Offshore drilling may be in U.S. energy bill

WASHINGTON (Reuters) - Senate Republicans said on Wednesday they are working with Democrats to come up with compromise energy legislation that would tackle record gasoline prices and open more offshore areas to oil drilling.

Instead of trying to move a broad energy bill that is loaded with all sorts of energy proposals, a bipartisan group of 10 senators is working on more narrow legislation that would have a better chance of winning the 60 votes needed in the Senate to block a filibuster.

"(We) are trying to move us in a direction to get a package that could actually pass the Senate," Senate Republican Leader Mitch McConnell told reporters on Capitol Hill.

"I think we have a real chance of passing energy legislation," said Republican Sen. Bob Corker.

Corker said Democrats "realize that Republicans would like to work with them to actually craft legislation that will pass."

Corker said whatever legislation comes out of the bipartisan group, it will likely include language expanding offshore oil drilling, developing onshore oil shale, promoting plug-in hybrid vehicles and giving the Commodity Futures Trading Commission the tools it needs to better monitor energy futures markets.

But boosting oil production is what Republicans want the most.

"You know, clearly, any bill to have any credibility would have to deal, at least in part, with the supply issue," said McConnell.

McConnell acknowledged that Democrats and Republicans have had a "tough time" agreeing to expanding domestic oil production.

"But I think the American people are now demanding it," he said.

Over Congress' Independence Day holiday recess, lawmakers heard from their constituents how fed up they are with record gasoline prices and the impact both soaring fuel and food costs are having on family budgets.

As a result, McConnell said more Democrats are now willing to support expanding domestic drilling.

While there are many more senators who want to join the group, Corker said it will remain small "until we can get some legislation actually ready to flush out, and then expand it to some level."

The problem now facing lawmakers is the legislation time clock, which is ticking down fast.

Lawmakers will be leaving town again in a few weeks, this time for their August recess. After that, the focus will be on the November presidential and congressional elections, when controversial legislation normally is pushed aside.

(Editing by Christian Wiessner)