US Republicans seek drilling boost if oil reserves tapped

WASHINGTON Wed Mar 28, 2012 5:58pm EDT

WASHINGTON (Reuters) - Republicans in the U.S. Congress are proposing measures that would require President Barack Obama to allow more domestic oil production if he decides to tap emergency oil reserves.

The proposals are unlikely to become law, but they give Republicans another opportunity to slam Obama's energy policy as consumers fret about high gasoline prices leading up to November's presidential election.

France is in talks with the United States and Britain on a possible release of strategic oil stocks that could happen "in a matter of weeks," France's energy minister said on Wednesday.

The White House said no decisions nor specific proposals had been made.

Many Democrats in Congress have said they would support using the SPR to help alleviate surging gasoline prices caused by fears that Western sanctions constricting Iran's oil exports at a time of tight supplies could hurt the economy.

In the Democratic-controlled Senate, David Vitter, a Louisiana Republican, has proposed that any sale from the U.S. strategic petroleum reserve should trigger expedited leases for oil shale resources.

"Any short-term impact that may come from opening our or any country's SPR would not resolve broader market concerns or energy security concerns here in the U.S.," Vitter said.

In the House of Representatives, Republican Cory Gardner on the Energy and Commerce Committee has proposed that the "quick fix" of drawing down the SPR be paired with a "longer-term approach" of increasing oil and gas leases on land owned by the federal government.

The idea was panned as "burdensome" by a senior Energy Department official at a Capitol Hill hearing on Tuesday, who said it would make it harder to quickly respond to supply interruptions.

"Draw-downs are already complicated procedures," said Chris Smith, deputy assistant secretary for oil and natural gas.

"This bill, if enacted, will make it more difficult for the SPR to achieve its mission to respond promptly to supply interruptions with emergency crude oil," Smith said.

But Fred Upton, the committee's chairman, said he hopes the legislation will advance after a two-week break in April.

"If we're going to take oil out of the SPR, we're going to make sure there's the offset," Upton said.

The Republican-controlled House already has passed a suite of bills that would reduce regulatory hurdles and boost U.S. oil production offshore and in protected areas of Alaska.

But the bills have not been taken up by the Senate.

On Thursday, the Senate is slated to vote on a plan that would end tax breaks for the five largest oil companies: Exxon Mobil Corp (XOM.N), BP Plc (BP.L), ConocoPhillips (COP.N), Chevron Corp (CVX.N) and Royal Dutch Shell Plc (RDSa.L).

The plan, proposed by Democratic Senator Robert Menendez and praised by the White House, is not expected to get the 60 votes needed to advance toward passage, and will likely be set aside.

(Reporting by Roberta Rampton; Editing by David Gregorio)

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