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02 08, 2015 by Daily Advertiser
It seems appropriate that President Barack Obama released his latest budget proposal on Groundhog Day.
In every year of his administration, he has attempted to impose the same onerous, damaging tax increases on America’s oil and gas industry. I call it the “copy-and-paste” method. Thankfully, Congress and the American people have repeatedly recognized the importance of the oil and gas industry and soundly rejected his proposal.
However, even I was taken aback by his latest antics. As the curtain continues to close on his presidency, he sent the most resounding strike to the oil and gas industry to date.
His 2016 budget proposes that offshore revenue sharing — which doesn’t even start until 2017 — be completely eliminated. This represents a direct slap in the face of the people living in Louisiana and along the Gulf Coast.
Revenue sharing for Gulf Coast states is a concept that was implemented in the Gulf of Mexico Energy Security Act — GOMESA — in 2006 by former U.S. Sens. Mary Landrieu, D-New Orleans, and Pete Domenici, R-New Mexico. This marked the culmination of a multiple-decade battle to obtain adequate federal funding for the states in the Gulf Coast.
Dedicating 37.5 percent of revenue from Outer Continental Shelf leases to the Gulf States marked a long overdue (and modest) recognition of the efforts and contributions the Gulf Coast make in providing America with the energy needed to continue being an economic superpower. It was particularly insulting for Interior Secretary Sally Jewell to say the OCS is owned by all Americans and there needs to be a re-examination of how these funds are allocated. Yet, at the same time, the Interior is expanding drilling and development moratoriums.
Furthermore, the onshore-producing states continue to collect 50 percent of revenue from oil and gas activity that occur on federal lands inside their state. How’s that for fairness?
These revenues will play a large role in the funding of coastal restoration in Louisiana. Even mentioning the elimination of this revenue sharing agreement marks the gravest threat to coastal restoration — at precisely the most inopportune time imaginable.
GOMESA funds in 2018 represent the largest funding source at $140 million for the state Master Plan that aims to restore the coast. Eliminating the GOMESA funds would be a critical setback to a reliable funding source of the Master Plan. For someone who claims to be an environmental advocate, I find it peculiar that he would attempt unilaterally to disassemble what some could argue is the largest and most important environmental project in the United States.
Thankfully, the Louisiana delegation in D.C. has already rallied in support to defeat this measure. With their help and the mobilization of citizens affected by this, we can make this budget nothing more than another Groundhog Day.
— Chris John, former congressman, is president of the Louisiana Mid-Continent Oil & Gas Association.
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