Offshore oil drilling fight heats up

The rhetoric about domestic oil drilling reached a fever pitch in Washington this week with the Obama administration touting the approval of more Gulf deepwater drilling permits and Republicans countering that the pace of permitting is still too slow.

The stakes are high for both sides of the issue, as pressure to address high oil and gas prices mounts amid continued unrest in the Middle East and North Africa.

This week was packed with Obama administration announcements about drilling permit approvals.

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The Interior Department’s Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) this week issued three Gulf deepwater drilling permits for the kind of projects that were halted after last year’s Gulf oil spill, bringing the total number of approved deepwater permits since the spill to six.

“Some say we are now proceeding too quickly; some say we are still proceeding too slowly,” BOEMRE Director Michael Bromwich said in a statement Friday, after his agency approved the third deepwater permit of the week.

“The truth is, we are proceeding as quickly as our resources allow to approve permit applications that satisfy our rigorous safety and environmental standards,” Bromwich said.

BOEMRE also approved a Gulf exploration plan this week that paves the way for new drilling in the Gulf.

The approval of the exploration plan “once again shows that we can and we are moving ahead with safer and more responsible exploration and development,” Interior Secretary Ken Salazar said Monday.

But that’s not enough for drill-state lawmakers and the oil industry. They have mounted an increasingly aggressive campaign to paint the administration as out of step with the American public on expanding domestic oil and gas resources.

The American Petroleum Institute, the country’s top oil industry lobbying organization, is planning to circulate on Capitol Hill in the coming weeks a graphic outlining what the group argues is a pattern within the Obama administration of blocking domestic oil and gas production.

API graphic on Obama administration drilling The graphic, obtained by The Hill, alleges that the administration has “taken specific steps to stop or delay the development of domestic oil and natural gas resources necessary to power our nation’s economy, create jobs and enhance our nation’s energy security.” (Click here for a PDF version.)

API Upstream Director Erik Milito told The Hill that he is not convinced that the administration is serious about speeding up the offshore permitting process.

“They are still moving too slow,” he said in an email. “These wells had both plans and permits approved and a rig under contract in place at the time Interior put the deep water under moratorium.”

Asked how many permit approvals it would take to be satisfied with the administration’s offshore drilling policies, Milito said, “We aren't looking at a specific number. We are looking for an effective, efficient process that provides for the approval of plans and permits at a steady enough pace to provide the confidence to the industry to invest in these U.S. projects.”

Environmentalists have countered the criticism with a campaign to discredit oil industry claims.

“The oil industry has a long history of pleading poverty while driving in a limo,” said Dan Weiss, senior fellow at the Center for American Progress. “They’re always out their complaining that they need more when the reality is that they’re swimming in money and oil.”

Weiss said the reason it has taken time to approve permits is because many of the oil industry’s applications did not meet updated safety standards.

Democrats in Congress are also hoping to put pressure on companies to tap unused oil and gas leases on public lands. The Democrats argue that companies should tap their unused leases before drilling in new territory.

They’ve floated proposals that would impose a fee on non-producing leases and require companies to show they're planning to develop their tracts.

President Obama has said he supports such a proposal. In fact, his fiscal year 2012 budget request calls for "establishing fees for new non-producing oil-and-gas leases (both onshore and offshore) to encourage more timely production."

Obama, at a March 11 press conference on rising gas prices, called on the Interior Department to report back about the number of unused leases on public lands. The review is expected to be delivered to the White House in the coming days.

But Republicans say the legislation is simply a distraction from the larger issue of expanding domestic production.

“We won’t reduce our dependence on foreign oil if politicians in Washington remain dependent on hollow talking points like ‘use it or lose it,'" House Speaker John Boehner (R-Ohio) said in a statement this week. “Americans are looking for real solutions and a sustained commitment to expanding American energy production that will lower gas prices and create more jobs, which is what our American Energy Initiative is all about.”

In the end though, analysts say that an expansion of domestic oil and gas production will have little near-term effect on gas prices.