Session Information

2006 Regular Session Highlights

Natural Resources

"LEGACY" LAWSUITS

The contentious issue of "Legacy" lawsuits involved suits filed by landowners who leased their property to oil and gas companies for drilling and later sued for alleged contamination of their property. Four bills (Senate Bill 702 by Senator B. Gautreaux (subject to call - Senate final passage), Senate Bill 462 by Senator Kostelka (pending Senate Natural Resources), House Bill 1177 by Representative Daniel (pending House Natural Resources), Senate Bill 655 by Senator Adley (Act 312)) were filed to address the issues. The bills were similar in many aspects, but a major difference concerned who would decide the plan for remediation - the court or the Department of Natural Resources. After much discussion, Senate Bill 655 by Senator Adley (Act 312) was signed into law by the governor. SB655 provides that the court shall adopt the plan approved by the department, unless a party proves by a preponderance of the evidence that another plan is more feasible to protect the environment and the public health, safety, and welfare.

On June 15, 2006, Governor Blanco officially objected to the August federal lease sale for oil and gas exploration off the coast of Louisiana. In the letter to the U.S. Department of Interior, Minerals Management Service ("MMS"), Governor Blanco objected to the lease sale because it is not consistent with the state's coastal zone management program. Even with the governor's objection, MMS proceeded with the lease sale. On July 20, 2006, Governor Blanco filed a lawsuit in federal court in New Orleans seeking to block the August federal lease sale. The lawsuit seeks an injunction blocking the lease sale and an order of the court declaring that the environmental impact statement prepared for the lease sale does not adequately address the environmental impacts on Louisiana's coast. If tried, the lawsuit is estimated to cost the state between $700,000 and $1,000,000.

House Bill 107 by Representative Pierre (Act 145) authorizes the undersecretary of the Department of Natural Resources to serve as a proxy member for the secretary on the Oilfield Site Restoration Committee and the State Mineral Board.

House Bill 1069 by Representative Pierre (Act 295) provides in the emergency gas shortage allocation plan that petroleum, petrochemical, and chemical industries using intrastate natural gas to operate facilities will have a priority as long as the gas is used to ensure the protection of public health, safety, and the environment.

Senate Bill 237 by Senator Malone (Act 519) requires certain payments to the office of mineral resources to be paid by check or electronic wire transfers and requires a royalty payor whose total monthly payment is $50,000 or more must pay the royalty payment by electronic wire transfer.

Senate Bill 238 by Senator Malone (Act 520) provides that the owner of geophysical and geological information with the right to license may give permission, with restrictions and limitations, to the commissioner of conservation to release such information for certain purposes proposed by the state, and such release will not be in violation of state law.

Senate Bill 78 by Senator Theunissen (Act 446) requires that a reservation of mineral rights in an instrument transferring ownership of land must include surface rights in the exercise of the mineral rights reserved, if not otherwise provided. The law provides specific language that will satisfy the requirements of the law.

On May 5, 2006, Governor Blanco announced her decision to deny Freeport-McMoran's application for a LNG facility off the coast of Louisiana. Her decision comes after debate over what type of system is more environmentally-friendly - an "open-loop" system or a "closed-loop" system. Freeport- McMoran's facility would utilize the "open-loop" system. Numerous conservation groups have opposed the "open-loop" system, claiming potential negative impacts on the fragile Gulf of Mexico ecosystem and its fisheries. The "closed-loop" system, while being more expensive to operate, would have negligible impacts on the ecosystem and the fisheries.

On May 8, 2006, Freeport-McMoran announced its decision to adopt a "closed-loop" system. Governor Blanco assured the company that the state will do everything reasonable and appropriate to expedite the application review process.