November 28, 1979
Page 33792
Mr. JAVITS. Senator METZENBAUM, it would be amusing to answer your question by simply saying they are so fat they are no longer enterprising. That is what you have thought about them for a long time. That is a fact, but I will not say it.
The fact is that they simply do not consider it worthwhile to explore in all these other countries, but we may consider it worthwhile in terms of the United States, for two reasons: First, we are anxious to have those countries self-sufficient, and take the strain off their foreign exchange which is bankrupting them today; and second, because it tends to reduce the power of OPEC.
Let us understand that the big oil companies may not be anxious to reduce the power of OPEC, with whom they are working, as they have for decades, largely as their representatives for distributing the petroleum in the world which commands such a big price.
They are partners in that business with the OPEC countries; they are the distribution system.
Mr. METZENBAUM. Would the Senator from New York be amenable to an amendment that would preclude these financial incentives being made available to the majors, so that at least some of the smaller companies might be induced to develop in the lesser developed countries?
Mr. JAVITS. Senator METZENBAUM, I think that would be defeating our own purpose, because I think we would have to rely upon the fact that there has to be an appropriation, that this will be administered by the Department of Energy according to the policy which it sets, to see that this money goes where it is really needed, where it really will stimulate exploration and discovery that might not otherwise take place. It might be making an arbitrary distinction which would be very counterproductive in terms of finding new sources of oil.
Mr. METZENBAUM. I thank the Senator.
Mr. JAVITS. Mr. President, I am prepared to vote.
Mr. LONG. Mr. President, I yield 3 minutes to the Senator from Wyoming.
Mr. WALLOP. Mr. President, one thing that does not seem to settle into the thinking of many Members of the Senate, including the Senator from Ohio and this Senator, is that all the oil industry is not Exxon, the majors, or the so-called seven sisters. There are small companies, including small Wyoming companies, which have exploration tracts they are joint-venturing in many parts of the world: New Zealand, Fiji, and elsewhere.
The disincentive of which the Senator is speaking simply does not exist in the economic world. It exists solely in the political world, and no billion dollars out of the U.S. Federal Treasury will break down that disincentive. It has to be a matter of self-interest before those countries will allow drilling, exploration, and development.
That is my point, and I think it is the point of the Senator from Louisiana, that there is no reason to spend tax dollars of the American people which could well be used in many ways to decrease our domestic dependence and increase our domestic production and relieve domestic problems at the same time. If these countries would simply express a willingness to open their territories for exploration, it would be done without tax dollars. There is no reason to burden the American taxpayer or the American petroleum industry or anyone else with this kind of financial incentive, when the incentive exists in the world market price. The incentive exists everywhere except politically in these countries. Somehow or other, that problem is a matter of those countries operating in their own self-interest. No billion dollars will do it; we would just be throwing it out the door.
As the Senator from Louisiana has said, we have not exhausted the ways to give away money in the world, but there are at least ways in which we can spend it much better; and this does not appear to be one of them.
Mr. LONG. Mr. President, I ask for the yeas and nays on the amendment.
The PRESIDING OFFICER. Is there a sufficient second? There is a sufficient. The yeas and nays were ordered.
Mr. JAVITS. Mr. President, how much time do I have remaining?
The PRESIDING OFFICER. The Senator from New York has 2 minutes remaining.
Mr. JAVITS. I yield myself 1 minute to say that the difficulty with the argument we have just heard about "leaving it to natural events" is that natural events cannot contemplate the very real possibility of political uncertainty in the future even with friendly government, which investors naturally wish to make some provision against.
That is why many areas of the world are blocked out. I have already given a list of 30 countries where that is the case.
Mr. MUSKIE. Mr. President, I would ask the distinguished sponsor of the amendment to confirm my understanding of the budgetary implications of his amendment.
Mr. JAVITS. I would be happy to respond to the Senator's questions.
Mr. MUSKIE. Is it not true that your amendment is simply an authorization for appropriations of $1 billion over the next 10 years and will be subject to the normal authorization and appropriations process of the Congress?
Mr. JAVITS., The Senator is correct.
Mr. MUSKIE. Is it not also true that this amendment does not establish a trust fund, a reserve, or any earmarking of funds from the windfall profit tax bill, but simply authorizes the Secretary of the Treasury to establish the program specified in the amendment if funds are appropriated?
Mr. JAVITS. The Senator is correct.
Mr. MUSKIE. I thank the Senator for his clarification of these matters.