Domenici Statement on Department of the Interior FY2009 Budget Hearing

February 13, 2008
12:18 PM
WASHINGTON – U.S. Senator Pete Domenici, ranking member of the Senate Energy and Natural Resources Committee, today issued the following statement regarding President Bush’s FY2009 budget request for the Department of the Interior:
“Thank you, Chairman Bingaman.  Good Morning, Mr. Secretary. I want to thank you for coming to testify on the Department of the Interior’s Budget Request for FY 2009. It is our last meeting at an annual budget hearing in our respective capacities.  It was a pleasure working with you when you were in the Senate, and I have enjoyed working with you in your capacity as Secretary.   I know that we will accomplish many good things in the time we have left.
“Let me begin by saying that our desperate need to reduce this nation’s dependence on foreign energy sources continues.  As we press on with research into alternatives to fossil fuels, we must acknowledge that our energy security still rests on the vitality of domestic oil and gas supplies in the near term. 
“One area in which we may be able to make great strides is by working to enable this country to take advantage of its tremendous reserves of oil shale.  The Department of Energy estimates that technically recoverable oil shale in the United States is roughly equivalent to three times Saudi Arabia’s oil reserves. 
“In the coming weeks, I will be speaking at length about the threats we face as a nation if we don’t do something about our increasing dependence on foreign oil.  You, Mr. Secretary, can effect positive change in this regard, if you stand firm against those who wish to lock up our domestic resources.
“I am extremely disappointed that the FY 2008 Omnibus Appropriations Act contained a one-year moratorium on preparing and publishing the final regulations for a commercial leasing program for oil shale resources on public lands.  This moratorium reverses the great work of Section 369 of EPACT, a provision crafted on a bipartisan basis to promote the development of unconventional resources such as oil shale.  Mr. Secretary, I hope you will speak in opposition to this today and weigh in forcefully with the House and Senate on this.
“Mr. Secretary, this year’s budget contains a program reduction of $2 million for the oil shale program and the redirection of $400,000 in base funding.  I bring this up to emphasize the wrong-headedness of the appropriations language passed last year.  When we have companies willing to invest upwards of $5 billion dollars to realize the potential of oil shale, I find it foolish to tie their hands with this moratorium.  The development of unconventional resources such as oil shale is essential to our nation’s energy security, and I will work this year to do away with the impediment caused by this moratorium.  I hope you will assist me in this.
“Mr. Secretary, you have continued to implement several provisions of EPACT 2005, but I am disappointed that you have proposed once again to amend several provisions of Section 365, related to oil and gas permitting and development. 
“The FY 2009 budget proposes to repeal Section 365 to allow the Bureau of Land Management to undertake a rulemaking to permanently charge a fee for processing APDs, and charge an interim fee of $4,150 during the rulemaking process. The fee would be paid to the United States Treasury instead of going back to the Permit Processing Improvement Fund, which funds the pilot offices.
            “We felt that Section 365 was necessary to expedite the oil and gas permitting process by establishing a number of pilot offices to expedite the backlog of APDs. This program has allowed more APDs to be processed more quickly.  The number of APDs processed rose from 7,736 in FY 2005 to 8,964 in FY 2007, an increase of 1,228, a testament to this EPACT 2005 provision.  The repeal of these Section 365 provisions will cause an undue burden on small independent producers, specifically in my home state of New Mexico.  This proposal would cause oil and gas permit applicants to incur fees to fund the pilot offices, and it would increase the cost to domestic energy production, something that I will continue to fight against vigorously.
“Mr. Secretary, this year’s budget proposal once again reduces the states’ share of receipts from mineral leasing activities on public lands by two percent annually in order to pay for administrative costs of the Minerals Management Service.  This so-called “net receipt sharing” proposal has substantial negative impacts on many western states, including a cost to New Mexico of approximately $11.5 million a year. 
“Mineral royalty revenues fund many important programs in New Mexico, including schools.  I will not sit by as the Department takes funding from New Mexico schools, and I know that the Chairman shares this view.  I strongly oppose losing this valuable funding to MMS’ administrative costs.  After this change to existing law was proposed by the Administration last year, it was enacted in the FY 2008 Omnibus Appropriation Act.  I plan to work with other western Senators to fight to reverse this provision this year. 
“Mr. Secretary, I am disappointed that the Administration has chosen a slimmed-down Interior budget this year.  However, I understand the constraints that OMB has placed upon you and know that you will do your best to work effectively within these constraints.  I am interested in hearing more about your new Water for America initiative.  And, I am also interested in knowing more about how the Department is progressing in implementing the Gulf of Mexico Energy Security Act of 2006.  I am excited to learn of the recent successful sales in the Gulf and in Alaska, and I will be asking some questions on this.  
“Again, thank you for being here, Mr. Secretary, and thank you for calling this important hearing, Mr. Chairman.  I look forward to working with you both on these issues.”