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Ocean Energy Agency Appropriations, FY2017

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Ocean Energy Agency Appropriations, FY2016

February 5FY2017 September 8, 2016 (R44312)
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Summary

This report discusses FY2016FY2017 appropriations for the Department of the Interior's (DOI's) Bureau of Ocean Energy Management (BOEM), Bureau of Safety and Environmental Enforcement (BSEE), and Office of Natural Resources Revenue (ONRR)—the three agencies that collectively administer federal ocean energy resources covering more than 1.7 billion acres on the U.S. outer continental shelf (OCS). These agencies were established in a departmental reorganization following the Deepwater Horizon oil spill of April 2010; prior to the spill, the nation's OCS energy resources were administered by DOI's Minerals Management Service. Under the reorganization, BOEM administers offshore energy leasing, BSEE oversees offshore operational safety and environmental responsibility, and ONRR manages public revenues from federally regulated offshore and onshore energy projects. BOEM, BSEE, and ONRR receive appropriations in the annual Interior, Environment, and Related Agencies appropriations bill.

BOEM's and BSEE's operations are funded both by discretionary appropriations from general funds of the Treasury and by the authority to expend offsetting collections derived from a portion of OCS rental receipts and cost recovery fees (and, for BSEE, inspection fees). The initial discretionary appropriation for each fiscal year to each agency is reduced by the amount of eligible receipts and fees that are collected, so that the final amount appropriated to BOEM and BSEE is the net of those collections. ONRR does not receive funding through offsetting collections.

For FY2016FY2017, the Obama Administration requested total appropriations of $170.9175.1 million for BOEM, $204.79 million for BSEE, and $128.7129.3 million for ONRR. The BOEM total included an estimated $96.694.9 million in offsetting collections, for a net appropriation of $7480.2 million. The BSEE total included an estimated $122.2108.5 million in offsetting collections, for a net appropriation of $82.596.3 million. The requests for all three agencies represented increases from enacted FY2015FY2016 appropriations—a requested increase of 2.58.0% for BOEM (for the net appropriation after offsets), 1.78.9% for BSEE (for the net appropriation after offsets), and 5.83.0% for ONRR.

P.L. 114-113, the Consolidated Appropriations Act, 2016, signed into law on December 18, 2015, provided FY2016 appropriations for BOEM, BSEE, and ONRR. For BOEM, the law contained total appropriations of $170.9 million, with $96.6On July 14, 2016, the House passed H.R. 5538, the Department of the Interior, Environment, and Related Agencies appropriations bill for FY2017. On June 16, 2016, the Senate Appropriations Committee reported its version of the bill, S. 3068. For BOEM, H.R. 5538 recommends total appropriations of $169.3 million, with $94.9 million derived from offsetting collections, for a net appropriation of $74.2 million. The net appropriation was the same as the agency's request and was $1.8 million (2.5%) more than the FY2015 enacted appropriation. For BSEE, P.L. 114-113 contained total appropriations of $204.7 million, with $116.24 million. S. 3068 recommends total appropriations of $169.6 million for BOEM, with $94.9 million derived from offsetting collections, for a net appropriation of $74.6 million. For BSEE, H.R. 5538 recommends total appropriations of $204.9 million, with $96.5 million derived from offsetting collections, for a net appropriation of $88.5 million. The net appropriation was $6.0 million higher than the agency's request and $7.4 million (9.2%) higher than the FY2015 enacted appropriation. For ONRR, P.L. 114-113 contained appropriations of $125.5 million, which was $3.2 million less than the agency's request and $3.9 million (3.2%) more than the FY2015 enacted amount.

Earlier, the House and Senate Appropriations Committees each reported an appropriations bill for Interior, Environment, and Related Agencies—H.R. 2822 in the House and S. 1645 in the Senate—but no regular appropriations act for FY2016 was enacted prior to the end of FY2015. A series of laws (P.L. 114-53, P.L. 114-96, and P.L. 114-100) continued appropriations for ocean energy agencies at FY2015 enacted levels, minus a 0.2108% rescission, until full-year FY2016 appropriations were enacted in P.L. 114-113.


Ocean Energy Agency Appropriations, FY2016
along with a rescission of $20.0 million. This results in a net appropriation for BSEE of $88.3 million. S. 3068 recommends total appropriations of $204.7 million for BSEE, with $96.5 million derived from offsetting collections and a rescission of $25.0 million, for a net appropriation of $83.1 million. For ONRR, H.R. 5538 contains appropriations of $126.5 million, and S. 3068 contains appropriations of $121.8 million.
Ocean Energy Agency Appropriations, FY2017

Three agencies in the Department of the Interior (DOI) share responsibility for managing the nation's ocean energy resources, which cover approximately 1.7 billion acres on the U.S. outer continental shelf (OCS).1 The Bureau of Ocean Energy Management (BOEM) administers offshore energy leasing; the Bureau of Safety and Environmental Enforcement (BSEE) oversees offshore operational safety and environmental responsibility; and the Office of Natural Resources Revenue (ONRR) manages public revenues from federally regulated offshore and onshore energy projects.2 BOEM, BSEE, and ONRR receive appropriations in the annual Interior, Environment, and Related Agencies appropriations bill.

This report discusses FY2016FY2017 appropriations for the three agencies, including the Obama Administration's funding request for each agency and subsequent congressional action. P.L. 114-113, the Consolidated Appropriations Act, 2016, signed into law on December 18, 2015, provided FY2016 appropriations for BOEM, BSEE, and ONRR. Earlier, the House and Senate Appropriations Committees each reported an appropriations bill for Interior, Environment, and Related Agencies—H.R. 2822 in the House and S. 1645 in the Senate—but no regular appropriations act for FY2016 was enacted prior to the end of FY2015. A series of laws (P.L. 114-53, P.L. 114-96, and P.L. 114-100) continued appropriations for ocean energy agencies at FY2015 enacted levels, minus a 0.2108% rescission, until full-year FY2016 appropriations were enacted in P.L. 114-113.

Bureau of Ocean Energy Management3

BOEM manages U.S. offshore oil and gas leasing, renewable energy development, and marine mineral leasing, with a mission to balance national interests in energy supply and environmental protection.4 BOEM's responsibilities include developing a five-year offshore oil and gas leasing program, managing oil and gas lease sales and marine mineral agreements, reviewing exploration and development plans, facilitating renewable energy development on the OCS, conducting resource evaluations and economic analysis, and performing environmental reviews, among others.

BOEM's operations are funded both by discretionary appropriations under the agency's Ocean Energy Management account and by the authority to expend offsetting collections derived from a portion of OCS rental receipts and cost recovery fees.5 The initial discretionary appropriation for each fiscal year is reduced by the amount of eligible receipts and fees that are collected, so that the final amount appropriated to BOEM is the net of those collections.

For FY2016FY2017, the Obama Administration requested total appropriations of $170.9175.1 million for BOEM, of which $96.694.9 million would be derived from offsetting collections, for a net appropriation of $7480.2 million (Table 1). The total request (including offsetting collections) was $1.1BOEM's total available funding under the request would be $4.3 million higher (+0.62.5%) than the total FY2015 enacted amount. The net requested appropriation was $1.8 million higher (+2.5%) than the FY2015 net amount of $72.4 millionFY2016 amount. This reflects an increase of $6.0 million (+8.0%) in BOEM's net requested appropriation from Congress, along with BOEM's estimate of fewer offsetting collections than in FY2016 (1.7% less in offsetting collections).

