Bush, Democrats Clash Over Offshore Drilling, Gasoline Prices

Tag : Extract Oil
Bush, Democrats Clash Over Offshore Drilling, Gasoline Prices

By Holly Rosenkrantz and Susan Decker
June 21 (Bloomberg) -- President George W. Bush and Democrats clashed over the administration's push to lift theban on offshore oil and gas drilling and disagreed on whether itwould lead to lower gasoline prices.
"If Congressional leaders leave for the Fourth of July recesswithout taking action, they will need to explain why $4- a-gallongasoline is not enough incentive for them to act,'' Bush said todayin his weekly radio address. "Congress now has a clear path tobegin easing the strain high gas prices put on your family'spocketbook."
House Natural Resources Committee Chairman Nick Rahall, a Democrat whose district includes coal-mining areas of WestVirginia, today accused the oil companies of ``stockpiling'' 68million acres of federal oil and gas leases, about the size ofColorado, and said lifting the ban won't affect gasoline prices.
With gasoline exceeding $4 a gallon, offshore drilling has become an issue inthe U.S. presidential election. Arizona Senator John McCain, 71, the presumptive Republican nominee, and Bush are pushing tolift a 27-year-old moratorium on offshore oil and gas drilling.Democrat Barack Obama, 46, an Illinois senator who is his party's presumed nominee,opposes the measure, as do environmental groups.
Oil doubled in the past year, touching a record $139.89 a barrel onJune 16, as investors bought commodities to hedge against aweakening U.S. dollar and concern mounted that demand is growingfaster than supply. Rising gasoline prices in the U.S. have sparkedconcern the economy may slip into recession.
Drilling in Refuge
Along with lifting the ban on offshore oil drilling, Bush wantsCongress to allow exploration and drilling in a portion of the19-million-acre Arctic National Wildlife Refuge in Alaska, leasingof federal lands to mine and extract oil from shale in the GreenRiver Basin of Colorado, Wyoming and Utah, and accelerating thepermit process for new refineries.
Bush, in his radio address, said Congress's lack of action on hisdrilling proposals is partially responsible for high gasolineprices. ``Now, Americans are paying the price at the pump for thisobstruction,'' he said.
Bush and his fellow Republicans are seeking to portray Democrats asstanding in the way of measures to help lower gasoline prices.Bush's move carries some risk as well, because offshore explorationhas faced opposition in Florida, which will be a battleground inthe presidential campaign.
Lawmakers last debated oil drilling in U.S. coastal areas in 2005and 2006, when gasoline averaged $1.84 a gallon during the two-yearperiod, Bloomberg data showed.
Use It or Lose It
Rahall and other Democrats are sponsoring legislation that wouldforce the oil companies to drill on lands already leased.
``Simply put, we are telling Big Oil to use it, or lose it,''Rahall said in the Democratic Party's weekly radio address. ``Theywould either have to produce from these lands, show they are beingdiligent in their development, or give up the right to control evenmore federal energy resources.''
Rahall said Democrats are planning to introduce legislation thatwould ``shine the light on speculators that have driven up theprice of oil'' and reduce fares for mass transit.
The oil companies are able to drill in areas of the Gulf of Mexicoand around Alaska. The Republican proposal would allow drillingalong the entire Outer Continental Shelf, including along both theEast and West coasts.
Rahall said an investigation by his committee showed that more than80 percent of the estimated oil and gas on federal land is alreadyavailable for drilling or will be in the near future, all withoutchallenge from environmentalists.