Louisiana US senator introduces oil, gas royalty-sharing bill

Washington (Platts)--16Mar2006

US Senator David Vitter, Republican-Louisiana, introduced legislation
Wednesday designed to ensure that oil- and natural gas-producing states gain a
share of royalties from production on federal lands off their shores.

Vitter's bill, the Coastal Conservation and Habitat Restoration Act of
2006, would provide funding for Louisiana and 34 other coastal states and
territories based on the amount of a state's offshore energy production and
the length of its coastline. These funds would be used to implement Coastal
Zone Management plans, to conserve coastal areas and reduce future losses and
to restore fisheries and marine habitat in coastal ecosystems, Vitter's office
said in a statement.

For the first 10 years, the funds available would come from excess
revenue received from the federal government for auctions and offshore energy
production. Afterward, the amount of money provided to states would be equal
to 50% of the federal government's offshore energy revenues. Currently, the
federal government gets 100% of royalties from drilling in federal waters.

Unlike previous offshore royalty measures, Vitter's legislation would be
referred to the Senate Commerce Committee, on which he serves.

"Louisiana cannot afford to keep running up against a brick wall time and
time again. Time is not a luxury we can afford," Vitter said. "With this in
mind, I am actively pursing a broad royalty-sharing bill for coastal states
through the Senate Commerce Committee, since we have not had any luck moving
this type of legislation through the Senate Energy Committee, despite
Senator Landrieu's good work on that committee," he said, referring to
Louisiana's other US senator, a Democrat.

"Louisiana and the other Gulf States have provided the infrastructure for
oil and gas production, which supports the energy needs for the vast majority
of the nation," Vitter said. "This bill is a way that we can ensure that Gulf
States are getting their fair share of the royalty revenues, which are
critical for Louisiana to use for hurricane protection and coastal
restoration."

Vitter's bill is cosponsored by Senator Trent Lott,
Republican-Mississippi.

--Cathy Landry, cathy_landry@platts.com

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