Tom Harkins response to me

At a time when Americans are working harder to make ends meet, I share your concern about the high cost of gasoline. Iowans are paying record prices and it's creating a ripple effect throughout our economy and the problem only seems to be getting worse. These prices make living our daily lives a real challenge. I am fully committed to changing the course of America's energy policy - to transition America away from our crippling dependence on foreign sources of oil.

These debilitating prices are due in part to a sharp increase in demand over the last few years in places like China and India, an ever weakening dollar, and supply disruptions in volatile places like Nigeria and Iraq - these price pressures are forecast to get worse in the foreseeable future. It is clear that we must chart a new energy course for America - one that aggressively invests in new technologies and pursues energy efficiency that will derive more value from all of our energy resources. And, we must turn to renewable energy sources, a common-sense solution that will help wean us off of foreign oil, stimulate the rural economy, and improve environmental quality. This is a long-term commitment that requires participation at the individual, corporate, and governmental levels.

In recent weeks, there have been renewed calls to open the Arctic National Wildlife Refuge (ANWR) to drilling and to add more areas to the lands already available for drilling in the Outer Continental Shelf (OCS) as a solution to high gas prices. But not only will this fail to decrease the cost of gas in the short-term, it does not address our very serious long-term energy needs. For that reason, I will continue to focus my efforts in Washington on a new national energy strategy. As you indicate in your letter, fossil fuels are absolutely an essential component of this energy infrastructure. I have supported and will continue to support appropriate steps to build our supply. I have repeatedly called for construction of the Alaska natural gas pipeline, and I voted for the energy bills in 2005 and 2007, which contained numerous incentives and provisions for the development of fossil fuels. But again, opening up ANWR and new areas of the OCS to drilling will simply not significantly decrease the price of gasoline or diesel, and does not address our very serious long-term energy situation. According to leading experts, opening ANWR or other regions like the OCS to drilling would have no significant effect on our dependence on foreign oil or on the price of gas at the pump. Indeed, estimates are that drilling in ANWR would produce only the equivalent of a six month supply of oil, starting 10 years from now and continuing over about a 20 year production period. The Energy Information Association forecasts that opening up ANWR would only decrease the cost of gas 1-4 cents at the pump and only after 10-20 years. Under the current GOP proposal on the table, no energy would be produced until 2017 and it would be 2030 before full production comes on line, and when it does, it would have a minimal impact on prices. What the GOP leadership fails to mention is that 79% of America's recoverable oil reserves are already currently open for drilling, that oil companies have not tapped millions of productive acres already open, and that the areas on the west and east coasts that could be important to drilling have no oil drilling infrastructure- no oil rigs, no pipelines to the shore, and no refineries at the end of those pipelines.

Opening up more areas to leasing will produce too little oil and only after 5 to 10 years or more - and there are no guarantees. There are more enduring options that can be developed just as quickly. In the same amount time, with the right investment and national energy plan, we could develop alternatives that improve efficiencies and create alternatives to secure our energy future. For example, based on the U.S.G.S. projections of the amount of oil in ANWR, an increase in the Corporate Average Fuel Efficiency (CAFE) standards for vehicles by about 2 miles per gallon saves more oil than ANWR could ever provide. Plug-in hybrid vehicles could be widely available within 10 years, and they can both double efficiencies and derive the majority of their fuel from the electric grid which is increasingly supplied by clean wind or geothermal or solar power. We also expect significant and growing production of advanced biofuels made from dedicated biomass energy crops, forest materials, and municipal wastes within10 years. All of these approaches provide a much more enduring approach to addressing our oil dependence problem. These are solutions that will last.

As Chairman of the Senate Agriculture Committee in the 107th Congress, I added the first-ever energy title into the Farm Bill and in the 2008 Farm Bill, I included a much more ambitious energy title that will invest in new technologies to help meet our nation's energy needs for years to come. The 2008 Farm Bill also closed the so-called "Enron loophole," and restored the critical authority of the Commodity Futures Trading Commission to oversee and regulate the trading of futures contracts that affect the price of oil, gasoline and other energy products. I am now working to enact additional legislation that will further strengthen federal oversight and enforcement to keep energy markets fair, honest, and free of manipulation or price distortion. And I've backed legislation and Congressional oversight to make sure that the Federal Trade Commission and Department of Justice have all the power they need -- and that they use it -- to prevent, root out and prosecute collusion, price-fixing or price manipulation in markets for gasoline or other petroleum products.

And last December, Congress we passed the Energy Independence and Security Act of 2007. This bill increases our Renewable Fuel Standard (RFS) focusing on advanced biofuels such as cellulosic ethanol, creating thousands of economic opportunities in our rural communities. It also sets high efficiency standards for our appliances, buildings and utilities and raises mileage standards for our cars and light trucks to 35 miles per gallon over the next 15 years. Again, it is important to note that by raising the fuel efficiency standards by just 2 mpg, we are saving more oil than would be produced by drilling in the Arctic National Wildlife Refuge. Also, this bill invests heavily in carbon capture and storage methods, which will allow us to capture the greenhouse gases from our coal power plants and it creates safeguards for consumers against price gouging during national emergencies.

