News & Politics  
comments_image Comments

How BP, Big Oil and the Feds Screw Louisiana to Bring You Cheap Gas

The waters off Louisiana produce more oil than anywhere else in the nation. So why is it the second poorest state?
 
 
Share
 
 
 

The first time I saw New Orleans, it was an empty city, save for the National Guard troops and Blackwater mercenaries patrolling the storm-ravaged streets. It was September 16, 2005, a little more than two weeks after the winds of Hurricane Katrina pushed the waters of the Gulf of Mexico up into the heart of the city via the Mississippi Gulf River Outlet, where they met the contents of the Industrial Canal in a fatal mix, overtopping the levees that were all that stood between the waterway and the death by drowning of the city's storied Ninth Ward.

The stench of rotting things pervaded the abandoned streets, which were coated in a powdery residue of salt, left behind when the Gulf waters receded back into the drink.

It was abundantly clear that the nation had failed the city, under the leadership of a president who at one time fancied himself to be an oilman. What I didn't know was that the disaster set in motion by the hurricane, which itself had bypassed the city, was ultimately caused by our nation's greed for oil.

Oil and Water

While Big Oil didn't create Hurricane Katrina (unless you factor in the possible role of global climate change in the creation of Katrina), it was the alteration of the New Orleans landscape at the behest of petroleum giants that caused the city's destruction during the 2005 storm.

Oil exploration off Louisiana's coast began in the 1940s, and was in full swing by the 1950s. In 1962, the federal government leased a large swath of underwater land in the Gulf for oil exploration, claiming jurisdiction over portions of the oil-rich Gulf that lay beyond the three-mile offshore limit allowed the state of Louisiana for its own control.

"Oil companies acquired almost 2 million acres of new leases, much of them in unprecedented water depths (the average water depth of leases in the 1962 sale was 125 feet, compared to 67 feet in 1954-1955 and 89 feet in 1960)," according to a 2004 report (PDF) by the Department of Interior's Mineral Management Services. By 1963, 90 drilling operations were in progress, according to the report, and the industry was, by one estimate, spending $1 million a day for drilling, a princely sum at that time. (Today, more than 27 million acres of the Outer Continental Shelf off Louisiana's shores are under lease for drilling.)

In 1965, at the urging of the companies excavating oil and petrochemicals in the Gulf of Mexico, the U.S. Army Corps of Engineers built the Mississippi River Gulf Outlet (abbreviated as MR-GO, and known colloquially as "Mr. Go"), a broad waterway that provided a shortcut between the Gulf and the ports of New Orleans, allowing large tankers to avoid the twists and turns of the Mississippi River. At 76 miles long, the building of MR-GO was "a larger dirt-moving project than the Panama Canal," according to Joby Warrick and Michael Grunwald of the Washington Post.

What Corps engineers called Mr. Go climatologists named Hurricane Highway -- a perfect conduit for a storm surge. If you were looking to engineer the flooding of New Orleans during a storm, you would have designed MR-GO.

It was a tragedy predicted by scientists, and compounded by the fact that MR-GO, as an avenue of commerce, was essentially a bust, little traveled in the last three decades by its intended clients.

For years before Katrina's winds destroyed much of New Orleans, environmentalists -- and the editorial board of the city's paper of record, the Times-Picayune -- called for the closure of MR-GO. Three months before the storm, Hassan Mashriqui, then a researcher with the Louisiana State University Hurricane Center, announced that MR-GO could amplify storm surges by 20 to 40 percent, according to the Post. And that's exactly what happened.

Environmentalists had long advocated MR-GO's closure, citing the detrimental environmental effect of the waterway, which caused devastating levels of erosion and the destruction of marshes and estuaries. The giant canal released salt water from the Gulf into the city's freshwater marshes -- marshes that protect the city from flooding during storms -- killing many of them. MR-GO was decommissioned and dammed last year, but it still remains an environmental hazard.

Oil and Deep Water

Barely a year after the paint on the "MR-GO IS GONE" signs dried, BP's Deepwater Horizon rig exploded in April, unleashing another environmental horror on Louisiana.

On Thursday, according to Allen Powell II of the Times-Picayune, black oil with the consistency of cake batter was reported for the first time in Barataria Bay, near Grand Isle, which is part of Jefferson Parish. "It's no longer sheen or tar balls," [Jefferson Parish Councilman Chris] Roberts said Thursday evening, Powell reported. "It is thick black cake-mix type oil."

