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Are the attorneys and plaintiffs who file lawsuits built around oilfield contamination allegations genuinely concerned about environmental damage? Or, are they instead motivated by a loophole in the law that allows for financial awards to be detached from cleanup efforts?

These questions will be explored over the next few weeks in the Louisiana legislature where over a dozen bills have been filed that would alter the terms and conditions currently set for “legacy lawsuits.” Plaintiff lawyers and their clients who have ownership over property previously leased out for conventional onshore drilling purposes have been the driving force behind suits that now impact about 60 percent of the state’s top crude oil producers, according to the Louisiana Oil and Gas Association (LOGA).

In many instances, the alleged contamination reaches back for several decades or even a century, and the ownership over the “legacy site” has changed hands several times. While in some instances legitimate environmental conditions need to be remediated, new evidence has emerged that suggests many of the suits are unrelated to genuine instances of wrongdoing and environmental damage. The Department of Natural Resources (DNR), for instance, reports that 78 percent of all the legacy cases filed have failed to present any evidence of contamination according to state standards.

“There is mounting evidence that the vast majority of these cases may not be legitimate,” Melissa Landry, executive director of Louisiana Lawsuit Abuse Watch (LLAW) commented. “We are talking about over three-fourths of the cases that are being filed right now. This statistic begs the question, if there is no legitimate evidence being presented of actual damage, then why are so many cases being filed? There is good reason to believe this is more about money, than it is about the environment.”

The American Tort Reform Association (ATRA) has released a video showing a legacy lawsuit lawyer consultant who describes how natural occurrences can be misconstrued as wrongdoing to secure large settlements. The consultant outlines an 11 step plan that can be used to pin the blame for environmental disturbances on oil and gas companies, even if they are not responsible.

“Salt domes impact the surface and near the surface themselves, just a natural occurrence,” the consultant explains in the video. “…But when I find these things, maybe I’m going to contend that the oil companies did it. It’s tough to name God as a defendant. The oil companies did it.”

Last year, Rep. Page Cortez (R-Lafayette) submitted a bill that would have shifted the primary jurisdiction for legacy lawsuits away from local courts over to the 19th Judicial District Court and the Department of Natural Resources. The idea was for state officials knowledgeable about the issues to have greater say over the claims process and any cleanup efforts. Critics charged that Cortez’s bill was overly protective of the oil and gas industry, while supporters viewed it as a vital policy change that would accelerate cleanups and lower costs. The House Natural Resources Committee turned away Cortez’s bill.

In the current session, Rep. Neil Abramson (D-New Orleans), who chairs the Civil Law and Procedure Committee, has submitted a bill  (HB 618) that would help ensure that damage claims are more in line with what the state environmental experts believe is needed to address any environmental damage. Sen. J.P. Morrell (D-New Orleans) and Sen. Robert Adley (R-Benton) are sponsoring similar legislation.

“These bills allow a party to limit an admission of liability to responsibility for implementing the most feasible plan [for cleanup],” Gifford Briggs, vice-president of the Louisiana Oil and Gas Association (LOGA), explained. “This would greatly speed up the remediation process.”

LOGA is very much opposed to an alternative set of legislation sponsored by Rep. Jack Montoucet (D-Crowley), especially HB 853, Briggs added.

“House Bill 853 is best described as the Louisiana oil field job killing act,” he said. “From our perspective, it is the worst bill ever filed.”

The Pelican Institute contacted Rep. Montoucet’s office seeking comment but did not receive a response.

Briggs is hopeful a compromise can be reached that balances legitimate environmental concerns with economic realities.

“The political terrain has not changed much since last year and we expect a vigorous debate,” he said. “But we do see a real opportunity here to implement reforms that would result in effective cleanup efforts and greater cost savings.”

The opening for excessive litigation came in 2003, Landry explained, when the Louisiana Supreme Court ruled in Corbella v. Iowa that the money awarded in environmental lawsuits did not necessarily have to be spent on cleanup efforts. In 2006, state lawmakers sought to re-prioritize environmental remediation over lawsuit profit motives with Act 312. The law was crafted in an effort to ensure that state experts work with landowners to develop a remediation plan and to be certain that the financial resources distributed by the responsible parties are spent on environmental repairs and compensation for actual economic damages.

Unfortunately, it is possible to sidestep Act 312 in court, Landry said. In some instances, the plaintiff attorneys have been able to persuade judges that the law is not applicable to their claim, she explained.

Haywood Martin, who chairs the Louisiana Chapter of the Sierra Club, also expressed misgivings toward the Corbella v. Iowa ruling and favors policy changes that would prioritize environmental clean up.

“The Sierra Club would like to see some requirement that funds for damages go towards remediation of the actual environmental damage,” he said. “But, at the same time, we would not want to see any limit on the ability of private landowners to sue for damages to their property.”

