July 4, 2008

Sharing Our Less-than-fair Share of Oil Revenue

Thank you, bayoustjohndavid, for reminding me about this.

Sen. Mary Landrieu called the Gulf of Mexico Energy Security Act of 2006 (GOMESA) the “fair share” bill. Not quite, if you compare it to what states get for onshore drilling on federal lands.

A slide show from the Mineral Management Service outlines how offshore revenue in the outer continental shelf (OCS) - the federally administered seas - will be shared with the Gulf Coast states under GOMESA, just as onshore drilling revenue from federally administered land is shared with the states where it is generated. I am calling “unfair” on a few points.

UNFAIR #1: Gulf Coast states will get a decreased share of OCS offshore revenue off their borders until 2017.

The government will not share money generated from all federal leases in the Gulf of Mexico until 2017 (and we still won’t get any credit for leases sold before 2008). For the next nine years, Gulf Coast states will get a share of revenue in new federal leases in just two areas: 181 East and 181 South.

Starting in 2017, we get a share of revenue from all new leases – but just new leases.

The latest lease sale in March is a good example of what we are missing until 2017:
Two federal sales of offshore oil and natural gas leases in the Eastern and Central Gulf of Mexico attracted more than $3.7 billion in high bids today…


The first sale, the Central Gulf of Mexico Sale 206, attracted a record-setting $3,677,688,245 in high bids. This sets the record in high bids in U.S. leasing history since area-wide leasing began in 1983.


For Eastern Gulf of Mexico Sale 224, MMS received 58 bids from 6 companies on 36 tracts resulting in $ 64,713,213 in high bids with an estimated 37.5 percent of that amount going directly to four Gulf producing States.
Sale 224 had leases in the 181 areas, the areas that Gulf states get a share of. And, as the press release stated, we get 37.5 percent of those leases, or around $24.2 million – split between four states.

That’s a lot of money. But, if this were 2017, the Gulf Coast states would be splitting 37.5 percent of both sales, which would come out to $1.4 billion – a big difference, and one that would help us out in our attempt to pull together the required matching funds for federal flood protection projects.

UNFAIR #2: Four Gulf Coast states must share 37.5 percent of offshore revenue while onshore drilling states get (at least) 50 percent of the revenue generated on federal land in their state.

That speaks for itself. It just sucks.

Here is how the MMS divides onshore revenue from drilling on federally owned land:
Distribution of revenues associated with onshore federal lands is split 50-40-10, with 50 percent of the money going directly to the state within which the specific lease was located. Forty percent is sent to the Reclamation Fund of the U.S. Treasury. This special account finances the Bureau of Reclamation's water projects in 17 western states. The remaining 10 percent goes to the Treasury's General Fund.

One exception, Alaska, gets a 90 percent share of the revenues. The remainder goes to the U.S. Treasury.
Emphasis mine.

Not only does 50 percent go to the onshore drilling states (90 percent to Alaska), but if you live in one of the 17 western states that have Bureau of Reclamation water projects, then you get a share of another 40 percent.

The Gulf Coast states, in contrast, *collectively* get 37.5 percent of offshore drilling revenues.

For each individual state, that number is even smaller than it looks – split into 30 and 7.5.

The state governments get the 30 percent, then divide it further among the four of them (Louisiana, Mississippi, Alabama, and Texas). And the oil-producing parishes and counties split up the 7.5 percent. This document shows the "42 subdivisions."

UNFAIR #3: Offshore revenue has strings attached. Onshore revenue doesn’t.

Half of onshore drilling revenue goes “directly to the state within which the specific lease was located.” According to a 2003 fact sheet, the onshore revenue can be “used as the States deem necessary, without Federal restrictions. Oftentimes the monies are used for schools, roads, public buildings, or general operations.”

