Oil and Gas Industry on Trial for Louisiana Wetland Erosion

Published September 29, 2015

The Southeast Louisiana Flood Protection Authority-East (SLFPA-E), charged with protecting New Orleans from flooding like the city experienced following Hurricane Katrina, has sued 97 oil and gas companies.

SLFPA-E claims exploration and production activities have undermined its ability to prevent flooding. It is calling for the companies to pay billions of dollars to the state to fortify levees and shore up the state’s coastal restoration plan.

SLFPA-E is just one of 28 parishes, local authorities, and other entities suing the oil and gas industry to force it to finance the reclamation of Louisiana’s coastal wetlands.

Once considered a nuisance, Louisiana’s wetlands serve as a natural barrier against hurricanes. Louisiana has lost about 1,880 square miles of coastal land during the past 80 years. A U.S. Geological Survey concludes the energy industry is responsible for at least 36 percent of the loss. The wetlands are now riddled with more than 10,000 miles of canals cut to access rigs, navigate barges, and construct pipelines. 

Opposition Not Universal

At one time, the oil and gas industry provided 70 percent of revenues for Louisiana’s state government, and it still provides a substantial 14 percent. The industry currently supports approximately 300,000 jobs in the state.

Because the oil and gas industry is still an important part of Louisiana’s economy, not all government agencies or officials embrace the lawsuits. Gov. Bobby Jindal (R) has argued litigation isn’t the proper way to fund wetlands restoration.

In 2014, the state legislature passed a bill banning state agencies or local authorities from pursuing lawsuits such as SLFPA-E’s. However, a state judge ruled the law missed its mark, finding SLFPA-E is neither a state agency nor a local authority; ruling it is hybrid entity.

In February, the federal judge presiding over the case ruled SLFPA-E doesn’t have standing to sue oil interests for coastal damage. In early September SLFPA-E appealed its lawsuit’s dismissal to the U.S. Court of Appeals for the Fifth Circuit. 

Lawsuits ‘Counterproductive’

Daniel Simmons, vice president for policy at the Institute for Energy Research, says Louisiana’s coastal wetlands have been in constant flux for centuries, even before the Corps of Engineers began to control the Mississippi River for navigation and levees were built to control coastal flooding.

“It is, after all, a flat coastal plain, bisected by the largest river in the United States,” Simmons said. “No one knows how much, if any, of the erosion was caused by oil companies, non-native nutria, river management, or how much is the work of God.”

Simmons says it is likely officials are suing oil and gas companies because they can’t sue the federal government, so they are going after the industry with the deepest pockets working in the swamps.

“Lawsuits against oil companies could actually be counterproductive to Louisiana’s interests, resulting in endless, costly litigation and appeals, which puts money in the pockets of lawyers and law firms by taking it from the pockets of oil and gas workers whose jobs have moved to other states,” Simmons said. 

Kenneth Artz ([email protected]) writes from Dallas, Texas.