The federal government in the past 12 years has disbursed more than $754 million in oil royalties to coastal states with offshore drilling.
Checks cut to qualifying states – seven in all – have ranged from as little as $803 to as much as $45.8 million in one year between 2003 and 2014, according to the U.S. Office of Natural Resources Revenue. Though eligible states received a cut of federal offshore oil royalties prior to 2003, that is the year the agency began keeping track electronically, according to an agency spokesman.
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The pathway for coastal states receiving federal offshore royalties has been blazed by state leaders and their congressional delegates who’ve argued the states should get a return on the infrastructure investments made to support offshore activities.
Under the Outer Continental Shelf Lands Act, first passed in 1953, eligible coastal states receive 27 percent of the revenue generated from offshore leases within the first three-mile stretch of ocean seaward of state coastal waters. These are classified as 8(g) waters.
Four states in the Gulf of Mexico – Texas, Louisiana, Alabama and Mississippi – got a larger percentage following the 2006 passing of the Gulf of Mexico Energy Security Act. The law grants a 37.5 percent cut to those states in lease areas beyond the three-mile zone.
Gulf states received first received money generated from federal royalties under that act in 2009.
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Those states with the highest federal offshore oil and gas subsidy revenues between 2003 and 2014 include: Louisiana, more than $339.7 million; Alabama, nearly $132 million; Texas, more than $100.1 million; Alaska, nearly $88 million; and California, more than $80.6 million.
The remaining states trail well behind in shares. Mississippi received about $14.3 million and Florida only $14,731.38.
The longstanding battle to give states a bigger share of royalty money is heating up once again as the Obama administration pushes to disburse federal royalties more evenly throughout the country.
Administration officials have so far dismissed proposals that would secure federal disbursements to Atlantic coast states.
