Louisiana will get $110 million for coastal restoration, hurricane protection
Louisiana and its parishes will receive more than $109.9 million for coastal restoration and hurricane protection projects through the Gulf of Mexico Energy Security Act (GOMESA), the U.S. Department of Interior announced, though the funding dropped nearly 29.4% from the previous year.
For the fiscal year 2020, the federal government distributed around $249 million to the nation's Gulf of Mexico offshore oil-producing states — Louisiana, Texas, Alabama and Mississippi. The federal government gives the states and their subdivisions a set percentage of oil and gas revenue produced in the Gulf.
“Revenues from offshore oil and natural gas production in the Gulf of Mexico are the only consistent funding source for critical restoration and hurricane protection projects that help make our communities safer and stronger,” said Tyler Gray, president of the Louisiana Mid-Continent Oil and Gas Association, in a news release.
“The future of our coast depends on continued domestic energy production in the Gulf of Mexico, and we need collaborative solutions that address climate change while also promoting a robust federal leasing program.”
The federal fiscal year 2020 ran from Oct. 1, 2019, to Sept. 30, 2020 — a period that includes the height of the COVID-19 pandemic in the U.S. and a historic drop in oil prices.
The $249 million distributed to Gulf Coast states was also down about 29.4%, a loss of about $104 million from the previous year. For fiscal year 2019, the nation's oil and gas revenues were more than $1 billion, triggering a cap on the disbursement to the states.
The states' share of the revenues were capped at $375 million for fiscal year 2019. The cap rose to $487.5 million for fiscal year 2020, but the revenues did not trigger the cap. Fiscal year 2021 will also have a cap of $487.5 million.
There have been efforts in recent years to raise or eliminate the cap, including a bill from U.S. Sen. John Kennedy, a Louisiana Republican. Under current law, the cap won't expire until 2056.
Louisiana historically has received the bulk of the GOMESA funding. Since 2009, Louisiana and its parishes have received nearly $455.2 million as part of the revenue sharing system, receiving more than 40% of the total amount disbursed to the states over that period.
The GOMESA funding is one of the primary funding sources for state and local Gulf conservation projects. In this disbursement, the state government receives around $88 million, and the remaining funding is going to 19 of the state's parishes.
The GOMESA funding, which is reliant on the success of the oil and gas industry, has been one of the primary arguments used by oil and gas advocates in opposition of President Joe Biden's moratorium on lease sales and new drilling operations in the Gulf of Mexico.
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“The current federal ban on offshore lease sales puts GOMESA funding in jeopardy for years to come and instead, the Biden administration should be looking at ways to protect Gulf oil and natural gas production while strategically transitioning to new energy resources," said Lori LeBlanc, executive director of the Gulf Economic Survival Team, in a press release.
In December, Kennedy and fellow Louisiana U.S. Sen. Bill Cassidy spearheaded a bill that would require the federal government to have at least two lease sales in the Gulf of Mexico each year. The lease sales are one of the revenue sources for the GOMESA disbursement.
Several oil and gas groups were in favor of the legislation, though environmental groups said it was "nothing more than a huge giveaway to oil companies."