`[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]



                   EXAMINING THE PRESIDENT'S FY 2025
                    BUDGET REQUEST FOR THE BUREAU OF 
                        OCEAN ENERGY MANAGEMENT,
                        THE BUREAU OF SAFETY AND
                       ENVIRONMENTAL ENFORCEMENT,
                       AND THE OFFICE OF NATURAL
                           RESOURCES REVENUE

=======================================================================

                           OVERSIGHT HEARING

                               before the

                       SUBCOMMITTEE ON ENERGY AND
                           MINERAL RESOURCES

                                 of the

                     COMMITTEE ON NATURAL RESOURCES
                     U.S. HOUSE OF REPRESENTATIVES

                    ONE HUNDRED EIGHTEENTH CONGRESS

                             SECOND SESSION
                               __________

                         Thursday, May 23, 2024
                               __________


                           Serial No. 118-125

                               __________

       Printed for the use of the Committee on Natural Resources
       
       
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        Available via the World Wide Web: http://www.govinfo.gov
                                   or
          Committee address: http://naturalresources.house.gov
                                 ______

                   U.S. GOVERNMENT PUBLISHING OFFICE 

55-753 PDF                 WASHINGTON : 2024          
























          
      

                     COMMITTEE ON NATURAL RESOURCES

                     BRUCE WESTERMAN, AR, Chairman
                    DOUG LAMBORN, CO, Vice Chairman
                  RAUL M. GRIJALVA, AZ, Ranking Member

Doug Lamborn, CO                     Grace F. Napolitano, CA
Robert J. Wittman, VA                Gregorio Kilili Camacho Sablan,        
Tom McClintock, CA                     CNMI        
Paul Gosar, AZ                       Jared Huffman, CA 
Garret Graves, LA                    Ruben Gallego, AZ      
Aumua Amata C. Radewagen, AS         Joe Neguse, CO          
Doug LaMalfa, CA                     Mike Levin, CA
Daniel Webster, FL                   Katie Porter, CA   
Jenniffer Gonzalez-Colon, PR         Teresa Leger Fernandez, NM              
Russ Fulcher, ID                     Melanie A. Stansbury, NM             
Pete Stauber, MN                     Mary Sattler Peltola, AK    
John R. Curtis, UT                   Alexandria Ocasio-Cortez, NY              
Tom Tiffany, WI                      Kevin Mullin, CA   
Jerry Carl, AL                       Val T. Hoyle, OR      
Matt Rosendale, MT                   Sydney Kamlager-Dove, CA                  
Lauren Boebert, CO                   Seth Magaziner, RI                        
Cliff Bentz, OR                      Nydia M. Velazquez, NY                   
Jen Kiggans, VA                      Ed Case, HI                     
Jim Moylan, GU                       Debbie Dingell, MI                 
Wesley P. Hunt, TX                   Susie Lee, NV                  
Mike Collins, GA                                       
Anna Paulina Luna, FL                                        
John Duarte, CA                                       
Harriet M. Hageman, WY              
  
                    Vivian Moeglein, Staff Director
                      Tom Connally, Chief Counsel
                 Lora Snyder, Democratic Staff Director
                   http://naturalresources.house.gov
                   
                                 ------                                

              SUBCOMMITTEE ON ENERGY AND MINERAL RESOURCES

                       PETE STAUBER, MN, Chairman
                     WESLEY P. HUNT, TX, Vice Chair
              ALEXANDRIA OCASIO-CORTEZ, NY, Ranking Member

Doug Lamborn, CO                     Jared Huffman, CA
Robert J. Wittman, VA                Kevin Mullin, CA
Paul Gosar, AZ                       Sydney Kamlager-Dove, CA
Garret Graves, LA                    Seth Magaziner, RI
Daniel Webster, FL                   Nydia M. Velazquez, NY
Russ Fulcher, ID                     Debbie Dingell, MI
John R. Curtis, UT                   Raul M. Grijalva, AZ
Tom Tiffany, WI                      Grace F. Napolitano, CA
Matt Rosendale, MT                   Susie Lee, NV
Lauren Boebert, CO                   Vacancy
Wesley P. Hunt, TX                   Vacancy
Mike Collins, GA
John Duarte, CA
Bruce Westerman, AR, ex officio

                                 ------
                                 
                                 
                                 























                                 
                               CONTENTS

                              ----------                              
                                                                   Page

Hearing held on Thursday, May 23, 2024...........................     1

Statement of Members:

    Stauber, Hon. Pete, a Representative in Congress from the 
      State of Minnesota.........................................     1

    Kamlager-Dove, Hon. Sydney, a Representative in Congress from 
      the State of California....................................     3

Statement of Witnesses:

    Klein, Liz, Director, Bureau of Ocean Energy Management, 
      Washington, DC.............................................     4
        Prepared statement of....................................     6
        Questions submitted for the record.......................    10

    Sligh, Kevin, Director, Bureau of Safety and Environmental 
      Enforcement, Washington, DC................................    11
        Prepared statement of....................................    13
        Questions submitted for the record.......................    18

    Cantor, Howard, Director, Office of Natural Resources 
      Revenue, Denver, Colorado..................................    18
        Prepared statement of....................................    19
        Questions submitted for the record.......................    22

Additional Materials Submitted for the Record:

    Submissions for the Record by Representative Graves

        ``Big Oil's Record Profits''.............................    39

    Submissions for the Record by Representative Huffman

        IMF Working Paper, ``Global Fossil Fuel Subsidies Remain 
          Large: An Update Based on Country-Level Estimates......    33

        Final Vote Results for Roll Call 385, ``Build Back Better 
          Act''..................................................    34
                                     

 
                   OVERSIGHT HEARING ON EXAMINING THE
                       PRESIDENT'S FY 2025 BUDGET
                    REQUEST FOR THE BUREAU OF OCEAN
                   ENERGY MANAGEMENT, THE BUREAU OF
                       SAFETY AND ENVIRONMENTAL
                    ENFORCEMENT, AND THE OFFICE OF
                       NATURAL RESOURCES REVENUE

                               ----------                              

                         Thursday, May 23, 2024

                     U.S. House of Representatives

              Subcommittee on Energy and Mineral Resources

                     Committee on Natural Resources

                             Washington, DC

                              ----------                              

    The Subcommittee met, pursuant to notice, at 10:06 a.m. in 
Room 1324, Longworth House Office Building, Hon. Pete Stauber 
[Chairman of the Subcommittee] presiding.
    Present: Representatives Stauber, Gosar, Graves, Westerman; 
Huffman, and Kamlager-Dove.
    Also present: Representative Carl.

    Mr. Stauber. The Subcommittee on Energy and Mineral 
Resources will come to order.
    Without objection, the Chair is authorized to declare 
recess of the Subcommittee at any time.
    Under Committee Rule 4(f), any oral opening statements at 
hearings are limited to the Chairman and the Ranking Minority 
Member.
    I ask unanimous consent that the gentleman from Alabama, 
Mr. Carl, be allowed to participate in today's hearing.
    Without objection, so ordered.
    I am now going to recognize myself for an opening 
statement.

       STATEMENT OF THE HON. PETE STAUBER, A REPRESENTA-
         TIVE IN CONGRESS FROM THE STATE OF MINNESOTA

    Mr. Stauber. This morning, the Energy and Mineral Resources 
Subcommittee will review the Fiscal Year 2025 budget request 
for three agencies at the Department of the Interior charged 
with development of offshore resources in Federal waters, 
safety of offshore operations, and collection and management of 
Federal energy revenues.
    As we approach the twilight of this Administration, many of 
us eagerly anticipate an end to the regulatory onslaught that 
has smothered economic activity offshore with layers of 
bureaucratic red tape and new fees. The Biden administration's 
Bureau of Ocean Energy Management has deliberately ignored 
statutory mandates for 4 consecutive years, proving themselves 
ineffective stewards of our offshore resources.
    Despite these failures and transgressions, BOEM is 
requesting more funding in Fiscal Year 2025. BOEM stands nearly 
2 years late in rolling out a new, 5-year plan for offshore and 
oil and gas development, an unprecedented delay in the 
program's 44-year history.
    Today, we will hear promises from the Administration that, 
despite delays, this plan will soon take effect. They might 
downplay their control over a disappointing, inadequate three 
lease sale schedule. I expect Director Klein will claim these 
sales were merely steps to ensure the Bureau could hold future 
sales for wind leasing, offering minimal hope BOEM will hold 
them if the wind leasing demand is diminished in the future.
    It would be profoundly naive for any American or member of 
this Committee to accept at face value assurances on offshore 
and oil and gas from Liz Klein and the Department of the 
Interior, especially after their clear reluctance to publish 
the plan they now vow to implement.
    In preparation for 2025, BOEM must focus on the singular 
Lease Sale 262, ensuring this sale offers premier acreage in 
the Gulf of Mexico. Known for yielding the world's cleanest oil 
in terms of emission, keeping energy costs affordable, and 
bolstering American energy independence, we cannot let the 
Department of the Interior sacrifice the livelihoods and 
security of Americans on the altar of hollow commitments to 
environmental activists who care very little about our current 
or future energy needs.
    Taking notice of BOEM's track record of canceling offshore 
sales, Congress had to mandate our nation's last three lease 
sales: 258, 259, and 261 in Alaska and the Gulf. These sales 
alone have generated over $645 million in bids, and promise 
billions in royalties from 4 million OCS acres. They also 
contributed to conservation and preservation efforts through 
the Land and Water Conservation Fund, LWCF, state and local 
allocations via GOMESA, and the Historic Preservation Fund.
    Canceling lease sales represents a blatant dereliction of 
duty, a profound disrespect to our nation's resource 
management, and a deliberate betrayal of the American people's 
trust, undermining the very foundation of our energy security. 
If the Department of the Interior truly prioritized 
environmental concerns, they would champion the expansion of 
oil and gas leasing in the Gulf of Mexico. More leasing means 
more funding for LWCF, GOMESA, and historic preservation, 
translating into more jobs, better benefits, enhanced community 
funding, and cleaner, more affordable energy.
    The Office of Natural Resources Revenue, ONRR, which 
reminds the public to pronounce its acronym like the word 
``honor,'' also has betrayed Americans' trust. Rather than 
fulfilling its fiduciary role, managing billions of dollars in 
annual revenues generated mostly through energy and mineral 
leases, ONRR has arbitrarily denied overpayment refund requests 
and ignored conflicts of interest. When industry contacts ONRR 
for regulatory guidance, the agency's response can be 
summarized as, ``Rules for thee, but not for me.''
    Worse yet, evidence suggests that ONRR staff ignored legal 
advice from the agency's own attorneys and attempted to delete 
communications to keep them from being included in any 
administrative record. Bad actors at ONRR must be held 
accountable to ensure energy and mineral revenues are properly 
managed, and all stakeholders are treated fairly.

    I now recognize the Ranking Member for her opening 
statement.

      STATEMENT OF THE HON. SYDNEY KAMLAGER-DOVE, A REP-
        RESENTATIVE  IN  CONGRESS   FROM  THE  STATE  OF
        CALIFORNIA

    Ms. Kamlager-Dove. Thank you, Chairman, and thank you to 
Director Klein, Director Sligh, and Director Cantor, for taking 
time to be with us here today.
    The Bureau of Ocean Energy Management, the Bureau of Safety 
and Environmental Enforcement, and the Office of Natural 
Resources Revenue are agencies critical to helping our country 
achieve our climate and clean energy goals, and support 
communities through the energy transition: efforts threatened 
by Republicans' proposed budget cuts.
    The BOEM plays a vital role in facilitating the development 
of offshore and wind energy, which has the potential to create 
tens of thousands of jobs and significantly reduce our reliance 
on fossil fuels. During this Administration, BOEM has approved 
the country's first eight commercial-scale wind projects, with 
a combined potential of over 10 gigawatts and enough clean 
energy to power nearly 4 million homes. The first commercial-
scale offshore wind projects are already producing clean, 
renewable energy in the Northeast.
    BOEM has also announced a forward-looking leasing plan for 
offshore wind energy through 2028. Standing up for the offshore 
wind industry is absolutely necessary if we are to stave off 
the worst impacts of climate change. But we must do so 
responsibly, in a way that balances the priorities of 
communities, impacted tribes, other ocean users like the 
turtles, and the environment.
    BOEM also oversees oil and gas leasing, and last year 
finalized the next 5-year plan, which includes the fewest lease 
sales in history. The agency has also recently finalized 
rulemakings to better hold offshore oil and gas companies 
accountable for cleaning up their messes.
    We have heard a lot of gripes from the industry over the 
past year-and-a-half about the Administration's actions to 
limit leasing and their accountability measures. But I will 
remind my colleagues that we recently uncovered allegations 
from the FTC that Big Oil has been colluding with OPEC to keep 
prices high for American consumers and artificially raise 
profits at the same time that they are already producing fossil 
fuels in record amounts. Talk about trust and honor. We have 
always known that further propping up the Big Oil industry is 
not in the best interest of the American people. Now it is 
simply becoming irrefutable.
    I look forward to hearing more from BOEM's efforts to 
address the climate impacts of offshore oil and gas drilling, 
and how the agency is working to mitigate risks to communities 
most impacted by offshore fossil fuel development.
    BSEE was formed in the aftermath of the Deepwater Horizon 
tragedy, and is charged with ensuring that offshore energy 
industries operate safely and responsibly. While we all may 
have different views on the future of the oil and gas industry, 
it is essential that current operations are conducted as safely 
as possible to minimize risk to workers and neighbors. The 
safety of our communities must be prioritized, especially the 
Black, Brown, Indigenous, and low-income communities that are 
disproportionately burdened with pollution.
    Last, but certainly not least, the Office of Natural 
Resources, Revenue or ONRR, is responsible for collecting and 
distributing energy and mineral resources revenue. ONRR manages 
one of the largest, non-tax revenues in the Federal Government. 
It distributes funds to states, tribes, and important Federal 
programs like the Land and Water Conservation Fund and National 
Historic Preservation Fund.
    Over the years, the Government Accountability Office and 
Office of the Inspector General have highlighted risks with 
ONRR and the agency's ability to ensure Americans are receiving 
everything they are due, and the agency is working towards 
implementing the recommendations from these non-partisan 
entities.
    For those across the aisle concerned with ONRR's processes, 
I will remind my colleagues that one side of this debate, a 
Federal agency works to ensure a fair return for the American 
people, and the other side, the extractive industries, have 
profit in mind, do not mind polluting, and have recently been 
charged with colluding with OPEC.
    Thank you, and I yield back.

