Shell Takes Big Lead in Wetland Campaign

Louisiana Lowlands Threat Level Red

By LOUISE S. DURHAM
EXPLORER Correspondent

'Fair Share’ Legislation Up in the Air

Given the enormous oil and gas activity that occurs in Louisiana’s wetlands and offshore environs, the question has been posed as to why the oil and gas companies don’t pick up the estimated $14 billion tab it will take to create a sustainable coastline.

In fact, they’re handing over big bucks to the federal government. How the money is then doled out leaves much to be desired, in the opinion of certain recipients.

"The oil companies are paying $5 billion a year for the right to operate offshore Louisiana, and they’re paying their taxes and doing everything else," said Ted Falgout, director of Port Fourchon, which serves as a critical link to the immense offshore oil and gas industry and itself faces the imminent threat of being cut-off from land (see related story). "It’s the federal government not using that money in an appropriate manner.

"The oil producing states are at a disadvantage because this money goes to the federal treasury, and everyone is getting to use it," Falgout said. "It’s not being put back into the business that allows them to have that money.

"What would be a normal business plan is missing here," he noted.

There’s reason to be optimistic that may change.

U.S. Sen. Mary Landrieu, D-La., crafted a "fair share" federal oil revenue proposal, which was included in the Senate’s version of the energy bill being drafted recently. In a surprise move early in August, the Senate threw in the towel on the effort and opted to resurrect the energy legislation it adopted last year. Because that bill faces re-writing, the fate of the Landrieu proposal is not known at this time.

According to the LA 1 Coalition, which was formed to preserve land access to Port Fourchon via LA Highway 1, the proposal would allocate 12.5 percent of federal severance taxes (estimated at $3.7 billion over the next six years) to coastal states that support the oil industry. Landrieu anticipates Louisiana will receive the heftiest portion of the redistributed revenue, given its sizeable investments directed toward energy production.

The increased funds would go far to help Louisiana come up with its matching dollars for the planned $14 billion coastal restoration effort and to address infrastructure needs in the parishes that bear the brunt of the impact of offshore drilling.

U.S. Rep. Billy Tauzin, R-La., chairman of the House Energy and Commerce Committee, included language similar to Landrieu’s proposal in that chamber’s version of the energy bill.

This proposed legislation is in stark contrast to 2001, when Louisiana received less than 0.5 percent of the $7.5 billion oil and gas royalties generated in the OCS, despite the fact that $5 billion of that total originated from drilling off its coast, according to the Minerals Management Service.

Exploration in the southern Louisiana marshlands -- like everything else in the region -- faces a constant threat in the form of rising water levels, a challenge that several companies are now trying to tackle.

There are dire predictions being tossed around that the vast array of surface wellheads and pipelines in the Louisiana marshlands -- as well as many now-populated communities -- may one day be covered by waters of the Gulf of Mexico.

Time will tell.

Meanwhile, as these fragile wetlands wash out to sea at an alarming rate, color the threat level red.

The Bayou State contains 40 percent of America’s wetlands, yet it represents more than 80 percent of all coastal wetlands loss in the continental United States. In fact, they’re disappearing at a rate of 35 square miles each year. More than one million acres have vanished since the turn of the century, and another 1,000 square miles are projected to be gone by 2050 if no preventive measures are taken.

The loss has been deemed catastrophic by a bevy of noted scientists, including AAPG member Chip Groat, director of the U.S. Geological Survey and former state geologist for Louisiana.

The continued disappearance of these wetlands would be bad news not only for Louisiana but for the nation itself.

Consider what’s at risk:

• 95 percent of all marine species in the Gulf of Mexico spend all or part of their lifecycle here.
• It’s the source of more than 30 percent of the nation’s fisheries’ catch.
• It’s one of the largest habitats in the world for migratory waterfowl.
• More than 25 percent of the oil and gas consumed in the United States comes from/through these wetlands, which offer protection for the multitudinous wells, pipelines, roads and other infrastructure.
• 80 percent of the offshore oil and gas traverses this area.
• It’s the site of the world’s largest port system.
• It’s protection from hurricanes and storm surges for more than two million people living in the coastal zone -- including New Orleans.
• It’s the direct livelihood for many of the region’s inhabitants.

No Time to Point Fingers

Given what’s at stake both locally and nationally, Louisiana has embarked on a three-year public awareness campaign dubbed "America’s Wetland: The Campaign to Save Coastal Louisiana." The goal is to create national awareness of the problem to help convince the nation that it’s in its best interest to spend $14 billion to save and rehabilitate this invaluable coast.

Shell Oil is the lead "world sponsor" of the privately-funded $10 million campaign, which boasts an extensive lineup of supporters. In fact, don’t be surprised to spot the campaign logo on your next bottle of Louisiana-made Tabasco, which also is a leader in the effort.

It’s been documented scientifically that wetlands loss can be attributed to both Mother Nature, e.g., natural subsidence, and to human contributions, e.g., artificial levees that prevent sediment and fresh water from replenishing the starving marshes.

