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Obama extends offshore drilling delay

By Aaron Smith, CNNMoney staff writer

NEW YORK(CNNMoney.com) -- President Barack Obama said on Thursday that his administration is extending the moratorium on permits to drill new deepwater wells for six months and suspending the planned exploration of two drill sites off the Alaskan coast.

The president also said that lease sales off the coast of Virginia and in the Western Gulf will be canceled because of environmental concerns.

The president also expressed the extreme difficulty in trying to find a way to plug the leak in the Gulf of Mexico off the Louisiana coast, caused when a drill rig exploded and sank in April, killing 11 workers.

Permits to drill offshore have been suspended since April, following the explosion.

"BP is responsible for this horrible disaster and we will hold them accountable," said the president. "They will pay for every dime of the damage it's done."

Obama said that fixing this "unprecedented disaster" is complicated by "the fact that the source of the leak is a mile under the surface [of the water,] where no human being can go."

Describing the oil spill as "the largest of its kind in history," Obama said that 20,000 workers and 1,300 vessels were deployed to the Gulf in the attempt to contain it.

Obama made these announcements to White House press after conducting a safety review of offshore drilling. Interior Secretary Ken Salazar, who was directed to oversee the report, briefed Obama and senior advisers on the report Wednesday night.

Nearly 30,000 jobs are at stake by midsummer if new permits are not issued soon, said Lee Hunt, president of the International Association of Drilling Contractors. Those include jobs on the drill rigs themselves and support positions such as crews on supply boats, caterers and construction yards.

In a letter sent out last week, 10 senators, including both from heavily impacted Louisiana, urged the Interior Department to begin issuing new permits as soon as possible.

"We are very concerned that the moratorium is far too broad and unnecessarily covers shallow-water drilling activities," the senators wrote. "If the moratorium is continued through June, lost revenue from shallow water drilling is estimated at $135 million."

Obama said the disaster highlights the fact that America needs to find alternate fuel sources.

"The fact that oil companies have to go a mile underwater and have to drill three miles under that, tells you something about the direction the oil industry is going in," he said. "That's part of the reason why you never heard me say 'Drill baby drill,' because we can't drill our way out of the problem. The easily accessible oil has already been sucked up out of the ground."

-- CNNMoney.com senior writer Steve Hargreaves contributed to this report. To top of page

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