Table 1. Appropriations for the Bureau of Ocean Energy Management (BOEM), FY2015-FY2016

FY2016-FY2017

($ in millions of dollars)

 

BOEM

FY2015FY2016 Enacted

FY2016FY2017 Request

House Comm.-Passed Bill (H.R. 28225538)

Senate Comm. Bill
(S. 1645)

Change from FY2016

FY2016 Approps. Act
(P.L. 114-113Senate Comm. Bill (S. 3068)

P.L. 114-113
Change from FY2015

FY2016
 

 

 

 

 

$

%

 

$

%

Ocean Energy Management

 

 

 

 

 

 

 

—Renewable Energy

24
23.1.3

23
24.3.9

23
23.1.4

24.3

-0.9

-3.6%

24.3

+1.2

+5.1%

—Conventional Energy

49.6

5923.9

49.6

59.9

59.9

+10.2

+20-0.4 -1.6%

Environmental Assessment

Conventional Energy

59
65.7.9

64
68.0.2

59
63.2.9

68.0

68.59.0

+2.3

-0.9

+3.6-1.5%

General Support Servicesa

Environmental Assessment

1568.0

68
.4

1568.0

-1568.0

-100.0%

—Executive Direction

18
16.3.7

18.18.7

18
16.3.0

18.7

-0.7

-3.6%

18.7

+2.3

+14.4%

Subtotal

170
169.8.9

175
170.9.1

167169.3

170.9

-1.6

170.9

-0.9%

+1.1

169.6

-1.3

+0.6-0.8%

Offsetting Rental Receipts

93
-94.9.0

88
-93.0.5

88
-93.0.5

-93.0

-93.0

+4.5

+4.8%

-88.5

+1.9

4.5

+2.04.8%

Cost Recovery Fees

-3
-2.5.7

6
-3.7.5

6
-3.7.5

-3.7

2.8

-3.7

+76.4%

-1.2

-47.6

-6.5

-2.8

+76.4%

Subtotal, Offsetting Collections

96
-97.3.6

94
-96.6.9

94
-96.6.9

-96.6

-96.6

+1.7

+1.7%

-94.9

+01.7

+01.7%

Net Appropriations

74
72.4.2

7480.2

74
70.6.4

74.2

+0.1

+0.2%

74.2

6

+1.8

0.4

+20.5%

Source: H.Rept. 114-170 on H.R. 2822; S.Rept. 114-70 on S. 1645; P.L. 114-113, Joint Explanatory Statement, Division G, at https://rules.house.gov/bill/114/hr-2029-sa.

Notes: Figures may not sum precisely due to rounding.

a. BOEM's FY2016 budget request proposed that the General Support Services budget activity be eliminated and its funding redistributed among the specific supported activities. P.L. 114-113 reflected this request.

On June 18, 2015, the House Appropriations Committee reported its Interior appropriations bill, H.R. 2822, with total appropriations of $167Sources: House Appropriations Committee detailed tables for BOEM and BSEE; U.S. Congress, House Appropriations Committee, Department of the Interior, Environment, and Related Agencies Appropriations Bill, 2017, report to accompany H.R. 5538, 114th Cong., 2nd sess., H.Rept. 114-632 (Washington, DC: GPO, 2016); U.S. Congress, Senate Appropriations Committee, Department of the Interior, Environment, and Related Agencies Appropriations Bill, 2017, report to accompany S. 3068, 114th Cong., 2nd sess., S.Rept. 114-281 (Washington, DC: GPO, 2016); P.L. 114-113, Division G, Explanatory Statement, Congressional Record, December 17, 2015, p. H10215.

Note: Figures may not sum precisely due to rounding.

On July 14, 2016, the House passed its Interior appropriations bill, H.R. 5538, with total appropriations of $169.3 million for BOEM, offset by the rental receipt and fee collections described above, for a net appropriation of $70.674.4 million. The House committee's total appropriation was $2.51.6 million less than the FY2015FY2016 enacted total and $3.65.8 million less than the agency request. Comparing the net appropriations after offsets, the House committee's amount was $1.80.1 million lessmore than the FY2015FY2016 enacted net appropriation and $3.65.8 million less than the agency request.

On June 23, 201516, 2016, the Senate Appropriations Committee reported its Interior appropriations bill, S. 16453068. The Senate committee bill contained total appropriations of $170.9169.6 million for BOEM, offset by the rental receipt and fee collections described above, for a net appropriation of $74.26 million. The total appropriation was the same as the Administration's request and an increase of $1.1 million over FY2015$1.3 million less than the FY2016 enacted total and $5.6 million less than the agency request. Comparing the net appropriations after offsets, the Senate committee amount was $1.80.4 million more than the FY2015FY2016 enacted net appropriation and $5.6 million less than the agency request. enacted net appropriation and the same as the agency request.

On December 18, 2015, the President signed into law P.L. 114-113, containing FY2016 appropriations for BOEM. The law provided the same amounts as in the Senate committee bill and the agency request.

BOEM Budget Accounts

BOEM's appropriations are contained in a single budget account, titled Ocean Energy Management.6 Within this account, the Conventional Energy budget activity funds development and administration of the agency's oil and gas leasing program, including the development of forward-looking five-year leasing plans.7 In January 2015March 2016, BOEM published its draft proposed oil and gas leasing program (DPPPP) for 2017-2022, which includes 3 proposed lease sales in the Alaska region and 1 in the Atlantic region, as well as 10 proposed sales in the Gulf of Mexico.8 Appropriations for the Conventional Energy activity also go toward BOEM's administration of lease sales under the current oil and gas leasing program for 2012-2017.9 Other BOEM Conventional Energy activities include managing existing leases, reviewing exploration and development/production plans, administering risk management and financial responsibility programs, evaluating ocean resources, mapping the OCS, and administering the Marine Minerals Program,10 among others.

A different budget activity under the Ocean Energy Management account, the Renewable Energy activity, supports BOEM's management of renewable ocean energy resources under Section 388 of P.L. 109-58, the Energy Policy Act of 2005. Under this activity, BOEM has planned and conducted wind energy lease sales in the Atlantic11 and has issued seven11 commercial wind energy leases offshore (in Delaware, Maryland, Massachusetts, New Jersey, Rhode Island, and Virginia). No commercial production of U.S. offshore wind energy has yet occurred, although one project off of Rhode Island reportedly has beguncompleted construction.12 For FY2016, in the joint explanatory statement to P.L. 114-113In its explanatory statement for FY2016 Interior appropriations (P.L. 114-113), Congress directed that BOEM should "continue working with coastal States and other stakeholders to study new wind energy areas, including those in shallow, transitional, and deep (over 200 feet) waters" and that the agency should also "continue to work with the Department of Energy to identify and permit a national offshore wind test site that incorporates new technology related to the structural material of transitional depth and floating wind turbines."13 BOEM has identified wind, wave, and ocean current energy as offering the greatest potential among renewables for OCS development in the foreseeable future,14 and it also has issued research leases and grants for hydrokinetic energy research and testing projects under the Renewable Energy activity. Other responsibilities include data collection and stakeholder engagement related to renewable energy efforts.

BOEM's Environmental Assessment budget activity (referred to in agency budget documents as Environmental Programs) supports BOEM's responsibilities for assessing the environmental impacts of ocean energy activities and providing environmental safeguards. BOEM coordinates with BSEE in managing OCS environmental programs. Under the National Environmental Policy Act of 1969 (NEPA),15 as well as the Outer Continental Shelf Lands Act (OCSLA)16 and other statutes, BOEM must conduct environmental assessments of proposed ocean activities such as geological and geophysical (G&G) exploration, five-year leasing programs, lease sales, exploration plans, and development and production plans. For example, BOEM studied the environmental impacts of G&G seismic surveys in the Atlantic Ocean and approved such surveys in summer 2014.17 This budget activity also supports BOEM's collaboration with other research agencies to develop scientific knowledge of the OCS.

