Texas Gov. Rick Perry and five fellow Republicans from other coastal states on Monday implored the Obama administration to open new areas for offshore drilling, saying the change would give a jolt to the U.S. economy by spurring jobs and spending.
“We want to create jobs,” said North Carolina Gov. Pat McCrory. “I urge the president to join us (and) make government a partner with us — not an adversary.”
“Let the states unleash these natural resources to create jobs and (help) the economy,” McCrory added.
The group of governors delivered their plea from the Offshore Technology Conference in Houston, aiming it squarely at the president and policymakers 1,200 miles away in Washington, D.C.
The Obama administration’s current plan for selling offshore drilling leases through June 2017 includes auctions of territory in the Gulf of Mexico and near Alaska _ but not along mid-Atlantic states. And a lease sale once planned near the coast of Virginia is indefinitely canceled.
“Let us step up,” said South Carolina Gov. Nikki Haley. “Let us do offshore work. Let us go and be part of the solution to our nation’s energy problem.”
The group of Republican governors acknowledged the Deepwater Horizon disaster that flooded the Gulf of Mexico with 4.9 million barrels of oil, but Perry emphasized new protections imposed in the past three years.
“Today’s energy exploration in the Gulf is safer than ever, for our operators (and) for the environment,” he said, without detailing specific improvements.
Haley noted the big stakes for coastal states that depend on tourism from beach-loving visitors for tax dollars and economic activity.
“I’m not going to do anything to mess up the No. 1 tourist destination in the world,” Haley said. “We’re going to do everything we can to protect the natural resources. But it’s not one or the other. We can do both.”
The governors also made a pitch for a new revenue sharing plan that would ensure coastal states can cash in on offshore energy development near their shores. Under existing federal law, four Gulf states will be able to collect 37.5 percent of oil and gas royalty revenue on some leases beginning in 2017, capped at $500 million annually.
But legislation sponsored by Sens. Mary Landrieu, D-La., and Lisa Murkowski, R-Alaska, would phase out that $500 million cap and allow Gulf states to collect the money sooner — while expanding revenue sharing to all other coastal states. The measure also would allow all offshore energy development — including wind and solar projects as well as oil and gas initiatives — to qualify.
Revenue from offshore energy development “should be shared in a fair way with the coastal states that assume the risk and provide the support for those offshore operations,” Alabama Gov. Robert Bentley told a crowded room at OTC.
At the federal level, expanded revenue sharing could more offshore energy development – enough to make up for lost federal dollars now diverted to states. “The government can Help pay down their debt and give states their fair share,” Perry said. “It is a win win.”
Garret Graves, executive assistant for coastal activities for Louisiana Gov. Bobby Jindal, stressed the disparity between coastal and inland states when it comes to collecting energy revenue. Inland states generally claim 50 percent of the revenue from oil and gas production on federal lands within their borders. And in some parts of Alaska, the share is 90 percent to local residents.
Although similar revenue sharing proposals have been introduced in the Senate before, they have never advanced far. But this year, Senate Energy and Natural Resources Committee Chairman Ron Wyden, D-Ore., is working with Landrieu and Murkowski to move the measure through his panel.
Perry said federal and state governments have a role to play fostering energy development.
“We need to get states and the federal government understanding that if you give incentives to these states they will go create this wealth. They will be better off if they will look to the future and put tax and regulatory policies in place that give incentives to the private sector to discover more resources of energy,” Perry said. “And they will do that.”