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Earlier this year, Louisiana received $95 million from the oil and gas produced from federal waters in the Gulf of Mexico through the Gulf of Mexico Energy Security Act (GOMESA).
However, many people in the industry and Louisiana lawmakers believe the cut should be more, especially since those funds go into Louisiana land restoration efforts.
United States senators and representatives, including U.S. Rep. Garret Graves, R-Baton Rouge; U.S. Rep. Cedric Richmond, D-New Orleans; U.S. Sen. Bill Cassidy, R-Baton Rouge; and U.S. Sen. John Kennedy, R-Madisonville, have all been vocal about the state receiving more revenue from offshore energy production and have sponsored legislation aimed towards Louisiana getting a bigger piece of the pie.
In August, just before Congress went into their annual August recess, Cassidy, Kennedy and senators from neighboring states introduced the Conservation of America’s Shoreline Terrain and Aquatic Life (COASTAL) Act, which is legislation to “strengthen the current offshore energy revenue sharing program under the Gulf of Mexico Energy Security Act (GOMESA) and to create a new revenue sharing program for future offshore energy production in Alaska,” a press release by Cassidy’s office reads.
“Louisiana constitutionally dedicates revenues from offshore energy production to pay for conservation, restoration and environmental projects to preserve and restore its eroding coastline,” the release continues. “However, under current law, Gulf states only receive a 37.5 percent share of revenues from energy produced in federal waters compared to states that receive 50 percent from onshore energy production on federal land.”
The COASTAL Act will also eliminate the $500 million cap GOMESA funds are limited to.
The bill had yet to be voted on at press time.
“This bill makes it clear that Louisiana needs an equitable portion of the revenue made off our coast from offshore drilling. Louisiana is leading the U.S. toward energy independence,” Kennedy said. “However, we have to invest in restoring our coastline and ensuring the safety of our coastal families and jobs from hurricanes. This bill will allow us to make those investments.”
That 37.5 percent is a number local delegates and oil and gas industry leaders agree is too low.
“I think the federal government has historically looked at it differently for offshore because those are not within state boundaries; it’s in federal waters,” said Port Fourchon Executive Director of the Greater Lafourche Port Commission Chett Chiasson. “So, the case is being made that because we are servicing it on a daily basis, mainly through Louisiana, Port Fourchon and other ports along the coast, that the activity is impacting the state, so we should get more share so that we can do what we need to do.”
Chiasson went with a group, consisting of governmental entities, non-government organizations and other oil industry representatives, to Washington D.C. in early September to speak with delegates about getting more revenue for GOMESA, which would in turn generate more funds for Louisiana land restoration.
GOMESA was established in 2006 and created to establish revenue sharing provisions for four oil and gas producing states along the Gulf Coast: Alabama, Mississippi, Texas and Louisiana. All revenues from the Outer Continental Shelf (OCS), including bonus bids, rentals and production royalty, are shared among those four states. Of that revenue, 12.5 percent goes into the Land and Water Conservation Fund.
This year alone, two OCS lease sales generated over $400 million worth of high bids.
Any federal dollars Louisiana receives from oil and gas production in the Gulf goes into restoration efforts, by state law.
“Louisiana’s coastline infrastructure is critical for America’s energy and economic security,” Cassidy said when the COASTAL Act was introduced. “This legislation creates equal treatment for Louisiana’s offshore revenue sharing and secures the funds needed to strengthen our state’s coastal restoration efforts.”•


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