September 29, 2008

News Analysis: End of Offshore Oil Drilling Ban Signals Shift of U.S. Energy Strategy

News Analysis: End of offshore oil drilling ban signals shift of U.S. energy strategy

WASHINGTON, Sept. 27 (Xinhua) -- U.S. Senate on Saturday approved the lifting of a quarter-century ban on offshore oil and gas drilling, a move analysts say marks a major shift in U.S. energy strategy.

Senators approved a 630-billion-dollar spending bill by a 78-12 vote. House of Representatives on Wednesday approved the same bill which dropped the offshore drilling bans.

The move indicates that the United States has shifted from heavy reliance on imports to a balance between imports and self-reliance in energy consumption, analysts say.

Congress imposed a ban on offshore drilling in 1981. In 1990 then President George H. W. Bush issued an executive order, reinforcing the ban.

In the past 27 years, Congress has renewed drilling bans on the Atlantic and Pacific coasts year after year because of environmental concerns. Some coastal states which feared that drilling might hurt the tourism industry also pushed for the ban.

Analysts believed energy security had been the top concerns behind the U.S. off-shore oil and gas drilling ban. A seal on the non-renewable energy at home brings Washington long-term strategic advantages, they said.

However, critics noted the ban had also confined the country's development, depriving its coastal regions of otherwise abundant job opportunities and aggravating its dependence on oil imports.

The United States has rich oil reserves. According to statistics from the U.S. Energy Department, its proven oil reserves stand at 20.9 billion barrels, ranking the 11th place in the world.

Under the bans, drilling is only allowed in the central and western Gulf of Mexico and part of the offshore area in Alaska, while 85 percent of offshore areas in the Atlantic, the Pacific and the eastern Gulf of Mexico were strictly prohibited from drilling operations.

Oil production in the United States has been sluggish in recent years. As the world largest oil consumer the United States relies heavily on imports. Statistics show that in 2007 the United States imported an daily average of 12.1 million barrels of oil to help meet its average daily consumption of nearly 20.7 million barrels, making it the largest oil importer in the world.

President George W. Bush lifted an executive ban on offshore oil drilling in July and had repeatedly urged Congress to lift legislative restrictions on offshore oil drilling to help address the rising fuel costs.

The president argued that the legislature was allowing skyrocketing oil prices to hurt the U.S. economy while the new drilling technologies eventually leaves little impact on the environment.

White House spokesman Tony Fratto expressed a welcome to the senate vote for an end of the ban, saying that the bill "puts the United States one step closer to ending our dependence on foreign sources of energy" by opening up huge reserves of oil shale in the West.

However, experts noted the lifting of the offshore oil drilling moratorium does not mean significant rise on domestic oil output in a short period of time and its effect could hardly be felt for at least ten years.

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