Besides market and environmental concerns, the U.S. Interior Department said it also based its decision on conflicts with competing commercial and military ocean uses.
The decision reverses a January 2015 proposal for new leases in the Atlantic as part of the department's five-year plan to set new boundaries for oil development in federal waters through 2022.
“We heard from many corners that now is not the time to offer oil and gas leasing off the Atlantic coast,” Interior Secretary Sally Jewell said.
“When you factor in conflicts with national defense, economic activities such as fishing and tourism, and opposition from many local communities, it simply doesn’t make sense to move forward with any lease sales in the coming five years.”
The proposal would have opened up drilling sites more than 50 miles off Virginia, North and South Carolina, and Georgia to oil drilling by 2021.
Coastal communities in these states protested the administration's plan, fearing the possibility of an oil spill like the BP Horizon accident in 2010 on the U.S. Gulf Coast, and its effects on tourism and their economies.
"With this decision coastal communities have won a ‘David vs. Goliath’ fight against the richest companies on the planet, and that is a cause for tremendous optimism for the well-being of future generations,” said Jacqueline Savitz, environmental group Oceana's vice president for U.S. oceans.
Virginia officials had welcomed the initial plan to allow offshore drilling, saying it would bring economic benefits. On Tuesday, Senator Tim Kaine, a Democrat from Virginia, said he was surprised that the Department of Defense had raised concerns about naval installations, one of which is off the state's coast.
"The DOD has been relatively quiet during this public debate and has never shared their objections with me before," he said.
The American Petroleum Institute said on Tuesday that the decision to reverse course on Atlantic drilling goes against the will American voters, governors and members of Congress who support more development.
“The decision appeases extremists who seek to stop oil and natural gas production which would increase the cost of energy for American consumers and close the door for years to creating new jobs, new investments and boosting energy security,” said API President Jack Gerard.
The Interior Department also announced Tuesday that it would evaluate 13 other potential lease sales in other areas of the country - 10 in the Gulf of Mexico and three off the coast of Alaska.
"The proposal focuses potential lease sales in areas with the highest resource potential, greatest industry interest, and established infrastructure," Jewell said.
The Interior Department said that in the Gulf, resource potential and industry interest are high and infrastructure already exists.
It proposes two annual lease sales that include the Western, Central, and part of the eastern Gulf of Mexico not subject to the current congressional moratorium.
It also includes a potential sale each in the Chukchi Sea, Beaufort Sea, and Cook Inlet planning areas in Alaska. The department would take comments on other options, including an alternative that includes no new leasing.
CONCERNS ABOUT ARCTIC
While green groups praised the decision to keep the Atlantic off limits for now, they raised concerns that the United States would keep the door open for drilling in the vulnerable U.S. Arctic.
"The administration must take Arctic leases out of the final five-year plan," said Cindy Shogan, executive director of the Alaska Wilderness League. "No place has potentially more to lose due to climate change than the Arctic."
The Interior Department will open the five-year proposal to a 90-day comment period.