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Tag Archives: oil revenues

This past week containment crews working with BP on the Deepwater Horizon oil explosion were able to cap the runaway leak. For the millions of our fellow citizens that call the Gulf home this is a welcome relief. With time, diligence and advanced technology the effects of the spill will be mitigated.

The effects of the oil spill are far reaching. Oxygen starved oceans, soiled beaches, lost oil and disrupted communities are the obvious negative effects. Yet from every disaster there is potential for a silver lining. The engineers that design offshore drilling rigs will be able to address the weaknesses that caused the blow out. It takes failure to learn about mistakes and how to prevent similar catastrophes. As our need for oil is far too great to forego offshore reserves, oil companies will be able to work safer and with greater awareness for the environment.

A second silver lining can touch the lives of citizens across the nation. Offshore oil reserves belong to the citizens of the United States. Oil companies lease regions with the greatest potential and in turn for this privilege pay a royalty to the federal government. Last year, the federal government collected over $5 billion in off shore leasing revenues. In 1965 Congress passed the Land and Water Conservation Fund (LWCF) to receive $900 million annually from the Outer Continental Shelf oil and gas leases. The funds from the LWCF have been shared with all 50 states and have connected with American citizens.

The parks, river ways and open space that we enjoy in landlocked Montana are in part funded by the LWCF. Here in southwest Montana, LWCF has protected Yellowstone River headwaters near Cooke City, critical elk passage up the Taylor Fork drainage, a popular climbing area in Bozeman Pass, and Madison Valley fishing access and ranch lands, to name a few. The program has also provided grants to hundreds of state and local parks across Montana including our own Peet’s Hill and the new Rose Park for Frisbee golf enthusiasts.

The challenge is that the full funding for the LWCF has fallen short every year but one since 1965, with most of the $900 million diverted to other purposes. Of the $5 billion in revenue from 2009 only 180 million was set-aside for the LWCF. This is 3% of the total of the total tax revenue from off shore oil and gas leases. To set this in economic context, the profits of BP in the quarter leading up to the Deepwater Horizon disaster were $4.7 billion. In 2008 Exxon Mobil posted record annual profits of $45.22 billion. And these figures are after paying royalties to the federal government of offshore leases. Given the catastrophe in the Gulf, the annual loss of open space to development, the importance of wetlands to water quality and the benefit of recreation to our population it is only fair to ask for full funding of the revenue be set aside for our nation’s natural heritage.

The LWCF is set to expire in 2015, 50 years after it’s signing. As a way to keep this part of our heritage, Senators Jeff Bingaman (D-NM) and Max Baucus (D-MT) introduced the Land and Water Conservation Authorization and Funding Act, S.2747, on November 6, 2009, and Senator Jon Tester joined to co-sponsor the bill. This legislation is simple and straightforward: it would permanently reauthorize the fund and make $900 million available annually to LWCF as dedicated funding. As the Congress considers ‘oil spill’ legislation in the coming weeks, full funding of LWCF should be a part of the solution.

Americans strongly support this initiative. In a May 2010 national public opinion survey 77 % support funding at the $900 million annual level. The revenue is from the oil we consume (and we all consume oil) and is shared by all. As a way of ensuring the land, water and recreation heritage we depend upon as part of our children’s lives, full funding of the LWCF is the right thing to do.