(The Center Square) – Louisiana Gov. John Bel Edwards urged the federal government Thursday to resume issuing new oil-and-gas leases in the Gulf of Mexico by the third quarter of this year and to increase offshore revenue sharing with Gulf Coast states.
Edwards said offshore energy development in federal waters is compatible with President Joe Biden’s administration’s efforts to reduce carbon emissions and fight climate change. He said a lengthy leasing moratorium or significant reduction in offshore energy development would be “devastating” for Louisiana’s economy and deprive the state of money to fund coastal restoration and protection.
“Climate change is a serious threat to Louisiana,” Edwards told the U.S. Senate Committee on Energy and Natural Resources. “In order for Louisiana to experience an orderly and responsible energy transition (away from fossil fuel dependence), even for the nation and our economy to be able to transition responsibly, federal oil-and-gas production must continue in the Gulf and well into the future.”
Louisiana also needs a bigger share of the revenue from offshore production to mitigate the impact of that production and of climate change in general, Edwards said. The Democratic governor noted offshore revenue helps pay for the state’s efforts to protect and restore its coastline and commended Republican U.S. Sen. Bill Cassidy of Louisiana for co-sponsoring legislation that would increase Gulf states’ revenue share of offshore energy revenue, including wind energy.
“Offshore energy production and environmental resiliency is not a partisan issue in Louisiana,” Cassidy said. “Gov. Edwards and I have worked together to best position our state for the energy transition occurring, while recognizing that oil and gas will continue to be an important part of the U.S. energy mix for years to come.”
Money derived from oil-and-gas development on federal lands is split 50/50 with host states, so while Wyoming got $457.5 million and New Mexico got $707 million, the four Gulf states had to share $249 million, Edwards said.
Gulf of Mexico oil-and-gas production produces substantially fewer greenhouse gas emissions than oil-and-gas production in any other region of the world, according to Edwards’ testimony. Cutting back on Gulf production won’t decrease international demand for oil, but it will lead to increased production in parts of the world where environmental regulation is less stringent, he said.
Edwards also discussed his administration’s Climate Initiative Task Force, which plans to issue recommendations next year to start Louisiana on the path to being carbon-neutral by 2050. He touted a renewable diesel refinery being considered in the state that will be “carbon negative when it’s done.”
“We’re committed to these goals,” he said. “But at the same time, we are a major oil and gas producing state.”
The Biden administration issued an executive order in January declaring a “pause” on new oil and gas leases on public land and offshore “pending completion of a comprehensive review and reconsideration of Federal oil and gas permitting and leasing practices.” The secretary of the interior was directed to consider whether royalty rates associated with coal and oil and gas should be adjusted to account for the impact of those fuel sources on climate change.
The feds continue to issue permits for existing leases and plan to issue an interim report on their findings early this summer.
Thirteen states, including Louisiana, have sued the Biden administration over the leasing pause, alleging the moratorium violates federal law.
“The Biden plan fails under the law, and it fails to account for the environmental benefits of producing domestic energy under one of the most stringent and detailed regulatory frameworks in the world,” Louisiana Attorney General Jeff Landry said.