Obama Restricts Oil Drilling in Alaska, East Coast, Gulf of Mexico

WASHINGTON, DC, May 27, 2010 (ENS) – In view of the ongoing oil spill disaster in the Gulf of Mexico, President Barack Obama today extended for another six months a month-long moratorium on new deepwater drilling permits that was due to expire on Friday.

At a White House press conference, President Obama also announced a suspension of oil drilling off the coast of Alaska already permitted for this summer and canceled certain lease sales off the coast of Virginia and others in the Gulf of Mexico.

Obama also suspended action on 33 deepwater exploratory wells currently being drilled in the Gulf of Mexico and announced that his administration will impose “aggressive new operating standards and requirements for offshore energy companies.”

President Barack Obama makes a point during his news conference, May 27, 2010. (Photo courtesy The White House)

Shell Oil Company will not be permitted to drill for oil in Alaska’s Beaufort and Chukchi seas this year, a decision that environmental groups have been seeking since long before the Deepwater Horizon oil rig leased by BP exploded April 20 leaving the damaged wellhead spilling oil into the gulf.

Center for Biological Diversity Senior Counsel Brendan Cummings said today, “While the decision to suspend Shell’s planned drilling this summer in the Arctic is an important first step, what we really need is revocation of the improperly issued leases and permanent protection of the Arctic. The fact that no technology exists to effectively clean up an oil spill in Arctic waters will not be changed in a year’s time.”

The Southern Environmental Law Center commended Obama for canceling the oil and gas drilling lease sale proposed for three million acres off the coast of Virginia, but urged withdrawal of the rest of the Mid- and South Atlantic, as well as the eastern Gulf, from all future drilling plans.

But the President emphasized today that domestic oil production is an important part of America’s overall energy mix and it will be part of his administration’s overall energy strategy.

“I also believe that is insufficient to meet the needs of our future, which is why I’ve made huge investments in clean energy, why we continue to promote solar and wind and biodiesel and a whole range of other approaches, why we’re putting so much emphasis on energy efficiency. But we’re not going to be able to transition to these clean-energy strategies right away,” said Obama.

“We’re still years off and some technological breakthroughs away from being able to operate on purely a clean-energy grid,” he said. “During that time, we’re going to be using oil. And to the extent that we’re using oil, it makes sense for us to develop our oil and natural gas resources here in the United States and not simply rely on imports.”

The mobile offshore drilling unit Q4000 in position over the damaged Deepwater Horizon well as crews work to plug the wellhead using a technique known as “top kill,” May 26, 2010. (Photo courtesy U.S. Coast Guard)

As BP continues today with its “top kill” procedure, pumping heavy drilling mud down the well in an attempt to shut off the flow of oil, The White House announced that the President will travel to the Gulf Coast of Louisiana Friday to assess the latest efforts to counter the BP Deepwater Horizon oil spill.

At the news conference, Obama took full responsibility for conduct of response to the spill.

“The American people should know that from the moment this disaster began, the federal government has been in charge of the response effort. As far as I’m concerned, BP is responsible for this horrific disaster, and we will hold them fully accountable on behalf of the United States as well as the people and communities victimized by this tragedy.”

“We will demand that they pay every dime they owe for the damage they’ve done and the painful losses that they’ve caused,” Obama said.

That price may be much higher than expected. In addition to the $100 million that the federal government has spent, which BP must reimburse, and the $750 million BP has spent to date, every barrel of oil spilled increases the amount BP could have to pay in fines to the federal government.

Today, a technical team assembled by the Obama administration estimated that oil is spilling at a rate of 12,000 to 19,000 barrels per day, a far greater rate than the rate of 5,000 barrels per day given by BP.

At the high end, the new estimate puts the amount of oil released into the Gulf at close to three times the amount spilled after the tanker Exxon Valdez ran aground in Alaska’s Prince William sound in 1989.

The National Incident Command’s Flow Rate Technical Group headed by U.S. Geological Survey Director Dr. Marcia McNutt used three separate methods to calculate their estimate. This is the most scientifically-sound approach, they said, because “measurement of the flow of oil is extremely challenging, given the environment, unique nature of the flow, limited visibility, and lack of human access to BP’s leaking oil well.”

“Now we know what we always knew – this spill is much larger than BP has claimed,” said Congressmen Edward Markey, who chairs the Select Committee on Energy Independence and Global Warming and the Energy and Environment Subcommittee in the Energy and Commerce Committee.

Today, Markey released copies of confidential BP documents showing that BP knowingly made public statements underestimating the rate of flow from the broken wellhead.

