One oil company has settled a lawsuit over damage the industry has caused to Louisiana's coastal communities. Photo credit: Mario Tama/Getty Images

By Karen Savage

An oil drilling company has agreed to pay the state of Louisiana for damaging the state’s coast.

The company, Freeport McMoRan, and its affiliates will pay $100 million in cash and environmental credits over the next several years, according to John Carmouche, of, Talbot, Carmouche & Marcello. That Baton Rouge-based law firm is representing six Louisiana parishes in more than 40 lawsuits against Freeport and dozens of other companies.

The parishes—Jefferson, Cameron, Vermillion, St. Bernard, St. John the Baptist and Plaquemines, as well as the city of New Orleans—say oil and gas operations, including drilling, dredging and waste disposal, have severely damaged the state’s wetlands, a natural barrier that protects coastal residents from sea level rise and storms. 

This is the first settlement to be reached in any of the suits, which were filed beginning in 2013 and allege that the oil and gas companies are violating Louisiana’s State and Local Coastal Resources Management Act by not restoring wetlands after damaging them. 

Freeport McMoRan is thought to be responsible for  about 4 percent of the total coastal damages and is named in 14 of the suits. If settlements are reached with other companies, they would likely be for much larger amounts.

Carmouche said the settlement is a solution other companies could follow. 

“It’s something that was presented to big oil a year ago and it’s a business solution,” Carmouche said, adding that larger companies could soon be more eager to settle.

On Thursday, a U.S. District Court judge for the Western District of Louisiana ruled that suits filed by Cameron Parish against several oil companies—including Exxon, Chevron and BP— involved state interests and should be heard in state court, where they were originally filed.

Similar suits filed by Plaquemines Parish were remanded to state court by a U.S. District Court judge for the Eastern District of Louisiana in June.

But unlike that decision, which also stayed the proceedings pending an appeal by the oil and gas defendants, Carmouche said the Cameron Parish suits are moving forward.

“We will have a trial date within eight months, so Big Oil has to make a quick decision if they’re going to try a case or come talk and try to make a reasonable business deal to resolve the cases” said Carmouche. “I’ve always said that the ones that come first get the better deal and I invite anybody to come and sit down and discuss what contributions they should make to the settlement fund.” 

Over the years, the oil and gas industry has dug thousands of miles of long, straight canals, cutting across wetlands to move equipment and to build pipelines. No longer needed, the canals now carry saltwater inland, killing marsh grass and allowing storm surges to race inland unimpeded, worsening erosion and increasing flooding in nearby communities.

Scientists say rising sea levels caused by climate change are fueling increased storm surges.

The lawsuits do not specifically mention climate change but a combination of sea level rise and land subsidence leaves coastal communities particularly vulnerable to the more extreme storms and extreme precipitation events caused by global warming.

A Freeport spokesperson told the Associated Press that the settlement includes Freeport Sulphur and related companies, including Freeport-McMoRan, Inc. “While we believe the plaintiffs’ theories of liability are unfounded, we recognize the importance of coastal restoration regardless of its cause. As a result, we decided to make an early investment in a creative solution rather than continue to engage in years of litigation,” they said in a statement.

Louisiana Gov. John Bel Edwards, who along with state Attorney General Jeff Landry has intervened on behalf of the parishes, told he wants to ensure the funds stay in the communities that are impacted for dedicated coastal restoration. “While the details are being conclusively negotiated, I am hopeful that the conceptual framework in this settlement will be used as a model for resolving other similar actions,” Edwards said in a statement. 

Louisiana’s oil and gas trade associations had harsh words for state officials who back the suits. 

“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,” the Louisiana Oil and Gas Association (LOGA) and the Louisiana Mid-Continent Oil and Gas Association said in a joint statement, adding that the litigation threatens the future of the industry in Louisiana. 

Carmouche, whose firm and others representing the parishes will not collect a set percentage of the damages, but will later petition the court for reasonable attorney fees, said proceeds from the settlement will go to restoring the coast, something that will benefit the economy and even the oil and gas industry. 

Carmouche said most importantly, the money will help residents of Louisiana’s southern parishes.

“This is going to restore our coast and protect the families and public from hurricanes and flooding, which have gotten horrible for us just because of the destruction and land loss caused by the oil and gas companies.”

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