Obama opens new oil drilling offshore in climate drive

WASHINGTON (Reuters) - President Barack Obama unveiled plans on Wednesday for a limited expansion of U.S. offshore oil and gas drilling in an effort to win Republican support for new proposals to fight climate change.

Opening up parts of the U.S. Atlantic coast, Alaska and possibly offshore Florida to exploration is Obama’s latest effort to woo legislators needed to pass a climate bill before mid-term elections in November.

Some senior Republicans in Congress called the drilling announcement a step in the right direction but said Obama did not go far enough. Environmental groups and some congressional liberals condemned the plan for endangering wildlife and coastal areas merely to give oil companies more profits.

Obama, who needs bipartisan support to pass a bill that would set limits on U.S. greenhouse gas emissions, cautioned that expanding drilling was not a catch-all answer to U.S. energy challenges.

“Drilling alone can’t come close to meeting our long-term energy needs, and for the sake of our planet and our energy independence, we need to begin the transition to cleaner fuels now,” Obama said at Andrews Air Force Base in nearby Maryland.

“I know that we can come together to pass comprehensive energy and climate legislation that’s going to foster new energy -- new industries, create millions of new jobs, protect our planet, and help us become more energy independent.”

Obama has made energy security and reducing U.S. reliance on foreign oil a key policy goal, and Republican support for drilling -- exemplified by cries of “drill, baby, drill!” at presidential campaign rallies for Republican Senator John McCain in 2008 -- has made offshore exploration a key bargaining chip in trying to get his energy legislation passed.

But Obama’s proposal came with significant limits.

Energy companies would not be able to drill on the U.S. West Coast or in Northeast waters, but 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.

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Republicans said the plan prevented the biggest U.S. offshore energy resources from being developed. The newest area that energy companies will have access to will be off the Virginia coast in tracts estimated to hold 130 million barrels of oil, which is equal to the amount the U.S. imports over two weeks from all foreign suppliers.

“Opening up areas off the Virginia coast to offshore production is a positive step, but keeping the Pacific Coast and Alaska, as well as the most promising resources off the Gulf of Mexico, under lock and key makes no sense at a time when gasoline prices are rising and Americans are asking ‘Where are the jobs?’” said House of Representatives Republican Leader John Boehner.

Senate Republican Leader Mitch McConnell added: “Today’s announcement is a step in the right direction, but a small one that leaves enormous amounts of American energy off limits.”

For more than 20 years, drilling was banned in most offshore areas of the United States outside the Gulf of Mexico because of concerns that spills could harm the environment.

Congress allowed a prohibition on offshore drilling to expire in 2008 and former President George W. Bush lifted a drilling moratorium that year. Environmental groups and some lawmakers continue to raise concerns about the impact increased drilling would have on coastal areas.

The administration has been weighing the pros and cons of offshore drilling since it took office and put the brakes on a Bush-era proposal that called for drilling along the U.S. East Coast and off the coast of California.

The Interior Department will conduct the first offshore oil and gas lease sale in the Atlantic Ocean in more than two decades in November 2011. The sale cover some 3 million acres in a triangular area 50 miles off the Virginia coast. Interior Secretary Ken Salazar said it could be delayed until 2012 to finish environmental reviews.

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Obama’s move potentially opens areas off the Southeast coast to drilling pending public approval and environmental testing, but those areas are less promising than the areas off the West Coast and Northeast he excluded.

Proposed oil and gas leasing in Alaska’s Bristol Bay will be canceled out of concern for protecting sensitive areas of the Outer Continental Shelf from environmental dangers.

This could affect companies like Royal Dutch Shell, which has expressed interest in the region, as well as ConocoPhillips, BP and Statoil.

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The biggest U.S. offshore oil producers are BP, Royal Dutch Shell and Chevron Corp, according to the U.S. Minerals Management Service.

The biggest natural gas producers are Shell, Anadarko Petroleum and Apache Corp. Of U.S. domestic production, offshore operations account for 27 percent of oil and 15 percent of natural gas output.

Exxon Mobil, the biggest U.S. oil company, called the announcement a “meaningful, potential opening” to more U.S. energy production.

The U.S. Minerals Management Service estimates the mid- and south-U.S. Atlantic coast waters and the Eastern Gulf of Mexico may hold 40.5 trillion cubic feet of gas and nearly 5.8 billion barrels of oil. All this could be considered for exploration and specific lease areas would be chosen if they receive public approval and pass environmental reviews.

The West Coast, which Obama has also put off limits to drilling, has 10.5 billion barrels of oil and 18 trillion cubic feet of gas.

To put that in context, the United States imports about 2 billion barrels of oil a year from OPEC nations and is expected to import 2.7 trillion cubic feet of natural gas from all sources this year, according to the Energy Department.

Environmentalists, who often make up part of Obama’s left-leaning political base, were not pleased by his plan.

“While China and Germany are winning the clean energy race, this act furthers America’s addiction to oil. Expanding offshore drilling in areas that have been protected for decades threatens our oceans and the coastal communities that depend on them with devastating oil spills, more pollution and climate change,” said Greenpeace Executive Director Phil Radford.

Additional reporting by Steve Holland, Matt Spetalnick, Alister Bull, Tim Gardner, Kristen Hays; Editing by Will Dunham and Philip Barbara