Building Trust with sound coastal
investment policies

Chapter One: Louisiana’s Coastal Land Loss

The ominous loss of Louisiana’s coastal area has been documented by multiple sources. Although the estimates vary, the depletion’s magnitude is evident and its impacts are alarming. The Louisiana Coastal Protection and Restoration Authority reports that coastal Louisiana has lost 1,880 square miles of land since the 1930s. If nothing more is done, projections show a loss of 1,750 additional square miles over the next 50 years. The estimated impact of flooding by 2061 will be 10 times greater with expected coast-wide annual damages increasing from potentially $2.4 billion to $23.4 billioni .

Louisiana is home to about 40% of the country’s wetlands, and yet the U.S. Geological Survey reports that Louisiana accounts for about 90% of the total coastal wetland loss in the continental United States. The trends from 1985 to 2010 show a wetlands loss rate of 16.6 square miles per year, or about a football field per hour.ii America’s Wetlands Foundation reports that 1,900 square miles (1.2 million acres) of wetlands has been lost since 1932, a loss approximately five times the size of Orleans Parish. Louisiana is losing about 16 square miles of vegetated wetlands per year. That rate amounts to about one football field of wetlands every 1 hour and 30 minutes.iii

The Coalition to Restore Coastal Louisiana reports that in the past 75 years more than 2,300 square miles of coastal Louisiana have been converted to open water by natural processes and human activity. The Coalition compares this loss to an area of wetlands roughly the size of Delaware that has simply vanished. Louisiana has lost an average of 34 square miles of land every year for the last 50 years.iv

In addition to this relentless land loss, the delta has in recent years suffered other catastrophes. The effects of four major hurricanes (Katrina, Rita, Gustav and Ike) within a four-year period (2004 to 2008) resulted in a cumulative net loss of 328 square miles.v The damage they brought, in the form of flooding and storm surge, was made worse by the on-going deterioration of the protective coastal wetlands. Then, in 2010, disruption came again in the form of the BP oil disaster, when millions of barrels of oil spilled from the ocean floor beneath the Deepwater Horizon oil platform and washed up on Louisiana’s barrier shorelines and coastal marshes. These catastrophes were troubling to an already degraded region. Their effects add increased urgency to the need for long-term, large-scale restoration of the state’s coast.

Economic Significance

The nation depends on America’s wetlands and coastal operations to fuel much of its economy. Coastal Louisiana plays a significant role in shaping and influencing the national, regional, state and local economies, which are interrelated. In addition to holding large oil and gas reserves, Louisiana provides protection for infrastructure that supplies 90% of the nation’s outer continental oil and gas. The state handles more than 25% of the nation’s annual waterborne commercevi and has five ports that are among the largest by volume in the country. By weight, Louisiana is responsible for nearly 26 percent of the nation’s commercial fish and shellfish harvest.vii

A recent economic evaluationviii conducted by Louisiana State University and Rand Corp. says land loss directly affects economic activity with the estimated total activity at risk ranging from $5.8 billion to $7.4 billion in output. The research confirms that Louisiana is a major trade hub, with the coastal parishes serving as the point for importing $160 billion and exporting $156 billion in goods annually, with petroleum and chemical products representing a large share of this activity.

Further, Duke University’s Center on Globalization, Governance & Competitivenessix found that Louisiana is already a national leader in the creation of coastal restoration jobs, with the highest concentration of related business headquarters in the Gulf. According to this study, restoration work spurs investments and jobs in a range of sectors including shipbuilding, equipment repair and manufacturing.

A study by Restore America’s Estuaries,x which looked at restoration efforts nationwide, found that restoring Louisiana’s coast can create more than 30 jobs for each $1 million invested. This is more than twice as many jobs as is gained through investments by the oil and gas and road construction industries. The study also found that investing in restoration provides long lasting benefits to local economies, such as higher property values, better water quality, sustainable fisheries and increases in tourism dollars.

A recent LSU/Louisiana Workforce Commission studyxi found that the $618 million spent by the state in 2010 on coastal restoration created 4,880 direct jobs and an additional 4,020 indirect and induced jobs, for a total impact of 8,900 Louisiana jobs. The spinoff benefits of these jobs were considerable; and, the study estimated that the state’s initial investment in 2010 created more than $1.1 billion in sales. Louisiana’s annual investment in coastal restoration alone is expected to be between $400 million to $1 billion, which would translate into 5,500 and 10,300 direct and indirect total jobs, $270-$520 million in wages, and between $720 million and $1.35 billion in total sales per year.

Federal, state and local politicians and policy-makers have developed a growing understanding of the significance of Louisiana’s coast to our nations’ economy and to Louisiana’s unique culture and the livelihood of its people. History has shown the need for a bigger and healthier coastal ecosystem to better protect coastal communities from both natural and manmade disasters.

