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Morgan City Daily Review - Landrieu: Fix Broken Corps, State Needs more Offshore Revenue

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Location: Morgan City, LA

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Louisiana needs more revenue from offshore oil and activity and the U.S. Corps of Engineers is broken and needs fixing, said Sen. Mary Landrieu during a fundraiser at the Petroleum Club of Morgan City on Thursday.

Landrieu, D-New Orleans, said the state is set to collect additional offshore oil and gas money through the Gulf of Mexico Energy Security Act of 2006 beginning in 2017.

"On average, between $4 billion and $6 billion per year leaves this community, and Grand Isle, and all of our communities in severance and royalty taxes that the operators pay on barrel of oil and cubic foot of gas that they take out. It's a huge amount of money, and the sad thing is that Louisiana and our communities don't see a penny of that money. It all goes into the federal treasury," she said.

"It's one of the most egregious and unjust situations that I've ever confronted, particularly when you look at the tremendous infrastructure needs that we have here for flood control and protection and navigation, for ports, for coastal restoration. I had one of the lawyers come up to me and say, "senator, I'm here to support you because I want my grandson to be able to fish like I did,'" she said.

Sen. Pete Domenici, R-N.M., was a cosponsor of the legislation that was signed into law by President George W. Bush.

"Everybody said it never could be done. John Breaux couldn't do it, Bennett Johnson couldn't do it, they said, "Mary, you'll never do it.' Well, I did it," she said.

"Sen. Domenici himself told me he would never support the bill, and I just kept working on him, working on him, and brought him down here myself, and when he saw it, he cried, literally, when I took him over the marsh. He and his wife wept, and that's what really motivated him to really get on board and say, "you're right.'"

The legislation established a revenue-sharing arrangement whereby coastal states receive 37.5 percent of the excise taxes paid to the federal government upon extraction of oil and gas.

"The money isn't going to start coming in until 2017, and then they put an arbitrary and very harmful cap of $500 million," Landrieu said.

"To save our coast, we have to have somewhere between $500 million and $1 billion per year to save this coast. The federal government is not going to give us this money out of the general fund."

Landrieu then spoke of why she thought the lack of revenue-sharing for coastal states was unfair.

"Since 1927, interior states like Wyoming, Utah, New Mexico, not coastal states, get 50 percent of the revenues from oil and gas production in their states. You may be shocked to know that the federal government owns 80 percent of Utah," she said.

"So, when the federal government opens up drilling on public lands, they cut a deal with Utah and take 50 percent of the severance. Before I passed this bill, they had done nothing for coastal states," Landrieu said.

"So, even though it's not technically state waters outside our three-mile line, neither is the land in Wyoming state land. It's federal land. So, it's federal land offshore, federal land onshore. One thing is treated one way, one thing is treated another way."

Landrieu said that seeing the legislation achieve its full potential is the reason why she is seeking re-election.

"I passed the initial bill, but I have to get back there and stay long enough to get that cap lifted and accelerate this payment, because that is the only significant source of money of which I know. We have to have real money every year to fix this coast," she said.

Landrieu then spoke of problems with the U.S. Army Corps of Engineers.

"The second big issue I want to talk about and why I am running again is because I've come to the determination that the corps of engineers is probably the most broken federal agency that has ever existed. Do y'all agree with me? They're good people. They're very fine people. Of course, it's the Army of the United States. So, I don't want to be critical of any branch, but there are too many engineer types, not enough leadership, and the entire organization is top heavy. They take too long with their projects, they over-engineer most things, and, worst of all, and it's not their fault, they are grossly underfunded," she said.

"Let me tell you how badly they are underfunded. The corps of engineers is responsible for dredging every waterway in the United States. So, think about the West Coast to the East Coast, think about the Ohio River to the Missouri River, the Hudson, the Missouri River, everybody," she said.

Landrieu said that the entire budget of the corps is $1.6 billion less than two decades ago.

"The transportation budget has gone up, and health care has gone way up, everything has gone up, but corps of engineers' budget has gone down relative to the GDP. While it's an inconvenience to some states when that happens, it's life and death and destruction to us because we are the water state. We are at the bottom of the greatest river system in America. The corps of engineers is so grossly underfunded. Every president underfunded it, Bill Clinton, Ronald Reagan, every president since Jimmy Carter," she said.

"Sen. Vitter and I work very closely on this. This is not something we disagree on. I will need Sen. Vitter as I work to reform the corps."

The fundraising luncheon Thursday at which Landrieu spoke was hosted by local businessmen Lee Dragna and Jamie Cashman.

Landrieu concluded her talk by reminding attendees about the importance of working toward coastal restoration.

"I've brought at least 20 senators here to tour. You can do a presentation in Washington, but nothing, nothing, takes the place of lifting off in a helicopter from on top of the Superdome or right here in Morgan City to get up and see the wetlands and how it's eroding before our eyes and how frightening it is to see the water so close," she said.

"It's a big fight, but I'm excited to do it. I feel like with the Restore Act passing and with GOMESA passing we can actually get this done, and it's a job that we have to get done, or none of our grandchildren will be able to live here."


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