June 29, 2006
Contact: Robin Winchell (202) 225-4031
WASHINGTON,
DC- U.S. Rep. Charlie Melancon
praised the House of Representatives for passing H.R. 4761 the Deep Ocean
Energy Resources (DOER) Act today by a vote of 232 to 187. Melancon was
instrumental in building support among Democratic members of Congress for the
DOER Act, whipping 39 fellow Democrats to vote with him in favor of the
legislation, which will provide $8 billion in new revenue for Louisiana's hurricane protection and coastal
restoration system. Following the vote, Melancon offered the following
comments:
"I applaud the U.S. House of Representatives for
passing the DOER Act today and I encourage the Senate to also recognize the
importance of this legislation and also vote for passage," said
Melancon. "In Louisiana, this bill will ensure that for the first time
since drilling began off our coasts 50 years ago we will receive a fair share
of the royalties this industry generates for the federal treasury. I am
also proud of our state legislature for passing a constitutional amendment
dedicating this new revenue to our most important need in coastal Louisiana: building a
comprehensive hurricane protection and coastal restoration system that will
protect a vulnerable population of over 1 million."
House Democratic Whip Steny Hoyer (MD) offered the following
praise, "Congressman Melancon is a tireless advocate for the people of Louisiana's Third
District. His work on this legislation is an example of how he stands up
for what he believes is right for those he represents."
Congressman Melancon garnered support for the bill from nine
fellow Democrats on the House Resources Committee, leading to its 29-9 passage
last week. Melancon and other leading members of the House Resources
Committee negotiated the comprehensive DOER Act from the more than two dozen
Outer-Continental Shelf-related bills introduced this Congress. The DOER Act is
a bipartisan bill giving coastal states the authority to allow energy
production, if desired, and benefit from increased revenue from shared
royalties.
The DOER Act, with today's amendments accounted for, would
provide about $8 billion for Louisiana
over the next 10 years in oil and natural gas royalties. For drilling
3-12 miles off Louisiana's
coast, the state would receive 25% of royalties for the first five years.
After year five, the share would increase by 5% a year until year 10, when Louisiana will receive a
42.5% share. From year 10 to 15, the state portion would gradually
increase to a final 63.75% share. For drilling beyond 12 miles off Louisiana's coast, the
state would receive 6% the first year, increasing gradually to 42.5% by year
15. Based on this formula, the Congressional Budgeting Office revised its
score for the bill and now estimates the bill will generate $900 million in
federal revenue by 2016. As a result, the Republican Study Committee
announced today it endorsed the DOER Act.
Currently, Louisiana receives only a small percentage of the
$6 to $8 billion in royalties the federal treasury accrues every year from
drilling in federal waters, despite the fact that Louisiana must shoulder the
burden of environmental damage, including an eroding coastline, and the cost of
infrastructure (ports, highways, etc) that result from the state's
support for this industry.
The Louisiana legislature
recently passed a constitutional amendment mandating that the revenue-sharing
mechanism in this bill will be used specifically to fund the most important
need in coastal Louisiana:
a comprehensive hurricane protection and coastal restoration system that will
cost over $30 billion and protect a vulnerable population of over 1 million.
This amendment will be sent to the voters on September 30.
Without this funding stream, the federal government lacks a
mechanism to pull together a comprehensive hurricane protection project.
The annual appropriations process would take several decades, if ever, to build
and/or strengthen hurricane protection levees and rebuild coastal
marshes. In the meantime, coastal Louisiana
is facing more storms with increased intensity each hurricane season. The
vast majority of the third congressional district (and coastal Louisiana) currently
contains NO federal levee system to protect them from these storms.
A comprehensive hurricane protection and coastal restoration
system in Louisiana would serve to protect the
infrastructure that supports 30% of the oil and 25% of the natural gas consumed
in the US,
as well as 30% of the nation's total commercial fish landings.
As Katrina and Rita showed, the cost of the status quo will
be even more expensive. Congress has already appropriated over $60
billion in emergency response following these storms as a result of a lack of
dependable hurricane protection, and FEMA estimate billions more will be needed
to rebuild New Orleans and coastal Louisiana.
The DOER Act will also alter the restrictions on gas and oil
drilling on the Outer Continental Shelf, lowering energy costs increasing
domestic energy production and reducing U.S. dependence on foreign
oil. The agreement establishes the following guidelines for coastal
states, including Louisiana:
- 0-50 miles offshore: Permanent moratoria on oil and
gas production, unless a state legislature enacts legislation to opt out of the
moratoria.
- 50-100 miles offshore: Moratoria on oil production
until June 30, 2010. Moratoria on gas production for one year after law
is enacted. After these dates, the moratoria will be lifted UNLESS the
state legislature enacts legislation to continue the moratoria.
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