[Congressional Record (Bound Edition), Volume 161 (2015), Part 5]
[House]
[Pages 7117-7120]
[From the U.S. Government Publishing Office, www.gpo.gov]




 THE PRESIDENT'S 2016 BUDGET REQUEST AND ENERGY POLICY FOR THE UNITED 
                                 STATES

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 6, 2015, the gentleman from Louisiana (Mr. Graves) is 
recognized for 60 minutes as the designee of the majority leader.
  Mr. GRAVES of Louisiana. Madam Speaker, I thank the House for the 
opportunity to talk this evening about the 2016 President's budget 
request and energy policy in this Nation.
  Madam Speaker, there are a number of energy programs in this Nation 
whereby public lands resources are leased and energy is produced on 
public lands and in the offshore waters of this Nation.
  As you can see here, this is a table that explains some of the 
different programs that are out there today.
  Onshore, on Federal lands, when you produce Federal resources--or 
energy resources--like oil, gas, coal, and other resources, you can see 
that 50 percent of the funds from that energy production on Federal 
lands goes to the Federal Government and that 50 percent goes to the 
States under the Mineral Leasing Act. There are no constraints 
whatsoever in regard to how those

[[Page 7118]]

States can spend those funds. So 50 percent of the money from energy 
production on Federal lands goes directly to the States.
  Right here, of the 50 percent that goes to the Federal Government, 40 
percent of that 50 percent--or 80 percent of the Federal funds--
actually goes into what is called the reclamation fund to be used on 
water projects in the 17 Western States. In effect, 90 percent of the 
funds that are produced from energy production on Federal lands goes 
back and is invested, in many cases, in those same States where 
production occurs. There is one anomaly, and that is the State of 
Alaska, where 90 percent of the money goes back to the State with no 
strings attached whatsoever.
  You can see here on geothermal energy that 25 percent goes to the 
Federal Government, and 50 percent goes to the State. Even the counties 
share in 25 percent of the revenue. For offshore alternative energy, 
such as wind and wave energy and things along those lines, 27 percent 
of the revenues are shared with the adjacent States.
  I am going to come back to this one on oil and gas offshore, but I 
will just make note that there is an extraordinary disparity in regard 
to how these different resources are treated.
  I made reference to the Mineral Leasing Act. Again, except for in the 
case of Alaska, when you produce energy on Federal lands, 50 percent of 
the money goes directly to those States. Of the offshore dollars, up to 
$900 million each year goes into what is called the Land and Water 
Conservation Fund, which all 50 States benefit from, for national 
parks, for urban parks, for playgrounds, and for wildlife refuges that 
the States manage.
  You have $150 million that goes into the Historic Preservation Fund 
to ensure the preservation of historic buildings. You have 27 percent 
in the 3-mile zone offshore of the 6 States that produce energy, and 
they get 27 percent under section 8(g) of the Outer Continental Shelf 
Lands Act. Under the Gulf of Mexico Energy Security Act, you also have 
12.5 percent of the revenues given to the Land and Water Conservation 
Fund, and then remaining funds go to the General Treasury.
  Let me just recap this disparity here.
  If you are producing energy on Federal lands onshore, 50 percent of 
the money goes directly to the State with no strings attached; 40 
percent of the money goes into the reclamation fund; and only 10 
percent goes into the U.S. Treasury. If you are producing energy in the 
offshore, effectively, all of that money goes to the Federal 
Government.
  I will show you another poster here that demonstrates some of the 
dollars that have been given to States that produce offshore energy.
  You can see here, in the case of Alaska--and this accounting 
mechanism came off of the Department of the Interior's Web site and 
from the Office of Natural Resources Revenue, and this pertains to 
different types of sales year data, so it will vary to some degree each 
year--that between 2009 and 2014, 97 percent of the funds that were 
generated from energy production on Federal revenues was returned to 
the State of Alaska. They received $158 million out of $163.6 million 
in revenue generated on Federal lands.
  In the case of California, 52 percent of the money went to the State 
of California. It was over half a billion dollars during that time 
period. To give you an idea on some of these amazing figures, you can 
go to the State of Colorado, where they produced nearly $2 billion in 
