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TX Energy Firms Agree on Settlement in Coastal Erosion Lawsuit

Two Texas energy firms are the first to wave the white flag and settle a massive lawsuit that accused nearly 100 oil and gas companies of directly contributing to coastal erosion. The firms settled with the New Orleans-area Levee Authority on Nov. 4.

White Oak Operating Co. and Chroma Operating settled with the Southeast Louisiana Flood Protection Authority-East, but the details of the settlement have not been released. Officials have said that they plan to use all the monies paid by the companies for coastal restoration. In fact, it could be used to fund the state's 50-year, $50 billion Coastal Master Plan.

Another hearing is scheduled in mid-November that could decide if the lawsuit against 95 other companies will continue in federal courts or be stopped by a new state law aimed at killing similar lawsuits. Senate Bill 469 was signed last year by Gov. Jindal; the law puts a limit on which government agencies can file lawsuits for damage done by oil and gas companies.

Although a state judge has ruled that the new law does not apply to the flood authority, a federal judge is not necessarily bound by the ruling.

The two companies that settled with the New Orleans-area levee authority are small players in the energy sector when compared to others involved in the lawsuit, such as BP and Exxon. Many more companies could choose to settle as the legal costs to go to court could outweigh the cost of a settlement.

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