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Gulf Coast Lawmakers Seek Fair Share of Offshore Royalties

Six Gulf Coast senators have introduced a bipartisan measure that calls for the federal government and the coastal states of Texas, Louisiana, Alabama and Mississippi to equally share the oil and natural gas revenues generated from additional leasing in the gas-rich area known as Lease Sale 181 in the eastern Gulf of Mexico.

The senators said they will offer their bill either as an amendment to legislation ( S 2253) reported out by the Senate Energy and Natural Resources Committee earlier this month to open up as much as 3.6 million additional acres in Lease Sale 181 for leasing by the federal government, or as a substitute for the underlying legislation (see NGI, March 13).

Sens. Mary Landrieu (D-LA) and Trent Lott, (R-MS), two of the sponsors of the revenue-sharing proposal, have vowed to vote against the Lease 181 bill unless their amendment is included. Other sponsors are Sens. Thad Cochran (R-MS), David Vitter (R-LA), Richard Shelby (R-AL) and Jeff Sessions (R-AL).

Senate Energy Committee Chairman Pete Domenici (R-NM) and Sen. Jeff Bingaman of New Mexico, the ranking Democrat on the Senate energy panel, introduced S. 2253 in early February. Domenici has indicated in the past he would support the revenue-sharing proposal if Bingaman would go along with it. However, Bingaman believes that the federal Outer Continental Shelf -- along with and the revenues generated from production on it -- belongs to the entire nation, not individual states.

The coastal states' share of the revenues would be used to restore coastal wetlands; mitigate damage to wildlife and natural resources; implement federally approved conservation management plans; onshore infrastructure projects; and activities related to energy production or administrative costs necessary to comply with the legislation, the senators said.

Interior states currently receive 50% of the royalties for oil and gas production on federal lands within their boundaries, while coastal states receive only a small share of the revenues for production in waters off their shores. "It is time that Gulf states receive a return on their investment in our nation's oil and gas production," said Shelby.

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