Lawmakers push new energy bill, tapping reserve

By Ayesha Rascoe

WASHINGTON (Reuters) - As the United States grapples with surging fuel costs, U.S. lawmakers on Thursday renewed calls to tap the Strategic Petroleum Reserve and will attempt to pass new energy legislation aimed at increasing domestic production as early as next week.

U.S. House of Representatives Speaker Nancy Pelosi urged President George W. Bush to release a small amount of the emergency stockpile to ease record prices by putting more supply in the market.

"Right now, the president has 700 million barrels of oil. He can release a small percent of it, less than 10 percent of it; have immediate impact on the price at the pump now, within 10 days, not within 10 years," Pelosi said.

The White House rejected Pelosi's request, saying the reserve is intended only for severe supply disruptions.

Instead, Bush plans to meet with his economic advisors at the Energy Department on Friday to receive a briefing on how the rising energy prices are affecting the U.S. economy and American families.

Bush, who has appealed to Congress to lift a moratorium on offshore drilling, will also discuss his plan to increase domestic drilling and reforms that could increase U.S. refining capacity.

House Democrats are also planning to increase U.S. oil production with a new energy package they hope to pass in the coming weeks. The legislation would speed the development of the National Petroleum Reserve in Alaska, where drilling activity has been slow.

The Democratic bill would also force U.S. oil companies that hold rights to some 68 million acres in the lower 48 states to use them or lose them.

A previous "use it or lose it" energy bill sponsored by Democrats failed to pass in the House last month.

ROLE OF SPECULATORS

With oil prices reaching a record levels above $145 a barrel last week, many lawmakers have blamed the influx of large index traders, such as hedge and pension funds, in futures markets for the price run up.

The head of the top futures market regulator disputed these claims in his testimony at a hearing before a House Appropriations subcommittee on Thursday.

"We haven't evidence that speculators are broadly driving these prices," said Walter Lukken, chairman of the Commodity Futures Trading Commission.

Lukken also said the commission has no evidence that traders are working together to drive up prices.

Critics accuse the CFTC of not reining in excessive speculation on the futures market, and lawmakers have introduced a flood of bills aimed at strengthening the commission's oversight.