I received the following responses from Rep. Barney Frank after expressing my opposition to expanded oil drilling leases and the need to reduce energy consumption. Since the responses explaining the complex issue of energy don't lend themselves to soundbytes, it is presented in its entirety with permission.
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I appreciate your asking if you could post my letter. I think that any mail that a Member of Congress sends out in response to a constituent should be considered a public document, in part to guard against people giving different answers to different people, so I of course have no objection.
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I also, however, want to answer your suggestion that I "begin to address conservation." In fact, I have been working on conservation issues for some time - for example I have been a strong supporter of higher fuel efficiency standards for automobiles. In my role as Chairman of the Financial Services Committee, which began last year, I began an initiative to significantly improve the energy efficiency of homes, which is a major area where conservation has been neglected. As I dictate this letter to you, I am preparing for a meeting of the committee I chair on Wednesday, July 30th - the day after this - in which we will call for a significant increase in energy efficiency in the way in which we live in our homes. I think we have neglected this aspect of conservation and I am very proud that it was under my chairmanship that we began to take it up.
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BARNEY FRANK
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Thank you for contacting me with your opposition to drilling for oil in sensitive areas. I agree with you, and I am against drilling in the Arctic National Wildlife Refuge (ANWR) and on the Outer Continental Shelf (OCS). I am a cosponsor of H.R. 39, introduced by my colleague Congressman Ed Markey, that would permanently protect the ANWR. If oil companies utilized the 68 million federal acres of currently leased land, they could generate an estimated 4.8 million barrels of oil a day - six times what ANWR would produce at its peak. Additionally, 80 percent of the oil available on the OCS is in regions that are already open to leasing, but the oil companies have refused to drill there. The current industry practice of stockpiling oil leases has clearly demonstrated that opening new areas to drilling offers no guarantee of additional oil production, and in fact it demonstrates the opposite. I would not favor providing the oil industry with additional areas to drill until it more fully utilizes the current areas that are readily available.
.I am taking a number of other steps to deal with the rising cost of energy in our country. The high fuel costs have arisen due to several factors; OPEC's decision to maintain high oil costs by not producing enough oil, continuing political unrest in Venezuela, Nigeria, and the Middle East, anticompetitive activity in the oil industry, and continuing strong demand in China and India in particular. As you may know, an increase in one type of fuel such as crude oil often creates a ripple effect throughout the entire fuel market place, thus increasing the costs of gasoline, propane, heating oil, and natural gas. I realize what a hardship this creates and I am doing what I can to mitigate these increases.
.For several years, I have strongly supported the proposal to have the Bush administration temporarily suspend oil purchases for the nation's Strategic Petroleum Reserve (SPR) until prices stabilize. I believe that suspending oil purchases for the SPR would put downward pressure on rising oil and gasoline prices. The SPR has a maximum capacity of 727 million barrels and a current inventory of about 700 million barrels of oil. I believe suspending oil purchases for the SPR and in turn selling that oil on the open market, instead of putting it into the reserve, would have a moderating impact on prices. Unfortunately, President Bush has stated his opposition to suspending oil purchases and consumers are now paying the price in the form of these higher fuel costs. In light of President's failure to act, I recently voted for H.R. 6022, the Strategic Petroleum Reserve Fill Suspension and Consumer Protection Act. This important bill will suspend petroleum acquisition for the SPR until crude oil prices dip below $75 a barrel. I am pleased that the House and Senate overwhelmingly passed H.R. 6022, and that the President reversed his stance and signed the bill into law. Suspending oil purchases for the SPR would warn OPEC immediately that the U.S. stands prepared to use the SPR to break the spiraling oil prices. President Clinton used this approach to good effect during his term to protect consumers from the manipulations of OPEC and the oil companies.
.Additionally, Speaker Pelosi has urged the President to not only stop filling the SPR, but to begin releasing oil from it. I agree with this approach to providing relief on prices and I recently voted for H.R. 6578, the Consumer Energy Supply Act. This important bill will temporarily release nearly 10 percent of the oil from the SPR, and replace it later with heavier, cheaper crude oil. This could bring gas prices down, strengthen our national security, and be a good deal for the American taxpayer. The SPR has been tapped or suspended before by President Bush, President Clinton, and the first President Bush, and each time oil has been released the impact on prices has been dramatic and immediate. In 1991, oil prices immediately dropped by 33 percent. The 2000 exchange drove oil prices down by 19 percent. And the release by President Bush in 2005 resulted in a 9 percent drop. The Strategic Petroleum Reserve is currently more than 97 percent full - the highest level ever - with enough oil to meet our national security needs, and the legislation requires that the reserve be kept 90 percent full. We have more oil in SPR than we did at the beginning of the Iraq War. To strengthen American national security, the bill reforms the SPR to maximize protection for the nation's energy supply, by making the SPR supply more compatible with U.S. refinery capacity, as recommended by the GAO and the Department of Energy. Right now, the 11 refineries on the Gulf Coast can only process heavy crude - yet the SPR does not have any heavy crude if there is stoppage of heavy oil imports. It is also a good deal for the American taxpayer. It will potentially raise $840 million in revenues by exchanging more than 70 million barrels of light sweet crude oil for more than 70 million barrels of heavy crude - which is currently $12 per barrel cheaper than light crude. That money deposited in the SPR account could be used to increase its total inventory -- further strengthening our energy supply against potential disruptions. Unfortunately, while the bill received a majority of the votes cast (268 for to 157 against), it did not pass the House because it was brought up under a parliamentary mechanism known as "suspension of the rules" in which a two-thirds vote is required for passage, and there was not enough Republican support (only 37 Republicans votes for the bill) to reach the two-thirds threshold and therefore the bill was defeated. While I am disappointed with this result, you can be sure I will continue working for the passage of this legislation.
