Virginia Gov. Terry McAuliffe (D) said he opposes oil and gas leasing off the state's coast under a new federal Outer Continental Shelf management program because it apparently would not include royalty and revenue sharing from any crude oil or natural gas produced there.
A "revenue sharing agreement is an essential precursor to moving forward on any offshore oil and gas exploration in Virginia," he said in Richmond on Aug. 17 as he submitted comments to the US Bureau of Ocean Energy Management under a request for information that closed that day as the first step in developing a 2019-24 OCS plan.
"President [Donald] Trump's proposal to end the revenue sharing agreement with the gulf states is a clear indication that we cannot trust the president to give Virginia its fair share of the revenues that would result from offshore exploration," McAuliffe said.
"Additionally, the president's administration is actively working to cut funding from the very agencies that would be charged with protecting Virginia's coastal environment in the event that exploration went forward," he said. "For these reasons, I do not support including the Commonwealth of Virginia in the new review of the National OCS Oil and Gas Leasing Program."
McAuliffe said in his comments that he made clear in comments he submitted for the 2017-22 program, which became final on Jan. 17, that revenue sharing between the federal government and participating Atlantic states was a basic prerequisite for his support. "During my time as governor, no legislation has been signed by the president authorizing this type of arrangement," he noted.
He said the president's proposed federal budget also includes the repeal of the 2006 Gulf of Mexico Energy Security Act, which authorized sharing new federal offshore oil and gas royalties and revenue with Alabama, Louisiana, Mississippi, and Texas. "This is a clear indication that any new revenue sharing agreement [with] additional states is as unlikely as ever, and is a nonstarter with the current administration," he said.
Left with one option
McAuliffe also expressed concern that Trump's proposed budget also includes funding cuts to federal agencies that are responsible for ensuring statutory safeguards and environmental protections. "In the absence of willingness by the federal government to work together and reap rewards of that collaboration, Virginia is left with only one option," he maintained.
Virginia Petroleum Council Executive Director Miles Morin responded that the American Petroleum Institute affiliate also supports necessary environmental protections and revenue sharing with the commonwealth from federal offshore energy resource development. VPC stands ready to work with McAuliffe and Virginia's congressional delegation to make safe energy development off the state's coast part of the next OCS management program, he said.
The Virginia Oil & Gas Association, Dominion Energy, Virginia Natural Gas, and 10 other oil and gas organizations and businesses groups from the Old Dominion joined VPC and 83 trade associations and businesses from 29 other states and the District of Columbia calling for more offshore oil and gas development opportunities in the 2019-24 federal OCS program in an Aug. 17 submission of comments to BOEM.
The letter from the coalition of organizations and states came in addition to recent letters the Virginia Chamber of Commerce and Virginia Manufacturers Association sent to BOEM expressing support for offshore energy development in Virginia, Morin said.
