Jim Brown on the Louisiana

Thursday, May 27th, 2010

Venice, Louisiana

DID LOUISIANA MAKE A DEAL WITH

THE DEVIL OVER OIL?

The blame game is in full force as the Gulf catastrophe oil spill continues to directly attach the Louisiana coast. BP, the giant British corporation that drilled the defective well, is taking the blunt of everyone’s criticism. But BP is throwing off the blame to a list of their subcontractors who actually did the physical drilling. Then the state of Louisiana is lobbing blame at the Obama administration including the Department of the Interior and the Coast Guard. Interior Secretary Ken Salazar seems to be having hourly press conferences saying how he is “keeping my foot on the neck of BP.”

No one really knows who is in charge. A national consensus is brewing that the federal government should be calling all the shots. But the Obama team seems to be bull headedly insisting that the sole responsibility is on the shoulders of BP. What is becoming more and more obvious is that there was virtually no advance planning for such a spill, and the feds just don’t know what to do. So their reluctance to “take charge,” when they know quite well that they will be immediately in over their heads, is not at all enticing.

Times Picayune outdoors Editor Bob Marshall put the blame on the backs of Louisiana’s elected officials, saying they became boosters for development, not protectors of the public trust. “The shock being expressed by these folks – and many of their constituents – at the terrible environmental gamble that comes with offshore drilling goes beyond preaching caution after the horse is out of the barn. After all, these same groups helped open the barn door, hung a feed bucket around the horse’s neck, and then gave it a good slap on the rump to speed it on its way.”

Yes, there is plenty of blame to go around. But maybe it goes beyond just the feds, the Louisiana congressional delegation, and other public officials. The state as a whole just might want to take a look in the mirror. Louisiana was seduced by an outside industry full of vast economic promises. The money came in easily and there can be no dispute that many new jobs were created. But when you put the financial tally to paper, has it been worth it?

A number of Louisiana politicians, including Gov. Huey Long in the 1930s and Plaquemines Parish dictator Leander Perez in the 1950s, made off like bandits by creating family controlled corporations and awarding themselves public oil leases that made them hundreds of millions of dollars. Oil company campaign cash has flowed into state and local political campaigns for decades.

Perez was particularly aloof from the public interest when he used his political clout to blackmail then Governor Earl Long back in the late 1940s to reject a federal-state split of off shore oil. President Truman forged a compromise on the federal –state land dispute by offering Louisiana two thirds
of all off shore oil out to a three mile boundary, then one third of all production from that point on out into the Gulf. Perez opposed the deal as his “vested interest” made him greedy, and Louisiana ended up receiving not one penny after a protracted battle all the way up to the U.S. Supreme Court. The failure to take this settlement has cost Louisiana, by several studies, more than $500 billion (that’s billon with a “b”) in lost revenue.

There still has been a continuing flow of oil money that has filled the Louisiana state treasury. Back in the early 70s when I was first elected to the Louisiana senate, 40% of the state’s budget came from oil and gas royalties. This year, some $1.5 billon is budgeted from oil and gas income, but the state budget has grown to $30 billion. So the mineral income is a diminishing return. And oil company executives have all but abandoned Louisiana. There is no major oil company headquarters located in Louisiana, though a large part of company production comes from the state.

But what about the environmental damage left behind? Numerous oil pits and petroleum waste dumps criss-cross the state, with a maze of corporations making it often impossible to determine who caused the damage. Pipelines have made hundreds of miles of cuts through the south Louisiana marsh that has caused a football field loss of Louisiana land into the Gulf every day. The continuing coastal erosion, caused by oil production, has dramatically weakened the wetlands hurricane protection system. And the present Gulf oil spill looks to undercut the $3 billion sea food industry for decades.

Professor Steven Picou, who teaches at the University of South Alabama and studies the social cost of disasters, says there will be intangible effects on the “human condition” of many residents of South Louisiana. This could well be more devastating than the more highly visible ecological impacts. He points to the Exxon Valdez Alaskan disaster where there have been mental and sociological problems for these coastal communities for decades after the spill.

“Residents of the small fishing communities and the native villages in Prince William Sound witnessed increases in divorces, domestic violence, alcoholism, drug addiction, and suicide. Surveys documented widespread depression, symptoms of post-traumatic stress disorder, income loss spiral and a continuing sense of helplessness as the litigation over the spill continued for 20 years.”

