BATON ROUGE — As Louisiana faces
crisis after a $940 million deficit last year, the oil and gas
industry says less litigation and more productivity could bring
revenue to the state.
Gifford Briggs is the acting president of
Louisiana Oil and Gas Association, which represents the independent
and service sectors of the state's oil and gas industry. Briggs
advocates that reform to the legal environment surrounding the
industry is crucial to encouraging business investment in the state
and increase the $500 million of direct revenue from the industry to
the state. The increased litigation for oil and gas companies does
not just impact the industry; Briggs said the residents are suffering
from it as well.
“Our [state] budget is heavily dependent on
oil revenue,” Briggs told the Louisiana Record. “When
we’re not out there drilling and producing and finding new oil then
our reserves deplete, which means we have less money for our state
budget, less money for roads, less money for education, less money
for health care and all the services that people have come to depend
The main types of litigation that are on the rise and
adding to the industry’s woes in Louisiana are legacy and coastal
lawsuits. Legacy lawsuits
are filed by landowners against oil and gas operations, claiming the
property was damaged from pollution and contamination. Coastal
lawsuits are similar to legacy lawsuits, but are instead allegations
of violations of coastal-use permits filed by government entities
instead of individual landowners.
Briggs estimated that there
have been about 400 legacy lawsuits since 2003, which often involved
five or more oil and gas companies in just one case. The constant
flood of lawsuits against oil and gas companies makes seems to be
making other companies wary of investing in the state.
no doubt that the legal environment in Louisiana is having a
detrimental impact on the state’s budget,” Briggs said.
“Louisiana is the only state that has this kind of type of
environmental litigation, either legacy lawsuits or coastal lawsuits.
They are both huge problems.”
Briggs noted that as other areas
of the country are experiencing incredible growth and increasing the
number of oil rigs, Louisiana is still experiencing historic lows.
“A big part of that is just because people are making
investments in places where they’re not afraid of being sued, and
certainly South Louisiana is a place where they’re very weary of
potential legal impacts” Briggs said.
earlier by the Louisiana Record, Louisiana ranked No. 37 in
Chief Executive magazine’s annual CEO survey comparing state
business climates. An anonymous comment by a surveyed CEO echoed
Briggs’ analysis of litigation impacting business.
Louisiana litigation environment is awful; tort and legacy liability
litigation appears to be a major industry,” a CEO was quoted as
Briggs suggested that one way litigation could be avoided
is if the state would review the permit and violation allegations and
issue compliance orders to allow the oil and gas companies a chance
to address the complaints.
“But because we’ve chosen not to
go that route, the reality is it becomes more about lawsuits and
lawyers … than it does about addressing any challenges that might
be there,” Briggs said.