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US Congress votes for some offshore oil relaxations

Bush wants more, threatens veto

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The US Congress has voted to end America's ban on offshore oil and gas drilling in the face of rising petrol prices. However the White House is resisting the Democrats' energy package, saying it will stifle the oil industry.

Reuters reports that the Democrat-controlled lower house passed the proposed measures by 236 votes to 189 yesterday. The bill would allow state governments to permit drilling between 50 and 100 miles from their coasts, with seas further offshore being completely opened.

Meanwhile, as the House vote comes in, a differing plan is going before the Senate. The draft Senate law also loosens drilling prohibitions, but not as much as the Congressional one. The two bills would be combined into one compromise document before going to the White House for signature into law, if the upper house approves and sufficient time remains in the Washington calendar.

The Democrats had until recently been totally opposed to lifting the long-standing US moratorium on offshore fossil exploitation, but shifting voter sentiment in America following recent escalation in fuel prices has changed their minds. Now the party has decided to back some drilling relaxation, but as part of a wider package of measures - some of which are hotly opposed by the White House and elements of the Republican party.

"This legislation is a result of reasonable compromise," said Speaker of the House Nancy Pelosi. "[It] will put us on a path to energy independence by expanding domestic supply."

However President Bush begged to differ.

"At a time when American families are in need of genuine relief from the effects of high fuel prices, this bill purports to open access to American energy sources while in reality taking actions to stifle development," said a White House statement. It's thought that the eventual combo bill may face a presidential veto should it move forward successfully.

Many in the oil industry contend that the inshore limit of 50 miles will bar drilling in many of the most promising continental shelf areas. They are also unhappy with the lack of any incentive - in the form of profit-sharing provisions - for state governments to issue permits, fearing that this may mean that none are issued in some areas.

Green groups were also predictably outraged by the plans, saying that a total ban should have remained in place. ®

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