USA: Offshore oil revenue sharing bill shot down in Senate

US Senator Bill Cassidy from Louisiana saw its proposed offshore revenue sharing bill, shot down on the floor of the US Senate, on Thursday.

Cassidy’s proposed bill called for more equitable revenue sharing for states involved in existing, new or future energy production from both onshore and offshore leasing areas. This would, it has been said, incentivize states to drill offshore. The legislation also proposed increased investments in conservation and coastal restoration efforts.

While attracting the majority of Senate support with 51 votes in favor and 47 against, the proposal fell short of the 60 votes required for to get a floor vote.

In a statement following the vote, Cassidy said he would continue the fight to pass the American Energy and Conservation Act of 2016.

“This bill would create 280,000 new jobs and generate $51 billion in government revenue. This makes sense for our economy and for the well-being of middle-class Americans,” said Dr. Cassidy. “Getting today’s floor vote was a victory. The majority of the Senate supports this. The fight for this pro-American legislation will continue.”

Here’s Cassidy’s speech in which he called for support of the legislation.

White House against

While Cassidy said he’d keep on the fight, the White House has other plans. In response to the act proposed by Cassidy, the White House issued a statement saying the Administration strongly opposes it.

“The bill would, among other things, change existing revenue sharing laws to increase the amount that certain States and counties would receive from energy production on Federal lands and waters, thereby reducing the fair return on the development of these minerals to taxpayers across the country for their shared resources,” reads a statement by the White House.

The Administration said that the bill would have significant and long-term costs to the Federal Treasury, as the Department of the Interior, which oversees the development of about 23 percent of domestic energy supplies, collects, on average, over $10 billion annually from the development of Federal minerals, including fossil and renewable energy resources.

“The majority of revenue generated from offshore energy leases on the Federal Outer Continental Shelf (OCS) goes to the Treasury, while a portion goes to fund important Federal conservation programs through contributions to the Land and Water Conservation Fund and the Historic Preservation Fund. Through the Gulf of Mexico Energy Security Act of 2006 (GOMESA), the amount of OCS revenue allocated to revenue sharing payments to nearby States and counties is already set to increase dramatically in fiscal year 2018.”

“If the President were presented with S. 3110, his senior advisors would recommend he veto the bill,” the statement from the White House reads.


$7 billion hole


Voting against the bill, among others, was United States Senator from Washington, Maria Cantwell who, prior to the vote said that passing of the bill would take away billions from the Treasury. She said that the bill could be a great deal for nine coastal states, but would be “a terrible, terrible deal for the nation as a whole.”

“I ask my colleagues, please do not blow a $7 billion hole in the Federal Treasury and give it to a few states when these lands and resources belong to all of us. If we want to help our coastal states in some other economic way or some way, let’s discuss that, but blowing a hole of $7 billion in the federal budget and then trying to make it up later on the backs of the rest of our constituents is an unfair deal for the American taxpayer. I urge my colleagues to vote ‘no’ on this proposition.

Following the vote, Cantwell issued a statement saying she led the fight to defeat a proposal to incentivize states to drill offshore.

“The proposal, drafted by Sen. Bill Cassidy (R-La.), was intended to promote offshore oil and gas drilling by providing states a larger percentage of federal revenues from offshore drilling and by expanding the number of eligible states,” Cantwell said.

Worth noting, a day earlier, Senator Cantwell (D-WA), together with Patty Murray (D-WA), Senators Barbara Boxer (D-CA), Dianne Feinstein (D-CA), Ron Wyden (D-OR), Jeff Merkley (D-OR) and Edward J. Markey (D-MA) wrote to President Obama, urging him to exercise his authority under the Outer Continental Shelf Lands Act to permanently withdraw the West Coast from consideration for new oil and gas leasing.

The Department of the Interior’s 2017-2022 Outer Continental Shelf Oil and Gas Leasing Proposed Program does not include lease sales off of the West Coast. President Obama has not allowed new lease sales in the Pacific during his presidency. However, Senators have pointed out that a moratorium is not currently in place.

“Opening up the coast to more fossil fuel development poses a threat to our oceans and the coastal economies that depend on them,” the Senators wrote. “We appreciate your Administration’s ongoing commitment to keep new West Coast lease sales off of the table… However, without a permanent withdrawal, we cannot be certain that the coastline would not see new oil and gas development in the future.”

Offshore Energy Today Staff

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