    Mr. Stauber. I thank Representative Kamlager-Dove for her 
opening statement. We will now move to introduce our witnesses.
    Let me remind the witnesses that under Committee Rules, 
they must limit their oral statements to 5 minutes, but their 
entire statement will appear in the hearing record.
    To begin your testimony, please press the ``talk'' button 
on the microphone.
    We use timing lights. When you begin, the light will turn 
green. When you have 1 minute remaining, the light will turn 
yellow. And at the end of the 5 minutes, the light will turn 
red, and I will ask you to please complete your statement at 
that time.
    I will also allow all witnesses to testify before Member 
questioning.
    Our first witness is Ms. Liz Klein. She is the Director of 
the Bureau of Ocean Energy Management in the Department of the 
Interior, and she is stationed right here in Washington, DC.
    Ms. Klein, you are now recognized for 5 minutes.

      STATEMENT OF LIZ KLEIN, DIRECTOR, BUREAU OF OCEAN 
              ENERGY MANAGEMENT, WASHINGTON, DC

    Ms. Klein. Thank you, Chairman Stauber, Ranking Member 
Kamlager-Dove, and members of the Subcommittee. I am pleased to 
appear before you today to discuss the mission and proposed 
budget of the Bureau of Ocean Energy Management, or BOEM. My 
name is Liz Klein, and I am the Director of BOEM at the 
Department of the Interior.
    BOEM is taking a leading role in transitioning the United 
States to a clean energy future, one that will advance 
renewable energy, create good-paying jobs, and ensure economic 
opportunities are accessible to all communities while managing 
the development of oil and gas resources on the Outer 
Continental Shelf, or OCS, in an environmentally and 
economically responsible manner.
    The Fiscal Year 2025 budget proposal includes $52 million 
for BOEM's Renewable Energy Program to further advance the 
development of renewable energy projects in Federal waters.
    The Biden-Harris administration has set ambitious goals to 
harness the significant offshore wind resources in the United 
States and combat the existential threat of climate change, 
including the goals of deploying 30 gigawatts of offshore wind 
energy capacity by 2030 and 15 gigawatts of floating offshore 
wind energy capacity by 2035. BOEM is making considerable 
progress towards achieving those objectives. We are taking a 
thoughtful, all-of-government approach on issues like efficient 
permitting and tribal engagement to build a robust offshore 
wind industry that benefits communities and co-exists with 
other ocean uses.
    Our efforts are working. Under this Administration, BOEM 
has approved eight commercial offshore wind projects, up from 
zero when President Biden took office. These projects have the 
potential to generate over 10 gigawatts of clean energy, enough 
to power nearly 4 million homes.
    Additional projects are undergoing review and benefiting 
from the hard work this Administration has done to streamline 
reviews and maximize interagency collaboration. Two projects, 
Vineyard Wind and South Fork, are already in operation and 
sending power to the grid. A new construction season is 
underway, and will continue through this summer.
    This Administration is also supporting additional future 
projects through a steady pipeline of lease sales. Since 
January 2021, BOEM has held four offshore wind lease auctions: 
one offshore New York/New Jersey, one offshore the Carolinas, 
and the first-ever sales offshore California and in the Gulf of 
Mexico. Together these auctions generated over $5 billion in 
high bids.
    Looking towards the future, last month Secretary Haaland 
announced a new 5-year offshore wind lease schedule, which 
includes up to 12 potential offshore wind energy lease sales 
through 2029. We anticipate holding lease sales offshore the 
central Atlantic, Oregon, in the Gulf of Maine, and in the Gulf 
of Mexico later this year, and the schedule outlines our 
priority focus areas in the years to come.
    To continue this momentum, the offshore wind energy 
industry will also need a well-trained workforce and a diverse, 
comprehensive supply chain throughout the various stages of 
facility planning, construction, and operation. BOEM is doing 
our part to support these efforts.
    Thanks to strong state and industry partnerships, multiple 
domestic supply chain projects are already underway, including 
a first-of-its-kind wind energy port in New Jersey, the first 
sub-sea cable manufacturing facility in South Carolina, and a 
Jones Act-compliant offshore wind installation vessel being 
constructed in Texas that is using more than 14,000 tons of 
domestic steel sourced mostly from Alabama, West Virginia, and 
North Carolina.
    The Fiscal Year 2025 budget also includes $67 million for 
BOEM's conventional energy program. As conventional energy 
sources continue to play an important role in our economy, the 
OCS Lands Act requires BOEM to prepare an oil and gas leasing 
program that includes a proposed 5-year schedule of oil and gas 
lease sales.
    In December 2023, Secretary Haaland approved the final 
2024-2029 National OCS Oil and Gas Leasing Program. The program 
schedules three oil and gas lease sales in the Gulf of Mexico 
Program Area, one each in 2025, 2027 and 2029. The proposed 
schedule will meet national energy needs for the next 5 years 
and balance the potential for environmental damage, the 
discovery of oil and gas, adverse impacts on the coastal zone, 
and the transition to cleaner energy sources.
    As of May 1, 2024, BOEM is managing 2,410 active oil and 
gas leases on over 13 million acres of the OCS. Approximately 
78 percent of these leases are not yet in production.
    Thank you once again for the opportunity to testify. BOEM's 
proposed Fiscal Year 2025 budget reflects the Administration's 
continued commitment to ensuring a clean and low-cost energy 
future, one that is sustainable and beneficial to all 
Americans. Our work has the potential to shape future 
generations for the better. My team and I look forward to 
working with the Subcommittee on these important issues moving 
forward, and I would be happy to answer any questions you may 
have.

    [The prepared statement of Ms. Klein follows:]
    
Prepared Statement of Elizabeth Klein, Director, Bureau of Ocean Energy 
              Management, U.S. Department of the Interior

    Chairman Stauber, Ranking Member Ocasio-Cortez and members of the 
Subcommittee, I am pleased to appear before you today to discuss the 
mission and proposed budget of the Bureau of Ocean Energy Management 
(BOEM, Bureau). My name is Liz Klein, and I am the Director of BOEM at 
the Department of the Interior (Department).

Introduction

    BOEM is taking a leading role in transitioning the U.S. to a clean 
energy future--one that will advance renewable energy, create good-
paying jobs, and ensure economic opportunities are accessible to all 
communities, including underserved communities--while managing the 
development of oil and gas resources on the Outer Continental Shelf 
(OCS) in an environmentally and economically responsible manner.
    BOEM is working with Tribal Nations, other Federal agencies, state 
and local governments, potentially impacted communities, ocean users, 
and other key stakeholders to ensure that offshore energy development 
is done responsibly and informed by the best available science and 
Indigenous knowledge. These partnerships are invaluable assets in our 
mission to create a cleaner, more sustainable energy future for our 
nation.

FY 2025 Budget Request

    The FY 2025 President's Budget requests $242 million in total 
budget authority ($183 million in net current discretionary 
appropriations and $59 million in offsetting collections) to support 
the Bureau's commitment to overseeing the nation's offshore energy, 
mineral, and geological resources through proper environmental and 
economic stewardship.

    BOEM's FY 2025 budget request advances the Administration's 
priorities in the following areas:

     Facilitating the transition to a clean energy economy;

     Supporting underserved and disproportionately affected 
            communities; and

     Strengthening Tribal sovereignty and self-determination.

    These strategic investments support the American people and aim to 
establish a foundation for sustained growth and prosperity for future 
generations.

Facilitating the Transition to a Clean Energy Economy

    The FY 2025 Budget includes $52 million for BOEM's Renewable Energy 
Program to further advance the development of renewable energy projects 
in Federal waters.
    The Biden-Harris Administration has set ambitious goals to harness 
the significant offshore wind resources in the U.S. and combat the 
existential threat of climate change: the deployment of 30 gigawatts of 
offshore wind energy capacity by 2030 and 15 gigawatts of floating 
offshore wind energy capacity by 2035. BOEM is making considerable 
progress towards achieving these objectives.
    Throughout the offshore wind planning process, BOEM works with 
Tribes, other government agencies, ocean users, academia, and 
stakeholders to identify areas on the U.S. OCS that appear most 
suitable for commercial offshore wind development, while having the 
fewest apparent environmental and user conflicts.
    We are taking a thoughtful, all-of-government approach on issues 
like efficient permitting and Tribal engagement to build a robust 
offshore wind industry that benefits communities and co-exists with 
other ocean uses. This includes working collaboratively with our 
government partners and others to ensure that any future offshore 
energy development is done safely and responsibly and relies on the 
best available science and Indigenous knowledge. For example, BOEM is 
collaborating with NOAA's National Centers for Coastal Ocean Science to 
engage our vast, diverse set of stakeholders and employ a comprehensive 
spatial model that analyzes entire marine ecosystems to identify the 
most suitable areas for wind energy development.
    The Department recently announced that BOEM and the Bureau of 
Safety and Environmental Enforcement (BSEE) have finalized updated 
regulations for renewable energy development on the OCS (Renewable 
Energy Modernization Rule). The final rule will promote offshore wind 
deployment while reducing costs for developers by increasing certainty, 
modernizing regulations, streamlining overly complex processes and 
removing unnecessary ones, clarifying ambiguous regulatory provisions, 
and enhancing compliance requirements.
    BOEM has done extensive work to improve our processes for reviewing 
offshore wind projects. In order to increase transparency and 
consistency, we released guidance in August 2023 to outline BOEM's 
criteria for when to initiate the environmental review of offshore wind 
project plans. The guidance establishes a pre-application process to 
improve engagement with cooperating agencies and federally recognized 
Tribes. This guidance was developed with input from our government 
partners, the regulated community, and interested stakeholders.
    Our efforts are working. Under this Administration, the Bureau has 
approved eight commercial offshore wind projects--up from zero when 
President Biden took office. These projects have the potential to 
generate over 10 GW of clean energy, enough to power nearly 4 million 
homes. Additional projects are undergoing review and benefiting from 
the hard work this Administration has done to streamline reviews and 
maximize interagency collaboration; we currently have five more project 
plans under environmental review, and we expect additional plans in the 
coming year.
    Two projects, Vineyard Wind and South Fork, are already in 
operation and sending power to the grid. A new construction season is 
underway and will continue through the summer, during which more 
offshore wind projects will come online.
    This Administration is also supporting additional future projects 
through a steady pipeline of lease sales. Since January 2021, BOEM has 
held four offshore wind lease auctions: a record-breaking lease sale 
offshore New York--New Jersey, offshore the Carolinas, and the first-
ever sales offshore California and in the Gulf of Mexico. Together, 
these auctions generated over $5 billion in high bids.
    Looking towards the future, last month Secretary Haaland announced 
a new five-year offshore wind lease schedule, which includes up to 12 
potential offshore wind energy lease sales through 2029. We anticipate 
holding lease sales offshore the Central Atlantic, Oregon, and in the 
Gulf of Maine and the Gulf of Mexico later this year, and the schedule 
outlines our priority focus areas in the years to come.
    In response to the rapid growth in demand for offshore wind along 
the Atlantic coast and the associated need to bring additional focus 
and presence to BOEM's work on this priority issue, BOEM proposes to 
establish an Atlantic Regional Office by realigning its existing 
Atlantic-related energy and minerals functions and reassigning staff 
from headquarters and other BOEM regional offices. Creation of the 
Office will address the increase in requests for engagement with local 
communities along the Atlantic by providing additional opportunities 
for access to and collaboration with BOEM. Supporting Administration 
renewable energy goals requires dedicated, regionally focused 
management and staff that can develop integrated strategies for dealing 
with issues throughout the Atlantic region, build lasting relationships 
with regional partners, and provide senior-level access to States, 
Tribes, communities, and stakeholders.
    To continue this momentum, the offshore wind energy industry will 
also need a well-trained workforce and a diverse, comprehensive supply 
chain throughout the various stages of facility planning, construction, 
and operation.
    BOEM is doing our part in this effort and has taken steps to 
encourage union-built projects and support the development of a 
domestic supply chain. BOEM is finding opportunities to incentivize the 
domestic sourcing of major components, such as blades, turbines, and 
foundations; develop a highly skilled and well-trained domestic 
workforce; and develop lease stipulations that strongly encourage 
Project Labor Agreements (PLAs) for project construction. PLAs help 
ensure a safe and well-trained workforce for the construction and 
operations of offshore facilities.
    The Carolina Long Bay, California, and Gulf of Mexico lease sales 
included a 20 percent credit for bidders that agreed to contribute to 
programs or initiatives that support offshore wind workforce training 
programs or development of a U.S. offshore wind domestic supply chain. 
These bidding credits generated approximately $160 million in future 
investments for these critical programs and initiatives.
    Thanks to strong state and industry partnerships, multiple domestic 
supply chain projects are already underway, including: a first-of-its-
kind wind energy port in New Jersey; the first subsea cable 
manufacturing facility in South Carolina; and a Jones Act-compliant 
offshore wind installation vessel being constructed in Texas that is 
using more than 14,000 tons of domestic steel, sourced mostly from 
Alabama, West Virginia, and North Carolina. On September 21, 2023, nine 
East Coast States and four Federal agencies signed the Federal-State 
Memorandum of Agreement on East Coast Offshore Wind Supply Chain 
Collaboration, to strengthen regional collaboration on offshore wind 
supply chain development.
    Combined with state initiatives, these efforts promote investment 
in the domestic supply chain and delivery of benefits and opportunities 
to underserved, disadvantaged, and overburdened communities. These 
efforts will also catalyze the offshore wind industry domestically and 
create certainty for stakeholders, industry, and ocean users alike.
    As a champion of the Biden-Harris Administration's all-of-
government approach, BOEM will continue to partner with the multiple 
levels of government, Tribal Nations, and governors of U.S. Territories 
to expand responsible offshore wind energy development.

