U.S. won't allow drilling in Atlantic, off Florida

WASHINGTON Wed Dec 1, 2010 6:42pm EST

Unused oil rigs sit in the Gulf of Mexico near Port Fourchon, Louisiana August 11, 2010. REUTERS/Lee Celano

Unused oil rigs sit in the Gulf of Mexico near Port Fourchon, Louisiana August 11, 2010.

Credit: Reuters/Lee Celano

WASHINGTON (Reuters) - The Obama administration on Wednesday reversed its decision to allow drilling in Atlantic coast waters and offshore Florida, moving cautiously in the wake of BP's massive oil spill.

U.S. Interior Secretary Ken Salazar said the Deepwater Horizon oil spill showed that the administration needed "to proceed with caution" on expanding offshore drilling.

"The changes that we are making today really are based on the lessons that we have been learning," Salazar said.

President Barack Obama pledged last spring to expand offshore drilling, but after the April BP spill the administration slapped a temporary deepwater drilling ban and began tightening rules for offshore drilling.

Salazar said companies could still focus on exploring the 29 million acres (12 million hectares) in the Gulf of Mexico that they have already leased but not yet moved on.

"There's plenty of opportunity for oil and gas companies to go out and develop these additional resources," he said.

The administration said in March energy companies would be able to explore off the Atlantic Coast from Delaware to Florida and 125 miles beyond Florida's shore in the eastern Gulf of Mexico.

The policy change does not affect any immediate government supply projections as oil companies would need to launch multi-year exploration programs to find sufficient oil and gas reserves before bringing a field into production.

Some East Coast and Florida lawmakers were quick to back the tighter drilling policy. The move should be popular with environmentalists and voters in key states such as Florida, a large part of the political base for Obama.

"Just one accident could ruin Florida's tourism economy and our unique environment, not to mention the Everglades," said Democratic Senator Bill Nelson of Florida. "I'm glad the White House is listening to the people of Florida, and has decided not to allow any new drilling in the eastern Gulf."

Obama's reversal makes political sense as he prepares to for the 2012 presidential campaign and works to win Florida's potentially pivotal electoral votes, according to Stephen Hess, presidential expert at the Brookings Institution.

"Florida is the only state that makes significant electoral difference to him," Hess said. "You got to win that one."

Republicans, who will take control of the House of Representatives in the new Congress, have promised to investigate the administration's offshore drilling policy and press the White House to support traditional energy sources instead of focusing so much on renewable energy.

"This plan to lock-up vast portions of America's offshore energy resources is short-sighted and will lead to long-term job impacts, economic harm and increased reliance on foreign energy from dangerous and hostile countries," said Representative Doc Hastings, the expected new Republican chairman of the House Natural Resources Committee.

The administration's decision will forego billions of dollars that oil companies would have paid to lease new offshore tracts, which could have been used to help balance the federal budget.

Drilling also will not be allowed off the West Coast, as expected, and the administration will not lease any tracts off the Alaska coast until 2012 as part of the five-year drilling plan, the Interior Department said. (Reporting by Tom Doggett; additional reporting by Ayesha Rascoe; Editing by Marguerita Choy, Russell Blinch and David Gregorio)