Oil, gas royalties are vital for rebuilding Louisiana's coast: Editorial
Posted on July 29, 2017 at 6:02 AM By The Times-Picayune Editorial Board
Louisiana leaders are trying to make sure President Donald Trump understands how devastating the loss of offshore oil and gas royalties would be for our state.
Almost 300 businesses, local governments, economic development organizations, civic groups, ports and outdoors organizations signed on to a July 11 letter asking the president to rethink his proposal to kill the Gulf of Mexico Energy Security Act (GOMESA).
It's an impressive list -- including everyone from Brennan's Restaurant to Women of the Storm to the Nicholls State Student Government Association and chambers of commerce and parish governments from across South Louisiana.
The entire nation benefits from the energy and seafood produced along Louisiana's coast. Coastal erosion puts those essential resources at risk.
These groups reflect the sentiment of hundreds of thousands of Louisianians.
The letter starts by defining the problem: "Louisiana is confronting the largest land loss crisis in North America. This accelerated land loss has far-reaching economic implications and poses real threats to the Mississippi River navigation system, our nation's largest port system, seafood industries, as well as oil and gas production and petrochemical manufacturing."
As the letter makes clear, the devastating effects from land loss aren't just our problem. The nation as a whole suffers when ports, energy infrastructure and fisheries are at risk.
"The Gulf of Mexico Energy Security Act will soon provide the only consistent source of federal funds dedicated to combat Louisiana's land loss crisis. This predictable source of revenue -- constitutionally committed to implementation of the State's 2017 Coastal Master Plan for a Sustainable Coast -- is critical for the communities and businesses that rely on a stable Louisiana coastline to survive and grow," the letter says.
For decades, the federal government kept all the royalties from drilling off our shore. In December 2006, then-U.S. Sen. Mary Landrieu finally persuaded Congress to share offshore royalties on new drilling with Louisiana and other Gulf Coast states.
Louisiana has gotten only small payments since then -- $102,700 in 2016. That is supposed to change in 2018, when the state expects to start getting roughly $140 million per year.
But as Louisiana, Alabama, Mississippi and Texas get closer to getting the royalty they were promised, the federal government keeps threatening to back out.
In 2015, former President Barack Obama tried to take some royalties away from Gulf states and use it on environmental projects across the country. Congress rejected the idea. Now President Trump's budget calls for killing GOMESA. He argues that the royalties promised in the act would benefit "only a small handful of states ... despite federal waters belonging to all Americans." President Obama's budget director said almost exactly the same thing in 2015. They are both off base.
This isn't a partisan issue, and we enjoy strong bipartisan support in protecting these funds for Louisiana and other Gulf states.
Gulf states have borne the infrastructure and environmental costs of energy exploration for decades while the federal government kept all the royalties paid by oil and gas companies. Between 1949 and 2006, the payments to the federal treasury totaled $160 billion.
During that time, our coast has been eroding. Canals cut through Louisiana wetlands for oil and gas exploration are a key cause of erosion that destroyed 1,900 square miles of land from 1932 to 2000. Our coast has continued to erode since then.
The royalty payments Congress approved are essential to Louisiana's ability to carry out its $50 billion, 50-year master plan to restore lost coastal land.
The letter from civic and political leaders laid out how vital the state is to the nation's economy. Louisiana has five of the nation's 15 largest shipping ports by cargo volume, which handle one-fifth of all waterborne commerce in the United States. Our state is responsible for $47 billion per year in oil and gas production and accounts for nearly 30 percent of the commercial fishing landings in the continental United States.
"In short, billions of dollars in jobs, essential industries, infrastructure, and flow of commerce will be at risk, along with our coastal communities, wildlife, and way of life, if the current federal legal obligation to share in the cost of coastal restoration is undermined," the letter said.
The president ought to reconsider. If he doesn't, Congress must make sure the royalties go to the state, as promised.