Southeast Louisiana Flood Protection Authority – East · Southeast Louisiana Flood Protection Authority – East Presentation to CPRA January 15, ... Murphy Oil Devon Energy ...

Southeast Louisiana FloodProtection Authority – East

Presentation to CPRAJanuary 15, 2014

Three Points Today

I. SLFPA-E’s lawsuit is based upon soundscience and undisputed fact.

II. We address Mr. Graves’s criticisms ofthe lawsuit.

III.SLFPA-E’s lawsuit will bridge fundinggaps in coastal restoration and hold theoil & gas industry responsible for theharm it caused.

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Background

The Southeast LouisianaFlood Protection Authority - East

SLFPA-E’s Mission“[T]he protection of the entire territory of theauthority from overflow.” La. Rev. Stat.§ 38:330.2(G).

The Buffer Zone

The Importance of the Buffer Zone

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“Barrier islands, marshes, andswamps throughout our coast reduceincoming storm surge, helping toreduce flood impacts. If we continue tolose these habitats, the vulnerability ofcommunities, nationally important tonavigation routes, and energyinfrastructure will increasesubstantially. In addition, our floodprotection systems will become morevulnerable as the land around themerodes.”

The Buffer Zone

Delacroix

Land Loss in Delacroix

Delacroix 1956

Delacroix 1965

Canal dredged 1961

Delacroix 1972

Canal dredged 1971

Delacroix 1989

Canal dredged 1983

Devon EnergyMurphy Oil

Delacroix 2008


Devon Energy Permit 1983 – Well abandoned 1994

“Upon abandonment of the well location, the spoilbanks around the herein permitted canal shall bedegraded to marsh level. The dredged material shallbe returned to the canal or spread adjacent to existingmarsh in open water areas to an elevation not morethan 1’ above that of adjacent marsh in an effort tocreate marsh and encourage vegetation.”

“Upon abandonment of the well location the hereinpermitted canal shall be plugged with an earthen damnot less than 3’ MSL and topped with a 6” shell cap.”

CZMA Regulations (1980)“Mineral exploration and production sites shall becleared, revegetated, detoxified, and … restoredas near as practicable to their originalcondition upon termination of operations to themaximum extent practicable.” LAC 43:I.719(M).

Delacroix 2008


Delacroix 2008

Delacroix 2008

Devon Energy

Murphy Oil

Delacroix 2008

Devon Energy

Murphy Oil

Rig Access Canals

Delacroix

Devon Energy

Murphy Oil

Bayou Terre aux Boeufs

1956 - 2008

“So, why are we losing land?What’s going on here?”

-Garret Graves, presentation to SLFPA-E, Dec. 19, 2013.

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The Big Question:

Oil and gas industry activities.

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The Plain Answer:

I. CPRA’s Lawsuit is Based onSound Science and Undisputed Fact.

Studies Conclude that Oil &Gas Activities Contributed to Coastal Loss

L. St. Amant, 1971US Bureau of Land Management, 1972US Army Corps of Engineers (S.M.Gagliano), 1973US Army Corps of Engineers, 1973US Environmental Protection Agency, 1976D.W. Davis, 1976N.J. Craig et al., 1979National Oceanic and AtmosphericAdministration, 1980Fruge, 1981Johnson & Gosselink, 1982US Fish and Wildlife Service, 1983US Geological Survey, 1983R.E. Turner et al., 1984Louisiana Mid-Continent Oil and GasAssociation, 1985Minerals Management Service, 1985LSU Center for Wetland Resources, 1985

Louisiana Geological Survey, 1987Mineral Management Service, 1987US Fish and Wildlife Service, 1987American Petroleum Institute, 1988LA Dept of Natural Resources/US Fish andWildlife Service, 1988Minerals Management Service, 1989Penland et al., 1990Louisiana Geological Survey, 1991US Environmental Protection Agency, 1992US Department of the Interior, 1994Penland et al., 1996US Environmental Protection Agency, 1997US Geological Survey, 2001US Geological Survey, 2004US Army Corps of Engineers, 2004Louisiana Sea Grant, 2008LACPR, USACE, 2009Minerals Management Service, 2009Gulf Coast Ecosystem Restoration TaskForce, 2011

Shell’s Former ChiefOffshore Engineer Agrees

• Robert Glenn Bea

• Former chief offshore engineer for Shell Oil Co.

