[StBernard] Louisiana oil industry launches latest campaign in ongoing 'legacy lawsuit' battle

[Westley Annis]

Louisiana oil industry launches latest campaign in ongoing 'legacy lawsuit'
battle
Print Jennifer Larino, NOLA.com | The Times-Picayune By Jennifer Larino,
NOLA.com | The Times-Picayune 
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on February 17, 2014 at 6:14 PM, updated February 17, 2014 at 6:15 PM

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.

The oil and gas industry correlates the rig declines with a surge in
so-called "legacy lawsuits." But there are also a number of economic factors
at work.
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 summer
and 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.