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Don't bribe states to drill for oil

Editorial

Gulf Coast states want a revenue-sharing deal in which they would collect 37.5% of the federal royalties derived from drilling off their coasts. It's bad policy.

September 12, 2012
  • Oil containers and railroad cars sit in Hurricane Isaac's flood waters in Braithwaite, La.
Oil containers and railroad cars sit in Hurricane Isaac's flood waters… (Mario Tama / Getty Images )

What a guy: Rep. Cedric Richmond (D-La.), arguing on behalf of proposals that would enrich his oil-slicked state by directing the federal government to hand over more royalty money from offshore drilling, said Louisiana deserves the cash because it bears the brunt of the risks from oil production. "So that's a sacrifice that we make for people [in places like] California to be able to turn on their lights," he said during a House debate.

Thanks, congressman, but really, you needn't trouble yourself. California gets 0.01% of its electricity from oil, so if you don't want Louisiana to be the scene of the next BP-style oil spill disaster, you don't have to keep drilling on our account.

Gulf Coast leaders have been pushing for years to win a revenue-sharing deal in which states would collect 37.5% of the federal royalties derived from drilling off their coasts. They scored a partial victory in 2006 when four gulf states, including Louisiana, were awarded just such a deal. But Louisiana Democratic Sen. Mary L. Landrieu, among others, still isn't happy; last week, during President Obama's visit to her state to assess the damage from Hurricane Isaac, she urged him to extend the arrangement to all coastal states. Landrieu would also like to cut some of the strings tied to the money by Congress: She wants to eliminate a $500-million collective cap that was placed on the four states, and to collect the money sooner than the current start date of 2017.

Landrieu and Sen. Lisa Murkowski (R-Alaska) have led several attempts to get such changes through Congress, only to see them stalled in the Senate. But that might change next year with the upcoming retirement of Sen. Jeff Bingaman (D-N.M.), a revenue-sharing opponent who as chairman of the Senate Energy and Natural Resources Committee has wielded considerable power on the issue. If Republicans take over the upper house, his successor will be none other than Murkowski.

The revenue-sharing plan is bad policy. Most drilling takes place in federal waters, so the revenue belongs to the nation. Those oil and gas royalties accounted for about $6.5 billion in 2011, and reducing them would worsen the deficit. Further, the plan could be unfair to neighboring states: A spill off North Carolina, one state that might be encouraged to allow offshore drilling if the price were right, could well affect the coastlines of other Atlantic states that forbid it.

The nation won't wean itself off oil overnight, but we've barely started trying. Instead of bribing states to worsen our oil addiction and risk their coastlines, we should be focusing on conservation and cleaner sources of energy.

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