News : Economy
Published: Wednesday, 15 May 2013 09:19
The Hill - Sen. James Inhofe (R-Okla.) will introduce legislation Wednesday calling for increased drilling on U.S. federal lands to displace Iranian oil on the world market, according to a copy of the bill obtained by The Hill.
The bill requires the president to establish enough “Iranian Oil Replacement Zones” on federal lands to produce 1.25 million barrels of oil per day — approximately the amount Iran exports every day.
An Inhofe aide told The Hill that would divert oil the U.S. imports from Saudi Arabia and elsewhere to nations that still buy Iranian crude, such as China, India and Japan.
The goal is to give President Obama wiggle room to enforce full sanctions on Iranian oil by ending waivers awarded to some nations.
The release of the bill comes as Sens. Robert Menendez (D-N.J.), the chairman of the Senate Foreign Relations Committee, and Mark Kirk (R-Ill.) consider legislation regarding Iranian oil, according to media reports.
The aide said Inhofe wants to take the bill through the Senate Energy and Natural Resources Committee.
The bill continues calls from Republicans to expand oil and gas drilling on public lands, as they have argued the White House has restricted such activity. But getting the legislation through the Democratic-controlled Senate could prove challenging.
Western countries have mostly embargoed Iranian oil exports in hopes of coaxing it to drop its nuclear-enrichment program, as the U.S. and others worry Iran is looking to make nuclear weapons. With about 70 percent of Iran’s revenue coming from oil, the idea is to keep a Western foot on the Iranian economy’s throat until its leadership acquiesces.
But the U.S. awarded China, Japan, India and others a waiver for the sanctions. Those nations argued completely cutting off Iran’s supply would yield price spikes that overheat their economies.
While the Inhofe bill could give Obama leeway in world oil supplies to end those waivers, the bill does not contain language directing the president to do so.
And while the bill attempts to level world oil supply through ramped up U.S. production, the Inhofe aide noted nothing could stop Iran’s allies from restricting output to maintain demand for Iranian oil.