The oil and gas industry was faced with several tough issues this Louisiana legislative session.
The hot topic for debate were the pieces of legislation that would combat the hundreds of abusive lawsuits that are plaguing the oil and gas industry. Louisiana Oil and Gas Association, along with coalition members like the Louisiana Mid-Continent Oil and Gas Association, the Louisiana Association of Business and Industry, and the Louisiana Landowners Association had a few key victories, but industry is still facing some very tough challenges down the road.
For starters, "legacy lawsuits" continue to plague our industry. Therefore, this year, the coalition took another step to bring much needed clarity to the legal process.
The governor has now signed SB 667 into law. Sen. Robert Adley authored this bill with Rep. Neil Abramson carrying the bill on the House side. This is the legacy compromise bill agreed to by landowners and industry. The legislation accomplishes four things:
1: The bill creates a presumption in favor of the Department of Natural Resources’ cleanup plan.
2: It clarifies the types of damage awards and the standard for recovering those damages.
3: It allows attorneys fees to be awarded to a defendant who is dismissed in preliminary hearings.
4: It defines contamination. While this bill is a positive step in the right direction, much work on this legacy issue is still to be done.
Another hotly debated bill of the 2014 Session was SB 469. Sen. Bret Allain authored this bill with Rep. Joel Robideaux carrying the bill on the House side; Governor Jindal has now signed the bill into law. This bill directly attacked the lawsuit filed by the Southeast Louisiana Flood Protection Authority-East against 97 oil and gas companies for alleged coastal damages. The bill states that only authorized entities under the coastal zone management lawsuits can bring coastal lawsuits. The Southeast Louisiana Flood Protection Authority – East is not an authorized entity. Again, while the passage of this bill is a good step in the right direction, the opposition to the bill has publicly said that they will be challenging this bill in the court system for years to come.
A positive move for our state’s legal climate was the passage of HB 799 by Rep. Stuart Bishop. This bill limits the use of contingency fee contracts by the Louisiana Attorney General and adds transparency and oversight to this process. Specifically, HB 799 requires additional information in applications to the Attorney General and the Governor by state boards and commissions to employ outside attorneys. The bill also requires a statement showing real necessity exists, reasons for the action, compensation to be paid, and the statutory authority if the contract contains a contingent fee. HB 799 sets straight many of the legal issues LOGA’s lawsuit against the Louisiana Attorney General laid out.
These are simply three examples of major pieces of legislation that were passed that confirm the notion that greed will not trump hard work and determination. Many other positive bills were passed in this session regarding water, taxes, hydraulic fracturing, pipelines and other general oil and gas issues. To the contrary, some good bills like the ones that would reverse the coastal lawsuits against industry did not pass, leaving a long fight ahead for industry.
No matter what bills passed or failed, the oil and gas industry must continue to produce consumer-ready resources, create thousands of jobs for our workforce, and remain committed to the safety of our communities and the preservation of our environment to which we have been entrusted.