Hearing Statement Of Congressman Stephen F. Lynch On Energy And U.S. Policy

May 23, 2006

On May 16, 2006, Congressman Stephen F. Lynch made the following statement at the Government Reform Subcommittee on National Security, Emerging Threats, and International Relations and Subcommittee on Energy and Resources Joint Hearing entitled: "Energy as a Weapon: Implications for U.S. Policy:”

 

Thank you, Mr. Chairman.

I want to thank Chairman Shays and yourself, Chairman Issa, for holding this hearing.  I can think of very few issues that are so prominent, so profound and so immediate in the world today.

I'd also like to thank both our secretaries and the collective witnesses in the second panel for helping our committee with its work.

Throughout the past year, we've witnessed a dramatic thirty-eight percent increase in the price of crude oil and concurrently a sharp rise in the average cost of gasoline to American families.  In recent weeks, crude oil prices have risen to over $70 a barrel.  And according to the Energy Information Administration, this week's average national price for regular-grade gasoline is nearly $3 per gallon, a nearly eighty percent increase from a year ago.  On the East and West Coasts, the average price per gallon is actually over $3.

Among the chief factors that have facilitated recent rises in oil prices have been increased worldwide consumption and demand, as countries such as China and India have experienced significant economic growth.  However, it is the United States that remains the world's leading oil consumer, consuming over twenty million barrels of the roughly eighty million barrels produced worldwide each day, while producing only about seven million barrels daily.

Notably, our high oil consumption, coupled with a weakened reserve position, means that the United States, for the most part, will continue to rely on the world markets for its crude oil supply.  According to the Energy Information Administration's last international energy outlook, seventy percent of U.S. oil consumption is projected to be satisfied by crude oil and petroleum product imports by the year 2025.

Regrettably, our growing dependence on foreign oil not only poses a substantial risk to our economic security, but may also serve to compromise the effectiveness of American foreign policy, as high domestic demand leaves the United States susceptible to the threat of hostile oil-related political actions by foreign governments in oil- producing countries.

Iran, for example, the second-largest producer within the Organization of Petroleum Exporting Countries, has repeatedly issued thinly-veiled supply disruption threats in response to U.S.-led efforts to curb that country's uranium enrichment program.

In addition, Venezuelan President Hugo Chavez, whose country is the United States' fifth-largest source of crude imports, has similarly asserted the possibility of retaliatory oil-related actions stemming from his opposition to U.S. policy.  In April of 2004, Hugo Chavez threatened to stop selling oil to the United States if we did not stop, quote, "intervening in Venezuela's domestic affairs."  And in February of 2006, President Chavez again asserted that the U.S. government should know that, if it crosses the line, it will not get Venezuelan oil.

As evidenced by these examples, America's addiction to foreign oil means that our economy and foreign policy are extremely vulnerable to oil-related threats issued by, in some cases, rogue oil-producing states.

Accordingly, I welcome the witnesses today, both our secretaries in the first panel, and we also have a very distinguished panel to follow.  And I am enormously happy that you've been willing to help the committee with its work.  And I look forward to your testimony.

Thank you, Mr. Chairman.

-30-