Isra-Mart srl : Obama unveils domestic oil push as clean energy plans falter

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President Barack Obama has responded to growing pressure over rising fuel prices by unveiling controversial new plans designed to boost US domestic oil production.

The move is bound to anger environmental groups and green business leaders, and comes despite growing concerns that the President will not be able to push his flagship proposals for a clean energy standard and is struggling to deliver on plans to repeal multibillion dollar tax breaks for the oil industry.

Speaking in his weekly radio address, Obama said that the administration would set up a new taskforce to accelerate the issuing of offshore Alaskan drilling permits, and commence annual auctions for oil and gas leases in the Alaska National Petroleum Reserve.

The administration will also extend leases for operators in the Gulf of Mexico and off the coast of Alaska affected by last year's post-spill restrictions, and introduce new incentives to encourage oil companies to exploit leases they already hold.

Significantly, Obama said that the administration would also accelerate a promised review of the environmental impact of drilling off the Atlantic coast, the first step towards potentially scrapping current rules which block all Atlantic seaboard exploration until at least 2018.

The move represents a partial victory for Republicans who have been cranking up pressure on the administration to boost domestic oil production in response to rising oil prices, and last week tabled three new bills proposing a relaxation of drilling rules.

Democrats have said they will oppose the bills as they stand, but officials signalled that some elements could be included in the President's new plan.

Obama claimed that the latest proposals "make good sense", arguing that "we should expand oil production in America, even as we increase safety and environmental standards".

In an attempt to appease environmental groups, Obama explained that he would continue to push for the repealing of tax breaks for the oil industry as a matter of urgency.

"In the last few months, the biggest oil companies made about $4bn in profits each week. And yet they get $4bn in taxpayer subsidies each year - $4bn at a time when Americans can barely fill up their tanks; $4bn when we're trying to reduce our deficit," he said.

However, a Senate bill due to be tabled this week designed to repeal those tax breaks is widely expected to fail in the face of concerted Republican opposition.

Speaking to broadcaster C-SPAN over the weekend, Jeff Bingaman, the Democrat chair of the Senate Energy and Natural Resources Committee, said the bill does not have enough support in its current form.

He also revealed that legislation designed to deliver on the President's State of the Union pledge to deliver a clean energy standard requiring 80 per cent of US energy to come from renewable, nuclear, carbon capture and storage, or natural gas sources by 2035 could struggle to get out of the Senate committee stage.

"We are trying to figure out if we can put together a draft piece of legislation that can get enough votes to be seriously considered in our committee," he said.

"We don't have the answer to that yet, but we are trying in a conscientious way to get to something that would achieve the kind of objective the President laid out."