Mar 08 2006


Bill provides coastal impact assistance to energy producing states

Six Gulf Coast senators joined together today to introduce bipartisan legislation that will direct a portion of offshore oil and gas revenues from the Gulf of Mexico to the states of Mississippi, Louisiana, Alabama and Texas. The bill, authored by U.S. Senators Trent Lott, R-Miss., Mary Landrieu, D-La., Thad Cochran, R-Miss., David Vitter, R-La., Richard Shelby, R-Ala., and Jeff Sessions, R-Ala., responds to legislation reported out by the Senate Energy Committee today to open as much as 3.6 million acres of the Gulf to oil and gas production.

The Gulf Coast senators’ bill would share with the coastal producing states 50 percent of the federal revenue generated by production in an area known as Area 181. This coastal impact assistance had not been included in S. 2253, the legislation passed by the committee this morning despite a letter from Senators Lott and Landrieu last month stating that they could not support such a bill unless coastal impact assistance was included.

“The Gulf Coast states have provided the ports, pipeline facilities, fabrication facilities, and other support functions to maintain oil and gas exploration in the Gulf of Mexico,” Sen. Lott said today. “As we saw from the devastation caused by hurricanes Katrina and Rita, the damage to this supporting infrastructure causes its own damage to our coastal communities. The increase in Gulf oil and gas exploration that will occur as a result of leasing Area 181 will increase the impact on the Gulf Coast communities. The provision of coastal impact assistance using a portion of the federal revenues from these leases is appropriate and greatly needed by those communities.”

“The nation has a need for more oil and gas, and we are the nation’s only Energy Coast,” Sen. Landrieu said. “We’ve got to increase our supply, not decrease it; and we also have to conserve more. But the host states along the Gulf Coast are the ones who make offshore energy possible. Without them, none of those minerals would be accessible. So particularly after hurricanes Katrina and Rita, we need to use our fair share of these royalties to build better, stronger levees and to restore our eroding wetlands – the first line of defense against oncoming storms. It is imperative that this new source of revenue come to help us in the long term rebuilding efforts of the Gulf Coast.”

“This legislation will allow Mississippi to get a fair share of the profits from the oil and gas produced in the 181 Area of the Gulf of Mexico,” Sen. Cochran said. “This is especially important for our state in light of the loss of tax revenue we have faced because of the damage of Hurricane Katrina. The income Mississippi will gain from this revenue sharing agreement will provide funds for infrastructure improvements, conservation programs, and restoration of coastal areas.”

“Louisiana and the other Gulf States have provided the infrastructure for oil and gas production, which supports the energy needs for the vast majority of the nation,” said Sen. Vitter. “This bipartisan legislation is one of several avenues that we will pursue to ensure that Gulf States are getting their fare share of the royalty revenues, which are critical for Louisiana to use for hurricane protection and coastal restoration.”

“This legislation is an important step towards leveling the playing field for the Gulf States,” Sen. Shelby said. “It is time that Gulf States receive a return on their investment in our nation’s oil and gas production. Time and again we have experienced the direct impact the supply of oil and gas from the Gulf has on our economy. I believe it is imperative that the Gulf States benefit from their willingness to participate in exploration activities that are essential to our nation’s energy supply.”

“Increasing domestic production is a matter of national security, and Congress should act now to allow more drilling in the Gulf of Mexico. Alabama and three other Gulf states produce oil and gas that benefit the rest of the country, and it is only fair that these states are rewarded for their willingness to produce a disproportionate share of our nation’s energy needs,” said Sen. Sessions.

The bi-partisan legislation introduced today allows for the funding to be used by states and parishes or counties for the restoration of coastal wetlands; mitigation of damage to wildlife and natural resources; implementation of federally-approved conservation management plans; projects pertaining to onshore infrastructure; and activities related to energy production or administrative costs necessary to comply with the legislation. While the exact amount of funding created by the legislation remains unknown, Area 181’s total lifetime royalties are estimated to be as high as $11 billion.

The Gulf Coast senators’ bill is expected be re-offered as an amendment to or as a substitute for the underlying legislation, S. 2253, when it reaches the Senate floor.



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