White House, Senate Democrat at Odds Over Energy Revenue Sharing

The Obama administration draws ire from Mary Landrieu for refusing to support a boost in revenue sharing for coastal states.

FILE - In this Wednesday, Dec. 5, 2012, file photo, Senate Appropriations Subcommittee on Department of Homeland Security Chairman Sen. Mary Landrieu, D-La., speaks to witnesses, during a hearing, to examine Hurricane Sandy, focusing on response and recovery and progress and challenges on Capitol Hill in Washington. When Landrieu became chair of the committee in 2009, she was well aware of the struggles that small companies deal with when a disaster strikes.  (National Journal)

If the Senate increases energy-revenue sharing for coastal states, it will do so without the support of the Obama administration -- and likely after a debate that pits interior states against their coastal counterparts in the fight for federal dollars.

For the White House, the measure to reallocate 37.5 percent of energy revenues to coastal states poses a deficit challenge, according to Interior Department Deputy Assistant Secretary Pamela Haze, who said the U.S. Treasury would lose more than $5 billion if the bill became law.

She cited sequestration, saying the proposal from Democrat Mary Landrieu of Louisiana and Republican Lisa Murkowski of Alaska would stress an already reduced federal budget.

That did nothing to quash the senators' anger over the Obama administration's position. Landrieu and Murkowski grilled Haze, noting the revenue sharing granted to interior states for coal and gas revenues is about 50 percent.

"Is it the Department's intention to perpetuate a double standard?" Landrieu asked.

When Haze said the administration is not explicitly opposing the bill, but simply "cannot support it," Landrieu cut her off. "It's the same thing," the senator said.

Haze did not address the discrepancy in revenue sharing for interior states, stating only that the administration "would continue revenue sharing based on existing law."

Murkowski responded, "Right now, you have a double standard."

While Republican Sen. John Barrasso from landlocked Wyoming pushed back against the double standard argument, his GOP colleague Tim Scott, R-S.C., argued for more Atlantic energy development. "Unfortunately, it seems unless we do it legislatively, the Atlantic will never be included "¦ in energy production," Scott said. "It would only be appropriate and fair if the Atlantic states got the same 37.5 percent revenue sharing as Gulf states."

Landrieu added an emotional appeal in her questioning of Haze. "After losing 1,400 lives in the devastating floodwaters of Katrina and Rita "¦ I find it tragic the administration's position on this issue, and seemingly heartless considering the issues before the Gulf Coast states." While interior states have no requirements for conservation spending for their energy revenue funds, Landrieu said, the proposal revenues for coastal states have such a mandate built in.

Committee Chairman Ron Wyden's statement on the bill expressed a desire for more information. "I'm anxious to learn more about the substance of the bill, and the economic and environmental benefits," Wyden said. He said he wished the committee could start with a "clean slate" rather than comparing previous states' precedents. But, of course, coastal states that feel they aren't getting their fair share are unlikely to overlook the funding allocated to their landlocked counterparts.

Correction: An earlier version of this story incorrectly identified Murkowski's political party affiliation.