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From NPR News, this is ALL THINGS CONSIDERED. I'm Melissa Block.

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And I'm Robert Siegel.

In Congress, some competing talk today of oil. Democrats are trying to fight oil speculators while Republicans would rather focus on offshore drilling. Democrats want to lower gas prices by curbing speculation in oil futures and their legislation survived the key vote in the Senate today.

NPR's David Welna reports on the tug of war over energy policy.

DAVID WELNA: Speculation in oil futures markets has exploded over the past few years ever since the Republican-led Congress changed the rules, so anyone could buy oil futures not just those who actually intended to use that oil. As a result, the number of futures contracts has increased nearly twelvefold since 2001.

North Dakota Democrat Byron Dorgan today called it excessive, relentless speculation.

Senator BYRON DORGAN (Democrat, North Dakota): Thirty-seven percent of the people in the oil futures market in the year 2000 were speculators. Now, oil speculators are 71 percent of the market. They've broken the market.

WELNA: Democrats cited estimates said speculation's responsible for between 20 and 50 percent of the recent spike in oil prices. Senate Republican leader Mitch McConnell wasn't buying it.

Senator MITCH McCONNELL (Republican, Kentucky; Senate Minority Leader): Nobody can say with a straight face that simply addressing speculation — a very narrow part of the problem — is a serious approach.

WELNA: McConnell said he and his fellow Republicans want an extensive debate on energy - what he called the nation's number one issue. But majority leader Harry Reid flatly rejected the changes Republicans proposed adding to the anti-speculation bill.

Senator HARRY REID (Democrat, Nevada; Senate Majority Leader): They want 28 amendments. They're not serious about this. We are serious about it.

WELNA: Reid accused Republicans of trying to undermine the anti-speculation measure.

Sen. REID: Forty-seven different Republican senators have spoken at one time or another on the need to do something about speculation. That was before they heard from the oil companies, and I guess from some people on Wall Street. Now, suddenly, they don't think speculation's a big deal.

WELNA: It is a big deal, said Nevada Republican John Ensign. But it's a deal, he warns, in danger of becoming the domain of foreign markets.

Senator JOHN ENSIGN (Republican, Nevada): We've been willing to do something on the speculation front as long as you're not destroying our futures markets in the United States and just sending those markets overseas.

WELNA: And at the White House today, spokeswoman Dana Perino played down the significance of speculation.

Ms. DANA PERINO (White House Spokeswoman): We believe that speculation does cause some volatility in the day-to-day market fluctuations of oil prices, but we believe that the root causes of high energy prices is supply and demand.

WELNA: The Commodity Futures Trading Commission issued a report today, cobbled together by various Bush administration agencies, that also concludes supply and demand - not speculation - is the problem.

But energy markets expert Roger Diwan of PFC Energy told the Senate panel last week, it's not so much a problem of supply and demand of actual barrels of oil but rather one of speculative contracts.

Mr. ROGER DIWAN (President and CEO, PFC Energy): It's the supply and demand of paper barrels. And these paper barrels, what you have right now, you have created a structure where you have a lot of people who wants to hold paper demand. You don't have a lot of people who are willing to provide paper supply.

WELNA: Another Senate panel heard today from recovering Texas oilman T. Boone Pickens. He warned lawmakers that the wise response to the oil price shock is not to drill more, but to expand solar and wind power.

Mr. T. BOONE PICKENS (Chairman, Mesa Petroleum Co.): We have walked into a trap and we've got to get out of it. We are the ones that put ourselves there, nobody else.

WELNA: It's not clear whether the anti-speculation bill will keep moving forward. Republicans are balking at being limited to only two amendments. Democrats say one of those amendments can be on expanding oil drilling because they don't expect it to pass.

David Welna, NPR News, the Capitol.

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