Legacy Building

Even though a new law to address polluted oilfields went into effect four months ago, the state still has far to go to see the finished product.



The most recent legislative battle over so-called legacy sites may be over, but the war is still raging. Gov. Kathleen Blanco capped off the political skirmish in early June when she scribbled her name across a new law that shifts oversight of cleaning up contaminated oil production sites from state courts to the Louisiana Department of Natural Resources.

Almost five months have passed since the bill was passed, but DNR still hasn't formulated regulations to administer the new process. A special committee charged with drafting the rules has met only twice, and an operating plan -- complete with budget and staff -- is just starting to come together.

The fight is about a number of contaminated oilfields around Louisiana referred to as "legacies." They're called that because for generations some oil companies -- not necessarily the current operators -- created them and polluted the land around them. Now, years later, those sites still haven't been cleaned up -- and that makes for lots of environmental litigation.

The lawsuits became a boon for trial lawyers, and at one time they were being talked about as the new tobacco or asbestos litigation. A 2003 decision, Corbello v. Iowa Production, resulted in a $33 million property damage award. But a discouraging trend emerged. Landowners were not always being required to use the damage awards to clean up their properties. Business interests thus claimed that juries were creating a hostile business climate by sticking oil companies with huge judgments -- and the environmental messes that often were created by other operators weren't even being cleaned up.

Lawmakers sought a middle ground, adopting a compromise of sorts in the regular session earlier this year. It was the most contentious issue they addressed, pitting oil companies against trial lawyers and landowners. Every vote was close, and each debate was brimming with volatile emotions.

Each team of players had a bevy of lobbyists running back and forth during the debates, and amendments were hammered out in huddled sessions while lawmakers patiently waited. Don Briggs, president of the Louisiana Oil and Gas Association, was a mastermind behind one of those teams, and he helped push the final policy change through.

Briggs says he initially thought it would take "about four months" for the state to have the revised process in place, but now he realizes it's going to take longer. "I didn't think it was so detailed and complicated that we wouldn't finish it quickly, but quickly for government sometimes means several months," Briggs says. "It was not a perfect piece of legislation and it's going to take some time until it gets into the courts to see how good or bad it is."

The parties owning or representing contaminated property wanted Louisiana's 231 district courts to oversee the new cleanup process, while oil interests wanted DNR in control. Big Oil won out. Mostly.

Landowners can still sue oil companies over legacy sites, and the courts still decide who is responsible, but now the state is largely responsible for drafting cleanup plans. Both sides of the case can present their recommendations to the state, but DNR officials have final say over what goes back to the judge for consideration. The trial court would then hold damage awards and make sure cleanups occur.

The legislation also gave DNR's Office of Conservation authority to promulgate the rules and regulations for administering the process, which hasn't formally happened yet, according to Jim Welsh, the state's conservation commissioner. He says a special committee consisting of representatives from all interested parties first met in July and asked DNR to draft a proposed set of rules.

That draft was distributed at a second meeting on Oct. 10, and the process is beginning to grow some legs, Welsh says. Once a compromise is hammered out -- no one interviewed seems to think it will get bogged down -- a legislative committee will have final approval following a public hearing. Welsh says the entire process should be ready by the end of the year. "I really hope so," he says.

There are 103 active legacy cases in the courts, but the new process has not been applied to any of them yet. Welsh says he hopes the final product will be in place by the time a case does come across his desk, but there's always the possibility his office will be forced to administer the program with a set of rules that haven't had public input or lawmaker approval.

"We would follow the law that was passed the best way we could," he says. "We would just make management decisions." Welsh adds he has the authority to promulgate temporary emergency rules if needed. Until any of that happens, though, the new process remains largely untested.

Welsh also is waiting on a legislative committee to approve $250,000 for the program, which represents a one-year administrative budget. Civil Service has endorsed the hiring of four new staffers for the program, but Welsh says no one has been hired. Despite all the loose ends, Welsh believes everything is moving ahead as planned, and he's confident the new process will be effective.

Opponents aren't so sure, and they fear DNR will be overly friendly to oil companies, a sector it regulates. Sen. Butch Gautreaux, a Democrat from Morgan City who pushed an alternative to the legacy bill this year -- one favored by environmentalists and landowners -- says the problems under the old system haven't been addressed under the new act, and he suggests the perceived delay in rule making is evidence of that. "I'm really surprised they have taken this long and I think they're dragging their feet on it," he says. "I thought this was a real priority, but I guess it really isn't."

Although there are lingering questions from an administrative standpoint, Don Carmouche, a plaintiff attorney whose Gonzales firm is represented on the rulemaking committee, says there hasn't been a huge rush to avoid the new process by settling open cases. A DNR attorney confirmed that no legacy suits have been settled since the law was enacted. Carmouche says that proves that no harm has been done thus far and that progress is being made.

That's an odd assertion coming from a man who frequently represents landowners in legacy suits, and it could signal a changing climate. "Right now it's going as well as we could have expected," Carmouche says, "and I really believe people in the commissioner's office are doing the best they can."

Don Briggs, president of the Louisiana Oil and Gas - Association, stands in the shadow of the State Capitol. - He says Louisiana's new rules and regulations for dealing - with so-called legacy litigation is going to take time, and - will largely be untested until the courts get involved. - KARRON CLARK
  • Karron Clark
  • Don Briggs, president of the Louisiana Oil and Gas Association, stands in the shadow of the State Capitol. He says Louisiana's new rules and regulations for dealing with so-called legacy litigation is going to take time, and will largely be untested until the courts get involved.

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