Democratic Louisiana flag
Volume 1, Number 19
By Democrats For Democrats
June 15, 2010
Welcome back to Democratic Louisiana!

The six-month moratorium on deep water drilling is the right decision in response to a catastrophe that is still developing in the Gulf of Mexico.

The state's political elite cannot bring itself to recognize how the BP Gulf Gusher has fundamentally changed life and politics in Louisiana. They keep kowtowing to the industry that is killing our wetlands, our seafood industry, our way of life along the coast. They could get by with that subservience when the wetlands were slowly sinking into the Gulf — at least some of the blame fell on the Corps of Engineers for building levees along the Mississippi to prevent flooding.

The BP Gulf Gusher continues unabated. It is in our faces, in our newspapers, on our various screens, gushing away despite the best efforts of the best minds in the energy industry. The very clear message of the past 57 days is that the oil and gas industry does not have a handle on dealing with catastrophic failures of equipment in the deep water environment. Those who argue for an immediate end to the moratorium are arguing to let more BP Gulf Gushers bloom.

Louisiana can't afford that. The job losses — to whatever degree they occur — will be painful, but the damage to our fishing industry is painful. The damage to our coast and wetlands is painful. The damage to the communities and cultures along our coast that were based on working the wetlands and the Gulf for seafood is painful.

The gusher continues unabated. Work is proceding on relief wells that might cap the blowout in August. But, if that does not go as scheduled (and nothing appears to have gone according to schedule yet), when does protecting the coast become as valuable as protecting those oilfied jobs?

Louisiana's political elite continues to act as though nothing has changed, that the BP Gulf Gusher is the price we accepted all along for gaining access to the jobs and revenue derived from oil and gas exploration. This disaster has driven home the stark terms of our deal with the devil and many of our citizens are experiencing buyer's revulsion. The world has changed. Only Louisiana's political elite have not.

Here's the link to the archive page.

Thanks for reading!

Mike Stagg, Editor

Democratic Louisiana

Obama, Democrats want BP escrow fund for spill damage

President Obama is prepared to compel BP executives to set up a multibillion-dollar escrow account to pay damage claims in the region, according to the Los Angeles Times.

The paper said that the Obama administration could use its legal authority under the federal oil pollution act — the landmark legislation passed a year after the 1989 Exxon Valdez spill —- to force BP to set up such a fund to cover damages that are likely to be astronomical and could prove to be a burden even for BP, which posted a $6.1-billion profit last quarter.

In a letter to BP Chief Executive Tony Hayward on Sunday, 54 senators, nearly the entire Democratic caucus, called on the company to set aside $20 billion for cleanup and damages, to be administered by an independent trustee.

Before meeting with BP executives Wednesday, the president traveled to the gulf on Monday for his fourth visit since the Deepwater Horizon drilling rig exploded April 20, killing 11 men and starting what has become the largest oil spill in U.S. history. Tonight, the president plans to deliver a nationwide address on the spill and the government's response.

On Friday, federal officials said that number barrels of oil gushing into the Gulf of Mexico is about 40 times more than BP's original estimate of 1,000 barrels per day.

The LA Times' Greenspae blog has good links to stories related to the ongoing disaster.

McClatchy News' main Gulf disaster page is here.

Gannett's coverage of the disaster can be found here.

The Times-Picayune coverage of the BP disaster can be found here.

The Houston Chronicle's coverage of the disaster is here.

The BP Gulf Gusher hit day 57 today. Somewhere between 40 million and 55 million gallons of oil have blown from the floor of the Gulf of Mexico since the well blew out on April 20 and relief is at least six weeks away.

Tens of millions more gallons of oil will have gushed by the time relief wells are completed in August. If the relief wells work, the end of the beginning of this nightmare might be over. BP's record of predicting when they will get this well under control is almost as shoddy as its safety record for North American operations in recent years.

There are doubts within the industry that the relief wells themselves will work in putting an end to the flow of oil into the Gulf of Mexico.

Louisiana political and business leaders are working more frantically to bring an end to the six-month moratorium on deep water drilling ordered by President Obama than they are to protect Louisiana's coast.

