June was an extraordinary month from the legislative perspective: Both the House and Senate Appropriations committees acted with unexpected alacrity and completed their work on DOE’s oil and natural gas budget activities.
While both houses of Congress restored funding to the program in several areas, very little of the funding is targeted for the historical oil and natural gas programs. Noticeably absent was funding for the Petroleum Technology Transfer Council.
Both houses reaffirmed their support for the Energy Policy Act provisions for ultra deepwater and unconventional resources research.
In summary:
- The House Appropriations Committee recommended funding for $12 million for natural gas hydrates and $4.2 million in earmarked projects for specific performers in oil and natural gas research.
- The Senate Appropriations Committee recommended funding of $17 million for natural gas hydrates program and $10 million for oil technology, including tar sands and oil shale.
With DOE’s allocated portion of the ultra deepwater and unconventional resources program -- and assuming that the Senate language prevails and the earmarks from the House language are included in conference resolution of R&D budget -- the current language would suggest that DOE’s oil and natural gas research budget will be in the neighborhood of $43.7 million. This compares to the 2006 budget of $64 million.
House and Senate conferees will be named in the near future and the disparate budgets will be reconciled. This conference activity will be the final opportunity for any modification of budget language.
GEO-DC ranks the probability for additional funding as very small, and the prospects for changing the restrictive language on how the budget may be allocated, slightly better.
As the reconciliation process moves forward, GEO-DC will advise AAPG members through the GEO-DC Web site.
AAPG activated the GEO-DC Web site, issued the first Web-based “Action Alert” and mobilized member support for restoration of the DOE budget through individual contacts with members of Congress and appropriations sub-committee staff.
We will continue to use this site to keep AAPG members informed of current legislative and administration activities that impact the professional activities of AAPG members.
In other legislative action, The Deep Ocean Energy Resources (DOER) Act of 2006 passed the House with a majority vote.
In response to high oil and natural gas prices during the 109th Congress, lawmakers have introduced several pieces of legislation aimed at making more Outer-Continental Shelf (OCS) acreage available for hydrocarbon exploration. Expanded OCS access is an issue that AAPG has long supported
The DOER Act, passed by the House before the Independence Day recess, is the result of bipartisan compromise. It allows states to determine if and when there will be oil and gas (combined) or natural gas leasing activity within 100 miles of its coastline.
It also asserts that states should benefit from revenues generated by such activity.
It reinvests a percentage of federal mineral receipts in three new federal Funds:
- The Federal Energy Natural Resources Enhancement Fund will support management of natural resources -- such as wildlife habitat and fisheries -- related to energy and minerals development on federal onshore and offshore lands.
- The Federal Energy and Mineral Resources Professional Development Fund will fund petroleum and mining schools, engineering and applied geoscience programs focused on petroleum and minerals, career technical education and a variety of scholarships.
- The National Geo Fund will fund programs ranging from fuel production from unconventional resources to renewable energy. It also funds geologic mapping and geologic and geophysical data preservation.
Finally, the bill introduces price thresholds on royalty relief for OCS leases. If prices exceed certain limits the lease becomes ineligible for royalty relief. It also imposes a graduated “conservation of resources” fee on non-producing acreage or acreage not paying royalties.
The Senate must still act on its OCS legislation introduced by Sen. Pete Domenici (R-N.M.) before the House and Senate can reconcile the two bills and send a final version to the president for signature. Much work remains, but the political necessity of dealing with high energy prices in an election year is increasing the odds of action.
Stay tuned to Washington Watch and the GEO-DC Web site for updates on this legislation.
Finally, a short update on administration activities.
On June 21, the National Petroleum Council accepted and initiated action on a Global Oil and Gas Study requested by Energy Secretary Bodman on Oct. 5, 2005. AAPG will be represented in this study by Pete Rose.
The study work plan, including scope, organization and timetable can be found at www.npc.org/.