Washington (Platts)--10Jul2008

US House Speaker Nancy Pelosi Thursday unveiled a new plan she says will
bring down record high oil prices without providing oil companies access to
more of the Outer Continental Shelf for drilling.

Despite signs this week that some House Democrats and Senate leaders
might entertain the idea of allowing more access for offshore drilling, Pelosi
made clear Thursday that her position on lifting the congressional moratorium
was not softening.

"This call for drilling in areas that are protected is a hoax. It is an
absolute hoax on the part of Republicans and the Bush administration," she
said.

The speaker, who is from California, argued that allowing drilling on the
Atlantic and Pacific seaboards would be useless because oil companies say they
lack the technological ability and time to produce the offshore leases they
already have. The same would hold true for new areas if they were opened, she
said.

Instead, Pelosi and members of her leadership team proposed a variety of
measures aimed at maximizing production of areas now open to drilling. The
speaker's package would speed completion of new oil and natural gas pipelines
in Alaska, direct the Bureau of Land Management to hold annual rather than
biannual lease sales for the National Petroleum Reserve, prevent Alaskan oil
from being sold outside the US, and tighten restrictions on speculation in oil
markets.

The speculation bill is being developed this week in the House
Agriculture Committee, and the speaker said it could be on the floor as early
as next week.

Democrats also propose requiring the Bush administration to release some
crude oil from the Strategic Petroleum Reserve.

Pelosi argued that since SPR stopped being filled on June 30, the cost of
oil has declined nearly $10/barrel, before Thursday's $5.60 gain in the NYMEX
August crude contract. Placing SPR oil on the market would put even more
downward pressure on oil markets, she said, and she urged Americans
to call the White House and encourage the president to support the idea.

"It's the fastest way to bring down prices at the pump," she said.

House Democrats also plan to revisit a measure that would bar oil
companies from bidding on new federal leases if they do not produce the leases
they already hold. The bill was defeated before the Fourth of July recess when
Pelosi brought it to the floor under rules that required a two-thirds
majority, an approach she said she planned to use again for her energy
package.

--Jean Chemnick, jean_chemnick@platts.com