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Oil and Water Underneath Louisiana’s costal waters lie billions of barrels of oil reserves, and every year nearly $20 billion worth of that oil is pumped out by large oil companies, netting them billions. Also netting billions: the federal government, which takes a 27 percent royalty on all oil drilled off the Louisiana coast. Left out of the money chain? The state of Louisiana, which pockets a lowly one-half of 1 percent of the revenues generated from most oil drilled off its coast. The state, and particularly Gov. Kathleen Babineaux Blanco (D), looks poised to make things difficult for the oil companies — threatening to sue to block the lease of new sites off the Louisiana coast that are scheduled to be auctioned next month. The state is seeking a 50 percent share of revenues from what are defined as federal waters (those more than three miles off the Louisiana coast). A revenue portion of that size would bring it more in line with Texas, whose state waters extend nine miles from its coast, allowing it to keep 100 percent of royalties from oil drilled in its state waters. Louisiana has passed a constitutional amendment that would channel those oil funds into a program that would fight coastal erosion and restore coastal wetlands, adding a key layer of protection against hurricane damage for the state’s coastal areas. “Unless and until there [is] revenue sharing passed by Congress, or some commitment to mitigate what’s happening to Louisiana’s coast, [Gov. Blanco] will object to the [Aug. 16] lease sale and all future lease sales,” says Sidney Coffee, Blanco’s top aide on coastal matters. The governor has pleaded her case to the Bush administration and has been shot down, and because offshore drilling is a federal matter, Blanco has no recourse but to file suit, something that will be done “if the federal government informs us that they’re going ahead with the sale,” says Coffee. It’s a prospect that doesn’t have oil companies jumping for joy. “We’re sympathetic to her position, but it’s disappointing,” says Michael Lyons, the manager of legal and environmental affairs for the Louisiana Mid-Continent Oil and Gas Association, a trade association representing big oil companies in Louisiana. “Hopefully you can resolve the issue some way, but she’s been adamant that she’s going to do this,” Lyons says. He adds that oil companies have no dog in the tussle between Baton Rouge and Washington, but they’re the ones that stand to lose should new oil rigs be blocked. — Andy Metzger
Save 90210! Posh Beverly Hills, Calif., needs money — Department of Homeland Security money, that is. The California firm Manatt Phelps & Phillips is helping to secure extra bucks in Washington for the famously wealthy California town. “Even though it’s small in size, it attracts particular attention because of events like the Golden Globe Awards,” says Ivan Kallick, a partner at Manatt Phelps. Ditto, says Lt. Mitch McCann of the Beverly Hills Police Department: “We are a small city of 35,000 to 38,000 residents who don’t always have the funds to draw on, and yet we have a [security] burden because the city requires a lot of dignitary protection.” Kallick, whose firm has offices in Palo Alto, Sacramento, Los Angeles, and Costa Mesa as well as branches in New York state and one in Washington, D.C., says the goal of the lobbying effort is to secure funds or to make sure that if money is being doled out, Beverly Hills is not forgotten. Former Beverly Hills mayor and current City Council member Linda Briskman notes that the city does not have the luxury of refusing to protect visiting dignitaries. “When the Academy of Achievement came to town [this year] it cost the city close to $400,000 [to protect visiting officials],” Briskman says. “We need to get some recovery.” Kallick says his firm is also helping the city with efforts to revive a decades-old Westside subway-extension project connecting downtown Los Angeles to Santa Monica — a plan endorsed by Rep. Henry Waxman (D-Calif.). Waxman was a supporter of the original rail plan, but a methane-gas explosion in 1985 along the proposed route caused him to change his position. A November 2005 study, however, determined that tunneling along Wilshire Boulevard (which runs through Beverly Hills) can be done safely. Consequently, Waxman now supports the effort proposed by the Los Angeles County Metropolitan Transportation Authority and endorsed by Los Angeles Mayor Antonio Villaraigosa. Although the routing has yet to be determined, Beverly Hills would like to see at least three train stops alongside its glitzy paradise, which employs 1,000 workers in the hospitality industry and more than 7,000 employees at the world-renowned Cedars-Sinai Medical Center, says Briskman. “We need to move those employees in and out of those employment corridors in the most efficient way,” she notes. — Joe Crea

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