October 19, 2021

Senate Energy Committee Considers Cassidy Legislation to Strengthen Gulf Revenue Sharing Program

WASHINGTON – Today, the U.S. Senate Energy and Natural Resources Committee held a subcommittee hearing to consider U.S. Senator Bill Cassidy’s, M.D. (R-LA) legislation, the Reinvesting in Shoreline Economies and Ecosystems (RISEE) Act, to strengthen gulf revenue sharing program. The bipartisan RISEE Act would amend the Gulf of Mexico Energy Security Act (GOMESA) and create a new dedicated stream of funding from future offshore wind development for coastal protection and resiliency. This legislation will also allow for more equitable resource sharing between states, the federal government and conservation programs. During the hearing, testimony was presented demonstrating widespread support from national, state and local organizations and the need to pass this legislation in light of recent storms.

“In the last two years, Louisiana has been hit by several hurricanes and tropical storms. These storms exacerbate a land loss crisis that threatens ecosystems, communities, local economies, ways of life, and increases the risk of flooding. Coastal communities use the resources from offshore revenue sharing to restore our coastlines,” said Dr. Cassidy.

The RISEE Act also received bipartisan praise during the hearing.

“I want to emphasize the point that Senator Cassidy just made—that talking about mitigation and resiliency is a hell of a lot cheaper than talking about rebuilding after a disaster,” said Senator Angus King (I-ME).

“[I] urge my colleagues to support this important bipartisan legislation, and I certainty appreciate the work that has been done on this. It is really needed in our Gulf states,” said Senator Cindy Hyde-Smith (R-MS).

“I very much support this legislation that Senator Cassidy, and Senator Whitehouse, Senator King have all put so much effort into. And I do think there is an equity issue here—we just haven’t done enough for our coastlines and our oceans,” said Senator Martin Heinrich (D-NV).

This hearing came on the heels of a September letter to Chairman Joe Manchin (D-WV) and Ranking Member John Barrasso (R-WY), in which Cassidy and U.S. Senators Sheldon Whitehouse (D-RI), Cindy Hyde-Smith (R-MS), and Angus King (I-ME) requested a hearing to consider the RISEE Act. Read the full letter here.

Since Cassidy and Whitehouse introduced the RISEE Act in June, support has grown to strengthen the gulf revenue sharing program.

Senators Hyde-Smith, Chris Coons (D-DE), Tim Kaine (D-VA), Brian Schatz (D-HI), King, Chris Van Hollen (D-MD), Jeanne Shaheen (D-NH), Roger Wicker (R-MS), and Martin Heinrich (D-NM) are co-sponsors of the bill. It is also supported by the Congressional Sportsmen’s Foundation, Environmental Defense Fund, National Audubon Society, American Sportfishing Association, Citizens for Responsible Energy Solutions, Ørsted, American Clean Power Association, National Wildlife Federation, National Marine Manufacturers Associations, Coastal States Organization, Theodore Roosevelt Conservation Partnership, American Shore & Beach Preservation Association, National Ocean Policy Committee, Trust for Public Land, The Nature Conservancy, City Parks Alliance, National Recreation and Park Association, and Rhode Island Department of Environmental Management.

The bill amends GOMESA by:

  • Eliminating the state revenue sharing cap, currently at $375 million.
  • Increasing the amount of GOMESA revenues shared with states from 37.5% to 50%.
  • Lifting the Land & Water Conservation Fund’s state side funding cap of $125 million.
  • Adding the National Oceans and Coastal Security Fund as a fourth GOMESA equity (12.5%).
  • Making oil and gas leases from 2000-2006 eligible for future GOMESA payments to Gulf coast states and the National Oceans and Coastal Security Fund. Currently, only leases from 2007 to present are eligible for GOMESA payments. EIA reports 11 new oil and gas fields in the Gulf of Mexico will contribute to the overall growth in U.S. production are GOMESA eligible under current law. Another eight would also qualify under this proposed change.
  • Protecting GOMESA revenues from sequestration.

Louisiana constitutionally dedicates revenues from offshore energy production to pay for conservation, restoration, and environmental projects to preserve and restore its eroding coastline.

