Southern Louisiana Picks a Fight With Big Oil to Save the Wetlands

The region's coastal marshes are disappearing, making it even more vulnerable to storms like Katrina. Municipalities want to make the state’s biggest industry pay for the damage.
by | August 25, 2015

In the middle of Lake Hermitage, about 30 miles south of New Orleans, there used to be a marsh about a mile long. There also used to be, amid the grasses, dozens of wells tapping oil and gas deposits below. Dave Marino, a charter captain who grew up nearby, scans the coast from his boat. Down the road, closer to the Gulf of Mexico, he says, “it’s all gone.” Marino is talking about the marsh. While there are a few wells still standing, the marsh itself has vanished. “When you kill the vegetation,” he says, “the rest of it just melts away.”

Louisiana’s wetlands were once considered more of a nuisance than an environmental blessing. But that was before people understood they served an important purpose: They formed a natural barrier against hurricanes, which lose strength as they travel over land. In other words, the longer the coastline, the greater the protection. With the loss of mile upon mile of wetlands, the threat of severe flooding has intensified. Flooding here could disrupt an economic corridor of national importance, an area that’s home to the nation’s largest commercial port, that refines a quarter of the country’s crude oil and that brings in more than half of its foreign supplies. But it could also further wreak havoc on coastal life. The local government here blames the energy companies for the damage, and it wants them to pay.

Lake Hermitage is just one waterway named in 21 lawsuits filed by the government of Plaquemines Parish against many of the energy companies that have helped pay its bills and employ its people for decades. There are other suits from governmental groups as well. They’re all different, but at bottom they want the same thing: to force oil and gas companies to pay for wetland destruction that has made the area more vulnerable to storms.

The stakes are enormous. Louisiana has lost about 1,880 square miles of coastal land in the last 80 years, and official estimates predict the loss of another 1,750 in the next half-century if the state doesn’t take drastic engineering measures to stem the erosion and recreate land. Studies by the U.S. Geological Survey have concluded that the energy industry is responsible for at least 36 percent of the damage; other estimates put the number much higher. But the politics of the oil and gas industry in Louisiana is a tricky business. At one point, that industry contributed 70 percent of state government revenue -- today, it’s about 14 percent -- and still supports close to 300,000 jobs in the state, according to a study commissioned by oil and gas interests. Critics contend that industry influence has led regulators and elected officials to take a loose approach that allowed the damages to mount.

Once consigned to the op-ed pages, these critics are now turning to the courts. Growing awareness of the coastal crisis has prompted the most significant legal action in the state’s 100-year relationship with the oil industry. But it’s happening without the blessing of state leaders, who argue litigation isn’t the best way to get the industry to help with a restoration effort that most agree is essential. Support for the legal action is far from universal in the coastal parishes, where the influence of the energy companies remains potent, but the lawsuits demonstrate that a vocal contingent of Louisiana residents is demanding relief, no matter how crucial the industry is to local commerce and day-to-day living.

The lawsuit that has attracted the most attention is the one that was first out of the gate: The Southeast Louisiana Flood Protection Authority-East, charged with protecting the New Orleans area from the kind of flooding that followed Hurricane Katrina, argues in its suit against 97 oil and gas companies that their exploration and extraction undermined the authority’s mission. It wants them to pay billions in damages, and the money would go to fortifying levees and shoring up the state’s coastal restoration plan, which is far from fully funded.

Louisiana has lost about 1,880 square miles of coastal land in the last 80 years. (David Kidd)

In the flood protection authority’s view, the single biggest contributor to wetland loss has been the network of canals forged out of the marshes surrounding New Orleans over the past 80 years or so. There are at least 10,000 miles of canals cut across coastal Louisiana to access rigs, navigate barges and construct pipelines. But the canals disrupt the natural process that replenishes wetlands with sediment and allows saltwater intrusion that corrodes freshwater vegetation. The flood protection authority says the canals should have been backfilled and restored to their previous condition under coastal regulations.

