UPDATE 2-Obama: Gulf drilling only if ensure no more spills

* Obama unveils commission to probe oil spill

* Says companies, government to be held accountable

* Says panel not to interfere with criminal or civil probe
(Adds quote from executive order)

By Matt Spetalnick

WASHINGTON, May 22 (BestGrowthStock) – U.S. President Barack Obama
said on Saturday that offshore oil drilling could only go
forward if there were assurances that a disaster like the
massive Gulf of Mexico oil spill would not happen again.

As Obama officially unveiled a commission to investigate
the accident, he issued a stern message that while keeping
pressure on firms involved in the still-uncapped spill — BP
(BP.L: ), Halliburton (HAL.N: ) and Transocean Ltd (RIG.N: ) — he
would also hold Washington accountable for mending its ways.

In his executive order announcing former Democratic Senator
Bob Graham and and former Environmental Protection Agency chief
William Reilly would co-chair the panel, Obama also made his
first reference to the possibility of a separate criminal probe
into disaster.

“The commission shall ensure that it does not interfere
with or disrupt any ongoing or anticipated civil or criminal
investigation or law enforcement activities or any effort to
recover response costs or damages arising out of the Deepwater
Horizon explosion, fire and oil spill,” the order stated.

Attorney General Eric Holder said on May 3 that the Justice
Department was part of the investigation into the spill, though
a U.S. official at the time said it was not a criminal
inquiry.

With frustration growing and political risks looming over
the spill, Obama gave the new bipartisan panel six months to
report its findings and recommendations for the future of
offshore drilling.

“The purpose of this commission is to consider both the
root causes of the disaster and offer options on what safety
and environmental precautions we need to take to prevent a
similar disaster from happening again,” Obama said in his
weekly radio and Internet address.

Obama has steadily sharpened his tone over the past week as
the oil leak — which threatens to eclipse the 1989 Exxon
Valdez spill off Alaska as the worst U.S. ecological disaster
— has spread with little sign it will be halted soon.

Analysts say as ecological and economic damage mounts, it
could become more of a political liability for Obama ahead of
pivotal congressional elections in November when his Democrats
already face the threat of big losses because of voter anxiety
over nearly double-digit unemployment.

Creating a commission helps Obama show leadership in a
crisis that has drawn heavy criticism not only of companies’
safety practices but also loose government oversight.

The spill has raised major questions about Obama’s earlier
proposal to expand offshore drilling as part of strategy to win
Republican support for climate change legislation.

DEMANDS ASSURANCES

Obama said since the spill he had ordered inspections of
all deepwater operations in the Gulf and barred permits for
drilling new wells until a 30-day review is complete.

“We must … pursue domestic sources of oil and gas,” Obama
said. “Because it represents 30 percent of our oil production,
the Gulf of Mexico can play an important part in securing our
energy future. But we can only pursue offshore oil drilling if
we have assurances that a disaster like the BP oil spill will
not happen again.”

He expressed hope the new commission would “help provide
those assurances so we can continue to seek a secure energy
future.” The seven-member panel is patterned after those that
probed incidents such as the 1986 explosion of the space
shuttle Challenger.

Obama had more tough words for the companies involved in
the spill. “First and foremost, what led to this disaster was a
breakdown of responsibility on the part of BP and perhaps
others, including Transocean and Halliburton,” he said.

“And we will continue to hold the relevant companies
accountable not only for being forthcoming and transparent
about the facts surrounding the leak, but for shutting it down,
repairing the damage it does, and repaying Americans who’ve
suffered a financial loss,” he said.

But he also put the onus on government. “Even as we
continue to hold BP accountable, we also need to hold
Washington accountable,” he said. “The question is what lessons
we can learn from this disaster to make sure it never happens
again.”

“If the laws on our books are inadequate to prevent such an
oil spill, or if we didn’t enforce those laws, I want to know
it,” he said. “I want to know … where oversight of the oil
and gas industry broke down. We know, for example, that a cozy
relationship between oil and gas companies and agencies that
regulate them has long been a source of concern.”

Stock Market Analysis

(Editing by Eric Walsh)

UPDATE 2-Obama: Gulf drilling only if ensure no more spills