2006 Regular Session Highlights
by: J.W. Wiley
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
OIL AND GAS
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.
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.
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.
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
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
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.
LIQUIFIED NATURAL GAS (LNG) TERMINALS
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.