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House Panel Eyes Action on Energy Royalty-Sharing Bill

Rep. Bobby Jindal (R-LA) said the House Resources Committee will hold a hearing Wednesday (June 14) on his bill to increase Louisiana's share of royalties from offshore oil and natural gas production. A mark-up is expected the following week.

"This represents the best chance Louisiana has to receive its fair share of offshore royalties," said Jindal, a member of the committee. His bill (HR 4761) currently has 103 co-sponsors from 32 states, he noted.

While states with onshore energy production receive 50% of the royalties produced, Louisiana gets virtually nothing from the $5 billion to $7 billion in royalties on production off of its coasts, according to Jindal. The bulk of the royalties go to the federal government. His bill proposes to change that, creating a new zone of revenue sharing from the edge of state waters (three miles from shore) to the 12 nautical mile mark, within which states like Louisiana will receive 75% of all royalties generated.

Additionally, beyond 12 nautical miles revenue sharing will increase until energy-friendly states like Louisiana receive 50% of the royalties generated out to the edge of U.S. energy production (deepwater). If passed by the House and Senate, the bill would bring Louisiana up to 75% of the energy royalties produced offshore, which would mean more than $10 billion for the state in the first 10 years of the program, Jindal said. That amount would grow to more than $28 billion over the first 20 years and $50 billion over the first 30 years of the bill, he estimated.

Sen. Mary Landrieu (D-LA) and senators from other energy-friendly coastal states are working on a similar proposal. They may try to include it in a bill seeking to open up more acreage in Lease Sale 181 in the eastern Gulf of Mexico to producers. The bill, sponsored by Sens. Pete Domenici (R-NM) and Jeff Bingaman (D-NM), has been voted out of the Senate Energy and Natural Resources Committee, and is awaiting floor action.

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