Congressman
John E. Peterson

Louisianans deserve their fair share of offshore revenue

By Congressman John E. Peterson
February 2006

Louisianans are a resilient lot. That fact, if not already clear, will never again be in doubt following what will be remembered as the worst and most poignant example of nature’s fury our nation has ever seen. 

But if Louisiana and, indeed, the entire Gulf Coast region are to experience the rebirth that its residents – and certainly, our country – desperately needs, it’s my view that this resiliency must be met with opportunity, and method matched and made stronger by the appropriate means.

In the charge of providing those necessary means, Congress has appropriated more than $62 billion thus far to aid humanitarian and rebuilding efforts across the region. But Congress’s responsibility should not be limited to simply writing checks. Along with additional resources, I think we ought to take a close look at a federal policy that continues to inequitably divert money away from Louisiana, denying the state and its people of millions of dollars each year, and severely stunting the growth of the local economy and the delivery of essential services.

That policy is Louisiana’s current offshore royalty sharing agreement, which, as it stands today, is nothing short of an abomination.

How else can you describe a federal policy that splits energy revenues down the middle with states that produce energy on federal lands onshore, but only allows for a fraction of those same resources to go to states that produce in federal waters offshore?

By any standard, that’s unfair. And so recently I joined with my friend Neil Abercrombie, a Democrat from Hawaii, to introduce legislation that seeks to fix this imbalance. The bill, H.R. 4318, would lift the current moratoria on natural gas production along the entire Outer Continental Shelf beyond 20 miles from the coast, and introduce a new royalty payment plan that would allow Louisiana to reap hundreds of millions of additional dollars that up until this point have been deposited in the federal treasury – money, frankly, Louisiana should have been receiving for years.

Mr. Abercrombie and I introduced this bill with the nation’s long-term security and prosperity in mind, not just Louisiana’s. But the Pelican State’s profit, it turns out, is also America’s gain. By unlocking our own huge reserves of American natural gas, we will finally be taking positive steps toward halting the ongoing exodus of entire sectors of the American economy – such as the chemical and fertilizer industries – to nations overseas where offshore natural gas (and oil, incidentally)production is the norm, and gas is staggeringly less expensive.

This is precisely the debate Congress should be having right now. We should be talking about how to best expand our domestic capacity to produce energy so that our nation can begin to take real steps toward dramatically lessening our dependence on foreign, and often unstable, agents. But instead of engaging that historic issue, Congress seems rankled by a million other questions – including whether we should be producing energy within our national boundaries in the first place.

Nothing better illustrates this unfortunate reality than the curious piece of legislation offered recently by Sens. Bill Nelson and Mel Martinez of Florida. More than simply a declaration of Florida’s individual opposition to offshore drilling, the Nelson/Martinez bill actually declares nearly the entire region off limits until the year 2020, establishing a “Florida Exclusion Zone” that would extend a whopping 260 miles into the Gulf.

Travel 260 miles west of Tampa Bay, and you reach a point in the Gulf that’s actually closer to New Orleans than it is to the Florida coast. Should two senators from Florida have the authority to place federal lands that are closer to Louisiana, Mississippi, and Alabama off limits? Not only are they trying to take the ball and go home, it seems, they’re actually trying to lock up the entire playground on the way out. I don’t think that’s fair either.

Over the next weeks and months, more offshore energy proposals will be offered, and additional counterproposals will emerge. As it stands today, all seven lawmakers representing the state of Louisiana in the House of Representatives – both Republicans and Democrats – have signed on as co-sponsors of my bill. In the weeks ahead, I look forward to working with my colleagues in the House to bring this bill to the floor, and hopefully deliver a clean and effective version of it to the U.S. Senate.

Of course, I’m ready at this point to support any sensible plan that increases the availability of American natural gas reserves and establishes a just and equitable system for distributing royalties among stakeholders. For the future of your state and our country, I would urge you to do the same.