From: Tom Doggett, Reuters
Published November 4, 2004 12:00 AM

Bush Is Likely to Renew Push for Alaska Oil Drilling

WASHINGTON (Reuters) - In his second term, U.S. President George W. Bush is likely to stick to his plan to fill the nation's emergency crude oil stockpile and may find more Congressional allies to open an Alaskan wildlife refuge to oil drilling, energy experts said.

Democratic challenger John Kerry conceded defeat on Wednesday, handing Bush another four years in the White House.

Key energy issues facing Bush include managing the nation's Strategic Petroleum Reserve (SPR), relations with OPEC oil producers, and winning congressional approval of an energy bill to boost domestic oil and gas drilling.

Kerry said he wanted to temporarily suspend oil shipments to the 671-million-barrel Strategic Petroleum Reserve (SPR) amid tight U.S. oil supplies and record high prices that topped $55 a barrel last week. But Bush has insisted on continuing to fill the stockpile.

Bush took a lot of criticism for his position during the campaign from Kerry, members of Congress, and energy experts, and some believe there is no need for him to buckle now.


"Bush is generally characterized as a man who stays on the message. He has time and time again said, 'No, we don't tap into the Strategic Petroleum Reserve unless there is a severe disruption in supply,' and I think he'll stick with that," said Robert Ebel, who oversees the energy program at the Center for Strategic and International Studies think tank in Washington.

However, other experts noted that in a second term, Bush could fine-tune his policies without taking a political hit.

"I think the Bush administration might take another look at the box that it has painted itself into on SPR policy," said David Goldwyn, head of Washington-based Goldwyn International Strategies and a former assistant energy secretary in the Clinton administration.

Bush "might have a little less fear in a second term ... and might be more willing to use the reserve," he added.

However, Bush would keep a tight lid on the stockpile if the administration believes there is a serious threat of supply disruptions in the Middle East, especially Saudi Arabia, according to Goldwyn.

An open question is whether Bush might tap the separate 2-million-barrel heating oil reserve in the U.S. Northeast this winter. Unlike the SPR, federal law specifically allows that stockpile to be used to combat high heating oil prices.

Relations with OPEC, Congress

Few, if any, changes are seen in the administration's relationship with OPEC. But Bush could face a possible oil production cut from the cartel soon after he is sworn in for a second term in late January.

U.S. oil demand typically falls in the second quarter of each year when there is a switch from winter heating oil to spring gasoline use. That is when the Organization of Petroleum Exporting Countries (OPEC) may cut its crude oil production.

"If OPEC cuts (output), then prices will stay high. But if they're sensible they would maintain production so that we could build (oil) stocks in this country and be more comfortable when we go into the driving season," Ebel said.

Separately, Bush faces an uphill battle in winning Senate approval to open Alaska's Arctic National Wildlife Refuge (ANWR) to oil drilling, a key plank in his energy policy.

The House of Representatives backs ANWR drilling, but moderate Republicans and Democrats in the Senate have voted to keep the refuge off limits to oil companies.

When the new Congress convenes early next year, the House will have more Republicans lawmakers to increase support for drilling in the refuge.

While Republicans picked up several seats in the Senate, they appeared to still fall short of 60 votes needed to end a filibuster of an energy bill that would open ANWR. New Republican senators include David Vitter of Louisiana, Mel Martinez of Florida, Jim DeMint of South Carolina, and John Thune of South Dakota, giving the party possibly 55 seats in the chamber.

Bush could explore another route such as having ANWR drilling language attached to the yearly bill that funds the government, experts said. That bill requires just 51 votes to pass the Senate.

Comprehensive energy legislation that became bogged down in the current Congress could be split into several measures in the new Congress, focusing on increasing ethanol use, improving the reliability of the U.S. electric grid and boosting nuclear power, according to lobbyists.

Source: Reuters

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