Dec 12 2006

State can certainly use oil, gas windfall

Tuscaloosa News


Who says the Republican-controlled 109th Congress, which this year met for fewer days than any in history and didn’t even pass the federal budgets, was a “do-nothing" Congress?

Well, just about everybody, from the Democrats to the Beltway pundits to even many Republicans themselves.

But something financially beneficial, if not exactly environmentally sound for Alabama and some sister Southern states, did come out of the last hours of the lame-duck session before the House and Senate adjourned, stepping aside for the Democrat-/scontrolled 110th Congress, which will convene next month.

Led by Republican Alabama Sens. Richard Shelby and Jeff Sessions and several of their regional colleagues, the Senate passed legislation late Saturday that will expand offshore drilling and give energy companies access to oil and gas deposits in a huge area once off-limits in the Gulf of Mexico.

But more important, the legislation, which had already been approved by the House and is expected to be signed into law by President George W. Bush, will allow Alabama, Mississippi, Louisiana and Texas to share in millions of dollars of royalties that would otherwise have gone to the federal government.

The legislation opens up 8.3 million acres of Gulf waters 125 miles out to sea from the Florida Panhandle, and 37.5 percent of the revenue it will produce once the oil and gas begins to flow will be split between Alabama and the three other states.

In a recent analysis by the Congressional Budget Office, the potential payoff is impressive: an average of about $51 million per year to be split by the states from 2009 to 2016.

Although the exact amount each state would receive is not yet certain, each state is guaranteed at least $5.1 million annually and while that works out to less than 1 percent of this year’s $1.66 billion Alabama General Fund Budget, every little bit helps, as they say.