NOIA President Urges Congress To Increase OCS Access

September 2013, Vol. 240 No. 9

Testifying before the Senate Energy and Natural Resources Committee hearing on offshore energy revenue sharing, National Ocean Industries Association (NOIA) President Randall Luthi urged Congress to move forward in enhancing America’s energy security, energy reliability and American jobs by increasing access to the Outer Continental Shelf (OCS) for exploration and development.

“Only by providing additional oil and natural gas lease sales in more of the OCS can this theoretical revenue sharing become reality. The two policies are inextricably linked – revenue sharing and access,” Luthi testified.

The hearing focused specifically on the Fixing America’s Inequities with Revenues Act (FAIR Act). Among other things, the FAIR Act would provide 37.55% of revenues to all offshore energy producing states, move the date on which revenue is shared with energy producing Gulf coast states from 2017 to 2014, and phase out the current cap on revenue sharing for these states. The bill establishes a formula for the sharing of offshore revenues between state and federal governments. However, NOIA believes the bill’s revenue-sharing formula alone is only part of the equation to providing more revenue and additional energy security for America.

“Right now there are no revenues coming from offshore oil and natural gas development in 85% of the OCS. The federal government is receiving 100% of nothing. Under the formula in this bill, and assuming lease sales in new areas, the federal government would receive 62.5% of something,” said Luthi.

Federal policies effectively ban exploration in more than 85% of the Outer Continental Shelf (OCS). If the entire OCS were opened, it is estimated the offshore industry would sustain 1.2 million new jobs over the next 30 years and generate an additional $1.3 trillion in new revenues.