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 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 manage oviti as varied as live stock grazing and conservation of natural, historical and reso. 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 earths and we intend to reach our goal of

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 potential 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