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Obama: US will seek oil in Alaska and Gulf of Mexico

Fuel prices on display in California, April 2011
Image caption Recent fuel price spikes in the US have taken costs towards record highs

The US will seek to expand domestic oil production in an attempt to reduce dependence on imported oil and bring down fuel prices, President Obama says.

New leases for exploration will be granted in non-protected areas of Alaska and in the Gulf of Mexico.

In his weekly address the president insisted the US could reduce its need for imported oil and improve safety.

And he urged Congress to back proposals to end taxpayer subsidies to highly profitable oil companies.

Using his address to tell Americans that he understood their concerns about rising prices, President Obama focused particularly on the price of fuel, which has spiked in recent months.

US consumers have historically enjoyed cheap fuel, but have seen prices reach $4 per gallon (£0.65 per litre) in recent months.

Vow on standards

US oil production in 2010 reached its highest level for seven years, Mr Obama said in his address.

"But I believe that we should continue to expand oil production in America - even as we increase safety and environmental standards," he said.

New leases would be sold each year in Alaska's National Petroleum Reserve, and oil and gas fields in the Atlantic Ocean would be evaluated as a high priority, the president said.

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Media captionPresident Obama: 'We plan to lease new areas in the Gulf of Mexico'

Despite the BP oil spill in the Gulf of Mexico in 2010, Mr Obama said the Gulf remained a core part of the country's future energy supply and new incentives would be offered for on and offshore development.

Leases already held but adversely affected by the president's moratorium on drilling, imposed after the BP spill, would be eligible for extensions, Mr Obama said.

A ban on drilling in eastern areas of the Gulf was imposed during the Deepwater Horizon spill, and has since been extended until 2017.

The president's proposals come after Republicans in Congress introduced a series of bills that would expand and speed up offshore oil and gas drilling.

The White House has criticised the Republican proposals on safety grounds, but Mr Obama was clear in his address that he felt safety and environmental standards could be maintained even though production might rise.

"I believe that we should continue to expand oil production in America - even as we increase safety and environmental standards," he said.

"As a nation, we should be investing in the clean, renewable sources of energy that are the ultimate solution to high gas prices."

Mr Obama has previously called for a step-change in energy policy, saying the US must move towards getting 80% of its electricity from clean energy sources by 2035.

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