President Trump unveiled a $1.15 trillion budget proposal on Thursday that includes a nearly one-third cut in funding to the U.S. Environmental Protection Agency (EPA), the elimination of more than 20% of the agency's workforce, and the termination of climate change programs, including the Clean Power Plan (CPP).
Meanwhile, the proposed budget also calls for a $1.5 billion cut in funding to the Department of Interior (DOI) and $1.7 billion less to the Department of Energy (DOE). But the cuts are smaller in proportion to those facing EPA.
And while the budget includes several items that should both thrill and dismay the oil and gas sector, it also elicited a sharp rebuke from a key Republican lawmaker -- DOI's budget includes increased funding for programs that support energy development on public lands and in the offshore, but the Trump administration also called for the elimination of the Low Income Home Energy Assistance Program (LIHEAP).
"The American people elected me to fight for their priorities in Washington, DC, and deliver on my promise to protect our nation," Trump said in a message that accompanied the budget's release. "I fully intend to keep that promise."
The budget, officially "America First: A Budget Blueprint to Make America Great Again," calls for $5.7 billion in funding to EPA, a reduction of $2.6 billion, or 31%. The cuts would result in the elimination of about 3,200 jobs at the agency, which currently employs about 15,000 people.
According to the budget, Trump's plan would "discontinue funding for the CPP, international climate change programs, climate change research and partnership programs, and related efforts," which would amount to more than $100 million in savings. "Consistent with the president's America First Energy Plan, the budget reorients EPA's air program to protect the air we breathe without unduly burdening the American economy."
The budget also calls for slashing the budget of EPA's Office of Enforcement and Compliance Assurance to $419 million, a reduction of $129 million. The cut was justified to help the federal government "[avoid] duplication by concentrating EPA's enforcement of environmental protection violations on programs that are not delegated to states, while providing oversight to maintain consistency and assistance across state, local and tribal programs."
Under the budget, EPA's Office of Research and Development would have its budget slashed by $233 million to $250 million. It also calls for the elimination of more than 50 EPA programs, including the popular Energy Star program.
"We are going to do more with less, and make the government lean and accountable to the people," Trump said. "Many other government agencies and departments will also experience cuts. These cuts are sensible and rational. Every agency and department will be driven to achieve greater efficiency and to eliminate wasteful spending in carrying out their honorable service to the American people."
The budget calls for a $54 billion increase in defense spending, which would be offset by deep cuts in foreign aid and domestic programs. The plan appears identical to an earlier draft of the budget that the White House's Office of Management and Budget shared with Congress last month.
Cuts at DOI and DOE; LIHEAP eliminated
Under the proposed budget, DOI would receive $11.6 billion, a reduction of $1.5 billion from current funding levels, or 12%. The budget "requests an increase in funding for core energy development programs," but also advocates the elimination of funding "for unnecessary or duplicative programs while reducing funds for lower priority activities, such as acquiring new lands."
In a clear nod to energy development and the wishes of the oil and gas industry, the budget calls for strengthening DOI programs "that support environmentally responsible development of energy on public lands and offshore waters.
"Combined with administrative reforms already in progress, this would allow DOI to streamline permitting processes and provide industry with access to the energy resources America needs, while ensuring taxpayers receive a fair return from the development of these public resources."
The DOI budget calls for maintaining funding to its Office of Natural Resources Revenue, while also supporting the "stewardship capacity for land management operations of the National Park Service, Fish and Wildlife Service and Bureau of Land Management."
At the DOE, the proposed budget calls for $28 billion in funding, a $1.7 billion (5.6%) decrease.
"The budget for DOE demonstrates the administration's commitment to reasserting the proper role of what has become a sprawling federal government and reducing deficit spending," a statement that accompanied the budget said. "It reflects an increased reliance on the private sector to fund later-stage research, development, and commercialization of energy technologies and focuses resources toward early-stage research and development. It emphasizes energy technologies best positioned to enable American energy independence and domestic job-growth in the near to mid-term."