Fishermen hired by BP to help contain the oil are becoming sick from exposure to the oil and dispersants.

The Washington Post's Rob Stein reports that nine workers were hospitalized last week after complaining of nausea and dizziness, but the long-term repercussions could be far worse:

"There's no way you can be working in that toxic soup without getting exposures," Hugh Kaufman, a senior policy analyst at the EPA's office of solid waste and emergency response, said during an interview Thursday. He likened the response to previous toxic waste disasters and the World Trade Center cleanup, which left workers with long-term respiratory problems despite repeated official claims that workers did not need respirators because the working conditions were safe. "It's unbelievable what's going on. It's like deja vu all over again," he said.

Long-term exposure to the chemical mix churning through the Gulf could lead to disorders of the nervous system, as well.

As the oil makes its way to shore, there's no telling how the toxic winds that brought it, and the poisoned swamps left in its wake will affect the health of the people of the Gulf Coast. The health of Louisianans already ranks dead last in the nation among the states, and along the coast, it's about to sink even lower.

The Louisiana death toll for Hurricane Katrina varies according to how you measure it, but it's safe to say that more than 1,000 people died in the storm, and likely many more.

Mental illness continues to be a major problem in post-Katrina New Orleans, and the stress experienced by residents who endured the storm but lost everything -- including access to medical services -- is doubtlessly taking its toll in the form of stress-exacerbated illnesses, such as heart disease and hypertension.

How many more thousands will suffer in the years to come from the BP spill, the largest environmental disaster the U.S. has ever known? No one knows, but you can bet that from upticks in the incidence of respiratory disease to an increase in mental illness, the people of the Gulf will experience all of it, and likely endure infirmities as a result of this disaster that we have yet to imagine.

Show Them the Money

Louisiana, according to the Web site of the Louisiana Mid-Continent Oil and Gas Association, is the third largest producer of crude and the second largest producer of natural gas, if you include the federally administered leases in the Gulf of Mexico, off Louisiana's shore. Add its oil production to its refining operations, and you'll find that Louisiana either refines and/or produces one-fifth of the nation's oil, according to Timothy J. Haney, a professor of sociology at Mount Royal University in Calgary.

Writing for Truthout of the environmental debt owed Louisiana by the rest of the nation, Haney, a former New Orleans resident, makes the point that if Louisiana were an independent nation, its oil riches would render it a very wealthy one indeed. Instead, Louisiana has more residents living under the poverty level than any other state except Mississippi, its neighbor on the Gulf. Yet in terms of its gross domestic product, Louisiana ranks ahead of Connecticut, which is the nation's third wealthiest state.

The poverty of Louisiana's people and the paucity of its coffers are due in part to the fact that Louisiana, unlike a number of other oil-excavating states, receives no revenues for most of the oil extracted just off its shores; those undersea wells are claimed by the federal government, which in turn claims the riches, the royalties, from the leases of the seabed to such oil giants as BP. More revenues would mean more money, say, for education, a critical element in creating a diverse economy. According to the National Center for Educational Statistics, Connecticut ranks fourth in the nation in its per capita elementary and secondary education spending, while Louisiana ranks 38th.

In 2006, Congress passed a law that will allow Louisiana to claim revenues from those rigs, but the measure doesn't kick in until 2017. In the meantime, Louisiana is left to struggle with inadequate resources against disasters as monumental as the flooding wrought by Hurricane Katrina at the invitation of Mr. Go, and the explosion of BP's Deepwater Horizon oil rig.

Adding insult to injury is the disaster-industrial-complex that grew in the aftermath of Katrina, whereby outsiders were brought in to clean up and rebuild, while native Louisianans were left to idly wallow in their own devastation. Louisianans fear the same will happen with the cleanup of the BP spill, even as those who once earned their living fishing are deprived of their livelihoods.

Even so, you won't hear many Louisianans bad-mouthing the oil industry. The state's economy is utterly dependent on the petroleum giants for jobs directly tied to the industry, and the economies of services that spring up around dominant industries in any region.

