Oct. 13, 2014 09:41 PM

Here's what's at stake in the November Senate race - regardless of whether Republicans gain control of the upper chamber.

Here's what's at stake in the November Senate race - regardless of whether Republicans gain control of the upper chamber. By Lamar White Jr.

Wednesday, Oct. 15, 2014

Photo by Robin May  
 
U.S. Sen. Mary Landrieu shares a moment with Lafayette oil exec Mark Miller in March of this year
at the Louisiana Oil & Gas Association's annual meeting in Lake Charles,
where Landrieu appeared as keynote speaker.
 

If Mary Landrieu loses in November, oil exec Mark Miller warns, it will take 30 years for Louisiana to fully regain its influence in the U.S. Senate.

A registered Republican in Lafayette, Miller may not be the likeliest defender of Sen. Landrieu, who is now in the middle of the most important and closest fight of her political career. But 58-year-old Mary Landrieu is the chairwoman of the powerful Senate Energy and Natural Resources Committee, and Mark Miller is the president of Merlin Oil & Gas and the vice chairman of the Independent Petroleum Association of America.

"Our state has been a leader in the oil and gas industry for many decades," Miller says, "and having our senator as the chair of the Energy Committee provides our state with a preeminent spot in the world of politics."

"The Energy Committee, you could argue, is the most important position, and as I've said around the state, it's not my clout; the clout belongs to the people of Louisiana," Sen. Landrieu tells me, while she is driving across the Morganza Spillway, en route to an event in Baton Rouge. "This chairmanship is theirs, not mine. And why would we want to give it up, particularly to someone or some other Democrat to either be chair or ranking member that doesn't support the oil and gas industry? That is a likely scenario if I don't win."

During the last 20 years, oil and gas companies have extracted nearly a half trillion dollars in natural resources from Louisiana, and although the industry is still hugely important to the state's overall economy, most of its profits go elsewhere. New Orleans is no longer the energy capital of Louisiana, and neither is Lafayette or Lake Charles. Instead, that title belongs to Houston, Texas, the fourth largest city in the country and a city built by the federal government's space program and Louisiana oil. Houston has never denied this. Its basketball team is the Rockets; its baseball team is the Astros, and for a long time, its football team was the Oilers ­- now called the Texans. Spindletop, the well in East Texas that became the emblem of the Texan oil boom, dried out in the 1930s. Today, the largest oil and gas companies headquartered in Houston are doing much of their domestic production off the Louisiana coast.

Photo by Robin May  
 
Mike Stagg  

"As a result of the industry bust of the 1980s and the consolidation that followed it, corporate power and control shifted to Houston, relegating Louisiana and its energy cities to being home to the service sector of the industry," explains Mike Stagg of Lafayette. Stagg is a well-known state activist and a former candidate for Congress, currently writing a book about what he calls "propaganda" by the oil and gas industry. "Deepwater drilling in the Gulf of Mexico and [fracking in] the Haynesville Shale showed that Louisiana still mattered, but as a resource play - not as an industry power center."

There is no dispute that seniority matters in the U.S. Senate, and if Landrieu loses and if David Vitter trades his seat in the Senate for the governor's mansion, Louisiana's influence would be severely weakened, if not crippled.

Assuming that Vitter becomes the next governor - the polls suggest right now that he is in the lead - and if Landrieu loses, we would have two brand new senators. I ask Mark Miller how long would it take for us to recapture the seniority and the clout Landrieu has right now? I mean, are we looking at 15 years or 20 years?

"I'd say three decades if you want to know the truth," Miller says, without hesitation. "We've had the conversation, my friends and myself. To me, it could take 30 years to get back up to where we are. There are a lot of relatively young people in the Senate that would be ahead of the people of Louisiana moving back up the ladder. We would lose a tremendous amount of seniority. Seniority means a whole lot when you're trying to get things done."

It took Landrieu 17 years to ascend to the chairmanship of the Senate Energy Committee, and because the Senate is younger now than it was when she was first elected, it may now take nearly twice as long for another Louisiana senator to climb back into that position. We should not understate the importance of the chairmanship.

From 1987 to 1995, Sen. J. Bennett Johnston Jr. of Shreveport was chairman of the Senate Energy Committee, and during his tenure, he helped launch the deepwater offshore industry, deregulated the pipelines and allowed power plants to burn natural gas, actions that were both individually and collectively game-changing, historic and enormously profitable for the Louisiana oil and gas industry.
Johnston retired in 1997 and took a position on the board of directors of Chevron. He endorsed then-State Treasurer Mary Landrieu as his successor.

"Louisianians who make money in oil buy politicians, or pieces of politicians, as Kentuckians in the same happy situation buy racehorses," A.J. Liebling wrote in what I consider to be the best political memoir in American history, 1960's The Earl of Louisiana. "Oil gets into politics, and politicians, making money in office, get into oil. The state slithers around it."

Nearly 55 years later, Liebling's diagnosis is still true. Gov. Bobby Jindal received more than $1 million in donations from oil and gas companies and then attempted to spare the industry from any accountability in a case The New York Times just recently dubbed "the most ambitious environmental lawsuit in the country." Like Jindal, Landrieu also opposes this historic lawsuit, arguing to the Baton Rouge Press Club that it "will not save the coasts of Louisiana."

In a state battle-scarred from storms personified as Katrina, Rita, Isaac and Gustav and a state still reeling from the worst environmental disaster in American history, patience is wearing thin. "I don't care what the Senate looks like in 30 years," Mike Stagg explains. "I care what the Louisiana coastline looks like."

