Senator Lisa Murkowski

SEN. LISA MURKOWSKI: Well, good morning to all of you. I don't know whether it's the room or the very low ceilings but, Joe, don't you feel like you're kind of Alice in Wonderland. Maybe you don't, but I feel like I'm Alice in Wonderland.

JOE GRIFFITH: No.

SEN. MURKOWSKI: Okay. Just to set the record straight there. Good morning to all of you. I have to tell you I am just amazed that so many of you folks get up so early in the morning to come out and listen to people speak. I'm honored that you have chosen to get up early and share your coffee with me.

I was told that my Commonwealth North speech was going to be like my debut speech, my maiden speech as they say in the United States Senate, but you were trumped yesterday when I went out to the Valley and met with the combined Chambers of Commerce from Big Lake to Talkeetna to Palmer to Wasilla to Houston and had a great reception. Had a real -- really a very warm welcome from the community up there which was nice to see, nice to be part of that. I had a great speech that was prepared and is something that I am -- ought to do. I ignoring my speech all together gave first impressions and kind of jumped back and forth. And after the speech was given the commentary was boy, we sure liked all those parts where you didn't really refer to your speech. So I'm tempted this morning to just ditch the speech, but there is a lot of substance in terms of what's going on in Washington, D.C., that is critical to what is happening here in Alaska as it relates to opening of ANWR and the natural gas pipeline. So I really do want to get to that this morning.

But having said that I need to back up just a little bit and address all those questions that have repeatedly come to me whether I'm in the breakfast line, whether I'm walking down the street, or attending the Fur Rondy Carnival. No, my family is not back with me in Washington, D.C., yet. My older son is in sixth grade and so my husband and I have opted to keep the family as stable as families can stay when one of the spouses is a Senator. And we're finishing out the school year here in Anchorage and going to make that commute back and forth as often as is humanly possible. And for those of you that do make that trek you know what I mean when I say humanly possible. You can only do so much before the airlines and that seat time in the airplane wears you out completely. So I have been back and forth now between Washington and Alaska, I think this is my fifth trip since I went back the first part of January.

I've been spending my time building my staff. I did walk into a staff and an office that is pretty well put together. The Anchorage staff who many of you know, Pat Heller, from my office who is back here stayed on. All my Anchorage staff stayed on which is great. And I have some new folks that I brought over -- borrowed a couple with the permission of good Senator Stevens from his staff, Justin Stiefel, in the back over here is my chief of staff. Justin, I think many of you in this room know, has been a great asset to Senator Stevens and he's been a wonderful person to work with.

I've also brought on John DeVore (ph). John has been with the SBA here in Anchorage for, I believe, eight years or so. He will be starting in my office as my legislative director this coming Monday. So we're rounding out that team. We've got a good group of Alaskans. And I'm really excited about the group that we have put together, so that aspect of it has come together well.

And I made a few apologies yesterday. We've been getting the usual torrent of letters and e-mails and faxes that come to a senatorial office. Keep in mind that we still irradiate the mail in Washington, D.C., so if you send mail expect that it's going to be about three weeks before it gets to my office because it has to go to Ohio to be zapped. So if you have anything in it it's mailed and attached -- fixed to the letter so you can't read it afterwards, but we'll get your letter.

The problem that we have had is we didn't have letterhead until about last week, so I'm working through a stack about this high of letters that we're sending out to folks. So if your response has been less than timely, I've got an excuse for now, but after this next week there are no excuses. We do want to get to you as soon as absolutely possible. So that's kind of the where we are.

I could talk all morning about some of the first impressions, some of the amazing things that you encounter in the world in Washington, but there'll be plenty of time for that and we'll share some of those stories later, but I wanted to kind of update you on what has happened in Washington the past month.

