April 2013
Port Fourchon

Spill penalties could help fund remaining portion of LA 1

In what could be seen as an ironic twist, fallout from the 2010 Macondo oil spill could deliver the long-sought funds needed to help complete the elevated replacement of a rapidly sinking, and often-impassable, Lafourche Parish highway that provides the only access to the strategic deepwater hub of Port Fourchon.


One of the 21 post-Isaac washouts on the road grade portion of LA 1., which was off limits for 62 hr, after the minor storm passed.
One of the 21 post-Isaac washouts on the road grade portion of LA 1., which was off limits for 62 hr, after the minor storm passed.

In what could be seen as an ironic twist, fallout from the 2010 Macondo oil spill could deliver the long-sought funds needed to help complete the elevated replacement of a rapidly sinking, and often-impassable, Lafourche Parish highway that provides the only access to the strategic deepwater hub of Port Fourchon.

In late February, litigation over the oil dispersed into the Gulf of Mexico from the Macondo blowout began playing out in a New Orleans federal court, against BP and its co-defendants. As the proceedings are expected to result in hefty fines, under the U.S. Clean Water Act, an oft-frustrated southern Louisiana alliance has its collective fingers crossed that a considerable portion of the federal penalties will be earmarked to help fund the segmented Phase II of the Louisiana Highway 1 Improvement Project.

As things now stand, the distribution of fines under the so-called RESTORE Act represents the only viable avenue into federal coffers, to secure a chunk of the $320 million needed to wrap up the second phase of the nearly 16-year-old roadway project, said Henri Boulet, executive director of the close-knit LA 1 Coalition. Barring a settlement, observers say fines of up to $21 billion could be levied, of which 35% would be distributed evenly among the five coastal states most impacted. Per-state distribution of another 30% of the aggregate penalties would be at the discretion of a specially designated Gulf Coast Restoration Council, comprising representatives of various federal agencies. That agency will examine the impact to each state and allocate restoration funds accordingly.

Congress approved the RESTORE Act as part of the yet-to-be-appropriated $500-billion omnibus transportation bill, enacted in July. “The RESTORE Act provides the framework for awarding monies from the civil penalties,” Boulet said. “Of those, 35% will be split evenly between the five states.”

While Louisiana, Mississippi, Alabama, Florida and Texas would get even shares of that percentage, another 30% would be divided based upon the effect of the spill on each individual state. “We’re in constant communication with the council designatees, because we think that based on the impact, Louisiana will get the vast majority of that (30%),” Boulet said.

NEXT SEGMENT UNDERWAY

In the meantime, design work is underway for a $42-million ¾-mi. section to be erected over the levee at Golden Meadow and to clear the way for construction of the remaining two segments of the second phase. The final two segments would require $60 million and $215 million, respectively, and, once completed, would provide an 8-3-mi., two-lane elevated highway from Golden Meadow to Leeville. Here it would connect with an elevated roadway that opened in late 2011, which provides direct access to Port Fourchon.

Boulet said construction of the short segment is needed to provide the access required to complete the final two segments. “Our environmental permits require end-on-end construction, so we need a way to get the equipment on site. This section will get us over the levee and provide the utility access for the cranes and other equipment needed to complete the second phase,” he said. “We have no access to federal funds, because this section will not provide independent utility, meaning cars won’t be allowed to drive on it. The feds didn’t want to fund a road segment that does not offer immediate, independent utility.”

With federal funds out of reach, Boulet said the coalition has requested that the state pony up $35.4 million, which would be spread over three fiscal years, beginning in 2014. The remaining $6.6 million for the access road will come from industry, he said. Gov. Bobby Jindal has agreed to include the funding request in the capital outlay bill he will present to the state legislature. If approved, funds for the utility access section would not begin arriving until the next fiscal year, as the design itself is expected to take 18 months to complete, said Boulet.

“We went to the governor in December, and acknowledged that we know the state can’t fund all the $320 million we need to complete the highway, but we’d like you to help fund this first ($42-million) section. This is the cheapest part, so let’s build it first as the rest of the project truly hinges on getting this segment completed.”