State and Federal Responses

Awareness and concern for the condition of the coastal lands of Louisiana are not new. Elected and non-elected leaders in Louisiana, on both the state and federal levels, have long recognized the problems. Locals, recreational and commercial fishers and naturalists were among the first to recognize the scale of coastal land loss at a time when few in our state had much expertise to address it. As early as 1971, the Louisiana Advisory Commission on Coastal and Marine Resources was established by the Louisiana Legislature, under Gov. John McKeithen, to begin top-level discussions and efforts to respond. A series of state and federal efforts have followed since that time (See Timeline below).

Louisiana’s coast received much attention due to the high profile events of Hurricanes Katrina and Rita in 2005 and the Deepwater Horizon oil spill in 2010. Those events marked turning points for Louisiana coastal management. Katrina and Rita prompted Gov. Kathleen Blanco and the Legislature to create the Coastal Protection and Restoration Authority (CPRA), which over time consolidated the state’s oversight of wetlands restoration and levee matters under a single agency and a related governing board. The CPRA is responsible for developing a Comprehensive Master Plan for a Sustainable Coast (Master Plan), to be updated every five years with legislative approval, and an annual plan of action. It oversees the Coastal Protection and Restoration Fund, the font of most coastal spending in Louisiana.

Then in 2006, Congress passed the Gulf of Mexico Energy Security Act (GOMESA), a break-through piece of legislation for Louisiana co-authored by former Sen. Mary Landrieu. It lets Louisiana and the other three Gulf Coast oil production states receive a share of federal revenues from outer-continental oil and gas operations. Significant revenue will flow to Louisiana beginning in 2017 when Phase II of the law takes effect, unless the President and other foes of GOMESA prove successful in derailing the plan.

In 2010, BP’s Deepwater Horizon drilling operation off the coast of Louisiana exploded, leaving a deep ocean-floor oil leak that took months to contain. A variety of settlements for damages will result in billions of dollars in coastal restoration resources for Louisiana. In 2012, the U.S. Department of Justice announced a plea agreement whereby BP would pay $2.4 billion over five years for federal criminal charges against the parties responsible for the spill. The National Fish and Wildlife Foundation (NFWF) provides oversight of the distribution and regulated use of the money, much of which will go to projects in Louisiana. Also in 2012, Congress passed the RESTORE Act, which dedicated 80% of the oil spill’s Clean Water Act civil penalties to Gulf Coast restoration. The distribution is governed by the RESTORE Council, comprised of state and federal agency appointments.

An additional source of funds will come from the federal Natural Resource Damage Assessment, which eventually could amount to more than $5 billion, including a large portion for Louisiana. On top of those funds, the state is due to receive an economic damages settlement from BP of $1 billion spread over 17 years.

Most of these sources of money come with conditions and regulations for how they may be used. In many cases specific restoration projects must be approved by authorities outside of Louisiana. The great majority of the funds reaching Louisiana will flow with the CPRA’s supervision and through the Coastal Fund.

Accountability will be a major focus for those authorities releasing the funds to Louisiana, and the state’s reputation will constantly be at stake. Misuse of funds could result in Louisiana being forced to return its money. Moreover, poor management or profligate spending could create controversy and distrust, leading to a slower or terminated source of funds. To succeed in taking advantage of these financial resources for the coast, Louisiana needs sound policy, planning and procedures, as well as good behavior. A commitment to an open, fair and transparent process is the place to begin.

Coastal Revenues and Financing

Louisiana, with the help of its legislative and congressional delegation and many stakeholder and advocacy organizations, has secured recurring and non-recurring funding dedicated to coastal restoration and protection. These funds include state mineral revenues, federal revenue sharing from oil and gas leases, federal reimbursement for the Coastal Wetlands Planning, Protection and Restoration Act (CWPPRA) projects, federal hurricane protection and restoration funding, and most recently the significant Deepwater Horizon oil spill settlements and adjudication of civil or administrative claims against responsible parties. Below are some of the more significant revenue sources that support coastal restoration and protection. Economic impact settlement money is not included. Some sources are tied to revenue streams that fluctuate, such as oil and gas taxes. Others are expiring, such as the Coastal Impact Assessment Program (CIAP). Some require periodic reauthorization such as CWPPRA. Some are limited payouts over a set period.

Table1

The Evolution of Louisiana Coastal Remedies

Executive and legislative efforts to address Louisiana’s coastal problems have created and reformed agencies and programs over the years on both the state and federal levels.

  • 1971: The Louisiana Advisory Commission on Coastal and Marine Resources was established to begin top-level discussions and efforts to respond.

  • 1972: To improve efforts to combat adverse impacts to the coast, Congress passed the Coastal Zone Management Act.

