The balance between business and environmental interests is a delicate one. Before a company can drill or build and run pipelines under current law, they must apply for permits to do so. Provisions within permits require companies to pay for or perform environmental remediation in areas that ultimately are damaged due to drilling, cutting through wetlands to build pipelines and other similar activities.

Recently, the Southeast Louisiana Flood Protection Authority-East, which is responsible for minimizing the risk of flooding to residents in the three districts it covers, has sued approximately 97 oil companies including BP, Exxon, Chevron and others, in state court. They allege that the oil companies damaged wetlands, causing such problems as soil erosion during their decades of activity. According to experts, wetlands act as buffers during hurricanes and floods.

According to its suit, under the terms of a drilling permit, a company or companies are required to perform environmental remediation. But, in this case, no remediation work was performed. Further, federal law prohibits activities that hurt levees, which are constructed to regulate water levels to provide temporary protection against flooding. The drilling permits and what the companies were required to do under them is a key issue in the lawsuit.

Business law coupled with environmental issues is a complex and challenging area of law. Given the on-going litigation in regard to the BP oil spill and the recent partial collapse of a drilling rig in the Gulf of Mexico, environmental damage to coastal regions is in the limelight. As this case illustrates, there can be substantial conflicts between meeting business interests and safeguarding environmental interests.

Source: The Globe and Mail, “Louisiana agency sues big oil firms for hurting wetlands,” July 24, 2013