Rep. Jindal Bill's Effect on Budget Deficit 'Significant,' MMS Chief Says

The director of the Minerals Management Service said today that House offshore drilling legislation that shares production revenues with coastal states would have a "significant, long-term impact" on the budget deficit.

But the MMS chief, Johnnie Burton, also said the Bush administration is "willing to enter into a dialogue on revenue sharing" with lawmakers.

Legislation being discussed at a House Resources Committee hearing today would allow states with offshore drilling to receive over half the production royalties, and far more from leasing in some cases.

Rep. Bobby Jindal's (R-La.) bill would funnel tens of billions of dollars over decades to Louisiana alone, according to his office. Significant petroleum production occurs off the Louisiana coast.

The bill would also share revenues with states that would be allowed to "opt-out" of offshore drilling bans under the bill. Burton, in testimony to the committee, said the administration has "generally supported this concept," but she expressed opposition to the revenue sharing in the bill as too generous.

"The administration supports opening up additional oil and gas resources for development on the [outer continental shelf] that are not currently available for leasing and could support appropriately structured revenue sharing from new areas," Burton said.

In response to questions from the committee, Burton said allowing revenue sharing in areas where production is already allowed could affect federal revenue projections and impair efforts to reduce the deficit.

"We would be more interested in discussing brand new areas," Burton said.

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