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Freeport McMoRan Settles Coastal Lawsuits

Oct 3, 2019
Originally published on October 3, 2019 9:29 pm

Seven parishes in coastal Louisiana have sued oil and gas companies to restore the coast. The suits say that nearly a hundred companies carved canals through the marshes over the years, and those canals worsened coastal land loss and made parishes more vulnerable to storms. Now, in the first settlement of its kind, one of those oil companies is settling.

To learn more about the case and its implications for the other suits, reporter Tegan Wendland talked with Christopher Dalbom, senior researcher at the Tulane Institute on Water Resources Law and Policy.

Q: Last week Freeport McMoRan settled one of these lawsuits for $100 million. It’s the first company to do so. How long has the company operated here in Louisiana and by settling this suit, what wrongdoing did it admit to?

Dalbom: The company has operated in Louisiana for decades – it’s a long-established company for oil and gas production in Louisiana. I haven’t seen the actual language of the settlement; my guess would be that they haven’t actually admitted to any wrongdoing in the settlement, however they’ve said they’re willing to pay this money in order to not be subject to further lawsuits in the future.

Q: How will the money be distributed and spent?

Dalbom: The money is to be distributed across the coastal parishes where the company has operated. And it is intended to go directly towards coastal work and a specific fund that would need to be set up by the legislature going forward – where these monies would get deposited by the company to then be distributed amongst the parishes.

Q: Seven parishes have sued oil companies now - including Orleans - but this settlement will go to 12 of the parishes on the coast. How does that work?

Dalbom: Correct. This settlement is intended to go towards the 12 parishes where Freeport has coastal use permits, where they’ve done coastal work. They have not done work in Orleans Parish, therefor Orleans Parish is not part of this suit and not part of this settlement.

Q: Considering that state officials say they need $50 billion to protect the coast, $100 million doesn't seem like much. Is this more or less than people expected?

Dalbom: It all depends on how you look at it. One hundred million dollars is a whole lot of money, but it’s a whole lot less than $100 billion. However, that being said, Freeport is only one of 98 different companies that are subject to these coastal use lawsuits. So it’s a big number and when you add it up it gets into an even bigger number – but even when you compare that big number with our need as a state it’s not very much.

Q: How long might it take for this money to come down to these 12 coastal parishes?

Dalbom: Well, the settlement is set up so there’d be a distribution of money every year for about 22 years. So that $100 million will get spread out over a long time. As for when that would start – that all depends on all 12 of the parishes agreeing to the settlement. As well as, as the settlement is structured now, they do need the legislative act to create the fund that this money would go into.

Q: And how does that look now, in terms of all 12 parishes agreeing to accept it?

Dalbom: I don’t know yet. However it’s hard to imagine a parish turning down money. Especially when they’re all really strapped when it comes to their funds for coastal restoration. So little of that goes through the parish, so for these parishes to have another source of coastal restoration income, I imagine that they would all welcome it.

Q: Could this settlement encourage other companies to come up with their own agreements with coastal parishes, rather than letting these cases continue to wind their way through the courts? 

Dalbom: They certainly can. This, I think, was always a possibility for every one of these companies. And it’s up to their internal decision-making as to whether they value a settlement that gives them some peace of mind and a known quantity that they are responsible for as well as the chance to be let off the hook as to other violations that they could have made in the past and so, some companies value that over the ability to pound their chest and say that they’ve nothing wrong, then they might also follow Freeport’s lead and settle.

Support for the Coastal Desk comes from the Greater New Orleans Foundation, the Walton Family Foundation, and local listeners.

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