Oil and Gas Firm Becomes First to Reach Coastal Restoration Settlement; Critics Respond


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According to a report from Nola.com, Carmouche & Marcello, a Baton Rouge-based law firm representing Louisiana’s coastal parishes, reached a landmark settlement with the oil and gas firm Freeport McMoRan that is aimed at restoring damage to Louisiana’s coast. The mining giant agreed to pay a total of $100 million dollars in cash and environmental credits over the course of the next several years. Freeport McMaRon is the first in the energy industry to reach a settlement for damages caused to the coastal zone. The company was supportive of the agreement as it protects them against any further litigation.

According to the company’s website, Freeport McMoRan is “committed to conducting, developing and designing projects that are both economical and environmentally conscious.”  However, despite its stated goals, the lawsuit brought against them charged the oil and giant firm with failing to abide by state law in drilling wells, constructing canals, restoring the wetlands to their conditions prior to beginning oil and gas operations, and disposing of wastes.

According to Carmouche, Freeport McMaRon’s wells account for only four percent of the drilling on the state’s coastal region and suggested this could be the first of many settlements to come from other major oil and gas firms responsible for damage to Louisiana’s coast. The state could potentially collect $2.5 billion dollars in settlements from deals reached with other major oil and gas firms.

In a statement, Governor John Bel Edwards said that “While the details are being conclusively negotiated, I am hopeful that the conceptual framework in this settlement will be used as a model for resolving other similar actions.” He further noted that while these lawsuits were initiated prior to his inauguration, he supports the funds from the settlement staying in the communities that were specifically impacted by the damage caused by the company’s actions.

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Governor Edwards has been proactive when it comes to securing funds for coastal restoration projects. In April 2019, the Governor announced that Louisiana will receive $94 million from the Gulf of Mexico Energy Security Act (GOMESA).

While Edwards welcomed the settlement, among his Republican challengers, not all were receptive to the idea of extracting funds from settlements reached with oil and gas firms. The Louisiana Oil and Gas Association and the Louisiana Mid-Continent Oil and Gas Association were critical of the deal, noting that the companies have operated within the confines of federal regulatory framework for decades. Additionally, Republican gubernatorial candidates Eddie Rispone and Ralph Abraham dismissed the lawsuits as frivolous, opining that such lawsuits will deter investment from oil and gas companies in the state of Louisiana.

Ralph Abraham has been an adamant opponent to efforts to extract funds from oil and gas companies and has committed to reversing damage caused to oil and gas companies as a result of the lawsuits. He accused his opponent of declaring war on the oil and gas industry. However, despite Republican gubernatorial candidate Ralph Abraham’s opinion that lawsuits to oil and gas companies will deter investment, as the Bayou Brief reported, Abraham is the only candidate in the Governor’s race to personally sue an oil and gas firm for damage caused to his farm.

Other local leaders, including Mayor Latoya Cantrell and the New Orleans City Council, have also been vocal in recent years about the impact oil and gas companies have had on Louisiana’s coastal region. In March 2019, the city filed a lawsuit against eleven oil and gas companies for damage to wetlands, citing non-compliance with the city’s coastal use permits.

According to the National Climate Assessment, coastal regions like New Orleans have seen a dramatic increase in extreme rainfall events, resulting in more flooding in recent years.

Although many Republican politicians argue that taking money from Big Oil to invest in coastal restoration would deter investment and stymie economic growth, according to a 2017 report from the Environmental Defense Fund, inaction on coastal restoration could be even more costly, threatening billions of dollars in state assets, labor productivity and economic growth. The report noted projections that without action, Louisiana would lose approximately 1,750 additional square miles of land area, which would in turn affect many homes and businesses, and as local government officials argue, land loss reduces the storm protection services of coastal wetlands, which places thousands of residents directly in harms way. The resulting storm damage from a single storm as a result of inaction on coastal restoration is estimated to cost as much as $138 billion with $53 billion dollar loss in economic output.

The deal from the settlement still requires agreement among the 12 coastal parishes, and parishes could potentially go to court with one another if they feel the distribution of the settlement shortchanges their claims. The state’s chief deputy attorney general said that they are reviewing the agreement to determine whether in its state’s best interest.

Regardless of the air of uncertainty regarding the next steps in implementing the agreement reached, there is consensus among local leaders that we must hold Big Oil accountable for the irreparable damage done to the wetlands as a consequence of non-compliance with federal and local environmental regulations.


Scott Ploof is Publisher and Founder of Big Easy Magazine.

 

 

 

 

 

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