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On Louisiana Coast, Damage From Oil Goes Much Deeper Than Spill

First Posted: 01/13/11 10:36 PM ET Updated: 05/25/11 07:25 PM ET

Gulf Oil Spill

Last summer's Deepwater Horizon disaster in the Gulf of Mexico -- the largest offshore oil spill in recorded history -- made the Gulf Coast states the poster children for the enormous environmental risks posed by energy production near their shores.

But while the BP spill was conspicuous, an even more profound wave of environmental destruction has been steadily battering the Gulf Coast with little public scrutiny for most of a century: Continuous oil and gas development has contributed to the disintegration of nearly 2,000 square miles of Louisiana's coastline -- an area larger than the state of Delaware -- making New Orleans far more vulnerable to the flooding inflicted by hurricanes that regularly roll in off the Gulf.

Pipelines and navigation channels meant to ferry oil and natural gas from the vast reservoirs beneath the Gulf have chiseled away at the natural landscape of Louisiana, degrading coastal forests, swamps and marshlands. Many scientists believe the weakening of this formerly protective layer of land enabled Hurricane Katrina to lay waste to key areas of the city.

"These are long term problems that make the effects of the oil spill, even in the worst-feared case, pale by comparison," said Donald Boesch, the president of the University of Maryland Center for Environmental Sciences who has studied coastal Louisiana and the Gulf for more than 30 years.

Yet despite the damage the oil and gas industry has imposed on Louisiana, the state has received only a minute fraction of the billions of dollars in royalties doled out by oil companies over the years in exchange for leasing the Gulf from the federal government. Instead, most of that money has landed in the coffers of the U.S. Treasury by dint of a decades-old disagreement over who controls the bounty of the sea -- the states, or the federal government?

Huge stakes hang in the balance: Offshore oil and gas revenues, primarily from the Gulf, have contributed more than $150 billion to the federal government's coffers since the 1950s, the second largest source of revenue behind taxes.

To be sure, Louisiana has seen significant economic benefits from the presence of the oil and gas industry -- not least, approximately 15 percent of household earnings, according to the state, and tax revenues and fees that contributed about 14 percent of the state's general fund. But state leaders argue that a lack of direct compensation via a slice of offshore energy royalties has left them with inadequate funds to restore lands that have been harmed through oil and gas extraction.

The damage has left southern Louisiana, and particularly New Orleans, acutely exposed to the anticipated effects of climate change. The city is widely considered the most vulnerable in North America to the impacts of rising seas.

By contrast, western states such as Wyoming, New Mexico, Colorado and Utah secured billions of dollars over the years as part of a deal that splits the royalties from oil and gas drilling straight down the middle between states and the federal government. In recent years, Louisiana has sought to redress this imbalance. Following the widespread floods inflicted by Hurricane Katrina, the state sued the branch of the federal Department of the Interior that regulates offshore oil and gas, seeking formal recognition of the environmental problems exacerbated by the industry.

The state argued that regulators were liable for having failed to calculate the devastating impact of Katrina and another storm the previous year, Hurricane Rita, as well as the damage wrought by the industry over the years.

The lawsuit prompted Congress to intervene and craft a compromise: States along the Gulf, including Louisiana, would receive 37.5 percent of the royalties from new offshore oil and gas in the Gulf, beginning in 2017. On leases established before 2006, the federal government would keep all the royalties.

But even when the cash begins flowing in six years, the amount of money that the Gulf Coast states will claim each year has been capped at $500 million. Estimates are that Louisiana would receive some $200 million of the money each year. That is only expected to cover a fraction of the mounting costs of building back the land that has been lost.

The current estimate for a slew of environmental restoration projects in southern Louisiana is upwards of $100 billion -- more than five times the cost of repairing levees damaged by Katrina. It would be the largest environmental remediation project ever undertaken by the U.S. government.

Yet despite the eye-catching price tag, the costs of doing nothing are estimated to be higher, leaving New Orleans and southern Louisiana exposed to the potential ravages of the next well-placed storm.

"The less work that nature does, the more work the Federal Emergency Management Agency (FEMA) will have to accomplish," stated a recent report on coastal collapse in Louisiana published by the Environmental Law Institute, penned by eight well-regarded natural resource economists and coastal scientists.

The coastal land at issue is now so degraded that nature alone will continue to carve away, with tidal action, rain, and wind eroding the remains, and Hurricane Rita making inroads into previously freshwater areas.

"Every day that you wait, your options get fewer," said Mark Davis, director of the Institute on Water Resources Law and Policy at Tulane University's Law School in New Orleans. "The costs of doing what you can go up dramatically. It's far easier to conserve an acre of marsh than it is to recreate it."

Numerous studies following Katrina have documented how the loss of coastal wetlands surrounding New Orleans was akin to removing speed bumps from a school zone: Waves and storm surges from hurricanes now wash in with greater force and velocity, encountering much less resistance before crashing into levees.

"In many places, restoring the wetlands or restoring estuaries is viewed as an enhancement, as simply icing on the cake," said Paul Harrison, who heads the coastal Louisiana restoration project for the Environmental Defense Fund. "But in Louisiana, it's absolutely critical to the continued existence of the economy and society. Louisiana is facing an existential crisis."

OIL AND WATER

In southern Louisiana, water and land are often indistinguishable. South and west of the New Orleans metro area, miles of swamps, coastal marshes and wetlands stretch in every direction until eventually giving way to the open Gulf of Mexico.

For thousands of years, the geography of this complex landscape has been shaped by the interactions of the mud-laden Mississippi River, carrying a continent's worth of sediment, and the ocean. It's the largest river delta in North America, and for years the system morphed and shifted as the river changed course.

But in the last century, human impacts have injected imbalance into the system, rendering the delta exposed to the force of the Gulf.

As oil exploration began in the early 1900s, companies needed access through the byzantine maze of bayous, lakes and bays that made up the Louisiana coast. Canals were dug straight through the wetlands to allow access to wells and to lay pipelines for conveyance.


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