[Congressional Record Volume 144, Number 130 (Friday, September 25, 1998)]
[Extensions of Remarks]
[Page E1805]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

[[Page E1805]]



                          THE WEST DELTA FIELD

                                 ______
                                 

                         HON. RICHARD H. BAKER

                              of louisiana

                    in the house of representatives

                       Friday, September 25, 1998

  Mr. BAKER. Mr. Speaker, I am pleased today to join my colleagues Mr. 
Tauzin and Mr. John in introducing legislation that will correct a 
wrong suffered by the State of Louisiana over a decade ago.
  I believe that all of my colleagues know that most of the Federal 
Outer Continental Shelf oil and gas development occurs off the coast of 
Louisiana and, indeed, off the coast of my Congressional district. 
Large portions of the Gulf of Mexico are among the very few areas of 
the OCS where offshore drilling is not prohibited by the 
Administration's recently announced leasing moratorium.
  To put the contribution of the State of Louisiana in perspective, in 
fiscal year 1997 $3.2 billion of the slightly over $4 billion of OCS 
revenue received by the Federal government was generated off the coast 
of Louisiana. Louisiana has been making this type of contribution to 
the Federal government's effort to develop its oil and gas resources 
every year beginning in the early 1950's.
  Throughout the entire history of Federal oil and gas development off 
the coast of Louisiana, the state and the Department of the Interior 
have cooperated on the development of oil and gas resources that might 
underlie both the state and Federal offshore waters. Obviously, the 
interest of our state and our delegation is that the revenues generated 
by the development of oil and gas resources owned by the people of 
Louisiana be returned to the treasury of the state of Louisiana. Where 
oil and gas resources occur in underground formations that underlie 
both state and Federal waters, the state and the Federal government 
have developed these areas through cooperative agreements that ensure 
that neither sovereign develops the resources of the other.
  Unfortunately, this spirit of cooperation broke down in the mid-
1980's in the development of a natural gas field along the seaward 
boundary of Louisiana called the West Delta Field. For the first and 
only time in the history of Federal OCS development off the coast of 
Louisiana, the Department of the Interior refused to cooperate with 
Louisiana in protecting Louisiana's resources from being developed by 
Federal lessees. As a result, Federal lessees drained over $18 million 
of Louisiana's natural gas, the revenues from which went to the Federal 
treasury rather than the State of Louisiana's treasury. In 1989, an 
Independent Fact Finder appointed by the Secretary of the Interior at 
the direction of Congress confirmed these facts. Section 6004 of the 
Oil Pollution Act of 1990 authorized an appropriation to repay the 
State of Louisiana and its lessees for the $18 million of gas developed 
improperly by the Federal lessees, plus interest. Today, the total 
authorized payment to the State and its lessees, with interest, is 
approximately $32 million.
  The State of Louisiana and its lessees have never received this 
money. Therefore, this legislation authorizes an alternative means of 
compensating the State and its lessees. Under this legislation, the 
state lessee in the West Delta Field would be authorized to withhold 
its Federal royalty payments on other OCS production in the Gulf of 
Mexico, using these funds to pay the State of Louisiana and itself 
until the authorization in Section 6004 of the Oil Pollution Act of 
1990 (U.S.C. 2701 note) is satisfied. At that point, the lessee would 
resume its royalty payments to the Department of the Interior.
  Mr. Speaker, the time has come to close this unhappy chapter in the 
relationship between the State and Federal government on Federal OCS 
oil and gas development. Louisiana has been a good host to the Federal 
government with respect to OCS development. Louisiana expects the 
Federal government to honor the authorization enacted in 1990. I 
respectfully encourage all of my colleagues to support this long-
overdue legislation and ensure its swift enactment this year before 
Congress departs in the coming month.

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