Gov. Jeff Landry
BATON ROUGE — Gov. Jeff Landry has signed a 227-page bill that reorganizes the Louisiana Department of Energy and Natural Resources and reforms the system to adjudicate “legacy lawsuits” against energy companies, but critics say the measure may have unintended consequences.
Senate Bill 244, which Landry signed on Tuesday, recasts the energy agency as the Department of Conservation and Energy (DCE) and places more authority over energy projects – pipelines, injection wells, mineral leasing – in the hands of a secretary who is appointed by the governor. The new agency will also have more authority to settle legal disputes between landowners and oil and gas companies over environmental damage resulting from drilling sites in past decades.
In a post on X, formerly Twitter, Landry said the bill and other measures he signed this year would improve energy affordability and address legal challenges affecting the energy industry.
“Closing the book on legacy lawsuits means real progress and predictability for Louisiana’s energy future,” he said.
At a recent press conference, the governor said SB 244, which was authored by Sen. Bob Hensgens (R-Abbeville), would bring both stability and consistency to the regulation of the oil and gas industry in the state.
“The (legacy) litigation pitted property owners against producers for decades,” Landry said. “The Legislature had failed to address this issue. When I ran (for governor), I promised the people of this state and this industry to work on improving the business environment by addressing our litigation landscape.”
The goal of the legislation is to get environmental cleanup efforts on track, reduce lawsuit costs and provide more clarity about the process for the courts, property owners and energy producers, supporters say.
The president of the Louisiana Oil and Gas Association, Mike Moncla, welcomed the state Legislature’s passage of SB 244 and another measure reducing the state’s oil severance tax rate from 12.5% to 6.5% on new drilling projects.
“... We are elated that this legislation made it through the process,” Moncla said in a prepared statement. “While the timeline to implement this new legislation won’t begin until September 2027, this is a long-game play. The clock for a new future has officially started with this legacy reform bill.”
Louisiana Lawsuit Abuse Watch (LLAW), however, finds some of the provisions of SB 244 troubling.
“LLAW is concerned about the two-year window that remains open for adjudicating these questionable lawsuits,” Lana Venable, LLAW’s executive director, told the Louisiana Record in an email. “This is likely to result in a flurry of litigation filed just under the wire before these new reforms take effect in September 2027.”
A group that advocates for government transparency in the state, Citizens for a New Louisiana, sees the measure as putting too much political power in the hands of a single secretary and allowing state officials to more easily approve carbon-capture projects funded by billions of dollars in federal subsidies to energy companies.
Such projects allow oil and gas companies to expand production while reducing their “carbon footprint” and their impact on global warming.
“It’s a bureaucratic reshuffle that could easily go unnoticed,” Citizens for a New Louisiana reported on the group’s website. “But the consequences are enormous: centralized power, fast-tracked industrial permitting, reduced public input and increased vulnerability to abuse.”
The current Department of Energy and Natural Resources secretary, Tyler Gray, said the legislation was the product of 18 months of work.
“We’ve been working with our internal staff and external stakeholders for more than a year to put together a plan that makes the best use of existing technology, proven processes and our people in order to make DCE more effective and efficient in its role of balancing the needs of supporting energy and sustaining our shared environment,” Gray said in a statement.
SB 244 also places limits on attorney fee reimbursements and damages awards. But the new system won’t be in effect until Sept. 1, 2027, meaning that lawsuits against energy producers for environmental damage may still be filed under the current system for another 26 months.