energy production on Federal lands, and they received over $900 million 
with no strings attached.
  Madam Speaker, there are two extraordinary ones. The State of New 
Mexico generated $5.5 billion in revenue between 2009 and 2014 from the 
production of energy on Federal lands. That State received $2.75 
billion back, or approximately 50 percent. In the case of Wyoming, they 
produced $11.7 billion in revenue between 2009 and 2014 from energy 
production on Federal lands, and they received $5.8 billion--over $1 
billion a year--with no strings attached whatsoever.
  I want to be clear that I think that is great. I think that is how 
Federal policy should work. I think the revenues should be returned and 
shared with the States that host such energy production, but here is 
the incredible, absolutely indefensible comparison of what happens with 
offshore energy revenues.
  This shows you that, in 2009, less than 1 percent of revenues were 
returned to the States that produced offshore energy. Those are the 
States of Texas, Louisiana, Mississippi, Alabama, California, and 
Alaska. Those States in 2009 generated over $5 billion in revenue for 
the U.S. Treasury. Those 6 States--and in some cases shared with 
counties and parishes--received only $30 million of that, or 0.56 
percent. In 2010, they received 0.06 percent. In 2012, they produced 
$6.5 billion in revenue for the Federal Government from energy 
production offshore of the coasts of those States, and those 6 States 
in 2012, on $6.5 billion in revenue, shared only $837,000. 
Unbelievable--less than $100,000 per State.
  If you take overall the comparison between 2009 and 2014, 
approximately $41 billion in revenue was produced from offshore energy 
production, and less than $50 million of that, or 0.12 percent, was 
shared. In the case of onshore energy, States, in some cases, are 
getting 90 percent of the revenues. In the case of offshore energy, the 
6 States that produce all of this offshore energy are receiving 0.12 
percent, not the 90 percent and not the 50 percent. They are receiving 
0.12 percent.
  Madam Speaker, you have to ask: What roles do these six States play 
in our overall energy production?
  It is pretty amazing. With just 2 percent of the offshore Outer 
Continental Shelf actually leased, the oil production offshore accounts 
for 18 percent of all of the oil production in the United States. With 
just 2 percent of the Outer Continental Shelf offshore leased for 
energy production, that production is approximately 5 percent of the 
Nation's natural gas production. For example, in 2014, it generated 
incredible numbers--$7.3 billion. This is one of the largest recurring 
nontaxed revenue streams that goes into the U.S. Treasury each year.
  To add insult to injury, I guess it would be five of the six States 
that produce offshore energy only have 3 miles of State waters, which 
means they only get 100 percent of revenues from State water energy 
production, which would be between zero and 3 miles offshore of their 
coasts.
  In the cases of Florida, which doesn't produce energy, and the State 
of Texas, they actually have three times that--or 9 miles--of State 
waters. So you have disparity, and that onshore production gets 50 to 
90 percent of the revenues. In the case of offshore production, the 
States only get 0.12 percent of the revenues to date, and you have the 
fact that the States of Louisiana, Mississippi, Alabama, California, 
and Alaska only have 3 miles of State waters. In the cases of Texas and 
Florida, they have 3 marine leagues, or, roughly, 9 miles, of State 
waters. The disparity is unbelievable.
  This House has taken many efforts dating back decades ago, with some 
of the more recent ones in the mid-nineties, to try to rectify--to try 
to address--this disparity. Dating back to the mid-nineties, the 
Conservation and Reinvestment Act, known as CARA, brought together such 
diverse interests as those of Congressman Don Young of Alaska and 
Congressman George Miller of California, who are two Members who, I am 
quite certain, agreed upon nothing except for this. It was really 
amazing to see this House pass legislation bringing together everyone 
from the oil and gas community to the environmental community in order 
to ensure that these resources were reinvested back into coastal States 
that produced energy and back into ensuring that we conserve and 
protect our outdoors and opportunities for future generations. 
Unfortunately, that legislation, despite passing the House with a 
strong margin, didn't pass in the Senate.
  Rolling forward to the early 2000s, in 2001, as I recall and I 
believe again in 2003, additional efforts included in the Energy Policy 
Act, during a conference report, passed the House of Representatives, 
once again, with a strong margin to share offshore energy revenues with

