OCS production revenue-sharing bill proposed

U.S. oil state congressional representatives plan to push legislation next session to allocate at least half the federal revenues from Outer Continental Shelf oil and gas production for coastal states and national conservation and wildlife programs. The Senate bill would use 50% of OCS revenues, or $2.296 billion/year. The House bill earmarks 60%, or $2.74 billion/year. The sponsors face environmental lobby opposition, the problem of how to divide revenues, and how to fund the

Oct. 26, 1998

3 min read

The Senate bill would use 50% of OCS revenues, or $2.296 billion/year. The House bill earmarks 60%, or $2.74 billion/year. The sponsors face environmental lobby opposition, the problem of how to divide revenues, and how to fund the multibillion-dollar program. Unless they can obtain a waiver of budget laws, they must find offsetting revenues.

' Two of the sponsors, Sen. Frank Murkowski (R-Alas.) and Rep. Don Young (R-Alas.), chair the committees with primary jurisdiction for energy legislation in Congress.

Both the Senate and House bills would allocate 27% of federal OCS revenues, about $1.24 billion, to 34 states with shorelines on oceans, seas, gulfs, or the Great Lakes-although only six have oil and gas production. The allocation would be made with a formula based on hydrocarbon production, coastline miles, and population.

The Senate bill would earmark 40% of the $1.24 billion for the states, 40% for coastal communities, and 20% to other communities affected by OCS operations. The House bill would divide the $1.24 billion equally between the states and coastal towns.

The Senate bill would allocate 16% of OCS revenues, about $734 million, for the land and water conservation programs. State and federal programs each would get 45% of that allocation, and urban parks would get 10%.

The House bill would allocate 23% of OCS revenues, about $1 billion, with state and federal programs getting 42% each and urban parks 16% of that allocation.

The Senate bill earmarks 7%, or $321 million, for state fish and wildlife conservation programs. The House bill would give them 10%, or $460 million.

The congressmen noted the federal government shares 50% of its onshore oil and gas revenues with the states where oil and gas production occurs. But offshore, it only gives coastal states 27% of revenues from a 3-mile strip just beyond state waters (the Section 8(g) area) and none of its revenues from production beyond that.

Comments

Murkowski said, "This remedies a tremendous inequity in the distribution generated by offshore oil and gas production by directing that a portion of these monies be allocated to coastal states and communities."

Rep. Young said, "This bill is not an incentive for more offshore drilling. It just resolves the inequity of oil and gas revenue distribution while providing for important conservation and recreation programs."

Sen. Mary Landrieu (D-La.) said hers and other coastal states have suffered effects from OCS drilling but each have received less than 1% of the revenues.