that could be going into a depression, you don't have that luxury. you have to come with overwhelming force and over welshing speed on so many different areas. i remember so well, i was a treasury those first two years and most importantly at treasury, the first six months. what was happening, the things that we were dealing with in the recovery act to the stabilization to chrysler, gm, achlt g, it was just ov overwhelming. and i think that people will see that story and i think that -- i mentioned the automobile industry. i think that's the most clear aspect. that was something the president did in march of 2009, which his political advisers will be happy to tell you they knew was going to be enormously politically unpopular but he did it because

it was the right thing to do and i don't think there's anybody flir w anywhere, unless they have a specific and calculated political agenda who does not recognize what a difference that has made. not only for the comeback of the american auto industry, not only for the, perhaps, million jobs that were saved or more, but for what that has done to our manufacturing base and our economic future. >> i'm afraid that's all we have time for. gene, thank you so much. >> thank you. >> thank you very much. in a few moments a hearing on the president's 2013 budget request for energy production. in an hour and a half, representatives patrick kennedy and jim ram stad and ben bernanke on the economy.

and marry shapiro, and the dodd-frank regulation's law. represents of the energy production around the 2013 request. that quest cuts $200 million from offshore oil and gas development. this is an hour and a half.

good morning, i'll welcome our witnesses to the oversight hearing on federal offshore and onshore energy development programs within the department of the interior. on behalf of the members of the interior subcommittee i welcome everyone and thank you for joining us here today. we have the honorable bob abby the director of bureau of land management. tommy boudreau and the honorable james watson, director of the bureau of safety and environmental enforcement. gentlemen, thank you. director boudreau and watson, this is your first hearing before the committee with these two new bureaus created in october of last year so we offer a special welcome to both of you. the subcommittee was fortunate to have the opportunity to discuss many aspects of energy

development when secretary salazar appeared before us two weeks ago. i'm especially grateful that we had the opportunity to discuss the potential for offshore wind development to create new manufacturing and assembly jobs and to generate renewable energy in my home state of rhode island and other states. however, as i know that many of my colleagues on both sides of the aisle will agree, there's much more to discuss about energy policy which is whooi we've convened this additional hearing today. making sure the right resources and policies are in place is what safe and responsible energy development on public land is a significant mart of this suk committee's jurisdiction. and the three agencies before the s committee today all play a huge role in ensuring the uk suck's of the energy strategy by yoifr seeing constrengsal and renewable energy development on federal land and our federal waters. we must ensure that the three

agencies have the right resources and staffing in place to perform their duties. that's why it's important to start with an overview of where the agencies are in terms of their fiscal year 2013 budget kwi request. the bureau of safety and environmental enforcement for a total of $232 million, a 13% increase. the president's request also continues to the inspection fee program that congress established last year and proposes to collect $65 million in inspection fees from drilling operations to offset the appropriation's request. the budget request also includes a total program level for the bur low of ocean and energy management of $164.1 million. that's a $3 million increase in the 2012 level or approximately 2%. finally, the budget includes a program level of $173.4 million

for the bureau of land management's energy program. that's a $33 million increase above the fiscal year 2012 level. or approximately, 23%. the budget request also includes a new $48 million inspection fee program, similar to the one we enacted last year for bsee, that will offset the appropriation's request. i'm anxious to hear from director abby how these fees would be used to strengthen energy development on the land. and we're also looking at the progress that's being made to better process offshore and on shore permits and efforts these agencies have made to recruit hire and train new petroleum engineers and inspection personnel. since the deepwater horizon incident, less than two years ago, major reforms have been made to the way the interior department oversees the planning, leasing processes for offshore energy development. i understand the concern about whether the administration's acting quickly enough to exploit our offshore energy reserves.

yet it's also important to note that lease sales are under way and permits have been approved since the incident including a total of 325 deepwater drilling permits and an additional 116 shallow-water drilling permits approved in the gulf of mexico as of monday, march 12th. they must strike the proproper balance between the speed of processing and ensure industries are drilling responsibly and safely especially after the largest spill in our history which we saw. the same can be said for making sure we're addressing on shore energy development in a thoughtful and environmentally sensible manner. i look forward to discussing the efforts of improving the bureau of land management process and the eyes of hydraulic fracking on public lands. before we hear from our panel i'd like to recognize ranking member senator murkowski.