For the moment, the Sierra Club has declined to take an official on any of the bills that have been introduced.

“We are very early in the legislative session and a lot could change,” Martin continued. “It’s important to know that what the oil industry has been advocating for is to have negotiations over the damages from oil activities overseen by the Department of Natural Resources (DNR), which has been very favorable to the oil industry. Their mission [the DNR] is to help the oil industry to extract and produce revenues, so there’s an obvious conflict there.”

Attorney Jimmy Faircloth, who represents the Louisiana Landowners Association (LLA), concurs. Industry officials believe they are more likely to secure a favorable settlement if DNR agents can testify on their behalf in court, he said. Faircloth and his landowner clients back legislation from Sen. Gerald Long (R-Natchitoches) (SB 528) that would rewrite Act 312.

“Here we give the oil and gas industry everything it has asked for in its propaganda pieces,” Faircloth said. “But it [Long’s bill] does not accomplish what industry officials are really after. They want to use a state agency as a screening tool, and take that agency to trial. This is not about reducing frivolous lawsuits.”

Faircloth also challenged the idea that most of the environmental allegations lacked tangible evidence.

“The Department of Natural Resources (DNR) did not find that most of these claims were baseless,” Faircloth said. “This is a perfect example of how industry misrepresents what the agency is actually saying, and why they would like to drag this agency with them into court. DNR only said that it did not have any data that demonstrates most of the cases have environmental contamination because it did not have the necessary documents.”

A new report  from the Louisiana State University (LSU) Center for Energy Studies concludes that legacy lawsuits have resulted in diminished drilling activity. In northern Louisiana, the study estimates  that drilling activity has been reduced by about 952 wells over an eight period. Southern Louisiana experienced a drilling reduction of about 377 wells during this same time period. The LSU study also shows that  Louisiana residents have lost out on over 30,000 jobs and $1.5 billion in wages as result of reduced drilling.

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President Barack Obama says Americans are getting hit twice _ once at the gas pump, and once more by sending billions of dollars in tax subsidies to oil companies.

“Right now the biggest oil companies are raking in record profits,”  the president said.  “Last year the three biggest U.S. oil companies took home more than $80 billion in profits.”

Flanked by dozens of invited guests in the Rose Garden, Obama is again seeking to pressure Congress to end $4 billion in tax subsidies. He says oil companies shouldn’t get taxpayer help when that money could be used on alternative energy.

Obama, up for re-election, has sought to align himself with people frustrated by high gas prices.

Many congressional Republicans say cutting the tax breaks would lead to higher fuel prices, raising costs on oil companies and affecting their spending on exploration. Obama couldn’t end the subsidies when Democrats controlled Congress earlier in his term.

The oil industry in Louisiana is taking issue with the president.

“He’s talking about $4 billion dollars in which he calls ’subsidies.’  These are not subsidies.  They are tax investments that all other industries here in the U.S. share,” said Don Briggs with the Louisiana Oil and Gas Association.  “He’s just singling out the (oil) industry.”

Briggs insists this is part of a political ploy to phase out the oil industry.

“He really wants to see energy prices go up,” Briggs insisted of President Obama.  “He’s doing it politically.”

He insists this will drive energy prices higher.  “It’s an absolutely ridiculous time to be doing this.”

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A plaintiff’s attorney is attempting to depose a Louisiana State University researcher over a study he released regarding the economic damage of “legacy lawsuits.”

Dr. David Dismukes, associate director and professor at the Center for Energy Studies at LSU, released the study in late February revealing the state economy had lost an estimated $6.8 billion and lost out on the creation of over 30,000 jobs over the past eight years due to lawsuits filed on behalf of property owners who claim environmental damages from past energy extraction activities.

There have been 16 bills introduced in the current state legislative session to reform the way legacy lawsuits are handled.

Attorney Don Carmouche, who has filed suits on behalf on many landowners, has ordered Dismukes be deposed to answer questions in relation to the accuracy of the study’s conclusions and to determine who funded the study.

Don Briggs of the Louisiana Oil and Gas Association claims Carmouche is using the deposition to try and sway public opinion.

“I can assure the Louisiana Oil and Gas Association did not put a dime into the study and never requested it,” Briggs said. “It’s political strategy. It’s intimidation and for lack of a better word-trickery.”

Carmouche said the most recent action in the case has been LSU’s attempt to stop the deposition from occurring.

“It’s absurd to me that our flagship university in the face of our complete awareness that this was bought and paid for by the major oil companies-that they would deny us the right to depose this so-called expert over there, but they are moving to quash it,” Carmouche said.

Carmouche originally planned on deposing Dismukes on March 29, but says that date will be postponed due to the challenge from LSU.

