Congress failed to strike a deal Friday on expanding offshore oil and gas drilling, another setback in Louisiana’s decades-long quest to get a share of billions of dollars in federal energy royalties to repair its eroding coastline.

Members said they hoped to revive negotiations when they return Nov. 13 from a six-week recess. But the intervening congressional elections inject an element of uncertainty into already-fragile talks.

“It doesn’t look good, but it’s not completely hopeless,” said Sen. Mary Landrieu, D-La.
Rep. Bobby Jindal, R-Kenner, was somewhat more optimistic, given how far House and Senate negotiators came toward a deal in the past week.

“As we resolved old issues, new issues emerged,” Jindal said. “I am still optimistic of getting this done this year, in this Congress. I think waiting until next year would be a mistake.”

At stake for Louisiana is a share of $10 billion in royalties expected from the correcting of a bureaucratic mistake in Gulf leases from the late 1990s and about $20 million annually for the next decade in royalties from wells drilled in newly available territory in the eastern Gulf of Mexico. The share of new royalties could jump as high as $650 million a year after 2017.

Repairing the coastline is seen as crucial to protecting the state from storm surge created by hurricanes.

After digging in their heels for weeks, House and Senate negotiators made significant progress in recent days resolving several contentious issues, only to be tripped up by a last-minute disagreement over how to divvy up royalties in the Gulf of Mexico and along the eastern seaboard.

Members of the House, led by Resources Committee Chairman Richard Pombo, R-Calif., wanted to use maps that Pombo’s staff developed that were designed to encourage states such as Virginia and Georgia to permit drilling off their coasts. Federal bans prohibit drilling, but the House sought to lift the moratoria for certain states and offer their legislatures a financial inducement of royalties to approve production.

Members of the Senate, however, were wary of expanding drilling anywhere beyond the Gulf of Mexico. In the end, negotiators were willing to allow drilling on 8.3 million acres in the eastern Gulf and lift the ban solely for natural gas production 50 miles or more off Virginia’s shores.

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