Federal lands, indian lands, good morning, everyone. The committee will come to order. First, we will examine federal revenues generated from Energy Development on federal lands, indian lands, and federal offshore areas. Secondly, we will explore how that is distributed and shared with state, local, and tribal governments. Then we will hear from onshore renewable and onshore developments. Both bills under consideration are sponsored by members of this committee. Senator cassidy, introducing in 2018 the coastal act, and senator mcsally, introducing the energy reproducing act. Thank you for introducing legislation that would bring revenuesharing for coastal producing states into parity with onshore development. Congress lay the foundation for offshore revenuesharing through the passage of the gulf of Mexico Energy securing act in 2006. At that time the bill did not include alaska. The coastal act that we are considering now would establish a revenuesharing program that would include alaska and, at the current time, our offshore production is pretty minimal and therefore any returns to the states are equally minimal. It is important to address this at this time. In fact, some of us would say that its well, well overdue in terms of timing to address it. The coastal act would do for alaska what it does for other producing states, such as those in the gulf of mexico, in terms of being able to provide onshore revenuesharing for the state to help meet critical purposes, including the protection of the coasts, assistance for villages grappling with the effects of climate change, development of lowercost clean energy generation, as well as assistance for the University System and just all that comes with our efforts to turn our nonrenewable resources into longterm assets. To me, offshore revenuesharing is a matter of simple fairness. The cook inlet, american waters, by virtue of alaska and alaska alone. We build the infrastructure and provide the Public Services needed for responsible development and we bear the impacts. As we have heard senator cassidy say many times before this committee, those who shoulder much of that burden, it is only right that they should share in a greater opportunity for the benefits. So, lets talk about some of the benefits from revenuesharing. A few weeks ago the department of the interior announced of that it distributed a lead 6 billion in revenue from Natural Resource production in fy 2019. That is significantly higher than last years disbursement of 8. 9 billion. Much of it will be reinvested back into our public lands, waters, native american, and rural communities. This year, 4. 4 billion went to the states and governments that host Energy Development. 1. 1 billion was dispersed to tribes that undertake resource extraction on native american land. 1. 7 billion dollars in mineral royalties and hydropower revenue went to the Reclamation Fund that supports a dam and Irrigation Systems that move and store precious Water Supplies across the west. We talk a lot in this committee about land and Water Conservation funds and all that they provide, programs like the American Battlefield protection program, forest legacy program, and the cooperative endangered species program. But those of us who know and understand the program, lw kiev is one of the biggest beneficiaries of offshore lwcs is one of the biggest beneficiaries. Lwcs also receives additional funds through go mesa and the Stateside Program in 2015 received 76 Million Dollars from those leases. These substantial revenues only exist because we are the worlds top producer of oil and gas. We have seen new ideas emerge on how to allocate the revenues that emerge from our production. Whether it is part maintenance backlog or helping with the recovery of wildlife, but we have also seen proposals to cut off a federal oil and Gas Production, some suggesting cutting it off immediately without consideration of the economic consequences that would prevent us from adressing the needs. As we push for the development of new and cleaner technologies, which we certainly encourage here in this committee, including our renewable energies, we have to consider what it means for federal revenue dispersants. When we think about our solar assets, the wind assets, i think we recognize that when you look, when you look to what they have generated in terms of revenues, they are a mere fraction of the billions of dollars that are generated by oil and gas. So, when we think about the benefits and how lwcs has been structured, certainly historically, it is important to keep these considerations in mind. We will have an opportunity to review some of the proposals that senator mcsally has outlined in her legislation to create streamlining while sharing revenues with local governments. We have got a lot to talk about. I am glad that we have Witnesses Today who are from both state and local governments that are the beneficiaries of federal revenuesharing programs that can help to explain what these revenues actually mean for them. I look forward to hearing how they would support, or do support, communities with the funds that they receive in this development in their backyard. I want to particularly thank mayor brower, he has come a particularly long way, from the top of the world, as we say. We know it is a long haul and we appreciate the fact you have made this journey today to share your comments. For that i will turn to senator manchin. You have come a long way and we appreciate the effort you have made. Today we are discussing two revenuesharing bills. My home state of West Virginia is a small state and we have more private land than the federal land. Im trying to understand and get up to