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House Democrats to Sweeten Use-It-Or-Lose-It Measure

House Democrats plan to introduce energy legislation, possibly as early as this week, that would include a recycled proposal and some sweeteners in an attempt to boost production of domestic oil and natural gas resources in the Lower 48 states and Alaska. The legislation comes as Republicans' calls to open up the Arctic National Wildlife Refuge and more of the Outer Continental Shelf to drilling grow louder, and as crude oil, natural gas and gasoline prices continue to steadily rise.

The legislation last week still was in the "conceptual stage," said Drew Hammill, a spokesman for House Speaker Nancy Pelosi (D-CA), who along with Majority Leader Steny Hoyer (D-MD) and other Democrats held a press briefing on Capitol Hill last Thursday to discuss the energy proposal.

Democrats said the bill will incorporate the "use-it-or-lose-it" proposal (HR 6251), which failed in the House last month, but "this time we're sweetening the pot to incentivize people to get moving," Hammill said (see NGI, June 30).

The so-called use-it-or-lose it measure, which House Republicans and oil and gas producers widely opposed, would require producers to "diligently" develop their existing leases before they can seek new leases from the Interior Department.

Democrats claim producers are sitting on 68 million acres of leased public land in the Lower 48 states, which they estimate could produce an additional 4.8 million b/d of crude oil and 44.7 Bcf/d of gas. Hoyer estimated that there is an additional 20 million acres available in Alaska. But producers and other critics argue that the proposal fails to take into account the fact that it often takes years of exploration and other activities to determine whether oil and natural gas can be recovered from a lease.

As a sweetener, the upcoming bill would call on the Bush administration to mandate annual lease sales in the National Petroleum Reserve in Alaska (NPRA), Hammill said. Currently lease sales are held every other year in the NPRA.

The NPRA, a 23-million-acre area on Alaska's North Slope, is estimated to hold technically recoverable resources of 1.3-5.6 billion bbl of crude oil and 39.1-83.2 Tcf of natural gas on federal lands, according to the U.S. Geological Survey. But the economic viability of the natural gas resources hinges on the ability to transport them to markets in the Lower 48 states.

The bill will call on President Bush to take action to "facilitate the construction" of a long-line pipeline from Alaska to the Lower 48 states as soon as possible, according to Hammill. It also will seek to ban the exportation of Alaska oil. In effect, the House will tell Alaska producers to "bring it [the oil] to American markets," Hoyer said.

Separately, Pelosi has called on Bush to release a "small portion" of the crude oil stocks from the Strategic Petroleum Reserve (SPR) to ease the pressure on gasoline prices. "It's the fastest thing we can to" to bring down prices, she said. The SPR contains an estimated 700 million barrels of oil.

House Democrats also plan to offer a bill that addresses speculation, manipulation and price gouging in the energy markets before Congress leaves for its August recess, Hammill said. The House Agriculture Committee held three hearings on the issue last week (see related story).

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