Bingaman exit could help Gulf states get more offshore drilling royalties

Landrieu said in a letter hand-delivered Monday to President Obama that the flooding caused by Hurricane Isaac calls for another debate on revenue payments to coastal states. The letter signaled the Louisiana Democrat would push a bill to alter the payment structure and schedule next Congress after coming up short last year.

“Our effort to secure robust revenue sharing for coastal communities has been an ongoing fight for decades,” Landrieu said in the letter to Obama that asked for his support. “Currently, onshore states receive 50 percent of revenues. Coastal states, particularly Louisiana, should receive a similar allotment so they can engage these funds in flood protection.”

Landrieu staff said the retiring Bingaman was one of the most significant obstacles to getting Landrieu’s offshore revenue amendment tacked to a drilling-safety bill in July 2011. It never reached a vote because Landrieu and some Republicans walked out of the meeting when it appeared the proposal would fail.

With Bingaman out of the picture next session, Landrieu sees an opportunity, staff said. Her staff said that Sen. Ron Wyden (D-Ore.), who appears poised to grab the committee gavel if Democrats retain the Senate after the Nov. 6 election, intimated he could eventually support the bill. And if Republicans take the Senate, committee ranking member Sen. Lisa Murkowski (R-Alaska) — who supported Landrieu’s first attempt — would likely head the committee.

The four states Landrieu seeks to aid — Alabama, Louisiana, Mississippi and Texas — are scheduled to get 37.5 percent of federal revenues from energy production in the Gulf of Mexico beginning in 2017.

Landrieu’s proposal would lift the $500 million cap on those royalties and start paying the states in 2015. It also would create a revenue-sharing mechanism for states engaging in future federal offshore renewable energy production.

Staff admitted the renewable energy portion of the bill was scraped together at the last second to sway some Democrats. Staff said those Democrats hinted they liked the idea but ultimately decided the language needed more work.

One of those Democrats was Wyden, Landrieu’s staff said. That gives Landrieu hope that she would have a more willing partner on the subject than Bingaman, staff said.

Keith Chu, spokesman for Wyden, told The Hill on Thursday that, “Senator Wyden believes all communities impacted by resource extraction from federal lands and waters should share in the benefits of those operations. He plans on working with a broad range of stakeholders to ensure that taxpayers and the environment are protected while helping communities recover the costs associated with the exploitation of federal resources.”