i appreciate everything you do. >> it was nice to visit with you. always nice to have an alaskan at the helm clearly understand what can we're faced of with so many of these issues but again, welcome. as americans face steeply rising energy costs it's important that this subcommittee ensure the agencies that sit before us today have the resources that they need and the right policies that are in place to maximize domestic production from our federal lands in an environmentally responsible manner. now, a number of new authorities were included in last year's interior bill that i hope will give your agencies the tools necessary to improve the pace of permitting and increase our domestic production. for example, the new fees on offshore operators were authorized and 50% of these collections must be used to expand capacity and expedite the development of the ocs.

higher salaries for certain critical positions in order to address the problem of hiring sufficient number of key personnel to review the plans and process permits in a timely fashion, as the chairman as mentioned. finally, the responsibility for reviewing air quality issues in the arctic ocs was transferred from the epa to oem to deal with the egregious permitting delays. almost six years in one case. i'd like to hear from all of you about how these new authorities are being utilized and whether you believe you've got the tools that you need to improve the pace of permitting and increase production both on and offshore. improving the department's performance is particularly important to me in light of recent doi reports that indicate while overall production domestically, it is at an all-time high, it's not necessarily the case on federal land and waters.

ene news recently reported the production of natural gas declined by 11% in fy 11 and oil production declined by 14%, a significant portion of this is clearly the result of the moratorium put in place in the gulf of mexico following the deepwater horizon and we'd like to explore with you today what the current pace of permitting is in the gulf. how many drilling rigs are operating. whether the improvements have been made to improve and accelerate the approval of exploration plans and drilling permits. i think there's a difference of opinion out there between the department and the industry on whether or not things are improving. i'd like to hear your perspective on that. the discrepancy between production on state and private lands versus federal lands concerns me as i look at the new policies that are proposed in the fy 13 budget that will make leasing on federal lands less competitive. when companies have the option of oil exploration on large new reserves on state and private

lands, whether it's north dakota or texas or for natural gas in the marcellus shale, i question the wisdom of proposals to increase federal onshore royalty rates put in place new inspecting and drilling fees, and charge a dpee on the so-called nonproducing leases. it seems to me that this is just taking in a direction that will make our federal lands less competitive and we may see a continued trend of more investment fleeing to the stateside and to the private lands or possibly other countries. again, thank the witnesses for joining us and for the work that they do within their respective agencies. and look forward to the questions. >> thank you. i have to point something out. mr. boudreau is from alaska. but his father is from woonsocket, rhode island. >> i didn't know. >> that's either the shrewdest appointment ever made or the

luckiest point ever made. senator, comments? >> i do. thank you chairman reed and ranking members today. i welcome bob abby and mr. boudreau and mr. watson to the hearing this morning. and just a few quick words about the 2013 department of interior budget. there's been a lot of talk about oil gas leasing and development in the u.s. and the need to expand. the developments reduce our dependence on foreign oil and i firmly do believe we need to reduce over dependence sending $1 billion a day to countries that don't like us much hadn't done us much good in securing and developing our economy or enhancing our national security. but i think it's important not to confuse reducing our dependence on foreign oil with reducing prices at the pump. we all know the price of gas isn't just about supply and demand factors and the talking point of "drill, baby, drill."

it's not getting it for us. be honest. there's for drilling rigs in the united states than there are anywhere else in the world. production is up. we're producing more than we have in the last eight years, dms on imported oil is declining and consumption domestically is down. but we're facing competition from china for oil and that's driving the world price as well as speculators influencing the market and adding as much as 56 cents a gallon at the pump. we need to look at an all-of-the-above solution. there's no magic bullet. in montana we're feeling it. we're producing nearly 500,000 barrels per day. i'm proud montana is a part of that expanding energy domestic energy solution. but i also want to point out it's not just about extracting traditional fuels from public lands. we need to permit renewable energy projects in a timely manner and put just as much effort into those leasing approvals of those projects to

secure our energy future and i look forward to visiting with each one of you today, in particular, you, bob, about getting more renewable energy up and running. i look forward to visiting with you about those throughout this hearing and hearings to come and once again, i thank chairman reed and ranking member murkowski for holding this hearing. >> you may be free to summarize your comments if you'd like. >> thank you, mr. chairman and mention of the committee. it's always a pleasure to appear before you and today, to discuss the president's fiscal year 2013 energy and budget request for the bureau of land management. in the interest of time i'll keep my opening remarktion brief. as many of you know we're responsible for managing over 245 million acres of public lands, primarily in the 12 western states. as well as the approximately 700

