Bipartisan Views & Estimates

In the Senate, each Committee is required, under the Budget Act, to annually provide “Views & Estimates” for programs under its jurisdiction. Today is the deadline. Here’s what Chairman Bingaman and Ranking Member Pete Domenici jointly wrote to the Budget Committee’s chairman and ranking member:

February 28, 2007

The Honorable Kent Conrad, Chairman

The Honorable Judd Gregg, Ranking Member

Committee on the Budget

United States Senate

Washington, D.C. 20510-6100

Dear Chairman Conrad and Senator Gregg:

This letter responds to your request of February 5, and sets forth the views and estimates of the Committee on Energy and Natural Resources on the federal budget for fiscal year 2008.

The Department of Energy

The Department of Energy is requesting substantial increases for three major initiatives: the American Competitiveness Initiative; the Advanced Energy Initiative; and the Global Nuclear Energy Partnership.

The American Competitiveness Initiative is intended to encourage scientific and technological innovation and economic productivity and competitiveness by increasing funding for research and development and education. The Committee generally supports these programs and the proposed spending increases for them.

The Advanced Energy Initiative is intended to reduce our dependence on foreign oil by promoting renewable energy technologies such as biomass, wind, solar energy, and hydrogen. The Committee generally supports these programs and the proposed spending increases for them as well.

The Global Nuclear Energy Partnership is intended to promote greater world-wide use of nuclear power by developing a new nuclear fuel-cycle featuring a more proliferation-resistant form of spent fuel reprocessing and fast-neutron reactors. There is, as yet, no consensus among the Members of the Committee on this program. While some of our Members strongly support it, others believe it is unwise and untimely.

In addition to these three signature initiatives, the Department’s budget request contains several other proposals that concern many of our Members.

< The Department proposes to double the capacity of the Strategic Petroleum Reserve. We will need to look closely at the need for a larger Reserve, its cost, its impact on world markets, and its effect on oil and gasoline prices, before we authorize any such expansion.

< The Department proposes a deep cut of nearly a billion dollars in spending to clean up the Department’s nuclear weapons sites. While great progress has been made to clean up many of these sites, others lag far behind, and many of our Members are opposed to reducing cleanup spending while so much work remains to be done.

< The Department proposes to zero out funds for research and development on oil, natural gas, hydroelectricity, and geothermal energy, which we believe will compromise efforts to fully develop our domestic energy resources.

< The Clean Coal Technology account is eliminated. Less than half of the funds already provided by Congress would be transferred to the FutureGen initiative and the remainder would be returned to the Treasury, frustrating congressional intent to promote clean coal technologies.

< The Department also proposes a 35 percent reduction in the weatherization program, which helps working families better insulate their homes to reduce heating and cooling bills.

< The Department has again proposed to accelerate the Bonneville Power Administration’s debt repayment by diverting surplus power revenues to the Treasury. Congress blocked the Administration from implementing a similar proposal last year, and strong bipartisan opposition to the proposal remains.

< Similarly, the Department has again proposed raising the interest rates the Southeast, Southwest and Western Area Power Marketing Administrations must pay the Treasury. The Committee also continues to have concerns with this proposal.

The Committee is also concerned with the pace of the Department’s efforts to implement many of the programs authorized by the landmark Energy Policy Act of 2005. In particular, the Committee is troubled by the Department’s failure to begin making loan guarantees under title XVII of that Act. The Committee notes that certain loan guarantees under title XVII will have no impact on the budget, since the Department is authorized to require the beneficiaries to pay the full cost of the loan guarantee into the Treasury.

Finally, we wish to note that the Committee will be considering additional energy legislation this year to reduce the nation’s dependence on foreign oil by promoting the use of new energy technologies. It is important that the budget resolution accommodate the necessary funding to allow the Committee to report such legislation. We urge the Budget Committee to include a deficit neutral reserve fund in the budget resolution to accommodate such legislation.

The Department of the Interior

The Department of the Interior’s budget request proposes three major legislative initiatives of concern to the Committee: the National Parks Centennial Challenge; Bureau of Land Management land sales; and opening the Arctic National Wildlife Refuge to oil and gas development.

The National Parks Centennial Challenge is a new three-part program that calls for $3 billion in additional funds for the national parks over the next ten years. One third of this amount ($100 million per year for ten years) would come from additional appropriations, one third would come from private donations, and one third would come directly from park fees without further appropriations. Members of the Committee generally support increased funding for the national parks and appreciate the Administration’s attempt to resolve the perennial problem of insufficient funding for the parks, but we need more information on how the proposal would work. We note, too, that all previous legislative proposals to provide mandatory spending for the national parks have been unsuccessful.

The Department has again proposed giving the Bureau of Land Management authority to sell public land and use part of the proceeds for operational expenses, while using the majority of the proceeds to reduce the federal deficit. A similar proposal was rejected by both parties, in both houses of Congress, last year. A majority of the Committee remains strongly opposed to selling off the public domain for deficit reduction.

The Administration is again proposing to open the Arctic National Wildlife Refuge to oil and gas development. The Senate has considered and failed to pass similar legislation in each of the last several Congresses. This Committee—like the Senate as a whole—remains deeply divided over this issue. We do not believe that this Congress is likely to enact legislation to open ANWR.

In addition, the Department’s budget proposes cuts or changes in four programs of great interest to our Members.

< First, the Department proposes only $59 million for the federal side, and no funds for the state side, of the Land and Water Conservation Fund, which would be the lowest funding level in the program’s 42-year history, less than 7 percent of the authorized amount, and less than two-thirds of last year’s funding level.

< Second, the Department proposes further cuts in the Payments in Lieu of Taxes (“PILT”) program, which is crucial to the economic well-being of communities in our public land states.

< Third, the Department proposes significant funding cuts in the water programs of the Bureau of Reclamation and the U.S. Geological Survey, which are vitally important to communities throughout the West.

< Fourth, the Department has again proposed repeal of portions of section 365 of the Energy Policy Act related to funding for processing applications for permits to drill for oil and gas on federal lands.

Most of our Members strongly support these programs and oppose the Department’s proposals.

Finally, we wish to note our concern over the omission of price thresholds in certain oil and gas leases on the Outer Continental Shelf issued by the Department of the Interior in 1998 and 1999. The omission of price thresholds from the leases may result in the loss of billions of dollars of oil and gas royalty payments to the Federal Treasury. The Committee is looking at ways to mitigate these losses.

The Forest Service

The Forest Service’s budget request proposes giving the Secretary of Agriculture authority to sell off National Forest System lands and to retain the receipts. Half of the receipts would be used to make payments to counties to make up for the loss of receipts resulting from declining timber harvest on federal lands. The other half would be available for buy new forest lands in the states where the lands currently in the System are sold. A similar proposal to sell off National Forest System lands to finance the county payments program met with strong bipartisan opposition last year. A majority of the Committee supports renewing the county payments program, but continues to oppose selling off National Forest System lands to pay for it. The Committee is working on legislation to renew the program and recommends that funds be included in the budget resolution for this purpose.

The Committee supports the Administration’s proposal to increase funding for wildland fire suppression and urges the Budget Committee to include the President’s full request for this important program in its budget assumptions. In addition, we urge the Budget Committee to include language in the budget resolution, as it has done in the past, to provide for an adjustment of at least $700 million for wildland fire suppression funding if additional funds are needed to fight fires.

We appreciate this opportunity to provide our views and estimates to your Committee and look forward to working with you.

Sincerely,

Jeff Bingaman Pete V. Domenici

Chairman Ranking Member

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