Environment
 

Despite Obama’s pledge, no progress on speeding up increased offshore drilling royalties

The Lens has partnered with PolitiFact for the 10th anniversary of Hurricane Katrina to see if President Barack Obama has followed through on his campaign promises about the storm and the city of New Orleans. 

Pledge: Direct revenues from offshore oil and gas drilling to increased coastal hurricane protection

Will also direct revenues from offshore oil and gas drilling to increased coastal hurricane protection.

Ruling: Promise Broken


As a presidential candidate, Barack Obama promised in 2008 to “direct revenues from offshore oil and gas drilling to increased coastal hurricane protection.” With the 10th anniversary of Hurricane Katrina approaching, we wanted to check in on additional progress.

The bottom line is that the timetable for increased royalty payments hasn’t changed under Obama, and his administration has since proposed eliminating such revenue sharing altogether.

Currently, Louisiana, Texas, Mississippi, and Alabama share 37.5 percent of offshore drilling revenue ($30 million annually) under the Gulf of Mexico Energy Security Act of 2006. Beginning in 2017, the pie will grow larger as more revenue sources are added, but the slice going to the four states will be capped at $500 million beginning in 2018.

We noted in past reports that lawmakers from coastal states, particularly Louisiana, have tried numerous times to accelerate that timetable or lift the cap and have been unsuccessful. So in 2012, we rated this a Promise Broken, noting delays and caps on the pledged revenue.

Since then, Louisiana lawmakers have seen more (but still limited) momentum in the Republican-controlled Congress.

In May 2015, Sen. Bill Cassidy, R-La., introduced a bill that would lift the ban on drilling in the Eastern Gulf and increase the revenue sharing cap to $700 million from 2018 to 2025, and then to $1 billion for the following three decades.

The Obama administration opposed Cassidy’s plan during hearings. But the legislation was folded into a comprehensive offshore drilling bill and cleared the Senate Energy and Natural Resources Committee on July 30, 2015. Its fate is to be determined.

Past efforts like this, however, have fizzled. In 2014, when Cassidy was a member of the House of Representatives, he co-sponsored similar legislation to increase the cap to $1 billion. The bill passed the House but didn’t make it to the Senate. A 2013 bill to gradually lift the cap introduced by former Sen. Mary Landrieu, D-La., also died on the Senate floor (Landrieu lost her seat to Cassidy in 2014).

Obama, for his own part, has backtracked on the promise. His budget proposal for 2016 seeks to eliminate revenue sharing altogether, reallocating the royalties from offshore drilling instead to conservation projects across the whole country, not just coastal restoration. However, the plan — strongly opposed by Louisiana lawmakers and environmental groups — “has zero chance of becoming law,” Sen. David Vitter, R-La., told the Advocate.

So caps and delays on sharing offshore drilling revenue with the four coastal states still remain. One bill to increase the caps is in the works, but even if it passes, it doesn’t seem like Obama wants to direct the revenue to coastal protection anymore. We continue to rate this a Promise Broken.

Sources

Bureau of Ocean Management, Gulf of Mexico Energy Security Act (GOMESA), accessed Aug. 3, 2015

Congress.Gov, S.1276 – Offshore Energy and Jobs Act of 2015, May 19, 2015

U.S. Department of the Interior, S. 1276, The Offshore Energy and Jobs Act of 2015, May 19, 2015

U.S. Senate Committee on Energy & Natural Resources, Offshore Production and Energizing National Security Act of 2015, July 23, 2015

U.S. Senate Committee on Energy & Natural Resources, Business Meeting on 20 Agenda Items (Continued), July 30, 2015

Congress.Gov, H.R.4899, June 26, 2014

Congress.Gov, S.1273, July 23, 2013

U.S. Dept. of the Interior, Fiscal Year 2015 The Interior Budget in Brief, Feb. 2015


Visit PolitiFact.com for prior updates on this pledge and to learn more about its ratings.

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