Washington (Platts)--22Jul2008

With the US Senate prepared to vote on legislation Tuesday that would
curb speculation in oil and natural gas markets, Majority Leader Harry Reid
again offered to consider allowing Republicans an opportunity to propose
amendments for more oil and natural gas development.

"We have made it clear that we are willing to compromise and work
together on energy legislation that both sides can live with," the Nevada
Democrat, who sponsored the speculation bill, told the Senate. "They can offer
their drilling amendment, and we would offer our own alternative. Both
measures would receive a vote. That is how the legislative process is supposed
to work."

Senate Republican Leader Mitch McConnell told reporters Monday that he
did not necessarily object to the Reid bill, but insisted that acting on that
issue alone would not adequately address concerns over oil and fuel supplies
and prices.

"That alone is simply not going to get the job done," the Kentucky
Republican said. "Our goal ought to be for the United States Senate to use
this opportunity to address a big issue in a comprehensive way."

The Senate is scheduled to vote Tuesday morning on a motion to limit
debate on the speculation bill, a move that would close off attempts by
opponents of the measure to prevent a final vote by conducing a filibuster.

McConnell and most of his Republican caucus support more access to
protected federal lands and waters for oil and natural gas production. They
have indicated that they would not allow a final vote on a bill that would not
increase drilling opportunities.

Republican and Democratic Senate leaders were still negotiating what, if
any, amendments to the speculation bill might be allowed.

'SIDE-BY-SIDE' AMENDMENTS MAY BE OFFERED

Regan Lachapelle, a spokeswoman for Reid, said Democratic and Republican
bills might be offered "side by side" as amendments to the speculation
measure. Each of the two proposals would have to attract 60 votes to pass the
Senate.

Among the possible options for Democrats is one being written by Energy
and Natural Resources Committee Chairman Jeff Bingaman. The New Mexico
Democrat has been working for weeks on a comprehensive proposal with Senator
Byron Dorgan of North Dakota and other Democratic members of his committee.

Bingaman's office Monday did not offer details about the possible
measure, other than that it includes both supply and demand components. But
Dorgan, Democrat-North Dakota, told reporters that it would increase
opportunities for drilling.

Both Bingaman and Dorgan have supported lifting congressional
prohibitions on energy production in the past, most notably in 2006 when they
supported a bill that opened new areas of the central and western Gulf of
Mexico to energy production.

"We understand we have to do a lot of everything," Dorgan said. He named
conservation, energy efficiency measures, and new supply as pieces of the
yet-to-be unveiled energy proposal.

Energy and Natural Resources Committee Ranking Republican Pete Domenici,
meanwhile, said he will offer an amendment that would allow states to "opt in"
to deep-sea exploration for mineral resources.

"My amendment would allow states to opt into exploration if they choose,
providing states with a substantial source of revenue and providing America
with much needed domestic oil," the New Mexico senator said.
--Jean Chemnick, jean_chemnick@platts.com