Exxon Joins Jindal to Face Dr. Mud in Wetland Legal Fight

Paul Kemp moved to Louisiana in the 1970s, a young geologist fascinated by the Mississippi Delta and eager to “get some mud between my toes.”

Forty years later, he’s neck-deep in political muck, the central figure in a bayou power struggle challenging Governor Bobby Jindal and the world’s biggest energy companies.

Kemp sits on a New Orleans levee board that’s suing 90 oil and natural gas producers. The suit claims that decades of drilling and dredging helped destroy the coastal marshes that shield the region from floods. The repair bill may cost the companies billions.

The attack on the state’s largest industry triggered a swift backlash. Four of the nine board members have been replaced with people who’ve said they would drop the suit, and Kemp, 60, may be next to go. Whether he keeps his seat, which could be decided in the coming weeks, may determine how much companies including Exxon Mobil Corp., BP Plc and Chevron Corp. will be required to help shoulder the costs for shoring up what’s become North America’s fastest-vanishing coastline.

“The stakes are huge,” said Oliver Houck, a professor at Tulane University Law School who supports the lawsuit. Without industry’s contribution, “we don’t have the money to keep the levees going.”

Louisiana’s vast network of levees and wetlands are critical to protecting the low-lying region from hurricanes, and the state has proposed a 50-year, $50 billion “master plan” to stabilize the coast and improve flood protection.

‘Hijacked’ Board

Jindal, a Republican, has said the levee board has been “hijacked by a group of trial lawyers,” and the state’s political leaders, backed by an industry that employs 65,000 Louisianans, say the case is jeopardizing their chances of winning private-sector support.

“It makes it really hard for us to come to the table after they’ve sued us,” said Chris John, a former U.S. congressman who now leads the Louisiana Mid-Continent Oil & Gas Association. “This is all about a rogue agency with a very small number of trial lawyers that’s decided to go after the industry.”

The levee board, officially the Southeast Louisiana Flood Protection Authority-East, was created after Hurricane Katrina devastated New Orleans in 2005. It voted unanimously to sue dozens of oil, gas and pipeline operators in July 2013, saying extensive damage to the wetlands had rendered the levee system unworkable.

The lawsuit, now in U.S. District Court in New Orleans, demands companies restore the canals carved through the delta, or make restitution another way.

Second Term

Kemp has been nominated for a second term on the board, leaving the next move to Jindal. State law won’t let the governor reject the nomination, but he can ask the state Senate to do so.

Jindal opposes the lawsuit “because it’s a waste of taxpayer dollars” and exceeds the board’s authority, Shannon Bates, the governor’s spokeswoman, said in an e-mail.

The focus is now on Kemp, a former Louisiana State University researcher appointed by Jindal to the board in 2011.

Kemp moved to the state from Long Island, New York, in 1975, drawn by the confluence of the Mississippi River and the Gulf Coast, where “you can watch geology happen in real time,” he said. He spent years tramping through the swamps and flying overhead, measuring sedimentation rates and cataloging the flow of nutrients through the soil. “My kids called me the Mud Doctor.”

Deteriorating Delta

Even then, the region was “in a state of deterioration,” Kemp said during a seaplane tour over the delta. “It’s only now that it’s seen as a tragedy, as something that needs to change.”

The industry “reaped a lot of benefits from its time out here,” he said. “There’s no question they’ve contributed significantly to the damage. The hope is they’d be part of the restoration.”

From the air, the decimation of the coast is clear, however one parcels out the blame. Wetlands that once covered much of the state’s southern reaches -- and buffered New Orleans -- have been replaced by open seas. The remaining marshes are crisscrossed by oil and gas canals.

About 10,000 miles (16,000 kilometers) of channels have been carved through the area to haul equipment in and pipe petroleum out, said Gene Turner, an oceanographer at LSU in Baton Rouge.

Lost Land

Louisiana has lost 40 percent of its coastal area since 1956, according to figures from the U.S. Geological Survey. The region is receding at about 17 square miles a year.

Energy production isn’t the only cause. Hurricanes, rising seas and upstream levees that cut off the supply of sediment also play a role. Most researchers cite industry operations for at least a third of the loss, perhaps as much as 90 percent, said Turner.

“We’ve significantly changed the amounts of water coming in, through and around these wetlands,” he said. “If you left the hose running on your lawn and overwatered it, you’d have a dead lawn. If you didn’t water it enough, you’d have a dead lawn. And we’ve done both.”

The industry acknowledges it’s had an impact, said John, the trade group president. Still, drillers were following the environmental rules in place at the time and had government permits, he said. Retroactive punishment isn’t fair, he said.

‘Multiple Causes’

Energy companies, already contribute handsomely in Louisiana, said Greg Beuerman, a spokesman for defendants in the lawsuit. Industry taxes and fees account for almost a fifth of the state operating budget, while companies have spent “millions” on individual wetlands projects, he said.

“The problem of wetlands loss is very real, it has multiple, multiple causes and it needs to be addressed collaboratively, not by singling out one particular entity,” Beuerman said.

Starting in 2017, Washington will also dedicate as much as $500 million a year in offshore royalty payments to coastal restoration, he said. Lawsuit supporters say that merely shifts payments the industry already owes to the government, diverting money from other parts of the federal budget.

Exxon, Chevron and BP, all named in the suit, referred questions to Beuerman or their trade groups in the state.

The lawsuit doesn’t put a price tag on restoring “each and every” canal carved through the delta over the decades. More troubling for industry may be the prospect that other cases will follow. Already, two Louisiana parishes have filed similar lawsuits.

State legislators from both parties, meanwhile, voted in May to block the levee board’s litigation. The levee board is challenging that move as unconstitutional.

‘Very Serious Money’

Potential damages from the industry are “certainly in the billions,” said John Barry, a former board member who championed the litigation. He wasn’t reappointed after his term expired last year.

“If the flood authority were to win, I believe other jurisdictions in the state would have a fiduciary responsibility to do what we did. And then you get into very, very serious money.”

Kemp has experience on both sides of Louisiana’s coastal debates. He was part of a team of scientists who studied the levees’ failure post-Katrina and later testified on behalf of flood victims who sued the U.S. Army Corps of Engineers.

In 2007, he was named director of the National Audubon Society’s Gulf Coast Initiative. Three years later, he raised eyebrows by suggesting the society could allow some drilling on a nature preserve to raise funds for fighting erosion.

Now an environmental consultant for local governments and nonprofits, Kemp said his business has suffered from the lawsuit controversy. That hasn’t changed his mind.

“Even in the governor’s office, they’re quite convinced of the science behind this,” he said. “It is almost inevitable that the industry will have to pay at some point. The only question is when?”

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