Bush to lift offshore drilling ban

By Jeremy Pelofsky and Tom Doggett

WASHINGTON (Reuters) - U.S. President George W. Bush plansto lift a presidential ban on offshore drilling on Monday tocombat soaring energy prices, a largely symbolic move unlikelyto have any short-term impact on the high cost of gasoline.

With prices at the pump over $4 (2 pounds) a gallon, Bushhas been pushing the Democratic-controlled Congress to expandoffshore drilling and give oil companies access to the ArcticWildlife National Refuge amid strong opposition fromenvironmentalists.

High gasoline prices and soaring food prices have irkedAmerican consumers in a presidential election year, when Bush'sRepublicans are trying to keep the White House and wrestcontrol of Congress from Democrats.

Bush's move is largely symbolic because Congress also has aban on offshore drilling and while it expires on September 30,it could be renewed. Government officials also say it wouldtake years for any oil to be produced in those areas.

White House spokeswoman Dana Perino said initially thepresident wanted to move in concert with Congress but decidedto go ahead alone after being rebuffed by Democratic leadersand because of a relentless upward spike in energy prices.

"It has been nearly a month since the president urged theCongress to act to expand environmentally-friendly andresponsible exploration for American energy," Perino toldreporters.

"Congress has not moved forward despite calls fromconstituents and the continued pressure of record high energyprices," she said.

Bush is due to announce his decision and make a statementon energy needs at 1:30 p.m. EDT (6:30 p.m. BST).

Democratic White House hopeful Sen. Barack Obama's campaignquickly condemned the move. "It would merely prolong the failedenergy policies we have seen from Washington for thirty years,"spokesman Bill Burton said.

His Republican rival John McCain said he supports thepresident's decision. He recently reversed his previousopposition to offshore drilling to say the states should decidewhether to pursue it, and repeated that stance on Monday.

Even if more Democrats in Congress backed lifting the ban,it would be unlikely they would buck their presidentialcandidate ahead of the November election.


Despite the hurdles, stocks of offshore drilling companiesrose, including Noble Corp. up 1.4 percent and HerculesOffshore Inc. up more than 3 percent. August crude oil was downslightly to $144.90 a barrel in midday trading on the New YorkMercantile Exchange.

The U.S. Energy Department's forecasting arm has saidopening the Pacific, Atlantic and eastern Gulf of Mexicoregions to drilling "would not have a significant impact ondomestic crude oil and natural gas production or prices before2030."

Based on data more than 25 years old, the departmentestimates that drilling on closed federal tracts off the U.S.coasts could produce 18 billion barrels of oil and 76 trillioncubic feet of natural gas.

Congress has blocked many attempts to allow updated surveyson the amount of oil and gas reserves in the banned areas.

If both the presidential and congressional bans werelifted, it would then be up to individual states to permitdrilling off their shores, Perino said. Florida's Gov. CharlieCrist has expressed support for drilling while California'sGov. Arnold Schwarzenegger has opposed it.

"There's a lot of things that would need to be worked out,"Perino said. "And both the legislative ban and congressionalban need to be lifted in order for us to move forward to try todevelop more sources here in our own country."

Bush's move was immediately condemned by environmentalistswho said drilling would not end U.S. dependence on oil or cutthe prices at the pump.

"The solutions to this problem are not off our coasts,"Athan Manuel, director of lands protection for Sierra Club,said. "The U.S. does not contain enough oil to influence theworld market."

The presidential offshore drilling ban was instituted byBush's father, George Bush, in 1990 and was later extended byPresident Bill Clinton and was set to expire in June 2012. Mostoffshore drilling is allowed in the Gulf of Mexico, off thecoasts of Texas, Louisiana, Mississippi and Alabama, but notFlorida.

"The president cruelly is misleading Americans forattempted political gain," said Sen. Bill Nelson, a FloridaDemocrat. "He knows ruining our coastlines won't bring downgasoline prices nor solve our energy challenges."

(Editing by Philip Barbara)