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Offset Tightening World Oil Supplies with Domestic Production

WASHINGTON, D.C. - U.S. Sen. Lisa Murkowski, R-Alaska, today underscored the importance of America developing its own oil resources amid growing demand and rising world prices.

During a hearing before the Senate Energy and Natural Resources Committee, the Energy Information Agency predicted oil supplies will tighten over the next two years, with world consumption growing by an annual average of 1.5 million barrels a day, while annual production increases by less than 100,000 barrels a day.

"It's not that I expect our nation to supply 100 percent of its own oil - we won't. And it's not that I expect increased domestic production to singlehandedly bring the world price of oil back down to our preferred price range - it won't," Murkowski said. "But I do expect an honest discussion about what increased domestic production can do to protect against supply disruptions, increase our security, restore our trade balance, generate government revenues and, most of all, create jobs," Murkowski said.

The International Energy Agency estimated that global demand reached almost 88 million barrels a day last year - the highest level on record. The IEA expects demand will reach 107 million barrels a day by 2035 and the EIA expects energy consumption to grow about 50 percent over the next 25 years, with almost all of that increase coming from China, India and the Middle East.

"Growing demand around the world means Americans will be facing greater competition for the oil we import - and that means higher prices," Murkowski said. "The best protection we can have against rising prices is increased production here at home. We have the resources; we simply lack the political will."

Since last September, oil prices have increased by more than 25 percent, recently reaching $100 a barrel for the first time in over two years. The EIA expects the price of oil to average $93 a barrel in 2011 - $14 higher than the average price last year - and $99 a barrel in 2012. 

Gasoline prices are expected to average $3.17 a gallon this year and $3.29 a gallon in 2012, according to the EIA.

"I've never been one to deny the critical need for greater energy efficiency, for greater investments in alternatives and for a responsible path to a cleaner energy future. But I'm also interested in what we can achieve today - not just tomorrow," Murkowski said. "Our energy policy, at times, goes beyond frustrating and becomes simply irresponsible. We need a rational energy policy that strikes a balance between greater investment in the fuel we depend on today and the energy sources of tomorrow."

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