Though the President and BP are allotting $20 billion for the Gulf Coast recovery effort, lawmakers from the Gulf Coast region are fighting for more. And they have a viable plan for obtaining the needed funds.
Two Louisiana lawmakers are introducing legislation that would bump up the start date of a previous bill granting states along the Gulf a share of oil and gas revenues.
Through the 2006 Gulf of Mexico Energy Security Act Texas, Louisiana, Mississippi and Alabama are entitled to 37.5 percent of revenue in royalty fees from oil companies drilling in the Gulf.
However, the majority of funding doesn’t kick in until 2017. Proposed legislation from Rep. Joseph Cao (R-La.) and Sen. Mary Landrieu (D-La.) would move that date from 2017 to 2011.
Some analysts predict revenue of up to $300 million could be shared among all Gulf Coast states after 2017, according to the Louisiana Governor’s Office of Coastal Activity. The bill caps total revenue the states can receive at $500 million.
Under the current bill, the states can only accept revenue from drilling permits obtained before 2006. But starting in 2017, the revenue sharing will open up to all drilling permits in the Gulf.
“The legislation going into effect in 2017 opens up more drilled areas to royalties,” Taylor Henry, spokesman for Cao, said. “This expansion will vastly increase the revenue coming into the Gulf states.”
In addition, the Gulf Coast may also benefit from royalties stemming from the oil spill, since BP’s 2008 land lease with the Minerals Management Services subjects them to an 18.75 percent royalty contract, according to the D.C. advocacy group The Tax Blog.
Revenue from the Gulf of Mexico Energy Security Act stems from royalties, including bonus bids, rentals, and production. The funds are intended for use in coastal recovery and restoration.
Louisiana makes a strong case for revising the original legislation because the state’s “spider web-looking” estuaries makes the ecosystem more vulnerable than the other states in the oil’s path, Chairman of the Coastal Protection and Restoration Authority Garret Graves told the 10/12 Weekly Corridor in Louisiana.
“You can see how fragmented and how broken our shoreline is in Louisiana,” he told the publication. “It’s a fundamentally different problem in coastal Louisiana to have oil pollute and contaminate our shoreline than in other states.
Cao’s H.R. 5267 moved into the House Subcommittee on Energy and Mineral Resources in May, where it is under debate. Landrieu is working on a similar act – the Restoring Ecosystem Sustainability and Protection on the Delta Act (RESPOND).
