House Democrats back Obama plan to halt Gulf revenue sharing

By Phil Taylor | 03/17/2015 07:23 AM EDT

House Democrats are quietly backing President Obama’s bid to divert billions of dollars in future offshore oil and gas revenues from Gulf Coast states, a position that has angered their Gulf colleagues.

House Democrats are quietly backing President Obama’s bid to divert billions of dollars in future offshore oil and gas revenues from Gulf Coast states, a position that has angered their Gulf colleagues.

House Natural Resources Committee Democrats made their views known in a Feb. 20 letter to the Budget Committee obtained by E&E Daily. The letter was Democrats’ response to the budget "views and estimates" submitted by Natural Resources Chairman Rob Bishop (R-Utah).

"The Outer Continental Shelf belongs to all Americans, not individual states, and we believe that the revenue should be used to benefit all Americans," committee Democrats led by Natural Resources ranking member Raúl Grijalva of Arizona wrote to Budget Chairman Tom Price (R-Ga.) and ranking member Chris Van Hollen (D-Md.).


"Coastal restoration efforts in the Gulf are going to be funded by billions of dollars of BP Clean Water Act penalties pursuant to the RESTORE Act," they added. "We are committed to Gulf restoration efforts and believe that additional coastal restoration funding should be provided through the appropriations process as necessary after the effectiveness of RESTORE Act funding is determined."

Obama’s Gulf of Mexico revenue proposal was unveiled as part of his fiscal 2016 budget request in early February. It’s been sharply attacked by Gulf Coast lawmakers, as well as some prominent environmental groups and Obama allies that depend on Gulf energy revenues to support coastal restoration.

Some conservationists privately support redirecting states’ revenues, which the administration has proposed using for national conservation priorities, including the Land and Water Conservation Fund. But prominent green groups have yet to publicly back the president. Democrats have also remained quiet.

Under a 2006 bipartisan revenue-sharing law, Alabama, Mississippi, Louisiana and Texas are entitled to receive 37.5 percent of federal offshore revenues — up to $500 million annually. Revenues so far have been limited to leases from small areas in the eastern and central Gulf, but beginning in late 2016, revenues are slated to significantly increase from leases throughout the Gulf.

Obama’s budget proposed diverting more than $3 billion in Gulf Coast revenues over the next decade to fund national conservation and public lands priorities, arguing that revenue from federal mineral sales should be shared by all Americans.

The proposal incensed Gulf Coast lawmakers and drew a sharp rebuke from former Sen. Mary Landrieu (D-La.), who authored the revenue-sharing law with former Sen. Pete Domenici (R-N.M.). As of one year ago, the Gulf of Mexico Energy Security Act (GOMESA) had provided more than $30 million to Louisiana for wetlands restoration, hurricane protection and flood control projects, Landrieu said.

Some conservationists were surprised when Obama proposed repealing GOMESA provisions in the 2016 budget. Some believed the administration was drawing a line in the sand as coastal lawmakers eye expanding revenue sharing to all coastal states.

Landrieu last Congress co-sponsored such a proposal with Sen. Lisa Murkowski (R-Alaska), but the administration withheld its support, saying it would add about $5 billion to the federal deficit.

It’s not the first time Natural Resources Democrats have objected to GOMESA.

Last year, Democrats led by then-ranking member Peter DeFazio of Oregon argued in a letter to Budget Committee leaders that ending GOMESA revenue sharing could increase revenue to the U.S. Treasury by nearly $30 billion over the next 60 years.

Taxpayers for Common Sense has also rallied behind the Obama plan.

"This really is a much larger, longer fight we’ve been having since GOMESA came out," said Autumn Hanna, TCS’s senior program director. "We realize it’s an uphill battle."

The proposal would raise an estimated $3.069 billion within the next decade, beginning in 2018, the Interior Department budget said. The money could be used for LWCF, payments in lieu of taxes, State and Tribal Wildlife Grants, federal coastal restoration and resilience programs, and other national priorities, Interior said.

Sen. David Vitter (R-La.) yesterday called the plan "insulting" to Louisianans.

"If anything, President Obama and congressional Democrats should want Louisiana to keep more of this revenue — it’s going to vital coastal restoration," he said in an emailed statement yesterday. "Our coasts are the first line of defense to a hurricane or tropical storm, and it’s absolutely critical that we do everything in our power to protect and restore them."

Sen. Bill Cassidy (R-La.) said federal policies are to blame for the state’s vanishing coastline.

"GOMESA is a way [to] proactively protect Louisiana families, businesses and our coastline," he said in an emailed statement. "The president and his supporters who want to take this money away are hurting the people who were flooded in hurricanes Rita and Katrina."

Earlier this month, seven oil-state Republican senators blasted the Obama plan, arguing that GOMESA revenues are critical for Gulf states to provide infrastructure, public safety and social services for workers who drill offshore, and to maintain their coastlines.

The Obama plan is also opposed by the Environmental Defense Fund, National Wildlife Federation, National Audubon Society and Lake Pontchartrain Basin Foundation, groups that have invested heavily in restoring the eroding Gulf coastline. According to the New Orleans Times-Picayune, Louisiana voters amended the state’s constitution to dedicate future offshore royalties to coastal restoration, part of a $50 billion, 50-year master plan to rebuild barrier islands, marshland and beaches that defend against floods.