Louisiana’s Coast Is Vanishing. Can a Mining Company’s $100 Million Offer Help Save It?

Freeport-McMoRan’s deal to resolve claims that its aggressive drilling damaged the coast could lead to more. But oil giants like BP, ExxonMobil and Shell have bristled at the idea.


By Nicholas Bogel-Burroughs  Published Sept. 26, 2019Updated Sept. 27, 2019, 11:28 a.m. ET

Coastal Louisiana parishes announced on Thursday that they had reached a deal with a mining company over claims that its aggressive drilling for oil damaged the state’s vanishing coast, a settlement that could lead to other agreements with energy giants as the state scrambles to stop its disastrous land loss.

In a tentative agreement with 12 coastal parishes, the company, Freeport-McMoRan, said it would pay up to $100 million toward restoring the coast, much of which it could recoup through environmental credits.

Freeport-McMoRan is just one of 98 companies that have been sued in 46 lawsuits over coastal damage, according to John Carmouche, a lawyer representing eight of the 12 parishes that are part of the tentative agreement. But the deal is likely to blaze a trail for future negotiations between the parishes and industry leaders like ExxonMobil, Chevron, BP and Shell.

“This is definitely a starting point, and I think they all understand that the ones that come first get the better deals,” Mr. Carmouche said.

More than 2,000 square miles of coast — roughly the size of Delaware — have sunk underwater since the 1930s. Studies, including those sponsored by oil and gas industry groups, have shown that private enterprise is responsible for a substantial portion of the land loss, largely from the construction of pipelines and access canals.

But the energy industry has remained a powerful force in Louisiana, which accounts for 7 percent of all gas production in the United States and is capable of processing 3.3 million barrels of crude oil each day, according to the federal government’s Energy Information Administration.

Some of the largest oil and gas companies bristled at the idea that they would agree to a similar deal.

“It’s a long way away from presenting a legitimate solution,” said Melissa Landry, a spokeswoman for five of the defendants: BP, Chevron, ConocoPhillips, ExxonMobil and Shell. She declined to say whether the companies had discussed possible settlements with the parishes.

In a statement, Ms. Landry said oil and gas companies had been operating within the scope of the law for decades and that the “complex and multifaceted problem” of protecting and restoring Louisiana’s coast “will not be resolved in a courtroom.”

Gov. John Bel Edwards, a Democrat who in 2016 intervened as a third party in the lawsuits and encouraged other coastal parishes to sue the oil and gas companies, said he hoped other corporations would strike similar deals with the local governments.

State officials have estimated that it would cost $50 billion to neutralize land loss. The money from the proposed settlement would go toward a Coastal Zone Recovery Fund, managed by the state, that would distribute the cash toward coastal projects in the affected parishes.

“Ensuring these funds stay in the communities that are impacted for dedicated coastal restoration is why the state of Louisiana intervened in these lawsuits, despite the fact that they were filed before I was governor,” Mr. Edwards said in a statement, adding that he hoped the deal would be a model for future agreements.

The deal still needs the formal approval of all 12 parishes, which Mr. Carmouche said he expects before the end of the year, but the tentative settlement marks the latest turn in litigation battles against the oil and gas industry in Louisiana.

Private landowners allowed companies to use their lands, but some later sued after they said the companies had polluted their property. In 2017, a federal appeals court threw out a lawsuit from a state levee authority, which claimed that oil and gas companies had weakened New Orleans’s defenses from storm surges by destroying coastal wetlands that act as a buffer zone.

John Barry, a former member of the authority that led that charge, said on Thursday that he was glad to see Freeport-McMoRan’s willingness to reach a settlement, but that it was a drop in the bucket compared with the impact of other companies that have larger operations in the state.

“Compared to the scope of the problem, and the liability of the industry, it’s a small but important step,” Mr. Barry said.

Oliver Houck, a law professor who advised the parishes’ lawyer early in the case, said that the settlement was significant, but that he had nearly given up hope that larger companies would take responsibility for the disappearing coast.

“They just can’t accept it,” he said.

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Wonder how much the lawyers are getting... I'm sure it was all pro bono...

Considerably less than if Freeport-McMoRan had gone to court and lost.  Instead of a focus on "lawyers" maybe the real issue here is something that all Louisianans should consider.  The O&G industry has significant exposure to losing these suits, settling may be the cheaper way out.  But there is another way to view this settlement.  The O&G industry has billions of dollars of infrastructure on the coast that is at risk to the effects of a changing climate.  Freeport-McMoRan just may have come to the conclusion that the best business decision is to settle, work with the state, and while addressing coastal problems get some help protecting, relocating or replacing the most vulnerable O&G infrastructure with some help from tax dollars, federal and state.  Toward that end, $100M is a drop in the bucket and quite possibly a smart investment.

The one thing I definitely agree with you on is that the O&G companies will relocate their infrastructure and operations.... probably to Texas if I had to guess. I wonder if our marshes and coastal areas were full of wind mills and solar panels, if that would have made a difference. :)

The marshes are not suitable for either wind or solar but floating solar and offshore wind are growing niches in renewable energy.  The O&G industry isn't going anywhere, they have too much invested in Louisiana.  And much of the end user demand is located in SE LA.  Any assertion that those existing facilities would go anywhere, including Texas, is a fairy tale.


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