(Note: Dr. Picou will be a guest on my syndicated national radio program this Sunday morning, May 30th, at 9:30 am. To listen live, go to http://www.jimbrownusa.com. )

History shows that Louisiana was in the economic doldrums with a number of southern states before the advent of oil. Other gulf states, which have jumped ahead of Louisiana in a number of economic and environmental measurements, had to create new jobs with the limited resources at hand. These states with no minerals took the approach that their oil and gas was in the heads of their students. That’s why universities in surrounding states like Alabama, Georgia, Florida, and the Carolinas are ranked considerably ahead of Louisiana’s academic institutions. They had to use their brain power. But in Louisiana, it was oil.

Remember the movie Thunder Bay? Jimmy Stewart plays an oil wildcatter who discovers oil in the Gulf. When the locals rise up in arms, Stewart makes no bones about what they face. “There’s oil under this Gulf. We need it. Everybody needs it. Without oil, this country of ours would stop and start to die. And you would die. You die,” he tells the crowd. “You can’t stop progress. Nobody can.”

Stewart might have been right, but history tells us time and time again that with resources and power, there is responsibility. Did Louisiana accept the riches of the land, but fail to demand that those who set the rules, those who govern, be good stewards of these bountiful resources? Or did the state just stand by, pocket the money, and demand little in protection and environmental accountability?

King Lear addressed such a duty as he prepared to die. “Poor naked wretches, wheresoever you are,
that bide the pelting of this pitiless storm, How shall your houseless heads and unfed sides, Your loop’d and window’d raggedness, defend you from seasons such as these? O! I have ta’en too little care of this.”

Too little care. That might be a good epitaph to put on a large banner at the mouth of the Mississippi river. It may not be completely fair to call it a deal with the devil. But you have to take the bad with the good. The bucks have been rolling in for years. And now it’s payback time. So as the blame game and finger pointing continue, there is plenty of fault to go around.

*****

Modern technology
Owes ecology
An apology
.
~Alan M. Eddison

 

Peace and Justice

Jim Brown

Jim Brown’s syndicated column appears each week in numerous newspapers and websites throughout the South. You can read all is past columns and see continuing updates at www.jimbrownla.com. You can also hear Jim’s nationally syndicated radio show each Sunday morning from 9 am till 11:00 am central time on the Genesis Radio Network, with a live stream at http://www.jimbrownusa.com.

2 thoughts on “Jim Brown on the Louisiana”

  1. At the end of World War II, an agreement was reached at the Bretton Woods Conference which pegged the value of gold at US$35 per ounce and that became the international standard against which currency was measured. But in 1971, US President Richard Nixon took the US$ off the gold standard and ever since the US$ has been the most important global monetary instrument, and only the United States can produce them.
    The fear of the consequences of a weaker US$, particularly higher oil prices is seen as underlying and explaining many aspects of the US foreign policy, including the Iraq and Libyan War. The reality is that the value of the US$ is determined by the fact that oil is sold in US$. If the denomination changes to another currency, such as the euro, many countries would sell US$and cause the banks to shift their reserves, as they would no longer need US$ to buy oil. This would thus weaken the US$ relative to the euro. A leading motive of the US in the Iraq war — perhaps the fundamental underlying motive, even more than the control of the oil itself — is an attempt to preserve the US$ as the leading oil trading currency. Since it is the USA that prints the US$, they control the flow of oil. Period. When oil is denominated in US$ through US state action and the US$ is the only fiat currency for trading in oil, an argument can be made that the USA essentially owns the world’s oil for free.
    So long as almost three quarter of world trade is done in US$, the US$ is the currency which central banks accumulate as reserves. But central banks, whether China or Japan or Brazil or Russia, do not simply stack US$ in their vaults. Currencies have one advantage over gold. A central bank can use it to buy the state bonds of the issuer, the USA. Most countries around the world are forced to control trade deficits or face currency collapse. Not the USA. This is because of the US$ reserve currency role. And the underpinning of the reserve role is the petrodollar. Every nation needs to get US$ to import oil, some more than others. This means their trade targets US$ countries.
    Because oil is an essential commodity for every nation, the Petrodollar system, which exists to the present, demands the buildup of huge trade surpluses in order to accumulate US$ surpluses. This is the case for every country but one

  2. Ecologically speaking I often wonder why , when the SuperDome was being re-roofed after Katrina there were no solar panels installed. Ditto on the Arena. The amount of sunlight power on those two buildings would be sufficient to run the buildings in the event of an outage not to mention sufficient to ‘sell back’ to the Energy Companies…could that be why no ‘greening’ of the buildings occurred? And the water run-off from storms and rains could easily be used to flush toilets, water plantings, water cool the facades…why not?

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