Obama puts forward plan for offshore drilling

 @ibtimes
on April 01 2010 11:07 AM

WASHINGTON (Commodity Online): In a bid to corner more profits for cash-scarce oil companies, the US president Barack Obama has today announced that his administration would consider offshore drilling in the mid and south Atlantic and in the Gulf of Mexico.

The move is expected to help increase employment and ease gas prices in the country. However, Obama, who needs bipartisan support to pass a bill that would set limits on US greenhouse gas emissions, cautioned that expanding drilling was not a catch-all answer to US 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 in remarks at Andrews Air Force Base in nearby Maryland.

In US, for over past 20 years, drilling was banned in most offshore areas including the Gulf of Mexico because of concerns that spills could harm the environment.

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 US East Coast and off the coast of California.

Obama also said the government would support development of leased areas off the North Slope of Alaska but protect that state's Bristol Bay.

However, the environmentalists were not pleased by the plan. According to them, it could also damage shorelines and some states that depend on tourism. Also, the White House would need the permission of Congress to open the eastern Gulf to drilling.

According to the proposal, the coastline from New Jersey and north of that state would remain closed to all oil and gas exploration and drilling. The Pacific Coast would also stay closed.

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.

Energy stocks closed higher on the US bourses on Wednesday, March 31, 2010, led by gains in the oil services sector as well as firmer crude oil prices.

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