There is more that Congress can and should do. I strongly supported a debate about S. 3044, the Consumer First Energy Act of 2008, and am disappointed that this legislation failed to be considered on a party line vote. This Act would amend the Internal Revenue Code to deny major oil producing companies a tax deduction on profits attributable to domestic production of oil, limit the ability of these companies to claim foreign tax credits, and would impose a 25% windfall profit tax on oil companies unless the invested the funds in renewable energy sources. The revenue raised from these actions would be placed in an Energy Independence and Security Trust Fund that would be used to expand the development of renewable energy sources.

Rest assured, I will continue to work on this vital issue to ensure that Iowans pay a fair price at the pump. In the meantime, there are many simple steps that individuals can take to reduce our gasoline bills. Inflating tires, combining trips whenever possible, driving with the speed limits and similar steps can all help to reduce miles or increase miles driven on a gallon of fuel.

As oil prices continue to reach all-time highs and political instability continues to threaten the security of our energy sources, it has become starkly clear that we need to change our energy policies and I am proud to support legislation that addresses this need. I am determined to secure our nation's energy future, and will do so in a way that does not put excessive oil company profits ahead of consumers, country, and common-sense policy.

Thank you again for your comments and sharing your frustration. Should you have any additional concerns regarding this matter, please feel free to contact my office.

Discovery of the gigantic Prudhoe Bay oilfield was announced in July 1968, the largest deposit ever found in North America. (Environmentalists called it a “few months’ supply.”) Nine years, 7.7 billion dollars, and 1,347 government permits later, Americans cheered as oil began flowing through the 800-mile Trans-Alaska Pipeline System.

Making the case for Arctic National Wildlife Refuge (ANWR) development

Too Much Imported Oil: Bad for the Economy

As domestic oil production continued its decline, the U.S. imported 58% of its petroleum needs in 2004. These oil imports cost more than $150 billion and robbed tens of thousands of steady, high-paying jobs from American workers.

More than 20,000 foreign supertankers (most single-hulled) offloaded oil at east, west and gulf coast refineries last year; they carry from 700,000 to 1.2 million barrels a day from Iraq alone. Foreign oil is produced and shipped under less strict environmental standards than domestic oil. Alaska’s oil fields are the cleanest in the world, second to none.

Through shortsighted actions, Congress and federal agencies have banned oil activity from more than 300 million acres of federal land onshore and more than 460 million acres offshore in the past 20 years. An estimated 67% of oil reserves and 40% of natural gas reserves are on federal lands in America’s western states.

Eighty-eight percent of the energy for America’s transportation, industry, government and residential needs comes from oil, gas and coal. No combination of conservation, technology or alternatives can come close to replacing these fossil fuels. It will take years for research, testing, permitting, construction, and distribution systems for replacement alternatives to be realized. When alternative energy sources become practical and economical, Americans will use them. Until then, fossil fuels must be relied upon.

Today’s domestic oil production comes from more than 150,000 wells scattered throughout the country; they average 15 barrels a day. There have been no new major discoveries in the 48 contiguous states in thirty years. As the U.S. population increases, the nation must either produce more or import more. Alaska’s Arctic is the most promising area for the largest supply with the smallest physical impact.

The U.S. economy benefits from domestic production when new construction, service, manufacturing, and engineering jobs are created. These jobs occur in all 50 states. A national impact study by Wharton Econometrics estimates total employment at full production in ANWR to be 735,000 jobs. Federal revenues would be enhanced by billions of dollars from bonus bids, lease rentals, royalties and taxes.

Alaska’s Experience as an Energy Supplier

Since July 1977, the pipeline has carried more than 13 billion barrels of oil from Alaska’s North Slope. During that time Alaska oil has supplied 20% of domestic production, amounting to nearly a $300 billion offset to the national trade deficit. Natural gas, produced with the oil, continues to be reinjected pending studies to determine feasibility of a pipeline to U.S. markets. Prudhoe Bay gas reserves are 30.9 trillion cubic feet.

Today the Alaska oil pipeline carries less than half its capacity; thus the search continues for new supply to keep it operating. (Without it, the entire system must eventually be decommissioned and removed.) The coastal plain of ANWR, 60 miles east of Prudhoe Bay and with similar geology, is America’s most prospective area for another giant oil field.

Studies of the ANWR coastal plain indicate it may contain between 6 and 16 billion barrels of recoverable oil (between 11.6 and 31.5 billion barrels in-place). With enhanced recovery technology, ANWR oil could provide an additional 30 to 50 years of reliable supply. Natural gas, produced with the oil, could be reinjected or added to a new gas pipeline originating in Prudhoe Bay.

Petroleum development at Prudhoe Bay has not negatively affected wildlife. For instance, the Central Arctic caribou herd is at home with pipeline facilities and has grown from 3,000 to as high as 27,100 in the last 20 years. Drilling activity in ANWR would be limited to winter months when wildlife does not frequent the coastal plain.

Constantly improving technology has greatly reduced the footprint of Arctic oil development. If Prudhoe Bay were built today, facility designs show the footprint would be 64% smaller.

1/2005

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