Incentives

Yesterday the legislature passed a bill that (theoretically) could put a stop to the SLFPAE's lawsuit against the oil and gas industry over damage it has done to the Louisiana coast.

State Sen. Robert Adley, R-Benton, is sponsoring the bill, as well as a few more that seek to derail the lawsuit filed last summer by the Southeast Louisiana Flood Protection Authority - East, or SLFPA-E against 97 oil, gas and pipeline companies. The east bank levee board is seeking damages from industry for decades of environmental harm that dredging and other pipeline activities imposed on Louisiana's coastline.

But Gov. Bobby Jindal is fiercely opposed to the lawsuit. After ensuring its strongest proponents were removed from the levee board, Jindal turned his eye to killing the suit legislatively. Adley agrees with the governor that the board illegally entered into a contingency fee contract with legal firm Swanson Jones, without seeking the proper approval or making the terms of the terms of the contract public.

Jindal and Adley and others have argued that the lawsuit interferes with the state's own supposedly good faith negotiations with oil and gas over coastal restoration funds.

Which brings up the question, what are the industry's incentives with regard to coastal loss?  What do they get, for example, if nothing is done about it?

A set of laws unique to Louisiana allows the state to claim the minerals found under any navigable body of water. That has troubling implications for landowners in Vermilion Parish and every other coastal region of the state. The laws mean that as more land becomes submerged under the waters of the Gulf of Mexico each year, more and more money that once flowed from oil and gas drilling companies to the bank accounts of landowners now flows directly into the coffers of the state.

Landowners here say the law not only hurts their pocketbooks, but also creates a disincentive for Louisiana’s government to care about coastal areas and repair and maintain wetlands. The theory goes that if the cash-strapped state can make money off gaining increased mineral rights, then it has no reason to help keep privately owned bayou property from going underwater.