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Against a backdrop of rising gasoline prices and a presidential campaign tapping into consumer fears, Louisiana oil producers are pointing to a rare breed of legal sludge they say is choking their business, costing the state thousands of jobs and billions of dollars in lost investment.

The complaints from one of the Gulf Coast’s most vital industries come as energy-focused Republican presidential candidates court Louisiana voters ahead of Saturday’s primary. President Obama has been pushing his own message in the run-up to that contest, traveling around the country in an effort to demonstrate his friendliness to America’s energy producers.

The administration continues to faces charges that it is slow-walking drilling permits in the wake of the 2010 BP spill. The Louisiana lawsuits, though, compound those concerns.

The lawsuits started to explode several years before the BP disaster and have shown no sign of abating . The oil industry is trying to draw attention to their charge that trial lawyers are running rampant through the state courts in a bid to milk energy producers regardless of whether the producers did anything wrong.

“This is what I call legalized extortion,” Don Briggs, president of the Louisiana Oil & Gas Association, told FoxNews.com.

The claims in question are known as “legacy lawsuits.”

They’re not your typical lawsuits. In these cases, a plaintiff can bring a claim against an oil company for alleged environmental damage that occurred decades ago, long before the defendants were at the site. They are based on the “legacy” of alleged environmental damage inflicted by prior oil producers who can also be held liable.

Attorneys defend the suits, arguing that landowners would otherwise have to cope with costly environmental damage inflicted by the industry.

The claims were encouraged following a 2003 state Supreme Court decision that upheld a $33 million judgment for clean-up costs for a property worth a fraction of that amount. The ruling included a couple critical findings: The award did not have to be tied to the market value of the property and did not have to be used to fix up the property.

The decision created a lawsuit bonanza, according to the industry.

“That’s like throwing blood into the water, and all the sharks started swimming,” Briggs said.

Industry representatives say the looming cloud of lawsuits has chilled investment and that many smaller companies opt to settle because they don’t have the money to sustain a drawn-out legal battle.

The industry has recently touted a new study out of the Louisiana State University Center for Energy Studies, which claimed the lawsuits are cutting down on Louisiana oil and gas drilling.

The study estimated that over eight years, the suits “led to a loss of some 1,200 new wells” — translating to $6.8 billion in lost drilling investments for the state. The total economic loss was estimated at more than $10 billion. The study estimated the suits have cost roughly 30,000 jobs.

The research also showed the number of suits has spiked every year since 2005. A separate state study found that as of early 2012, there were at least 271 “legacy” suits filed in Louisiana.

Lawyers representing landowners in the state sharply contested the Louisiana State University study and plan to depose the author later this month. Attorney Don Carmouche said in a statement that the research was “flawed, erroneous and prejudiced.”

But Scott Sinclair, a local oilman and president of Tensas Delta Exploration Company, said the claims have stifled his business. He’s faced four suits in recent years.

“These are not only abusive but baseless claims,” Sinclair said, adding that they’ve had “an effect on my relationship with my bankers.”

Sinclair said his company, which has a 50 percent stake on 126,000 acres in the state, is looking at as many as 10 “drilling prospects” on the land but hasn’t drilled there because of the suits. In total, he estimated the company can count 30 or more wells that haven’t been drilled “solely” because of legacy lawsuits.

The lawsuits generally pertain to claims that oil companies decades ago stored waste material in unlined pits on Louisiana land, which released chemicals into the environment.

While industry representatives downplay the long-term damage caused by this practice, attorneys say it’s heavily impacted landowners.

“These environmental conditions create long-term … liabilities for the landowners and they don’t go away,” said Stuart Smith, a New Orleans-based attorney who represents more than 100 landowners in cases against major oil companies.

Smith said the landowners are liable for any hazardous substances on their property, meaning they could be sued by the Environmental Protection Agency if it’s not cleaned up and could run into problems selling the land since they’d have to disclose those problems.

He said chemicals ranging from lead to Benzene to radioactive radium-226 have been found at these sites. Smith said one of his clients, with a $5 million piece of property, found it would cost more than that to clean up — making the property “essentially worthless.”

