Obama's offshore conversion: helps but battles loom

By Russell Blinch - Analysis

WASHINGTON (Reuters) - Sen. Barack Obama's conversion in favor of offshore drilling on the road to the White House will ease the standoff in the U.S. Congress over energy but forging a veto-proof bill still faces big hurdles.

The Democratic presidential candidate said he would back limited offshore drilling as part of a broader package, signaling support for legislation unveiled by a bipartisan group of senators just before Congress recessed on Friday.

"My interest is in making sure we've got the kind of comprehensive energy policy that can bring down gas prices," Obama told The Palm Beach Post in Florida on Friday.

"If, in order to get that passed, we have to compromise in terms of a careful, well thought-out drilling strategy that was carefully circumscribed to avoid significant environmental damage -- I don't want to be so rigid that we can't get something done."

After long deriding calls for more drilling from President George W. Bush and other Republicans, the Illinois senator is signaling he has one eye on the polls as he calls for compromise.

"Senator Obama's campaign staff has clearly concluded the current 'no drilling, no bill' strategy is unsustainable and damaging to the senator's election prospects in November," wrote economist John Kemp of the commodities firm RBS Sempra.

"So the senator has indicated he is open to a compromise, even if this angers the hard core environmental vote."

Obama's change of heart will attract charges of flip-flopping from opponents but could gladden the hearts of Democrats worried about campaigning without any bills purported to help bring down gasoline from around $4 a gallon.