Democratic presidential contender Sen. Barack Obama of Illinois has signaled that he would be open to allowing drilling off certain coastal states as part of a larger compromise on energy policy, a shift in his position against repeal of the congressional ban on oil and natural gas activity in much of the federal Outer Continental Shelf (OCS).

Obama indicated that he could support a bipartisan, comprehensive bill offered last week by five Senate Republicans and five Democrats — known as the “Gang of 10” — that seeks to open additional Gulf of Mexico areas to drilling, and would allow the states of Virginia, North and South Carolina and Georgia to opt into leasing off their shores (see Daily GPI, Aug. 4). The measure would not open coastal areas off states such as New Jersey and California or New England states, which have bitterly opposed offshore activity.

The Energy Reform Act of 2008 would bar production up to the 50-mile limit from shore and would require all new production to be used domestically. It also would create a commission to make recommendations to Congress on future areas of the OCS that should be considered for leasing. And the bill would provide for revenue sharing with states that allow leasing off their coastlines.

The bipartisan bill “includes a limited amount of new offshore drilling, and while I still don’t believe that’s a particularly meaningful short-term or long-term solution, I am willing to consider it if it’s necessary to actually pass a comprehensive [energy] plan,” Obama said in a speech Monday in Lansing, MI.

The Democratic presidential candidate first hinted at a change in his position on offshore drilling over the weekend. “If we can come up with a genuine, bipartisan [energy] compromise in which I have to accept some things I don’t like, or the Democrats have to accept some things that they don’t like, in exchange for moving us in the direction of energy independence, then that’s something I’m open to,” Obama said in Florida.

The softening of Obama’s opposition to offshore drilling comes nearly two months after Republican presidential contender Sen. John McCain of Arizona announced his support for repealing the congressional moratorium on offshore drilling, so that coastal states can choose the option to allow drilling (see Daily GPI, June 18).

Republicans immediately accused Obama of flip-flopping on the offshore issue. “I am not surprised that he’s hedging on this issue. But the fact is he still opposes offshore drilling. We need to drill now,” McCain said in an interview with ABC’s Diane Sawyer.

Others believe Obama’s willingness to compromise on the issue may be a sign that the wall between Republicans and Democrats is crumbling. Senate and House Republicans for weeks called for a vote on expanded drilling in the federal OCS, but Democrats refused to schedule a vote on the issue. The new proposal would take Speaker Nancy Pelosi’s home state of California off the table, which some believe may moderate her opposition to allowing a House vote on an OCS drilling bill.

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