Conventional Energy

    The FY 2025 Budget also includes $67 million for BOEM's 
Conventional Energy Program. BOEM's obligations include administering 
existing leases, permitting geological and geophysical surveys, 
reviewing exploration and development plans, evaluating resources, and 
developing and implementing a National OCS Oil and Gas Leasing Program. 
In meeting these obligations, BOEM supports energy security, 
environmental protection, and economic development through providing 
fair market value for the American taxpayer, mitigating adverse 
environmental impacts, and maintaining adequate financial assurance by 
leaseholders. As of May 1, 2024, BOEM is managing 2,410 active oil and 
gas leases on over 13 million acres of the OCS. Approximately 78 
percent of these leases are not yet in production.
    As conventional energy sources continue to play an important role 
in our economy, the OCS Lands Act requires BOEM to prepare and 
periodically revise an oil and gas leasing program that includes a 
proposed schedule of oil and gas lease sales for the five-year period 
following approval or reapproval of the program.
    In December 2023, Secretary Haaland approved the final 2024-2029 
National OCS Oil and Gas Leasing Program. The Program schedules three 
oil and gas lease sales in the Gulf of Mexico Program Area; one each in 
2025, 2027, and 2029. The proposed lease sale schedule will meet 
national energy needs for the next five years and balance the potential 
for environmental damage, the discovery of oil and gas, and adverse 
impacts on the coastal zone. The FY 2025 Budget request will ensure the 
continued effective implementation of the 2024-2029 National OCS Oil 
and Gas Leasing Program and BOEM's continued ability to provide 
accurate and accessible geologic and geophysical data in support of 
U.S. offshore energy development, economic security, and environmental 
interests.
    In addition, in April 2024, the Department announced the final Risk 
Management and Financial Assurance for OCS Lease and Grant Obligations 
rule to protect taxpayers from covering costs that should be borne by 
the oil and gas industry when offshore platforms require 
decommissioning. This rule, which updated 20-year-old regulations, 
substantially strengthens financial assurance requirements for the 
offshore oil and gas industry operating on the OCS.

Resiliency and Restoration

    The FY 2025 Budget includes $15 million to continue advancing 
marine mineral activities that contribute toward the Administration's 
goal of increasing climate change resilience through the application of 
science to make informed decisions, incorporation of nature-based 
solutions and other adaptation strategies, and continued development of 
strong partnerships to ensure our Nation's coasts are sustainably 
managed, protected, and preserved for current and future generations.
    Pursuant to the OCS Lands Act, BOEM is the Federal authority 
overseeing the use of marine minerals across the billions of acres that 
make up the OCS. The Bureau may convey, on a noncompetitive basis, the 
rights to OCS sand and other sediment to Federal, state, and local 
government agencies for use in shore protection, beach and wetlands 
restoration projects, or other construction projects funded or 
authorized by the Federal government.
    BOEM's Marine Minerals Program ensures environmentally responsible 
stewardship and conscientious management of the Nation's OCS solid 
mineral resources to support resilient coasts, natural disaster 
preparedness, climate change adaptation, and critical infrastructure 
development and protection.
    In addition, BOEM recognizes that OCS critical minerals may in the 
future be vital to the advancement of clean energy technology, as well 
as the Nation's security and economy. BOEM continues to gather 
information about critical minerals that may be located on the OCS and 
collect baseline data on the ecological communities and conditions 
associated with potential critical mineral deposits.
    In support of these efforts, BOEM will continue developing and 
enhancing its National Offshore Sand Inventory, Marine Minerals 
Information Management System, and National Offshore Critical Minerals 
Inventory.

Environmental Program

    The FY 2025 Budget includes $87 million for BOEM's environmental 
program. The program provides a foundation to ensure programmatic 
decision-making is guided by the best available environmental research 
and data to inform the public, stakeholders, diverse ocean users, and 
external decision-makers about the potential impacts of OCS energy and 
mineral activities. This work enables BOEM to identify risks and 
mitigation strategies to assist with conservation and protection of 
environmental and cultural resources.
    For 50 years, the Bureau's Environmental Studies Program (ESP) has 
funded research on the potential environmental impacts of activities 
the Bureau authorizes. Because of the quality, scale, and duration of 
studies performed under its auspices, the ESP is a leading contributor 
to the growing body of scientific knowledge about the Nation's marine 
and coastal environments, leveraging partnerships with academic 
institutions and other Federal agencies to produce top-tier scientific 
work.
    BOEM uses the ESP and other research to evaluate the environmental 
impacts of energy, mineral, and geological development and to develop 
measures to avoid, minimize, mitigate, and monitor those impacts for 
incorporation in leases, plans, and permits. These measures are the 
fabric for regulatory compliance work by BOEM as well as BSEE, and they 
are developed through National Environmental Policy Act documents and 
analyses required under other statutes.
    BOEM's environmental program also hosts the Center for Marine 
Acoustics (CMA), a one-of-its kind center of expertise in government 
focused on ocean noise and impacts to marine life. Launched in 2020, 
the CMA provides expertise and leadership to drive best practices, 
expand research on underwater sound, seek policy improvements, and 
improve messaging related to ocean noise issues.

Enhancing Tribal Engagement

    BOEM is committed to upholding its Tribal trust responsibilities 
and fostering working relationships based on trust and meaningful 
consultation. BOEM engages with Tribal Nations at all phases of the 
renewable energy leasing process to incorporate Indigenous knowledge 
and Tribal perspectives. This feedback is critical to help inform our 
decisions.
    BOEM wants Tribal communities, ocean users, and stakeholders to 
have the information they need and an equitable and accessible seat at 
the table. BOEM's FY 2025 budget request of $2.6 million supports the 
hiring of additional personnel to enhance and increase BOEM's ability 
to maintain open and transparent communication and increase engagement 
opportunities with Tribal governments and organizations, Alaska Natives 
and Alaska Native Claims Settlement Act Corporations, Native Hawaiian 
Organizations, and other Indigenous communities. BOEM's budget request 
would also support the development of a Center for Tribal Engagement, 
which would provide funding and additional capacity-building to support 
Tribal members in more active participation in consultation, 
coordination, data collection, assessment, and monitoring for renewable 
activities.
    BOEM's approach aims to ensure meaningful involvement through 
trust, respect, and shared responsibility as part of a deliberative 
process for effective collaboration and informed decision-making.

Conclusion

    Thank you once again for the opportunity to testify. BOEM's 
proposed FY 2025 budget reflects the Administration's continued 
commitment to ensuring a clean and low-cost energy future, one that is 
sustainable and beneficial to all Americans. Our work has the potential 
to shape future generations for the better, and my team and I look 
forward to working with the Subcommittee on these important issues 
moving forward. I would be happy to answer any questions you may have.

                                 ______
                                

 Questions Submitted for the Record to Ms. Liz Klein, Director, Bureau 
      of Ocean Energy Management, U.S. Department of the Interior

Ms. Klein did not submit responses to the Committee by the appropriate 
deadline for inclusion in the printed record.

            Questions Submitted by Representative Westerman

    Question 1. The Infrastructure Investment and Jobs Act was signed 
into law (P.L. 117-58) on November 15, 2021. Section 340307 amends the 
Outer Continental Shelf Lands Act to authorize the Secretary of the 
Interior to grant a lease, easement, or right-of-way on the Outer 
Continental Shelf for activities that ``provide for, support, or are 
directly related to the injection of a carbon dioxide stream into sub-
seabed geologic formations for the purpose of long-term carbon 
sequestration.'' The Act requires the Bureau of Safety and 
Environmental Enforcement jointly with the Bureau of Ocean Energy 
Management to promulgate regulations within one year of the law's 
enactment. Given the evolving landscape of carbon capture and 
sequestration (CCS) and its importance for carbon management, enhanced 
oil recovery, and other evolving uses; I'd like to understand BOEM's 
current stance and plans regarding CCS on the Outer Continental Shelf 
(OCS).

    1a) Can you provide an update on where BOEM and BSEE are in 
drafting and publishing the necessary regulations for CCS? 
Specifically, when can we expect these proposed regulations to be 
available for public comment?

    1b) Will companies holding existing OCS oil and gas leases be 
permitted to convert these leases into CCS leases, or will they need to 
acquire new leases specifically for CCS activities? If conversion is 
not allowed, what is the rationale behind this decision?

    1c) Can companies currently seek new leases specifically for CCS 
under 43 USC 1337(p)? If so, what is the current process for obtaining 
such a lease? If not, is it because BOEM is awaiting the finalization 
of the new regulations?

West Coast Decommissioning/Chumash Sanctuary

    Question 2. On behalf of a broad community consortium, the Northern 
Chumash Tribal Council submitted their sanctuary nomination in July 
2015. NOAA's Office of National Marine Sanctuaries issued a Notice of 
Intent to begin the designation process for the proposed sanctuary in 
November 2021.

    Now that NOAA has formally proposed the Chumash National Marine 
Sanctuary, it doesn't allow for an exception for decommissioning. BOEM 
and BSEE are currently in the process of working towards the 
decommissioning of the platforms within the proposed sanctuary. If the 
proposed sanctuary is finalized without a decommissioning exception, 
how will that impact BOEM and BSEE's mission to have these platforms 
decommissioned?

Financial Assurance

    Question 3. The BOEM Financial Assurance Rule is now finalized. 
BOEM has discretion under that rule on when and whether to call on any 
bonds granted in its favor.

    1a) Does BOEM intend to call on those bonds in all instances when a 
current lessee/owner fails to perform (e.g., even where there are 
predecessors)? If not, why not?

    1b) Will BOEM make the proceeds of those bonds available to 
predecessors who are called upon to perform? If not, why not?

    Question 4. During his administration, President Obama designated 
the Bears Ears National Monument in December 2016, recklessly 
restricting 1.35 million acres, and expanded the Hawaiian Marine 
National Monument, a 600,000 square acre designation, in the waning 
months of his term in August 2016, making it the largest protected area 
on Earth at the time.

    4a) As we thankfully approach the end of President Biden's term, 
what funding in the BOEM budget is allocated for preparing reviews; 
analyses, or required documents to withdraw lands and waters under 
OCSLA, the Antiquities Act, or other statutes?

    4b) Have you participated in, or are you aware of any plans within 
the Department of the Interior to carry out such withdrawals in the 
near future? If so, under which program would these actions be carried 
out, and which line item from FY24 or FY25 funding would be utilized to 
prepare for such actions?
                                 ______
                                
    Mr. Stauber. Thank you, Director Klein. Our next witness is 
Mr. Kevin Sligh. He is the Director of the Bureau of Safety and 
Environmental Enforcement in the Department of the Interior, 
and he is stationed right here in Washington, DC.
    Mr. Sligh, you are now recognized for 5 minutes.

     STATEMENT OF KEVIN SLIGH, DIRECTOR, BUREAU OF SAFETY    
         AND ENVIRONMENTAL ENFORCEMENT, WASHINGTON, DC

    Mr. Sligh. Good morning, all. Chairman Stauber, Acting 
Ranking Member Kamlager-Dove, and members of the Subcommittee, 
thank you for the opportunity to appear today to discuss the 
President's Fiscal Year 2025 budget request for the Bureau of 
Safety and Environmental Enforcement, or BSEE for short. I am 
Kevin Sligh, the Director of BSEE, and it is my distinct honor 
to be with you here today.
    BSEE's mission is to promote safety, protect the 
environment, and conserve offshore resources as we regulate and 
monitor all offshore energy operations, ensuring safe and 
responsible energy development from exploration through the 
facility, installation, production, and ultimately 
decommissioning on the Outer Continental shelf, or OCS.
    BSEE's Fiscal Year 2025 budget request is for $252.6 
million in total funding. This includes $170.4 million in 
current appropriations and $82 million in offsetting 
collections from rental receipts, cost recoveries, and 
inspection fees.
    BSEE's Fiscal Year 2025 OCS priorities include 
strengthening oversight, regulatory and research capabilities, 
building and sustaining a high-performing workforce, enhancing 
BSEE's tribal engagement program, decommissioning orphaned 
infrastructure, facilitating carbon sequestration, and 
supporting the development of a safe, robust, and sustainable 
domestic renewable energy industry.
    BSEE's budget request fully supports the Biden-Harris 
administration's priorities to oversee safe and responsible 
energy production, help address the climate crisis, and deploy 
30 gigawatts of offshore wind by 2030 and 15 gigawatts of 
floating wind by 2035. BSEE is requesting an increase in 
funding to help create good-paying jobs and restore ecosystems 
by actively addressing the challenges associated with timely 
decommissioning, and with particular focus on orphan wells and 
infrastructure.
    This funding will help to properly plug and abandon orphan 
wells on the OCS and properly decommission associated orphan 
pipelines and structures. Plugging these wells is critical to 
helping reduce pollution risk and eliminate safety hazards. 
These orphan wells create risks and could cause oil spills that 
could occur after weather-related events, and would have 
significant impacts on marine and coastal environments in 
Federal and state waters.
    BSEE will also continue to focus on strengthening our 
decommissioning oversight capabilities to meet end-of-life 
cycle demands. Leaseholders enter a contractual obligation that 
includes decommissioning requirements that must be met to 
protect both the environment and the American taxpayer, and 
BSEE will continue to enforce these obligations. As a result of 
our commitment, BSEE is driving the advancement of safety 
performance in the offshore wind industry.
    The Fiscal Year 2025 budget request would enable BSEE to 
conduct timely and rigorous reviews of industry plans, carry 
out a robust compliance assurance program, and focus on 
renewable energy data analysis.
    While offshore renewable energy represents a relatively new 
area of work for BSEE, we continue to remain focused on 
ensuring oil and gas development and production is safe and 
environmentally sustainable.
    BSEE's request also includes an additional $1.5 million to 
support the management of carbon sequestration on the OCS in 
conjunction with BOEM, and we are currently working with BOEM 
to finalize a proposed rule for carbon sequestration, which we 
expect to publish later this year.
    BSEE is proud to serve the American public, and conducts 
proactive and regular engagement with energy and marine 
minerals stakeholders at the Federal, state, tribal, and local 
agency levels, NGOs, and their national counterparts and the 
public. We aim to expand our government-to-government 
interaction with Tribal Nations. The Fiscal Year 2025 budget 
includes an $800,000 request for BSEE's tribal engagement 
program to ensure timely and meaningful coordination and 
consultation with tribes.
    And as BSEE moves towards the expansion of the offshore 
renewable energy industry while continuing to oversee safe and 
responsible offshore oil and gas production, we consistently 
aim with the future in mind. Updating our processes and framing 
our work with a particular emphasis on preparedness enables 
BSEE to focus on reducing risk to the people and the 
environment, and support responsible and efficient energy 
production.
    If I may, I would like to take this opportunity to 
highlight the dedication of our BSEE workforce as we embark on 
preparing for the future of offshore energy development and 
production for the American public. BSEE's 2023-2026 strategic 
plan has four goals driving our mission: people, protection, 
reliability, and sustainability. Without the first goal, 
people, we will never be able to accomplish the other three.
    I want to express my sincere appreciation for your 
continued support of BSEE's workforce and our mission to 
promote safe and environmentally sustainable offshore energy 
operations. Congressional support of our budget would allow 
BSEE to build on the advancements we have made, and to expand 
our capabilities to provide even more effective off-site OCS 
operations.
    Thank you, Chairman Stauber and Acting Ranking Member 
Kamlager-Dove, for inviting me here today. I will be happy to 
answer any questions that the Subcommittee may have for me.

