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United States: Obama reveals offshore development strategy

THE LONG-awaited strategy for energy exploration and development in US coastal waters is a comprehensive plan that Interior Department secretary Ken Salazar hailed as "a new direction" for the Outer Continental Shelf (OCS)

The strategy, made public on 31 March in a speech at a military base in Maryland, has something for everyone: oil and gas companies, environmentalists and drilling proponents in Congress.

It calls for the opening-up of more of the resource-rich eastern Gulf of Mexico (GOM), including areas at least 125 miles offshore Florida that the Interior Department believes could boost total Gulf oil production by 100m barrels within two decades. At present, the region is closed to development under a Congressional moratorium.

Says Salazar: "Our efforts to strategically open new areas in the eastern Gulf would represent the largest expansion of our nation's available offshore oil and gas supplies in three decades."

Under the plan, four lease sales for tracts in the central and western GOM already scheduled between now and 2012 would go forward. In addition, sales would be held to lease acreage in Alaska's Cook Inlet and in a 2.9m acre area about 50 miles offshore Virginia, where energy activity has been banned for nearly three decades. The Interior Department also announced plans to conduct seismic studies along south- and mid-Atlantic coasts "because the potential oil and gas resources and the benefits and risks of developing OCS frontier areas are not sufficiently known."

Plans by the previous government to lease tracts off the northeastern Atlantic and Pacific coasts, where drilling has been prohibited for decades, were shelved because of environmental concerns and local opposition. Also withdrawn from consideration for development was Bristol Bay, an area Salazar called "too special to drill". This effectively resulted in the cancellation of a 2011 lease sale that would have put 5.6m acres up for bid in these waters offshore southwestern Alaska, which are inhabited by sockeye salmon and endangered whales. A long-standing presidential prohibition on energy development in Bristol Bay was removed by the George Bush administration in 2007.

Barack Obama's administration said it would "gather scientific information, conduct environmental scoping and hold public meetings" to determine which other OCS areas, including other parts of the GOM, much of the Atlantic OCS and the Chukchi and Beaufort Seas off Alaska's north coast, appropriate for leasing under the 2012-17 programme. However, it cancelled plans for four sales pending for the Chukchi and Beaufort Seas. This decision would not affect existing leases in the region held by ConocoPhillips and Shell, among others.

The strategy will underpin the 2007-12 offshore leasing programme, which was announced by the Bush administration, but ruled to be legally flawed by the courts, as well as the new 2012-17 programme the Obama administration will propose in early 2012.

American Petroleum Institute chief executive Jack Gerard called the plan "a positive development". He added: "As we move forward, we hope that consideration can be given to other resource-rich regions, such as the Destin Dome area of the eastern Gulf and areas off the Pacific coast and Alaska. We also need to ensure that the permitting processes are handled in an expeditious way."

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