Obama to permit oil exploration off Virginia coast

* First offshore oil and gas sale in 20 years

* Lease sales to continue in Gulf of Mexico

* Some Alaska leases to be canceled

By Steve Holland

WASHINGTON, March 30 (BestGrowthStock) – President Barack Obama is
to announce on Wednesday a plan to permit exploration for oil
and natural gas off the coast of Virginia as a way to create
jobs and reduce U.S. dependence on foreign oil.

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. [ID:nN09117653] [ID:nN27159393]

Joined by Interior Secretary Ken Salazar, Obama is to
detail an updated plan for offshore oil and natural gas
drilling in remarks at a military base in nearby Maryland.

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

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 which called for drilling along the East
Coast and off the coast of California.

An administration official said, as part of the new plan,
Interior will conduct the first new offshore oil and gas sale
in the Atlantic Ocean in over two decades as part of a lease
sale 50 miles off the coast of Virginia.

Seismic exploration in the south Atlantic and mid-Atlantic
Outer Continental Shelf of the United States will determine the
quantity and location of potential oil and gas resources to
support energy planning.

The Bush plan had called for leases to be offered in
November 2011, but it was not immediately clear whether the
Obama administration would stick to that schedule.

A senior Interior official said in January that drilling
off Virginia’s coast would be delayed past the original 2011
leasing date. [ID:nN26102214]

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, based on Interior
Department estimates.

In addition, the Interior Department will continue lease
sales in the Central and Western Gulf of Mexico, which have
proved to have sizable reserves.

Much of the Eastern Gulf is currently under a congressional
moratorium on oil and gas operations. The Interior Department’s
plan would open up about two-thirds of the available oil and
gas resources in this region in the event that the moratorium
is lifted, the official said.

Military training in the Eastern Gulf will be protected and
drilling activities will occur more than 125 miles from the
Florida coast.

ALASKA LEASE PROPOSALS CANCELED

Proposed oil and gas leasing in Alaska’s Bristol Bay will
be canceled out of concern for protecting sensitive areas of
the Outer Continental Shelf from environmental dangers.

This could affect companies like Royal Dutch Shell (RDSa.L: )
which has expressed interest in the region, as well as
ConocoPhillips (COP.N: ), BP (BP.L: ) and Statoil (STL.OL: ).

Four pending lease sales in the Chukchi and Beaufort Seas
in North Alaska will be canceled and those areas reserved for
future scientific research to determine if they are suitable
for further leasing. At the same time, a previously scheduled
lease sale in Alaska’s Cook Inlet will proceed.

Congress allowed a prohibition on offshore drilling 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.

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.

Also to be announced is that the Environmental Protection
Agency and Transportation Department will sign a joint final
rule on Thursday establishing greenhouse gas emission standards
and corporate average fuel economy (CAFE) standards for
light-duty vehicles for model years 2012-2016.

Obama will announce that 5,603 new hybrid cars and trucks
have been ordered to convert the federal fleet to one of
greater fuel efficiency.

Investing Basics

(Additional reporting by Tom Doggett in Washington and Yereth
Rosen in Anchorage)
(Editing by Roberta Rampton and Todd Eastham)

Obama to permit oil exploration off Virginia coast