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With gas costs high, Obama to speed oil production

WASHINGTON — Amid growing public unhappiness over gas prices, President Barack Obama is directing his administration to ramp up U.S. oil production by extending existing leases in the Gulf of Mexico and off Alaska's coast and holding more frequent lease sales in a federal petroleum reserve in Alaska.

Answering the call of Republicans and Democrats from gulf coast states, Obama said in his weekly radio and Internet address that he would extend all gulf leases that were affected by a temporary moratorium on drilling imposed after last year's BP oil spill. That would give companies additional time to begin drilling.

The administration had been granting extensions case by case, but senior administration officials said the Interior Department would institute a blanket one-year extension.

New safety requirements put in place since the BP spill also have delayed drilling in Alaska, so Obama said he would extend lease terms there for a year as well. An oil lease typically runs 10 years.

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.

It was at least a partial concession to Obama's 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 anti-drilling policies. The White House had announced its opposition to all three bills, which are unlikely to pass the Democratic-controlled Senate.

Obama acknowledged Saturday that the measures he is proposing won't help to immediately bring down gasoline prices topping $4 a gallon in many parts of the country, and an oil industry analyst agreed.

"There is practically nothing that Washington can do that would materially change the price of fuel in this country," said Raymond James analyst Pavel Molchanov, noting that the United States produces about 5 percent of the world's petroleum while consuming about 20 percent. "Given that imbalance, there is simply no policy shift that could plausibly come from the federal government that can significantly change that dynamic."

House Natural Resources Committee Chairman Doc Hastings, R-Wash., sponsor of the three measures that recently passed the House, said it was "ironic" that Obama "is now taking baby steps in our direction" after the White House and congressional Democrats criticized the bills.

"The president is finally admitting what Republicans have known all along, that increasing the supply of American energy will help lower prices and create jobs," Hastings said.

Information from the Associated Press and New York Times was used in this report.

With gas costs high, Obama to speed oil production 05/15/11 [Last modified: Sunday, May 15, 2011 12:16am]

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