State’s coastal restoration efforts imperiled by Obama’s budget proposal

President Obama’s unexpected budget proposal to stop sending a portion of federal offshore mineral royalties to Gulf states could cripple Louisiana’s coastal-restoration efforts by eliminating what is expected to be $140 million to nearly $180 million in annual revenue.

The money, to come through the Gulf of Mexico Energy Security Act starting in 2017, would be the largest by far of only three recurring revenue streams the state has to pay for its Master Plan for the Coast, a 50-year, $50-billion effort. Current projections of land subsidence and sea level rise show most of southeast Louisiana will be part of the Gulf of Mexico by the end of the century if that plan isn’t a success.

“It would be a pretty tremendous blow to our overall efforts,” said Kyle Graham, executive director of the state’s Coastal Protection and Restoration Authority, in charge of the Master Plan initiative. “That was the revenue stream we were designing and planning our efforts around.”

The president would need Congress to pass legislation to change a 2007 bill that sent the royalties to the states.

“There are a lot of steps that this would have to go through before it became something to make us change our plans,” Graham said. “So we’ll just watch for right now.”

Passed in 2007, the energy bill was the culmination of a decade-long effort by Louisiana to have Congress mitigate the onshore damage related to the more than 4,000 oil and gas rigs off the state’s coast. When oil and gas are pumped from national lands inside a state, the royalties are shared equally by the state and federal governments. But most of the offshore energy extraction has taken place for decades beyond Louisiana’s three-mile territorial waters, making it a federal area.

Louisiana had always received the same share of offshore royalties as inland states, even though tens of thousands of miles of pipelines run from those rigs through its coast. Research shows canals and pipelines related to those activities are responsible for at least 36 percent of the 1,880 square miles of coastal wetlands the state has lost in the past 70 years.

The 2007 bill, passed in the wake of the devastation caused by Hurricanes Katrina and Rita, changed that system by dedicating 37.5 percent of all royalties from specific areas of the Gulf to the four coastal states with energy development – Louisiana, Mississippi Alabama and Texas.

Louisiana has taken in less $10 million total across the seven years since the bill passed, but that amount is expected to increase dramatically in 2017 because vast new areas of the Gulf will be included. The state is estimating annual income of as much as $178 million a year, depending on the rate of pumping and the price of leases and oil. Its estimated income could jump to as much as $600 million annually after 2055 when a cap on the states’ share is lifted.

The money is divided among the states and their coastal communities based on complicated formula involving the distance from the state to the drilling areas, coastal populations and other metrics.

 The law requires the money to be used for:

  • Coastal protection, including conservation, coastal restoration, hurricane protection, and infrastructure directly affected by coastal wetland losses.
  • Mitigation of damage to fish, wildlife, or natural resources.
  • Implementation of a federally approved comprehensive conservation management plan for the Gulf and coast.
  • Mitigation of the impact of outer continental shelf activities through the funding of onshore infrastructure projects.
  • Planning assistance and administrative costs, with a limit of 3 percent of income.

The budget change caught most coastal advocates by surprise because Obama has been a strong supporter of the Master Plan. He was the first president to include funding for that effort in a federal budget, twice asking Congress to allocate about $38 million. The GOP-led House killed both those efforts.

The reason for the change, his budget states, is to “redirect these payments … to programs that provide broad natural-resource, watershed and conservation benefits to the Nation, help the Federal Government fulfill its role of being a good neighbor to local communities, and support other national priorities. Such programs could include the Land and Water Conservation Fund, Payments In Lieu of Taxes, State and Tribal Wildlife Grants, Federal coastal restoration and resilience programs, or other national priorities.”

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About Bob Marshall

From 2013 to 2017, Bob Marshall covered environmental issues for The Lens, with a special focus on coastal restoration and wetlands. While at The Times-Picayune, his work chronicling the people, stories and issues of Louisiana’s wetlands was recognized with two Pulitzer Prizes and other awards. In 2012 Marshall was a member of the inaugural class inducted into the Loyola University School of Communications Den of Distinction.

  • Chris McLindon

    We may have experienced a paradigm shift a couple of weeks ago when Garland Robinette made the following statement on his Thinktank radio show: “If I was in charge of the money, I’m not sure I give us any money at all (for coastal restoration)”. Garland Robinette for crying out loud. The most significant thing about a democrat president including a provision like this in his budget is that it captures a mood in Washington. With the pending cuts in state budgets and this mood in Washington now is the time to rethink how we should be spending dollars for coastal protection. Most of the larger restoration projects that are concieved in the Master Plan are still very much in experimental stages. Nobody can say for sure that diversions, marsh creation projects, or beach and barrier island projects would make any difference at all in providing flood protection. In the meantime subsidence, the true driver of almost all change in the wetlands, is an unabated threat to our existing protection infrastructure.
    The U.S.G.S. is preparing to release an updated Land Area Change Map and report that will include updated rates of “land loss” since they were last measured in 2010. Those update rates are likely to be significantly lower than the “football field an hour” rate that is so oftern quoted in the media. If they are lower, it will mean that we have time to get this right. We should focus much more effort on understanding the real processes that are causing change in the wetlands and causing sections of existing levees to sink. With a better understanding of those processes we can better plan how best to use the money we do get access to.

  • cbrown

    And guess what, Louisiana? We now have NO power in the Senate to make our case…smart move, voters!

  • crabioscar

    maybe Mary Landrieu could better protect us from this type of thing, but it makes it even worse if this move is made to spite the state’s voters for making the wrong choice.

  • Scott Eustis

    so, Landrieu is gone, we knew that last year. One day, Louisiana may decide to stand up for itself and tax industry, but for now, we are totally dependent on federal funding.

  • Scott Eustis

    There’s a bigger problem, though. This State, especially under Jindal, refuses to fund itself, and is thus reliant on the federal government in all things, not just coastal.

  • Kelly M. Haggar

    Took another look back at: http://issues.org/22-2/sparks/ this afternoon.

    Perhaps this is the bottom line: Are “Navigation” (be that only 9 ft for barges or 50 ft for Panamax) and “Wetlands” compatible? It is even possible to do both at once? Or must we choose? The Nat’l Geographic guy in 1897 (4 page article attached in PNG format) had never heard of faulting or sea level rise or dams or a steep CO2 rise or pressure depletion or E & P canals . . . but he was already afraid that just the river levees alone would kill off the marshes on the “flood” side.

    Forget all these hazards we think we understand (or at least know about) in 2015 which weren’t any college prof’s mild nightmare in 1897 or 1927 – – did loss of the La coast become inevitable once the US of A made the “command decision” to levee the river from MO to the sea after 1927?

  • Kelly M. Haggar

    Added thought . . .

    In other words, once we interrupted the Penland delta cycle with levees, once we tried to stop Frazier’s lobe shifts with levees, did we guarantee the faults would win?

    Of course if it takes another 22 feet to get back up to the last glacial minima, none of this budget or CPRA stuff matters either way.

  • nickelndime

    Landrieu is gone – Yes! But Louisiana has a “welfare” mentality – how do we change that? 02/04/2015 8:38 PM

  • nickelndime

    The deck gets stacked more every day. This state is an absolute mess… Louisiana has a welfare mentality. It relies too much on government money. A poor uneducated electorate is easier to control, direct, and convince they “will be taken care of.” Being taken care of by the government and by others who say they know best reduces individual initiative and personal responsibility. Lunch may be “free ” but it really isn’t. It is probably too late to help Louisiana, and the corruption and graft in government exacerbates the problems. 02/04/2015 11:48 PM