Congressman Bradley Byrne has thrown support behind a bill that would bring more offshore oil royalties to coastal Alabama and expand the types of projects those funds can pay for.
The Domestic Offshore Energy Reinvestment Act of 2018 was previously introduced by Rep. Garret Graves (R-Louisiana) and approved by the House Natural Resources Committee during a markup session on several pending bills last week.
In short, Graves’ bill would amend the Gulf of Mexico Energy Security Act (GOMESA) to increase the percentage of federal oil and gas revenues made available to the Gulf states and the political subdivisions along their respective shorelines.
After a moratorium on new oil exploration was lifted in 2006, GOMESA was passed to prevent overharvesting and create the revenue-sharing program that has generated millions of dollars for coastal communities every year and is expected to keep growing.
Alabama collected $21 million through GOMESA in 2018 alone, while Baldwin County saw $2.4 million and Mobile County received $2.8 million. The original legislation dictates the lion’s share of the local funding — around 80 percent — goes directly to the state government.
Though nothing has come of it, President Donald Trump entertained the idea of ending GOMESA last year, but Byrne and other coastal lawmakers defended the program because of its benefits to coastal communities most imperiled by nearshore oil production.
Money from the program helps to mitigate the risk to Gulf states due to the possibility of oil spills.
“Money from the GOMESA program is critical to coastal Alabama and allows for important infrastructure, coastal restoration, flood mitigation and other projects,” Byrne said in a written statement. “I am committed to working with my Gulf Coast colleagues to get this bill across the finish line and support our coastal communities.”
The increase in local GOMESA funding at the heart of Graves’ bill is based on a simple change in percentages. Currently, 50 percent of GOMESA revenues go to the federal government and 37.5 percent is shared among Gulf states. Graves’ proposal would simply swap those numbers while continuing to set aside the remaining 12.5 percent for a Land and Water Conservation Fund.
Byrne said the change would bring Gulf states in line with revenues landlocked states receive for their energy production. The bill would also remove the $500 million revenue-sharing cap the original GOMESA legislation self-imposed through the year 2055.
As Lagniappe previously reported, Mobile and Baldwin counties have seen increased revenues in recent years. Eddie Kerr, who works with the Mobile County Environmental Department, said revenues have more than doubled since the second phase of GOMESA began in 2017.
Those annual revenues are expected to stay at around $3 million through at least 2020, but Kerr told Lagniappe this week that could be closer to $4 million if Graves’ bill were to become law and $6 million if revenues were to actually hit the $500 million cap set back in 2006.
“It’s not outside reasonable thought to think we could reach the cap one day, it’s just the current market isn’t there yet,” he added. “If the cap were lifted, we could go up to almost $8 million.”
Asked specifically about the proposals in the bill, Kerr said: “anything that increases the amount of funding for Mobile County is interesting,” adding that the county “needs to understand this process and the motivation behind this bill to see how we can take advantage of it.”
While the county gets to decide how its GOMESA dollars are spent, the original legislation limits their authorized uses to environmentally focused efforts including land conservation, hurricane preparedness projects and coastal protection, among others.
However, one provision in Graves’ bill could broaden the scope of those limitations by allowing GOMESA funds to be used for “planning, engineering, design, construction, operations and maintenance of one or more projects that are specifically authorized by any other Act for ecosystem restoration, hurricane protection or flood damage prevention.”
One existing act specifically authorizing “ecosystem restoration” projects is the RESTORE Act. While it was passed to help the Gulf recover from BP’s 2010 Deepwater Horizon oil spill, the RESTORE Act includes funding streams that allow for economic development, infrastructure and tourism projects.
As written, Graves’ amendment seems to allow GOMESA funds to go toward projects submitted through the RESTORE Act, including those that might be outside its original authorized uses. Yet, Byrne’s Communications Director Seth Morrow says that, even with the proposed changes, provisions in the original GOMESA legislation would still limit what types of projects could be funded with those dollars.
“No less than 25 percent of these funds have to be used on hurricane protection or flood prevention projects,” Morrow wrote in an email to Lagniappe. “If we have a RESTORE project that does this, then yes. If that RESTORE project also happens to increase economic development, then that’s great too.”
Byrne himself has previously floated the idea of using GOMESA funds for larger infrastructure projects, though. In a 2015 speech before the Mobile Chamber of Commerce, he suggested state oil revenues could help pay for the $2 billion Interstate 10 Mobile River bridge project.
While it’s unclear what the state of Alabama might do with its GOMESA dollars, the Mobile County Commission asked its staff to put together a structured plan. Kerr said that’s nearly completed and could be presented to commissioners for approval as early as next week.
“The plan details what projects we’ll be going after using the next three years of funding,” he said. “We’ve used these plans with previous programs, so we seen the benefit of having a plan to keep the process moving forward and to define what the process actually is.”
Tina Sanchez, who also works in the county’s environmental department, declined to discuss the specific priorities of the plan because it isn’t yet finalized. However, she did say some could be similar to initiatives the county funded through the Coastal Impact Assistance Program (CIAP).
Through CIAP, which also utilizes funding generated from oil royalties, the county was able to purchase and preserve more than 600 acres of wetlands and floodplains throughout the area and construct the Mobile County Recycling Center off Hitt Road in West Mobile.
“The county had a robust program, and we’re building on that experience from CIAP,” Sanchez said. “We’re also looking at the types of projects that are included in the RESTORE Act plan to see how we might can complement those.”
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