Congressman John E. Peterson
Pennsylvania's 5th District
GLENN: Let's go to Congressman Peterson. Congressman John Peterson is the guy who brought this bill in front of the subcommittee and, jeez, why do you hate the polar bears so much, John?
CONGRESSMAN PETERSON: This has nothing to do with polar bears, but it's --
GLENN: I'm sorry, you're right. Why do you hate the manatee so much?
CONGRESSMAN PETERSON: Well, where we produce energy offshore, and that's not just Florida. It's the whole East Coast, it's the whole West Coast, and it's another part of the gulf. Less than half the Gulf's actually been producing the oil. All the energy we've gotten from the gulf has been from (inaudible). So we're the only country in the world, only country, you know, countries like Canada and Great Britain and Norway and Sweden and Ireland and New Zealand and Australia all produce offshore. In fact, everybody gives Brazil high marks for being energy independent, and they are. 15% of that's ethanol. 85% of it is they went offshore and found huge amounts of energy and they are self-sufficient. They don't import anymore. It would take us a while to get there, but we are currently importing 2/3 of our oil, 1/3 from friends, Canada, Mexico and other friendly countries and 1/3 from OPEC. Every year we're increasing our dependence by about 2% and, of course, we know what we've done to price. There's a shortage in the world. Historically we've had about 8 million barrels of oil available in the world and if Country A couldn't produce today or they had a problem, Country B can produce it. Today we have about a million barrels of oil surplus and so if any major country suddenly can't produce, we don't have energy available.
GLENN: Imagine what happens to the world if, God forbid something happens with Iran, God forbid Israel strikes Iran. The price of oil just on the fear of that thing breaking out and spreading, the price of oil will go through the roof. So tell me, Congressman Peterson, what the heck is going on?
CONGRESSMAN PETERSON: Well, you know, I've been working this issue for almost a decade. I can debate it with anybody. I know the issue upside down. And I really had high hopes that with today's prices and the pressure, and we're about 88 to 90% of Republicans historically vote for production. We have 20 or 20 something that won't in the aggregate. But in our last bill we had 40 something Democrats help us. In '06 we passed a good offshore bill but the Senate wouldn't do anything with it, they wouldn't deal with it. But we lost it. We're trying to do it again but I thought we would not have a partisan -- there are members on the interior committee -- we're marginal there as far as votes for it, but I thought we would win. But we didn't have one Democrat. We've always had some. So it appears, it appears -- we'll know next Wednesday when we do it again in full committee. Now, that will be probably 80 something members of congress instead of a small -- in the teens. We had 15 members of congress, but it will be a much larger group. If they lock up again, then we'll know that this is a Pelosi plan to stop offshore production of energy.
GLENN: Okay. So here's what I want to do. Could I have you back for a good chunk of time to explain this issue both on radio and television, maybe Monday or Tuesday. I would also encourage you, we have a newsletter that goes out daily and it reaches hundreds of thousands of people. I would encourage you to write, you know, a piece for that explaining how this works, why it's important, et cetera, et cetera, let me mail it out next week and if people want to call for or against their congressmen and say, look, vote for or against it, will you do that?
CONGRESSMAN PETERSON: Absolutely. I can't do it Monday night but I'll be in --
GLENN: Well, Tuesday would probably be better because it will come up on Tuesday, right?
CONGRESSMAN PETERSON: No, it's Wednesday.
GLENN: It will come up on Tuesday. So Tuesday night would be better.
CONGRESSMAN PETERSON: I'd like to make one more point if I can because this is the most misunderstood. Even worse than oil prices in America, the threat to our economy is natural gas. See, natural gas is not a world price. Unfortunately a lot of members of congress still don't understand that. We are approaching $13 for gas. Just a few years ago it was $2. Last year at this time, which is the time of year we don't use much gas because we're not heating and cooling much, we were between $6.50 and $7.50. But right now we're approaching -- we were $12.80 something yesterday. I haven't seen the market this morning but it was $12.80 and rising all day yesterday pennies per hour. Those natural gas prices will drive every major corporation that uses natural gas, the petrochemical industry, the polymers, plastics, fertilizer, people who make glass. I predict if we don't deal with the natural gas issue that all our bricks and glass, bulk commodities that are usually made in our neighborhoods because you can't haul them very far, they will be made in Trinidad, South America where gas is $1 something. They are building plants. Dow Chemical's energy bill for gas in '02 was $8 billion annually. It's now $8 billion quarterly. In '02 they were 60% onshore production. They wanted to stay onshore. They are now 30% onshore here. They had to move to all the countries where there's cheap gas because that's the only way they can sell their products in the world market.