[[Page 7119]]

the States of Louisiana, Mississippi, Alabama, California, Alaska, and 
those States that produced offshore energy. Unfortunately, those 
efforts died in the United States Senate.
  Then you roll forward to 2006. In 2006, the Gulf of Mexico Energy 
Security Act--in December of that year--was enacted. What that did is 
that largely replicated an offer that President Truman made to the 
States decades ago whereby President Truman offered those States that 
produced offshore energy 37\1/2\ percent of all of the revenues 
generated from energy production in Federal waters. Those States, 
apparently, turned down that offer from President Truman and asked for 
a higher share. Despite that being offered decades and decades ago, it 
was not until 2006 when Congress finally acted and enacted again what 
is known as the Gulf of Mexico Energy Security Act, which would share 
37\1/2\ percent of revenues from new energy production. I want to be 
clear on that distinction--new energy production--which is energy 
production that occurs prospectively after December of 2006.

                              {time}  2015

  It is not 37\1/2\ percent of all energy production. It is not 37\1/2\ 
percent of these numbers you see here, of the overall energy 
production, the billions of dollars. It is merely a fraction of that. 
So it is not anything close to parity with what happens for onshore 
revenues, but it is a start; and it is establishing parity in onshore 
and offshore policy, and it is a movement in the right direction.
  Mr. Speaker, in the State of Louisiana, we actually passed a 
constitutional amendment with an amazing margin that dedicated every 
penny of those revenues from the Gulf of Mexico Energy Security Act, 
GOMESA, here, dedicated every penny of it to hurricane protection and 
coastal restoration, to making our coastal communities and our coastal 
ecosystem more resilient, ensuring that we don't see a repeat of what 
we all witnessed from Hurricane Katrina, where in our home State of 
Louisiana we had over 1,200 of our brothers and sisters, of our 
neighbors, of our friends, of our coworkers lose their lives--over 
1,200.
  Hurricanes Katrina and Rita in 2005 caused or resulted in gasoline 
price spikes nationwide to the tune of 75 cents a gallon--nationwide 
average. And again in 2008 we saw price spikes $1.40 a gallon on 
average in the 50 States--$1.40--constituting the largest price spike 
in gasoline since the Arab oil embargo.
  Mr. Speaker, you may be wondering the reason I am here tonight. The 
reason I am here tonight is to talk about the President's budget 
request. This year, when the President submitted his budget request, he 
submitted a request where he proposes to withdraw the Gulf of Mexico 
Energy Security Act, to withdraw the pittance--or in 2014, the $8.6 
million--that was split among the four Gulf States that produce 
offshore energy, trying to prevent that from ever happening again.
  In the President's budget request he says: This proposal generates 
$5.6 billion in savings over 10 years through legislative reform 
proposals, including oil and gas management reforms to encourage 
diligent development of Federal energy resources while improving the 
return to taxpayers from relative reforms.
  Well, let's talk about that for a minute. He says that it is going to 
generate savings. He says that its management reforms on oil and gas 
production are going to encourage diligent development. Mr. Speaker, by 
withdrawing revenue sharing and potentially discouraging offshore 
energy production, that is not encouraging diligent development. It 
results in us having to import more energy from other nations.
  I remind you, nations like Venezuela, nations like Nigeria and many 
countries in Africa and the Middle East that don't share America's 
values, we are sending hundreds of billions of dollars to those 
countries. In 2011, over one-half of this Nation's trade deficit was 
attributable to importing energy from other nations. That effectively 
is sending jobs. It is sending hundreds of billions of dollars to those 