As for the Louisiana State University study, Smith charged that it was pushed out by the oil industry “to affect ongoing litigation.”

“They’re using it to try to taint the jury pool,” he said.

Briggs denied that the industry financed the study.

Oil companies, in making their case that the suits are baseless, lately have pointed to a 2006 lecture given by Texas-based consultant W.D. Griffin, before a gathering at South Texas College of Law.

In a video of the lecture, obtained by FoxNews.com, Griffin tells the audience that the lawsuits are “like winning the lottery.”

“Those type (of) lawsuits are big money,” he said in the lecture.

Griffin urged lawyers to look for defendants with money to spare.

“Southern Louisiana has a rich crop of deep pockets,” he said. “We’ve got to look for those deep pockets.”

His slide show urged lawyers to make sure “at least one deep pocket is on the hook. If not, place project on shelf for later consideration, if any.”

Griffin did not return a call from FoxNews.com.

Briggs said his group is trying to persuade the state legislature to step in and staunch the flow of claims. Lawmakers pushed through a reform law in 2006, but the industry claims it was not strong enough. Briggs’ group is pushing a new proposal that would allow oil companies to take responsibility for any environmental cleanup without being liable for financial claims.

Environmental details about the cases are spotty. An early February report from the state’s Department of Natural Resources showed that of 271 cases the office was reviewing, environmental data had not been received on 210 of them. But for the 61 cases in which the data was available, the report found 59 of the sites were deemed to pose “no demonstrable long-term threat” to safety or health.

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Donald T. Carmouche thumbs through a stack of documents until he finds an internal Shell Oil Co. memo from May 26, 1931.

The memo discusses seepage from a pit in White Castle used to store tainted water brought up while drilling for oil. He points to the passage that says water is “spreading over a considerable area and killing the timber and vegetation.”

He sorts another stack, quicker now, until coming upon another Shell report about “earthen pits,” this time from Oct. 12, 1979, which notes “there is no economic incentive to maintain them.”

Various courts hearing any number of “legacy lawsuits” have ordered oil companies to turn over internal reports and correspondence that now number in the millions of pages. These Shell memos, like others reluctantly disclosed by the industry, show that oil companies have long recognized the damage their waste practices caused and purposely hid that knowledge over the years, said Carmouche, who represents landowners seeking recompense from the oil companies. It’s hard to tell how many, but there could be 20,000 such sites, polluted and abandoned, around the state, he said.

Attention at the State Capitol has been focused recently on all the name-calling between supporters and opponents of Gov. Bobby Jindal’s education overhaul. However, another group of bills soon could again fill the State Capitol with shrill debate.

Eleven bills addressing “legacy lawsuits” are filed in the Louisiana House, and five more sit on the calendar in the state Senate.

The oil and gas industry is pushing to change legal procedures to essentially keep these cases out of court, where judges often order companies to turn over internal documents, he said. “If these documents get out, the public’s perception that these are great companies changes,” said Carmouche,

Don Briggs, of the Louisiana Oil and Gas Association, says the drillers and oil companies represented by his Baton Rouge-based trade group already admit to causing much of the damage. “That was the way it was done back then,” Briggs said.

Back in the day, drillers would syphon off the water that came up with the oil and pump it into nearby pits. Over the years the land would be sold and resold, but the pits were never cleaned. Nowadays, the oil companies reinject the by-products deep into the earth.

“The industry is not perfect. But it doesn’t deserve to be exploited,” said Briggs.

His issue is with the interpretation of Louisiana law. When an oil company takes responsibility for cleaning a site, Briggs says, current law also exposes the company to other claims that are harder to link directly to the pollution, difficult to calculate and often add up to millions of dollars.

“We’re not admitting to all these unproven private claims that the cows are not giving milk the way they used to, or that the cats died,” Briggs said.

LOGA counts 273 lawsuits that name more than 1,500 defendants, Briggs said.

Jimmy Faircloth is a Pineville lawyer who represents major landowners, including some who are close to Gov. Bobby Jindal. What the oil and gas industry wants is to create a procedure that requires the state Department of Natural Resources, which has the ability to deviate from set cleanup standards, to touch any claim before it goes to court, he said.