    [The prepared statement of Mr. Sligh follows:]
    
   Prepared Statement of Kevin Sligh, Director, Bureau of Safety and 
       Environmental Enforcement, U.S. Department of the Interior

    Chairman Stauber, Ranking Member Ocasio-Cortez, and Members of the 
Subcommittee, I am pleased to join you today to discuss the President's 
FY 2025 Budget Request for the Bureau of Safety and Environmental 
Enforcement (BSEE, Bureau), a bureau of the Department of the Interior 
(DOI, Department).

FY 2025 Budget Request

    BSEE's FY 2025 Budget Request is $252.6 million in total funding, 
including $170.4 million in current appropriations and $82.2 million in 
offsetting collections from rental receipts, cost recoveries, and 
inspection fees.
    BSEE's FY 2025 Budget Request fully supports President Biden's 
priority for tackling the climate crisis and increasing renewable 
energy production safely and responsibly, with the goal of deploying 30 
gigawatts (GW) of offshore wind capacity by 2030 and 15 GW of floating 
offshore wind capacity by 2035. The FY 2025 Budget Request supports 
BSEE's continued work in its renewable and conventional energy 
programs, focusing on safe and responsible offshore energy development, 
pushing the industry forward towards a more robust and meaningful 
safety culture, and enhancing regulations to protect environmental, 
cultural, and biological resources on the Outer Continental Shelf 
(OCS). BSEE's FY 2025 Budget Request continues to focus attention on 
priority areas and builds on BSEE's current work that reflects its 
commitment to transparent and data-driven operations. This budget will 
promote safe and environmentally responsible programs, including 
decommissioning orphaned wells and infrastructure, preparing for the 
expansion of offshore wind energy generation, developing a carbon 
sequestration program, and bolstering BSEE's Tribal Liaison Program.
    The FY 2025 Budget Request will enable BSEE to continue 
strengthening oversight, regulatory, and research capabilities on the 
OCS by building and sustaining staff capabilities. BSEE will direct 
resources to the recruitment, training, and support of expert 
engineers, geoscientists, and inspectors; oil spill planning, 
prevention, and response specialists; and employees in other 
disciplines to support the implementation of BSEE's regulatory 
oversight responsibilities and evolving offshore energy landscape. BSEE 
will continue outreach and dialogue with experts from academia, 
industry, nongovernmental organizations, and other governmental 
agencies to enhance the knowledge base of technical personnel related 
to innovative technologies, regulatory gaps, real-time monitoring 
capabilities, and risk-based decision making for safety and 
environmental enforcement.
    The energy resources and activities under BSEE's jurisdiction are 
vast, as the OCS is an important source of energy for the U.S., with 
significant oil and gas production and a growing offshore wind 
industry. The Nation's first eight commercial-scale offshore wind 
projects on the OCS were recently approved, and BSEE is reviewing an 
additional 18 projects over 15 leases.
    From January through October 2023, OCS oil and gas leases offshore 
Alaska, California, and in the Gulf of Mexico produced approximately 
566 million barrels of oil and 628 billion cubic feet of natural gas. 
This production accounted for approximately 15 percent of domestic oil 
production and 2 percent of domestic natural gas produced in the same 
period. Ninety-nine percent of offshore oil and gas production occurred 
in the Gulf of Mexico. Deepwater wells (those in greater than or equal 
to 1,000 feet water depth) accounted for 91 percent of all barrels of 
oil equivalent produced on the OCS.

Decommissioning

    Shallow water areas of the Gulf of Mexico, first drilled in 1947, 
are undergoing significant well and infrastructure decommissioning that 
BSEE believes will continue to accelerate, leading to an increase in 
regulatory oversight and workload. Similarly, in the Pacific Region, 
eight of the 23 platforms no longer produce oil and gas and are located 
on terminated leases that will not resume production. BSEE expects to 
receive decommissioning applications for these eight platforms and 
associated pipelines and infrastructure in the near term.
    While decommissioning on the OCS is the obligation of the oil and 
gas industry, BSEE must ensure that wells and infrastructure used in 
exploration, development, and production activities undertaken pursuant 
to the Outer Continental Shelf Lands Act (OCSLA) are decommissioned 
properly and in a timely manner to remove unnecessary hazards to 
safety, navigation, and the environment.
    When a company responsible for decommissioning is bankrupt, or 
predecessor companies with a regulatory obligation no longer exist or 
are financially unable to fund their decommissioning obligation, the 
federal government may need to decommission this orphaned 
infrastructure using American taxpayer dollars. The Biden-Harris 
Administration is committed to addressing these orphaned oil and gas 
wells and infrastructure that pose serious safety hazards and cause 
ongoing air, water, and other environmental damage across the country. 
In the last year, BSEE enhanced its enforcement and civil penalty 
policies to address industry's performance and delinquent 
decommissioning obligations on terminated leases and rights-of-way. 
BSEE is evaluating additional enforcement strategies to encourage 
timely decommissioning.
    BSEE will continue to address the immediate and urgent need to 
properly plug and abandon orphaned wells on the OCS and remove orphaned 
pipelines and other infrastructure from the seabed. Requested funding 
would augment forfeited financial assurances the Bureau of Ocean Energy 
Management (BOEM) receives from operators, proceeds from bankruptcy 
proceedings, and potential funds from the federal orphaned wells 
program established by the Bipartisan Infrastructure Law (BIL) to 
address the most immediate and urgent needs to reduce the risk of 
safety incidents and pollution.

Offshore Wind and Renewable Energy

    In addition to regulating oil and gas operations on the OCS, BSEE 
continues to support the development of a safe, robust, and 
environmentally responsible offshore renewable energy industry in the 
United States. The first two OCS offshore wind projects are now 
generating power, and as the industry rapidly grows, BSEE will continue 
to engage with offshore wind developers to identify and promote best 
practices for ensuring worker safety and environmental protection. 
Engagement with industry, federal partners, including BOEM and the U.S. 
Coast Guard, Tribal Nations, and stakeholders continues to inform the 
development of renewable energy program functions.
    DOI is reviewing its siting and permitting processes on public 
lands and in offshore waters to identify steps that can be taken to 
increase renewable energy production, with the goal of deploying 30 GW 
of offshore wind capacity by 2030 and creating good-paying jobs that 
support working American families. As of November 2023, the Department 
has issued 27 offshore wind commercial leases in the Atlantic, five 
offshore wind commercial leases off the Pacific coast, and one lease in 
the Gulf of Mexico. In 2023, the first two offshore wind projects began 
construction, and on November 29, 2023, South Fork Wind became the 
first OCS wind project to deliver electricity to the grid; on January 
3, 2024, Vineyard Wind became the second. By the end of 2024, we expect 
that construction and installation will commence on four additional 
projects. An additional 18 wind energy projects are currently under 
review. Based on this activity and industry estimates, BSEE anticipates 
receiving over 40,000 engineering reports for review by the end of FY 
2025, including facility design reports, fabrication and installation 
reports, and certified verification agent reports. BSEE's FY 2025 
Budget Request would enable hiring to complete timely and rigorous 
industry plan reviews, establish a robust compliance assurance program, 
and conduct renewable energy research.

Carbon Sequestration

    In FY 2025, BSEE is requesting $1.5 million to hire additional 
staff to establish a Carbon Sequestration Program authorized under BIL. 
The FY 2025 Budget Request would allow BSEE to actively pursue 
solutions to address the unique challenges presented by sub-seabed CO2 
storage. A multi-disciplinary team funded through the request would 
focus on identifying relevant industry standards and enforcement 
requirements, determining applied research needs and requirements, 
creating baseline risk assessment criteria for carbon storage projects, 
reviewing flow modeling, assessing conservation considerations, and 
instituting performance and safety standards.
    BSEE and BOEM have been developing offshore carbon sequestration 
regulations that are comprehensive and rely on the best available 
science for oversight of carbon sequestration activities on the OCS. We 
are reviewing numerous industry standards and existing regulatory 
frameworks, and engaging with experts, both domestically and 
internationally. BSEE is engaging other federal agencies with 
associated expertise, including the Department of Energy, and 
evaluating the federal government's existing geological sequestration 
programs and frameworks, and mapping the applicability to the OCS 
environment. This ongoing work will facilitate the Department's ability 
to make sure sequestration operations will be safe and environmentally 
sustainable.

Inspections and Permitting

    Each year BSEE's 120+ inspectors conduct over 20,000 inspections at 
more than 1,750 facilities on the OCS. BSEE's oil and gas inspection 
strategy relies on a tiered approach to ensure the Bureau meets its 
statutory requirements, fulfills regional and national priorities, and 
uses its workforce effectively to inspect each offshore oil and gas 
facility at least once a year. In FY 2025, BSEE will continue to 
execute its Risk-Based Inspection (RBI) Program, which allows for 
targeted inspections of higher-risk operations and facilities. RBIs use 
data that was analyzed in previous years to identify safety and 
environmental concerns and issues.
    BSEE's implementation of its inspection strategy helps the Bureau 
effectively carry out core functions by promoting the use of sufficient 
controls to mitigate risk and support continuous improvement.
    Among the Bureau's priorities are ensuring the public receives fair 
market value for developed resources and that fees and cost recovery 
are fair and reasonable. In coordination with the Office of Natural 
Resources Revenue, BSEE's offshore inspectors ensure that production 
volumes are accurately measured and reported for the assessment of 
royalties owed to the American people. In FY 2025, BSEE is proposing to 
allow the Bureau to charge a per-visit production facility inspection 
fee, as is done for offshore drilling rigs, rather than the current 
once-per-year fee that has been in place since FY 2012, as well as to 
adjust existing inspection fees for inflation. This would allow BSEE to 
recover a greater share of the actual costs incurred in overseeing 
these operations and reduce the direct cost to taxpayers, while 
providing an incentive for operators to improve safety performance and 
reducing the need for follow-up inspections. The Bureau will continue 
to review inspection and other cost recovery fees to determine if 
further adjustments are needed to reduce or eliminate the potential for 
subsidies.
    BSEE is also regularly reviewing permitting processes to support 
timely processing and appropriate consideration of the risks and phases 
of development on the OCS. Conducting robust stakeholder technical and 
procedural workshops along with other engagement efforts is critical to 
the success of BSEE's modernization and reform efforts. BSEE will 
continue to hold stakeholder engagement meetings, including meetings 
with industry association groups, to provide updates on permitting 
procedures and BSEE's ``e-permitting'' modules.

Cybersecurity

    In FY 2025, BSEE will actively work to establish a BSEE offshore 
operational technology (OT) cybersecurity safety threat detection and 
mitigation program. BSEE is closely collaborating with federal 
partners, including the Department of Homeland Security's Cybersecurity 
and Infrastructure Security Agency, the U.S. Coast Guard, and the 
Department of Energy to ensure comprehensive coordination and address 
cybersecurity concerns on the OCS.
    Relationships with federal partners, including the intelligence 
community, and industry decision makers are key to ensuring that, as 
the program develops, the Bureau is equipped to inform and address OT 
cybersecurity risks on the OCS. BSEE will continue to explore program 
enhancements and engagement strategies to improve and integrate a 
cybersecurity posture within all OCS activities.
    To assist with the federal government's efforts to address OT 
cybersecurity risk on the OCS, BSEE has initiated efforts to develop a 
cybersecurity risk profile for offshore energy operators. BSEE began by 
determining the vulnerabilities within OT systems utilized by a cross-
section of these operators. Field assessments will identify strengths 
and weaknesses within client OT networks and provide BSEE and its 
federal partners with a snapshot of offshore operator OT 
vulnerabilities. This, in turn, will contribute to the development of 
an overall cybersecurity risk profile.

