May 14, 2011
By JOHN M. BRODER
WASHINGTON — President Obama, facing voter anger over high gasoline prices and complaints from Republicans and business leaders that his policies are restricting the development of domestic energy resources, announced Saturday that he was taking several steps to speed oil and gas drilling on public lands and waters.
It was at least a partial concession to his critics at a time when consumers are paying near-record prices at the gas pump. The Republican-led House passed three bills in the last 10 days that would significantly expand and accelerate oil development in the United States, saying the administration was driving up gas prices and preventing job creation with antidrilling policies.
Administration officials said the president’s announcement, which included plans for expanded drilling in Alaska and the prospect of new exploration off the Atlantic coast, was intended in part to answer those arguments, signal flexibility and demonstrate his commitment to reducing oil imports by increasing domestic production.
But in fact the policies announced Saturday would not have an immediate effect on supply or prices, nor would they quickly open any new areas to drilling.
“These spikes in gas prices are often temporary,” Mr. Obama said, “and while there are no quick fixes to the problem, there are a few steps we should take that make good sense.”
The president’s turn to a domestic pocketbook issue comes after two weeks of intense focus on the killing of Osama bin Laden, terrorism more broadly and the multiple crises in the Middle East.
In his weekly radio and Internet address, Mr. Obama said the administration would begin to hold annual auctions for oil and gas leases in the Alaska National Petroleum Reserve, a 23-million-acre tract on the North Slope of Alaska. The move comes after years of demands for the auctions by industry executives and Alaska’s two senators, Lisa Murkowski, a Republican, and Mark Begich, a Democrat.
The administration will also accelerate a review of the potential environmental impact of drilling off the southern and central Atlantic coast and will consider making some areas available for exploration. The move is a change from current policy, which puts the entire Atlantic Seaboard off limits to drilling until at least 2018.
The president also said he would extend leases already granted for drilling in the Arctic Ocean off Alaska and the Gulf of Mexico that had been frozen after the BP spill last year. The extension will allow companies time to meet new safety and environmental standards without having to worry about their leases expiring.
And the government will provide incentives for oil companies to more quickly exploit leases they already hold. Tens of millions of acres onshore and offshore are under lease but have not been developed.
The actions signal a return to a more industry-friendly approach to offshore operations that Mr. Obama had adopted early in his presidency, though they do not reverse some of the steps the administration made to slow drilling after the gulf disaster.
Hastening the review of drilling permits in Alaska and the possibility of offering parts of the Atlantic Coast for lease in the next few years, in particular, represent a significant change from the administration’s attitude toward drilling after the spill.
The moves come after the House passed a series of bills that would force the administration to move much further and faster to open public lands and waters to oil and gas development. The administration formally opposed the bills as written, but officials said Friday that the White House might accept some provisions in the bills, like extending the frozen leases in the gulf and in Alaska.
Responding to the shift by the administration, Brendan Buck, a spokesman for Speaker John A. Boehner, said, “The president just conceded what his party on Capitol Hill still denies: more American energy production will lower costs and create jobs. This reversal is striking, since his administration has consistently blocked American-made energy.”
Although Mr. Buck characterized the policy changes as “not terribly substantial,” he added that they should “pave the way for legislation, like the bills the House passed in the past two weeks, to reduce the damage from the restrictions he imposed in the past.”
Congressional Democrats, who are largely united in their opposition to the Republican “drill here, drill now” legislation, said the president’s proposals made sense as part of a broader policy that includes revoking tax breaks for the oil industry and encouraging companies to drill on the public land they already control.
Representative Nancy Pelosi of California, the House Democratic leader, endorsed the measures Mr. Obama proposed Saturday but also advocated selling some part of the Strategic Petroleum Reserve, which now contains 727 million barrels of crude oil. The administration has so far resisted tapping the reserve, saying that it would have only a small and temporary effect on prices and was intended for critical supply shortages, which the country is not now experiencing.
The president, in his address, said he supported increased domestic oil and gas development, if done safely and responsibly. “Last year, America’s oil production reached its highest level since 2003,” he said. “But I believe that we should expand oil production in America, even as we increase safety and environmental standards.”
The Alaskan petroleum reserve was set aside in the 1920s as a source of oil for the Navy. There have been fewer than a dozen lease sales there; the most recent one, in 2010, drew only modest industry interest. The government has lowered its estimate of recoverable oil under that vast tract, and the Obama administration is leaving large areas untouched because of their ecological and wildlife value.
Response from environmental advocates was muted. Eric Myers, Alaska policy director for the National Audubon Society, said conservationists were willing to see an increase in drilling in the Alaskan petroleum reserve as long as it did not threaten wildlife, waters or sensitive lands.
The more environmentally sensitive Arctic National Wildlife Refuge in Alaska will remain off limits to oil and gas drillers, administration officials said Friday.
The president noted in his address that the Justice Department had formed a task force to look into potential market manipulation or excessive speculation in oil, and he repeated his call for a repeal of the $4 billion a year in tax incentives that the oil industry receives.
“In the last few months, the biggest oil companies made about $4 billion in profits each week,” Mr. Obama said. “And yet, they get $4 billion in taxpayer subsidies each year. Four billion dollars at a time when Americans can barely fill up their tanks. Four billion dollars at a time when we’re trying to reduce our deficit.”
This week, the Senate will take up a Democratic bill to remove a portion of those subsides, but it is not expected to become law because of united Republican opposition in both chambers of Congress.
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