The Little Issue That Could

by Jeremy Alford

Wednesday, May 25, 2011

How a sleeper bill about contaminated oilfield sites became one of the most hotly lobbied issues of the session  By Jeremy Alford

Our story ends with a rare defeat for the oil industry. Actually, it was more than that. By a vote of 10-7, the House Natural Resources Committee "deferred" the so-called legacy lawsuit bill, which oil interests desperately wanted to pass.
Wednesday, May 25, 2011

How a sleeper bill about contaminated oilfield sites became one of the most hotly lobbied issues of the session  By Jeremy Alford

Our story ends with a rare defeat for the oil industry. Actually, it was more than that. By a vote of 10-7, the House Natural Resources Committee "deferred" the so-called legacy lawsuit bill, which oil interests desperately wanted to pass.

To fully grasp the import of the committee's action, one must recognize that the layman's definition of "deferred" differs radically from that of lawmakers. In the legislative lexicon, deferring a bill in committee is the same as spiking it, effectively killing it even before it comes to an official vote.

Technically, oil interests have a duplicate Senate bill, which can be taken up and navigated back to the House, forging potential compromises along the way in the hope of a different outcome before the same House committee next time - but the odds are stacked heavily against success.

"There's discussions going in all ways right now," said Gifford Briggs, vice president of the Louisiana Oil and Gas Association, several hours after last Wednesday's vote. "But I think the general consensus is we brought the issue to the committee and lawmakers have acted. I think at this point it's highly unlikely that we'll proceed again."

With that, Louisiana's top lobbyists gave a collective sigh - not of relief, but of what might have been. And then eyebrows started to arch and ears perked up as the weekend break gave way to chatter about a resurrected bill. This version, which could be tied to yet one more duplicate bill pending in the House, would focus on lessening liability for oil companies while fast-tracking cleanup. The sequel could surface as soon as this week.
So what's all the fuss about?

Legacy sites are old oilfields that have been contaminated by previous owners or operators, but which still require mitigation - which is expensive. The issue pitted landowners against oil companies, and it drew a Who's Who of government consultants and lobbyists to the committee room for last week's showdown. If a bomb had gone off in the room, the bulk of the Legislature's institutional knowledge would have gone with it.

"What started out as Little Land' and Little Oil' has become Big Land' and Big Oil,'" said Rep. Sam Jones, D-Franklin.

The battle lines were clear: Big Oil wanted to give a state agency (as opposed to judges) more control over legacy sites in the name of speeding up litigation; Big Land wanted to maintain the status quo, which has courts deciding legacy cases. The status quo itself was the subject of a legislative war several years ago - and the result of a compromise. Now Big Oil wants to change the rules again.

While the issue went nowhere in committee last week, it served as a case study for what can happen at the Capitol during a very brief period of time when there's a lot of money at stake. House Bill 563 by Rep. Page Cortez, R-Lafayette, was filed prior to the session's start, and it flew largely under the radar until this month.

By the second weekend in May, just days before last week's hearing, the energy lobbyists were scrambling to rewrite the bill to satisfy large (read: influential) landowners. "At this point I don't even know what it's going to look like," said one lobbyist involved in the drafting process. Another, on the dole for landowners, suggested, "That's exactly how they want it."

As the weekend rewrites proceeded, robo-calls in opposition to the bill were unleashed in House districts represented by committee members. Energy lobbyists responded quickly - and so forcefully that LOGA officials, among others, apologized for their full-court press.

LOGA alone has 15 paid lobbyists representing its interests, according to the Louisiana Ethics Administration. They include top-tier lobbyists like Courson Nickel and Harris, DeVille and Associates. In carrying out their jobs, the lobbyists mostly spoke with lawmakers about the need to have the state wrest control of the legacy cases from the courts and speed litigation along. "[LOGA] cannot go around and educate every single lawmaker on this very complex issue," Briggs said of his lobbying phalanx. "We needed help."

