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Senate bill wants US oil demand cut by 10 mln bpd

Written by: Staff

WASHINGTON, May 4 (Reuters) A group of Senate Republicans and Democrats today introduced legislation to cut U.S.

crude oil demand by 10 million barrels a day over the next 25 years and reduce America's dependence on oil imports.

The legislation is the latest bill to be dropped on the Senate and House floor by lawmakers who are scrambling to show their constituents back home they are doing something to tackle high gasoline prices.

Democrats believe voter anger over soaring pump costs could help them wrestle majority control from Republicans over both chambers in the Congress during this November's mid-term elections.

''The high gas prices we are facing today can only be addressed by a serious, long-term effort to reduce our dependence on foreign oil,'' said Democrat Evan Bayh of Indiana, a co-sponsor of the legislation, titled the Enhanced Energy Security Act of 2006.

The bill aims to slash US oil consumption, from projected levels, by 2.5 million barrels a day by 2016, 7 million barrels a day by 2026 and 10 million barrels a day by 2031.

The United States currently uses about 21 million barrels of oil a day, with imports meeting about 60 per cent of that demand and forecast to increase in the years ahead.

''It's time we take our energy future out of the hands of foreign nations and implement an aggressive national energy plan that returns Americans to the driver's seat,'' said Republican Norm Coleman of Minnesota.

''This legislation would put our economy on an oil-reducing diet and push to market the alternative fuels and advanced technologies that will end our oil addiction,'' said Democrat Joe Lieberman of Connecticut.

To help reduce US reliance on foreign oil by cutting domestic oil consumption, the bill includes programs that will: * Speed the development of new vehicle technologies such as plug-in hybrids and the use of light weight materials in vehicles; * Provide government loan guarantees and competitive grants to automakers and parts manufacturers to convert existing plants or build new facilities to make fuel-efficient vehicles; * Increase access to alternative fuels, such as motor fuel made from 85 per cent ethanol, across the country by providing funding for alternative fueling stations; * Provide funds to state programmes to encourage motorists to retire gas-guzzling vehicles; * Provide financial incentives to produce cheaper ethanol from crop waste.

In other energy events on Capitol Hill, Democrats introduced companion legislation in the Senate and House to repeal at least 28 billion dollars in tax breaks and subsidies for oil and natural gas companies.

The legislation would not allow the companies to write-off certain drilling costs, repeal the ability of companies to deduct 50 percent the cost of building a new refinery and ends royalty relief for oil and gas production in deep waters of the Gulf of Mexico.

The bill's sponsors said the tax breaks were not needed with oil companies earning record profits at the expense of drivers paying near-record gasoline prices.

Also, House Majority Leader John Boehner says he still plans to bring a package of yet-to-be-defined energy legislation to the floor in June.

Reuters VJ VP0158

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