WASHINGTON, D.C. – US President Barack Obama’s fiscal year 2017 (FY 2017) budget includes requests to strengthen the coffers of two of the country’s regulatory bodies.
For BSEE, that is an increase of $196,000 over the FY 2016 enacted level, and includes $96.34 million in current appropriations and $108.53 million in revenue from rental receipts, cost recoveries, and inspection fees.
BSEE Director Brian Salerno said: “The president’s proposed FY 2017 budget fully reflects the administration’s continued emphasis on ensuring the safe and responsible development of the nation’s offshore energy resources. The president’s request supports BSEE’s efforts to build a robust culture of safety, with a strong focus on risk reduction to protect lives and the environment.
“The bureau uses a comprehensive program of regulations, compliance monitoring and enforcement, technical assessments, inspections, and incident investigations to mitigate and reduce risk.”
BOEM will see an increase of $4.1 million over the FY 2016 enacted level.
BOEM Director Abigail Ross Hopper said: “The president’s budget request for BOEM will support ongoing efforts and important initiatives that are vital to our mission and critical to advancing administration priorities. This request reflects the resources and personnel needed to develop our capacity and to carry out our mission carefully, responsibly, and efficiently.”
The president’s FY17 budget request for the BOEM focuses on core program responsibilities, such as the Five Year Outer Continental Shelf Oil and Gas Program, oil and gas exploration and development plans, offshore renewable energy, and environmental analysis and studies.
In FY 2014, the bureau initiated an effort to expand its financial assurance and risk management capability by updating regulations that address the growing cost of decommissioning. This program is an effort to update requirements and develop a comprehensive program to assist in identifying, prioritizing, and managing the risks associated with industry activities on the outer continental shelf.
In FY 2017, the president’s budget request includes funding for 15 additional employees with specialized skillsets to aid in enhancing BOEM’s capacity to identify, analyze, and mitigate financial risk and liability. The bureau said that its Risk Management Program has the potential to save US taxpayers from billions in contingent liabilities that could result from industry bankruptcies and associated decommissioning costs, as it says that estimated total liabilities in the Gulf of Mexico could be as high as $38 billion. Combined with the resources provided by Congress in FY 2016, the requested funding will bring the program to full staffing capacity.
The president’s 2017 request also includes additional resources to support critical resource evaluation and plan review activities and to enable BOEM’s continued emphasis on environmental stewardship. Despite the down market, the bureau said that its responsibilities and associated workload have not diminished.
While activity in shallow water has decreased in recent years, deepwater activity has remained robust, and – according to the US Energy Information Administration – deepwater oil and natural gas production will continue to increase over the coming decade. BOEM anticipates that this increased deepwater production will be accompanied by a corresponding increase in associated plan reviews and environmental work.
Finally, the 2017 request seeks to raise awareness of a looming fiscal challenge: the projected decline in offsetting rental revenue. The rental offsets that fund a significant portion of BOEM and BSEE programs are anticipated to decline fairly abruptly beginning in FY 2017, and according to projections, the shortfall could be as large as $82 million by 2025.
Although the president’s budget proposes a solution to this challenge in 2017, a more comprehensive long-term solution will be necessary to ensure that both BOEM and BSEE can continue to carry out their respective missions, the BOEM concluded.
The FY 2017 budget also supports research and the development of new technologies and scientific investments to best manage the country’s offshore energy resources, BSEE said. The request includes $190 million for offshore safety and environmental enforcement programs.
The bureau is also working collaboratively with BOEM to establish appropriate permitting and oversight processes for offshore renewable energy projects. The FY 2017 proposal includes $14.9 million for oil spill research, equal to the 2016 request level, to address key knowledge and technology gaps, focusing research on deepwater and Arctic environments.
The oil spill research program plays a pivotal role in initiating applied research to support decision making to prevent or mitigate oil spills, which is a critical component of the offshore permitting process, BSEE noted. Funds are used to sponsor testing of new equipment or methods and also to support the bureau’s oil spill and renewable energy test facility, Ohmsett.
The president’s FY2017 budget request of $13.4 billion for the Department of the Interior reflects his commitment to responsibly managing energy development on public lands and offshore waters, conserving vital national landscapes across the nation, meeting federal trust responsibilities to Native Americans, and supporting the next century of our public lands, BSEE said.