Blanco v. Burton: Louisiana's Struggle for Cooperative Federalism in Offshore Energy Development

AuthorPatrick B. Sanders
PositionProfessor patient guidance and to Amos J. Cormier III

Page 255

I Introduction: Hurricane Katrina Exposes Louisiana's Fragile Coastline

The day after Hurricane Katrina struck the coast of Louisiana, biologist Tommy Michot and geographer Chris Wells of the United States Geological Survey conducted a flight to photograph and assess the damage to Louisiana's coastland.1 Michot and Wells took aerial photographs of countless destroyed human structures, including almost all of the homes and camps on Grand Isle.2 The town of Venice, located just west of the Delta National Wildlife Refuge, was completely flooded, leaving lumber and dead vegetation washed up against the levee.3 The most dramatic impacts of Katrina were seen along the Chandeleur Islands, which served as an important habitat for wildlife and were the first line of hurricane defense for Louisiana's coastline. The land mass of those islands had been reduced by an astonishing fifty percent.4

Scientists with the U.S. Geological Survey believe about 100 square miles of marshland were destroyed and became open water as a result of Hurricanes Katrina and Rita.5 Since the early 1990s, the state has spent roughly a half billion dollars building rock barriers, planting marsh grasses, and diverting freshwater into lowlying areas damaged by salt water. Katrina and Rita erased all of that progress in an instant.6

Traditionally, the populace was averse to "environmental extremists."7 In fact, Governor Blanco was the self-proclaimed "oilPage 256 and gas governor."8 However, Hurricanes Katrina and Rita significantly shifted the paradigm of Louisiana politics. Katrina particularly demonstrated to the citizens of Louisiana just how dangerous the loss of a coastal buffer can be. Suddenly, protecting the environment was a central part of the conversation and an important factor in the region's long-term survival.

Thus, in light of Katrina's destruction, it was not surprising that Governor Blanco sued the United States Department of the Interior in Blanco v. Burton for their failure to cooperate with Louisiana in protecting its coastline in the months that followed.9 The Blanco lawsuit was precipitated by the federal government's decision to proceed with an oil and gas lease sale10 in the Gulf of Mexico within weeks of the two devastating hurricanes. The Department of the Interior dismissed Louisiana's environmental concerns associated with the lease sale, illustrating the friction between federal and state governments in balancing offshore energy development with environmental regulations.

The erosion of Louisiana's coastline and wetlands is a multi-faceted problem. The causes of erosion include, but are not limited to, the destruction from hurricanes, a levee system that interrupts the natural flooding process, wave erosion, and the natural sinking of marshland. Another significant factor having an impact on the State's coastline and wetlands is the expanding oil and gas industry. While the State has reaped economic benefit from offshore oil and gas production, it has also incurred tremendous infrastructure and environmental costs to make offshore production possible. Scott Angelle, Secretary of the Louisiana Department of Natural Resources, testified before Congress in June of 2006 that Louisiana has tens of billions of dollars of requirements to repair, rebuild, and maintain the infrastructure needs of roads, ports, flood protection, environmental damage from old practices of thePage 257 past, onshore disposal of offshore production wastes, and other infrastructure, including restoring protective coastal wetlands that are being lost at a rate of more than 24 square miles per year.11Approximately 200 acres of wetlands are lost per year due to human activities associated with the oil and gas industry.12 Inland and coastal dredging, the building of channels for navigation, oil and gas exploration, land reclamation projects, as well as the construction of ports, are all contributing factors to this loss.13

Some of the contributing factors of coastal erosion are not easily manageable by legislation or through the court system. Mother Nature controls the hurricane season, and a dramatic overhaul of the present levee system in the state is not financially feasible. However, one area where legislation can and has made a difference is offshore energy development. A balance is needed for Louisiana to continue to provide for the nation's energy needs while protecting its coastal environment. This balance can only be achieved through true cooperation between the federal and state agencies involved in oil and gas production.

Part II of this Note provides a historical context for a proper understanding of Blanco v. Burton. There has been an ongoing dispute between the federal government and coastal states over who has control of oil and gas production in the offshore area. This conflict concerns who will control drilling rights, who will benefit from them, and who will receive oil and gas royalties to finance environmental protections. Part III presents the facts and arguments of the case, including the findings of the court that the Department of the Interior failed to cooperate with Louisiana in the lease sale process and had disregarded environmental regulations. Part IV offers solutions for this multi-faceted environmental crisis by stressing the importance of cooperative federalism14 between federal and state governments. The judiciary is encouraged toPage 258 make a more effective use of the preliminary injunction to postpone lease sales once it is determined an agency has failed to follow environmental regulations. Finally, Congress is encouraged to enact further legislation requiring a sharing of offshore royalties with coastal states to finance environmental projects.

II Louisiana and the Tidelands Controversy: A Historical Perspective

The conflict between the federal government and coastal state governments over offshore energy development is often referred to as the Tidelands Oil Controversy.15 The friction occurs because both the federal government and the coastal states have a vested interest in offshore energy development. The federal interest includes an ever-increasing demand for a domestic supply of energy, preserving jobs in the oil industry, generating federal revenues, and reducing the trade deficit.16 Likewise, offshore energy development provides economic benefits to the coastal states, although they bear the brunt of adverse environmental impacts associated with such development.17

The Tidelands Oil Controversy particularly involves the states' share of money from federally controlled offshore oil and gas royalties. If Louisiana (or any coastal state, for that matter) is to finance a meaningful environmental program to protect its coastlines, it must share the revenues generated by offshore drilling and production.18 These royalties are the appropriate source of funds for addressing environmental needs since offshore oil and gas production and its related activities have significantly contributed to the destruction of the State's coastline. Because Louisiana's offshore drilling and production have provided oil and gas for the rest of the nation and billions of dollars to the federal treasury, the federal government has an obligation to mitigate the environmental impact to the state resulting from offshore energy development.

The United States Supreme Court confronted several related issues connected with the Tidelands Oil Controversy from the 1940s through the 1960s. The holdings from several of these casesPage 259 have directly impacted Louisiana and laid the groundwork for the confrontation arising in Blanco v. Burton.

A California I: The Federal Government Claims Dominion over Offshore Lands

In October 1945, President Harry Truman issued a proclamation that declared U.S. jurisdiction over "the natural resources of the subsoil and sea bed of the continental shelf beneath the high seas."19 Executive Order 9633 said the proclamation did not affect the federal-state controversy as it related "to the ownership or control of the subsoil and sea bed of the continental shelf within or outside of the three-mile limit."20The Truman Proclamation defined the controversy strictly as a domestic conflict between the federal and state governments, and not as an issue of defining national boundaries for international purposes.21

Federal or state ownership of the offshore area was particularly relevant when it pertained to oil and gas leases granted to oil companies. The owner of the sea bed in which the drilling took place would be the recipient of the subsequent oil and gas royalties. Between 1933 and 1937, the Department of the Interior received a number of mineral lease applications from oil companies seeking to drill offshore for oil and gas.22 The Department rejected all of these applications on the basis that states owned the submerged lands.23 However, in 1937, Secretary of the Interior Harold Ickes reversed this policy, announcing that the federal government...

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