million acres of i don't know shore subsurface mineral states nationwide. the blm's unique multiple eyes management of lands include activities as varied as live stock grazing and conservation of natural, historical and cultural resources. america's lands provide resources critical to the nation's energy security and will continue to play an important role in domestic energy production and mineral development for decades to come. our management of public land resources and protection of public land values results an extraordinary economic benefits to local communities and to this that's. it's estimated that in 2011, the blm's management of public lands contributed more than $120 billion to the national economy in supported more than 550,000 american jobs. blm's fiscal year 2013 budget

proposal reflects the administration's efforts to maximize public benefits while recognizing the reality of the current fiscal situation. the new energy frontier initiative recognizing the value of environmentally sound, scientifically grounded development above conventional and renewable energy resources on public lands. conventional energy resources on these public lands continue to play a critical role in meeting the nation's energy needs, producing 41% of the nation's coal, 13% of natural gas and 5% of the domestically-produced oil. during 2011, the blm held 32 onshore oil and gas lease sales covering over 4 million acres. onshore mineral leasing revenues are estimated to be $4.4 billion in 2013. the 2013 budget strengthens the bml's fee. similar to the fees now charged

for offshore inspections. collection of these fees is consistent with the principal that users of the public lands pay for both the cost of use authorizations and for providing for oversight activities. this fee will generate an estimated $48 million in funds to improve safety and production inspections for oil and gas operations. president obama, secretary salazar and this congress have stressed the critical importance of renewable energy to the nation's energy security job creation and long-term economic development. to date, secretary salazar has approved 29 commercial-scale renewable energy projects on public lands. and these include 16 solar, five wind and eight geothermal projects that represent more than 6500 megawatts and 12,500 jobs. the blm's 2013 budget proposes a

$5 million for these earthsnten having 11,000 megawatts of renewable energy production in 2013. finally, to propose these initiatives to reform hard-rock mining, remediate abandoned mines and encourage diligent development of nonproducing oil and gas leases. thank you for your time. >> thank you very much, director boudreau? put your microphone on, please? >> my apology. thank thank your chairman reed, ranking member murkowski and thank you for having me here to discuss the president's 2013 budget request and for the opportunity to provide these brief opening remarks. as we know the deepwater horizon rig explosion and oil spill in the gulf of mexico spurred the administration to undertake the most aggressive and

comprehensive reforms to offshore oil and gas regulation in united states' history. central to these reforms are the structural changes we made to federal oversight including the establishment of new independent agencies with clearly-defined missions, to provide effective management and strong safety oversight of the development of our shared offshore energy and mineral resources. simply put, they are responsible for overseeing environmentally and economically-responsible development of our country's abundant offshore conventional and renewable energy resources. this includes promoting responsible offshore oil and gas development, as well as renewable energy projects such as offshore wind. the decision making must closely consider the resource and geographic regions on the outer continental shelf and the critical role offshore energy development place in the mix of resources necessary to meet the

nation's energy demands, the significance of offshore oil and gas to the economy and employment, and the vital need for environmental protection and responsible stewardship. these are priorities and values shared by everyone in this room. this budget request is theesours necessary to advance our commitment to a comprehensive, all-of-the-above energy strategy that encourages safe and responsible domestic oil and gas exploration and development as well as pushes forward with the development of offshore wind and other clean, renewable energy resources. the resources we've requested will allow us to continue pursuing our problematic priorities which include, one, finalizing and implementing the next five-year offshore oil and gas leasing program which as proposed will include 15 potential lease sales and make available more than 75% of the undiscovered but recoverable oil and gas resources offshore of

the united states. two, conducting the rigorous scientific and environmental analysis necessary at all stages of the offshore energy development process. last december, we held the first lease sale following the spill which was one of the most successful in history in the western gulf of mexico. we'll hold a consolidated lease sale for the central coast of gulf of mexico june 20th. this included rigorous analysis of available information concerning the environmental affects of the deepwater horizon oil spill. three, we continue to conduct efficient and thorough reviews of offshore exploration and development plans under the new heightened standards, which include sight-specific environmental assessments on every deep water exploration and development plan. four, we've inimplemented innovative lease terms making sure the american taxpayer receiving fair return and strong

