For decades, oil companies in Louisiana – the backbone of the Gulf Coast’s oldest and wealthiest industry – indiscriminately and with impunity contaminated private property with highly toxic chemicals ranging from lead to benzene to radioactive radium-226. Landowners are now suing the responsible companies, in a breed of cases called “legacy lawsuits,” for environmental damage that presents grave health risks and destroys the value of the property.
These are lawsuits aimed at rectifying the well-documented legacy of rampant land contamination at the hands of oil producers across Louisiana. And by the way, industry spin doctors came up with the term “legacy lawsuit.” In reality, these are “environmental degradation” cases, plain and simple.
In all too predictable fashion, the industry is calling the wave of landowner lawsuits “abusive,” and equates the claims to “legalized extortion.” The enormously wealthy industry, while posting record profits, claims the legacy lawsuits are “choking their business, costing the state thousands of jobs and billions of dollars in lost investment.” Right (I’ll address that nonsense shortly). So as the industry pleads poverty – in an election year filled with promises of “energy security” – legacy suits are getting a lot of media play of late, in large part due to the political ramifications. Here’s how Judson Berger framed it in his March 23 report for Fox News:
Against a backdrop of rising gasoline prices and a presidential campaign tapping into consumer fears, Louisiana oil producers are pointing to a rare breed of legal sludge they say is choking their business, costing the state thousands of jobs and billions of dollars in lost investment.
The complaints from one of the Gulf Coast’s most vital industries come as energy-focused Republican presidential candidates court Louisiana voters ahead of Saturday’s primary. President Obama has been pushing his own message in the run-up to that contest, traveling around the country in an effort to demonstrate his friendliness to America’s energy producers.
The administration continues to faces charges that it is slow-walking drilling permits in the wake of the 2010 BP spill. The Louisiana lawsuits, though, compound those concerns.
The contamination in these cases is very real, and it does indeed pose a health hazard and a significant drag on property value. Would you buy land that was contaminated with hazardous material? Regardless of how long ago the contamination took place, if the damage persists – which it does – why shouldn’t the responsible parties have to pay to cleanup the mess? If somebody can come up with a compelling argument that suggests some other party should pay for the contamination left behind by hugely wealthy oil producers, I’d love to hear it. But I haven’t yet.
In many cases, the contamination contains radium-226, a highly radioactive substance found in oilfield waste water and sludge. The half-life of radium-226 is 1,600 years. Unless it’s cleaned up properly, that radioactivity will linger for generations. More from the Fox News report (and yes, that’s me being quoted):
The lawsuits generally pertain to claims that oil companies decades ago stored waste material in unlined pits on Louisiana land, which released chemicals into the environment.
While industry representatives downplay the long-term damage caused by this practice, attorneys say it’s heavily impacted landowners.
“These environmental conditions create long-term … liabilities for the landowners and they don’t go away,” said Stuart Smith, a New Orleans-based attorney who represents more than 100 landowners in cases against major oil companies.
Smith said the landowners are liable for any hazardous substances on their property, meaning they could be sued by the Environmental Protection Agency if it’s not cleaned up and could run into problems selling the land since they’d have to disclose those problems.
He said chemicals ranging from lead to Benzene to radioactive radium-226 have been found at these sites. Smith said one of his clients, with a $5 million piece of property, found it would cost more than that to clean up – making the property “essentially worthless.”
So clearly the landowners have cause to sue. Now, as for Louisiana oil companies pleading poverty and lost business and investment due to the prolificacy of legacy lawsuits, research shows that’s complete and utter bunk.
Three states – Texas, Oklahoma and you guessed it, Louisiana – continue to dominate U.S. fossil fuel production. According to independent research from the nonprofit Headwaters Economics: “As of May 27, 2011, 63 percent of all land-based drilling activity in the U.S. was occurring in these three states.”
As far as permitting and production goes, Louisiana continues to go like gangbusters, despite the fact that the number of legacy lawsuits has spiked every year since 2005. Consider these statistics:
(1) 9,043 drilling permits issued (not counting OCS) in Louisiana since 2007, excluding November and December 2011 due to lack of current data;
(2) Permits have remained consistent over period of time except in 2009 when prices dramatically decreased; and
(3) 217 million barrels of oil have been pumped out of Louisiana lands from 2007-2011 (excluding November and December of 2011 due to lack of data)
Despite their complaints, Louisiana oil companies aren’t hurting by any stretch of the imagination (see more economic data in the Legislators Guide below). Clearly, legacy lawsuits are eating into the industry’s massive profit margins, but nobody is going bankrupt any time soon.
Listen, I’ve represented landowners for more than 25 years. All we’ve ever asked for is to have oil companies honor their obligations to restore landowner property after they use it to make record profits from oil and gas production.
It’s very simple, really. Legacy suits are just like any other “breach of contract” claim. The oil companies were tenants on private land, and they contaminated the property and walked away. Now all that contamination is coming home to roost.
It’s time to pay the piper.
Read Judson Berger’s Fox News report here: http://www.foxnews.com/politics/2012/03/23/louisiana-oil-companies-decry-abusive-rash-lawsuits-say-industry-hurting/#ixzz1qDibMNyS
Review economic data on the state of Louisiana’s oil and gas industry here: FREE-GUIDE_2012_lal_legislators
For more info on legacy lawsuits and why they are necessary in remediating private lands, visit: http://louisianatruth.org/
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