From the Houston Chronicle’s Loren Steffy:
My neck hurts.
I think I got a case of whiplash from listening to President Barack Obama’s announcement on offshore oil and natural gas drilling. That’s what I get for trying to look for logic in what passes for federal energy policy.
The headlines, of course, were that Obama was opening parts of the East Coast and eastern Gulf of Mexico to new drilling, but most of that is just a political dance to woo Republicans for a climate bill.
The real issue in the Obama policy is Alaska. The energy industry spent seven years persuading the Bush administration to open Bristol Bay, on the southern coast, and two regions in the north to new drilling.
Under Obama’s plan, it would be closed again until at least 2017, just another zig in our ever zagging plan for energy development.
Houston-based ConocoPhillips has invested more than $500 million in its Chukchi Sea leases in the north during the past two years and is scheduled to drill its first well in 2012. It will be allowed to proceed under the new plan, as will a project Shell Oil Co. has in the region.
ConocoPhillips’ investment, though, shows the level of capital and long lead times required for these projects. It’s not the sort of money most companies are willing to gamble on wishy-washy government policies.
While shutting down new areas of Alaska, Obama plans to open new areas of the Gulf. Drilling will be limited to at least 125 miles off the shore of Florida.
Don’t expect companies to be flooding into the area and setting up platforms.