US House Dems Push for More Drilling in Alaska

WASHINGTON (Dow Jones Newswires), July 10, 2008

U.S. House Democrats are positioning themselves to battle Republicans on the issue of increased domestic drilling, and may vote as early as next week on an expanded package aimed at boosting oil production in Alaska.

House Speaker Nancy Pelosi, D-Calif., and House Majority Leader Steny Hoyer, D-Md., on Thursday announced a new energy package that would include measures to speed the production and delivery of oil from federal land in Alaska that is currently home to limited drilling. The measure would also encourage the construction of a pipeline to deliver oil from Alaska to the 48 states in the continental U.S.

"Democrats support increasing the domestic production of petroleum and other energy resources," Hoyer said. "Some people have missed it."

Republicans have repeatedly accused Democrats of failing to increase supplies. The GOP is pushing for increased drilling off the coast and in environmentally sensitive areas such as the Arctic National Wildlife Refuge. Now, House Democrats are suggesting alternatives, and will seek to speed up production in the National Petroleum Reserve, an area in Alaska already approved for drilling but where so far much of the land hasn't been leased.

"This administration has been dragging its feet on leasing those areas," Hoyer said.

The expanded energy bill comes as Republicans prepare for a new attack on Democratic energy policies. House Minority Leader John Boehner, R-Ohio, plans to lead a delegation to Alaska next week to the Arctic National Wildlife Refuge to "learn about the abundance of American energy held hostage below the tundra by the Democrats," according to a press release. He will also go to Colorado to one of the nation's research labs to learn about new renewable-energy technologies.

With gasoline prices at a record-high $4.11 a gallon on average across the nation last week, U.S. consumers are growing increasingly eager for increased supplies. A Rasmussen Reports survey in June showed 67% of U.S. citizens support deepwater energy exploration - with 64% expecting it will lower gasoline prices - while a CNN poll published last week showed 73% of Americans favor more exploration of deep ocean energy resources far off U.S. shores.

Voter pressure has prompted U.S. Senate Democratic leaders to declare that they are open to increased domestic drilling in off-limits areas - a step further than House leaders are going.

"We haven't shut our minds on anything," Senate Majority Leader Harry Reid, D-Nev., told reporters on Wednesday when asked about opening up the nation's coastal waters to drilling. "I personally wouldn't like that. But we're going to take a look at that. I'm not knee-jerk opposed to anything." 

Currently, five companies - ConocoPhillips (COP) unit ConocoPhillips Alaska Inc., BP PLC (BP), Anadarko Petroleum Corp. (APC), Total (TOT) unit Total E&P Inc., and FEX LP - have begun drilling in the National Petroleum Reserve. But the U.S. Bureau of Land Management has been selling leases roughly once every two years, with the result that only 26 wells exist in the area.

Democrats are considering requiring the BLM to offer leases annually. They are also considering ways to encourage the construction of both an oil and a natural gas pipeline from Alaska to the lower 48 states. Currently, oil produced in Alaska is delivered by ship or truck, according to Ruth McCoarde, a spokeswoman in the Bureau of Land Management's Alaska office.

Democrats would also wrap into the package a measure that would bill that would force oil companies to develop lands under unused oil and gas leases. A majority of House lawmakers support the "use it or lose it" bill, but the measure failed to pass the U.S. House of Representatives last month after Pelosi brought it up for a vote under an expedited procedure that requires a two-thirds majority for passage.

Pelosi said Thursday that she would also like to vote on the newly unveiled energy package on an expedited basis. That would allow Democrats to avoid facing any amendments - including potential Republican amendments to allow drilling in environmentally sensitive areas. 

Copyright (c) 2008 Dow Jones & Company, Inc.

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