When it Comes to Coast, It is not ‘Industry Should’ It is ‘Industry Is’

By Marc Ehrhardt, Executive Director for the Grow Louisiana Coalition

Earlier this summer, the state legislature adopted the next phase of the Coastal Master Plan. This effort was recognized as an ambitious commitment to secure our economic future through the preservation of Louisiana’s working coast. It is also an opportunity for government and industry to commit financial resources and work together for the good of Louisiana. A fact that sometimes gets lost in both political and media circles is that the oil and natural gas industry has been, and continues to be, the primary economic driver of state finances – including those dedicated to coastal restoration.

Misguided efforts have targeted the energy industry with lawsuits, arbitrarily declaring that oil and natural gas needs to do more. It is time to recognize that the people and businesses of Louisiana’s oil and natural gas industry bear the enormous responsibility of paying taxes as good corporate citizens and for making contributions to the coast.

If you live in Louisiana, someone very close by, whether it be a relative or friend, earns a living, raises a family or enjoys retirement because of the opportunities offered by the industry. Each year, thousands of Louisiana-based oil and natural gas businesses account for $3 billion in taxes and fees to the state. Over and above what is already contributed to the state, each day the industry pays $3.5 million to parishes and cities in Louisiana, totaling $1.3 billion each year.

Some say “these are taxes you have to pay anyway, and we will sue you to get more.” That is wrong.

Between 2006 and 2016, Louisiana’s oil and natural gas industry paid approximately $14 billion for the opportunity to do business in the state, according to the Louisiana Department of Natural Resources. These are monies above what regular businesses here pay. All the while tens of thousands of Louisiana businesses in oil and natural gas and hundreds of thousands of Louisianians each year pay sales, corporate franchise and income taxes.

Louisiana’s oil and natural gas industry is the only entity, beyond the federal government, contributing anything towards Louisiana’s coast. The funds dedicated to the Coastal Master Plan come in the form of taxes and royalties paid by Louisiana’s oil and natural gas industry. The infrastructure projects along Louisiana’s coast for environmental permitting and protection are being funded with industry funds.

This situation questions whether the challenges of the coast are rooted in finding more funds in any way possible or whether we are prioritizing this issue appropriately as a state.

This is not a matter of “the industry should.” It is a fact that the industry is addressing coastal issues now. On June 9, NOLA.com posted a story about ConocoPhillips piloting a program to seed mangroves along coastal Louisiana. Apache Corporation received Louisiana’s top conservation award for donating four million trees since 2005. A partnership between the New Orleans Geological Society and three Louisiana universities is using $200 million in industry data to conduct research of seismic faults along the Louisiana coast. Other companies are partnering to create miles of oyster reefs along southeast Louisiana.

While the industry and communities go to work on these programs, lawsuits filed in 2013 were thrown out of federal court three times, with other lawsuits languishing in state court without any significant movement. However, applications for coastal use permits by businesses looking to invest in Louisiana dropped 37 percent since 2013.

Lawsuits negatively affect Louisiana’s competitive position, especially for new projects. That leaves Louisiana in a position that hurts our economic recovery and the potential for our coast.

The solution to our coastal issues is to use the best science available, which the industry has, and invest financial resources, which the industry has contributed for decades, into projects that can ensure both a protected coast and a working coast. Taxing and suing the largest employer in Louisiana is not a sound economic development strategy.

The best way to preserve Louisiana’s economic and coastal future is working with the oil and natural gas industry, not against it.