The administration is reviewing drilling and safety standards in the wake of the Gulf spill. Obama reverses on offshore drilling

The White House’s uneasy on-again, off-again relationship with offshore oil drilling is off again.

On Wednesday, the Interior Department said it would not propose oil exploration off the Atlantic and Pacific coastlines or the eastern Gulf of Mexico for at least seven years.


But unlike the late March announcement when President Barack Obama took to the podium to embrace domestic energy production and call for bipartisan support in Congress, Wednesday’s declaration came with little fanfare — a press release and a phone call with reporters by Interior Secretary Ken Salazar.

At the time, Obama said the administration would take exploratory steps toward opening up the eastern Gulf and the Atlantic Coast to drilling. That announcement was generally seen as a potential landmark series of steps toward allowing drilling in uncharted waters.

Less than a month later, the April 20 blowout of BP’s Macondo well led to the unprecedented Gulf of Mexico oil spill that spewed an estimated 172 million gallons of oil into the Gulf. Since then, the administration has tried to put a temporary deepwater drilling ban in place and come under fire for simultaneously hampering economic development and not doing enough to protect the environment.

“The changes that we are making today really are based on the lessons that we have been learning” since the April 20 explosion that killed 11 workers on the Deepwater Horizon rig, Salazar said.

Interior’s 2012-2017 offshore-drilling lease strategy will proceed “safely and responsibly” with offshore drilling “in the right ways and the right places,” he added.

The March announcement was not a guarantee that the administration was going to propose allowing oil and gas drilling in the eastern Gulf and off the Atlantic Coast. For one, Congress would have to act on allowing that drilling.

Congress in 2006 — as part of a deal with Florida lawmakers — put the far eastern Gulf of Mexico near the Sunshine State’s borders off-limits until 2022 as part of a package that made available 8.3 million acres to oil and gas development in the more east-central part of the Gulf. The administration considered opening up more of those waters before the BP spill.

Salazar also announced Wednesday that the next lease sales in the western and central Gulf of Mexico — where drilling is currently allowed under law — will occur in late 2011 and 2012 after the department finishes its environmental review. He also emphasized that only an estimated one-third of leases currently held by drilling companies in the Gulf are currently being used by those companies.

March’s proposal brought instant opposition from two key Atlantic Coast Democratic senators — Robert Menendez of New Jersey and Bill Nelson of Florida — who were thrilled Wednesday with the administration’s reversal.

“I regret that it took the spill in the Gulf to have them come to that conclusion that there is no such thing as absolutely safe drilling,” Menendez told reporters.

“Remember the direction that they were heading was about studying,” he said, referring to the late March announcement. “But studying always created scoping and all that stuff. Those are all preludes to leasing. And so at the end of the day, when you open the door, you never how far it’s going to get thrust open.”

But oil industry officials weren’t cheering.

American Petroleum Institute CEO Jack Gerard blasted the announcement, saying that it “shuts the door on new development off our nation’s coasts and effectively ensures that new American jobs will not be realized.”

One energy industry official said the reversal is not terribly surprising, given that the West Coast was never in play and the eastern Gulf and Atlantic coastline was barely so. “This is just playing base politics,” the industry official said. “They’re just taking care of their enviro base.”

“Any step backwards in drilling is not a good step to take,” Sen. Mary Landrieu (D-La.) told reporters. “Having said that, the step backwards is probably not as large as it initially appears to those of us who have been disappointed with this administration.”

Landrieu recently lifted a months-long hold on Obama’s nomination for Jack Lew to head the White House Office of Management and Budget at least first to protest the administration’s deepwater drilling ban and then to try to push for expedited permitting of deepwater and shallow-drilling projects when that ban was lifted.

Landrieu said that she will continue to “look for every pressure point that I can place on this administration” but that Wednesday’s announcement does not up the ante in that effort.

“It doesn’t make me any angrier than I already am,” she said. “It’s just is something to note. It’s another backwards step, not the worst thing in the world.”

Interior is continuing to review and roll out new offshore drilling and safety standards after placing and later lifting a six-month ban on deepwater oil and gas drilling as a result of the Gulf spill.

Drilling advocates in Congress and industry are still pushing the Interior Department to speed up the processing and approval of both deepwater and shallow water drilling permits.

The next flash point will come in the Arctic, where Shell is trying to get Interior to approve its proposed drilling project in the Beaufort Sea. That operation is at most 200 feet deep, as opposed to the 5,000-foot Macondo well that ruptured and sparked the three-month oil spill that was plugged this summer.

In the Arctic, Salazar said Interior will “proceed with upmost caution,” leaving open the question of whether the agency will greenlight plans by Shell to drill in shallow waters off the coast of Alaska.

Shell Alaska Vice President Pete Slaiby is in D.C. and will meet with Bureau of Ocean Energy Management, Regulation and Enforcement Director Michael Bromwich on Thursday to discuss the plan.

“We’re trying to clarify timing right now,” Slaiby told POLITICO on Wednesday. He is meeting with the state’s three-member congressional delegation as well.

It is the last set of meetings in Washington before Shell has to decide whether to pursue any drilling activities off Alaska next year, and company officials are trying to get certainty one way or another this month.

But Bromwich said a federal verdict will take some time.

“We understand Shell needs a decision,” Bromwich said on the conference call. “But we’re not going to be constrained by any artificial deadlines.”

Shell would also need to get a sign-off from the National Oceanic and Atmospheric Administration and the Environmental Protection Agency.

Sen. Mark Begich (D-Alaska) said Salazar called him this morning and noted that the announcement removes a hurdle for Shell to obtain its final permits to explore in the Beaufort Sea next summer.

“This decision to clear the way for responsible oil and gas in Alaska’s resource-rich offshore waters is great news for our state and the nation,” Begich said in a statement. “It’s unfortunate the development was sidelined by this spring’s oil spill in the Gulf of Mexico, but I’m pleased the Obama administration took a hard look and made the right decision.”