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Decline of oil and gas rigs in Louisiana blamed on lawsuits

Baker Hughes, Inc., reports weekly on the number of oil and gas rigs that are actively drilling in the southern part of Louisiana. As of Dec. 20, there were 11 rigs in operation. This number does not include the number of rigs in operation off the coast or in the northern part of the state.

In December 2012, there were an average of 17 oil and gas rigs actively drilling, which was up by 70 percent from the middle of 2009. June’s numbers from 2009 were the lowest in the past 10 years.

The oil and gas industry is quick to blame “legacy lawsuits” for the decline. There are a lot of other factors, though, that are pushing in on the industry, including exploring in other parts of the country for oil and gas. This has drawn many investors away from the southern area of Louisiana, even though this area has provided proven results. Natural gas prices are lower as well, forcing many to head to areas in North Dakota and Texas in search of oil.

The Louisiana Oil and Gas Association’s president says that the continuous array of lawsuits seeking compensation for the clean up of areas where the oil and gas industry was or is today has harmed the industry in the state.

Homeowners, though, and others who believe that the oil and gas industry should pay for the damage and injury to these areas, say that the contamination has to be cleaned up. Many say that there is simply no other place for landowners to seek compensation – even though the contracts signed with the oil and gas companies specifically say that the clean up would be completed.

The Southeast Louisiana Flood Protection Authority – East’s lawsuit seeks such compensation, or at the very least, wants the coastal areas cleaned up and the damage undone. Their lawsuit against 97 oil and gas companies is one of the most contentious lawsuits involving this topic. There is little sign of the aggressiveness of the opposition by the oil and gas companies slowing down soon, especially when the opposition also includes Governor Bobby Jindal. However, the SLFPA-E has met all attempts to undermine the lawsuit so far, but only time will tell if they are successful.

Many environmental issues require court action to achieve any results. An experienced environmental attorney might be able to ensure the problem is heard by the right people.

Source: nola.com, “Oil industry blames ‘legacy lawsuits’ for drilling rig decline in south Louisiana” Jennifer Lareno, Dec. 24, 2013

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