The areas that interest producers the most fall under two categories, tax deductions and tax credits for marginal wells, said Larry Nichols, president of Oklahoma City-based Devon Energy Corp.
"One is to eliminate the disincentives that we have where we cannot deduct legitimate business expenses, Nichols said.
"The second is looking for areas where we can produce marginal wells so that when oil does decline, which it will in the future, we won't continue to lose that valuable resource for our country.
Inhofe, who was an oil man before his tenure as a U.S. Senator, said the decision to drill marginal wells, which typically produce only a few barrels a day and can become unprofitable when the price of oil drops, must be made a year in advance.
"The problem is predictability, Inhofe said. "You have to make a decision a year out what the price of oil is going to be.
He said that's why Senate supporters of a national energy policy have introduced legislation that would allow tax credits when the price of oil falls to $17 dollars a barrel, thus maintaining interest in the less profitable marginal wells.
A national energy policy would also have to reduce America's dependence on foreign oil, Inhofe said.
It's been estimated that up to 56 percent of the oil that America uses is imported, he said. Reducing that number to 33 percent would be a step in the right direction, he said.
"But to do that you have to have some incentive to start going after those marginal wells, he said. "There's a tremendous capacity there.
Inhofe said it's estimated that if all the marginal wells plugged in the last 15 years were reopened, the oil produced from those wells would equal the amount of oil imported from Saudi Arabia.
Another hurdle to cross for oil producers is the many environmental regulations put in place by the Environmental Protection Agency during the Clinton administration.
"A lot of the costs, for gasoline at the pump and gas and oil to heat homes, comes directly from the regulations and the over-regulations (of the EPA), Inhofe said.
He said during the last days of the Clinton administration, numerous regulations were imposed. So many, that President Bush has issued a 60-day period of evaluation to determine what laws are now on the books, he said.
As an example, Inhofe said the Clinton administration put 60 million acres of land out of the reach of producers. It's estimated that 21 trillion cubic feet of natural gas is in that land, enough to provide America with natural gas for a year, he said.
High natural gas bills, increased production costs for farmers and the power shortages in California have brought to light the deficiencies in those environmental regulations, Nichols said.
"Now that people realize there is a cost, Nichols said, "that farmers have higher bills, that people in California don't have access, we're going to have a redebate and head toward a peak balance between the country's legitimate environmental concerns and the country's legitimate concerns for energy.