GLENN: Congressman John Peterson was on this program, I believe it was on Friday. Congressman, welcome to the program, sir. How are you?
CONGRESSMAN PETERSON: Thanks for having us on.
GLENN: Sure. Now, you are the guy that last week proposed a bill that would open up the outer continental shelf.
CONGRESSMAN PETERSON: That's right. 50 miles out, oil and gas, tremendous resources. In fact, the current calculation they are approaching $11 trillion worth of oil out there alone.
GLENN: Wait, $11 trillion or 11 trillion barrels?
CONGRESSMAN PETERSON: $11 trillion worth of oil.
GLENN: Okay. And the outer continental shelf alone, that makes us energy independent if we would pull this out for how long?
CONGRESSMAN PETERSON: Well, now, I don't know that it makes us energy independent. It makes us less dependent. It's going to take -- natural gas we can be totally self-sufficient because we have lots of natural gas out there. But on oil it's helpful. We also need to do the shale oil and we need to do Alaska, we need to do coal-to-liquids, coal-to-gas. We need to do more nuclear. We need to do everything, all the renewables and conservation so that we can compete in the economy in the future.
GLENN: Yeah. Unfortunately none of that is happening in congress. Tell us what happened last week when you introduced this bill.
CONGRESSMAN PETERSON: Well, surprise. In a subcommittee they don't like amendments and they talked the other amendments out. I decided we need to start this today and that's what we've done. Across the country. And now we're approaching 70% of the American public who support offshore production of energy and only 18% oppose and 15% are undecided. And I predict that when the rest of that 15% listen to the facts, we're going to be close to 85% support of energy offshore. Because Americans, you know, what America doesn't know yet is that natural gas yesterday was $12.93. That's approaching $13. If that continues to climb in the next month or two, we'll have a doubling of natural gas costs to heat homes this winter. We're putting that $12.93 gas in the ground to heat homes because we start in the summer and then we burn it in the winter when it's cold. And last year at this time it was $6.50 to $7. It wouldn't take long to figure out we're soon going to be doubling natural gas prices and when that happens, I don't know how the middle class and poor in this country are going to drive their car and heat their homes.
GLENN: Barack Obama will tax the rich and then give it to the poor.
CONGRESSMAN PETERSON: That's right. Our original bill, we take money, you know, the amount of royalty on this kind of wealth would be huge. And that's money the government doesn't have now and we would like to take a portion of that. So we have the money to support renewable and do all the research for solar and wind and hydrogen and electric cars and all this stuff, do all the research that's needed to make it happen. But also to do the -- we're going to have to help poor people this winter. If we go offshore, we could take a small piece of the royalties for helping people insulate their homes and to pay for energy until we get affordable energy.
GLENN: Well, let me play devil's advocate here with you, congressman. You know, we are so very far behind the rest of the world when it comes to global warming. We are just -- the rest of the world looks at us in awe and says, goodness, I wish the United States would wake up and start to get on board with global warming. So name, if you will, congressman, all of the countries that have banned offshore oil exploration.
CALLER: Zero, nobody. Everybody in the world, you know, everybody gives Brazil credit for ethanol and being energy independent. Well, 15% of their energy's ethanol. The rest is offshore.
GLENN: No, you didn't understand the question. Because everybody else cares about global warming and they want to get off oil. The question was name the countries that have banned offshore oil. Because there must be a lot of them.
CALLER: No, there's not any. Because only the leaders, you know, the Gore-ites that are voting this global warming theory, the number one issue facing America, affordable energy, global warming is still a theory. It's computer models to say that there's a problem. The real facts do not prove that. And it's time the American public -- and I had a gentleman on a plane last week say to me, they talk like this global warming debate's over. He said, did I miss it? He said, I'm a pretty informed citizen. I don't know how we had the debate and I didn't know about it, he said, because I'm not convinced that's our number one issue. Our number one issue is available affordable energy.
GLENN: Clearly. Is there anyone in Washington that you know of that has ever run a business? I mean, it is so apparent to me that the clowns in Washington have no idea what it takes to run a household or what it takes to run a business because energy -- if we don't have energy -- and they all pretend like, oh, well, we're just, next week we're just going to have more energy. We don't have it.
CONGRESSMAN PETERSON: China, China's increasing their use by about 15% a year. They are soon going to surpass us. And, you know, they are building a coal plant every five days, a nuclear plant a month, hydro dams, they are doing wind, solar, they are doing everything. We should do everything. There's nothing we shouldn't be doing that would give us more energy.
GLENN: Right. Do you believe in today's world we could actually build hydroelectric dam?
CALLER: No, but we have a lot of dams that have water coming out of them that could be harnessed for hydropower that we wouldn't build a dam. We have a lot of dams. Our government owns them.
GLENN: Right. But what I'm asking you is in today's America, if we wanted to go with the cleanest energy possible, you don't believe we could even build that?
CALLER: Absolutely not. We could not build a dam in this country, no. In fact, you know, they are trying to blame the oil companies for not building the refineries. Well, it's almost impossible. The refineries -- the oil companies are expanding existing refineries because they already have a permit. They don't think they can get through the permit process. I think there's one. I'm trying to think of the company. There's one coming online that's soon going to be built I think here in the near future but that's one.
GLENN: Are you thinking of one in South Dakota?
CONGRESSMAN PETERSON: I think so.
GLENN: That's not going online anytime soon. The opponents say they have plenty in their bag of tricks to keep it tied up in court for years.