Strengthening our Regulatory Program

    BSEE continues to perform its statutory responsibilities by 
developing and conducting a robust regulatory program. In recent years, 
BSEE has published the High-Pressure High-Temperature and Subpart B 
Revisions proposed rule, the Blowout Preventer Systems and Well Control 
Revisions final rule, the joint BOEM/BSEE Renewable Energy 
Modernization final rule, and the Decommissioning Activities and 
Obligations final rule. BSEE is currently working on several other 
regulatory priorities including the Oil-Spill Response Requirements for 
Facilities Located Seaward of the Coast Line proposed rule, the 
Revisions to Subpart J--Pipelines and Pipeline Rights-of-Way proposed 
rule, the BSEE Renewable Energy Safety proposed rule, and the joint 
BSEE/BOEM Carbon Sequestration proposed rule.

Strengthening our Commitment to Safety and the Environment

    BSEE works closely with operators as they shift from designing to 
implementing their Safety and Environmental Management Systems (SEMS) 
processes that promote a performance-based safety approach and culture. 
Through this approach, BSEE leverages the capabilities and expertise of 
government, industry, and independent third parties to continually 
improve safety and environmental outcomes.
    BSEE's SafeOCS Program collects and analyzes near-miss, safety, and 
failure data for well-control equipment and other safety and pollution 
prevention equipment. The goal of the program is to identify proactive 
steps to mitigate risks and ensure offshore operations are safe, 
reliable, and environmentally responsible. BSEE will continue to obtain 
statistical advice on the evaluation of daily notifications of safety 
events through its partnership with the Department of Transportation's 
Bureau of Transportation Statistics.
    The BSEE!Safe program uses text messaging to send offshore workers 
links to published Safety Alerts, which inform the offshore oil and gas 
industry of the circumstances surrounding an incident or near miss and 
provide recommendations to help prevent the recurrence of such 
incidents. BSEE!Safe is part of the Bureau's strategy to supplement 
regulation with innovative programs, expanding the available toolbox of 
methods for driving safety performance and environmental stewardship 
improvements, and is the first instance in which a safety regulator has 
communicated directly with the industry workforce to ensure the 
distribution of critical safety information. As of April 2024, more 
than 7,900 subscribers have signed up for the service, and BSEE is 
expanding the service to include safety information for offshore wind 
energy workers as well.
    BSEE is also prioritizing the Safety Performance Enhanced by 
Analytical Review (SPEAR) Program, with the goal of enabling innovative 
data analytic tools and strategic Bureau-wide processes. SPEAR enables 
BSEE subject matter experts to thoroughly analyze data to identify 
current and emerging safety and environmental hazards from OCS energy 
operations. The SPEAR Program: (1) explores the potential use of 
advanced data analytic tools to support the Bureau's processes; and (2) 
establishes a world-class approach to analyzing and communicating data 
and information throughout the Bureau and to external stakeholders as 
needs arise. In FY 2025, BSEE will develop new use cases to evaluate 
and develop data for other useful applications.
    BSEE provides technical training to Bureau field personnel, 
inspectors, scientists, and engineers to ensure staff have the tools 
and knowledge needed to accomplish the Bureau's mission safely and 
effectively. BSEE's training programs provide staff with the most up-
to-date, relevant training available that addresses the technological 
advances the Bureau's workforce will encounter in the field. The 
Bureau's National Offshore Training Center (NOTC) provides cutting-
edge, comprehensive, multi-tiered training and professional development 
opportunities for BSEE's inspectors, engineers, and scientists to 
ensure safe and environmentally-sound offshore energy operations. In FY 
2025, BSEE plans to continue implementing a multi-phased approach to 
assess the current program, identify training gaps, develop and 
implement curriculum, develop and implement an accreditation plan, and 
perform annual curriculum reviews. Training enhancement will include 
incorporating training on renewable energy topics into the NOTC 
curriculum. These investments will help demonstrate the Bureau's 
commitment to building a ``best in class'' technical training program 
and will allow BSEE to better capture and track the costs associated 
with the program.

Collaboration

    The Bureau values its close cooperative relationships with federal 
and state partners with jurisdictional interest on the OCS and is 
working to strengthen resources through intra- and interagency 
cooperation. In FY 2024 and FY 2025, the Bureau is planning to complete 
several state-level agreements regarding oil spill preparedness 
coordination. Also, BSEE has been involved in discussions on continuous 
safety improvement and safety culture policy with federal partners, 
such as the Pipeline and Hazardous Materials Safety Administration and 
the Nuclear Regulatory Commission. BSEE continues to engage in 
opportunities to leverage resources and share information across U.S. 
government agencies.
    BSEE will continue to enhance international collaboration in FY 
2025. BSEE engages regularly with international counterparts to promote 
the safe and environmentally responsible development of offshore energy 
resources globally. BSEE has established itself as a leader in 
international cooperation, actively participating in multilateral 
forums such as the International Regulators' Forum, the Arctic Offshore 
Regulators Forum, and the International Offshore Petroleum Environment 
Regulators group, and Arctic Council bodies such as the Emergency 
Prevention, Preparedness and Response Working Group. BSEE's 
preparedness activities at the international scale span work in both 
temperate and Arctic waters. The Bureau uses its international 
leadership role to better understand the viabilities of traditional oil 
spill cleanup strategies in different environments.

Oil Spill Prevention

    BSEE continues to implement a comprehensive, cost-effective, long-
term research program dedicated to improving response countermeasures 
for oil spills offshore, including in Arctic environments. The research 
program is based upon a strategic plan that recognizes the evolving 
risks in offshore exploration and production and BSEE's mission of 
protecting the environment. BSEE focuses its oil spill response 
research on advancing state-of-the art methods and technologies for oil 
spill detection.
    A crucial and unique asset that aids BSEE's ability to conduct this 
work is Ohmsett, the National Oil Spill Response Research and Renewable 
Energy Test Facility in Leonardo, New Jersey. Ohmsett hosts a large, 
outdoor, aboveground concrete test tank that is 667 feet long, 65 feet 
wide, and filled to a depth of eight feet with 2.6 million gallons of 
saltwater. Ohmsett allows government and private industry oil spill 
response personnel to hone techniques and test full-scale equipment in 
realistic sea environments. Ohmsett plays an important role in 
protecting the Nation's oceans by supporting development of the most 
effective response technologies as well as preparing responders by 
creating the most realistic training environment available.

Tribal Coordination

    BSEE regulates activities that may have direct or indirect impacts 
to the integrity of the shoreline and its ecology, offshore habitat, 
marine mammals, other critical species, natural view-scape, and 
submerged historical or archaeological sites. BSEE strives to ensure 
that its processes surrounding activities that may have effects on 
Indigenous communities are communicated openly, transparently, and 
thoroughly. BSEE hosts consultations with Tribal Nations for three 
primary reasons: to honor our nation-to-nation relationship; to hear 
directly from Tribal leaders as we address economic, environmental 
justice, and climate crises, all of which disproportionately impact 
Native Americans and Alaska Natives; and to commit ourselves to a 
process that addresses Tribal needs and ensures we respect and 
understand the input we receive.
    To support this commitment to Tribal coordination and consultation, 
BSEE is requesting $800,000 to strengthen its existing National Tribal 
Engagement Program to include additional dedicated, full-time Tribal 
liaison positions. With this additional funding, the National Tribal 
Engagement Program will be better able to provide meaningful and timely 
coordination and consultation with Tribes.

Conclusion

    I would like to take this opportunity to express our appreciation 
for the continued support for safe and environmentally sustainable 
offshore energy development and production. The FY 2025 Budget Request 
will support BSEE's efforts to ensure responsible offshore energy and 
mineral resource development, build on BSEE's advancements, and expand 
its ability to provide effective oversight of the OCS through the 
initiatives outlined above.
    I thank the Chairman and Ranking Member for inviting me here today 
and would be happy to answer the Subcommittee's questions.

                                 ______
                                 

Questions Submitted for the Record to Mr. Kevin Sligh, Director, Bureau 
    of Safety and Environmental Enforcement, U.S. Department of the 
                                Interior

Mr. Sligh did not submit responses to the Committee by the appropriate 
deadline for inclusion in the printed record.

            Questions Submitted by Representative Westerman

    Question 1. The Infrastructure Investment and Jobs Act was signed 
into law (P.L. 117-58) on November 15, 2021. Section 340307 amends the 
Outer Continental Shelf Lands Act to authorize the Secretary of the 
Interior to grant a lease, easement, or right-of-way on the Outer 
Continental Shelf for activities that ``provide for, support, or are 
directly related to the injection of a carbon dioxide stream into sub-
seabed geologic formations for the purpose of long-term carbon 
sequestration.'' The Act requires the Bureau of Safety and 
Environmental Enforcement jointly with the Bureau of Ocean Energy 
Management to promulgate regulations within one year of the law's 
enactment. Given the evolving landscape of carbon capture and 
sequestration (CCS) and its importance for carbon management, enhanced 
oil recovery, and other evolving uses; I'd like to understand BOEM's 
current stance and plans regarding CCS on the Outer Continental Shelf 
(OCS).

    1a) Can you provide an update on where BOEM and BSEE are in 
drafting and publishing the necessary regulations for CCS? 
Specifically, when can we expect these proposed regulations to be 
available for public comment?

    1b) Is there any provision that allows companies with existing OCS 
oil and gas leases to perform CCS activities before the new regulations 
are finalized and published?

West Coast Decommissioning/Chumash Sanctuary

    Question 2. On behalf of a broad community consortium, the Northern 
Chumash Tribal Council submitted their sanctuary nomination in July 
2015. NOAA's Office of National Marine Sanctuaries issued a Notice of 
Intent to begin the designation process for the proposed sanctuary in 
November 2021.

    Now that NOAA has formally proposed the Chumash National Marine 
Sanctuary, it doesn't allow for an exception for decommissioning. BOEM 
and BSEE are currently in the process of working towards the 
decommissioning of the platforms within the proposed sanctuary. If the 
proposed sanctuary is finalized without a decommissioning exception, 
how will that impact BOEM and BSEE's mission to have these platforms 
decommissioned?

                                 ______
                                 

    Mr. Stauber. Thank you, Director Sligh. Our next witness is 
Mr. Howard Cantor. He is the Director of the Office of Natural 
Resources Revenue in the Department of the Interior, and he is 
stationed in Denver, Colorado.
    Mr. Cantor, you are now recognized for 5 minutes. Welcome.

        STATEMENT OF HOWARD CANTOR, DIRECTOR, OFFICE OF
          NATURAL RESOURCES REVENUE, DENVER, COLORADO

    Mr. Cantor. Thank you. Chairman Stauber, Ranking Member 
Kamlager-Dove, and members of the Subcommittee. I am Howard 
Cantor, the Director of the Office of Natural Resources 
Revenue. I am pleased to join you today to discuss the 
President's Fiscal Year 2025 budget request for the Office of 
Natural Resources Revenue, also known as ONRR, an office under 
the Assistant Secretary for Policy Management and Budget within 
the Department of the Interior.
    ONRR collects, accounts for, and verifies natural resource 
and energy revenues due to states, American Indians, Alaska 
Natives, and the U.S. Treasury. In Fiscal Year 2023 alone, ONRR 
disbursed $18.24 billion in revenue from energy production on 
Federal and Indian lands and offshore areas, including $4.72 
billion to 33 states.
    Given the large size of the revenue stream handled and 
dispersed, ONRR strives for transparent and efficient 
operations in collecting every dollar due to ensure that the 
American taxpayer and Indian tribes receive full payment of the 
revenues they are owed for the development of their resources. 
ONRR works to collect every dollar due while maintaining a 
collaborative working relationship with industry.
    Every American benefits from the revenues generated from 
mineral resources, either directly, through payments to 
American Indian tribes and individual Indian mineral owners, or 
indirectly, through payments to the Historic Preservation Fund, 
the Reclamation Fund, the Land and Water Conservation Fund, 
states, and the General Fund of the U.S. Treasury.
    The Fiscal Year 2025 budget for ONRR supports its mission 
to collect, disperse, and verify Federal and Indian energy and 
other natural resources revenues on behalf of all Americans. 
The budget request includes funding for the assumption of 
mineral revenue management responsibilities of the Osage 
Nation. Taking over these responsibilities represents a 
significant effort, due to the unique framework of mineral 
revenue within the Osage Nation.
    The request also includes $7 million to restore audit and 
compliance activities reduced by the Fiscal Year 2024 enacted 
budget, enabling ONRR to perform additional data mining 
activities, compliance reviews, and audits.
    ONRR's Fiscal Year 2025 budget request also demonstrates 
fiscal responsibility, as the requested amount for ongoing 
information technology modernization work is reduced by $10 
million.
    I want to take this opportunity to express our appreciation 
for the continued support for responsible, secure, and accurate 
collection of mineral revenue from Federal and Indian lands and 
Federal waters.
    The Fiscal Year 2025 request will support ONRR's efforts to 
modernize systems, become more efficient, and ensure the 
American taxpayer and Indian tribes receive full payment of the 
revenues that they are owed for the development of their 
resources.
    I thank the Chairman and Ranking Member for inviting me 
here today, and I would happily answer the Subcommittee's 
questions.

    [The prepared statement of Mr. Cantor follows:]
    
   Prepared Statement of Howard Cantor, Director, Office of Natural 
           Resources Revenue, U.S. Department of the Interior

    Chairman Stauber, Ranking Member Ocasio-Cortez, and Members of the 
Subcommittee, I am pleased to join you today to discuss the President's 
Fiscal Year (FY) 2025 budget request for the Office of Natural 
Resources Revenue (ONRR), an office under the Assistant Secretary for 
Policy Management and Budget within the Department of the Interior 
(Department).

