How will Louisiana adapt to an inevitable, global energy transition away from oil and gas?

In a shocking ruling that has seen almost no media attention, the Dakota Access Pipeline was ordered shut down by a federal district judge in early July. Despite the fact that the pipeline has moved up to 570,000 barrels of crude oil each day for the last three years, a federal judge in Washington, DC found enough mistakes in the company’s environmental permitting process to merit the immediate shut down of the pipeline until a new environmental analysis of the project happens. While the immediate shutdown has been postponed by a court challenge, the ruling represents a surprise victory for the Standing Rock Sioux and a reopening of the seminal Indigenous-led struggle that pitted fossil fuel extraction against tribal sovereignty and climate activism during the pipeline’s construction. The left-field ruling begs a lot of questions about the pipeline itself and others like it, including the near-50,000-mile network of pipelines in Louisiana, the industries they serve, and the people who organize against them here.

Chief among that Louisiana network is the Bayou Bridge Pipeline, the southeasternmost terminus of the crude oil that the Dakota Access Pipeline removes from Canada and the Dakotas. Bayou Bridge moves that oil from Nederland, Texas, crosses most of south Louisiana, including the Atchafalaya Basin, and ends in St. James Parish. The swampy pipeline easement was the scene of its own grizzly fights between the pipeline company and Louisiana Indigenous groups and environmental activists before the pipeline’s completion in March of 2019. Despite the fact that the two pipelines are part of the same network, owned by the same company, and transport some of the same oil, they are technically separate projects with separate environmental review processes. Energy Transfer Partners, the owner of both pipelines, has said that Bayou Bridge is not included in the ruling and will continue to operate as normal.

But ten days later after the DC court’s ruling, a Lake Charles-based state appeals court handed a separate victory to pipeline opponents in a long-standing case brought against Bayou Bridge by three private landowners in the Atchafalaya Basin. The plaintiffs sued when the company began construction of the pipeline without securing their permission, and the Third Circuit Court of Appeal, in a 4-1 decision, sided with them, ruling in a strongly-worded decision that Bayou Bridge “not only trampled Defendants’ due process rights as landowners, it eviscerated the constitutional protections laid out to specifically protect those property rights.” The landowners and their attorneys say the ruling bolsters others in their position who fear opposing large industrial projects.

Misha Mitchell, an attorney for the Atchafalaya Basinkeeper (a non-profit advocacy group), was a co-council for the plaintiffs and told ANTIGRAVITY that the ruling will have significant implications for the ecologically-sensitive Atchafalaya Basin. “It sends a message to any developer that it can and will be held accountable to the law. A major issue we face in the Basin is accountability, poor compliance and minimal enforcement. This case provides some assurance to property owners in the Basin and throughout Louisiana that you can challenge these types of blatant constitutional violations, and to the industries developing in the Basin that they cannot expect to trample the rights of others without consequence.”

A third ruling in July took the pipeline fight to the U.S. Supreme Court, which ruled against the Keystone XL pipeline and sided with a lower court’s ruling nullifying the pipeline’s permit to dredge and fill 200 streams and rivers along its path. Taken together, the three rulings represent a shock to the system for both activists and industry. Tulane energy researcher Eric Smith told WWNO that he “worries investors might be losing their appetites for pipelines.” On July 6th, just a day before the shutdown order was issued for Dakota Access, the Atlantic Coast Pipeline, another project hotly contested by environmental activists, was cancelled by its owners who spent six years and billions of dollars in planning and litigation for the project.

It is impossible to understand the implications of these struggles without the context of the state petrochemical economy and the global forces that affect it. In another unprecedented shock to the oil and gas industry, on April 20 the price of U.S. oil dipped below zero for the first time in its history. Global supply had been flooded by international producers while demand bottomed out due to coronavirus stay-at-home orders. As a result of the low prices, hundreds of wells across Louisiana have been shut down. The News-Star of Monroe said as many as 34,000 Louisiana oil jobs were at risk across the state. Nearly a quarter of those workers were laid off by early May. And in early July, Shell announced it was interested in selling its 4,400-acre Convent Refinery in Ascension and St. James parishes. The site has the capacity to process 240,000 barrels of oil a day and employs about 700 workers.

Things are bad enough for the oil and gas industry here that Gifford Briggs, the president of the Louisiana Oil & Gas Association, told The News-Star, “We’re watching an entire industry being eliminated before our eyes.” There are so many questions about what these stories mean when taken together: for the workers across the state who rely on the oil industry and the schools that rely on its taxes, and for the marshes and the coastal communities threatened by oil-fueled climate change.

