORD at the conclusion of my remarks.

This means that not only more cheap foreign chemicals, but it means potentially more closed U.S. plants. We must also ask whether we want to add to our oil addiction a new chemical dependency on Iraq, Iran, and the Middle East.

Before we make any hasty decisions, I believe we must have answers to these questions, and we must answer these questions as we begin to debate further carbon cap proposals.

Exhibit 1 - From MEHRNEWS.com, Jan. 2, 2006

Iran Striving to Rank First in Ethylene Production

Iran plans to be number one in producing ethylene in the world--reaching 12 million tons output within the next 10 years--by allocating 17.5 billion dollars in investment for development of petrochemical projects in the Fourth Five-Year Development Plan (2005-2010).

The figure stood around 12.5 billion dollars for the first to third development plans (1990-2005) in total.

Out of the 25 projects under implementation, the National Petrochemical Company (NPC) have completed 17 and would finish the rest soon, said Hassan Sadat, manager of plans in the NPC.

NPC plans to have an output of 25.6 million tons capacity by March 2010 jumping up from 7.3 million tons in 1999, he added.

The investment in the sector is forecast to increase by 40 percent in the fourth plan. Sadat said that the output of polymers would reach 10 million tons within the next 10 years. The production of chemical fertilizers, methanol, and aromatic materials would increase to 8 million tons each. NPC has estimated that the country earns some 20 billion dollars from export of petrochemicals only by the date.

At present, nearly 52,000 employees work in petrochemical sector that enjoys modern technologies such as ABS, PET--PAT, engineering polymers, isocyanides, DME, and acetic acid.