WASHINGTON – The massive oil spill off the Gulf coast has complicated President Barack Obama's plan to expand offshore oil drilling in areas long out of bounds to energy development, forcing administration officials to promise a more critical look at the potential environmental risks.
As a slick of oil moved closer to the Louisiana coast on Thursday, White House officials acknowledged that the explosion and spill at a BP oil rig 40 miles off shore could impact future decision on offshore drilling, depending on what investigators determine caused the accident.
White House press secretary Robert Gibbs said depending on the cause, the spill could affect what areas would be viewed as acceptable for drilling — or even change the president's "viewpoint" on new offshore oil drilling.
"We need to learn from the incident," said White House energy adviser Carol Browner. She said those lessons "will be folded in" as the Interior Department goes through a lengthy process of issuing offshore oil development leases.
But Gibbs and Browner said — at least for now — Obama remains committed to plans to expand offshore drilling to new areas of the Outer Continental Shelf.
Obama a month ago called for new offshore drilling in the Atlantic Ocean from Delaware to central Florida, plus the northern waters of Alaska. He also wants Congress to lift a drilling ban in the oil-rich eastern Gulf of Mexico, 125 miles from Florida beaches.
The administration hopes the drilling proposal — along with increased federal loan guarantees to ramp up construction of nuclear power plants — will attract some Republican votes on a bill to curb emissions of pollution-causing gases blamed for global warming.
"Obviously this will become part of the debate" on climate change, White House energy adviser Carol Browner said Thursday.
The legislation backed by the White House aims to cut emissions of carbon dioxide and other greenhouse gases 17 percent below 2005 levels by 2020. It also would expand domestic production of oil, natural gas and nuclear power.
Sen. Robert Menendez, D-N.J., a drilling opponent, said he hoped the White House statements were a sign that the administration was incorporating the reality of oil spills into its approach to coastline drilling. White House officials had minimized the impact of the oil spill in the days immediately following the April 20 explosion, which left 11 people missing and presumed dead. An estimated 5,000 barrels of oil a day are spewing from the blown-out well off the Louisiana coast.
"There are a lot of Americans — particularly in places where coastline drilling doesn't currently exist — who are watching the dramatic images from the Gulf and rethinking whether they would accept such a scene closer to home," Menendez said. He will work to ensure that the New Jersey shore never comes under a similar environmental threat, Menendez said.
Sen. Bill Nelson, D-Fla., meanwhile, filed legislation blocking the Interior Department from conducting seismic tests in the Atlantic Ocean as part of its plan to expand offshore drilling.
"Questions about the practices of the oil industry raised in the wake of this still-unfolding incident require that you postpone indefinitely plans for expanded offshore drilling operations," Nelson wrote in a letter to Obama.
Deputy Interior Secretary David Hayes said the type of explosion that led to the Gulf Coast oil spill is extremely rare, adding that oil rigs in the Gulf and other offshore sites are subject to close federal oversight.
Obama has outlined "a thoughtful, scientifically grounded process" to determine which offshore sites are appropriate for exploration and development, and for assessing the potential risks and benefits of oil development, Hayes said. Before production moves forward in a new region of the Gulf of Mexico, the Atlantic or the Arctic Ocean, the site will have to undergo an environmental analysis, with public comments and an examination of the potential risks and spill response capabilities in that area, he said.
No lease sales would be scheduled until at least 2012 in new areas the administration is considering for oil development.
House Speaker Nancy Pelosi, D-Calif., said the oil rig explosion needs to be taken into account when weighing Obama's plan to expand offshore drilling.
"I do know that what we had been told is that the technology has changed, that there's much safer drilling (now) than decades ago. Clearly, there's room for improvement," she told reporters Thursday. "And I think the people who are affected in the area would want there to be some careful review of what exposure people on the coastlines have to this drilling."
Real estate agents are working seven days a week, builders are staying open late and homebuyers are scrambling to get their offers in as they rush to take advantage of tax credits that expire at midnight Friday.
To qualify, buyers must have a signed contract in hand by the deadline and must complete the deal by June 30.
The tax incentives — offered to both first-time buyers and some current homeowners — are fueling a strong spring selling season and helping home prices stabilize. Real estate agents hope the burst in activity, along with the lifting of general economic gloom, will propel the housing market for the rest of the year.
"It's been a great thing for us," said Andrew Dielmann, owner of Dielmann Sotheby's International Realty in St. Louis. "I would love to be a first-time homebuyer right now."
