Senator at odds with Obama over timeline to up oil revenue
WASHINGTON - U.S. Sen. Mary Landrieu said Tuesday it was tragic that the Obama administration opposed legislation that would generate hundreds of millions of dollars for Louisiana by creating more parity for states that do not benefit enough from the oil-and-gas drilling off their coasts.
“After losing 1,400 lives in the rising floodwaters of (hurricanes) Katrina and Rita ... and in the devastation that ensued, I find it tragic the administration’s position on this issue and it’s seemingly heartless,” said Landrieu, D-La., who along with U.S. Sen. Lisa Murkowski, R-Alaska, cosponsored a bill that would create the FAIR Act - Fixing America’s Inequity with Revenues Act.
The FAIR Act would speed up increased revenue sharing for offshore energy production for Gulf Coast states to 2013 from 2017 and phase out a $500 million cap on annual state revenues shared amongst five Gulf Coast states. The offshore revenues for Louisiana are supposed to be dedicated to coastal preservation, restoration and flood protection efforts.
Landrieu and Murkowski argued the legislation would lead to even more federal revenues through added state motivations to encourage producing offshore energy.
The bill is projected to cost the federal government $6 billion over 10 years by giving more revenues to states.
Pamela Haze, an U.S. Interior Department deputy assistant secretary, argued during the U.S. Senate Energy and Natural Resources Committee hearing on the FAIR Act that the bill also could hurt President Barack Obama’s proposed Energy Security Trust fund to support research for alternative energies that would be funded through offshore drilling revenues.
Since 1920, interior states have kept 50 percent of revenues from all oil, gas and coal produced on federal lands. However, energy production offshore of the Gulf Coast states has generated $211 billion in federal revenues, while the states have received very little. In 2011, for instance, energy production off of Louisiana’s coast generated $5.7 billion in federal revenues with $26.7 million going back to the state. But Wyoming generated $2.1 billion in energy production revenues on federal lands and got $995 million back.
The administration’s lack of support makes it appear to “perpetuate the double standard” that exists to benefit interior states and keep funds away from coastal states, Landrieu said.
While backed by much of the energy sector, The FAIR Act is opposed by environmental groups, such as the Sierra Club, because it promotes more oil-and-gas production. It also is opposed by fiscal responsibility groups like Taxpayers for Common Sense because it adds to the deficit short term.
Landrieu called those views short-sighted.
Reggie Dupré, a former state senator who is the executive director of the Terrebonne Levee and Conservation District, testified Tuesday in Congress that Louisiana only wants fair treatment.
Mississippi River damming and diversions projects - even in northern parts of the country - implemented as long as 100 years ago have led to many of southern Louisiana’s coastal erosion problems while the state has served as an economic corridor for the nation, Dupré said. “Our region is gasping for survival as a result,” he said.
“Action taken by the federal government in the early 1900s is destroying my homeland before my eyes,” Dupré said. “Is it fair for Congress to pass the FAIR Act? The answer is - absolutely.”
Louisiana residents just want help with flood protection and restoration to enact the state’s $50 billion, 50-year master plan, he said, while local communities continue to invest on their own.
Last month, the U.S. House approved a bill that would increase revenue-sharing for Louisiana on offshore oil-and-gas production starting in 2023.
U.S. Rep. Bill Cassidy, R-Baton Rouge, successfully tacked the language onto the U.S. Offshore Energy and Jobs Act, which would open up offshore drilling production in the Atlantic and Pacific oceans.
The problem for Cassidy’s amendment is that the bill has little chance in the Senate and the White House has already issued a veto threat on it.
The FAIR Act also faces a tough road progressing in the Senate. While no votes are set yet on the bill, Landrieu argued that progress is being made as more senators offer their support, including the aid of Energy and Natural Resources Committee Chairman Ron Wyden, D-Ore.