  • 1974: A new Louisiana Constitution is adopted that creating a legal duty to invest in coastal restoration and protection. Article IX, Section 1, says, “The natural resources of the state, including air and water, and the healthful, scenic, historic, and esthetic quality of the environment shall be protected, conserved, and replenished insofar as possible and consistent with the health, safety, and welfare of the people. The Legislature shall enact laws to implement this policy.”

  • 1978: The Louisiana Legislature passed the State and Local Coastal Resources Management Act.

  • 1984: In the landmark Save Ourselvesxxii decision, the Louisiana Supreme Court stated that a “public trust for the protection, conservation and replenishment of all natural resources of the state was recognized by … the 1921 Louisiana Constitution … [and] was continued by the 1974 Louisiana Constitution.”

  • 1989: The Louisiana Legislature adopted the Louisiana Coastal Wetlands Conservation, Restoration and Management Act creating a multi-agency coastal restoration authority directly in the governor’s office and establishing a dedicated trust fund to support the efforts.

  • 1990: Congress passed the Coastal Wetlands Planning, Protection and Restoration Act (CWPPRA or “Breaux Act”) furthering the partnerships between federal agencies and the state in coastal planning and project implementation.

  • 1998: The state along with federal partners developed Coast 2050, a plan that proposed landscape level projects in response to the magnitude of coastal land loss.

  • 2001: The Committee on the Future of Coastal Louisiana was formed to identify challenges and provide recommendations for addressing coastal land loss and the resources it threatens.

  • 2001: Congress passed the first Coastal Impact Assistance Program. In 2005, the second program was signed into law with substantial funding for projects.

  • 2003: The Legislature and voters statewide pass a constitutional amendment affecting state mineral and non-recurring revenue that results in newly authorized deposits into the Wetlands Conservation and Restoration Fund.

  • 2004: In the Avenalxxiii decision, the Louisiana Supreme Court made it clear that the public trust duty applies to coastal protection matters.

The Avenal court said “[w]e find that the implementation of the Caernarvon coastal diversion project fits precisely within the public trust doctrine. The public resource at issue is our very coastline, the loss of which is occurring at an alarming rate. The risks involved are not just environmental, but involve the health, safety, and welfare of our people, as coastal erosion removes an important barrier between large populations and ever-threatening hurricanes and storms. Left unchecked, it will result in the loss of the very land on which Louisianans reside and work, not to mention the loss of businesses that rely on the coastal region as a transportation infrastructure vital to the region's industry and commerce. The State simply cannot allow coastal erosion to continue; the redistribution of existing productive oyster beds to other areas must be tolerated under the public trust doctrine in furtherance of this goal….”xxiv

  • 2005: Following Hurricanes Katrina and Rita, the Louisiana Wetland Conservation and Restoration Authority was revised into the Coastal Protection and Restoration Authority (CPRA) with expanded membership, a mandate to develop and implement the Comprehensive Master Plan for a Sustainable Coast (Master Plan), to be updated every five years, and an annual plan of action approved by the Legislature that includes three years of proposed coastal program expenditures. The new law directed the CPRA to consider both “hurricane protection and the protection, conservation, restoration and enhancement of coastal wetlands and barrier shorelines or reefs.”

  • 2006: Congress passed the Gulf of Mexico Energy Security Act (GOMESA, Domenici-Landrieu Revenue Sharing Bill) providing for the four Gulf Coast producing states to receive a share of federal revenues from outer-continental oil and gas operations. Phase II, with significant revenue, was to begin in 2017.

  • 2007: The first Coastal Master Plan was approved by the Legislature.

  • 2009: The Legislature created the implementation and enforcement arm of the CPRA, the Office of Coastal Protection and Restoration (OCPR), and consolidated state efforts and staff working on coastal projects.

  • 2012: The first five-year update to the Coastal Master Plan was approved by the Legislature.

  • 2012: The U.S. Department of Justice announced a plea agreement whereby BP would pay $2.4 billion over five years for federal criminal charges against the parties responsible for the 2010 Deepwater Horizon oil spill. The National Fish and Wildlife Foundation (NFWF) provides oversight of the distribution, much of which will go to projects in Louisiana.

  • 2012: Congress passed the Resources and Ecosystems Sustainability, Tourist Opportunities, and Revived Economies of the Gulf Coast States Act (The RESTORE Act), which dedicated 80% of the Clean Water Act civil penalties placed against the Deepwater Horizon spill to Gulf Coast restoration. The distribution is governed by the RESTORE Council comprised of state and federal agency appointments.

  • 2012: To clarify and integrate the roles and titles of the state coastal agencies, the Legislature gave the OCPR the name of CPRA and made the ruling authority of the CPRA into simply the CPRA Board. The law also transferred additional responsibilities from other state agencies to the CPRA and board.

  • 2016: A major court settlement was reached that scheduled the penalties and payments due to Louisiana and other states affected by the 2010 BP oil spill.