Obama Set to Unveil Offshore Drilling Plan
Ian Talley
Wall Street Journal
03/30/2010
WASHINGTON-The Obama administration is expected Wednesday to unveil a long-awaited five-year national offshore oil and natural-gas drilling plan, which may include new drilling off the Virginia coast.
The plan is expected to reveal when and where companies such as ExxonMobil, ConocoPhillips and Royal Dutch Shell can explore off the coasts of long-proven oil states like Texas, Alaska and Louisiana. It also is expected to open new areas offshore between 2012-2017.
Industry officials say the administration is likely to offer a lease sale for exploration blocks off the Virginia coast. This section had been previously set for a 2011 lease sale before the White House pulled it from the program last year. Also, the plan is expected to include a timeline for seismic work on the Atlantic and a schedule for decisions on possible future lease sales off the Eastern shore.
In a letter to lawmakers last month, Interior's Minerals Management Service outlined a timeline that would produce an environmental impact statement for Atlantic seismic surveys by early 2012.
Based on existing surveys, Atlantic exploration is expected to yield more natural gas than oil. That fits into the administration's efforts to cut greenhouse gases by using a fossil fuel with a lower carbon dioxide content as a bridge to a low-carbon economy.
The plan comes as oil and gas producers face an uncertain regulatory climate from an administration that has targeted the sector for higher taxes and stricter regulations.
President Barack Obama is expected to unveil the new plan at an event in Maryland Wednesday morning, according to people familiar with the matter. Both the White House and the Interior Department declined to comment.
The plan has become political leverage in the debate over climate and energy legislation on Capitol Hill.
The oil and gas drilling roadmap was originally expected out last year. But Secretary Ken Salazar delayed its release, saying he wanted to review the entire country's oil and natural-gas resource development schedule. Republicans and the oil industry charged the Interior Department as engaging in obstructionism.
Proposals to open new regions for drilling may prove attractive to Republican lawmakers, since expanded offshore drilling is a key tenet of their energy platform.
The administration has used the prospect of allowing more exploration to try and entice GOP support for legislation to curb greenhouse gases.
But some in the sector remain skeptical.
"My expectation is that we're going to see some sound and fury around future offshore leasing activity but when you clear the dust away, all they're going to give us is what we already had," a senior official working for a large industry group said.
