The White House released its FY 2018 budget proposal today, entitled “America First – A Budget Blueprint to Make America Great Again.”
The White House proposes a budget that will increase funds in support of energy development on public lands and offshore, and it intends to continue to streamline the permitting process “and provide industry with access to the energy resources America needs,” but the theme of the administration’s proposed budget is predominantly one of cuts.
U.S.A. Federal Lands – Source: U.S. Government, ArcGIS
Budget discontinues funding for Clean Power Plan, cuts EPA 31%
The president’s proposed budget discontinues funding within the Department of Interior for the Clean Power Plan. If that proposal remains in the final FY 2018 budget that is passed by Congress, it would be a major milestone for coal–supplying another breath of life to the once left for dead U.S. coal industry.
The topline proposed individual budgets including cuts at the key federal departments and agencies with which energy companies frequently interact are included below.
Where the cuts are
Proposed budget cuts within key departments/agencies affecting the oil and gas industry:
- Department of Commerce -16%
- Department of Energy, the non-nuclear security functions -18%
- Department of the Interior -12%,
- S. Army Corps of Engineers -16%,
- Environmental Protection Agency -31%
The Trump White House assessment for the key energy-related department/agency missions and objectives in light of today’s proposed budget considerations:
DEPARTMENT OF COMMERCE
The Department of Commerce promotes job creation and economic growth by ensuring fair and secure trade, providing the data necessary to support commerce, and fostering innovation by setting standards and conducting foundational research and development. The Budget prioritizes and protects investments in core Government functions such as preparing for the 2020 Decennial Census, providing the observational infrastructure and staff necessary to produce timely and accurate weather forecasts, supporting the Government’s role in managing marine resources and ocean and coastal navigation, and enforcing laws that promote fair and secure trade.
The Budget also reduces or eliminates grant programs that have limited impact and reflect an expansion beyond core missions of the bureaus. The President’s 2018 Budget requests $7.8 billion for the Department of Commerce, a $1.5 billion or 16 percent decrease from the 2017 annualized CR level.
The President’s 2018 Budget:
- Strengthens the International Trade Administration’s trade enforcement and compliance functions, including the anti-dumping and countervailing duty investigations, while rescaling the agency’s export promotion and trade analysis activities.
- Provides $1.5 billion, an increase of more than $100 million, for the U.S. Census Bureau to continue preparations for the 2020 Decennial Census. This additional funding prioritizes fundamental investments in information technology and field infrastructure, which would allow the bureau to more effectively administer the 2020 Decennial Census.
- Consolidates the mission, policy support, and administrative functions of the Economics and Statistics Administration within the Bureau of Economic Analysis, the U.S. Census Bureau, and the Department of Commerce’s Office of the Secretary.
- Eliminates the Economic Development Administration, which provides small grants with limited measurable impacts and duplicates other Federal programs, such as Rural Utilities Service grants at the U.S. Department of Agriculture and formula grants to States from the Department of Transportation. By terminating this agency, the Budget saves $221 million from the 2017 annualized CR level.
- Eliminates the Minority Business Development Agency, which is duplicative of other Federal, State, local, and private sector efforts that promote minority business entrepreneurship including Small Business Administration District Offices and Small Business Development Centers.
- Saves $124 million by discontinuing Federal funding for the Manufacturing Extension Partnership (MEP) program, which subsidizes up to half the cost of State centers, which provide consulting services to small- and medium-size manufacturers. By eliminating Federal funding, MEP centers would transition solely to non-Federal revenue sources, as was originally intended when the program was established.
- Zeroes out over $250 million in targeted National Oceanic and Atmospheric Administration (NOAA) grants and programs supporting coastal and marine management, research, and education including Sea Grant, which primarily benefit industry and State and local stakeholders. These programs are a lower priority than core functions maintained in the Budget such as surveys, charting, and fisheries management.
- Maintains the development of NOAA’s current generation of polar orbiting and geostationary weather satellites, allowing the Joint Polar Satellite System and Geostationary Operational Environmental Satellite programs to remain on schedule in order to provide forecasters with critical weather data to help protect life and property.
- Achieves annual savings from NOAA’s Polar Follow On satellite program from the current program of record by better reflecting the actual risk of a gap in polar satellite coverage, and provides additional opportunities to improve robustness of the low earth orbit satellite architecture by expanding the utilization of commercially provided data to improve weather models.
- Maintains National Weather Service forecasting capabilities by investing more than $1 billion while continuing to promote efficient and effective operations.
- Continues to support the National Telecommunications and Information Administration (NTIA) in representing the United States interest at multi-stakeholder forums on internet governance and digital commerce. The Budget supports the commercial sector’s development of next generation wireless services by funding NTIA’s mission of evaluating and ensuring the efficient use of spectrum by Government users.