Background

    For the benefit of all Americans, ONRR collects, accounts for, and 
verifies natural resource and energy revenues due to states, American 
Indians, Alaska Natives, and the U.S. Treasury. In FY 2023 alone, ONRR 
disbursed $18.24 billion in revenue from energy production on federal 
and Tribal lands and offshore areas, including $4.72 billion to 33 
states. Given the large size of the revenue stream handled and 
disbursed, ONRR strives for transparent and efficient operations, 
collecting every dollar due and ensuring that the American taxpayer and 
Indian Tribes receive full payment of the revenues that they are owed 
for the development of their resources. ONRR maintains a collaborative 
working relationship with industry through reporter training, providing 
speakers for industry-led conferences, and informal interactions in an 
effort to gain compliance with the laws and regulations before any 
formal actions need to be taken.
    Every American benefits from the revenues generated from mineral 
resources, either directly through payments to American Indian Tribes 
and Individual Indian Mineral Owners or indirectly through payments to 
the Historic Preservation Fund, the Reclamation Fund, states, and the 
General Fund of the U.S. Treasury. ONRR also contributes to the Land 
and Water Conservation Fund (LWCF), with appropriations made permanent 
in August 2020 as part of the Great American Outdoors Act (GAOA), and 
tracks and reports the energy funds available for calculation of the 
amounts attributable to the National Parks and Public Land Legacy 
Restoration Fund created under the GAOA.
    The Federal government has collected revenues from mineral 
production on federal onshore lands since 1920, on American Indian 
lands since 1925, and on federal offshore areas since 1953. In 1982, 
the Federal Oil and Gas Royalty Management Act called upon the 
Department to establish a comprehensive, consolidated system for the 
collection, accounting, and disbursement of these revenues. From FY 
1982 through FY 2023, Interior has provided over $371 billion to 
federal, state, and American Indian recipients through this program. 
Approximately 56 percent of all annual collections have gone to the 
General Fund of the U.S. Treasury, 23 percent to special purpose funds, 
16 percent to states, and 5 percent to the American Indian community.

Fiscal Year (FY) 2025 Request

    The FY 2025 budget request for ONRR is $175,987,000 to support 
ONRR's mission to ``collect, disburse, and verify federal and Indian 
energy and other natural resource revenues on behalf of all Americans'' 
through the work of our various program areas:

     Revenue, Reporting, and Compliance Management: These 
            activities ensure revenues from federal and American Indian 
            leases are efficiently, effectively, and accurately 
            collected, accounted for, invested, and disbursed in a 
            timely manner. This program's activities also include 
            support of the Bureau of Indian Affairs Indian Energy 
            Service Center, as well as efforts to ensure timely, 
            complete, and accurate reporting while providing reasonable 
            assurance of company compliance.

     Audit Management: These activities focus on accurate 
            reporting and payment of the nation's federal and American 
            Indian mineral revenues. Federal and American Indian audit 
            and compliance activities represent a critical part of the 
            operational strategy to ensure companies comply with 
            applicable laws, regulations, and lease terms. This 
            program's activities also include administering cooperative 
            agreements with states and American Indian Tribes, tribal 
            consultations, and investigating and responding to the 
            inquiries of individual Indian mineral interest owners.

     Research, Enforcement, Guidance, and Appeals: These 
            activities develop and implement consistent and 
            comprehensive compliance planning, as well as market and 
            geospatial analysis, valuation guidance and determinations, 
            production meter verification, rulemaking, responding to 
            appeals of ONRR actions, bankruptcies, litigation support, 
            and enforcement.

    The FY 2025 budget request is $8.05 million above the FY 2024 
enacted level attributed to the following:

     $4.1 million and 25 full time equivalent (FTE) for ONRR to 
            assume the mineral revenue management responsibilities for 
            the Osage Nation.

     $7.0 million to restore Audit and Compliance activities.

     $5.5 million to fund a fixed cost increase for FY 2024 and 
            $1.5 million for FY 2025 fixed cost increases.

     A reduction of $10 million in ONRR's ongoing information 
            technology modernization efforts.

Osage Trust Accounting Implementation

    In 2014, ONRR was first tasked with providing minerals revenue 
management functions for the Osage Tribe so that the Department could 
comply with a settlement agreement with the Tribe. However, a court 
delayed, and then the Bureau of Indian Affairs (BIA) withdrew a final 
rule intended to shift the Department's Osage minerals revenue 
management responsibilities from BIA to ONRR. BIA published a new 
proposed rule in January 2023 and is working to publish the final rule 
in FY 2024. ONRR requests an additional +$4.1 million and +25 FTE in FY 
2025 as part of a multi-phase and multi-year implementation effort to 
ensure essential collection, disbursement, and compliance functions for 
Osage mineral revenues. ONRR's assumption of the full oil and gas 
revenue and production reporting and verification program on Osage 
lands represents a significant increase in ONRR's workload across its 
mission activities. Once fully implemented, ONRR expects that taking on 
Osage properties will increase its Indian-related workload by 
approximately 50 percent. There are currently 2,900 active leases and 
14,500 producing wells on Osage lands, which will increase the number 
of Indian leases and wells in ONRR's systems by 46 percent and 62 
percent, respectively. Additionally, ONRR expects to provide guidance 
and training to 230 new production and royalty reporters, a 43 percent 
increase in the number of Indian reporters. The Osage-related workload 
is likely to continue increasing, as an additional 4,760 wells are 
expected to be drilled by 2037 on Osage lands.
    With its current Osage funding, ONRR is performing limited 
compliance activities as permitted by existing regulations. ONRR 
proposes a phased approach to funding and fully carrying out its 
functions for the Osage Tribe once the final rule is effective. The 
additional funds requested in FY 2025 will help ensure ONRR conducts 
essential collection and disbursement activities for Osage mineral 
revenues. In addition to continuing current limited compliance 
activities, this would allow ONRR to perform required functions in FY 
2025.
    Transitioning these activities to ONRR will require a significant 
time investment as ONRR works with Osage stakeholders to shift them to 
ONRR's forms and processes. ONRR's production and royalty forms will be 
completely new to Osage reporters, and ONRR plans to provide reporter 
training sessions to assist them. Even so, ONRR expects it will need to 
respond to questions and investigate and assist in resolving reporting 
errors. Also, BIA's current processes do not involve enforcement, so 
ONRR expects to inform and educate affected payors and lessees about 
ONRR's enforcement processes.

Audit and Compliance Activities

    Funding reductions enacted in the FY 2024 appropriation are 
impacting ONRR's Audit and Compliance activities. ONRR disbursed over 
$18 billion in FY 2023, so even relatively small percentage reductions 
to collections can equate to large dollar amounts, which can adversely 
impact the financial well-being of tribal members and allottees, as 
well as states' abilities to fund vital programs. Restoration of the 
$7.0M reduction ONRR received in FY 2024 would enable ONRR to perform 
additional data mining activities, compliance reviews, and audits, 
thereby increasing ONRR's ability to ensure accurate reporting and 
payment of royalties due.

IT Modernization

    ONRR has made significant progress implementing its IT 
Modernization program and has determined the funding received for these 
efforts can be reduced by $10.0 million beginning in FY 2025 without 
significantly impacting the project schedule. ONRR's IT Modernization 
effort supports EO 14028, Improving the Nation's Cybersecurity, by 
continuing on the path to replace its aging Minerals Revenue Management 
Support System (MRMSS) with modernized systems. This work will ensure 
the stability and security of systems that disbursed over $18 billion 
in FY 2023 and enhance efficiency and mission delivery.

Baseline Capacity

    The FY 2025 budget includes important investments in programs 
needed to help strengthen America and be more competitive as the world 
continues to change. These investments include funding needed to 
maintain a robust and talented workforce and the must-pay requirements 
needed to continue to fulfill ONRR's mission. The budget includes +$5.5 
million for ONRR, which reflects the incremental amount needed to cover 
the fixed costs associated with mission operations in FY 2024. This 
request, in combination with the FY 2025 fixed cost amounts, will allow 
the program to meet must-pay requirements without impacting program 
activities.

Conclusion

    I would like to take this opportunity to express our appreciation 
for the continued support for responsible, secure, and accurate 
collection of mineral revenue from federal and Indian lands and federal 
waters. The FY 2025 request will support ONRR's efforts to modernize 
systems, become more transparent, and add capacity to ensure the 
American taxpayer and Indian Tribes receive full payment of the 
revenues they are owed for the development of their resources.
    I thank the Chairman and Ranking Member for inviting me here today, 
and I would be happy to answer the Subcommittee's questions.

                                 ______
                                 

  Questions Submitted for the Record to Mr. Howard Cantor, Director, 
  Office of Natural Resources Revenue, U.S. Department of the Interior

Mr. Cantor did not submit responses to the Committee by the appropriate 
deadline for inclusion in the printed record.

            Questions Submitted by Representative Westerman

    Question 1. The Infrastructure Investment and Jobs Act was signed 
into law (P.L. 117-58) on November 15, 2021. Section 340307 amends the 
Outer Continental Shelf Lands Act to authorize the Secretary of the 
Interior to grant a lease, easement, or right-of-way on the Outer 
Continental Shelf for activities that ``provide for, support, or are 
directly related to the injection of a carbon dioxide stream into sub-
seabed geologic formations for the purpose oflong-term carbon 
sequestration.'' The Act requires the Bureau of Safety and 
Environmental Enforcement jointly with the Bureau of Ocean Energy 
Management to promulgate regulations within one year of the law's 
enactment.

    1a) Does ONRR anticipate revenues and if so how much from CCS 
leasing or how would revenues be calculated in case of conversion 
mechanism?

