Louisiana oil industry launches latest campaign in ongoing ‘legacy lawsuit’ battle
By Jennifer Larino, NOLA.com | The Times-Picayune on February 17, 2014
The Louisiana oil and gas industry has spent the better part of the past decade locked in a public debate with landowners and those who represent them over the growing number of environmental lawsuits filed in the state.
Landowners argue the lawsuits are a key step in reversing the toll decades of oil and gas exploration has taken. Industry representatives aim to quash what they say are frivolous lawsuits that are killing investment.
Industry representatives unveiled their latest offensive on Monday (Feb. 17) at the Louisiana Oil and Gas Association State of the Industry meeting in New Orleans.
The campaign, dubbed “Change Louisiana,” aims to build a coalition of businesses, government and community leaders “to stand up against the abuse and attacks generated by plaintiff lawyers,” according to a handout provided at the meeting.
In his address, the association’s Vice President Gifford Briggs noted the oil and gas industry in Louisiana is preparing for a busy decade. Low natural gas prices have prompted more than $60 billion in refinery, chemical and manufacturing investment in south Louisiana.
The state plays a key role in U.S. energy production at a time when the country is poised to surpass Russia and Saudi Arabia and become the world’s largest oil producer by 2015.
But Briggs said that’s only a fraction of the investment Louisiana would see if it weren’t for a legal environment that has pushed the state to the bottom of desirable drilling areas.
“We’re in an incredible spot right now, but there are issues in Louisiana that are preventing us from doing all the things we could do,” Briggs said. “If we were really able to tap into the power of this industry and all the resources we’ve got, there’s so much more that we could do.”
The number of drilling rigs in south Louisiana neared a record low this winter, with 16 operating as of Feb. 14. That compares with 26 in February 2006.
At the same time, the number of landowners filing suit to recover the costs of cleaning up after oil and gas activity has increased in recent years, up from 106 lawsuits in 2006 to 342 lawsuits last year.
“Louisiana is not the only place with oil in the ground and we’re not the only place with natural gas, but we are the only place with this kind of legal environment,” Briggs said.
Hydraulic fracturing, or fracking, has opened up new parts of the country for oil and gas exploration, drawing investors away from older, proven areas such as south Louisiana.
South Louisiana is also rich in natural gas, the price of which has plummeted to near historic lows. Companies are now migrating to areas where they are more likely to hit oil, such as the Eagle Ford Shale in Texas or the Bakken Shale in North Dakota.
Environmentalists, landowners and their attorneys say the economics of drilling in south Louisiana, not lawsuits, are driving companies away.
During Monday’s meeting, Briggs said larger lawsuits, including one filed by the Southeast Louisiana Flood Protection Authority-East lawsuit last summerand similar parish-led lawsuits, show a cultural shift toward litigation.
The levee authority’s lawsuit names 97 oil, gas and pipeline companies and seeks damages for deteriorated wetlands along the state’s coastline.
The Louisiana Oil and Gas Association sued Attorney General Buddy Caldwell in December asking a state judge to determine whether Caldwell’s office improperly approved a contract between the levee authority and the law firm representing it. The case has been moved to federal court and is pending, Briggs said.
“We’ve made it OK to sue the oil and gas industry in Louisiana,” Briggs said. “The thought process is, file as many lawsuits as you want, (the industry) isn’t going anywhere.”
This isn’t the first time the oil and gas industry has drummed up opposition. In 2003, the industry led a push for legislation that required groundwater damage awards to pay for cleanup. The law was expanded in 2006 to to require all types of environmental damage awards in such cases to be used on cleanup efforts.
In 2012, a set of new laws were passed requiring environmental claims to go through hearings under the state Department of Natural Resources before going to court and allowing companies to limit liability for damages to a particular section of property, among other regulations.
The association’s representatives Monday did not lay out specific legislation they plan to back during the upcoming legislative session