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Offshore Drilling Receives Twin Boost

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Wall Street Journal
By RYAN TRACY

With higher gasoline prices holding steady, the Obama administration on Wednesday took steps that could pave the way for oil and gas exploration off the coast of Alaska and in the Atlantic Ocean as it sought to combat criticism it is hostile to fossil-fuel development.

The Department of Interior approved Royal Dutch Shell's plan for responding to oil spills in Alaska's Beaufort Sea, news the company called "another major milestone" toward drilling there this summer.

The agency also set 2013 as a target for allowing new seismic surveys off much of the East Coast. Energy companies use the survey data to evaluate oil and gas resources. Current data for the Atlantic are decades old.

"There is no silver bullet to high gas prices, but we must continue to reduce our reliance on foreign oil and reduce our vulnerability to the ups and downs of the international market," Interior Secretary Ken Salazar said.

The national average price of a gallon of regular gasoline was $3.91 Wednesday, according to AAA, up from $3.59 a year ago.

Mr. Salazar made the announcements at the Norfolk, Va., headquarters of Fugro Atlantic, a firm that conducts seismic surveys, echoing recent statements from President Barack Obama, who has been seeking to rebuff Republican criticism that his policies restrict U.S. oil production.

House Natural Resources Chairman Doc Hastings (R., Wash.) said Mr. Obama "is focused on trying to talk his way out of what he's done, rather than taking real steps to boost American energy production." Mr. Hastings said a more significant move would be to revive a planned oil and gas lease sale off the Virginia coast that was canceled in May 2010.

Shell spokeswoman Kelly op de Weegh said the spill-plan approval "is another major milestone achieved," but the firm still needs more permits before beginning drilling in July. To secure approval, Shell added well-capping and containment systems engineered specifically for Alaska, Ms. op de Weegh said.

Environmental groups say the spill plan doesn't go far enough, arguing Arctic conditions would make it difficult to clean up a spill. Cindy Shogan, executive director of the Alaska Wilderness League, said the decision was "extremely disappointing."

Mr. Salazar said the plan was modified "to give us the kind of assurance they will work."

For the Atlantic, the administration released a draft environmental review outlining a 330,000-square-mile area from the Delaware Bay to Cape Canaveral, Fla., where seismic surveys could be conducted. The administration has no current plans to allow drilling in the Atlantic, though Mr. Salazar said that could change in light of the surveys.

Environmental groups oppose the testing, saying it can kill marine mammals and fish.

Randall Luthi, president of the National Ocean Industries Association, which represents offshore drillers, called the surveys "a welcome step," but said that "it appears the department has given the offshore industry a canoe with no oars, since there are no lease sales planned."

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