Obama halts offshore drilling

President Obama announced today that he is extending a moratorium on deepwater oil drilling permits for six more months, and canceling or delaying drilling off the Alaska and Virginia coasts.

Speaking at a mid-day White House press conference, Obama said last month’s BP Deepwater Horizon oil rig explosion underscored the need to transition to a green economy. He challenged Republicans to help pass the energy bill now before Congress that would move in that direction.

The BP oil spill has now exceeded the 1989 Exxon Valdez accident, latest estimates say. That makes it the worst oil spill in U.S. history. In the five weeks since the April 20 explosion, scientists say 19 million gallons of oil have been flooding into the Gulf of Mexico from the BP site, compared with 11 million gallons from the Exxon Valdez.

Asked by a reporter about his earlier support for offshore oil drilling, the president said he continued to believe that “it makes sense” to develop domestic oil production during the shift to a green economy.

“You’ve never heard me say ‘Drill baby, drill’,” Obama said. “We can’t drill our way out of the problem.” However, he said, we are not able to transition to clean energy right away and oil has to be “part of the mix” in the meantime. But, he emphasized, “we are going to have to start moving on this transition.”

The fact that oil companies now have to go 1 mile under water and another 3 miles to hit oil, Obama said, means that producing oil is increasingly more expensive and more risky.

“Where I was wrong,” the president said, “was in my belief that the oil companies had their act together when it came to worst case scenarios.” The companies’ claims that fail-safe procedures were in place “proved to be incorrect,” he said.

Obama indicated that his administration will turn away from the Bush-era deregulation that lets the oil industry monitor itself. Obama said there would be a “thorough-going scrub” of industry safety procedures. Even for a “one in a million” possible problem, he said, “we have to have confidence we can shut it down” in a matter of days.

Obama said the BP explosion has shown the “scandalously close relationship” between the oil companies and federal regulators.

He referred to a culture of corruption and cronyism in the agency that is supposed to enforce safety in oil operations, the Interior Department’s Minerals Management Service, during the eight years of the Bush administration – a culture “in which oil companies were able to get what they wanted,” he said.

Obama acknowledged that his own officials had been slow to fully clean house, and he vowed aggressive action. Just before the news conference, the head of the Minerals Management Service, Elizabeth Birnbaum, who took office last July, submitted her resignation.

Obama emphasized that the federal government is “in charge” in the Gulf Coast cleanup operations.

Responding to criticisms that the government was letting BP call the shots, Obama noted that under the 1990 Oil Pollution Act, enacted after the Exxon Valdez spill, the oil company is responsible for paying “every dime” of the cost of the containment and cleanup work.

But, he declared, “Make no mistake: BP is operating at our direction.”

The president cautioned that the work would take time, and required careful assessment of risks and options for stopping the flood of oil into the Gulf, and for protecting and cleaning up the water and shorelines. The government, he said, is leading these efforts, and has overruled BP on a number of measures. Obama said it was “at our insistence” that the company was paying compensation to those whose livelihoods have been affected.

In addition to extending the moratorium on deepwater drilling, Obama is suspending planned drilling off the Alaska coast for six months, and canceling scheduled sales of drilling leases in the Gulf of Mexico and off the coast of Virginia.

Photo: A mobile offshore drilling unit holds position directly over the damaged Deepwater Horizon blowout preventer as crews work to plug the wellhead using a technique known as “top kill,” May 26. The procedure is intended to stem the flow of oil and gas and ultimately kill the well by injecting heavy drilling fluids through the blowout preventer on the seabed down into the well. U.S. Coast Guard photo by Petty Officer 3rd Class Patrick Kelley.