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White House slams Republican offshore drilling bill

By Tom Doggett

WASHINGTON (Reuters) - The White House sharply criticized a bill passed by the House of Representatives on Thursday that would expand offshore drilling as part of a broader Republican effort to stimulate domestic production in the face of rising gasoline costs.

The bill, which easily cleared the Republican-dominated House, would require lease sales to proceed that were canceled or delayed by the Obama administration offshore Virginia and in the Gulf of Mexico following the BP oil spill.

The White House said the bill would "undercut" new offshore drilling safety reforms imposed after the massive oil spill last year.

"These reforms strengthen requirements for issues ranging from well design to workplace safety to corporate accountability, and they require operators to show that they can contain a subsea oil spill like the Deepwater Horizon oil spill," the White House said.

The White House also said the Interior Department would hold new lease sales in the Gulf of Mexico by mid 2012. The administration had planned to open up drilling offshore Virginia but backtracked on the idea after an explosion aboard the Deepwater Horizon rig sent millions of barrels of oil into the Gulf of Mexico.

With both parties revving up for elections in 2012, Republicans argued that increasing exploration would help lower gasoline prices, even though it would take years to find and develop new offshore oil.

"This will send a strong signal to the world markets that the U.S. is serious about producing our resources and bringing more production online," said Republican Representative Doc Hastings, who steered the bill through the House.

Environmental groups said the legislation would leave the nation's oceans more vulnerable to drilling accidents.

"Congress is putting the interests of the oil industry over those of the American people," Ocean conservation group Oceana said in a statement. "Their chief priority seems to be assuring continued profits, even if it costs us our coasts."

Democrats were blocked from offering amendments to the bill that would have stripped billions of dollars in federal tax breaks from big oil companies.

"The Republicans say Big Oil needs these subsidies as an incentive to drill and yet for the first quarter of this year, the big five oil companies had profits of over $30 billion," said House Democratic Leader Nancy Pelosi.

The legislation has little chance of making it into law. The measure needs to be voted on by the Democratic-controlled Senate, where it faces strong opposition.

In the Senate, the commerce committee approved a bill to toughen safety standards on oil and gas pipelines, while imposing higher fines on violators.

The safety bill is in response to a string of pipeline accidents in the last year that killed more than a dozen people, destroyed homes and polluted land and water.

The legislation would raise fines from $100,000 per violation to $250,000, and from $1 million for a series of pipeline violations to $2.5 million.

The measure must still pass the full Senate and then clear the House before it could be signed in to law.

As Republicans and Democrats scramble to show voters they are trying to do something about rising gasoline prices, the House will vote next week on legislation to set a 60-day deadline for the Interior Department to decide on new offshore drilling permits.

The Senate will begin tackling tax breaks for oil companies over the next few weeks by holding hearings on the issue and offering Republicans the chance to vote on related bills.

Debate is also picking up on a bill to promote natural gas.

This week the Blue Dog coalition, a group of 25 moderate Democrats who push for conservative budget and tax policies, endorsed a bill that would provide incentives for manufacturers to build heavy-duty trucks powered by natural gas and to covert passenger cars to run on the fuel.

The measure, which incorporates ideas from Texas billionaire T. Boone Pickens, has bipartisan support. But chemical makers and other industries that use large amounts of gas are afraid that increased demand would boost prices and are lobbying to stop the bill.

(Additional reporting by Timothy Gardner and Richard Cowan; Editing by Russell Blinch, Dale Hudson and Sofina Mirza-Reid)

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