Reporter Roundtable:

Reporters take a look at fiscal year 2006 numbers, oil drilling in ANWR, ESA, more

E&E Daily and Greenwire reporters take a look at the Bush administration's fiscal year 2006 budget proposal as it relates to environment and energy policy. They offer their opinions on what effect the proposed budget changes will have on federal agencies, including EPA, DOE and the Interior Department. They also examine, in light of the President's new funding numbers, the outlook for specific hot-topic issues, including oil drilling in ANWR, renewable energy R&D funding, and the Endangered Species Act.

Transcript

Colin Sullivan: Today we're joined by Ben Geman, Dan Berman and Darren Samuelsohn all reporters with E&E Daily and Greenwire to talk about the FY '06 budget proposal submitted by the White House today to Capitol Hill. Darren Samuelsohn, I'd like to first start with EPA. The president proposed cutting EPA by $450 million do you think that cut will stand up when it goes to Capitol Hill?

Darren Samuelsohn: It'll stand on some degrees, and it'll be restored in others. It's a tricky answer to the question, because Congress will resist on the earmarks that the president has proposed ripping out of last year's budget. Congress will try and put some of the money back in for the Clean Water State Revolving Loan Fund, the biggest thing that was cut out of EPA's budget. But will Republican leaders allow EPA and that whole budget to go that far above and try and busy caps, you know, budget caps? That's a good question and I think Republicans are angling to try and, you know, maintain some fiscal discipline.

Colin Sullivan: Now the acting EPA administrator justified the cuts by saying, "We removed the congressional earmarks." Is that sort of a nonsense justification for what's going on? Are those earmarks just going to be put back in when it goes up to the Hill?

Darren Samuelsohn: When you look back at every EPA budget that I've covered and you know the administrator, Whitman, Levitt and now Steve Johnson have said, you know, that that's their major justification for their cut that they've proposed year in and year out from what was enacted the year before. Congress typically likes to say that they know, you know, their jurisdictions the best and on these particular water projects they're going to fight pretty hard to get them back in.

Colin Sullivan: Right. Ben Geman, if we can turn to you, one of the more controversial items in the budget this year is assumed drilling revenue from the Arctic National Wildlife Refuge. Are you surprised that was included? Is that sort of standard operating procedure and how's that going to go forward?

Ben Geman: No, it's not surprising that was included, what is going to be interesting is how it goes forward in this budget cycle as compared to last budget cycles. The administration is assuming about $2.4 billion in revenues from leasing and ANWR. That money would start to come in in 2007. Now a question is whether or not that's going to survive in the Senate. In past years there hasn't been the votes, but with the election of several more pro-drilling members it looks like it has a much stronger chance this time.

Colin Sullivan: So this is sort of standard procedure that they would assume it through the budget and then try to pass it. Now do we expect them to go through budget reconciliation and try to move ANWR that way?

Ben Geman: That's what we're seeing on the Senate side. That's the only way it could survive on the Senate side, because of course budget legislation cannot be filibustered under Senate rules. Whereas, doing ANWR through an energy package it would be pretty much a nonstarter because they just haven't got 60 votes in favor.

Colin Sullivan: Now across-the-board environment energy spending was pretty much cut, but when we look at the Energy Department there was a slight increase. Can you talk about some of the programs that were actually increased, like nuclear power?

Ben Geman: Sure, sure. I mean, overall the Department of Energy it's about a $23 or $23.4 billion budget. That's about half a billion, actually, less than in fiscal year '05, but the cuts weren't even, what was added, what was cut wasn't evenly distributed. You know, there was a lot of attention real recently because the president has really been talking up the need for new nuclear power and he kind of, this budget sort of walks the walk because it does seek a big increase for some pretty important nuclear power programs.

Colin Sullivan: As opposed to the Interior Department, Dan Berman, which is down, were you surprised to see that the Interior Department was cut and where was it cut?

Dan Berman: The Interior Department was cut about 1 percent, but some of the more dramatic cuts came in the area of land conservation. Specifically, the land and water conservation fund, stateside grants. It's a $90 million program. It's very popular in Congress, has a lot of friends there, but the administration decided to zero it out. Interior Secretary Gale Norton said that the department wants to focus on interior priorities and federal priorities and even though these areas help conserve a lot of land in states and communities, it's, you know, not a federal priority. It helps local communities more and Secretary Norton feels the money is better spent on federal lands.

