President Bush Presses Congress
To Lift Offshore Drilling Ban

WASHINGTON -- President Bush pressed Congress to take quick steps to boost oil production in the U.S., sharpening the clash with Democrats over energy policy as consumers struggle with soaring gasoline prices.

Speaking in the Rose Garden, Mr. Bush outlined a four-point plan to tackle the imbalance between supply and demand that the White House believes is the main force pushing oil prices to record levels. He called for Congress to lift a moratorium on drilling off the U.S. coast, open Alaska's Arctic National Wildlife Refuge to drilling, develop oil shale resources and expand domestic oil-refining capacity.

"The proposals I've outlined will take years to have their full impact," Bush said, calling on lawmakers to act before the Fourth of July holiday. "There is no excuse for delay. As a matter of fact, there's a reason to move swiftly."

Most of Bush's proposals are long-held policy positions. But the debate is more urgent with gasoline prices averaging more than $4 a gallon. This week, presumptive Republican presidential nominee John McCain made a similar call for lawmakers to lift the ban on offshore drilling, a prohibition supported by his Democratic rival, Barack Obama.

Mr. Bush called the moratorium on drilling in the Outer Continental Shelf "outdated and counterproductive," saying the area could produce 18 billion barrels of oil. Backed by Democratic lawmakers, the ban has been in place since 1981. Now, however, Bush said new technologies mean drilling can be conducted out of sight of the shore and in a way that protects the environment.

To reverse the moratorium, Congress and the president would have to lift two separate bans. Bush said he would remove an executive prohibition after Congress acted. Decisions on drilling ultimately would be up to states once the prohibition is lifted.

"Unfortunately, Democrats on Capitol Hill have rejected virtually every proposal. And now Americans are paying the price at the pump for this obstruction," Mr. Bush said. "Unless members are willing to accept gas prices at today's painful levels or even higher, our nation must produce more oil. And we must start now."

Mr. Bush also said advances in technology and high oil prices have made oil shale a more affordable and efficient potential source of oil. He said the Green River Basin of Colorado, Utah, and Wyoming, has around 800 billion barrels of recoverable oil, far larger than the proven reserves of Saudi Arabia.

FURTHER READING

 

• Governor Backs Florida Drilling
06/18/08

• Oil Giants Try to Deflect Gas-Price Fury
06/17/08

• Quest for Oil: Where to Look Is the Question
06/16/08

• Oil Surge Is a Fresh Hit to Economy
06/07/08

"If it can be fully recovered, it would be equal to more than a century's worth of currently projected oil imports," Mr. Bush said. He asked lawmakers to remove a block on oil shale leasing on federal lands.

On refining, Mr. Bush repeated his call for an expansion of capacity, citing lawsuits and red tape as problems that boost the cost of modifying existing refineries. To overhaul the refinery permitting process, Mr. Bush said challenges to refinery permits should be brought before the D.C. Circuit Court of Appeals within 60 days of the permit's issuance. He said Congress should give the secretary of energy the authority to establish binding deadlines for permit decisions.

Mr. Bush's comments come ahead of Sunday's meeting of oil producing and consuming nations in Jeddah, Saudi Arabia. The White House says the meeting won't have an immediate impact on prices, but will give it an opportunity to discuss market, and supply-and-demand issues with other countries.

"No one's going over there expecting that producers are all going to make commitments on increasing output," White House spokesman Tony Fratto said.

Still, Energy Secretary Samuel Bodman, who will lead the U.S. delegation at the session, will press for more oil supply, underscoring the White House's view that the primary force driving prices higher is an imbalance in supply and demand, not market speculation.

While Mr. Bush's comments Wednesday focused on supply, the president noted that the long-run solution to the U.S.'s dependence on foreign oil is to boost alternative energy technology.

"In the short run, the American economy will continue to rely largely on oil, and that means we need to increase supply, especially here at home," Mr. Bush said.

That, however, wouldn't have a large effect on prices now, the White House acknowledged. Still, National Economic Council Director Keith Hennessey said if Congress were to act quickly on the White House's proposals, oil prices could be affected as markets build in the expectation of future supply. He didn't estimate the size of the impact.

Mr. McCain made headlines Tuesday, when he reversed his position on offshore drilling, but maintained his opposition to drilling in ANWR and criticized financial market speculators. The senator's stance on speculation and ANWR put him at odds with the White House, while Democrats labeled him as a flip-flopper on offshore drilling.

"It's so difficult to focus on what Sen. McCain's positions are because they change so rapidly," said House Majority Leader Steny Hoyer (D., Md.). "It's certainly not the position that he had six months ago."

Mr. Hoyer said oil and gas companies currently hold leases on enough federal land and waters to double domestic oil production and increase natural gas production by 75%.

Write to Henry J. Pulizzi at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it