The first federal Outer Continental Shelf oil and gas lease sale following enactment of the Gulf of Mexico Energy Security Act in December 2006 drew different reactions from two congressional energy leaders on Mar. 19.
The law provides Louisiana, Mississippi, Alabama and Texas with 37.5% of the revenues generated, the same share which President Harry S Truman offered Louisiana in 1952 which the state rejected in a failed bid for all of the revenues.
"Since I came to the Senate in 1977, it has been my No. 1 priority to get Louisiana its fair share of oil and gas revenues and to apply it to shoring up our hurricane protection. Today in the Superdome, the first proceeds of more than half a century of team effort came to fruition," said Sen. Mary L. Landrieu (D-La.), who worked with then-Senate Energy and Natural Resources Committee Chairman Pete V. Domenici (R-N.M.) to get the law passed.
"Over time, this law means billions for Louisiana, every penny of which will be directed to coastal restoration and hurricane protection," she added.
The law provides Louisiana, Mississippi, Alabama and Texas with 37.5% of the revenues generated, the same share which President Harry S Truman offered Louisiana in 1952 which the state rejected in a failed bid for all of the revenues. The leased area contains about 1.3 billion bbl of oil and 5.8 trillion cubic feet of natural gas, Landrieu said. The four states could receive more than $144 million while another $48 million will go to the federal Land and Water Conservation Fund, she noted.
Rep. Edward J. Markey (D-Mass.), chairman of the House Select Committee on Energy Independent and Global Warming, called the OCS revenue sharing provision a windfall to the four states which could cost the federal government more than $170 million over the next 10 years. "This is the king of all earmarks, a giveaway that keeps on giving," he declared.
He said that the states should have obtained coastal restoration and hurricane damage repair funds through the congressional appropriations process. By circumventing that approach, they potentially could claim more money than is needed for these projects because of higher oil prices, he said.
"As the price of oil goes up, these four states will reap windfall profits from this deal, giving the other 46 states the short shrift when it comes time to fund important programs. The 50 stars on the flag are all the same size. It's time we end this entitlement program that takes the united out of the United States," Markey said.
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