State Officials Testify Before Presidential Oil Spill Commission
Lieutenant Governor Scott Angelle, Coastal Protection and Restoration Authority member, author and historian John Barry and Coastal Protection and Restoration Authority Chair Garret Graves were invited to testify before the National Oil Spill Commission yesterday in Washington, DC.
Their statements regarding the oil spill and the restoration and recovery of coastal Louisiana communities are posted below and posted on the CPRA website:
Lieutenant Governor Scott Angelle
Good Morning Senator Graham and Administrator Reilly, and distinguished members of the Commission. Thank you for your public service to the American people during these challenging times.
I bring greetings to you from Governor Jindal and the men and women of Louisiana who have been working for the past 162 days to restore our way of life on the Gulf coast. I realize you have robust agenda today, so I will only offer brief oral remarks on how the oil spill has thus far impacted our economy and will supplement with written comments and reports.
Our region of the Gulf of Mexico is different from our sister states and has often been referred to as America's Energy Coast. Certainly we are a unique slice of America that has embraced the development of all of our natural resources. We are not an "either or" province but absolutely respect those regions of our nation that wish to be.
For the last 75 years, through governors of different political parties, from different geographic regions of the state, we have always embraced a philosophy that encouraged the exploration of oil and gas alongside a robust fisheries industry. This co-existence has worked well. In fact, we even celebrate each Labor Day weekend the Shrimp and Petroleum Festival in Morgan City, Louisiana.
At the same time we explore, store, produce, refine, process or transport a third of the nation's oil and gas consumption, we provide over one fifth of the commercial fisheries catch for the lower 48 states.
We believe these efforts can be summed up as "Nation Building" and what we do has contributed to making America stronger and more secure, as we should.
The three most impacted areas of the Louisiana economy that have shown a weakness since the oil spill are our seafood industry, our tourism industry and our oil and gas exploration industry, the latter exclusively due to the moratorium.
Approximately 23 million people visit our state annually. Our tourist industry is a $8 billion annual industry, generating almost $1 billion in tax revenues and employing 124,000 people, making up nearly seven percent of our workforce. It's huge for us.
Like other places in America, people come to Louisiana for a variety of reasons: music, culture, sporting events, entertainment, outdoor recreation, visiting family and friends. However, the number one history reason people come to Louisiana is for our food. Out cuisine is our number one tourism asset and that is tied to the availability and confidence the market has in our seafood. If you take either availability or confidence out of the equation, you cripple our most unique selling point. The oil spill has done both. While availability seems to be coming back in the short term, confidence is something we will have to earn in the marketplace. That will take a serious investment of the responsible party, a process that BP has refused to engage in up until last week when they became aware of your invitation for our testimony today.
The commercial fishing industry has a $3 billion economic impact, and has been one of our most reliable industries. The LSU AgCenter reports shrimp landings were down 62 percent in the months of May, June and July versus the three year average from 2007 to 2009. Mississippi is down by 92 percent, Alabama by 82 percent and Texas by 16 percent.
Realizing safety should be our first priority, we were very aggressive in protecting public health by imposing a total of 58 "Emergency Action" on the management of fishing areas. The lack of any documented case of tainted Louisiana seafood clearly indicates these efforts were effective in protecting the public. To date, nearly 30,000 oysters, shrimp, crab and fish have been collected.
After testing at an independent lab, there have been no findings of significance. Yet, restaurants continue to indicate less demand by their customers for seafood.
In Louisiana, we don't have the luxury of showing a picture of a clean beach and declaring victory.
Common sense tells us we will need a long-term seafood testing and monitoring program along with a marketing strategy, complete with tracking surveys, to determine when consumer confidence has returned. We have asked for both from the responsible party and have gotten neither.
But rather than relying just on common sense, we engaged and were the first to engage professionals to conduct national and regional perception studies. I wish to make the results of these three studies part of the public record.
In summary, the studies indicate the following:
May 28 National Perception Study
• Of the 23 percent of respondents who had plans to visit Louisiana prior to the oil spill, a quarter had either postponed or completely cancelled their trip
• 55 percent stated that they believe the restaurants serving Louisiana seafood put customers at risk
Our most recent study, released on August 16, confirm that despite the passage of time, the nation's perception has not improved
• 28 percent of respondents believe the oil spill is just as bad or worse than Hurricanes Katrina and Rita
• 80 percent believe the oil spill will affect Louisiana for at least two years
• 29 percent of the respondents who had planned to visit Louisiana have cancelled purely because of the oil spill.
The most devastating finding is that 48 percent still believe restaurants that serve Louisiana seafood put customers at risk.
Again, until the responsible party learned of our invitation to testify at this meeting, they had for 58 days ignored two letters regarding seafood promotion and tourism marketing. I would like to make those letters part of the public record.
