The American Spectator

From an indefatigable source on the Hill:

As many have been alerting you, there are several FUNDAMENTAL problems with the omnibus that was dropped yesterday: (1) cost, (2) earmarks, (3) funding for Obamacare, and (4) procedure. For more detail on these fundamental problems, please read through to the bottom of this note for a high level summary prepared by my budget/tax colleague.

Because many of you are energy/environment/resources focused, I wanted to also flag some of the problematic issues in our portfolio area that have also been identified in the omnibus.

(1)  Eliminates all funding for DOE to pursue development of Yucca Mountain (For reference, see page 78 (“Defense Nuclear Waste Disposal”) and see page 82 (“Nuclear waste disposal”) of the attached from CBO SCOM summary).

(2)  Changes the law to triple the timing for DOI to approve exploration plans for offshore operators from 30 days to 90 days (Omni page 807). This provision may lead to huge financial penalties to the government, breach contracts, and add further impediments to creating jobs and energy here at home.   Attached are three letters in opposition from seven senators and several trade associations opposing this policy.

(3)  Reduces the state’s share of federal onshore oil and gas production revenues to 48% (from the 50/50 split required under current law (Omni page 771). Onshore state revenues are at their nominal lowest levels in decades due to DOI’s drastic scaling back of onshore leasing and permitting.  Confiscating an additional 2% (approximately $20M, for instance, from Wyoming’s annual average) adds insult to injury with no justification.

(4)  Raises fees for onshore and offshore oil and gas production on federal lands (Omni pages 748, 802-804). These fees amount to a tax that will make domestic energy production more expensive to produce, especially for small businesses. This is important because it is already cheaper to produce approximately 60% of U.S. oil consumption somewhere else (also known as “foreign imports”).   By comparison, the no-leasing policy of Obama’s DOI resulted in $10 billion less in lease sales in 2009 than in 2008. The International Energy Agency just reported that the Administration’s permitorium on the Outer Continental Shelf— in addition to the loss of American jobs — will result in 300,000 barrels per day more in imports.  At today’s oil price, the permitorium will mean almost $10 billion more per year for imports in 2015. At every turn, the Obama DOI makes it more expensive to produce energy in the US and with fewer opportunities to do it, which increases dependency on foreign oil and increases joblessness for American workers.

(5)  Requires that projects seeking Export-Import bank support result in greenhouse gas emissions that do not exceed those associated with projects supported by the bank in FY 2007, unless the Appropriations Committee is notified 15 days in advance, and public notice is provided on the bank’s website (Omni page 1272). Recall that there has been a great deal of extremist environmentalist activism around Ex-Im loans (Example).   What these activists fail to appreciate is a concept called “energy poverty” (e.g., IEA’s Report on Energy Poverty) and policies such as this one included in the omnibus will ensure that many poor households in developing countries will continue to lack access to modern energy services and the social and economic development affordable and reliable energy provides. Keeping other countries in the dark is not the path to regaining U.S. economic strength.  

(6)  Allows up to $1.48 billion to be spent on international climate change adaptation and other climate change initiatives (Omni page 1426). As Senators Barrasso, Inhofe, Vitter and Voinovich  said in their letter in the context of international climate change funding: “In the November 2nd election, Americans clearly expressed their concerns about record deficit spending…. In light of the federal government’s dire financial situation and the poor state of the economy, in addition to ongoing reviews at the IPCC, we request that the Administration freeze further spending requests to implement international climate change finance programs.”

(7)  Prohibits the proposed Fall River, Massachusetts liquefied natural gas terminal that would bring added natural gas supplies to the northeast.  This authorizing on appropriations provision is another example of shutting down American jobs and energy supplies. 

(8)  Prohibits a large solar energy plant in the Mojave desert (See page 808). It has been reported that this is an earmark for Senator Feinstein. Proponents would argue that this saves taxpayers and consumers money, since solar energy is heavily subsidized and yet still highly uneconomic (EIA Estimate of Levelized Cost of Electricity Generation Resources).  Opponents would argue that this continues the lip service policy of those who argue for more expensive wind and solar projects while blocking those very sources.  

(9)  Provides funding for Forest Service efforts to do away with Commercial Timber Sale Contracts and move toward Stewardship Contracts and 2nd growth only contracts (Omni page 824).

(10) Dramatically reduces wildfire suppression funding for the BLM (Omni page 880).

(11) Permit DOI to enter into multiyear cooperative agreements with nonprofit organizations and other appropriate entities, for the long-term care and maintenance of excess wild free-roaming horses and burros on private land (Omni page 752) . This provision was part of a proposal from the Obama Administration in which they promised to send up legislation (which was never transmitted).  Most Western Republicans had expressed serious concerns with allowing the BLM to enter into such agreement and this would lock us into 10 year contracts.