A House Appropriations subcommittee last Thursday voted out a $27.5 billion spending bill that makes deep cuts in funding for the Interior Department and Environmental Protection Agency (EPA) in fiscal year (FY) 2012, but is favorable to oil and natural gas producers.

The measure cleared the Subcommittee on Interior, Environment and Related Agencies by 8-5, with the vote split along party lines. It included $9.9 billion in funding for Interior in FY 2012, which is $720 million below the level for the current fiscal year and $1.2 billion below President Obama’s request; and $7.1 billion for the EPA — $1.5 billion less than the current year and $1.8 billion below the president’s request for the agency in FY 2012. Under this bill, funding for EPA is $468 million less than what it received for FY 2006.

Obama’s proposals to increase onshore and offshore fees for oil and gas producers were noticeably absent from the $27.5 billion appropriations measure, which is $2.1 billion less than this year’s level and $3.8 billion below the president’s request for FY 2012, which begins Oct. 1. The spending measure is scheduled to be marked up by the full House Appropriations Committee on Tuesday (July 12).

Specifically the spending bill excludes the president’s proposal to increase offshore oil and gas fees by $55 million, and to increase onshore oil and gas fees by $38 million. “Issues like this [oil and gas fee hikes] are best left to the authorizing committees of jurisdiction,” said Subcommittee Chairman Michael Simpson (R-ID) in explaining the reason for their absence.

The House subcommittee set aside $154 million for the Bureau of Ocean Energy Management, Regulation and Enforcement in FY 2012. Simpson said this would be sufficient for the agency to hire new inspectors and move forward with offshore oil and gas permitting and leasing.

Rep. Doc Hastings (R-WA), chairman of the House Natural Resources Committee, echoed the sentiment, saying that the proposed hike in funding for offshore drilling safety and inspections would “hopefully [result] in permits being approved in a timely and efficient manner.”

The subcommittee spending bill also incorporated House legislation (HR 2021), which was passed last month, that would force the EPA to act on exploratory air permits within a six-month time frame and would limit the ability of opponents to use the EPA’s Environmental Appeals Board to invalidate the permits for offshore exploration (see NGI, June 27). Sen. Lisa Murkowski (R-AK) has introduced a companion bill in the Senate.

Simpson made no apologies for the panel’s decision to cut the EPA’s FY 2012 budget by 18%. “Earlier this year I said that the scariest agency in the federal government is the EPA. I still believe that. The EPA’s unrestrained effort to regulate greenhouse gases, and the pursuit of an overly aggressive regulatory agenda, are signs of an agency that has lost its bearing.”

The proposed spending cuts for both EPA and Interior would prevent the two agencies from “carrying out several unilateral policy decisions that could lock up American energy,” Hastings said.

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