I am hopeful that today is the beginning of a new attitude from the responsible party.
I respectfully request that you require the responsible party to file a weekly report with this Commission on their efforts to restore the image and the brand of the Gulf Coast states. I think that will add to the transparency and accountability we need.
It is offensive at best to watch the television adds indicating they will make this write, when they refuse to even respond to the letters requesting engagement on these significant issues.
The other majorly impacted area of our economy is the oil and gas exploration industry. If the oil spill made us sad, the moratorium made us mad.
We understand that it can't be business as usual, and that a time out was, and is, appropriate. However, there has not been one shred of evidence of systemic failure, and we have been dealt a one-size fits all response.
The courts have declared the moratorium arbitrary and capricious. Several of the Secretary's own experts publically disagreed with him on the imposition of a moratorium. The National Bi-Partisan Commission believes that the new rules are sufficient to lift the moratorium.
We are now in the fourth month of the moratorium. Following the September 11th disaster, we shut down the airline industry for only for days, after an obvious systemic failure of catastrophic proportions.
Worst of all is that the de facto moratorium in shallow waters, an area that the President and Secretary have both publically indicated are open for business. The lack of permits being issued is at a critical level. We have had 11,000 shallow water wells drilled in America in the last 15 years, with 20 well control events and a total of 15 barrels of oil spilled. The risk in shallow waters is significantly less, but there remains a one-size fits all response. I am afraid the oil and gas industry is being held to a higher standard than other industries.
We are meeting with Director Bromwich today to offer suggestions to streamline, but we have got to get past punishing the innocent companies and workers. It is like having a problem with a Boeing aircraft, but requiring Cessna to pay the price.
By the end of October, 70 percent of the shallow water rigs will be idle. About a quarter of our jackup rigs are already idle.
Being smart and efficient in the permitting process, doesn't have to mean we are cutting corners.
For full transparency, I also respectfully request the Bureau of Ocean Energy Management, Regulation and Enforcement be required to submit to this Commission weekly reports on the permitting progress of shallow water areas in the nation. There needs to be more of a sense of urgency, and this level of accountability will help. Whether its 20,000 jobs lost or 10,000 we can all agree that they are important American jobs.
Thank you for your service, and I submit the supporting documents I have referenced.
We are confident we will drill again in Louisiana. We will fish again, and we will continue to be a slice of America that fuels and feeds the nation. I invite each of you to visit the Sportsman's Paradise, and I encourage you to consume Louisiana seafood at every opportunity.
John Barry, Coastal Protection and Restoration Authority member, Southeast Louisiana Flood Protection Authority East member, author, and historian
Mr. Chairman and members of the commission. My name is John Barry. I'm a writer and historian, but in the past six years have become actively involved in two areas that relate to homeland security. Today I'd like to discuss one of them, the Gulf Coast. Thank you for the opportunity to present my views. They are my personal views only. I am not speaking for any of the organizations with which I am associated.
Currently I'm vice president of the Southeast Louisiana Flood Protection Authority East, a board which oversees several levee districts protecting most of metropolitan New Orleans. I also represent this board on the Louisiana Coastal Restoration and Protection Authority, which is responsible for hurricane protection for the entire state. I'm Distinguished Scholar at the Center for Bioenvironmental Research of Tulane and Xavier Universities, and I serve on advisory boards and committees at MIT's Center for Engineering Systems Fundamentals and Johns Hopkins Bloomberg School of Public Health's Center for Refugees and Disaster Response.
I'd like to step back from the spill itself and give you a somewhat broader perspective on the situation on the Gulf Coast.
As you all know, Louisiana has lost 2300 square miles of barrier islands, coastal marsh, and once seemingly-solid land on the coastal, which is an area larger than Delaware. If you place Delaware between New Orleans and the sea, it wouldn't need any levees. The land loss had made populated areas in Louisiana and Mississippi vastly more vulnerable than did nature. They are vastly more vulnerable than they were even 50-60 years ago. And that land loss is continuing; as you also have all heard by now, a football-field size chunk of coast melts into the ocean every 45-50 minutes, constantly increasing the vulnerability.
I want to cover four points: How we got here, what can be accomplished, how to accomplish it, and what happens if we fail.
Let me take the last point first.
I. What happens if we fail.
The majority of all domestic oil and gas off shore production occurs in Louisiana. 19 refineries and 15% of the nation's refining capacity is in Louisiana, all of it within reach of hurricane storm surge. The life cycle of over 90% of all fish and 98% of all commercial species in the Gulf of Mexico depend on Louisiana marshes. By weight, 40% of all commercial fish caught in the US is caught in Louisiana waters. 5 of the 15 largest ports in the country are in Louisiana, and 18% of all waterborne commerce in the US passes through Louisiana waters. 20% of all US exports go down the Mississippi River, and 56% of all grain exports. The Gulf Intracoastal Waterway (GIWW) was built for national security in the 1930s and 40s; it still serves that role in addition to generating enormous commercial benefits.
