Salazar hits GOP plan to fund highway bill with drilling

Interior Secretary Ken Salazar said Wednesday that House plans to help fund transportation programs with a major expansion of oil-and-gas leasing don’t hold up to scrutiny.

The House GOP transportation bill mandates oil-and-gas leasing in areas off the Atlantic and Pacific coasts, expands acreage available in the eastern Gulf of Mexico and off Alaska’s coast, and removes the prohibition on drilling in Alaska's Arctic National Wildlife Refuge.

But Salazar, at a House Natural Resources Committee hearing, said the GOP plan relies on “phantom revenue.”

“We know that these places are not going to be developed in the near-term at all,” Salazar said. “They would only provide less than 10 percent of the revenue needed for surface transportation.”

“It will not fund the transportation needs of the United States of America,” he said.

The Congressional Budget Office estimates that the GOP’s offshore leasing plan would bring in net federal revenues of $1.8 billion between 2013-2022, while opening ANWR would bring in a net $2.5 billion in leasing revenues between 2013-2022 (both figures account for payments to states).

Republicans argue the CBO is not giving enough credit for the amount of money that would be raised through the expanded oil-and-gas leasing.

The proposed drilling expansion is part of the GOP’s much wider $260 billion highway bill. GOP leaders have delayed a vote on the sweeping legislation that had been slated for later this week.

Check out The Hill's Transportation blog for much more on the battle over the highway bill.

Interior’s 2012-2017 leasing plan is narrower than what the GOP is seeking. It focuses largely on the central and western Gulf of Mexico, where development is already centered, and in the plan’s later years envisions new sales off Alaska’s northern coast.

Obama administration officials say it focuses on areas with large amounts of known resources.