Study: Legacy lawsuits sapping Louisiana jobs

Negative perceptions associated with legacy lawsuits against oil and gas companies for environmental damage sometimes caused decades ago are costing Louisiana jobs and money, an LSU study released Tuesday concludes.

The findings were released by David Dismukes of the LSU Center for Energy Studies in the report, "The Impact of Legacy Lawsuits on Conventional Oil and Gas Drilling in Louisiana."

It's an update of a 2005 study conducted for the Louisiana Department of Natural Resources and the Department of Economic Development that found a "preliminary correlation" between legacy lawsuits and conventional oil and gas drilling in South Louisiana, Dismukes said Monday at the Louisiana Oil and Gas Association annual meeting in Lake Charles

The 2012 study quantifies the impact and cost of the legacy lawsuits, he said.

Dismukes said that legacy lawsuits cost Louisiana 1,200 new oil and gas wells over the past eight years, a loss of $6.8 billion in drilling investments and 30,000 jobs.

The financial impact goes even deeper, he said. With state government chopping its budget because of declining revenues, fewer wells equates to less revenues coming into state coffers, Dismukes said.
Don Carmouche, whose Baton Rouge law firm Talbot

Carmouche and Marcello settled 40 to 50 legacy lawsuits in recent years, said the LSU study released Tuesday is flawed because much of it was done before Act 312 of the 2006 regular session of the Louisiana Legislature.

That legislation was sponsored by the oil companies and supported by then-Gov. Kathleen Blanco, Carmouche said. But oil and gas companies aren't happy with it.

They failed in attempts last year to amend Act 312 and are gearing up for to push for amendments in the 2012 regular session.

"We're not against the oil companies," he said. "We just expect them to bear responsibility for what they did."

Spokesmen for two Louisiana oil and gas industry associations spoke out Tuesday in support of the Dismukes report.

"The conclusions drawn in the study are particularly disturbing and dismaying to those who are interested in or dependent upon the future vitality of Louisiana's oil and gas industry," Chris John, president of the Louisiana Mid-Continent Oil and Gas Association, said in a news release.

Don Briggs, president of LOGA, said the report "clearly lays out the facts that legacy lawsuits are merely court-sanctioned extortion where there is no need for remediation in most cases."

Companies are being sued for drilling on property decades ago with little or no proof that any environmental damage occurred, he said.