House rejects bill to boost drilling on leases

WASHINGTON (Reuters) - The House of Representatives failed to approve legislation on Thursday that would have pushed oil companies to drill on federal leases they already hold while requiring the government to more often lease tracts in an Alaskan oil reserve.

House Democrats, trying to show they favor more U.S. oil production in light of record gasoline prices, came up with the bill to counter White House and Republican lawmakers' calls to lift a congressional offshore drilling ban. The White House had threatened to veto the measure.

The bill had a "use it or lose it" provision that required oil companies to diligently develop their existing federal leases or turn them back to the government before they could obtain new acres.

The legislation would have also mandated that the Interior Department conduct yearly leases in the National Petroleum Reserve in Alaska, which holds an estimated 10.6 billion barrels of oil.

"Increasing domestic supply means facilitating drilling where it is allowed already in tens of millions of acres across our country," House Speaker Nancy Pelosi said.

The House voted 244 to 173 in favor of the legislation, but the measure fell short of obtaining two thirds of the "yes" votes that was required when the chamber suspends its rules to quickly act on a bill.

Under the suspension of the rules, Republicans were blocked from amending the bill. Republicans say they had enough votes to pass the bill with an amendment lifting the ban on offshore drilling, which is opposed by the Democratic leadership.

(Reporting by Ayesha Rascoe; editing by Jim Marshall)