Over the last few years, the coalition has repeatedly been rejected in its attempts to seek federal funding, even though one agency after another has proclaimed the highway critical to the nation’s energy and economic security. For the foreseeable future, at least, the RESTORE Act represents the only potential source of federal funding, but how much, if any, of the distributed fines will go specifically to LA 1 remains the multi-million-dollar question. Boulet said monies from the separate $500 U.S. transportation bill are being divided among all 50 states, meaning the Louisiana share, even if fully designated for LA 1, would barely put a dent in the total construction budget. Consequently, the coalition is now concentrating on state and private funding.

“At this point, the RESTORE Act is the only federal money that may become available. There’s not even a federal agency we can apply to, so as of now the money will have to come from the state and the industry,” he said.

TIME RUNNING OUT

While Boulet said he is confident a completed LA 1 could be ready for traffic within 10–20 years, the latest scientific data suggests the sooner the better. In its most recent analysis, the National Oceanic and Atmospheric Administration (NOAA) showed LA 1 subsiding at a rate of 7 mm/year, Boulet said. “That’s the largest subsidence rate within the entire U.S. coastline,” he said.

The rate of subsidence in tandem with NOAA’s conservative estimate of 2 mm/yr rise in water level, puts LA 1 at the mercy of a 9 mm/yr relative rise in the sea level, Boulet said. “When we look ahead at the subsidence and the sea level rise, this highway conservatively will be impassable 6% of the time by 2030 and according to NOAA data, by 2050 it will be closed 50% of the time,” Boulet said.

At the end of 2011, the U.S. Department of Homeland Security (DHS) released results of a study that concluded a 90-day closure of the nearly 8 miles of LA 1 not yet elevated would result in an estimated $7.8-billion loss in GDP. The study also determined that closing off access to the OCS E&P infrastructure for three months would reduce oil and gas production by some 160 million bbl and 320 Bcf, respectively, for as long as a decade.

The vulnerability of the quickly deteriorating roadway was again brought into focus when comparatively minor Hurricane Isaac came ashore Aug. 28, and in its wake closed the ground-level portion of LA 1 to port traffic for more than 62 hr. Boulet said had the Category 1 storm came in from a different direction, the results could have been much worse, even from what he described as a “baby storm.”

“We had 21 washout locations on the road itself, specifically caused by this Category 1 storm. That is really a telling message,” he said. “Even with this minor storm, access to Grand Isle (adjacent to Port Fourchon) was shut off about two days before they could even open one lane, and then 10 days of controlled access as they only had one lane open. It could have been much worse had the storm came in from a more westerly direction and impacted LA 1 north of Port Fourchon. As it was, we were closed for 64 hr and the port inaccessible to industry.”

Chett Chaisson, executive director of Port Fourchon, said if not for having to wait out the opening of the non-elevated portion of the highway, the port could have returned to business as usual, in short order, after the mini-hurricane.

“We had maybe two feet of water in some spots in the port, but it went down quickly,” he said. “Once more, the most vulnerable area, and the one we keep talking about, is LA 1 between the elevated bridge and Golden Meadow, inside the levee system. At least, the elevated sections allowed us to return faster, as we didn’t have nearly so much highway to have to clean up.”

In the days following the storm, the U.S. General Accounting Office (USGAO) toured the area as part of a special congressional commission working on an Infrastructure Adaptation Report. “Both the White House and Congress want to see what forward-thinking communities are doing along the coast nationwide to prepare for climate change,” Boulet said.

He said the USGAO representatives came to Lafourche Parish after reading an article in the Washington Post, last March, which examined local efforts to re-build the strategically critical highway. In the article, Tim Osborn, NOAA navigation manager for the central Gulf Coast, described the ongoing LA 1 quandary as “a way we can look at climate change as having near-term impacts, that are national in scope and impact.” wo-box_blue.gif

Related Articles
Connect with World Oil
Connect with World Oil, the upstream industry's most trusted source of forecast data, industry trends, and insights into operational and technological advances.