Deal reached in $100 million settlement with Freeport over decades of coastal damage | Environment
The state and several communities have signed a long-delayed $100 million settlement with one of several oil and gas companies accused in court of damaging the Louisiana coast.
Mining giant Freeport-McMoRan Inc. and its subsidiaries agreed to the settlement in 2019, but payment of the funds has been blocked by some communities that would benefit.
“Big Oil spent millions of dollars on lobbying costs to keep the settlement from going through,” said John Carmouche, an attorney representing six coastal communities that have sued oil and gas companies. “After two years of struggle, communities have finally completed settlement to restore the Louisiana coast.”
The settlement required 12 coastal communities facing environmental damage caused by oil and gas companies to agree to the deal, but four of them – Lafourche, St Mary, St Martin and Iberia – declined and said they would prefer to work with companies on volunteer projects restoring wetlands lost to the Gulf of Mexico over the past century.
The impasse was broken when the state Department of Natural Resources signed the deal on behalf of the holdout communities, a move that went against the wishes of local governments but will likely boost their recovery efforts.
A Freeport spokesman confirmed that the agreement had been signed by all parties, but declined to comment further.
The deal comes a week after a federal appeals court returned a similar lawsuit, also led by Carmouche, to a state court for trial, potentially paving the way for more than 40 similar lawsuits alleging billions of dollars in damage to coastal wetlands from oil and gas companies should also continue to develop.
The 2019 settlement with Freeport was seen as a breakthrough in a years-long effort to force oil and gas companies to repair decades of damage. Freeport is now an Arizona-based mining company with oil and gas wells in southern Louisiana and was headquartered in New Orleans until a 2007 merger led to its relocation.
Canal dredging, drilling, oil spills, and waste disposal by oil and gas companies are believed to be some of the main contributors to Louisiana’s land loss crisis. Over the past century, the state has lost more than 2,000 square miles of land, an area roughly the size of Delaware.
Some local leaders have been reluctant to target an industry that has long provided good-paying jobs.
When Lafourche President Archie Chaisson III refused to sign the accord, he blamed not the oil and gas industry for the coast’s disappearance, but the levees of the Mississippi River, which prevent sediments from rebuilding land along the coast.
In 2020, Terrebonne Township President Gordon Dove praised the industry’s contributions to his community’s economy while blowing up the settlement, which trial attorneys described as a “money heist”.
Both community leaders could not be reached for comment on Tuesday.
Acting against Dove’s wishes, Terrebonne District Attorney Joseph Waitz Jr. signed the deal and hired an outside law firm to represent him in any potential court case.
The Jefferson, St. Bernard, Plaquemines, St. John the Baptist, Vermillion, and Cameron congregations were represented in the original lawsuit against Freeport by Carmouche’s Baton Rouge law firm, Talbot, Carmouche & Marcello.
Carmouche declined to say how the $100 million will be distributed among the 12 communities. A framework for using the money must be established by state legislatures, he said.
Freeport will make an initial payment of $15 million and additional payments of $4.25 million each in 2023 and 2024. The remaining $76.5 million would be tied to reimbursements from the sale of environmental credits.
The deal gives Freeport preferred status in the sale of environmental credits related to projects funded by its settlement. Also known as carbon credits, these financial instruments are generated by projects that reduce greenhouse gas emissions, such as B. the planting of trees or the renaturation of swamp areas. Credit can be used to offset an owner’s other environmental-related efforts, or the credit can be sold to other businesses.
Carmouche said it will likely take 22 years for the money to be fully paid out.
He hopes other oil companies will follow Freeport’s example and settle the more than 40 other coastal damage lawsuits he is defending against Chevron USA, Exxon Mobil Corp., ConocoPhillips Co., BP America and Shell.
“For five years, we have fought to return these coastal cases to the Louisiana state court so the people of Louisiana can decide what each company must do to restore our coast to its natural state,” Carmouche said. “Freeport chose to act responsibly (while) Big Oil chose to spend millions on lobbyists.”
Staff writer Tyler Bridges contributed to this report.
Action could clear the way for up to 42 lawsuits over wetland damage that could total billions of dollars.
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