WASHINGTON – U.S. Sen. Jeff Sessions (R-AL) announced today that he and other Gulf Coast senators have reached agreement on a proposal that would allow Alabama and three other states to share part of the federal revenues generated by new oil and gas production in the Gulf of Mexico.
“There’s nothing we can do this year that would have more impact in helping us to contain the price of gasoline and natural gas than passing this bill,” said Sessions, who helped negotiate the agreement with fellow Gulf state senators and the Senate leadership. “When we buy our energy from abroad, we transfer our wealth to those foreign countries, many of which are not our allies and are not friendly to the United States. This agreement will keep that wealth at home, creating American jobs and revenues for the American treasury.”
The bipartisan agreement, announced at a U.S. Capitol news conference along with Senate Majority Leader Bill Frist (R-TN), would open energy production in about 8 million acres of the Gulf of Mexico that lie to the south and east of the Alabama coast. The drilling would occur in Gulf waters at least 125 miles off the Alabama shoreline.
Alabama and three other energy-producing states – Louisiana, Texas and Mississippi – would share 37.5 percent of the federal revenues generated by the lease sale and production royalties of oil and natural gas.
Although numbers are not yet available, Sessions said the plan would result in tens of millions of dollars in revenue for Alabama. Distribution among the four states would be based on proximity to production, with historical production levels taken into account.
The agreement is expected to produce more than 1.3 billion barrels of oil and at least six trillion cubic feet of natural gas.
In addition to the share allocated to the four energy-producing states, the agreement allows 50 percent of the total revenues to remain in the U.S. treasury, with the remaining 12.5 percent dedicated to the Land and Water Conservation Fund.
“We’ve worked with Gov. Riley and the Alabama Oil and Gas Board to ensure that Alabama gets its fair share,” Sessions said. “We think it’s only fair that Alabama and those Gulf states already producing oil and gas are rewarded for their willingness to bear a disproportionate share of our country’s energy needs.”