Under GOMESA, offshore revenue can not be used for schools, roads, public buildings, or general operations, even if those projects are part of recovery from Hurricanes Katrina and Rita. GOMESA has federal restrictions (from the MMS slide show):
Coastal Protection
Conservation; Restoration; Hurricane Protection
Mitigation of damage to animals or natural resources
Mitigation of effects from OCS activities through onshore infrastructure projects
Associated planning and administrative costs

Now, these are excellent uses of the funds. But each onshore drilling state gets 50 percent of its revenue without restrictions. Gulf Coast states share 37.5 percent and we are told how to spend it.

On top of that, 17 western states get their non-restricted 50 percent plus a share of another 40 percent in water projects by the Bureau of Reclamation.

A similar arrangement for Gulf Coast states would be fair. Each Gulf Coast state could get 50 percent of the revenue generated from offshore drilling near its coast with no restrictions and then 40 percent could go to coastal protection projects along the Gulf.

Unfortunately, there is no Bureau of Coastal Protection for that 40 percent to go to.

UNFAIR #4: 12.5 percent of offshore drilling revenue goes to public outdoor recreation grants in the all the states and territories of the U.S. and Washington, D.C.


A fifth of the federal government’s take (12.5 percent overall) of revenue generated from offshore drilling goes to the Land and Water Conservation Fund (see the revenue slide above).

In fact, according to the LWCF website, that share of offshore drilling appears to be its entire budget for 2009:
The President's budget for FY 2009 again proposed zero funding for LWCF State grants. However, for the first time in the program’s history, legislation has been enacted which insures that regular LWCF appropriations will be supplemented by proceeds from certain oil and gas leases in the Gulf of Mexico. Section 105 of the Gulf of Mexico Energy Security Act (GMESA) designates 12.5 percent of the proceeds from leases in Areas 181, 181 South and the 2002-2007 planning areas to be dispensed to the States in accordance with Section 6 of the LWCF Act.
The Gulf States benefit from the LWCF. Louisiana, Mississippi, Alabama, and Texas got about $2.2 million in 2008 from the fund. Texas got more than half of that money. And I am not saying the LWCF should not be funded.

But why is 12.5 percent of offshore drilling revenue going to fund outdoor recreation all over the U.S.? The 12.5 percent that goes to the LWCF is exactly *one third* as much as the 37.5 percent of offshore revenue that the four Gulf Coast states must share. That means at least one Gulf State will receive less money from offshore drilling in the Gulf of Mexico than the Land and Water Conservation Fund will get from those revenues. That is not fair.

UNFAIR #5: Basically, 100 percent of offshore drilling revenue goes to the federal government’s interests.

-50 percent goes to the U.S. Treasury General Fund.
-12.5 percent goes to the federal Land and Water Conservation Fund.
-37.5 percent goes to protecting the coastal areas that support the infrastructure required for offshore drilling.

Add up those numbers and you get 100 percent.

Yes, Louisiana benefits from GOMESA. I am just saying we are still not getting our fair share.

Conditional UNFAIR #6: Offshore revenue available for the Gulf Coast states is capped at $375 million.

This UNFAIR is conditioned on 1) the assumption that onshore revenue is not capped for states and on 2) the assumption that I am reading the GOMESA bill correctly.

CONDITION 1) I can not find supporting information that onshore revenue is capped. If onshore revenue is not capped, then it is unfair to cap offshore revenue.

CONDITION 2)The way I read the bill as signed by the President, the money that can go to the states *and* the LWCF is capped at $500 million (look under SEC. 105).

Half the revenue generated by offshore drilling is distributed to the Gulf Coast states and the LWCF [SEC. 105 (2)(A) and (B)]. The states split 75 percent of that (37.5 percent overall) and the LWCF gets 25 percent of half (12.5 percent overall).

Under the title “Limitations on Amount of Distributed Qualified Outer Continental Shelf Revenues” [SEC. 105 (f)(1)], revenue is capped at $500 million. To me, that means the most the Gulf Coast states can get is 75 percent of $500 million, which is $375 million.

