[Congressional Record Volume 148, Number 15 (Friday, February 15, 2002)]
[Senate]
[Page S896]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




   CALIFORNIA COASTAL PROTECTION AND LOUISIANA ENERGY ENHANCEMENT ACT

 Ms. LANDRIEU. Mr. President, I have joined my colleague, 
Senator Boxer, in introducing the California Coastal Protection and 
Louisiana Energy Enhancement Act. This legislation will add to the 
production of oil and gas off the Louisiana gulf coast while solving a 
difficult problem associated with production off the coast of 
California.
  The Federal Government, through the Department of the Interior's 
Minerals Management Service, MMS, manages oil and gas exploration in 
all Federal waters from 3 miles beyond the coastline. For years, leases 
have been issued to companies, giving them the right to explore and 
produce on these lands. Companies bid on proffered leases at the MMS, 
then pay rental payments to the Federal Government to maintain their 
leases. Once oil or gas is flowing from Federal lands, companies pay a 
royalty on the production to the Federal treasury.
  Between 1968 and 1984, the MMS awarded 40 leases off the coast of 
California to a number of different companies so that they could 
explore for oil and gas and bring these energy resources to market. The 
proven oil reserves under these leases are vast. Over the past 34 
years, owners of the leases have been working through the processes of 
Federal and State government to bring production from these lands 
online, as was the original purpose of the lease sales. During this 
time, the owners have been paying annual rental payments to the Federal 
Government. To date, none of them are producing.
  The people of California have become increasingly opposed to new oil 
and gas production off their coast. This opposition has created a 
dilemma for the Federal Government and the leaseholders because while 
the opposition of the people of California has made it more difficult 
to proceed with oil production, the ability to produce oil from these 
lands is exactly what the companies have been paying the Federal 
Government for all these years.
  Senator Boxer and I have been working to solve this longstanding 
problem. The legislation we are introducing today will essentially move 
the investment these companies have made with the Federal Government 
from the California waters to the Federal waters in the central and 
western areas of the Gulf of Mexico. This investment will finally be 
put to the use for which it was originally intended, to provide a 
domestic source of energy for the United States. This will mean a more 
vibrant oil and gas industry in my state and more jobs for 
Louisianians. It will maintain the integrity of the MMS leasing process 
and the Federal contracts that have been in place these many years. 
Finally, it will assist the people of California in reaching their goal 
of no new oil production off their coastline.
  The California Coastal Protection and Louisiana Energy Enhancement 
Act gives the California leaseholders the option to move their 
investments to the central and western Gulf of Mexico. If the 
leaseholders choose, they may receive credits for the money that has 
been paid to the Federal Government for the California leases, and any 
other money invested in developing the leases. These credits may be 
redeemable at the MMS for lease bonus and royalty payments for 
production in the Gulf of Mexico. participating companies would then 
surrender the California leases and agree not to bring any future legal 
actions against the government for their inability to go forward with 
production over the past 34 years. Finally, our bill takes the lands 
that were in the leases and creates an ecological preserve to protect 
traditional fishing areas and provide conservational scientific and 
recreational benefits.
  About 65 percent of our Nation's energy needs are supplied by oil and 
natural gas. The waters of the Gulf of Mexico have proven to be a 
significant source of oil and natural gas and are predicted to remain 
so for the foreseeable future. While states such as Louisiana continue 
to welcome the development of Federal crude oil and natural gas 
resources in the Gulf of Mexico, this development is accompanied by 
adverse impacts on the infrastructure and public service needs of 
States, counties and local communities that ``host'' the development of 
these Federal sources. With the rest of the country consistently 
turning to the waters of the central and western Gulf of Mexico for oil 
and gas production, it is long past time to share a meaningful portion 
of the revenues generated annually from Federal offshore crude oil and 
natural gas resources with the coastal states that serve as the 
platform for this development: Louisiana, Texas, Mississippi and 
Alabama.
  I believe this bill is a creative solution to a difficult problem 
that has been left unattended for too many years. I commend my 
colleague, Senator Boxer, for taking a leading role with me in crafting 
this legislation. I hope my colleagues will join us in supporting this 
bill.

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