Making a Paradigm Shift
Floor Speech
MAKING A PARADIGM SHIFT -- (House of Representatives - April 02, 2009)
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Mr. FLEMING. Well, first of all, I thank the gentleman from Utah, Mr. Bishop, for his leadership in this area, both on the budget as well as the discussion on petroleum. He was a leader and the one who took the initiative on this no-cost stimulus plan, which I also cosigned as well, along with Mr. Vitter on the other side of the House and I think one or two other Senators. So I thank Mr. Bishop for his leadership and also allowing me to participate in the discussion tonight about the budget.
What has happened here this afternoon in passing this budget in the House of course yields three very bad things; that is, a budget that spends too much, taxes too much, and borrows too much.
It was only a few days ago that I spoke on the floor here about the fact that it is not just a matter of how much we spend, but it is a matter of where do we get this money from? And there is only two ways to get money that you don't have, and that is if you discount the Social Security Trust Fund, which we of course steal from daily. That is, either to borrow money, and you have to find people who have got the kind of dough that can lend that; or, you have got to print it out of thin air.
Well, who have we been borrowing money from? Well, we have been borrowing it from China. And the amount of spending that we are doing is now getting to an extent that even the Chinese, who seem to be flush with cash, can't seem to keep up and don't know how long that they are going to be able to lend us money before those interest rates begin going up.
Well, of course the other option is to print money. And we have been through that before. In fact, there is a number of precedence that we have seen over history, and the one that I point out that is the most poignant is pre-World War II Germany. And what happened there?
After World War I, the winning powers of the allies imposed a war reparation requirement on Germany. Germany couldn't afford this, and so in order to pay the money back, money they didn't have, they just simply printed it. And of course they had humongous inflationary rates to the point where, to buy a loaf of bread, you had to actually carry your currency in a wheelbarrow. Zimbabwe today is having a very similar situation.
We have also seen this precedence in our own economy. The spending spree that we went on in the sixties began to hit us in the seventies, along with, of course, the oil and gas problems that we had. And by the late seventies we had severe problems with inflation that was as high as 10, 12, 13 percent. And it was one of those things where, if you didn't get a raise every year, you were actually getting your pay cut. That ultimately led to terrifically high interest rates in the range of 20 percent, and of course we went into a severe recession in the early eighties.
It seems like that we in this body don't seem to learn the lessons. And the lessons are that any way you frame it, if you spend it, you are going to someday have to pay for it. And, you know, it is interesting in our own personal budgets, in our homes, in our cities, and in our States, we have to balance our budget. But for some crazy reason, we in the Federal Government are not required to balance our budgets.
Sometimes it makes sense to borrow money, just as a in your home you might want to borrow money to take out a mortgage to buy a home, perhaps that makes sense. But when it comes to running up tremendous credit card debt, spending today and paying tomorrow, then certainly it is a very difficult and dangerous way to live, and that is what we are doing today in America.
With this budget that has just been passed, we are seeing that deficits are now immediately exploding from a high of $500 billion a year to over $1 trillion a year. We are going to see a debt that already was growing pretty fast accelerate such that it doubles in 5 years and it triples in 10 years. But let me talk a little bit about the subject that my friend Mr. Bishop was discussing, and that is energy.
This FY 2010 budget has a negative impact on energy, just as he suggested. For one thing, it removes over $30 billion in tax incentives for oil and gas businesses. Now, I am sure the Shells and the Chevrons can handle that just fine, but the vast majority of exploratory drillers out there are small family businesses. And, of course, drilling is a risky operation to begin with, and that is the whole reason for having tax incentives is to encourage businessmen to go out and take a risk. But now that the tax incentives have been removed, what is going to happen? There is going to be less risk taken, there will be less drilling. Of course, that is going to further our oil dependence. And in my State of Louisiana, which is a heavy petroleum dependent State, it is going to tremendously affect jobs, and that is good jobs.
We could, over time, lose as many as 70,000 jobs. And again, we are talking about independent oil drillers. We are not talking about the big ones. The loss of the depletion allowance and the loss of the write-off of intangible drilling costs will effectively shut down these businesses in many cases. It will broaden our dependence on foreign oil, as I mentioned, and result in increased threats to our national security as we have to search around the world to have energy sources to run our Nation.
