Louisiana’s severance tax suspension for horizontal gas wells cost the state nearly $1.15 billion in fiscal years 2010 through 2014. During that time, higher education and health care suffered massive cuts in state general funding, which means students, families and the poorest citizens of the state suffered so that energy companies could reap larger profits.
That is the inescapable conclusion to be drawn from the latest report from the Louisiana Legislative Auditor’s office. A report released Monday, August 24, by the auditor’s office cites the Louisiana Department of Revenue’s (LDR) annual Tax Exemption Budget to back up its figures.
Worst of all, the severance tax exemption on horizontal gas wells cost the state money that it will never recoup, even if lawmakers were to suddenly repeal the exemption, according to the auditor’s report. That’s because the exemption applies to the most productive period of a well’s life — the first two years. Production from horizontal gas wells declines significantly during the two-year suspension period and does not bounce back afterward.
“Approximately 98% of the revenue loss from fiscal years 2010 through 2014 was from horizontal wells drilled for natural gas,” the report stated. “Most of these wells are located in the Haynesville Shale in northwest Louisiana. According to [the Louisiana Department of Natural Resources, which keeps tabs on oil and gas production in the state], all of the Haynesville Shale horizontal wells’ best production is in the first two years. Because production dwindles significantly after the first two years, some operators may never pay severance taxes.”
Two privately held Texas oil companies that were among nearly 90 defendants named in the Southeast Louisiana Flood Protection Authority-East’s (SLFPA-E) landmark environmental lawsuit have settled with the flood authority for a combined total of $50,000 in damages, according to documents filed in federal court and statements by the attorneys involved.
The terms of the settlement were announced a few hours after attorneys for SLFPA-E, White Oak Operating Co., L.L.C. and Chroma Operating, Inc. filed a “Joint Motion for Order of Dismissal With Prejudice” in federal court on Thursday. Parties typically file joint motions to dismiss when they have reached an out-of-court settlement. Because the SLFPA-E is a public entity, the terms of the settlement had to be made public.
While the dollar amount of the settlement seems small at first glance, the fact that two oil companies have agreed to pay damages for increased public exposure to hurricane-related flooding due to their operations in coastal wetlands is huge, even if they don't expressly admit responsibility. The settlement marks the first time an admission of this kind, along with payment of damages, has ever been made by energy companies.
White Oak and Chroma, a pair of related companies based in Houston, are among the smallest operators in the area that is the subject of the lawsuit. Their operations were limited to less than 100 linear feet of a single spoil bank, among nearly 700 miles of pipeline and access canals that are the subject of the litigation, and they operated there for only two years, according to documents attached to the original lawsuit. That makes them among the smallest players involved in the suit, not only financially but also in terms of actual damages caused by their activities.
Two energy companies that were among 97 defendants named in the Southeast Louisiana Flood Protection Authority-East’s (SLFPA-E) landmark environmental lawsuit have settled with the flood authority, according to documents filed in federal court. Terms of the settlement were not immediately disclosed, but they will be disclosed soon, according to one attorney on the case. (This story previously stated, erroneously, that a confidentiality provision applied.)
Attorneys for the levee authority and for the two settling defendants filed a “Joint Motion for Order of Dismissal With Prejudice,” which parties typically file when they have reached an out-of-court settlement.
Only a few weeks ago, supporters of the Southeast Louisiana Flood Protection Authority-East’s (SLFPA-E) environmental lawsuit against 97 energy companies were mired in despair. Gov. Bobby Jindal and SLFPA-E nominating committee chair Jay Lapeyre were poised to tip the balance on the authority’s board against the lawsuit and kill it.
Then, to the surprise of many — and over the objections of Jindal and Lapeyre — the nominating committee up and did the right thing by re-nominating coastal scientist Paul Kemp for another term on the board. Kemp supports the lawsuit, and his reappointment preserves a 5-4 majority on the board in favor of the suit. For now.
That was just the beginning of an amazing turn of events against Big Oil.
On Monday, Oct. 6, state District Court Judge Janice Clark of Baton Rouge ruled that Act 544 of 2014 (filed as Senate Bill 469) does not apply to the SLFPA-E lawsuit. SB 469 was specifically (though not very artfully) crafted to kill the lawsuit retroactively. The suit is currently pending in federal court in New Orleans.
SB 469 was literally thrown together overnight when the original anti-lawsuit bill was poised to die in a Senate committee. Through a ham-fisted bit of legislative legerdemain, lawsuit opponents hijacked a bill in a friendlier committee, completely gutted and rewrote it, and then passed it with relatively little opportunity for debate — and, Judge Clark ruled, other fatal defects.
Were this rate of land loss applied to New York, Central Park would disappear in a month. Manhattan would vanish within a year and a half. The last of Brooklyn would dissolve four years later. New Yorkers would notice this kind of land loss. The world would notice this kind of land loss. But the hemorrhaging of Louisiana’s coastal wetlands has gone largely unremarked upon beyond state borders.Following the suit, Barry was not nominated for another term on the board, and Gov. Bobby Jindal led legislation to kill the lawsuit. Jindal declined comment on the New York Times story. Barry — as Clancy DuBos had predicted — spoke freely with Rich about the genesis of the lawsuit during his time on the board and Jindal's plan to ensure the lawsuit's (and Barry's) failure:
During [the 2014 Louisiana Legislative session], about 70 lobbyists from the oil and gas industry were in the legislative chambers. They worked in concert with the governor’s staff to secure support for a bill that would void the lawsuit. “They turned on the fire hose,” one veteran energy lobbyist said. “It was the best organized effort I have ever seen,” another said.Rich also asked state Sen. Robert Adley, a longtime oil and gas employee who opposed the lawsuit, whether his position was a conflict of interest, and Adley put that on his voters: "They know what industry I’m in. They choose to send me there." He later added that the lawsuit and Barry's fight are merely for Barry's upcoming book.
Excellent play! Loved the story and the first class acting! Characters were so natural, funny…
Wow total Bullshit artical. Why doesnt anyone actually listing to what Duke has been saying…
With the likes of Trump opening the doors, more of these derelicts will be surfacing,…
MZPW-1, How did that even work? Didn't it get stuck?
MZPW-1, what exactly do you mean when you say you used a cotton ball to…
Dear random dude commenting, The tampon as we know it today was invent in the…
Hahaaaa now they got weed soaked ones too lol wats next mdma pons
Fantastic! Hope to see it and its present case in a long run at the…
ok..maybe lm slow or simply naive..You used Cotton balls for periodless sex..did that not interfere??
I know I wasn't the only one in the 60's who used a cotton ball…
There is actual evidence of tampons as far back as ancient Egypt. :-)