Republicans in the US House of Representatives want to penalize states who block oil and natural gas drilling off their coasts by forcing them to pay the federal government potentially billions of dollars to compensate for unused leases.
The proposal would allow states to keep drilling off their shores, but would levy a "lost production fee" on states who block drilling in more than half of the blocks off their coasts, Representative Paul Gosar, an Arizona Republican, said during a House Natural Resources Committee hearing Thursday. The proposal was included in a draft proposed bill, the Enhancing State Management of Federal Lands and Waters Act, discussed at Thursday's hearing. It would expand offshore revenue sharing to all states with offshore drilling and allow states to block up to half of lease blocks without penalty. But if a state blocked more than 50% of those blocks, it would be required to pay roughly one-tenth of the estimated revenue from offshore production, including from lease sales and royalties.
Gosar said several details of the bill, including how state offshore boundaries would be defined and how penalties would be calculated, have yet to be worked out.
But the legislation, even in its draft stage, already faces severe opposition from Democrats and coastal governors.
Representative Alan Lowenthal, a California Democrat, said the proposal amounted to a "shakedown" from the federal government and a way to "extort enormous sums" from states opposed to offshore drilling.
Lowenthal estimated that California, if it blocked offshore drilling, would need to pay $1 trillion in penalties over a 10-year period.
"It penalizes states for wanting a clean environment," Lowenthal said at Thursday's hearing.
In a letter sent to House leaders Wednesday, the governors of New Jersey, North Carolina, Connecticut, Rhode Island and Virginia wrote that the proposed bill "would impose a hefty cost on states that choose to exercise jurisdiction over their shorelines."
"Such an approach aims solely to penalize states that oppose offshore oil and gas drilling, while risking the nation's thriving and ever-expanding tourism industry," the governors wrote. "Rather than foster collaboration with states, this legislation needlessly pits the federal government against the states and their citizens."
In a separate letter sent to Representative Gosar Wednesday, New York Governor Andrew Cuomo, a Democrat, called the draft bill "a federal extortion system that requires states to pay the federal government for the privilege of protecting their own coastal resources from offshore drilling."
The bill was unveiled as the Trump administration plans to greatly expand oil and gas drilling into more federal waters.
Interior January 4 unveiled a draft proposed program for oil and gas lease sales from 2019-2024 that included sales for acreage off every coastal state except Hawaii. The proposal is fully opposed by every governor along the West Coast and nearly every East Coast state except Maine.
On January 9, following a meeting with Florida Governor Rick Scott, a Republican, Zinke announced that Florida would be exempt from the plan, later arguing that Florida's unique geology and its reliance on tourism justified its removal from the plan.
Interior has not offered any details of the exemption for Florida and the Bureau of Ocean Energy Management, the agency within Interior that developed the draft proposed lease sale plan, says that sales off Florida waters remain in the plan, at least until the next stage of the approval process later this year. --Brian Scheid