BOEM's General Support Services (GSS) and Executive Direction budget activities cover general administrative expenses and overhead (such as rent, telecommunications, and information technology) and the agency's executive offices (such as the Office of the Director, the Office of Congressional Affairs, and others). The GSS activity was eliminated in FY2016 appropriations, as discussed in the following section.

Proposed Budgetary Changes

In its budget request, BOEM proposed a realignment of its budget activities to eliminate the GSS activity, which partially funds the agency's administrative and shared support services. BOEM proposed to redistribute the administrative functions to the specific budget activities that are supported, with corresponding increases in funding for those activities. P.L. 114-113 adopted BOEM's proposal to eliminate the GSS activity, with corresponding increases as requested by BOEM to reflect the redistributed costs under other activities.

Separate from the budgetary realignment, BOEM requested additional funding increases in the following areas:

  • $2.5 million for the Risk Management Program (in the Conventional Energy budget activity), to pursue a more proactive approach to identifying and mitigating financial liabilities. The agency would use the funds to hire or contract with experts in insurance risk analysis and credit analysis, among other areas.
  • $1.1 million across multiple budget activities (Conventional Energy, Environmental Assessment, and Executive Direction) for staffing increases. The agency stated that additional staffing was needed to accommodate a significant increase in the number of deepwater drilling plans BOEM must review, as well as changes toExecutive Direction budget activity covers the agency's executive offices, such as the Office of the Director, the Office of Congressional Affairs, and others. BOEM's Proposed Budgetary Changes

    BOEM proposed funding changes for FY2017 in several areas. Some of the changes relate to the agency's offsetting collections, which consist of a portion of OCS rental receipts and cost recovery fees that the agency is authorized to spend.18 With respect to offsetting rental receipts, BOEM anticipated an 11% ($4.5 million) decline in FY2017 as compared with FY2016. BOEM attributed the anticipated decline to multiple factors, including the reduced number of leases being sold in the Gulf of Mexico as the area matures and world oil prices decline, as well as changes in lease terms and a resulting increase in lease relinquishments.19 Because "this decline in rental receipts is not meaningfully correlated to BOEM's workload," the agency requested that Congress provide direct appropriations of $4.1 million to offset the reduced rental receipts.20 BOEM further stated that "the projected decline in offsetting rental receipts is expected to continue to present a significant fiscal challenge in the coming years."21 In addition to requesting direct appropriations from Congress to make up for the projected reduction, BOEM and BSEE also proposed to change the proportion of offsetting rental receipts that go to each agency. Whereas in earlier years BOEM received 65% of the offsetting rental receipts and BSEE 35%, the proposal for FY2017 is for BOEM to receive 70% and BSEE 30%.22

    Separately, BOEM also anticipated a net reduction of $99,000 in its existing types of cost recovery fees for FY2017. However, BOEM proposed a new cost recovery fee for costs associated with the agency's Risk Management Program. BOEM estimated that this new fee would bring in revenues of $2.9 million for FY2017, so that the agency would have an overall gain of $2.8 million in cost recovery fees. The monies from the new fee would be used to fund continued implementation of the Risk Management Program, including adding staff with specializations in risk assessment and management.23

    Both the House-passed and the Senate committee-reported bills reflected BOEM's anticipated changes to its offsetting collections, including BOEM's estimated reductions in rental receipts and cost recovery fees, its proposed new fee associated with the Risk Management Program, and the change in the proportion of offsetting rental receipts that would go to BOEM and BSEE. However, neither bill provided the level of direct appropriations that the agency had requested to make up for the reduction in offsetting collections.

    Apart from the changes to offsetting collections, BOEM proposed a number of other funding changes for FY2017:

    • An increase of $1.6 million in the Conventional Energy budget activity to fund special pay authority to attract and retain skilled geophysicists, geologists, and petroleum engineers. The pay rates would accord with special salary rate tables issued for these positions by the Office of Personnel Management (OPM).24
    • An increase of $0.9 million across two budget activities (Conventional Energy and Environmental Assessment) for additional staffing. The agency stated that staffing increase was needed to accommodate a growth in the number of deepwater drilling plans BOEM must review and regulatory changes that add to the workload of the plan review process.25
    • An increase of $0.2 million across all activities for fixed costs, which are non-programmatic, mandatory costs such as those for employee pay and benefits, workers' compensation, and rent to the General Services Administration.
    • A decrease of $0.4 million in funding for methane hydrate research under the Conventional Energy budget activity to accommodate the higher pay for skilled positions described above.
    • A decrease of $0.4 million for data collection and outreach under the Renewable Energy budget activity, also to accommodate the higher pay for skilled positions described above.

    The House-passed and Senate committee-reported bills provided BOEM with less money in direct appropriations than the agency had requested. The House bill contained lower than requested totals for all of four of BOEM's budget activities (Renewable Energy, Conventional Energy, Environmental Assessment, and Executive Direction). The House Appropriations Committee did not specify in its report on the bill whether BOEM's specific requested increases were to be funded out of available totals. The Senate committee bill provided BOEM's requested amount for one budget activity—Renewable Energy—and contained less than requested for the other activities. For the Conventional Energy budget activity, the committee report stated that "the Committee concurs with the agency proposed reductions" but did not comment on the agency's requested increases.

    Bureau of Safety and Environmental Enforcement26
    the plan review process.
  • $0.5 million for collaborative efforts on ecosystem science (in the Environmental Assessment budget activity), to support the agency's engagement in the Arctic Council and to increase its expertise on climate change resilience and adaptation.

P.L. 114-113 included the requested amounts. BOEM also proposed a general programmatic reduction of $384,000 in administrative savings, as well as a reduction of $2.5 million within the Environmental Assessment activity, marking the end of a one-time appropriation in FY2015 to complete a programmatic environmental impact statement (PEIS) for the agency's 2017-2022 DPP (see "BOEM Budget Accounts," above). P.L. 114-113 reflected both reductions.

Bureau of Safety and Environmental Enforcement18

BSEE provides oversight of oil and gas exploration, development, and production on the OCS. Its mission is to promote safety, protect the environment, and conserve resources offshore through regulatory oversight and enforcement. BSEE's functions include issuing permits for oil and gas operations, inspecting facilities, developing regulations and standards, conducting research and collecting data on offshore safety, assessing technology, and overseeing industry oil spill prevention and readiness activities, among other responsibilities.

Similar to BOEM, BSEE's operations are funded both by discretionary appropriations under the agency's Offshore Safety and Environmental Enforcement and Oil Spill Research accounts and by a portion of OCS rental receipts, cost recovery fees, and inspection fees,1927 which are treated as offsetting collections in the BSEE budget.

For FY2016FY2017, the Obama Administration requested total appropriations of $204.79 million for BSEE, of which $122.2108.5 million would be derived from offsetting collections of OCS rental receipts, cost recovery fees, and inspection fees, for a net appropriation of $82.596.3 million (see Table 2). The total request (including offsetting collections) was nearly level with the FY2015FY2016 enacted total. The, but because of an estimated drop in offsetting collections, the requested net appropriation was $1.47.9 million higher (+1.78.9%) than the FY2015FY2016 enacted net amount of $81.088.5 million.

