Gambit > bestofneworleans.com > marcH 08 > 2011
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Gov. Bobby Jindal dips a fishing net into oil-stained water in Louisiana marshlands after the BP oil disaster. courtesy Louisiana governor’s office
which spent $153 million in 2010, brings hundreds of cases a year against leaky underground storage tanks. It also shuts illegal waste dumps and fines air polluters, including oil and gas refineries. Losco, which works on spill mitigation, has no authority to assess penalties. It prefers a “cooperative approach,” said David Gisclair, director of the agency’s technical assistance program. The agency said it has completed 10 of 23 cases it has undertaken since 1991. “Big fines don’t work,” Gisclair said. “The oil companies just fight them
in court and tie you up for years.” Thirteen spills were reported since 2002 at various facilities of Hilcorp Energy Co., Louisiana’s largest oil producer in 2009. Eleven of them came from small pipes known as flowlines, according to DEQ data. The data show the state agency hasn’t imposed a spill fine that stuck against the Houston-based independent oil company. The largest incident, in December 2002, totaled 1,000 barrels. It created what state enforcement documents called a “dead zone” in 7 acres of cypress forest in the Atchafalaya Basin about 130 miles west of New Orleans. While Hilcorp faced a penalty of as much as $32,500, it wasn’t fined, the records show. The company spent $2 million cleaning up the spill, reimbursed Louisiana $75,000 for the cost of assessing the environmental damage and last year agreed to restore a nearby section of swamp, according to Losco. Hilcorp also promised “a new aggressive flowline management program to prevent future flowline leaks,” according to a 2003 company letter to state regulators. The 12 other spills included three in an 11-day stretch in March 2006. Two of them involved less than a barrel and none exceeded 50 barrels. The DEQ moved to fine the company $1,000 for a September 2003 spill and $1,000 for another in September 2004, both of them for “unauthorized discharge of oilfield wastes,” DEQ documents say. The state rescinded both penalties in 2010. In the 2003 case, the DEQ ruled that a Hilcorp contractor had caused the spill. In the 2004 incident, the Louisiana State Police had also fined Hilcorp $1,000 for failing to promptly report a spill of hazardous material. “It’s our policy not to fine companies twice,” said Celena Cage, the DEQ’s
administrator for enforcement. Hilcorp didn’t respond to more than a half-dozen phone messages left at the office of Michael Schoch, whom the company identified as its regulatory, environmental and safety manager in a 2006 letter to the state. In 2009, state data show the company produced 7.9 million barrels of oil in Louisiana worth $490 million at the year’s average crude price of $61.99 a barrel. OIL AND GAS COMPANIES’ POLITICAL influence undermines regulatory efforts, said Foster Campbell, a former Democratic state senator who tried unsuccessfully to pass an oil transfer tax to replace the state’s 1920s-era severance tax. The industry employs 50,000 people. The state general fund’s receipts from oil and gas severance taxes, royalties and fees totaled $1.3 billion last year, about 15 percent of revenue. That’s down from a peak of $1.6 billion in 1982, when oil and gas receipts accounted for 42 percent of the state’s revenue. “Our record of regulating oil and gas is dismal,” says Campbell, now a member of the Louisiana Public Service Commission. “Down here, nobody wants to punish anybody.” From 1982 to 1997, Kerry St. Pe recommended fines in “hundreds and hundreds of cases” as a DEQ inspector in southeastern Louisiana, he says. “But in terms of actual penalties that were levied based on my investigations, I can count them on one hand,” said St. Pe, 60, a marine biologist who now heads the Barataria-Terrebonne National Estuary Program in southeastern Louisiana. He said the main reason was “political pressure to the contrary,” which he described as a sense that vigorous enforcement in the field was being discouraged in Baton Rouge. “When oil companies see it’s cheaper to pollute than to prevent spills, it creates a culture of noncompliance,” St. Pe said. The DEQ won’t respond to St. Pe’s comments, said Tim Beckstrom, a spokesman for the agency. The regulator’s field agents today have no more effect in imposing fines than St. Pe did, according to a person with long, direct knowledge of the current DEQ inspection system who declined to be identified because his employer didn’t authorize the comments. The person said spill cases sent to DEQ headquarters can languish for years without action. State field agents, frustrated by inaction from their supervisors, sometimes tip off federal regulators about incidents, the person said.