• Head of the National Science Foundation study team on Hurricane Katrina

• 2006 Affidavit prepared for the State of Louisiana

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Shell’s Former ChiefOffshore Engineer Agrees

• Robert Glenn Bea

• Former chief offshore engineer for Shell Oil Co.

• Head of the National Science Foundation study team on Hurricane Katrina

• 2006 Affidavit prepared for the State of Louisiana

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“There is clear evidence that past and current oil andgas activities have made and continue to makesubstantial contributions to degradations in thenatural defenses against hurricane surges and wavesin coastal Louisiana. . . . All of these works andactivities have contributed significantly to the loss ofnatural defenses such as barrier beaches, wetlands,and marshes. In several important cases, it was theloss of these natural defenses that contributed to theunanticipated breaches of flood protection facilitiesthat protected the greater New Orleans area duringhurricane Katrina and led to repeated flooding duringhurricane Rita.”

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SLFPA-E’s Mission:“[T]he protection of the entire territory of theauthority from overflow.” La. Rev. Stat.§ 38:330.2(G).

Bea Affidavit:“. . . It was the loss of these natural defenses thatcontributed to the unanticipated breaches of flood protectionfacilities that protected the greater New Orleans areaduring hurricane Katrina and led to repeated floodingduring hurricane Rita.”

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One Result of Overflow – August 2005

Mr. Graves Agrees

“No one is saying that historic oil and gasactivities did not leave scars,” Graves said.

Jindal demands East Bank levee authority drop lawsuitagainst oil, gas, pipelines, Mark Schleifstein,www.nola.com, July 24, 2013.

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Mr. Graves Agrees Again

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“The debate here is not aboutwhether or not historic oil and gasactivities in the coastal zonecontributed to wetlands loss. Thescars are there.”

-Letter, Garret Graves to Timothy P. Doody,July 26, 2013.

Mr. Graves Agrees Yet Again

“As I noted earlier, the historic energyproduction and activity that date back intothe early 1900s, they contributed to landloss. Whether it’s the pipeline canals, theaccess canals, the extraction, theycontributed.”

-Garret Graves, Testimony at Joint TransportationCommittee hearing, Aug. 14, 2013.

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Mr. Graves Agrees Once More

“I will be the first one to admit, there’sliability there,” Graves said. “I’m not anapologist for the oil and gas industry, I’llbe the first to tell you that.”

-Jeff Adelson, Maneuvering for Levee Board seats beginsamid lawsuit controversy, THE ADVOCATE, Sept. 16,2013.

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CPRA Agrees, Too

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August 7, 2013

WHAT’S CAUSING THECRISIS?

“Canal dredging has had one of the mostdramatic effects on wetland growth andregeneration. In addition to directlydestroying marshes in the path of the canal,the plants are unable to recolonize, and thusthe marsh is unable to regenerate itself. Oncecanals are dredged, most grow larger as thesustainable areas of marsh subsequentlydecrease.”

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August 7, 2013

“INDUSTRIAL NEGLIGENCE:... and in the early to mid-20thcentury, oil and gas explorationactivities increased the dredgingof canals.”

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August 7, 2013

“As the century continued, oil and gas becameprominent economic drivers and critical resourcesfor our nation. Access to these was provided bynavigation canals and pipelines whichcrisscrossed South Louisiana marshes.Unfortunately, in the process the coastal marsheswere lost when spoil banks were left randomlythroughout the area, disastrously altering thenatural hydrology of the region.”

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August 7, 2013

Rig Access Canals

Bayou Terre aux Boeufs

“. . .disastrously altering thenatural hydrology . . . .”

Murphy Oil

Devon Energy

Delacroix

1956 - 2008

Mr. Graves Wants to Kill the Suit

“Asked if the state’s strategy couldconceivably involve litigation againstenergy companies for historical wetlandsdamage, Mr. Graves said that was ‘not ourplan A, B, C, D or X.’”

