Does CARA include “incentives” that would make states and municipalities more receptive to offshore oil and gas drilling?
A portion of CARA’s funding is allocated to coastal states and their local governments based on their proximity to offshore oil and gas leases. Under this formula, coastal states and their local governments will receive more federal funding as they have more offshore leases. The bill includes safeguards to limit the possibility of creating incentives for offshore drilling. For instance, the bill specifically excludes any tract within an area that was under a leasing moratoria on January 1, 1999 unless a lease had been issued in that area and the lease was in production as of January 1, 1999. As a result, the debate over incentives is relevant only to those coastal areas that are not currently covered by moratoria. Notably, the distribution of billions of dollars in so-called Section 8(g) funds from OCS production to adjacent coastal states, as required by the OCS Lands Act, has not led to support in those states for additional leasing which would increase their revenues. In fact, oppos
