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Drilling-Oversight Agency Needs 30% Budget Rise, Landrieu Says

Feb. 8 (Bloomberg) -- The U.S. Interior Department, which oversees drilling in the Gulf of Mexico, should get a 30 percent boost in its 2012 budget to speed processing of oil-exploration permits, said Senator Mary Landrieu, a Democrat from Louisiana.

“The office needs to be scaled up in order to accomplish what we need to accomplish,” she said yesterday in an interview in Washington. “It has been historically understaffed and underfunded.”

President Barack Obama will present his proposal for the 2012 fiscal year budget on Feb. 14. Landrieu said she doesn’t have information on what will be in the president’s proposal.

Almost four months after the U.S. lifted a ban on deep-water exploration, drilling remains stalled because energy companies haven’t proved to regulators they have ships and equipment ready to handle catastrophic blowouts. BP Plc’s disaster in April killed 11 and led to the worst U.S. offshore oil spill.

Obama has singled out energy industry by proposing to eliminating tax breaks for oil and natural-gas producers, Landrieu told reporters yesterday.

“It continues to be a puzzlement to me to why this administration continues to target the oil and gas industry,” she said. “If the whole entire tax code goes under review, then of course this should be under review, too.”

Obama is seeking to fund an 85 percent increase in renewable-energy investments by scrapping taxpayer subsidies to oil and gas producers. The cuts, which Obama says would be absorbed by the profit-rich industry, follow his attempt a year ago to scrap about $3.6 billion a year in fossil-fuel subsidies. That proposal never gained support in Congress.

Senator Mark Begich, an Alaska Democrat, doesn’t expect Obama’s proposal on the energy-industry taxes to pass this year either, he said in a separate interview in Washington yesterday.

To contact the reporter on this story: Katarzyna Klimasinska in Washington at kklimasinska@bloomberg.net

To contact the editor responsible for this story: Larry Liebert at lliebert@bloomberg.net

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