Also, the minimum revenue one of the four states can get in a year is 10 percent of the 75 percent of the 50 percent set aside to be distributed [SEC. 105 (b)(1)(B)]. So, if the cap on that 50 percent is $500 million, then three states have to get at least $37.5 million. That means the most any one state can get in one year is $262.5 million in revenue.

Once again, that's plenty of money. But the cap is unfair.


1) Gulf Coast states have a decreased share of revenue until 2017.

2) Four Gulf Coast states split a smaller percentage than each onshore drilling state gets from drilling on federal land inside its borders.

3) All offshore revenue that goes to Gulf Coast states has strings attached. Onshore revenue that goes to states doesn’t.

4) All 50 states, U.S. territories, and Washington, D.C., get funding from offshore revenue as part of the sharing agreement - besides half of the revenue that already goes into the U.S. Treasury general fund.

5) Basically, 100 percent of OCS offshore drilling revenue goes to the federal government’s interests.

6) There is a cap on how much Gulf Coast states can get. (conditional)

June 16, 2008

More on murder rates: Jefferson Parish and New Orleans

So, going by my previous post, the FBI says New Orleans had a murder rate of 95 murders per 100,000 residents in 2007. That’s high - probably too high, because the US Census population numbers for New Orleans were low. My calculation is more like a murder rate of 80 (that’s what I am using here).

What about Jefferson Parish?

By my count, Jefferson Parish (including incorporated and unincorporated JP) had at least 55 murders in 2007. By the US Census’ count, Jefferson Parish had 423,520 people last year. JP officials say that number is too low. I am okay with it as an average for 2007.

That makes the Jefferson Parish 2007 murder rate 13 murders per 100,000 residents.


Jefferson Parish had a murder rate of 13 last year. New Orleans – right next door – had a murder rate of 80 (going by my count).

Using my population numbers (260,000 for NOLA, which is different from the US Census, and 423,000 for JP), the combined JP/NOLA murder rate for 2007 is 38 murders per 100,000 – still in the top 10 highest 2007 murder rates according to the FBI:
1. Gary, IN – 73 (pop. 97,048)
2. Richmond, CA – 46 (pop. 102,471)
3. Baltimore, MD – 45 (pop. 624,237)
4. Detroit, MI – 44 (pop. 860,971)
5. St. Louis, MO – 40 (pop. 348,197)
6. Birmingham, AL – 38 (pop. 227,686)
7. JP/NOLA – 38 (pop. 683,000)
8. Newark, NJ – 37 (pop. 280,158)
9. Baton Rouge – 31 (pop. 228,446)
10. Oakland, CA – 30 (pop. 396,541)
A more optimistic calculation would use a NOLA population of 300,000 and a JP population of 445,000. Those numbers seem high to me. Nevertheless, the “optimistic” combined murder rate would be 35 per 100,000 residents – still in the top 10 highest.

My point here is to show that something is going on. New Orleans’ murder rate is way too high. Even factoring in JP’s 2007 population – anywhere from 150,000 to 200,000 more people – and JP’s lower murder total, the combined 2007 murder rate is still near the top in the country.

Something is going on.

June 15, 2008

The New Orleans murder rate is still really high

I haven’t posted in a while, but I have continued to track murders in the city. As of June 15, we are up to at least 88 murders in New Orleans.

On June 9, the FBI released its Preliminary Annual Uniform Crime Report for 2007, which “is based on information that the FBI gathered from 12,032 law enforcement agencies that submitted six to 12 comparable months of data to the FBI for both 2006 and 2007.”

For reported murders in 2007, here are the ten cities with the most murders, followed by their counts:
Total Murders in 2007
1. New York, NY – 496
2. Chicago, IL – 443
3. Philadelphia, PA – 392
4. Los Angeles, CA – 390
5. Detroit, MI – 383
6. Houston, TX – 351
7. Baltimore, MD – 282
8. Phoenix, AZ – 213
9. New Orleans, LA – 209
10. Dallas, TX – 200
New Orleans isn’t #1 when it comes to total murders. We’re #9. That’s good news.