In the budget for the Department of Health and Human Services (HHS), the Trump administration called for the elimination of discretionary programs within the HHS's Office of Community Services, including LIHEAP.
"Compared to other income support programs that serve similar populations, LIHEAP is a lower-impact program and is unable to demonstrate strong performance outcomes," the budget said.
Although reaction to the proposed budget followed a familiar narrative, Sen. Lisa Murkowski (R-AK), chairman of the Senate Energy and Natural Resources Committee, issued stinging criticism of some of the changes.
"This budget request is the first step in a long process through which Congress decides which programs to fund and how much funding those programs should receive," Murkowski said Thursday. "The president's budget expresses his priorities, and we will consider them, but it is the congressional budget and appropriations committees that will establish our priorities and fund them over the coming months."
But she added that while she supports continuing streamlining at EPA, "I cannot support many of the proposed cuts in this 'skinny' budget. Programs like Essential Air Service, LIHEAP, and water and wastewater programs are critical to the health, welfare, and safety of Alaskans, especially those in our remote, rural communities. We need to remember that these programs are not the primary drivers of our debt, and to look at the full budget to find the best ways to reduce federal spending."
The American Petroleum Institute (API) had a measured response. "This is the beginning of a long budget process and the president has provided a clear outline of his priorities," API told NGI's Shale Daily on Thursday. “We look forward to working with the administration and Congress as all of these issues work their way through the budget process."
Thomas Pyle, president of the American Energy Alliance, issued a lengthy response. On the cuts to EPA, Pyle said Trump "is sending a clear message that the EPA will no longer waste taxpayer dollars to carry out the previous administration's climate action plan.
"The argument that this proposal would keep EPA from doing its job holds no water. President Trump's budget blueprint will not only eliminate wasteful spending at EPA, but will also allow the agency to return to a more constructive relationship with states and the private sector in ensuring that our air is pure and our water is clean and safe."
Pyle added that DOI "has an obligation to ensure that the American people enjoy the full benefits of their public lands, whether it be from recreation or resource development.
"Under the previous administration, the DOI adopted a 'keep-it-in-the-ground' approach that prevented the responsible development of our energy resources, especially natural gas, oil, and coal. On top of this, the DOI has wasted precious time and resources to acquire even more federal lands or put existing lands further and further off limits. President Trump's DOI proposal will address the backlog of maintenance needs at our national parks and streamline the process for responsible energy development on multiple-use lands, both onshore and offshore."
The American Gas Association (AGA) said the proposed budget doesn’t “tell a complete story” because it only includes top-line funding numbers for government agencies. But it promised to follow the budget process closely.
“Tough choices will be made [by Congress],” the AGA told NGI’s Shale Daily. “AGA supports the elimination of duplicative and wasteful programs and the streamlining of programs that can be made more cost effective. We look forward to working with the administration and Congressional appropriators to help ensure that the right cuts are made to help agencies like the EPA and the DOE support their vital core mission and deliver greater value to American taxpayers more efficiently.
“We will also continue to advocate for funding for important initiatives that help low income Americans such as LIHEAP through our membership in the National Energy and Utility Affordability Coalition.”
But Steve Nadel, executive director of the American Council for an Energy-Efficient Economy, said Trump's budget proposal "will raise Americans' energy bills and kill jobs," and he lamented the loss of programs such as Energy Star.
"The fact is, these programs produce a huge windfall for all Americans -- saving us billions of dollars in energy bills, making businesses more competitive, reducing air pollution, and creating millions of U.S. jobs," Nadel said. "All of these gains could be lost under the president's proposal."
In a note to clients on Thursday, ClearView Energy Partners LLC said it believes the 'skinny' budget reflects policy statements by the Trump administration and is not necessarily indicative of any project plans.
"This seems particularly likely given the narrow 52-48 Republican Senate majority and the 60-vote threshold required to [overcoming] a filibuster," said Christi Tezak, managing director at ClearView.