"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.