S10508 CONGRESSIONAL RECORD — SENATE September 27, 2005 knows he will do just that, equal jus- ing the week when I am in DC, I visit Matthew R. Simmons, author of ‘‘Twilight tice under the law for every American. with the janitors, electricians, picture in the Desert: The Coming Saudi Oil Shock I yield the floor. hangers, and others around the offices. and the World Economy,’’ (John Wiley & Mr. ENZI. I rise today to share my To a person they had comments like Sons Inc., 2005), says crude from the Arctic thoughts on the nomination of Judge National Wildlife Refuge’s 1.5-million-acre ‘‘this man really knows his stuff.’’ ‘‘He coastal plain could play a valuable role in John Roberts to be the Chief Justice of answers their questions without a sin- the nation’s energy policy. the U.S. Supreme Court. Like most gle note or staff person whispering in Simmons, an investment banker who holds Americans, I watched the Judiciary his ear. I bet he could take the bar an MBA from Harvard University, is chair- Committee hearings with great inter- exam tomorrow and still pass it. This man and chief executive officer of Houston- est and curiosity. Judge Roberts could guy is good’’ and I think that is the based Simmons & Co. International, which potentially be the 17th Supreme Court specializes in the energy industry. He serves opinion of mainstream America. I look on the boards of Brown-Forman Corp. and Chief Justice in the history of the forward to voting on his nomination The Atlantic Council of The United States. United States. It is amazing to con- later this week. He’s also a member of the National Petro- sider that only 16 other people have Even after the vote, the Senate’s leum Council and The Council of Foreign Re- shared that honor. It is a much shorter work to fill the Supreme Court will not lations. line than the number of Presidents be complete. We are waiting for an- Simmons recently shared his views with back to George Washington—42. other nomination from President Bush Petroleum News on Alaska’s oil and gas in- Considering this tie with history, I dustry. He has been busy promoting his book to replace retiring Justice O’Connor. I with appearances on several talk shows, in- was thrilled to be watching the pro- am pleased with the recent precedent cluding a recent radio interview with Jim ceedings. However, I am also aware of set by the Judiciary Committee. Puplava, host of Financial Sense Newshour. my serious responsibility as a U.S. In a bipartisan and timely manner, ‘‘Twilight in the Desert’’ hit the bookstores Senator at this time. The Senate has they voted out a nominee based on his in the spring and is generating considerable the duty to give its advice and consent qualifications. They voted him out comment in energy, economic and political to the President’s nomination. Given based on his stated devotion to apply- circles. the comparative youth of Judge Rob- Simmons’ book is the culmination of years ing the rule of law. As the Senate pre- of research, including scrutiny of 200 tech- erts, the vote this week could affect pares to consider the next Supreme nical papers, published by the Society of Pe- the dispensation of constitutional Court nomination, it is my hope that troleum Engineers, on problems encountered questions for many decades. the same process will be followed—a by professionals working in Saudi Arabia’s During over 20 hours of questions, I timely consideration based upon the oil fields. The papers, combined with tran- had ample opportunity to consider the qualifications of the nominee and not scripts from little-noticed U.S. Senate hear- qualities and character of Judge Rob- on scoring political points. ings in the 1970s and Simmons’ discovery that little actual public and verifiable data erts. I observed Judge Roberts’ keen in- I suggest the absence of a quorum. telligence and modesty regarding his exists on Saudi oil reserves, form the back- The PRESIDING OFFICER. The bone of observations and conclusions in the accomplishments. I also enjoyed his clerk will call the roll. book. sense of humor in the midst of intense The assistant legislative clerk pro- While most energy economists start with and repetitive questioning. He con- ceeded to call the roll. the assumption that Middle East oil reserves vinced me that he is qualified to serve Mr. COBURN. Mr. President, I ask are plentiful, Simmons questioned that as- on the highest Federal bench. unanimous consent that the order for sumption after he found that no one had ever During the hearings, I was reminded compiled a verifiable list of the world’s larg- the quorum call be rescinded. est oil fields and the reserves they hold. of a common fallacy where people The PRESIDING OFFICER. Without His questions first surfaced at a Wash- think judges are politicians. Judges are objection, it is so ordered. ington, D.C., workshop, conducted by CIA not politicians. It has been easy to slip f energy analysts, where top energy experts