The Obama administration announced Wednesday that it will not allow offshore oil drilling in the eastern Gulf of Mexico or off the Atlantic coast through 2017, reversing two key policy changes the president embraced in late March.
The revised Interior Department drilling plan, which took industry officials and many environmentalists by surprise, will also delay the next two lease sales in the central and western Gulf of Mexico. It marks a sharp political shift by the White House – yanking concessions to conservatives and oil companies – in the wake of the massive BP oil spill and the collapse of comprehensive climate legislation.
Interior Secretary Ken Salazar told reporters that the decision to remove large swaths from the 2012-17 offshore lease plan was “based on our nation’s experience with the Deepwater Horizon oil spill.” Instead of opening up new areas to oil and gas exploration, Salazar said, the United States should “focus and expand our critical resources on areas that are currently active.”
Salazar said the department would also gather new environmental information about drilling off the coast of Alaska, potentially postponing activity there.
The move eliminates the prospect of any drilling taking place off the coast of Virginia for several years, although as recently as eight months ago state and federal officials had envisioned holding a lease sale there in 2011. On March 31, President Obama declared his administration would study the prospect of energy exploration off the Atlantic coast from Delaware to Florida, along with areas in the eastern gulf and in Alaska’s Chukchi and Beaufort seas.
Virginia Gov. Robert F. McDonnell (R), who spoke to Salazar by phone Wednesday, called the new policy “an irresponsible and shortsighted decision.”
“It demonstrates a complete lack of confidence in the entrepreneurial spirit of American industry and its ability to fix the problems experienced in the gulf spill, and no confidence in the ability of the U.S. government to better plan for and react to offshore emergencies,” said McDonnell, who had made drilling off Virginia’s coast one of his top priorities.
“The cost of today’s decision will be seen in major lost job opportunities, surrendered economic growth and increased dependence on foreign sources of energy, from nations often hostile to American interests,” he said.
Criticism was bipartisan. A spokesman for Sen. Mark Warner (D-Va.) said that “while it is appropriate to take the time to incorporate lessons learned from the gulf disaster, Senator Warner sees no reason to delay this process for what realistically could be another seven years or more.”
Offshore oil production from state and federal waters accounts for 9 percent of U.S. liquid fuel consumption and 32 percent of U.S. crude oil production. The Interior Department draws up five-year plans for lease sales to companies seeking to explore federal waters, which begin three miles from shore. If oil or gas is discovered, commercial production can begin some years later. The next five-year plan starts in 2012.
Interior said the lease sales scheduled for March and August 2011 in the central and western gulf would be postponed until the end of next year, if not later.
In addition, Interior will conduct a “supplemental” environmental analysis of Shell’s plan to drill an exploratory well in the Beaufort Sea next summer. Officials said that Interior was “processing” Shell’s permit request but that the new analysis will require another public comment period, ending Dec. 22. Shell has warned that delays could jeopardize its ability to prepare in time to drill next year.
“We understand Shell needs a decision,” said Michael Bromwich, who directs the Bureau of Ocean Energy Management, Regulation and Enforcement. “But we’re not going to be constrained by any artificial deadlines.”
The announcement prompted Stephen H. Brown, vice president for federal government affairs for the oil refiner Tesoro, to quip, “I thought the concept was a five-year plan for, not a five-year ban on, offshore production.”
Drilling opponents, by contrast, hailed the new restrictions as reasonable precautions in light of the BP spill, which poured nearly 5 million barrels of crude into the Gulf of Mexico from April to July.
“Today, anyone who loves our beaches, who fishes in the ocean or who depends on a healthy coastal economy can thank the Obama administration for protecting the Atlantic and Pacific coasts and the west coast of Florida from oil drilling,” said Margie Alt, executive director of the advocacy group Environment America. “The BP disaster earlier this year was a tragic reminder that drilling is a dirty and dangerous business. The only way to truly keep our coasts and ocean ecosystems safe is to keep them rig-free.”
Salazar and Bromwich said scientific concerns played a role in shaping the policy, although they did not offer many specifics. Jack Gerard, president of the American Petroleum Institute, said he didn’t understand how a March decision based on science could undergo a “complete reversal” now.
Salazar said he and his deputies had decided to postpone next year’s scheduled lease sales in the central and western gulf “so we can take into account the environmental information and analysis from the Deepwater Horizon spill.”
But he hinted that political factors affected the decision, especially in connection with the eastern gulf, which is still subject to a congressional drilling moratorium. If lawmakers are interested in opening up that area to energy exploration, Salazar said, the administration “is willing to entertain a discussion only if it is part of a balanced package that includes other energy priorities of the president.”
Obama’s March 31 decision represented an overture to business interests, as well as to Republicans and some Democratic lawmakers, who were trying at the time to forge a compromise climate bill in the Senate.
Wednesday’s announcement set up a clash with those same interests, some of whom contend that the political tide had moved in their direction. API’s Gerard said the decision “is inconsistent with the message from the public a few weeks ago about job creation and economic recovery.”
Rep. Doc Hastings (R-Wash.), who is poised to chair the House Resources Committee next year, accused the administration of “taking the wrong approach in responding to the BP spill and creating energy and energy jobs in this country. The answer isn’t to give up and say: ‘America can’t figure it out. We’ll rely on other countries to produce our energy.'”
Hastings spokesman Spencer Pederson said that although the congressman has not decided whether he will hold oversight hearings or introduce legislation next year, he will do “whatever it takes… to expand our current oil and gas drilling offshore in a safe manner.”