Obama backs off expanded oil drilling, sparking new battles

The Obama administration has backed off plans to vastly expand offshore oil-and-gas drilling, a decision that acknowledges safety concerns laid bare by BP’s oil spill and guarantees battles with ascendant Capitol Hill Republicans.
 
The Interior Department announced a revised offshore energy plan Wednesday that’s narrower than the one unveiled in March — before the Deepwater Horizon disaster dumped several million barrels of oil into the Gulf of Mexico and altered the politics of drilling.
 
The new five-year plan abandons the sale of oil-and-gas leases off the coast of mid-Atlantic and southeastern states, and Interior officials also say they’re uncertain whether they will offer more leases in Arctic waters off Alaska’s coast.

Also, the 2012-2017 plan no longer seeks expanded leasing in the eastern Gulf of Mexico, which would have required congressional approval to shrink the no-drilling buffer off Florida’s shores to 125 miles.
 
“As a result of the Deepwater Horizon oil spill, we learned a number of lessons, most importantly that we need to proceed with caution and focus on creating a more stringent regulatory regime,” Interior Secretary Ken Salazar said.
 
“We have revised our initial March leasing strategy to focus and expend our critical resources on areas with leases that are currently active. Our revised strategy lays out a careful, responsible path for meeting our nation's energy needs while protecting our oceans and coastal communities,” he added.

However, even western and central Gulf lease sales scheduled under the 2007-2012 plan will be delayed by months to allow completion of post-oil spill environmental analyses, Interior said. Salazar said the sales will proceed in late 2011 or early 2012.
 
The revised plan drew attacks from Republicans and an alphabet soup of industry groups, such as the American Petroleum Institute, the right-leaning Institute for Energy Research and others.
 
“This plan to lock up vast portions of America’s offshore energy resources is short-sighted and will lead to long-term job impacts, economic harm and increased reliance on foreign energy from dangerous and hostile countries,” said Rep. Doc Hastings (R-Wash.), who will chair the House Natural Resources Committee when Republicans take over next year.
 
Hastings hinted through an aide that he might seek legislation to force wider leasing and noted that Congress in 2008 allowed decades-long bans on Atlantic and Pacific Coast leasing to lapse.
 
“While Hastings currently has no specific legislation plans in mind, he is interested in doing whatever it takes to safely expand offshore oil-and-gas development and return energy jobs to places like the Gulf,” said Hastings spokesman Spencer Pederson. “The administration’s decision is in direct contradiction to the broad, bipartisan vote in 2008 to lift the OCS [Outer Continental Shelf] moratorium. Hastings hopes there will be similar support in the 112th Congress.”
 
But Salazar said oil-and-gas companies already have plenty of leases in the western and central Gulf that they’re not using, claiming there are about 29 million undeveloped acres under lease.
 
“There are plenty of opportunities for oil-and-gas companies to develop these additional resources,” Salazar said on a conference call with reporters.
 
Previewing battles next year, Interior’s decision drew praise from Rep. Edward Markey (D-Mass.), who is slated to be the ranking Democrat on the Natural Resources Committee.
 
“Following the largest oil spill in our nation’s history, this plan shows the Obama administration has heeded the lessons of the BP disaster,” Markey said in a statement. “Opening up wide swaths of our coasts to oil drilling before we put the proper regulatory measures in place would have been a mistake.”
 
Several environmental groups applauded Obama’s reversal on drilling, while noting they want more protections for the Arctic.
 
“We commend President Obama for protecting much of America’s coasts from the all too evident perils of offshore drilling. The recent tragedy in the Gulf Coast clearly demonstrates that our dependence on oil — be it from hostile nations or friendly coasts — hurts our economy, threatens our security and harms our environment,” said League of Conservation Voters President Gene Karpinski. “However, we are disappointed that drilling in the especially fragile Arctic is still under consideration.”
 
The decision reveals increasing Interior concerns about Alaskan drilling. In March, Interior canceled upcoming lease sales off Alaska’s northern coast but backed expanded leasing in the 2012-2017 program.
 
But Salazar noted that drilling in the harsh environment presents challenges around spill response and other issues. Interior on Wednesday noted it is conducting an environmental study that will “help inform Secretary Salazar’s decision on whether and where to schedule Alaska lease sales under the 2012-2017 program.”
 
Salazar is pledging to honor existing Arctic leases. The agency is mulling Shell Oil’s request to conduct exploratory drilling on an existing lease in the Beaufort Sea — the company is pressing Interior for a decision soon to enable drilling next summer.
 
“We are not going to be constrained by any artificial deadline,” Michael Bromwich, who heads Interior’s Bureau of Ocean Energy Management, Regulation and Enforcement, said on Wednesday. But he noted, “We understand that Shell needs a decision.”

Sen. Mark Begich (D-Alaska) expressed confidence that Shell’s effort to win permission to drill – which he supports – is back on track. Begich in recent weeks and months had accused the Interior Department of leaving Alaskan development in limbo.

“This decision to clear the way for responsible oil and gas in Alaska’s resource-rich offshore waters is great news for our state and the nation,” Begich said in a statement. “It’s unfortunate the development was side-lined by this spring’s oil spill in the Gulf of Mexico, but I’m pleased the Obama administration took a hard look and made the right decision.”

Sen. Lisa Murkowski (R-Alaska), the top Republican on the Energy and Natural Resources Committee, called Interior’s revised plans a mixed bag. “I am pleased and relieved that Alaska’s offshore leases are being honored, but I strongly believe that the Eastern Gulf of Mexico, as well as the Atlantic and Pacific, should be open to exploration,” Murkowski said in a statement Wednesday.

“These areas represent some of the most abundant oil and gas resources available for domestic production in the Lower 48,” Murkowski said. “Restricting their development will only further stunt our economic recovery.”

This story was updated at 6:14 p.m.