* Passage would let Democrats claim oversight over Big Oil

* Republicans say bill would cut U.S. oil, gas production

* Safety standards for equipment, workers also in bill

(Recasts story for close vote on bill, Democratic opposition)

By Tom Doggett and Richard Cowan

WASHINGTON (Reuters) - A close vote is expected
later on Friday when the U.S. House of Representatives decides
on legislation to reform the oil industry's offshore drilling
practices in response to the massive Gulf oil spill.

Republicans warned the bill will slash U.S. oil and gas
production in the Gulf of Mexico, a major supplier of domestic
energy, and cut high-paying drilling jobs.

"The Obama moratorium on deepwater drilling has already
costs thousands of jobs and this bill will eliminate even more
American energy jobs, making it harder and more expensive to
produce both energy on and offshore," said Republican
Representative Pete Sessions.

Democrats said the bill would make offshore drilling safer
for workers and protect the environment and Gulf Coast business
from future oil spills like the one caused by BP that damaged
wetlands and hurt the region's fishing and tourism
industries.

"If you want to apologize for Big Oil, go right ahead, but
the American people are not on your side on this one,"
Democratic Representative Jim McGovern told his Republican
colleagues.

However, the House vote on the bill could be a close one,
as several Democrats representing districts with strong oil
industry interests were planning to join Republicans in
opposition.

Representative Gene Green, from the oil industry-dominated
city of Houston, was one of those Democrats. "There are a lot
of things in there that have nothing to do with safety" of
offshore drilling operations, Green told reporters.

Gulf Coast Democrats will also offer an amendment to the
bill to end the federal moratorium on deepwater drilling for
oil companies that meet new safety requirements.

Passing the bill as the House leaves for its six-week recess
would give lawmakers the opportunity to return home boasting
that they had moved to rein in Big Oil and hold BP
responsible for the worst offshore oil disaster in U.S.
history.

While the House was expected to approve the bill later on
Friday, the legislation still has a long way to go before it
can become law.

A similar bill is pending in the Senate, but it was
unlikely it would pass before that chamber begins its summer
recess on Aug. 6.

A sticking point in the Senate is opposition from
Republicans and some moderate Democrats to removing all
liability limits oil companies would face for economic damages
stemming from the BP disaster and any future spills.

Current law requires companies to only cover up to $75
million for damages to local economies. The BP spill could end
up costing billions of dollars in lost tourism, fishing and
other Gulf Coast revenues.

BP has said it would pay for all costs related to the
spill, but many lawmakers worry that the company could put
victims through years of litigation.

On the eve of the House debate, the White House said in a
statement that it strongly supports passage of the
legislation.

The Senate energy bill has an added component: new
incentives to encourage more natural gas-powered trucks and
electric vehicles to clean up the environment. It also provides
$5 billion to help improve home energy efficiency.

But Senate Democrats abandoned attempts to attach climate
change provisions that would have set mandatory limits on some
companies' carbon dioxide emissions.

Senate leaders plan to hold a test vote next Wednesday to
gauge support for the bill, according to a Democratic aide. But
Republicans, and possibly some moderate Democrats, might block
a full debate, forcing senators to take it up in September.

The House was also expected to approve a separate bill on
Friday that would give whistle-blower protection to workers who
report violations in offshore drilling rules.

(Editing by Lisa Shumaker)