Blanco attacks offshore oil and gas lease sale

Blanco attacks offshore oil and gas lease sale

Gov. Kathleen Blanco on Wednesday upped the ante in her offensive to get billions of dollars from offshore oil and natural gas royalties for Louisiana, formally objecting to an August sale of federal drilling leases off the state’s coast.

Backing up months of rhetoric, Blanco said she sent a letter opposing the sale to the U.S. Minerals Management Service. The objection, officials said, sets the stage for a lawsuit asking a judge to force the federal government to give Louisiana more money.

Blanco argues that Louisiana needs the money to fix its quickly eroding coast and protect energy infrastructure. Meanwhile, Louisiana’s congressional delegation is working to achieve similar results through a change in the offshore royalty formula.

“I’m calling on them (the federal government) to reinvest on what is perhaps our country’s most important asset,” Blanco said at a news conference in Baton Rouge. “Our world has changed dramatically and we don’t think the federal government and those in charge at MMS have adequately looked at our situation.”

Blanco said she would oppose the August lease sale, and future sales, until the state is given a bigger share of money.

She emphasized that her action was not an attack on offshore drilling but only a challenge to policies governing offshore royalties. She said that blocking a lease sale would not disrupt business for eight to 10 years because that is how long it takes for a lease to be developed.

Caryl Fagot, a Minerals Management Service spokeswoman in New Orleans, said, “We’re waiting to receive the letter and we’ll review it.”

Characterized as a longshot before Katrina devastated the state, the push to squeeze more money for Louisiana out of offshore drilling in the Gulf of Mexico has gained momentum since the storm hit. So far, nearly all that money _ about $4 billion a year _ goes to the federal Treasury.

But Louisiana officials believe Katrina’s catastrophic damage has highlighted the need for the nation to invest billions of dollars in restoring the state’s coastal wetlands, part of the state’s natural hurricane defense. The state has lost about 2,000 square miles of marsh and swamp since the 1930s.

Louisiana argues that the damage, much of it caused by oil and gas exploration, also threatens the nation’s supply of energy because important pipelines, refineries and offshore drilling activities depend on a healthy coastal Louisiana.

U.S. Rep. Bobby Jindal, R-La., said support for the deal is mounting and that Louisiana has it’s best chance ever to get a bigger share of money. Jindal is shepherding a bill that could funnel more than $10 billion to Louisiana over 10 years. Under his bill, the amount of money going to Louisiana after that would triple.

“The hurricanes have gotten people’s attention,” Jindal said. “People saw the price of gas go up to $5 a gallon, and drop back down to $3.”

Louisiana’s two senators _ Republican David Vitter and Democrat Mary Landrieu _ are doing their part in the upper chamber by pushing for more royalty money.

A major plan to save the coast would run into the billions of dollars. One blueprint puts the cost at $14 billion.

Allan Pulsipher, a professor with Louisiana State University’s Center for Energy Studies, was not so sanguine about Louisiana’s chances of getting Congress to approve a new funding system.

“It’s kind of Louisiana against the other states,” Pulsipher said.

Allies are lacking, he said, because Louisiana would reap the biggest benefits because so much of the nation’s offshore exploration occurs off the Louisiana coast.

He said the chances of any legal challenge Blanco might bring are uncertain, and added that a lawsuit might not result in any delay in the lease sale, slated for mid-August.

Copyright 2006 Associated Press. All rights reserved.

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