Committee backs ‘legacy’ bill

04 27, 2012 by The Advocate

A state Senate committee early Thursday advanced an alternative to the Louisiana House-passed legislation that addresses “legacy lawsuits.”

Senate Bill 731 was advanced by the state Senate Natural Resources Committee on a 3-2 vote, which would allow the full Senate to consider the legislation early next week.

The Louisiana House approved House Bill 618 late Wednesday on an 82-19 vote. The measure is awaiting a committee assignment in the state Senate.

Lobbyists and legislators portray HB618 as the oil industry’s solution, while SB731 is what big landowners support.

At issue is litigation stemming from the contamination of land by oil and gas drilling activities over the decades, called legacy lawsuits.

The oil industry say though operators were following legal and accepted practices at the time, the companies are willing to clean up well sites that were damaged by drilling and production years ago. But the civil lawsuits expose the companies to all sorts of other claims that could cost millions of dollars.

The owners of the land counter that oil companies are only willing to clean up after being sued and are trying develop procedures that would limit the amount of cleanup necessary and the amount compensation paid for other damages.

The sponsors of HB618 and SB731 said Thursday their individual measures are attempts to develop legislation after months of fruitless negotiations between oil companies and the landowners. “This is a good honest effort to try to find common ground to propose a solution,” said state Sen. Bret Allain II, R-Franklin, who sponsored SB731.

“Actually, both of these bills are very similar,” said state Rep. Neil Abramson, D-New Orleans, adding that there is plenty of room for agreement.

Abramson notes some significant differences. For instance, Abramson’s bill does not address indemnification. Allain’s includes a way to nullify agreements in which current owners of the right to drill agreed to assume the responsibilities of all the previous owners of the leases.

But the two sides are not far apart on some other issues, Abramson said.

For instance, Allain’s SB731 would require about a half-dozen state agencies to authorize any exceptions to the regulations that govern how extensive cleanup will be.

“The exception is where the value is,” said Jimmy Faircloth, a lawyer representing some of the state’s largest landowners. “The difference in the exceptions could be the difference between $1 million cleanup and a $25 million cleanup.”

Abramson said he could agree with having the agency, whose rules are being used as part of the exception, sign off on the cleanup plan. But a half-dozen authorizations are too many, he said.

Gifford Briggs, vice president of Louisiana Oil and Gas Association, said the provision as written, however, gives veto power to seven state agencies.

Faircloth said the language is broadly written. That language could be tweaked, he said.

“Adding agencies that are supposed to lend some oversight is always good,” said Baton Rouge lawyer Donald Carmouche, who represents landowners in legacy lawsuits. But he opposes both bills, arguing that the current system, though cumbersome, works to clean damaged sites and recompense landowners for their losses.

Briggs said the industry supports Abramson’s HB618 but is open to negotiations on Allain’s SB734.

“The two bills do look similar on the surface. But when you get down into it subtle word changes that have far-reaching impact,” Briggs said. “It’d be hard for the industry to agree with the (Allain) bill without amendments.”