Government begins process for offshore drilling

WASHINGTON – The federal government announced Wednesday that it would be taking the first major step to expand offshore oil drilling after a long-standing ban on new energy exploration off much of the U.S. coast expired last month.

Officials with the U.S. Minerals Management Service, which oversees oil and gas development in federal waters, said that starting today it would begin the process that could lead to leases at a potential site at least 50 miles off the coast of Virginia – an area that has never seen offshore drilling.

Although the move involves only one coastal area off one state, it represents the first turn in a much larger offshore-drilling campaign that rose to a fury this summer and now stands to increase energy exploration in federal waters around the country, including off the coasts of California, Alaska and Florida.

“We’ve had some discussion, but now we’re getting serious about it,” said Randall Luthi, director of the Minerals Management Service. “This is actually an important step in our nation’s energy security picture.”

It could be a temporary step, however.

Democratic lawmakers and President-elect Barack Obama have said that they would consider offshore drilling as a compromise in a comprehensive energy policy and as a way to wean the U.S. off foreign oil. But, whatever approaches prevail, they figure to be more restrictive than the current rules under the lapsed ban, which technically allow oil companies to drill as close as three miles offshore with federal approval.

“The issue of offshore drilling will be addressed by the next president and the next Congress,” said Drew Hammill, spokesman for House Speaker Nancy Pelosi, D-Calif., who recently supported letting states decide whether to permit energy exploration 50 to 100 miles off their coasts.

Since 1981, a congressional moratorium on new offshore drilling has prevented the Interior Department from establishing leases in virtually all coastal waters outside the western Gulf of Mexico and some areas of Alaska. The ban was enacted after a massive oil spill devastated the Santa Barbara coast in California in 1969.

Last month, however, Congress allowed the moratorium to lapse amid pressure from the White House, Republican lawmakers and even members of the Democratic caucus who had come under attack for not doing more to bolster domestic energy supplies with gas prices topping $4 a gallon this summer.

As it stands, the process in Virginia would begin with a 45-day public comment period, starting today and ending Dec. 29. The Interior Department does not expect to start leasing the area until 2011, after an environmental analysis.

Virginia’s governor and Legislature have supported offshore gas exploration. According to estimates, the Interior Department believes there could be 130 million barrels of oil and 1.14 trillion cubic feet of natural gas in the area they expect to begin leasing.

But environmental groups and some Democrats have argued that the resulting gasoline could be years away and probably would do nothing to reduce prices any time soon. The U.S. Department of Energy has estimated that crude oil and gas production would not be substantially affected until 2030.

“It is not going to make a meaningful difference in terms of gas at the pump,” said Daniel Hinerfeld, spokesman for the Natural Resources Defense Council. “It is just a distraction from our need to cut off our dependence on oil.”