In short, Louisiana gets no tax revenue money from the oil production on federal lands in its state. Every other oil producing state gets at least 50% of these revenues. "In 2002, $7.5 billion in offshore revenues went into the Federal treasury and more than $5 billion, or 2/3 of that amount came from offshore Louisiana. Among states, Louisiana ranks 1st in crude oil production and 2nd in natural gas production."
http://landrieu.senate.gov/issues/coast.cfmSo the oil industry destroys La's wetlands and coastline, making the state more vulnerable to flooding (and making Mississippi more vulnerable, too, since Katrina crossed La's "wetlands" without slowing at all before striking Mississippi), but the feds give Louisiana no compensation for this industry. Thus, Louisiana is broke, and has to beg for federal assistance to rebuild the damage done by the oil industry.
Imagine what Louisiana and New Orleans could have done with an extra billion a year over several decades. Better levees, better infrastructure, better evacuation routes, more wetlands and coastline to weaken the storm surge, better locks and flood gates on MR-GO (the canal that caused the levee to break on the Industrial Canal), maybe even better living standards. Instead of having to beg for crumbs to repair the damage done by the oil industry, Louisiana could have decided what it needed to build.
This is the answer to those who say that Louisiana has mis-spent the federal funds allocated them for levees over the years, or to those who say Louisiana should have to pay for its own repair. If the government hadn't been taking Louisiana's money and leaving them with nothing to show for it, there might not even be a mess to clean up. There was no reason for those levees to fail, except pure petty DC politics.
The federal government owes Louisiana a marsh, a coastline, some offshore islands, a culturally rich city and a thousand lives, if you ask me.
From a Mother Jones article:
"Though other states receive generous shares of revenues they generate by allowing production of goods on federal lands within their borders, Louisiana gets almost nothing. Louisiana produces 25% of the nation's natural gas and 30% of the nation's oi, yet it has nothing to show for it. Well, not quite nothing: the laying in of pipelines has seriously eroded the state's coastline, making it much more vulnerable to hurricanes."
"Had Louisiana been permitted its fair share of revenues over the decades, the state would not be in the financial shape it is in today. With no oil and gas revenue and a government that both refuses to help restore its coastline and to keep its promise about rebuilding after Katrina and Rita, Louisiana has little recourse. There is talk of filing suit against the Army Corps of Engineers, whose incompetence was largely responsible for the levee breeches during Katrina. Technically, the Corps is immune from lawsuits, but Congress can amend the immunity to exclude criminal acts, and make the amendment retroactive. Alternatively, the state could file for damages in the U.S. Court of Claims, then hope that Congress would pay the judgment. In this case, some of the blame would go to the Orleans Parish Levee Board, which was negligent in inspecting the levee system."
http://www.motherjones.com/mojoblog/archives/2005/12/every_federal_r_1.html