Facing billions of dollars in coastal erosion lawsuits, oil industry seeks public's help

Facing billions of dollars in coastal erosion lawsuits, oil industry seeks public's help

Credit: John Harper / Houma Courier

Gifford Briggs, Louisiana Oil and Gas Association vice-president, gave a state of the industry presentation to the South Central Industrial Association, calling for a grassroots campaign to curtail so-called legacy lawsuits.

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Posted on February 19, 2014 at 2:25 PM

John Harper / Houma Courier

HOUMA, La. — One of the state's main oil and gas lobby groups asked industry members in Houma Tuesday to help start a campaign to slow down and fend off lawsuits from landowners seeking damages for oil and gas activity.

Gifford Briggs, Louisiana Oil and Gas Association vice-president, gave a state of the industry presentation to the South Central Industrial Association, calling for a grassroots campaign to curtail so-called legacy lawsuits.

Briggs denounced the lawsuits as frivolous, saying a suit filed last year was for trial lawyers to benefit from million-dollar and billion-dollar verdicts and settlements.

In July the Southeast Louisiana Flood Protection Authority–East, which is tasked with managing levees in Orleans, Jefferson and Plaquemines parishes, filed a lawsuit in federal court asking oil companies to fill in canals they say have accelerated coastal erosion and pay a share of $14.6 billion in levee infrastructure that has been built to augment the region's flood protection as land has eroded.

Jefferson and Plaquemines parishes filed a similar class action suit in November following efforts by Gov. Bobby Jindal to fire the president of the Southeast Louisiana Flood Protection Authority-East.

"These lawsuits are not about coastal erosion, but rather about greedy trial lawyers trying to make money," Briggs said. "This is the beginning of a grassroots coalition to come together and stand up for the industry."

Briggs asked audience members to sign up at a website, changelouisiana.org, and to call their state representatives to encourage legislative action to reduce or stop the lawsuits.

Asked if he thought the oil companies could simply fight the lawsuits in court, Briggs said "we haven't won any of these (legacy) lawsuits."

The stakes for the industry have been growing, and now almost 100 different oil and gas companies are facing tens-of-billions of dollars in litigation.

A key piece of evidence in the levee district lawsuit has been U.S. Geological Survey reports that blame oil and gas operations for 36 percent of the coastal erosion that has occurred since 1930.

Briggs said he hadn't seen the Geological Survey reports.

Part of Briggs' presentation included graphs that correlated a drop in drilling and exploration activities with an increasing number of legacy lawsuits. While he did not discuss how much of the drop in activity could be attributed to concerns over the lawsuits, he said oil and gas companies in Houston have looked to spend money elsewhere.

"We have our fair share of roadblocks that are keeping us from doing everything that we can," Briggs said. "We need to ask, what is keeping us from being Texas?"

The actual effect of the lawsuits on energy investment is unknown, said George Hite, Houston-area oil and gas engineering consultant.

"Certainly there have been a number of things that are negatives for Louisiana," Hite said. "Leases are relatively expensive. ... It would seem to me that most of the operators make decisions based on economics. It is more expensive to drill along the coastline because Louisiana is basically marsh and you have to drill using water operations. Texas is different because you have land right up to the coast that you can drill on."

"You can't really compare Louisiana and Texas," said Hite, who has worked to engineer drilling projects across south Louisiana.

Hite said that while the threats of lawsuits represent a cost for oil and gas companies, the suits are over activity that has happened in the past and are not necessarily indicative of future risk.

"They are already there, are they going to leave?" Hite said. "Even if they leave, the lawsuits are still going to go forward."

Deepwater investment is not at stake, Briggs said, because the offshore activity does not affect the coastline in the same way that near-shore or land-based oil wells do.

Playing into the oil and gas association's campaign is how Louisiana has been called one of the worst legal climates in the U.S. In 2013, the American Tort Reform Association named Louisiana the nation's second "judicial hellhole," citing judicial activism as a primary reason for the designation.

In labeling the lawsuits as frivolous, Briggs drew a parallel between a noteworthy hot coffee lawsuit, a 1994 case between Stella Liebeck and McDonald's in which Liebeck sued McDonalds after spilling the restaurant's coffee and suffering third-degree burns to her pubic area.

The audience laughed at a clip from a mid-1990s "Seinfeld" episode mocking the lawsuit. Liebeck suffered burns covering her vaginal area that required extensive skin grafts and more than two years of medical treatment. She won a $2.9 million verdict in the suit after it was discovered that McDonald's intentionally kept its coffee significantly hotter than industry standards, resulting in third-degree burns after just two to five seconds of skin exposure.

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