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Interior Warns Against Misinterpreting Obama Action on Leasing Plan

The White House decision not to include the recently published draft five-year leasing plan for offshore drilling in the Obama administration's freeze on pending regulations does not signal that the new president supports drilling in long-banned areas of the federal offshore, an Interior Department spokesman said last Thursday.

Published stories "went too far to say this administration is going to go ahead with the five-year leasing plan" that the Bush administration released just four days before President Obama took office, said Interior spokesman Frank Quimby (see NGI, Jan. 19). The Obama administration's action should not be interpreted as support for the Bush-era leasing plan or expanded drilling in the federal Outer Continental Shelf (OCS), he said.

"The White House freeze did not [include] the leasing plan" for one reason only -- it "was not in the rulemaking phase," he said. "It was only in the public comment gathering phase. It was not proposing a draft rule or a final rule."

Quimby said the Obama administration "will make a decision down the road a bit on whether to continue" with the five-year (2010-2015) leasing plan. "It has not enunciated a formal position on that plan" yet.

"To say Obama is letting drilling go forward is not necessarily true," agreed Cathy Landry, a spokeswoman for the American Petroleum Institute (API), which represents major producers. Instead, by permitting the process to continue, the president is simply allowing Interior to "solicit comments on where and how the lease sales should take place over the next five years," she said.

"I believe it's encouraging that they [the Obama camp] want it to move forward," added Michael Kearns, a spokesman for the National Ocean Industries Association. "We think that's a good thing." The OCS leasing plan wasn't part of the freeze because "technically it's not a regulation; it's a process," he said.

Thomas J. Pyle, president of the Institute for Energy Research, echoed the sentiment. "The Obama administration is to be commended for allowing this energy plan to advance. It's our hope the decision serves as the momentum we need to guide this process through toward completion."

Shortly after Obama was sworn in as president last Tuesday, White House Chief of Staff Rahm Emanuel sent a memorandum to all agencies and departments to freeze all pending regulations until a legal and policy review can be conducted by the new administration. A review is often conducted by new administrations to slow and possibly reverse last-minute "midnight regulations" that were issued in the waning days of previous administrations. The draft leasing plan, which was published in the Federal Register the day after Obama assumed office (last Wednesday), proposes to hold lease sales in offshore areas that have been closed to producers under a moratorium for nearly three decades.

In mid-December Obama charged his energy and environmental team with the task of reviewing the issue of whether to reinstate the expired moratorium on oil and gas development in the OCS (see NGI, Dec. 22, 2008).

"What I said during the campaign was that I was open to the idea of offshore drilling if it was part of a comprehensive package to achieve energy independence," he told reporters at the time. But "I'm not thrilled with it [the moratorium] simply lapsing as a consequence of inaction without broader thought to how we're going to achieve energy independence."

Congress allowed the moratorium on drilling off the Atlantic and Pacific coasts and most of the eastern Gulf of Mexico to expire on Oct. 1, while then-President Bush removed the executive ban on drilling in the federal offshore areas last July (see NGI, Oct. 6, 2008, July 21, 2008). The ban to protect Florida's western coast remains in place until 2022.

The newly issued draft five-year oil and gas lease sale proposal would auction offshore drilling acreage in areas that have been off-limits to producers for decades. The draft provides for 31 OCS lease sales in all or portions of 12 of the 26 federal planning areas. New areas proposed under the plan would include four areas offshore Alaska, two off the Pacific Coast, three areas in the Gulf of Mexico and three in Atlantic waters.

The draft lease sale proposal is just the first step in a lengthy approval process. The subsequent steps -- a proposed leasing program, final environmental impact statement and possible congressional review of the program -- will be up to the Obama administration, which could shelve the entire offshore leasing program.

"This has always been a very long process," said API's Landry.

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