Sun, May 15, 2011 - Page 11 News List

Obama to hasten oil production

DEMAND:Hoping to lower gasoline prices, which are at US$4 a gallon, high for the US, the government is hoping to speed up approval for drilling off the Alaskan coast


Facing continued public unhappiness about gasoline prices, US President Barack Obama is directing his administration to ramp up US oil production by extending existing leases in the Gulf of Mexico and off Alaska’s coast, and holding more frequent lease sales in a US federal petroleum reserve in Alaska.

Obama said yesterday that the measures “make good sense” and will help reduce US consumption of imported oil in the long term. However, he acknowledged anew that they won’t help to immediately bring down gasoline prices topping US$4 a gallon, or nearly US$1 a liter, in many parts of the country, a high price for US drivers.

His announcement followed passage in the Republican--controlled US House of Representatives of three bills — including two this week — that would expand and speed up offshore oil and gas -drilling. Republicans say the bills are aimed at easing gasoline costs, but they also acknowledge that won’t be immediate.

The White House had announced its opposition to all three bills, which are unlikely to pass the Democratic-controlled US Senate, saying the measures would undercut safety reviews and open environmentally sensitive areas to new drilling.

However, Obama is adopting some of the bills’ provisions.

Answering the call of Republicans and Democrats from Gulf coast states, Obama said in his weekly radio and Internet address that he would extend all Gulf of Mexico leases that were affected by a temporary moratorium on drilling imposed after last year’s BP PLC oil spill. That would give companies additional time to begin drilling.

The administration had been granting extensions case by case, but senior administration officials said the US Department of the Interior would institute a blanket one-year extension.

New safety requirements put in place since the BP spill also have delayed drilling in Alaska, so Obama said he would extend lease terms there for a year as well. An oil lease typically runs 10 years.

Lease sales in the western and central Gulf of Mexico that were postponed last year will be held by the middle of next year, the same time period required by the House of Representatives.

A sale off the Virginia coast still would not happen until 2017 at the earliest. However, Obama said he would speed up environmental reviews so that seismic studies to determine how much oil and gas lies off the Atlantic Ocean coast can begin.

To further expedite drilling off the Alaskan coast, where such plans by Shell Oil Co have been delayed by an air pollution permit, Obama said he would create an interagency task force to -coordinate the necessary approvals. He also will hold annual lease sales in the vast US National Petroleum Reserve on Alaska’s North Slope. Officials said the most recent sale was last year, but that they had not been held on any set schedule.

Republicans dismayed by the lack of progress in Shell’s drilling have drafted legislation to exempt drilling off Alaska from air pollution laws.

House Natural Resources Committee Chairman Doc Hastings of Washington, sponsor of the legislation, said it was “ironic” that Obama “is now taking baby steps in our direction” after the White House and congressional Democrats criticized the bills.

“The president is finally admitting what Republicans have known all along, that increasing the supply of American energy will help lower prices and create jobs,” Hastings said.

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