In Houston, transit mechanic Stan Henderson, 51, is buying his first home, a three-bedroom, $104,995 house from builder KB Home that is still under construction. Affordable prices and low mortgage rates were part of the draw, he said, but the tax credit "was the straw that stirred the drink."
Congress included the temporary tax credit in the $787 billion stimulus package signed into law a month after President Barack Obama took office last year. The idea was to bring the housing market back to life. Lawmakers, after intense lobbying from the real estate industry, agreed last fall to extend it until April 30.
Nearly 1.8 million households had used the credit as of mid-February at a cost of $12.6 billion, according to the Internal Revenue Service.
The government is offering buyers who haven't owned a home for three years a tax credit of 10 percent of the purchase price, up to $8,000. Single buyers with incomes above $145,000 and couples who make more than $245,000 are not eligible.
There is also a credit of 10 percent, up to a maximum of $6,500, for buyers who already own a home. To qualify, they have to have been homeowners for at least five years. The same income limits apply.
The credit for first-time buyers is believed to be playing a bigger role in stimulating home sales this spring. Sales of new homes surged 27 percent last month from a record low a month earlier; it was the biggest monthly increase in 47 years. Sales of previously occupied homes, meanwhile, were up nearly 7 percent in March and are expected to keep climbing.
After the tax credit is gone, though, the surge could be short-lived. Many analysts project sales will drop sharply in the second half of the year. Some expect prices to plunge as well, especially if mortgage rates rise and a wave of foreclosed homes hits the market.
Though the number of new foreclosures has come down a bit, it remains near record levels. Nearly 7.4 million borrowers, or 12 percent of all households with a mortgage, had missed payments or were in foreclosure as of March, according to Lender Processing Services Inc.
Still, the housing market seems finally to be regaining its footing after the worst downturn since the Depression.
Numerous government measures have helped. They include: the tax credit, the Obama administration's $75 billion foreclosure prevention plan, the Federal Reserve's $1.25 trillion program to drive down mortgage rates, and about $126 billion in taxpayer spending to stabilize mortgage finance companies Fannie Mae and Freddie Mac.
The Obama administration touts its efforts to stabilize the market as a success.
"For most Americans, their house is their most important financial asset," Treasury Secretary Timothy Geithner told lawmakers on Thursday. "As the financial crisis wreaked havoc on household wealth, the administration moved to protect this critical component of stability."
Skeptics say that these measures are an attempt to manipulate market forces and that they are leaving housing vulnerable to a dangerous double dip. And many economists say the main effect of the first-time buyer tax credit was to bring would-be homeowners into the market sooner.
"Most of the benefits went to people who would have bought a home anyway," said Patrick Newport, an economist at IHS Global Insight. He estimates that the tax credits will spark only 350,000 to 450,000 additional sales for 2009 and 2010 combined.
Tasha Brown, 29, of suburban Atlanta, is hoping to seal a deal by Friday. She had no intention of buying as house until a friend convinced her earlier this year that buying could be as affordable as renting. Then she learned about the tax credit.
"That was the thing that catapulted me," said Brown, an executive assistant.
She made an offer Monday on a foreclosed home, but the bank said it would take 10 days to approve the contract, which killed the deal. On Thursday, she was waiting to hear back from a seller on her offer of $141,000 for a home listed at $149,900.
"I haven't been sleeping for about two weeks," she said. But even if she doesn't get the credit, she won't stop looking. "I might be able to get something a lot better," she said. "It won't be a mad dash."
CHARLOTTE, N.C. – MetLife Inc. said Thursday it was profitable in the first quarter, reversing a year-ago loss, as the life insurer benefited from premiums and fee growth in both its U.S. and international businesses.
The New York company said its net income totaled $805 million compared to a loss of $574 million a year ago. Net earnings per share rose to 97 cents from a loss of 71 cents last year.
Operating income, which excludes investment gains and losses, grew sixfold to $834 million, or $1.01 per share, versus $131 million, or 16 cents per share, a year ago.
Total revenue for the most recent quarter was $13.07 billion, an 17 percent increase from the first quarter of 2009.
Results topped Wall Street's expectations for earnings of 97 cents per share and $12.83 billion in revenue, according to Thomson Reuters. Analysts typically exclude investment gains and losses from their estimates.
Like most insurers, MetLife emphasizes operating income because it is considered more reflective of the company's performance.
MetLife shares rallied 5.1 percent to $46.13 in after-hours trading, after closing up $1.71, or 3.9 percent, at $45.62.