Jindal unveils legislation to solve oil and gas legacy lawsuits

Gov. Bobby Jindal unveiled legislation Thursday that he said will finally solve a simmering problem in Louisiana.

The proposal, which will be filed for consideration in this legislative session, tackles what are known as legacy lawsuits.

The lawsuits involve damage often created years ago by oil and gas drilling. Industry claims the expensive litigation drives it out of Louisiana. Landowners counter that oil and gas companies aren’t readily cleaning up their environmental mess.

Surrounded by industry leaders and landowners, Jindal said legislation by state Sen. Robert Adley, R-Benton, would strike the right balance.

The governor said the proposal would protect landowners’ interests while protecting industry from overly expensive and frivolous litigation.

“This consensus is noteworthy in that it does a couple of very important things. One, it allows us to clean up our lands more quickly and efficiently in Louisiana.

Secondly, it creates a predictable environment for industry, not only for the energy industry and the oil and gas companies, but it sends a signal to the rest of the country that we welcome responsible investment in job creation in the state of Louisiana,” the governor said.

The proposal is the latest crack at resolving the oil and gas industry’s complaints about legacy lawsuits hampering its investments in Louisiana.

Jindal’s predecessor, former Gov. Kathleen Blanco, pushed a proposal to require court awards to be spent on actual cleanup.

Legislators tackled the issue again in 2012, producing bills that offered industry the opportunity to admit liability and allow the state to develop remediation plans.

On Thursday, Jindal said Adley’s bill is a more comprehensive approach than past efforts. He said a broader spectrum of stakeholders came to the table and worked out a compromise.

The governor said Adley’s legislation will:

Encourage more operators to make admissions that will result in increased regulatory cleanups prior to lengthy and costly litigation.

Clarify the types of damages that can be recovered and the standards for recovering those damages.

Provide a common sense definition of contamination that makes it clear it must rise to an unsafe or unsuitable level before claims can be supported.

Jindal said the compromise was not easy to reach. “It involves operations conducted decades ago, standards that have evolved over time as technology has improved and the changing ownership of properties and lease rights. It’s also difficult because it involves, on one hand, an industry that’s been the cornerstone of our economy for literally the last century, on the other hand, land rights and environmental concerns that are important to our way of life,” he said.

Adley said he worked on the legislation with the help of the governor and Jindal’s former chief of staff, Stephen Waguespack. Waguespack now heads the Louisiana Association of Business and Industry, the state’s largest business lobbying group.

“The goal has been really very simple for all of us. We had to find a way to continue to protect the lands in the state of Louisiana, to create what accountability we could create along with predictability for the industry. Working together, I think we’ve come to that point,” Adley said.

Adley said he hopes the legislation will bring more people out of the courtroom.

James Justiss, chairman of Jena-based Justiss Oil Company, said he was vital to the negotiations. “I’ve been involved in this for a few months, mostly as a peacemaker and a money tree for these lawyers,” he said.

Justiss said the compromise will benefit landowners and oil operators.

“Most importantly I think it will benefit Louisiana consumers. ... We consumers ultimately pay all of the cost. I think it’s a win-win situation,” Justiss said.

One of the state’s major landowners, Roy Martin, president of RoyOMartin companies, said in a statement that the agreement will “help end needless litigation and clear the way for more responsible onshore oil and gas exploration without compromising environmental standards.”