Colin Sullivan: What about cuts to the Forest Service? Where do those cuts come in?

Dan Berman: A lot of the Forest Service cuts came in the area of state fire grants. Once again it's, you know, the idea of the federal government giving grants or lending assistance to communities, you know, just in terms of fighting wild land fires and doing some restoration work around that, it was about a 26 percent cut overall. But once again, you know, with the popularity of these programs in local areas they're likely to be restored by Congress.

Colin Sullivan: OK. Darren Samuelsohn, I know the reactions are still coming in, but how are some environmentalists reacting to these cuts across the board to the environmental programs?

Darren Samuelsohn: The first reaction of course is, you know, EPA's budget has been cut by $450 million, so they're saying this is reflective of the administration's environmental priorities. Specifically, on water issues here, primarily is where the cuts are. They're saying, and the industry as well is reacting too, the sewage industry, the wastewater and the drinking water folks who, you know, are relying on federal loans to support improvements to infrastructure, all reacting, saying that this is a very, a devastating cut is pretty much the reaction from the environmental groups and also from the industry folks who are expecting the Clean State Water Revolving Loan Fund to be ramping up. It has stayed about $1.2, $1.3 billion over the last two or three years. Last year it was cut, it was taken down to just over $1 billion and now Bush is requesting it go down to $750 million.

Colin Sullivan: So nobody's happy?

Darren Samuelsohn: Nobody's happy, except for the fiscal hardliners in the administration, yeah.

Colin Sullivan: OK. Going back to you, Ben, can we talk about some of the oil and gas programs R&D funding that was completely eliminated --

Ben Geman: Right.

Colin Sullivan: As part of the president's budget?

Ben Geman: Yeah, speaking of people not being happy. There is a, some of these programs, to spur research into newer technologies to increase domestic oil and gas production, some of these drilling technologies programs, the administration has said, "You know what, we're just going to phase out these programs. This is the last year they're going to get funded." We've already got some people up on the Hill saying they're angry about this. You know, this is a little bit of the push-me pull-me that's happened before. The administration proposed at least a big cut to these programs last year and it was, the money was basically restored by the Senate. But one thing that was sort of interesting about this is during the budget rollout earlier today, this afternoon, you had Department of Energy officials saying that because these programs got poor reviews under something called the Program Assessment Rating Tool, which is a White House sort of tool for assessing the strength of federal programs, they were using that as a rationale for saying, "OK it's appropriate to cut them." There's going to be a big fight about that because the administration is also saying the private sector can fund this, but you got a lot of domestic oil and gas producers, at least the small guys, saying, "We can't."

Colin Sullivan: What about other functions, like renewable energy function, what's going on there?

Ben Geman: That was kind of a mixed bag. Renewable energy, some of the programs on the power generation side either were up a little or down a little. Solar and wind, I believe wind was up a tiny little bit, solar maybe down a tad. They're cutting out a hydro program completely. They're also cutting back on the transportation fuel side, on bio fuels.

Colin Sullivan: OK. Turning to some policy things, Dan Berman, there is a proposal in the Interior portion of the budget to transfer proceeds from Nevada land sales to the federal treasury. How is that going to be receiving and can you give me some details on that proposal?

Dan Berman: Well, it's already been received and depending on who you ask it's already been, you know, it's a nonstarter. You know the problem with, they're fooling around with proceeds from land sales in Nevada and so they've already run into a minority leader, Harry Reid, over in the Senate. The problem is this is a, has raised nearly $2 billion in the six years since the program was enacted and it was promoted to Nevadans as they're selling off federal lands to developers, but they're keeping all the proceeds in state. Well now the problem is they've raised far more money than they expected to and Interior hasn't been able to spend it all. So they figure well, if we're not spending all the money there, we might as well try to take a chunk out of it.

