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Offshore drilling proposal gains ground

Members of Congress gather in the Senate chamber

TEXT OF STORY

Kai Ryssdal: Meanwhile, the slide in oil prices came to an end today. Lower-than-expected U.S. inventories and concerns about the fighting between Georgia and Russia did the trick. Crude closed up 3 bucks, the first real rise in a week. Here at home, angst over gas prices has prompted a number of congressional proposals to do something. To do anything. Because this is an election year, after all. Our Washington bureau chief John Dimsdale reports now on one compromise that is getting some traction.


John Dimsdale: A bipartisan group of moderate Senators, calling themselves the Gang of 10, backing a proposal that takes a little bit from both sides in the debate over oil prices. Their idea is to allow southeastern states to approve drilling offshore for more oil. The proposal would also raise as much as $30 billion for conservation and energy efficiency programs by repealing a number of tax credits for oil companies.

Drilling opponents say it'll take 10 years to bring new domestic oil to market. But Myron Ebell of the Competitive Enterprise Institute sees a quick psychological impact on oil prices.

Myron Ebell: Knowing that a new source of petroleum in a stable country is coming online will have an immediate effect.

Polls show most Americans favor more offshore drilling, prompting even hard-core opponents like Speaker of the House Nancy Pelosi to allow a vote on the idea, as she told CNN's Larry King this week.

Recording of Nancy Pelosi: We can do that. We can have a vote on that. But it has to be part of something that says we want to bring immediate relief to the public and not just a hoax on them.

Pelosi says conservation and switching to alternative fuels will have a quicker impact on gas prices. But Sara Banaszak with the American Petroleum Institute says hitting up oil companies to pay for the transition would be counterproductive.

Sara Banaszak: Taxes on the industry are raising the cost of delivering the product to the consumer.

The Gang of 10 Senators acknowledge their proposal faces some daunting odds in Congress this fall, but say without their compromise nothing will get past the Senate before next year.

In Washington, I'm John Dimsdale for Marketplace.

About the author

As head of Marketplace’s Washington, D.C. bureau, John Dimsdale provides insightful commentary on the intersection of government and money for the entire Marketplace portfolio.
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The critics are right, increased drilling will not change the price of gas today. We should increase drilling as part of something known as long term planning that asks will we need more oil ten years from now? As part of this radical act of long them assessment, perhaps we should also be encouraging more use of existing oil claims.

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