Senate energy leaders voice concerns in budget requests

US Senate energy leaders have formally raised questions about oil and natural gas-related aspects of President George W. Bush administration's proposed fiscal 2008 budgets for the Departments of Energy and the Interior.

Mar 5th, 2007

Nick Snow
Washington Correspondent

WASHINGTON, DC, Mar. 5 -- US Senate energy leaders have formally raised questions about oil and natural gas-related aspects of President George W. Bush administration's proposed fiscal 2008 budgets for the Departments of Energy and the Interior.

Energy and Natural Resources Committee Chairman Jeff Bingaman (D-NM) and Ranking Minority Member Pete V. Domenici (R-NM) cited proposals to double the Strategic Petroleum Reserve's size and eliminate funding for oil and gas, geothermal, and hydroelectric research and development in DOE's budget request.

In a Feb. 28 letter to Budget Committee Chairman Kent Conrad (D-ND) and Ranking Minority Member Judd Gregg (R-NH), Bingaman and Domenici also questioned proposals in DOI's budget request to authorize oil and gas leasing within the Arctic National Wildlife Refuge and to repeal portions of the 2005 Energy Policy Act related to funding for processing of drilling permit applications on federal lands.

Their letter was required under Senate rules for each committee to provide views and estimates annually of programs under its jurisdiction to the Budget Committee.

Of the proposal to double the SPR's size, Bingaman and Domenici wrote, "We will need to look closely at the need for a larger reserve, its cost, its impact on world markets, and its effect on oil and gasoline prices, before we authorize any such expansion."

They also said they believe that eliminating R&D funding for oil and gas and other traditional energy sources "will compromise efforts to fully develop our domestic energy resources." Administration officials have said they do not believe federal funding for oil and gas R&D is justified because prices for the commodities have grown dramatically the past few years.

Regarding the ANWR proposal in DOI's budget request, Bingaman and Domenici noted that the Energy Committee and the Senate overall are deeply divided over the issue, but added that they do not consider it likely that the 110th Congress will approve the plan.

They listed the drilling permit application processing proposal with three others involving cuts or changes. The others were proposed reductions of Land and Water Conservation Fund support to its lowest point in history, of Payments in Lieu of Taxes and of water programs at the US Bureau of Reclamation and US Geological Survey.

Bingaman and Domenici also expressed their concern over omissions of price thresholds from federal deepwater Gulf of Mexico oil and gas leases that were issued in 1998 and 1999. They said that the omissions may result in billions of oil and gas royalty payments being lost and indicated that the committee would look it ways to mitigate such losses.

The committee also will consider additional legislation this year to reduce US dependence on foreign oil by promoting the use of new energy technologies, they said. "It is important that the budget resolution accommodate the necessary funding to allow the committee to report such legislation. We urge the Budget Committee to include a deficit neutral reserve fund in the budget resolution to accommodate such legislation," Bingaman and Domenici said.

Contact Nick Snow at nsnow@cox.net.

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