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The World Trade Center of New Orleans is proud to welcome world-renowned author and energy expert Dr. Daniel Yergin for a very special breakfast briefing on Tuesday, April 17 at 8:00 a.m. Dr. Yergin will address the future of energy and its impact on the Gulf Coast region. Cost to attend is $50 for WTCNO Members and $65 for Future Members

Daniel Yergin is the Pulitzer Prize-winning author of “The Prize: the Epic Quest for Oil Money and Power,” which was a New York Times bestseller and has been translated into 17 languages. His new book, “The Quest: Energy, Security, and the Remaking of the Modern World” has been hailed as “necessary reading for CEOs, conservationists, lawmakers, generals, spies, tech geeks, thriller writers, and many others”.

Daniel Yergin is CNBC’s Global Energy Expert and is an advisor to the Secretary of Energy. Dr. Yergin has been called “America’s most influential energy pundit” and his works have been considered must-reads for more than two decades.

This event is produced in cooperation with the Louisiana Oil & Gas Association & the Louisiana Association of Business & Industry.

Registration is available online by clicking here.

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Analysts at Stifel Nicolaus raised their price target on shares of Goodrich Petroleum (NYSE: GDP) from $21.00 to $28.00 in a research report issued to clients and investors on Tuesday. They currently have a “buy” rating on the company’s shares.

The analysts wrote, “Goodrich holds 80k net acres in southwest Mississippi and east-central Louisiana that are prospective for the Tuscaloosa Marine Shale (TMS) (Figure 1). Despite six wells currently producing from the formation, EnCana Corporation’s (ECA) Weyerhaeuser 73H #1 in St. Helena Parish, LA, which had a 30-day average rate of more than 700 Boe/d, was the first significantly positive step for the play.”

A number of other firms have also recently commented on GDP. Analysts at Capital One upgraded shares of Goodrich Petroleum to a “neutral” rating in a research note to investors on Wednesday, March 7th. Separately, analysts at Global Hunter Securities upgraded shares of Goodrich Petroleum from an “accumulate” rating to a “buy” rating in a research note to investors on Tuesday, February 28th. They now have a $26.00 price target on the stock, up previously from $25.00. Finally, analysts at RBC Capital (NYSE: RY) raised their price target on shares of Goodrich Petroleum from $16.00 to $18.00 in a research note to investors on Friday, February 24th. They now have a “sector perform” rating on the stock.

Goodrich Petroleum traded down 1.23% on Tuesday, hitting $19.26. Goodrich Petroleum has a 52-week low of $9.91 and a 52-week high of $22.87. The stock has a 50-day moving average of $17.82 and a 200-day moving average of $15.52. The company’s market cap is $700.5 million.

The company last announced its quarterly results on Wednesday, February 22nd. It reported ($0.66) earnings per share (EPS) for the previous quarter, missing the Thomson Reuters consensus estimate of ($0.20) EPS by $0.46. The company’s quarterly revenue was up 41.6% on a year-over-year basis. Analysts expect that Goodrich Petroleum will post $-0.04 EPS next quarter.

Goodrich Petroleum Corporation is an independent oil and gas company engaged in the exploration, exploitation, development and production of oil and natural gas properties primarily in East Texas and Northwest Louisiana.

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A behind-the-scenes firestorm Louisiana’s legislative session centers on a big-money, years-long dispute between landowners and the oil and gas industry over how cleanup should be handled of environmental damage from drilling years ago.

More than a dozen bills have been filed on the issue of so-called “legacy lawsuits.” Leaders of the House and Senate natural resources committee hope a compromise can be reached without public and contentious disputes in the Legislature.

The Louisiana Oil and Gas Association says frivolous lawsuits over the cleanup are choking the industry and stifling exploration in the state. Landowners say they want to remediate property, but also want to preserve legal rights over damage claims.

Gov. Bobby Jindal’s natural resources secretary, Scott Angelle, is trying to mediate a compromise.

“We feel like the best approach is to give a reasonable period of time. We’re going to try to give them at least another two weeks to try to bring some type of consensus, and then we’ll hold a hearing,” said Sen. Gerald Long, R-Winnfield, chairman of the Senate Natural Resources Committee and sponsor of a bill for the landowners’ group.

The last time lawmakers took up the issue — six years ago — the matter uncomfortably put legislators in the midst of a dispute between multiple sets of powerful lobbying groups and campaign donors: landowners, trial lawyers and one of Louisiana’s biggest industries, oil and gas.

Jindal faces the same dilemma this time, with the strong oil and gas companies on one side and on the other side the governor’s former top lawyer, Jimmy Faircloth, and his big-money contributor Roy O. Martin, whose company is the largest private landowner in the state with thousands of acres and pending legacy lawsuits.

