Companies Should Fix What They Break

Shreveport Times
John Barry
November 17, 2013

The Southeast Louisiana Flood Protection Authority East (SLFPAE) — the levee board responsible for protecting most of metro New Orleans — decided to sue 97 oil, natural gas and pipeline companies for two reasons. First, oil and natural gas operations have played a major role in destroying 1,900 square miles of coastal Louisiana. Second, the destruction of this land buffer outside the levees has made people throughout coastal Louisiana more vulnerable to hurricanes.

The SLFPAE never has argued that the companies are responsible for all the damage. But they are responsible for a significant part of it. And the state and federal governments and even the industry itself agree.

Louisiana’s master plan to restore and protect the coast notes that the industry dug “canals and pipelines which crisscrossed south Louisiana marshes … disastrously altering the natural hydrology of the region. Saltwater intrusion increased and more land was lost.” The U.S. Geological Survey — in a study that included industry scientists — concluded that the industry is responsible for 36 percent of the land loss.

And Bob Bea, Shell’s former chief offshore engineer and head of the National Science Foundation team that investigated levee failures during Hurricane Katrina, noted in an affidavit on behalf of the state, “Oil and gas activities have made and continue to make substantial contributions to degradations in the natural defenses against hurricane surges and waves in coastal Louisiana. In several important cases, it was the loss of these natural defenses that contributed to the unanticipated breaches of flood protection facilities that protected the greater New Orleans area during Hurricane Katrina.”

Opponents of the lawsuit never address these facts. Instead, they throw up smokescreens attacking lawyers, talking about how cooperative the industry is now, arguing that the industry complied with the law when it conducted its damaging activities or implying the industry should be let off because it employs people.

In fact, the lawsuit contends that the companies never complied with the law. If courts find that the companies did not break the law, the SLFPAE will lose. That’s unlikely: Both the permits that companies agreed to and the law itself require sites of operations to be “restored as near as practicable to their original condition upon termination of operations.” Instead, sites have deteriorated so much that often what once was land now is open water.

It is true that today the industry is cooperating in many areas, and that cooperation is worth millions of dollars. But industry liability statewide is in the tens of billions of dollars. Its cooperation amounts to somewhere between one one-hundredth of a penny and one-tenth of a penny on the dollar.

It also is true that the oil and natural gas industry generates economic activity that benefits the state. So do thousands of other Louisiana businesses, ones that do not get a pass when it comes to obeying the law. An absolute requisite for capitalism to thrive is a society governed by the rule of law. The rule of law means all businesses and individuals are treated the same, and it requires a court system to enforce the law.

Most importantly, remember that the purpose of the lawsuit is not to attack the industry. It is to protect people’s lives and property. Louisiana’s master plan has a $50 billion to $100 billion price tag. It also has no funding. If the oil companies don’t pay to fix the part of the damage they caused, one of two things will happen. Either coastal Louisiana will continue to melt into the Gulf of Mexico — an enormous economic and human catastrophe — or taxpayers will have to pay to fix it.

That’s what Gov. Bobby Jindal wants. That’s right. Our anti-tax governor wants taxpayers to pay to fix what was broken by the most profitable industry in the history of the world.

The SLFPAE is simply asking — in fact, demanding — that the oil companies fix what they broke. Let the courts decide who’s right. This is something everyone in Louisiana should support.