WASHINGTON — Louisiana's pitch for a larger share of offshore oil and gas revenues for coastal projects, including efforts to protect Louisiana's receding coastline, was met with a mixed reaction during a U.S. Senate hearing Thursday.
Some members of the Energy and Natural Resources Committee appeared sympathetic to the case that Louisiana's efforts to combat coastal erosion rely on the funding and that, currently, Gulf States don't receive as much from federal land leases as states that benefit from inland revenues.
But members from states that have little or no energy production on federal land and water questioned the existing program and argued that they want to tap into the money, too.
U.S. Sens. Bill Cassidy, R-Baton Rouge, and John Kennedy, R-Madisonville, have partnered with Alaska Republican Sen. Lisa Murkowski to propose the Conservation of America’s Shoreline Terrain and Aquatic Life Act, an effort to update to the current energy revenue-sharing Gulf of Mexico Energy Security Act.
But the tepid response it received during Thursday's hearing could spell trouble for the proposal.
U.S. Rep. Joe Manchin, D-West Virginia, said he is still learning about how the government doles out oil and gas revenues to states, but he questioned why it’s not comparable to coal in his state.
“We just treated all 55 counties the same, as if they were producing counties,” he said.
Manchin said other states also have stake on federal lands.
“It’s owned by the people of the country,” he said.
The latest push, led by Louisiana officials and others from the Gulf Coast, is aimed at putting states that have oil and gas production off their coastlines on the same footing as states that have drilling on federal lands on shore.
"What we're looking for is equity," Cassidy said during the hearing.
Under current federal law, Louisiana along with Alabama, Mississippi and Texas split about 37.5% of the money made from drilling off their coastlines. States that have energy production sites on federal land receive a 50% share.
The 12.5% difference is because a portion of offshore revenues go 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.
Offshore oil and gas leases generated $4.8 billion last year for the U.S. Treasury — the amount beyond what the states received — compared to $3.4 billion under the inland mineral lands leases.
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Aside from being one of the largest offshore energy producers, Louisiana is faced with catastrophic land erosion that threatens coastal communities.
By law, any federal dollars Louisiana receives for offshore energy production goes to the state’s coastal restoration efforts that also help shore up the state's energy infrastructure.
Chip Kline, chairman of the Louisiana Coastal Protection and Restoration Authority, said during the hearing that the state's catastrophic land loss makes any dollar received from GOMESA crucial.
"We are being responsible with the dollars that are returned to us from oil and gas production," he said. "We are reinvesting these dollars back into our coast and building projects that protect our homes, our communities, our businesses, our environment, our way of life and the very infrastructure that continues to help fuel this nation."
But even that prompted "what about us" sentiment.
U.S. Sen. Mazie Hirono, D-Hawaii, described her state’s land loss, which threatens to consume the popular tourist destination Waikiki.
“What kind of help do we get?” Hirono said.
Kline explained the role that Louisiana plays in facilitating offshore energy production.
"Coastal states also provide and support the vast and extensive infrastructure needed to transport this energy across the nation, including highways, ports and pipeline corridors," he said. "All of these activities have helped generate hundreds of billions of dollars into the federal Treasury."
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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.
While Louisiana officials have been trying to build support for the proposal, it appears unlikely that the GOMESA update will advance very quickly.
Congress has fewer than two dozen working days left this year and faces a daunting list of issues that have not been resolved. 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 in the next two months.
Meanwhile, the Democrat-controlled House continues its impeachment inquiry of President Donald Trump with a goal of wrapping up by the end of the year.