Republicans Fault Obama Oil Plan Environmentalists See as Risky

Photographer: Danita Delimont

Oil rigs in Cook Inlet with Alaska Range in background. The five-year oil leasing plan includes Alaska, but keeps the Atlantic and Pacific coasts off limits. Close

Oil rigs in Cook Inlet with Alaska Range in background. The five-year oil leasing plan... Read More

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Photographer: Danita Delimont

Oil rigs in Cook Inlet with Alaska Range in background. The five-year oil leasing plan includes Alaska, but keeps the Atlantic and Pacific coasts off limits.

The Obama administration’s latest five-year oil-leasing plan angered Republicans, who sought to open more areas for drilling, and environmentalists, who said drilling may lead to disasters similar to BP Plc’s (BP/) 2010 spill.

The plan released yesterday by the U.S. Interior Department scheduled 15 lease sales through 2017, in the Gulf of Mexico and Arctic waters, while keeping the Atlantic and Pacific coasts off limits.

“The Obama administration has demonstrated that they will not allow the safe and responsible development of oil and gas energy resources off of Virginia’s coast,” Republican Governor Bob McDonnell said in a statement. “Offshore energy exploration and development would mean thousands of new jobs and millions in new revenue.”

President Barack Obama has set a target of reducing U.S. oil imports by a third by 2025 through more domestic oil production and increased use of natural gas and renewable resources. Republican challenger Mitt Romney has called for more extensive drilling.

The five-year plan includes 12 sales in the Gulf of Mexico, an auction in Alaska’s Cook Inlet in 2016, in Chukchi Sea in 2016 and in the Beaufort Sea in 2017. The regions hold more than 75 percent of total undiscovered and recoverable oil, according to the agency.

Safety Risks

“The government keeps promoting risky offshore drilling that jeopardizes the health of the entire Gulf and Arctic regions,” said Jacqueline Savitz, vice president for North America at environmental group Oceana. “This plan sets us up for another devastating oil spill, which endangers human lives, coastal economies and marine life.”

The administration has held two auctions since BP’s Macondo well blew up in April 2010, killing 11 workers and spewing about 4.9 million of barrels of oil to the Gulf.

An auction on June 20 for leases in the Gulf of Mexico off the coast of Louisiana, Alabama and Mississippi raised $1.7 billion, with Royal Dutch Shell Plc (RDSA) offering the most high bids at $406.6 million, or 24 percent of all offers, followed by Statoil ASA (STL) with $333.3 million, the Interior Department said.

Industry Demands

Interior Secretary Ken Salazar said the 2012-2017 plan responds to demands from the energy industry for additional leasing, while keeping environmentally sensitive areas off limits.

“Our plan adopts a regionally tailored approach that accounts for the distinct needs of the different regions,” Salazar told reporters in Washington. “The plan takes into account the range of factors, like resource potential, status of development and emergency-response structure, regional interest, and the need for a balanced approach when it comes to the use of our natural resources.”

The American Petroleum Institute, representing more than 500 oil and natural gas companies, criticized the plan.

This proposal “will not allow us to realize the full benefits from safe and responsible development of America’s oil and natural gas resources,” said Erik Milito, a director at the Washington-based group. “For example, this plan pushes back the 2015 Beaufort lease sale, where leasing has already occurred.”

To contact the reporter on this story: Katarzyna Klimasinska in Washington at kklimasinska@bloomberg.net

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net

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