Obama administration withdraws offshore drilling plan

Citing the lessons of the BP oil spill, the Obama administration reversed course Wednesday and pulled plans to open the eastern Gulf of Mexico and portions of the Atlantic Coast to oil and gas exploration.

“We believe the most appropriate course of action is to focus on development with existing leases and not expand to new areas at this time,” Interior Secretary Ken Salazar said.

The five-year offshore plan unveiled Wednesday was a relatively sharp turn from the administration’s proposal in March, when it moved toward drilling off the mid- and southern Atlantic Coast and in the eastern gulf, areas that had long been off-limits. That plan was seen as an attempt to garner GOP support for then-upcoming energy and climate change legislation.

But a few weeks later, the Deepwater Horizon rig exploded in flames off the Louisiana coast, setting in motion the largest offshore oil spill in American history. Gulf fishing grounds were closed, summer vacationers boycotted the beaches, and the shortcomings of the federal government’s oversight of drilling were cast in high relief.

The administration imposed a moratorium on deep-water drilling — recently lifted — and reevaluated its long-term plans for leasing on the outer continental shelf.

“As a result of the Deepwater Horizon oil spill we learned a number of lessons, most importantly that we need to proceed with caution and focus on creating a more stringent regulatory regime,” Salazar said.

He emphasized that a large part of the gulf remained open to drilling and pointed out that energy companies weren’t active on the majority of leases they held there.

“We have approximately 29 million acres that are already under lease in the Gulf of Mexico that have not yet been developed, so there’s plenty of opportunity for oil and gas companies,” Salazar said.

In Alaska, the administration is suspending new lease sales through 2012 but left open the possibility of future oil and gas development in the Arctic and in Cook Inlet after the completion of studies of possible environmental impacts and oil spill response capabilities. Long-standing prohibitions on new drilling along the Pacific Coast remain in effect.

Environmentalists, who criticized the March move to more offshore drilling, cheered the administration’s change of mind Wednesday. “This decision is a wise and sensible step to protect Florida, the Atlantic Coast and the Pacific Coast from an inevitable disaster from expanded drilling,” said Oceana Chief Executive Officer Andrew Sharpless.

Political reaction mirrored the partisan divide on the nation’s energy policy. Virginia Gov. Bob McDonnell, a Republican who has sought to open his coast to energy exploration, called the decision “irresponsible and short-sighted” and said he would turn to the state’s congressional delegation for a “legislative fix.”

The probable incoming chairman of the House Natural Resources Committee was also critical. “We shouldn’t allow this single event to disrupt our long-term need for an all-of-the-above energy plan that includes the responsible development of our nation’s oil and gas resources,” Rep. Doc Hastings (R-Wash.) said.

Democratic Sen. Bill Nelson of Florida called the decision “an enormous victory” for his state, cautioning that “just one accident could ruin Florida’s tourism economy and our unique environment.”

Rep. Edward J. Markey (D-Mass.), who chairs key energy panels in the House, also praised the revision, saying that the nation should focus on developing alternative energy sources rather than “looking deeper and deeper for the last remaining drops of oil.”

The oil industry viewed Wednesday’s decision as another blow to domestic energy production, following last summer’s suspension of deep-water drilling — lifted in October — and a pronounced slowdown in the approval of shallow-water drilling permits.

“Today’s decision, coupled with the slow permit approval in the Gulf of Mexico, will cripple our nation’s ability to produce home-grown energy and high-quality jobs for the next generation,” said Randall Luthi, president of the National Ocean Industries Assn., an offshore energy trade association.

American Petroleum Institute President Jack Gerard also took issue with Salazar’s statement that the industry was not fully exploiting its existing leases.

“The 29 million acres are in ongoing phases today to determine whether there are oil and gas resources present and if they can be developed. It’s a red herring to suggest somehow that there is oil and gas waiting to be developed.”

In Alaska, Salazar said, the administration “will proceed with utmost caution,” adding that “cautious, limited exploratory activities” can help improve scientific understanding of the remote region.

Officials also said they were proceeding with a final environmental assessment of Shell Oil Co.’s proposal to drill at least one exploratory well in the Beaufort Sea off Alaska as early as next summer, which would be the first substantial new drilling in U.S. Arctic waters in many years.

Conservation groups complained that the Arctic should have been left out of the 2012-17 leasing program.

bettina.boxall@latimes.com

richard.simon@latimes.com

Boxall reported from Los Angeles and Simon from Washington. Times staff writer Kim Murphy in Seattle contributed to this report.