Energy & Environment / Featured

Guest Commentary: Sound Legal Climate Essential For a Healthy Job Market

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Low taxes and limited regulation will incentivize businesses to take risks

NEW ORLEANS, La. – This Labor Day weekend we welcome the end of summer, and most importantly, we celebrate the social and economic achievements of the American workforce.  At LOGA, we focus our thanks and gratitude toward the hardworking men and women that make up the oil and gas industry throughout our state and nation.  Through their daily sacrifice and commitment, we are provided access to an abundance of affordable energy that fuels our vehicles, powers our homes, and keeps our nation moving forward into the 21st century.

In Louisiana, we have been blessed with a plethora of energy resources.  From ongoing developments in the Gulf of Mexico to the boom of the Haynesville Shale, business and job growth throughout the state has drawn heavily from the energy sector.  Recent news of the potential Tuscaloosa Marine Shale and “Brown Dense” formations could mean even further growth and opportunity within the industry for years to come.  Louisiana’s economy and employment rates have remained strong in the midst of a significant economic downturn nationwide because of the support and substantial job growth created by the development of these natural resources.

As citizens of this great state, it is our duty to ensure that Louisiana remains a great place to work and grow our families.  This is only achievable if our people have access to good paying jobs and our businesses are provided with a level playing field.  A healthy job market is dependent on an environment that encourages business growth and development.

Job creation can flourish and we can incentivize businesses to take risks in a system of low tax structure and limited burdensome regulations.  Furthermore, an equally important factor in a stable job market is the assurance of a sound legal climate.  Unfortunately in Louisiana, our legal climate is deteriorating by the day, continues to discourage investment, and stagnates economic growth throughout the state.

For the oil and gas industry, “legacy lawsuits” hinder energy exploration, production, and expansion.  The considerable risein these lawsuits has lead to job loss, rig decline and exodus, the revocation of insurance, and in worst cases, the bankruptcy of long-standing businesses in our communities.

Frivolous lawsuits plague all sectors of our state’s economy, not just the oil and gas sector.  Medical malpractice suits, personal injury claims, and other civil suits are rampant and at an all time high in Louisiana.  In a recent article, the Louisiana Lawsuit Abuse Watch claimed, “According to the most recent data from the state Supreme Court, civil filings in city and parish courts shot up from fewer than 73,000 to nearly 90,000 between 2006 and 2009. That’s a 24 percent increase in statewide civil filings over the period—a disturbing trend that we must address.”

Over a decade ago, the state of Texas found itself victim to a deteriorating legal environment where frivolous lawsuits stifled job creation and business investment.  Over the last several years, Texas has made tort reform its top priority and instituted a number of laws to curb the influence of predatory lawsuits.  The end result has placed Texas on the top of the chart in terms of job creation and economic development.  We should learn from their lessons.  By revamping our legal system in Louisiana, we can revitalize our energy sector and allow businesses to flourish throughout our economy.

Don Briggs is president of the Louisiana Oil and Gas Association.