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Terrebonne assessor hits energy firms with lawsuits

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Terrebonne Parish’s property assessor has filed lawsuits against more than two dozen oil and gas companies, alleging they failed to report $100 million in taxes owed to the parish.

The 29 lawsuits filed in the U.S. Eastern District of Louisiana come on the heels of two similar lawsuits by Terrebonne Assessor Gene Bonvillain against subsidiaries of ConocoPhillips, accusing the companies of lying about their tax obligations to the parish. The subsidiaries, Louisiana Land & Exploration Co. and Burlington Resources Oil & Gas Co., owe as much as $6 million to the parish, according to the May lawsuits.

The latest lawsuits request jury trials to recover more than $100 million in back taxes and other damages from 29 additional companies, said Matt Yemma, a spokesman for the attorneys handling the case.

“We have only begun what will be a long recovery process on behalf of the residents of Terrebonne Parish,” said Don Richard, a lawyer with the Metairie law firm Chehardy, Sherman, Ellis, Murray, Recile, Griffith, Stakelum & Hayes.

Energy companies are responsible for reporting their own tax liabilities to Louisiana’s parishes, an equation based on the value of their production equipment and wells. Suspecting that they were inaccurately reporting their holdings, Bonvillain hired the Oklahoma firm Visual Lease Services Inc. to audit Terrebonne’s 1,546 oil and gas wells and other production facilities in 2008 and 2009.

The survey “uncovered vast and pervasive underreporting and false reporting of tax liability,” according to one of the lawsuits filed against …..

…. and other firms reported false data about the value of their wells and property. In some cases, wells that were producing fuel were listed as “shut in,” or inactive. Other properties were omitted from reports of assets, according to the lawsuits, which accuse the companies and their employees of engaging in fraud and racketeering.

Don Briggs, president of the Louisiana Oil and Gas Association, dismissed the allegations, calling the lawsuits an excuse to fatten public coffers at the expense of industry.

“This is a classic shakedown,” said Briggs, whose organization represents most of the companies named in the lawsuits.

Briggs said the assessor should have used methods other than lawsuits to pursue any missing tax payments, such as directly contacting companies or appealing to the Louisiana Tax Commission.

Bonvillain has contacted individual companies, according to Richard, who did not know whether the assessor has filed complaints with the tax commission. Bonvillain did not return phone calls Wednesday seeking comment.

Briggs also criticized Bonvillain’s office for “harassing” energy companies during a national economic downturn. Oil and gas prices have drastically declined after reaching record highs last summer. The number of rigs operating in south Louisiana has dropped by more than half since last August.

Briggs said the lawsuits could further discourage oil and gas development in Louisiana, costing the state jobs and tax dollars.

“We are tired of doing business in a state where we get sued for doing it,” Briggs said.

Environmentalists, however, applauded the Terrebonne assessor for pursuing back taxes. Darryl Malek-Wiley, a Louisiana representative of the Sierra Club, said the industry should pay more for the damage their work inflicts on the environment.

“I think that if these cases go forward, and Terrebonne Parish gets a significant amount of money . . . the money should be dedicated to coastal wetland restoration,” Malek-Wiley said, referring to the expensive process of rebuilding Louisiana’s eroded shoreline. Scientists have blamed coastal erosion in large part on canals that were cut through the marsh to aid oil and gas development.

Assessors in at least two other coastal parishes — Iberia and St. Mary — are also investigating oil and gas companies for tax violations, according to a Web site created by Richard’s firm to track the Terrebonne lawsuits.

Iberia Assessor Rickey Huval has also recruited Visual Lease Services to survey fuel production in the parish and is awaiting a report from the company.

“I wanted to be sure that we had every well in our parish identified,” Huval said.

Companies named in the Terrebonne Parish lawsuits include: Apache Corp.; Badger Oil Corp.; Brammer Engineering Inc.; BTA Oil Producers; Castex Energy Inc.; Chaparral Energy; Cimarex Energy Co.; Desco Oil Co.; Dimension Energy; Energy Properties Inc.; Energy XXI Gulf Coast Inc.; ExPert Oil & Gas; Forest Oil Corp.; Helis Oil & Gas Co.; Hilcorp Energy Co.; LLOG Exploration; Maritech Resources; Meridian Resources & Exploration; Merit Energy Co.; Palace Operating Co.; PetroQuest Energy; Petsec Energy; Phoenix Exploration Co.; Rapiere Resources Co.; Renaissance Petroleum Co.; Stone Energy Corp.; Tellus Operating Group; Texas Petroleum Investment Co.; and Wagner Oil Co.

http://www.nola.com/business/t-p/index.ssf?/base/money-1/1251351143320500.xml&coll=1

Jen DeGregorio can be reached at 504.826.3495 or jdegregorio@timespicayune.com.

Panel bashes climate legislation

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Several speakers at an industry-sponsored discussion today at LSU expressed opposition to a proposed federal law that would create a “cap and trade” system to discourage carbon emissions and attempt to head off global warming. Some were more skeptical than others about whether human activities are causing harmful climate change, but no one found much to like in the Waxman-Markey bill.

“We don’t believe in global warming, period,” says Gifford Briggs, vice president of the Louisiana Oil and Gas Association. “We are fighting for our right to exist.”

“Cap and trade” refers to a proposed system whereby the government would set an overall cap on carbon emissions, then allow businesses to trade emission allowances among each other. Theoretically, the system allows the free market to decide where emissions can be reduced most efficiently.

One study presented at today’s conference showed Louisiana could lose as many as 35,500 jobs by 2030 while losing $874 in disposable income per household, thanks to lower industrial output, higher energy prices and other factors. Margo Thorning of the American Council for Capital Formation, which co-sponsored the study, says new emissions standards in this country would have little to no impact on global emissions because of increased pollution from China and India.

David Dismukes, associate executive director at the LSU Center for Energy Studies, says the bill could create opportunities for the state; for example, by creating markets for forestry products to fuel renewable energy. But Dismukes says the new opportunities would not nearly offset the economic costs.

Public Service Commissioner Jimmy Field says he was unsure whether Louisiana would be able to meet Washington’s renewable energy standards, but would have a better idea after hearing the results of a PSC study at the end of the year. He suggested that Congress should delay action on cap and trade pending further study of the science of climate change.

Elaine Kamarck of the U.S. Climate Task Force says there is no doubt that man-made climate change is real, but said a straightforward tax on carbon is a better solution. Such a tax would guarantee that carbon becomes more expensive, and would be predictable for businesses. The tax could be rebated to consumers through a cut in payroll taxes, offsetting the inevitable higher energy prices until renewable energy sources are able to carry the load. A cap and trade market, on the other hand, would be unpredictable and invite speculation. Emerging nations like China and India could enforce a carbon tax [if they could be persuaded to adopt one], but could never regulate a complicated cap and trade system, she says.

“Governments, even corrupt governments, know how to tax,” Kamarck says.

Climate change legislation probably won’t pass the Senate this year, says Tom Michels, U.S. Sen. Mary Landrieu’s legislative director. He said Landrieu, D-Louisiana, opposes the bill, even though she believes climate change is a legitimate problem. Michels says EPA regulation might be a better way to reduce carbon emissions.

The panel did not include any cap and trade supporters. LABI, the U.S. Chamber of Commerce, the Louisiana Oil and Gas Association, and the LSU Center for Energy Studies co-hosted the event.