                                 ______
                                 

    Mr. Stauber. Thank you, Mr. Cantor. I thank all the 
witnesses for their testimony. The Chair will now recognize 
Members for 5 minutes of questioning, and I now recognize 
myself for 5 minutes.
    Director Klein, I would like to start by focusing on BOEM's 
implementation and interpretation of the Inflation Reduction 
Act Section 5265, which couples oil and gas leasing to wind 
leasing. You are aware of the 60 million acre requirement, 
correct?
    Ms. Klein. Correct.
    Mr. Stauber. Do you interpret this as Congress wanting you 
to offer robust acreage for oil and gas leasing, or do you see 
it as oil and gas will only get the 60 million acres if the 
wind industry decides so?
    Ms. Klein. Thank you for the question.
    In setting out the schedule of lease sales for oil and gas, 
and the process that we undertake to determine where those 
lease sales should take place, there is an environmental review 
process that takes place, which has been launched. We just put 
out our area identification that notes the place where we are 
focusing our environmental analysis in the Gulf of Mexico. And 
as has been the usual process for the history of the program, 
we provide additional information as we get closer to the lease 
sale stage about which areas will be offered. We are aware of 
the 60 million-acre requirement.
    Mr. Stauber. OK. So, Director Klein, hypothetically, if the 
offshore wind industry came to you and said, ``We have enough 
acreage for offshore wind development, no need to hold a lease 
sale this year,'' would you still hold an offshore wind lease 
sale or an oil and gas lease sale?
    Ms. Klein. Thanks for the question. On the offshore wind 
space, what we have tried to do is set out a schedule of 
offshore wind lease sales to continue the robust development of 
an offshore wind industry here in the United States, so that we 
can transition to cleaner energy sources.
    Mr. Stauber. Well, Director Klein, respectfully, with the 
precedent you have set, not a lot of people here believe you 
are acting in good faith.
    This Administration has neglected its duty to support oil 
and gas leasing, so we are incredibly worried you will continue 
this trend and fail to carry out the measly three lease sales 
that you have put in the current 5-year plan. Based on the 
readings of the Department's plans, it appears that your 
offshore wind schedule has 12 sales scheduled over the next 5 
years, a 400 percent increase in renewables over oil and gas. 
Is that correct?
    Ms. Klein. I don't know that I can do the math that quickly 
in my head, but we have scheduled 12 potential lease sales for 
offshore wind over the next 5 years, reflecting what we believe 
to be the tremendous opportunity for offshore wind.
    Mr. Stauber. Director Klein, it is correct. So, how much of 
the revenue raised from these 12 lease sales will contribute to 
coastal communities, and will a single dollar from these lease 
sales go back to these communities?
    Ms. Klein. In developing this program, we have focused on, 
or I should say, in supporting the development of offshore wind 
in this country, the Biden-Harris administration has put a 
tremendous amount of effort on----
    Mr. Stauber. Director Klein, with all due respect, that is 
not what I asked. I said, ``Will the money go back to these 
coastal communities?''
    Ms. Klein. There is a tremendous amount of economic 
development and opportunity happening in coastal communities 
right now. I cited some of that in my opening testimony.
    Mr. Stauber. No, I am talking about the revenue that will 
be generated. Will that go back to the coastal communities?
    Ms. Klein. Where revenue goes from offshore wind is a 
matter of statutory authority. Right now, there is no statute 
that exists that directs revenues from offshore wind to 
anywhere else but the Treasury.
    Mr. Stauber. And Director, that is what we are getting at. 
There is no mechanism approved by Congress to return these 
revenues to the coastal communities. They won't be compensated 
for this development for offshore wind. Instead, these 
communities will have to pay more to cover their energy costs 
while not receiving conservation funding.
    Do you know how BOEM could fix that? You could support 
offshore oil and gas leasing. By law, your dollars would flow 
back to coastal communities through revenue sharing and 
conservation funding, and Americans across the country would 
see lower energy costs. I think that is a simple fix.
    Director Cantor, how much GOMESA revenue has offshore oil 
and gas contributed in the last 5 years?
    Mr. Cantor. Thank you for the question, Chairman. For 
GOMESA, let's see. I don't have the total for the last 5 years.
    Mr. Stauber. Hundreds of millions?
    Mr. Cantor. Hundreds of millions. Yes, sir.
    Mr. Stauber. And how about LWCF or Historic Preservation 
Fund in the last 5 years?
    Mr. Cantor. The LWCF is capped at $125 million per year.
    Mr. Stauber. OK. And then how much from offshore wind?
    Mr. Cantor. Can you repeat the question, Chairman?
    Mr. Stauber. How much has offshore wind generated for you?
    Mr. Cantor. Over the last 5 years we have had----
    Mr. Stauber. Just for coastal communities. How much has 
come back to coastal communities?
    Mr. Cantor. There has been about $5.7 billion, most of that 
due to a bonus in 2022 for the New York Bight wind sale. But in 
terms of how much goes back to coastal communities, that----
    Mr. Stauber. My time has expired here, but I will say it 
goes back to the Treasury. So, nothing goes back directly to 
the communities from offshore wind at this moment.
    I will now turn it over to Representative Kamlager-Dove for 
5 minutes of questioning. Thank you.
    Ms. Kamlager-Dove. Thank you, Mr. Chair, and I too am 
interested in folks not operating in good faith, and the money, 
and lower energy costs.
    Director Klein, last month the FTC issued a complaint about 
Pioneer Resources, with evidence that their CEO, Scott 
Sheffield, colluded with OPEC to illegally manipulate the 
market to drive up gas prices. The complaint was big news in 
part because it had solid evidence that the high gas prices my 
colleagues on the other side have been talking about were not, 
in fact, the result of insufficient oil production here in the 
United States or Biden's so-called war on American energy, as 
our colleagues across the aisle often claim. Instead, gas 
prices may have been inflated because of illegal manipulation 
of oil markets.
    The amount of money Sheffield squeezed out of working 
families, according to his own estimates, conservatively, was 
between $2.7 and $4 billion in 2023 alone. After Mr. Sheffield 
started manipulating the markets, his compensation went from 
$19 million a year to $67 million a year. That was his big 
reward for gouging the American people.
    The FTC complaint presents evidence that Pioneer was not 
just colluding with Iran, Saudi Arabia, and Russia, but with 
other oil companies in the United States, too. Even more 
evidence of collusion between nine different oil companies in 
the United States, including Pioneer, was detailed in a 
separate class action lawsuit from April of this year.
    Director Klein, does Pioneer Resources have any offshore 
leases?
    Ms. Klein. Thank you for the question. I believe that 
Pioneer does not. They mostly focus on the onshore space.
    Ms. Kamlager-Dove. OK, thank you.
    Ms. Klein. That is my understanding.
    Ms. Kamlager-Dove. Now, Hess Corporation was part of the 
lawsuit, too. Does Hess Corporation have any offshore leases?
    Ms. Klein. I believe that Hess does, yes.
    Ms. Kamlager-Dove. OK. And what about Occidental Petroleum?
    Ms. Klein. I also think they have offshore leases, yes.
    Ms. Kamlager-Dove. Yes. So, if Occidental, Hess, or any 
other oil and gas company with an offshore lease were found 
guilty of colluding with OPEC and engaging in illegal, anti-
competitive practices, or price fixing, would they still be 
eligible to get a lease in the future?
    Ms. Klein. No. If a company is found guilty of something 
like collusion, we have regulations in place that make them 
ineligible to hold a lease in the future.
    Ms. Kamlager-Dove. OK, thank the Lord. Because I would hope 
that, if a company was using taxpayer lands or waters to scam 
the American people into paying astronomical gas prices so the 
company could pad their profits, increase dividends, and stock 
buybacks, which is exactly what Pioneer did, that BOEM should 
be able to put a stop to it. It should be an easy call to 
disqualify, suspend, or debar them from being able to do any 
further business with the Federal Government, including being 
able to extract more oil and gas from public lands.
    And I would hope that my colleagues from across the aisle 
would join me in this pursuit to ensure that is the case, 
because Committee Democrats are requesting a formal 
investigation into this matter, and I hope we can take this up 
in a bipartisan way.
    BOEM also manages offshore renewable energy development, 
which will play a vital role in curbing the climate crisis. 
And, of course, there are challenges to standing up a new 
industry, but there are also far-reaching benefits.
    Director Klein, can you briefly go over some highlights of 
the job and economic benefits of the offshore wind energy for 
coastal communities and throughout the United States?
    And if you heard anything that you disagree with earlier, 
could you please respond to those issues?
    Ms. Klein. Thank you for the question. I have been in this 
role a little bit over a year, and I have been really 
energized, sorry for the pun, by my travels all around the 
country. I have been visiting and hearing from all sorts of 
communities, workers, folks associated with the growth of 
offshore wind. There are really billions of dollars of 
investments that are flowing all across the country.
    I was able to travel to Portsmouth, Virginia, for instance, 
and celebrated milestones of a project, Offshore Virginia, with 
the Governor, the Lieutenant Governor, and the Attorney 
General.
    I have been to Brownsville, Texas to look at the 
construction of the first Jones Act-compliant offshore wind 
vessel that is, as I mentioned in my opening remarks, sourced 
with steel from the United States, and has a number of American 
workers working hard to launch that boat.
    We celebrated the South Fork project, its first delivery of 
energy to the grid up in Long Island, and heard from union 
workers and folks who are really proud of the work that they 
have done there to support a clean energy future. That project 
has export cable that was manufactured in South Carolina, a 
substation from Texas, so the opportunity for economic growth 
all around the country, it is a long list, and we are really 
excited about it at BOEM.
    Ms. Kamlager-Dove. Thank you.
    Mr. Stauber. Thank you very much. We will now go to 
Representative Graves from Louisiana for 5 minutes.
    Mr. Graves. Thank you. Thank you all for being here.
    Ms. Klein, how long does it take to go from a lease sale to 
actual production in the OCS?
    Ms. Klein. Thank you for the question. The timeline can 
vary.
    Mr. Graves. Just give me a ballpark, please.
    Ms. Klein. It can take anywhere from 5 to 10 years. It 
really depends on the operator, and how swiftly they move to 
production plans.
    Mr. Graves. It generally takes a lot closer to 10 years 
than 5.
    Mr. Cantor, when ONRR releases something saying that GOMESA 
revenue sharing hit the cap ``due to record high oil and gas 
production under this Administration,'' if it takes 10 years to 
go to production, from lease sale to production, is that really 
an honest statement, suggesting to the American people that 
production is at high levels because of this Administration?
    Mr. Cantor. Thank you for the question, Congressman. If the 
timeline is as you have stated, then the timeline is as you 
have stated.
    Mr. Graves. So, the answer would----
    Mr. Cantor. I don't really have a comment on that question.
    Mr. Graves. The answer would be no.
    Ms. Klein, let's say that President Smith comes in next, 
and President Jones comes in after that, and subsequent to this 
Administration. Since you are not doing any lease sales, is it 
going to be their fault that we don't have appropriate supply 
of liquid fuels, of oil and gas?
    Ms. Klein. In setting the three lease sales over the next 5 
years for oil and gas, the Secretary determined that those 
sales would best meet our energy needs. There is obviously 
production continuing right now, record levels of production. 
That will continue----
    Mr. Graves. Ms. Klein, you are not answering my question. 
Is it going to be their fault that we don't have sufficient 
supplies?
    This is the lowest, the lowest lease sale production since 
we have had an OCS program ever, ever, 1/100 of what was leased 
under President Jimmy Carter, 1/360 under what was leased under 
President Ronald Reagan. This is awful. You are completely 
screwing the next administration and the one after from this 
completely failed energy plan.
    Let me ask you a few questions, and any of you in the panel 
are welcome to answer this. When you did the Rice's whale sue-
and-settle, is that going to result in lower production costs 
or higher production costs in the OCS?
    Ms. Klein. I don't know what you are referring to by sue-
and-settle, but if you are referring to the voluntary 
measures----
    Mr. Graves. The Rice's whale restrictions, is that going to 
cost more to produce or less to produce?
    Ms. Klein. Currently, there are voluntary measures that we 
have offered to oil and gas.
    Mr. Graves. That is a yes or no. Please don't burn my time. 
It is a yes-or-no question.
    Is it going to cost more to produce or less to produce?
    Ms. Klein. It is not going to have any----
    Mr. Graves. It is not going to cost less. Do you want to 
just say that? That is fine.
    No. 2, financial assurance. The financial assurance rule, 
is that going to result in higher cost to produce or lower cost 
to produce?
    Ms. Klein. We believe----
    Mr. Graves. The additional $9.2 billion in bonding will 
cost more.
    The methane rule, is that going to cost more to produce or 
less to produce?
    [No response.]
    Mr. Graves. That is going to cost more to produce. I will 
help you all out here.
    The pipeline feed that this Committee proposed, what was 
it, $500 a mile or what, I don't even remember what it was, but 
the pipeline fee for offshore energy products, and it was like 
a fee for below 1,000 feet and above 1,000 feet, or something 
like that. Those additional fees similarly would be passed on 
to consumers, and then higher royalty rates, which means that 
you are paying more to the government to produce.
    All of these things cumulatively cost a higher cost for 
production, and that is all passed on to consumers. So, my 
friends are sitting here talking about higher prices. Look, we 
saw this under the Obama administration. Oil and gas prices are 
higher under these flawed policies. It shouldn't be a shock to 
anybody that we are seeing it right now again. In fact, it is 
embarrassing that we saw it once, and this Administration is 
walking into the same thing, putting your hand right on that 
red hot stove all over again, and then pointing to everybody 
else as the cause. And it is shown over, and over, and over 
again that the excuses that have been brought up by this 
Administration are completely untrue.
    So, let's be crystal clear. It is this Administration's 
policies, your lack of lease sales that are causing higher 
energy prices. You are completely screwing this country's 
energy security in the future with the 10-year timeline it 
takes to go from lease sales into production. You are putting 
communities in the Gulf of Mexico at risk because Mr. Cantor is 
not going to have a penny in revenue sharing that, under our 
Constitution, is required to be spent on resiliency projects 
like restoring our coastal ecosystem, on hurricane protection, 
and on flood control projects, putting these people as sitting 
ducks for future hurricanes. And consumers are paying, when 
this Administration took office, $1.74 a gallon were gasoline 
prices, lowest prices in Louisiana. Today, I am going to guess 
three bucks. Completely screwing communities.
    Look Mr. Chairman, I know I am out of time. I just want to 
see if Mr. Sligh or Ms. Klein can give us any clarity on the 
financial assurance rule. Specifically, is that BOEM or BSEE's 
intent to call upon the additional supplemental bonds when a 
current operator can't fulfill their decommissioning obligation 
before going after the predecessor lessees? It should be a yes 
or no.
    Ms. Klein. The Financial Assurances Rule is meant to ensure 
that current lessees and grant holders undertake their 
obligations to clean up after themselves when they are done. 
So, we would be going to those financial assurance requirements 
before we went to predecessors.
    Mr. Graves. Thank you. Thank you for answering that 
question.
    Mr. Stauber. Thank you very much.
    Mr. Graves. I yield back.
    Mr. Stauber. We will now go to Representative Huffman for 5 
minutes.
    Mr. Huffman. Thank you, Mr. Chairman.
    We expect a lot of fossil fuel boosterism in this Committee 
and this Subcommittee, but recently it has risen to the level 
of almost cartoonish fealty to the fossil fuel industry. At a 
time when you are talking about record production, record 
exports, record profits, we continue to hear this rhetoric 
about the Biden administration declaring a war on oil and gas. 
It is just not something that can credibly be said. But if you 
are so beholden to fossil fuel that without blushing you can 
mouth these talking points, this is the place where we hear it.
    And when we see clear evidence that these fossil fuel 
interests are colluding with OPEC to screw American consumers 
and rig the global price of oil, and Democrats try to do 
something about it on a bipartisan basis, we hear crickets from 
the other side, because they just can't bring themselves to 
ever stand up to this massive industry, no matter how much it 
abuses the environment or American consumers.
    In fact, we have a moment here where you have a chance to 
choose between the American people and consumers, and 
protecting them from high gas prices or your friends at Big 
Oil. And it looks like, to no one's surprise, our friends 
across the aisle choose Big Oil every time.
    Director Klein, it is a little rich when the Chair lectures 
you about good faith. And you should just know that when that 
term is used around here, it has a coded meaning. ``Good 
faith'' means absolute boosterism for fossil fuel at all costs.
    The $60 million minimum and other provisions of the IRA 
that you were asked about were formulas that one U.S. Senator 
insisted upon in the Inflation Reduction Act. It is not sacred, 
and it doesn't mean you have to go over and above that. It 
doesn't mean that you have to bow and scrape at the throne of 
Big Oil, as the Chair would ask you to do, in order to comport 
with his notion of good faith. So, I would say minimum 
compliance with this formula that was forced in to the IRA, 
something that most Members of Congress in both houses, I 
believe, did not support, I certainly opposed it, but minimum 
compliance is just fine, and certainly meets the good faith 
standard, in my view.
    With respect to offshore wind, the Chair is having some fun 
with the nuance of how royalties work, and how auction credits 
work, and it is misleading. So, we need to clean this up a 
little bit. When he says that no money goes back to local 
coastal communities from these auctions, that is not right. I 
know that because I represent one of those coastal communities, 
where there were credits that the successful bidders embraced 
as part of their bid, and a lot of money is going back to local 
communities. Isn't that correct, through those auction credits?
    Ms. Klein. Yes, we have certainly set up systems where, 
during the auctions, we can make sure that we are supporting 
domestic supply chain, domestic workforce, and supporting 
communities where these projects will go.
    Mr. Huffman. Do you envision using auction credits in other 
offshore wind leases to make sure that some of that money 
actually gets turned back around into community benefit 
agreements, tribes, fishermen, and other interests that will 
benefit from those auction credits?
    Ms. Klein. Yes, we do.
    Mr. Huffman. Thank you.
    The Chair is correct that, in terms of long-term royalties 
and revenues from the sale of energy, oil and gas is in a 
different place than offshore wind. Oil and gas has a mechanism 
to turn that money back into the Land and Water Conservation 
Fund and to benefit states and local communities. And right 
now, offshore wind does not. We need to fix that.
    I am working on legislation that will address that, and 
eventually we need to get there. But to extrapolate from that, 
as the Chair does, that instead of doing offshore wind you 
should just do more oil and gas is certainly problematic if you 
care about the climate crisis and the transition to clean 
energy.
    I only have about 30 seconds left. The last question I want 
to ask you about involves tribal consultation, because I do 
want the project in Humboldt County to succeed. And I think you 
know that we have heard loud and clear from tribes that we need 
better engagement by BOEM. There is a co-management Executive 
Order, Joint Secretarial Order 3403, where other agencies have 
rolled out their co-stewardship plans for land and waters for 
tribes. We have yet to see anything from BOEM on that. I am 
still waiting for a response on my request for better 
engagement, including somebody on the ground for California and 
other West Coast, in the remaining time I have, could you speak 
to where we stand on these things?
    Ms. Klein. Sure. Thank you for that question, and I 
appreciate the feedback we have received and the inquiries that 
you have sent to us.
    We are spending a lot of time at BOEM, making sure that we 
really have a robust tribal engagement program. Our Fiscal Year 
2025 budget request identifies some additional resources that 
we think would be helpful in order to do that not just within 
BOEM, but also support tribal capacity at tribes themselves to 
be able to meaningfully engage in this.
    So, obviously, a long history of mistrust between many 
tribes and the Federal Government, and I think working together 
with the Subcommittee we can start to address that.
    Mr. Huffman. It is very important. I appreciate that.
    And thank you, Mr. Chairman, I yield back.
    Mr. Stauber. Thank you very much. We will now go to the 
Chair of the Full Committee.
    Representative Westerman, you are up for 5 minutes.
    Mr. Westerman. Thank you, Chairman Stauber. Thank you to 
the witnesses for being here today.
    Director Klein, we have already talked about the three 
lease sales in the next 5 years in the 5-year plan, and the 12 
wind lease sales. But I just want to be sure that, on Lease 
Sale 262, is that going to proceed as planned, particularly if 
no additional wind lease sales are deemed necessary for 2025 to 
2026?
    Ms. Klein. Thank you for the question. We have started the 
environmental review process for the three sales that were 
identified in the 5-year plan. We recently issued the area 
identification. The next step would be the draft environmental 
impact statement that analyzes those potential sales, so that--
--
    Mr. Westerman. So, your planning----
    Ms. Klein. That process is underway.
    Mr. Westerman. You are planning to hold the sale. Do you 
anticipate any hiccups in the process, or delays?
    Ms. Klein. I have learned not to try to anticipate hiccups, 
but, as I said, the environmental process is underway for those 
lease sales, and we expect the draft environmental impact 
statement to be out in the next couple----
    Mr. Westerman. Well, last fall you told me there wouldn't 
be any delays for Lease Sale 261, yet you voluntarily chose to 
delay it. Has your agency done any planning or work which sets 
up the cancellation of any of the three offshore oil and gas 
lease sales?
    Ms. Klein. I am sorry, could you repeat the question?
    Mr. Westerman. Have you done any planning to delay the 
three sales?
    Ms. Klein. No, we have not done any planning to delay any 
sales.
    Mr. Westerman. So, there is no scenario or plan in place to 
cancel any of the three oil and gas lease sales.
    Ms. Klein. We are required under the National Environmental 
Policy Act and a number of other statutes to conduct 
environmental analysis of those potential sales, so that 
process is underway. And, of course, an agency like BOEM 
doesn't act until there is a Record of Decision, and that is 
where we are in the process right now.
    Mr. Westerman. What is an example of something that would 
cause you to trigger your authority and cancel the sales, even 
though doing so would destroy the ability to sell offshore 
wind?
    Ms. Klein. Well, one of the reasons that sales have been 
canceled in the past was the Deepwater Horizon oil spill, which 
killed 11 people and caused billions of dollars worth of damage 
in the Gulf of Mexico.
    Mr. Westerman. So, you are saying if there was another 
incident like that, you would cancel the oil and gas sales, and 
all the wind sales?
    Ms. Klein. Saying anything about canceling lease sales at 
this point would be pre-decisional. As I said, we are in the 
environmental review process, and that process is underway.
    Mr. Westerman. Representative Graves talked about how long 
it takes to construct an offshore oil platform, and the cost 
that goes with it. How much of that cost gets offset by the 
Federal Government or by the taxpayer?
    Like, what programs are out there to help oil companies 
develop offshore platforms?
    Ms. Klein. Thank you for the question.
    I think over the years there have been a number of programs 
that have supported the development of fossil fuel, including 
the statutes we operate under, our tax code, the way that 
royalties are set----
    Mr. Westerman. When you say tax code, are you talking about 
depreciation of assets?
    Ms. Klein. As I said, at the Bureau of Ocean Energy 
Management we are really focused on ensuring that, in part, 
operators are fully internalizing the cost of doing business. 
We mentioned the financial assurances rule, which is one of the 
ways that we are making sure of doing that.
    Mr. Westerman. I think you are missing the question. There 
is no program that subsidizes the oil and gas industry. That is 
outside of any kind of tax program, that any business gets to 
depreciate assets. I have heard my colleagues across the aisle 
talk about the handouts to oil and gas companies, and I finally 
figured out they were talking about depreciation schedules, 
which any manufacturing company, if you own a bakery you get to 
depreciate your ovens.
    But let's switch gears and talk about offshore wind. If you 
are going to build an 8 megawatt wind tower, what kind of 
programs are out there from the government to help the 
construction cost?
    Ms. Klein. Well, I think the President has made clear that 
he thinks the climate crisis is a real challenge, and the 
Federal Government has an obligation to do something about it, 
so----
    Mr. Westerman. But what are those programs like? Like, what 
kind of tax credits are available?
    Ms. Klein. The Bureau of Ocean Energy Management is not 
responsible for the suite of tax credits, but they do exist for 
the offshore wind----
    Mr. Westerman. Well, there are 30 percent tax credits, 
there are production tax credits, you can get $0.027 or $0.03 
per kilowatt hour, which could be, if the windmills actually 
operate, hundreds of thousands, if not millions of dollars of 
taxpayer money every year, which if that is a decision Congress 
has made, it is the Administration's job. But it is not fair to 
say that offshore oil and gas gets subsidized when they don't, 
when they actually are paying in royalties off of what they 
produce, yet offshore wind gets huge, huge subsidies from the 
taxpayer. Otherwise, it wouldn't be cost effective to build 
these facilities.
    So, I think we just need to clear the air on who is getting 
the subsidies, where the cost is to the taxpayer that they are 
not seeing because it is hidden in tax cost. And the oil and 
gas industry does not get these huge subsidies and credits that 
it is often claimed that they get.
    And I am way out of time, and I yield back, Mr. Chairman.
    Mr. Stauber. Thank you very much.
    I want to thank the witnesses for their valuable testimony 
and the Members for their questions.
    The members of the Subcommittee may have some additional 
questions for the witnesses, and we will ask you to respond to 
these in writing.
    And to the witnesses, you will have questions given to you.
    We were going to go a Round 2, but it was decided we won't.
    Under Committee Rule 3, members of the Committee must 
submit questions to the Subcommittee Clerk by 5 p.m. on 
Wednesday, May 29. The hearing record will be held open for 10 
business days for these responses.
    OK. Well, we hadn't closed down, Representative Gosar. We 
were just closing statements. You made it, good job.
    You can open up your books, there will be more questions.
    Representative Gosar, you are up for 5 minutes. You made it 
just in time.
    Mr. Huffman. Mr. Chairman, to give Mr. Gosar a chance to 
catch his breath, could I ask for unanimous consent on two 
things real quick?
    Mr. Stauber. Yes, you can.
    Mr. Huffman. Thank you. I would like to enter into the 
record a report from the IMF citing over $649 billion in 
subsidies for oil and gas. That is if you consider the health 
and environmental impacts that the taxpayers pick up the tab 
for every year.
    And then a second one I would like to enter into the record 
by unanimous consent is just the final vote on the Inflation 
Reduction Act in both Houses, because we have had a long line 
of questioning where my Republican friends are hopping mad 
about the fossil fuel giveaways in that leasing formula, and 
every one of them voted against the legislation.
    Mr. Stauber. Without objection.

