Trump backs off proposal to halt offshore royalty payments

WASHINGTON — President Donald Trump has backed off his proposal to stop sharing oil revenues from offshore drilling with states along the Gulf of Mexico.

In the budget plan released this past week, the White House preserved the revenue-sharing agreement, which was expected to deliver $275 million to Texas, Louisiana, Alabama and Mississippi this year.

“I’m glad the administration heard us loud and clear and decided to support offshore revenue sharing,” said Sen. Bill Cassidy, R-La. “After years of our concerns falling on deaf ears, it’s refreshing to have an administration that actually listens.”

The funds are set aside under the law to protect the Gulf coastline, with money directed to maintaining levees and other infrastructure, hurricane relief and preventing further erosion of wetlands that are fast disappearing along the coast.

Trump proposed keeping the funds for federal programs last year. By eliminating the royalty sharing, the administration estimated it would increase federal revenues by $3.6 billion over 10 years.

But elected and industry officials along the Gulf Coast objected almost immediately.

“Eliminating Gulf state revenue sharing for offshore energy production would punish coastal states that support and host the development of home-grown energy and jobs,” Randall Luthi, president of the trade group National Ocean Industries Association President, said at the time.

Royalty sharing with Gulf States was established under the Gulf of Mexico Energy Security Act, passed in 2006 with a goal of increasing oil and gas leasing in the Gulf of Mexico.