Senate and House appropriators will get their turn this week to explore the Interior Department's 2012 budget request, which proposes a major boost in conservation funding and new fees on mineral extraction industries.

The agency's $12.23 billion proposal -- a slight $10 million increase over current levels -- also seeks to slash $1.1 billion in spending on information technology, procurement reform and travel, among other things. It would also impose significant cuts on construction at agencies including the Bureau of Land Management, National Park Service and Fish and Wildlife Service.

Interior Secretary Ken Salazar tomorrow and Wednesday will be asked to defend the agency's proposal to impose new fees on offshore oil and gas drillers to help offset the cost of regulating activity in the Gulf of Mexico in the wake of BP PLC's massive oil spill last April.

The agency is proposing raising inspections fees and establishing new fees on nonproducing oil and gas leases both on and offshore. The lease fees are projected to raise $25 million in 2012 and $874 million over the next decade, the agency notes.

The proposal gained support from leading Democrats in both chambers last week, including Rep. Ed Markey (D-Mass.), ranking member of the House Natural Resources Committee, who introduced legislation with Rep. Rush Holt (D-N.J.) that would authorize the proposed leasing fee.

Republicans and industry groups have bashed the fee-raising proposals and have suggested new funds should come from the billions of dollars in royalties operators already pay.

"The intent is to incentivize the beginning of activity, and if not, put it back so others can move forward with leases," Interior Deputy Secretary David Hayes said last week of the fee on nonproducing leases.

Rep. Mike Simpson (R-Idaho), who chairs the House subcommittee that funds Interior, last month told E&E that he was not opposed to raising fees on offshore oil and gas drillers but has not taken a position on the agency's specific proposal.

All told, the budget seeks $358 million for the Bureau of Ocean Energy Management, Regulation and Enforcement, a $134 million bump over current funding levels, in order to strengthen oversight and complete the restructuring of the former Minerals Management Service.

Simpson may also ask Salazar how he plans to address concerns raised by Government Accountability Office officials last week that Interior has failed to accurately track billions of dollars in royalties owed by companies that drill for federal minerals (Greenwire, March 1).

"It's a concern obviously for everyone on the committee," Simpson said. "I don't have the ideas to fix it, but it is certainly something we will ask the secretary about when he testifies before us."

Conservation funding

Interior's budget also requests a significant boost for the Land and Water Conservation Fund, the federal government's main vehicle for purchasing new lands and assisting states in buying lands and promoting recreation.

The requested $900 million -- the maximum allowed for LWCF -- would roughly double current funding levels and is a critical part of the Obama administration's Great Outdoors initiative to improve public lands access and connect youth to the outdoors.

But it faced opposition from the House Natural Resources Committee last week and, while supported by Senate Energy and Natural Resources Chairman Jeff Bingaman (D-N.M.), drew jeers from the ranking member of the committee, Sen. Lisa Murkowski (R-Alaska).

Simpson is viewed as an ally of public lands but will be hard-pressed to grant the administration's request given the broader opposition in his caucus to enlarging the federal estate.

Even under Democratic control in the last Congress, the Interior appropriations subcommittee proposed $518 million for LWCF for fiscal 2011, a $72 million cut from the president's request. The proposal was never made law.

Sen. Jack Reed (D-R.I.), chairman of the Senate subcommittee that funds Interior, has not spoken publicly about the agency's request for land acquisition. But he issued a statement earlier this year indicating that, despite tough fiscal times, he would place a high priority on funding for parks and museums.

Also up for debate

Appropriators may also debate other proposed changes in Interior's 2012 budget request, including a new leasing and royalty program for hardrock mines, which are prevalent in many Western states including Simpson's Idaho.

Western lawmakers have also criticized the administration's proposal to end funding to some states to cleanup abandoned coal mines and charge a new fee on hardrock mining companies that could be used to clean up mines in Eastern states (E&E Daily, Feb. 16).

Western lawmakers may also question a proposal to raise fees on BLM inspections on oil and gas wells on public lands. The proposal is expected to raise nearly $40 million a year and was also proposed for fiscal 2011.

Schedule: The hearing is tomorrow at 1 p.m. in 2359 Rayburn.

Witnesses: Ken Salazar, secretary, Department of Interior; David Hayes, deputy secretary, Department of the Interior; and Pamela Haze, deputy assistant secretary of budget, finance, performance and acquisition at Interior.

Schedule: The hearing is Wednesday, March 9, at 3 p.m. in 124 Dirksen.

Witnesses: To be determined.