WASHINGTON, DC – U.S. Senators Roger Wicker (R-Miss.) and Thad Cochran (R-Miss.) have joined a bipartisan group of 24 U.S. Senators working to increase support in the Senate for allowing coastal states to share in a fair portion of the royalty revenues from energy production in the Outer Continental Shelf (OCS). 

In a letter to their colleagues, the Senators urged members to support a revenue sharing plan that recognizes the role that coastal states play in hosting offshore oil and gas exploration.  As possible energy legislation is developed, some in Congress have proposed eliminating or curtailing revenue-sharing for states that allow OCS energy production.

“Offshore energy production is vital not only to the Gulf Coast economy, but also the entire country,” said Wicker. “Mississippi and other coastal states should not have to shoulder the responsibilities of offshore energy production without receiving a fair share of the rewards. Rather than send 100 percent of the revenue to the federal government, Congress should provide more local aid for the states that handle the costs associated with energy production.”

“Onshore states benefit from energy produced on federal land, and coastal states like Mississippi should also be able to receive similar benefits for energy production off its shores.  Taking away that option would result in a double standard that penalizes states that choose to help meet the nation’s energy needs by allowing offshore production,” Cochran said.

The letter to Senate colleagues was led by Senators Mary L. Landrieu (D-La.) and Lisa Murkowski, (R-Alaska). Along with Wicker and Cochran, Senators Richard Burr (R-N.C.), Mark Begich (D-Alaska), Saxby Chambliss (R-Ga.), Jeff Sessions (R-Ala.), Kay Hagan (D-N.C.), Jim Webb (D-Va.), Robert Bennett (R-Utah), Lamar Alexander (R-Tenn.), David Vitter (R- La.), John Cornyn (R-Texas), George Voinovich (R- Ohio), John McCain (R-Ariz.), Kay Bailey Hutchison (R-Texas), Richard Shelby (R-Ala.), Jim Inhofe (R-Okla.), Lindsey Graham (R-S.C.), Tom Coburn (R-Okla.), Sam Brownback (R-Kan.), and George Lemieux (R-Fla.) joined in urging the Senate to support a revenue sharing plan.
   
The Senators take issue with the disparity between onshore and offshore energy policies.  Under the Minerals Leasing Act, states with onshore production are entitled to 50 percent of the federal revenues.  On the other hand, coastal states with offshore production receive nothing.

Offshore oil and gas production is the second largest source of federal revenue after income taxes, having generated over $165 billion in revenue for the federal treasury since the 1930s.  This revenue currently bypasses the states directly to the Federal Treasury, despite the role that the coastal states play in developing offshore energy resources.

“All of our states are shouldered with fiscal challenges similar to those of the federal government,” the Senators wrote in the letter.  “States also face hard choices regarding the balance between local costs and national benefits.  Should Congress enact laws that would have coastal states host more production of the OCS, it is important to consider the local impacts.  OCS production places vastly heightened demands on transportation services, ports, fuel supplies, pipeline corridors, public health and safety, and other infrastructural and social resources.  There are also associated risks, actual and perceived, to coastal economies in terms of fisheries, tourism, recreation, and wildlife habitat.  As the Gulf Spill shows, production in federal waters beyond three miles from shore can have even greater impacts than production in near-shore state waters.”

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