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 shores.
"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 Natives.
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 shelf.
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 natural gas.

By:  Originally published in the Alaska Journal of Commerce on July 31, 2009