Louisiana coastal damages lawsuit provokes wrath of Big Oil's political friends
After the Hurricane Katrina disaster drew scrutiny to Louisiana's flood-control efforts, voters overwhelmingly approved an amendment to the state constitution in 2006 to allow the creation of the Southeast Louisiana Flood Protection Authority to ensure the region's levees would be overseen by engineering experts and not politicians' friends.
But now the authority's eastern division (SLFPA-E), which oversees flood control on the Mississippi's east bank including New Orleans, is feeling pressure from the highest levels of Louisiana politics over a historic lawsuit it filed last month to force 97 oil, gas and pipeline companies pay for damage they've caused by cutting canals through the state's coastal wetlands. Named in the suit are industry giants including BP, Chevron, ConocoPhillips, Exxon Mobil, Koch Industries and Shell.
SLFPA-E Vice President John M. Barry has responded to the political criticism with a letter noting that the authority -- which is overseen by nine unpaid members who are nominated by a blue-ribbon committee of engineering professionals, then selected by the governor and approved by the state Senate -- was formed to resist heat from high places. Its decision to file the action was unanimous.
"We are an independent board, expressly designed to be insulated from political pressure -- exactly the kind of pressure now being exerted upon us," Barry wrote. "Our purpose is protecting people's lives and property. We are supposed to exercise our judgment in how best to do so. We are a board with expertise in flood protection, not politics. Based on our responsibility, expertise and best judgment, we filed this lawsuit."
Besides being a diverse and economically important ecosystem, Louisiana's coastal wetlands serve as a critical barrier to storms, with every 2.7 miles of marsh estimated to reduce damaging storm surge by a foot. But those wetlands are disappearing at the alarming rate of a football field every hour, with oil and gas industry activity estimated to bear responsibility for as much as 60 percent of the loss. Besides putting the lives of the state's 2 million coastal residents at greater risk, Louisiana's land loss is also contributing to the state's average annual toll of about $50 million in coastal property damage.
Here's how the lawsuit, filed July 24 in state district court in Orleans Parish, describes the problem:
Oil and gas activities continue to transform what was once a stable ecosystem of naturally occurring bayous, small canals, and ditches into an extensive -- and expanding -- network of large and deep canals that continues to widen due to Defendants' ongoing failure to maintain this network or restore the ecosystem to its natural state. That canal network continues to introduce increasingly larger volumes of damaging saltwater, at increasingly greater velocity, ever deeper into Louisiana's coastal landscape and interior wetlands. The increasing intrusion of saltwater stresses the vegetation that holds wetlands together, weakening -- and ultimately killing -- that vegetation. Thus weakened, the remaining soil is washed away even by minor storms. The canal network thus comprises a highly effective system of coastal landscape degradation. The product of this network is an ecosystem so seriously diseased that its complete demise is inevitable if no action is taken.
The lawsuit notes that the permits the companies are working under require restoration after the work is completed. It asks the court to order the companies to immediately begin filling in canals and to compensate for past damages. While the bill could run into the billions of dollars, the top five U.S. oil and gas companies made an estimated $120 billion in profits last year alone.
In a statement about the lawsuit, Barry -- author of the award-winning book "Rising Tide: The Great Mississippi Flood of 1927 and How It Changed America" -- noted that the industry "has taken about $470 billion of the state's natural resources during the past 20 years, and we ask that it pick up its share of the increased costs of flood protections required to offset the loss of protective coastal wetlands."
But while Barry and other authority members view the legal action as a matter of enforcing basic accountability, that's not the way some of Louisiana's top political leaders see it. Instead, they have condemned the lawsuit and are trying to stop it from going forward. And not surprisingly in a state where oil and gas money gushes into politics, the politicians making the most noise over the lawsuit have especially close ties to the industry:
* Slamming the lawsuit as a "windfall for trial lawyers," Louisiana Gov. Bobby Jindal (R) has questioned the authority's legal right to file the suit and urged the state's Coastal Protection and Restoration Authority (CPRA) to consider intervening. Jindal claims that in order to hire special counsel to prepare the lawsuit, as the SLFPA-E did, it needs his permission, though the authority disagrees. Jindal has received substantial political support from the oil and gas industry. In fact, it is the top contributor to Jindal after party committees, investing over $730,000 in his gubernatorial campaigns to date, according to the National Institute on Money in State Politics.
* Garret Graves, Jindal's appointed CPRA chair and his executive assistant for coastal activities, has said he wants to talk with SLFPA-E members to encourage them to drop the suit. The group has invited Graves to its next meeting, which is Aug. 15. CPRA provides the SLFPA-E with its annual $500,000 budget. Graves previously served as an advisor to Louisiana's former Democratic U.S. Sen. John Breaux and former Congressman Billy Tauzin, who served as a Democrat from 1980 to 1995 before becoming a Republican. The oil and gas industry was the second-biggest contributor to Breaux after lawyers and law firms and the top contributor to Tauzin, according to the Center for Responsive Politics.
* U.S. Rep. Steve Scalise, a Republican who represents Louisiana's Jefferson Parish, is demanding the SLFPA-E turn over information on the contract with its attorneys. Scalise is upset about the inclusion of a "poison pill" provision that would require the SLFPAE to pay the attorneys for their time and expenses if the suit is withdrawn; it was added to discourage political efforts to force it to drop the suit. The oil and gas industry is the second-biggest contributor to Scalise's campaign after real estate, at over $349,000, with the Koch Industries' PAC alone contributing $25,000. The oil and gas industry was also a major contributor to Scalise when he served in the Louisiana legislature.
* Former Congressman Chris John of Lafayette, La., who now heads the politically powerful Louisiana Mid-Continent Oil and Gas Association, has said his group -- which includes many of the defendants -- may ask state lawmakers to scuttle the lawsuit. During the time John, a Democrat, represented Louisiana's 7th congressional district from 1997 to 2005, the oil and gas industry was the second-biggest industry contributor to his campaign after lawyers and law firms, with the Koch Industries PAC contributing $28,000 and the Chevron PAC donating $18,000.
Some observers have drawn a parallel between the politicians' response to the lawsuit against the big oil companies and what happened when former Louisiana Attorney General Richard Ieyoub joined a massive lawsuit against the politically influential tobacco companies. Then-Gov. Murphy "Mike" Foster (R) and Jindal, who was secretary of the state Department of Health and Hospitals at the time, submitted affidavits saying the case was not properly authorized and should be thrown out. The judge did not agree, however, and the lawsuit went on to end in a multibillion settlement for the states.
In the coming weeks, the SLFPA-E will make presentations about the lawsuit to the Association of Levee Boards of Louisiana and to key state legislative committees in an effort to win their backing. But some levee board members have expressed concern that the lawsuit will damage their relationship with oil and gas companies, The Advocate reports. Other observers expect the legislature may try to intervene by passing laws to restrict the SLFPA-E's authority.
Meanwhile, nine environmental groups are circulating a petition asking Jindal to support the lawsuit; over 10,000 people have signed it so far. Environmental advocates have long called on oil and gas companies to pay to restore the damage they have done to coastal wetlands.
Asked about whether he thought the lawsuit might discourage oil and gas development in Louisiana, Barry said he did not.
"They will leave the state when the oil goes away," he told the Times-Picayune. "When they suck all the oil out, that's when they'll go away."
Sign up for our free newsletter for the latest news, trends & analysis.