Local Advocates Decry Proposed State ‘Bribe’ to Permit Drilling

 

Connecting state and local government leaders

House Republicans are pushing a plan that would financially incentivize states to drill for oil and gas and punish those that don’t.

WASHINGTON — Local government advocates this week criticized a draft bill that would grant states “exclusive jurisdiction” over oil and gas drilling on federal land and give them a higher share of royalties, but also impose a stiff penalty if they halt production.

The House Subcommittee on Energy and Mineral Resources discussed the Enhancing State Management of Federal Lands Waters Act, which would increase states’ share of mineral revenues from 50 percent to 60 percent if they opt to increase production on specific federal parcels. States that decide to reduce production would only receive 20 percent of revenues moving forward and would pay a lost production fee to the Treasury Department.

Similarly, coastal states would be able to determine the Outer Continental Shelf lease blocks included in the final offshore drilling sale proposed by the Trump administration—47 parcels currently up for grabs. Those states that withhold parcels would owe unfinalized “indemnifications” to the Treasury Department, while those that include more blocks would receive a higher revenue sharing percentage.

State mineral management plans would still be subject to Interior Secretary Ryan Zinke’s approval.

“Once again, Washington is pushing its beliefs onto local citizens, instead of listening to their vehement opposition,” said Ben Cahoon, the mayor of Nags Head, North Carolina during congressional testimony on Thursday. “Oil and gas development poses a real threat to the fishing, tourism and recreation-based businesses along the East and West coasts that each year generate around $180 billion in gross domestic product and support nearly 2.6 million jobs.”

The Republican mayor called indemnifications a “ransom” they would need to pony up to protect the “coastal way of life,” pointing out the bill would impose hundreds of millions of dollars in penalties on states where there hasn’t been offshore drilling in decades.

Environmental groups including the National Wildlife Federation and Hispanics Enjoying Camping, Hunting, and the Outdoors also spoke out against the draft measure.

The Trump administration in January announced that it would open up drilling along the coasts. It shortly exempted Florida from offshore drilling and most states have since requested meetings with Zinke to exempt their jurisdictions to no avail.

States that attempt to halt offshore drilling would impose “a localized will on a nationally owned, widely enjoyed benefit,” said Rep. Paul Gosar, an Arizona Republican and chairman of the subcommittee.

“Such attempts to strand federal assets come at the expense of the American taxpayer,” Gosar said. “The ideas presented today increase the states’ role in federal mineral management while identifying the taxpayer if the state chooses to leave the mineral undeveloped.”

Rep. Alan Lowenthal, a California Democrat and the committee’s ranking member, argued the opposite: that the legislation prioritized the fossil fuel industry over everyday Americans. Blue states that prioritize conservation will be punished—California as much as $1 trillion for a 10-year reprieve—when public land management is essentially handed to oil and gas companies in each state, Lowenthal said.

“In effect this title is a bribe to take public lands out of the public’s hands,” he added.

Proponents of the proposal disagreed. Federal ownership of mineral land has “taken decision rights away from the states,” when they can approve drilling far quicker than the federal bureaucracy, said Nick Loris, a Heritage Foundation energy and environment fellow.

Loris said the proposed reforms would make the industry more responsive to price changes and create jobs and suggested opening lease auctions to all parties to encourage cooperation.

“Congress could go even further by applying the same reforms to all energy investments on federal land and waters,” he said. “States should have the same incentives and choices the draft legislation provides to oil and gas for all other energy projects, whether it is a solar farm in Nevada or offshore wind in the Atlantic.”

World energy demand continues to grow and could be predominantly be fed by coal, oil and gas for the next 10 to 30 years, said Myron Ebell, the Competitive Enterprise Institute’s Center for Energy and Environment director.

Federal royalty sharing makes up a large portion of states like Wyoming’s budget, Ebell said, and mineral resources could jump start other rural economies.

“If a state wants a moratorium on offshore development, they can actually get it,” he added. “They can say, ‘We want a moratorium, and here’s what we’re willing to pay for it.’”

Dave Nyczepir is a News Editor at Government Executive’s Route Fifty and is based in Washington, D.C.

NEXT STORY: Boston Tightens Regulatory Screws on Airbnb

X
This website uses cookies to enhance user experience and to analyze performance and traffic on our website. We also share information about your use of our site with our social media, advertising and analytics partners. Learn More / Do Not Sell My Personal Information
Accept Cookies
X
Cookie Preferences Cookie List

Do Not Sell My Personal Information

When you visit our website, we store cookies on your browser to collect information. The information collected might relate to you, your preferences or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. However, you can choose not to allow certain types of cookies, which may impact your experience of the site and the services we are able to offer. Click on the different category headings to find out more and change our default settings according to your preference. You cannot opt-out of our First Party Strictly Necessary Cookies as they are deployed in order to ensure the proper functioning of our website (such as prompting the cookie banner and remembering your settings, to log into your account, to redirect you when you log out, etc.). For more information about the First and Third Party Cookies used please follow this link.

Allow All Cookies

Manage Consent Preferences

Strictly Necessary Cookies - Always Active

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data, Targeting & Social Media Cookies

Under the California Consumer Privacy Act, you have the right to opt-out of the sale of your personal information to third parties. These cookies collect information for analytics and to personalize your experience with targeted ads. You may exercise your right to opt out of the sale of personal information by using this toggle switch. If you opt out we will not be able to offer you personalised ads and will not hand over your personal information to any third parties. Additionally, you may contact our legal department for further clarification about your rights as a California consumer by using this Exercise My Rights link

If you have enabled privacy controls on your browser (such as a plugin), we have to take that as a valid request to opt-out. Therefore we would not be able to track your activity through the web. This may affect our ability to personalize ads according to your preferences.

Targeting cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.

Social media cookies are set by a range of social media services that we have added to the site to enable you to share our content with your friends and networks. They are capable of tracking your browser across other sites and building up a profile of your interests. This may impact the content and messages you see on other websites you visit. If you do not allow these cookies you may not be able to use or see these sharing tools.

If you want to opt out of all of our lead reports and lists, please submit a privacy request at our Do Not Sell page.

Save Settings
Cookie Preferences Cookie List

Cookie List

A cookie is a small piece of data (text file) that a website – when visited by a user – asks your browser to store on your device in order to remember information about you, such as your language preference or login information. Those cookies are set by us and called first-party cookies. We also use third-party cookies – which are cookies from a domain different than the domain of the website you are visiting – for our advertising and marketing efforts. More specifically, we use cookies and other tracking technologies for the following purposes:

Strictly Necessary Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Functional Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Performance Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Social Media Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Targeting Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.