Obama Offshore Drilling
An offshore oil platform is seen near Huntington Beach, California, Sept. 28, 2014. Lucy Nicholson/Reuters

The Obama administration is expected to withdraw its proposal to allow oil and gas drilling off the U.S. Atlantic coast.

An announcement from the U.S. Interior Department could come as soon as Tuesday, a person familiar with the decision told the New York Times. The source was not authorized to speak to the newspaper on the record because the plan wasn’t publicly disclosed.

The decision would follow an outpouring of opposition to last year's proposal from coastal communities, seafront businesses and environmental groups from Virginia to Georgia. Critics said they feared drilling along the Southeast coast would lead to a repeat of the 2010 Deepwater Horizon oil spill in the Gulf of Mexico, harming the environment and threatening local economies.

Oil and gas companies have hailed Obama’s drilling proposal as a boon for U.S. energy production. The Atlantic’s outer continental shelf is estimated to hold 3.3 billion barrels of recoverable crude oil and 31.3 trillion cubic feet in natural gas reserves, according to federal energy data. Industry experts, however, say the estimates are outdated and that the outer shelf may actually contain far more oil and gas than expected.

BOEM Offshore Atlantic
The Interior Department's proposal for the period 2017 to 2022 would have auctioned off one offshore drilling lease on the southeastern Atlantic coast. U.S. Bureau of Ocean Energy Management

The Interior Department in January 2015 proposed to open much of the southeastern Atlantic coast to offshore drilling for the first time in decades. Governors, state legislators and senators from Virginia, North Carolina, South Carolina and Georgia had all expressed support for drilling, citing the potential for job creation and new state tax revenue.

The Obama administration wasn’t expected to finalize the offshore drilling proposal, which was still in draft form, until later this year. The five-year plan for the period 2017 to 2022 would have auctioned off one offshore drilling lease in the combined Mid-Atlantic and South Atlantic zones.

The federal government hasn’t issued a new lease in this area for more than three decades due to regulatory and economic concerns. Obama in early 2010 had proposed a five-year plan to allow for new lease sales in federal waters off Virginia, but officials dropped the idea in the aftermath of BP’s Deepwater Horizon disaster, which killed 11 people and covered nearby coastal states in millions of gallons of oil.

U.S. offshore drilling for now only takes place near Alaska, in the Gulf of Mexico near Louisiana, Alabama and Texas and in the Pacific Ocean off the coast of California. Drilling in those federal and state waters began in the late 1970s and early 1980s.

More than 100 coastal cities and towns, from Norfolk, Virginia, down to Charleston, South Carolina, signed resolutions in recent months asking Obama to shut down plans for new Atlantic drilling. The owners of about 1,000 coastal businesses, including bait and tackle shops and kayak rental stores, similarly signed letters warning the White House that an oil spill could destroy their economic model. Environment America, a national green group, said it presented the Obama administration with the letters in February.

The Obama administration this week is also expected to release a new draft of its plan for offshore drilling leases in the Gulf of Mexico and Alaska’s Arctic waters.