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Murkowski pushes to boost domestic oil production

Posted: Friday, February 25, 2000

ANCHORAGE (AP) -- The push is on in Congress to boost U.S. petroleum production.

Former Energy Secretary James Schlesinger said the recent rise in the price of gasoline, heating oil and diesel fuel shows the nation needs to stimulate production. That includes opening the Arctic National Wildlife Refuge in Northeast Alaska to oil and gas exploration and development, he said.

''If we want greater domestic production, we will have to protect domestic producers,'' he said.

Schlesinger now is a senior adviser to Lehman Brothers in Washington. He was the lead witness at a hearing before the Senate Energy and Natural Resources Committee which is chaired by Sen. Frank Murkowski.

The Alaska Republican is critical of the Clinton administration for not supporting more drilling.

''This administration must be held accountable for the lack of an energy policy,'' Murkowski said in a floor speech Wednesday. ''There is no energy policy on nuclear power, on coal, on gas, on oil.''

But the prevailing sentiment fell short of a national crisis at Thursday's hearing and there was no consensus about what the government's response should be.

Sen. Peter Fitzgerald, R-Ill., who was elected in 1998, said the current oil price rise was the result of some old-fashioned supply and demand.

''I came in (to the Senate) when oil prices were low, and people were talking about guaranteed loans to the oil industry,'' he said.

The witnesses seemed united in the belief that the current price rise is linked to reduced foreign production at the direction of the Organization of Petroleum Exporting Countries. But they said OPEC production will rise in the months just ahead.

The production decline has created shortages of crude for U.S. refiners. But witnesses said the refiners also have curbed operations because higher prices have lowered their profit margins.

Schlesinger and others said they do not foresee a return to year ago prices, when crude was fetching less than $10 a barrel and gasoline was selling for less than $1 a gallon.

Investments in exploration and development will increase once domestic producers are confident oil prices will stabilize around $20 a barrel, they said.

Murkowski has used the nation's growing dependence on foreign oil to press congressional and White House action to permit oil drilling in the arctic refuge, whose coastal plain is regarded as a promising prospect.

Environmentalists said they saw Thursday's hearing as an effort to prop up the domestic oil industry.

''If oil prices are low, what you hear is that there's a chokehold on the industry,'' said Adam Kolton of the Alaska Wilderness League. ''If prices are high, the problem is industry access to lands.''



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