CONGRESSMAN PETERSON: Well, that's the trouble. The ability to do unlimited, just presents so many things from happening. And that's how the liberals have won is turn the trial lawyers loose to sue every little --
GLENN: So why is natural gas going up?
CONGRESSMAN PETERSON: Well, it's because we're using so much of it now. See, just 12 years ago we only made 7% of our electricity with natural gas. We only allowed it to be used for peak power, morning and evening, when we use that extra surge because a gas generator, you can just turn it on, turn it off. So it backs up wind, it backs up everything. So now we're 23% of our electricity's with natural gas and over the last six months we've turned down, our PUCs at the state level, the state environmental agencies have turned down between 50 and 70 coal plants. Those will all become natural gas plants because that's our only option.
GLENN: Wait, wait, wait. Why did we ban them in the first place? Why did we say we could only use them at peak times? If we have so much gas?
CONGRESSMAN PETERSON: Originally people thought gas was too good a fuel, it was a poor use of natural gas. When you make electricity, you only use a small percentage of the BTU value. If you make your electricity in the middle of a city where you use the hot water to heat your city, then you use a lot of it. But unfortunately most of our power plants, we chill the water and put it back in the river or do something with it and we only use a small part of the energy. So making electricity out of natural gas -- see, natural gas is a commodity that 55% of petrochemicals is natural gas. But 60 to 70% of fertilizer is natural gas. Polymers and plastics, 45% of the cost of making them is natural gas because it's an ingredient. See, it's a substance that we use to make almost everything. And so being it's such an important product, they didn't think we should make electric out of it. Now we're making electric out of it. But we haven't opened up supply and there's -- you know, we cannot change world oil prices. We can only change dependence. But when we produce natural gas, we can change our price. We only import 17% of our natural gas, 15% from Canada and 2% from other foreign countries. But natural gas is the one that's really biting us because Dow Chemical spent $8 billion in '02 for natural gas a year and they are now spending $8 billion a quarter and they were 60% on shore. They are now 34% on shore. They had to go where gas was cheaper because we use so much of it.
GLENN: You know, on this program I warned a year ago about ethanol and how crazy that was.
CONGRESSMAN PETERSON: Yes.
GLENN: Then before anybody else was talking about the price of food, I told people -- and everybody said I was crazy. I said, store up on food just as an investment because it is going to go up at such a high rate, you will gain money. It is a good investment, probably the best investment you can make is just putting food downstairs for your family just to offset the cost. I warned at the time, you haven't seen anything yet. God forbid our crops are wiped out in any way.
CONGRESSMAN PETERSON: Well, we got $7.50 for corn yesterday. That's the world record. And we have, I think someone said 40% of the corn's in trouble with water.
GLENN: We were looking at just the price of corn yesterday is the equivalent of going from $80 a barrel oil to $320 a barrel. They are talking now about rationing, et cetera, et cetera. Now, I've been warning the same thing about fuel and gas, that you think it's bad now. Buckle up because God forbid we have a hurricane or the war heats up or Iran gets nasty.
CONGRESSMAN PETERSON: There's three issues that can spike prices overnight. One is a terroristic attack, when you have lines that are vulnerable. The Iraqi pipeline goes right by Iran. If they blew up our sending station in a major country like Saudi Arabia, oil prices would double. So if we have terroristic attacks, a storm in the Gulf. In the last two years are the first years on record in a row that we had no major storm in the Gulf. Major storms in the Gulf can displace 20, 30, to 40% of our energy for several months. And that's energy we never get then because you produce energy, you know, 24/7. So you don't ever get that energy. Everybody's predicting a terrible storm this year for hurricane. We have a bad hurricane season, the Gulf gets hit, that will spike prices. And if you have any one of the sending countries, have a problem governmental-wise that all dictatorships, that one of them would topple and they are having civil war there for a period of time and instead of producing 8 million barrels, they are only producing 2 or 3, the system cannot stand those kind of oil losses. We're down to where there's only about a million barrels a day of extra and so if Country A produces 2 million barrels, that means we don't have enough that day. So that's why the price is so vulnerable. Some oil company executives -- and I don't talk to them often but I talked to them in a hearing in the house where I just asked them a simple question. I said, if we don't (inaudible), what would that do for prices? He said, well, it would take the fear out of the market because down the road we know we're going to have ample supply because we know there's lots out there and we can start moving towards. It will just take the fear factor out of it.
GLENN: Which takes the speculators down, which everybody's blaming speculators.
CONGRESSMAN PETERSON: That's right. And whenever the rumor goes out that China's going to buy scrap, scrap prices go through the roof. I mean, whatever is in short supply, the speculators make money on. That's always been our system. I don't know how you change that, but some want to. But that's stockpiling the problem. What takes it off the table is ample supply. So you have to produce. We have to conserve and produce, conserve and produce.
GLENN: I want to take a break here and then I want to come back. I want to ask you, what does the country look like in a year from now with none of those things happening. We're not gaining any ground on finding new energy. We're just at a stalemate here. But none of the bad things also happen. What does the price of everything look like a year from now. And what happens, what happens to the country if one of those things do hit us? What does that mean? What does the price of oil and energy and everything else look like? And then I want to talk to you about, okay, great, now what does the average person do besides grab a fork and a pitchfork. We'll be with you just a second. It's Congressman John Peterson from Pennsylvania. He is the guy who said last week, drill in the outer continental shelf and congress said no. He is reintroducing it tomorrow and your support is needed if you're interested in this. I can't imagine how you're not.