Washington (Platts)--12Sep2008

In the first half of a long anticipated energy summit Friday, US Senate
members heard testimony from academic and industry representatives on the best
way to bring down the cost of gasoline and eventually wean the country off of
petroleum.

Senate Majority Leader Harry Reid called the meeting as a way to inform
legislation that the chamber will debate as soon as next week, and to attempt
to end a standoff between Republicans, who generally emphasize greater access
for oil and natural gas production, and Democrats who favor energy efficiency
and renewable energy.

The summit is being chaired by Senate Energy and Natural Resources
Chairman Jeff Bingaman, who is also involved in drafting a Democratic energy
bill endorsed by Reid and the party leadership.

Reid has said he plans to bring Bingaman's yet-to-be introduced measure
to the floor soon, along with a bipartisan bill drafted by Senate Democrats
and Republicans, and a Republican leadership-backed bill.

"The purpose of today's energy summit is to foster a bipartisan dialog on
how we achieve a more secure, reliable, sustainable and affordable energy
future for the American people," Bingaman said.

Despite the bipartisan flavor of the morning, senators in attendance used
the event to tout the energy bills they backed. Senate Republican Leader Mitch
McConnell called bills other than the "Gas Price Reduction Act" proposed by
Republicans "disproportionally meager in light of the current crisis."

The Republican bill (S. 3202) calls for a lifting of the federal
moratorium on offshore drilling 50 miles from shore with state consent, but
would leave it in place for the eastern Gulf of Mexico.

The drilling provision is identical to one proposed to House of
Representatives Democrats this week, except that it shares revenues from
drilling with adjacent states.

The panelists all told senators that both aspects were important to any
energy bill.

Shell executive Marvin Odum used his time before the Senate to decry
litigation by environmental groups that he said was holding up the production
of existing leases, especially in Alaska's Beaufort Sea. A lawsuit by
environmentalists has delayed Shell's ability to explore and produce in the
area, which is rich both in wildlife and mineral resources.

Odun also said the senators should support more government assistance for
coal, complaining that there was still no plan for a large-scale carbon
capture and sequestration project following the demise of the FutureGen
project. "It is crucial that this country learns to use its coal resources in
a clean, carbon-free way," he said.

--Jean Chemnick, jean_chemnick@platts.com