Louisiana’s lawsuits undermine Trump’s vision of energy dominance



One of Donald Trump’s main objectives over the next four years is to restore America’s energy independence. “Drill baby, drill!” didn’t make it into his second inaugural, but it might as well have. He and his team, led by Interior Secretary Doug Burgum, went straight to work on efforts to reduce the nation’s dependence on energy imported from politically unstable parts of the world.

To get there, they’ve got to overcome lots of roadblocks. One of them, strangely enough, emanates from the newly renamed Gulf of America, where Republican Louisiana Gov. Jeff Landry has seemingly partnered with settlement-seeking trial lawyers and radical environmentalists on activities that impede the growth of the nation’s energy sector.

You’d think the leaders of a state hunting for every dollar it can find would consider the revenue impacts before deciding whether to go on with lawsuits.

Energy analyst David Blackmon pointed out in a recent Forbes column that Landry is a plaintiff in lawsuits against energy producers working to help Trump fulfill his promise of energy independence. This doesn’t make much sense. Perhaps the president asked him about it when both were in New Orleans for Super Bowl LIX.

Even if he didn’t, here are the facts: 43 lawsuits have been filed, starting in 2013 while Landry was serving in the U.S. Congress. These lawsuits, brought by several Louisiana parishes, aim to hold private entities responsible for coastal erosion — a problem that, like many environmental issues, is a “commons” problem.

This means that because coastal erosion generally happens in nature, no single person or entity is automatically responsible unless a court finds that someone or something is. With states and local governments facing budget constraints, they have increasingly partnered with special interests to ask courts to hold deep-pocketed corporations accountable for the costs of remediation.

As Blackmon also noted, the Louisiana-based Pelican Institute for Public Policy, a nonpartisan think tank, found the state has suffered significant economic consequences because “when the risk of getting sued increases, the expected costs faced by companies increases, and as a result, drilling activity decreases.”

In its report, Pelican found:

  • Between 53 and 74 fewer oil wells were drilled offshore Louisiana than would have been drilled if the threat of lawsuits was lower in the state.
  • This decrease in drilling activity led to economic losses in the range of $125.7 million to $320.3 million during those 34 months for Louisiana’s oil and gas economy, which work out annually to something in the range of $44.4 million to $113 million per year.
  • Given that the average royalty rate in the coastal zone of Louisiana is approximately 20%, Pelican estimated Louisiana’s state and local governments lose $8.9 million per year to $22.6 million per year in royalty revenue.

Focus on that last point. According to the think tank, Louisiana is “losing more in royalty revenue than oil and gas producing companies are losing in profit, which are likely less than 20% of revenues on average, due to litigation risk.”

You’d think the leaders of a state hunting for every dollar it can find would consider the revenue impacts before deciding whether to go on with the lawsuits. Instead, as the state’s attorney general, Landry supported the parishes’ right to bring claims under the State and Local Coastal Resources Management Act and agreed not to endorse any substantive defenses raised by defendants.

Landry’s critics complain this decision may have compromised his obligation to uphold state law since, significantly, the courts later affirmed some of these defenses. In any event, it has left some of them asking if he favors the interests of the plaintiff bar over those of the oil and gas industry, a critical economic driver in the state he leads.

The U.S. Energy Information Administration has recently forecasted that natural gas and oil will be the most used fuels in the U.S. through 2050. Trump’s day-one executive order on “Unleashing American Energy” encourages “energy exploration and production on Federal lands and waters, including on the Outer Continental Shelf, in order to meet the needs of our citizens and solidify the United States as a global energy leader long into the future.”

It’s basic economics. Increased energy demand (as the EIA predicts) combined with continual increases in supply produce lower prices. By suing the producers for billions, the governor and the other plaintiffs are handcuffing the companies providing abundant and affordable energy. Landry, unusual for such an allegedly market-friendly conservative, appears to be on the opposite side of President Trump when it comes to promoting America’s energy dominance.

Biden appears to promise 'no more drilling' when climate change protester confronts him about oil drilling



President Joe Biden promised "no more drilling" on Sunday after a climate protester confronted him at a campaign event for New York Gov. Kathy Hochul (D).

What did Biden say?

Toward the end of his speech, a clearly agitated Biden responded to a heckler who criticized him for not stopping offshore oil drilling.

"No more drilling," Biden declared. "There is no more drilling. I haven’t formed any new drilling."

"There are at least five more years of offshore drilling," the protester shouted back, "not in the Atlantic or the Pacific but in the Antarctic and off the gulf of Mexico."

Biden then told the heckler those leases were finalized "before I was president," explaining that "we’re trying to work on that and get that done." It is not exactly clear what Biden was referring to, but it sounded like he confirmed that his administration is trying to end offshore drilling, thus further decreasing American oil production and increasing our reliance on foreign energy.

Biden actually spoke with the woman after the event, the Washington Examiner reported.

None
— Gno (@Gno) 1667779411

What is the significance?

Biden's admission came just two days before voters nationwide head to the polls.

In an election where voters repeatedly say the economy is the most important issue — especially as Americans face sky-high inflation and high gas prices — promising to significantly cut American oil production will not help Democrats.

Even worse, Biden was already facing energy-related criticism after vowing to shut down every coal plant in the U.S.

"So it's going to become a wind generation," Biden said on Friday. "And all they're doing is it’s going to save them a hell of a lot of money and using the same transmission line that they transmitted the coal-fired electric on."

"We're going to be shutting these plants down all across America and having wind and solar power," Biden proclaimed.

The White House later claimed Biden's remarks had been "twisted to suggest a meaning that was not intended" — but Sen. Joe Manchin (D-W.Va.) did not buy it.

"President Biden’s comments are not only outrageous and divorced from reality, they ignore the severe economic pain the American people are feeling because of rising energy costs," Manchin responded in a statement.

"Comments like these are the reason the American people are losing trust in President Biden and instead believes he does not understand the need to have an all-in energy policy that would keep our nation totally energy independent and secure," he proclaimed. "It seems his positions change depending on the audience and the politics of the day."

Trump's first-term gains for oil industry could be undone by Biden

President Trump, during his first term, largely delivered for an oil and gas industry that is facing financial stress and increasing public scrutiny, providing tax cuts and cutting regulations.

South Carolina Republican, running against offshore drilling, seeks to outdo Democrat Joe Cunningham

Democratic Rep. Joe Cunningham last year sponsored a bill that passed the House to forever ban offshore oil and gas drilling off the Atlantic Coast, aimed at protecting the tourism economy of South Carolina’s 1st District.

Trump announces expansion of offshore drilling ban for Florida and other coastal states

President Trump announced Tuesday he is extending an existing moratorium offshore oil and gas drilling in the eastern Gulf of Mexico and expand it to Florida's Atlantic coast, Georgia, and South Carolina.