re: Louisiana special session: Failure.

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you got some real evidence for that? something good enough to show that it is more to blame than us not having a permian basin + a general fall in prices?

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Yes, I have deep knowledge and understanding.

I spent the weekend with both a higher level management position guy from Exxon and also the CEO (long time close friend) of a fleet of barge rigs. Things were discussed in detail.

Shallow water rigs is a great barometer for the situation because obviously all of their work falls in Louisiana waters.
1st of all, Exxon stated that they do whatever the can not to further projects in Louisiana waters. The lawsuit is one thing, because those cases will be whatever the legal system decides. The real issue is, why would they further their liability not knowing what Louisisana is going to do to them. So until the case is dropped or decided, they and the others will avoid doing business at all costs.

The meat of the case is whenever and wherever any dredging was done, the request was made to the state. The state would approve or deny after the C of Engineers would approve. So the state was then entitled to 25% of the production of that well! So fast forward, and JBE is trying to repay Cormouche and company (other lawyer backers of his campaign) by letting them sue the state. That's when Jeff Landry stepped in and sued basically sued the administration for the right to hire and use his own lawyers for the suit. He solidly against it, BUT if it has to happen, ge should be able to hire the attorneys, out them on staff at salaried positions, and therefore sace the state many many millions in lawyers costs. Why give away 50% to attorneys if the root cause is to get as much money for the state as possibke. JBE fought it tooth and nail! I know, shocker huh?
It's so fricking dumb because not only has Louisiana killed present income opportunity of 25%, LA also benefited 25g of the proceeds of all the wells they are suing over...think about that.
Exxon asks for permits, Louisiana checks with feds (CoE) and then pjs Exxon to hire A THIRD PARTY to dredge the location. Now, 20 years later, they are getting sued for approved, permitted work..of which, the state profited 25% of all production! So again, why would Exxon do work in Louisiana waters not knowing what they are facing.
Now, the 25% that nirmallybwould be flowing into LA pockets, is starting to dwindle because of fewer wells being drilled or worked over. Any you wonder why we are in a larger budget crisis?
Now to the rig owner side. Yes, lower prices had drastically decreased work when it happened. Then JBE slid in and announced the lawsuit. His rig utilization plummeted and held at a certain low point for over a year while prices stayed around $30...now prices get over $60 and have held and his utilization on barge rigs remains the same...understand, the price supports shallow water projects (more expensive than land), yet there has been ZERO increase in projects...the Exxon's have simply decided to do NOTHING in Louisiana besides land projects.
FYI, his land rigs have risen during the same time to 75% utilization...end of story.

Now, you may ask, why isn't Texas suing as well? Simply put, they have different laws on the books that limit the scope of the payout on lawsuits.
Right now, on those legacy lawsuits (run by Cormouche firm) which are the suits for land drilling that date back to the 40s thru the 80s, Louisian drilled like "x" amount of wells and is letting Cormouche sue the original drilling companies. I think it covers over 900 rig locations. Texas probably drilled at least 20 times that..guess how many legacy lawsuits there are in TX? ZERO. See, in Texas, the damages paid out can't exceed the property value...and if someone is paid out, they are forced to use the payout to correct the environmental issues on their property.

Louisiana doesn't stipulate that. I personally know of people who own a shite half acre of land and live in a trailer on it, and recieved a check for 300k...and kept every penny because LA doesn't require them to use the money to repair the issue!

Louisiana is just a legal cesspool and it's laws are deranged and far far from being business friendly. Throw someone like JBE was is a lawyers wet dream, when it just is way too toxic for the bigs to come to our inland and offshore waters and do business.

I know this was long, and excuse me for maybe making mistakes in wording...but I tried to condense a LOT of stuff into a shorter synopses.

It's INSANE how problematic all of this is to our state...especially realizing the case has no merit. So why would the Exxon's want to do business here knowing the state is doing what're they can to frick the oil companies. Anyone who knows drilling, knows the oil comoany has little to no ownership of any of the equipment or services that go into the drilling of the well
Imagine looking for every boat the has come up the Mississippi and sue the owning company for the damage the waves caused.