But I am sure you noticed that one of these cities is not like the others. Here are the same ten cities in order of their official 2007 populations:
1. New York, NY – 8,220,196
2. Los Angeles, CA – 3,870,487
3. Chicago, IL – 2,824,434
4. Houston, TX – 2,169,544
5. Phoenix, AZ – 1,541,698
6. Philadelphia, PA – 1,435,533
7. Dallas, TX – 1,239,104
8. Detroit, MI – 860,971
9. Baltimore, MD – 624,237
10. New Orleans, LA – 220,614
That population difference translates into an incredibly high murder rate (murders per 100,000 residents) for New Orleans when compared to the other cities. Here’s are the same ten cities is order of murder rates:
1. New Orleans, LA – 95
2. Baltimore, MD – 45
3. Detroit, MI – 44
4. Philadelphia, PA – 27
5. Houston, TX – 16
6. Dallas, TX – 16
7. Chicago, IL – 16
8. Phoenix, AZ – 14
9. Los Angeles, CA – 10
10. New York, NY – 6
Now, an important note: New Orleans officials dispute the US Census number for 2007. They say the US Census number is too low. One local estimate put the year end population of 2007 at 300,000.

Of course, in the case of a rapidly repopulating city, you can’t use December numbers for the entire year. The number I like to use for New Orleans’ 2007 population is 260,000, which is in the middle of the US Census estimate and the year end estimate. But even with the higher number of 260,000, New Orleans sits atop the murder rate list with a rate of 80 murders per 100,000 residents.

In fact, if you use the year end population of 300,000, New Orleans still is atop the above list with a murder rate of 70.

Another important note: the above list is not the top 10 murder rates in the country going by the FBI numbers. I am using the cities with the top 10 total murders and reordering them according to their murder rates. I do this because the total amount of murders is a concrete number, a “real” number. It doesn’t change when you factor in percentages. If 209 people are violently killed in your city, 209 people are dead whether you divide it by the total population or not.

Here are the cities with the top ten murder rates in 2007 (going by official US Census numbers):
1. New Orleans, LA – 95 (pop. 220,614)
2. Gary, IN – 73 (pop. 97,048)
3. Richmond, CA – 46 (pop. 102,471)
4. Baltimore, MD – 45 (pop. 624,237)
5. Detroit, MI – 44 (pop. 860,971)
6. St. Louis, MO – 40 (pop. 348,197)
7. Birmingham, AL – 38 (pop. 227,686)
8. Newark, NJ – 37 (pop. 280,158)
9. Baton Rouge – 31 (pop. 228,446)
10. Oakland, CA – 30 (pop. 396,541)
One more thing. If you use New Orleans' population before the storm of 454,000 with 2007’s murder count of 209, we get a murder rate of 46. That would have still put New Orleans tied with Richmond, CA, at #2 on the top 10 murder rate list.

My point: the murder rate is really high in New Orleans. It’s a problem, no matter what population numbers you use.

The FBI numbers I used can be found here.

Anything change while I was gone?

posted by m.d.

Okay, I think I’m back. Let’s see if I can post regularly again.

I’ll start off with an easy one:
The deputies and Drug Enforcement Agency special agents got permission to search the car, and a drug sniffing dog alerted them to the car's passenger side. The occupants were ordered out of the car, and patted down. During the pat-down, the U.S. Attorney's Office says, officers felt a large, hard object in the pants area on Keys.

April 3, 2008

Ashley Morris: the man

posted by m.d.

I echo jeffrey's words. The few times I met Ashley in person, the dude was real.

When I mentioned in a post that I played tuba in high school, he asked me in an email if I still had the tuba. He said he had a drum and we could do a brass band thing.

I regret I did not still have that tuba to have shared that experience with the man.


Help his family and donate to the Ashley Morris fund.

A website is being set up: rememberashleymorris.com.

January 27, 2008

A Recovery that Doesn't Work

posted by m.d.

