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In a speech to environmental scientists that described the rapid erosion of the state’s marshes as a threat to the city’s continued existence, New Orleans Mayor Mitch Landrieu called Friday for a negotiated settlement — backed by threats of higher taxes or lawsuits — with the oil and gas industry to pay for nearly a century of damage to coastal wetlands.
“I’ll give you the short version of the speech,” Landrieu said as he began. “Without a coast, there is no city.”
In his remarks at the State of the Coast conference in New Orleans, Landrieu both criticized the environmental damage he said the energy industry has wrought and hailed its importance to the state’s economy.
In doing so, he called for an end to the “uneasy bargain” he said has governed the state’s relationship with oil and gas companies since the 1930s — a deference to the industry that he said has contributed to the erosion of about 1,900 square miles of coastal wetlands through policies that are “penny-wise and pound-foolish.”
“I don’t believe we should or we must abandon the industry that has provided us with so much opportunity. We can drill, but we must restore,” Landrieu said.
He endorsed an effort by the state to bring oil and gas companies to the negotiating table, a process tied to coastal damage suits filed by individual parishes. That effort is aimed at working out a deal with the companies to cover the cost of the damage caused by drilling and dredging in coastal areas.
The effort, however, has been rejected by industry groups, which responded to Landrieu on Friday by arguing they already are doing their share for coastal restoration.
“A sincere discussion about addressing Louisiana’s coast doesn’t single out the state’s largest industry,” the Grow Louisiana Coalition, an industry group, said in a news release. “We are working on the coast, not talking about it. As we continue to move forward in that work, federal authorities, including and especially the U.S. Army Corps of Engineers, as well as the commercial and scientific interests who operate in coastal parishes and the parishes themselves, must play a significant role whenever we talk about big issues, including funding.”
Landrieu also floated another idea that could lead to a similar result: imposing higher taxes on oil and gas companies, with that money funneled toward coastal restoration efforts, in exchange for releasing them from liability for past damage. That proposal echoes a failed plan backed by Republican Gov. David Treen in the early 1980s.
“We can come to a negotiated agreement with the industry. We can come up with a way to fairly tax the industry and put that money to the coast. Or we can engage in a standoff and litigation,” Landrieu said.
Louisiana has been grappling with how to fund coastal restoration efforts, a matter made more urgent as estimates of the cost of its plan have ballooned from $50 billion to $100 billion. Some of that additional money will come from an increased share of federal revenue from drilling activities the state is set to receive. The state also will use money from a legal settlement stemming from the BP oil spill.
Landrieu acknowledged that the industry is not alone in its culpability for coastal erosion. Building of levees along the Mississippi River, subsidence and sea-level rise also have taken a toll.
In calling for a “new covenant” with the industry, Landrieu also suggested a shift to restoration and alternative energy could lead to an economic boom for both energy companies and the state as a whole.
Likening the massive restoration efforts envisioned by the state’s coastal master plan to the Depression-era Works Progress Administration, he said, “I believe there is a great opportunity that can be born from this tragedy we’re now suffering under.”
The Grow Louisiana Coalition, however, pointed to local environmental projects that companies already are engaged in, such as building an artificial reef in Lake Pontchartrain near West End, as well as the money they pay to the federal government to lease drilling sites in the Gulf of Mexico — which will be shared with the state starting next year — as signs the industry “is already doing its part to fund coastal restoration.”
Follow Jeff Adelson on Twitter, @jadelson.