In recent years, this global shortage of drill-ships has created a critical bottleneck, frustrating energy company executives and constraining their ability to exploit known reserves or find new ones. Slow growth in oil supplies, at a time of soaring demand, has been a major factor in the spike of oil and gasoline prices.

Mr. Bush called on Congress Wednesday to end a longstanding federal ban on offshore drilling and open the Arctic National Wildlife Refuge for oil exploration, arguing that the steps were needed to lower gasoline prices and bolster national security. But even as oil trades at more than $135 a barrel -- up from $68 a year ago -- the world's existing drill-ships are booked solid for the next five years. Some oil companies have been forced to postpone exploration while waiting for a drilling rig, executives and analysts said.

The Interior Department’s program to collect billions of dollars annually from oil and gas companies that drill on federal lands is troubled by mismanagement, ethical lapses and fears of retaliation against whistle-blowers, the department’s chief independent investigator has concluded. The report, a result of a yearlong investigation, grew out of complaints by four auditors at the agency, who said that senior administration officials had blocked them from recovering money from oil companies that underpaid the government.

The Senate fell nine votes short of the 60 required to proceed to debate on the Democrat-sponsored energy measure, which would have erased $17 billion in tax breaks for oil companies over 10 years and created a levy on "unreasonable" profits collected by the five largest U.S. oil companies. Only six Republicans voted to move ahead.

I'll make oil companies like Exxon pay a tax on their windfall profits, and we'll use the money to help families pay for their skyrocketing energy costs and other bills.

If oil and natural gas prices stay as high as they've been in recent months, the government could lose as much as $53 billion over the next 25 years in energy royalties because of an adverse court ruling, according to congressional auditors.

The Government Accountability Office said in a report released Thursday that the soaring price of crude oil and natural gas also means the windfall that companies will enjoy from the court ruling also could increase by billions of dollars.

In October 2007, a federal court ruled in a claim originally filed by Kerr McGee Corp. that the government cannot require companies that are exempt from paying royalties on oil and gas taken from federal land and waters to pay them if market prices reach a certain level.

The case is based on a claim filed by Kerr-McGee, which was purchased by Anadarko Petroleum Corp., in 2006.

Anadarko had argued successfully that the Interior Department's Minerals Management Service had overstepped its authority when it imposed royalties on oil and gas taken from deep waters of the Gulf of Mexico under a royalty relief program enacted by Congress in 1995.

Congress at the time provided the royalty break for deepwater exploration to encourage energy development in those areas. The Interior Department contends it had the authority to lift that royalty relief once prices reached a certain level -- prices that are far below what crude oil and natural gas is now costing.

Honestly, why take the 18 cents out of the federal budget? Why not take it out of the oil company profits? The $10 billion in revenue the federal government would lose, at a time when our roads are crumbling and bridges literally collapsing, is only a quarter of Exxon Mobil's annual profits...

And that's just Exxon Mobile, excluding every other Big Oil company. Add them all up, and $10 billion would be but a blip in their balance sheet. So why do McCain and Clinton want to penalize the federal government at a time of record oil profits?

Hillary Rodham Clinton's campaign was quick to send out an e-mail accusing Mr. Obama of making false statements in his ad, saying he has received more than $160,000 from the oil and gas companies. Phil Singer, deputy communications director for Mrs. Clinton, put out this statement: "It's unfortunate that Senator Obama is using false advertising to explain why he can be trusted to do something about energy prices. Senator Obama says he doesn't take campaign contributions from oil companies, but the reality is that Exxon Mobil, Shell and others are among his donors. I wonder if they'll fix the ad."

Mr. Singer shouldn't hold his breath. Bill Burton, press secretary for the Obama campaign, reaffirmed the ad's message, saying "Senator Obama is the only candidate in the race who doesn't accept campaign contributions from special interests PACs and Washington lobbyists, and that includes oil companies and oil lobbyists." "The energy bill that Senator Clinton has already been criticized for misrepresenting -- one that Clinton supporters Representatives Murtha and Kanjorski also backed -- actually raised taxes on oil companies and made the largest investment in renewable energy in our nation's history," said Mr. Burton in a statement. "Instead of continuing with the negative and misleading tactics that voters everywhere are rejecting, Senator Clinton should get behind the Obama plan to ease the burden of rising gas prices on working families."

As early as today, the House of Representatives is expected to approve a measure that would eliminate roughly $18 billion in tax incentives for oil and gas companies, and use the savings to fund tax credits and other incentives for renewable energy.

It isn't expected to become law, but it is one of several recent attempts by Democrats to keep President Bush and Republicans on the defensive.The measure comes as high energy prices put increased pressure on consumers. ...