If the landowner then questions whether the cleanup is thorough enough or seeks recompense for other damage caused by decades of pollution, a jury would be presented with the State of Louisiana’s endorsement of the industry’s remediation efforts, he said.

“It’s tangling a government agency into a private lawsuit,” said Faircloth, who was Jindal’s first executive counsel. Faircloth says the documents Carmouche uncovered while pursuing lawsuits are incriminating. He says they show that oil companies over the years calculated the costs of fixing the problem versus the possibility of being held responsible and decided it made more business sense to ignore the pollution.

Landowners’ success in the courts have changed that calculus, Faircloth said. “The landowners are trying to hold these companies accountable for those calculated business decisions.”

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Washington — The political sun is shining on Louisiana. The state’s presidential primary is Saturday. All four remaining candidates will be campaigning in the state Friday. And the only issue anyone, from President Barack Obama on, seems to be talking about is energy.

The questions that preoccupy Louisiana day in, day out, year in, year out, are now front and center for every American, and might dominate the 2012 presidential election.

“Suddenly it’s on everybody’s doorstep,” said Samuel A. Giberga, senior vice president and general counsel for Hornbeck Offshore. And so it is that what in times past might have sounded like the special pleading of oil-patch politicians for a home-state industry are now articles of faith for every Republican candidate.

President Obama’s protestations notwithstanding — “so we are drilling all over the place, right now; that’s not the challenge, that’s not the problem,” he said Thursday in Cushing, Okla. — for the Republican field, it is about drilling and increasing domestic production.

It is the “silver bullet,” said former House Speaker Newt Gingrich, who has rebranded himself the candidate of $2.50-a-gallon gasoline, during an appearance Wednesday in Pineville.

“Drill, baby, drill. Mine, baby, mine,” said Rick Santorum, the grandson of a coal miner, at a rally the same day in Mandeville.

What separates the Republican candidates more than anything is the messianic passion that Santorum brings to the issue, identifying himself as the only genuine climate-science denier in the bunch.

“Global warming and climate science convinced many, many Republicans, including two running for president on the Republican ticket — Newt Gingrich and Mitt Romney — but there was one who said, this is not climate science, this is political science,” Santorum said Tuesday night before departing from Gettysburg, Pa., for Louisiana.

In 2008, Gingrich famously sat on a sofa with then-House Speaker Nancy Pelosi for an ad produced by the Alliance for Climate Protection, a nonprofit organization founded by former Vice President Al Gore, calling for action to deal with climate change. He has since expressed his regrets for that.

Romney has also not been one to deny that human activity contributes to global warming, though he doesn’t particularly advertise that.

Aaron Viles, deputy director of the Gulf Restoration Network, said, to his regret it now seems de rigueur for Republicans to “pander to the anti-science within the Republican Party.” But he said, “Santorum is head and shoulders above the rest in the vitriol of his anti-environmental rhetoric.”

The opprobrium of Viles and other environmentalists will not harm Santorum in Saturday’s vote, which is open only to registered Republicans.

But criticism from Don Briggs, head of the Louisiana Oil and Gas Association, is another matter.

What caught Briggs’ eye was a bullet point in Santorum’s energy plan. It reads: “Eliminate all energy subsidies and tax credits. This will prevent the federal government from picking winners and losers in our effort to unleash all of America’s domestic energy sources.”

“That doesn’t sit well with me,” Briggs said. “First of all, these are not subsidies, they are tax credits, incentives.”

In his weekly column Friday, Briggs wrote that “Rick Santorum is calling to end what he and President Obama call ‘energy subsidies.’ The oil and gas industry is presently in direct opposition to President Obama on this very issue.”

Asked about this, Hogan Gidley, Santorum’s national communications director, replied, “Rick’s plan will be a significant benefit to the energy industry, especially in Louisiana, because it starts with regulatory relief and lifting drilling moratoriums. Sadly, this president would rather raise taxes on energy so he can give taxpayer dollars to his friends in the green energy industry like Solyndra.

