Obama takes responsibility for oil spill

WASHINGTON Thu May 27, 2010 3:54pm EDT

President Obama departs the East Room of the White House following his news conference, May 27, 2010. REUTERS/Kevin Lamarque

President Obama departs the East Room of the White House following his news conference, May 27, 2010.

Credit: Reuters/Kevin Lamarque

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WASHINGTON (Reuters) - President Barack Obama took responsibility for the U.S. response to the Gulf of Mexico oil spill on Thursday and extended for six months a moratorium on offshore drilling, dealing a potential setback to his own energy policy.

Obama, who has come under increased pressure to show leadership over the spill, suspended planned exploration off the coast of Alaska, and canceled a pending lease sale in the Gulf of Mexico and a proposed lease sale off Virginia.

Addressing reporters at the White House, a worn-looking Obama said even his daughter had asked him when the oil would stop leaking.

"In case you're wondering who's responsible, I take responsibility," he said, leaning over his podium.

"It is my job to make sure that every thing is done to shut this down," he said.

The president rejected criticism that he and the federal government had not taken charge as BP Plc (BP.L) struggles to stop the gushing deep-sea oil well.

"There shouldn't be any confusion here. The federal government is fully engaged, and I'm fully engaged," he said.

"From the moment this disaster began, the federal government has been in charge of the response effort."

Offshore oil drilling is a key part of Obama's efforts to rejig the country's energy policy and a needed sweetener for gaining Republican support for a bill in the Senate.

But the spill has forced him and fellow Democrats to rethink their support for such an expansion, which many environmentalists oppose.

"Extraction is more expensive and it is going to be inherently more risky," Obama said. "That's part of the reason you never heard me say, 'drill, baby, drill,' because we can't drill our way out of the problem."

The Obama administration ordered a halt in new drilling permits after BP's oil rig, owned by Transocean (RIG.N) RIGN.S, exploded in the Gulf on April 20.

Some U.S. lawmakers have called on the administration to lift the permit ban, at least for exploration in the shallow waters of the Gulf while keeping it in place in deeper waters where BP was operating.

SHIFTING THE RISK?

Mike Breard, an analyst at Hodges Capital Management, said the decision would force companies to move rigs to places such as Brazil, forcing the United States to import more and increasing the possibility of tanker accidents.

"You're trading a risk of one type of spill for another type of spill," Breard said.

Obama has established a presidential commission to investigate the causes of the spill, which by government estimates is the country's largest ever.

His announcement on Thursday was meant to amplify his administration's response before that panel draws its own conclusions on what went wrong.

The moratorium on permits to drill new deepwater wells will continue for a period of six months while the commission does its work.

Political fallout has not been limited to legislation. Interior Secretary Ken Salazar said Liz Birnbaum, the head of Minerals Management Service, which oversees U.S. offshore oil drilling, had resigned.

Obama said he had learned of the resignation on Thursday morning. He declared that reforms are needed in the government's process for approving oil drilling permits and said the MMS suffered from a relationship with the oil industry that was "scandalously close."

Obama has come under increasing pressure to stop the spill and halt its environmental and economic consequences for Gulf states. BP, which has been publicly scolded by the president, was working on Thursday to plug the leaking well in a procedure known as "top kill."

Obama promised to hold BP accountable in the catastrophic spill and said his administration would do everything necessary to protect and restore the coast.

"We're exploring any reasonable strategies to try and save the Gulf from a spill that may otherwise last until the relief wells are finished and that's a process that could take months," Obama said.

(Additional reporting by Steve Holland, Caren Bohan, Matt Spetalnick and Alister Bull; Editing by Eric Beech)

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