Administration Says OCS Revenue Sharing Costs Too Much

Murkowski’s Fair Act would grant at least 27% of outer continental shelf royalties to coastal states. If states establish conservation funds, the allocation would jump 10%.

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So it’s no wonder many coastal leaders, like North Slope Borough Mayor Charlotte Brower, support the plan. She saidthe revenues would go to major infrastructure improvements.

“I’m already being asked by the Korean government to come off my port. What port? I don’t have a port in the North Slope,” she told the Senate Energy Committee. “I don’t have a port in Barrow, Alaska.”

The bill would share profits with states for renewable offshore energy too, not just oil and gas. Its supporters say it levels the playing field between interior states that share energy revenues and coastal states that don’t get OCS royalties.

The administration says it would cost the federal coffers $6 billion.

Deputy Assistant Secretary for Budget, Finance, Performance and Acquisition at the Department of Interior Pamela Haze told the committee that increases the deficit too much.

“Because these lands and resources belong to the public, our goal is to ensure environmentally responsible development and fair returns to the American people, tribes and individual Indians for the use of the resources,” she said.

“Fair returns to the American people” – the federal government does not see OCS revenue sharing as just that.

Murkowski and the bill’s cosponsor, Louisiana Democratic Senator Mary Landrieu say the money spent up front is worth the potential windfall. They contend the money would go to fund local governments as well as the Land and Water Conservation Fund.

Murkowski called concerns over the bill’s costs “short-sighted.”

“If we’re talking about an offset, we’re going to work to find that offset,” she said.

An offset is Washington-speak for cuts elsewhere in the budget. If this costs the federal government $6 billion, there needs to be a cut of $6 billion elsewhere.

Without that offset, it will be hard to move. At this point, it’s unclear whether it can pass the committee, let alone the full Senate.