Obama Administration to Propose New Offshore Areas for Oil and Gas Drilling

Tug boats transport the Chevron Corp. Jack St. Malo semi-submersible drilling and production platform to the Gulf of Mexico from Kiewit Offshore Services in Ingleside, Texas, U.S. on Nov. 15, 2013. PHOTO: EDDIE SEAL/BLOOMBERG NEWS
WASHINGTON—The Obama administration is planning to propose opening up new areas of the nation’s federally owned waters to oil and natural gas drilling, including areas along the Atlantic Coast, according to people familiar with the plan.

The Interior Department is set to propose as soon as Tuesday its plan that will outline what leases the federal government will offer from 2017 to 2022, a step the government is required by law to take every five years.

The plan is expected to come under increased scrutiny as low oil prices are testing the profit margins of energy companies and President Barack Obama is pursuing an aggressive climate-change agenda.

Jessica Kershaw, an Interior Department spokeswoman, declined to comment Monday evening on the proposal.

The plan is expected to include leases off states in the mid- and south-Atlantic coasts, including Virginia and both South and North Carolina, whose governors support offshore drilling. It isn’t expected to include offshore Florida, whose policy makers have generally opposed such a move.

The plan is also expected to block parts of the Beaufort and Chukchi seas off the coast of Alaska for future oil and gas development, according to Robert Dillon, a spokesman for Sen Lisa Murkowski (R., Alaska).

On Sunday, Mr. Obama announced in a video message that the Interior Department was designating as wilderness more than 12 million acres of Alaska’s more than 19-million acre Arctic National Wildlife Refuge, including 1.5 million acres of coastal plains thought to have rich oil and gas resources.

That move drew cheers from environmental groups, who are expected to criticize Interior Department’s proposal to offer lease sales on the Atlantic Coast, which has no current drilling activity.

“The best way to fight climate change is to leave these resources in the ground,” said Sierra Weaver, a lawyer at the Southern Environmental Law Center, which opposes offshore drilling, on Monday. “And the Atlantic Coast has incredible potential for offshore wind.”

The government’s plan, which must go through a public comment period before becoming final, represents a sort of middle ground between what the oil and natural-gas industry wanted and what environmentalists have called for. The final plan could be narrower than its proposal, though not more expansive.

In its last five-year plan initially issued in March 2010, the administration proposed opening up at least one area off Virginia’s coast to drilling. In the wake of the BP oil spill that wore on for most of that summer, the administration reversed course and canceled that lease sale.

The American Petroleum Institute, a Washington-based trade group, had lobbied for the Eastern Gulf of Mexico, which is under a congressional drilling ban until 2022, to be included as well in case Congress repeals the ban before then. The plan isn’t expected to include this, but additional sales in the Western and Central parts of the Gulf are expected.

“We want this to be the first step of a dialogue in terms of making sure we’re not taking anything off the table,” said Erik Milito, director of upstream and industry operations at API, criticizing the department’s expected move to not include the Eastern Gulf of Mexico.
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by Amy Harder