“Rick’s plan would phase out alternative energy subsidies so the government won’t pick winners and losers — and at the same time, would provide tax relief to all in the energy industry by cutting the corporate tax rate in half and cutting the tax rate to zero for all U.S.-based manufacturing activity,” said Gidley. That answer did not satisfy Briggs.

“Eliminating industries’ tax credits falls in line with the president’s policy,” said Briggs. “I don’t believe he understands the importance of these credits to the independents that drill 90 percent of the wells in the U.S.”

Assaying the other candidates, Briggs said, “Newt wants to get rid of the EPA. I’m all for that.” Ditto Ron Paul. “Romney wants to do some regulatory streamlining, which is a good thing.”

Briggs said some of the more conservative members of his association in North Louisiana are “warm and fuzzy” for Santorum, while “I have friends that really support Mitt and just like the hell out of him, just really like him.”

Romney “would turn around the energy policy of this country,” said Scott Sewell, a past head of the former federal Minerals Management Service, who is co-chairing and directing the former Massachusetts governor’s campaign in Louisiana. “Absolutely, no question that Mitt Romney is viewed as the strongest business mind we’ve had run for president in memory.”

Like Sewell, Louisiana Public Service Commissioner Eric Skrmetta said he believed the Obama administration was bent on driving up the cost of traditional energy in favor of more costly alternatives.

“I feel very comfortable about supporting Mr. Romney,” said Skrmetta. “If he wins, great. If he doesn’t, I will vote for whoever is nominated.”

Texas Gov. Rick Perry was the top choice of many energy executives during his short-lived presidential campaign. Of the remaining candidates, Romney has gotten the lion’s share of donations from industry bigwigs, but Santorum has benefitted from the single largest donation from any individual associated with oil and gas in Louisiana, and that is the $1.5 million that William Dore, a Lake Charles energy executive, gave to the Red, White and Blue Fund, the super PAC backing Santorum.

However, Dore, who has been mum about the reasons for his generosity, has not said whether energy issues are what drew him to Santorum.

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The decades-long struggle between Louisiana landowners and oil and gas companies over so-called “legacy” lawsuits is set to take another turn later this month when attorneys representing hundreds of landowners in the cases call on the author of a recent Louisiana State University study on the lawsuits to testify about the research under oath.

In a statement posted online earlier this week, Baton Rouge attorney Don Carmouche said he plans to question David Dismukes, associate director of the LSU Center for Energy Studies, about the funding and data behind his February study as a part of larger potential litigation. The deposition is set for March 29.

The study attributed the drop in conventional drilling activity in Louisiana in part to an uptick in the number of legacy lawsuits filed in the state. Legacy lawsuits allow landowners to sue oil companies to recover the costs of cleaning up after oil and gas activity.

Carmouche said in the statement that the research is “flawed, erroneous, and prejudiced.”

“Because of its outlandish claims, we want some questions answered by Dismukes and LSU on a number of issues,” Carmouche said.

The LSU study comes as oil and gas interests lobby for more controls on the suits, which they say are growing in number and award amounts and staunch drilling investment.

Dismukes estimates that legacy lawsuits in south Louisiana have led to a loss of about 1,200 new oil and gas wells, or about $6.8 billion in lost drilling investments, since 2004.

Louisiana Department of Natural Resources records show an average of 30 legacy suits have been filed per year over the past eight years, up from seven in 2003. The DNR, the state oil and gas regulator, started monitoring environmental remediation tied to legacy lawsuits in 2006.

Unlike other states, the legacy damage awards are not tied to the value of the property in Louisiana. Cases often involve several companies since land is typically traded and re-leased over the lifespan of mineral interests.

One proposal from industry lobbyists would allow oil and gas companies to admit responsibility for cleanup plans outlined by state regulators without having to admit to responsibility for additional private claims.

Landowners and their attorneys say today’s landowners are more clued into the environmental damage years of oil and gas work can do than previous generations were.

Carmouche and his firm, Talbot, Carmouche and Marcello, represent nearly half of the 270 legacy cases tracked by the state Department of Natural Resources.