.In addition, I strongly supported and voted for H.R. 6, the Energy Independence and Security Act of 2007, which became law last December. This bill included a provision that increased corporate average fuel economy (CAFE) standards for cars and light trucks. This is the first such CAFE increase in 22 years. Specifically H.R. 6 requires that cars and light trucks sold in the United States meet a fleet wide average of 35 miles a gallon by 2020. This new standard will help reduce our dependence on foreign oil, and will cut production of gases that cause global warming. Additionally, the Energy bill mandates that at least 36 billion gallons of renewable fuels be incorporated into gasoline annually by 2022. Improving vehicle fuel economy standards is an important long-term step in coping with the increased demand and cost of gasoline.
.While this legislation did not include tax subsidies for alternative energy sources, the House recently considered a separate bill focusing on these issues. Specifically, the House passed and I voted for legislation called the Renewable Energy and Job Creation Act of 2008. This bill, which was introduced by my colleague Congressman Charles Rangel, Chairman of the House Committee on Ways and Means, will end unnecessary subsidies to oil companies, and take positive steps towards combating global warming by extending federal tax credits for renewable energy, such as wind and solar, as well as many energy efficiency programs. The bill has not so far been approved by the Senate, and I am doing what I can to encourage my Senate colleagues to take action on it.
.I also voted for H.R. 1252, the Federal Price Gouging Prevention Act. This bill makes it unlawful during a period proclaimed by the President as an energy emergency to sell gasoline or any other petroleum fuel at a price that is unconscionably excessive. This bill passed the House in May of 2007 by a vote of 284-141. Additionally, I voted for H.R. 2264, the No Oil Producing and Exporting Cartels Act ("NOPEC"). This bill would make it illegal for any foreign country (including OPEC members) to limit the production or distribution of oil, natural gas, or any other petroleum product when such an action has a direct adverse effect on the price of petroleum in the United States. This bill would finally hold OPEC accountable for price fixing and it would allow the Attorney General to take action against OPEC in U.S. District Court. This bill passed the House last May by a vote of 345-72. I also voted for H.R. 5351, the Renewable Energy and Energy Conservation Tax Act, which would remove billions of dollars worth of subsidies and tax loopholes for large oil companies and in turn invest those funds in renewable energy and energy efficiency programs. This bill passed the House last February by a vote of 236-182. Unfortunately, President Bush issued veto threats after each of these important bills passed the House, effectively blocking the Senate from acting on the bills due to the slim Democratic majority in that body and Senate Republicans' willingness to block bills that are opposed by the energy industry.
.I have also cosponsored H.R. 6256, the Responsible Ownership of Public Lands Act, introduced by Congressman Markey, which would address the issue mentioned above relating to unused leases. This bill will help increase domestic oil supply by compelling oil companies to begin producing oil and gas on the roughly 68 million acres of public land that they currently hold but are not using. Oil companies are not producing oil or gas on the vast majority of federal land onshore and offshore already under their control. In fact they are only drilling on 23% of the land they hold. This bill will charge oil companies an escalating fee for unused oil leases, providing a strong incentive for them to develop these federal lands instead of stockpiling them.
.President Bush also expressed willingness to expand our oil refining capacity, but according to the President's own Energy Information Administration (EIA), our refineries are currently running at 88% capacity - well below the 95-98% capacity use rates we've seen at this time of year for the last decade. Additionally, no new oil refineries have been built in the past 30 years because major oil companies have not sought to build them. In fact, one facility received a permit, but the company never constructed it. ExxonMobil, Chevron, ConocoPhillips, BP and Shell have all publicly stated they have no plans to build new refineries. Instead, they prefer to expand existing facilities. Shell, ConocoPhillips and BP all testified that they were unaware of any environmental regulations preventing them from building new refineries or expanding existing ones, and internal memos from oil companies make it clear they've made the determination that they need to reduce refinery capacity to drive up their profits.
.Recently, I also joined several of my colleagues in sending a letter to Speaker Pelosi supporting her call for the President to immediately use his authority to release oil from the SPR in order to provide immediate relief to our constituents now. Additionally, the letter asks the Speaker to consider legislation to increase funding and expand eligibility for the Low Income Home Energy Assistance Program (LIHEAP) to help counter price increases for heating and cooling expenses. The letter also asks the Speaker to provide additional funding for Weatherization Assistance. More funding for this important assistance will provide long-term energy conservation savings. I have enclosed a copy of this letter for your review.
