The Advocate (Baton Rouge) - 10/28/00

COASTAL FUNDING REDUCED

By JOAN McKINNEY Advocate Washington Bureau

WASHINGTON --- Congress has approved new federal funding for oil and gas coastal states, but Louisiana will only receive a tenth of what state officials once hoped to get.

Furthermore, the new legislation will guarantee only one year of "coastal impact assistance," not the permanent funding stream proposed by the Louisiana congressional delegation.

In Louisiana congressional offices, the universal reaction was disappointment, tempered by expressions that "It's better than nothing."

The fiscal 2001 appropriations bill for the U.S. Commerce Department would allocate about $28 million for "coastal impact" projects in Louisiana, according to Louisianians who participated in drafting the legislation.

This is "new money," and it could be used for "infrastructure and public service projects" that are not funded by existing federal programs, according to an aide to U.S. Sen. Mary Landrieu, D-La.

However, these "coastal impact" appropriations replace the unsuccessful Conservation and Reinvestment Act, an oil- and gas-royalty sharing proposal that could have guaranteed about $300 million annually to Louisiana.

CARA passed the U.S. House with the estimated $300 million-a-year for Louisiana and with a policy recognition that oil and gas coastal states were due some special consideration for absorbing the impacts of federal offshore oil and gas production.

In the Senate, another version of CARA was approved by the Senate Energy Committee but was never considered by the full Senate. It was blocked by a coalition of "property-rights" and budget leaders.

The property rights bloc opposed other aspects of CARA that would have provided new federal and state funding for land purchases to protect the environment. The budget leaders objected to reserving so much federal money for the coastal states and the environment, contending that would shortchange other worthy programs.

For almost a month, the Louisiana congressional delegation has been trying to salvage parts of CARA and to attach the "coastal impact assistance" program to the Commerce appropriations bill. Negotiations ended early Thursday morning, and by Friday afternoon the House and the Senate had approved the bill.

Louisiana congressional offices reported that oil and gas coastal states had failed in their main policy goal and did not win the guarantee of permanent federal offshore royalty sharing. Instead, there will be a one-year appropriation of $150 million for "coastal impacts" to be shared among seven coastal oil-producing states, and Louisiana's share is roughly $28 million.

The allocation formula provides a slightly greater share to states, such as Louisiana, that are adjacent to the heaviest-producing federal offshore oil and gas tracts.

However, negotiators rejected Louisiana's request that the allocation be based solely on offshore production figures, a formula that would have boosted Louisiana's share to about $135 million.

In addition to the $150 million shared among the oil and gas coastal states, all coastal states also could compete for another $170 million appropriated to the existing coastal grant programs administered by the Department of Commerce.

The Commerce appropriations bill will be vetoed because President Clinton and Republican leaders in Congress differ on other provisions not related to the coastal-funding issues. After the veto, negotiations will resume on some sections of the bill.

However, Louisiana congressional offices agreed that even if the big Commerce bill is revised, the coastal-funding agreements will not change.

Louisiana's share "will not be bumped up," said an aide to U.S. Rep. Chris John, D-Crowley.

The Commerce appropriations bill "is a mere pittance of what we passed out of the House (under CARA)," said U.S. Rep. Billy Tauzin, R-Chackbay. "... It's a small token of recognition for the contribution Louisiana makes (to the nation's oil and gas supply) and for the massive amount of coastal restoration we need to do.

"I voted for it. I'm glad to get every nickel we can get for coastal restoration. But obviously, we've got to start all over again next year."

Be informed! Don't allow yourself to be snowed by CARA.