Carmouche plans to question Dismukes on the timeliness of data used and the identities of people and entities paying for the research. The attorney will also ask for all communications between Dismukes and the oil industry and records of payments made to Dismukes for oil industry-related research.

“In all of our cases where hazardous pits have been left by the oil industry, we have discovered the only way to find the real truth is by demanding internal documents,” Carmouche said.

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Over the coming days, the top four Republican presidential candidates will make stops in Louisiana pleading their case of why they should become the nominee to face President Barack Obama. Each contestant has slightly different views that differentiate him from the president.

Regarding energy, Rick Santorum, Mitt Romney, Newt Gingrich and Ron Paul each take a different approach to their energy policy, yet each of their positions have common threads.

Santorum’s energy policy pushes for the removal of drilling bans on and offshore. Romney, Gingrich and Paul all agree on this issue as well — more drilling equals less dependence on foreign oil.

Santorum is promoting the use of natural gas on the basis that more than half of U.S. homes are heated by it. Santorum is calling for the immediate approval of the Keystone Pipeline. However, Santorum is calling to end what he and Obama call “energy subsidies.” The oil and gas industry is in direct opposition to Obama on this very issue.

Romney focuses on

regulatory reform within the energy industry. He desires to see fixed timetables for all resource development approvals, the creation of a one-stop shop to streamline the permitting process and the implementation of fast-track procedures for companies with established safety records. Romney, like Santorum, is also in favor of the Keystone Pipeline project.

Gingrich is making waves amongst the candidates by campaigning for the closure of the Environmental Protection Agency. Gingrich has made it clear that reform must take place surrounding frivolous lawsuits, or what Louisiana knows as Legacy Lawsuits.

Along with Gingrich, Ron Paul is pushing for the closure of the EPA. He feels that those causing pollution issues should answer to property owners in court. Paul’s energy stance calls for the repeal of the federal gasoline tax, which would save consumers 18 cents per gallon. Paul would then make tax credits available for the purchase and production of alternative fuel technologies.

While these candidates engage in an important part of the electoral process, the oil and gas industry will continue in the fight to end Legacy Lawsuits, oppose the removal of investment tax credits by the Obama administration, and remain diligent in the U.S. production of oil and natural gas.

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Republican presidential candidate Newt Gingrich railed against President Obama’s “anti-energy” policies that he said are keeping America dependent on Middle Eastern oil, delivering the message at Louisiana College on rainy Wednesday morning.

The partisan crowd to see Gingrich numbered more than 400 in the Baptist college’s Granberry Conference Center, a mix of older and middle-aged voters and young LC students.

Gingrich told them that if Obama is elected again this fall, “you can’t imagine how radical he’ll be” in a second term.

Throughout the 45-minute address, the former speaker of the House used the term “radical” and “radicalization” in describing Obama, the president’s cabinet members and the policies put in place since Obama took office in January 2009. He called Energy Secretary Steven Chu the “secretary of anti-energy.”

Gingrich didn’t mentioned the three other leading Republicans vying for the nomination — Rick Santorum, Ron Paul and delegate-count leader Mitt Romney. Instead he concentrated his message on what he called Obama’s leftist and hurtful policies.

Gingrich is third in delegate votes and is considered a long shot for the Republican nomination. He said after addressing supporters at LC that he would stay in the race up to the Republican Convention in Miami in August.

Louisiana Republicans head to the polls Saturday to vote in a statewide preference primary where the winner could receive up to 20 delegates, depending on the percentage of votes won. Only registered Republicans will be able to vote for the GOP contenders Saturday.

Gingrich revisited his $2.50-a-gallon gasoline pledge, saying “there is a silver bullet” to the nation’s energy needs, “it’s called drilling.”

No American president, he said, “should ever bow to a Saudi king” by asking an Arab nation to increase oil production there to lower gasoline prices here. Gingrich said Obama made the request to the Saudis while there’s plenty of oil here that Obama is not allowing drillers to get at.

The statement about the Saudi king drew the longest applause of the morning.