-Facing Fire Over Challenge to Louisiana’s Oil Industry,Campbell Robertson, New York Times, August 31, 2013.

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“Canal dredging has had one of the mostdramatic effects on wetland growth andregeneration. In addition to directlydestroying marshes in the path of the canal,the plants are unable to recolonize, and thusthe marsh is unable to regenerate itself. Oncecanals are dredged, most grow larger as thesustainable areas of marsh subsequentlydecrease.”

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“INDUSTRIAL NEGLIGENCE:... and in the early to mid-20thcentury, oil and gas explorationactivities increased thedredging of canals.”

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“As the century continued, oil and gas becameprominent economic drivers and critical resourcesfor our nation. Access to these was provided bynavigation canals and pipelines whichcrisscrossed South Louisiana marshes.Unfortunately, in the process the coastal marsheswere lost when spoil banks were left randomlythroughout the area, disastrously altering thenatural hydrology of the region.”

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The Litmus Test

“‘To be very clear, the governor has saidthat the lawsuit is a litmus test. Period,’said Coastal Protection and RestorationAuthority Chairman Garret Graves, whohas been the administration’s chiefspokesman in criticizing the lawsuit.”

-Jeff Adelson, Levee board suit supporters are likely tolose seats, THE ADVOCATE, Sept. 16, 2013.

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II. Addressing Mr. Graves’s Criticisms.

Baseless Criticismand Misinformation

The following slides demonstrate that:

A. Mr. Graves has recently minimized theoil and gas industry’s role in causingcoastal land loss.

B. Mr. Graves’s criticisms of the lawsuit,lawyers, and SLFPA-E are incorrectand misleading.

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Minimizing the Industry’s Role“But I would consider the Corps ofEngineers implications as a heart attack; Iwould consider the BP implications as amajor cut that needs to be stitched; and,comparatively, based upon science that’sbeen done over and over again, theimpacts of the oil and gas industry wouldbe more like a scrape.”

-Garret Graves, Interview with Garland Robinette,WWL, Nov. 19, 2013.

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Minimizing the Industry’s Role

“I’ve had neighbors that have donethings that have been offensive to me.I haven’t filed a lawsuit. I’ve goneover and knocked on the door andsaid, you know what, can you pick upthe dog poop in my yard?”

-Garret Graves, presentation to SLFPA-E, Nov. 21, 2013.

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Minimizing the Industry’s Role

Mr. Graves has cited three reports tosuggest that oil and gas was not theproblem:

• Department of Interior Report

• National Research Council Report

• White House Report

- Garret Graves, presentation to SLFPA-E, Dec. 19, 2013.

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Setting the Record Straight:the Department of Interior Report

“Canal dredging occurs to create or deepen channels fornavigation and to embed oil and gas pipelines. The dredgingdigs up sediment that is then deposited as spoil banks alongthe canals, thus filling existing wetlands. Canal dredgingand spoil deposits accounted for between 30 and 59 percentof the coastal wetland losses in Louisiana from 1956-1978(Turner and Cahoon 1988; Turner 1987). About 8200 milesof canals traverse the coastal wetlands....While the lossfrom the initial construction of canals is significant, thegreatest damage occurs over the longer run.”

“The Impact of Federal Programs on Wetlands, Vol II,” A Report toCongress by the Secretary of the Interior, p. 146 (1994).

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Setting the Record Straight:the National Research Council Report

“Oil and gas exploration, with its associated canaldredging, peaked in the 1960s to 1980s. Canals, and thespoil banks formed during their construction, alter localwater circulation patterns and sediment depositionalprocesses. Spoil banks impede the flow of water, causing aninundation that may be further exacerbated by sea levelrise. These processes result in the drowning of fragileterrestrial vegetation. Freshwater vegetation is alsoadversely affected by saltwater intrusion from sea level riseor along canals that provide a route for saltwater to intrudeinto typically freshwater areas . . . .”

Dean, R., J. Benoit, et al., “DRAWING LOUISIANA'S NEW MAP: ADDRESSING LANDLOSS IN COASTAL LOUISIANA.” National Research Council of the NationalAcademies, p. 16 (2006).

