Legacy Lawsuits equal less drilling in Louisiana

05 03, 2012 by Daily Advertiser

Louisiana is known as the oil and gas state of our country. Around 25 percent of the oil and natural gas that fuels our country flows through the pipelines of Louisiana, while 50 percent of the gasoline and diesel fuel that drives the engines of our country flows out of Louisiana. North Louisiana is also home to the most productive natural gas field in the country, the Haynesville Shale.

While these statistics sound very encouraging, the industry is currently experiencing a statewide rapid decline due to crashing natural gas prices and being exacerbated by Legacy Lawsuits.

Recently, the LSU Center for Energy Studies released a report on the effect of Legacy Lawsuits on conventional oil and gas drilling in Louisiana. To date, more than 270 Legacy Lawsuits have been filed with more than 1,500 defendants.

The LSU study estimates that Legacy Lawsuits have led to the loss of nearly 1,200 new wells in Louisiana, translating to an astonishing $6.8 billion in lost drilling investments. When drilling decreases, jobs are lost at a rapid rate. So while the court-sanctioned extortion, also known as Legacy Lawsuits, is taking place, more than 30,000 jobs have been lost, according the LSU study.

Sen. David Vitter has made a plea for each side to work together on the issue of Legacy Lawsuits. He stated recently in a news release on the matter, "The current stalemate over the legacy lawsuit issue actually favors one side, the continued "bonanza" benefitting trial attorneys who often seek millions more in damages than required cost to clean up the contaminated land."

Thus far, the trial lawyers have made it an all out battle between landowners and the oil and gas industry. Whoever is to blame, the bottom line remains the same — the negative effect on drilling in Louisiana is astronomical due to these frivolous lawsuits.

Scott Sinclair, president of Tensas Delta Exploration Co., says that the Legacy Lawsuits are "crippling his company's operations." TDE is facing five Legacy Lawsuits with one of the plaintiffs seeking $133 million in damages, when cleanup estimates have come in at only $500,000.

TDE owns property in Catahoula and Tensas parishes, where 126,000 acres of their land is not being developed directly due to these Legacy suits.

Currently, several bills are before the Louisiana Legislature regarding Legacy Lawsuits. Both the landowners and the oil and gas industry are backing bills to attempt to mitigate this ongoing problem.

Thus far the trial lawyers have succeeded in using various landowner groups as a shield to prevent reasonable solutions to the legacy issue. While the Legacy Lawsuits seem to have no end in sight, the burden on oil and gas companies will continue to grow until this problem is corrected.