Deal reached in $100 million settlement with Freeport over decades of coastal damage

Some parishes refused the payout from Freeport-McMoRan 

• BY TRISTAN BAURICK | Staff writer Oct 25, 2022 - nola.com

The state and several parishes have signed off on a long-delayed $100 million settlement with one of several oil and gas companies accused in court of damaging Louisiana’s coast.

Mining giant Freeport-McMoRan Inc. and its subsidiaries agreed to the settlement in 2019, but payment of the funds was stalled by some of the parishes that stood to gain from it.

“Big Oil has spent millions of dollars in lobbying costs to try to prevent the settlement from being finalized,” said John Carmouche, an attorney representing six coastal parishes that sued oil and gas companies. “After two years of fighting, the parishes have finally finalized the settlement to restore the coast of Louisiana.”

The settlement required 12 coastal parishes with environmental damage caused by oil and gas companies to approve the deal, but four of them — Lafourche, St. Mary, St. Martin and Iberia — refused, saying they preferred to work with companies on voluntary projects to restore wetlands lost to the Gulf of Mexico over the past century.

The deadlock was broken when the state Department of Natural Resources signed the deal on behalf of the holdout parishes, a move that ran counter to the parish governments’ wishes but will likely boost their restoration efforts.

A spokesperson for Freeport confirmed the agreement had been signed by all parties but declined further comment.

The deal comes a week after a federal appeals court sent a similar lawsuit, also led by Carmouche, back to state court for trial, potentially clearing the way for more than 40 similar suits that allege billions of dollars in coastal wetland damages by oil and gas companies to also move forward.

The 2019 settlement with Freeport was considered a breakthrough in the yearslong push to force oil and gas companies to repair decades of damage. Now an Arizona-based mining company with oil and gas wells in south Louisiana, Freeport was headquartered in New Orleans until a merger led to its 2007 relocation.

Canal dredging, drilling, oil spills and waste disposal by oil and gas companies are considered some of the main contributors to Louisiana’s land loss crisis. Over the past century, the state has lost more than 2,000 square miles of land, an area about the size of Delaware.

Some local leaders were hesitant to target an industry that had long provided good-paying jobs.

In refusing to sign the deal, Lafourche President Archie Chaisson III blamed the disappearing coast not on the oil and gas industry but on Mississippi River levees, which prevent sediment from rebuilding land along the coast.

In 2020, Terrebonne Parish President Gordon Dove praised the industry’s contributions to his parish’s economy while blasting the settlement, which he called “a money grab” by trial lawyers.

Both parish leaders could not be reached for comment on Tuesday.

Acting against Dove’s wishes, Terrebonne Parish District Attorney Joseph Waitz Jr. signed off on the deal and hired an outside law firm to represent him in a possible lawsuit.

Jefferson, St. Bernard, Plaquemines, St. John the Baptist, Vermillion and Cameron parishes were represented by Carmouche’s firm, Baton Rouge-based Talbot, Carmouche & Marcello, on the original lawsuit against Freeport.

Carmouche declined to say how the $100 million will be distributed among the 12 parishes. A framework for how to spend the money will need to be determined by the state Legislature, he said.

Freeport will make an initial payment of $15 million and additional payments of $4.25 million each in 2023 and 2024. The remaining $76.5 million would be tied to reimbursements from the sale of environmental credits.

The deal gives Freeport preferred status from the sale of environmental credits related to projects funded with its settlement. Also called carbon credits, these financial instruments are generated by projects that cut greenhouse-gas emissions, such as tree plantings or marsh restorations. Credits can be used to offset an owner’s other pollution-causing endeavors or the credits can be sold to other companies.

The full disbursement of the money will likely take 22 years, Carmouche said.

He hopes other oil companies will follow Freeport’s lead and settle the more than 40 other coastal damage suits he’s representing against Chevron USA, Exxon Mobil Corp., ConocoPhillips Co., BP America, and Shell.

“For five years, we have fought to return these coastal cases to Louisiana state court so Louisiana citizens can decide what each company needs to do to restore our coast to its natural state,” Carmouche said. “Freeport has chosen to act responsibly (while) Big Oil has chosen to spend millions on lobbyists.”

Staff writer Tyler Bridges contributed to this report.