The Hardball Issue

While Louisiana has the sympathy of the nation after Katrina and Rita, some political realities remain unchanged.



The governor wants more federal oil royalties for Louisiana. The issue is gaining momentum, but it'll take more than grit to make it happen. President Harry S. Truman offered Louisiana a sweet deal in 1949, an arrangement that state officials are now trying to get the feds to duplicate today. He offered fabled Gov. Earl Long all of the money oil companies pay the federal government in royalties within 3 miles from the shoreline and more than a third of everything farther out. According to the lay of the political land then, it wasn't totally Uncle Earl's decision to make.

Leander Perez, the powerful boss of Plaquemines Parish who also controlled a wealth of mineral rights, refused to take the deal. Perez and Long held out for more. Truman called their bluff, and Louisiana wound up with almost nothing.

Today, Louisiana sends more than $5 billion a year to the federal treasury from offshore oil and gas activity. But, as a result of the hardball tactics more than 50 years ago, the state gets back a mere $39 million a year.

Nearly three generations of congressmen and governors have tried to remedy the situation, but the split hasn't changed. Meanwhile, inland states such as New Mexico get upwards of 50 percent of the oil-and-gas revenue they send to the federal government. And few deposit as much as Louisiana.

Kathleen Blanco fired the most recent volley and made national headlines last month for saying, "It's time to play hardball, as I believe that's the only game Washington understands."

What Blanco meant by "hardball" is her refusal to approve future federal oil and gas leases off Louisiana's coastline. Not everyone thinks it will work. Gary Strasburg, a spokesman for the Minerals Management Service, told The New York Times that Blanco's approval is merely an "intergovernmental courtesy" and withholding it won't stop the feds from getting their cash.

Additionally, even if Louisiana were to get a greater share of offshore royalties -- partly for coastal erosion, as touted -- the fund to hold the dedicated monies isn't ready. A constitutional amendment defining the fund was supposed to face voters in late April, but lawmakers moved it to the fall in the wake of Hurricanes Rita and Katrina. Of course, if Blanco's refusal to cooperate ends up in court, there's no telling where her "hardball" tactics might lead.

A more measured approach comes from U.S. Rep. Bobby Jindal, a Metairie Republican, and U.S. Sen. Mary Landrieu, a New Orleans Democrat. Both have filed bills to raise all coastal states' shares of offshore royalties to 75 percent for the area between three and 12 miles offshore, and eventually 50 percent farther out.

U.S. Sen. Pete Domenici, a New Mexico Republican, has talked with Gulf Coast lawmakers about adding a coastal restoration fund to his drilling bill. That would not necessarily increase royalty shares, but it would provide a long-term funding mechanism.

Mark Davis, executive director of the Coalition to Restore Coastal Louisiana, is pleased to see momentum building, but he has seen it before. Although the state has sympathy on its side and a governor willing to play "hardball," Davis says the concept of greater revenue sharing is still a long way off and the state should explore other alternatives.

"We've come close before and we've never actually crossed the goal line," he says.

Indeed, the stage was set three years ago when former Rep. Billy Tauzin, a Chackbay Republican and then-chair of the House Energy Committee, passed an energy bill in the House with language granting Louisiana $1 billion over time. It failed in the Senate by two votes. Again in 2001, Tauzin brokered a deal for $600 million, but it too ultimately failed.

"We had done a great job of delivering the right message and making the case, but it got caught up in politics," Tauzin says. "The objections came from appropriators who wanted to keep controlling the money every year."

So, while Louisiana has the sympathy of the nation after Katrina and Rita, some political realities remain unchanged. There's also the danger that Louisiana's efforts will be seen as a money grab. When the governor proposed her $20.3 billion budget last week, it was not filled with cuts or cautionary verse, but rather pay raises for teachers and professors, as well as status quo priorities.

Davis says Louisiana needs to figure out a way to leverage its needs and show Congress that more money is required to recover and strengthen the coast. "Why should (Congress) feel any pressure to help us?" he says.

Hopefully, the federal government will learn that paying to protect Louisiana now will be cheaper than paying to put the pieces back together later, Tauzin says. Until then, Louisiana needs a solid strategy, one not based on "hardball" tactics that could backfire, he adds.

"The nation is ready to rally behind rebuilding and revenue sharing," Tauzin says. "I just don't think we need to threaten to get there."

Jeremy Alford can be reached at

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