Governor Jindal led a pep rally in Houma and called the White House to urge an end to the moratorium.

Senator David Vitter (John DC/LA) wrote a letter to Department of the Interior Secretary Ken Salazar calling for an end to the moratorium — ooops! No, this letter to the White House is the one I meant to link to (sorry!).

Senator Mary Landrieu questioned Salazar about why the moratorium was ordered when his panel of experts convened in the wake of the blowout did not recommend it.

Newly minted interim Lieutenant Governor Scott Angelle blasted the President claiming the moratorium was based on his dislike of the industry when Angelle launched a PR effort to gin up state support for an end to the ban (or is this another Jindal fund-raising effort by Angelle while on public duty?).

Attorney General Buddy Caldwell criticized the moratorium during a presentation to a joint session of the Legislature on Tuesday (but it did not help him get approval to direct legal work to his contributors the best legal minds he could find to sue BP). And, of course, the Louisiana House of Representatives took a position, as well.

At the core of the issue for those politicians is the fact that the moratorium will cost offshore service jobs. Just how many is subject to debate and the industry is playing it cute, saying they'll wait a month before deciding what to do. Interestingly, other governments are taking a tougher line on environmental and safety requirements as the disaster in the Gulf continues to unfold.

The fact that the affected companies include some of the state's largest political contributors in what has become the state's zone of the deepest political pockets (think the Bollingers and Chouests for starters) and it is easy to see why Louisiana politicians are clamoring for an end to this moratorium.

Money affecting politics? In Louisiana? Nah!

Beyond Politics

To hear his Louisiana critics, President Obama decided to impose the deep water drilling moratorium without considering the economic impact of the decision on Louisiana. That was not the case and, in fact, he made that clear in appearances in Louisiana last week. He also made it clear through a proposal to have BP pick up the tab for those oil workers laid off as a result of the moratorium.

One undeniable fact in the Gulf of Mexico is that the well on the floor of the Gulf that was once drilled by the Deepwater horizon continues spewing very large amounts of oil into the water, just as it has done for the past 56 days.

It has done this despite the best efforts of BP and all of the major players oil and gas industry to get this well capped and the flow of oil staunched.

As we see every day, nothing has worked.

Since the scope of the problem has been recognized, BP's peers have been providing the company engineering and technical assistance because they recognize that this blowout is a problem for the entire deep water drilling industry. Royal Dutch Shell is lending expertise. Chevron is helping BP. Exxon-Mobil is helping.

They are all helping BP because they see this disaster for what it is: a threat to the future of the deep water drilling industry.

And while there are those in state government and the industry parroting figures about how many thousands of wells have been drilled offshore over the years without any accidents, the Deepwater Horizon incident, the resulting gusher, and the so-far-futile attempts to stop that gusher prove conclusively that deep water drilling presents a much higher degree of difficulty than drilling in shallow waters.

Click here to read the rest of "How Much Oil Must Be Spilt?"

The Ethics Governor's™ Best Berm Buddy Has Legal, Ethics Woes

The only man competing with Bobby Jindal for air time and national attention in the nearly two months since the Deepwater Horizon blew up and oil started gushing from the floor of the Gulf has run afoul of state and local laws and the state ethics code. The Times-Picayune has the story here.

According to the TP, the Legislative Auditor says Plaquemine Parish President and Jindal's Chief Berm Advisor Billy Nungesser, "may have violated the parish charter and local law when he independently entered into two hurricane recovery contracts in early 2007 without securing the parish council's approval, according to a legislative audit report."

In addition, the report identified three other potential legal and ethical violations by Nungesser's administration, including the hiring of a parish attorney without properly notifying the council; a decision to exclude certain Federal Emergency Management Agency grants from the parish's budget; and a possible state ethics violation by Nungesser.

Well, if not everyman a king, maybe every Plaquemines Parish president a kingmaker will have to do. Not that Jindal needed any help, mind you, but Nungesser's berm idea rescued Jindal from the brackish waters of near national Republican obscurity.

