In Wake of BP Disaster, Tone Deaf Louisiana Legislators Seek to Shield “Big Oil” from Onshore Cleanup Costs


Apparently we’ve learned absolutely nothing from the regulatory failures that led to the Deepwater Horizon disaster, at least not here in Louisiana. Against the backdrop of BP’s 200-million-gallon spill and botched cleanup efforts, a group of tone deaf Louisiana legislators has introduced three bills that would drastically limit the liability of the oil and gas industry in site contamination cases. At issue are “legacy claims,” lawsuits that address past and present environmental damages – primarily contamination from oilfield waste and radioactive brines – tied to exploration and production processes.

Louisiana landowners have long tried to cleanup the “legacy” of pollution left behind on private property once leased by oil and gas companies. Now their hopes of a “legacy-free environment” may never be realized.

If passed, these bills would shift the financial burden of cleaning up contaminated sites from the industry to an economically strapped state bureaucracy. And, to make matters even more unpalatable (not to mention unconstitutional), the legislation would apply retroactively to “legacy claims” that have already been filed, enabling the industry to walk away from decades of environmental degradation and potentially billions in remediation costs. Perhaps most disturbing of all is the fact that this legislation, if voted into law, will shield BP from having to pay for a complete cleanup.

With the Gulf Coast still reeling from the BP disaster, this sort of shameless industry pandering by our elected officials is unforgivable, and Louisiana voters need to take a stand.

The proposed legislation – supported wholeheartedly by the industry (which should tell us something) – aims to nullify much of the intent of Act 312 passed in 2006 which correctly gave authority to local courts to determine fault in oil site contamination cases before the state Department of Natural Resources (DNR) developed and presented a cleanup plan. Act 312 dictates that the courts consider the DNR plan along with non-government proposals for cleanup. The courts would then select a remediation plan and determine an appropriate cost.

Sounds reasonable, right? But these newly proposed, half-baked bills would take the legacy claims process out of the court system, effectively stripping landowners of their right to sue for contamination damages. It’s an appalling power-grab.

One of the bills (HB 563) – authored by known oil and gas industry supporter, Lafayette Rep. Page Cortez – would shift “primary jurisdiction” over cleanup and claims from the courts to the state’s Office of Conservation (OOC). One of the many problems with this approach is that the OOC is deeply conflicted on such matters, and as such has shown a complete lack of political will to enforce regulations, including land cleanup. Let me try to explain (the seemingly inexplicable). One of the OOC’s directives is to promote oil and gas business across the state, essentially making it the marketing division of the industry. So if Rep. Cortez gets his way, the Office of Conservation will be in charge of both promoting the interests of the oil and gas industry across the state while at the same time serving as the overseer of that same industry’s cleanup of contaminated land.

That’s like putting the fire department in charge of promoting arson.

Cortez, who apparently has an exceedingly high threshold for shame, says that his concern is ensuring the environment is cleaned up. Really? Seems to me he’s looking for some Big Oil campaign contributions.

In reality (a place with which Rep. Cortez is clearly unfamiliar), HB 563 is designed to shut down cleanup efforts. The industry knows full well that shifting jurisdiction from the courts to the OOC will result in an enforcement vacuum, effectively ending the need to restore contaminated land. No enforcement, no cleanup – it’s that simple, and that unfortunate.

I leave you with what I consider to be the top-6 reasons to oppose this flagrantly pro-industry legislation:

1. The OOC is Part of the Problem, Not the Solution. The OOC already has jurisdiction to inspect, test and issue compliance orders for impacted sites. In addition, the OOC has established regulatory standards under its rule-making authority. The problem – which has plagued the state for decades – is the lack of enforcement by the OOC. If handled appropriately, the party responsible for environmental pollution would self-report and clean the site to regulatory standards, or else the OOC would issue a compliance order to force the cleanup. Ironically, legal claims are filed because the oil and gas industry will not voluntarily restore impacted sites and because of a lack of regulatory enforcement by the OOC. The industry now seeks to eliminate the only independent enforcement process for landowners by forcing all claims into the OOC. Before there is any expansion of authority for the OOC, there should be a public accounting of its activities to date, starting with an explanation about its knowledge of legacy sites and why compliance orders have not been issued and enforced.

