Obama’s fiscal 2017 plan would raise oil, gas regulators’ budgets

Agencies across the federal government that regulate oil and gas activity would receive more money to enforce regulations and implement programs to increase clean-energy alternatives under US President Barack Obama’s proposed fiscal 2017 budget.

“This is a smart, innovative, and forward-looking budget that invests in Interior’s key missions—now and in the future—so we can continue to serve the American people,” Sec. of the Interior Sally Jewell said during a Feb. 9 briefing on the $13.4 billion that DOI would receive.

Within DOI, allocations would be $1.3 billion for the US Bureau of Land Management, $204.9 million for the US Bureau of Safety and Environmental Enforcement, $175.1 million for the US Bureau of Ocean Energy Management, $1.6 billion for the US Fish and Wildlife Service (FWS), and $1.2 billion for the US Geological Survey (USGS).

BLM’s allocation would include $19 million more than fiscal 2016’s enacted amount to for priorities which include:

• Instituting new procedures for oil and gas producers to measure volumes they extract from public lands.

• Implementing stronger regulations to curb methane releases from oil and gas operations.

• Implementing the agency’s hydraulic fracturing rule.

• Modernizing BLM’s Automated Fluid Minerals Support System.

• Addressing legacy wells on Alaska’s North Slope (ANS).

• Funding special pay for certain oil and gas staff positions to improve employee recruitment and retention.

The agency also would receive an additional $14.2 million for greater sage grouse conservation, bringing to $74.2 million BLM’s total investment in protecting and restoring the bird’s habitat over 11 western states.

BLM was part of an unprecedented collaboration which included other federal agencies, state fish and game departments, local communities, oil and gas producers, ranchers, recreation groups, and other stakeholders whose voluntary habitat conservation efforts made it unnecessary for FWS to list the greater sage grouse as a threatened or endangered species in 2015 (OGJ Online, Sept. 22, 2015).

BSEE’s $204.87 million would be $196,000 more than fiscal 2016’s enacted level and includes $96.34 million in current appropriations and $108.53 million in revenue from rental receipts, cost recoveries, and inspection fees.

The request includes $190 million for offshore safety and environmental enforcement programs. BSEE is also with BOEM to establish appropriate permitting and oversight processes for offshore renewable energy projects, the agency said.

The fiscal 2017 proposal includes $14.9 million for oil-spill research, equal to what was requested in 2016, to address key knowledge and technology gaps, focusing research on deepwater and Arctic environments.

Proposed USGS, FWS budgets

Of the $1.2 billion USGS would receive under the administration’s proposed fiscal 2017 federal budget, $99.5 million goes to Energy and Mineral Resources and Environmental Health. This would be $1.6 million more than fiscal 2016 enacted amount.

The Energy Resources Program’s proposed $1.4 million increase includes funds for unconventional oil and gas (UOG) research and assessments, evaluation of waters produced during UOG development, and assessments of undiscovered UOG on ANS.

It also funds scientific data-gathering needed for other domestic assessments of shale and tight oil and gas, geothermal energy research to support land management decisions about alternative energy permitting on federal lands, and the application of an ecosystem services approach to enhance coastal infrastructure resilience and evaluate green infrastructure investments. These increases are partially offset by reductions to lower priority programs, USGS said.

The $1.6-billion budget request for FWS is $54.5 million more than fiscal 2016’s enacted amount, and complements about $1.5 billion in permanent appropriations, most of which goes directly to states to support their fish and wildlife conservation and outdoor recreation programs.

It includes an additional $3 million for review of restoration projects in the Gulf of Mexico funded by a settlement reached following the 2010 Macondo deepwater well blowout and subsequent oil spill.

Proposed budget for EPA

The administration’s fiscal 2017 budget request allocated $8.267 billion for the US Environmental Protection Agency, $127 million more than the agency’s enacted level for 2016.

The agency’s budget request includes $235 million for efforts to cut carbon and other greenhouse gas emissions through standards, guidelines, and voluntary programs. EPA said its Clean Power Plan, which establishes carbon pollution reduction standards for existing power plants, is a top priority. It said CPP’s implementation “will involve innovative approaches and flexibility for achieving solutions, as well as extensive and unprecedented work with states, tribes and territories.” The budget seeks $25 million in grants to help states implement their CPP strategies.

In a 5-4 vote on Feb. 9, the US Supreme Court ordered the Obama administration to hold off efforts to implement the CPP. The stay was not the last word because the court will probably get the case back after an appeals court considers an expedited challenge by 29 states and several corporations and industry groups, the New York Times reported.

As part of its 21st Century Clean Transportation Plan, EPA said the administration proposed establishing a mandatory fund at the agency which would provide $1.65 billion over 10 years to retrofit, replace, or repower diesel equipment. The proposed funding, which is separate from the agency’s discretionary funding request, would provide up to $300 million in fiscal 2017 to renew and increase funding for the Diesel Emissions Reduction Grant Program, which is due to expire in 2016.

Budget requests for PHMSA

At the US Department of Transportation, which would receive $98.1 billion under the fiscal 2017 budget request, the US Pipeline and Hazardous Materials Safety Administration gets $295.2 million, $45.6 million more than the enacted 2016 amount.

Of that amount, $176.4 million is allocated for pipeline safety, including $7.6 million to hire inspectors and other employees, $5.8 million to add a pipeline safety information sharing system, and $5.5 million for grants and research and development. It also includes $2 million for a new fee which will let PHMSA assess pipeline owners and developers for costs to review pipeline designs where projects cost at least $2.5 billion or when projects use new or novel technologies or designs.

PHMSA’s proposed budget also allocated $68.2 million for hazardous materials safety, including $5.3 million for safe energy product transportation by rail. A primarily focus will be on preventing accidents involving flammable liquids releases and addressing findings by the US National Transportation Safety Board and the Canadian Transportation Safety Board from recent incidents in North Dakota, Quebec, and Alabama.

The US Department of Energy’s proposed $32.5 billion budget would commit $5.9 billion in discretionary funds to support a commitment announced at the beginning of the Paris climate negotiations to accelerate private and global clean energy innovation. Of another $1.5 billion in mandatory clean energy development and deployment funding, $1.3 billion is for advanced clean transportation ($11.3 billion over 10 years) and $150 million for the Advanced Research Projects Agency-Energy ($1.85 billion over 5 years).

Contact Nick Snow at nicks@pennwell.com.

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