GOMESA – What is it – Will it save the LWCF State Assistance Program ?
Gulf of Mexico Energy Security Act (GOMESA)
The following is a summary of this Act which has helped fund the State Assistance Program of the LWCF since it’s adoption in 2006. Currently only minor amounts of GOMESA funding have been added to the regular allocation of state grants. ( See 2016 Apportionment Certificate attached ). However, Phase II begins in FY 17 ( with FY 19 being the targeted year for Phase II allocations ). State grants of the LWCF are targeted to receive 25% of these funds, estimated at one time to be $ 125 million a year! However, NASORLO doubts the amounts will be that significant, as oil leases are down and there are attempts to change this law to give more states a share of these proceeds. We are monitoring the legislation and trying to find out what is going on with the leases. The following is a summary of the current situation from Dave Tyahla, of NRPA.
5-19-2016 email… I’m in the process of arranging a meeting with the lead GOMESA contact at BOEM, Tom Farndon. His office is in Sterling, VA (out near Dulles Airport) and I will likely be seeing him at this office during one of my Wednesday trips to NRPA HQ in nearby Ashburn. Most of all, I’m asking him to also “brief” everyone during an upcoming Thursday conference call.
Tom provided his new “white paper” on the GOMESA process. It’s quite helpful if you’re interested in “how we got to where we are” stuff, BUT… it does NOT include any of the all-important anticipated overall revenues for the next few years. Basically, if GOMESA generates at least $1 BILLION in said revenues in a given year, than everybody gets what they’re looking for – both the Gulf Coast States and LWCF. Namely, our $125 Million for State Assistance. Again, what his document does NOT include the BOEM’s estimates for actual revenues in FY 2017 and beyond. That’s the “$125 million question” which I’m trying to get a clear answer too, as are each of you.
Will provide updates as events and scheduling warrant.
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On December 20, 2006, the President signed into law the Gulf of Mexico Energy Security Act of 2006 (Pub. Law 109-432). The Act significantly enhances OCS oil and gas leasing activities and revenue sharing in the Gulf of Mexico (GOM). The Act:
- shares leasing revenues with Gulf producing states and the Land & Water Conservation Fund for coastal restoration projects;
- bans oil and gas leasing within 125 miles off the Florida coastline in the Eastern Planning Area, and a portion of the Central Planning Area, until 2022; and,
- allows companies to exchange certain existing leases in moratorium areas for bonus and royalty credits to be used on other GOM leases.
Revenue Sharing
The Act created revenue sharing provisions for the four Gulf oil and gas producing States of Alabama, Louisiana, Mississippi and Texas, and their coastal political subdivisions (CPS’s). GOMESA funds are to be used for coastal conservation, restoration and hurricane protection. There are two phases of GOMESA revenue sharing:
Phase I: Beginning in Fiscal Year 2007, 37.5 percent of all qualified OCS revenues, including bonus bids, rentals and production royalty, will be shared among the four States and their coastal political subdivisions from those new leases issued in the 181 Area in the Eastern planning area (also known as the 224 Sale Area) and the 181 South Area. Additionally, 12.5 percent of revenues are allocated to the Land and Water Conservation Fund (LWCF). The final regulations for Phase I revenue sharing were issued on December 23, 2008 and specify that the Bureau intends to disburse funds on or before March 31st of the fiscal year following the fiscal year to which the qualified OCS revenues were attributed.
Phase II: The second phase of GOMESA revenue sharing begins in Fiscal Year 2017. It expands the definition of qualified OCS revenues to include receipts from GOM leases issued either after December 20, 2006, in the 181 Call Area, or, in 2002–2007 GOM Planning Areas subject to withdrawal or moratoria restrictions. A revenue sharing cap of $500 million per year for the four Gulf producing States, their CPS’s and the LWCF applies from fiscal years 2016 through 2055. The $500 million cap does not apply to qualified revenues generated in those areas associated with Phase I of the GOMESA program. The final regulations to implement Phase II of the GOMESA legislation were published in the Federal Register on December 30, 2015. The final rule is effective 30 days after its publication. ( There are some issues with GOMESA.. related to offsets in the budget.. being worked on.. 11-14-18 )
GOMESA Revenue-Sharing Allocations and other statistical information can be found at http://statistics.onrr.gov/under Common Data Summaries.