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Good. Maybe they’ll finally re-write the constitution so that we don’t tie-up 90% of our funding

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Why wasn’t this pursued after the budget crisis a year ago?

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It was. The bill was killed in committee.

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the LSUSaint

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I appreciate your insight. Good stuff.

25% royalty or not, I cannot imagine anyone thought ripping up the wetlands like that was a good idea. Depending on who you talk to, either 1) the companies/their subs did not do the work as designed (if as designed, we would not have these problems) or 2) The design as approved by the state was faulty / the state did not force them to do the work correctly.

In any event, drilling in shallow water isn't going to cause any more problems. XOM and the like can drill where they choose, and if they choose to not drill in LA shallow water because they are upset about the lawsuit, that is their certainly their right.

My guess is when supply becomes harder to find, they will get over themselves.

I think the lawsuit is misguided. We can't undo the past. I would rather emphasis be placed on ensuring we don't have this same ecological disaster in the future.

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I just went and ate lunch and paid 10% in sales taxes. When I bought a car I paid 10% in sales taxes. When I purchase equipment for my business I pay 10% in sales taxes.

I realize groceries and prescriptions are exempt, but that isn't a large percentage compared tot he whole.

Sales tax has a high impact on most citizens. I can't believe we are 13th lowest.

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Several things:
1. I think that info is dated. Sales tax collections in FY15 were $2.7 billion versus $3.8 for FY17. A big difference.
2. Remember cost of living is lower in LA so sales tax will be lower here even if another state had an identical system.
3. The exemptions really are a lot. In FY 16 food exemption cost $424 million, drugs $358 million, residential power cost $166. And there are lot more ($2.7 billion in sales tax exemptions). That isn't including the fact that we don't include services like Texas and Tennessee do.

Legislators love them some tax exemptions.

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The real issue is, why would they further their liability not knowing what Louisisana is going to do to them. So until the case is dropped or decided, they and the others will avoid doing business at all costs.

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I don't have a clue whether the suits have merit or not, and that is not what I asked. Talking about that question makes your response seem like sleight-of-hand.

For these suits to impact CURRENT decisions on investments/activities, the potential liability they face would have to still be unclear per the law.

Is the law not clear about what they are responsible/liable for if they engage in new activity right now? If that is the issue, that is separate from the lawsuits, which are about actions in the past.

So far, this sounds suspiciously like an industry with options simply exerting political pressure in order to get a favorable outcome.

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Shallow water rigs is a great barometer for the situation because obviously all of their work falls in Louisiana waters.

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Actually, it's not a great barometer at all. It just allows one to make a claim that can't be falsified. It'd be a great barometer only if it were possible to see if declines in activity were happening in other places that are otherwise comparable.

Isn't it true that non-shale production has generally declined everywhere? Might newfound cost/production advantages there drive a shift in activity to places where that kind of work can be done? I don't know that an Exxon (downstream) or barge rig (water) exec is going to be able to give you the whole picture here.

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The Wall Street Journal had a short article this morning about this very issue and how John Bel Edwards is trying to give his attorney friends a handout on these bogus lawsuits. Unfortunately Edwards will put the interest of his trial attorney friends ahead of everyone else on this issue.

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And yet Nola.com, The Advocate, the Times picayune won't say a word about this because they are too busy carrying the water for JBE.

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groceries,

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Groceries aren't exempt from sales taxes. Just some of it is exempt.

Healthcare is so high now if they taxed it most would go broke!

Our utilities are high too, so is our car insurance.
If your insurance is 10% higher than most states, who cares that you don't pay sales taxc. You are already paying more than most.

I stand by what I said, when you look at the big picture as to what we pay for things (groceries, utilities, autos, insurance, etc.) we are not skating by especially here in EBR Parish.

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I see more posters on this board, and the media in general, reference this flawed analysis

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Thank you for confirming my line of thinking.

We pay plenty in taxes.

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Groceries aren't exempt from sales taxes. Just some of it is exempt.

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Another big issue is that groceries are exempt from state sales taxes, but not all local sales taxes.

We really need to consider a unified sales tax system like Texas has.

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Another big issue is that groceries are exempt from state sales taxes, but not all local sales taxes.

We really need to consider a unified sales tax system like Texas has.

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agree 100%