If there are no workers:
Thousands of blue-collar workers like Washington who never lived in publicly subsidized housing increasingly have no place to live in New Orleans. The planned demolition of 4,500 publicly subsidized apartments is less significant to the future, policy experts say, than Katrina's destruction of nearly 41,000 inexpensive rentals that once housed the city's self-sufficient working class.

With no concrete plan to replace those apartments, some say the city's economic base erodes with every blue-collar worker pushed out by higher living costs.


Amid predictions affordable housing could be indefinitely out of reach for blue collar workers, state and federal agencies offered landlords a subsidy to accept lower-income tenants. The effort is falling short because landlords can get high rent in the post-Katrina free market without dealing with bureaucratic red tape. To date, there are only 550 of these subsidized apartments.

Long term, the Bush administration has offered tax breaks to developers to build mixed-income housing. Two and a half years after the storm, little such construction is evident.
No apartments, but plenty of homes:
More than 8,800 houses are for sale in the New Orleans area – almost as many as were sold in the last 12 months, according to one of the city's leading real estate brokerage firms. High insurance costs and the crash in the mortgage market nationwide have slowed sales.

Thousands more damaged houses are being bought by the state of Louisiana through its Road Home program. It pays homeowners for their losses in the 2005 hurricanes. These houses will be turned over to local governments for redevelopment or resale.

Meanwhile, 27,500 families, mostly from New Orleans, are still living in tiny, tinny government-issued travel trailers across the state.
If you have been waiting for rebuilding help that never came and now you want to sell, that's tough too:
A new study of home prices around the New Orleans area shows that buyers rewarded sellers who gambled and rebuilt in devastated areas like Lakeview, eastern New Orleans and Chalmette. Renovated homes in those areas recovered much of their pre-storm value last year, while prices continued to tumble on homes that were gutted but otherwise left untouched.

Wade Ragas, the retired University of New Orleans professor who prepared the study, said buyers have gotten wise to the amount of money and drudgery it takes to bring a damaged house back from the dead. Heartsick from being displaced for two years, distrustful of contractors and insurance companies, buyers are shopping for houses that have already been repaired for them.
Tipping point? What tipping point?
[Federal coordinator for Gulf Coast rebuilding Donald] Powell disagreed with Mayor Ray Nagin’s assertion that 2008 will be a tipping point in New Orleans’ recovery from the levee breaches that put most of the city under water and left behind massive destruction.

The recovery seems to have entered a new phase, with Nagin and other local officials who had decried the pace of federal aid saying money is starting to flow more freely and that the responsibility now falls on them to put it to smart use.
I've heard that something's "getting ready to explode."


A Connection?

posted by m.d.

Anthony Amato resigns as the Kansas City School District Superintendent in a similar way that he left New Orleans.

The last I heard, Sandra "18-Wheeler" Hester was living in Glasgow, a small city about two hours away from Kansas City.

Could it be... Sandra?

January 25, 2008

What a Wonderful Thing to Say

posted by m.d.

Rev. Jack Battiste of the New Testament Baptist Church in the 9th Ward on why his church will make a comeback:
"The love of the city exceeds the hardship."
I just liked that. I liked it because I read it two ways. First, that the reverend's love of the city he lives in is greater than the hardships he faces. Then I looked at it again and read it as the city's love - the love the city feels for her residents - is greater than the hardships we face.

The city's love exceeds the hardships. I think that is important. The residents already love New Orleans. That's why they are here.

New Orleans must love her residents back.

The article is written by a journalist from Northern Michigan. She also maintains a blog on her newspaper's website. In it, she writes of her experience in the Lower 9th and St. Bernard Parish:
It’s hard to believe it’s been more than two years since Katrina, judging from the state of neighborhoods like these. And seeing the devastation firsthand makes it seem all the more real.
Journalists keeping having that same reaction when they come down for the first time.

I must keep reminding myself that this year is the "tipping point."

January 20, 2008

Sunday Morning Peter Tosh

posted by m.d.

When stuff like this happens, I think of this song.