The opposition to the authority’s lawsuit has been fierce. Gov. Bobby Jindal opposes the suit and has fought to reassert state control over the flood protection authority, whose members he appoints. The legislature passed a bill trying to preempt the lawsuit. And in February, the federal judge presiding over the case ruled that the authority doesn’t have standing to sue oil interests for coastal damage. An appeal is expected to be heard in the coming months by the U.S. Court of Appeals for the Fifth Circuit, which has a history of backing the business side in environmental cases.

Chip Kline, the Jindal-appointed chairman of the state’s coastal restoration fund, acknowledges oil industry involvement in coastal destruction, but says that state litigation isn’t the way to negotiate over damages. He and others say the authority’s lawsuit overstates the industry’s responsibility compared with other drivers of erosion, particularly the leveeing of the Mississippi River that contributed to flood protection but deprived wetlands of the sediment they needed to maintain themselves. Under Jindal, the state has launched a $50 billion, 50-year restoration plan that, among other things, is creating new barrier islands off Plaquemines Parish. But independent experts argue that it will cost at least double that price tag. Currently, the plan has enough funding to stay on schedule for about seven years, and much of the revenue over that time depends on settlements from the 2010 BP oil spill that will gradually thin out. The state has nowhere near $50 billion committed after that. As for the oil and gas industry, Kline says, “they’re absolutely hesitant to come to the table and discuss anything until the lawsuit is 102 percent put to bed.”

But Kline takes no issue with the local lawsuits, of which there are now 28 in total, seven from Jefferson Parish and 21 from Plaquemines. It’s expected that two more parishes will file suits as well. The parish litigation may face fewer questions about the right to sue because of state law giving coastal governments some influence over their wetlands. The energy companies, however, are not conceding this.

Oil leaks into the water from a barge. (David Kidd)

Plaquemines Parish is more dependent on oil jobs and money than Jefferson, which makes the Plaquemines council’s unanimous decision to sue such a bold one. Two-thirds of government revenue comes from oil and gas companies. But Plaquemines Parish is also a critical front in the fight to save Louisiana’s coast. It actually accounts for nearly 10 percent of the entire nation’s wetlands, and it’s right at New Orleans’ back.

The Jefferson and Plaquemines lawsuits could come to trial sometime next year. In addition to canal dredging, the parish cases focus on industry techniques for disposing of saltwater that bubbles up from oil and gas wells. Lawyers for Plaquemines argue that oil companies discharged their saltwater directly into the wetlands or through pits dug into the marsh, usually without getting a permit. Louisiana didn’t officially outlaw the waste pits until 1986, however, decades after other oil-producing states, according to attorneys.

Many of those pits, like the marsh, have washed away. “The oil industry knew going back to the ’30s that if you put water in these pits that are unlined, you’re kidding yourself if you think it’s going to stay there,” says John Carmouche, whose law firm is taking the lead in the Plaquemines and Jefferson suits. The firm is still fleshing out the level of damages it will ask for and ironing out the responsibility of individual companies, but one partner at Carmouche’s firm said the number they’re thinking of for both parishes “will have to have a ‘b’ in front of it.”

Despite the unanimous vote in favor of litigation in 2013, the resolve of Plaquemines Parish government is in question. The former parish council president who became synonymous with the suit, Byron Marinovich, lost his re-election bid in 2014 to a gas company administrator bankrolled by energy interests. Despite some grassroots sentiments in favor of killing the suits, however, the councilwoman who replaced Marinovich has failed to rally a majority so far.

The only coastal parish that has publicly refused to file a suit is nearby Terrebonne, one of the hardest-hit in terms of land loss. A quarter of the 1,880 square miles of Louisiana coastal land that has disappeared over the last 80 years has come from the Terrebonne Basin, eliminating an amount of land roughly the size of New York City. One council member said last year that the parish’s crest bears a fishing boat and an oil rig for good reason. “Without the two there is no Terrebonne,” she said. “There is no good earth, no good people and no good economy.”