The House Appropriations Committee's Interior appropriations bill, H.R. 28225538, contained total appropriations of $203.3204.9 million for BSEE, offset by rental receipt and fee collections of $116.2 million, for a net appropriation of $87.0 million. The House committee96.5 million. The bill also included a rescission of $20.0 million in unobligated balances, which functions as an offset to the total, yielding a net appropriation of $88.3 million. The House's total appropriation for BSEE was $1.40.2 million lessmore than the FY2015FY2016 enacted total and $1.4 million less thanthe same as the agency's FY2016 request. Although the House committee's total BSEE appropriation was less than the FY2015 enacted amount andthe same as the agency's FY2016 request, request, because of different estimations of offsets, its net appropriation was $6.0 million more than the FY2015 enacted amount and $4.6 million more than the agency's request. The net appropriation was higher because the House committee estimated BSEE's offsetting collections to be lower than the offsetting collections in both FY2015 and BSEE's FY2016 request.20 The Senate Appropriations Committee also used the lower estimate for offsetting collections.

8.0 million less than the agency's request and $0.1 million less than the FY2016 enacted net appropriation.28

Table 2. Appropriations for the Bureau of Safety and Environmental Enforcement (BSEE), FY2015-FY2016

FY2016-FY2017

($ in millions of dollars)

 

-53.0

-96.5

BSEE

FY2015FY2016 Enacted

FY2016FY2017 Request

House Comm.-Passed Bill (H.R. 28225538)

Senate Comm. Bill
(S. 1645)

Change from FY2016

FY2016 Approps. Act
(P.L. 114-113Senate Comm. Bill (S. 3068)

P.L. 114-113
Change from FY2015

FY2016
 

 

 

 

 

$

%

 

$

%

Offshore Safety and Environmental Enforcement (OSEE)

 

 

 

 

 

Environmental Enforcementa

8.3

8
.3

8.3

8.3

Operations, Safety, and Regulation

145
133.6.0

145
151.8.2

145
133.1.2

151.8

+0.2

+0.1%

145.0

+11.4

+8.5%

Administrative Operations

18
15.7.3

18.3

18
15.7.3

18.3

18.3

+2.6

+16.5%

General Support Servicesb

Executive Direction

18
13.9.2

18
.2

18
13.9.2

18
.2

-13.9

-100.0%

—Executive Direction

Subtotala

189
18.2.8

190
19.7.0

190
17.4.0

19.7

+0.2

+0.1%

189
18.2.8

+<0.1

+<0.1%

Subtotalc

Offsetting Rental Receipts

-49
189.7.4

-37
189.8.9

-37
188.4.9

189.8

+11.5

+23.2%

-37
189.8.9

+<0.1

11.5

+<0.123.2%

Offsetting Rental Receipts

Inspection Fees

59
-50.4.0

65
-49.4.0

53
-49.4.0

-49.4

-49.4

+6.0

+10.2%

+16.0

+2.010.2%

Inspection Fees

Cost Recovery Fees

7
-65.0.8

5
-65.0.6

5
-59.0.6

-59.0

+2.2

-59.0

+28.2%

-5.6

+6.0

2.2

+928.2%

Cost Recovery Fees

Subtotal, Offsetting Collections

-8116.2

108
-7.8.5

96
-7.8.5

-7.8

-7.8

+19.7

+16.9%

+0.4

19.7

+4.416.9%

Subtotal, Offsetting Collections

-123.6

Rescission of Unobligated Balancesb

-122.2

20
-116.2.0

-116.2

20.0

-116.2

N/A

+7.4

-25.0

+6.0%

-25.0

N/A

Net Appropriation, OSEE

73.6

81
66.1.4

73
67.6.4

72.1

-0.1

73.6

-0.2%

73.6

68.2

+7.4

-5.3

+11-7.2%

Oil Spill Research

14.9

14.9

14.9

14.9

14.9

14.9

Net Appropriation

88.5

96
81.0.3

88
82.5.3

87.0

-0.1

88.5

-0.1%

88.5

83.1

+7.4

-5.3

+9.2-6.0%

Source: H.Rept. 114-170 on H.R. 2822; S.Rept. 114-70 on S. 1645; P.L. 114-113, Joint Explanatory Statement, Division G, at https://rules.house.gov/bill/114/hr-2029-sa.

Notes: Figures may not sum precisely due to rounding.

a. BSEE's FY2016 budget request proposed that the Environmental Enforcement activity be consolidated into the Operations, Safety, and Regulation activity.

b. BSEE's FY2016 budget request proposed that the General Support Services budget activity be eliminated and its funding redistributed among the specific supported activities.

c. Subtotals differ from those discussed in the text because the subtotals in the text include appropriations for both the OSEE account and the Oil Spill Research account (see second row from the bottom).

The Senate Appropriations Committee's Interior appropriations bill, S. 1645, contained total appropriations of $204.7 million for BSEE, offset by rental receipt and fee collections of $116.2 million, for a net appropriation of $88.5 million. The Senate Committee's total appropriation was $46,000 higher than the FY2015 enacted total and the same as the agency request. The committee's net appropriation, after offsets, was $7.4 million higher than the FY2015 enacted net appropriation and $6.0 million higher than the agency's request, reflecting the lower estimate for BSEE's FY2016 offsetting collections discussed above.

P.L. 114-113 contained FY2016 appropriations for BSEE. The law provided the same total and net appropriations as the Senate committee bill.21

Sources: House Appropriations Committee detailed tables for BOEM and BSEE; U.S. Congress, House Appropriations Committee, Department of the Interior, Environment, and Related Agencies Appropriations Bill, 2017, report to accompany H.R. 5538, 114th Cong., 2nd sess., H.Rept. 114-632 (Washington, DC: GPO, 2016); U.S. Congress, Senate Appropriations Committee, Department of the Interior, Environment, and Related Agencies Appropriations Bill, 2017, report to accompany S. 3068, 114th Cong., 2nd sess., S.Rept. 114-281 (Washington, DC: GPO, 2016); P.L. 114-113, Division G, Explanatory Statement, Congressional Record, December 17, 2015, p. H10215.

Notes: Figures may not sum precisely due to rounding. N/A = not applicable.

a. Subtotals differ from those discussed in the text because the subtotals in the text include appropriations for both the OSEE account and the Oil Spill Research account (see second row from the bottom). b. Both H.R. 5538 and S. 3068 contain rescissions of unobligated balances from BSEE's OSEE account. These rescissions function as an offset to the funding in the Interior appropriations bill for the fiscal year in which they are enacted. In other words, rescissions effectively allow the new appropriations for the agency to be at a higher level than might otherwise have been the case.

The Senate Appropriations Committee's Interior appropriations bill, S. 3068, contained total appropriations of $204.7 million for BSEE, offset by rental receipt and fee collections of $96.5 million, as well as a $25 million rescission of unobligated balances, for a net appropriation of $83.1 million. The Senate Committee's total appropriation was the same as the FY2016 enacted total and $0.2 million less than the agency request. The committee's net appropriation, after offsets, was $5.3 million less than the FY2016 enacted net appropriation and $13.2 million less than the agency's request, reflecting different estimations of offsetting collections.29

BSEE Budget Accounts

BSEE's funding is appropriated under two budget accounts, Offshore Safety and Environmental Enforcement (OSEE) and Oil Spill Research.2230 Under the OSEE account, the Operations, Safety, and Regulation (OSR) activity supports the agency's development of regulations and safety standards, review and approval of OCS operating permits, inspections of facilities and equipment, oversight of operators' Safety and Environmental Management Systems (SEMS) programs,2331 real-time monitoring of oil and gas drilling, and evaluation of emerging technologies, among other activities. Under this activity, BSEE in February 2015July 2016 coordinated with BOEM to issue proposedfinal safety regulations for Arctic exploratory drilling,2432 and in April 20152016 BSEE issued proposedfinal regulations for blowout prevention systems and well control.25 Regarding the well control rule, the Senate Appropriations Committee, in its report on S. 1645, expresses concern that aspects of the rule should be further examined by BSEE, and states that findings should be provided to the Appropriations Committee and to the committees of policy jurisdiction.2633

Also under the OSEE account, the Environmental Enforcement activity supports BSEE's own compliance with NEPA and other environmental statutes, as well as the agency's oversight and enforcement of environmental compliance by operators on the OCS. The program has pursued approximatelymore than 200 cases of environmental violations fromsince late 2011.34 late 2011 through 2014.27 For FY2016, BSEE proposed merging the Environmental Enforcement activity into the OSR activity to enhance coordination of enforcement activities. Congress did not adopt this proposal in P.L. 114-113 (see "Proposed Budgetary Changes," below).

