Tuesday, February 03, 2015

Oil royalty wayback

Bob Marshall explains what Obama's proposal to renege on Louisiana's promised share of offshore drilling royalties means for the future of coastal restoration projects.
Louisiana had always received the same share of offshore royalties as inland states, even though tens of thousands of miles of pipelines run from those rigs through its coast. Research shows canals and pipelines related to those activities are responsible for at least 36 percent of the 1,880 square miles of coastal wetlands the state has lost in the past 70 years.

The 2007 bill, passed in the wake of the devastation caused by Hurricanes Katrina and Rita, changed that system by dedicating 37.5 percent of all royalties from specific areas of the Gulf to the four coastal states with energy development – Louisiana, Mississippi Alabama and Texas.

Louisiana has taken in less $10 million total across the seven years since the bill passed, but that amount is expected to increase dramatically in 2017 because vast new areas of the Gulf will be included. The state is estimating annual income of as much as $178 million a year, depending on the rate of pumping and the price of leases and oil. Its estimated income could jump to as much as $600 million annually after 2055 when a cap on the states’ share is lifted.
In other words, we really haven't even begun to realize the benefits of this change and now they're proposing to take it away from us. 

Not sure if this is any consolation to anyone but it's worth remembering this was already a pretty shitty deal in the first place. And that many folks said so at the time.

See also here.

More recently, Congressman Garret Graves, during his time as Jindal's CPRA head, vehemently opposed raising additional revenue via the controversial SLFPA-E lawsuit. Graves said he preferred "pushing legislation that would bring Louisiana a substantial share of offshore drilling royalties currently going into the federal treasury." 

So, nice to see that's going well.

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