State leaders seek offshore drilling revenue

A seismic survey ship explores for geological formations that could hold oil and natural gas offshore mid-Atlantic states.

As coastal communities weigh whether to support exploring and drilling for fossil fuels offshore, South Carolina’s governor and members of its congressional delegation are pushing for a piece of the revenue from federal leasing fees for the work. Part of that money could go to those communities.

Gov. Nikki Haley is among a group of seven governors who have agreed to work out a regional formula to split federal leasing fees if waters off the Southeast are opened. North Carolina Gov. Pat McCrory announced the agreement after a recent governor’s meeting, according to Bloomberg BNA.

The revenue would come from leasing that takes place outside of state waters, so the states wouldn’t be entitled to a share. But Congress passed a bill in 2006 sharing money with four Gulf of Mexico states along oil and gas producing waters. Shares of those funds also are designated to go to coastal governments in those states, to be used for coastal conservation, restoration and hurricane protection.

The governors’ agreement would supplant various Congressional bills looking for revenue shares that have been filed by legislators from individual states. The bills haven’t gained traction. They include a bill filed by Rep. Jeff Duncan, R-Laurens, and an amendment offered by Sen. Tim Scott, R-Charleston, to the Keystone Pipeline bill.

The Scott amendment never was voted on, and the bill just vetoed by President Obama.

“Governor Haley has always been a strong supporter of offshore exploration of oil and gas — it’s good for jobs — in a way that preserves our local environment, our ports, and our tourism industry,” said Haley spokeswoman Chaney Adams.

“Current federal revenue sharing rules do not reflect the state’s partnership role in these ventures and the governor supports our federal delegation’s efforts, specifically those by U.S. Senator Scott and Congressman Duncan, to keep more of these resources at the state level,” she said.

Adams did not immediate respond when asked if Haley would designate shares for coastal communities.

Scott will “continue to advocate for revenue sharing that allows states within the South Atlantic planning area to receive 37.5% of all revenues from energy production, similar to the Gulf of Mexico Energy Security Act,” said spokesman Sean Conner. Scott supports Haley’s efforts, Conner added.

Whether to open the waters at least 50 miles off the coast to exploring and drilling is becoming more contentious in the Lowcountry, as federal regulators begin to hold public hearings on a plan to lease for a five-year period starting in 2017. The leases would end a 30-year ban on the work here.

The issue cuts to the heart of coastal life, where people and interests are divided between exploring for potential economic benefit, or restricting it to protect marine life and a billion-dollar tourism economy.

Coastal communities are beginning to voice their opposition to exploration and drilling. Isle of Palms earlier this week passed one such resolution, joining Edisto Beach, Beaufort and Port Royal among more than 30 communities or organizations from North Carolina to Florida.

The money might appeal to Lowcountry coastal communities struggling to find funding for beach restoration. But Isle of Palms Mayor Dick Cronin said he didn’t think the possibility of revenue sharing would affect the communities opposing exploration or drilling.

“It’s hard for me to believe we’d have enough revenue (from it) to overwhelm our concerns for coastal preservation or tourism,” he said.

The 2006 bill for the Gulf states stipulated as much as $375 million per year could be shared, but recent revenues have been far less, according to The Washington Post.

Jackie Savitz, Oceana vice president, said even if the Southeast governors reach an agreement, that’s no guarantee of success in getting Congress to pass a bill. Recent attempts to cull the revenue shares haven’t been successful.

Hamilton Davis, of the Charleston-based Coastal Conservation League, called the governors’ move short-sighted.

“The irony is that these southern governors have been willing to push offshore drilling forward without any federal system for revenue sharing in place. Not only that, none of the data collected during proposed seismic testing will be made available to the states or the public. Therefore, no cost-benefit analysis can even be conducted,” he said.

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