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Barack Obama reverses on offshore drilling

The admin is reviewing drilling and safety standards in the wake of the Gulf of Mexico spill. | AP Photo

By DARREN GOODE | 12/1/10 12:03 PM EST

The White House’s uneasy on again, off again relationship with offshore oil drilling is off again.

Wednesday, the Interior Department said it would not propose oil exploration off the Atlantic and Pacific coastlines or the eastern Gulf of Mexico for at least seven years.

But unlike the late March announcement when President Barack Obama took to the podium to embrace domestic energy production and call for bipartisan support in Congress, Wednesday’s declaration came with little fanfare – a press release and a phone call with reporters by Interior Secretary Ken Salazar.

At the time, Obama said the administration would take exploratory steps towards opening up the eastern Gulf and the Atlantic Coast to drilling. That announcement was generally seen as a potential landmark series of steps towards allowing drilling in uncharted waters.

Less than a month later, the April 20 blowout of BP’s Macondo well led to the unprecedented Gulf of Mexico oil spill that spewed an estimated 172 million gallons of oil into the Gulf. Since then, the administration has tried to put a temporary deepwater drilling ban in place and come under fire for simultaneously hampering economic development and not doing enough to protect the environment.

“The changes that we are making today really are based on the lessons that we have been learning” since the April 20 explosion that killed 11 workers on the Deepwater Horizon rig, Salazar said.

Interior’s 2012-2017 offshore drilling lease strategy will proceed “safely and responsibly” with offshore drilling “in the right ways and the right places,” he added.

The March announcement was not a guarantee that the administration was going to propose allowing oil and gas drilling in the eastern Gulf and off the Atlantic Coast. For one, Congress would have to act on allowing that drilling.

Congress in 2006 – as part of a deal with Florida lawmakers – put the far eastern Gulf of Mexico near the Sunshine State’s borders off-limits until 2022 as part of a package that made available 8.3 million acres to oil and gas development in the more east-central part of the gulf. The administration thought of opening up more of those waters before the BP spill.

Salazar also announced Wednesday that the next lease sales in the western and central Gulf of Mexico – where drilling is currently allowed under law – will occur in late 2011 and 2012 after the department finishes its environmental review. He also emphasized that only an estimated one third of leases available to drilling companies in the gulf are currently being used by those companies.

In the Arctic, Salazar said Interior will “proceed with upmost caution,” leaving open the question of whether it will green light plans by Shell to drill in shallow waters off the coast of Alaska.

Shell Alaska Vice President Pete Slaiby is in D.C. and will meet with Bureau of Ocean Energy Management, Regulation and Enforcement Director Michael Bromwich Thursday to talk about the company’s delayed drilling projects in the Beaufort Sea. That drilling operation is at most 200 feet deep, as opposed to the 5,000-foot Macondo well that ruptured and sparked the unprecedented Gulf spill this summer.

“We’re trying to clarify timing right now,” Slaiby told POLITICO Wednesday. He is also meeting with the state’s three-member congressional delegation as well.

It is the last set of meetings in Washington before Shell has to decide whether to pursue any drilling activities off Alaska next year and company officials are trying to get certainty one way or another this month.

But Bromwich said a federal verdict may will take some time.

“We understand Shell needs a decision,” Bromwich said on the conference call. “But we’re not going to be constrained by any artificial deadlines.”

Shell would also need to get sign off from the National Oceanic and Atmospheric Administration and the Environmental Protection Agency as well.

Sen. Mark Begich (D-Alaska) said Salazar called him this morning and noted that the announcement clears the way for Shell to obtain its final permits to explore in the Beaufort Sea next summer.

“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 sidelined 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.”

Interior’s announcement quickly won praise from some anti-drilling advocates. “The White House obviously learned lessons from the BP oil disaster,” Rep. Kathy Castor (D-Fla.) said in a statement. “Drilling for oil off of Florida’s coast poses a threat to Florida’s economy, jobs and environment. Our small businesses and hotel owners are still suffering from the devastation left behind by the BP blowout.”

Rep. Ed Markey (D-Mass.) – who is expected to be top Democrat on the House Natural Resources Committee next year – said: “Opening up wide swaths of our coasts to oil drilling before we put the proper regulatory measures in place would have been a mistake. We can’t put thousands of miles of coastline at risk for another spill when the oil companies are still not prepared to respond, and all for oil that would make an economically insignificant impact a decade or more from now.”

Rep. Doc Hastings (R-Wash.) – who is expected to chair the House Natural Resources Committee next Congress – said the decision is “short-sighted and will lead to long-term job impacts, economic harm and increased reliance on foreign energy from dangerous and hostile countries.” The solution, he said, “is to find out what went wrong and make effective, timely reforms to ensure that U.S. offshore drilling is the safest in the world.”

American Petroleum Institute CEO Jack Gerard blasted the announcement, saying it “shuts the door on new development off our nation’s coasts and effectively ensures that new American jobs will not be realized.”

One energy industry official said Wednesday’s reversal is not terribly surprising given that the West Coast was never in play and the eastern Gulf and Atlantic coastline was barely so. “This is just playing base politics,” the industry official said. “They’re just taking care of their enviro base.”

Interior is continuing to review and roll out new offshore drilling and safety standards after placing and later lifting a six-month ban on deepwater oil and gas drilling as a result of the Gulf spill.

Drilling advocates in Congress and industry are still pushing the Interior Department to speed up the processing and approval of both deepwater and shallow water drilling permits.

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