Louisiana Fights for Money to Protect Coast

Louisiana officials are suing to stop the Department of Interior's plan to auction offshore oil production leases. The state wants a cut of the income generated from the production facilities, fees and royalties to help cover its environmental coastal protection programs.

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The Senate has passed a bill to open up eight million new acres of oil and gas exploration in the Gulf Coast. Louisiana lawmakers have been leading the charge on that legislation, because the state wants a bigger chunk of oil and gas production fees and royalties to help cover its environmental coastal protection programs.

And Louisiana is leaving nothing to chance. The state has filed a lawsuit, seeking a preliminary injunction against the Department of Interior's plan to auction off shore oil production leases. NPR's Audie Cornish reports.

AUDIE CORNISH reporting:

Louisiana and the other Gulf states currently share just 2 percent of the $5 billion the federal government rakes in from oil and gas production royalties. The Senate bill that passed yesterday offers up to 37 percent. And the House legislation, passed earlier this summer, proposes sharing up to 75 percent.

But a compromise seems a long way away, so Governor Kathleen Blanco says the lawsuit she's filing against the federal government is giving the state a real voice in the debate.

Governor KATHLEEN BLANCO (Democrat, Louisiana): The lawsuit itself does not produce money for us. The lawsuit is a tool for our members of Congress to speak toward the importance of what we're dealing with here in Louisiana.

CORNISH: Blanco is suing the federal agency that oversees the sale of offshore production leases - the Minerals Management Service, or MMS. The state argues that the agency's environmental impact review didn't take into account the affects of last summer's hurricanes.

Normally, the state loses 20 square miles of coastal wetlands a year. But by the end of 2005, Louisiana had lost an estimated 200 square miles of coastal protection.

The MMS declined to do an interview of the ongoing lawsuit, and issued a statement saying the agency is confident in its analysis. But Larry Wall of the Louisiana Mid-Continent Oil and Gas Association says his group is disappointed with the governor's decision to sue.

Mr. LARRY WALL (Louisiana Mid-Continent Oil and Gas Association): The lawsuit was the governor's card to play in her efforts to get more revenue for the federal government. It's about the money. And that's why we don't support the lawsuit, because it's using environmental tactics to try and get more money.

CORNISH: But at a press conference at the New Orleans Aquarium yesterday, the governor said the lawsuit isn't going away. Blanco stood in front a tank of turtles and sharks doing laps around a fake, barnacled oil rig while announcing another part of the state's strategy - a public awareness campaign.

(Soundbite of TV commercial)

Unidentified Man: (In commercial clip) …comes from our energy coast - eroding coastlines, crippling storms. It's fragile.

CORNISH: If the state stands its ground, that could prove that the suit was not just about money, leverage, or even stopping this month's offshore lease sales, according to Tulane Environmental Law Professor Oliver Houck.

Professor OLIVER HOUCK (Environmental Law, Tulane): Well, the anomaly is I don't think the state wants to say no. The state wants to say yes, but the state wants to say yes to a better deal. Then what does a better deal consist of? It consists of monies, but it also consists of mitigating measures in the execution of not only the sale, but the subsequent development plans.

CORNISH: Houck supports the state's lawsuit and even submitted affidavits for the case. But he says he's got a two-beer bet going with his lawyer buddies over whether a federal bill offering substantial revenue sharing would pull the rug out from under the state's efforts.

Prof. HOUCK: I think the amount of monies in the bill are not going to be sufficient to provide a meaningful federal revenue stream for restoring the coast, that's for sure. So there's every reason for the state not to cave and to say, thanks a lot, that's a help. But our job is to defend out state.

CORNISH: Professor Houck says that by forging on with the suit and going on the record about the environmental damage that's been done to the coast, Louisiana can negotiate a better deal from the federal government and from companies that do business on the coast.

And while Congress now sets about the job of creating a compromise bill, the state will ask a judge to stop the latest oil lease auction.

Audie Cornish, NPR News, New Orleans.

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