Setting the Record Straight:the Position of the White House

• December 2011 Report of the Gulf CoastEcosystem. Restoration Task Force, establishedby President Obama.

• Cover letter signed by Garret Graves, Task ForceVice–Chairman.

Conclusion, p.8:

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“Channels and canals for navigation and oil andgas activity in Texas and Louisiana have alloweda greater inflow of salt water from the Gulf ofMexico into the estuaries. In some cases, this hascaused saltwater intrusion into freshwatermarshes and forested wetlands, stressing thesehabitats and converting them to open water.”

Mr. Graves’sResponse to the Lawsuit

1. Suggested lawsuit was filed withoutcooperation or information.

2. Said SLFPA-E had no authority to sue.

3. Attacked lawyers and contract.

4. Alleged interference with BP lawsuit.

5. Asserted that MRGO plan addressesSLFPA-E’s flood protection needs.

6. Exaggerated adverse economic effects.

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1. Failure to Cooperate?

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“[A]ll this has -- has been happeningbehind closed doors for several monthsnow without any opportunity fordiscussion with -- with all the folksthat truly have authority in thiscase . . . .”

-Garret Graves, Aug. 15, 2013 interview.

Mr. Graves Was Well InformedAbout SLFPA-E’s Lawsuit

• December 4, 2012 – Mr. Graves met with SLFPA-EBoard President Tim Doody and Vice-President JohnBarry and was informed of the suit. Mr. Gravesrequested that SLFPA-E meet with Jimmy Fairclothto discuss a suit against the Army Corps instead.

• January 17, 2013 – Mr. Graves attended the SLFPA-EBoard meeting, at which SLFPA-E’s counsel waspresent, during which he was further apprised of thesuit.

• January 2013-March 2013 – Mr. Barry contacted Mr.Graves periodically to remind him of SLFPA-E’scontinuing intent to proceed with the suit and tofollow up on Mr. Graves’s request for a meeting withMr. Faircloth to discuss the suit.

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Mr. Graves Was Well InformedAbout SLFPA-E’s Lawsuit

• April 2, 2013 – Mr. Doody relayed the SLFPA-E’sintention to proceed with the suit to Jerome Zeringue,Mr. Graves’s deputy.

• July 12, 2013 – Mr. Doody discussed the suit directlywith Mr. Graves yet again.

• July 17, 2013 –Mr. Graves was advised of the suit atthe CPRA Board meeting, a week before the suit wasfiled.

• July 20, 2013 – Mr. Barry e-mailed Mr. Gravesconfirming the SLFPA-E’s intention to file the suitthat following Wednesday, July 24, 2013.

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2. Disputing SLFPA-E’s Authority

“. . . Louisiana law provides a process for filinglawsuits, hiring outside counsel and for makingsignificant decisions such as filing a lawsuitagainst 100 companies. Louisiana law and ourconstitution organize government and placecertain responsibilities with accountableentities. However, SLFPA-E’s recent decisionviolates those principles.”

-Garret Graves, Letter to SLFPA-E Board President Tim Doody,July 26, 2013.

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Setting the Record Straight

“The board may sue and be sued under the styleof Board of Commissioners for the respectivedistrict.”

-La. Rev. Stat. § 38:309(B).

SLFPA-E’s Mission:

“[T]he protection of the entire territory of theauthority from overflow.”

-La. Rev. Stat. § 38:330.2(G).

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CPRA’s AttorneyDisagrees with Mr. Graves

“The attorney general or his designee shall bethe legal advisor to the [CPRA] board, shallcounsel and advise the board, and shallrepresent the board in all legal proceedings.”

-La. Rev. Stat. §49:214.5.7.

“SLFPA and its levee districts often exercise theconstitutional and legal rights the Legislaturegave them to hire special counsel . . . . WhenSLFPA decided to sue 97 separate oil and gascompanies, they abided by the law.”

-Letter, Attorney General Caldwell to State Sen. Adley, Nov. 25,2013.

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3. Distorting the Contract

“. . . I don’t think that there’s anything thatwould prevent this contract from being inheritedby the great, great, great, great, greatgrandchildren of the attorneys that are workingon it now and in the future suing againstrecreational fisherman 200 years from now. ”

“ . . . you are now indentured servants . . . .”


