Obama backtracks on plan to open more Gulf waters to offshore drilling

The United States Interior Department on Wednesday backtracked on a plan to open up the eastern Gulf of Mexico and parts of the Atlantic seaboard to new offshore drilling leases – a decision sparked by the Gulf oil spill this summer and the failure to strike a political deal with Republicans on global-warming legislation.

The decision, which bans oil exploration in these areas until at least 2017, could have an impact on short-term energy independence while also laying a more permanent framework for the development of alternative energy sources.

It also hints at what could be a new method of governing for President Obama in the wake of last month's midterm elections, with the president attempting to set energy policy himself rather than incorporating Congress.

"This may be an indicator of what Democrats and people on the hard left were saying after Democrats got thumped in November, that Obama should just start using executive authority and acting unilaterally," says Robert Bryce, a senior fellow at the Manhattan Institute. "This is the beginning of that ... process of governing."

The news is a further blow to the oil industry in the Gulf, which is still waiting for the Obama administration to approve new leases in areas of the Gulf that are open to drilling – despite the lifting of the deep-water drilling moratorium in October.

Eastern areas of the Gulf 125 to 300 miles off Florida's west coast have been off limits to drilling since Congress passed a moratorium in 2006. But a few weeks before the Deepwater Horizon rig exploded on April 20, the Obama administration vowed to begin studying whether the eastern Gulf and parts of the Atlantic coast should be opened to drilling. Congress would ultimately have to approve such a plan.

But with the global warming bill dead and the spill of 200 million gallons of oil in the Gulf fresh in the minds of many Americans, the administration is now placing more emphasis on drilling safety, scientific evaluation, and environmental assessment, the administration announced Wednesday. Other media outlets are reporting that the administration is still open to the possibility of expanding offshore drilling in central and western areas of the Gulf as well as off the coast of Alaska, which was also a part of the March plan.

Interior Secretary Ken Salazar says the Obama administration remains committed to working with Congress to craft a "careful, responsible path for meeting the nation's energy needs," including oil and gas exploration.

"The change is based on the lessons that we have learned and continue to learn from the Deepwater Horizon spill," he said Wednesday. "With respect to the eastern Gulf, the president has made clear that energy policy is an area where the administration and Congress have an opportunity to work together in a bipartisan way to cut foreign oil and limit pollution."

Such policy can't be focused just on drilling, but has to be part of a comprehensive package of green energy investment, vehicle electrification, and clean energy research and development, he said.

The announcement comes two weeks after Secretary Salazar disappointed offshore drillers by giving few new details on when exploratory drilling could commence in the Gulf. Days later, he announced that the administration would ease regulatory hurdles for new wind farm proposals along the East Coast.

"This drilling plan is only part of a comprehensive offshore energy plan which the Obama administration is developing, including safer forms of energy like wind and wave," said Rep. Ed Markey (D) of Massachusetts in a statement. "Instead of looking deeper and deeper for the last remaining drops of oil, we can harness the wind that whips over the waves, and the energy from the swells off our coasts. Before we are swept away by the tide of international clean energy competition, we should push the limits of clean energy innovation, not the limits of deepwater drilling.”

But the US Chamber of Commerce called the reversal a "major step backwards for energy security." Energy experts say the decision could delay for a decade the tapping of some 3 billion barrels of oil likely to be found off the coast of Florida alone.

Meanwhile, the continued delay on issuing new permits in the already-open areas of the Gulf could mean a reduction of domestic oil production by 26,000 barrels per day in 2011, according to the Department of Energy. That is about 0.4 percent of America's daily domestic output.

The US offshore industry, which employs 100,000 people mostly in the southern United States, has already begun moving equipment and labor onshore or to foreign offshore operations as a result of what they call a de facto drilling moratorium still in effect in the Gulf. Meanwhile, basic technological problems of efficient wind-farming – including how to store off-peak energy – have yet to be solved.

"This preference for offshore wind is hoping on wishes and dreams," says Mr. Bryce, the author of "Power Hungry." "This announcement shows the Obama administration is giving priority to an unreliable and expensive form of energy, while denying the development of proven energy sources that are reliable and abundant."