The US Department of Energy's latest budget proposal contains funding for several new fossil energy research and development programs.
Overall, DOE requested $18.9 billion for fiscal 2001, up $1.6 billion from the level appropriated in fiscal 2000. Most of the funding will go for nuclear weapons and wastes programs.
Meantime, the Clinton administration's fiscal 2001 budget reproposed two tax changes that Congress has rejected several times in recent years.
Energy breakdown
The US Federal Energy Regulatory Commission was budgeted at $179.9 million. It will recover the full cost of its operations through charges and fees.
DOE's fossil programs would get $406.6 million, up $26 million from the previous fiscal year. The budget request for coal, natural gas, and petroleum R&D was down slightly vs. fiscal 2000.
Funding was increased for DOE's Vision 21 electric power generation plant, which is designed to emit virtually no pollution. Spending would jump to $41.2 million from $29 million last year, as DOE selects contractors to develop key modules.
Carbon sequestration research was also slated for a major increase. DOE's proposed $19.5 million request was more than double the $9.2 million appropriated this year.
A new program would ensure the reliability of natural gas pipelines and storage systems, both in and outside the US.
DOE would spend $13.3 million in fiscal 2001, about $5 million of which will be used to apply sophisticated US-developed surveying technology to detect leaks from Russian pipelines. It said the pipelines, which carry gas to many of the former Soviet countries and to much of Europe, are thought to leak as much as 20% of their throughput.
DOE will spend $10 million on its Ultra Clean Fuels program. It is a competition to select concepts for producing fuels that meet or exceed the administration's proposed sulfur standards for automotive fuels and to develop a new generation of tailpipe pollution-control devices.
DOE would spend $158 million on the Strategic Petroleum Reserve, the least since 1987.
Overall petroleum research would cost $52.6 million. Most would go to a program examining the best ways to produce oil from the most common types of US reservoirs.
The $38.8 million natural gas R&D budget includes $2 million for methane hydrates research.
Interior, EPA
The US Department of the Interior requested $19.2 billion, up from $l8.2 billion appropriated for the current fiscal year.
Outer Continental Shelf oil royalties would provide $3.2 billion and onshore production $1.1 billion for federal coffers in fiscal 2001.
The Minerals Management Service is requesting $247.7 million, up $7.3 million. MMS said its highest priority is issuing a royalty reform rule.
DOI said the administration would propose legislation to hike offshore fees and permits for oil companies, raising $10 million/year more. It said MMS had 7,750 active offshore leases, totaling 40.7 million acres, at the end of 1999.
The US Environmental Protection Agency requested $7.2 billion for fiscal 2001, down from $7.5 billion. However, the budget includes a $384 million increase for core operating programs.
The budget includes $227 million for the Climate Change Technology Initiative. It promotes voluntary measures that reduce energy use and thus greenhouse gas emissions.
Tax changes
The Clinton administration's most significant tax change reproposal would reduce the tax credits US energy companies could receive on their foreign oil and gas extraction income. The administration said the proposal would raise $428 million over the next 5 fiscal years.
Currently, firms are eligible for the foreign tax credit if a foreign fee is the equivalent of an income tax and not compensation for a specific economic benefit the foreign government provides.
The administration proposes to allow credits for foreign taxes only if the nation has a generally applicable income tax. The plan would create a tax credit for foreign oil and gas income, complying with treaties that allow a credit for taxes paid on oil or gas income.
The administration also proposed to reinstate a 5¢/bbl oil spill excise tax on US crude oil and imported oil and petroleum products, effective Sept. 30, 2001.
The tax would raise $1.044 billion over the next 4 fiscal years for the Oil Spill Liability Trust Fund. Companies paid the tax until Jan. 1, 1995, when it expired.
The administration proposed collecting the tax until the trust fund reaches $5 billion, vs. a previous target level of $1 billion.