The activities for Administrative Operations, General Support Services (GSS), and Executive Direction, which are also within the OSEE account, support a range of administrative services as well as BSEE's executive offices. Similar to BOEM, BSEE proposed to eliminate its GSS Services activity in FY2016, and P.L. 114-113 reflected this change (see below).

A separate BSEE budget account is for Oil Spill Research. This account funds research and planning for oil spill responses, as well as oversight of operators' spill response plans. It also supports Ohmsett, the National Oil Spill Response Research and Renewable Energy Test Facility.

BSEE's Proposed Budgetary Changes

Like BOEM, BSEE anticipated changes to its offsetting collections for FY2017. The agency estimated a drop of $11.5 million in rental receipts for FY2017 as compared to the previous year's collections.35 BSEE estimated lower cost recovery fees as well (-$2.2 million). The agency estimated an increase of $6.0 million in anticipated inspection fees, based on its proposal for legislative changes to authorize the agency to charge additional fees for repeat visits to certain OCS facilities. However, neither the House nor the Senate Appropriations Committee included this new authorization in its bill, and the committees estimated $12.0 million less in FY2017 inspection fee collections for BSEE than the agency had suggested. Neither bill provided the level of direct appropriations requested by BSEE to address the estimated shortfall in offsetting collections. Both bills included rescissions of unobligated prior-year balances, which function as offsets to the funding in the Interior appropriations bill for the fiscal year in which they are enacted, as discussed above.

Separate from the estimated changes to offsetting collections, BSEE proposed other funding changes in its OSEE account, including the following:

  • An increase of $0.5 million across four budget activities (Environmental Enforcement, OSR, Administrative Operations, and Executive Direction) for projected growth in fixed costs such as rent, salaries, and information technology.
  • A decrease of $0.3 million across four budget activities (Environmental Enforcement, OSR, Administrative Operations, and Executive Direction), to be achieved through administrative savings efforts and implementation of new program management models.

BSEE, like BOEM, proposed to increase pay levels for certain skilled professionals, as authorized in August 2015 changes to OPM special salary tables. BSEE stated that base funding would be used to support the revised pay rates, resulting in no change to the OSR appropriation from the FY2016 enacted level.36

The House-passed and Senate committee-reported bills for the most part reflected BSEE's proposed changes, except for those concerning offsetting collections, as discussed above. Additionally, the Senate bill did not reflect BSEE's proposed changes for the OSR account, and instead provided the same as the FY2016 enacted level.

Office of Natural Resources Revenue37
Proposed Budgetary Changes

Within the OSEE account, BSEE proposed that the Environmental Enforcement activity be consolidated into the Operations, Safety, and Regulation activity28 and that the GSS budget activity be eliminated and its funding redistributed among the specific supported activities. P.L. 114-113 reflected the elimination of the GSS activity, with corresponding increases in other activities as proposed by the agency. Contrary to the agency's realignment proposal, P.L. 114-113 retained Environmental Enforcement as a separate activity. In the joint explanatory statement for P.L. 114-113, appropriators stated: "While the Committees realigned general support service costs consistent with the budget request, concerns remain with respect to further budget consolidations. The Bureau should continue to provide greater clarity in its Congressional Justification for mission specific program areas within the budget line for Operations, Safety, and Regulation."29

Separate from the proposed budgetary realignment, BSEE requested certain funding increases in its OSEE account, including the following:

  • $750,000 for the Renewable Energy Inspection Program (in the OSR budget activity), to provide additional personnel and field operations support, primarily for anticipated growth in the offshore wind industry.
  • $1.7 million for the Engineering Technology Assessment Center (in the OSR budget activity), to develop a Houston-based program of engineering expertise—including both current BSEE staff and newly recruited experts—to support BSEE decisionmaking.
  • $1.4 million across three budget activities (OSR, Administrative Operations, and Executive Direction) for projected increases in fixed costs such as rent, salaries, and information technology.

BSEE also proposed a reduction of $2.4 million across two budget activities (OSR and Executive Direction) as a result of management efficiencies, cost savings, and administrative adjustments. P.L. 114-113 reflected BSEE's proposed increases and reduction.

Office of Natural Resources Revenue30

ONRR was established under the DOI Office of the Assistant Secretary for Policy, Management, and Budget to collect, account for, analyze, audit, and disburse revenues from energy and mineral leases on the OCS as well as on federal onshore and American Indian lands.3138

With regard to its disbursement function, in FY2015 ONRR disbursed $9.9 billion in revenues from mineral leases on federal and Indian lands, down from $13.4 billion in FY2014 and $14.2 billion in FY2013. Of the FY2015 total, approximately $5.1 billion came from leasing and production activity on the OCS. The revenue amounts disbursed fluctuate annually, based primarily on the prices of oil and natural gas, and have averaged about $12 billion per year for onshore and offshore production combined over the last five years (FY2011-FY2015). Sources of ONRR receipts include royalties, bonus bids, and rents for all leasable minerals including oil, natural gas, coal, and others.

ONRR distributes revenues under various authorities. Revenues from onshore leases are disbursed to the states in which they were collected, the General Fund of the U.S. Treasury, and the Reclamation Fund based on various statutory formulas. Revenues from offshore leases are allocated among coastal states, the Land and Water Conservation Fund, the Historic Preservation Fund, and the Treasury.3239

ONRR receives and processes approximately 49,000 royalty and production reports monthly. It annually collects royalties on some 32,000 offshore and onshore producing leases and rents on some 29,000 nonproducing leases.3340 ONRR uses an automated liquid verification system and gas verification system to ensure the accuracy of reported offshore production information.

In early 2015, DOI published a proposed rule to reform valuation practices for oil and gas on federal lands (onshore and offshore) and for coal on federal and Indian lands.34

41

FY2016FY2017 Budget and Appropriations

The Administration submitted an FY2016 grossFY2017 total funding request of $128.7129.3 million for ONRR. There are no offsetting collections proposed for ONRR as there are for BOEM and BSEE. See Table 3 for the FY2016FY2017 funding request and ONRR appropriations. ONRR identified three major areas of importance that support its mission to collect, disburse, and verify federal and Indian energy and other natural resource revenue: (1) Financial and Production Management, (2) Audit and Compliance Management, and (3) Coordination, Enforcement, Valuation, and Appeals.

The FY2016FY2017 request reflected resources proposed for ONRR to assume trust responsibility for the Osage Nation as it does for all other tribes receiving mineral revenue.3542 The Osage Nation is a federally recognized tribe located in Oklahoma. After a 2011 settlement ($380 million), DOI and the Osage Nation agreed to implement programs to strengthen management and improve communication. To date, the Osage oil and gas leasing program operates with support only from DOI's Bureau of Indian Affairs (thus, with no support from the Bureau of Land Management [BLM] or ONRR). The addition of Osage to ONRR's portfolio will increase the amount of Indian leases under ONRR's management by 82%, or an additional 4,500 new leases5,000 new leases and 30,000 producing wells. The Administration's FY2016 request sought about $3.6 million for the Osage Trust Accounting programFY2017 request sought $968,000 to fully fund the Osage Trust Accounting program. The Osage Trust Accounting Program received $2.6 million in FY2016.

