New York: US President Barack Obama is likely to soon announce proposals to allow oil and natural-gas drilling off US coastlines in the Atlantic Ocean and Gulf of Mexico when he delivered a speech on energy security.
Obama is set to propose allowing exploration off the coast of Virginia and, in the event that a Congressional moratorium is lifted, in the Gulf of Mexico, 201km off the coast of Florida, according to an administration official speaking on the condition of anonymity.
The new policies are designed to reduce the nation's dependence on foreign oil and create jobs while taking environmental risks into account, the official said.
Big change
"It's absolutely a big change in policy because these areas have been closed for years," Stuart Traver, principal adviser at consultant Gaffney, Cline & Associates in Singapore, said. "While it's interesting, we're really talking probably years before we see an impact in terms of new production."
Obama is providing his most detailed comments to date on coastal drilling, a topic that has long divided lawmakers and now threatens to derail efforts to reach a compromise on climate-change legislation.
Democratic senators such as Bill Nelson of Florida have said they won't support a bill providing for unlimited exploration, while US oil companies press to increase domestic exploration. Oil prices have swung from less than $20 a barrel in 2001 to a record $147.27 a barrel in July 2008 as investors bet demand growth would outstrip new findings.
Crude traded at $82.35 a barrel on the New York Mercantile Exchange at 3.02pm Singapore time.
Access
"Our member companies are very interested in access and want to see areas opened up," Randall Luthi, president of the National Ocean Industries Association, said.
The Washington-based trade group represents companies in the offshore energy industry, such as Irving, Texas-based ExxonMobil.
A federal ban on drilling off the East and West Coasts and in parts of Alaska expired in 2008. Virginia Governor Bob McDonnell, a Republican, supports offshore drilling off his state and last month signed legislation on how to distribute royalty revenue from energy production.
