Attorney General Jeff Landry on Thursday authorized a $100 million settlement with an oil and gas company that has been accused in court of damaging Louisiana’s coast, but his decision immediately faced blowback from industry officials who fear the precedent it sets.
Landry said he signed the agreement with mining giant Freeport-McMoRan Inc. because the company wanted to settle its lawsuits and because the deal will help restore the disappearing coast.
“Our actions on these suits are designed to bring finality and resolution and allow everyone a seat at the table,” Landry said at a press conference and added that he still opposes the dozens of lawsuits that have now led to a settlement with the one company. “I believe we can get to a place where everyone works together to protect our coastal communities” and ensure “that Louisiana’s oil and gas industry, and our number one job creator, is able to thrive here in this state.”
But Landry, a fossil fuel industry ally, encountered immediate criticism Thursday from industry officials, although they were careful not to single him out by name.
“It is disappointing that some elected officials have sided with plaintiffs’ attorneys in support of job-killing lawsuits and a flawed settlement scheme that could put our coast further at risk," said Tyler Gray, president of the Louisiana Mid-Continent Oil and Gas Association, and Mike Moncla, president of the Louisiana Oil and Gas Association, said in a joint statement.
To take effect, the settlement must overcome several major hurdles, including the passage of enabling legislation in the upcoming legislative session that faces opposition from prominent Republican lawmakers.
“I'm certain it's as dead this year in the legislature as it was last,” state Sen. Sharon Hewitt, R-Slidell, said in a statement. “I will work with my colleagues in the legislature to expose this shakedown, save those jobs, and fight for real solutions that restore our coast."
A Republican, Landry signed the Freeport settlement Thursday along with Thomas Harris, the secretary of the Department of Natural Resources, on behalf of Gov. John Bel Edwards, a Democrat. It marked one of the few occasions where Landry and Edwards have been on the same page, in this case, literally.
The agreement was reached by Freeport Sulphur and related companies, which conducted sulphur and oil and gas operations in coastal Louisiana over many years, and the Carmouche law firm in Baton Rouge, which has sued more than 200 companies, including Freeport, on behalf of coastal parishes since 2013.
Freeport would pay the state the $100 million over 20 years, Carmouche said, with the Legislature directing the money to the state coastal recovery authority. In exchange, the state and the 12 coastal parishes where Freeport operated would release the company from legal liability.
Carmouche predicted over a year ago that all 12 parishes were going to approve it by last February.
But only seven or eight of the parishes – who has the authority to represent Terrebonne Parish in this matter is disputed – have signed the settlement. The biggest remaining question is whether Bofill Duhe, the district attorney for three additional parishes – St. Martin, Iberia and St. Mary’s – will agree to it.
In October, Duhe said he didn’t intend to sue the oil and gas companies but hasn’t returned phone calls over the past two days to address whether he will agree to the settlement. Freeport has insisted that it doesn’t take effect unless all 12 parishes approve it.
Carmouche has declined to make the settlement public, and attorneys working with him have been sharing it with parish elected officials in behind-closed-doors meetings. But Landry made it public on Thursday on his office’s webpage.
In an interview, Carmouche said the deal with Freeport could serve as a settlement template for other oil companies that his law firm has sued in lawsuits that accuse their drilling and exploration activities of causing coastal erosion. Freeport’s wells account for only 4% of the wells drilled in the coastal zone since 1911, Carmouche said, suggesting that the $100 million settlement could be just a fraction of any broader deals, should they come to pass.
Having Landry and Edwards support the Freeport agreement “shows unity that the oil companies can see an avenue to resolve this in a fair and equitable way and allow the energy companies to come back to Louisiana and drill and put thousands of people back to work,” Carmouche said. “The reason that hasn’t happened is not because of the lawsuits. It’s because of the pollution left behind by Big Oil. No one wants to come and drill and have to face liability of others’ actions.”
Besides Gray and Moncla, other oil industry officials panned the settlement on Thursday.
"The proposed settlement is not dedicated to Louisiana's coast, and it will not help advance a meaningful resolution to the litigation. These misguided lawsuits challenge decades of operations that were conducted lawfully with the full knowledge and encouragement of state and federal officials,” said Melissa Landry, a spokesperson on behalf of the legal teams representing several companies that have been sued: BP America Production Company, Chevron, ConocoPhillips, Exxon Mobil Corporation, and Shell.
Carmouche said he hasn’t nailed down yet which legislator would sponsor the measure to direct how the state would collect and spend the Freeport settlement money. Last year’s measure, sponsored by state Sen. Eddie Lambert, R-Gonzales, failed to pass even its first step, a state Senate committee. Lambert said he won’t file a similar measure this year because he has already maxed out on the five bills that each legislator is allowed to file this year.
State Sen. Bret Allain, R-Franklin, said he would remain opposed to it unless he was confident that the money would go to coastal restoration and not be siphoned off on other spending needs.
State Rep. Phillip DeVillier, R-Eunice, a strong oil and gas industry supporter, questioned the settlement, saying he believes the companies operated legally in Louisiana.