Newsroom

For Immediate Release July 21, 1999

Contact: Keith Ashdown (202) 546-8500 x110

Senate Interior Bill a Windfall for the Timber, Oil, Mining and Coal Industires Washington, D.C. – As the Senate considers next year's spending, several senators are attempting to use the FY 2000 Interior Appropriations Bill to serve up a smorgasbord of giveaways to the timber, oil, coal and mining industries, according to an analysis by Taxpayers for Common Sense, a federal budget watchdog organization. "American taxpayers the own the trees, oil, coal and minerals on public land," stated Ralph DeGennaro, Executive Director, Taxpayers for Common Sense, "The Senate is giving these taxpayer assets away at scandalous prices." The Senate is scheduled to vote this week on the FY 2000 Interior Appropriations Bill, which is riddled with wasteful provisions that benefit oil, logging, coal and mining industries. In many cases, the Senate has proposed millions of dollars above what the president has requested for the coming fiscal year. Some of the wasteful provisions include: A legislative rider sponsored by Sens. Domenici (R-NM) and Hutchison (R-TX) that would delay a federal rule to collect $130 million in oil royalties owed to the federal government by oil companies. A plan to give $48 million more to the Forest Service to manage timber sales than the administration requested. A legislative rider sponsored by Sen. Craig (R-ID) to allow mining companies to patent even more public land for $2.50 to $5.00 an acre to dump their waste. Continuation of a duplicative and obsolete program to fund research for private companies to develop cleaner burning coal technologies. Taxpayers for Common Sense is calling for a reduction in spending and in some cases the termination of projects in the bill. For a copy of The Great Senate Sellout: An Analysis of Giveaways in the Senate Interior Bill, please call 202-546-8500 ext. 118, or go to our website at www.taxpayer.net ### Taxpayers for Common Sense (TCS) is an independent budget watchdog group headquartered in Washington, D.C. that works to cut government waste by reaching out to taxpayers from all political perspectives THE GREAT SENATE SELLOUT: AN ANALYSIS OF GIVEAWAYS IN THE SENATE INTERIOR BILL The following is a list of wasteful riders, programs and provisions that should be eliminated from S. 1292, the Senate FY 2000 Interior Appropriations Bill. Oil Royalty Rider Cost: $130 million over two years Sen. Kay Bailey Hutchison (R-TX) and Sen. Pete Domenici (R-NM) have attached an oil royalty rider that would allow oil companies to continue underpaying royalties they pay the federal government when drilling on public lands. The rider would delay a Department of the Interior (DOI) rule that would stop oil companies from underpaying royalties owed to the federal treasury, states and Native American tribes. If the Hutchison and Domenici rider passes, the government and taxpayers stand to lose at least another $130 million in the next two years. The oil industry currently owes as much as $856 million in unpaid royalties to the federal treasury, states and Native American tribes, according to some estimates. Congress has enabled the oil industry to continue underpaying royalties by passing moratoriums on proposed regulations since 1998. Mining Rider Cost: millions of dollars Sen. Larry Craig (R-ID) has attached a rider to the Interior Bill that would cost taxpayers millions by allowing mining companies to patent even more public land for $2.50 to $5.00 an acre to dump their waste. The Craig rider would effectively expand the 1872 Mining Law and make it even worse for taxpayers. The Craig rider would amend one of only sensible parts of the Mining Law of 1872, which has allowed the industry to extract more than $240 billion of publicly owned minerals without paying a penny in royalties to taxpayers. The law has also left taxpayers with a $32 billion to $72 billion cleanup bill for abandoned mines. Powerline Provisions Cost: $5 million this year, $40 million eventually The Alaska delegation is proposing that the federal government pay up to $40 million for the Swan Lake-Lake Tyee Intertie electric powerline. The Swan Lake project is a proposed 57-mile, $77 million electric power line connecting the city of Ketchikan’s utility system to a power source at Lake Tyee that would benefit only local electrical users. Numerous studies, including one by the state of Alaska, have shown that there are cheaper and more feasible alternatives to provide power to Ketchikan. $5 million has been provided in the bill in the form of an advanced, direct lump sum payment to the city of Ketchikan for the construction for the Swan Lake-Lake Tyee Intertie. Timber Sales Management Cost $32 million According to the General Accounting Office (GAO), the U.S. Forest Service lost $2 billion from 1992-1997 through its "Timber Sales Management" Program. The program loses money because it charges timber companies far less that it costs to prepare and administer the sale of trees. Still, the Senate has requested $228.9 million for "Timber Sales Management" this year, which is $32 million more than the Forest Service's request. Timber companies should pay the full cost of preparing and administering timber sales. Taxpayers shouldn’t have to pick up the tab by annually spending millions to cover the full cost of the Forest Service timber program. Quincy Library Group Cost: $10.5 million in one year, $70 million over 5 years The proposal would cost taxpayers as much as $70 million over five years and require more than 100 miles of new road construction. Forest maintenance costs could drive the price even higher. This year, the committee has provided $4.5 million for implementation of the Quincy Library Group legislation from forestland management activities and directed the agency to retain the projected $6 million in carryover balances from FY99 for use in FY00. Clean Coal Technology Program (CCTP) Cost: Hundreds of Millions The Senate Appropriations Committee has recommended a deferral of $156 million for the Clean Coal Technology Program, which means that the program would get to spend the money later. Instead, the $156 million should be rescinded, given back to the treasury and the whole program terminated. Taxpayers should not have to fund this program for the following reasons: First, strong economic incentives already exist for private companies to develop cleaner burning coal technologies under the 1990 Clean Air Act. Second, the program is mismanaged and inefficient. A 1991 GAO report found that a number of projects within the program had either been terminated within a few years of funding, experienced significant schedule delays or exceeded their budgets. Finally, the coal industry is a mature industry and capable of supporting its own research and development costs. Fossil Fuel Research and Development Cost: $390 million in one year Under the Fossil Fuel Research and Development program, taxpayers pay more than $390 million for oil, coal and utility companies’ research. The committee recommended an increase of $26.9 million over the president’s request for the program for FY2000 and $6.9 million more than the FY99 enacted level. Much of the research conducted in these programs concentrates on oil and coal exploration, production and refining – research these industries have significant market incentives to conduct with their own money. These multi-billion dollar industries should pay for their own research without relying on taxpayer dollars. Forest Health Rider Cost: unknown This rider would transfer money from the Roads and Trails Fund to other Forest Service activities. Since logging activities are already very well funded, this sets up an incentive for the Forest Service to abuse these funds. The rider would likely divert more taxpayer funds to money-losing timber sales. Tongass Red Cedar Rider Cost: unknown This rider allows mills to purchase red cedar timber in Alaska at prices far below the actual costs of the timber sale to the government in order to benefit Pacific Northwest mills. This subsidy to the mill operators will encourage more logging of old-growth red cedar, since this species tends to be less marketable before it is very old. It also allows the Forest Service to use antiquated accounting systems that would eliminate 60 percent of the costs to the USFS. The costs would NOT include some road-building and administrative costs.

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Taxpayers for Common Sense is a non-partisan budget watchdog that serves as an independent voice for American taxpayers.  Now in its second decade of service to the nation, TCS works to ensure that our government spends taxpayer money efficiently and responsibly by working to eliminate wasteful and harmful federal spending.