Legacy lawsuits, often totaling millions of dollars, are filed by landowners who leased their property to energy companies and claim environmental damage for the drilling on their land, like contamination of ground water resources.

Six years ago, lawmakers gave new power to the state Department of Natural Resources in devising cleanup plans and the costs associated with that.

Don Briggs, president of the Louisiana Oil and Gas Association, or LOGA, said that new authority hasn’t helped settle cleanup disputes. He said more than 270 lawsuits are pending with over 1,500 defendants, and he accused trial lawyers of dragging out cases to force companies — particularly small and independent producers — to settle rather than pay for the legal costs of continuing litigation.

“They sue you, don’t provide any data and force you to spend money to prove that you’re innocent, and it’s costly,” Briggs said. “This created an incredible cottage industry for the trial bar.”

Briggs said the lawsuits stifle exploration in Louisiana, and he said in many instances settlements aren’t being used to clean up property. He cites an LSU Center for Energy Studies report that said legacy lawsuits over the past eight years have led to a loss of 1,200 new wells and $6.8 billion in drilling investments in Louisiana.

“You can’t sue 1,500 different defendants in all these different cases and not have an impact on where people decide where they want to invest and to drill for oil and gas. It does in fact have an impact,” Briggs said.

LOGA wants a process to take responsibility for cleaning up sites without accepting liability for damage to landowners, which could then be pursued in separate lawsuits.

But Faircloth said LOGA’s proposal would center primary jurisdiction for these cases in administrative law judge hearings in Baton Rouge, rather than in local courts. He called it the industry’s attempt to “manipulate the outcome of private litigation” and erode the court’s jurisdiction.

“If I’m a landowner, I definitely don’t want to have to hire a lobbyist and go down to Baton Rouge to fight,” Faircloth said.

In a letter to lawmakers, Faircloth argues a potential conflict for the natural resources department to promote and police the industry at the same time.

“Simply put, oil and gas companies have considerable influence over the ability of DNR to fulfill its mission of promoting the development of our state’s natural resources and related economic opportunities,” Faircloth wrote

Faircloth said he’s offering a proposal that would allow small oil and gas companies, who he said are being held responsible for damage done years ago by the bigger companies that drilled years ago, to get out of lawsuits while holding the “majors” responsible for the mess they left behind.

The governor’s spokesman Kyle Plotkin issued a statement that seemed to ally him with Faircloth and Martin, while pressing for a compromise.

“It’s important that all the different stakeholders on this issue work together and try to seek consensus. Where there’s environmental damage, the responsible party must be held responsible for cleaning it up, and the independent oil and gas producers, who are not responsible for the damage, must be protected from lawsuits,” Plotkin in a statement.

Long said he’s hopeful, but not sure, an agreement can be reached behind the scenes.

“Almost every day I get mixed signals. One day someone will tell me, `Boy they’re real close. They ought to have this thing worked out in the next day or two.’ The next day they tell me they’re still at a crossroads,” Long said.

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At the spring session heats up, state legislators, energy industry officials and trial lawyers are reportedly not any closer to a compromise on “legacy” lawsuit reform.

The lawsuits refer to landowners who bought polluted properties that were not cleaned up by the energy industry after sometimes decades of drilling activities. Opponents of the lawsuits say landowners sometimes file the suits even if drilling activities took place, but there is no discernible pollution.

Sixteen bills in the house and senate meant to reform legacy lawsuits were introduced when the session began earlier this month. Some of those bills were supported by energy industry officials and interest groups and other have been linked to landowners, trial attorneys and environmentalists. And, a few are reportedly meant to be adaptable via amendment into a compromise between opposing views.

“I think that it is everyone’s hope that a compromise is reached that would help to rout out the suits that have absolutely no merit and improve the system so that it would operate more efficiently, balance all the interests and hopefully get our land cleaned up more quickly,” said Melissa Landry of Louisiana Lawsuit Abuse Watch.

Don Briggs, president of the Louisiana Oil and Gas Association said his group supports four of the bills, including those that would limit the liability of defendants in remediation cases.

“It allows the industry to accept responsibility for the regulatory cleanup and it limits their liability for the private claims,” he said.

“What we are saying is we want to be able to admit responsibility for the regulatory cleanup, but it doesn’t mean we’re admitting responsibility or liability for the private claims. That is a whole separate issue.”

New Orleans political consultant Cheron Brylski, who works on behalf of the trial lawyer bar, says any bill that would change the way the courts work is unacceptable.

“It’s my understanding that both sides are still rather far apart and our concern is that what big oil and gas seems to want is to control the judiciary in this process and we just find that unacceptable,” Brylski said.

“No one is supposed to control the judiciary. They are supposed to be impartial and independent.”

All legislation will have to be wrapped up before adjournment of the legislature on June 4.

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