The leaking Deepwater Horizon wellhead has been spewing oil and gas since April 20, 2010. (Video image courtesy BP)

One document, dated April 27, shows that BP’s high estimate for the daily rate of the spill was 14,266 barrels per day, in the midrange of today’s technical group report. Yet one day later, BP was telling the public that the spill was only 1,000 barrels a day – their low estimate for the size of the spill.

“What’s clear is that BP has had an interest in low-balling the size of their accident, since every barrel spilled increases how much they could be fined by the government,” said Markey.

BP’s financial liability is directly linked to the size of the spill. Under current law, the Clean Water Act as amended by the Oil Pollution Act of 1990, following the Exxon Valdez disaster, a company that spills oil is subject to fines up to $1,000 per barrel, or up to $3,000 per barrel in the case of gross negligence.

According to the range calculated by the Flow Rate Technical Group, BP could be subject to between $444 million and $2.1 billion in potential fines for the oil spilled to date.

In a press conference with reporters this morning, McNutt said BP knew that the rate of flow could have been much higher than it announced publicly.

“To tell you the truth [BP] did have numbers ranging from 1,000 to 13,000 barrels per day,” McNutt said. “They had such wildly different numbers all based on surface observations that they decided to take a number somewhere in the middle that they thought was conservative and defensible.”

President Obama told reporters today that his administration should have pushed harder for BP to release video images of the flow of oil and gas issuing from the broken wellhead.

The estimate of 5,000 barrels a day was based on satellite imagery and satellite data that would give a rough calculation, said Obama.

“At that point, BP already had a camera down there but wasn’t fully forthcoming in terms of what did those pictures look like, and when you set it up in time lapse photography, experts could then make a more accurate determination,” he said.

“The administration pushed them to release it, but they should have pushed them sooner,” Obama said. “I mean, I think that it took too long for us to stand up our flow tracking group that has now made these more accurate ranges of calculation.”

“Now keep in mind that that didn’t change what our response was. As I said from the start, we understood that this could be really bad. We’re hoping for the best but preparing for the worst,” he said.

“And so there aren’t steps that we would have taken in terms of trying to cap the well or skimming the surface or the in situ burns or preparing to make sure when this stuff hit shore that we could minimize the damage. All those steps would have been the same even if we had information that this flow was coming out faster,” said Obama.

“But there was a lag of several weeks that I think shouldn’t have happened,” he said.

Meanwhile today, the head of the federal agency that oversees offshore oil drilling and permitting resigned.

Elizabeth Birnbaum (Photo courtesy MMS)

Elizabeth Birnbaum submitted her letter of resignation as director of the Minerals Management Service to Interior Secretary Ken Salazar. Contrary to rumor, Salazar said she was not fired but resigned of her own free will

“Elizabeth Birnbaum is a strong and effective person and leader,” said Secretary Salazar. “She resigned today on her own terms and on her own volition.”

Interior Secretary Ken Salazar testifies at a House Appropriations Committee hearing on the BP oil spill as Greenpeacers hold a sign seeking a permanent ban on Arctic drilling. May 27, 2010 (Photo by Richard Clement courtesy Greenpeace)

“She helped break through tough issues including offshore renewable development and helped us take important steps to fix a broken system,” Salazar said. “She is a good public servant.”

Birnbaum said, “It’s been a great privilege to serve as Director of the MMS. I have enormous admiration for the men and women of the MMS who do a difficult job under challenging circumstances. I’m hopeful that the reforms that the secretary and the administration are undertaking will resolve the flaws in the current system that I inherited.”

On May 19, Salazar announced the restructuring of the Minerals Management Service, dividing its three functions into separate entities, each with an independent set of responsibilities.

One of the new divisions will have oversight of safety and environmental protection in all offshore energy activities, such as oil drilling.

A second division will take care of leasing federal waters for conventional and renewable energy resources, and the third will collect and distribute revenues.

At today’s press conference, President Obama defended his Interior Secretary and said his job is safe.

Finally, the President said he wants everybody to understand that the spill is the first thing that crosses his mind in the morning and the last thing he thinks about at night.

“And it’s not just me, by the way,” he said. “You know, when I woke up this morning, and I’m shaving, and Malia knocks on my bathroom door and she peeks in her head and she says, “Did you plug the hole yet, Daddy?” (soft laughter) because I think everybody understands that, you know, when we are fouling the Earth like this, it has concrete implications not just for this generation but for future generations.”

“I grew up in Hawaii, where the ocean is sacred,” Obama said. “And when you see birds flying around with oil all over their feathers and turtles dying and that doesn’t just speak to the immediate economic consequences of this; this speaks to, you know, how are we caring for this incredible bounty that we have?”