The Obama administration has reversed a decision to allow oil and natural-gas drilling in the eastern Gulf of Mexico and off part of the Atlantic coast following the BP Plc spill, an administration official said.
President Barack Obama won’t support new drilling in those areas in the administration’s next five-year plan for offshore exploration, according to the official familiar with the administration’s decision who spoke today on condition of anonymity before a planned announcement. Interior Secretary Ken Salazar may discuss the decision on a conference call with reporters later today.
Obama in March proposed drilling off the Atlantic coast from south of Delaware and in the eastern Gulf of Mexico 125 miles (201 kilometers) off the west coast of Florida. Less than a month after the announcement, BP’s Macondo well blew out, killing 11 workers on a drilling rig and setting off the worst U.S. offshore oil spill.
“I don’t think anyone is moving into this area anytime soon anyway,” Allen Good, an equity analyst at Morningstar Inc. in Chicago, said in a phone interview today. “The concerns are with the speed future licenses will be approved in the areas they are drilling in right now,” such as the Gulf off the Louisiana coast, he said.
Obama’s proposal before the BP spill had included drilling 50 miles off the Virginia coast, in what would be the first offshore Atlantic oil and gas sale in more than two decades. Former President George W. Bush removed a presidential moratorium on offshore drilling in 2008, and Congress let a ban expire.
“Today’s reported announcement by the Obama administration that the eastern Gulf of Mexico, Atlantic, and Pacific coasts will be excluded from the upcoming five-year offshore exploration plan represents a major step backward for the security of America’s energy future,” Karen Harbert, president of the U.S. Chamber of Commerce’s Institute for 21st Century Energy said in a statement. The Washington-based chamber is the largest U.S. business lobbying group.
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