Murkowski introduces OCS revenue sharing bill
U.S. Sens. Lisa Murkowski, R-Alaska, and Mary Landrieu,
D-Louisiana, have introduced legislation that would guarantee a share
of offshore oil and natural gas revenue to coastal states.
The Domestic Energy Security Act of 2009 provides coastal states,
including Alaska, a 37.5 percent stake in energy development off their
"This bipartisan bill will serve as the foundation for Alaska
and other states to balance local economic and environmental concerns
with national energy security," said Murkowski, the top Republican on
the Senate Energy and Natural Resources Committee. "Considering the
economic and energy challenges we as a nation face, now is the time to
get this right."
The bill grants 37.5 percent of all rents, royalties and bonuses
from oil and gas development in federal waters off Alaska's coast to
the state and other local entities. The state of Alaska would receive
47 percent of the funds, Alaska Native regional and village
corporations share 33 percent, and 20 percent is dedicated to coastal
borough and community governments.
The bill would also require oil produced in the waters of the
Beaufort, Chukchi and Norton Basin planning areas to be transported to
onshore facilities by pipelines to better protect whales and other
marine mammals vital to the cultural and subsistence needs of Alaska
North Slope Borough Mayor Edward Itta, whose area would be
affected by OCS issues, said revenue sharing is a crucial concern for
communities that would be affected by new development in the Beaufort
and Chukchi seas.
The Chukchi Sea holds an estimated 15 billion barrels of oil and
77 trillion cubic feet of natural gas. The Beaufort Sea has an
estimated 8 billion barrels of oil and 28 trillion cubic feet of
natural gas. Alaska has two-thirds of the nation's outer continental
The bill would also open parts of the eastern Gulf of Mexico to
offshore energy production, as well as extend revenue sharing to
Virginia, North Carolina, South Carolina and Georgia.
"There are real local costs associated with energy production.
From the need for bigger ports and airports to the need for schools and
housing for energy workers and their families," Murkowski said.
"Providing more local aid will let Alaskans better handle the costs
associated with energy production that benefits the entire nation."
In 2006, the Congress allotted 37.5 percent of OCS rents,
royalties and bonuses to five states along the Gulf of Mexico, an
arrangement that mirrors long-standing revenue sharing with states for
development on federal lands. The Domestic Energy Security Act of 2009
follows on that precedent.
Current federal data estimates the OCS holds recoverable reserves
of roughly 86 billion barrels of oil and 420 trillion cubic feet of
Originally published in the Alaska Journal of Commerce on July 31, 2009