Natural gas this year at home heating season which, you know, the people that are paying their high driving bills now will get a -- last year those who were on propane and home heating oil paid enormous prices. Those will be up another 50% or more this year. And last year they couldn't afford them. But this year the majority of Americans heat their homes with natural gas. They will have somewhere between a 50 and 100% increase on natural gas prices.
GLENN: Holy cow.
CONGRESSMAN PETERSON: And that's when the economy's going to stop. Now, there are a lot of companies that I don't think can afford $130 oil, a lot of businesses could absorb that. And I know these natural gas prices. I mean, we for eight years have had the highest natural gas price in the productive world.
GLENN: Don't we have more natural gas than --
CONGRESSMAN PETERSON: We have more natural gas, we could be self-sufficient for the next 70 to 80 years. It's everywhere. Now, we're producing more onshore but again, offshore is the best. It's close to our markets, it's close to the cities where we use it. Every time we have zero weather in the wintertime, the New York City gate -- that's what people in New York pay, if they use more than normal, will run up to $20 to $30 a thousand in a few days' time because there's not enough capacity to get it into New York.
GLENN: So tell me, Congressman, again why is this happening? I just had a guy call me a little while ago and said, Glenn, you can figure it out, I can figure it out, all my neighbors can figure it out; we need to do these things. Congress is working against it. His exact quote was, "If my house is on fire and my neighbors are starting to bring gasoline, they've got an ulterior motive."
CONGRESSMAN PETERSON: That's correct.
GLENN: And that's exactly what we're starting to look at congress as, what is the ulterior motive. What is going on?
CONGRESSMAN PETERSON: Well, the members on the Republican side that don't vote with us on production are usually very close to Greenpeace and Sierra Club and those groups and enjoy a rating from them. In my view, not all, there were 40 something people that I find in the Democratic party. But the majority of the Democratic party is in lockstep. Everybody's talking about the same things now. They are saying it takes 10 years to get; there's no point in doing it, 10 years to get it. There are saying there's 68 million acres leased; that's enough, we don't have the right land leased, we have old tired fields that no longer produce or they never became productive, so they are not being. And they have all these same talking points, there are so many thousand leases, they don't need more. The Democrat members are all using the same talking points and those all come from the environmental community. I've seen them for years. They are the same talking points that have been out there for years. And they are claiming that 82% of available energy in the world is already leased. That's just a lie. That's just not a fact. But they have been using that for years, too. So their talking points, everybody's using them. Norm Dicks used them in the meeting. A young Democrat from Ohio used them on one of the television network shows last night. They use the exact same talking points and they're not factual, but it appears that they have chosen that they are not going to be pro energy, production.
GLENN: But see, this doesn't make sense.
CONGRESSMAN PETERSON: I'm for all renewables.
GLENN: Look, we all are. You want to put up windmills and solar panels and clean energy, let's do that. But you can't shut down the economy. And these people, are they just this stupid that they don't understand? I mean, I get the 10-year thing, but do we all have an appointment? Are we all supposed to be some place in 10 years that I don't know about?
CONGRESSMAN PETERSON: Well, the thing we don't know -- now, I heard a talking person last night say that the volatility in the market's 50%. I don't believe that. I think there may be a 20 to 25% volatility in the market that I asked two top oil people what they thought would happen at a House hearing, I just walked up, two CEOs. I don't even know them, I never met them. I said, if we would open up the outer continental shelf, what would it do to the market? They said it would take the fear out of the market, that we knew that's going to be soon available, some areas quicker than others, but the process could start. He said it could take 20 to 25% off the price. That was their opinion. So I think if we open up some major areas, if we would say, all right, we're going to do shale oil in the west instead of trying to block it. We have legislation constantly trying to block it. If we're going to do ANWR and offshore and we're going to have a major initiative for coal-to-liquids and coal-to-gas and -- you know, what America needs to have is a plan to be OPEC-free, and we need to tell OPEC that. And we're going to buddy up with Canada, we're going to work closely with Mexico who has lots of energy but don't have the ability to produce it and have a North American agreement where we work together and push the renewables, push coal-to-liquids, push coal-to-gas, hydrogen if it will work, anything that will work. You know, biofuels is what everybody's talking about, but they're minor. And they hit the wall with corn over $7 yesterday.
