Levee board picks fight with oil and gas industry, roiling La

Levee board picks fight with oil and gas industry, roiling La. by Annie Snider, August 28, 2013, E&E News
The oil and gas industry, which owns about 80 percent of Louisiana’s coast, has carved 10,000 miles of canals in the marshes. While scientists debate the scope of industry’s role in the state’s loss of 1,900 square miles of land over the last century, few dispute that it has had one. Now, a government panel created to oversee protective levees here in the wake of Hurricane Katrina has filed a lawsuit against 97 oil and gas companies that aims to force them to repair or pay for the damage they caused to the marshes. The lawsuit, filed last month in civil district court in New Orleans, is the brainchild of Southeast Louisiana Flood Protection Authority-East Vice President John Barry, well-known in these parts for his 1997 book “Rising Tide,” which chronicles how the devastating 1927 Mississippi River flood transformed the country’s relationship with its longest river. With this lawsuit, he stands to write the next chapter in the region’s history. “This lawsuit is about making sure that New Orleans has a fighting chance to survive,” Barry said in an interview. “As we go forward and we look at the requirements of protecting people’s lives and property, it’s simply not possible to do that with the kind of financial resources that we can call upon. So it makes sense that someone — an industry that is a significant contributor to the problem — pay to fix the problem that they created.”

But taking on the oil and gas industry, which provides a significant share of jobs and revenue to the state, is one sure way to find a fight. During a time of year when life here has usually slowed to a steamy simmer, the Big Easy is roiling with controversy over the lawsuit. Gov. Bobby Jindal (R) and his coastal adviser have come out swinging against the lawsuit, contending that it is unconstitutional and ill-thought out and that it jeopardizes the state’s ability to carry out a coastal restoration plan. And while Louisiana’s federal lawmakers have mostly been taking a wait-and-see approach with the suit, some state legislators are not. The Legislature doesn’t come back into session until next March, but already lawmakers are talking about ways of intervening.

For decades, stakeholders here have been whispering about the prospect of such a lawsuit, but until now, no one had seriously tried it. Proving standing — that the plaintiff was injured by companies’ actions — was one major hurdle. Mark Davis, a senior research fellow and director of Tulane University Law School’s Institute on Water Resources Law and Policy, said the East Bank levee authority is one of the few entities that could show that it has been directly affected. “It has one job and one job only, and that is to keep the people safe,” he said. The authority was created after Katrina, when legislators took dramatic steps to remove politics from levee boards. A constitutional amendment, which passed overwhelmingly, consolidated the levee districts around New Orleans and downriver into just two boards: one responsible for the protection of communities on the river’s east bank and the other for the west. It also set detailed requirements for who could be nominated to those boards to ensure that they would be filled with technical experts rather than political appointees. Those boards are tasked with maintaining and operating the levees, storm barriers and other infrastructure, including the new $14.5 billion flood-control system nearing completion by the Army Corps of Engineers. That is no small — or cheap — job, given the scale of the new system and Louisiana’s constant battle against subsidence. The levee authorities are also responsible for finding the funding for their work. They don’t receive state support and are not slated to receive funds from fines or settlements related to the 2010 Deepwater Horizon oil spill.

“The Authority is responsible for protecting a great majority of the Greater New Orleans region from the mortal threat of hurricane storm surge,” the lawsuit states. “It alone manages the levee system that is designed to check the floodwaters that threaten to inundate the city each year during hurricane season. It alone must confront the reality that with the disappearance of the land buffer that protects the levees from the ocean, its mission could become a physical and a fiscal impossibility.” The board voted unanimously to file the suit in June. The list of defendants includes some of the biggest and most influential oil companies, including BP America Production Co., ConocoPhillips Co., Chevron Inc., Shell Oil Co., Exxon Mobil Corp. and Koch Industries Inc.

The lawsuit relies on the well-established legal theories of nuisance, negligence and liability. It stands on three main arguments.

First, it alleges that companies violated their permits by failing to “maintain and restore” the wetlands affected by their work. Although individual permit obligations vary, lawyers say many required companies to backfill canals when they finished them, meaning that the dredge spoil piled on the banks would be returned to the canal. Depending on the location, such backfilling can over time help wetlands rebuild. The suit contends that those original restoration requirements remain in effect for companies that first did the work or businesses that now own the land.

Second, the suit argues that the companies’ actions violated the federal River and Harbors Act of 1899, which prohibits actions that reduce the effectiveness of federal levees.

Finally, it points to a centuries-old legal principle, “servitude of drain,” which holds that someone is liable for damages if he does something that increases the flow of water onto another person’s property. Significantly, the courts have ruled that properties don’t have to be contiguous. The principles at play here are similar to those that have been used by individual landowners to successfully sue oil and gas companies, said Oliver Houck, a professor at Tulane University Law School, but this is the first time that such a suit has been attempted on a landscape scale. He said that one major hurdle to the suit is the fact that oil and gas companies’ behavior was never challenged over the decades since the dredging was done. Under the legal concept of prescription, this could be seen this as a type of easement allowing that activity. But, Houck said, prescription was conceived of with respect to fixed events, not continuous ones like the ongoing erosion of wetlands. “It’s not like somebody went and burned down your shed some time ago, and now you’re left with a burnt shed,” he said. “It’s like your shed is burning every day. It’s a continuing kind of problem.” A caveat in the permit language could also be a critical issue in determining whether the suit moves forward. Gene Turner, a wetlands scientist at Louisiana State University who has spent decades studying the impacts of canals, said that most permits obligations go into effect “upon abandonment.” “That’s a legal term,” he said. “Companies will not declare it abandoned because they say, ‘Well, we might want to go back there.’ And there’s not a requirement to declare it abandoned when they finish drilling.”

Louisiana is experiencing a coastal crisis. In the last century, it has lost 1,900 square miles of land — an area as large as Delaware. … With pressure being applied to the East Bank levee authority, the board recently offered an olive branch, voting to consider a 45-day pause in the lawsuit to allow for negotiations with the state and with energy companies. Board member Barry has said that he is open to settling the suit if enough is offered in exchange. But legal experts say that’s unlikely to happen until oil and gas companies are certain that the litigation is moving forward, and the two sides still appear to be fundamentally at odds on this. [Emphasis added]

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