other countries that in many cases are taking those same dollars and 
using them against the United States' interests around the globe. It 
doesn't encourage diligent development of Federal energy resources, as 
the President's budget request suggests.
  They also say that it improves the return to taxpayers. I am 
struggling with how this improves the return to taxpayers whenever 
study after study is crystal clear that proactive investment in things 
like coastal restoration, hurricane protection, hazard mitigation 
investments, according to the CBO it returns $3 for every $1 invested; 
according to a FEMA study, it returns $4 in cost savings for every $1 
invested; and many, many others have estimated that the cost savings 
are multiple times that.
  Now, what is incredible to me, when we had the Secretary of the 
Interior, who I asked for a meeting, I believe it was, on February 4, 
and here we are on May 18 and we still have not been able to get that 
meeting, including offering to meet with the Deputy Secretary or anyone 
else who can speak intelligently on this issue. I will take the 
receptionist, if you are watching. We have asked for that meeting.
  In their budget request, it specifically says this cut has been 
identified as a lower priority program activity for purpose of the GPRA 
Modernization Act. Now, that is the Government Performance Results Act. 
So I said: Well, wow, they did an evaluation. So let's go ahead and ask 
the Secretary, Madam Secretary, could you explain to me how you did an 
evaluation and what the outcome of that was?
  Well, her first response was: What is GPRA?
  Well, this is in her budget request, and she asked me what GPRA was, 
despite the fact that it said they did an analysis and it determined 
that it was a low-priority program. After I explained it, they were 
unable to answer the question.
  I asked if they would provide us their calculation here to show how 
it is a lower priority program and how it may compare with other 
onshore programs. Of course, here we are months later, and you will be 
shocked to learn that we still have not received that information that 
simply doesn't exist.
  Politics, Mr. Speaker, at its best. Unbelievable.
  You can't justify it from a policy perspective; you can't justify it 
from a financial perspective; you can't justify it from a resiliency 
perspective; you can't justify it from an environmental perspective. 
Absolutely incredible.
  In fact, Mr. Speaker, I would like to read a quote here from the 
Environmental Defense Fund, from the National Wildlife Federation, and 
from the National Audubon Society, where they note, let's see: ``This 
proposed budget undercuts the administration's previous commitments to 
restore critical economic infrastructure and ecosystems in the 
Mississippi River Delta, where we are losing 16 square miles of 
critical wetlands every year--a preventable coastal erosion crisis.''
  ``We urge Congress to fund the President's commitments to coastal 
restoration and conservation by maintaining GOMESA funding that is 
vital to the Gulf Coast and by identifying additional funding for . . . 
other priorities.''
  That is a quote from the environmental community. This is the 
administration, I guess, attempting to win accolades from the 
environmental community, who turned around and criticized him for that.
  Now, the irony goes even further in that in 2013, Secretary Jewell 
actually sends out a press release saying how great these dollars that 
are being shared are. It talks about how these revenues were 
distributed to State, local, and Federal tribes to support critical 
reclamation, conservation, and other projects. So here they are taking 
credit for it, saying how great it is, and then they come back and make 
an about-face that they can't explain, justify, can't even meet on, and 
haven't even been able to provide any documentation as to how they came 
to their decision.
  In December of 2014, once again a press release from the Department 
of the Interior giving all sorts of accolades to themselves for sharing 
these

