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Jamie Dupree's Washington Insider

Posted: 1:01 a.m. Monday, May 16, 2011

White House Moves on Drilling 

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By Jamie Dupree

The White House changed course over the weekend on offshore oil and gas exploration, dropping some of the efforts to delay drilling permits in the wake of the BP oil leak in the Gulf of Mexico.

President Obama used his Saturday radio address to announce the changes, which came after Republicans in the House had pushed through a variety of bills to promote more offshore exploration.

"I am directing the Department of Interior to conduct annual lease sales in Alaska’s National Petroleum Reserve, while respecting sensitive areas, and to speed up the evaluation of oil and gas resources in the mid and south Atlantic," the President said on Saturday.

"We plan to lease new areas in the Gulf of Mexico as well, and work to create new incentives for industry to develop their unused leases both on and offshore," Mr. Obama added.

Without mentioning the BP oil spill directly, the President noted the need for "higher safety standards when it comes to exploration and drilling."

"That’s why my Administration is extending drilling leases in areas of the Gulf that were impacted by the temporary moratorium, as well as certain areas off the coast of Alaska."

The move by President Obama came as Democrats try to set up a vote this week in the Senate to do away with certain tax breaks for major oil and gas companies.

Originally, the White House wanted to use the $4 billion a year in new revenues for clean fuels development, but Mr. Obama seemed to side with Democratic lawmakers, who now want to use that money to offset the size of the federal deficit.

The change in tune on from the White House did not satisfy the oil and gas industry, which opposes the idea of ending their tax breaks and still wants more areas opened to drilling.

"While this is a step forward for the national discourse on America’s energy future, we hope that these proposals are only the first in a series towards a more robust national energy plan," said a statement from the American Petroleum Institute.

At this point in time, the oil company tax breaks don't look like they will be in any danger, but Democratic leaders think they have an issue here that will resonate with the voters.

"The American people shouldn’t be subsidizing oil companies at a time when they’re making near-record profits," the President said on Saturday.

Also part of these new White House plans is an effort to take a seismic inventory of what kind of oil and gas resources might be off the Atlantic Seaboard, from the DelMarVa peninsula on down to the Florida Keys.

Such plans have drawn criticism from many Democrats, especially in Florida in the past, worried that it's just one step towards drilling not far from their coastline and beaches.

With the House out of session this week, the Senate will be the only game in town when it comes to legislative battling over high oil and gas prices.

Stay tuned on a lot of these details.

Jamie Dupree

About Jamie Dupree

Jamie Dupree is the Radio News Director of the Washington Bureau of the Cox Media Group and writes the Washington Insider blog.

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