“We’re nowhere near ‘peak oil,’” Gingrich said, a reference to estimates over the years that concluded U.S. output of oil and natural gas had reached its zenith and was moving into diminishing production.

“I like him (Gingrich) a lot “» and I hate it that people are not seeing his potential,” said Leonard Nash of Forest Hill.

“Obama is the most destructive president we’ve ever had,” said Nash, who is 58 and works on a drilling rig for Noble Drilling.

Nash wore a red T-shirt that said he was a “Watcher” for “Cenla Patriots.”

Oil and gas advocacy groups have warned it’s possible the federal Environmental Protection Agency would take over regulation of hydraulic fracturing in land drilling. They said added federal regulations imposed by the EPA would bring drilling to its knees.

The process, called “fracking,” currently is regulated by states. It’s a relatively new method of extracting oil and gas from dense shale rocks, and it’s controversial.

“Newt Gingrich is making waves amongst the candidates by campaigning for the closure of the (EPA)” Don Briggs said in a statement released Wednesday. Briggs is director of the Louisiana Oil & Gas Association.

“He believes the EPA to be a ‘job-killing regulatory engine of higher energy prices,” Briggs said.

Gingrich recommended opening up exploration in Alaska and off the Gulf of Mexico coast of Florida, where it’s banned. He also said Obama should have allowed the Canadian pipeline to be built so it could bring in needed crude oil from the north and also allow oil produced in North and South Dakota to be transported to the Gulf Coast to refineries.

“(Gingrich) seemed very conservative and very concerned about oil prices,” said Torrey Boggs, a 21-year-old sophomore at LC.

On another issue, Gingrich said a provision in Obama’s national health-care law that requires making employers have health insurance that would pay for contraception is another instance of the president’s “radicalization of America.”

The remark was made after LC President Joe Aguillard said “we will close the institution” before LC is made to pay for after-conception medication that aborts the fetus.

LC filed a lawsuit in Alexandria federal court in February contesting the provision in the law.

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Gov. Bobby Jindal’s former executive counsel asked legislators for patience this week on legislation involving what are known as “legacy lawsuits.”

In a letter to members of the Senate and House natural resources committees, Alexandria attorney Jimmy Faircloth Jr. said negotiations are continuing on a compromise bill that will appease both the oil and gas industry and landowners.

At issue is how to resolve often decades-old pollution caused by oil and gas drilling.

The oil and gas industry contends landowners want to maintain the status quo with protracted legal battles that are blamed for limiting drilling in Louisiana.

Landowners are accusing the industry of trying to erode the jurisdiction of the courts.

“Though some progress has been made, reaching a final compromise will be difficult, and may prove to be impossible,” Faircloth wrote.

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The fix is in, and the word out. News about the job-killing lawsuit abuse that’s taking place in Louisiana seems to be popping up everywhere these days, and now our state’s dirty little secret has hit the national stage.

A new YouTube video posted by the American Tort Reform Association shows a personal injury lawyer giving a tutorial on how to make up legacy lawsuits based on bad information in order to get rich. This plaintiffs’ expert is caught on tape saying legacy lawsuits are “big money … it’s like winning the lottery.” See it for yourself at www.judicialhellholes.org/legacy-lawsuits/.

This video exposes legacy litigation for what it really is — mostly a scam run by a few politically connected personal injury lawyers for the purpose of making money, not cleaning up our land. There are plenty of statistics that show just that. For example, data from the Louisiana Department of Natural Resources shows 78 percent of all the legacy cases filed present no evidence of actual damages according to state standards. If there are no actual damages, then why are these cases being filed? The plaintiffs attorneys said it themselves — “big money.”

The bottom line is these frivolous lawsuits are wreaking havoc on conventional onshore oil and gas operators in the state, as well as their employees and families. A new report from the LSU Center for Energy Studies shows legacy lawsuits have cost Louisiana citizens more than 30,000 jobs and $1.5 billion in wages over the past eight years.

At a time when our national economy is suffering and energy prices are skyrocketing, no state in the country can afford these kinds of frivolous, job-killing lawsuits. Let’s hope the Louisiana Legislature will take notice and do something to help rein in the abuse.

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