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Obama orders freeze on offshore drilling

Barack Obama reversed a planned expansion of offshore drilling on Thursday, admitting he had been wrong to believe that oil companies were prepared to deal with a catastrophic oil spill.

business Updated: May 28, 2010 22:33 IST

Barack Obama reversed a planned expansion of offshore drilling on Thursday, admitting he had been wrong to believe that oil companies were prepared to deal with a catastrophic oil spill.

He told a White House press conference he was ordering a six-month freeze on the opening up of the remote waters of the Arctic to oil exploration and on the drilling of 33 deepwater wells in the Gulf of Mexico. Proposed lease sale off the coast of Virginia and in the western Gulf would also be cancelled.

The US president said he was calling the pause in plans by Royal Dutch Shell to begin drilling exploratory wells in the Chukchi and Beaufort seas after studying an interior department review of the Deepwater Horizon disaster.

He acknowledged that the enormity of the Gulf oil spill had forced a change in his earlier thinking that offshore drilling was safe and should remain a vital part of America’s energy mix. “Where I was wrong was in my belief that the oil companies had their act together when it came to worst-case scenarios,” he said.

The announcement represents a retreat from Obama’s proposal last March to expand offshore oil drilling. It was overshadowed in part by Obama's moves to assert his command over the oil spill and appease critics who say his government has yielded to BP too much authority over plans to plug the well and clean up the environmental damage.

The president, who said repeatedly he remained in command of the disaster, also defended that earlier decision. He acknowledged he had also underestimated the scale of corruption and dysfunction in the government agency charged with oversight of the offshore oil industry, the Minerals Management Service. “There has been a scandalously close relationship between oil companies and the agency that regulates them,” he said.

The six-month halt in drilling falls short of the outright ban sought by Democratic members of Congress on the Atlantic and Pacific coasts and by environmental organisations. Conservationists said they hoped the review of environmental and safety regulations also discussed by Obama would lead to better protection, especially for the Arctic.