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3. Distorting the Contract

“. . . you could have an accumulating value every timethere’s a storm, every time there’s a bird born, everytime there’s a fish that’s hatched.”

“So today it’s oil and gas, tomorrow you could go afterhistoric timber – Cypress and Tupelo logging operationsthat happen in the Maurepas swamp or other areas butthe scars are still there today. The next day you could goafter shippers who are creating wave energy in thecoastal area which contributes to erosion.”

-Garret Graves, presentation to SLFPA-E, Nov. 21, 2013.

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“We have agreed that we will notpursue entities . . . in any industryother than the oil, gas, and pipelineindustries without the SLFPA-E’sprior approval . . . .”


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“. . . if there is a settlement or

. . . .”

“. . . if there is a settlement orjudgment that compels a defendant toundertake restoration and/orremediation efforts, the SLFPA-Eshall not be responsible for payingany attorneys fees in connection withthat restoration and/or remediation. . . .”


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. . . .”


“. . . the fee payable by the SLFPA-Ewould be calculated on the amount of[any cash or cash-equivalent]payment, not on the value of therestoration or remediation thedefendant was ordered to make. . . .”


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. . . .”


“. . . the fee payable by the SLFPA-Ewould be calculated on the amount of[any cash or cash-equivalent]payment, not on the value of therestoration or remediation thedefendant was ordered to make. . . .”

“. . . SLFPA-E shall have the right toterminate the attorneys for cause. . . .”

4. Interference with BP Lawsuit?

“. . . BP is going to pick up your allegationsand they are going to argue, wait a minute,you can’t hold us accountable for this. Youare on the state board over there saying thatall this was a result of the oil and gasactivity. They are going to use your scienceand your arguments to diminish our case, soyou are doing work for BP right now. That’swhat’s happening.”

-Garret Graves, presentation to SLFPA-E, Dec. 19, 2013.67

Studies Conclude that Oil &Gas Activities Contributed to Coastal Loss

L. St. Amant, 1971US Bureau of Land Management, 1972US Army Corps of Engineers (S.M.Gagliano), 1973US Army Corps of Engineers, 1973US Environmental Protection Agency, 1976D.W. Davis, 1976N.J. Craig et al., 1979National Oceanic and AtmosphericAdministration, 1980Fruge, 1981Johnson & Gosselink, 1982US Fish and Wildlife Service, 1983US Geological Survey, 1983R.E. Turner et al., 1984Louisiana Mid-Continent Oil and GasAssociation, 1985Minerals Management Service, 1985LSU Center for Wetland Resources, 1985

Louisiana Geological Survey, 1987Mineral Management Service, 1987US Fish and Wildlife Service, 1987American Petroleum Institute, 1988LA Dept of Natural Resources/US Fish andWildlife Service, 1988Minerals Management Service, 1989Penland et al., 1990Louisiana Geological Survey, 1991US Environmental Protection Agency, 1992US Department of the Interior, 1994Penland et al., 1996US Environmental Protection Agency, 1997US Geological Survey, 2001US Geological Survey, 2004US Army Corps of Engineers, 2004Louisiana Sea Grant, 2008LACPR, USACE, 2009Minerals Management Service, 2009Gulf Coast Ecosystem Restoration TaskForce, 2011

5. Federal Plan forMRGO Is Not a Cure-All

“So here you are filing a lawsuit I'mconcerned that is then trying to apportionblame to the energy industry for an areathat Congress says and federal law says isthe responsibility of the Corps ofEngineers. It’s their job to do this.”


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CPRA

Master Plan

SLFPA-E

Lawsuit

MRGOPlan*

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MRGO Plan Is Not a Cure-All

*$3 billion not appropriated

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6. Misinformation AboutEffects on Louisiana’s Economy

“Folks have indicated – and I don’t wantto oversell this – a portion of the Shelldecision was related to increased costsassociated with litigation here.”


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“Royal Dutch Shell Plc (RDSA), Europe’sbiggest oil company, halted plans to build a$20 billion gas-to-liquids plant inLouisiana, citing the potential cost anduncertainty about future crude and naturalgas prices.”

