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Congressman Garret Graves

Representing the 6th District of Louisiana

Gulf states would get a bigger share of offshore revenue, under bill that advanced in House

September 15, 2018
In The News

Louisiana, Texas, Alabama and Mississippi would all get a significantly larger share of Federal offshore energy revenue from the Gulf of Mexico under a bill proposed by U.S. Rep. Garret Graves, R-Baton Rouge, that was approved by the U.S. House Committee on Natural Resources on Thursday (Sept. 13).

The legislation amends the Gulf of Mexico Energy Security Act of 2006 to increase to 50 percent the share of revenue paid by oil, gas and other energy companies that would go to Louisiana and other states from certain lease areas. The bill also removes a $500 million a year cap on how much money can be shared with states each year.

Graves' amendment must still be approved by the full House and the Senate. It was co-sponsored by Reps. Ralph Abraham, R-Alto; Clay Higgins, R-Port Barre; Mike Johnson, R-Bossier City; Cedric Richmond, D-New Orleans; Steve Scalise, R-Jefferson; Brian Babin, R-Texas; Bradley Byrne, R-Ala.; and Randy Weber, R-Texas.

"After working on this for 20 years, I can tell you: what happened today is historic," Graves said in a news release. "Moving this bill is a big deal and has enormous implications for south Louisiana."

"This bill will help us plan, design and, ultimately, construct the projects that are vital to our survival," said Emily Vuxton, policy director for the Coalition to Restore Coastal Louisiana, in a statement released after the meeting. "We urge Congress to pass the Domestic Offshore Energy Reinvestment Act of 2018 as quickly as possible. The people of Louisiana are depending on it."

Graves worked on the original Gulf energy security legislation as a congressional staffer, and later lobbied for improvements in the law as chairman of the Louisiana Coastal Protection and Restoration Authority before being elected to Congress in 2014.

He and other state members of Congress and state officials have for years demanded that the state receive at least 50 percent of offshore revenue, the same share that states receive from energy produced on federal lands within their borders. Gulf Coast states argue that since their shorelines bear the brunt of the effects of offshore exploration and production -- through the supply of workers and supplies, and the movement of oil and gas back to shore through pipelines -- they should receive the same share as other states.

The four Gulf Coast states had only just begun to share 37.5 percent of the revenue in fiscal year 2017, and delays in development of oil and gas following the 2010 BP Deepwater Horizon oil spill had reduced the amount each state received by about half of what had been expected. Louisiana expects to receive about $82 million in its first major payment in fiscal year 2018, and if these changes make it through the full House and Senate, the state's share could increase significantly.

Florida was not included in GOMESA because it has no oil or gas exploration or production in Gulf waters off its shoreline.

The increase in revenue would be good news for Louisiana's $50 billion, 50-year coastal Master Plan, which includes both restoration and levee projects. The state might also use a share of future money to pay a $100 million a year debt it owes to the Army Corps of Engineers for the state's share of the post-Katrina hurricane levee system in New Orleans.

The Graves amendment reduces the amount of Gulf offshore revenue going to the general federal treasury to 37.5 percent, from 50 percent.

The amendment continues to require another 12.5 percent of the offshore revenue to go to the federal Land and Water Conservation Fund. The Gulf money is in addition to $900 million a year that the fund receives almost exclusively from other offshore energy revenues.

At the same mark-up meeting of the committee, its members also agreed to renew that fund, renaming it the "Restore Our Parks and Public Lands Act." That law provides money for both operation of national and state parks and wildlife refuges, and for the purchase of land for their expansion. The law was set to expire later this week.