Lafourche Parish declines to sign Freeport McMoRan settlement agreement

Louisiana’s $100 million coastal damage settlement with mining company Freeport McMoRan has hit a roadblock, as the Lafourche Parish Council did not sign a settlement document necessary for the agreement to proceed.

Freeport McMoRan settled with the state and 12 coastal parishes in March after eight years of litigation, but each parish is required to sign a memorandum of understanding (MOU) for the agreement to execute.

Lafourche Parish, which is a nonsuing party named in the settlement, has effectively opted out, and, according to a recent letter from Parish President Archie Chaisson III, the parish council is not likely to change course.

“As you probably know Lafourche Parish has been asked for the last two years to sign onto the Freeport Settlement Agreement,” Chaisson wrote to Gov. John Bel Edwards after a Tuesday evening council meeting. “The Lafourche Parish Council has held several Executive Sessions during their regular meetings to discuss the settlement and has twice placed a resolution on their agenda to approve the agreement. At both meetings the resolution did not garner enough support and was eventually removed from the Council’s agenda.

“At this point I am unsure if the item will ever get the required votes to be able to pass therefore Lafourche Parish will not be signing on to the Freeport Settlement,” Chaisson said.

Chaisson indicated Edwards, a settlement supporter, may take steps to execute the MOU document on behalf of Lafourche Parish.

An emailed statement Friday from the governor’s office said Chaisson’s letter had not been received, “but we will thoroughly review it once we do,” the email said.

Edwards, a Democrat, left the state Thursday to attend a United Nations climate change summit in Scotland.

The Freeport case is the first of dozens of multiyear lawsuits against oil-and-gas companies to reach a settlement, and the outcome of the settlement process could influence legal strategies in other cases.

Private plaintiffs’ attorneys representing seven local governments have filed 43 coastal lawsuits against more than 200 energy defendants. Some of the defendants are among the world’s largest oil companies, such as Shell, BP and Exxon Mobile.

The legal challenges allege wrongdoing under the Louisiana State and Local Coastal Resources Management Act of 1978, though the alleged violations were federally authorized and include many activities that took place before the state law.

A jurisdictional battle to determine whether the cases should be heard in federal court or state court is ongoing.

The 5th U.S. Circuit Court of Appeals ruled in August in favor of oil-and-gas defendants in two lead coastal land loss cases, saying they should be re-examined in federal district court since they involve operations that were federally overseen at the time.

In a joint letter to the Lafourche Parish government, the Louisiana Oil and Gas Association, the Louisiana Mid-Continent Oil-Gas Association and the Grow Louisiana Coalition urged the parish council to reject the Freeport settlement agreement ahead of Tuesday’s meeting.

Citing 10,000 jobs across the Bayou Region, the groups said the agreement only “seeks” to settle coastal land loss claims, whereas the oil-and-gas industry, they said, had generated more than $443 million in funding for coastal restoration and hurricane protection over the past five years.

“We firmly believe the proposed settlement framework is deeply problematic and reflects the decision of one company – not the best interests of Lafourche Parish, the state of Louisiana or the oil and gas industry,” they said.

In addition to a fully executed MOU, the settlement calls for the state Legislature to create a complicated environmental credit scheme, similar to cap-and-trade programs, and a funding mechanism called the Coastal Zone Recovery Fund.

Freeport McMoRan would pay $23.5 million to the fund over the first three years of the 20-year settlement period. The money would go toward coastal restoration projects and generate environmental credits that then could be sold to offset Freeport’s remaining $76.5 million obligation.

Two bills – House Bill 569 and Senate Bill 233 – would have established the settlement framework during the 2021 regular legislative session but they failed to receive a hearing. Renewed legislative efforts are expected next year.

This article was originally posted on Lafourche Parish declines to sign Freeport McMoRan settlement agreement

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