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January 2014 Issue

Moving Toward Fair Revenue Sharing For Coastal States

By Sen. Mary Landrieu (D-La.)
For more than 300 years, Louisiana's ports and waterways have made the region the main gateway to United States trade and commerce. President Thomas Jefferson pushed to bring this great river system into the union because of the strategic and economic importance of controlling the maritime infrastructure, and it has played a major role in the growth and development of the U.S.

Louisiana is home to two deep draft waterways—the Mississippi River and the Calcasieu Ship Channel—and 32 ports, including the largest tonnage port in the nation, the Port of South of Louisiana that handled more than 278 million tons of cargo last year. The state's rivers and tributaries drain 40 percent of the continent, provide energy to power the country and put seafood on family tables and restaurants around the world. The region also serves as a natural barrier for inland areas against the threats of hurricanes and rising tides.

These are significant contributions to the nation that deserve attention and investment, but many of these contributions—and the communities of people who work hard to provide them—are in danger from erosion along Louisiana's shoreline, some due to natural causes but mostly man-made.

The Louisiana coast is eroding at a rate of 25 to 35 quare miles a year, or about a football field each hour. If this rate of land loss continues, it is estimated that more than 155 miles of waterways, as well as several ports, will be exposed to open water within 50 years.

There is a solution, which is to provide a fair revenue sharing partnership with the federal government, similar to that of inland states, that allows Louisiana and other coastal states to keep a percentage of the billions of dollars in energy revenues they help to generate each year. These highly targeted funds would go toward Louisiana's long-term, science-based Coastal Master Plan to restore and protect fragile wetlands, safeguard communities and secure vital contributions to the nation.

The federal government has been engaging in this kind of smart partnership with interior states since 1920, sharing with them 50 percent of revenues from energy produced on federal lands within their borders to spend on education, infrastructure or other local priorities. Furthermore, President Harry Truman supported the idea more than 60 years ago.

But the federal government has refused such a partnership with coastal states, reinforcing an inequity that has cost Louisiana, Texas, Mississippi and other states billions in royalties, rentals and bonus bids.

These are funds that should have been helping to restore and protect the coast for decades. But instead, these states have received virtually nothing, and the coast continues to erode away.

This is a glaring injustice that needs to end. That is why I joined Sen. Lisa Murkowski (R-Alaska) to introduce the Fixing America's Inequities with Revenues, or FAIR Act, which will allow coastal states to keep up to 37.5 percent of revenues for all offshore energy producing states, regardless of the type of energy they produce.

It would also lift the current congressionally mandated $500 million a year cap on revenues collected by Gulf Coast producing states and accelerate those payments to 2014. We cannot afford to wait any longer.

We are making progress in our efforts to push for the passage of this vital piece of legislation. The chair of the Senate Energy and Natural Resources Committee, Sen. Ron Wyden (D-Ore.), is supportive of our efforts and recently held a hearing on our bill. We heard from local and industry leaders, including the president of the National Ocean Industries Association, about the importance of this legislation for the future of our communities and the economy of our country. I will do everything in my power to see this legislation passed.

Throughout Louisiana's history, the state has been a strategic asset for the nation. Its coast and waterways are major centers of trade and shipping, producing energy, seafood and agricultural products that are used by the entire nation. And just like we protect the nation from the ravages of storms, the nation should join with Louisiana in the fight to protect its coast. That is what the FAIR Act would do. It is right for Louisiana, and it is right for the country.

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