Access and Interior’s New Budget Request
Posted February 2, 2015
Taking a look at the president’s new budget request for the Interior Department, we see the administration asking for $13.2 billion, an increase of nearly $1 billion over the enacted funding level for the current fiscal year.
Now take a look at the data table below from Interior’s Office of Natural Resource Revenue, which tabulates federal revenues from energy developed in federal areas onshore and offshore (configured by API to show just oil and natural gas revenues):
It’s a lot of information, but check the bottom line. For fiscal year 2013, revenues from oil and natural gas developed in federal areas totaled about $12.9 billion. For FY2014 the total was about $11.7 billion. Federal revenues from oil and natural gas development in FY2014 were about $1.2 billion less than in FY2013.
Interestingly, the amount of lost revenue is just about equal to Interior’s requested budget increase for FY2016. In other words, Interior lost $1.2 billion in revenue from 2013 to 2014 and basically is looking to taxpayers to fill in the gap in the next budget.
Yet, let’s look at reasons federal oil and natural gas revenue declined. What we see, in data collected by the Bureau of Land Management, is declining oil and natural gas activity in areas controlled by Washington, detailed in this recent post. We see a drop in new leases, from 1,468 in FY2013 to 1,157 in FY2014:
A drop in the total number of leases in effect, from 47, 427 in FY2013 to 46,183 in FY2014:
And a drop in total acres leased, from about 36 million in FY2013 to 34.5 million in FY2014:
These declines largely reflect current federal energy policies that have resulted in less access to federal oil and natural gas reserves and more difficulty in securing drilling permits. Simply put, less energy activity equals less revenue to government from energy, and the administration’s own policies are to blame.
The solution is pretty simple: The administration should increase access to federal reserves. It should streamline the permitting process and make it more predictable. Energy companies are pretty good at finding energy – when they’re allowed to look for it, and when the rules governing operations are sensible, transparent and fair.
About The Author
Mark Green joined API after a career in newspaper journalism, including 16 years as national editorial writer for The Oklahoman in the paper’s Washington bureau. Previously, Mark was a reporter, copy editor and sports editor at an assortment of newspapers. He earned his journalism degree from the University of Oklahoma and master’s in journalism and public affairs from American University. He and his wife Pamela have two grown children and six grandchildren.
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