Colin Sullivan: Um-hmm. What else is going on? I mean, in terms of endangered species recovery funds there was some language in there addressing ESA, there was a reduction of $5.5 million. How is that likely to reform efforts to list endangered species?

Dan Berman: Well, I mean you know any time they're cutting the budget of endangered species recovery, it's likely to help arguments by House Resources Chairman Richard Pombo and others who feel that species are, you know, being put on the endangered species list, but they never get removed from the list. They're always there. I asked Secretary Norton about this and she said that while the recovery budget itself has been cut by a million dollars, there's at least $10 million in various other programs, land conservation programs, grant programs, habitat conservation programs elsewhere in the budget that have the same effect of helping species recovery, but it just isn't listed specifically as recovered.

Colin Sullivan: OK. Darren, there was some increases in the EPA budget. Where were those increases seen?

Darren Samuelsohn: Increases were seen, I guess, in the science and technology program, which is all the research that they do into everything from particulate matter health effects to global warming to water quality, drinking water quality. So the science and technology account got a slight bump. Superfund got a slight increase from last year as well. The EPA says that they're focusing on the hardest sites I guess is what their primary focus is on. Brownfields got a little bit of an increase. Great Lakes sediment cleanup got an increase, but these are all, you know, the last ones that I mentioned, are smaller programs, $20, $30 million a piece.

Colin Sullivan: What about something like Everglades's restoration? Do you have any number on where that is?

Darren Samuelsohn: No, I don't have those numbers.

Colin Sullivan: OK, Ben, can we turn to environmental cleanup? Can you give us an update on what's going on in the environmental cleanup program?

Ben Geman: Sure, sure. I mean, looking at the DOE budget overall for a second, one nice way to think about it is security funding up, cleanup funding down. You know, obviously there's a huge legacy pollution problem within the Department of Energy nuclear science areas where there was nuclear weapons material produced, there was a fairly sharp decrease in funding for those programs and we're already seeing environmental groups saying it's just not acceptable. Now, to be fair on what DOE said this afternoon is that there's a very good reason to cut some of these programs. They said in part it's because of tough budgetary choices, but also because they're really, according to DOE, moving forward on the closure of some of these sites and getting closer to completion of the cleanup and that it's only natural that you would see a reduction in those funding, in those funds, but it is a fairly steep cut.

Colin Sullivan: Now kind of lurking all over this there's a shadow over the appropriations process on Capitol Hill. There's this reorganization plan that Tom DeLay and Jerry Lewis in the House are putting forward. Do you have any indication how that shakeup is likely to affect these budget proposals going forward? Is it just going to make it very confusing until they figure that out?

Darren Samuelsohn: It's probably going to be confusing for a little while longer. I think House leaders say that they're going to come out with a proposal later this week, and I think the Senate, this is going to be something that may be there's going to be an agreement on, on changing it from 13 subcommittees, which is what we currently have, down to a number, the House wants to take it all the way down to 10. But you know, the budget process will work itself out here in the next couple of weeks. We'll work our way towards a budget resolution on April 15. So the appropriations committees will start holding hearings. It's going to be confusing until we know exactly where does the EPA go? Does it become part of the Interior budget? Does the Army Corps become part of the Interior budget? What's in energy and water? All of these things, all of the budgets that we cover are going to be kind of up in the air until we get a clear reading from leaders.

Colin Sullivan: Dan Berman, the Interior budget, the appropriations process, is one of the subcommittees that might be affected. Do you have any take on how those programs that come under Interior might be, if they're all rolled into one are environmentalists concerned that that would be a more effective way for Republicans to cut environmental programs across the board?

Dan Berman: Yeah. That's a concern, but the concern also lies more where if you put, you know, the Interior Department and EPA into one pot they're concerned that, you know, since Congress is going to be so interested in restoring a lot of the earmarks that Darren talked about that, you know, that may come at the expense of various Interior agencies. Since they'll have a limited budget allocation to draw from many of the members may have to focus more on EPA programs or even Army Corps programs, rather than Interior programs.

Colin Sullivan: OK. Well, we'll have that be the last word. Darren Samuelsohn, Dan Berman, Ben Geman thank you all for joining us. Join us tomorrow for another edition of OnPoint.

[End of Audio]

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