DEPARTMENT OF ENERGY
The Department of Energy (DOE) is charged with ensuring the Nation’s security and prosperity by addressing its energy, environmental, and nuclear challenges through transformative science and technology solutions. The Budget for DOE demonstrates the Administration’s commitment to reasserting the proper role of what has become a sprawling Federal Government and reducing deficit spending. It reflects an increased reliance on the private sector to fund later-stage research, development, and commercialization of energy technologies and focuses resources toward early-stage research and development. It emphasizes energy technologies best positioned to enable American energy independence and domestic job-growth in the near to mid-term. It also ensures continued progress on cleaning up sites contaminated from nuclear weapons production and energy research and includes a path forward to accelerate progress on the disposition of nuclear waste. At the same time, the Budget demonstrates the Administration’s strong support for the United States’ nuclear security enterprise and ensures that we have a nuclear force that is second to none.
The President’s 2018 Budget requests $28.0 billion for DOE, a $1.7 billion or 5.6 percent decrease from the 2017 annualized CR level. The Budget would strengthen the Nation’s nuclear capability by providing a $1.4 billion increase above the 2017 annualized CR level for the National Nuclear Security Administration, an 11 percent increase.
The President’s 2018 Budget:
- Provides $120 million to restart licensing activities for the Yucca Mountain nuclear waste repository and initiate a robust interim storage program. These investments would accelerate progress on fulfilling the Federal Government’s obligations to address nuclear waste, enhance national security, and reduce future taxpayer burden.
- Supports the goals of moving toward a responsive nuclear infrastructure and advancing the existing program of record for warhead life extension programs through elimination of defense sequestration for the National Nuclear Security Administration (NNSA).
- Enables NNSA to begin to address its critical infrastructure maintenance backlog.
- Protects human health and the environment by providing $6.5 billion to advance the Environmental Management program mission of cleaning up the legacy of waste and contamination from energy research and nuclear weapons production, including addressing excess facilities to support modernization of the nuclear security enterprise.
- Eliminates the Advanced Research Projects Agency-Energy, the Title 17 Innovative Technology Loan Guarantee Program, and the Advanced Technology Vehicle Manufacturing Program because the private sector is better positioned to finance disruptive energy research and development and to commercialize innovative technologies.
- Ensures the Office of Science continues to invest in the highest priority basic science and energy research and development as well as operation and maintenance of existing scientific facilities for the community. This includes a savings of approximately $900 million compared to the 2017 annualized CR level.
- Focuses funding for the Office of Energy Efficiency and Renewable Energy, the Office of Nuclear Energy, the Office of Electricity Delivery and Energy Reliability, and the Fossil Energy Research and Development program on limited, early-stage applied energy research and development activities where the Federal role is stronger. In addition, the Budget eliminates the Weatherization Assistance Program and the State Energy Program to reduce Federal intervention in State-level energy policy and implementation. Collectively, these changes achieve a savings of approximately $2 billion from the 2017 annualized CR level.
- Supports the Office of Electricity Delivery and Energy Reliability’s capacity to carry out cybersecurity and grid resiliency activities that would help harden and evolve critical grid infrastructure that the American people and the economy rely upon.
- Continues the necessary research, development, and construction to support the Navy’s current nuclear fleet and enhance the capabilities of the future fleet.
DEPARTMENT OF THE INTERIOR
The Department of the Interior (DOI) is responsible for protecting and managing vast areas of U.S. lands and waters, providing scientific and other information about its natural resources, and meeting the Nation’s trust responsibilities and other commitments to American Indians, Alaska Natives, and U.S.-affiliated island communities. The Budget requests an increase in funding for core energy development programs while supporting DOI’s priority agency mission and trust responsibilities, including public safety, land conservation and revenue management. It eliminates funding for unnecessary or duplicative programs while reducing funds for lower priority activities, such as acquiring new lands.
The President’s 2018 Budget requests $11.6 billion for DOI, a $1.5 billion or 12 percent decrease from the 2017 annualized CR level.
The President’s 2018 Budget:
- Strengthens the Nation’s energy security by increasing funding for DOI programs that support environmentally responsible development of energy on public lands and offshore waters. Combined with administrative reforms already in progress, this would allow DOI to streamline permitting processes and provide industry with access to the energy resources America needs, while ensuring taxpayers receive a fair return from the development of these public resources.
- Sustains funding for DOI’s Office of Natural Resources Revenue, which manages the collection and disbursement of roughly $10 billion annually from mineral development, an important source of revenue to the Federal Treasury, States, and Indian mineral owners.
- Eliminates unnecessary, lower priority, or duplicative programs, including discretionary Abandoned Mine Land grants that overlap with existing mandatory grants, National Heritage Areas that are more appropriately funded locally, and National Wildlife Refuge fund payments to local governments that are duplicative of other payment programs.
- Supports stewardship capacity for land management operations of the National Park Service, Fish and Wildlife Service and Bureau of Land Management. The Budget streamlines operations while providing the necessary resources for DOI to continue to protect and conserve America’s public lands and beautiful natural resources, provide access to public lands for the next generation of outdoor enthusiasts, and ensure visitor safety. 28 Department of the Interior
- Supports tribal sovereignty and self-determination across Indian Country by focusing on core funding and services to support ongoing tribal government operations. The Budget reduces funding for more recent demonstration projects and initiatives that only serve a few Tribes.
