Hastings vows oil revenues action after August break

Four Gulf of Mexico states – Louisiana, Texas, Mississippi and Alabama – won offshore revenue-sharing under a 2006 law that will steer 37.5 percent of leasing bids and production royalties from certain leases their way, but the bulk does not kick in until fiscal 2017.

Sens. Mary Landrieu (D-La.) and Lisa Murkowski (R-Alaska) are leading Senate efforts to speed up the Gulf program and expand revenue-sharing to Alaska, where several companies have offshore leases they want to develop, and other states such as Virginia where there has not been offshore leasing.

But the Senate effort stalled in that chamber’s energy committee last week, and the top Democrat on the House Natural Resources Committee bashed revenue-sharing at Wednesday’s hearing, calling it a bad idea at a time when lawmakers are trying to battle the deficit.

“What we are doing here today is finding a way of taking more revenues out of the federal government,” Markey said, arguing it will hinder efforts to fund Medicare and other priorities.

Indeed Markey touted legislation he’s introducing with Rep. Rush Holt (D-N.J.) to repeal the revenue-sharing for the four Gulf Coast states that was enacted in 2006.

Markey’s office, citing Interior Department estimates, said the 2006 law will result in a loss to the Treasury of $150 billion over six decades.

“Oil fields off of our national coasts do not belong to any one governor or state legislature and should not be used to pad any favored state’s budget,” Holt said in a statement.

But revenue-sharing proponents say that expanding offshore drilling to new areas can enhance federal revenues through greater domestic production, even with the share funneled to states.

The House has approved bills over White House opposition in recent months that would greatly expand offshore drilling by requiring lease sales off the Atlantic and Pacific coasts, and more aggressive leasing and permitting programs in the Gulf Coast and Alaska.

Hastings also said that after the August break the panel would take up legislation to put a congressional stamp on the reorganization of the Interior Department's offshore drilling oversight. He floated a plan last week.

-- This post was updated at 11:55 a.m.