not getting a fair share of offshore oil royalties

Living on the Gulf Coast I’m used to dealing with natural disasters. But this decidedly unnatural disaster we’re dealing with is quite bizarre. In some ways it’s like dealing with a hurricane—we even get a daily NOAA forecast—but it’s not like we have to board the windows and evacuate. We just move on with our daily lives and watch as what could become the worst environmental disaster in our nation’s history rages on some 60 or 70 miles from downtown New Orleans.

At this point I don’t really know how to feel. Should I pissed off at BP? Yeah. The government? Yeah. Maybe this is the work of a company cutting every corner it can, regardless of the risks. Maybe it was just a freak accident. (I think the former is more likely, but that’s besides the point I want to make). What I am pissed off about is the fact that for far too long we in Louisiana have run the risks and taken so much damage from the oil industry without being fairly compensated. For years Louisiana and the other states with offshore drilling got completely screwed out of oil royalties.* We got nothing.** States with inland oil and gas production? A 50/50 split between the state and the feds. What is wrong with this picture? Sure, there’s an argument to be made for giving the federal government some of the money; Americans have a right to enjoy all of our natural resources, not just the ones from the state they happen to live in. But we are the ones bearing the negative externalities while the federal government reaps the benefits. We are the ones who have had our wetlands ripped apart by subsidence and canals. We are the ones with Cancer Alley. And we run the risk of a spill like this.

So why the hell did this happen? In what may be the worst Supreme Court decision I’d never heard of until a few days ago, 1947′s U.S. v. California, the Supreme Court said that the federal government owned the offshore areas, not the states. (It doesn’t make any sense to me either.) In response Eisenhower made the issue an important part of his 1952 campaign, and in 1953 Congress passed the Submerged Lands Act, which gave the states ownership over land up to 3 miles from shore. (I assume that means Louisiana profits from drilling inside that range, but I’m not sure. And I’m guessing that the majority of our drilling is way offshore, well beyond the three-mile limit.

The ironic thing is that just weeks before the explosion and spill, a bill was passed to give states a share of the royalties. (Mobile’s newspaper has a nice article here detailing the benefits for Louisiana.) It had been an issue for years; there’s a 2008 press release from Senator Mary Landrieu’s website detailing her support for earlier bills. Obviously, the expansion of offshore drilling was and is controversial—even more so after the BP spill—but giving us a decent share of the royalties should have been a no-brainer, even if having to wait until 2017 and only getting 37.5% of the royalties is a bit obnoxious. The money will go into a coastal protection and restoration trust fund. Just think if we’d have had billions of dollars in coastal protection and levees before Katrina. Would’ve been nice, wouldn’t it? There is so much oil off our coast that we should be ridiculously wealthy, Persian Gulf-style (minus the deserts and the fundamentalists). Instead, our money’s been getting siphoned off to Washington D.C. and then who knows where else, and all the while our coastline fades to blue.

* Alaska made a sweetheart deal at statehood and got 90% of their royalties. Fuck those bastards.

** I had to use italics and bold to make my point.

2 Responses to “not getting a fair share of offshore oil royalties”


  1. 1 Jon

    The hell of it is that Texas gets to own up to 9 miles off of its coast. The bastards.
    Blame Leander Perez.

  2. 2 Michele Gaudin

    Very nice explanation of a difficult topic. I am putting a link to it on my website! Thanks! Louisiana bears all the risk and gets none of the reward, so I say we either renegotiate immediately, or shut it down. Not kidding

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