WASHINGTON The Senate voted Tuesday to move ahead with a Democratic plan to curb speculation in oil markets that has been blamed for some of the recent run-up in oil prices.
The 94-0 vote clears a procedural hurdle for the legislation, which would require the Commodity Futures Trading Commission, or CFTC, to set limits on trading in oil markets by investors and speculators.
Despite the big tally, however, the rival parties are bitterly divided on how to address high gasoline prices and an underlying stalemate remains in place.
The rapid increases in oil prices have coincided with big rises in trading on oil future markets and investment in oil by pension and hedge funds. Democrats say much of the recent increases in oil prices are due to speculation and investment by people who have no intention of taking possession of the commodities.
"The demand for 'paper barrels' ... has begun to swamp the price signals that are generated by the more traditional hedgers and the large producers and the consumers of petroleum products in tune to the real time dynamics of supply and demand," said Energy Committee Chairman Jeff Bingaman, D-N.M.
Republicans said the bill would have little if any effect and said Congress should instead lift a ban on offshore drilling along the Atlantic and Pacific coasts and the eastern Gulf of Mexico.
They protested that Senate Majority Leader Harry Reid, D-Nev., appears determined to block a vote on allowing more offshore drilling, despite opinion polls that show voters increasingly support the idea.
"Nobody can say with a straight face that simply addressing speculation a very narrow part of the problem is a serious approach," said Minority Leader Mitch McConnell of Kentucky.
Given Democrats' refusal to permit a vote on more exploration, Republicans are likely to ultimately block the measure unless they are permitted to offer more amendments. The bickering promises to consume the Senate for several days.
The debate is being driven by more than record oil prices. Presidential politics and the looming elections for control of Congress are coloring lawmakers' every move.
To a remarkable degree, the energy debate has been dominated by the question of whether to open up more Outer Continental Shelf waters to oil exploration. Most Democrats, led by Reid and House Speaker Nancy Pelosi, D-Calif., oppose the idea.
But Democrats are on the defensive since voters though not Democratic-friendly environmentalists increasingly support more oil exploration. If the idea was allowed an up-or-down vote, enough Democrats would likely defect and side with most Republicans for it to pass.
Sen. John McCain of Arizona, the presumptive GOP presidential nominee, recently reversed his position to favor new offshore drilling leases, though he remains opposed to opening up the Arctic National Wildlife Refuge to oil companies.
For Republicans, the drilling question is one of the few issues where they have an edge with voters, and they're pressing it to the hilt. Even though new offshore leases wouldn't deliver oil to the marketplace for a decade or so, some Republicans say simply opening up new coastal areas to exploration would lower prices now.
"If we move to demonstrate that we are opening up America's energy resources, that would factor into future expectations of where supply and demand go," said Rep. Eric Cantor, R-Va. "Those future prices are directly related to spot prices."