Senators introduce federal offshore revenue reform bill
US Sen. Bill Cassidy, chair of the Energy and Natural Resources Committee’s Energy Subcommittee, and ENR Committee Chair, Sen. Lisa Murkowski, introduced legislation on Aug. 2 that aims to reform federal offshore revenue-sharing for Gulf Coast states.
US Sen. Bill Cassidy (R-La.), who chairs the Energy and Natural Resources Committee’s Energy Subcommittee, and ENR Committee Chair, Sen. Lisa Murkowski (R-Alas.), introduced legislation on Aug. 2 that not only aims to reform federal offshore oil and gas revenue-sharing for Gulf Coast states but also would create a new offshore revenue sharing program for future offshore energy production in Alaska.
Sens. John N. Kennedy (R-La.), Dan Sullivan (R-Alas.), Roger F. Wicker (R-Miss.), and Doug Jones (D-Ala.) are cosponsors.
Louisiana constitutionally dedicates revenues from offshore energy production to pay for conservation, restoration, and environmental projects to preserve and restore its eroding coastline, Cassidy noted. Gulf Coast states with federal oil and gas production offshore now receive a 37.5% revenue share compared with onshore states with federal energy production within their borders, which receive a 50% share.
“Louisiana’s coastline infrastructure is critical for America’s energy and economic security,” Cassidy said. “This legislation creates equal treatment for Louisiana’s offshore revenue sharing and secures the funds needed to strengthen our state’s coastal restoration efforts.”
Kennedy added, “This bill makes it clear that Louisiana needs an equitable portion of the revenue made off our coast from offshore drilling. Louisiana is leading the US toward energy independence. However, we have to invest in restoring our coastline and ensuring the safety of our coastal families and jobs from hurricanes. This bill will allow us to make those investments.”
Called the Conservation of America’s Shoreline Terrain and Aquatic Life (COASTAL) Act, the bill also would increase revenue available for the Land and Water Conservation Fund’s (LWCF) financial assistance to states. Under current law, the LWCF receives 12.5% of federal oil and gas revenue generated in the gulf. Cumulative dollars available to states receiving revenue payments under the 2006 Gulf of Mexico Energy Security Act (GOMESA) for the fund are capped at $500 million. The COASTAL Act would eliminate this cap, Cassidy said.
The legislation also protects GOMESA payments from future sequestration cuts and makes oil and gas leases from 2000-06 eligible for future GOMESA payments to Gulf Coast states. According to the US Department of Interior, in 2018 Gulf Coast states could have received an additional $247 million for environmental protection in 2018 if more offshore leases were GOMESA eligible, Cassidy said.
The bill also creates an additional authorized use of dollars for planning, engineering, operations, and maintenance of federally authorized projects, Cassidy said.
A National Ocean Industries Association official welcomed the measure. “By amending GOMESA and establishing a revenue-sharing program for Alaska, the COASTAL Act will ensure that these states receive continued benefits from their participation in offshore energy production, while still protecting an irreplaceable revenue stream for the US Treasury, the LWCF, historic preservation, and other important federal funding priorities,” said Tim Charters, NOIA’s vice-president for government and political affairs.
“Congress must connect the dots between responsible offshore energy development and the critical funding it can provide the American public. This bill is a step in that direction,” Charters said.
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