The Administration requested $1.0 million for geospatial information systems (GIS) to improve the effectiveness of ONRR and to better understand the relationship between leases and transportation lines, among other things. The Administration also requested $1.3 million for onshore production meter verification. The FY2016 request reflected ONRR's ongoing pilot inspection partnership program with BLM, which was established to support BLM field inspections. The request would fully fund the verification program, which Congress partially funded at $1.7 million in FY2015. The money would be used to enhance onshore production verification efforts.

2 million to improve its audit and compliance function. In FY2016 appropriations, ONRR did not receive the $1.2 million it requested to cover its fixed cost increases.

ONRR's strategic goals include revenue management and royalty reform using ONRR-wide compliance measures. ONRR would like to improve its newly implemented compliance measures to fully reflect all of ONRR's compliance work. A major challenge confronting ONRR is to ensure that its audit and compliance program is consistently effective. Critics contend that less auditing and more focus on compliance review has led to a less rigorous royalty collection system and thus a loss of revenue to the federal Treasury. DOI's Inspector General and the Government Accountability Office (GAO) have made recommendations to strengthen and improve administrative controls of the compliance and asset management program, including adoption of a risk-based compliance approach. In FY2014FY2015, ONRR, along with its state and tribal audit partners, closed 509110 audits and 557667 compliance reviews. Tribes can conduct mineral royalty audits on their tribal land, and states can do so on federal leases within their state boundaries. ONRR has agreements with 10 states and 6 tribes to conduct leasing-compliance activities in their jurisdictions.

Congressional Action

P.L. 114-113 provided $125.5 million for ONRR, including increases over FY2015 of $1.3 million for ONRR's production verification program and $2.6 million for the Osage Trust Accounting program. The House supported ONRR at $125.5 million, whereas the Senate supported ONRR at the FY2015 enacted level of $121.6 million. Noting the proposed rule to reform valuation methods, the law included the committee request for a GAO report to Congress on the effectiveness of existing valuation regulations, including an analysis of the impact of increasing royalty rates on federal coal and oil and gas leases and production levels.

The House-passed Interior appropriations bill, H.R. 5538, supported ONRR's programs at $126.5 million, $2.8 million below the Administration's request and $1.0 million above last year's appropriation. The Senate committee-reported bill, S. 3068, provided $121.8 million for ONRR, $7.6 million below the Administration's request and $3.8 million below the FY2016 appropriation.

Table 3. Appropriations for the Office of Natural Resources Revenue (ONRR), FY2015-FY2016

FY2016-FY2017

($ in millions of dollars)

Change from FY2016

ONRR

FY2015FY2016 Enacted

FY2016FY2017 Request

House Comm.-Passed Bill (H.R. 28225538)

Senate Comm. Bill (S. 1645)

FY2016 Approps. Act
(P.L. 114-113)

P.L. 114-113
Change from FY2015

Change from FY2016

Senate Comm. Bill (S. 3068)

 

 

 

 

 

$

%

 

$

%

Total Appropriations

121.6

125.5

128.7

129.3

125126.5

121.6

+1.0

125.5

+0.8%

+3.9

121.8

-3.8

+3.2-3.0%

Source: H.Rept. 114-170 on H.R. 2822; S.Rept. 114-70 on S. 1645; P.L. 114-113, Joint Explanatory Statement, Division G, at https://rules.house.gov/bill/114/hr-2029-sa.

General Provisions

P.L. 114-113 contained some general provisions related to offshore energy,36 similar to those included in previous years' Interior appropriations laws. Section 107 directed the agencies to collect nonrefundable inspection fees in FY2016 to be deposited into BSEE's OSEE account, and it specified fee amounts. Section 108 authorizeds: House Appropriations Committee detailed tables for BOEM and BSEE; U.S. Congress, House Appropriations Committee, Department of the Interior, Environment, and Related Agencies Appropriations Bill, 2017, report to accompany H.R. 5538, 114th Cong., 2nd sess., H.Rept. 114-632 (Washington, DC: GPO, 2016); U.S. Congress, Senate Appropriations Committee, Department of the Interior, Environment, and Related Agencies Appropriations Bill, 2017, report to accompany S. 3068, 114th Cong., 2nd sess., S.Rept. 114-281 (Washington, DC: GPO, 2016); P.L. 114-113, Division G, Explanatory Statement, Congressional Record, December 17, 2015, p. H10215. General Provisions H.R. 5538 and S. 3068 contain general provisions related to offshore energy,43 some of which are similar to those included in previous years' Interior appropriations laws. Section 107 of both bills would direct the agencies to collect nonrefundable inspection fees in FY2017 to be deposited into BSEE's OSEE account and would specify fee amounts. Section 108 of both bills would authorize the Secretary of the Interior to transfer funds among and between BSEE, BOEM, and ONRR in accordance with reprogramming guidelines related to the earlier departmental reorganization.

The law did not contain a provision, included in recent years' Interior appropriations laws, to extend an authorization for higher minimum rates of basic pay for petroleum engineers and technicians at BOEM and BSEE.37 The joint explanatory statement for P.L. 114-113 stated that "[t]he Office of Personnel Management has approved special salary rate tables covering employees eligible under the provision and therefore it is no longer necessary."38

Section 124 of the House bill would prohibit the use of funds in FY2017 or any other fiscal year to implement new regulations pertaining to drilling margins or static downhole mud weight in offshore wells. The provision refers to regulatory changes contained in BSEE's April 2016 final rule on offshore well control.44

Administration's Legislative Proposals

DOI proposed as part of its departmental budget a package of legislative reforms, including some pertaining to the ocean energy agencies.3945 One DOI proposal, concerning offshore revenue-sharing payments under P.L. 109-432, the Gulf of Mexico Energy Security Act of 2006, would redirect the payments from their current recipients—the states of Alabama, Louisiana, Mississippi, and Texas—to broad federal natural resource and conservation programs. More than half of the funding would be redirected to a new Coastal Climate Resilience Program for at-risk coastal states, local governments, and communities to prepare for and adapt to climate change. A separate proposed package of federal oil and gas reforms for both offshore and onshore activities would include changes such as evaluating minimum royalty rates, adjusting the onshore royalty rate, repealing legislatively mandated royalty relief, providing for shorter primary lease terms, instituting a new fee on nonproducing leases, and making certain changes in revenue collections, among other elements. The House and Senate did not address these proposals in P.L. 114-113. Congressional action, if any, on such proposed reforms could take place outside of the appropriations process.

Author Contact Information

[author name scrubbed], Analyst in Natural Resources Policy ([email address scrubbed], [phone number scrubbed])
[author name scrubbed], Specialist in Energy Policy ([email address scrubbed], [phone number scrubbed])

Footnotes

See, for example, Justin Gillis, "America's First Offshore Wind Farm May Power Up a New Industry," New York Times, August 22, 2016, at http://www.nytimes.com/2016/08/23/science/americas-first-offshore-wind-farm-may-power-up-a-new-industry.html?_r=0.

27This section was prepared by Laura Comay, Analyst in Natural Resources Policy.

36. For more information, see BSEE, "Proposed Well Control Rule Fact Sheet," at http://www.bsee.gov/uploadedFiles/BSEE/BSEE_Newsroom/BSEE_Fact_Sheet/FACT%20SHEET-%20Proposed%20Well%20Control%20Rule.pdf.

DOI, Fiscal Year 2017.
1.

The U.S. outer continental shelf (OCS)OCS consists of submerged lands, subsoil, and seabed that lie beyond the outer seaward reaches of a state's jurisdiction and are subject to U.S. jurisdiction (43 U.S.C. §1331[a]). For more information on domestic and international ocean jurisdictions, see CRS Report RL33404, Offshore Oil and Gas Development: Legal Framework, by [author name scrubbed].

