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Monica Hernandez / Eyewitness News
Email: mhernandez@wwltv.com | Twitter: @mhernandezwwl

GRAND BOIS, La. - The people of Grand Bois say the oil waste facility in their backyard is making them sick.

The small town lies along Hwy. 24, near the Lafourche-Terrebonne Parish line. Neighbors say it has an alarming cancer rate.

Years after its highly publicized court battle, Eyewitness News revisits the community and takes a closer look at a sweeping federal loophole that may shock you.

Lisa Matherne's family has lived in the small town of Grand Bois for generations. It's the place where she's raised cattle, horses and a family.

But she believes it has also become a place that's making her sick.

'Stuffiness and the running eyes, the itching, the rashy itches,' said Matherne.

Matherne lives just down the road from a 140 acre oil waste facility. It takes in nearly a million barrels of oil waste each year and treats much of it in shallow, open air ponds called 'treatment cells.' You can see them from the one lane highway that leads into town.

'The smell is horrible. Mornings are really, really bad. It's pretty rough,' said Matherne.

But the state says everything being done at this facility is within regulation.

Records show the Louisiana Department of Environmental Quality allows the facility to release more than two dozen tons of volatile organic compounds into the air each year, including more than half a ton of benzene, a dangerous carcinogen.

Still, it's a decrease in previously permitted emissions, when the facility was also allowed to release harmful gases like carbon monoxide into the air.

'I know we're going to get sick from it somewhere down the line. I think that's what had the effect on my husband having kidney cancer,' said Matherne.

It turns out the oil waste facility only recently received an air permit. It was operating without one for nearly 30 years. No one noticed until the company applied for one in 2009.

The DEQ said the facility had other state permits and slapped it with an $83,000 fine for operating four facilities in Louisiana without air permits.

But we may never know what was seeping into the air before then.

'You elect officials to protect you and you put laws in place to protect not only individuals but communities. I guess we fell through the cracks,' said Matherne's husband, Wayne.

But it's not just the community of Grand Bois. Under federal law, oil waste is exempt from being classified as hazardous, even if it contains the same poisonous chemicals labeled 'hazardous' in other industries.

'In fact, much of it is more dangerous than some of the waste we regulate as hazardous. It's really exempted because, one, there's so much of it that the concern is how expensive it would be to regulate as hazardous,' said Adam Babich, a Tulane University law professor.

The EPA Largely leaves the task of regulating oil waste up to the states. In Louisiana, waste sites can be as close as 500 feet from the nearest home.

'You're basically regulating your industrial base without the pressure of the federal government to make you do that,' said Babich.

'That is what has led to many of the problems we see today in the state of Louisiana, that's the core issue,' said Gladstone Jones, a New Orleans attorney who specializes in fighting oil and gas pollution.

One of his first cases out of law school was in Grand Bois.

'I said, you may be legal, but it's not right. Nobody should have to live under those conditions,' said Jones.

In the 1990s, Jones helped the small town of 300 take on one of the most powerful industries in the world. The highly publicized court battle garnered national attention.

In 1997, CBS featured Grand Bois' fight in a one-hour special. In it, the head of the EPA at the time spoke out against her own agency's sweeping exemption for oil waste.

'Congress should revisit this loophole,' said Carol Browner, head of the EPA from 1993 to 2001. 'I mean, there's no other thing like this in federal law. You know, big oil got a sweetheart deal.'

To this day, that 'loophole' still exists. And though Grand Bois residents went to court to try to shut down the facility down, they ended up settling with the then owner of the site, Campbell Wells. In 1998, they agreed to accept $7 million and the promise of change at the site.

As part of that settlement, the company agreed to shut down the two cells closest to Grand Bois, and build a 15-foot berm wall.

But residents say that's not enough.

'We were one of the communities that didn't win the battle, so to speak,' said Wayne Matherne.

'These poor folks are under essentially the same assault and that's very unfortunate,' said Jones.

Before the lawsuit, the cells were 800 feet from the nearest home. Now, they're 1500 feet away. But neighbors say that's still too close. And they're still getting sick.

'That would be one thing, if they were there first and we all moved here, but we were here a long, long time before they showed up. They should have never been allowed to put that this close to a community,' said Wayne Matherne.

Wayne Matherne says, when the smell is bad, his horses' eyes weep and their hair falls out. He loses a cow every few months. He's called in one of several complaints to the DEQ.

DEQ sent a mobile air monitoring lab out twice in 2011, and says emissions were below state and federally approved levels.

'You call and you make complaints, looks like when it's long weekends, like a holiday weekend, that's when we really have trouble with odors, and nobody really comes out on a three, four-day holiday weekend,' said Wayne Matherne.

Houston-based R360 bought the facility in 2010. Representatives wouldn't give Eyewitness News a tour, or speak on camera.

But spokeswoman Cindy Landers said in a statement, 'The Bourg facility has been monitored extensively by both the DEQ and the EPA. Both agencies have concluded that there were no contaminants found that would extensively affect the health of the facility employees or local citizens.'

Representatives say R360 tests every load that comes in, and has a quarterly groundwater monitoring program. They maintain the facility does not accept toxic waste. But it does accept wastes like production water, called brine, which, according to one environmental law professor, is often contaminated with radioactive materials.

'Often high benzene levels, volatile organic compounds in this waste. much of it would qualify as hazardous except for the exemption,' said Babich.

The Department of Natural Resources, or DNR, is charged with regulating all of Louisiana's oil waste sites. The DNR's Office of Conservation inspects oil waste facilities every five years.

Jones said the DNR is charged with both regulating the oil and gas industry and encouraging it to grow into Louisiana.

State Rep. Jerry Gisclair, D-LaRose, believes DNR rules are antiquated. He is working to get those rules updated during the next legislative session.

The DNR has cited the facility near Grand Bois four times since 2010, most recently for violations relating to pipes and loading lines.

In a statement, DNR spokesman Patrick Courreges said, 'The rules and regulations for permitting and operating such a facility are designed to prevent to the greatest extent possible any harm to the public and the environment.'

'We're the most regulated industry of any by far, not only in the state but in the nation, and that's a fact,' said Chris John, president of the Louisiana Mid-Continent Oil and Gas Association.

John says the industry has a $77 billion impact on Louisiana, fueling 14 percent of the state budget.

'There's no other industry in the state, by far, that provides the quality of living for our citizens as the oil and gas industry,' said John.

But those in Grand Bois say their quality of life will never be the same as long as an oil waste facility is next door.

'We'd like to see the oilfield prosper. It's our bread and butter in this area,' said Wayne Matherne, who is in the oil trucking business himself. 'But there's right ways and wrong ways of doing things, and this was a wrong way.'

'I think everybody's sick and I think there's a lot more cancer just in this small community than you're going to find in a big city right now,' said Lisa Matherne.

The Matherne's said they would like to move out of the area, but don't believe anyone will buy their current property, leaving them unable to relocate. They believe finding 14 acres for their cattle and horses elsewhere would be difficult.

'I've gotten complaints since I've been a councilman in 2000,' said L. Philip Gouaux, II, Lafourche Parish Councilman, District 7. 'The courts and the regulatory agencies of the state and the federal government have said there's nothing wrong. They're not in violation, so as far as a council, in a parish, there's nothing we can do.'

Meanwhile, state agencies say they're doing all they can to make sure the oil industry isn't making people sick.

The issues in Grand Bois are now inspiring another parish's battle against a proposed oil waste site.

Terrebonne Parish is taking it's fight to appeals court, while a company tries to build an oil waste facility near a neighborhood with several schools.

Watch that story on Eyewitness News Thursday night at 10 p.m.

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