Bush urges Congress to end offshore oil drill ban

WASHINGTON (Reuters) - President George W. Bush urged Congress on Wednesday to end a ban on offshore oil drilling, responding to consumer anxiety over soaring gasoline prices with a plan sure to anger environmentalists.

"Every American who drives to work, purchases food or ships a product has felt the effect. And families across our country are looking to Washington for a response," Bush said.

As average U.S. pump prices pierced the $4-a-gallon ($1.06-a-litre) level for the first time this month, up more than $1 from a year ago, energy policy has become a key issue in the presidential race ahead of November elections.

Bush said opening federal lands off the U.S. coast -- where oil drilling has been banned by both a presidential executive order and a congressional moratorium -- could yield about 18 billion barrels of oil.

That would meet current U.S. consumption for about 2-1/2 years, but it would likely take a decade or more to find the oil and produce it.

The short-term impact on oil prices is open to debate. The prospect of more energy supply down the road could calm nervous traders who see a looming global oil crunch but any actual supply would be years away, even if Congress acted quickly.

Congress banned most offshore drilling in 1981. Bush's father, former President George H.W. Bush, followed suit with an executive order banning drilling in the wake of the 1989 Exxon Valdez oil spill in Alaska -- the worst tanker accident in U.S. history.

The White House said Congress should lift the moratorium first and then Bush would end the executive order because presidential action alone would not lead to new offshore drilling.

TRADING BLAME

Bush's latest energy plan adds intensity to a war of words on Capitol Hill over who is to blame. If lawmakers leave for their July 4 holiday without action, they will face the wrath of their constituents, Bush said.

Bush and fellow Republicans have repeatedly blamed Democrats for blocking legislation that would open offshore lands and the Arctic National Wildlife Refuge in Alaska to drilling.

"Democrats on Capitol Hill have rejected virtually every proposal and now Americans are paying the price at the pump for this obstruction," Bush said.

But California Gov. Arnold Schwarzenegger, a Republican, declined to support Bush's plan, calling his state's coastline "an international treasure."

Democrats in turn say 80 percent of the oil in the Outer Continental Shelf is in federal lands already open to drilling, mostly in the Gulf of Mexico, which hold 107 billion barrels of oil -- equal to 14 years of current U.S. consumption.

"The White House has become a ventriloquist for the oil and gas industry -- repeating the requests of the oil and gas industry that they be allowed to destroy the most pristine areas of our country," said Rep. Edward Markey, a Massachusetts Democrat.

About 60 percent of Americans support government moves to encourage more oil drilling and refinery construction as a way to combat soaring energy prices -- but the same number also profess to be in favor of conservation, according to a Reuters/Zogby poll released on Wednesday.

Republicans, including presidential candidate John McCain, increasingly support lifting the offshore drilling ban. The Arizona senator announced his backing this week after opposing it in the past.

Democratic presidential candidate Barack Obama and members of his party oppose expanded offshore drilling on environmental grounds and say such action would have little immediate impact on fuel prices.

Analysts say the chances that Congress will drop its ban during an election year are slim.

"Short answer: Don't bet on it," a Friedman, Billings, Ramsey & Co Inc report said.

Environmental groups have long opposed expanded offshore oil drilling, raising concerns about the dangers to fragile ecosystems as well as a potential for spills.

"It's cynical to say that we can drill our way out of this mess," said Athan Manuel, director of lands protection for the Sierra Club. "The solution to $4 gas is not off our coast."

(Additional reporting by David Alexander; Editing by John O'Callaghan)