.I will continue to work with my colleagues to pressure the President to act to the fullest capacity to deal with the current energy emergency. Thank you again for contacting me.
.BARNEY FRANK BF/JNJuly 16, 2008.The Honorable Nancy PelosiSpeaker of the House of RepresentativesH-232, US CapitolWashington, DC 20515.Dear Madam Speaker: .Our delegation strongly supports your call for the President to immediately use his authority to release oil from the Strategic Petroleum Reserve (SPR), in order to lower the price of oil and give relief to our constituents now.
. Additionally, as you plan the remaining weeks of the Legislative session, the New England delegation urges you to take action that addresses the rising price of home heating oil and could provide immediate relief to our constituents. Specifically, we ask for two vital measures to be taken. First, that you consider legislation or include provisions to a second economic stimulus package that will increase the funding and expand the eligibility of the Low-Income Home Energy Assistance Program (LIHEAP). Second, we request you provide additional funding to Weatherization Assistance programs. The rising cost of home heating oil will be difficult for millions of families throughout New England in the coming winter, but for some, it may be impossible to pay to heat their homes and also properly feed themselves. We have heard stories from our constituents of elderly individuals who have had to turn over their Social Security checks to pay for home heating oil, and of middle class families in search of third jobs in order to heat their homes. If oil prices remain close to the current highs, we expect the situation to get much worse in the coming winter. Fire Marshals are concerned that some may turn to dangerous makeshift solutions in an attempt to stay warm. Low-income families, especially those with children and senior citizens, are at risk of serious illness or even death during winter months if they do not receive help.
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The continued volatility in the home heating oil market does not bode well for our constituents in the coming winter. According to the Energy Information Administration (EIA), there are over six million households in New England that will be affected by rising home heating oil prices. The average New England household uses 850-1200 gallons of oil to heat their home during the winter. With prices expected to remain above $4.00 a gallon, they could expect to spend minimally between $3,400 and $4,800 on heating oil this winter. This is going to severely stretch the budgets of New England families for which heating oil already comprises about 50 percent of household energy expenditures. Given the high and volatile price of oil, members of the New England delegation believe that it is necessary to expand the eligibility and increase the funding for LIHEAP. Because of rising energy costs, it will cost twice as much just to cover the same number of households as last year. Under the leadership of Chairman Obey, the House Appropriations Committee has already made LIHEAP a priority and, even with the budget constraints, has provided $770 million over the President's request for LIHEAP. As more and more family incomes that do not meet the traditional LIHEAP qualification threshold are squeezed by skyrocketing fuel and food prices, we believe it may require as much as $9 billion to reach those in desperate need this winter. Fully funding LIHEAP will ensure that all states receive additional funding and will enable states to provide meaningful assistance to their residents during this time of economic instability. In addition, the Weatherization Assistance Program represents another effective measure that must be a part of any strategy to help homeowners address rising energy costs. The program will immediately help stimulate the economy as homeowners take advantage of the incentive by putting money directly into the economy for home improvements and it will provide long-term conservation savings. Weatherization provides three important benefits: it lowers homeowners' bills by over $400 every year for the life of the measures, reduces overall energy usage, and drives labor demand that can inject local economies with cash. While the President's FY09 budget request did not include any funding for the Weatherization Assistance Program, the House-passed budget rejected this cut. It is critical that the second stimulus reflect Congress's commitment to this program. For this reason, we request that the Weatherization Assistance Program be funded at a level of at least $1 billion. Funding Weatherization Assistance will help bring both immediate and long-term energy relief to New England families this winter.
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Finally, we would like to reiterate our strong support for your call for President Bush to release oil from the Strategic Petroleum Reserve (SPR) in order to provide immediate relief to American consumers facing skyrocketing gas and energy prices this summer. The SPR currently holds 706.2 million barrels of oil and is filled to over 97 percent of its capacity. Deploying our nation's oil stockpile has a proven history of success in quickly lowering prices for American families. We applaud you for your leadership in calling on the President to take this common sense and long overdue action, and we hope to work together to provide much needed relief now to families in New England facing record energy prices. We would also note that if oil prices remain high, it may also be necessary to tap the Northeast Home Heating Oil Reserve to assist New England consumers.
.Madam Speaker, as we continue to consider initiatives to help stimulate the economy and provide relief to our constituents from skyrocketing energy costs, expanding LIHEAP eligibility requirements, increasing LIHEAP funding, funding Weatherization Assistance programs, and releasing oil from the Strategic Petroleum Reserve will provide relief now to millions of Americans trying to prepare for the coming winter.
. We look forward to continuing to work with you on these important matters..REP. EDWARD MARKEY REP. BARNEY FRANKREP. RICHARD NEAL REP. JOHN OLVERREP. PATRICK KENNEDY REP. ROSA DELAUROREP. TOM ALLEN REP. JAMES MCGOVERNREP. JOHN TIERNEY REP. MICHAEL CAPUANOREP. NIKI TSONGAS REP. PETER WELCHREP. CHRISTOPHER MURPHY REP. CAROL SHEA PORTERREP. JOE COURTNEY REP. PAUL HODES
