WASHINGTON -- Ending a five-decade battle, President Bush signed historic energy legislation into law Wednesday that will give Louisiana and other Gulf Coast states a share of royalty payments for oil and gas produced off their shores.
"This is really an important piece of legislation for Louisiana for a lot of reasons, not the least of which is it will help provide money so that we can help restore the wetlands in Louisiana," Bush said at the bill signing ceremony attended by Louisiana's two senators.
Sen. Mary Landrieu, D-La., who had been working on the issue since she first arrived in the Senate in 1997, said she told the president that embracing the energy legislation will create a positive legacy for him and his administration for decades to come.
"I said, 'Mr. President, this is going to be such a phenomenal legacy for you for the Gulf Coast, for all of us,' " Landrieu said.
The legislation opens 8.3 million acres in the eastern Gulf of Mexico that has been off limits to energy exploration. Four coastal states will share in the bids companies make to acquire the new leases and then enjoy a 37.5 percent share of the royalties they pay on the oil and gas they extract.
According to Landrieu's office, the bill will generate $106 million for Louisiana in 2007, and $125 million cumulatively over the following nine years. Starting in 2017, the legislation would generate at least $562 million a year, jumping to $817 million in 2013.
1st check in 2008?
The Minerals Management Service, which oversees the royalty program for the federal government, couldn't say Wednesday when the first revenue-sharing dollars will flow to Louisiana. Landrieu aides hoped that the money would begin arriving in early 2008.
Sen. David Vitter, R-La., said that the onus is now on Louisiana to make sure the money, limited by a state constitutional amendment to wetlands and coastal restoration, hurricane protection and other environmental projects, is spent wisely.
"With this enormous opportunity comes great responsibility," Vitter said. "We need to have vision and discipline in Louisiana, starting with our leaders."
In another benefit for Louisiana, the legislation extends until 2010 the Gulf Opportunity Zone Act, which allows a business to depreciate 50 percent of its capital costs in a single year, which could produce huge tax savings compared to building a project outside the Gulf Coast.
Landrieu said her joy at the bill signing was greater because of past disappointments. In 2000, she noted, a revenue-sharing bill had passed the House, passed the Senate Energy Committee, and President Clinton had promised he would sign it into law. But Senate leaders would not let the bill come up for a vote.
"It was very depressing because we had to start again from scratch and every Congress has different dynamics to deal with," Landrieu said.
United in purpose
Bush seemed to relish signing legislation that could do so much to restore the state's coast and wetlands, according to Landrieu and Vitter, who met privately before the ceremony with the president along with other congressional backers of the energy legislation.
Landrieu said she told the president that the $40 billion royalty sharing doesn't just help Louisiana, but provides money for a land and conservation fund that will improve the environment across all 50 states.
She said Bush responded: "Yeah, I know all about that, but I really want to save the wetlands."
"And," Landrieu added, "He said it's OK to be parochial every now and then."
At the public ceremony, Bush introduced some of the congressional leaders instrumental in the bill's enactment, -- including outgoing House Speaker Dennis Hastert and Senate Majority Leader Bill Frist, R-Tenn.
Then, he thanked "Mary (Landrieu) and David Vitter for good work on this important bill" and offered his congratulations.
"Texas people kind of like Louisiana," Bush said to laughter. "A lot of us spent some of our youth in Louisiana."
He said restoring coastal wetlands, whose loss contributed to the deadly storm surges during Hurricane Katrina, has "united the people of Louisiana. People are rightly concerned about the evaporation of wetlands."
Bush said the extension of tax benefits made available to Gulf Coast businesses after Hurricanes Katrina and Rita would also produce results.
"There is a great spirit of entrepreneurship on the Gulf Coast, and the incentives in this bill will help our fellow citizens help revive these communities," Bush said. "It's in our nation's interest that this piece of legislation pass, and it's in our interest that the people of the Gulf Coast recover as quickly as possible."
Rep. Bobby Jindal, R-Kenner, who helped move the energy bill through the House after GOP leaders gave up on a more expansive drilling legislation with more revenue for Louisiana, said he'll continue to work in the next Congress to correct a 1990s mistake that led to oil companies paying reduced royalties on some leases. Jindal, who did not attend the signing ceremony, said he wants Louisiana to share in the revenue if those royalties are recouped.
Gov. Kathleen Blanco said she was "pleased President Bush made this bill the law of the land today. I commend our current congressional delegation and all those who came before them for their hard work in moving this bill to passage. I also thank those here in the state who have advocated for the sharing of revenues for so long." . . . . . . .