The decades-long fight to increase revenue sharing for coastal states may shift in favor of those communities after Jeff Bingaman (D-NM) ends his 30-year career in the Senate in January.
Historically, inland states have enjoyed a 50/50 split with the federal government of all revenues generated from royalties and bids for onshore oil and natural gas production. Revenue sharing for costal states producing offshore oil and gas beyond the first three miles of federal waters has been treated differently.
The Gulf of Mexico Energy Security Act (GOMESA), enacted in December, 2006, created revenue sharing provisions for several oil and natural gas producing states while increasing access to oil and natural gas supplies in the Gulf of Mexico. Alabama, Louisiana, Mississippi and Texas were the beneficiaries, with allocations set to support offshore activities and onshore infrastructure.
From 2007 through 2016, the four Gulf oil and gas producing states will share 37.5% of revenues from new leases in the 0.5 million acres in the Eastern Gulf and the 5.8 million acres in the Central Gulf. After 2016, they will share 37.5% of revenues from all Gulf leases issued after December 2006.
As head of the Senate Energy and Natural Resources Committee, Bingaman was one obstacle to an amendment Senator Mary L. Landrieu (D-LA) worked to have attached to a 2011 drilling-safety bill, Landrieu staff members told The Hill last week. Her proposal is aimed at eliminating the $500 million cap on those royalties and moving the timeframe for payments to 2015. A revenue-sharing plan for states engaging in future federal offshore renewable energy production was also included.
Now, Bingaman is retiring and Landrieu is poised to push the plan again. During President Barack Obama's visit to Louisiana to inspect damage from Hurricane Isaac, the Senator delivered a letter to him regarding the ongoing federal response. In the letter, also, she mentioned the revenue sharing plan.
“Currently, onshore states receive 50 percent of revenues. Coastal states, particularly Louisiana, should receive a similar allotment so they can engage these funds in flood protection,” Landrieu said in the letter.
Sen. Ron Wyden (D-Ore.), and Sen. Lisa Murkowski (R-Alaska), two possible front-runners for the Committee Chairman seat, as reported by The Hill, have both expressed a level of willingness to support Landrieu’s plan next Congress.
