Louisiana Gov. Bobby Jindal speaks during the opening of the state legislature at the state capitol in Baton Rouge on Monday. (Associated Press)
Last Modified: Friday, June 06, 2014 11:51 AM
You had to be there to understand and appreciate the irony of the situation. Gov. Bobby Jindal and representatives of the oil and gas industry and large landowners were at the state Capitol Monday celebrating passage of a bill that gives the energy industry almost total immunity from legacy lawsuits. It just happened to be on the same day that reports surfaced saying the state is doing a poor job of regulating and inspecting oil and gas wells.
Irony is defined as “a state of affairs or an event that seems deliberately contrary to what one expects and is often amusing as a result.” This occasion fit that definition perfectly. How could an industry just accused of failing to clean up environmental problems caused by improperly operated wells be so bold as to celebrate getting a free pass?
This was no wild accusation by an outside party. Legislative auditor Daryl Purpera, an extremely credible and unbiased source, released the report. It laid everything on the line.
When oil and gas companies abandon and fail to plug wells, the state has to pick up the environmental costs and the expense of plugging those wells.
The report said 53 percent of the oil and gas wells in Louisiana weren’t inspected within a three-year guideline set by the state. And over 2,800 orphaned wells in the state hadn’t been plugged as of July 2013.
There’s more. Louisiana has only required 25 percent of the state’s 57,819 wells to be covered by financial security agreements. Those agreements provide funding to cover the cost of plugging wells that are abandoned by the oil and gas industry.
The Times-Picayune said Texas, Oklahoma and California, other leading oil and gas production states, are doing a much better job. And Louisiana’s production fees aren’t sufficient to cover the costs of problems caused by those abandoned wells, the auditor said.
Who is at fault for all of those failures? Some of the blame belongs to the Legislature, but the primary responsibility rests with the Office of Conservation within the state Department of Natural Resources.
Nothing was said about the auditor’s report on oil and gas wells until a television reporter asked Jindal if it was a good day to be signing an oil industry bill. The governor and spokesmen for DNR blamed the problems on the need for new technology and accountability, and Jindal said all of the issues will be addressed.
Maybe they will, but maybe they won’t. DNR doesn’t have a stellar record when it comes to enforcing rules and regulations. A department spokesman was asked at a House committee hearing during the session why it hadn’t pursued the oil and gas companies on behalf of the state.
“We do not have any evidence that the (oil and gas) permits have been violated,” he said.
The legislative auditor has turned up some extremely credible evidence showing abandoned oil and gas wells are a serious problem. Lax enforcement falls squarely on the shoulders of DNR. And that brings us to the bill those folks were celebrating Monday.
Senate Bill 667 by Sen. Robert Adley, R-Benton, is the one the governor signed with much fanfare. He then handed pens to those marking the occasion with him. There were smiles and hand-shakes all around after each bold signature.
The Adley bill puts DNR in charge of coming up with a plan to clean up oil well contamination that occurred many years ago. The legislation pretty much kills legacy lawsuits filed by property owners who inherited land that needs to be cleaned up. If they don’t like DNR’s cleanup plan, they can take the issue to court. It’s a tough process for small landowners who don’t have the resources to pursue legal action.
Some of the oil and gas representatives who showed up to celebrate the Adley bill signing have taken on a more conciliatory mood since Monday. Don Briggs, president of the Louisiana Oil and Gas Association, told the Lafayette Daily Advertiser he believes his members should pay double the amount of fees needed to plug and clean up abandoned wells. Richard Metcalf, environmental affairs director for the Mid-Continent Oil and Gas Association, told the newspaper his members would also be willing to pay higher fees.
In a surprise development, both men said fees won’t be easy to increase because of Jindal’s opposition to raising fees. Does that mean the state’s taxpayers are going to have to continue to pay for plugging those wells and cleaning up the contamination?
As I sat there in the press conference room on the fourth floor of the Capitol Monday watching that bill signing, I wondered why the governor didn’t just postpone the event. The audit that was so highly critical of DNR made a mockery of what he was doing. He also had to cancel plans to sign a bill that would kill a lawsuit filed against 97 oil, gas and pipeline companies. That one is posing some serious legal problems.
True to form, Jindal rolled right along as though everything is right with the world.
“... This bill will help deter frivolous claims and ensure our legal system is fair for those that need it most,” he said. “Many have come together to work on this bill, and I am proud to sign it into law.”
You have to wonder what those who lost their right to sue think about that. They weren’t part of the compromise Jindal was praising. Only the big boys sat at the table.
Maybe those are the things you have to say when you are running for president and want the rest of the country to only think positive about life in Louisiana. It is a great state, but it needs a lot of attention it isn’t getting from the political arena.
Jim Beam, the retired editor of the American Press, has covered people and politics for more than five decades. Contact him at 494-4025 or email@example.com.