Obama to permit oil exploration off Virginia coast

Obama, who wants Congress to move a stalled climate change bill, has sought to reach out to Republicans by signaling he is open to allowing offshore drilling, providing coastlines are protected.

Joined by Interior Secretary Ken Salazar, Obama is to detail an updated plan for offshore oil and natural gas drilling in remarks at a military base in nearby Maryland.

For more than 20 years, drilling was banned in most offshore areas of the United States outside the Gulf of Mexico because of concerns that spills could harm the environment.

The administration has been weighing the pros and cons of offshore drilling since it took office and put the brakes on a Bush-era proposal which called for drilling along the East Coast and off the coast of California.

An administration official said, as part of the new plan, Interior will conduct the first new offshore oil and gas sale in the Atlantic Ocean in over two decades as part of a lease sale 50 miles off the coast of Virginia.

Seismic exploration in the south Atlantic and mid-Atlantic Outer Continental Shelf of the United States will determine the quantity and location of potential oil and gas resources to support energy planning.

The Bush plan had called for leases to be offered in November 2011, but it was not immediately clear whether the Obama administration would stick to that schedule.

A senior Interior official said in January that drilling off Virginia's coast would be delayed past the original 2011 leasing date.

The proposed Virginia lease area, located about 50 miles from shore, may hold 130 million barrels of oil and 1.14 trillion cubic feet of natural gas, based on Interior Department estimates.

In addition, the Interior Department will continue lease sales in the Central and Western Gulf of Mexico, which have proved to have sizable reserves.

Much of the Eastern Gulf is currently under a congressional moratorium on oil and gas operations. The Interior Department's plan would open up about two-thirds of the available oil and gas resources in this region in the event that the moratorium is lifted, the official said.

Military training in the Eastern Gulf will be protected and drilling activities will occur more than 125 miles from the Florida coast.


Proposed oil and gas leasing in Alaska's Bristol Bay will be canceled out of concern for protecting sensitive areas of the Outer Continental Shelf from environmental dangers.

This could affect companies like Royal Dutch Shell which has expressed interest in the region, as well as ConocoPhillips, BP and Statoil.

Four pending lease sales in the Chukchi and Beaufort Seas in North Alaska will be canceled and those areas reserved for future scientific research to determine if they are suitable for further leasing. At the same time, a previously scheduled lease sale in Alaska's Cook Inlet will proceed.

Congress allowed a prohibition on offshore drilling to expire in 2008 and former President George W. Bush lifted a drilling moratorium that year. Environmental groups and some lawmakers continue to raise concerns about the impact increased drilling would have on coastal areas.

The U.S. Geological Survey estimates the U.S. Atlantic coast waters may hold 37 trillion cubic feet of gas and nearly 4 billion barrels of oil, while the Pacific Coast has 10.5 billion barrels of oil and 18 trillion cubic feet of gas.

To put that in context, the United States imports about 2 billion barrels of oil a year from OPEC nations and is expected to import 2.7 trillion cubic feet of natural gas from all sources this year, according to the Energy Department.

Also to be announced is that the Environmental Protection Agency and Transportation Department will sign a joint final rule on Thursday establishing greenhouse gas emission standards and corporate average fuel economy (CAFE) standards for light-duty vehicles for model years 2012-2016.

Obama will announce that 5,603 new hybrid cars and trucks have been ordered to convert the federal fleet to one of greater fuel efficiency.

[Source: By Steve Holland, Reuters, Washington, 31Mar10]

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