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Louisiana's love-hate relationship with the oil industry

The industry bankrolls 14% of the state's budget and supports 320,000 jobs, but at a cost. The state has sacrificed some of its biologically rich wetlands, as well as some residents' health.

September 15, 2010|By Julie Cart, Los Angeles Times

Reporting from Grand Bois, La. — The trucks came at night, ferrying load after load of oil-field waste from Alabama to the US Liquids disposal facility in this tiny south Louisiana settlement.

For the oil company, it was an easy decision: Exxon's drilling and production waste was classified as hazardous under Alabama law. Its disposal there would cost about $100 a barrel. In Louisiana, however, the chemical waste could be dumped into open pits at a cost of $8 a barrel.

The US Liquids plant is across a two-lane highway from Clarice Friloux's property, which backs up to an alligator-filled bayou. Now, 16 years after her struggling community took oil giant Exxon to court to stop the toxic discharge, little has changed. Even though the citizens of Grand Bois won the court case and helped change state laws, their battle against big oil continues.

In Louisiana, towns like this are the exception. The state is replete with communities that took on oil interests but failed to get energy companies to clean up their air, land and water.

Tangled with 83,000 miles of pipeline, home to the nation's largest oil refinery and an 85-mile corridor of petrochemical factories, Louisiana has sacrificed much in the name of oil, including part of the biologically rich wetlands that nourish its seafood industry and protect its cities from storms.

Friloux and others question what the state and its people have gained from that uncommon devotion.

Return to business

Louisiana's oil fealty has been a persistent backdrop to the drama sparked by BP's Gulf of Mexico well blowout April 20. With the well capped and slicks vanishing from the state's waters, Louisiana wants to get back to business. And by and large, that business is drilling.

The oil and gas industry bankrolls 14% of the state's budget through royalties and other fees, and its total economic impact, according to a 2007 industry-commissioned study, amounts to $70 billion, directly or indirectly supporting 320,000 jobs. People may argue over the industry's figures, but few disagree that energy jobs are dear to a state that otherwise struggles to create jobs.

Such numbers go a long way toward explaining Louisiana's evolving reaction to the BP blowout. State and local officials quickly condemned the federal government — not BP — for its response. Lately, they have insisted that the Obama administration's moratorium on deep-water drilling in the gulf will devastate the state's economy.

Jim Welsh, commissioner of conservation in the state Department of Natural Resources, is blunt about it: "We are an energy state; there's no doubt about it," he said. "This is what we do in this state."

Oliver Houck, professor of environmental law at Tulane University in New Orleans, called the industry's control over public dialogue "corrosive."

"You won't find any power center in Louisiana taking a critical stance on oil," Houck said. "It's simply not possible."

It did not surprise Friloux that the documented cases of skin rashes, burning eyes, respiratory problems and other illnesses that swept over Grand Bois' 300 residents in 1994 were met with official indifference.

"I said: 'Look, guys, these people are poisoning us. What can we do?' " Friloux said recently, sitting on her porch on a stiflingly muggy day and gazing at the waste pits across the road.

"What I found out is that people are scared," she said. "Oil and gas companies run Louisiana. Our politicians get their pockets lined. Sixty miles south of Bourbon Street and this is what's going on. No one would believe you. And it still goes on."

Since the blowout on the Deepwater Horizon rig, the world's attention has been trained on the waters 50 miles from Louisiana's coast. But a turn of 180 degrees shows the fuller footprint of a century of aggressive energy prospecting: stands of piney forests cleared to make way for gas fields and thousands of miles of wetlands converted into watery highways.

On a per-capita basis, Louisiana has the highest volume of toxic chemicals in the country. The energy infrastructure that followed the state's first gushing well in 1901 has transformed it into an industrial powerhouse, converting a stretch of the Mississippi River from Baton Rouge to New Orleans into "chemical alley." Some residents refer to it as "cancer alley."

Louisianans like to say they get their hands dirty for the rest of the country, and they are still rolling up their sleeves. The latest strike, the Haynesville Shale formation in Louisiana's northwest corner, is projected to become the nation's top-producing natural gas field, bringing in an estimated $150 million a year in tax revenue.

The process to uncouple gas from the deep shale, called hydraulic fracturing, is the same extraction method that left ranchers in Wyoming with tap water that could be ignited, stock ponds that sicken livestock and wells that became poisonous.

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