BATON ROUGE, La. — State Sen. Gerald Long of Louisiana calls it “kind of a gentlemen’s agreement.”
For generations, this state has relied on the oil and gas industry for a considerable part of its revenues and for tens of thousands of jobs. In return, the industry has found the state an obliging partner and staunch political ally.
Now, however, a panel of state appointees, created after Hurricane Katrina to be largely insulated from politics, showed just how insulated it was by upending the agreement.
In July, the panel, the Southeast Louisiana Flood Protection Authority-East, composed primarily of engineers and scientists charged with managing flood control for most of New Orleans and its suburbs, filed a lawsuit against nearly 100 oil and gas companies. The suit argues that these companies unlawfully neglected to fix decades’ worth of damage they caused to the state’s wetlands, making flooding from hurricanes more dangerous and flood protection vastly more expensive.
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The reaction was swift. Gov. Bobby Jindal, a Republican, called the suit “nothing but a windfall for a handful of trial lawyers,” prompting civic groups to highlight the $1 million he has received in donations from oil and gas interests. But at public meetings in Baton Rouge and down on the bayou, the board has faced the displeasure of public officials largely alone.
At the meetings, the governor’s senior coastal adviser, Garret Graves, has strongly criticized the board as jeopardizing the broad coalition assembled to address coastal issues and needlessly complicating the state’s efforts to find money for remediation. Other officials at public meetings have taken turns disparaging the board for seeking to penalize companies for decades-old activities and, perhaps more than anything, acting without broad political consent.
“You are not a state unto yourself,” state Sen. Robert Adley said at a crowded legislative hearing, a rare occurrence in August.
John Barry, a historian and writer who is the vice president of the flood panel, chalked the reaction up to politics, referring to an old saying that the flag of Texaco should fly atop the Louisiana Capitol.
It is true that the oil and gas industry’s connection with Louisiana runs deep. Industry executives — such as Adley, who has run two different oil- and gas-related companies — sit in the Legislature, and former politicians lobby on the industry’s behalf. Several years ago, eight of the 16 judges on the U.S. Court of Appeals for the 5th Circuit, based in New Orleans, recused themselves because of perceived conflicts in a case involving the energy industry.
But the connection goes beyond politics, into the state’s identity and culture. In 2010, many residents of southern Louisiana were as outraged at the federal government for its moratorium on offshore drilling as they were at BP for its Gulf of Mexico oil spill.
The industry paid Louisiana $1.5 billion in 2012 in royalties and taxes. Industry analyses say it accounts for, directly and indirectly, about 16 percent of the state’s workforce.
Although the energy industry has its complications, says Long, a Republican, the arrangement on the whole has been a net positive for the state. Other officials put it more strongly. “We’ve had a $10 million surplus every year I’ve been president of Plaquemines Parish because of oil and gas,” Billy Nungesser, whose own $20 million business provided services to offshore rigs and platforms, said at one public meeting. “We can’t keep picking their pockets.”
But studies of the state’s catastrophic land loss in the past century — the disappearance of nearly 2,000 square miles of marsh serving as a crucial buffer against hurricanes — show that decades of oil and gas activity have come at a steep price.
Dams and federally built levees holding back the replenishing sediment of the Mississippi River are main culprits in the land loss, but there is widespread agreement that the 10,000 miles of pipelines and canals cut into the marsh by oil companies are also to blame. One widely cited study concludes that oil and gas activity accounts for 36 percent of the total loss.
Coastal master plan
No one anticipated a clash when civic activists and Chamber of Commerce groups urged an overhaul of New Orleans’ patronage-riddled levee boards after Hurricane Katrina. These efforts led to laws and amendments creating a regional flood-protection authority with east and west branches. More critically, the laws established a less political-appointment process, putting a premium on technical expertise.
“It became a symbol of Louisiana willing to change its ways,” said Robert Scott, president of the Public Affairs Research Council of Louisiana, a good-government group.
Six years later, the experts in the east branch did something no one would have foreseen. They voted unanimously to file the lawsuit. Citing regulations and permits requiring companies to restore what they had disrupted, the suit argues that the wetlands crisis is at least related to unlawful neglect.
Graves does not dispute damage was caused by industry, but denies that opposition to the suit is about politics. He said the state had worked for years to build a broad coalition, including environmentalists and representatives from oil companies, to finance and implement a $50 billion coastal master plan. “There’s a bigger strategy that they’ve come in and really screwed up,” he said.
Barry said he supported holding the federal government accountable. But the cost of coastal protection is enormous and growing, he said, and he cannot see any way this lawsuit would interfere with these other efforts.
“All we’re trying to do is have a court decide whether we’re right or not that they broke the law,” he said. “And if they broke the law, they need to fix the part of the problem that they created. It is so simple.”
For now, the suit’s chief obstacles may be political rather than legal. The terms of four of the nine authority members are either expired or in limbo. And lawmakers are planning to pass legislation in 2014 to block the suit, possibly by taking away some of the authority’s powers.
“We’ll definitely do some legislation to try to decapitate this thing,” said state Sen. Norby Chabert, a Republican.
State Rep. Sam Jones, a Democrat, was on the same page. “This House will probably not be punitive to the oil companies because, look, they’ve brought us thousands of jobs,” he said.
But the scope of opposition is unclear. And in recent years, efforts by oil and gas interests to fight in the Legislature a wave of lawsuits by private landowners have not been entirely successful.
Among residents along the coast, the crisis of the wetlands has complicated what were once straightforward arrangements.