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02 28, 2013 by The Advocate
U.S. Sen. David Vitter filed a comprehensive bill Wednesday to increase offshore oil production revenue sharing with Louisiana and other affected states, to expand offshore drilling in the Gulf of Mexico and along the Atlantic and Pacific coasts, and to expedite other permitting for projects such as the controversial Keystone XL pipeline.
Vitter, R-La., said the Energy Production and Project Delivery Act is intended to boost domestic energy production and economic development while also helping the “host” states that would share in the increased federal revenues.
“If we broaden and expand what we’ve begun to do in the Gulf of Mexico by allowing states to be the beneficiary of revenue sharing off their shores, we can get a lot more production happening offshore,” Vitter said.
Domestic energy production has increased under President Barack Obama, but the jumps have occurred mostly on private lands.
“We have enormous domestic energy resources,” Vitter said. “We are the single most energy rich nation in the world, bar none. But the problem has been we’re the only country in the world that puts well over 90 percent of those resources off limits, and we would change that through this bill.”
The legislation bears some similarities to the OPEN Act filed last year by Sen. Mary Landrieu, D-La., which would have expanded offshore drilling access and removed the cap on state revenue sharing in the Gulf.
But that bill did not progress, and Landrieu is working on a tighter version of the bill with Sen. Barbara Mikulski, D-Md., that is expected to focus only on increasing revenue sharing.
Both Vitter’s new bill and Landrieu’s anticipated legislation would expand on revenue-sharing legislation first approved in 2006.
Louisiana residents are waiting until 2017 for a potentially steady stream of revenue because the Landrieu-sponsored Gulf of Mexico Energy Security Act that became law in 2006 does not fully kick in until 2017.
The law will allow Louisiana to share in the 37.5 percent royalty that the federal government receives from new drilling in 8.3 million acres in the Gulf of Mexico.
Louisiana is expected to receive close to half of the funds with the rest going to Texas, Mississippi and Alabama.
Because the offshore drilling revenue sharing is capped at $500 million a year for the four states, rough estimates show Louisiana starting with as much as $100 million in 2017, and then growing from there. But much of that depends on the amounts of future offshore oil-and-gas drilling off Louisiana’s coastline.
Vitter’s new bill increases the cap in the Gulf from $500 million to $1 billion from 2017 through 2024 and then hikes it to $2 billion through 2055.
“Mary (Landrieu) and I absolutely agree that revenue sharing is a key tool that we need to use to increase domestic production,” Vitter said. “Step one is opening access … but step two of that is revenue sharing. To actually get the production going, I think you need to provide the incentive to host states, and this is a powerful incentive for coastal states.”
Rep. Rob Bishop, R-Utah, is expected to soon file a House version of the bill.
While the legislation could move forward in the House, Vitter acknowledged the Democratic-led Senate will not allow his bill to see the Senate floor.
So Vitter said the focus of he and his 16 Senate co-sponsors is to find ways to “force votes” to amend the whole bill or “major parts” into other pieces of legislation.
The Interior Department is saying across-the-board spending cuts scheduled to begin going into effect on Friday will slow the permitting process for new oil-and-gas drilling permits.
Vitter criticized what he called the White House’s “general scare strategy that the world is ending because of sequestration,” which is the technical name of the budget cuts.
When asked about the president’s new nominee to lead the Interior Department, Vitter said he has major concerns about the department but that he has not yet decided whether he will attempt to block her Senate confirmation.
The nominee, Sally Jewell, is an outdoor business executive as the president and CEO of REI.
Jewell was previously an oil field engineer and she also has won national recognition for her support of outdoor recreation and habitat conservation.
Vitter said he is scheduled to meet with her soon.
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