Speech: Statement of Ken Salazar, Secretary of the Interior, on the 2011 President's Budget Request - Part 2

Senate Energy and Natural Resources Committee

Management Efficiency Savings – The 2011 budget assumes management efficiency savings throughout the Department totaling $82.1 million. All bureaus and program offices, including the Working Capital Fund, assume reductions from efficiency savings that are either bureau specific or are part of a Department-wide reform. The budget assumes $20.1 million in bureau specific management efficiency savings which includes $3.4 million from property consolidation.


The Department's 2011 budget assumes $62.0 million in savings from three specific Department-wide management initiatives launched in 2010 – travel, information technology consolidation, and strategic sourcing. All of these improvements were identified from the Administration's SAVE Award effort, where Federal employees across the country put forward their best ideas to improve government operations. Each of these initiatives targets unnecessary redundancy. Implementing management policies will reinforce these initiatives to ensure efficiencies are achieved. Savings from these reforms are assumed in each bureau and program office budget request commensurate with established criteria.

Legislative and Administrative Proposals

The budget assumes enactment of a number of legislative proposals, including:


* Termination of mandatory payments from the General Treasury to States and Tribes that have been certified as completing reclamation of abandoned coal mine sites and, consequently, no longer need funds for that purpose.

* A $4 per acre fee on non-producing Federal oil and gas leases on Federal lands and waters to provide a financial incentive for oil and gas companies to either get their leases into production or relinquish them so that the tracts can be re-leased to and developed by new parties.

* The budget proposes to make permanent the current arrangement for sharing the cost of administering energy and minerals receipts. Under current law, States receiving significant payments from mineral revenue development on Federal lands also share in the costs of administering the Federal mineral leases from which the revenue is generated through a 2 percent deduction from their payments.

* The Administration will submit legislation to repeal portions of Section 365 of the Energy Policy Act. Section 365 diverted mineral leasing receipts from the Treasury to a BLM Permit Processing Improvement Fund and also prohibited BLM from establishing cost recovery fees for processing applications for oil and gas permits to drill.

* The Administration will submit legislation to repeal Section 224(b) of the Energy Policy Act of 2005. The repeal of Section 224(b) will permanently discontinue payments to counties and restore the disposition of the geothermal revenue to the historical formula of 50 percent to the States and 50 percent to the Treasury.

* The budget proposes to repeal Sections 344 and 345 of the Energy Policy Act of 2005. Section 344 extended existing deep gas incentives and Section 345 provided additional mandatory royalty relief for certain deepwater oil and gas production. These changes will help ensure that Americans receive fair value for Federally-owned mineral resources.

* The Administration proposes to reauthorize FLTFA, eliminating the 2010 sunset date and allowing lands identified as suitable for disposal in recent land use plans to be sold using the FLTFA authority. FLTFA sales revenues would continue to be used to fund the acquisition of environmentally sensitive lands and the administrative costs associated with conducting sales.

* Federal Migratory Bird Hunting and Conservation Stamps, commonly known as Duck Stamps, were originally created in 1934 as the Federal licenses required for hunting migratory waterfowl. The Administration proposes to increase these fees to $25 per stamp per year, beginning in 2011. Increasing the cost of Duck Stamps will bring the estimate for the Migratory Bird Conservation Account to $58.0 million.

* The Office of Insular Affairs is currently engaged with the State Department, the Defense Department, and other agencies in a review of the Compact of Free Association with the Republic of Palau. Permanent and indefinite funding for the compact expires at the end of 2010. The 2011 budget seeks to authorize permanent funding for the Compact as it strengthens the foundations for economic development by developing public infrastructure, and improving health care and education.




Through appropriations language, the Administration proposes to implement the following changes:


* Create an inspection fee in 2011 for onshore oil and gas drilling activities that are subject to inspection by BLM. The proposed inspection fee is expected to generate an estimated $10.0 million in 2011, offsetting about 25 percent of the cost of onshore inspections.

* Continue a fee for processing drilling permits through appropriations language, an approach taken by Congress in the 2009 and 2010 Appropriations Acts. A fee of $6,500 per drilling permit was established in 2010, and if continued, would generate an estimated $45.5 million in offsetting collections.

* Increase the inspection fees in 2011 for offshore oil and gas drilling activities that are subject to inspection by MMS. The increased fees are expected to generate an estimated $20.0 million in 2011, offsetting about half of the cost of inspections.


Sam Hamilton, Director, Fish and Wildlife Service


Before I conclude my statement, I want to pay tribute to a great conservation leader that died last week. Sam Hamilton was a visionary and a professional whose years of service and passionate dedication to his work have left an indelible mark on the lands and wildlife we cherish. His forward-thinking approach to conservation - including his view that we must think beyond boundaries at the landscape-scale- will continue to shape our nation's stewardship for years to come. He as a remarkable leader and a compassionate, wise, and eternally optimistic man


When Sam become the Director of the Fish and Wildlife Service on September 1, 2009, he brought over 30 years of experience with the Service, beginning when he was 15 years old working as a Youth Conservation Corps member on the Noxubee National Wildlife Refuge in Mississippi. Throughout his career, Sam exhibited outstanding leadership and fostered creative and innovative solutions to the challenges facing wildlife conservation. In the Southeast Region, he supported efforts leading to the establishment of a carbon sequestration program that has helped biologists to restore roughly 80,000 acres of wildlife habitat. His emphasis on partnership activities bolstered the Service's fisheries program and helped establish the Southeast Aquatic Resources Partnership to restore vital aquatic habitats across the region.


Sam provided key leadership and oversight to restoration work in the Everglades and oversaw the extensive recovery and restoration efforts following Hurricanes Katrina and Rita, which devastated coastal wetlands, wildlife refuges, and other wildlife habitat areas along the Gulf of Mexico.

Sam believed that the sustainability of the nation's fish and wildlife resources require our cooperative efforts and he worked tirelessly toward building collaborative partnerships for conservation of resources for this and future generations. We will miss Sam.


Conclusion


Thank you for the opportunity to testify on behalf of the President's 2011 budget request for the Department of the Interior. I want to reiterate my appreciation for the long-standing support of your Committee. We have a tremendous opportunity to improve the future for our children and grandchildren with wise investments in clean energy, addressing climate impacts, treasured landscapes, our youth, and the empowerment of tribal nations. I look forward to working with you to implement this budget. This concludes my written statement. I am happy to answer any questions that you may have.