I support exploring alternative energy resources such as, of course, solar and wind. But when do we expect that we will be pulling up next to a windmill and filling our car up with windmill fuel? It just isn't going to happen. Solar, we are not there yet. None of these technologies are coming on line. Yes, we see them in Europe, but they are subsidized by the governments. They have to stand on their own. We just went through a recent experience with this with ethanol where we were running the cost of feed through corn in order to create ethanol, and that was, of course, done with subsidies. And then in the meantime, it drove up the cost of chicken. And that severely impacted my district, where we have Pilgrims Pride, the chicken-producing farms, and almost created bankruptcy for over 200 chicken-producing families, not to mention the jobs that would have been lost. Hopefully we have saved that. But that came directly as a result of efforts to subsidize and encourage ethanol from corn, which is really a very inefficient use of corn.
Nonetheless, I do support research in these areas. And at some point when we can actually create electricity into our grid in a cost-effective way, I'm all in favor of it. I'm also in favor of the use of nuclear energy. It doesn't produce any carbon dioxide into the atmosphere. And certainly anyone who ``thinks green'' has got to think that nuclear energy is the way to go for electricity. And other countries have taken the lead on that, such as France, with about 80 percent of its electricity produced that way.
Well, let me discuss a little bit, and I hope the camera can pick this up, this, of course, is the ArkLaTex, this is Arkansas, northwest Louisiana and Texas. And in the crosshatch here is an area called the Haynesville Shale. Now, shale is a rock formation in which certain petroleum products are found, sometimes oil, sometimes natural gas. In this case, it is natural gas. And we have known about these deposits for many years. However, we didn't know how to get to them. The technology was not there. And something was invented called ``horizontal drilling,'' where we can literally go down deep in the ground, turn horizontally, we can crack open the shale and we can take out the natural gas.
Now, what lesson does that teach us? Well, it teaches us that the more we advance technology, the more access to fossil fuels we have and the safer we make it. As far as safety, I will give you an example, and that is offshore drilling, OCS, where, for instance, with Hurricane Katrina, there were a number of rigs that were destroyed; however, there was not an appreciable leakage of any oil from these rigs. In fact, there is more oil in the ocean leaking today from the bottom naturally than ever from any rigs. So we know that technology, when put together with fossil fuels and with nuclear energy, is really the future until hopefully some day we can harness the power of the wind and the sun.
This Haynesville Shale is projected to contain over 200 trillion cubic feet of natural gas production, one of the, if not the, largest natural gas deposits in the world. Now, natural gas emits probably half the carbon in other products as other forms of energy such as oil, certainly much less than coal. So it is cleaner. And here in Washington, D.C., we see buses driving around, and on the side is printed ``this runs on natural gas.'' You don't detect any odor. You don't see any smoke coming out there. There is no question that that is a better way to go. But we don't have the infrastructure yet where you can pull your car, if it did run on natural gas, to the pump and get it filled. But we can do that. It is just a simple matter of taking the initiative, and that will come with time. So we can become, as a nation, far more independent by using natural gas than we can trying to develop oil. But we still can't ignore the opportunities for oil such as in ANWR and offshore and even on Federal lands.
I will also point out that beyond the 200 trillion cubic feet of natural gas production potential, we are already seeing 10 to 20 million cubic feet of natural gas production per day in the ArkLaTex. Lots of jobs are being produced. Money is flowing in the economy, and it is really helping out northwest Louisiana in these difficult times. In fact, our unemployment level is half what it is in some States. We don't have the real estate issues that others have. And certainly it is not just because of the Haynesville Shale, but it certainly is helping. It is injecting tremendous amounts of capital into our local economy and creating thousands of jobs.
Mr. Speaker, in closing, I just what to say that the issue with the budget is still problematic. We are, again, pushing this country way over into the leftist socialist realm. Even the leftist socialists from socialistic countries in Western Europe think we have lost our marbles. They think what we are doing is crazy. Even the ones that used to criticize us for being too conservative are now criticizing us for being too liberal. Just the other day, both France and Germany said ``no more stimulus packages.'' They think we are crazy if we want to move forward with another one. So enough is enough, Mr. Speaker. And this budget that passed the House today is way over the top. And I'm afraid that we are going to see even more coming down the pike.
So, in closing, I want to thank Mr. Bishop, my friend from Utah, for giving me this opportunity to talk about this. And I await some more discussion about the petroleum industry and its impact through the budget.
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