2.

BOEM, BSEE, and ONRR were established in a departmental reorganization following the Deepwater Horizon oil spill of April 2010. Prior to the spill, the nation's OCS energy resources were administered by the Minerals Management Service (MMS). An interim agency, the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE), replaced MMS directly after the spill. The current structure of three agencies has been in place since October 2012.

3.

This section was prepared by Laura Comay, Analyst in Natural Resources Policy.

4.

43 U.S.C. §1344(a)(3).

5.

Language in annual appropriations acts since 1995 has contained authority for BOEM or its predecessor organizations to retain rental revenues above the $3.00/acre rate in effect on August 5, 1993, up to an annual cap, to fund current operations. The provisions also have allowed BOEM to use cost recovery fees authorized under the Outer Continental Shelf Lands Act (43 U.S.C. §§1131 ff.) to partially fund mission-related activities. For more information, see BOEM, Budget Justifications and Performance Information: Fiscal Year 20162017, pp. 127-128131-132, at http://www.boem.gov/BOEM-FY-20162017-Budget-Justification/.

Hereinafter this publication is referred to as "BOEM Budget Justification FY2017."
6.

This report's descriptions of BOEM's budget activities are drawn from the BOEM, Budget Justifications and Performance Information: Fiscal Year 2016, at http://www.boem.gov/BOEM-FY-2016-Budget-Justification/, Budget Justification FY2017 and from other sources.

7.

Under Section 18 of the Outer Continental Shelf Lands Act (OCSLA), 43 U.S.C. §§1331 ff., the Secretary of the Interior is to prepare and submit to Congress an oil and gas leasing schedule to implement the policies of the act. This schedule indicates the location of leasing activity that the Secretary determines will best meet national energy needs for the five-year period following the schedule's approval.

8.

BOEM, 2017-2022 Outer Continental Shelf Oil and Gas Leasing: Draft Proposed Program, January 2015March 2016, at http://www.boem.gov/2017-2022-DPPProposed-Program-Decision/. Members of Congress, state governors, and other stakeholders have commented on the DPPPP, and legislation has been introduced in the 114th Congress that would modify the 2017-2022 DPPPP in various ways. For more information, see CRS Report R44504, The Bureau of Ocean Energy Management's Five-Year Program for Offshore Oil and Gas Leasing: History and Proposed Program for 2017-2022, by [author name scrubbed], [author name scrubbed], and [author name scrubbed]. in various ways.

9.

BOEM, Proposed Final Outer Continental Shelf Oil & Gas Leasing Program, 2012-2017, June 2012, at http://www.boem.gov/uploadedFiles/BOEM/Oil_and_Gas_Energy_Program/Leasing/Five_Year_Program/2012-2017_Five_Year_Program/PFP%2012-17.pdf. Legislation also has been introduced in the 114th Congress to modify the current program in various ways.

10.

The Marine Minerals Program addresses the development of all OCS minerals other than oil, gas, and sulfur under Section 8(k) of OCSLA.

11.

Most recently, on November 9, 2015, BOEM held a wind energy lease sale covering approximately 344,000 acres offshore of New Jersey (see BOEM, "New Jersey Activities," at http://www.boem.gov/New-Jersey/). Two companies submitted winning bids collectively totaling $1.9 million. Additionally, on September 18, 2015, BOEM announced a revised environmental assessment for wind energy areas off of North Carolina, allowing the agency to move forward with its process for considering a renewable energy lease sale in those areas (see BOEM, "North Carolina Activities," at http://www.boem.gov/North-Carolina/).

12.

See, e.g., Joby Warrick, "A Milestone for Wind Energy: Work Underway on First Offshore Platforms in U.S. Waters," Washington Post, July 27, 2015, at http://www.washingtonpost.com/news/energy-environment/wp/2015/07/27/a-milestone-for-wind-energy-work-underway-on-first-offshore-platforms-in-u-s-waters/in August 2016, BOEM announced a proposed lease sale of approximately 120,000 acres off of North Carolina for commercial wind energy leasing. See BOEM, "Atlantic Wind Lease Sale 7 (ATLW-7) for Commercial Leasing for Wind Power on the Outer Continental Shelf Offshore North Carolina (Kitty Hawk)—Proposed Sale Notice and Request for Interest," 81 Federal Register 54591, August 16, 2016, at https://www.federalregister.gov/articles/2016/08/16/2016-19552/atlantic-wind-lease-sale-7-atlw-7-for-commercial-leasing-for-wind-power-on-the-outer-continental. Also in August 2016, BOEM published a request for interest (RFI) concerning a proposed wind lease in federal waters off of California. The RFI is to assess whether BOEM could issue a lease to an interested company on a noncompetitive basis, or whether there is sufficient interest in the area to require a competitive process. BOEM, "Potential Commercial Leasing for Wind Power on the Outer Continental Shelf (OCS) Offshore California—Request for Interest," 81 Federal Register 55228, August 18, 2016, at https://www.federalregister.gov/articles/2016/08/18/2016-19349/potential-commercial-leasing-for-wind-power-on-the-outer-continental-shelf-ocs-offshore.

12.
13.

P.L. 114-113, Joint Explanatory Statement, Division G, p. 23, at https://rules.house.gov/bill/114/hr-2029-sa.

14.

See BOEM, Budget Justifications and Performance Information: Fiscal Year 2016, pp. 39-40, at http://www.boem.gov/BOEM-FY-2016-Budget-Justification/ Budget Justification FY2017, p. 43.

15.

42 U.S.C. §§4321-4347. For an overview of NEPA requirements, see CRS Report RL33152, The National Environmental Policy Act (NEPA): Background and Implementation, by [author name scrubbed].

16.

43 U.S.C. §§1331 ff.

17.

BOEM, Record of Decision: Atlantic OCS Proposed Geological and Geophysical Activities, Mid-Atlantic and South Atlantic Planning Areas, Final Programmatic Environmental Impact Statement, July 2014, at http://www.boem.gov/Record-of-Decision-Atlantic-G-G/.

18.

See footnote 5.

19.

BOEM Budget Justification FY2017, p. 137.

20.

Ibid., p. 11. The agency proposed to achieve a general programmatic reduction of $0.5 million to account for the remainder of the decline in offsetting rental receipts.

21.

Ibid. The budget request includes a detailed discussion of the projected decline in rental receipts in Appendix B.

22.

Ibid, p. 138.

23.

Ibid., pp. 9-10. This new fee would be developed and used by BOEM under the authorities discussed in footnote 5.

24.

Prior to OPM's approval in August 2015 of special salary rate tables covering these employees, recent Interior appropriations laws had contained a provision to authorize higher minimum rates of basic pay for petroleum engineers and technicians at BOEM and BSEE. The FY2016 Interior appropriations law, P.L. 114-113, did not include this provision because the OPM approval rendered it unnecessary.

25.

BOEM Budget Justification FY2017, p. 10. The budget justification states: "BOEM anticipates regulations designed to promote environmentally responsible development of offshore energy and mineral resources to create an additional workload. All regulatory oversight and activities—whether for ensuring environmental stewardship, geological and geophysical permitting, exploration, or development and production—require a high level of detailed analysis to support Bureau decisions and the commensurate level of resources to effectively complete the activities."

26.

This section was prepared by Laura Comay, Analyst in Natural Resources Policy.

19.

Annual appropriations laws have directed that total BSEE appropriations are to be reduced by amounts collected by DOI and credited to the BSEE appropriation from certain rental receipts and cost recovery fees (see footnote 5 for more information). In addition, BSEE's offsetting collections include inspection fees, although BOEM's do not.

