EDITORIAL: Obama surrenders gulf oil to Moscow

The Washington Times (Link) (March 18, 2010)

The Obama administration is poised to ban offshore oil drilling on the outer continental shelf until 2012 or beyond. Meanwhile, Russia is making a bold strategic leap to begin drilling for oil in the Gulf of Mexico. While the United States attempts to shift gears to alternative fuels to battle the purported evils of carbon emissions, Russia will erect oil derricks off the Cuban coast.

Offshore oil production makes economic sense. It creates jobs and helps fulfill America�s vast energy needs. It contributes to the gross domestic product and does not increase the trade deficit. Higher oil supply helps keep a lid on rising prices, and greater American production gives the United States more influence over the global market.

Drilling is also wildly popular with the public. A Pew Research Center poll from February showed 63 percent support for offshore drilling for oil and natural gas. Americans understand the fundamental points: The oil is there, and we need it. If we don�t drill it out, we have to buy it from other countries. Last year, the U.S. government even helped Brazil underwrite offshore drilling in the Tupi oil field near Rio de Janeiro. The current price of oil makes drilling economically feasible, so why not let the private sector go ahead and get our oil?

The Obama administration, however, views energy policy through green eyeshades. Every aspect of its approach to energy is subordinated to radical environmental concerns. This unprecedented lack of balance is placing offshore oil resources off-limits. The O Force would prefer the country shift its energy production to alternative sources, such as nuclear, solar and wind power. In theory, there�s nothing wrong with that, in the long run, assuming technology can catch up to demand. But we have not yet reached the green utopia, we won�t get there anytime soon, and America needs more oil now.

Russia more sensibly views energy primarily as a strategic resource. Energy is critical to Russia�s economy, as fuel and as a source of profit through export. Russia also has used energy as a coercive diplomatic tool, shutting off natural gas piped to Eastern Europe in the middle of winter to make a point about how dependent the countries are that do business with the Russians.

Now Russia is using oil exploration to establish a new presence in the Western Hemisphere. It recently concluded four contracts securing oil-exploration rights in Cuba�s economic zone in the Gulf of Mexico. A Russian-Cuban joint partnership will exploit oil found in the deep waters of the Gulf.

Cuba has rights to the area in which drilling will be conducted under an agreement the Carter administration recognized. From Russia�s perspective, this is another way to gain leverage inside what traditionally has been America�s sphere of influence. It may not be as dramatic as the Soviet Union attempting to use Cuba as a missile platform, but in the energy wars, the message is the same. Russia is projecting power into the Western Hemisphere while the United States retreats. The world will not tolerate a superpower that acts like a sidekick much longer.

Update: Government set to unveil offshore drilling plan Reuters (March 29, 2010)

The Obama administration is expected to announce by Wednesday its updated plan for oil and natural gas drilling in U.S. waters, including whether to allow exploration for the first time along the U.S. East Coast.

The plan could pave the way for a significant new domestic source of energy, helping to reduce U.S. dependence on oil imports and boost supplies of natural gas used to displace coal in power plants as the country works to reduce emissions of climate-changing greenhouse gases.

Last month, Interior Secretary Ken Salazar said he wanted to release the updated drilling plan by the end of March.

Two industry sources said on Monday President Barack Obama was expected to give a speech about energy security on Wednesday, which could include his views on expansion of offshore drilling.

The Interior Department and White House declined comment on Monday on whether Obama would speak to the issue in a speech slated for mid-morning on Wednesday at Andrews Air Force Base in Maryland.

The administration has been weighing the pros and cons of offshore drilling since it took office and put the brakes on a Bush-era proposal that called for drilling along the East Coast and off the coast of California.

For more than 20 years, drilling was banned in most offshore areas of the United States outside the Gulf of Mexico because of concerns spills could harm the environment.

Congress allowed the prohibition to expire in 2008 and former President George W. Bush lifted a drilling moratorium that year.

Environmental groups and some lawmakers continue to raise concerns about the impact increased drilling would have on coastal areas.

But Obama, who wants Congress to move a stalled climate change bill, has sought to reach out to Republicans by signaling he is open to allowing offshore drilling, providing coastlines are protected.

The U.S. Geological Survey estimates the U.S. Atlantic coast waters may hold 37 trillion cubic feet of gas and nearly 4 billion barrels of oil, while the Pacific Coast has 10.5 billion barrels of oil and 18 trillion cubic feet of gas.

To put that in context, the United States imports about 2 billion barrels of oil a year from OPEC nations and is expected to import 2.7 trillion cubic feet of natural gas from all sources this year, according to the Energy Department.

The administration's plan is expected to spell out whether and when drilling will be allowed in 3 million acres off the Virginia coast.

The Bush administration had proposed leasing the Virginia tracts to energy companies and said the government would receive bids for the leases in November 2011.

However, a senior Interior official told an oil industry conference in January that drilling off Virginia's coast would definitely be delayed past the original 2011 leasing date.

The proposed Virginia lease area, located about 50 miles from shore, may hold 130 million barrels of oil and 1.14 trillion cubic feet of natural gas.

The possible delay in drilling off Virginia's coast has been criticized by the state's new governor, Republican Bob McDonnell, and two U.S. senators eager for the state to tap into the jobs and royalties that come with exploration.

A spokeswoman for McDonnell said his office has not been told the updated drilling plan would be announced on Wednesday.