Louisiana seeking increased share of OCS royalties

Feb. 20, 2006
Louisiana Gov. Kathleen Babineaux Blanco has threatened to block oil and gas leases off Louisiana unless the state receives its “fair share” of oil and gas revenue from federal acreage to help with coastal management.

Louisiana Gov. Kathleen Babineaux Blanco has threatened to block oil and gas leases off Louisiana unless the state receives its “fair share” of oil and gas revenue from federal acreage to help with coastal management.

During a Feb. 6 speech to state lawmakers in New Orleans, Blanco suggested splitting oil and gas royalties from the Outer Continental Shelf off Louisiana 50-50 between the state and the federal government. Her comment came as she opened a second special legislative session since Hurricanes Katrina and Rita.

“If no effort is made to guarantee our fair share of royalties, I have warned the federal government that we will be forced to block the August sale of offshore oil and gas leases,” Blanco said.

Letter to MMS

States have used the Coastal Zone Management Act to block activity on federal offshore acreage by declaring the activity inconsistent with required management plans.

In a Feb. 3 letter to the US Minerals Management Service, Blanco wrote: “I am getting pressure from our coastal parishes to consider using the option to object to future oil and gas lease sales off our coast. This is not my preference, but the pressure is mounting to take a stronger stand.”

She said Louisiana state and federal lawmakers seek congressional authorization of recurring OCS revenue-sharing so the state can implement measures to protect Louisiana’s coastal habitats, communities, and infrastructure.

“Federal policy on OCS leasing must include provisions for the protection of the very resources necessary for the exploration and production of these leases,” Blanco said. “Future OCS lease sales that are not accompanied by meaningful provisions for the protection of Louisiana’s human and natural resources will likely be inconsistent with Louisiana’s coastal zone management program.” In addition, Blanco met with oil industry representatives earlier this month in Baton Rouge, urging them to advocate OCS revenue-sharing to provide coastal protection.

In a news release after that meeting, Blanco said she is optimistic the oil industry will assist Louisiana with efforts to secure a share of federal revenue now going to the US treasury.

Congressional move

US Sens. Mary L. Landrieu, D-La., and David Vitter, R-La., sent a letter to President George W. Bush noting that Louisiana provides nearly $6 billion/year in royalties from offshore energy production to the US Treasury.

“States with energy production on federal lands keep at least 50% of their royalties, whereas states with offshore production keep virtually none,” Landrieu and Vitter said in a letter proposing “an equitable revenue-sharing plan for coastal states.”

A revenue-sharing provision will “provide the definitive revenue source to ensure the gulf coast’s recovery,” the senators wrote, proposing that the money provided to Louisiana could be used to build and maintain a hurricane protection system, including wetlands restoration.