When Ken Salazar announced he would step down as Secretary of the US Department of the Interior it created a difficult decision for President Obama and brought a campaign issue back to the fore. Regulating development on federally-owned lands – particularly for oil and gas drilling – is one of the most polarizing energy issues of the day and because this is a primary function at the Interior Department, the issue and the department’s role has exploded into the political arena.

The department’s mission: “The US Department of the Interior protects America’s natural resources and heritage, honors our cultures and tribal communities, and supplies the energy to power our future.” The onshore and offshore acreage managed by Interior account for 30 percent of US natural gas output, 30 percent of the country’s oil production and up to 40 percent of US coal production.

The controversy arises from differing land management views held by oil industry proponents, who are often Republicans, and the environmental activist community, which is a largely Democratic constituency. Essentially, industry wants greater access including fast-track licensing and other business-friendly regulation while sticking to current regulatory standards on the environment, while more conservation-minded activists, politicians and voters want to limit oil, gas and coal development in these areas. The president’s pick to run this department will hold considerable sway over the issue.

So who might this be?

It will be a difficult decision as the Obama Administration seeks to diversify the Cabinet and select a representative from a western state – where many federal lands are located – who is not a Republican and not a member of the Senate. “He [Obama] has to be careful about poaching senators from an increasingly fragile majority,” Ben Cole, Director of Communications for the American Energy Alliance – a free market non-profit – told AOL Energy.

Potential successors include Congressman Raúl Grijalva (D-AZ), Office of Personnel Management Director John Berry, former Democratic Senator from Arkansas Blanche Lincoln, Deputy Interior Secretary David Hayes, Senator Tom Udall (D-NM) and outgoing Washington Governor Christine Gregoire.

In Cole’s view, Governor Gregoire appears to be the most likely candidate for the top job at either the Interior Department or the EPA.

Industry proponents, including the AEA, are not enthusiastic about the prospect of another Democrat Interior Secretary. “We don’t expect it’s going to be any better in the second term than in the first – now it’s just a matter of who is less bad,” Cole said.