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Louisiana representatives ask for more offshore oil royalties for coastal restoration

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Washington, DC, September 24, 2019 |

BY SARA SNEATH | Staff writer Nola.com Sep 24, 2019

The four Gulf Coast states that produce oil offshore want a bigger cut of the royalties the federal government gets from drilling on the Outer Continental Shelf to be put toward hurricane protection and coastal restoration.

Representatives from the four states — Louisiana, Alabama, Mississippi and Texas — formed a coalition in August to take up the cause.

They made a trip to Washington this month to lobby White House and Department of Interior staff for a bigger chunk of money from the Gulf of Mexico Energy Security Act, or GOMESA, said Meg Bankston, of the Governor's Office of Coastal Activities.

Under the law, offshore royalties collected by the federal government are split three ways: Oil-producing states on the Gulf receive 37.5%, the Land and Water Conservation Fund receives 12.5%, and the U.S. Treasury gets the remaining half.

Louisiana received $94.7 million for its share of 2018 GOMESA disbursements. Since GOMESA was enacted in 2006, the state has allocated most of its share for hurricane protection, said Chip Kline, the governor's coastal adviser and chairman of the Coastal Protection and Restoration Authority.

This is not the first time Louisiana has pushed for a bigger share of GOMESA funds. The renewed effort comes as two bills make their way through Congress that would allocate a greater share of offshore royalties toward outdoor recreation and addressing the maintenance backlog at national parks. Those bills and the coalition are both targeting the Treasury's share of royalties.

The multi-state group, which calls itself the GOMESA Revenue Sharing Coalition, aims to increase the coastal states' share of royalties from 37.5 percent to 50 percent and to remove the $500 million cap on revenues allocated to states.

A bill by Louisiana U.S. Reps. Cedric Richmond and Garret Graves would increase states' share of offshore revenue to 50 percent. That would line up with the share states retain from production on federal lands onshore, according to a news release about the bill.

"There is more traction and more of an opportunity to get this over the finish line," Kline said at a CPRA board meeting in August.

Industry and environmental groups, including Shell and Restore the Mississippi River Delta, are backing the coalition's efforts.

Louisiana in particular should receive a larger share of offshore revenues because the state has proved that it will put the money toward hurricane protection and coastal restoration, said Simone Maloz, executive director of Restore or Retreat.

"We've put our money where our mouth was," Maloz said. "We've been putting it to our coast."

"It is our continued belief that offshore producing states deserve an equitable share of the revenues and associated benefits from activities which they host, support and sustain," a statement from Shell said.

It's unclear what Congress will do. The bill sponsored by Graves and Richmond has no additional sponsors, while the effort to use offshore revenues to tackle the $11 billion maintenance backlog at national parks has more than 300 sponsors.

Graves said putting the money into parks would be short-sighted.

"Diverting Louisiana's energy revenues away from efforts to improve the resiliency of the people, communities and ecosystems responsible for generating the resources in the first place is a fundamentally flawed approach to addressing the maintenance backlog in national parks," Graves said in a statement. "Our bill ensures that these increased revenues will be committed to projects that restore the coast, protect our coastal communities from hurricanes and other disaster and, ultimately, reduce our nation's outrageous disaster response costs."