We started out the session in January about 10 days behind because we couldn't get the organizational resolution agreed to. And if you know anything about how things operate in Washington, D.C., it's basically by unanimous consent. Both sides have to agree, we move forward and move on to the next piece of business. Well, we couldn't agree to the organizational resolution which essentially determines things such as office space, staffing allocations, and you know, I'd walk into this thing going wait a minute, this is the United States Senate. This is a pretty auspicious body, why are we messing around with all this? So if you think that politics gets that much more refined and sophisticated the higher up it goes, let me tell you it's still just about office space.

But we did just this past week on Thursday, we passed the Omnibus Appropriations bill. This was the spending bill from last session in the 107th Congress. So what we have been doing this past month was working on the work from last year. That was another interesting thing for a newcomer coming in to have to deal with the work of the previous Congress in putting together the spending bills not knowing necessarily the history behind it. That was truly trust me legislation. But the good news is, is we have gotten that off the table. We signed off on it. The President now has it on his desk. And we can officially start the 108th Congress.

In that Omnibus spending bill I was successful in getting an amendment attached to it. It was my first amendment. This was the one that related to the Trans Alaska Pipeline and the re-authorization. There was a $40 million environmental impact study that was performed for purposes of renewing the right-of-way for the oil pipeline. And what my legislation says, or what the rider said is for purposes of the environmental impact standards we're saying that Congress says you've met them through this EIS. It's generated a little bit of discussion amongst the environmental community 'cause they seem to be concerned that we're somehow short cutting the process through the courts. And in fact, what we're doing is we're just saying hey, Congress can set these standards. Congress can now say when those standards have been met.

You know, it's somewhat significant in that we need to keep the oil coming down that pipeline. We don't need the pipeline shut down because we've got litigation going on surrounding that re-authorization, so we're pleased that that one is in there and it's taken care of.

We were also successful in working with Senator Stevens to secure some funding or some help, Social Services, educational funding. We've got the list and you know, the list is huge when it comes from Senator Stevens in terms of all the things that he's managed to get through for Alaska. And I'm not going to go down the laundry list. I'm not going to go down and identify those that we have worked with, but you all need to know and I'm not divulging anything of any confidence, but Senator Stevens has a way of making things happen. I was going to say making miracles happen, but he has a way of making things happen for the state of Alaska. And we need to recognize the level of mastery that he is at as he accomplishes these things for the state. And a lot of thanks are owed to the good Senator.

Now I want to get to a discussion about the energy policy and the legislative prospects for the two most important projects that we look to here in Alaska. I'm talking about ANWR, of course, and the natural gas pipeline. There's a reason for optimism, I think, for both. Obviously we have a situation in the Mid East that is causing angst, turmoil, uncertainty. And with that uncertainty comes higher prices for gasoline and heating oil. And the oil prices have been about $30 a barrel for several months. The average price at the pumps is a buck 60. And it's not just in Alaska. This is everywhere.

The civil unrest in Venezuela, all of this is combining to just add to the uncertainty in terms of what is happening with our oil supplies in not only the Middle East but throughout the world. And when we look at our economy right now in the Lower 48, things aren't as healthy and robust as we would like them to be. One of the reasons is because of the high energy prices that we're facing down there. Consumers are spending nearly $100 million more per day on energy than they did last year. And you think about that in real dollars, in terms of dollars that you can spend out of your pocket for consumables or investment or whatever, you know, that's $36 billion a year that cannot be spent on other goods and services. It's a big chunk of change.

And when we look at where our oil is coming from outside of the country, you look to the countries that we're relying on; Venezuela, Nigeria, Saudi Arabia, Kuwait and Iraq, they account for more than half of our oil imports. And I would ask anyone of you do you think that these are islands political stability, I think not. You know, recognizing the world situation, the collision course that we're on with Iraq right now, again, it is going back to why are we so reliant, why do we allow ourselves to be so reliant on outside foreign sources of oil? At the same time that we're sending over 150,000 men and women into the Persian Gulf. We're increasing our demand -- or we're increasing our supply of oil from Iraq. Iraq oil exports to the U.S. nearly doubled to 500,000 barrels a day in December. Barely a month ago imports from Iraq jumped to more than 800,000 barrels a day.

