Obama turns attention to energy in Las Vegas speech

By Jim Kuhnhenn and Dina Cappiello, Associated Press

Thursday, Jan. 26, 2012 | 11:59 a.m.

President Barack Obama promoted the sale of new oil and gas drilling leases in the Gulf of Mexico and the promise of cars running on natural gas, defending his energy agenda Thursday against critics who say his policies have stifled domestic energy production.

"We need an all-out, all-in, all-of-the-above strategy that develops every source of American energy - a strategy that's cleaner and cheaper and full of new jobs," Obama said at a Nevada UPS center, flanked by large trucks bearing the company's logos.

Obama announced plans for the sale of new oil and gas drilling leases for nearly 38 million acres in the central Gulf of Mexico and highlighted the completion of a highway corridor for vehicles that run on liquefied natural gas. It came days after he drew sharp Republican criticism for rejecting a cross-country oil pipeline that would have delivered Canadian tar sands oil to refineries in Texas.

The parcels the Obama administration is putting up for lease in June are part of an offshore drilling plan for 2007-12 put in place by President George W. Bush. But after the massive BP oil spill led to an overhaul of the government's oversight of offshore exploration and production, some of those areas had to be re-evaluated for the environmental risks associated with drilling, in some cases delaying the original auction date.

The two leases that will be sold off next summer were originally scheduled for 2011 and this year.

"We're going to keep moving on American energy," Obama said.

Combined with other parts of Obama's energy pitch, the White House is portraying the president as willing to seek the middle ground on energy after Republicans and the industry criticized him for the moratorium put in place after the Gulf disaster, the rejection of the Keystone XL pipeline from Canada, and other policies they say have hampered production, jobs and national energy security.

Some of those critics on Thursday weren't convinced anything has changed. They accused Obama of taking credit for work done to increase oil and gas production by previous administrations.

"Announcing a scheduled lease sale that doesn't open any new areas for energy production and that should have happened a year ago shouldn't be a `major announcement,'" said Rep. Doc Hastings, R-Wash., chairman of the House Natural Resources Committee.

The lease proposal includes Obama administration measures designed to encourage oil and gas exploration companies to develop the leases. The Interior Department has increased the minimum bid for deepwater leases to $100 an acre from $37.50. Administration officials said Wednesday that the increase was designed to give leaseholders incentives to invest in acreage they would be more likely to explore. Escalating rental rates are also designed to encourage faster exploration and development.

Later, speaking at Buckley Air Force Base in Colorado, Obama was expected to highlight the expanded use of clean energy by the Defense Department. The Air Force is installing a one-megawatt solar array on the base, and it tested jets last year that are powered by advanced biofuels.

In choosing Nevada and Colorado, Obama is returning to two states that are important to his re-election campaign.

Obama last visited both states in late October, using the trip to launch a phase of his campaign to jumpstart the economy. With economic indicators improving, Obama this time visited on a higher note.

Both states hold their presidential caucuses within the next two weeks - events that have grown in importance as the Republican contest for the White House continues to shift and narrow to a choice between former Massachusetts Gov. Mitt Romney and former House Speaker Newt Gingrich.

Obama won both Nevada and Colorado in 2008. Nevada has had the nation's highest unemployment, in excess of the national average. But a poll in December by the Las Vegas Review-Journal showed Obama with a 6-percentage-point lead over Romney and a 12-point lead over Gingrich.

Colorado offers an example of a state with a mix of energy programs, from a booming solar-energy industry to natural gas extraction that is a result of a compromise between energy companies and environmentalists.

Obama kicked off his post-State of the Union tour on Wednesday in Iowa and Arizona, pushing for tax incentives for manufacturers. His three-day trip concludes Friday in Michigan.