The continued erosion of the Louisiana coast threatens all of that. The national economy, and national security, depends on protecting and preserving the economic infrastructure currently in place. Proof of that assertion: after Katrina interrupted Gulf supplies and refining, gasoline prices jumped roughly $1 a gallon.. And, incidentally, Katrina knocked out access to the Strategic Petroleum Reserve. Continued erosion of land threatens all that energy infrastructure. That's just the impact on national energy supplies, not the port system.
There is no substitute for Louisiana's port system. Tulsa and Pittsburgh and cities in between are all ports with direct access to the ocean because of it. There is simply no other way to give the interior of the nation, the body of the nation, cheap, efficient access to the sea. The GIWW carries barge traffic east west connecting other great ports from Florida to Texas, and the existence of that waterway is at risk. So, what's at stake is the well-being of the entire nation.
400 years ago John Donne described what is in effect out situation: "No man is an island, entire of itself; every man is a piece of the continent, a part of the main. If a clod be washed away by the sea, Europe is the less, as well as if a promontory were, as well as if a manor of thy friend's or of thine own were: any man's death diminishes me, because I am involved in mankind, and therefore never send to know for whom the bells tolls; it tolls for thee."
II. How we got here
Our present circumstances were created by a combination of geology and too-narrow a view held by those who made political decisions. Those political decisions translated into engineering decisions with unintended consequences,.
To understand the problem, you need first to understand the role of the Mississippi River. The Gulf of Mexico once reached north to Cape Girardeau, Missouri. Through a combination of falling sea level and the deposit of sediment, the Mississippi River created almost 35,000 square miles of land in 7 states. Coastal currents carrying sediment horizontally from the river's mouth made several thousand additional square miles of land outside of the river's flood plain; to the west this land goes to the Texas border. In total, river sediment created roughly 40,000 square miles, including about 8,000 square miles on the coast.
Engineering has reversed the natural process and transformed land-making into land loss. Virtually all of this engineering benefits the entire nation. But the Gulf Coast, and mostly the Louisiana coast, bears all the costs. Let me give you a few lesser-known obvious factors.
1. The Mississippi River now carries less than half its historic natural sediment load, and some scientists believe it carries less than 30% of that load. The river once carried close to 400 million tons a year. Now it carries between 125 and 140 million tons a year. This decline is a major factor in land loss.
The decline occurred because of literally tens of thousands of engineered interventions throughout the entire system, from putting riprap on river banks to development. All of these interventions benefited people far from upriver, often more than 1,500 miles or even more from the Gulf. But more than half the total sediment decline is caused by just six dams on the upper Missouri River.
These six dams in Montana and North and South Dakota-the last dam sits just above the Nebraska line-- provide hydro-electric power, irrigation, and, ironically, flood protection along the Missouri River. Construction began in the 1940s, the first dam was completed in 1952, and construction ended in 1963. According to the Corps of Engineers, after completion sediment at Omaha dropped from 175 million tons annually to 25 million tons.
In other words, these six dams, built entirely with federal dollars, alone retain 150 million tons of sediment, while the entire river system currently delivers 125-140 million tons to the Gulf.
These dams may well have provided tremendous benefits to people from St. Louis to the Rockies. They have produced tremendous damage and greatly increased the danger to the Gulf Coast.
2. At least half the sediment still available to the Gulf is now wasted, prevented from replenishing the Louisiana and Mississippi coasts and barrier islands, again to benefit the entire nation. This is what happened:
In the natural land-building process, when the river hit the ocean it dropped its sediment load. This created massive sandbars which blocked shipping. To solve that problem, engineers built jetties extending more than two miles out into the Gulf of Mexico, dropping most of the sediment remaining in the river into deep water off the continental shelf.
The benefits have clearly been enormous. For example, in 1875, the year construction on the jetties started, 6,500 tons of shipping went from St. Louis out into the Gulf. Just four years later, the year the jetties were finished, St. Louis sent 456,000 tons out the same route. A similar explosion of trade occurred throughout the entire Mississippi Valley, on the Ohio, Missouri, and Arkansas rivers.
Today, jetties continue to carry most of the sediment in the river out into the Gulf and drop it into deep water. This waste benefits the national economy but increased the danger to the Gulf Coast. When more sediment was available in the whole system, when there were no other insults to the natural order, this waste was not a major factor. Now, when every particle matters, it is.