And when you think about that, it's just ludicrous that we allow this to happen. If there was ever a time for a rational, sound energy policy it is now. So what are we going to do to make a difference? How are we going to convince folks that we need to have an energy policy that includes ANWR and that includes development of a natural gas pipeline?

Well, the President is solidly with us. He has said repeatedly he has included ANWR in his budget. He has made the commitment to us. And I do have to do a little bit of name dropping. They have had a lunch for the new Senators at the White House. President Bush is sitting to my right, Andy Card is sitting to my left, and I'm sitting there thinking what do I say to these guys? And it was wonderful because the President was delighted to talk about ANWR. He was absolutely effusive about you've got our commitment, you've got our support, we're going to make it happen, it's absolutely imperative that ANWR happen. And when you can have that kind of a casual conversation and have him repeat we're going to do everything that we can to make this happen it gives you a little more certainty.

The political landscape in Washington has changed. Republicans are back in control of the Senate which is going to be helpful because it allows us to control the floor process. And it's through the control of the floor process that we will be able to get ANWR placed on a budget resolution. If we're successful in this it's 50 votes that we need, not the 60 votes. We won't be subject to a filibuster if it's attached to the budget resolution. We can't get to 60. It's just as simple as that, but we're at 48 now. We can count 48 Senators. We had some good things happen in this last election cycle. There were two Democrats who had voted against ANWR last year, that's Senators Cleland and Carnahan and they were defeated and they were replaced by Republican supporters, Saxby Chanlice (ph) and June Tallent (ph). We've also got John Sunnunu (ph) in there who was an ANWR supporter in the House. We've got friends where we didn't have friends before, so it helps to be able to count on them.

Now having said that, it's real easy to talk and say oh, we'll just get it on the budget resolution and 50 votes and done we're in. Mano is in here chuckling. You know it's much, much more difficult than all this. The professional environmental groups are out there, they're working hard. This is everything to them. ANWR has been and will continue to be for as long as it is an issue a huge fund raising effort for them. Last year the environmental groups out spent ANWR supporters three to one. Probably even more than that. I can't imagine that that is an accurate figure. The environmental groups raised nearly $4 billion each year, much of it tax free. $4 billion is a lot of money. And they're able to get it because they keep talking about we need to preserve and protect. We need to save ANWR. ANWR has been that (indiscernible) drum. So they're going to fight up every step of the way.

They're going to argue, no, we need to look at the conservation. They're going to argue no, you need to -- you must go to alternative fuels. Well, it's not an either or debate. It really isn't. We've got to work towards conservation. We've got to look toward alternative sources. That's the way of the future. We recognize that. But having said that there's got to be a little bit of a bridge. There's a recognition that you're never going to be entirely dependent on these alternative sources. They're a long way in the future.

Now there will be those that say hey, you're not going to be able to get ANWR on line and doing anything for another eight to 10 years. You're not going to be able to get a natural gas pipeline on for another eight to 10 years, so you know, tell me which -- what is happening with our increased demand is we need to have it all. We need to have the oil from ANWR in order to reduce somewhat our dependence on foreign oil. We need to have a natural gas pipeline because of the huge increased demand that we're seeing. These are just simple facts.

And it's not something where we say well, we'll give you a little of this, but back off. We'll give you a natural gas pipeline but back off on ANWR. And that's kind of the sentiment that I'm hearing from a lot of folks. The Democrats and the environmentalists are much more eager to embrace a natural gas pipeline. Say well, we'll give you that, but ANWR we just don't think we can go there.

My friends on the Republican side, particularly those that are from producing states aren't real anxious to have a natural gas pipeline come on because, well, Mary Lander from Louisiana says well, you're gas is going to compete with my state's gas. And maybe we don't really want that. So there is kind of this tug of war, this well, we'll give you one. We need to convince them, again, of the need for both. And it's going to be a tough job, but it can be done.

