This past weekend, Congress passed a bill requiring the federal government to share offshore oil and gas royalties with Louisiana for coastal restoration efforts, something state leaders have long pressed for.
The massive $45 billion package that included the royalties measure offers other provisions aimed at boosting the state's hurricane recovery efforts. Among them is a two-year extension for bonus depreciation, which allows companies to write off 50 percent of their new capital expenses in a given year.
The royalty-sharing provision calls on the Interior Department to provide Louisiana, Mississippi, Texas and Alabama with 37.5 percent of future royalties collected from Gulf oil production, with Louisiana getting about half. It allocates another 12.5 percent to land and water conservation programs, with the remaining 50 percent going to the U.S. treasury.
However, the new law angered shrimpers across the South by creating permanent normal trade relations with Vietnam, which has been accused of flooding the U.S. market with cheap seafood, the New Orleans Times-Picayune reports:
"We are getting bombarded with more shrimp than we know what to do with," said A.J. Fabre, president of the Louisiana Shrimp Association and an opponent of liberalizing trade with Vietnam. "Favored nation status means that the door would be thrown wide open."
The U.S. shrimp industry initiated an anti-dumping petition against foreign shrimp three years ago. In November 2004, the U.S. Department of Commerce found that companies exporting shrimp from Vietnam and China violated U.S. trade laws by selling below the cost of production and imposed tariffs for economic damage.
Under the Continued Dumping and Subsidy Offset Act -- also known as the Byrd Amendment after sponsor Sen. Robert Byrd (D-W.Va.) -- U.S. shrimpers and processors began receiving compensatory checks last month. (However, there have been allegations of excessive or improper payments, leading the Southern Shrimp Alliance to call for better verification of claims.)
The bill passed by Congress also opens to oil and gas development 8.3 million previously protected acres off the Gulf Coast, raising the ire of environmental leaders such as Sierra Club Executive Director Carl Pope, who released a statement blasting the move:
"We are disappointed that Congress is finding it so difficult to cut ties to the oil and gas industry and to think outside the drilling rig when it comes to America's energy policies. Just last month Americans cast their ballots in a call for a new direction, not more of the same. Let's hope this is Congress' one last fling with Big Oil and that we can make a fresh start to achieving true energy security with the new year and the new Congress."