Senators from New Mexico, North Dakota and West Virginia say U.S. can't afford 'giveaway'
The ultra-deepwater drillship Discoverer Inspiration was photographed March 30 in the Gulf of Mexico about 240 nautical miles from Leeville. Three influential Democratic senators are threatening a major fight if, as expected, a Senate climate bill includes revenue sharing for states that allow new offshore drilling.
A spokesman for Sen. Jeff Bingaman, D-N.M., said that a letter circulated by the three senators isn't intended to block implementation of a 2006 energy bill co-authored by Sen. Mary Landrieu, which beginning in 2017 will bring Louisiana 37.5 percent of royalty payments from new drilling off the state's coastline.
But the letter argues, according to Bingaman spokesman Bill Wicker, that a debt-ridden federal government shouldn't allow any new revenue-sharing schemes, or for that matter, proposals by some Louisiana lawmakers, to speed up starting date for the sharing of off-shore royalties.
The letter calls revenue sharing a "giveaway" of money that belongs to all Americans.
"The fiscal consequences of such a loss would be devastating, particularly given the enormous demands on the federal treasury and our need to reduce the deficit," says the letter signed by Bingaman, Byron Dorgan, D-N.D, and Jay Rockefeller, D-W.Va.
The letter seems intended to sound a warning about a bipartisan climate change bill now being written by Sens. John Kerry, D-Mass., and Lindsey Graham, R-S.C. Graham has said that revenue sharing is the key to getting some GOP support for the bill. Landrieu also has expressed support for a new revenue-sharing regime to encourage states such as Florida and Virginia to go along with new drilling.
Landrieu said the revenue-sharing critics would continue an "inequity" under which states that allow drilling on their land get 50 percent royalties from the federal government, while most states that allow drilling off their coasts get little if anything in return.
"Despite this inequity, these three senators are still endorsing the status quo -- a system where only coastal states have to shoulder the responsibilities of energy production without reaping the rewards," Landrieu said.
Sen. David Vitter, R-La., also criticized the three Democratic senators.
"This line of thinking explains why Senate Democrats fought to shoot down my amendment that would have expedited grants for storm protection and coastal restoration from Louisiana's fair share of the revenue from the oil leases off its shores," Vitter said. "Their line of logic is telling -- taking money away from those states that carry the burden of our nation's energy production, like Louisiana, to backfill the national treasury to pay for more of their reckless spending agenda."
The 2006 energy bill, sponsored by Landrieu and then Energy Committee Chairman Pete Domenici, R-N.M., opened up 8.3 million acres in the Gulf of Mexico to new oil and gas production, with the higher royalties going to states in 2017. In Louisiana, the state has committed to using the annual revenue, which is expected to ultimately be in the hundreds of millions of dollars, to coastal restoration and hurricane protection projects.
Bruce Alpert can be reached at balpert@timespicayune.com or 202.383.7861.