WASHINGTON — A measure that would potentially raise Louisiana's share of federal oil revenue in the coming decades was headed for inclusion in the U.S. Senate's GOP-backed tax bill.
The proposal would raise a federal cap on the amount of offshore oil revenue currently split between Gulf Coast states. Sen. Bill Cassidy, R-Louisiana, added the change to a bill opening up Alaska's Arctic National Wildlife Refuge to drilling.
The entire package is expected to get tacked onto the Senate Republicans' version of a congressional tax-code overhaul currently at the center of debate on Capitol Hill.
Louisiana just began receiving a portion of the royalties from oil and gas drilling in federal Gulf of Mexico waters. Under the 2006 Gulf of Mexico Energy and Security Act (GOMESA), all Gulf Coast states except Florida share in the federal revenue.
But the total amount of money split between the states is capped at $500 million per year until 2055 under current law.
The Cassidy-backed change would bump the cap to $650 million in 2020 and 2021. Louisiana receives the largest share of the GOMESA pot and, according to Cassidy's office, would see nearly $100 million more in funding if federal offshore oil revenues hit the higher cap.
It's not clear if that will happen. Payouts to states from GOMESA began in 2016 — but current federal projections of how much states are likely to receive have fallen short of expectations
Officials have largely attributed the drop in projected GOMESA funds to a sharp decline in the price of oil and a downturn in the drilling industry.
The vast majority of Louisiana's GOMESA income is dedicated to coastal protection and restoration projects along with efforts to protect the state from catastrophic floods.
The state's Coastal Master Plan, an ambitious set of projects aimed at slowing or stopping land-loss along Louisiana's coast, relies heavily on projected GOMESA income to fund projects.
The bill to open up the Arctic National Wildlife Refuge to drilling — including Cassidy's amendment — passed the Senate Energy Committee on Wednesday in a near party line vote. Sen. Joe Manchin, D-W. Virginia, was the only Democrat to back the bill.
A different bill in the U.S. House — the Rep. Steve Scalise-backed SECURE American Energy Act — would also raise caps on GOMESA revenue sharing. That bill also cleared committee but, unlike the GOP tax plan, it's unclear when it might come up for a floor vote.