WASHINGTON, July 25 (Reuters) - The U.S. oil industry may have found its
dream team with Smirk's pick of Dick Cheney as his vice presidential running mate.

American energy firms could get a break from environmental regulations
and policies imposed under the Clinton-Gore administration that industry
representatives claim have discouraged domestic oil production and left
the United States vulnerable to foreign suppliers like OPEC.

Bush's prior experience as an independent oil operator had already won
him industry favour, and that popularity is likely to grow with Cheney,
who headed the world's largest oil field service company, now joining the ticket.

Both politicians' public statements show they would favour a stronger
energy policy than Democratic presidential candidate Al Gore in terms of
increasing U.S. oil production, which is at its lowest level in half a century.

Domestic oil production has fallen from 7.2 million barrels per day (bpd) in 1992,
the year before the Clinton-Gore administration came to power, to 5.8 million bpd
in the first half of this year, according to the Energy Department.

Bush said he favours giving oil firms drilling access to more federal
lands, including the pristine Arctic National Wildlife Refuge in Alaska.

Gore opposes drilling in the refuge and has even gone as far as
threatening to ban all offshore oil drilling, which accounts for about
20 percent of U.S. crude supplies.

Cheney, while serving in Congress in the mid 1980s, co-sponsored
legislation to allow oil drilling in the Arctic refuge.

The Sierra Club, which endorsed Gore this week for president, said a
Bush-Cheney presidency would be bad for the environment. The group
pointed out that during his tenure in Congress, Cheney has a lifetime
average score of 11 percent in voting for pro-environmental legislation.

"A Bush-Cheney ticket would be just what the oil industry wants," the
group said. "They both support weakening the Clean Air Act, oppose
protection of public lands and have consistently opposed efforts to
protect the health and safety of our environment."

However, Cheney's record has apparently improved enough for Halliburton,
the company he headed, to win an energy award from the Environmental
Protection Agency in 1996.

Halliburton was named EPA's Green Lights Corporate Partner of the Year
by voluntarily agreeing to install energy efficient lighting in the company's buildings.

One of Cheney's biggest differences with the current administration, and many
members of Congress, is over U.S. policy toward Iran.
Cheney has called on the United States to drop its economic sanctions
against Iran and permit U.S. oil firms to invest in the country's energy sector.

Iran has tried to attract from U.S. and foreign firms to rake in
millions of dollars a year from oil exploration and production projects.

The United States has sought to deny Iran those funds and isolate the
country from becoming a larger world oil supplier, because the United
States believes Iran supports international terrorism.

"We're kept out of there primarily by our own government, which has made
a decision that U.S. firms should not be allowed to invest significantly
in Iran, and I think that's a mistake," Cheney said in June after a
speech at an oil industry conference in Calgary.

Cheney said he also disagrees with the U.S. law that seeks to punish foreign
companies making annual investments of $20 million or more in Iran's oil
and natural gas sector.

He said Halliburton had some operations in Iran through foreign
subsidiaries, which is all that is allowed under U.S. law.