Political Horizons for Sunday 4/22

A lot of people have dismissed the “legacy lawsuit” issue in the Louisiana Legislature as a debate between 1-percenters: big landowners versus Big Oil.

Lewis Hubbard, who manages a glass shop in Monroe, disagrees.

Hubbard was brought into the issue when his elderly parents’ health began failing and he was pressed to help with the small farm east of Rayville that had been in his family since the 1800s.

During a recent interview, he recalled trying to rid the property of some tanks, apparently abandoned by one of the operators looking for oil on the property back in the 1940s and ’50s.

“I didn’t know who to call,” Hubbard said. He couldn’t tell which of the half dozen or so companies that operated on his father’s farm over the years were now responsible.

Hubbard said he then heard from neighbors that his problem could be much larger than a rusting eyesore. They advised taking a closer look at that idyllic pond on the corner of the acreage, shaded with trees, its banks littered with fishing corks.

Tests discovered that Hubbard’s picturesque pond was like dozens of others dotting Louisiana that were dug a half-century ago. They were filled with fluids separated from the crude oil produced from a well at the location. Though mostly salt water, the fluids also frequently contain toxins.

Hubbard filed a lawsuit against all the oil companies that held operating leases on his father’s land. After years of threats and recalcitrance, a coalition of operators settled the lawsuit, the terms of which are private, he said. But they did agree to drain the pond, remove about 10 to 15 feet of contaminated clay from beneath the fluids, fill up the hole with clean soil, install a few monitors and plant wildflowers.

There are about 20,000 such sites around Louisiana. Most are not owned by millionaires; and each has an individual story, said state Sen. Gerald Long, the Winnfield Republican who chairs the Senate Natural Resources Committee that is considering about a dozen and a half legacy lawsuit bills.

Long said, in an interview last week, that the oil industry needs to feel comfortable that it can tidy up old messes at a predictable price without an all-out legal war — or it will stop drilling in Louisiana. Landowners need some assurance that, after decades, the mess will be cleaned to an acceptable level and their losses recompensed without having to wage all-out legal war — or they won’t signs the leases that allow for energy exploration.

In between the landowners and Big Oil are a bunch of smaller, locally owned oil operators. Big Oil’s lobbyists like to call them “Mom and Pops.”

“I’m getting squeezed from both sides,” said David Russell, president of McGowan Working Partners, a Jackson, Miss., company that employs 60 people, and uses a specific technology to prolong the life of about 20 oilfields.

Like all operators, when McGowan buys a lease — the right to take over operations on a particular oilfield — the contract includes an “indemnification clause” that says, basically, he would protect past owners from lawsuits over damage done to the land. It’s a standard clause.

“It was just part of the deal,” Russell testified at a hearing last week, adding that he understands American business is built on the sanctity of the contract.

“But I never thought I’d get sued for $700 million 20 years ago when I signed that contract,” Russell said.

Sen. Long says the issue is complex with a lot of moving parts.

Eyeing the line of high-priced lobbyists waiting to speak to him, Long added: “They need to come up with a compromise so we don’t have a blood bath.”

Sorting through these details in the highly polarizing world of Louisiana politics is the imperative to protect the state’s largest private employment and financial engine, which should concern and impact every resident, he said.

“If we can’t find a balance between oil and gas and the landowners, this will kill the golden goose,” Long said.

Mark Ballard is editor of The Advocate’s Capitol news bureau. His email address is mballard@theadvocate.com.