Reid Pushes Bill to Curb Energy Trading Speculation

July 14, 2008 07:00 PM
 

via a special arrangement with Informa Economics, Inc.

President Bush lifts executive branch moratorium on oil and gas drilling in OCS

NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.


Senate Majority Leader Harry Reid (D-Nev.) on Monday rejected calls by President George Bush to open new offshore areas to oil and gas drilling, indicating that Democrats will focus instead on advancing bipartisan legislation to curb speculation some blame for higher energy prices.

“We’ve given the oil companies ample time to increase supply,” Reid said, after President Bush lifted an executive branch moratorium on oil and gas drilling in the Outer Continental Shelf (OCS) and called on Congress to lift its own ban as well. Reid said oil companies should drill on the tens of million of acres of public land they already hold leases for. Republicans said they will look to the appropriations process to block the annual practice of extending the moratorium on development of the OCS.

Background: The administrative ban on offshore exploration is one of two hurdles to increased exploration. Congress must also act to lift its legislative moratorium, to open the 85 percent of the OCS that is currently off-limits to oil and gas exploration. Congressional offshore moratoria has been renewed annually as a rider in the Interior Department appropriations bill since 1982. It will expire Sept. 30 unless renewed by Congress.

Facts and figures. According to the Minerals Management Service, there are an estimated 17.8 billion barrels of oil and 76.5 trillion cubic feet of natural gas, in an area covering about 574 million acres, that are currently off limits on the OCS to leasing and development. The US uses 20 million barrels per day of oil and petroleum products and 22 trillion cubic feet of natural gas per year.

Reid may introduce legislation on Wednesday to address what he labeled excessive speculation in energy markets, saying the issue is an area that both parties largely agree on. “We believe we should start with speculation,” he said. He said the timing of a floor debate on the matter will depend on the extent of cooperation by Republicans.

Reid said he wants to do a "straight up-or-down attack on speculation," and suggested it might be the only remaining item to address gas prices that the two parties can agree on this year.

Meanwhile, Senate Energy and Natural Resources Chairman Jeff Bingaman (D-N.M.) on Thursday will hold an open meeting on energy issues at which Senators will be able to present their ideas and listen to experts in several areas. The forum will focus on high costs for gas and home heating oil as well as possible solutions, a Bingaman spokesman said.

House Democratic leaders plan to offer a revamped "use it or lose it" package on the floor Thursday targeting existing areas open for drilling offshore. House Speaker Nancy Pelosi (D-Calif.) has also called on Bush to release some oil from the Strategic Petroleum Reserve.


Comments: Importantly, Democrats may not have the votes to extend the congressional ban on development of the OCS. A recent poll indicated that 65 percent of Americans now support offshore drilling.


NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.


 

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