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Kennedy backs bill to return more offshore energy revenue to Louisiana, Gulf states

Posted on February 15, 2023

Sen. John Kennedy (R-La.), Sen. Bill Cassidy (R-La.) and Sen. Sheldon Whitehouse (D-R.I.), along with a bicameral, bipartisan group of lawmakers, introduced the Reinvesting in Shoreline Economies & Ecosystems (RISEE) Act. This legislation would reform the Gulf of Mexico Energy Security Act (GOMESA) to lift a current revenue cap that unfairly penalizes Louisiana, Texas, Mississippi and Alabama.

The RISEE Act would secure more shared resources among Gulf states, the federal government and conservation programs from the revenue generated by offshore oil, gas and wind leases. Specifically, this proposed legislation would ensure that a larger cut of Gulf states’ offshore energy profits would fund coastal protection and restoration as well as other environmental priorities in Louisiana.

“GOMESA’s current cap unfairly targets our state. Louisianians work hard to provide America with reliable, affordable energy, and they deserve their fair share from that energy production. Our communities depend on these resources to defend our coastlines against hurricanes and other natural disasters, so amending the GOMESA cap is crucial to protecting Louisiana lives and livelihoods. There’s still more to be done, but this bill is a welcome step forward,” said Kennedy.

“With strong bipartisan support and movement through the Senate Energy and Natural Resources Committee last year, we look forward to advancing the Reinvesting in Shoreline Economies & Ecosystems (RISEE) Act this Congress. Louisiana has learned to use money from offshore energy production to rebuild our coastline and protect our communities. This bill takes the lessons that Louisiana has learned, adds more funding, and serves as a model for other coastal states,” said Cassidy.

The Senate Energy and Natural Resources Committee previously passed the RISEE Act in the 117th Congress.

Kennedy also formerly introduced similar legislation, the Offshore Cap Parity Act, to eliminate the GOMESA cap.

Background:

GOMESA divides federal revenues from the offshore energy production of Gulf states into three portions. The federal government returns 37.5 percent of this revenue to Louisiana, Texas, Mississippi and Alabama. The Land and Water Conservation Fund receives 12.5 percent of offshore revenue, which largely invests in the needs of landlocked states. The final 50 percent of Gulf energy revenue goes to the U.S. Treasury.

The GOMESA cap limits the dollar value of Gulf states’ 37.5 percent revenue share to $375 million, meaning those states receive no benefit when the energy sector peaks and revenues surpass the cap. Conversely, the Mineral Leasing Act ensures that states with onshore drilling operations receive 50 percent of their revenues, and there is no cap on how much money that share can include.

States with onshore energy production typically aren’t required to spend that revenue on environmental priorities. Louisianians, however, have previously voted in favor of dedicating their state’s share of offshore energy revenue to coastal conservation and restoration projects. Such projects may include updating levee systems and shoring up silt to bolster Louisiana’s coastal defenses. These investments mitigate damage to communities, local wildlife and other natural resources.

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