Sen. Jeff Bingaman (D-NM), chairman of the Senate Energy and Natural Resources Committee, urged Democrats to vote Tuesday against a Republican amendment that seeks to make more federal onshore and offshore lands available to producers.

The amendment, introduced by Senate Minority Leader Mitch McConnell (R-KY) and Sen. Pete Domenici (R-NM), would overturn the moratoriums on drilling off the East and Pacific Coasts and open a portion of the Arctic Natural Wildlife Refuge (ANWR) to leasing, among other things. The Republicans plan to offer the amendment as part of legislation to reauthorize federal flood insurance (S. 2284).

The Senate Democrats won’t try to attach their energy package to the flood bill, according to Bill Wicker, a spokesman for Bingaman. Rather, Senate Majority Leader Harry Reid (D-NV) plans to wait until later this month to bring up the Democratic version, possibly as a stand-alone bill, he said. The Democrats’ bill, The Consumer-First Energy Act of 2008, seeks to revoke $17 million in tax breaks for energy companies, impose a windfall profits tax on energy companies that don’t invest in renewable energy sources and impose federal penalties for energy price gouging.

“The Republican leader’s amendment is not a credible proposal for reducing [the] burden” of crude oil, gasoline and natural gas prices, Bingaman said on the Senate floor Monday. “This is an election year effort. This is election year policy in its classic form. It is Washington finger-pointing.”

President Bush recently blamed Congress for high commodity prices, Bingaman noted, adding that McConnell’s amendment “continues with this same old blame-the-other-guy approach.”

He blasted the Republicans for wanting to open up more federal lands for oil and natural gas production. Bingaman said producers aren’t even drilling on the lands that have been leased.

Of the 7,124 permits that were issued to drill for oil and gas on federal lands last year, Bingaman estimated that only 5,243 were actually drilled. He said three-fourths of the lands leased onshore are not being produced. Producers are sitting on about 31 million acres, he noted. And of the 41 million acres leased offshore, Bingaman reported that 33 million acres are not being produced.

He further said 3.8 million acres have been leased in the National Petroleum Reserve-Alaska, which Bingaman noted was twice the size of the portion of the ANWR that the Republicans seek to open. However, he noted that current production from the leases was “zero.”

The Republicans are calling for oil and gas production in Alaska areas that “are remote from transportation.” Having a lease sale in ANWR “will not do a single thing to bring down prices anytime soon,” Bingaman said.

He noted that the Republican amendment leaves out one area “where it would be the easiest and fastest to get production” — the eastern Gulf of Mexico. When the Senate last “debated offshore [and] onshore oil and gas production in this chamber in 2006, we made what I considered to be a very bad bargain. We put off limits…10 times the amount of natural gas that we opened up to exploration and drilling,” Bingaman said.

“We made available for lease 2 Tcf of natural gas in the Gulf of Mexico, while putting off limits 22 Tcf of natural gas. We also put new areas of the Gulf of Mexico under moratoria for the first time, including portions of Lease Sale 181 area that were closest to the existing oil and gas infrastructure. These areas under current law [are] off limits until 2022 because of that provision that we passed into law in 2006.”

Bingaman estimated that the portion of Lease Sale 181 that was placed off limits for the first time contains about one-half billion barrels of oil and 4 Tcf of natural gas. The “infrastructure to take [this energy] to market is already there, and the interest by industry in these resources is intense,” he told the chamber.

“If we are really serious about increasing domestic production and repealing existing moratoria, the place to start is here in the Gulf.”

Bingaman said the Democrats did agree with one Republican proposal — suspending filling the Strategic Petroleum Reserve for the remainder of the year.

“If we want to get at the real question of why oil is over $125 a barrel and why gasoline is closing in on $4 a gallon across the country, you won’t find the answer in the Republican leader’s amendment,” Bingaman said. “We are witnessing a substantial influx of speculative money into energy markets. It is bidding up the price of oil beyond any reasonable level…A Commodity Futures Trading Commission (CFTC) witness told our committee that they saw no evidence of speculation driving up oil prices. I thought they were alone in that view. But the Republican leader’s amendment also fails to acknowledge or deal with this significant part of the problem.”

“If we’re going to protect consumers, we need to have the federal government as an effective overseer, to start policing these markets.” The Democratic measure, introduced by Reid, “will begin to address this issue,” Bingaman said. “That bill requires the CFTC to start doing the job that Congress intends for it: to make sure oil trading is done with adequate transparency and to make sure that limits on speculation apply across the board. Right now it’s entirely possible for hedge funds or traders to evade the protections put in place for trading oil in the United States. They simply trade U.S. crude oil in foreign markets that the CFTC has decided it will not regulate.”

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