Not to be outdone, the Louisiana Landowners Association lined up its own ringers, such as the New Orleans law firm of Adams and Reese. Mix in the lobbying teams of the Louisiana Farm Bureau, the state Timber Association and the Forestry Association, and the big picture comes into focus. Now consider how much each lobbyist earns in salary and how much he or she spends over lunch or dinner with their intended targets - not mention research and outreach - and the cost of bringing the bill easily goes to six figures.

What's at stake, however, is much more. Plaintiff attorneys and law firms representing oil interests have made millions pursuing and defending legacy lawsuits, and if an oil company or contractor loses such a suit the damages can be huge.

Wealthy, independent landowners like Roy O. Martin of Alexandria, a big supporter of Gov. Bobby Jindal and all-around lumber tycoon, weighed in personally against the oil companies. He not only wrote personal letters to members of the House Natural Resources Committee, but he also recruited Jimmy Faircloth, Jindal's former executive counsel, to present the opposition's case.

With statewide elections just five months away, most lawmakers wanted nothing to do with the issue.

Still, if there was a tipping point, it may have been Faircloth's offensive. With the state's largest landowners sitting not far behind him (including the Louisiana Landowners Association, which represents some 3 million acres in the state), Faircloth was able to accuse the oil lobby of lying about having landowners at the table during the weekend drafting session. "I categorically disagree," he said. "I won't go any further than that. You can draw your own conclusions to what I'm saying."

Faircloth also recounted a story about being cornered by an oil lobbyist outside the House chamber unexpectedly and being presented with a bill and being asked on the spot to agree with it. "I couldn't believe that," he added.

Despite facing the likes of LOGA, which mostly represents independent oil companies, the Louisiana Association of Business and Industry, and local forces like the Lafayette Chamber of Commerce, opponents built a strong case for their claim that the Louisiana Department of Natural Resources doesn't have the resources to take over the claims process from the courts.

That case was built without the help of DNR, by the way. In fact, some lawmakers looked irritated when DNR refused to take a position. "Are they capable of doing this job or not? I don't want to create another layer of bureaucracy with this," said Rep. Joe Harrison, R-Napoleonville. "I don't understand that. I've never been neutral in my life."

Environmentalists were responsible for their own fancy footwork. Cheron Brylski, a New Orleans-based consultant working with environmentalists and landowners, said she feared that the proposed legislation would take away the right of claimants to go to court.
Brylski linked the legacy site bill to last year's BP oil disaster, arguing that it could potentially affect claimants' rights against BP or companies like it. While it's highly unlikely the legislation would have impacted anything related to the spill, the claim gained traction when officials from BP showed up last week to endorse the bill.

If nothing else, lawmakers may have taken note and realized how easy the situation could have been spun against them in the fall elections. "Big Oil and Gas hire the best lawyers and lobbyists money can buy," says Brylski, who also oversaw an email campaign that informed opponents in real time as to which lawmakers were wavering. "They don't want you to hire any lawyer. Ever. Period."

On the other side of the issue, David Russell, president of McGowan Working Partners, which is domiciled in Mississippi but has offices in Roanoke, said he deserves protection, too.

"Obtaining proper insurance to cover non-sudden or accidental [legacy] pollution liability for oilfield operations is not difficult to get," Russell said. "It's impossible. After 15 years of providing coverage, my company's provider declined pollution liability insurance coverage simply due to the legacy lawsuit issues in the state. Developments like this are going to shut this industry down, as far as Louisiana is concerned."

While the legacy debate, at least last week's incarnation, was a case study in how much money can be dumped behind (and against) an issue in a short period of time, it also underscored why the public is so often oblivious to such issues. Only a sprinkling of mainstream media outlets covered the committee hearing, and barely any peeled back the layers of the story.

It makes one wonder how many other accounts of power politics are slipping through the cracks - but that's an entirely different kind of legacy.

Jeremy Alford can be reached at [email protected]