speed on these issues. Its quite fascinating. As a result, West Virginia receives very little of the revenue that we are going to be discussing today. In 2018, West Virginia received 93,000 for the whole year. I have a hard time explaining i will ask way via have a hard time understanding all of this. My colleagues on the committee that do receive the lion share of federal revenuesharing city are rich in Natural Resources. Coal, more recently natural gas, have provided funds to my state for a long time. They are still a key source of revenue through taxes collected from coal and natural gas operations. The model for disbursement in West Virginia, where i was governor for two terms, we did this in such a fair manner, we treated all 55 counties the same as if they were the producing counties and a lot of them were not producing anything. But they are all a part of our great state. We are a part of this great country. We get very little of any of this and this is owned by the people of the country. Im very interested in this process. Now that i know more about it. Its been very enlightening. Each year the department of the Interior Office of Natural Resources collects billions of dollars in rent, royalty, and bonus bids from oil and gas leases off of those lands and waters. The geographic location determines the disbursement, which makes no sense to me at all. But thats the way they do it. I dont know when that bill was written or that law, or who got that in. Fiscal year 2019 they dispersed a total of 11. 6 billion in offshore and onshore revenue. 11. 6 billion. We got 93,000. Its important that we examine both of these contracts and constructs. The chairman and i have had conversations regarding revenuesharing in coastal states. I got it. Makes all the sense. As we know, before the gulf of Mexico Energy security became law, 100 of oil and gas revenue on the first three miles of federal waters went to the u. S. Treasury, reflecting the belief that these resources are federal. Revenue raised from the instruction must benefit all taxpayers because it is federal, not state owned. Go mesa established the outer Continental Shelf sharing. Today four states receive 37. 5 of the share of the revenue from the federal gulf of mexico outer Continental Shelf. 27 of the revenue from the the fourth through sixth not a comile, the eight g zone, that was back in the 50s or 60s, what they did was 100 for three, give us three more, we took 27 . Thats how that one was explained to me coming about. That totaled almost 223 million of those states in fiscal year 2019. This is in addition to the states already receiving 100 revenue from the first degree not occur miles. Under go mesa, lwcsf, they receive 25 of the outer Continental Shelf revenue be on the 8g zone, another 200 miles out. Onshore revenuesharing is governing them all. I know that this committee has examined the difference between how onshore and offshore revenues are handled in the past, i think that that issue is worthy of additional attention from this committee. The primary distinction between the two is that onshore lands are contained entirely within a states borders. While offshore leases are not within the state border. Onshore and offshore Energy Development also have different histories, with different leasing systems under the management of different bureaus within the department. That history in mind, changing the policy for how revenues are dispersed, whether it be onshore or offshore, requires a factual understanding of the complexities of the Broader Energy market and should not be done without careful analysis. It is also important that we make sure that these resources are being properly managed by the federal government in the first place. Over the last few years the bureau of Land Management and the bureau of Ocean Energy Management have come up short in ensuring taxpayers receive fair market value for the resources extracted from public lands and waters. Those agencies are responsible for management. September, the Government AccountabilityOffice Published a report discussing how the boe had conservatively estimated the values of the lands they lease and even lowers the valuation of these lands to justify awarding bids. I repeat, it justifies it lowering the value of valuation when it awards bids. I have long been concerned about the unnecessary bending and flaring of natural gas on public lands, which we dont do when it is an individual or private company. Thats a value. We are venting on private lands. When gas is vented, you know what im talking about their, for purely economic reasons the gas never makes it to the market, royalty is never collected and not one of us benefit at all. They give me that the excuse that there is no pipelines, no gathering system. We can fix that. We should not be vetting this on an easy way to increase revenues. That would require conversation about pipeline infrastructure. Which we will do. But these are important conversations. Reducing flaring on public lands is not only taxpayer fairness issues, its a positive step towards addressing climate change. Its a big winwin for all of us. We are a nation that has been blessed with vast National Resources that help to make the nation the superpower it is today and while we enjoy these abundant federal resources, discussion of how revenue should be shared is extremely important and i look forward to discussing these proposals. Thank you, madam chairman. Thank you, senator. I appreciate that it is clear that these are issues that are important, important to the region, important to the country, but also understanding where one another comes from is what will allow us to, to be able to really address the