Senators Pressure Administration on Oil & Gas Funding

January 11, 2005
12:00 AM
Five senators joined Sen. Bingaman on a letter today asking the White House to increase – not reduce – funding for domestic oil and gas R&D programs in the upcoming FY06 budget request. The letter to OMB Director Joshua Bolten also asks the White House not to cut funding for BLM’s onshore oil and gas management activities. Cuts to these three programs would hurt small domestic petroleum producers who do not have the same resources as major oil companies. Last year, the Administration’s budget request sliced nearly $17 million from the Energy Department’s natural gas technologies program, $20 million from its oil technologies program and $3.5 million from the Bureau of Land Management’s onshore oil and gas leasing program. Congress, displeased, significantly increased that funding. Bingaman’s letter points out that these programs are needed components of any forward-looking national energy policy. “We hope that the President’s Budget for fiscal year 2006 will reflect the importance of these activities to enhance oil and gas production and that it will contain a substantial increase in these areas.” Joining Bingaman (D-NM) in signing the letter were Sens. Daniel Akaka (D-HI), Craig Thomas (R-WY), Byron Dorgan (D-ND), Mary Landrieu (D-LA) and Ken Salazar (D-CO). January 11, 2005 The Honorable Joshua B. Bolten, Director Office of Management and Budget Washington, D.C. 20503 Dear Director Bolten: We are writing to express our concern that crucial Federal programs relating to domestic oil and gas production be adequately funded in the fiscal year (FY) 2006 Budget Request of the President. The United States is heavily reliant on imported oil, a situation that threatens our national energy security. Recent high prices for crude oil have harmed consumers and industry. We have also seen exceptionally high prices for natural gas, a trend that is likely to continue, particularly as more electric generation uses natural gas. We were disappointed in the FY 2005 Budget Request along these lines. That Request proposed cuts at the Department of Energy (DOE) in funding for research and development (R&D) related to oil and gas exploration and production. The prime beneficiaries of that R&D would have been domestic independent petroleum producers, who cannot afford to conduct the kind of R&D that would help them to increase the productivity of their oil and gas operations. They rely heavily on the DOE program and on organizations, such as the Petroleum Technology Transfer Council, that are supported by DOE. The FY 2005 Request also cut the funding requested for oil and gas management activities at the Department of the Interior’s Bureau of Land Management (BLM), coupled with a proposal to raise funds to fill in this gap by increasing fees for lease applications and applications for permits to drill for oil and gas on public lands. The BLM’s onshore oil and gas program has featured a substantial backlog of such applications, along with increased needs to effectively oversee increased oil and gas activities on federal lands so that those activities do not damage the environment or impair other persons engaging in permitted uses on these multiple-use lands. The Administration’s proposals in the last budget were not agreed to by Congress, which increased funding for DOE oil and gas R&D by $37 million over the Administration’s request, increased BLM oil and gas activities by $2 million over the Administration’s request, and directed that the proposed increase in lease and permit fees not be implemented. The improved management of federal onshore oil and gas and increased oil and gas R&D are important components of any forward-looking national energy policy. Calling new technology “the key to environmental protection and new energy production,” the President’s National Energy Policy released in 2001 prominently featured R&D, such as enhanced oil and gas recovery through new technology and improved oil and gas exploration technologies. The need for R&D was again underscored in the report just released by the National Commission on Energy Policy, entitled “Ending the Energy Stalemate: A Bipartisan Strategy to Meet America’s Energy Challenges.” This comprehensive report recommends a substantial increase in federal R&D funding relating both to the production of unconventional oil resources and methane hydrates. Likewise, virtually all of the comprehensive energy policy bills considered by Congress over the past several years have included increased funding for BLM’s oil and gas activities and DOE’s oil and gas R&D. With all of this as background, we request that you give particular attention to the funding for these crucial DOE and BLM programs in the upcoming Budget Request. Given current high energy prices, the President’s stated policies in favor of increased oil and gas R&D and increased domestic production, and the strong support in Congress for both DOE and BLM programs, there would seem to be no reason why these activities should not be proposed for funding at levels well above those appropriated by Congress for FY 2005. Similarly, we believe that the Forest Service budget should include adequate funding for activities of that agency relating to oil and gas resources on National Forest System lands. We hope that the President’s Budget for Fiscal Year 2006 will reflect the importance of these activities to enhance domestic oil and gas production and that it will contain a substantial increase in these areas. Thank you for your attention to our request. Sincerely, [Jeff Bingaman … Daniel Akaka … Craig Thomas … Byron Dorgan … Mary Landrieu … Ken Salazar]