Offshore Energy Revenues Boost State Conservation, Coastal Protection
Posted May 2, 2019
Offshore energy development has delivered yet another economic and conservation boost to states – this time to the tune of $215 million.
The U.S. Department of the Interior disbursed the funds last week to the four Gulf natural gas and oil producing states – Alabama, Louisiana, Mississippi and Texas, and their coastal political subdivisions – for use toward coastal conservation and hurricane protection projects. And the best part? Not a single dollar came from taxpayers.
Under the Gulf of Mexico Energy Security Act of 2006 (GOMESA) and the revenue sharing model it created, the four states receive a portion of revenue generated by offshore production in the Gulf. This year, the states saw an increase of $26.95 million – almost 15 percent more than the prior year. Below, the state allocations for 2019:
Beyond the Gulf region, GOMESA also directs a portion of revenue to the Land and Water Conservation Fund (LWCF), which means that all 50 states, U.S. territories and the District of Columbia benefit from offshore energy development via grants that support state conservation and outdoor recreation projects – not just energy producing states. Below, the top five state LWCF apportionments for Fiscal Year 2018 (Interior data):
Opening up the Atlantic Outer Continental Shelf (OCS) to development, for example, could generate over $20 billion in industry spending a year, boosting the U.S. economy. Within 20 years, that figure could rise to $85 billion in cumulative federal, state and local tax revenues from industry spending. That’s in addition to $52 billion in royalties and lease sales from Atlantic OCS development, cumulatively, within 20 years if revenue sharing agreement similar to the one in place in for the Gulf states is enacted.
There really is no better time than now for states to begin development. The U.S. natural gas and oil industry has invested heavily in technologies and standards-setting to make offshore energy development safer than ever before – for our workers and the environment. In addition to creating the Center for Offshore Safety to promote a continuous, ever-improving approach to safety, industry has published more than 100 new or revised exploration and production standards over the past 10 years and has worked to enhance federal inspection and enforcement at production facilities.
Safe offshore development is benefiting states like Louisiana, and can extend those benefits to others by broadly boosting state economies while advancing the United States’ long-term energy security. The time for development is now.
About The Author
Jessica Lutz is a writer for the American Petroleum Institute. Jessica joined API after 10+ years leading the in-house marketing and communications for non-profits and trade associations. A Michigan native, Jessica graduated from The University of Michigan with degrees in Communications and Political Science. She resides in London, and spends most of her free time trying to keep up with her energetic Giant Schnauzer, Jackson.