President Obama Proposes Changes in the Federal Oil and Gas Budget

Amy Mall
Posted on Monday 1st February 2010

Today the President submitted his proposed budget for the 2011 fiscal year (which starts on October 1) to Congress. He reaffirmed his commitment to addressing global warming by proposing steps to help the U.S. transition away from the dirty fossil fuels that cause global warming and other considerable air and water contamination.

When it comes to the federal oil and gas budget, the President wants to make some changes. Among them:

  • Repeal tax provisions that preferentially benefit fossil fuel production. This is an important move to help transition America to a clean energy future. Ending these giveaways to a very wealthy industry will provide over $36.5 billion that can be used on cleaner alternatives.
  • End mandatory research to promote oil and gas. Industry does enough of its own research on how to get oil and gas out of the ground. Government should step in where research is desperately needed: protecting the environment and human health.
  • Charge fees to oil companies for processing oil and gas drilling permits on federal lands, and establishing fees for non-producing oil and gas leases to encourage more timely production. Since the oil and gas on our federal lands belong to the American people, this is the right thing to do. Leasing our oil and gas under the current structure doesn’t make sense anymore. We are giving away too many taxpayer resources to private industry for enormous profits, while public resources, such as wildlife habitat and recreation areas, are getting trashed. 

The proposed fee to process an application for a permit to drill is $6,500. We'll hear industry complain about this, but keep in mind that it can cost millions of dollars to drill one well. Although some areas should be completely off limits, the federal government should make more money on our oil and gas where drilling does occur--and use the funds to protect the environment and human health and transition to a clean energy future.

For further information, more details are available in the budget's Appendix.

This post originally appeared on NRDC's Switchboard.

Amy Mall serves as Senior Policy Analyst for Natural Resources Defense Council in Boulder, Colorado. NRDC is a non-profit organization dedicated to protecting the environment, people and animals. NRDC was founded in 1970 and is comprised of more than 300 lawyers, scientists and policy experts, with more than one million members and e-activists.

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