[StBernard] Governor urges Congressional Delegation to recover lost revenue on faulty contracts

[Westley Annis]

Governor urges Congressional Delegation to recover lost revenue on faulty contracts 




September 14, 2006

The Honorable Mary L. Landrieu The Honorable David Vitter
United States Senator United States Senator

The Honorable Richard Baker The Honorable Jim McCrery
United States Representative United States Representative

The Honorable William Jefferson The Honorable Rodney Alexander 
United States Representative United States Representative

The Honorable Bobby Jindal The Honorable Charlie Melancon
United States Representative United States Representative

The Honorable Charles Boustany
United States Representative

Dear Members of the Louisiana Congressional Delegation:

As you are aware, Chevron announced last week the remarkable discovery in the Gulf that could bring as much as 15 billion barrels of oil online in the coming years. On much of this, Chevron and its partners will pay no royalties to the Federal treasury. This was due to a mistake made by the U.S. Dept of Interior in administering the Deep Water Royalty Relief Act, a program meant to give incentives for exploration in the Gulf. Instead, billions in revenues have been lost because of faulty contracts.

This is a travesty against the American people and against coastal states like Louisiana, who make the production from these leases available to the rest of our nation. In much the same way the Department of Interior failed to adequately assess the environmental impacts to the state of Louisiana in preparing for the recent Western Gulf Lease Sale, this Federal agency has now failed in its responsibility to ensure leases on this huge Gulf find be properly done. 

I urge you to explore every available option to recover these lost revenues and implement meaningful revenue sharing from these leases with Louisiana and the other coastal producing states. After all, we make possible the production from these leases.

Through your leadership, Louisiana is approaching an historic milestone in its energy partnership with the Federal government. The ongoing debate in Congress over the sharing of offshore oil and gas revenues with coastal producing states could bring reality to our efforts to restore and protect coastal Louisiana. I urge you to continue your hard work and send a meaningful revenue sharing bill to the President before the Congress adjourns this year. 

I understand the sensitivity involved as negotiations proceed between the House and Senate on a final revenue sharing bill. Any number of issues could potentially jeopardize the likelihood of final passage. 

Given the delicate nature of your negotiations on an OCS revenue sharing bill, this may not be the appropriate vehicle to address this error and allow Louisiana to share in the revenues from these leases. However, this issue must be addressed by the Congress in some form.

I understand negotiations are ongoing with companies to renegotiate these leases and would hope that a substantial portion of these new receipts be dedicated to the restoration and protection of Louisiana's coast.

Thank you for your continued and tireless dedication to saving coastal Louisiana. I know many challenges remain, but I am confident that we shall prevail and I am proud to stand with you in this fight. 

Sincerely, 

Kathleen Babineaux Blanco
Governor


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The Louisiana Disaster Recovery Foundation
Louisiana's Fund for Louisiana's People
www.louisianahelp.org