Four Gulf Coast States Share in $353M Windfall From Oil and Gas

WASHINGTON — Four coastal states in the southeast — Alabama, Louisiana, Mississippi and Texas — will share in a windfall of over $353 million in additional energy revenues due to increased production and market trends in the 2022 fiscal year.

The disbursal of money by the U.S. Department of the Interior is the result of the Gulf of Mexico Energy Security Act.

That legislation, passed in 2006, created a revenue-sharing model of oil- and gas-producing Gulf states to receive a portion of the revenue generated from offshore oil and gas leasing in the Gulf of Mexico. 

The law requires 37.5% of the funds be paid to the federal government by owners of wells drilled in federal waters in the Gulf. Each state’s share is determined by which wells are within 75 miles of their respective coastlines.

The federal Land and Water Conservation Fund, which finances projects at federal and state parks and wildlife preserves nationwide, receives 12.5% of the revenue, while the other 50% goes to the U.S. Treasury.

In all, Louisiana is receiving $156 million in GOMESA revenue this year, while Texas will get $95.5 million, Mississippi, $51.9 million and Alabama, $49.7 million.

By law the states must then use a set portion of the funds to support coastal conservation and restoration projects, hurricane protection programs, onshore infrastructure projects, and activities to implement marine and coastal resilience management plans.

For instance, in Louisiana, the state constitution mandates that 80% of money go to the Louisiana Coastal Protection Trust Fund, overseen by the Coastal Protection and Restoration Authority.

The remaining 20% is divided among Louisiana’s 19 coastal parishes, also based on distance to the offshore wells.

Similar rules are in place in Texas, where four South Texas counties in the district of Rep. Vicente Gonzalez, D-Texas, will share in $3.5 million of the state’s allotment.

“Thanks to historic production, South Texas communities can utilize funds to further support conservation efforts, invest in hurricane preparedness, and implement marine and coastal resilience management plans,” Gonzalez said.

More information on the revenue allocations can be found here.  

The latest payment, announced last Thursday, is the largest the department has given out since it began disbursing GOMESA revenues to states and their coastal political subdivisions in 2009.

But a bill passed in the House, also on Thursday, could greatly increase future payouts.

Sponsored by House Majority Leader Steve Scalise, R-La., the Lower Energy Costs Act would increase the Gulf oil and gas revenue sharing for states to 50% and remove a current cap on the total payout.

The bill would provide a 50% share of revenue from offshore wind energy to coastal states and their coastal parishes and counties.

Since the act’s passage, $1.65 billion has been disbursed to further conservation efforts of critical coastal wildlife habitats.

Dan can be reached at [email protected] and @DanMcCue