SCENARIOS: Possible Political Fall Out From U.S. Oil Spill

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    By Ayesha Rascoe

    WASHINGTON, April 27 (Reuters) – A massive oil spill in the Gulf of Mexico could undermine support for U.S. offshore drilling, just as lawmakers were warming to the practice, and even upset hopes for winning bipartisan support to U.S. climate legislation.

    Last week’s explosion on a deepwater rig finishing a well for BP (BP.L) left 11 workers missing, presumably dead, and a subsequent oil slick that now covers about 28,600 square miles (74,000 sq. km) and could not have come at a worse time for the oil industry.

    After a decades-long moratorium on drilling in most areas outside the Gulf of Mexico, the Obama administration last month unveiled a limited expansion plan. [ID:nLDE6350CP] But now the industry faces a spill that may have an impact not seen since the Exxon Valdez disaster in the late 1980s.

    The Senate climate change bill was expected to include measures to encourage more offshore drilling, which was seen as crucial to attracting Republican votes.

    The well that was being drilled is now leaking about 1,000 barrels of oil per day and the spill could reach land this weekend.

    Here’s a look at some of the possible political fall out from the spill.

    THE WHITE HOUSE

    The Obama administration has stood by its proposal for new offshore oil drilling in the wake of the accident and seems unlikely to change course on the issue any time soon. The president’s plan was already a fairly modest, opening only parts of the U.S. Atlantic coast and Alaska to drilling. [ID:nN31367614]

    Obama must also consider that closing more areas to offshore drilling could alienate the Republicans and moderate Democrats he is trying to court to support U.S. action on climate change.

    CONGRESS

    A lot will depend on the cause and severity of the oil spill, but the outcome could undermine supporters of more oil drilling and embolden lawmakers, particularly from Florida, who dislike the expansion plans.

    If the oil reaches land, damaging coastlines and disrupting sensitive ecosystems, public sentiment could turn against the offshore drilling and make it difficult for lawmakers to call for a significant increase in drilling.

    In a worse case scenario, where the clean-up takes months and damage is significant, lawmakers may even consider legislation further restricting offshore oil production.

    Regardless of how quickly the spill is contained, it will undoubtedly add clout to the arguments of offshore drilling opponents. Lawmakers in coastal states dependent on tourism are already using the accident to question the safety of the offshore oil industry.

    Senator Bill Nelson, a Democrat from Florida, has called on the Interior Department to investigate the industry’s safety record over the past 10 years. On Tuesday, the House Energy and Commerce Committee said it will probe the spill and is requesting documents from the companies.

    SENATE CLIMATE CHANGE BILL

    Offshore drilling was touted as a key component of the climate change compromise bill crafted by Senators John Kerry, Joseph Lieberman, and Lindsey Graham. That bill has been delayed after Graham pulled out for other political reasons, but the accident could have an impact on the legislation.

    The infamous Exxon Valdez disaster, which spilled about 11 million gallons of oil off the coast of Alaska in 1989, provided a boost to Clean Air Act amendments enacted after the spill.

    But since the Senate bill seeks to expand offshore oil production, the BP accident could put pressure on Democrats to row back on some elements, which in turn could anger some Republicans who have been pushing for more access for drillers. (Reporting by Ayesha Rascoe; Editing by Marguerita Choy)

    http://www.reuters.com/article/idUSN2711338320100427

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