3. Levees that prevent river flooding in Louisiana and Mississippi interfere with the replenishment of the land locally as well. To the extent they protect populated areas from floods, that is a local benefit. But the levees in the areas of greatest land loss are well down river from populated areas, and they were not built to protect people-- much of the area is entirely unpopulated. The levees in this region were built to help control the shipping channel; they benefit interstate and international commerce. Again, the benefits to the national economy have increased the danger to Louisiana.
4. Benefits to the shipping industry in other areas have also caused enormous damage. The Mississippi River Gulf Outlet has been much discussed. It never delivered the promised benefits. It did deliver all the damage warned against by its opponents. It destroyed tens of thousands of acres of natural buffer, and it did so right on the edge of an urban area. In addition, the federal government through the Corps of Engineers maintained this channel-or, more accurately, failed to maintain it-- with reckless disregard for life and property. A federal judge spent weeks listening to expert testimony and ruled that-not even considering the impact of the lost buffer, just on the basis of direct engineering maintenance failures on MRGO- the Corps was directly responsible for the destruction of the homes of 90,000 people in St. Bernard Parish and the Lower 9th Ward. I might add, the Corps and the state of Louisiana are now in dispute over whether the state needs to share the cost of fixing the damage to wetlands which MRGO caused.
MRGO has received much publicity because of its direct role in bringing storm surge to metropolitan New Orleans, yet MRGO has not caused as much damage to coastal marsh as the Gulf Intra-coastal Waterway. The GIWW was originally built to protect shipping from German submarines, and it still contributes to national security. But it and other shipping channels have brought much salt water into coastal marsh, generating significant erosion. Are there local benefits from the GIWW? Yes, it does benefit the port of New Orleans, but it provides far greater benefit to the ports of Houston, Gulfport, Biloxi, Mobile, and even Tampa by giving them access to the Mississippi system.
5. Louisiana is by far the country's largest producer of off shore oil and gas, and the extraction of oil and gas has itself contributed to subsidence. The industry has also dredged more than 10,000 miles of canals and pipelines through the marsh to service that production. Every inch of those 10,000-plus miles lets salt water penetrate and eat away at, the land. The Mineral Management Service has never been accused of favoring environmentalists, yet even it concluded the energy industry is responsible for 60% of the land loss directly attributable to a cause. (Not 60% of all land-loss; 60% of all the loss with direct causes). These canals and pipelines have enormously accelerated what was a slow degradation, transforming a long-term problem into an immediate crisis.
A good analogy is that the decline of sediment in the river, the jetties and other engineered factors that benefit shipping, and the levees created a situation akin to taking a big block of ice out of the freezer so it begins to melt. The impact of the canals and pipelines is akin attacking that block of ice with an ice pick, breaking it up far rapidly.
Given all these facts, there is no other possible conclusion but that benefits accruing to the entire nation have dramatically increased the danger to the Gulf Coast.
III. What can be accomplished
The bulk of the land lost cannot be rebuilt. Rebuilding is impossible because the river no longer carries enough sediment to do it. The National Academy of Science's review team of the Corps's Louisiana Coastal Protection and Restoration (LACPR) study of a system that would protect against major hurricanes made this point, and no expert disagrees. And unfortunately the sediment load in the river is still trending downward.
Nonetheless, the scientific community does support the proposition that if the right decisions are made we can achieve no net loss of coastal lands, rebuild land in strategic places to protect densely populated regions, and do so in a sustainable way.
We have a chance to succeed even with rising sea level. The delta of the Mississippi River is a dynamic, living system. It's alive. Like everything living, it will fight for life. If supplied with sediment and fresh water, it will adjust to and rise with the consensus predictions for rising sea level.
Unfortunately, even in a best case, not all areas can be protected. In some cases the cost will be too great. In others, choices will have to be made to sacrifice some areas in order to make others safer. The LACPR report recognizes this: the greatest expense in several of their alternative strategies is not for construction; it's for buy-outs for people whose homes will become untenable. Mississippi has at least begun to address some of the buy-out issues. Louisiana has not yet done so. This is important and worth mentioning because, right now, people who have already had their lives disrupted live in the most vulnerable areas. The disruption could make them receptive to a fair buy-out that might be good for them, good for the region, and good for the country. They should have that option.
IV. How to Accomplish the Goal
Do I believe the dams on the Missouri should come down, oil production in the Gulf should cease, and international shipping interrupted? No, of course not. I do not believe any of those things. The nation needs the benefits it gets. But I do believe that educating the nation about the trade-offs and unintended consequences which have created dangers on the Gulf Coast is essential. Otherwise restoration efforts will not get sustained support from the Congress in future years. If people in the Dakotas, Nebraska, and Missouri understood that their profits and even their safety have endangered the lives and property of people in the Gulf, they would support rather than oppose national policies to help the Gulf. They would see them as a responsibility, not a hand-out.