into the thinking that we need to know gathered several years ago. their political allegiance so that we MORNING BUSINESS ‘‘We’d spend a day doing a discussion of all can know what their decisions will be. Mr. COBURN. Mr. President, I ask the key countries, and how much oil capac- We also begin thinking that judges ity they had in place over the course of the unanimous consent that there now be a corning three years,’’ Simmons recalled. should make decisions based on good period of morning business with Sen- ‘‘And I basically said, ’How do you all even policy. Finally, we believe that judges ators permitted to speak for up to 10 know that? What are the three or four top have to make us promises on the future minutes each. fields in China?’ And no one had any an- decisions so they can win our votes. The PRESIDING OFFICER. Without swers. Judges are not politicians. We need to objection, it is so ordered. ‘‘So I decided it would be interesting and know their qualifications, not their po- educational to see if you could actually put f together a list of the top 20 oil fields by litical allegiances. We need to know MIDDLE EAST OIL name,’’ he added. that their decisions will be made on That exercise revealed that Saudi Arabia, the rule of law, not on good policy. We Mr. STEVENS. Mr. President, I ask like most of the other Middle East countries, need to know that judges will not unanimous consent to have printed in extracted 90 percent of its oil production make promises to prejudge future cases the RECORD a recent article from Pe- from five huge fields, and the biggest of the in order to win votes. Judges are not troleum News which is entitled ‘‘Saudi fields, Ghawar, had been producing oil for politicians. A judge’s only constituent Oil Shock Ahead,’’ in which Matthew more than 50 years. ‘‘What I also found is that the top 14 fields should be the U.S. Constitution. If the R. Simmons discusses the relative im- that still produce over 500,000 barrels per day people were the constituents of judges, portance today of oil and gas explo- each, were 20 percent of the world’s oil sup- our confidence in an impartial hearing ration in the Arctic National Wildlife ply, and on average they were 53 years old,’’ and ruling on our case would collapse. Refuge and discusses the valuable role he observed. A judge should be an intelligent, im- this area can play in our national en- Historically, oil field discoveries fit a pat- partial, open, and unbiased executor of ergy policy. tern that Simmons likens to the nobility of the law. I believe that Judge Roberts There being no objection, the mate- a European country or the pieces on a chess- meets these qualifications and is fit to board. In each of the world’s great oil basins, rial was ordered to be printed in the explorers have found a large field first, most serve as the Chief Justice of the Su- RECORD, as follows: often the ‘‘queen’’ field but sometimes the preme Court. I am pleased that a bipar- [From Petroleum News, Sept. 11, 2005] ‘‘king.’’ Next explorers typically find an- tisan majority of the Judiciary Com- other large field, usually the other half of SAUDI OIL SHOCK AHEAD—SIMMONS POKES mittee passed him through the com- the royal pair. After that, oil basins typi- HOLES IN IMAGE OF UNLIMITED MIDDLE EAST cally yield several moderate-sized fields, or mittee. I go home to Wyoming most OIL; PREPARE FOR WORST ‘‘lords.’’ Beyond that, only small pools of weekends. It lets me personally poll (By Rose Ragsdale) my constituents. That is an advantage crude reserves or ‘‘peasants’’ typically re- As Congress turns to legislation that could main, he said. of being from the least populated open a new era of Alaska Arctic oil produc- In ‘‘Twilight in the Desert,’’ Simmons not State. I can assure you they are im- tion, one highly regarded energy analyst only documents the history of Saudi Arabia pressed with Judge Roberts. That is says he’s convinced the move is critical to and its oil fields, he also questions the Mid- probably not a surprise. However, dur- the success of a national energy strategy. dle East country’s claims that it still has

VerDate Aug 31 2005 01:36 Sep 28, 2005 Jkt 039060 PO 00000 Frm 00048 Fmt 0624 Sfmt 0634 E:\CR\FM\G27SE6.078 S27SEPT1 September 27, 2005 CONGRESSIONAL RECORD — SENATE S10509 plentiful oil reserves. He notes that Ghawar back up to unsustainably high levels of pro- rate of 10 million to 11 million bpd, or we is the ‘‘king’’ field and is flanked by a score duction,’’ he said. ‘‘So probably, we’re sweep- lose crude oil stocks. We have to basically of lesser fields, ranging from ‘‘queen’’ size in ing the cupboard bare. People looked at the create almost 3 million bpd of finished prod- Abqaiq to much smaller pools. way we were able to do this and thought, uct imports and we have to run the system Simmons also suggests that Saudi produc- ‘Wow! This is actually easy,’ without real- 24/7, all summer long, and we still liquidate tion is very near its peak. But the feedback izing what we were actually doing was to- stocks, he said. he has received from technical people who tally non-sustainable.’’ ‘‘So we have actually now created a pend- have read the book, leads him now to believe America needs more oil sources and Alaska ing domestic embargo, and we’re going to be that Saudi Arabia has ‘‘actually exceeded is a good place to look, Simmons said. As for lucky to get through the summer without sustainable peak production already.’’ ANWR, he said it’s ludicrous for people, some periodic shortages,’’ he told Financial ‘‘And I think at the current rates they are whether geologists or environmentalists, to Sense Newshour the week of Aug. 6. ‘‘We producing these old fields, each of the fields make definitive statements about the quan- probably will, but the odds are probably as risks entering into a rapid production col- tity of oil reserves in the refuge. high we will have some shortages, and then lapse,’’ he said. ‘‘Drilling on the (North) Slope has been if we get through the summer we have a fab- Simmons said energy economists are reluc- tricky. Otherwise, it would not have been so ulous respite from Labor Day to Thanks- tant to even entertain the notion that Saudi hard to find the ’king,’ Prudhoe Bay, or we giving, until we hunker to try to figure out oil output is past its peak because they real- would never have drilled Mukluk,’’ he said. how the world gets through the Winter of ly don’t understand the difference between ‘‘So we shall never know whether ANWR is a 2005 and 2006 because oil demand globally oil supply peaking and running out of oil. series of dry holes or where the missing could easily go to 86–88 million bpd during ‘‘I continue to remind people that the dif- ‘queen’ of the slope lies until an intense the winter, and that could easily exceed sup- ference is as profound as someone saying, drilling is done. A few dry holes does not ply by 2 million to 5 million bpd.’’ ‘I’m getting a little bit hungry,’ and some- mean much either.’’ In a worst case scenario, Simmons said oil one saying, ‘I have about two more minutes The environmental community’s claim prices could easily soar past $100 a barrel to live before I starve to death,’’’ Simmons that ANWR contains only a six months sup- without slowing down. said. ‘‘. . . We will never run out of oil, in ply’ of oil is a calculation that assumes the Such high prices would simply be a sticker our lifetime, our children’s lifetime, our nation has no other source of oil when shock, not an end to driving, he said. ‘‘At grandchildren’s lifetime. But by 2030 we ANWR oil comes on line, Simmons said. $3.20 a gallon, gasoline costs 20 cents a cup. could easily have a world that can only ‘‘On that standard, we end any new energy A cup of gasoline can take a full car of peo- produce 10 or 15 or 20 million barrels per day, development, period,’’ Simmons said. ‘‘What ple about 11⁄2 miles. If you think this is ex- and the shortfall from what we thought we is very important about the urgent need to pensive, try and hire a rickshaw or a horse- were going to produce is only a modest 100 find more oil at ANWR, the Naval Reserve or drawn wagon and pay only 20 cents to go a million barrels per day. So this is really a somewhere else on the slope is the inevitable mile and half. After haggling price for an major, major, major global issue.’’ decline of North Slope oil, and the fast de- hour or so, you pay about $5 to $6 for the ride Compounding the problem is that every en- cline that will happen if a gas pipeline is and thank the person for not making you ergy supply model used by economists today built and the gas caps (are) blown down.’’ walk.’’ starts with the assumption that Saudi oil is Moreover, it would not take 10 years to get To cope with the coming oil shock and plentiful, Simmons said. ‘‘What’s interesting a big oil find in ANWR into production since much higher oil prices, Simmons told Finan- is that we’ve based all of this assumption on the infrastructure is in place, Simmons ob- cial Sense Newshour, the world, led by the no data,’’ he explained. served. United States, will have to become dras- Meanwhile, as the world’s thirst for oil ‘‘At some point, the oil that flows through tically energy efficient virtually overnight. grows, Saudi Arabia and other oil-producing the 2 million bpd pipeline must fall to a level A series of changes, including transporting countries will be unable to keep pace. Some insufficient to get oil over the Brooks Range all goods that currently travel by truck, by analysts say Saudi Arabia is capable of pro- other than by shutting in for part of a month rail or water, could cut oil consumption 20– ducing 20 million to 25 million bpd, but Sim- so the oil can be batched,’’ he explained. ‘‘If 40 percent, he said. mons says that level of production is ‘‘im- all ANWR does is extend the life of the pipe- ‘‘So by getting trucks off our highway sys- possible.’’ line, it has filled a very valuable role. tem we have a major impact on removing ‘‘And I also believe that—Ghawar, for in- ‘‘If a ‘lord’ is found, let alone a ‘queen,’ it traffic congestion. And traffic congestion is stance, which is really the whole nine yards, is a home run,’’ he added. public enemy number 1 through 5 on pas- because that is 60 percent of their produc- As for the rest of Alaska, Simmons said he senger car fuel efficiency. So it’s a real win, tion—that North Ghawar, which is the top 20 has no idea whether the state contains other win, win,’’ he observed. percent of the field, has a productivity index large pools of oil. ‘‘The only way oil is ever He also suggested returning to a system of that is about 25 times the productivity index found (and gas, too) is to drill wells,’’ he growing most foods close to where they will of the rest of Ghawar, and that’s the area said. be consumed and using technology to allow Though the world needs more oil sources, that is almost depleted now,’’ Simmons ob- people to work at home or in their village Simmons does not see additional reserves served. ‘‘And when that drops, you could ba- rather than requiring them to commute to a curbing prices in the long term. sically see Ghawar go from 5 million down to central location. While others lament the high price of oil, 2 million bpd in a very short period of time.’’ Simmons also advocates jumpstarting the Until now, Simmons said the United States the investment banker says crude oil at cur- largest energy R&D program ever envi- has been lucky because Saudi oil production rent prices of 18–20 cents a pint is ‘‘cheap.’’ sioned, and ‘‘just pray that over 5–7 years it was 3 million bpd when U.S. oil production ‘‘Obviously it’s cheap. I don’t know what’s has the same impact as when people got seri- peaked in 1971. Saudi output soared and the next cheapest liquid we actually sell in ous about developing radar, and developing today ranges from 9 million bpd to 11 million any bulk is, that has any value. I suspect nuclear power, so that we could actually win bpd. there are places around the United States World War II.’’ Elsewhere, explorers discovered the last where municipal water costs more than 18 ‘‘But if we don’t do these things, then this three great provinces of brand new oil in the cents a pint,’’ he observed. ‘‘And yet for really ends up being a very dark world—no last three years of the 1960s—Prudhoe Bay in some reason, we created a society built on a pun intended,’’ he added. Alaska in 1967–68; Siberian oil fields in the belief that oil prices in a normal range were same period of time; and oil in the North Sea some place in the $15–20 level. It turns out f in 1969. $15 per barrel, which is the average price of HONORING OUR ARMED FORCES ‘‘And Siberia, Alaska, and North Sea oil, oil—in 2004 dollars—it sold for, for the last effectively combined to produce: the North 140 years, is less than 4 cents a pint. So we’ve TRIBUTE TO JOHN FLYNN AND PATRICK STEWART Sea peaked in 1999 at a little over 6 million basically used up the vast majority of the Mr. REID. Mr. President, I rise today bpd, it’s already down 25 percent; Alaska oil world’s high flow rate, high quality sweet oil to say a few words about two heroes peaked in the 1990s at 2 million bpd; it’s now at prices that were effectively so cheap, you from Nevada who were killed in Af- at about 900,000 bpd; and Siberia oil peaked basically couldn’t sustain an industry. And ghanistan this weekend. Their names at about 9 million bpd; and it’s about 5 mil- now we’re left with lots of oil. But it’s lion bpd,’’ Simmons said. ‘‘And we haven’t heavy, gunky, dirty, sour, contaminated- were John Flynn and Patrick Stewart, basically found another province since the with-various-things oil. It doesn’t come out and my heart goes out to their families late ‘60s.’’ of the ground very fast, is very energy inten- today. To meet growing demand from existing sive to get out of the ground, and we’re going John and Patrick were courageous customers as well as a new surge in demand to pay a fortune for it.’’ soldiers—true American heroes. John from emerging countries such as China and Simmons predicted we would encounter was from Sparks. He had two young India, Simmons said producers have contin- problems with oil supplies this year, nearly a children. Patrick was from Reno. He ued to pull more and more oil out of the month before Hurricane Katrina struck the North Sea. ‘‘And then we found deep water Gulf Coast. also had two children. Both of them which was a fabulous last shot from the ba- He said we must operate the nation’s refin- were distinguished soldiers who did sins (in which) we already had shallow water eries at 100 percent, or we have major prod- their part to make the world a better, production. And we took the Middle East oil uct shocks, and we have to import oil at a safer place.

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