Washington (Platts)--5Mar2009

Opening the Outer Continental Shelf to oil drilling would only drop
prices in the long term by $1 to $2 a barrel, officials from both the
International Energy Agency and the US Energy Information Administration told
Congress Thursday.

Both IEA Chief Economist Fatih Birol and EIA Acting Administrator Howard
Gruenspecht told a subcommittee of the House Natural Resources Committee that
while increased OCS drilling might lead to as much as 600,000 b/d of
additional domestic production in the US by 2030, oil prices might only drop
by $1 to $2 a barrel as other producers compensated for the increased supply
by cutting production elsewhere, and as demand rose.

Some Democrats have opposed expanded drilling in the OCS, saying it would
make little difference in reducing prices, while Republican supporters of
expanded drilling have argued that reducing dependence on foreign oil by
opening up once-prohibited areas trumps the limited price benefit.

--Daniel Goldstein daniel_goldstein@platts.com