For many, Sen. Landrieu's support of the industry comes at the expense of greater concerns about the environment and prevents her from using the power of her position to effectuate real change in clean energy and coastal restoration. "She was elected to represent the people of Louisiana, not the oil and gas industry," Stagg says, repeatedly. It's not an entirely unfair criticism.

Last year, Louisiana provided more than $460 million in severance tax exemptions and more than $70 million in petroleum products tax exemptions to oil and gas companies. If we were willing to collect the tax revenue we would be otherwise due, Louisiana wouldn't have a budget crisis; we wouldn't struggle to fund higher education; we wouldn't need to close public hospitals; benefits for state employees wouldn't be on the chopping block.

The industry, pardon the pun, has far too often rigged the system.

For example, a temporary exemption on experimental horizontal drilling (or fracking), signed by Edwin Edwards in 1994 and intended to incentivize a then-nascent industry, is still the law of the land, even though the technology, 20 years later, is no longer experimental and even though it is costing taxpayers hundreds of millions of dollars every year. In North Louisiana, the Haynesville Shale is believed to be the second largest natural gas field in the country (third if you include protected land in Alaska), and since 2008, when production became economically and technologically feasible, the mad rush on leasing rights made countless landowners into overnight millionaires. At one point last year, the Haynesville Shale accounted for nearly 10 percent of the country's natural gas production, which may be great for the industry but still hasn't done anything substantive to help the state's bottom line.

In South Louisiana, the negligence and the arrogance of BP in the 2010 Deepwater Horizon disaster was a wake-up call for many: A multinational corporation drilling right beyond our coast had, in the flash of only a few minutes, put an entire ecosystem and the livelihoods of tens of thousands of our citizens in peril.

When the Obama administration placed a temporary moratorium on the issuance of new deepwater offshore drilling permits, a moratorium that ultimately affected only 21 of the more than 3,600 platforms in the Gulf, the industry went apoplectic. Lawsuits were filed. Rallies were staged, with oil and gas companies paying and busing in employees to join the protests. Economists who worked for the industry issued hastily reasoned and apocalyptic reports suggesting that the moratorium would result in the loss of 30,000 jobs in Louisiana, more than half of the entire industry. The moratorium, said Sen. Landrieu, "could cost more jobs than the spill itself."

"It could affect 330,000 people in Louisiana alone," she told Interior Secretary Ken Salazar during a Senate committee hearing.

A year after the spill, only 343 oil rig workers were able to collect claims as a result of losing their jobs during the moratorium. Indeed, according to an analysis by Harvard Professor Joseph Aldy in a paper titled "The Labor Market Impacts of the 2010 Deepwater Horizon Oil Spill and Offshore Oil Drilling Moratorium," despite the sky-is-falling narrative that had been sold to us, "the most oil-intensive parishes in Louisiana experienced a net increase in employment and a net increase in wages."

The next year, Lafayette led the nation in job creation.

Still, it's hard to fault Sen. Landrieu for simply being a proponent of an industry that has generated such enormous wealth for her home state, and as tenuous (and frankly, unlikely) as it may be, there is an argument to be made that Landrieu's alarmism over the moratorium may have helped to mitigate its potential effects. It's also difficult to blame Landrieu for the failures of the state government in holding the industry accountable for the hundreds of millions of dollars we provide in tax exemptions. That's just not her turf, and for that matter, neither is the Southeast Louisiana Flood Protection Authority-East's historic lawsuit against 97 oil and gas companies.

It is also hard to overlook Landrieu's enormous accomplishments in steering oil and gas revenue back to Louisiana. In 2006, she worked across the aisle with Sen. Pete Dominici, a Republican from New Mexico, in passing the Gulf of Mexico Energy Security Act, a law that will generate billions of dollars for Louisiana. Shortly after the BP oil spill, Landrieu championed the passage of the RESTORE Act, which, she points out, represents "the single largest investment in environmental restoration in our nation's history."

If Landrieu loses and the Republicans take control of the Senate, Lisa Murkowski of Alaska is poised to become the next chairwoman of the Senate Energy Committee, and although she and Landrieu have worked together in the past, Louisiana's interests aren't the same as Alaska's. Often, they are competing. More important, particularly for Louisiana citizens like Mike Stagg who care passionately about coastal restoration and the environment, compared to Sen. Murkowski, Mary Landrieu looks like a card-carrying member of the Sierra Club.

Alternatively, if Sen. Landrieu loses (recent polls show her trailing ever-so-slightly Republican U.S. Rep. Bill Cassidy of Baton Rouge) and the Democrats somehow still maintain control of the Senate, Maria Cantwell of Washington is likely to become chairwoman. Cantwell, suffice it to say, would be the Louisiana oil and gas industry's worst nightmare.

"Why would Louisiana give up such an influential position at a time you could argue is one of the most exciting times in the history of the natural gas industry?" Landrieu asks me rhetorically. "Why would we give this power up? We can help design an energy policy that we can live with and grow with and prosper with and create the jobs and the economy of our dreams. That's a big thing at stake in this race."  

Lamar White Jr. is a native of Alexandria and author of CenLamar.com, an award-winning blog about Louisiana politics. He is in his final year of law school, concentrating on constitutional law and public policy, at the SMU Dedman School of Law in Dallas, where he lives with his golden retriever, Lucy Ana.

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