Gulf of Mexico
BP's Thunder Horse platform. Photo by BP

LA - Louisiana could see $1.9B from Gulf oil, additional money from wind, under Senate bill 31

Bill would lift a $500 million cap on offshore revenue allotted to states

Louisiana could receive an additional $1.9 billion in revenue from Gulf of Mexico oil and gas and a separate share of revenue from Gulf wind energy operations under federal legislation expected to be considered Thursday.

The U.S. Senate’s Energy and Natural Resource Committee on Thursday will consider the the bipartisan Reinvesting In Shoreline Economies and Ecosystems Act, authored by Sens. Sheldon Whitehouse, D-Rhode Island, and Bill Cassidy, R-La.. That bill would lift a present $500 million annual cap on oil and gas revenue shared with Gulf states.

All told, Gulf states could receive $4.4 billion more in offshore revenue over the next decade if the cap is dropped. That’s according to conservative estimates of oil and gas prices in the coming years provided by University of Louisiana at Lafayette economist Stephen Barnes.

The bill would also provide a 37.5% share of federal revenue from offshore wind facilities located in federal waters to states, with amounts divvied up based on how close the wind facilities are to state borders.

And yet another 12.5% of the wind funds would go to the National Oceans and Coastal Security Fund, which funds projects aimed at better understanding and using ocean and coastal resources and infrastructure. Louisiana would be eligible for a share of those grants, too.

According to officials in Cassidy’s office, the consideration of the bill on Thursday is the result of an agreement between Gulf Coast and other senators with Sen. Joe Manchin, D-W.Va., who chairs the committee.

The bill’s sponsors agreed to drop two provisions from the legislation that Manchin opposed: Increasing the state share of offshore oil revenue from 37.5% to 50%, and adding oil and gas operations that were leased between 2000 and 2006 to those whose revenue is shared with coastal states.

The sponsors also agreed to add language guaranteeing that none of the offshore revenue would be used by states for “entertainment” purposes, such as to fund the construction of stadiums or aquariums. And Manchin insisted, Cassidy’s office said, on adding language that requires states to say precisely what they will spend the money on.

Louisiana laws require offshore oil revenue to be spent only on coastal restoration or coastal flood protection projects. In recent years, the state has directed much of its offshore revenue toward levee construction projects. The spending is disclosed annually in a plan approved by the Legislature.

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