May 12, 2015

Cassidy, Gulf State Senators Introduce Legislation to Expand Offshore Energy Access

WASHINGTON— U.S. Senator Bill Cassidy, M.D. (R-LA) introduced S. 1276, the Offshore Energy and Jobs Act of 2015. The legislation will expand offshore energy production by opening parts of the Outer Continental Shelf (OCS) that are currently restricted from oil and gas exploration and development. In addition, it brings greater equity in revenue sharing for the Gulf states that host offshore energy production by lifting the Gulf of Mexico Energy Security Act (GOMESA) cap to provide Louisiana and fellow Gulf states with increased amounts of revenue to protect their coasts.

Energy and Natural Resources Chairman Lisa Murkowski (R-AK) introduced similar legislation today to expand Alaska’s OCS, and Sens. Mark Warner (D-VA) and Tim Scott (R-SC) introduced bipartisan legislation to open the Atlantic.

Co-sponsors of Dr. Cassidy’s Gulf Coast-focused bill include Senators David Vitter (R-LA), John Cornyn (R-TX), Thad Cochran (R-MS) and Roger Wicker (R-MS).

Currently, 87 percent of otherwise available OCS areas from offshore oil and gas exploration is restricted. The administration’s current five-year offshore oil and gas leasing plan, which took effect on August 27, 2012, removed 1.42 billion acres of the 1.65 billion acres of available OCS lands for production.


Provides Access to New Offshore Energy Resources:

  • Provides access to frontier acreage in the Gulf of Mexico by redefining the Eastern Gulf of Mexico (EGOM) moratoria in 2017 (it is currently scheduled to expire in 2022) to open the largest undiscovered, technically recoverable, energy resources in areas 50 miles from the Florida coastline
  • Directs the Department of Interior to hold three lease sales in the EGOM in 2018, 2019, and 2020.  S.1276 would also allow for ongoing lease sales going forward beyond 2022
  • According to a 2014 API/NOIA commissioned study, by 2035, Eastern Gulf offshore oil and natural gas development could produce nearly one million barrels of oil equivalent per day, generate nearly 230,000 jobs, contribute over $18 billion per year to the U.S. economy, and generate $70 billion in cumulative government revenue

Provides Greater Equity in Gulf State Revenue Sharing:

  • Coastal states provide the docks, roads, railways, refineries and other infrastructure that make energy production possible. In addition, the critical areas that support this energy supply for the country are experiencing unparalleled land-loss due to federal engineering decisions for nearly a century that have channelized the lower Mississippi River System for the benefit of the entire country
  • Louisiana’s 2,300 square miles of land loss is largely attributed to this channelization, along with the placement of federal levees along the river system, which has converted a once growing delta plain to the greatest source of wetlands loss in the history of the United States. Addressing the historic costs of hosting a capital intensive industry while ensuring resilient domestic energy supply can only be attained through equitable revenue sharing
  • Provides greater equity in revenue sharing for states that host offshore energy production by lifting the GOMESA revenue sharing cap for Louisiana, Texas, Mississippi, and Alabama, from $500 million in 2017 to close to $700 million annually from 2018-2025, and $1 billion annually from 2026-2055. The cap is also lifted to allow for greater allocations to the Land and Water Conservation Fund state grant program, which shares 12.5% in offshore revenue
  • Provides for revenue sharing for the State of Florida starting in fiscal year 2017. Florida will share in the revenue derived from leases in the Eastern Gulf of Mexico with 37.5% going to eligible Gulf states, 12.5% allocated to the Land and Water Conservation Fund, and 50% allocated to the U.S. Treasury. It is estimated that Florida would receive $1.6 billion over a 10-year period in revenue sharing distribution from offshore energy production in the Eastern Gulf of Mexico.

“Developing oil and natural gas resources in the Gulf of Mexico could create more than 200,000 jobs, add more than $18 billion per year to the U.S. economy and strengthen our national security,” said Sen. Cassidy. “What is there to oppose? Time for everyone to get on board.”

“States like Louisiana who produce energy off our shores only receive a small portion of the revenue generated from the production. The rest goes to the federal Treasury. I’ve always said that they’re our coasts, our risk, and our workers – So we should get more of that revenue to stay here in Louisiana,” said Sen. Vitter.

“Increasing responsible production opportunities in the Gulf of Mexico is one important way to create jobs and continue to enhance America’s energy security,” said Sen. Cornyn. “In addition, this bill will ensure states like Texas that host offshore drilling for the benefit of the nation continue to receive a share of the revenue.”

“Our energy policies should be geared toward greater U.S. energy and economic security, and that means responsibly maximizing our own energy resources,” said Sen. Cochran. “This legislation would move us in that direction for the benefit of our nation and Mississippi.”

“Offshore energy exploration is important to boosting the Gulf Coast’s overall economy,” said Sen. Wicker. “America thrives when our Gulf Coast thrives. This bill would provide precisely what Mississippi needs to prosper – an increase in jobs, revenue, and use of our natural resources.”

In addition, the legislation is supported by NOIA, API and NAM, among others:

“Safely developing offshore oil and natural gas in new areas will create jobs, strengthen our energy security and help consumers at the pump. Offshore energy also generates billions of dollars for the government each year, and states along the coast where drilling occurs should get a fair share of that revenue.” – Erik Milito, API Group Director Of Upstream And Industry Operations

“Manufacturers support the Offshore Energy and Jobs Act, which would promote the leasing, exploration and development of the nation’s offshore oil and natural gas resources in an environmentally sound manner. Development of the Atlantic Outer Continental Shelf alone could generate nearly 280,000 jobs and contribute up to $23.5 billion per year to the U.S. economy, with many of those gains coming in the manufacturing sector. The NAM strongly supports exploration and development of promising areas offshore, which can substantially lower our nation’s energy vulnerability with minimal environmental impact.” -Ross Eisenberg, Vice President, Energy and Resources Policy, NAM

“The National Ocean Industries Association (NOIA) applauds Senator Cassidy for offering this important legislation that will expand American energy production in the Gulf of Mexico. Senator Cassidy’s bill comes at an important time when America is on the brink of energy independence. Opening more areas of the Gulf of Mexico to energy exploration and production will put hundreds of thousands of Americans to work, provide billions of dollars for federal and state treasuries, further strengthen our energy security, and benefit consumers all across the country.”- Randall Luthi, NOIA President