There is urgency. Two years ago a group of highly respected coastal scientists stated that if within a decade major steps weren't taken to restore the coast, it would be too late, that we would pass a tipping point. We have already started, but we need to scale up our efforts dramatically, and soon. So what should we do?
The easy part is to identify specific policies and legislation that need to be acted upon. To give just one example, let me describe some of the issues associated with dredging, and this is by no means are they an inclusive list even regarding dredging:
... The Corps's interpretation of current law requires them to waste some sediment they do dredge from the river; we have to absolutely maximize the beneficial use of dredged material.
... Foreign dredges operate on an entirely different scale than U.S. dredges; it may be necessary to change the Jones Act to use their capabilities.
... River diversions-cutting the levee to let some of the river run where nature put it-- will be necessary to get sediment where needed, but diversions also create dredging costs to keep the shipping channel open. The Corps seems to want the state to pay a full cost share for this, just as it wants the state to pay to restore the marsh destroyed by MRGO.
Frankly, I consider the idea of requiring local cost share for such dredging ludicrous. It's like having a tractor trailer drive over your lawn and crash through your living room, and then having the trucking company send you a bill to fix not only your lawn and house but the truck too.
But identifying a few specific things which need to be done is the easy part. The harder part is to devise a governance structure that can accomplish the goal, that can restore as much of the coast as can be restored, and to get the money for it.
Governance needs to operate in a decisive, flexible, disciplined, and science-based manner. Those last two points-it has to be disciplined and science-based-- are crucial because sediment is more important even than money. We can at least in theory always get more money. But even in theory we cannot get more sediment. There is a saying that when you mix religion and politics you get politics. It's also true that when you mix science and politics you get politics. Only science can determine the best use of sediment. And the structure must have the discipline to, as much as possible, insulate science from politics.
The governance structure has to do three things:
1. First, it has to coordinate efforts of many federal agencies and get rapid response.
2. Second, it has to involve the states, local government entities, and possibly non-profits. Each state should be able to identify its priorities, and considerable deference should be given to those choices, but I don't think they should automatically be acceded to. The federal government should also define certain priorities which may or may not be the same as a governor's.
I think whatever governance structure is set up, it should function like the grant process at the National Institutes of Health, or perhaps the Small Business Innovation and Research Act, with projects scored and prioritized. If the idea is good, it shouldn't matter where it comes from. Not only the states but counties, parishes, municipalities, levee districts, and possibly non-profits should be able to compete for funds. This should generate maximum speed and maximum activity, with projects fully integrated in concept and when completed and underway simultaneously, not sequentially. The Coastal Impact Assistance Program gives money directly to counties and parishes, for example, and that money has been well spent. Similarly, the flood protection authority with which I am associated has some coastal restoration projects identified and ready to go, but no money to spend.
An assessment is not an excuse for delay. And we do not need to reinvent the wheel. I'm familiar only with planning in Louisiana, and we have spent nearly 20 years planning. We created a Coastal Protection and Restoration Authority which has written a master plan, and every entity in the state has to conform to that master plan. Right now the master plan is conceptual, but it is an important and quality first step. CPRA has also identified a number of projects already authorized by the Congress and engineered; these projects lack only funding for construction to start. The state should get the funding.
3. Third, the governance has to foster scientific research and integrate both existing and new science immediately into projects. Senator Landrieu has proposed creating a science institute. That is an excellent idea. Too much of what needs to be done involves science that is not yet fully worked out, or engineering that has never been applied to the scale now needed. For example, we don't know the best way to maximize benefits of river diversions, and to compensate for the decline of sediment in the river, we need to improve our ability to harvest what remains. We also need to maximize benefits from any technical advances. There may be a model in medicine, where in the last decade or so an entire field has developed called "translational medicine." This is designed to move laboratory advances to patient care as rapidly as possible. There may be a medical model that's useful.
The best means to accomplish these things is to use an inter-agency and inter-governmental group-- several now exist that could be adapted to the task-- headed by a single chair person with accountability, as much authority as an executive order can provide, legislation to augment the chair's authority, and direct access to the president. Once a decision is made, OMB and other agencies should not be able to re-litigate it. In other words, I believe we need a czar. The post-Katrina federal effort demonstrates that a "coordinator," even one personally close to the president, lacks the power to do what was necessary and what he seemed to want to do.
I am not convinced that the various review processes of projects, for example of environmental impacts, need to be scrapped, but restoration projects do need to be fast-tracked. They need to jump to the front of the line in various agencies. This is where White House leadership is essential.
Finally, where should the money come from? There are two obvious sources: BP and off shore oil revenues.We need both.
The Natural Resource Damage Assessment process will generate billions of dollars. Normally that process takes years. BP should provide funding up front for restoration and simply deduct this from any final agreement. EPA fines will generate billions more. The administration has already stated 80% of this money should go to restore the coast. But this requires legislation. Obviously, I believe Congress should accept this recommendation.