The oil companies have said little publicly in their defense, instead arguing that the flood protection authority and the parishes have no legal right to sue. A spokeswoman for BP, Shell and Chevron declined to make company officials available for an interview. “While there may be isolated exceptions,” she said in a statement, “we believe that the vast majority of the industry complied with these permits, which were regulated and monitored by the agencies that issued and managed them, including the Corps of Engineers and the Louisiana Department of Natural Resources. These agencies also had the authority to enforce these permits, and that includes the authority to bring suit, which they have not done.”

It’s impossible to read the lawsuits and the mountain of work on Louisiana coastal erosion without asking one simple question: Where were the state regulators? The Department of Natural Resources has issued oil and gas permits in Louisiana’s coastal zone since 1978 and is also charged with enforcing them. The department defends its record by pointing out that canal dredging is now relatively rare and takes place on a smaller scale. When the department does allow larger-scale dredging, it requires operators to use the proceeds to offset damage through a state program. “What you’re trying to do is balance economic benefit without sacrificing too much environmental impact,” says Patrick Courreges, a department spokesman.

There are at least 10,000 miles of canals cut across coastal Louisiana to access rigs, navigate barges and construct pipelines. But the canals disrupt the natural process that replenishes wetlands with sediment. (David Kidd)

The question for critics is whether the balancing act has been achieved. Development has clearly won out, even in some of the most environmentally sensitive areas. The state has the legal authority to establish special zones to minimize it, but so far only two of these zones have been created. Backfilling canals

is also within the department’s enforcement powers, but a survey by Louisiana State University scientist Gene Turner has found only 10 miles of backfilled canals in the state, compared to at least 10,000 that were dredged. Alternative methods for accessing wells, such as requiring air-cushioned vehicles that would minimize the need for dredging, have been rejected by state regulators even though they are commonly used in other places, according to Oliver Houck, a Tulane University environmental law professor who’s written a history of energy regulation in the state.

State regulators argue that Plaquemines’ claims of improper waste disposal should come to them -- not to the courts. But without legal intervention, there’s little parishes can do to enforce environmental law or get compensated for damages, especially from activities that are decades old. The state’s Oilfield Site Restoration Program has a long waiting list and only about $4 million in funding a year. If the state really wanted to monitor waste disposal properly, critics contend, it would need a small army of watchdogs. According to Courreges, there are about 20 on patrol in the coastal zone at any given time.

On the issue of canal dredging, arguably the biggest sore spot for environmentalists, the Department of Natural Resources says much of the damage came so long ago that requiring restoration isn’t possible. But about 70 percent of the more than 200 dredging permits listed in the flood authority’s lawsuit came from the state under the coastal zone program after 1978. The state just doesn’t view backfilling canals as a good policy, as they’ve publicly said, because operators may need to reaccess a well at some later date. Paul Templet, who helped to write Louisiana’s environmental law and has also worked in other states, says Louisiana could set tougher standards for companies that claim they’ll need to reuse the canals and press far harder for efforts to mitigate damage. “If you put pressure on oil and gas companies, they’ll find ways to do things and money to do it with,” he says.

That’s essentially the lesson of Long Beach, Calif. That city stands on a bounty of fossil fuels; drilling was so heavy in the 1930s that the area began to sink at a rapid clip. That was because sucking up oil from reservoirs below the earth without replacing it creates a vacuum that leads to subsidence, or sinking land. Officials in California were so alarmed that they put a halt to most drilling in the 1960s. But five major oil companies formed a consortium to construct manmade islands that allow for drilling away from population centers, along with replacements that maintained pressure in oil reservoirs to prevent subsidence. “In the 1960s, Long Beach said, ‘Fix it or leave,’ and they fixed it,” says Brandon Taylor, a lawyer representing the Plaquemines plaintiffs. “I guess the question I have is, why couldn’t they do the same things they were in Long Beach in Lake Hermitage?”