Jindal and Nungesser had an obsessive passion for in their idea matched only by their refusal to submit it to any kind of critical review. When Admiral Thad Allen recommended approval of a limited version of the plan, one got the sense that he did that in the hope that neither Jindal's nor Nungesser's head would explode.

Now, Nungesser has come acropper of ethics, of all things. It will be interesting to see if Jindal dumps Nungesser like a bag of David Vitter's phone records, or if the Governor shows a bit of loyalty for the able-bodied assist that Nungesser has given to Jindal's national political prospects (yes, compared to Haley Barbour of Mississippi, Jindal looks engaged).

Those who watch the Governor say that he probably won't be able to recall Nungesser's face or name by July 1.

If Nungesser's troubles mount, Jindal will have met the residency requirement that would enable him to seek the Plaqeumines parish presidency in 2011. Hey, the bumperstickers just said "Jindal for President" — they didn't say president of what!

Playing Chicken with Kamikazes

With a week left in the current session and 15 days left in the fiscal year, the Finance Committee of the Louisiana Senate will begin working today on the two budget the state currently has in play.

The current fiscal year budget is somewhere between $300 million and $600 million in the red which would constitute a violation of the state constitution if the state ended the year with that balance outstanding. The Speaker of the House, Jim Tucker, last week refused to accept the latest findings on the deficit in his role as a member of the state's Revenue Estimating Committee. Without unanimous recognition of the deficit by that committee the new deficit numbers ($581 million and counting) cannot be officially considered by either the House or the Senate.

Tucker's refusal to recognized the new deficit numbers come on the heel of his refusal to recognize the so-called Rainy Day Fund dollars because no one outside of the House agrees with his interpretation of how quickly the funds need to be replace once they are borrowed. Tucker maintains that the funds, if used for the current fiscal year, would need to be replaced in the next fiscal year which begins July 1.

Tucker and his favorite Democrat, House Appropriations Chairman Jim Fannin, engaged in some legislative slight of hand last week to try to get their way with the Rainy Day Fund payback rules.

Senate President Joel Chaisson, Senate Finance Committee Chair Mike Michot and others claim the payback can be spread out over time so as to allow state finances to recover from the conditions that required the funds to be used in the first place.

So, when the Finance Committee begins its work today, it will do so dealing with the full $581 million deficit of the current fiscal year then move onto the essentially worthless 2011-12 budget — made so because the revenue estimates upon which it is based are so unreliable.

Michot and company will try to appear as the responsible parties in the Legislature — the grown ups in the room, so to speak. Clearly, the Senate does not want to make the cuts included in the House version of the budget which stripped $319 million from state programs, primarily cutting higher education and heathcare and directing the Division of Administration to make almost $70 million in cuts at its discretion among the agencies and departments it controls.

This battle over the budget between the House and Senate is not new, some variation of it happens every year. What makes this year different is the size of the budget deficit in the current year and the anticipated size of the deficit for next year, coupled with a rising sense among conservatives in the House that this is the opportunity they've longed for to make drastic changes in state government.

What the conservatives view as a historic opportunity strikes many people as a wrong-headed leap into the abyss that will reduce state spending in the short term at the cost of wreaking significant human suffering not only on those who are dependent on state services like healthcare but also on the thousands of state workers who deliver those services.

If oilfield jobs are worth saving why aren't the jobs of state workers? If the loss of a few thousand oilfield jobs due to the deep water driling moratorium will adversely impact state and local economies, won't the loss of a similar number of state employee jobs due to budget cuts have a similar negative impact?

In the past, Senators like Michot and Chaisson could count on a majority of the House members coming around to a more reasonable budget perspective at crunch time. As they say in the business prospectus, past performance may not be an indicator of future behavior. The Kamikazes run the House now. The budget cuts included in HB-1 were easy for them to make because they foresee more of this coming next year. They are just getting warmed up.

The Senators looking for reasonable negotiating partners on the House side are going to find them in as short supply as BP Gulf Gusher optimists. The wreck that is coming will not be an accident. Anyone see (or even mention) the governor?

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