- The Washington Times - Sunday, December 3, 2006

In the remaining days of its lame-duck session, the House should adopt Sen. Pete Domenici and Sen. Mary Landrieu’s narrowly drawn bill to expand Gulf Coast oil and gas production. If adopted, it would give the Gulf states a greater share of oil revenues to rebuild and restore the vanishing coastline. The Domenici-Landrieu bill is a good first step toward a process in which other states could apply for permission to develop new offshore oil and gas reserves in exchange for a share of the revenues.

Hurricanes Katrina and Rita decimated the Gulf Coast, and after federally built flood-control systems failed, flood waters ravaged the city of New Orleans and the surrounding region. But the levees were not the only system that failed. Mismanagement and neglect over the last half century have contributed to the serious erosion of the coastal wetlands, the first line of defense against such devastating hurricanes. The wetlands and barrier islands act as a natural sponge to soak up storm surges but are disappearing at the rate of 25 square miles a year. Hurricanes Rita and Katrina are estimated to have lapped up an additional 217 square miles with 1,900 square miles already lost. The effects of this ecological disaster cost us thousands of lives and hundreds of billions of dollars, too high a price to ever be paid again.

Meanwhile, it has become abundantly clear that America’s dependence on foreign oil is dangerous. We must seek out new energy sources in the near and long term. Our offshore petroleum reserves hold great promise for the near term as we pursue longer-term solutions in alternative renewable technologies.

Congress must act to provide the infrastructure necessary to prevent a Katrina-scale disaster from ever reoccurring along the Gulf Coast while providing for our growing energy needs.

The Domenici-Landrieu Bill — “The Gulf of Mexico Energy Security Act” (S. 3711) — has the endorsement of both the Democratic and Republican Senate Leadership but is being held up in the House. House Republicans are pushing for a much stronger bill that would open the Atlantic and Pacific coasts to drilling but has no chance of passing the Senate.

The Senate bill expands current offshore drilling by 8.3 million acres in the Gulf of Mexico and shares the revenues from that new production with the four states (Texas, Louisiana, Mississippi and Alabama) that the drilling would affect. The federal government would still get 50 percent of the royalties accrued from the new production while 37.5 percent of money will go directly to the four coastal states for restoration of the disappearing wetlands, and infrastructure projects aimed at flood control and hurricane protection. The remaining 12.5 percent would go toward the joint state and federal Land and Water Conservation Fund projects to benefit all 50 states.

The Domenici-Landrieu bill also gives the coastal states a fairer deal on offshore drilling. Under current law, revenues from land-based drilling — even on federal land — are split evenly between the states and federal government to compensate the states for the use of state infrastructure that contributes to oil production. These revenue-sharing provisions currently exclude offshore drilling and allocate zero revenue to the states. Revenue sharing under the Domenici-Landrieu bill would not cut into current federal revenues as the revenue-sharing provisions apply only to new production.

The fairness embodied in this bill should be expanded beyond just the Gulf Coast states. Congress should open up the revenue sharing option to all states without removing the blanket federal moratorium on new offshore development. With the prospect of new revenue streams as a powerful incentive, states could then apply to Congress for permission to drill offshore. This reasonable compromise would still give Congress the final say over any offshore expansion while opening the door to future offshore production.

Instead of holding out for an impossible bill, the House Republicans would be wise to see the Senate bill as an important first step toward energy self-sufficiency through expanded offshore oil and gas production, disaster prevention and ecological restoration. Completing this in the next few weeks is an important step in the right direction.

Former House Speaker Newt Gingrich is a Senior Fellow at the American Enterprise Institute.

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