See the section below on "General Provisions" for more information on BSEE's offsetting collections of inspection fees.
20.

Specifically, for FY2016, both the House and Senate Appropriations Committees estimated lower BSEE collections of inspection fees ($59.0 million) than the agency did in its budget justification ($65.0 million). The agency's estimate was based on projected collection of the full amount of fees authorized to be used as offsets ($65.0 million), but the Congressional Budget Office, when scoring the bills, used a historical average of actual collections, resulting in the lower estimate of $59.0 million. BSEE had estimated higher collections for FY201628. The differences in BSEE's estimation of its offsetting collections versus the estimations by the House and Senate are due, first, to the House's and Senate's rescissions of prior-year balances, and second, to the fact that the House and Senate Appropriations Committees estimated lower BSEE collections of inspection fees ($53.0 million) than the agency did in its budget justification ($65.0 million). BSEE estimated higher collections of inspection fees for FY2017 than in recent years, based partially on its request to Congress to allow the agency to collect inspection fees for some types of inspections (such as follow-up facility inspections) for which it is not currently authorized to charge fees. The agency proposed language for the general provisions of the appropriations bill that would allow the new fees. However, the House and Senate committees did not include the requested language in their Interior appropriations bills. Personal communication between Laura Comay and BSEE's Congressional Affairs and Budget Offices, October 1, 2015.

2129.

Although P.L. 114-113 provided the same total and net appropriations as the Senate committee bill, it differed from the Senate bill in the distribution of funding across certain budget activities. See Table 2.

See footnote 28 and discussion under "BOEM's Proposed Budgetary Changes."
2230.

This report's descriptions of BSEE's budget activities are drawn from BSEE, Budget Justifications and Performance Information: Fiscal Year 20162017, at http://www.bsee.gov/uploadedFiles/BSEE/About_BSEE/Budget/FY2016_BSEE_Greenbookhttps://www.bsee.gov/sites/bsee.gov/files/budget-justifications//bsee-fy-2017-budget.pdf, and from other sources.

Hereinafter, this publication is referred to as "BSEE Budget Justification FY2017."
2331.

The SEMS framework, based on BSEE's Workplace Safety Rule, as revised (BSEE, "Oil and Gas and Sulphur Operations in the Outer Continental Shelf—Revisions to Safety and Environmental Management Systems," 78 Federal Register 20423, April 5, 2013), requires operators to implement programs and practices to enhance workplace safety and environmental protection, including many different elements. For more information, see BSEE, "SEMS Fact Sheet," at http://www.bsee.gov/Regulations-and-Guidance/Safety-and-Environmental-Management-Systems—SEMS/Fact-Sheet/.

2432.

BSEEDepartment of the Interior, "Requirements for Exploratory Drilling on the Arctic Outer Continental Shelf," 8081 Federal Register 9915, February 24, 2015 Register 46477, July 15, 2016. For more information, see CRS Report R41153, Changes in the Arctic: Background and Issues for Congress, coordinated by [author name scrubbed], section on "Oil, Gas, and Mineral Exploration."

2533.

BSEE, "Oil and Gas and Sulphur Operations in the Outer Continental Shelf—Blowout Preventer Systems and Well Control," 8081 Federal Register 2150325887, April 17, 201529, 2016. For more information, see CRS Insight IN10484, The Department of the Interior's Final Rule on Offshore Well Control, by [author name scrubbed].

34.

BSEE Budget Justification FY2017, p. 49.

35.

BOEM and BSEE also proposed a change in the proportion of offsetting rental receipts that would go to each agency; see discussion under "BOEM's Proposed Budgetary Changes."

26.

S.Rept. 114-70, p. 35. The House and the Senate have held hearings on both proposed rules.

27.

BSEE, Budget Justifications and Performance Information: Fiscal Year 2016, p. 68, at http://www.bsee.gov/uploadedFiles/BSEE/About_BSEE/Budget/FY2016_BSEE_Greenbook.pdf.

28.

The agency stated in its budget request that combining the two accounts would "allow for better identification of regulatory needs for enhanced environmental compliance and closer coordination between the EEP [Environmental Enforcement Program] and the newly established SEMS [Safety and Environmental Management System] program. The merger will also allow better management and oversight of all of the compliance and inspection programs in BSEE" (BSEE, Budget Justifications and Performance Information, Fiscal Year 2016, p. 15, at http://www.bsee.gov/uploadedFiles/BSEE/About_BSEE/Budget/FY2016_BSEE_Greenbook.pdf).

29.

P.L. 114-113, Joint Explanatory Statement, Division G, pp. 23-24, at https://rules.house.gov/bill/114/hr-2029-sa. BSEE FY2017 Budget Justification, pp. 14-15.

3037.

This section was prepared by [author name scrubbed], Specialist in Energy Policy.

3138.

Secretarial Order 3306 established ONRR in 2010 as part of the reorganization of the MMS (DOI Secretarial Order 3306, "Organizational Changes Under the Assistant Secretary—Policy, Management and Budget," September 30, 2010).

3239.

For a discussion of offshore revenue sharing issues and legislation, see CRS Report R40645, U.S. Offshore Oil and Gas Resources: Prospects and Processes, by [author name scrubbed] and [author name scrubbed].

3340.

Department of the Interior, Budget Justifications and Performance Information, Fiscal Year 20162017: Office of the Secretary and Department-Wide Programs, p. 166159, at https://www.doi.gov/sites/doi.gov/files/migrated/budget/appropriations/2016/upload/FY2016_OS_Greenbook2017/upload/FY2017_OS_Greenbook.pdf.

3441.

See proposed rule: ONRR, "Consolidated Federal Oil & Gas and Federal & Indian Coal Valuation Reform," 80 Federal Register 608, January 6, 2015.

3542.

According to DOI, the federal Indian trust responsibility is a legal obligation under which the United States "has charged itself with moral obligations of the highest responsibility and trust" toward Indian tribes (Seminole Nation v. United States, 1942). This obligation was first discussed by Chief Justice John Marshall in Cherokee Nation v. Georgia (1831). Over the years, the trust doctrine has been at the center of numerous other Supreme Court cases, thus making it one of the most important principles in federal Indian law. See DOI, Indian Affairs, "Frequently Asked Questions," at http://www.bia.gov/FAQs/.

3643.

This report addresses general provisions that are specifically related to offshore energy and does not cover general provisions that apply across DOI, such as department-wide emergency funding transfer authorities.

3744.

BSEE, "Oil and Gas and Sulphur Operations in the Outer Continental Shelf—Blowout Preventer Systems and Well Control," 81 Federal Register 25887, April 29, 2016. For more information, see CRS Insight IN10484, The Department of the Interior's Final Rule on Offshore Well Control, by [author name scrubbed].

45.

The Government Accountability Office (GAO) has identified problems in recruiting and retaining these highly skilled professionals at both agencies as an area of high risk for the federal government. GAO, High-Risk Series: An Update, February 2015, pp. 94, 97-100, at http://www.gao.gov/assets/670/668415.pdf.

38.

P.L. 114-113, Joint Explanatory Statement, Division G, p. 23, at https://rules.house.gov/bill/114/hr-2029-sa.

39.

DOI, Fiscal Year 2016: The Interior Budget in Brief, "Legislative Proposals and Offsetting Collections," February 20152016, at https://www.doi.gov/sites/doi.gov/files/migrated/budget/appropriations/2016/highlights/upload/DH061uploads/FY2017_BIB_DH067.pdf. In addition to the legislative proposals discussed here, footnote 2028 discusses DOI's proposal for a new fee for onshore oil and gas inspections.