Congressional delegation optimistic about offshore revenue sharing
By John Hill
November 20, 2006
After a week of behind-the-scenes lobbying, Louisiana's congressional delegation is more optimistic about enacting an offshore oil revenue sharing bill that will pump millions into coastal restoration and hurricane protection.

The Senate, White House and House members are turning their efforts toward convincing the House, where conservatives want to open most of the nation's coasts to exploration, to pass a version of the more limited Senate bill that will open more areas of the Gulf of Mexico to drilling.

Another area on which there may be an agreement is fixing the 1998 and 1999 oil-leases glitch made by a U.S. Mineral Management Service bureaucrat that has resulted in oil companies avoiding paying any royalties, totaling $11.2 billion. Louisiana's congressional delegation hopes to capture about $2.5 billion of that for the coastal effort.

"There is a good bit of movement," said U.S. Sen. Mary Landrieu, D-New Orleans, who is filing a separate bill to fix the lease glitch that gives half the reclaimed royalties to the four major producing states of Louisiana, Mississippi, Alabama and Texas.

U.S. Rep. Charles Melancon, D-Napoleonville, and others have persuaded oil companies to lobby the House to pass the more politically possible Senate bill that would open just a portion of the eastern Gulf of Mexico to new drilling.

Grabbing a portion of those oil revenues is seen as key to helping the state embark on a program, along with the U.S. Corps of Engineers, that will stop coastal erosion and thereby protect the state's oil and gas land-based infrastructure and fisheries industry, which would save thousands of south Louisiana jobs. Increased hurricane protection for coastal Louisiana is also at stake.

Congress is taking a week off for the Thanksgiving holiday, then will return in December for a lame-duck session before adjourning. If no compromise is reached, any pending legislation dies, and the Louisiana congressional delegation will have to start over from scratch when the new Congress convenes in January. Furthermore, if the lease glitch is not fixed, the Congressional Budget Office will recognize that potential income as part of the revenue stream, which will cause it to be out of reach for Louisiana.

Landrieu said her lease-fix legislation would allocate the recovered $11.2 billion in royalties to the states, some for reduction of the U.S. government's deficit and some for other environmental programs.

"A little something for everybody," she said. Her lease-fix legislation is a sweetener for the House to help win passage of the offshore oil revenue-sharing bill approved last summer by the Senate.

"Whatever we get has to be broadly distributed so it lasts," Landrieu said.

The House is divided, with half wanting to open drilling everywhere and half not wanting to open drilling anywhere, Landrieu said.

The revenue-sharing bill is part of an overall energy bill the White House has made a priority for the lame-duck session, with White House Federal Hurricane Recovery Coordinator Don Powell helping Louisiana's congressional delegation.

"The good news last week was that we got a commitment from Chairman Powell that this is a top priority for the administration," said U.S. Rep. Bobby Jindal, R-Metairie, who is sponsor of the more liberal House bill that opens much of the nation's coasts to exploration.

The House leadership has told Jindal and U.S. Rep. Jim McCrery, R-Shreveport, they will ask for a House floor vote on the Senate bill or a version close to it.

"I think we have a very good chance of getting this done in December," Jindal said.

Jindal has conceded that the most politically practical move is to back the Senate versions, along with a fix in the 1998 and 1999 leases.

"You cannot let the perfect be the enemy of the good," Jindal said. "This is the first step in getting what we need."

McCrery, who joined Jindal in meetings with key House Republican leaders, said they received assurances the issue "would get to the House floor in one form or another.

"We made it clear that we are willing to accept the Senate version," McCrery said. "It's all going to happen in December."

In a major lobbying move last week, the Louisiana-based America's Wetlands campaign released a poll showing widespread national support for offshore oil revenue sharing with Louisiana. The Louisiana congressional delegation is showing the results to colleagues.

Penn, Schoen and Berland Associates of Washington, D.C., a prominent national polling firm, conducted the Nov. 8 poll of 1,096 people across the country. The poll has a margin of error of plus or minus 4 percentage points, which statistically means if all voters were polled, there is a likelihood the results wouldn't vary by more than four points. The poll's key findings:

n 80 percent believe the federal government should share 50 percent of offshore oil revenue with Louisiana, now that the state has adopted a constitutional amendment dedicating the money to coastal protection and restoration.

n 89 percent of the respondents believe the federal government should share in the cost of rebuilding wetlands in Louisiana after they were told that the two hurricanes washed away 200 square miles.

n 87 percent believe the federal government should help pay the cost of rebuilding the coastal marshes in order to secure the energy resources.

The chief pollster, Robert Green, said the poll shows "broad and deep national support" for revenue sharing, not just for hurricane protection, but also to secure the national energy and economic interests.

U.S. Sen. David Vitter, R-Metairie, said the biggest issue is the lack of time.

"I think it is clear, with time ticking down, that our opportunity is for the House to pass the Senate bill as it is or something like it," Vitter said. Among those opposed to any new drilling, "it is almost a quasi-religious belief," the senator said.

"I am hopeful," Vitter said, also pointing to the lobbying effort under way by the oil and gas industry as well as the major users of their energy products, the petrochemical, wood and glass industries.

"We return Dec. 4. That's when the rubber meets the road," Vitter said.

U.S. Rep. Rodney Alexander,

R-Quitman, said the delegation is unified and working together and will meet for a strategy session prior to Dec. 4.

"It really looks good," Alexander said. "I think we've been blessed in one way. We have been able to heighten the interest of the nation because of the hurricanes, the high gas prices and the fact that China is drilling in international waters off the coast of Cuba."

That has been a key turn-around for Florida's congressional delegation.

"They didn't want all their retired people looking off into the sunset and seeing drilling platforms; now they could be looking at them and they don't even belong to us," Alexander said.

"We are moving ahead with cautious optimism. Whatever we come out with is likely to benefit Louisiana because a little bit is better than nothing," Alexander said.

U.S. Rep. Charles Boustany, R-Lafayette, said the moment is historic, coming after 50 years of Louisiana's struggle to get more offshore oil revenue.

"We are working together," Boustany said. "Ultimately, we would have liked more, but we have to consider what is doable."

"The great danger is if we try to get too much, if we get too greedy, we get nothing," Boustany said. "You have to be realistic."

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