Louisiana, Alabama sue U.S. agency over drilling royalties

A change in how the federal government calculates royalties from offshore drilling in the Gulf of Mexico could cost Louisiana $2.81 million and Alabama $7.52 million. That prospect has led the two Gulf Coast states to file suit against the federal government to block the change. The Birmingham News reports Alabama’s legal challenge was recently combined with Louisiana’s similar complaint, and the cases are pending in federal court in Washington, D.C. The U.S. Department of the Interior last year notified the states it was correcting old errors that caused overpaid royalties dating back to the 1980s, and is demanding the money be paid back. A section of the Outer Continental Shelf Lands Act requires that all “bonuses, rents, royalties and other revenues” from federal leases in certain zones within three nautical miles of shore go into a special account with the U.S. Treasury, and a portion of those go to the Gulf Coast states each month, according to Alabama’s lawsuit. The Interior Department altered how those zone boundaries are drawn, causing the change to the revenues. Read the full story here.