“I have always found the thought of taking resources from the OCS … and dedicating the revenue to just a handful of states to be unfair.” — Sen. Jeff Bingaman (D-N.M.)
Sen. Jeff Bingaman has a point — although it’s certainly not the one he intended.
Bingaman made the above statement in 2009 after the senate voted 36-61 to reject a proposal that would have given coastal states a larger piece of the revenue the federal government collects on oil and gas drilled off of their coasts.
Currently, coastal states like Louisiana carry the risks of allowing drilling off their coasts, but get only a pittance of the billions the federal government collects in oil and gas revenue every year.
In fact, last year the federal government raked in nearly $8 billion in revenue from oil and gas drilled off our coast, but Louisiana got only $600,000, or .00008 percent, of that money.
The senator thinks that money belongs to the federal treasury.
However, he feels quite differently about the tax revenue generated from oil and gas drilled on federal land in New Mexico.
Bingaman’s constituents get back 50 percent of that money, and, interestingly enough, the senator’s just fine with that.
Despite Bingaman’s fierce objections, revenue sharing for Louisiana and other coastal states passed in 2006 as part of that year’s energy bill. As a result, Louisiana will get 37.5 percent of federal tax revenue on all drilling on new leases beginning in 2017.
But delegations from coastal states are rightly pushing for a bigger piece of that pie, hoping to get favorable language written into the looming climate bill.
Bingaman, along with Sens. Byron Dorgan (D-N.D.) and Jay Rockefeller (D-W.V.), has vowed to fight this, circulating a letter to other senators calling revenue sharing a “giveaway.”
I beg to differ.
The only “giveaway” is what Louisiana has historically done with its oil and gas leasing. Other states object to drilling off their coasts, so they don’t allow it.
So Louisiana picks up the slack, supplying the U.S. with the majority of its domestic offshore oil and gas.
And what does Louisiana get in return? Some industry jobs (many of which moved to Houston) and a few pennies from the federal coffers.
What the final result will be from the Deepwater Horizon disaster, no one can say for sure at this point. But a couple of things are certain: Our state’s fishing industry has been wounded, perhaps mortally, and our imperiled coastal marshes will fade more quickly as a result of their interaction with crude oil and dispersants.
Louisiana will bear the brunt of the effects of the disaster, and yet, if the Horizon accident had never happened, BP would have paid high tax rates only to the federal government.
For Louisiana, it’s all risk and no reward.
You’re right, Sen. Bingaman, that’s unfair.
