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Special Energy Report / BUDGET

INTERIOR: Oversight of Offshore Drilling Would Get a Boost

photo of Olga Belogolova
February 13, 2012

The Interior Department would see only a 1 percent increase in overall funding next year under President Obama's 2013 budget proposal, but a significant boost is proposed for oversight and development of offshore oil and gas resources in keeping with the White House's recent push to expand domestic energy production.

The department's Bureau of Ocean Energy Management and its Bureau of Safety and Environmental Enforcement would together receive $386 million next year, an increase of about $28 million from its current budget.

In the wake of the disastrous BP oil spill in 2010, Interior has worked to revamp its oversight of offshore oil and gas development by breaking up the old Minerals Management Service into two agencies: one handling leasing and environmental review and one handling permitting, inspections and safety of drilling operations.

 

A portion of the proposed $386 million would also go toward completion of a Gulf of Mexico lease sale to round out a 2007-2012 exploration and production plan. Some funds also would go for implementation of the leasing plan for 2012-2017, which Obama touted in his State of the Union address as opening up more than 75 percent of oil and gas resources on the Outer Continental Shelf.

Overall, President Obama’s 2013 budget request proposes $11.4 billion for the Interior Department, an increase of about 1 percent from the 2012 enacted level of $11.2 billion. Last year, Obama requested $12.2 billion for Interior, with a heavy push toward revamping offshore oil and gas oversight in the wake of the BP spill.

In this year’s request, Obama once again calls for the end of tax breaks for oil and gas companies – a request that has gone unanswered for many years and several administrations.

“Oil and gas subsidies are costly to the American taxpayer and do little to incentivize production or reduce energy prices,” the request says, as Obama has argued multiple times in the past. The 2013 request calls for the elimination of some 12 tax breaks to oil, gas, and coal companies to raise $41 billion over 10 years.

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