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Wednesday, December 01, 2010

U.S. Won’t End Drilling Ban in Eastern Gulf -

U.S. Won’t End Drilling Ban in Eastern Gulf -

WASHINGTON — The Obama administration is rescinding its decision to expand offshore oil exploration into the eastern Gulf of Mexico and along the Atlantic coast because of weaknesses in federal regulation revealed by the BP oil spill, Interior Secretary Ken Salazar announced on Wednesday.

Mr. Salazar said that drilling would remain under a moratorium for those areas for at least seven years, until stronger safety and environmental standards were in place.

Drilling will continue in the central and western Gulf of Mexico, although under a set of new safeguards put in place after the deadly BP explosion and oil spill in April. Future gulf leases will be subject to further environmental and safety studies, he said.

Shell’s pending lease in the Arctic Ocean off the Alaska coast will be honored, but drilling will be allowed only after a new environmental review is completed and additional spill response requirements are met. That probably will push the oil company’s plans back by a year or more, officials said. Other potential drilling sites in the Arctic will be studied before any leasing decisions are made, Mr. Salazar said.

“As a result of the Deepwater Horizon oil spill we learned a number of lessons,” the interior secretary said Wednesday afternoon in a briefing for reporters, “most importantly that we need to proceed with caution and focus on creating a more stringent regulatory regime.”

The decision essentially reverses the controversial drilling plan announced in March, which would have begun environmental studies and exploration activity in previously untouched swaths of the gulf and along the East Coast from Florida to Delaware.

That plan, unveiled just three weeks before the BP accident, was part of a political effort to encourage more domestic oil production in exchange for Congressional action to limit the carbon dioxide emissions that are contributing to global warming.

The eastern gulf and the Atlantic Seaboard had been off-limits to oil companies for years because of Congressional opposition, although lawmakers in some Atlantic coast states have been pushing for offshore oil activity to reduce foreign imports and to generate tax and royalty revenue

The Obama administration’s package fell apart as a result of the oil spill and the Senate’s refusal to take up comprehensive legislation on energy and climate change.

The administration imposed a moratorium in May on all deepwater offshore drilling while the new safety procedures were drawn up. Mr. Salazar lifted the ban in October, and oil companies have been seeking new permits to resume exploration in the gulf.
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