‘Stinging’ from BP settlement split, lawmaker files oil revenue bill

‘Stinging’ from BP settlement split, lawmaker files oil revenue bill

By MARY SELL, Alabama Daily News

A south Alabama lawmaker wants it in writing that the state will never try to direct money from an oil and gas revenue fund to non-coastal parts of the state.

Earlier this month, Gov. Kay Ivey announced almost $28 million from the federal Gulf of Mexico Energy Security Act of 2006 for 16 projects on Alabama’s coast.

A senator from Baldwin County says he wants to ensure that future GOMESA money stays on the coast.

Sen. Chris Elliott, R-Fairhope, said his area is still “stinging” from the way the state’s BP settlement money was distributed in 2016. He’s pre-filed for the 2020 session Senate Bill 3. It requires GOMESA funds, “be expended only within the coastal political subdivisions of the state.”

“We just want to memorialize that in statute,” Elliott told Alabama Daily News.

The 2006 act created a revenue-sharing model for oil- and gas-producing gulf states. Under the act, Alabama, Louisiana, Mississippi, and Texas receive a portion of the revenue generated from oil and gas production offshore in the Gulf of Mexico, according to the U.S. Department of the Interior.

In fiscal 2019, $24.5 million in GOMESA funds were received by the state, and $2.8 million and $3.4 million were given directly to Baldwin and Mobile counties, respectively. The department’s website says GOMESA funds are to be used for coastal conservation, restoration and hurricane protection. According to the act, money can be distributed to the states and coastal political subdivisions, defined as within a coastal zone and not more than 200 nautical miles from the center of a leased track.

The funds are administered by the Alabama Department of Conservation and Natural Resources and Elliott said he thinks it’s Ivey’s intention to always direct the money to Baldwin and Mobile counties.

“But we don’t know what the next governor may do,” he said.

In 2016, lawmakers argued extensively about how the state’s nearly $1 billion BP settlement from the 2010 oil spill should be spent. South Alabama lawmakers said that more money should to go coastal communities closer to the spill. North Alabama lawmakers argued the settlement was for the entire state, not just south Alabama. When it was settled, About $400 million was allocated to pay off state debt, $120 million for Medicaid split up between fiscal years 2017 and 2018 and about $120 million for road projects in Mobile and Baldwin counties.

The state issued a bond on the settlement for an upfront payment of about $640 million.

Elliott likens the GOMESA money to the TVA in-lieu-of-tax dollars that 16 north Alabama counties receive each year.

The 2020 legislative session starts Feb. 4.