McDonnell hails 'breakthrough' on offshore drilling

1:45 p.m.

Gov. Bob McDonnell is heralding President Barack Obama's decision to open Virginia waters to oil and gas exploration and says the next step is securing Virginia's share of the royalties.

McDonnell this afternoon said that he would like Virginia to collect the 37.5 percent share that Gulf of Mexico states receive on royalties on offshore drilling. The governor says efforts are under way within Virginia's congressional delegation to secure the state's share.

McDonnell says a lease sale on coastal tracts may be completed by the end of 2011, possibly 2012. McDonnell wants to use the millions that a sale could generate to, among things, finance transportation improvements.

McDonnell will participate this afternoon in a conference call with U.S. Secretary of Interior Ken Salazar's office. McDonnell noted that the military will have a seat at the table in discussions because of concerns that drilling is a possible safety hazard.

"This is the breakthrough," McDonnell said of the president's announcement. But McDonnell says others things must fall in place before drilling becomes a reality.

Some Democrats in Virginia's congressional delegation issued statements supporting the move, including Sen. Mark R. Warner and Reps. Glenn Nye, D-2nd and Tom Perriello, D-5th.

But the Chesapeake Bay Foundation criticized the step.

"Offshore drilling creates a new pollution source, one capable of significant, even devastating environmental damage from drilling, transportation, storage, or refinement," said Will Baker, president of the Chesapeake Bay Foundation.

"Taken together, the totality of the potential harm is too great a risk for the Chesapeake Bay, which EPA already officially lists as impaired."

"Drilling off Virginia's shore is business as usual," Baker said. "Big Oil gets the bucks while citizens get the bill."

(This has been a breaking news update. Check back for more details as they become available. Earlier stories are posted below. Read a complete account in tomorrow's Richmond Times-Dispatch.)

11:45 a.m.
WASHINGTON -- Sen. Mark Warner said this morning he backs the decision to lift a ban on offshore drilling

"This is good news and a positive step forward as we work to expand our nation's domestic energy production. Moving forward on the mid-Atlantic off-shore proposal will provide an opportunity to determine the scope of our region's off-shore energy resources, the economic viability of accessing those resources, and the potential impacts on our environmental and national security priorities," Warner said in a statement. Warner said the next key step is for Congress to approve a formula for sharing revenues between the federal and state governments.

(This has been a breaking news update. Check back for more details as they become available. Earlier stories are posted below. Read a complete account in tomorrow's Richmond Times-Dispatch.)

11:30 a.m.
WASHINGTON — Reversing a ban on oil drilling off most U.S. shores, President Barack Obama on Wednesday announced an expansive new policy that could put oil and natural gas platforms in waters along the southern Atlantic coastline, the eastern Gulf of Mexico and part of Alaska.

Speaking at Andrews air base outside Washington, Obama said, "This is not a decision that I've made lightly." He addressed the expected outcry from disappointed environmentalists by saying he had studied the issue for more than a year and concluded it was the right call given the nation's voracious thirst for energy and the need to produce jobs and keep American businesses competitive.

"We're announcing the expansion of offshore oil and gas exploration but in ways that balance the need to harness domestic energy resources and the need to protect America's natural resources," Obama said, according to his prepared remarks released in advance by the White House. "This announcement is part of a broader strategy that will move us from an economy that runs on fossil fuels and foreign oil to one that relies more on homegrown fuels and clean energy. And the only way this transition will succeed is if it strengthens our economy in the short term and long term."

He added: "To fail to recognize this reality would be a mistake."

Obama made no secret of the fact that one factor in his decision was securing Republican support for a sweeping climate change bill that has languished in Congress. But Obama has long stated his support in favor of the "tough decision" to expand offshore drilling

The plan modifies a ban that for more than 20 years has limited drilling along coastal areas other than the Gulf of Mexico. It allows new oil drilling off Virginia's shoreline and considers it for a large chunk of the Atlantic seaboard. At the same time, he's rejecting some new drilling sites that had been planned in Alaska.