2. Funding. The OOC lacks the resources to properly administer its functions under the existing framework of Act 312. These bills will greatly expand the responsibilities of the OOC, to include testing, monitoring, and regulatory hearings that will overwhelm the capabilities of the office. The fiscal note for the OOC to perform the functions contemplated by these bills cannot be defended in the current budget climate.

3. More Legal Fees for All. These bills make it worse for independent operators by forcing them to participate in a regulatory hearing process before a legal proceeding to determine the “responsible party,” as required by Act 312. In other words, every potentially responsible party will be dragged through the entire process, which will increase legal fees for all. True, independent operators are trapped in the battle between landowners and the Big Oil companies that caused legacy impacts. An anti-indemnity bill should have passed years ago to prevent Big Oil from assigning its responsibility for hidden conditions to independent operators, as was done in Texas and other states. Instead, the Big Oil companies – who haven’t produced on-shore in decades – blocked the anti indemnity bill and continue to use Louisiana’s independent operators as liability (and political) shields. Legislation should be passed to prevent this from happening.

4. The Bills are Unconstitutional. These bills are unconstitutional for at least three reasons: (1) by granting the OOC the authority to adjudicate claims, which is reserved to the courts; (2) by stripping landowners of substantive property rights; and (3) by applying retroactively to claims already filed and pending in the courts.

5. Big Oil has Used Act 312 as a Game to Avoid Remediation by Paying “Hush Money” and then Hiding at the OOC. Big Oil complains about having to pay “settlements” for legacy claims. The solution is simple – don’t settle any case for which you are not responsible. In fact, the O&G industry has avoided the goals of Act 312 by “settling” claims to avoid cleanups, effectively paying millions of dollars in “hush” money. Despite specific settlement terms requiring restoration of impacted sites to regulatory standards, very few sites have been resorted. Why? The answer is clear: There is no genuine intention to clean the environment; rather, the goal is to end the lawsuit and go back to business as usual because the OOC will not require restoration. This is the key to understanding why the O&G industry wants to extinguish landowner judicial claims and proceed straight to the OOC. The public must be informed about the total sum paid in settlements since enactment of Act 312 versus the total sum spent on remediation in that same time frame. Big Oil has opted for paying hush money over cleaning the environment.

6. If Act 312 is Not Working to Big Oil’s Satisfaction, It Should be Amended With Consideration of the Rights and Interest of All Stakeholders.

As long as we continue to let them get away with it, oil industry fat cats will keep on taking from Louisiana. There is no end in sight. I urge you all to write or call the legislators listed below to voice your opposition to this legislation (HB 563/564 and SB 146) before Wednesday, May 18.

Rep. Gordon Dove – Chair (R)
(985) 876-8823 (o)

Rep. Karen St. Germain – Vice Chair (D)
(225) 687-6272 (o)

Rep. Bobby Badon (D)
(337) 896-3482 (o)

Rep. Robert Billiot (D)
(504) 431-1535 (o)

Rep. Henry Burns (R)
(318) 949-2463 (o)

Rep. Simone Champagne (R)
(337) 276-4916 (o)

Rep. Franklin Foil (R)
(225) 342-6777 (o)
Baton Rouge

Rep. Jerry Gisclair (D)
(985) 798-7707 (o)

Rep. John E. Guinn (R)
(337) 824-0376 (o)

Rep. Joe Harrison (R)
(800) 935-2081 (o)

Rep. Reed Henderson (D)
(504) 278-6599 (o)

Rep. Sam Jones (D)
(337) 828-4100 ext 370 (o)

Rep. Eddie Lambert (R)
(225) 644-4947 (o)

Rep. Sam Little (R)
(318) 556-7026 (o)

Rep. Jack Montoucet (D)
(337) 783-2999 (o)

Rep. Jim Morris (R)
(318) 995-6852 (o)
Oil City

Rep. Patrick Williams (D)
(318) 676-5990 (o)

Check back with us soon, as we’ll be covering this story very closely.

Here’s a good overview on the legacy bills from the Times-Picayune:

Review HB 563
Review HB 563 amendment
Review HB 564
Review SB 146

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Stuart H. Smith is an attorney based in New Orleans fighting major oil companies and other polluters.
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