and stand up for Louisiana oil and natural gas.

Opinion|The Governor and Louisiana Lawyers Plot an Energy Shakedown

Their demand: Fork over billions to restore the eroding coastline or brave a drawn-out legal battle.

By: Allysia Finley

Louisiana Gov. John Bel Edwards was elected in 2015 with substantial support from trial lawyers, and he’s now repaying them in kind. The former minority leader of the state’s House of Representatives is effectively extorting oil and gas companies to backfill the budget while engineering what could be a handsome payday for his friends at a politically connected law firm.

Mr. Edwards wasted no time shaking down Louisiana’s energy industry. Shortly after taking office in January 2016, he met with oil and gas companies and issued an ultimatum: Fork over billions of dollars to help restore Louisiana’s eroding coastline or brave a drawn-out legal battle.

“We are struggling to pay for our state’s Master Plan to restore the coast,” the governor wrote in a May 19 letter to the presidents of Louisiana’s two largest oil and gas trade associations, which between them represent more than 100 local companies. “I intend to be involved in all facets of the state’s coastal restoration efforts—including those efforts to secure funding for the Master Plan. . . . At this point, we have two choices—work together toward an amicable solution or spend years in litigation. There should be no doubt that it is in the best interests of Louisiana and the industry to choose the former option.”

Louisiana’s coastline loses a football field worth of land to erosion every 48 minutes. This would put many of Louisiana’s 20 coastal parishes without protective levees underwater by 2100. These areas have been incurring stronger storm surges as wetlands that once provided a protective barrier against approaching hurricanes have disappeared.

But as Mr. Edwards, a Democrat, has acknowledged, oil and gas exploration isn’t solely to blame for coastal erosion. Natural causes—such as changes in the course of the Mississippi River—have contributed. As did levying of the river by the U.S. Army Corps of Engineers. Dredging wetlands for fossil-fuel exploration played a secondary role.

The energy industry insisted that the governor initiate an administrative review to identify permit violations before taking legal action against individual companies. Since 1980, the state has issued about 60,000 coastal permits—many of which recognized the potential for adverse environmental effects.

One permit accepted the “adverse impacts of dredging on water quality” and “erosion of wetland from laying pipeline across marsh area.” Another noted that “after careful consideration of the environmental and socio-economic issues, it is apparent that the environmental risk (loss of 1.5 acres of undisturbed wetlands), while significant enough to warrant serious attention, does not counterbalance the social and economic factors involved in this application.”

The state simply determined the benefits of drilling outweighed the environmental risks and costs. The oil and gas industry employed about 5% of the state’s workforce, contributed about 10% of its aggregate payroll and accounted for between 10% and 15% of tax revenues, according to a 2016 report by Louisiana State University’s Center for Energy Studies.

The problem is that oil production has been steadily declining since 1980 as fields are exhausted and extraction becomes more expensive. Lower oil prices and production have damaged the state budget and economy. Facing a $1 billion deficit that could impel tax hikes or cuts to public programs, the governor is desperate for extra revenue.

The oil and gas industry rejected Mr. Edward’s ultimatum, so instead he sought to conscript coastal parishes into suing the industry by threatening to cut non-joining parishes out of any future settlement cash. Six parishes obliged. In September 2016, Mr. Edwards sent letters to the others that “we have been advised by counsel for the plaintiff Parishes that it is likely that similar damages exist in your Parish” and “encourage you to consult with your private counsel and file such a suit, in which [Natural Resources] Secretary [Thomas] Harris will then intervene. Should you not do so within thirty (30) days of the date of this letter, Secretary Harris will do so.”

Ganging up with local governments puts more pressure on oil and gas companies and increases the size of the potential jackpot, of which trial lawyers will get a cut. The law firm spearheading the coastal parish suits on a contingency basis happens to be Talbot, Carmouche & Marcello, which raised $2 million for a super PAC to boost Mr. Edwards in 2015 and spent heavily in local races.

The law firm also spent $10,500 to re-elect state district court judge Michael Clement, who will hear several cases in Plaquemines Parish that are set to go to trial in 2019—one year before the judge faces re-election. Such apparent political back-scratching isn’t a crime unless an explicit quid pro quo occurs, but all of this smells worse than rotten crawfish.

Click here to read the article on The Wall Street Journal.