- Reduces funding for lower priority activities, such as new major acquisitions of Federal land. The Budget reduces land acquisition funding by more than $120 million from the 2017 annualized CR level and would instead focus available discretionary funds on investing in, and maintaining, existing national parks, refuges and public lands.
- Ensures that the National Park Service assets are preserved for future generations by increasing investment in deferred maintenance projects. Reduces funds for other DOI construction and major maintenance programs, which can rely on existing resources for 2018.
- Provides more than $900 million for DOI’s U.S. Geological Survey to focus investments in essential science programs. This includes funding for the Landsat 9 ground system, as well as research and data collection that informs sustainable energy development, responsible resource management, and natural hazard risk reduction.
- Leverages taxpayer investment with public and private resources through wildlife conservation, historic preservation, and recreation grants. These voluntary programs encourage partnerships by providing matching funds that produce greater benefits to taxpayers for the Federal dollars invested.
- Budgets responsibly for wildland fire suppression expenses. The Budget would directly provide the full 10-year rolling average of suppression expenditures.
- Invests over $1 billion in safe, reliable, and efficient management of water resources throughout the western United States.
- Supports counties through discretionary funding for the Payments in Lieu of Taxes (PILT) program at a reduced level, but in line with average funding for PILT over the past decade.
ENVIRONMENTAL PROTECTION AGENCY
The Environmental Protection Agency (EPA) is responsible for protecting human health and the environment. The budget for EPA reflects the success of environmental protection efforts, a focus on core legal requirements, the important role of the States in implementing the Nation’s environmental laws, and the President’s priority to ease the burden of unnecessary Federal regulations that impose significant costs for workers and consumers without justifiable environmental benefits. This would result in approximately 3,200 fewer positions at the agency. EPA would primarily support States and Tribes in their important role protecting air, land, and water in the 21st Century. The President’s 2018 Budget requests $5.7 billion for the Environmental Protection Agency, a savings of $2.6 billion, or 31 percent, from the 2017 annualized CR level.
The President’s 2018 Budget:
- Provides robust funding for critical drinking and wastewater infrastructure. These funding levels further the President’s ongoing commitment to infrastructure repair and replacement and would allow States, municipalities, and private entities to continue to finance high priority infrastructure investments that protect human health. The Budget includes $2.3 billion for the State Revolving Funds, a $4 million increase over the 2017 annualized CR level. The Budget also provides $20 million for the Water Infrastructure Finance and Innovation Act program, equal to the funding provided in the 2017 annualized CR. This credit subsidy could potentially support $1 billion in direct Federal loans.
- Discontinues funding for the Clean Power Plan, international climate change programs, climate change research and partnership programs, and related efforts—saving over $100 million for the American taxpayer compared to 2017 annualized CR levels. Consistent with the President’s America First Energy Plan, the Budget reorients EPA’s air program to protect the air we breathe without unduly burdening the American economy.
- Reins in Superfund administrative costs and emphasizes efficiency efforts by funding the Hazardous Substance Superfund Account at $762 million, $330 million below the 2017 annualized CR level. The agency would prioritize the use of existing settlement funds to clean up hazardous waste sites and look for ways to remove some of the barriers that have delayed the program’s ability to return sites to the community.
- Avoids duplication by concentrating EPA’s enforcement of environmental protection violations on programs that are not delegated to States, while providing oversight to maintain consistency and assistance across State, local, and tribal programs. This reduces EPA’s Office of Enforcement and Compliance Assurance budget to $419 million, which is $129 million below the 2017 annualized CR level.
- Better targets EPA’s Office of Research and Development (ORD) at a level of approximately $250 million, which would result in a savings of $233 million from the 2017 annualized CR level. ORD would prioritize activities that support decision-making related to core environmental statutory requirements, as opposed to extramural activities, such as providing STAR grants.
- Supports Categorical Grants with $597 million, a $482 million reduction below 2017 annualized CR levels. These lower levels are in line with the broader strategy of streamlining environmental protection. This funding level eliminates or substantially reduces Federal investment in State environmental activities that go beyond EPA’s statutory requirements.
- Eliminates funding for specific regional efforts such as the Great Lakes Restoration Initiative, the Chesapeake Bay, and other geographic programs. These geographic program eliminations are $427 million lower than the 2017 annualized CR levels. The Budget returns the responsibility for funding local environmental efforts and programs to State and local entities, allowing EPA to focus on its highest national priorities.
- Eliminates more than 50 EPA programs, saving an additional $347 million compared to the 2017 annualized CR level. Lower priority and poorly performing programs and grants are not funded, nor are duplicative functions that can be absorbed into other programs or that are State and local responsibilities. Examples of eliminations in addition to those previously mentioned include: Energy Star; Targeted Airshed Grants; the Endocrine Disruptor Screening Program; and infrastructure assistance to Alaska Native Villages and the Mexico Border.
