Wednesday, February 01, 2006

La. Governor Demands U.S. Pay Royalties

Gov. Kathleen Blanco is demanding that the federal government give Louisiana more of the billions in royalties from oil and natural gas extracted off its coastlines, saying she'll block future leases without an increase in the state's share.

Blanco's warning, in a letter this week to the federal agency that manages offshore drilling, comes as the state is struggling to finance up to $40 billion in hurricane recovery and protection projects, and complaining that the federal government isn't helping enough.

The state wants half the royalties from oil and gas produced beyond its three-mile boundary - a sum that could amount to more than $2 billion a year.

from The Times Picayune

Under a federal law that governs offshore drilling, governors in adjacent states are required to agree that federal lease sales are consistent with their states' coastal management plans. Louisiana governors have traditionally signed off on such lease sales, and Blanco's letter will not stop a March 15 lease sale of 4,000 blocks in the Gulf of Mexico for oil and gas exploration.

But if Blanco makes good on her threat, she could hold up an expected August lease sale.

'Tipping point'

Blanco's effort is the most substantial in the latest push for a share of federal royalties from oil and gas production off Louisiana's coast. The issue has been brought forward every year by the state's congressional delegation, but has never won support in Congress.

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