GLENN: Yeah, let me ask you this. Why isn't anybody, with corn prices climbing as much as it did yesterday, why isn't congress calling for an investigation there? Why didn't the corn companies build more for capacity? Why didn't they invest the record profits in producing more corn? I mean, don't blame the floods or the increased demand. Big corn is to blame, isn't it? I mean, if we're going to blame big oil --
CONGRESSMAN PETERSON: Let me say this. There's a lot of people in congress who started as a county sheriff or some political office locally, have never run a business, don't understand the economic systems, must have flubbed through economics class in college because they don't understand economics. But wouldn't talk that way. You know, when you tax something, you get less of it. When you make regulations tougher, you are going to get less of it. If you want to, you are for all the renewables, but they have not renewed. So how do people invest in wind and solar and geothermal and all these renewables if we don't have a five- to ten-year opportunity to recoup their investment. So they are not adequately funding the renewable side, let alone being pro production. You're 86% fossil fuel dependent, 8% nuclear and that's declining because, you know, until we get some new plants out there, we're soon going to be a smaller percentage nuclear.
CONGRESSMAN PETERSON: And, you know, 50 to 60 coal plants have been turned down by states because of the fear of the carbon tax. I hear the number one issue in the Senate is the carbon tax. The carbon tax, carbon credits or carbon is going to raise energy prices another 20 to 30%. But then there are those who are scared.
I had a member ask me the other day if we opened up to Australia, would energy get cheap and I said no. He said, why would you ask that? He said, we can't afford to have it get cheap again.
GLENN: Oh, that's Barack Obama. Barack Obama said the same thing. I mean, Barack --
CONGRESSMAN PETERSON: Because now you and I are forced to change. We are forced to change. The American public better be tightening up their houses, they better be fixing their windows and doors and insulating their ceilings. They better be doing everything they can do to not use energy this year because I'm going to tell you it's coming, higher prices.
GLENN: Norm Dicks said, his office said to one of our callers that called in, he said -- his office said that energy companies, he's done some -- he's seen some research from a government study that shows that the oil companies, you know, they don't really want this anyway. They don't want the offshore drilling because it won't really -- they won't really benefit from it, either.
CONGRESSMAN PETERSON: I don't know what he means by that. Big energy, big oil companies, the top five big ones basically were pushed out of this country because we locked up. You know, George Bush I looked up our continental shelf along with legislators from Florida and California 28 years ago. That's been in place for that length of time. But we've also locked up, you know, the part of ANWR we haven't been able to produce was actually set aside by previous administrations for energy and, of course, everything that looks productive in the West, there's a bill moving to lock it up, lock it up. So if you are an energy company, you are going to go where it's easy to produce energy.
Now, they've also had the problem where they are being -- I see right now another one of the oil companies is being pushed out of Nigeria but what's happening in the world with no surplus in the system, more and more of these countries are now, they have all nationalized them, they are all running them by government and, you know, how well does the government run a business. And they are stealing the money personally and they are -- you know, Mexico is not producing oil anywhere near where they used to but they have great fields but it's because they were running it, they won't let big oil of any country in. And so, you know, almost -- and the high 70% of the oil today is actually owned by governments. And over half of those are governments that are not Democratic. And they are not -- you know, if either one of them topple -- you know, what really is scary is we have these prices of both gas. Natural gas is more vital than oil even. It's more harmful. We have these prices without having had a storm in the Gulf for two years that always disrupts supply, we've not had a terroristic attack on the energy system, and that could happen tomorrow, could happen today, and we haven't had a major country where the Government have a coup and the government top he would, and when that happens, you are going to have war within for a while, you are not going to to produce as much energy. With no surplus, we could be at $200 oil in a week or so.
GLENN: Congressman John Peterson, we will have you back on the program next week. We'll put you on television as well. The vote comes back up again next Wednesday. We'll have you write something for our newsletter so you can lay out what America's facing, what the choices are and we'll get the word out. Thank you very much, congressman.
CONGRESSMAN PETERSON: Well, thank you for giving us the opportunity.
GLENN: You bet.
CONGRESSMAN PETERSON: God bless.