(This has been a breaking news update. Check back for more details as they become available. The earlier story is posted below. Read a complete account in tomorrow's Richmond Times-Dispatch.)

8:42 a.m.

WASHINGTON -- In a reversal of a long-standing ban on most offshore drilling, President Barack Obama is allowing oil drilling 50 miles off Virginia's shorelines. At the same time, he is rejecting some new drilling sites that had been planned in Alaska.

Obama's plan offers few concessions to environmentalists, who have been strident in their opposition to more oil platforms off the nation's shores. Hinted at for months, the plan modifies a ban that for more than 20 years has limited drilling along coastal areas other than the Gulf of Mexico.

At a fundraiser last night, Virginia Gov. Bob McDonnell was eagerly awaiting word on the president's decision.

McDonnell, a Republican who made offshore drilling a centerpiece of his campaign, said last night in South Richmond that his "biggest concern is that Virginia, which is the only state that's set to go forward with drilling leasing in 2011 stays on schedule and stays first."

"The jobs and economic development and capital investment in Virginia that will come forward with that are going to be astounding."

McDonnell, whose frequent refrain is to make Virginia what he calls the "energy capital of the East Coast," recently signed legislation from this year's General Assembly session to funnel a portion of proceeds from offshore drilling to pay for roads.

McDonnell banks on those dollars as part of his transportation-funding plan put forth during the campaign.

But even with the green light from Washington on the lease, it will be years, if ever, before Virginia sees proceeds from drilling.

Congress would still need to approve legislation allowing Virginia to share the royalties.

McDonnell in December wrote to Secretary of the Interior Ken Salazar urging the Obama administration to proceed with a lease sale in 2011 and then the governor made a personal plea during a February trip to Washington.

Obama is set to announce the new drilling policy today at Andrews air base in Maryland. White House officials pitched the changes as ways to reduce U.S. reliance on foreign oil and create jobs -- both politically popular ideas -- but the president's decisions also could help secure support for a climate change bill languishing in Congress.

The president, joined by Salazar, also was set to announce that proposed leases in Alaska's Bristol Bay would be canceled. The Interior Department also planned to reverse last year's decision to open up parts of the Chukchi and Beaufort seas. Instead, scientists would study the sites to see if they're suitable to future leases.

Obama is allowing an expansion in Alaska's Cook Inlet to go forward. The plan also would leave in place the moratorium on drilling off the West Coast.

In addition, the Interior Department has prepared a plan to add drilling platforms in the eastern Gulf of Mexico if Congress allows that moratorium to expire. Lawmakers in 2008 allowed a similar moratorium to expire; at the time President George W. Bush lifted the ban, which opened the door to Obama's change in policy.

Under Obama's plan, drilling could take place 125 miles from Florida's Gulf coastline if lawmakers allow the moratorium to expire. Drilling already takes place in western and central areas in the Gulf of Mexico.

The president's team has been busy on energy policy and Obama talked about it in his State of the Union address. During that speech, he said he wanted the United States to build a new generation of nuclear power plans and invest in biofuel and coal technologies.

"It means making tough decisions about opening new offshore areas for oil and gas development," he warned.

Obama also urged Congress to complete work on a climate change and energy bill, which has remained elusive. The president met with lawmakers earlier this month at the White House about a bill cutting emissions of pollution-causing greenhouse gases by 17 percent by 2020. The legislation would also expand domestic oil and gas drilling offshore and provide federal assistance for constructing nuclear power plants and carbon sequestration and storage projects at coal-fired utilities.

White House officials hope today's announcement will attract support from Republicans, who adopted a chant of "Drill, baby, drill" during 2008's presidential campaign.

The president's remarks today would be paired with other energy proposals that were more likely to find praise from environmental groups. The White House planned to announce it had ordered 5,000 hybrid vehicles for the government fleet. And tomorrow, the Environmental Protection Agency and the Transportation Department are to sign a final rule that requires increased fuel efficiency standards for new cars.

_ The Associated Press and Times-Dispatch staff writer Olympia Meola contributed to this report