But the days of finger-pointing are essentially over, with disparate sides banding together to come up with a solution to this enormous problem.

"There are a number of challenges we face in implementing a successful coastal restoration program," said Karen Gautreau, executive assistant for coastal restoration activities in the governor’s office. "It’s more correct to say rehabilitation, because we’ll never restore the coast to its historical configuration.

"We want a functional, sustaining wetlands system that’s ecologically significant and is also a base for economic and energy interests," she added.

Various wetlands rehabilitation projects in Louisiana have been implemented under the auspices of the Coastal Wetlands Planning, Protection and Restoration Act, aka the Breaux Act of 1990, according to Len Bahr, director of Louisiana’s coastal R&D program. The most recent coastal plan, the Coast 2050 feasibility study, was developed with funding courtesy of the Breaux Act and encompassed considerable input from the general public.

"2050 included a lot of things people would like to see across the whole coast," Bahr said. "Because it was recognized by the U.S. Army Corps of Engineers as a reconnaissance document, it achieved important status in D.C. and opened the door for us to go to the next step.

"What we’re seeking now is congressional authorization for a comprehensive coastal restoration effort, which will include a price tag but not the actual funding," Bahr noted. "The idea is that by next June we’ll be ready to go forward with the Louisiana Coastal Area (LCA) plan, which is being developed by the state and the Corps."

A draft of the LCA plan will be ready for public review in October.

An Historic -- and Costly -- Effort

The America’s Wetland campaign folks say the restoration effort will be the largest engineering project ever attempted in the world. It will include:

• Sediment diversions.
• Marsh creation.
• Barrier island restoration.
• Shoreline protection.
• Delta management.
• River water re-introduction.
• Sediment and nutrient trapping.
• Vegetative planting.

Lest anyone get bent out of shape over the $14 billion price tag, this is slated to be a 20- to 30-year project, and the cost is not cast in stone. In fact, it’s a rough estimate that came out of Coast 2050, according to Bahr, who noted it could ultimately cost less as well as more. Calculations performed to arrive at that number did not allocate any benefits to synergistic effects or redundancies.

Louisiana will have to come up with its share of the final tally, and the question du jour is what kind of cost sharing will be required.

"We’ll make the case we want a fair cost share," Bahr said. "A lot of the problems we’re trying to offset are a result of federal decisions imposed on us, like the levee system, and a lot of channel modifications having to do with navigation.

"Also, the energy produced here helps fill a national energy need," he said. "A lot of that benefit is out of state, but the cost is borne by the state."

"No other state would be expected to pay for this on its own," Gautreau asserted. "Certainly, we can’t."

The $14 billion estimate pales when compared to the cost of inaction, which is postulated to be more than $100 billion in infrastructure alone. Factor in the community impact, and the number soars to $150 billion, according to Ed Theriot, director of the environmental laboratory at the Corps.

Solid Science

When Louisiana voters go to the polls in October, they will find three crucial wetlands-related amendments on the ballot that would:

• Raise the cap on the monies that can accumulate in the state’s coastal wetlands fund from $40 million to $500 million.
• Allow additional sources to go into the wetlands fund, e.g., certain surplus funds.
• Limit liability of lawsuits against the state with regard to coastal restoration projects.

Passage of the liability-related amendment is particularly critical to ensure the state is not litigated out of the wetlands restoration business.

For instance, there’s that pesky, yet-to-be-resolved $2 billion lawsuit brought against the state by some oyster leaseholders over the first major fresh-water diversion project built in 1991.

"This entailed a fresh water development structure to let in sediment-laden water at certain times and in certain volumes to rebuild marsh areas that the river couldn’t flood because of the levees," Theriot said.

"As the coast has washed away, the oyster reefs moved inland," he said, "and when you flood the habitat with fresh water, the initial effect is to diminish the oyster beds.

"With slugs of fresh water, they’ll gradually move offshore, but this kind of impact will occur until the system readjusts."

"If the state creates impacts, we need to compensate," Gautreau noted, "but we need to have a predictable system in which we’re compensating. The way the law reads now, parties can sue for damages to the full extent of the law rather than being limited to fair market value."

Bahr makes the point that the state can’t ask the national taxpayers to give money only to have it given up in lawsuits.

The enabling statute for the proposed amendment says liability will be established in accordance with the Fifth Amendment of the U.S. Constitution, which is essentially fair market value, according to Gautreau.

"The statute also allows for retroactivity," she said, "so we can pay past, present and future claims consistently."

The immense restoration program being developed is steeped in science, according to Bahr. Experts are on board from both the state and nationally, many of whom have experience in wetlands problems worldwide.

Even so, Bahr cautions it’s an experimental program.

"All restoration programs around the country are experimental," he noted. "Certain things are tried that are not 100 percent certain, and they are closely monitored. They all need good science, which we have on our side.

"It’s really an ambitious challenge we’ve taken on," Bahr added, "and those of us involved are desperate that it be successful.

"It’s the Big Enchilada for the state, and we’re passionate about it."