Senate Democrats also held a hearing yesterday to put new pressure on the administration to take a tougher line against the industry in a dispute over royalties for leases issued in the late 1990s. Assistant Secretary of the Interior Stephen Allred told a Senate Appropriations subcommittee that as much as $31 billion is at stake in the dispute, which centers on leases issued to oil and gas companies for the right to drill in the Gulf of Mexico from 1996 to 2000.

The House of Representatives voted to repeal $18 billion of tax breaks for oil and gas producers, and to use the savings to finance tax incentives for wind-power projects, solar panels and more energy-efficient cars. ...

Under the bill, Congress would extend through 2011 tax credits for newly built wind farms and other facilities that generate power from renewable sources such as landfills. The government estimates the cost at $6.6 billion over 10 years, making it the single most expensive tax break in the legislation. Congress would also extend, through 2016, the tax credit of 30% that companies may claim for investments in solar products and so-called fuel cells. Fuel cells convert fuel into electrical energy without any combustion, thereby minimizing pollution.

Consumers would gain new tax breaks for buying plug-in hybrid cars.

Oil and gas companies would lose some $13.6 billion in tax breaks granted in 2004 for domestically produced goods. Exxon Mobil Corp., Chevron Corp., ConocoPhillips, Royal Dutch Shell PLC and BP PLC would lose the tax breaks entirely. The deduction would be frozen at 6% for smaller oil and gas companies. That deduction had been scheduled to jump to 9% in 2010.

Oil companies would also lose another $4.1 billion under provisions that provide less-favorable tax treatment for certain kinds of foreign income.

A U.S. Interior Department official said today that the government may have a hard time collecting as much as $31 billion in royalty payments for leases issued in the late 1990s unless a court decision that rejected the government's right to the payments is reversed.

The warning from Assistant Secretary Stephen Allred came at a hearing aimed at keeping visibility on disputed royalty payments for deepwater drilling. Sen. Dianne Feinstein, D-Calif., has been pressing oil companies to make the payments, and promised to try again with legislation that would ban oil companies from participating in sales of new leases unless they pay royalties on a set of leases issued in 1998 and 1999.

Clinton said her White House agenda would include environmentally friendly policies that would create millions of jobs. But she said the plan "also recognizes the continuing vital role of the oil and gas industry," another huge Houston-area employer.

She said she voted for legislation to expand oil drilling in the Gulf of Mexico because she backs such projects that have local support and are environmentally sound. Obama voted against, she added.

"I think on that issue alone, I should be able to make a strong case to the energy community" for support, the New York senator said.

Clinton added that energy companies have to be part of a national push for conservation and cleaner energy sources.

"Unfortunately, evidence suggests that the cozy relationships between MMS officials and oil and gas companies have allowed these companies to underreport the resources they remove from federal lands and underpay the royalties they owe to the federal government. Evidence that MMS has failed to detect and pursue these violations by oil and gas companies is especially troubling as gas prices continue to rise, corporations make record profits and average American are struggling to fill their gas tanks and make ends meet."

What is the true cost of a barrel of oil or a tank of gas for US consumers? Difficult to say. But any holistic number would have to partially factor in the damage done to local and regional water tables from refineries and storage facilities, the gigatons of greenhouse gases and other pollutants released, and the hundreds of billions of tax payer dollars and thousands of lives spent in Iraq and elsewhere in the Middle East to secure cheap oil. Adding insult to injury, consider the lavish tax breaks and sweetheart subsidies the oil industry and Exxon specifically have received from the Bush-Cheney administration courtesy of We the People.

Shell was today accused of making "obscene" profits at a time when pensioners, motorists and industry are struggling with higher energy prices when it unveiled annual earnings of $27.6bn.

The oil major has made British corporate history with the record figures, which are equivalent to more than ($3 an hour) and come at the end of a three month period when crude prices have averaged over $90 a barrel.

Jeroen van der Veer, chief executive of Royal Dutch Shell, described the performance as "satisfactory" and admitted that overall production for the year had actually dropped 2%.

He said the company had benefited from launching new oil and gas projects but had suffered in the last quarter from weak refining margins.

"We are proceeding with the rejuvenation of our portfolio with investment in new legacy assets and through disposals. The execution of our strategy is on track."

But Tony Woodley, joint general secretary of Unite the union, Britain's largest trade union said a windfall tax should be imposed on "greedy" companies such as Shell whose profits are more than four times higher than retailer, Tesco.

"Shell shareholders are doing very nicely whilst the rest of us, the stakeholders, are paying the price and struggling," said Mr. Woodley. "Record profits of over thirteen and a half billion pounds at Shell and cumulative oil industry profits in excess of fifty billion in the last three years are, quite frankly, obscene. It is time the government acted."