In the immediate term, there is danger for the state budget. For every one dollar that the price of a barrel of oil falls, Louisiana loses an average of $12 million of tax revenue, according to the state’s legislative economist, Greg Albrecht. That money pays teachers and police, to name a few. It’s clear there will be pain, and that the pain could be acute.

The last time oil prices dipped so low was the mid 1980s, when a similar excess of oil across the globe drove down prices to $10 a barrel and caused an oil bust in Louisiana which remains infamous to this day. It was another confluence of multiple economic woes: in New Orleans, stable longshoremen’s positions at the city’s ailing port were being inadequately replaced with low-wage jobs in the tourism industry. Attendance at the 1984 World’s Fair in New Orleans was so bad that the company went bankrupt. Famous stores were shuttered on Canal Street. A total of 1,100 city employees were laid off, and by 1986, Louisiana had the highest unemployment rate in the nation at 13.2%.

But that oil bust ushered in an era of major diversification of the Louisiana economy. For instance, 70% of Lafayette’s economy was dependent on the oil and gas industry in the 1980s. Today that number is down to 30%, with tourism, health care, and technology as the three main economic drivers in the region alongside the oil and gas industry. The population of the Lafayette region has actually increased by 62% since the 1980s.

Jan Moller is the executive director of The Louisiana Budget Project, a research and policy group that advocates for low-income families in the state legislature. Asked whether something similar could happen after this downturn, he said that oil and gas revenue currently represents a much smaller portion of the state budget than one might think. Oil and gas royalties and severance taxes now account for only about 6% of the state’s economy. That’s down from 42% in the ‘80s. “The legislature can’t do a damn thing about the price of oil,” he said. “That is global.” But while those industries have been steadily declining in Louisiana’s economic scheme, their power in the legislature remains. Moller said that legislative leaders allowed oil, gas, and business interests to write the entire agenda for the special legislative session that concluded in June. The organizations, Moller said, with a “never let a good crisis go to waste” mentality, pushed an old wish list of severance tax breaks for oil and gas companies and other expensive tax cuts for industry that would have left holes in the state budget at a time when COVID-19 has already decimated tax revenue. “The legislature through its actions is really trying desperately to forestall and put a finger in this leaky dam by providing more tax breaks and more subsidies to the industries when the market has kind of spoken. The industry is not ever coming back to what it was 40 years ago and it may never come back to what it was six years ago. And we haven’t pivoted to what comes next,” Moller explained.

In the context of this gradual decline, the possible sale of Shell’s Convent refinery is not a complete surprise, as the company has long planned to consolidate its holdings as the world pivots to a less oily future. Last year Shell announced it planned to slim its refinery assets to a group of “uniquely positioned refineries by 2025.” The trend away from oil and towards alternative energy is not a thing of the future; it’s happening now. This summer, Goldman Sachs forecast that for the first time ever, investment in renewables will overtake investment in fossil fuels in 2021.

Moller sees similarities between Louisiana and his hometown of Pittsburgh, where he witnessed steel’s decline and the resulting suffering and dislocation. Ultimately, he said that Pittsburgh has rebuilt itself as a place with more diversified opportunities, and he thinks the Louisiana legislature could encourage the same. “We have a workforce that’s been in energy production for a hundred years. We have a highly-skilled industrial construction workforce. We have all these petrochemical plants, and all of the people who work here live in Louisiana.” Moller says those skills are unique, valuable, and essential to the transition to renewable energy, but the legislature needs to prioritize that transition. “There is viability in wind energy in the Gulf, there’s hydroelectric, there’s been all these advances in the last 20 years in energy. Why is Louisiana not trying to be a leader in green energy?”

Regardless of the industry and regardless of the economic prognosis, there is no viability without solid land to live and work on. In mid-May, not long after the oil bust and amidst the worst of Louisiana’s COVID-19 battle, the headline “We’re Screwed” was scrawled across when a new study was published which (yet again) ratcheted up the urgency of sea level rise for the Louisiana coast, this time in more absolute terms. “Because of increasing rates of sea level rise fueled by global warming, the remaining 5,800 square miles of Louisiana’s coastal wetlands in the Mississippi River delta will disappear. The only question is how quickly it will happen,” wrote Mark Schleifstein about the new study. Another report on the newly-released Flood Factor Database forecast a skyrocketing of substantial flood risk for properties in Louisiana by 2050. That’s 809,000 properties at risk across the state, a 70% increase from today. In the meantime, Louisiana currently emits more carbon per capita than almost any state in the country, ranking fifth, according to the U.S. Department of Energy.