-Shell Halts $20 Billion Louisiana Gas-to-LiquidsProject, Bradley Olson, Bloomberg, Dec. 5, 2013.

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“2013 marks Louisiana’s bestyear for economic developmentin six years, with projects thatwill result in 27,000 new jobsand $26.4 billion in new capitalinvestment.”

III. SLFPA-E’s LawsuitWill Provide Funding and

Hold Oil & Gas Accountable.

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Master Plan Budget – $50 Billion

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“The master plan is based ona total budget of

approximately $50 billion.”

$50 Billion Will Not Stop Land Loss

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$50 Billion Will Not Stop Land Loss

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Less Than $50 Billion WillNot Achieve Significant Results

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“Although our funding analysisshowed that Louisiana could receiveanywhere between $20 and $50 billionover the next 50 years for coastalprotection and restoration, we used thetop end of this range to constrain ourselection of projects. We did thisbecause we found that the lower end ofthe funding range did not provide theresources needed to significantlyreduce coastal land loss, nor did itadequately reduce storm surge risk.”

$100 Billion Could Build Land

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“[A]dditional funds would increaseour ability to protect at riskcommunities and build coastal land.For example, by 2061 a budget of$100 billion would allow us toachieve a net gain of land . . . .”

The Master Plan is Not Funded

“Do we have our eyes on all $50 billionthat our master plan needs right now, no.”

-Garret Graves, Interview with Garland Robinette,WWL, Nov. 19, 2013.

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Funding Realities

• $50 billion – minimal plan, which doesnot arrest land loss.

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Funding Realities


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SOME FUNDS ARE NON-RECURRING

• CIAP and State Surplus: revenues of $385million out of $1.6 billion for FY 2015-2017.

• BP spill-related revenues: $835 million.• CIAP + surplus + BP = $1.2 billion.

Funding Realities


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GOMESA WILL NOTFULLY FUND THE MASTER PLAN

• GOMESA will generate $110million/year, according to 2012Master Plan. Other estimates rangefrom $100 million - $200 million.

Funding Realities


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GOMESA IS NOT THE ANSWER


COST-SHARING ADDS EXPENSE

• Cost-sharing on levee repairs adds a $73million annual expense starting in 2016.

Funding Realities


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GOMESA IS NOT THE ANSWER


COST-SHARING ADDS EXPENSE

• Cost-sharing on levee repairs adds a $73million annual expense starting in 2016.

BP SUIT CANNOT BRIDGE THE GAP

• The gap of $48 billion - $98 billion is not goingto be funded by the BP litigation/RESTOREAct.

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Proposed Master Plan Projects in Southeast Louisiana

Projects in Southeast Louisiana

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Public Opinion Poll - Who Should Payfor Restoring the Wetlands Where Oil

& Gas Companies Drilled?

Oil and GasCompanies - 90%

Louisiana Taxpayers -4%

Don't Know - 6%

Source: Silas Lee & Assocs., Public Opinion Survey on Coastal Erosion, Flood Protectionand Related Issues (Nov. 18, 2013).

Pursuing Our Options

“I think we should seek justice everywherewe can find it,” [Sen. Mary] Landrieu said.“In Baton Rouge, in Washington and inthe courts, we must continue to try andkeep our people above water and keep ourcommunities from drowning.”

-Bruce Alpert, Sen. Landrieu: Louisiana should fight ‘everywhere,’including courts, to stop wetlands loss, nola.com, July 24, 2013.

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The Goals

1. Get oil and gas industry to acknowledgeits responsibility.

2. Convene a discussion with allinterested parties.

3. Develop a fair solution.

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What CPRA Should Do

1. Cease efforts to protect oil and gasindustry.

2. Support formation of a task force toaddress industry responsibility.

3. Seek funding from all sources, not justtaxpayers.

4. Support aggressive enforcement ofpermits and regulations.

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Southeast Louisiana Flood Protection Authority – East · Southeast Louisiana Flood Protection Authority – East Presentation to CPRA January 15, ... Murphy Oil Devon Energy ...

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