Landrieu, Murkowski introduce OCS revenue sharing bill

US Sens. Mary L. Landrieu (D-La.) and Lisa Murkowski (R-Alas.) introduced legislation on July 27 which would guarantee coastal states a 37.5% share of federal revenue from new oil and gas production off their shores.

“This long overdue legislation would recognize contributions of host states, while [providing incentives for] them to undertake new and responsible offshore development,” said Landrieu, who has introduced similar bills for several years. “Coastal communities should not shoulder the risks and responsibilities of OCS production without reaping some of the rewards. This bipartisan bill would finally change the inequitable regime that sends 100 percent of revenue to federal treasury.”

“It will serve as the foundation for Alaska and other states to balance local economic and environmental concerns with national energy security,” added Murkowski, the Senate Energy and Natural Resources Committee’s ranking minority member. “Considering the economic and energy challenges we as a nation face, now is the time to get this right.”

The 37.5% share of rents, royalties, and bonuses from new oil and gas development in adjacent federal waters would match the share Alabama, Louisiana, Mississippi, and Texas receive under the 2006 Gulf of Mexico Energy Security Act which Landrieu and Murkowski’s predecessor as ranking minority member, Pete V. Domenici (R-NM), co-wrote. That bill opened more than 8 million acres in the GOM for federal leasing.

“As our nation weans itself off foreign oil and transitions to the next generation of energy, we need OCS production in U.S. waters to get us there,” Landrieu said. “Coastal states will play a key role in building that ‘energy bridge’ if Congress can guarantee them their fair share of revenue and conservation royalties. This approach has worked in Louisiana, and it can for other states as well.”

‘Real local costs’

“There are real local costs associated with energy production, from the need for bigger ports and airports to the need for schools and housing for energy workers and their families,” Murkowski said. “Providing more local aid will let Alaskans better handle the costs associated with energy production that benefits the entire nation.”

Their bill also would authorize the US Secretary of Defense to annually review the prohibition against oil and gas development in certain parts of the GOM for defense training purposes to determine if the restriction should be lifted. It also would permit leasing of the Destin Dome area near the Florida panhandle.

The Houston-based Consumer Energy Alliance applauded the bill’s introduction. “While energy-producing states have always been among the national leaders in job creation, economic development and energy affordability, it’s not unreasonable for them to expect equal treatment with states that generate billions in annual revenues from onshore and offshore production royalties,” CEA President David Holt said.

“This bill would end the current inequity, and in the process help deliver a future in which more states are given both the authority and the incentive to produce homegrown energy resources for themselves, their future, and the security and well-being of the American people,” he maintained.

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