Chevron Must Pay $745 Million for Coastal Damages, Louisiana Jury Rules

A jury in Louisiana has ruled that Chevron must pay a parish government about $745 million to help restore wetlands that the jury said the energy company had harmed for decades.

The verdict, which was reached on Friday, is likely to influence similar lawsuits filed by other parishes, or counties, in the state against other energy giants and their possible settlement negotiations.

The lawsuit, filed by Plaquemines Parish, is one of at least 40 that coastal parishes have filed against fossil fuel companies since 2013.

The lawsuit contended that Texaco — which Chevron bought in 2000 — violated state law for decades by failing to apply for coastal permits, and by not removing oil and gas equipment when it stopped using an oil field in Breton Sound, which is southeast of New Orleans.

A state regulation in 1980 required companies operating in wetlands to restore “as near as practicable to their original condition” any canals that they dredged, wells that they drilled or wastewater that they dumped into marshes.

Plaquemines Parish, which had sought $2.6 billion in damages, argued that wetland loss and pollution were directly linked to the oil and gas work.

However, Chevron said that its activities were not responsible for the decades of damage. Moreover, it said that the regulations that went into effect in 1980 did not apply to oil and gas activity that began earlier.

The jury, after a four-week trial, awarded Plaquemines Parish $575 million to compensate for land loss, $161 million to compensate for contamination and $8.6 million for abandoned equipment. Chevron said it would appeal the verdict.

“This verdict is just one step in the process to establish that the 1980 law does not apply to conduct that occurred decades before the law was enacted,” Mike Phillips, the lead trial lawyer for Chevron, said in a statement on Saturday. “Chevron is not the cause of the land loss occurring in Breton Sound.”

Louisiana’s state government, while usually friendly to the oil and gas industry, took the side of Plaquemines in the lawsuit, as the state struggles to reverse vast coastal land loss.

The state has lost more than 2,000 square miles, about the land area of Delaware, because of sea level rise and the loss of sediment that a free-flowing Mississippi River used to leave behind along the coast, until the river was constrained by levees built for flood control.

The loss in Plaquemines Parish, which is 10 miles downriver of New Orleans, is particularly acute.

The parish has been reduced by nearly half its original size in the last century. Oil-and-gas canals crisscross its wetlands, exacerbating seawater destruction of marsh vegetation. The state has taken aggressive countermeasures.

Louisiana has enacted a 50-year, $50 billion coastal master plan to try to save what it can from the rising Gulf of Mexico. The plan includes 124 projects designed to dredge sand, rebuild degraded marshes, and add levees, floodgates and storm surge barriers. It aims to create tens of thousands of acres of new land, preserve what land remains and protect the coast from hurricanes and sea-level rise.

The state received billions of dollars from the settlement of lawsuits stemming from the 2010 Deepwater Horizon oil spill in the Gulf of Mexico, which was the worst offshore oil spill in U.S. history.