Defend the Coast

She’s sticking to her guns:

Gov. Kathleen Blanco said Wednesday that she is willing to fight a legal battle with the federal government to block future oil leases off Louisiana's coast until the state gets a bigger share of the billions in royalties from the oil and gas extracted there.

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A 50 percent share of the royalties from the oil and gas produced beyond Louisiana's three-mile boundary -- in waters controlled by the federal government -- would equal more than $2 billion a year.

Get to know your opponent: U.S. Department of the Interior's Minerals Management Service and its Mineral Revenue Management offices.

The MMS's Minerals Revenue Management is responsible for management of all revenues associated with both federal offshore and onshore mineral leases. The effort is one of the federal government’s greatest sources of non-tax revenues.

Why would the federal government care if Blanco blocks new leases? I mean, according to their website, in 2002 alone the Outer Continental Shelf “supplied more than 25 percent of the country’s natural gas production and more than 30 percent of total domestic oil production” and the MMS estimates there’s a lot more undiscovered oil and gas. They can just go lease land somewhere else off the coast, right?

Wrong:

Current presidential withdrawals or congressional moratoria have placed more than 85 percent of the Outer Continental Shelf around the lower 48 states off limits to energy development.

Other states don’t want offshore drilling because the environmental threat is too great. That’s why state governors get to sign off on any new leases of federal land.

If Blanco refuses to allow new leases, the Dept. of Interior can override her decision. The next step is the legal fight. And if this battle goes to the courts, it will catch the media’s attention. Then it becomes a free-for-all after that. And, because oil and gas are involved, this administration’s energy policies will be thrown in the spotlight and any discussion involving oil brings in the discussion of higher gas prices and the war in Iraq.

My point: Blanco’s threat to block future offshore drilling leases can cause problems for Washington, D.C. – for both the President and Congress. Whether we are asking for our 50% share or adequate funding to rebuild our state, strengthen our levees, and restore our coast, we might get what we want.

Then we ask for retroactive royalties.