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Business Title: President Obama to Announce Allowing Offshore Oil, Gas Drilling in Speech Today March 31 (Bloomberg) -- President Barack Obama will announce a plan today to allow oil and natural-gas drilling off the U.S. East Coast and cancel development in Bristol Bay, Alaska. The president will propose permitting exploration 50 miles off the coast of Virginia and, if a congressional moratorium is lifted, in the Gulf of Mexico 125 miles (201 kilometers) off the west coast of Florida, Interior Secretary Ken Salazar said today. The decision to scrap leasing in Bristol Bay overturns former President George W. Bush’s action lifting a long-time ban on drilling in the region. Obama’s plan is designed to reduce dependence on foreign oil while taking environmental risks into account, Salazar said. “It’s about protecting places that are special as well as looking at additional places that should be opened up for oil and gas development,” Salazar said in an interview on Bloomberg Television. Obama will unveil a five-year plan for drilling later today in a speech on energy security. The comments will be his most detailed to date on coastal exploration, a topic that has divided lawmakers and now threatens to derail efforts to reach a compromise on climate-change legislation. Democratic senators such as Bill Nelson of Florida have said they won’t support a bill providing for unlimited exploration, while U.S. oil companies press to increase domestic exploration. “It’s absolutely a big change in policy because these areas have been closed for years,” said Stuart Traver, principal adviser at consultant Gaffney, Cline & Associates Ltd. in Singapore. “We’re really talking probably years before we see an impact in terms of new production.” Oil Prices Oil prices have swung from less than $20 a barrel in 2001 to a record $147.27 a barrel in July 2008 as investors bet demand growth would outstrip new findings. Crude oil rose 90 cents, or 1.1 percent, to $83.27 a barrel on the New York Mercantile Exchange at 9:56 a.m. in New York. “Our member companies are very interested in access and want to see areas opened up,” said Randall Luthi, president of the National Ocean Industries Association. The Washington-based trade group represents companies in the offshore energy industry, such as Irving, Texas-based Exxon Mobil Corp. A federal ban on drilling off the East and West Coasts and in parts of Alaska expired in 2008. Virginia Governor Bob McDonnell, a Republican, supports drilling off the coast of his state and this month signed legislation on how to distribute royalty revenue from energy production. Under Obama’s proposal, the Interior Department will allow the drilling off Virginia’s coast and open up the rest of the outer continental shelf in the south- and mid-Atlantic to oil exploration. Alaska Study In Alaska, along with proposing to cancel leases in Bristol Bay, sales in the Chukchi and Beaufort seas would be scrapped to allow further scientific study. “We will not be moving forward with respect to leasing in those areas until we develop information,” Salazar said. A sale in Alaska’s Cook Inlet will proceed. Along with the proposal on offshore drilling, Obama will announce a final rule on increased fuel efficiency standards for cars and the purchase by the federal government of 5,000 hybrid cars and trucks.
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