Offshore Lease Threat Leads to Uncertainty

February 17, 2006

Gov. Kathleen Blanco's threat to block oil and gas leases off the Louisiana coast until the state gets a larger share of the revenue to restore its coast has gotten the attention of Washington, although it's uncertain whether the stand will pay off. According to the Times-Picayune, the Minerals Management Service, which oversees the drilling program, acknowledges that it must seek comments from governors of states in which it plans to bid offshore leasing arrangements. But it's uncertain whether it must honor their objections. The agency would examine any comments from Blanco or other governors but is still likely to proceed with awarding drilling rights off the Louisiana coast. The next round of leases is scheduled for August. A challenge from Blanco could end up in the courts. From there, no one is certain what will happen. Blanco and members of Louisiana's congressional delegation have said they consider a 50-50 split of the revenue a fair allocation that could provide the state with the money it needs to restore the coast and wetlands critical to providing a natural barrier against hurricanes. A combination of natural and man-made forces, including oil exploration, contributed to the loss of wetlands and coastal barriers that can reduce the strength of a hurricane. According to government estimates, Louisiana received $32 million of the $5.7 billion the government earned last year from oil and gas production off Louisiana's shore. (Source: Times-Picayune)

Offshore Lease Threat Leads to Uncertainty

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