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Revenue-Sharing Fight Presents Conservation Fund Backers With Challenge, Opportunity

Douglas Graham/CQ Roll Call File Photo
Murkowski, left, and Landrieu have developed a proposal to send more of the royalties from offshore oil, gas and renewable-energy production to coastal states.

There is more than enough money made from offshore leases, bonus bids and royalties to meet the fund’s authorization level — with billions of dollars to spare for other priorities. The Interior Department collected about $6.8 billion in fiscal 2012 from the offshore oil industry, a number that is expected to grow as more tracts are leased in the Gulf.

But Congress has been increasingly stingy toward the fund, with appropriations declining 39 percent over the past decade after a few funding spikes toward the end of the Clinton administration.

Supporters hope that retiring Sen. Max Baucus, D-Mont., a vocal proponent of the fund, can use his influence to advance changes to how the program is funded. Baucus has sponsored legislation (S 338) to permanently authorize the fund and make its funding mandatory. The Finance chairman came close to securing two years of guaranteed funding for the program in the 2012 surface transportation authorization (PL 112-141) by linking the language to a provision creating a trust fund for Gulf Coast states affected by the 2010 BP oil spill.

The budgeting trick he devised to offset both pieces of the amendment won overwhelming support, with the amendment garnering 76 votes. But Senate Democrats were forced to give up on funding for the Land and Water Conservation Fund in conference to persuade Republicans to abandon their demands to mandate approval of the Keystone XL oil pipeline and roll back EPA regulations.

Landrieu has acknowledged the conservation fund’s significance but is concerned about efforts to shift the program to mandatory spending. She contends oil and gas production off the shores of Gulf states pays to preserve resources thousands of miles away — while coastal states face their own conservation issues.

“We’re saving the redwoods ... and the sequoias, but we’re not saving the marsh where the revenues are coming from,” Landrieu said at a hearing last month.

But a Senate aide said any expansion of revenue sharing for coastal states will have to be paired with a boost in funding for the rest of the country.

“There’s no way increased revenue sharing will be able to gain traction in the Senate without including benefits for interior states through a program like [the Land and Water Conservation Fund],” the aide said.

While conservation lobbyists seek out legislative vehicles for a broader overhaul, the more immediate spending fight will play out in debates over the House and Senate fiscal 2014 Interior-Environment appropriations bills. The House panel is expected to release its draft this month, which will be written with a $24.3 billion top-line figure.

House appropriators sought to fund the program at $66 million in fiscal 2013, an 80 percent cut from the previous year and the lowest funding level since the program’s creation in 1965. Still, the fund enjoys some support even among Republican appropriators, making the proposed funding level more a bargaining chip with the Senate than a policy statement against the program. Advocates hope the underlying support can ultimately lead to the overhaul they are seeking.

“Much like an endowment, if we responsibly put enough resources in the fund upfront, it becomes self-sustaining,” a Baucus aide said. “The underlying policy logic is sound.”

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