The New York Times May 14, 2011
Obama Shifts to Speed Oil and Gas Drilling in U.S.
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 these arguments, signal flexibility and demonstrate Mr. Obama’s 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, the president 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 environmental impact of possible 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 last year’s BP spill. 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 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, the House Democratic leader, endorsed the measures Mr. Obama proposed on Saturday but also advocated selling some portion of the Strategic Petroleum Reserve, which today 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 designed 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 relatively muted. Eric Myers, Alaska policy director for the National Audubon Society, said that 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.
Senator Mark Begich, Democrat of Alaska, who has been critical of the administration’s cautious approach to drilling in the Arctic, said he was pleased by much of the president’s announcement, including the adoption of his proposal to create a multi-agency task force to streamline decisions about oil development in Alaska and to extend the leases for companies planning to drill there.
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 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.”
Next 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.
_______________________
Read more: http://www.politico.com/news/stories/0511/54969_Page2.html#ixzz1MMHnNgAS
POLITICO
Obama says drill
By: Darren Goode
May 14, 2011 07:03 AM EDT
President Barack Obama is looking to bolster U.S. oil drilling, announcing Saturday a preemptive strike against bolder efforts from Capitol Hill as consumer unrest
The White House will move forward without congressional action on a set of ideas espoused by Republicans
It’s the closest Obama has come to rivaling his short-lived pro-drilling stance that ended with the BP oil spill.
At the same time, Obama is also firing up
“Without a doubt, one of the biggest burdens over the last few months has been the price of gasoline,” Obama said in his fourth weekly address in a row and fifth in seven weeks to touch on energy issues.
Gas prices are now averaging more than $4 a gallon
The situation is precarious for Obama, who must balance the need to work with a starkly divided Congress against his own effort to win a second term.
“These spikes in gas prices are often temporary, and while there are no quick fixes to the problem, there are a few steps we should take that make good sense,” Obama said.
Attorney General Eric Holder is leading a task force investigating possible fraud, manipulation and illegal activity by traders and speculators that might be leading to the spike in prices.
But drilling is where the political problems lie for the White House. Republicans and oil-state Democrats have continued to criticize Obama and the Interior Department for what they say is a dramatic slowdown in new permits off and on shore.
“[W]e should increase safe and responsible oil production here at home,” Obama said. “Last year, America’s oil production reached its highest level since 2003. But I believe that we should expand oil production in America – even as we increase safety and environmental standards.”
Obama is now looking to give a blanket extension to all oil and gas leases in the Gulf of Mexico due to the disruption caused by last year’s Gulf spill and subsequent administration ban and slow-down of drilling permits. By doing so, Obama is at least touching on an idea advocated by Republicans as part of a three-part offshore drilling package the House approved this month.
A senior administration official told reporters Friday that the administration is also looking to complete by the end of the year the first new lease sale in the Gulf since the BP spill – and to have two combined sales finished in the western and central Gulf of Mexico by the middle of next year.
But the GOP-passed bills go further and would require lease sales off the coast of Virginia that the administration canceled in the wake of the BP spill. The measures would also require more areas off the Eastern Seaboard and the California and Alaska coastlines be opened to new drilling.
House Natural Resources Chairman Doc Hastings (R-Wash.) – the lead sponsor of the House-passed drilling bills – called Obama’s actions “baby steps.”
“One weekend address announcing minor policy tinkering, while positive, does not erase the administration’s long, job-destroying record of locking-up America’s energy resources,” Hastings said in a statement.
Obama received a more favorable initial response from a critic in his own party.
“I’m cautious, implementation will be the key,” Sen. Mark Begich (D-Alaska) told POLITICO Friday. “It’s preemptive but I think he’s hearing Š from his own folks in his own party.”
Begich and Sen. Mary Landrieu (D-La.) have been highly vocal in criticizing the administration for its pace of expanding production in both the Gulf and the Arctic.
Obama is now expediting the completion of an initial environmental analysis of potential oil and gas resources in the mid-Atlantic and southern Atlantic coastline.
The review is on schedule to be finished in a little over a year and would be a first step in determining where production could be viable and worthwhile, a senior administration official said. “We want to get that answer as quickly as possible,” the official said.
It is possible that this could lead to areas off the Atlantic coast to be added at some point to the administration’s still evolving leasing strategy that runs through 2017, the official said.
Obama also announced he is directing the Interior Department to conduct annual lease sales in Alaska’s National Petroleum Reserve “while respecting sensitive areas.” The idea is to “regularize” what have been periodic lease sales there, a senior administration official said.
Alaska’s Arctic National Wildlife Refuge – long a symbolic centerpiece over the fight to expand domestic drilling – remains “off the table, and we do not support development there,” a senior administration official said.
The administration also will put together what one senior official deemed a “high-level interagency group” to expedite permitting off the coastline of Alaska.
Begich has offered legislation that would establish a federal coordinator to expedite permitting of offshore leases in the icy Arctic waters off Alaska.
But in a move sure to rankle Republicans and some Democrats, Obama is continuing his push to add pressure on companies to use existing leases they own, considering a new “graduated fee” structure that essentially rewards those who act on their leases quickly, a senior administration official said.
Final details were not provided and may not be settled. “There could be a sliding scale of royalties” companies would have to pay, the official said. For instance, companies could pay a lower royalty if they develop their leases within the first three years.
Obama also railed against the need for oil-industry tax incentives ahead of Senate action Wednesday on an effort to repeal $21 billion in incentives over 10 years for the five biggest private integrated oil firms.
“The American people shouldn’t be subsidizing oil companies at a time when they’re making near-record profits,” Obama said. “As a nation, we should be investing in the clean, renewable sources of energy that are the ultimate solution to high-gas prices.”
The Senate Democratic plan would put the money saved toward reducing the deficit and not direct it toward programs aimed at reducing oil dependence.
Despite Obama’s backing, opposition from Republicans and Democrats like Begich and Landrieu is likely to derail the measure in the Senate, and it would be dead on arrival in the GOP-controlled House.
Special thanks to Richard Charter