Things are working in our favor. For instance, with the natural gas pipeline. Look at what's happened with those prices. You know natural gas prices right now are about $6, nearly triple last year's prices. It's cold back East. There's lots of snow back East. And we don't feel too sorry for them. But, you know, there is a recognition that things are starting to line up in our favor, both with ANWR and the natural gas pipeline.

I think folks are going to be quite surprised as these studies come out that show the increased demand for natural gas and recognize that regardless of what happens in Canada, if we get the gas coming down from Mackenzie, regardless of whatever increased production domestically we can get from the Lower 48, the demand is going to far outstrip the supply. Alaskan gas has got to be there.

The President talked in his State of the Union about his desire or his agenda to move to a hydrogen based energy supply. Wants kids to be driving cars powered off hydrogen fuels. And that's wonderful. That's great. But keep in mind that one of the best ways to get your hydrogen you've got to have gas. So when the White House was reminded that they might need increased supplies of gas and asked well, where are you going to get that from? His comment was oh, I guess we need to think about that. So we just need to encourage them in the right direction because, again, it is starting to line up.

The incentives, as you know, when we talk about the natural gas pipeline, this is the big bugaboo that we're dealing with in Washington. There are concerns that -- again, I mentioned the producer states are concerned that our gas is going to flood the market and Louisiana is going to be kind of pushed out of the way. There are concerns that somehow Alaska's gas would be inflated at the expense of other gas in the Lower 48. There is some pre-market Republicans that are saying unh-unh, we don't even want to discuss any kind of mechanism that impacts the price for natural gas. And they need to be reminded that we do occasionally in the Congress allow for price supports for other commodities, wheat, corn, food and other things like that, so it's just subtle reminders that we'll be working with them on.

But we are in a position in Alaska to be the answer for America's energy needs. We know that. We've known it for a long time and we just need to convince the rest of the country, convince our colleagues in the Congress that the time is right, the time is appropriate. We are moving forward and we will make it work. We will make it work, but it is going to be a huge, huge battle between now and probably the next six months.

And the timing is interesting to look at. If ANWR is going to be placed in the budget resolution our first major floor fight on this is going to be somewhere towards the end of March. That's pretty close because of the time line.

Gas pipeline legislation will be considered as part of an overall energy bill that will probably be considered sometime during the summer. So again, a pretty expedited time basis. So these next six months are crucial.

People have asked well, what can we do to help you as you advance this agenda back in Washington? And I don't think the message is any different than it has been in the past. Arctic Power is working and will be making those contacts. And you know, we ask you all if you have contacts in other states, if you have family or friends who really just don't understand what Alaska has to offer up here talk to them. Make it real to them because ANWR as we all know has been this wonderful beautiful poster child. And we need to make sure that people understand exactly what it is that we're talking about, the part of the state that we're talking about, what we can supply. Another bonus, I'm sure you all read it in the paper a couple of days ago, this recognition, if you will, that the oil from ANWR may be sweeter, lower in sulfur. We always know that we can do it better and we've got the best product (indiscernible) but this is going to help us in our argument with the environmental community. You know, we can give you a product that is better and cleaner, easier to refine. So we've got some advantages that we need to ply (ph).

So there's a lot happening. It's a very exciting time to be back in Washington right now. There has not been a lot of time to contemplate my fate, to think about what's coming next. You just jump in and start swimming, but the good news for me is that I'm swimming with a team of Alaskans, Senator Stevens and Congressman Young that know what's going on. They've been great mentors and it's been a privilege to work with them. It's a privilege to represent all of you and I look forward to your questions. I look forward to just the opportunity to work with all of you and to serve you in the Senate.

It's been a pleasure. It wasn't so hard getting up and speaking early this morning, but I'm better at noon so with that if there's any questions.