Louisiana oil & gas leader: Lawsuits threaten industry

Louisiana Oil & Gas Association President Don Briggs speaks Tuesday to members of the Atchafalaya Chapter of the American Petroleum Institute at the Petroleum Club of Morgan City.
(The Daily Review Photo by Zachary Fitzgerald)

The Atchafalaya Chapter of the American Petroleum Institute held its monthly meeting Tuesday at the Petroleum Club of Morgan City. The guest speaker was Louisiana Oil & Gas Association President Don Briggs. From left are API Program Chairman Ray Autrey, API Chairman Michael Patterson, Briggs, and API Scholarship Chairman Herbie Kimble.
(The Daily Review Photo by Zachary Fitzgerald)

There’s only a handful of these guys, but the havoc they are making on our industry is phenomenal.”
By ZACHARY FITZGERALD zfitzgerald@daily-review.com

The petrochemical industry in Louisiana is experiencing a renaissance with the abundance of cheap natural gas, but that renewal could be in jeopardy due to lawsuits against oil and gas companies, Louisiana Oil & Gas Association President Don Briggs said Tuesday.
Briggs spoke to the Atchafalaya Chapter of the American Petroleum Institute Tuesday at the Petroleum Club of Morgan City.
The oil and gas industry has some serious issues facing it concerning lawsuits, which could run oil and gas companies out of business, Briggs said. With the exception of California, Louisiana has the worst legal climate in the U.S., Briggs said. The main reasons behind that rating are legacy lawsuits, levee board lawsuits and coastal lawsuits. Those lawsuits have created “a very dire situation for our industry,” Briggs said.
Briggs formed the Louisiana Oil & Gas in 1992 to represent exploration, production, and service sector companies operating in Louisiana. There are 3,200 defendants in the 386 lawsuits against the Louisiana oil and gas industry in the court system today, he said.
Legacy lawsuits in the court system today against the oil and gas industry date back to 1901, Briggs said. Even if companies were doing what was legal under the rules and regulations at the time, companies are still getting sued over what was done years ago, Briggs said.
St. Mary Parish President Paul Naquin said trial lawyers have been in the parish and asked him to join lawsuits against the industry, but Naquin has declined. Naquin said the next step in the lawsuit cycle is for lawyers to sue parishes because parishes have to sign off on companies’ drilling permits.
Due to the legal climate, south Louisiana’s rig count is “crashing like the Titanic,” Briggs said. As the lawsuits continue against the industry, companies will not keep investing in Louisiana, Briggs said.
“No other producing state allows this kind of legal treatment to any kind of business in the state,” Briggs said. The oil and gas industry represents 17 percent of the state’s budget, but if the industry declines there will be less money for education and health care in the state, he said.
Despite the legal climate, the oil and gas industry is “changing before our eyes” especially over the past few years, Briggs said. In north Louisiana, the Haynesville Shale had 37 wells several years ago, he said. The number of wells is now up to more than 8,000 wells, Briggs said. The Haynesville Shale is one of the largest natural gas-producing sites in the U.S., Briggs said.
“Natural gas, of course, is climbing as the fuel for energy. Coal is declining, and it won’t be long before natural gas will be the primary fuel for power generation,” Briggs said.
Louisiana companies are starting to liquefy natural gas and ship it to other countries, Briggs said. The gap between consumption and supply of oil is getting close, which is good for the economy, he said.
The Louisiana Oil & Gas Association filed a lawsuit against Attorney General “Buddy” Caldwell on Dec. 13 that the association lost Monday. Briggs said the association did not expect to win the case, though.
Briggs told API members that he needs people to sign a petition to get legislation passed in Louisiana in order to stand up for oil and gas companies, he said.
After the BP oil spill, a lot of people deserved to collect damages from BP, but the trial lawyers got a “big chunk” of that, Briggs said. “There’s only a handful of these guys, but the havoc they are making on our industry is phenomenal,” he said.

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