incentives for industries to diligently develop offshore to meet our energy needs. and finally, we're on the forefront of developing offshore development resources and over the next year we expect to issue a number of commercial leases for offshore wind development, particularly along the atlantic coast. we're focused on its mission to its energy future through responsible development of conventional andofhore knowledg. thank you and this committee for its continuing support of mission and our efforts. >> thank you so much. director watson, please? >> good morning, chairman reed and ranking member mckau ski and senator tester. thank you. i'm pleased to appear to before you for the first time as director and discuss the tremendous strides we've made as well as our vision for the future of the agency. we have a critical mission, providing safety and environmental oversight of offshore oil and gas explorations on the outer continental shelf and leading

positive changes in the safety culture of offshore operations. our near-term goal is to restore america's confidence that offshore operation "be carried out safely and responsibly and without the tragic human and ecological costs that occurred as a result of the deepwater horizon tragedy. we want to build capacity for thoffsughout the country and al, to be the world leader for shave i safe offshore operations. the keys to our success the employees. over the past through months i've met our employees from all of our it clear to me they believe in and are passionate in our mission. they're unmatched in their making the best offshore use of the resources at their disposal to advance the cause of safety and responsible offshore oil and gas operations. overseeing safety and environmental performance on the ocs includes drilling permits and managing the order ily development of the nation's offshore oil and gas resources.

a lot of attention has been paid to our permitting and i sympathize with the people who depend on the permits for jobs. the same people who were so negatively impacted by the deepwater horizon tragedy in many cases. permitting is an essential part of our safety mission and we issue permits only when companies have demonstrated that they can conduct their proposed operations safely and responsibly. they've met all the safety standards and they respond effectively in the case of worst-case discharge. we've significantly decreased the amounts of time it takes to approve a permit and have issued hundreds of deep water and shallow-water permits over the past year. but those that believe the pace of permitting should be automatically the same as before deepwater horizon are ignoring the lessons of that disaster. i will commit to rooting out inefficiencies and making the process as straight forward, predictable and understandable for the industry as possible but not at the expense of safety.

when coupled with increasing hiring and training of engineers, scientists, inspectors and other personnel these effort also further enhance the permitting process and improve safe and responsibility operations on the ocs. we've made a tremendous amount of progress and my written testimony provided examples of how we spent the time focused on hiring new personnel and enacting safety retomorrows and completing the reorganization of mms. thanks again for this opportunity to testify and i look forward to answering your questions. >> thank you very much, director we'll initiate six-minute rounds. i'll give my colleagues a chance. i anticipate at least one or two rounds. we have a very many questions. i'll begin with director boudreau, by the way, thank you, gentlemen, all, for your excellent testimony. director boudreau, in rhode island, you mentioned the accelerating approval of offshore wind, particularly along the atlantic coast. we have made some significant investments both with federal

dollars and local dollars in terms of kan seth qwanset point and we have application for the project for offshore and in federal waters. we've also done a lot of planning. special area of management plan which is drawn nationwide attention as one of the best of the comprehensive approaches to evaluating offshore potential and areas of development and it's recognized nationally. but we seem to be falling behind other states in terms of approvals. the next big step for us is the release of the draft environment assessment -- can you give us an indication of when that environmental assessment will be completed? >> yes, sir. you're absolutely correct about the work that the rhode

island has done to promote the development of offshore energy. that work will feed and has fed directly into the process in evaluating the wind energy area in the shared area between massachusetts and rhode island. what we call the area of mutual interest. one example is the sand that was a comprehensive environmental assessment relevant to our process under neba in evaluating area. that analysis and the good scientific work sponhode island directly into our environmental assessment. as will all of the work that the state task force has done. it helped us define what the potential conflicts might be, including the coccyx you're of ledge, an area of sensitivity both environmentally and for

fishing interests. already done by my agency and work done by the state of rhode island, we anticipate issues a draft of the environmental assessment late this spring. >> one of the reasons critical of getting the ea out is that it looks like august of this year, 2012, we hope, the time for the final assessment will be issued. it should put us back on track with some of the other states along the atlantic coast. and if that's the case, would allow us to really begin a leasing process at the end of the calendar year 2012 or early in 2013. and again, the theory is that if we don't we just fall behind and that's not just a question of the where the towers go in the water it's also a question of sort of the land-side

operations, where they might be situated. you know. so i would urge you, again, to expedite secretary salazar has committed to expedite this draft and with similar speed, finalize the environmental assessment so we can begin the leasing process. >> this is absolutely a high priority for the secretary for my agency. >> let me turn and, again, i anticipate the second round to director watson. as we, last year, included for your agency, the inspection fee program. can you tell us what improvements you're making with these fees? i think director abby said it very well. it makes sense to basically help defray the costs of inspections and review that immediately were bound to the benefit of the