This is being reported as some great boon for Louisiana’s environment, but it most assuredly is anything but. At one time Freeport-McMoRan had their corporate headquarters in downtown New Orleans, but that company is quickly devolving out of Louisiana altogether.
Several coastal parishes announced yesterday that they had reached a deal with mining company Freeport-McMoRan over claims that its aggressive drilling for oil damaged the state’s vanishing coast, a settlement that could lead to other agreements with energy giants as the state scrambles to stop its disastrous land loss.
In a tentative agreement with 12 parishes, Freeport-McMoRan said it would pay up to $100 million toward restoring the coast, although much of that total it could recoup through environmental credits, The New York Times reports.
Freeport-McMoRan is just one of 98 companies that have been sued in 46 lawsuits over coastal damage, according to John Carmouche, a lawyer representing eight of the 12 parishes that are part of the tentative agreement. But the deal is likely to blaze a trail for future negotiations between the parishes and industry leaders like ExxonMobil, Chevron, BP and Shell.
They’re not going to pay $100 million. Not even close. This was a one-call-does-it-all bullshit settlement. Freeport will cough up $15 million at the formal signing of the settlement, and then they’ll pay $4.25 million in 2023 and another $4.25 million in 2024, assuming the Legislature sets up a fund to receive the money. And the rest of the cash is “subject to contemporaneous reimbursements from the proceeds of the prior sales of environmental credits.”
What does that mean in English? It means that Freeport-McMoRan has plans to sell off whatever oil wells they still have in Louisiana, close down their New Orleans office and get the hell out of Louisiana by 2024. That’s what it means.
They’re paying $23.5 million in an exit fee to John Carmouche and that cabal of trial lawyers John Bel Edwards set loose on the oil and gas industry with those stupid coastal lawsuits, and they are getting clear of this place, which used to be their global headquarters not all that long ago, as fast as they can. And when someone calls then for that over $76 million, they’ll go straight to voice mail.
This was always the danger when those coastal lawsuits popped up – that one by one, the oil companies would look around and say “We could fight this, and we’ll win, but how much will it cost us and what do we really gain if we win?” And see Louisiana, with its lousy tax climate, oodles of political risk from stupid, corrupt politicians, the worst legal climate in America (or second worst, according to the latest U.S. Chamber of Commerce study), and realize that there’s lots of oil in lots of places with far less trouble.
And then make a low-ball settlement offer rather than fighting this thing, paying Carmouche his millions in legal fees and dumping a few shekels on the local greaseball politicians in those coastal parishes, and conducting a getaway of their jobs and remaining capital to a safer haven in Texas or New Mexico.
Freeport-McMoRan is only the first of those companies. Shell and BP are almost certain to follow, though Shell would have a lot more work to do unwinding their presence here – you might just see them grease Edwards and his pals in the old-school Louisiana way.
Eventually, Edwards’ cabal of trial lawyers will become mega-rich and the state’s best industry, the one supporting some 250,000 Louisiana jobs, will wither away and die.
The Louisiana Oil and Gas Association and the Louisiana Mid-Continent Oil and Gas Association bashed this settlement in no uncertain terms, and rightly so…
“This is just the latest chapter in the trial lawyers’ playbook to shakedown Louisiana oil and gas companies for legally conducting production activities, which were encouraged by state incentives and carried out under rigorous state and federal regulations many decades ago.”
“This misguided effort to go back in time and rewrite history amounts to an all-out legal attack on the entire regulatory framework through which oil and gas operations have been conducted for nearly a century. Regardless of how one company may choose to handle their case, LOGA, LMOGA and our members remain confident these claims will not stand up in federal court.”
“Unfortunately, while this divisive litigation drags on— potentially for decades— the uncertainty and unpredictability created by it will continue to drive jobs, workers, families, and investments away from Louisiana. For example, Lafayette and Houma, two communities that once thrived in the energy sector, are now suffering some of the largest job losses in the nation. Many factors influence investment decisions, including the price of oil, but there’s no question the increased litigation risk created by these meritless lawsuits is having a major impact. Enough is enough.”
“Litigation has been ongoing for years and is nowhere close to resolution. At the same time, this litigation threatens the future of the oil and gas industry in Louisiana, which has been a critical driver of job creation, tax revenue, and economic growth in the state. Revenues generated by oil and gas production also provide more than 30 percent of the state’s funding for coastal restoration and hurricane protection projects.”
“Rather than supporting these trial lawyer-invented permit lawsuits, state and local officials should be working with industry to support oil and gas production, which will create much-needed jobs and generate even more funding for our coast.”
That’s the take from the people in the industry who are committed to staying here and keeping those jobs for Louisiana folks.
But if John Bel Edwards is the governor for four more years, that could be a dwindling number of die-hards. Which is a scary reality the state’s voters are going to have to recognize.