APPROPRIATIONS:

Senate envisions Interior, EPA budget that improves drilling safety

The Senate's omnibus appropriations bill for the Interior Department and U.S. EPA would push key Obama administration goals of improving the safety of offshore and onshore oil and gas drilling through extended reviews, more inspection personnel and new industry fees to pay for them.

The $32.2 billion bill would flatline the agencies' funding at fiscal 2010 levels, but increased inspection fees for offshore drilling would raise an additional $50 million for Interior's Bureau of Ocean Energy Management, Regulation and Enforcement -- enough to double the outer continental shelf oil and gas inspection work force.

The measure partially fulfills a $100 million supplemental request from the Obama administration earlier this year as part of its response to BP PLC's massive oil spill in the Gulf of Mexico this April.

The new funding would be raised by fees on oil companies ranging from $12,000 to $36,000 depending on the type of platform and number of operating wells.

The bill also implements new inspection fees for onshore oil and gas developers who lease federal lands, a key part of Interior Secretary Ken Salazar's fiscal 2011 pitch to appropriators earlier this year.

Those fees range from $300 to $3,000 depending on whether a lease is producing and the number of wells in operation.

"I don't think any of these fees we're talking about here are going to put anybody out of business," Salazar told a Senate panel in March (E&E Daily, March 4).

The new fees are expected to help offset a doubling in funding for the Bureau of Land Management's oil and gas inspection and enforcement program from $10 million to $20 million in the next fiscal year, said Dave Alberswerth, the Wilderness Society's senior policy adviser on energy issues.

"This is in line with the request BLM made to make their inspection and enforcement program more muscular," said Alberswerth, who supports the fees. "It's obvious they've gotten the ear of the appropriators."

Offshore permit reviews

The omnibus bill also contains a controversial provision from a House-passed spending measure last week to triple the amount of time Interior is allowed to approve offshore drilling proposals.

The measure -- extending drilling permit reviews from 30 days to 90 days -- is backed by the Obama administration and key Senate Democrats as a way to allow fuller reviews of offshore drilling in the wake of the BP spill.

"Review of exploration plans should not be a perfunctory, rubber-stamp activity," Bill Wicker, spokesman for Senate Energy and Natural Resources Chairman Jeff Bingaman (D-N.M.) said this week. "These plans are complicated, they're complex and they're critical."

But the proposal has also drawn fire from several Senate Republicans and some coastal state lawmakers who contend that it would delay domestic energy production and create additional opportunities for lawsuits both from industry and environmental groups.

The Senate spending bill would also codify the reorganization of the former Minerals Management Service into three separate agencies to separate environmental oversight from the collection of billions of dollars in royalties and leasing revenues generated in federal waters.

Montana wilderness bill

The bill also includes a sweeping public lands proposal for Montana that would designate new wilderness and dedicated off-highway vehicle areas and create a pilot program to revive the state's timber economy.

Montana Sen. Jon Tester's (D) "Forest Jobs and Recreation Act" would require the removal of at least 100,000 acres of timber over the next 15 years and designate more than 600,000 acres of new wilderness in the state.

The bill failed to pass the Energy and Natural Resources Committee amid opposition from Bingaman to the timber removal mandate. The provision drew early concern from the Forest Service at a committee hearing in December 2009, but Agriculture Secretary Tom Vilsack this fall said Tester's timber mandate was "ambitious, but sustainable."

The bill is supported by environmental groups including the Montana Wilderness Association, the National Wildlife Federation and Trout Unlimited, as well as timber companies and recreation outfitters -- an unlikely partnership that could help make the bill a "model" for other public lands proposals, Vilsack said.

"Jon's pleased that his Senate colleagues agree it's time to put the Forest Jobs and Recreation Act up for a vote," said Tester spokesman Aaron Murphy. "This is just another step in what has been a year-and-a-half-long process to create jobs in Montana."

But, he added, "Nothing is final until this bill is passed by the full Congress and is signed into law."

Funding for EPA

Compared to the White House request, the Senate omnibus package would pull less money away from the federal programs that issue most of the EPA's rules and regulations -- and which are also the agency's most controversial efforts.

Those programs would get $2.93 billion under the Senate proposal, a decrease of $66.8 million from fiscal 2010 but about $36 million more than the White House requested. The Senate package would set aside $6 million more than a House Appropriations subcommittee did this summer when it approved a budget for EPA.

The amounts are a small slice of a proposed $10 billion budget. But while these programs are cheap compared to some of EPA's other work, they have an outsized impact on the policies that come out of the agency, the Congressional Research Service wrote in a June report.

The level of funding for federal efforts such as EPA's new greenhouse gas regulations and the controversial proposed changes to the nationwide smog standards drew criticism from Republicans this summer when the panel approved funding for EPA and Interior. That proposed budget, which has not been approved by the full spending panel, showed that EPA is the "favored child" of the Democratic leadership, said Idaho Rep. Mike Simpson, the subcommittee's top Republican.

"The EPA has wasted little time in using record budgets to impose new regulations that are at best ridiculous and at worst making it even more challenging for Americans to survive in an already fragile economy," he said (E&E Daily, July 23).

Overall, the omnibus proposal would give EPA $10 billion for fiscal 2011, a $275 million decrease from fiscal 2010 but $26 million more than the White House is seeking. Like the president's request, the Senate proposal would make most of its cuts to the State and Tribal Assistance Grants program, which funds infrastructure grants and the operations of state and local environmental agencies.

Once Republicans are back in the majority in Congress next year, the federal programs will likely be prime targets for critics of EPA's new rules. But in the current appropriations cycle, they could draw amendments to block or delay the agency's authority to address climate change.

Sen. Jay Rockefeller (D-W.Va.) has pegged an appropriations omnibus as the ideal bill for a rider that would stop some of the agency's new greenhouse gas regulations from taking effect next month. A Rockefeller spokesman could not be reached for comment yesterday.

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