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Oil spills. Poverty. Corruption. Why Louisiana is America's petro-state.

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By Steven Mufson
Sunday, July 18, 2010

Huey P. Long, the famous Louisiana populist, launched his political career by waging war on the big oil companies, especially what he called Standard Oil's "invisible empire."

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"I would rather go down to a thousand impeachments than to admit that I am the governor of the state that does not dare to call the Standard Oil Company to account," he declared in a 1929 campaign circular.

But the threat of a thousand impeachments notwithstanding, Long later built his own invisible oil empire: In 1934, while he was a senator, he and his political associates formed the Win or Lose Corp. The company -- which had a reputation of never losing -- bought up state mineral leases and resold them to oil companies at a healthy profit, while keeping a share for itself. Although Long died in 1935, his family and friends received royalties for decades.

This dividend came at a price for the rest of Louisiana. The oil leases Long and his associates sold were generally in wetlands; in the process of tapping the oil and gas below, oil companies built a sprawling network of roads and canals, leaving behind a trail of damaged marshes. Wildcat wells came to dot the state's landscape, and refineries and port facilities followed. Today, thousands of wells have been drilled within three miles of the far-from-pristine shoreline.

But it was a price Louisianans went along with: Since oil was first discovered there, the state has produced 159.5 trillion cubic feet of natural gas and 17.5 billion barrels of oil, according to the Louisiana Department of Natural Resources. That's as much oil as the entire United States has produced over the past nine years.

Americans may be torn up by the BP oil spill and its destruction of the Gulf of Mexico's natural habitat -- and torn up we should be -- but that habitat has not been pristine for decades. In many ways, Louisiana made its deal with the devil long ago.

And what a bad deal it was. Long before the oil spill, the state's embrace of the petroleum industry cast it under what economists call "the resource curse": the paradox that countries rich in minerals or petroleum tend to grow more slowly and have lower living standards than other nations. Simply put, Louisiana is the closest thing America has to a petro-state.

Instead of blessing Louisiana with prosperity, the oil industry fostered dependency, corruption and an indifference to environmental damage. Our Cajun sheikdom's oil and gas riches -- like those of the Niger Delta, the Orinoco belt in Venezuela and the Iraqi marshes -- also stunted its development, leaving it far behind states with fewer natural resources.

According to the Census Bureau and Harvard University health data, Louisiana ranks 49th among the states in life expectancy, has the second-highest rate of infant mortality, comes in fourth in violent crime, ranks 46th in percentage of people older than 25 with college degrees, and ties for second in percentage of people living below the poverty line.

Oil riches didn't create these problems, of course, but it is striking that they didn't ameliorate them. "We've always been a plantation state," said Oliver Houck, an environmental law professor at Tulane University. "What oil and gas did is replace the agricultural plantation culture with an oil and gas plantation culture."

Even though Louisiana's oil and gas production peaked in 1970 and many companies moved their offices to Houston, refineries, oil import facilities on the coast and a web of thousands of miles of pipelines continue to make the industry a powerful force in the state. It is embedded in Louisiana's mental and economic infrastructure, and remains one of its leading employers. The recent development of shale gas in the northern, poorer part of the state will bolster its influence even further.

All this explains why, even as the oil spill threatens Louisiana's tourism, fisheries and shoreline, local politicians have continued to speak up on behalf of continued offshore drilling: They, and their state, are addicted to oil.


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