Another source is off shore oil revenues. Since the 1920s national policy has recognized that oil and gas production comes at a price. To "relieve social or economic impacts occasioned by" this production, the federal government gives inland states 50% of revenues from such activities on federal land. Last year Wyoming alone received $1.3 billion from this source.
Louisiana has suffered immense damage from oil and gas production on off-shore federal land, and the federal government has received $165 billion in off-shore drilling revenues over the years. Yet until 2006 the federal government gave Louisiana nothing. After Katrina, Congress did give Alabama, Mississippi, Louisiana, and Texas, the Gulf states which allow off-shore drilling, a 37.5% share of revenue from new off-shore wells. But it capped the total at $500 million divided by those four states and delayed any substantial money until 2017; this year Louisiana, which passed a state constitutional amendment requiring all this money to go to coastal restoration or flood protection, will get only $400,00 to 600,000 from this source. Congress should treat all states the same and lift the cap, cancel the delay, equalize the revenue share, and give it on existing wells, not just new ones. Off shore oil and gas production has contributed greatly toward creating the problem; treating coastal states the same as inland states would provide the revenue to address it.
There is also a third source, although it's impossible to say at this point how much money it would generate. This involves the private sector. Some investment bankers are looking at ways to monetize mitigation banks. If building marsh in the Gulf could turn a profit for someone besides companies building it, it would be useful both politically-bringing the private sector in-and substantively in building land.
Thanks for your attention. I welcome any questions.
Garret Graves, Chair, Coastal Protection and Restoration Authority
Chairmen, members of the Commission, thank you for the opportunity to be here today.
The Deepwater Horizon Oil spills brought attention to one of the greatest and most complex environmental, cultural and economic challenges facing our country.
Since the 1930s, coastal Louisiana has lost over 2300 square miles. To put this in perspective, it is like having the entire state of Rhode Island or Delaware removed from the map. Perhaps a little closer to home, it is like eliminating the District of Columbia - 37 times over.
Many may view the challenges that we are facing as a parochial, state, or regional problem with only local repercussions. This impression is flawed. The resources associated with coastal Louisiana have implications in all 50 states and every taxpayer is affected by our ability to develop a resilient coastal landscape and sustainable ecosystem.
Proof lies in experiences that have occurred in the last five years.
First, the U.S. Fish and Wildlife Service determined that coastal Louisiana's ecosystem is the most productive ecosystem in North America. In fact, 70 percent of the commercial seafood harvested in the Gulf of Mexico is from Louisiana's offshore and up to 98 percent of the commercial seafood harvested in the Gulf of Mexico is dependent upon Louisiana's unique estuary. This area produces up to one-third of the wild seafood harvest in the continental United States and is the top source of shrimp, blue crabs, crawfish and oysters in the nation.
Impacts observed following Hurricane Katrina indicated that much of the void in Louisiana fishing fleet was filled by foreign imports. This included filling the void of the most consumed seafood in the country, shrimp, with an influx of foreign, farmed seafood.
Louisiana is also the top producer of domestic energy and one of the nation's top import points for foreign oil and gas. The energy infrastructure in Louisiana's coastal area represents one of the highest concentrations of energy infrastructure in the world. Indicating the national importance and energy security implications of our state's energy production, gasoline prices spiked nearly 75 cents a gallon following Hurricanes Katrina and Rita in 2005 and prices surged over $1/gallon following the Hurricanes Gustav and Ike in 2008. This represents the largest price spike since the Arab oil embargo. Every consumer in the nation paid the price for the vulnerability of coastal Louisiana.
Today, Americans are paying a different price for Louisiana's energy dominance. The offshore energy moratorium is causing increased reliance upon foreign energy and the transfer of jobs and economic activity to foreign energy sources - including Nigeria and Venezuela - and other nation's that do not share America's values.
Coastal Louisiana is also home to five of the nation's top 15 ports. We have the largest tonnage port in the hemisphere and one of the world's largest port cargo complexes in the world (between Baton Rouge and New Orleans). Today, the Mississippi River system, through our ports, provides maritime commerce to over 30 states and is responsible for approximately 19 percent of the water borne commerce in the United States.
Following Hurricane Katrina, the river system was shutdown and products were unable to access markets. This included an estimated 75 percent of the grain produced by the mid-western farmers.
Again, every consumer in the nation experienced the financial pain of not making more proactive investments in coastal Louisiana.
Finally, the reactions to the 2005 hurricanes included the appropriation of response and recovery funds and programs totaling $150 billion. Virtually every penny was financed by deficit spending. Not only did taxpayers in 2005 foot this bill, but generations to come will help to finance these reactions.
