Landrieu Reacts to Proposed GOMESA Rule

Fair Act needed to ensure La. Gets fair share of revenue from offshore production.

March 28, 2014

WASHINGTON, D.C. –United States Senator Mary L. Landrieu, Chair of the Senate Committee on Energy and Natural Resources, reacted to today’s proposed rule issued by the U.S. Department of the Interior regarding implementation of Phase II of the Gulf of Mexico Energy Security Act (GOMESA) of 2006. GOMESA, which Sen. Landrieu authored with Sen. Pete Domenici, R-N.M., has brought more than $30 million in revenue from offshore oil and gas production to Louisiana. Just last week, Louisiana and the Gulf Coast will receive at least $2.16 million from a lease sale at the New Orleans Superdome.

Phase I of GOMESA, which allows Louisiana and energy-producing state in the Gulf to share 37.5 percent of the revenues generated in bids, bonuses, royalties and rental payments, runs from 2007 through 2016.  Phase II, which opens the remaining gulf leases for revenue sharing, will begin in 2016 and is expected to bring another $600 million in Revenue to the Gulf Coast.  Today’s proposed rule set forth the Office of Natural Resources Revenue’s (ONRR) formulas and methodologies for calculating and allocating revenues during Phase II.

Last year, Sen. Landrieu authored the bipartisan FAIR Act that will accelerate the date for all payments, lift the arbitrary $500-million cap and expand revenue sharing to all coastal states whether they produce oil and gas, wind, wave or solar energy.

“When I passed GOMESA in 2006, it established a partnership to provide revenues to communities in the Gulf Coast that host offshore energy development. The first phase of GOMESA provided more than $30 million for coastal restoration projects in Louisiana and along the Gulf Coast, and I am happy that Phase II will generate another $600 million,” said Sen. Landrieu. “But the fact of the matter is that Louisiana generated $7 billion last year in revenue and got virtually nothing back. We need to build upon GOMESA and pass the FAIR Act to accelerate the payments, lift the arbitrary cap and provide all coastal states the same fair deal that interior states have for the energy they produce. I will not stop fighting until Louisiana gets its fair share of revenue, and this injustice ends."

In 2006, Sens. Landrieu and Domenici, then Senate Energy Chairman, built a bipartisan coalition and passed GOMESA to provide Louisiana and the three other Gulf Coast states with 37.5 percent of the offshore revenues generated. The revenues will be used for wetlands restoration, hurricane protection and flood control projects. Louisiana further buttressed the money's dedicated use by passing a constitutional amendment that specifically directs the funds to these pressing needs.