Current law requires all revenues generated from offshore wind leases and production beyond state waters be deposited in the U.S. Treasury. The RISEE Act sends 50% of offshore wind revenue to adjacent states where offshore wind farms are developed. The state share is based on a formula developed by the Secretary of Interior to ensure states are receiving revenues from wind energy development off their coasts. By sharing offshore wind revenues with nearby states, the RISEE Act will offer budget incentives for state and local governments to facilitate successful siting processes, balancing the needs of different ocean users and getting turbines up and running.

The state funds can be used:

  • For coastal restoration, hurricane protection, or infrastructure;
  • To mitigate damage to fish, wildlife, or other natural resources, including through fisheries science and research; and
  • To implement a marine, coastal, or conservation management plan.

In addition, 37.5% of offshore wind revenues would serve as a further dedicated funding source for the National Oceans and Coastal Security Fund. This Fund includes dollars to States based on a formula and also provides competitive grants to coastal and Great Lakes communities to respond to coastal erosion and sea level rise, restore coastal habitat, and make improvements to coastal infrastructure.

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A transcript of Cassidy’s remarks can be found below:

Madam Chair, Thank you for the hearing and for including S.2130 on the agenda, Protecting and Increasing Revenues Under the Gulf of Mexico Energy Security Act, or GOMESA, that is available to Louisiana, and that other Gulf States share, for coastal restoration, hurricane and flood protection, which is essential to restore our eroding coast—a coastline by the way, eroding in part due to levees built along the Mississippi for the benefit of inland ports and other states. And we bear the brunt.

According to the Department of Interior, from fiscal year 2016 to fiscal year 2020, Interior collected almost 21 billion dollars in offshore receipts from royalties, rents, bonus bids, inspection fees and other revenues. During that time, $757 million was shared with Gulf States, which is just 3.6% of offshore revenues generated. This is not equitable, certainly not in comparison with what states get for onshore revenue, and does not acknowledge the national significance of the Gulf region meeting the Nation’s energy needs.

Bipartisan legislation introduced by Senator Sheldon Whitehouse and I, fixes this inequity and improves the existing revenue sharing program for states producing offshore energy revenue. The bill also creates the new national revenue sharing program from offshore wind energy generation and provides dedicated sustainable funding to the National Ocean’s and Coastal Security Fund. I thank Senators Hyde-Smith, Heinrich, and King who are all cosponsors of the bill. And several of our Senate colleagues not on this committee, have also endorsed.

Specifically, S.2130, or the RISEE Act, removes an existing cap authorized in GOMESA on the amount of dollars shared among four Gulf States, as well as the cap on funds available for the Land and Water Conservation Fund’s stateside assistance program. It increases the percentage of offshore revenue shared by the Gulf States. It protects offshore revenue from sequestration and makes additional leases eligible for revenue sharing in the future. And the reason I think Senator Whitehouse is in favor, in part, the bill also creates a fourth GOMESA equity to provide immediate funding to the National Ocean’s and Coastal Security Fund, and as previously mentioned, creates a new national revenue sharing program for states hosting offshore wind energy generation.

The bill is supported by more than 50 national, state and local organizations from local chambers to levee districts, environmental organization such as the National Wildlife Federation, the Environmental Defense Fund, the Audubon Society, sporting groups such as the Congressional Sportsmen’s Foundation, the Theodore Roosevelt Conservation Partnership, American Sport-fishing Association, and Ducks Unlimited along with associations representing all forms of energy production, as well as 25 Louisiana state legislator and parish leaders and Governors including Governor Edward’s from Louisiana, Governor Baker from Massachusetts, and Governor McKee from Rhode Island.

In a letter I received from those environmental groups mentioned above, they say, “by investing coastal energy revenues in coastal protection and restoration and resilience, the RISEE Act will bring vital resources to mitigate the mounting hazards, risks, and impacts coastal communities face”. By the way, I ask that unanimous consent be given to enter these letters into the record.

In the last two years, Louisiana has been hit by several hurricanes and tropical storms, including hurricane Laura, which was the most powerful storm to make landfall in Louisiana, and most recently hurricane Ida, with recorded wind gusts of more than 220 miles per hour. These storms exacerbate a land loss crisis that threatens ecosystems, communities, local economies, ways of life, and increases the risk of flooding. Coastal communities use the resources from offshore revenue sharing to restore our coastlines. By the way, Louisiana State Constitution requires this money be used to rebuild these coastlines. This is good legislation. I encourage my colleagues to support. Thank you for holding the hearing and I yield.