Offshore wind bill reignites revenue sharing debate

Source: Geof Koss, E&E News reporter • Posted: Thursday, February 21, 2019

The long-standing debate over the sharing of offshore energy revenues is getting underway again in the 116th Congress.

A bipartisan pair of senators is proposing that U.S. territories and coral reefs benefit from offshore wind development.

S. 499, floated last week by Sens. Bill Cassidy (R-La.) and Brian Schatz (D-Hawaii), would amend the Outer Continental Shelf Lands Act to allow the Interior Department to lease the offshore areas adjacent to American Samoa, Guam, the Northern Mariana Islands, Puerto Rico and the Virgin Islands for renewable energy.

The bill would allow the territories to receive 37.5 percent of revenues generated from the leases, an amount equivalent to the revenues a handful of Gulf of Mexico states are eligible to receive from offshore drilling in federal waters under the Gulf of Mexico Energy Security Act (GOMESA) of 2006.

The Cassidy-Schatz bill additionally would direct 12.5 percent of revenues to NOAA’s Coral Reef Conservation Program, which aims to study and preserve coral reef ecosystems.

Puerto Rico Del. Jenniffer González Colón (R) introduced a companion bill, H.R. 1014, last week. Similar legislation passed the House in December (E&E Daily, Dec. 11, 2018).

In a statement, Cassidy said the measure “gives American citizens better access to electricity, boosts revenue for U.S. territories, and helps protect vulnerable coral reefs,” while allowing the territories the opportunity to benefit from offshore energy revenues as Louisiana currently does.

Schatz noted Hawaii’s past reliance on fossil fuel imports. “In less than a decade, we have made significant progress towards our 100 percent clean energy target, all while lowering electricity rates and creating jobs,” he said in the joint statement with Cassidy. “It is time to bring the clean energy future to the U.S. territories.”

‘Long overdue’

The Senate bill effectively revives a long-standing debate over the sharing of federal energy revenues with state governments.

Cassidy, along with Senate Energy and Natural Resources Chairwoman Lisa Murkowski (R-Alaska), has long supported an expansion of the GOMESA law nationwide, but those efforts have stalled amid opposition from Democrats opposed to offshore drilling.

Also, lawmakers from inland states have opposed an expansion of offshore revenue sharing, saying such funds belong to all Americans.

In 2011, the debate helped kill legislative efforts to overhaul the federal offshore safety regulatory apparatus after the Gulf of Mexico oil spill when revenue-sharing backers on the Senate Energy Committee — including Cassidy’s predecessor, Mary Landrieu (D-La.) — teamed up to offer amendments to expand the practice, including by allowing offshore renewable energy revenues to count.

Energy companies have long backed an expansion of coastal revenue-sharing, and a key business group last week came out in support of Cassidy and Schatz’s bill, which it called “long overdue.”

“This legislation will provide tremendous opportunities to create jobs, reduce costs to consumers and provide energy security to the people living in the territories of the United States,” wrote National Ocean Industries Association President Randall Luthi to the senators.

The revenue-sharing fight also flared at the end of the last Congress, as supporters of the Land and Water Conservation Fund (LWCF) sought to see that expired program permanently reauthorized with mandatory funding included.

That push drew a cool response from Gulf lawmakers on both sides of the Capitol, who feared it would overextend offshore drilling revenues, which by statute are intended to both fund LWCF and be shared with coastal states (E&E Daily, Nov. 13, 2018).

That opposition helped doom the mandatory LWCF funding provisions backed by senators from both parties, leading to the Senate’s passage last week of a public lands package that permanently authorizes, but doesn’t fund, LWCF (E&E Daily, Feb. 13).

The House may take up the measure after the Presidents Day recess.