We estimate that a proactive investment of $8-10 billion in previously-approved projects before Hurricane Katrina could have saved over 1000 lives and in excess of $100 billion for American taxpayers.
History and federal law are clear, the federal government will pay exponentially more reacting to a storm (Stafford Act) than could be proactively invested to improve the resiliency of the ecosystem and coastal communities.
The problems on Louisiana's coast date back 80 years to the construction of levees on the lower Mississippi River system through the Mississippi River and Tributaries program. While this civil works project was incredibly successful at preventing river flooding and ensuring the deep-draft navigation of the Mississippi River, it has caused one of our nation's worst environmental disasters - the loss of over 2300 square miles of coastal wetlands. In recent years, the loss has averaged up to 70 or 80 square miles of wetland per year. Keep in mind that during this same time, the United States has had a "no net loss of wetland policy" and requires permits for impacting as little as one-tenth an acre of wetland. Meanwhile, the same agency that is responsible for managing the wetland regulatory program is responsible for the majority of this wetlands loss. The U.S. Army Corps of Engineers has not issued a single permit for this loss and has not mitigated any impacts from their continuing actions. This must be addressed.
This encroachment of the Gulf of Mexico upon our coastal communities has increased the vulnerability of our citizens. Hurricane Katrina was evidence of this fact. Today, billions of dollars are being invested in repairs and revisions to the Greater New Orleans area hurricane protection system to provide a 100-year level of protection. Prior to the 2005 hurricane, we were constructing a 1960's-1970's-era protection system that was to provide a 300-year level of protection. In other words, the encroachment of the Gulf of Mexico has resulted in higher levees that actually provide a lower standard of hurricane protection. The coastal wetlands are our natural buffer to storm surge. Their loss not only reduces the ecosystem services, but exacerbates the impact of hurricanes in south Louisiana.
Since Hurricane Katrina, the State of Louisiana has applied many painful lessons learned in our coastal area. We have made fundamental changes in our organizational structure, made record investments in our coastal restoration, resiliency and sustainability efforts and eliminated regulatory and other policy conflicts that prevented, complicated or delayed projects. However, many critical policy and regulatory conflicts continue to exist at the federal level. In addition, coastal Louisiana appears to be a lower federal budget priority than other less nationally significant ecosystems. We believe that this is a key area where the commission's perspective could yield important progress.
Other large-scale ecosystem restoration efforts such as the Everglades, Chesapeake Bay and Great Lakes have benefited from the federal investment of hundreds of millions of dollars to over $1 billion annually in recent years. While we commend President Obama for recently requesting the first increment of construction funds for coastal restoration in Louisiana, the federal budget associated with the restoration of our ecosystem peaked with this FY2011 request of $36 million. $19 million of this amount is requested for construction.
At this same time, over $165 billion has been derived from offshore energy production seaward of Louisiana's coast for the U.S. Treasury. For energy production on federal lands, states share in 50 percent of the revenue. An additional 40 percent is deposited into the Reclamation Fund for water-related projects in those same states. In effect, 90 percent of the funds generated from energy production on federal lands are returned to those states that host such production. For the $165 billion produced for the federal treasury off of our coast, we have received virtually nothing. The disparity is indefensible. Further adding insult is the fact that our neighbor state of Texas retains full energy revenues for energy production up to approximately nine miles seaward of their coast while Louisiana retains energy revenues for only one-third this distance - or approximately three miles seaward of our coast. It is noteworthy that Louisiana's Constitution requires that any funds provided to the state from offshore energy production must be reinvested in coastal and ecosystem resiliency efforts. Our citizens have made their commitment to their coast evident.
A dedicated, sustainable funding stream comprised of oil spill remediation and energy revenue sharing should be committed to the Gulf Coast.
These unsustainable federal policies that result in the increased expenditure of federal funds, increased cost to taxpayers and increased economic uncertainty must stop. We have been studying coastal Louisiana's ecosystem for nearly five decades - without action. The current federal water resources project process takes 40-years from conception to completion. During this same period, we would lose miles and miles of wetlands - making the solutions studied decades earlier irrelevant to the ever-changing coastal environment. A fundamentally new process that is capable of responding to the dynamic and urgent situation facing coastal Louisiana is needed.
The State of Louisiana developed a coastal revitalization plan in July to address the Deepwater Horizon spills and the historic coastal losses.
This plan includes the following funding recommendations:
1) The dedication of Natural Resources Damage Assessment (NRDA) remediation efforts to fisheries and coastal restoration efforts. This would include a substantial and immediate down payment on NRDA liability. Should the responsible parties refuse to participate in an early settlement, I would urge that Congress act to compel the parties to provide a down payment on NRDA. This early restoration payment should be allocated among the states based upon need and preliminary data related to oil spill impacts.
