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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?

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.