Bush Budget Axes Oil, Gas R&D Funding, Targets Two Tax Breaks

The Bush administration Monday proposed to ax two federally-funded oil and gas research programs and modify two separate tax breaks for the oil and gas industry in its 2008 budget.

The administration’s budget primarily focuses on funding for new renewable energy, biofuel and nuclear programs, and the proposals would, in a small measure, help offset the new spending priorities.


The administration sought to add $1.5 billion in the federal coffers through 2017 by extending the amortization period for companies’ geological and geophysical costs from two years to five years, as well as repealing a law that reduced the recovery period for new natural gas distribution lines built before 2011 from 20 years to 15 years.

In an expenditure line item, the administration said it wanted to cancel a mandatory, $50 million a year Ultra-Deepwater and Unconventional Natural Gas and Other Petroleum Research created under the Energy Policy Act of 2005. The program was to be funded by revenues from oil and gas leases.

Dow Jones Newswires