WASHINGTON (Reuters) - A bipartisan group of U.S. lawmakers unveiled legislation on Friday aimed at forging a compromise between Democrats and Republicans deadlocked in the Senate over energy issues.
The legislation focuses on moving Americans to alternative energy, conservation, and increasing domestic oil production.
Opening up more areas for oil production has been a major stumbling block in negotiations to pass energy legislation in Congress.
Republicans support lifting bans on drilling in restricted areas, while Democrats want oil companies to use land already available and favor selling oil from the Strategic Petroleum Reserve.
Calling themselves the "Gang of 10," the Senators are trying to bridge that divide.
Their bill would require the government to open some additional areas in the Gulf of Mexico for development and would allow drilling off the coasts of Virginia, North Carolina, South Carolina, and Georgia if those states give permission. A commission would be created to recommend areas to be opened for leasing in the future.
Offshore production would still only be allowed 50 miles from the shore, and all the new oil produced would have to be used domestically.
"The American people have been clamoring for us to come together and that is what this group did," Sen. Blanche Lincoln, an Arkansas Democrat, told a press conference.
A Senator from Florida, however, said the package did not go far enough in increasing domestic production and objected to the proposal to open up areas in the Gulf of Mexico without his state's input.
"A comprehensive solution includes oil shale production, exploring ANWR (the Arctic National Wildlife Reserve), and allowing states to decide where to develop offshore resources," said Mel Martinez, a Republican. "This proposal falls short of meeting those goals."
The legislation sets a goal to transition 85 percent of America's new vehicles to nonpetroleum based fuels within 20 years by providing billions of dollars for research and development and helping U.S. automakers produce vehicles that do not run on gasoline.
U.S. consumers would receive up to $7,500 in tax credits when they buy cars that run on alternative fuels. Renewable energy and energy efficiency tax credits would also be extended until 2012 to promote investment in those industries.
Senate Majority Leader Harry Reid expressed support for the bipartisan effort, even though he said he did not agree with all of the measures.
"I am hopeful this plan can begin to break the current legislative stalemate on the Senate floor," Reid said in a statement.
The group is led by Sen. Kent Conrad, a North Dakota Democrat, and Sen. Saxby Chambliss, a Georgia Republican. The Senators said they plan to pay for the $84 billion in spending in the bill by eliminating $30 billion in tax breaks for energy companies and by ensuring the federal government gets a fair share of revenue from the Gulf of Mexico drilling leases.
The legislation did not address excessive speculation in energy futures markets, which many Democratic lawmakers have blamed for helping to push up oil prices.
Lawmakers adjourn on Friday for a five-week August recess, so they will have to tackle the package when they return to Washington.
Leaders from both parties have agreed to hold a one-day energy summit to help develop a plan for energy independence.
Reporting by Ayesha Rascoe; editing by Jim Marshall