Landrieu: ‘There is not going to be any drilling unless there is revenue sharing’

Landrieu’s comments came in response to a ‘dear colleague’ letter circulated by Sens. Jeff Bingaman (D-N.M.), Byron Dorgan (D-N.D.) and Jay Rockefeller (D-W.Va.) that calls on senators to oppose revenue sharing.

 A 2006 law that expanded Gulf of Mexico drilling handed a 37.5 percent share of revenues from certain leases to Louisiana and three other gulf states.

But Bingaman, Dorgan and Rockefeller don’t want that deal expanded through climate and energy legislation that may come to the floor this year – they’re warning that the federal government could eventually lose hundreds of billions of dollars.

“The fiscal consequences of such a loss would be devastating, particularly given the enormous demands on the federal Treasury and our need to reduce the deficit. There is no justification for using these significant national resources to provide benefits only for a few coastal states and their citizens. Rather, they must be available for the important public needs of all Americans,” they wrote to colleagues Monday.

Landrieu, for her part, argues that the current system is unfair because onshore states get half the revenues from oil-and-gas leasing on federal lands within their boundaries.

This aids “mostly Western interior states that have large portions of federal land” within their borders, while “most states do not receive a penny from the federal government when energy production takes place off its shores” she said in a prepared statement Monday.

Sen. Lindsey Graham (R-S.C.), who is a co-author of upcoming Senate climate and energy legislation, is strongly pushing for revenue sharing for coastal states – including states along the Atlantic coast where new development could occur following the expiration of leasing bans there in 2008.

The Obama administration in late March proposed eventual leasing off the coast of mid-Atlantic and southeastern states, as well as wider development in the eastern Gulf of Mexico if Congress lifts restrictions that remain there. The plan also envisions expanded leasing in Artic waters off Alaska's northern coast, although it cancels several planned lease sales to allow further study.

Dorgan said there is widespread opposition to expanded revenue sharing. “I don’t think it is a wise thing for them to do, and I think there are many people from non-coastal states who would agree with my assessment of that,” he told The Hill Monday.

The bill Graham is drafting with Sens. John Kerry (D-Mass.) and Joe Lieberman (I-Conn.) has been expected to include revenue sharing. Kerry declined to confirm this Monday, but more broadly said that lawmakers will need to compromise.

“Not everybody is going to support everything. There are going to have to be some things you work on on the Senate floor. I can’t tell you whether it is in or out,” he said Monday when asked about the revenue issue.

Kerry, Graham and Lieberman met again in the Capitol Monday evening to discuss their bill. Lieberman said they remain on track to unveil the measure Monday, April 26.

Meanwhile, negotiations on a Senate climate and energy package continue in multiple venues.

U.S. Chamber of Commerce CEO Tom Donohue and Bruce Josten – the group’s top lobbyist – are expected to meet Tuesday with White House senior adviser Valerie Jarrett and White House climate and energy adviser Carol Browner.