For the people of Louisiana, the oil industry is the company store -- the only game in town for the fundamentals of economic survival. According to the Louisiana Mid-Continent Oil and Gas Association, the petroleum industry accounts for $65 billion of Louisiana's economy. Compare that to the $2.4 billion brought in by fishing, and oil wins, hands down.

If the destruction of wildlife, livelihoods and, indeed, cultures wrought by the explosion of BP's Deepwater Horizon were the only price paid by Louisianans for our nation's petroleum jones, that would certainly be too much. But the cost borne by the people of the Gulf Coast today is but one installment in a long string of assaults by the oil barons on some of the nation's most distinctive landscapes and some of its oldest cultures.

While Americans pay about $3 per gallon for gasoline, the actual cost for each of those gallons -- costs measured in environmental destruction, illness, military protection for supply lines, and the clean-up of "natural" disasters resulting from climate change -- is around $15 per gallon, according Lester Brown, author of Plan B 3.0: Mobilizing To Save Civilization, as cited by Haney in his Truthout piece.

A good bit of that cost is carried by the people of Louisiana.

Louisiana as a Modern-Day Colony

To the rest of America, Louisiana is a little bit strange, and a good bit foreign. Its Creole, Cajun and African-American cultures are among America's oldest, after the American Indians; their English is laced with words heard nowhere outside the region and their cuisine is unique.

Then there's the music. Infused with the rhythms of West Africa combined with the instruments of Europe, New Orleans music, be it jazz, rock, blues or pop, has a sound all its own.

When I returned to New Orleans in 2006 on the one-year anniversary of Katrina, Cyril Neville, the virtuoso percussionist of the Neville Brothers, explained it to me like this: the rest of America, he said, "they don't see us as part of the same country." In fact, he posited, New Orleans is functionally "the northernmost port of the Caribbean." Indeed, New Orleans and the surrounding Gulf Coast share more culturally with the nations of the Caribbean than, say, with the states of New England or the Midwest, or even a southern state like Virginia.

Louisiana once had a shot at claiming a share of oil revenues from the Gulf of Mexico, in a compromise that House Speaker Sam Rayburn, D-Tex., tried to broker in 1949. But Leander Perez, the local Democratic Party boss of Louisiana's Placquemines and St. Bernard Parishes (and a segregationist), would have none of it, seeing how his representation of the compromise as a grab by the federal government played to his personal and political fortunes. In alliance with a similarly minded Texas attorney general, Perez succeeded in scuttling the deal, leaving Louisiana with nothing.

I recount all this in an effort to work out why a region so loaded with riches is deprived of its share in them. It's hard to imagine that happening off the northeast U.S. coast; there the oil barons and the federal government would never get away such a rape of entire cultures and their natural legacy.

But more than any other port in America, New Orleans exemplified the commodification of people and nature's bounty that was the engine of the colonial system. There, the riches of the Caribbean -- rum and sugar -- were traded alongside those of the American South -- cotton, rice and tobacco.

And there the nation's largest slave market thrived, selling people fresh off the ships from Africa, or just off the plantation.

The truth is, the everyday, regular people of Louisiana are used to being treated like crap. African Americans and American Indians there always faced great peril; the white Cajuns arrived as refugees from Canada in the 1760s, and their distinctive culture and language (and their dedicated preservation of it) still sometimes renders them suspect in the minds of non-Cajun whites. (It's bad enough that they insist on speaking French, but it's not even regular French.)

Yet Louisiana is fantastically American. Much of the music that screams "America" to the rest of the world was born thereabouts: jazz, blues and rock ‘n' roll. As an economic engine for the place the United States occupies in the world's economy, the Port of New Orleans played an historic role. And Louisiana today supplies a mighty portion of the oil and gas that fuels America.

On the eve of President Obama's first visit to the Gulf Coast last week to examine the destruction wrought by BP's deep-water well explosion, the editorial board of the New Orleans Times-Picayune pleaded its state's case, arguing, "We can't wait till 2017 for the resources we need to save our imperiled coast. We and other oil-producing coastal states must start getting the 37.5 percent share of oil and gas royalties from new drilling in the Gulf now. Not seven years in the future. Not when it's too late and there's nothing left to save." They continued:

Twice in the past five years, Louisiana has been knocked to its knees by disasters rooted in the quest for oil. Our bill has come due.

Adele M. Stan is AlterNet's Washington bureau chief.