intricacies and complexities. Im going to ask senator cassidy to speak briefly to his bill. He has indicated that he would like to make the introductions for mr. Lucy this morning and i would like to acknowledge the presence of our friend here on the committee, senator mary landrieu, from louisiana. Senator landrieu occupied the position of ranking and chairman on this committee. And certainly made this issue a priority of hers and her state. Senator cassidy has stepped right into that. Senator cassidy, if you would like to speak to your bill that you have introduced and that i have cosponsored, the coastal act, we will then allow for introduction of our guests. Thank you, madam chair. So, first let me say that i enjoyed senator manchins comments but there are some things that are a little misleading. Not that you intended to. Sen. Not at all. But i think it needs to be clarified. Sen. I appreciate that. I thought it was very factual, but i appreciate that. Sen. Cassidy the coastal states dont get 37. 5 of everything produced out there. There is a cap. You havent hit the cap yet. Sen. Cassidy itsalso production after a certain date, after a certain point in time. So, its not the entirety. I will show a graph. We are also always puzzled that federal waters or federal federal land, but federal land within a state boundary is not federal land for the purposes of how we do this. It always seems a distinction without a difference. Within the boundaries. That said, to continue my formal remarks, protecting the revenue of the gulf states, included increasing the share that with that we receive for hurricane flood protection is one of my top priorities. In our state by the state constitution we use the money to rebuild our coastline. A coastline that has eroded in large measure because the Mississippi River was levied for the benefit of in land ports. When you have a levying of a river that distributes sediment, therefore helps to build and rebuild for the benefit of the tributaries of the Mississippi River, there seems to be some equity involved in terms of helping our state rebuild. Its also common sense because if we get whacked by a hurricane, the federal government ends up spending a lot of money to rebuild that which was whacked. I have introduced legislation with others on this committee, the conservation of the american shoreline terrain and aquatic life coastal act, which is a part of todays hearing to create more equal revenuesharing treatment for states producing offshore energy revenue, a kind of equivalent, if you will, to those the produce onshore. For context, the gulf accounts for 60 of the crude oil supply and 15 of the natural gas. Recently the eia reported Energy Production in the gulf at a record of 1. 8 Million Barrels per day would forecast the production will continue increasing as other offshore facilities come online and Technology Evolution allows existing sites to become more efficient and productive. 2018, interior dispersed 9 billion to the federal treasury, state and local governments, tribes, and the bureau of reclamation, with funds such as the Water Conservation and Historic Preservation funds. Lets just kind of break this down. You know . So, here we see come a little bit farther above heres the federal offshore. Below is the federal onshore. We can see that offshore, the u. S. Treasury has received about 3. 1 billion over this time frame. This is go mesa, there. A small fraction of the total money dispersed. Heres the land that has been authorized by Historic Preservation and other offshore disbursements. Heres the onshore. The treasury gets . 41 billion. State and local governments get almost 1. 6 billion, Reclamation Funds getting 1. 2. It should also be noted that in the last Water Conservation fund a significant amount of this goes to states with onshore federal lands so they are not only receiving roughly a 50 share of the revenue from onshore, but also receiving dollars from the land Water Conservation act. So, if you will, this is, you are getting it here and there. Sometimes there is righteous indignation when you say that is not fair. I would argue that if we are going to have this, we should have this as roughly equivalent. Im not saying take from here, but i am saying allow the coastal states to use their dollars to rebuild the coastline, which in large measure has been lost in pursuit of policies that benefit in land states. I would also say that regarding yesterdays testimony about new mexico, these funds and be used for school testimony, roads, and other expenses. Again, more limitations. Just to repeat, state and local governments receive 50 of the federal revenues derived from onshore oil and gas in the federal land in that state. Gulf coasts gulf coast states share 35 in Energy Production. The coastal act seeks to address obvious inequity, removing existing caps on the amount of dollars shared among the gulf states and the land Water Conservation fund, raising the amount of offshore revenue that can be shared in the eligible areas from 37. 5 to 50 , protecting offshore dollars and makes leases entered into between 2000 and 2006 eligible for revenuesharing in the future. It creates a separate revenuesharing for the state with the largest amount of coastline, alaska. My state is dealing with a land loss crisis, threatening ecosystems, communities, economies, and a way of life. As i mentioned, the funds that we receive from revenuesharing go to protecting and rebuilding the coastline. I believe that chairman find a speak specifically to this, but my colleagues and i are looking for equity and the ability to strengthen Environmental Protection efforts. The states of know how to allocate the dolla