Looking to reset his priorities after a rancorous first year in office, President Barack Obama during his State of the Union address promised to work harder to create green jobs and said he would welcome new domestic offshore drilling for oil and gas as well as an expanded focus on nuclear energy.

“To create more of these clean energy jobs, we need more production, more efficiency, more incentives,” the president said during his speech last week. “That means building a new generation of safe, clean nuclear power plants in this country. It means making tough decisions about opening new offshore areas for oil and gas development. It means continued investment in advanced biofuels and clean coal technologies. And yes, it means passing a comprehensive energy and climate bill with incentives that will finally make clean energy the profitable kind of energy in America.”

The comments on offshore drilling were welcomed by the oil and gas industry which has opposed many of the president’s energy initiatives, and had previously claimed that the Obama administration has not been willing to talk with them.

The American Petroleum Institute, a trade group for oil and gas companies, issued a news release the day following the president’s Jan. 27 address to the nation, saying, “We are encouraged by the President’s words that decisions need to be made about opening new offshore areas for oil and gas development. These are important and necessary decisions for the American people and the American economy.”

On Jan. 28, the federal government began a 45-day public comment period that could clear the way for energy companies to do seismic research aimed at locating pockets of oil and natural gas along the Atlantic Coast. API President Jack Gerard said the industry believes that area has a huge potential for oil and gas deposits and its drilling is long overdue.

The API said greater access to America's vast oil and natural gas resources would bring more domestic energy, thousands of jobs, billions in government revenues and less reliance on imported energy.

“We support the President on jobs and are ready to do our part putting more Americans back to work,” the API added. “But to create these jobs, we will need policies that allow investment and development -- policies that are pro-job, pro-consumer and pro-energy. We are ready to work with the administration to help make that happen.”

The API said the oil and gas industry supports 9.2 million jobs. Between 2004 and 2007, the industry added two million jobs to the economy, including green jobs in the natural gas sector, and between 2004 and 2008 the industry invested more than $58 billion in carbon mitigation programs said Gerard.

“That’s equal to creating 1.2 million green jobs,” he said in prepared comments ahead of the president’s Union address.

Ahead of the president’s speech, Gerard said, “The government has been pursuing policies that make us more dependent on foreign oil. Policies affecting leasing of land drive up our costs. We don’t want the Department of Interior to lessen our ability to develop resources [in the United States]. We don’t think those are good public policies.”

He said the industry wants to increase domestic supply for oil and gas, but there has been a dramatic shift in federal land leasing since Obama took over as president, with total federal acreage leased shrinking to the lowest level on record in 2009, causing a 90 percent reduction in revenues going to the government in royalties. He said the federal government received $1 billion from land leases last year compared to $10 billion in 2008.

Obama reiterated in his speech that there would be no tax incentives for the oil and gas industry. Gerard said the Obama administration punished the oil industry when it moved last year to rescind tax incentives for expanding domestic production implemented under President George W. Bush.

He said instead of taxing the industry or raising royalty rates, the federal government should follow the example of the state of Pennsylvania, which has shelved plans for a severance tax and instead offered more state land for natural gas leasing. Pennsylvania ended up getting $128 million in a single lease sale, more than it expected.

“Higher taxes drive companies away,” he said. “Tax proposals [in the budget] are anti-jobs, anti-consumer and anti-energy.”

Current federal royalty rates are about 12 percent while state royalty rates are a little higher at 20 percent. Interior Secretary Ken Salazar wants to change that, arguing taxpayers are currently not getting value for their leased land. But the industry counters by arguing that federal lands are far off the ocean shore and are much more expensive to drill.

On the climate bill, Gerard said the industry was happy with the prospect that the Waxman-Markey bill, which was passed last year by the House of Representatives, and the Kerry-Boxer bill that passed the Senate Environment committee without Republican support, won’t become law in the current political environment. A major plunk of both bills is carbon trade or a cap-and-trade system, which the oil and coal industries don’t like because they would increase costs.

On the recent Supreme Court ruling allowing corporations to make political contributions to candidates for federal offices, Gerard said the oil industry will continue doing its advocacy work the way it has always been doing it. The impact of the ruling has been overblown, he said.