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Obama plans oil production increase

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President Barack Obama

President Barack Obama

President Barack Obama

US President Barack Obama is directing his administration to ramp up oil production in the face of continued public unhappiness over fuel prices.

Mr Obama said the measures - which include extending existing leases in the Gulf of Mexico and off Alaska's coast and holding more frequent lease sales in a federal petroleum reserve in Alaska - "make good sense" and will help reduce US consumption of imported oil in the long term.

But he acknowledged that they will not immediately help bring down fuel prices which currently top 4 US dollars (£2.47) a gallon, or nearly 1 US dollar (62p) per litre, in many parts of the country - a high price for American drivers.

His announcement followed passage in the Republican-controlled House of Representatives of three Bills - including two this week - that would expand and speed up offshore oil and gas drilling. Republicans say the Bills are aimed at easing fuel costs, but they also acknowledge that will not be immediate.

The White House had announced its opposition to all three Bills, which are unlikely to pass the Democratic-controlled Senate, saying the measures would undercut safety reviews and open up environmentally sensitive areas to new drilling.

But Mr Obama is adopting some of the Bills' provisions.

Answering the call of Republicans and Democrats from Gulf Coast states, Mr Obama said in his weekly radio and internet address that he would extend all Gulf leases that were affected by a temporary moratorium on drilling imposed after last year's BP oil spill. That would give companies additional time to begin drilling.

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The administration had been granting extensions case by case, but senior administration officials said the Interior Department would institute a blanket one-year extension.

New safety requirements put in place since the BP spill have also delayed drilling in Alaska, so Mr Obama said he would extend lease terms there for a year as well. An oil lease typically runs for 10 years.

Lease sales in the western and central Gulf of Mexico that were postponed last year will be held by the middle of next year, the same time period required by the House.


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