2) The dedication of appropriately-apportioned Clean Water Act fines to coastal and ecosystem restoration efforts in Louisiana. Once again, we would urge that a substantial down payment be made against this total liability -- currently estimated to be between $5 and $22 billion. It is critical that the Department of Justice and the Environmental Protection Agency seek full compliance with civil penalties provided under the Clean Water Act for this unique incident. The State of Louisiana, which has taken a Clean Water Act enforcement action against the responsible parties, should be a full partner with the federal agencies in the negotiation of a settlement offer with the responsible parties.
3) Expanding and expediting Gulf of Mexico Energy Security Act revenue sharing to begin immediately rather than beginning to share energy revenues with the Gulf States in 2017 will provide a long-term, sustainable funding stream dedicated to our coastal efforts.
4) Committing the $250 million in New Orleans area hurricane protection system mitigation funds toward large-scale restoration efforts will allow for up to two large-scale restoration efforts to be implemented in the near-term.
5) A substantial, multi-agency budget request for coastal restoration in Louisiana in the President's FY2012 budget request will bring the full expertise of the federal government to the table. Agencies like the U.S. Fish and Wildlife Service, National Oceanic and Atmospheric Administration (NOAA) and the Environmental Protection Agency have largely been sidelined while the Corps of Engineers has led federal efforts in coastal Louisiana.
While the funding stream is critical, the current dysfunctional federal water resources project development and implementation process is equally as challenging. Without changes, oil spill remediation dollars could remain escrowed as federal policy obstacles prevent critical action.
Alternative project implementation venues such as the federal multi-agency Coastal Wetlands Planning Protection and Restoration Act (Breaux Act) process takes four to eight years to take a water resources project from conception to completion. The Coastal Impact Assistance Program has shown another alternative process whereby projects have moved to construction as quickly as two-three years. State-led efforts have shown even greater efficiency.
The bottom line is that a fundamentally new project development and implementation structure is needed. The state recommends a structure that would expand the existing Breaux Act program while allowing greater participation by the state and designating a new rotating task force federal co-chair consisting of high-level representatives from the U.S. Fish and Wildlife Service, NOAA and the Environmental Protection Agency. The State of Louisiana should co-chair the task force. Importantly, we request that alternative National Environmental Policy Act (NEPA) arrangements be granted that would allow the federal-state task force to quickly move forward on restoration and recovery efforts. These alternative NEPA arrangements would primarily apply to projects that are designed to restore or enhance the ecosystem. Expediting this process would result in a net benefit to the environment.
In the interim, the Commission should consider the establishment of an arbitration board that would work to resolve disputes between the State of Louisiana and the Corps of Engineers. An estimated 20 "statutory accountability" issues are stopping progress. A similar process was created for Federal Emergency Management Act claims related to Hurricane Katrina. In that case, the board was able to break the logjam on policy and other conflicts that stymied recovery efforts.
Last, the State of Louisiana has been intimately involved in the Natural Resources Damage Assessment (NRDA) trustee council established for the Deepwater Horizon incident. The council participants representing five states and two federal agencies have been working very hard to progress early restoration actions; however, it is difficult to see how the authors of the Oil Pollution Act framework could have contemplated a spill where five states were affected. To date, the 60-70 trustee representatives have been unable to reach consensus on an offer to proffer to the responsible parties for a NRDA down payment. In the case of Louisiana, this spill placed an additional burden on an already-stressed ecosystem. We must begin remedial actions now.
As this consensus remains elusive, our coastal resources continue to be impacted. The state proposed a solution whereby each trustee would have one, high-level, empowered representative assigned to a trustee management council. The Environmental Protection Agency and the U.S. Department of Justice would also join the management council - thereby providing a holistic picture of two primary funding streams - Clean Water Act fines and NRDA liability. The state also suggested that considerations be given to a change in the law that would require a preliminary Clean Water Act and NRDA assessment be performed by the National Academies in conjunction with the states. The preliminary assessment would yield: a) an estimate of total NRDA liabilities b) an assessment of Clean Water Act liabilities and c) a preliminary apportionment of impacts among the gulf states. The responsible parties would then be legally-compelled or incentivized to make a down payment on their NRDA and Clean Water Act liabilities.
The state of Louisiana has an estimated $9billion in congressionally approved projects for coastal sustainability or ecosystem restoration. The State is prepared to immediately progress these projects as remediation efforts to the Deepwater Horizon spills.
Chairmen, members of the Commission, thank you for the opportunity to share the state's perspective. We appreciate your recognition of the importance of this component of the oil spill recovery. Your mission is critical not just to the restoration and recovery of the Gulf Coast, but to ensuring a functional response and recovery to future spills in communities around the nation.
We stand ready to address any questions or requests for information that you may have.
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