Landrieu to block OMB nominee unless oil drilling ban lifted

A Gulf Coast Democrat is vowing to block Senate confirmation of President Obama’s budget director until the administration agrees to lift or ease a federal freeze on deepwater oil-and-gas drilling.

Sen. Mary Landrieu’s (D-La.) hold on Jacob Lew, Obama’s widely praised pick to run the Office of Management and Budget (OMB), marks a dramatic political escalation of her battle against the temporary drilling ban, imposed as a safety measure after the BP oil spill.

And it reflects a broader frustration among Gulf Coast lawmakers at what they call economically devastating limits on drilling.

“Due to the administration’s unwillingness to reverse or modify its policies that have halted all deepwater and nearly all shallow-water energy exploration, I cannot in good conscience allow this nomination to proceed until I receive a commitment from Mr. Lew, the president or another senior economic adviser to reverse these policies, which have been so detrimental to working families across the Gulf Coast,” Landrieu wrote in a letter Thursday to Senate Majority Leader Harry Reid (D-Nev.).

Though she praised Lew’s expertise, Landrieu also said he “lacked sufficient concern for the host of economic challenges confronting the Gulf Coast.”

Landrieu’s threat comes as the White House economic team already is in flux and as administration officials gear up to craft fiscal 2012 budget plans. OMB Director Peter Orszag, whom Lew would replace, left at the end of July. Christina Romer, the former head of the Council of Economic Advisers, has departed, and Larry Summers, the president’s top economic adviser, is leaving after the midterm elections.

The White House countered Landrieu’s hold with a call for prompt Senate action.

“Jack Lew has received overwhelming, bipartisan support from senators across the spectrum in both committees. Especially during this critical time in our economy and in our fiscal situation, the Senate should move quickly to vote on his confirmation before it recesses at the end of the month,” said Kenneth Baer, OMB’s communications director.

A Reid spokeswoman declined to comment on Landrieu’s action.

Only hours before Landrieu's threat, the Senate Budget Committee cleared Lew’s nomination with a near-unanimous recommendation. The vote was 22-1, with only Sen. Bernie Sanders (I-Vt.) opposed.

Lew has won praise from members of both parties since Obama nominated him in July. He earned a reputation for working across the aisle during his first stint as OMB director in the Clinton administration. During his tenure, Lew turned around a budget deficit and oversaw three consecutive years of budget surpluses.

Lew's nomination won unanimous support from the Senate Homeland Security and Governmental Affairs Committee earlier in the week.

Senate Budget Committee Chairman Kent Conrad (D-N.D.) said he’s hoping for a Senate floor vote on Lew’s nomination before lawmakers leave to campaign before the Nov. 2 elections.

A six-month ban on deepwater drilling projects is slated to last through November, though administration officials have said it may be relaxed earlier. The Interior Department has also slowed approvals for shallow-water drilling permits — not covered by the ban — as it implements new safety standards.

Many Republicans, Gulf Coast lawmakers from both parties and the oil industry contend that the drilling limits are harming the region’s oil-tethered economy.

“I cannot support further action on Mr. Lew’s nomination to be a key economic adviser to the president until I am convinced that the president and his administration understand the detrimental impacts that the actual and de facto moratoria continue to have on the Gulf Coast,” Landrieu wrote to Reid.

A Commerce Department analysis last week found that the impact of the deepwater ban has been milder than feared. The study projected that up to 12,000 jobs will be temporarily lost, though Landrieu and other critics of the ban say the number may be far higher.

That figure is lower than earlier administration estimates of up to roughly 23,000 jobs.

Landrieu’s action won quick praise from a recently formed industry group pushing to speed up permits for shallow-water projects.

“Today, Sen. Landrieu has again recognized the importance of putting the Gulf back to work when she demanded that the declared deepwater and de facto shallow-water moratorium be lifted and that permits for new wells begin to flow,” said Jim Noe, who leads the Shallow Water Energy Security Coalition. “I hope that this renewed plea to the administration will help us find a breakthrough in our quest for a solution to get shallow rigs back to work.”

This post was initially published at 4:24 p.m.

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