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    Mr. Huffman. Thank you.
    Mr. Stauber. Representative Gosar, have you got your 
breath?
    Dr. Gosar. I got my breath.
    Mr. Stauber. You are up for 5 minutes.
    Dr. Gosar. I thank the gentleman from California for giving 
me my breath back. I know it has been a left-handed day in a 
right-handed world or, if you are a left-hander, it is a right-
handed day in a left-handed world.
    Anyway, Directors, when each of you issue an order or a 
decision to an operator, that decision is appealable. However, 
it is not appealable to an independent judge. Instead, the 
operator must go through the Department's administrative 
process, which means the appellate proceeds through the 
Interior Board of Land Appeals, or the IBLA, which answers to 
the Secretary.
    Currently, that board has a backlog of over 600 matters. Of 
these, your agencies collectively account for one-third, some 
of them dating back to 2014. Specifically, BSEE has 157 pending 
appeals; ONR squared has 37; BOEM has 2. Now, some of these 
appeals may be voluntarily paused. However, others are not, and 
these appellants are stuck in an administrative purgatory that 
cannot be easily resolved.
    So, a question for each of you. Until the IBLA or the 
Secretary issues a final decision, can an operator seek 
judicial relief within the Federal courts?
    Ms. Klein. Thank you for the question. We are happy to take 
that back. I imagine that it depends on the nature of the 
appeal.
    Dr. Gosar. OK.
    Mr. Sligh. Thank you, Congressman, for that question. I 
would have to agree with Director Klein. Each case is based on 
its own merits, and we would have to take that back as a 
question for the record.
    Dr. Gosar. OK. So, Director Klein and Director Sligh, is 
there a time limit on your appeals?
    Ms. Klein. Again, I would have to take that back. I think 
it depends on the nature of the appeal.
    Dr. Gosar. OK. Director Cantor, do you have a time limit on 
the appeal?
    Mr. Cantor. Thank you for the question, Congressman. There 
is a 33-month time limit on appeals that are made to the IBLA, 
and then the IBLA loses jurisdiction, and the company has an 
opportunity to go to Federal court.
    Dr. Gosar. Is there an incentive? Because it is my 
understanding that if the time expires, the amount is over 
$10,000, that that ruling is automatically in your favor. 
Correct?
    Mr. Cantor. That is correct.
    Dr. Gosar. Mr. Cantor, what we have heard is the deck is 
stacked against operators that receive an adverse ruling 
through your agencies. They must sit through an indefinite 
administrative appeal or be forced to face an automatic loss, 
where they must overcome agency deference. It sounds like a 
legislative solution might be needed to fix this process.
    Would you commit to work with me and my office on a 
solution that works to resolve this process of what sounds a 
bit like choosing between a rock and a hard place?
    Mr. Cantor. I thank you for the question, Congressman. We 
are always open to working with you and your staff.
    Dr. Gosar. Wonderful. Thank you so much. I also have some 
questions.
    The proposed budget includes funding for land acquisition. 
In reality, many counties that I represent have way too much 
Federal land. For example, La Paz County, Arizona is about 95 
percent Federal lands, depriving the locality of development 
and revenue.
    Mr. Biden's budget also proposes significant increases in 
funding for environmental efforts, yet fails to address the 
urgent need for reforms in the revenue-sharing agreements with 
states that host Federal lands. How can you justify 
prioritizing conservation spreading over ensuring equitable 
compensation for states like Arizona that bear the burden of 
hosting these resources?
    Ms. Klein. Thank you for the question. I think much of that 
is probably directed to the onshore agencies, and we would be 
happy to take that question back and get an answer for the 
record.
    Dr. Gosar. OK. Well, I am going to do one more. Given the 
recent increase in energy prices and concerns about energy 
independence, how does the budget proposal address the need to 
streamline permitting processes and encourage domestic energy 
production on Federal lands, rather than imposing barriers and 
delays?
    Ms. Klein. Thank you again for that question. Certainly, we 
have been spending a lot of time to streamline our permitting 
processes to ensure that we are still resulting in robust 
decisions that reflect our environmental and statutory 
responsibilities in the offshore wind context. We have been 
able to go from zero to eight approved projects, given our all-
of-government approach and our ability to streamline a lot of 
those permitting processes.
    Dr. Gosar. Have you seen any derogatory effects of these 
big wind projects, particularly with the whales? Or is it 
constantly in study?
    Ms. Klein. I am sorry, could you repeat the question?
    Dr. Gosar. Yes, some of the thought processes were that the 
wind turbines, these offshore wind turbines, were having some 
effect in regards to whales and their geospatial placement.
    Ms. Klein. Sure. Thank you for that question. There is 
really no evidence right now that anything having to do with 
offshore wind, and particularly the G&G work that is done 
before offshore wind construction, is having any effect on 
whales. We certainly have a whole suite of mitigation measures 
that we require of offshore wind operators before they can 
proceed with construction and throughout the project to make 
sure that their activities are avoiding, minimizing, and then 
mitigating any impacts that might occur. But right now, there 
is no data to suggest that the operations so far have had any 
impact on whales.
    Dr. Gosar. Is it an ongoing study?
    Ms. Klein. Well, we have a number of studies that are 
underway, and active monitoring at our construction projects. 
And, again, there is just no evidence that any of the whale 
strandings that have occurred on the East Coast are at all 
related to the G&G and seismic work and any of the work that is 
happening on the offshore wind space.
    Dr. Gosar. Thank you. I appreciate it.
    I yield back.
    Mr. Stauber. Thank you very much.
    Before we close, I do want to enter into the record, at 
Representative Graves' request, I want to enter it with 
unanimous consent. It is a chart, ``Record Profits Are Higher 
Under Democratic Administrations.''

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    Mr. Stauber. Also, Representative Huffman brought up the 
IRA. He, under unanimous consent, wanted the roll call vote in 
the record. I will note the IRA was endorsed and supported by 
the oil and gas industry, and every Republican in the House of 
Representatives voted against it.
    So, the members of this Subcommittee, as I said, may have 
some additional questions for the witnesses, and we will ask 
you to respond to these in writing. And I already told you that 
you are going to have some.
    Under Committee Rule 3, members of the Committee must 
submit questions to the Subcommittee Clerk by 5 p.m. on 
Wednesday, May 29. The hearing record will be held open for 10 
business days for your responses.
    If there is no further business, without objection, the 
Committee stands adjourned.

    [Whereupon, at 11:08 a.m., the Subcommittee was adjourned.]

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