Oyster lease bid plan unpopular with Louisiana’s oyster industry

A draft of proposed legislation to lift the moratorium on new oyster leases in Louisiana doesn’t even have a sponsor yet, but two provisions in it are raising the ire of the oyster industry.

One provision would require bidding for new leases instead of the current process of leasing these state-owned water bottoms for $2 an acre per year for 15 years. The provision would apply only to new leases, not to renewals.

A second provision would allow the state to terminate a lease after four years if there hasn’t been any legitimate oyster-related work done on the lease during that time.

“We’re asking for the moratorium to be lifted, but we’re asking them to pay market price,” Lawrence Marino, outside counsel for the state Coastal Protection and Restoration Authority, told the Governor’s Advisory Commission on Coastal Protection, Restoration and Conservation at a meeting Wednesday in New Orleans.

John Tesvich, chairman of the Louisiana Oyster Task Force, said members who attended the group’s legislative committee meeting the day before had an immediate “visceral and impassioned” reaction to the proposals.

“This cry came from an oyster industry that is already on its knees,” he said.

The moratorium on new oyster leases was put in place by the Louisiana Wildlife and Fisheries Commission in 2002 in the wake of a major lawsuit from oystermen over damage they said was caused by the operation of the Caernarvon Freshwater Diversion located near the St. Bernard-Plaquemines parish line.

In 2008, the state Legislature directed the Louisiana Wildlife and Fisheries Commission to develop rules to lift the moratorium. All but two of the recommendations could be done by rule, Marino said.

Attempts to get legislative action on the two items, including compromise revisions among oyster, oil and gas interests and landowners, were made in 2011, 2012 and 2013. But opposition came from attorneys representing oystermen involved in litigation over the Deepwater Horizon disaster in 2010, who feared the moratorium compromises would interfere with their efforts, Marino said.

The proposals being presented this year to oyster and coastal groups would make two changes: requiring that new leases be put up for bid and authorizing the state to terminate a lease for inaction.

Marino said bidding would make the leases subject to the market and allow new people to get into the oyster industry. He also pointed out that leases are sometimes resold for anywhere between $100 and $1,000 an acre by lease holders.

“This is a market allocation of this natural resource of the state,” he said. “That’s apparently what an oysterman thinks these are worth.”

The capping of the lease rate below market value encourages speculation and impedes competition, he said. Some of that speculation can come in the form of people getting leases only to hold them in hopes an oil and gas company will need to traverse the property, at which time the companies pay for the right and for any damages.

A report commissioned by the state Department of Natural Resources in 2005 concluded that many oyster leases are taken out with a speculative interest in hopes of getting these kinds of payments. Oyster farmers were quick to dispute the findings and said it’s common practice to take out multiple leases so they can adapt to changing salinities in the water and move oysters when conditions warrant.

“I know you say $2 an acre doesn’t seem like a lot,” said Al Sunseri, a member of the Louisiana Oyster Task Force and the coastal advisory commission.

However, he said, oyster growers spend hundreds of thousands of dollars to make the leased areas suitable for oyster production, and the improvements they make provide a benefit to the general public in terms of coastal protection and fishing.

In addition, Sunseri said, the lease termination clause isn’t feasible as oyster growers work to adapt to changing coastal conditions, and with even more changes on the horizon as more freshwater is introduced into certain areas for coastal-restoration purposes.

“With all these new changes, we need that flexibility to continue to exist,” he said.

Sarah Voisin, co-owner of Motivatit Seafoods Inc. in Houma, said she was very concerned about the bidding proposal, which she said could leave leases open for speculators to come in and buy them up. The lease-termination provision is also troubling, she said, because it would come down to someone else’s interpretation of what is “legitimate” activity on a lease.

She said that before anything is presented to the Legislature, a comprehensive meeting with members of the oyster industry should be held to discuss it.

Jerome Zeringue, executive director of the state Coastal Protection and Restoration Authority, which has been proposing the legislation to lift the moratorium, said this latest draft is just a starting point for discussion.

The proposed legislation will very likely be a topic of conversation during a Louisiana Oyster Task Force meeting scheduled for 1 p.m. Monday at the UNO Advanced Technology Center, 2021 Lakeshore Drive, Suite 210, in New Orleans.