* Group says not expanding offshore drilling hurts economy
* Oil group wants US Congress, W.House to reach consensus
By Tom Doggett
WASHINGTON, Jan 4 (Reuters) - Congress should pass legislation, if necessary, to force the Obama administration to open more offshore areas to oil and gas exploration, the head of the American Petroleum Institute said on Tuesday.
The administration last month removed from its proposed five-year offshore drilling plan an earlier decision to allow energy exploration off the Atlantic coast and in Florida waters. It had pledged to open the areas to exploration shortly before last summer's BP <BP.L> oil spill.
Jack Gerard, president of the powerful oil industry lobby, said his group hoped the administration would change its policy again and allow drilling in the disputed areas.
If that fails, Gerard said Congress should consider putting specific language in the Interior Department's annual spending bill to require that lease sales be held in those waters.
"It's clearly an option," Gerard told reporters following a speech. "That's one way that ultimately you can resolve it."
Gerard said taking the eastern Gulf, Atlantic and also Pacific waters off the drilling table for five years would hurt the economy and the ability to produce needed oil and gas.
Gerard said he hoped the White House could reach a consensus on offshore exploration with the new Congress, which will see Republicans controlling the House of Representatives and increasing their voting block in the Senate.
"We're still holding out hope that through conversation, deliberation and dialogue, that we might get parties to find a middle ground that will allow us to develop the energy we need for the nation."
Representative Fred Upton, the new Republican chairman of the powerful House Energy and Commerce Committee, told reporters he planned to hold hearings on the administration's five-year offshore drilling plan, which he faulted for not including new areas.
The administration said in March energy companies would be able to explore off the Atlantic coast from Delaware to Florida and 125 miles (200 km) beyond Florida's shore in the eastern Gulf of Mexico.
However, the administration pulled those waters from its proposed 2012 to 2017 drilling plan to avoid oil spills like the one caused by BP.
U.S. Interior Secretary Ken Salazar has said oil companies can still explore the millions of acres in the Gulf of Mexico they have already leased but not yet developed.
President Barack Obama could use the possibility of expanding offshore drilling as a bargaining chip to get Republicans to support his other programs and initiatives. (Editing by Dale Hudson)
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