Richard Shelby, Doug Jones join forces, urge fairness for Gulf mineral development program

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Alabama U.S. Senators Richard Shelby and Doug Jones reached across the aisle and joined forces on Wednesday asking the Chairman and Ranking Member of the Senate Energy and Natural Resources Committee to ensure coastal states receive their fair share of revenues from any new federal mineral reserves development.

“Our states have experienced significant impacts from federal offshore mineral development, including environmental damage to our coasts,” the senators wrote. “We are committed to ensuring that our states are treated fairly and that our states are not forgotten when decisions are made about the disposition of unallocated federal mineral revenues.”

Pending legislation would allow unallocated federal mineral revenues to be committed to specific causes, including the maintenance of national parks and increased support for the Land and Water Conservation Fund. The senators note that the majority of this funding would be generated from offshore oil and gas development in the Gulf of Mexico.

Under the current Gulf of Mexico Energy Security Act (GOMESA), which governs offshore federal mineral development in the Gulf of Mexico, the states of Alabama, Mississippi, Louisiana, and Texas receive only 37.5 percent of the revenue generated from oil and gas reserves within their borders. Revenue is capped at $500 million and must be divided among the four states. In contrast, other states receive 50 percent of the revenue generated from mineral development within their borders and those revenues are not subject to an arbitrary cap.

They were joined by Senators Roger Wicker (R-Miss.), John Cornyn (R-Texas), John Kennedy (R-La.), Ted Cruz (R-Texas), and Cindy Hyde-Smith (R-Miss.) in their request.

The full text of the senators’ letter to Senators Lisa Murkowski (R-Alaska), and Maria Cantwell (D-Wash.), can be found below:

Dear Chairman Murkowski and Ranking Member Cantwell:

We strongly support addressing parity in revenue sharing for coastal states in any package that may be considered by your Committee or the Senate.  Legislation is moving forward that would allow unallocated federal mineral revenues to be committed to various programs.  The majority of this funding will be generated from offshore oil and gas development in the Gulf of Mexico.  If Congress moves to designate federal mineral revenues to specific uses, then it is important this opportunity achieves equitable revenue sharing for the coastal producing states.

You are well aware that mineral revenues generated from federal lands located within a state are governed by the Mineral Lands Leasing Act of 1920.  Under that Act, 50 percent of the mineral funds generated are shared with the host state to offset the impacts of the federal mineral development.  There is no cap on the amount of federal revenues that may be shared with these states.  By contrast, under the Gulf of Mexico Energy Security Act, our states that host offshore federal mineral development receive only a 37.5 percent share of the revenue generated off our coasts, with a cap of $500 million annually that we must share among our four states.

The current revenue sharing with coastal producing states is not equivalent to the sharing that is occurring with the mineral lands states.  Our states have experienced significant impacts from federal offshore mineral development, including environmental damage to our coasts.  We are committed to ensuring that our states are treated fairly and that our states are not forgotten when decisions are made about the disposition of unallocated federal mineral revenues.

We look forward to working with both of you and your colleagues on the Senate Energy and Natural Resources Committee to ensure that parity in revenue sharing is included in any legislation that allocates federal mineral revenues, which in this case are primarily generated off our coasts.  Thank you for your attention to the concerns of our coastal producing states.

 

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