By LOUISE S. DURHAM
'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
- 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
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
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.
When Louisiana voters go to the polls in October, they
will find three crucial wetlands-related amendments on the ballot
- 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
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
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."