Oil and gas industry, landowners reach compromise in cleanup dispute with the La. Legislature

05 18, 2012 by The Republic

Louisiana lawmakers said Thursday that they have brokered an agreement in a dispute between the oil and gas industry and landowners over how to clean up environmental damage done in drilling years ago.

"There's been a compromise. It will move through the process, and we will have something for the governor to sign before the end of session," said House Speaker Chuck Kleckley, R-Lake Charles.

The legislation would change the complex legal process for dealing with so-called "legacy lawsuits" that seek millions of dollars in damage claims.

Natural Resources Secretary Scott Angelle worked on the agreement for Gov. Bobby Jindal and said it 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 — added to bills by Benton Sen. Robert Adley and New Orleans Rep. Neil Abramson — would allow cleanup plans devised by the 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.

Legacy lawsuits, often totaling millions of dollars, are filed by landowners who leased their property to energy companies and claim environmental damage from the drilling, such as contamination of ground water resources.

The oil and gas industry says the lawsuits are stifling energy exploration in the 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 Senate Natural Resources committee advanced the compromise bills without objection. Angelle said both measures need to pass to make the deal work.

"We are hopeful that this will bring some closure at this stage to legacy litigation reform," said Jimmy Faircloth, representing Roy O. Martin, whose company is the largest private landowner in the state with thousands of acres and pending legacy lawsuits.

Several issues remain to be worked out, however, with lawmakers pledging to make any tweaks needed. Both bills will need passage from the House and Senate before they are finalized.

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.

U.S. Sen. David Vitter previously suggested Jindal wasn't doing enough to resolve the issue. On Thursday, he applauded the agreement.

"I really congratulate Bobby for coming around and supporting this strong solution. It will help clean up real contamination and shut down the trial lawyer bonanza, which has been hurting job creation in our energy sector," Vitter said in a statement.