While Democratic presidential candidate Sen. Barack Obama of Illinois has said he would support limited expansion of oil and natural gas drilling on the Outer Continental Shelf (OCS), the head of Frost & Sullivan’s North American energy practice said she couldn’t rule out the possibility that he may reinstate presidential restrictions on drilling if elected next week.

“He’s, from my understanding, said he wouldn’t [reimpose the restrictions], or at least he would even support some expansion of offshore drilling. Now when he’s actually in office is that going to happen or not? I’m a little doubtful that there would be any expanding in offshore drilling,” said Roberta Gamble, director of the North American Energy and Power Systems Practice for the global consulting firm of Frost & Sullivan during an analyst briefing Wednesday.

“It’s possible I think that some more moratoriums could be placed on it. I guess it depends [on] what political pressure he’s under. But right now he’s stated he’s for limited expansion” of offshore exploration and production, she said.

In July President Bush removed the presidential ban that placed the East and West Coasts and parts of the eastern Gulf of Mexico off limits to leasing and drilling activity (see Daily GPI, July 15). And the congressional moratorium on leasing in those areas expired on Sept. 30, leaving the OCS free of restrictions for the first time in decades (see Daily GPI, Sept. 29). The energy industry is now waiting on the sidelines to see if a new president and new Congress will reinstate those bans, either partially or fully. When it returns in January, Congress is expected to take up legislation that, among other things, would lay the ground rules for drilling in the OCS areas that were previously subject to moratorium.

Obama seems to be “much less enthusiastic” about OCS drilling than Republican presidential contender John McCain of Arizona, Gamble said. McCain believes that the OCS should remain unrestricted and that individual coastal states should decide on whether to allow drilling off their shores.

In its review of the candidates’ energy policies, San Antonio, TX-based Frost & Sullivan appeared to be less than enthusiastic about increased offshore drilling, saying it was “risky — some estimates show offshore resources in the U.S. have limited supplies.”

As for other energy proposals, Frost & Sullivan said, “Obama’s plans for more aggressive carbon legislation and greater emphasis on renewable power [are] likely to create a more long-term solution for both electricity concerns and environmental issues.” However, “in the short term, this may be a more expensive proposition, which may delay or even reduce the ability to enact this longer-term vision. And is [Obama’s proposed] 80% reduction in carbon more than is needed (and more costly) to stabilize the environment?”

McCain’s plans, on the other hand, “in fully leveraging domestic capabilities and resources would likely decrease energy costs and increase security concerns at least in the short-to-medium term. It is uncertain how much of McCain’s proposed environmental regulations would be government- vs. market-driven. Also is [McCain’s proposed] 60% reduction in carbon enough to mitigate further environmental damage?” the consulting firm asked.

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