Maureen Lorenzetti
OGJ Online
WASHINGTON, DC, Feb. 1 -- The Bush Administration will unveil its budget proposal next week for the fiscal year that starts Oct. 1 and industry officials said Friday they hope the White House does not repeat last year's mistake of proposing deep cuts in government-funded oil and gas research.
President George W. Bush's budget last year reflected strong ideological differences between him and his predecessor, Bill Clinton. The Bush administration proposed dramatic research cuts on oil, gas, and renewable fuels in favor of clean coal technologies. Research for oil and gas was slated to fall by 50% from $112 million in 2001 to $51.5 million in fiscal 2002. (The government fiscal year begins Oct. 1.)
Congress, as the White House likely anticipated, later restored oil and gas funding close to 2001 levels under the Interior Appropriations bill.
That bill is one of 13 pieces of legislation that fund government programs. The Interior bill is of particular interest to industry because it earmarks money for several government oil and gas programs, including management of the Strategic Petroleum Reserve and fossil energy research at the Department of Energy (DOE).
On Monday, the White House starts the process over again when it unveils its proposal for fiscal 2003. Industry expects DOE's fossil energy research program will fare well because of the administration's promise to lower foreign oil imports, an issue also popular with oil-state lawmakers in an election year.
Industry is hopeful in the post Sept. 11 political environment, both Congress and the White House will be more receptive to government-funded oil and gas research, and perhaps even expand some programs, although new budget pressures may make that a difficult sell.
Nevertheless continued US government funding of oil and gas industry technology research is still needed, an invited panel of 18 industry representatives told DOE last August when the agency began preparing its budget request for the White House. DOE solicited industry advice on potential federal research programs (OGJ Online, Aug. 6, 2001).
Industry representatives at those meetings complained that some federal research programs are woefully under-funded and supervised by administrators who sometimes are not responsive to the industry's needs. And participation in government research programs is sometimes limited by corporate fears that they will be forced to give up proprietary information and technology, they said.
The argument industry will make to Congress this year is that more research will help build a stronger US oil industry, which in turn will increase national security by reducing reliance on foreign oil. Environmental groups meanwhile will want to see Congress use those same funds for alternative fuel research instead of for fossil fuels.
Industry is also hoping the Department of Interior will add money to the Bureau of Land Management's budget so the agency can hire more staff to review permits. Understaffing is one reason why the permitting process takes so long, industry officials say. Industry also endorses an administration initiative to streamline permitting by various agencies.
Lobbyists also expect lawmakers to attempt to attach policy legislation as "riders" on spending bills, a tactic increasingly used for back-door lawmaking, 1 year at a time (OGJ, Apr. 26, 1999, p.34).
This year will be no different, congressional staff members say. Although Congress may not be able to pass a broad energy reform bill as a stand-alone bill because it is so controversial, individual measures, such as energy tax incentives to expand domestic production, may be added to a spending bill working its way through the Congress.
Contact Maureen Lorenzetti at [email protected].
