WASHINGTON — A bill that would reverse course on much of former President Barack Obama's administration's policy on oil and gas drilling and potentially lift Louisiana's share of federal oil revenue in the coming decades cleared a House committee Wednesday.
The bill, dubbed the SECURE American Energy Act and sponsored by House Majority Whip Steve Scalise, R-Jefferson, has gained limited bipartisan support but faced Democratic opposition Wednesday over environmental concerns.
Louisiana — along with all other Gulf Coast states besides Florida — already receives a share of royalties from oil and gas drilling in federal waters in the Gulf of Mexico under the Gulf of Mexico Energy and Security Act, which was signed into law in 2006.
The new proposal would expand similar revenue-sharing deals to Alaska and to states along the Atlantic and Arctic coasts, areas where President Donald Trump's administration has taken initial steps toward opening up for offshore drilling.
One provision in the proposed law would require congressional approval before a president could permanently block future leases for offshore drilling, an apparent response to Obama's move late in his final term to put large American-controlled swaths of the Arctic Ocean off-limits to energy companies.
Congressional sources told The Advocate that new drilling or leases along Louisiana's coast in the Gulf of Mexico wouldn't be significantly affected by the bill. Oil companies already operate extensively in the area.
But the bill would tweak how much cash Louisiana and other Gulf Coast states could receive under the GOMESA revenue-sharing deal.
Louisiana has reserved the vast majority of its share of the GOMESA pot for projects designed to prevent coastal land loss, restore ecosystems along the Louisiana coast and protect the state from catastrophic floods.
Current law caps the amount of federal offshore revenue that Gulf Coast states can split at $500 million per year until 2055 — even if federal royalty and lease payments would otherwise send far more to the states.
Louisiana, Texas, Mississippi and Alabama split the cash based on a formula based primarily on how close rigs are to each state. Florida does not allow offshore drilling and isn't part of the revenue-sharing deal.
As currently written, the bill would raise the annual cap to $750 million in 2029 before phasing it out altogether in 2059.
Whether those changes would result in more cash for the state would still depend heavily on oil markets — where low prices have pushed down investment in recent years — and a range of other factors.
Louisiana officials were recently alarmed to hear that estimates of how much money GOMESA would bring in over the next three years had dropped by 50 percent and far short of the cap.
Other provisions in the bill would make it easier for private companies to drill for oil and natural gas on federally owned land and would put state, not federal, environmental regulators in charge of more decisions.
One section of the bill would open up areas far offshore to wind-energy projects and would direct federal bureaucrats to study the possibility of auctioning leases to build wind farms in the Atlantic and Pacific oceans.
The bill also would cut some restrictions imposed by the Marine Mammal Protection Act that those in the energy industry blame for slowing down offshore projects and increasing costs.
A number of environmental groups have attacked the bill, depicting it as a giveaway to the fossil-fuel industry and raising concerns about pollution and global warming.
"It’s the same polluter-industry wish list they’ve presented for years dressed up in yesterday’s talking points," U.S. Rep. Raul Grijalya, D-Arizona, the top-ranking Democrat on the House Natural Resources Committee, said during a hearing Wednesday.
The bill's backers, including Scalise, repeatedly pointed to its importance in bolstering the United States' "energy dominance" and potential to create jobs through additional oil and gas exploration.
"The SECURE American Energy Act will create good jobs in communities all across our country, empower states, optimize onshore resource management and raise revenue-sharing caps that dedicate critical funds to Louisiana’s coastal restoration," Scalise said in a statement.
Two Texas Democrats — U.S. Reps. Henry Cuellar and Vincente Gonzalez — have signed onto the bill as cosponsors, giving it at least a degree of bipartisan backing. Neither Cuellar nor Gonzalez is a member of the committee, however, and the bill advanced on a party-line vote.
It wasn't immediately clear when the bill might come up for a vote before the full House of Representatives. The legislation also faces potential hurdles in the U.S. Senate, where Republicans hold a much thinner majority and bills must collect the votes of 60 of the 100 senators to pass.