- About Us
- Industry Sectors
- Issues & Initiatives
- Legislative & Regulatory Affairs
- News & Events
Analysis: Oil-contamination deal lets Jindal squeak by
The brokering of an agreement over how to handle lawsuits involving environmental damages from oil and gas drilling removes Louisiana Gov. Bobby Jindal from an uncomfortable position.
Jindal had allies -- and big-money campaign donors -- on both sides of the issue.
Also, the dispute threatened to highlight an often unknown and awkward alliance for a Republican: Jindal has received thousands of dollars in campaign donations from trial lawyers, who are often at odds with business groups and who are regularly considered Democratic allies.
At issue are so-called legacy lawsuits that seek millions of dollars in damage claims, filed by landowners who leased their property to energy companies and claim environmental damage from the drilling, such as contamination of ground water resources, that limit their ability to use the property.
The oil and gas industry says the lawsuits are stifling exploration in the energy-rich state, and they accuse trial lawyers of dragging out the suits to maximize profits.
Landowners and the trial lawyers who represent them accused the oil and gas companies of trying to push bills that would give the industry a more favorable legal environment that will keep them from paying what they owe for the contamination.
The last time the issue reached a fever pitch at the Louisiana Capitol was six years ago.
Then, the matter uncomfortably put legislators in the midst of a dispute between multiple sets of powerful lobbying groups and campaign donors: landowners, trial lawyers and one of Louisiana's biggest industries, oil and gas.
Jindal faced the same dilemma this time as dozens of bills were filed to again change the complex legal process for dealing with the lawsuits, amid criticism the last agreement didn't work out as intended.
The Republican governor has regularly talked of his strong support for the oil and gas industry.
But on the other side of the dispute was the governor's former executive counsel, Jimmy Faircloth, and Jindal's big-money contributor Roy O. Martin, whose company in Alexandria is the largest private landowner in the state with thousands of acres and pending legacy lawsuits.
Also in the mix were trial lawyers, who have given Jindal's campaign account at least $290,000 in the last election cycle.
Jindal tried to stay out of the fray, putting his natural resources secretary, Scott Angelle, as the point man for negotiations. But the governor then faced criticism from the state's other top Republican leader, U.S. Sen. David Vitter, who suggested Jindal wasn't doing enough to resolve the issue.
Vitter sent out emails and statements declaring the current situation a "trial lawyer bonanza," and suggesting that if Jindal didn't intervene, the lawsuits could cost the state thousands of lost jobs.
The pressure immediately lifted with the announcement that a compromise had been reached.
Angelle said the agreement will require companies to start cleaning damaged areas to regulatory standards, while other, more extensive damages claims can be pursued in the courts.
The changes would set certain benchmarks and timelines in handling cases. Existing cases already set for trial wouldn't be included in the reworked legal provisions.
The proposal would allow cleanup plans devised by the state Department of Natural Resources to be admissible as evidence in a lawsuit for a larger damage claim, a move sought by the energy industry.
Two other agencies, the Department of Environmental Quality and the Department of Agriculture, would also weigh in on the cleanup plan. That addresses complaints from landowners who said the industry has too heavy an influence over DNR and could pressure the agency in cleanup estimates that would be reviewed to determine damages.
The Louisiana Landowners Association, Louisiana Oil and Gas Association and Louisiana Mid-Continent Oil and Gas Association all indicated they support the language included in the two bills.
And with that, the compromise bills sailed through the Senate. They're set for House debate Thursday, and House Speaker Chuck Kleckley, R-Lake Charles, said he expects no problems with them reaching final passage.
So, the uncomfortable dilemma for Jindal has ended -- as long as the compromise sticks.