An estimated $100 billion worth of energy infrastructure along Louisiana’s eroding coastline is threatened by rising sea levels, Bloomberg reports. As the coastline continues to recede at an alarming rate, tangles of pipeline are exposed to corrosive seawater; and refineries, tank farms and ports are also at risk.
“All of the pipelines, all of the things put in place in the ’50s and ’60s and ’70s were designed to be protected by marsh,” Ted Falgout, an energy consultant and former director of Port Fourchon, tells the news organization.
Louisiana has an ambitious—and expensive—plan to protect both its backbone industry and its citizens from this threat but, with a $2 billion deficit looming next year, the cash-poor state can only do so much to shore up its sinking coasts. That means the oil and gas industry is facing new pressures to bankroll critical environmental projects—whether by choice or by force.
“The industry down there has relied on the natural environment to protect its infrastructure, and that environment is now unraveling,” Kai Midboe, director of policy research at the Water Institute of the Gulf, tells Bloomberg. “They need to step up.”
Every year in Louisiana, more than 20 square miles of land is swallowed by the Gulf. At Port Fourchon, which services 90% of deepwater oil production, the shoreline recedes by three feet every month. Statewide, more than 610 miles of pipeline could be exposed over the next 25 years, according to one study by LSU and the Rand Corporation. Private industry owns more than 80% of Louisiana’s coast.
Midboe, with the Water Institute and the U.S. Business Council for Sustainable Development, is leading an effort to get companies to invest in restoration projects that directly affect their infrastructure. This month, over a lunch of fresh Gulf shrimp at Port Fourchon’s headquarters in Galliano, Midboe made his pitch to a group of about 20 industry representatives.
“The problems are real. We need to deal with them now,” Midboe told the executives. “The public funding needed to protect this infrastructure is going to fall far short.”
The task force, Midboe explained to the industry representatives, would identify restoration projects that could protect the industry’s hard assets. Member dues would cover operational costs, and companies that would benefit from projects would share the cost of construction.
The oil and gas sector is already losing an average of $14 billion a year to environmental threats to its infrastructure, according to a study by America’s Wetlands Foundation and Entergy Corp. By 2030, those losses could exceed $350 billion.
But so far there is little sign that companies are clamoring to spend the millions—or billions—of dollars needed. BP, Chevron, Royal Dutch Shell and Exxon Mobil Corp. all declined to comment to Bloomberg on the extent of their investments in environmental projects.
ConocoPhillips, the largest private wetlands owner in the state, says a combination of public and private funding was used to pay for 77 restoration projects enhancing 177,000 acres of its own wetlands. An additional 18 are underway, spokesperson Andrea Urbanek says.
