Mixed Messages: Virginia's Offshore Drilling Drama

(MoneyWatch)  So, now that President Obama has uttered the words "opening new offshore areas for oil and gas development" to the American people, what's to come of the planned -- and supposedly delayed -- lease sale offshore Virginia? If anything, the recent contradiction of statements from the folks, who are supposed to be deciding these things, indicates some backpedaling on the government's reported plans to delay the sale until 2012 or later.

Last week quite a hullabaloo erupted after a regional director for Interior Department's Mineral Management Service reportedly announced during an offshore industry workshop the Virginia lease sale would be delayed until at least 2012. But wait. A spokeswoman for MMS said Wednesday no decision has been made to delay the 2011 sale of oil and gas leases offshore Virginia, the Associated Press reported.

Hours later, Obama made his State of the Union address, where he called for incentives for clean energy innovation, advanced biofuels, nuclear energy and opening up new areas of offshore drilling. Whether or not Obama was referring to Virginia when he mentioned "making tough decisions" about opening up new areas for offshore drilling, that's what industry folks were thinking about.

The lease sale offshore Virginia would mark the beginning of a new era of drilling in the Atlantic, waters where oil and gas development has been banned for decades. Under the federal government's five-year Outer Continental Shelf program, an area about 50 miles off the coast of Virginia was slated for a oil and gas lease sale in 2011. The Interior Department's Mineral Management Service estimates that area may contain 130 million barrels of oil and 1.14 trillion cubic feet of natural gas. The area was off limits, despite being included in the five-year program developed by the Bush administration, until Sept. 2008 when a moratorium on drilling offshore Virginia expired.

The state's new Republican governor Bob McDonnell pressed Interior Department Secretary Ken Salazar last month to move forward with the planned lease sale. And after news broke the sale could be delayed, McConnell immediately called Salazar to try and confirm the news and told reporters "any delay beyond 2011 I would strongly oppose." Virginia Sens. Jim Webb and Mark Warner also sent Salazar a letter calling for the department to ensure the lease sale remained on track for 2011.

Obama's inclusion of offshore drilling in his speech had to have tickled McDonnell at least a little bit.