[[Page 7120]]

revenues and all the great investments that they will result in, yet in 
the fiscal year 2016 budget request we have seen them attempt to 
withdraw those dollars.
  Now, what is interesting in the press release, the administration 
said that this should be done because these resources, these public 
resources, these energy resources offshore, should be shared by all 
Americans. Well, okay, let's talk about that.
  As we noted here, for onshore production, 50 percent of the money 
goes to the Federal Government, but of that, 80 percent of this 
actually is returned back to the States; 50 percent goes directly to 
the States with no strings attached. So the Federal Government only 
gets 10 percent. The Federal Government only gets 10 percent, yet they 
didn't cut this program.
  So I am struggling with how they have determined that these resources 
should be shared with all Americans, yet they are only doing it for 
this one program and leaving this other program entirely intact. Once 
again, the disparity cannot be defended.
  Let's go ahead and take their idea that resources should be shared 
with all Americans, and let's apply it to other Federal resources. What 
about a national park? What about a national wildlife refuge? What 
about some BLM land somewhere?
  These facilities that charge entrance fees, they take all those 
dollars, and they give it right back to that park. The State of 
Louisiana doesn't get any of it. It goes back to the park. We don't get 
any disparate benefit from that. The State that hosts the national park 
and hosts the national wildlife refuge, it benefits from that in the 
form of tourism and economic activity and a place for their citizens to 
recreate. Explain to me that disparity. Once again, it simply can't be 
done.
  Mr. Speaker, I want to make note of the problem in coastal Louisiana 
and why it is so critical that these dollars be invested, that the Gulf 
of Mexico Energy Security Act be continued. In coastal Louisiana, prior 
to the Federal Government building levees on the Mississippi River, the 
Atchafalaya River, and our coastal region of the State, the State of 
Louisiana was growing to the tune of three-quarters of a square mile 
per year, on average. Our State was accreting; it was growing in land.
  When the Corps of Engineers came in and built levees on our river 
system, we immediately went from growing, or accreting, to losing land. 
In some decades, we have lost an average of 16 square miles per year. 
In other decades, we have lost closer to 26 or 28 square miles per 
year. In 2005, we lost nearly 200 square miles of our coast per year. 
To add it all up, the total figure, we have lost 1,900 square miles of 
our State since the 1930s. To put it in comparison, if the State of 
Rhode Island lost 1,900 square miles, the State of Rhode Island 
wouldn't exist anymore. If the State of Delaware lost 1,900 square 
miles, it would consist only of its inland waters. Nineteen hundred 
square miles is an extraordinary amount of land. Then to watch this 
administration come out and say: You know what? We are going to propose 
this new waters of the U.S. definition, because waters of the United 
States are so important and wetlands are so important to us, we have 
got to protect them. Yet the Federal Government is causing the greatest 
wetlands loss in the United States--prospective, ongoing, and 
historic--the Federal Government, the same agency, the Corps of 
Engineers, that actually is supposed to be enforcing wetlands laws.
  So the State of Louisiana said, yes, we are going to take these 
dollars whenever they finally begin flowing in some degree in 2017 and 
2018, we are going to take those dollars and we are going to invest 
them. We are going to protect them by constitutional amendment. We are 
going to complement them with billions of dollars and other State-
controlled spending, and we are going to invest them in making the 
coast of Louisiana more resilient, making our communities more 
resilient, making the economy of this Nation more resilient.
  I remind you, in 2005, because of hurricane impacts to the State of 
Louisiana, prices spiked 75 cents a gallon nationwide, on average. In 
2008, when hurricanes hit the Gulf Coast and Louisiana, prices spiked 
$1.40 a gallon, on average, nationwide. This is a national issue.
  Mr. Speaker, following the 2005 hurricanes, the Federal Government 
expended over $100 billion--by some estimates, perhaps close to $130 
billion or $140 billion--responding to these disasters. If we had taken 
somewhere in the range of $8 billion to $9 billion, we could have 
prevented the 1,200 lives that were lost that I referenced earlier. We 
could have prevented the expenditure of well over $100 billion in 
taxpayer funds, the majority of that going toward deficit spending.
  It doesn't save money to cut the Gulf of Mexico Energy Security Act. 
To the contrary, Mr. Speaker, it is going to cost our Nation more 
dollars; and history has proven that, studies by Congressional Budget 
Office, studies by FEMA, and many others have proven that this is 
penny-wise and pound-foolish. It will result in additional deaths. It 
will result in additional flooding. It will result in additional 
economic disruption in this Nation, and it is the wrong approach.
  In closing, Mr. Speaker, I am going to say it one more time. Onshore 
energy revenues are shared 90 percent between the Mineral Leasing Act 
and the Bureau of Reclamation funds, 90 percent; offshore energy 
revenues, we get well less than 1 percent, well less than 1 percent per 
year today. And as we try and slowly begin addressing the disparity but 
nowhere close to what happens for onshore production, when we try to do 
the right thing and make sure that these funds are constitutionally 
protected to be invested in making the communities more resilient, 
making the ecosystem more resilient, and addressing the wrongs of the 
Federal Government, addressing natural resource flaws of the Federal 
Government, we now have this administration who is supposed to be the 
environmental administration coming out and taking these dollars away, 
which is once again why the Environmental Defense Fund, National 
Wildlife Federation, Audubon Society, and many, many others came out 
against this.
  So, Mr. Speaker, I just want to urge, as we continue to move through 
the appropriations bills and continue to work on energy policy, that we 
truly seek to do what the President says in regard to an all-of-the-
above policy, which includes conventional fuels, to ensure that the 
States that are producing these energies receive some type of 
mitigative funds or revenue sharing, to ensure that the State of 
Alaska, that the East Coast and other States that are bringing offshore 
production online are treated fairly, and to ensure that these dollars 
are reinvested back in the resilience of these communities and in the 
ecosystem.
  With that, Mr. Speaker, I yield back the balance of my time.

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