Gulf Coast senators offer bill to share Sale 181 revenues

March 10, 2006
Six US senators from Gulf Coast states introduced Mar. 8 a bipartisan bill to direct a portion of offshore oil and gas revenues from the Gulf of Mexico to Mississippi, Louisiana, Alabama, and Texas.

Nick Snow
Washington Correspondent

WASHINGTON, DC, Mar. 10 -- Six US senators from Gulf Coast states introduced Mar. 8 a bipartisan bill to direct a portion of offshore oil and gas revenues from the Gulf of Mexico to Mississippi, Louisiana, Alabama, and Texas.

The measure by Sens. Trent Lott (R-Miss.), Mary L. Landrieu (D-La.), Richard C. Shelby (R-Ala.), Thad Cochran (R-Miss.), David Vitter (R-La.), and Jeff Sessions (R-Ala.) was a response to S. 2253, a bill reported out of the Senate Energy and Natural Resources Committee to open up to 3.6 million acres in the eastern gulf to federal oil and gas leasing.

The senators' bill would share 50% of revenue generated by leases in the so-called Sale 181 area with the coastal producing states. Such coastal impact assistance was not included in S. 2253 despite a February letter from Lott and Landrieu that they could not support the Sale 181 bill unless it was included.

Their bill would allow producing states to direct their share of federal Sale 181 revenues to counties or parishes to restore coastal wetlands, mitigate wildlife and natural resource damage, and implement federally approved conservation management plans, projects related to onshore infrastructure, and activities and administrative programs stemming from the new oil and gas activity.

The senators did not know the exact funding amount that would be created by their bill, but said that federal royalties from leases in the Sale 181 area have been estimated as high as $11 billion.

Provided services
Gulf Coast states have provided ports, pipelines, fabrication facilities, and other services to maintain exploration and production in the gulf, according to Lott. "The increase in gulf oil and gas exploration that will occur as a result of leasing Area 181 will increase the impact on Gulf Coast communities," he said.

Providing coastal impact assistances with a portion of the revenues from these leases would be both appropriate and greatly needed by those communities, Lott said.

Landrieu said that the nation needs increasing amounts of oil and gas, and the central and western Gulf Coast states currently are "the nation's only energy coast."

Particularly after Hurricanes Katrina and Rita, she continued, those states need a share of federal royalties from oil and gas produced off their coasts to build better, stronger levees and restore eroding wetlands—"the first line of defense against oncoming storms."

Shelby said that the bill would finally give producing states along the gulf a return on their oil and gas production investments.

"Time and again, we have experienced the direct impact the supply of oil and gas from the gulf has on our economy. I believe that it is imperative that the Gulf States benefit from their willingness to participate in exploration activities that are essential to our nation's energy supply," he said.

The senators said they expected to offer their bill as either a substitute or amendment when S. 2253 reaches the Senate floor.

Contact Nick Snow at [email protected].