US House bill leaves oil, gas research funding intact

July 12, 2004
The US House of Representatives June 17 passed, by a 334-86 vote, a spending bill that largely keeps federal oil and natural gas research funding intact for the upcoming fiscal year starting Oct. 1.

The US House of Representatives June 17 passed, by a 334-86 vote, a spending bill that largely keeps federal oil and natural gas research funding intact for the upcoming fiscal year starting Oct. 1.

Overall, the 2005 Interior Appropriations bill carries a $19.5 billion price tag. It funds the budget of the US Department of the Interior, including several federal agencies of critical importance to companies that drill on federal land and in federal waters.

Annual agency budgets of interest to producers include the Bureau of Land Management, the Minerals Management Service, and the US Geological Service. The bill also funds fossil fuel research under the Department of Energy. The White House this year, as it has the past 3 years, wants Congress to cut back federal oil and gas research, but legislators always restore funding back to historical levels.

The US Senate has not yet considered the spending proposal, one of 13 annual bills Congress is supposed to pass to fund the government's budget. But the appropriations process is off to an especially slow start; the contracted legislative calendar, coupled with election-year politics, may mean spending levels aren't formalized until after the November congressional and presidential elections. Before the final floor vote late last month, President George W. Bush won a legislative victory when lawmakers rejected a proposal to sell oil from the Strategic Petroleum Reserve. House members however again rejected calls by the Bush administration to reduce DOE's oil and gas research budget in FY 2005.

The House bill earmarks $35 million for oil technology research—the same level the program is slated to get for FY 2004. The White House requested $20 million less for FY 2005 (OGJ Online, Feb. 6, 2004).

Similarly for gas research, the House bill includes $42 million, $1 million less than FY 2004 spending levels, but $16 million more than what the White House wants to see.

The White House's Office of Management and Budget June 16 sharply criticized past DOE oil and gas research programs, indicating that the way Congress wants to see the programs funded is a waste of money.

OMB said that, the "programs do not clearly link annual activities and products to long-term benefits, had generally poor performance and results, and often duplicated industry work. The president's request refocuses these programs on long-term, high-risk research, and we urge the House to adopt this approach."