There are numerous organizations with plans for transitioning Louisiana’s economy away from oil and gas, from the coalition-planned Gulf South for a Green New Deal to that of 350 New Orleans, which touts the “enormous potential for this transition in Louisiana, if we work together to achieve it. The shallow waters off the coast of Louisiana can be the site of a new offshore wind economy that utilizes former oil and gas workers, and the state’s excellent solar energy potential can create thousands of jobs. Additional jobs can be created in coastal restoration and mitigation of fossil fuel pollution.”

Another transition-focused organization is the women-of-color-led collaborative, Another Gulf Is Possible. The group does call for divestment from fossil fuels and a just transition to renewable energy. But for that to work, the group focuses on policies, pulled directly from the Movement for Black Lives, such as the reallocation of funds from policing and incarceration, protection for workers, fully funded health care, and a fully-funded education, so that the cycle of exploitation does not continue into whatever industry does eventually replace oil and gas.

An environmentalist might be surprised by how little time Another Gulf Is Possible spent on the nuts and bolts of energy transition in their recent podcast series, We Got We, Not BP, which marked the 10th anniversary of the BP oil spill. It focused instead on systemic issues faced by the most marginalized in communities along the Gulf Coast: the people who are bearing the brunt of emissions in Cancer Alley, flooding, and environmental injustices. It’s an all-or-nothing approach to transition, highlighted by a response on the podcast by Tony McCray, an activist and organizer from Pensacola, who said, “The issues that we discussed have to all be dealt with: the recovery from the oil spill, the preparation for the next hurricane, and the recovery from that. The affordable housing issues that exist, jobs, business opportunities. I was involved in the disparity study for the City of Pensacola that found that the banking industry in this region had one of the worst records in the country for loaning money to African Americans, women, and Hispanics. So we’ve got to think holistically… Because if we ignore any issues, we’re going to get bitten in the butt by not tackling the disparities that we ignore or we feel we can’t handle.”

The energy market is shifting. It’s evident in the North American pipeline slow-downs, low crude oil demand, and the decreasing share of the industry’s contribution to the state’s economy. Employment in oil, gas, and mining extraction dropped 39% between 2014 and 2018, according to the industry trade organization Grow Louisiana Coalition. Since the pandemic, it has dropped a further 7%. While the implications of this are immediately quite grim for workers, the decline is part of an old pattern that has already moved towards diversification. And there are in fact plans for how to address the “leaky dam” of the state’s relationship with oil and gas and create a more equitable state economy. For Moller, it starts quite simply: “I have a fundamentally different view of how you drive the Louisiana economy forward than the Louisiana legislature. We as an organization believe that how to drive the economy is by making investments in people. Paying them better wages. Better schools, better access to health care. Colleges that are not in disrepair.” This echoes the transition priorities of Another Gulf Is Possible and the Movement for Black Lives.

Whether you’re an oil worker, a legislator, a person with a 30-year mortgage, or a server in a restaurant, now is not an easy time to be invested in Louisiana. There is so much shoring up to be done—of sinking land and job markets—against ever-emerging losses and threats. The challenges are especially intense if that work is done with a community focus and with the intention to leave no one behind, including the generations who will come after us. Despite this state of constant emergency (oil spill, hurricanes, banking discrimination), none of this—including a devastating virus—is new to Louisiana. To face an extreme state of emergency and handle it as a community is already in the playbook; grassroots organizing after Katrina ushered in unprecedented coastal protection measures and widespread environmental education.

Something similar is happening now as the energy slowly seeps out of pipelines while the streets come alive with the energy of thousands demanding change. They are making many of the same demands as the Gulf South for a Green New Deal platform, The Louisiana Budget Project, and Another Gulf Is Possible. These organizations, along with others across the Gulf Coast, have laid the groundwork for this ongoing transition in quiet legislative committee meetings, on tense pipeline easements, or with actionable plans over the years. Dangling on the edge of this hurricane season during a pandemic-induced recession, there has never been more urgency for Louisiana to change and more opportunity to encourage those changes. The energy is on people’s side right now, and the transition is already well on its way.

illustrations by Happy Burbeck