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Congressman Garret Graves

Representing the 6th District of Louisiana

Louisiana coastal advocates press Congress for a bigger cut of offshore energy revenues

October 22, 2019
In The News

WASHINGTON — Undeterred by government gridlock, representatives from the Gulf Coast descended on the nation's capital this week to lobby for an ongoing effort to secure more money from offshore oil and gas revenues for coastal projects, including efforts to protect Louisiana's disappearing coastline.

“Our sense of urgency in Louisiana is much different than any other state in the country," said Chip Kline, the head of the Louisiana Coastal Protection and Restoration Authority who is leading part of this week's intense push on Capitol Hill. "But this can’t just be a Louisiana issue."

Lawmakers from Louisiana, in both the U.S. House and Senate, have backed bills in recent months that seek to give Gulf states a bigger cut of the revenues from oil and gas produced in the Gulf of Mexico — launching a united effort alongside their Gulf State colleagues.

 

Under current federal law, Louisiana, Texas, Mississippi and Alabama get about 37.5% of the money made from drilling off their coastlines. But states that have energy production sites on federal land get a 50% share.

The difference is because about 12.5% of offshore revenues are dedicated to the Land and Water Conservation Fund to provide money for national parks and forests. There is no requirement that inland energy revenues be used for those purposes.

“There is a huge disparity that exists there,” Kline said.

Offshore oil and gas leases generated $4.8 billion for the U.S. Treasury — the amount beyond what the states got — compared to $3.4 billion under the inland mineral lands leases.

By law, any federal dollars Louisiana gets for offshore energy production goes to the state’s coastal restoration efforts that also help shore up the state's energy infrastructure.

“Louisiana’s coastline infrastructure is critical for America’s energy and economic security,” U.S. Sen. Bill Cassidy, R-Baton Rouge, said recently. “This legislation creates equal treatment for Louisiana’s offshore revenue sharing and secures the funds needed to strengthen our state’s coastal restoration efforts.”

Cassidy is sponsoring legislation in the upper chamber along with U.S. Sen. John Kennedy, R-Madisonville, while U.S. Reps. Garret Graves, R-Baton Rouge, and Cedric Richmond, D-New Orleans, have teamed up in the House.

Representatives from the Gulf Coast region who traveled to Washington to lend their support for passing the legislation included local government leaders, representatives from the private sector, state leaders and other stakeholders. A group from Texas has also been working the Capitol office building hallways to highlight the issue, and representatives from Alabama and Mississippi have joined the efforts.

 

In recent years, influential members of the Louisiana delegation, including U.S. House Minority Whip Steve Scalise, R-Jefferson, have been bringing members of Congress to Louisiana to see offshore energy production firsthand.

“I think (congressmen) are starting to be more sympathetic than they have in years past about why this makes sense,” Kline said.

Congress has fewer than two dozen working days left, with an almost mindbogglingly daunting to-do list. The federal government is only funded through Nov. 21 — the same day the National Flood Insurance Program is set to expire.

The United States-Mexico-Canada Agreement hasn’t been ratified by Congress a year after Trump hashed out the trade deal, and members from both chambers and both political parties have identified several health care issues, including high prescription drug prices and surprise medical bills, among problems they want to tackle by the end of the year.

In addition to the Gulf of Mexico Energy Security Act, often known as GOMESA, the Land and Water Conservation Fund is also seeking funding reauthorization, which may open up an opportunity for GOMESA to be tacked onto other legislation, but the effort could still drag into next year.

Louisiana received nearly $95 million in GOMESA revenue from the U.S. Department of the Interior earlier this year — about $12 million more than it received a year earlier in its first large-scale payout of outer-continental shelf revenue in GOMESA's scheduled phase-in.

Aside from being one of the largest offshore energy producers, Louisiana is faced with catastrophic land erosion that threatens coastal communities.

“It’s like the state of Rhode Island disappearing," Graves said during a recent Capitol hearing.

Louisiana voters in 2006 decided that any GOMESA revenue would go the state's Coastal Trust Fund to bolster coastal restoration and protection efforts. Kline said the impact that has had on protecting the nation's energy infrastructure sends a strong message.

“I think over the last couple of years a message that has resonated with members of Congress has been ‘Look at how Louisiana is using the dollars,' ” Kline said.