Obama Caves on Domestic Oil Drilling

President Obama will instruct the Interior Department to expedite the sale of oil drilling leases in Alaska’s National Petroleum Reserve and the Gulf of Mexico, arguing that in the long term additional domestic oil production will lower gasoline prices, now above $4 a gallon in many parts of the country. Obama had been hesitant to yield to calls for more drilling and will continue to protect the Arctic National Wildlife Refuge. The current debate has largely focused on supply instead of insatiable demand while failing to acknowledge that there is little if any relationship between current gas prices and additional domestic drilling. — KDG

Reuters:

Alaska’s National Petroleum Reserve is a 23 million-acre area originally set aside in 1923 as a fuel source for the U.S. military. It is located in the northwest corner of Alaska near the Arctic National Wildlife Refuge (ANWR), which the Bush administration tried to open for exploration against objections from environmental groups.

Energy companies have long dreamed of tapping oil reserves beneath that site, a home to herds of migrating animals.

A senior Obama administration official said the White House remained firmly opposed to drilling in that arctic refuge.

Alaska’s NPR is a different story, however. Rising crude prices have boosted the amount of oil that can be recovered economically from that area, even though it holds less oil than previously thought, the government said last week.

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